[Congressional Record (Bound Edition), Volume 156 (2010), Part 6]
[Senate]
[Pages 8419-8455]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           TEXT OF AMENDMENTS

  SA 4063. Mr. WYDEN submitted an amendment intended to be proposed to 
amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for himself and 
Mrs. Lincoln)) to the bill S. 3217, to promote the financial stability 
of the United States by improving accountability and transparency in 
the financial system, to end ``too big to fail'', to protect the 
American taxpayer by ending bailouts, to protect consumers from abusive 
financial services practices, and for other purposes; which was ordered 
to lie on the table; as follows:

       On page 30, between lines 11 and 12, insert the following:
       (3) Additional views.--In the annual report required by 
     paragraph (2)(M), the Secretary shall provide additional 
     views, which shall include--
       (A) whether the Secretary agrees with the recommendations 
     of the Council and the views of the Council on the financial 
     markets and potential emerging threats;
       (B) if the Secretary disagrees with any aspect of the 
     report of the Council, the Secretary's own views, analysis, 
     and recommendations; and
       (C) recommendations regarding whether there should be 
     changes made to the laws and rules in place at the time at 
     which the annual report is delivered to Congress to promote 
     the integrity, efficiency, and stability of the United States 
     financial markets or a determination from the Secretary that 
     the laws and rules in place at the time at which the annual 
     report of the Council is delivered to Congress are optimal to 
     achieve the integrity, efficiency, and stability of the 
     United States financial markets.
                                 ______
                                 
  SA 4064. Mr. MENENDEZ (for himself, Ms. Snowe, Mr. Schumer, Mr. 
Leahy, and Mr. Johnson) submitted an amendment intended to be proposed 
to amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for himself 
and Mrs. Lincoln)) to the bill S. 3217, to promote the financial 
stability of the United States by improving accountability and 
transparency in the financial system, to end ``too big to fail'', to 
protect the American taxpayer by ending bailouts, to protect consumers 
from abusive financial services practices, and for other purposes; 
which was ordered to lie on the table; as follows:

       On page 372, between lines 2 and 3, insert the following:

     SEC. 343. GUARANTEES FOR BONDS AND NOTES ISSUED FOR COMMUNITY 
                   OR ECONOMIC DEVELOPMENT PURPOSES.

       The Riegle Community Development and Regulatory Improvement 
     Act of 1994 (12 U.S.C. 4701 et seq.) is amended by inserting 
     after section 114 (12 U.S.C. 4713) the following:

     ``SEC. 114A. GUARANTEES FOR BONDS AND NOTES ISSUED FOR 
                   COMMUNITY OR ECONOMIC DEVELOPMENT PURPOSES.

       ``(a) Definitions.--In this section, the following 
     definitions shall apply:
       ``(1) Eligible community development financial 
     institution.--The term `eligible community development 
     financial institution' means a community development 
     financial institution (as described in section 1805.201 of 
     title 12, Code of Federal Regulations, or any successor 
     thereto) certified by the Secretary that has applied to a 
     qualified issuer for, or been granted by a qualified issuer, 
     a loan under the Program.
       ``(2) Eligible community or economic development purpose.--
     The term `eligible community or economic development 
     purpose'--
       ``(A) means any purpose described in section 108(b); and
       ``(B) includes the provision of community or economic 
     development in low-income or underserved rural areas.
       ``(3) Guarantee.--The term `guarantee' means a written 
     agreement between the Secretary and a qualified issuer (or 
     trustee), pursuant to which the Secretary ensures repayment 
     of the verifiable losses of principal, interest, and call 
     premium, if any, on notes or bonds issued by a qualified 
     issuer to finance or refinance loans to eligible community 
     development financial institutions.
       ``(4) Loan.--The term `loan' means any credit instrument 
     that is extended under the Program for any eligible community 
     or economic development purpose.
       ``(5) Master servicer.--
       ``(A) In general.--The term `master servicer' means any 
     entity approved by the Secretary in accordance with 
     subparagraph (B) to oversee the activities of servicers, as 
     provided in subsection (f)(4).
       ``(B) Approval criteria for master servicers.--The 
     Secretary shall approve or deny any application to become a 
     master servicer under the Program not later than 90 days 
     after the date on which all required information is submitted 
     to the Secretary, based on the capacity and experience of the 
     applicant in--
       ``(i) loan administration, servicing, and loan monitoring;
       ``(ii) managing regional or national loan intake, 
     processing, or servicing operational systems and 
     infrastructure;
       ``(iii) managing regional or national originator 
     communication systems and infrastructure;
       ``(iv) developing and implementing training and other risk 
     management strategies on a regional or national basis; and
       ``(v) compliance monitoring, investor relations, and 
     reporting.
       ``(6) Program.--The term `Program' means the guarantee 
     Program for bonds and notes issued for eligible community or 
     economic development purposes established under this section.
       ``(7) Program administrator.--The term `Program 
     administrator' means an entity designated by the issuer to 
     perform administrative duties, as provided in subsection 
     (f)(2).
       ``(8) Qualified issuer.--
       ``(A) In general.--The term `qualified issuer' means a 
     community development financial institution (or any entity 
     designated to issue notes or bonds on behalf of such 
     community development financial institution) that meets the 
     qualification requirements of this paragraph.
       ``(B) Approval criteria for qualified issuers.--

[[Page 8420]]

       ``(i) In general.--The Secretary shall approve a qualified 
     issuer for a guarantee under the Program in accordance with 
     the requirements of this paragraph, and such additional 
     requirements as the Secretary may establish, by regulation.
       ``(ii) Terms and qualifications.--A qualified issuer 
     shall--

       ``(I) have appropriate expertise, capacity, and experience, 
     or otherwise be qualified to make loans for eligible 
     community or economic development purposes;
       ``(II) provide to the Secretary--

       ``(aa) an acceptable statement of the proposed sources and 
     uses of the funds; and
       ``(bb) a capital distribution plan that meets the 
     requirements of subsection (c)(1); and

       ``(III) certify to the Secretary that the bonds or notes to 
     be guaranteed are to be used for eligible community or 
     economic development purposes.

       ``(C) Department opinion; timing.--
       ``(i) Department opinion.--Not later than 30 days after the 
     date of a request by a qualified issuer for approval of a 
     guarantee under the Program, the Secretary shall provide an 
     opinion regarding compliance by the issuer with the 
     requirements of the Program under this section.
       ``(ii) Timing.--The Secretary shall approve or deny a 
     guarantee under this section after consideration of the 
     opinion provided to the Secretary under clause (i), and in no 
     case later than 90 days after receipt of all required 
     information by the Secretary with respect to a request for 
     such guarantee.
       ``(9) Secretary.--The term `Secretary' means the Secretary 
     of the Treasury.
       ``(10) Servicer.--The term `servicer' means an entity 
     designated by the issuer to perform various servicing duties, 
     as provided in subsection (f)(3).
       ``(b) Guarantees Authorized.--The Secretary shall guarantee 
     payments on bonds or notes issued by any qualified issuer, if 
     the proceeds of the bonds or notes are used in accordance 
     with this section to make loans to eligible community 
     development financial institutions--
       ``(1) for eligible community or economic development 
     purposes; or
       ``(2) to refinance loans or notes issued for such purposes.
       ``(c) General Program Requirements.--
       ``(1) In general.--A capital distribution plan meets the 
     requirements of this subsection, if not less than 90 percent 
     of the principal amount of guaranteed bonds or notes (other 
     than costs of issuance fees) are used to make loans for any 
     eligible community or economic development purpose, measured 
     annually, beginning at the end of the 1-year period beginning 
     on the issuance date of such guaranteed bonds or notes.
       ``(2) Relending account.--Not more than 10 percent of the 
     principal amount of guaranteed bonds or notes, multiplied by 
     an amount equal to the outstanding principal balance of 
     issued notes or bonds, minus the risk-share pool amount under 
     subsection (d), may be held in a relending account and may be 
     made available for new eligible community or economic 
     development purposes.
       ``(3) Limitations on unpaid principal balances.--The 
     proceeds of guaranteed bonds or notes under the Program may 
     not be used to pay fees (other than costs of issuance fees), 
     and shall be held in--
       ``(A) community or economic development loans;
       ``(B) a relending account, to the extent authorized under 
     paragraph (2); or
       ``(C) a risk-share pool established under subsection (d).
       ``(4) Repayment.--If a qualified issuer fails to meet the 
     requirements of paragraph (1) by the end of the 90-day period 
     beginning at the end of the annual measurement period, 
     repayment shall be made on that portion of bonds or notes 
     necessary to bring the bonds or notes that remain outstanding 
     after such repayment into compliance with the 90 percent 
     requirement of paragraph (1).
       ``(5) Prohibited uses.--The Secretary shall, by 
     regulation--
       ``(A) prohibit, as appropriate, certain uses of amounts 
     from the guarantee of a bond or note under the Program, 
     including the use of such funds for political activities, 
     lobbying, outreach, counseling services, or travel expenses; 
     and
       ``(B) provide that the guarantee of a bond or note under 
     the Program may not be used for salaries or other 
     administrative costs of--
       ``(i) the qualified issuer; or
       ``(ii) any recipient of amounts from the guarantee of a 
     bond or note.
       ``(d) Risk-Share Pool.--Each qualified issuer shall, during 
     the term of a guarantee provided under the Program, establish 
     a risk-share pool, capitalized by contributions from eligible 
     community development financial institution participants an 
     amount equal to 3 percent of the guaranteed amount 
     outstanding on the subject notes and bonds.
       ``(e) Guarantees.--
       ``(1) In general.--A guarantee issued under the Program 
     shall--
       ``(A) be for the full amount of a bond or note, including 
     the amount of principal, interest, and call premiums;
       ``(B) be fully assignable and transferable to the capital 
     market, on terms and conditions that are consistent with 
     comparable Government-guaranteed bonds, and satisfactory to 
     the Secretary;
       ``(C) represent the full faith and credit of the United 
     States; and
       ``(D) not exceed 30 years.
       ``(2) Limitations.--
       ``(A) Annual number of guarantees.--The Secretary shall 
     issue not more than 10 guarantees in any calendar year under 
     the Program.
       ``(B) Guarantee amount.--The Secretary may not guarantee 
     any amount under the Program equal to less than $100,000,000, 
     but the total of all such guarantees in any fiscal year may 
     not exceed $1,000,000,000.
       ``(f) Servicing of Transactions.--
       ``(1) In general.--To maximize efficiencies and minimize 
     cost and interest rates, loans made under this section may be 
     serviced by qualified Program administrators, bond servicers, 
     and a master servicer.
       ``(2) Duties of program administrator.--The duties of a 
     Program administrator shall include--
       ``(A) approving and qualifying eligible community 
     development financial institution applications for 
     participation in the Program;
       ``(B) compliance monitoring;
       ``(C) bond packaging in connection with the Program; and
       ``(D) all other duties and related services that are 
     customarily expected of a Program administrator.
       ``(3) Duties of servicer.--The duties of a servicer shall 
     include--
       ``(A) billing and collecting loan payments;
       ``(B) initiating collection activities on past-due loans;
       ``(C) transferring loan payments to the master servicing 
     accounts;
       ``(D) loan administration and servicing;
       ``(E) systematic and timely reporting of loan performance 
     through remittance and servicing reports;
       ``(F) proper measurement of annual outstanding loan 
     requirements; and
       ``(G) all other duties and related services that are 
     customarily expected of servicers.
       ``(4) Duties of master servicer.--The duties of a master 
     servicer shall include--
       ``(A) tracking the movement of funds between the accounts 
     of the master servicer and any other servicer;
       ``(B) ensuring orderly receipt of the monthly remittance 
     and servicing reports of the servicer;
       ``(C) monitoring the collection comments and foreclosure 
     actions;
       ``(D) aggregating the reporting and distribution of funds 
     to trustees and investors;
       ``(E) removing and replacing a servicer, as necessary;
       ``(F) loan administration and servicing;
       ``(G) systematic and timely reporting of loan performance 
     compiled from all bond servicers' reports;
       ``(H) proper distribution of funds to investors; and
       ``(I) all other duties and related services that are 
     customarily expected of a master servicer.
       ``(g) Fees.--
       ``(1) In general.--A qualified issuer that receives a 
     guarantee issued under this section on a bond or note shall 
     pay a fee to the Secretary, in an amount equal to 10 basis 
     points of the amount of the unpaid principal of the bond or 
     note guaranteed.
       ``(2) Payment.--A qualified issuer shall pay the fee 
     required under this subsection on an annual basis.
       ``(3) Use of fees.--Fees collected by the Secretary under 
     this subsection shall be used to reimburse the Department of 
     the Treasury for any administrative costs incurred by the 
     Department in implementing the Program established under this 
     section.
       ``(h) Authorization of Appropriations.--
       ``(1) In general.--There are authorized to be appropriated 
     to the Secretary, such sums as are necessary to carry out 
     this section.
       ``(2) Use of fees.--To the extent that the amount of funds 
     appropriated for a fiscal year under paragraph (1) are not 
     sufficient to carry out this section, the Secretary may use 
     the fees collected under subsection (g) for the cost of 
     providing guarantees of bonds and notes under this section.
       ``(i) Investment in Guaranteed Bonds Ineligible for 
     Community Reinvestment Act Purposes.--Notwithstanding any 
     other provision of law, any investment by a financial 
     institution in bonds or notes guaranteed under the Program 
     shall not be taken into account in assessing the record of 
     such institution for purposes of the Community Reinvestment 
     Act of 1977 (12 U.S.C. 2901).
       ``(j) Administration.--
       ``(1) Regulations.--Not later than 1 year after the date of 
     enactment of this section, the Secretary shall promulgate 
     regulations to carry out this section.
       ``(2) Implementation.--Not later than 2 years after the 
     date of enactment of this section, the Secretary shall 
     implement this section.
       ``(k) Termination.--This section is repealed, and the 
     authority provided under this section shall terminate, on 
     September 30, 2014.''.

     SEC. 344. TAX EXEMPT STATUS OF CERTAIN BONDS.

       (a) No Federal Guarantee.--Subparagraph (A) of section 
     149(b)(3) of the Internal Revenue Code of 1986 is amended--

[[Page 8421]]

       (1) by striking ``or'' at the end of clause (iii);
       (2) by striking the period at the end of clause (iv) and 
     inserting ``, or''; and
       (3) by adding at the end the following new clause:
       ``(v) any guarantee of a qualified community development 
     financial institution bond provided by the Department of the 
     Treasury.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to bonds issued after the date of enactment of 
     this Act.
                                 ______
                                 
  SA 4065. Mr. MENENDEZ submitted an amendment intended to be proposed 
by him to the bill S. 3217, to promote the financial stability of the 
United States by improving accountability and transparency in the 
financial system, to end ``too big to fail'', to protect the American 
taxpayer by ending bailouts, to protect consumers from abusive 
financial services practices, and for other purposes; which was ordered 
to lie on the table; as follows:

       At the end of the bill, add the following:

                  TITLE XIV--EMERGENCY LIQUIDITY FUND

     SEC. 1401. SHORT TITLE.

       This title may be cited as the ``Emergency Liquidity 
     Fund''.

     SEC. 1402. PURPOSES.

       The purposes of this title are--
       (1) to immediately provide authority and facilities that 
     the Secretary of the Treasury can use to restore liquidity in 
     the community development financial system of the United 
     States;
       (2) to ensure that such authority and such facilities are 
     used in a manner that--
       (A) promotes access to credit for small businesses;
       (B) provides access to jobs, particularly for low and 
     moderate income individuals;
       (C) serves investment areas or targeted populations, as 
     those terms are defined under the Riegle Community 
     Development and Regulatory Improvement Act of 1994 (12 U.S.C. 
     4701 et seq.); and
       (D) provides public accountability for the exercise of such 
     authority; and
       (3) to provide grants to eligible entities and the 
     necessary authority to the Secretary of the Treasury to enter 
     into cooperative agreements that--
       (A) support small business development;
       (B) develop innovative local and regional programs to 
     expand capital access for small businesses; and
       (C) support local economic development and business 
     diversification.

     SEC. 1403. DEFINITIONS.

       In this title, the following definitions shall apply:
       (1) Eligible community or economic development purpose.--
     The term ``eligible community or economic development 
     purpose''--
       (A) means any purpose described in section 108(b) of the 
     Riegle Community Development and Regulatory Improvement Act 
     of 1994 (12 U.S.C. 4701 et seq.); and
       (B) includes the provision of community or economic 
     development in low-income or underserved rural areas.
       (2) Eligible entity.--
       (A) In general.--The term ``eligible entity'' included 
     community development financial institutions, as such 
     institutions are described in section 1805.201 of title 12, 
     Code of Federal Regulations, or any successor thereto.
       (B) Additional authority of secretary.--The Secretary may 
     further expand participation in any grant program established 
     under this title to include entities other than community 
     development financial institutions, if the Secretary, in his 
     discretion, determines that such other entities meet eligible 
     community or economic development purposes.
       (3) Secretary.--The term ``Secretary'' means the Secretary 
     of the Treasury.

     SEC. 1404. AUTHORIZATION TO MAKE COMMITMENTS TO ASSIST 
                   ELIGIBLE ENTITIES.

       (a) Special Liquidity Facility.--
       (1) In general.--The Secretary is authorized to establish a 
     special liquidity facility to make and fund commitments and 
     to purchase assets related to eligible community or economic 
     development purposes in accordance with--
       (A) the purposes of this title; and
       (B) the policies and procedures developed and published by 
     the Secretary.
       (2) Rule of construction.--Commitments made under paragraph 
     (1) may include grants, loans, loan commitments, equity 
     investments, agreements, and similar contracts or 
     undertakings or a combination thereof.
       (b) Applications for Assistance.--An application for 
     assistance under this title shall be submitted in such form 
     and in accordance with such procedures as the Secretary shall 
     establish.
       (c) Matching Requirement.--Assistance provided to an 
     eligible entity under this title shall be matched with funds 
     from sources other than the Federal Government on the basis 
     of not less than 1 dollar for every 2 dollars provided by the 
     Secretary.
       (d) Limitations.--
       (1) Annual number of awards.--The Secretary, acting through 
     the special liquidity facility established under subsection 
     (a), shall not issue more than 5 awards of assistance in any 
     calendar year under the authorities established by this 
     section.
       (2) Award amount.--In carrying out the requirements of this 
     section, the Secretary, acting through the special liquidity 
     facility established under subsection (a), may not make an 
     award to an eligible entity of less than $50,000,000.
       (3) Implementation.--Not later than 1 year after the date 
     of enactment of this title the Secretary shall issue rules 
     and regulations implementing this section.
       (e) Funding.--There are hereby appropriated to the 
     Secretary, out of funds in the Treasury not otherwise 
     appropriated, $250,000,000 to carry out this section, to 
     remain available until expended, for fiscal years 2010 
     through 2014.

     SEC. 1405. APPROVAL CRITERIA FOR ELIGIBLE ENTITIES.

       (a) In General.--The Secretary shall approve an eligible 
     entity for participation in the assistance program 
     established under section 1404 in accordance with the 
     requirements of this section, and such additional 
     requirements as the Secretary may establish, by regulation.
       (b) Terms and Qualifications.--Recipients of amounts under 
     section 1404 shall--
       (1) have appropriate expertise, capacity, and experience, 
     or otherwise be qualified to make loans for eligible 
     community or economic development purposes;
       (2) provide to the Secretary--
       (A) an acceptable statement of the proposed sources and 
     uses of the funds; and
       (B) a capital distribution plan for eligible community and 
     economic development purposes that details the following:
       (i) Management Capacity, by providing the following:

       (I) Experience deploying capital.
       (II) Experience raising capital.
       (III) Financial capacity and asset management capabilities.
       (IV) Program compliance track-record.
       (V) Community accountability.

       (ii) Capitalization Strategy, by providing the following:

       (I) Capital raising experience and track-record.
       (II) Experience deploying capital.
       (III) Strategy for raising investor capital.
       (IV) Relationships with investors.
       (V) Prospective sources and uses of capital.

       (iii) Business strategy, by providing the following:

       (I) Products, services ,and investment criteria.
       (II) Community and economic development investment track-
     record.
       (III) Financial projections or projected business activity.

       (iv) Community impact, by providing the following:

       (I) Ability to target areas of high unemployment.
       (II) Ability to support job creation or job retention.
       (III) Ability to further community revitalization.
       (IV) Ancillary community benefits.

       (v) Capacity, by demonstrating the following:

       (I) Ability to distribute and utilize 25 percent of amounts 
     received under this title not later than 1 year after receipt 
     of such amounts.
       (II) Ability to distribute and utilize 50 percent of 
     amounts received under this title not later than 2 years 
     after receipt of such amounts.
       (III) Ability to distribute and utilize 80 percent of 
     amounts received under this title not later than 5 years 
     after receipt of such amounts.

     SEC. 1406. BUSINESS-TO-BUSINESS GRANTS AND COOPERATIVE 
                   AGREEMENTS.

       (a) In General.--In accordance with this section, the 
     Secretary may make grants to and enter into cooperative 
     agreements with any coalition of private entities, public 
     entities, or any combination of private and public entities--
       (1) to expand business-to-business relationships between 
     large and small businesses;
       (2) to develop innovative local and regional programs to 
     expand access to capital for small businesses;
       (3) to provide businesses, directly or indirectly, with 
     online information and a database of--
       (A) public sector programs or private companies that are 
     interested in mentor-protege programs or supplier diversity 
     programs; and
       (B) State-wide, local, or community-based business 
     development programs;
       (4) to collect, analyze, and publish data that tracks the 
     impact of the coalition's programs on revenue and employment 
     at participating businesses, including disadvantaged business 
     enterprises;
       (5) to foster communication and collaboration within and 
     among the coalitions; and
       (6) to support efforts to enhance the long-term financial 
     stability of employees, the economic viability of 
     communities, and business diversification within locales and 
     regions.
       (b) Matching Requirement.--The Secretary may make a grant 
     to a coalition described under subsection (a) only if the 
     grant shall be matched with funds from sources

[[Page 8422]]

     other than the Federal Government on the basis of not less 
     than 1 dollar for each dollar provided by the Secretary under 
     this section.
       (c) Funding.--There are hereby appropriated to the 
     Secretary, out of funds in the Treasury not otherwise 
     appropriated, $50,000,000, to carry out this section, 
     including to pay the reasonable costs of administering the 
     grant program established under this section, for each of 
     fiscal years 2010 through 2015.

     SEC. 1407. IMPLEMENTATION AND ADMINISTRATION.

       (a) General Authorities and Duties.--The Secretary shall--
       (1) establish minimum standards for approved use of amounts 
     made available under this title;
       (2) provide technical assistance to eligible entities 
     receiving amounts under this title;
       (3) manage, administer, and perform necessary integrity 
     functions for the grant programs established under this 
     title; and
       (4) ensure adequate oversight of the eligible entities that 
     received amounts under this title.
       (b) Administrative Funding.--There are hereby appropriated 
     to the Secretary, out of funds in the Treasury not otherwise 
     appropriated, $15,000,000 to carry out the administrative 
     expenses associated with the grant programs established under 
     title, including to pay reasonable costs of administering 
     such programs. In administering this title and the grant 
     programs established by this title, the Secretary is 
     authorized to use the staff and resources of the Department 
     of the Treasury.
       (c) Expedited Contracting.--During the 1-year period 
     beginning on the date of enactment of this title, the 
     Secretary may enter into contracts without regard to any 
     other provision of law regarding public contracts, for 
     purposes of carrying out this title.
       (d) Termination of Secretary's Program Administration 
     Functions.--The authorities and duties of the Secretary to 
     implement and administer this title shall terminate at the 
     end of the 5-year period beginning on the date of enactment 
     of this title.

     SEC. 1408. REGULATIONS.

       The Secretary may issue such regulations and other guidance 
     as the Secretary determines necessary or appropriate to 
     implement this title including, to define terms, to establish 
     compliance and reporting requirements, and such other terms 
     and conditions necessary to carry out the purposes of this 
     title.
                                 ______
                                 
  SA 4066. Mr. FEINGOLD submitted an amendment intended to be proposed 
to amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for himself 
and Mrs. Lincoln)) to the bill S. 3217, to promote the financial 
stability of the United States by improving accountability and 
transparency in the financial system, to end ``too big to fail'', to 
protect the American taxpayer by ending bailouts, to protect consumers 
from abusive financial services practices, and for other purposes; 
which was ordered to lie on the table; as follows:

       On page 1290, strike line 5 and all that follows through 
     page 1291, line 9, and insert the following:

     SEC. 1028. AUTHORITY TO RESTRICT MANDATORY PRE-DISPUTE 
                   ARBITRATION.

       (a) Study and Report.--Not later than 1 year after the 
     designated transfer date, the Bureau shall conduct a study 
     and submit a report to Congress concerning the use of 
     agreements providing for arbitration of any future dispute 
     between covered persons and consumers in connection with the 
     offering or providing of consumer financial products or 
     services.
       (b) Further Authority.--The Bureau, by regulation, may 
     prohibit or impose conditions or limitations on the use of an 
     agreement between a covered person and a consumer for a 
     consumer financial product or service providing for 
     arbitration of any future dispute between the parties, if the 
     Bureau determines that such a prohibition or imposition of 
     conditions or limitations is in the public interest and for 
     the protection of consumers. The determination of the Bureau 
     under this subsection shall be consistent with the study 
     conducted under subsection (a).
       (c) Limitation.--The authority described in subsection (b) 
     may not be construed to prohibit or restrict a consumer from 
     entering into a voluntary arbitration agreement with a 
     covered person after a dispute has arisen.
       (d) Rule of Construction.--No other provision of Federal 
     law shall be construed to preempt or otherwise affect the 
     applicability of any regulation prescribed by the Bureau 
     under subsection (b).
                                 ______
                                 
  SA 4067. Mr. FEINGOLD submitted an amendment intended to be proposed 
to amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for himself 
and Mrs. Lincoln)) to the bill S. 3217, to promote the financial 
stability of the United States by improving accountability and 
transparency in the financial system, to end ``too big to fail'', to 
protect the American taxpayer by ending bailouts, to protect consumers 
from abusive financial services practices, and for other purposes; 
which was ordered to lie on the table; as follows:

       On page 1455, after line 25, insert the following:

     SEC. 1077. MANDATORY PREDISPUTE ARBITRATION RULEMAKING.

       (a) Section 921.--Section 921 of this Act is amended to 
     read as follows:

     ``SEC. 921. AUTHORITY TO ISSUE RULES RELATED TO MANDATORY 
                   PREDISPUTE ARBITRATION.

       ``(a) Amendment to Securities Exchange Act of 1934.--
     Section 15 of the Securities Exchange Act of 1934 (15 U.S.C. 
     78o), as amended by section 918, is amended by adding at the 
     end the following:
       ```(i) Authority to Restrict Mandatory Predispute 
     Arbitration.--The Commission shall--
       ```(1) conduct a rulemaking on the use of agreements that 
     require customers or clients of any broker, dealer, or 
     municipal securities dealer to arbitrate any dispute between 
     such customers or clients and such broker, dealer, or 
     municipal securities dealer that arises under the securities 
     laws or the rules of a self-regulatory organization; and
       ```(2) if the Commission finds that prohibition of, or 
     imposition of conditions or limitations on, the use of 
     agreements described in paragraph (1) is in the public 
     interest and for the protection of investors, promulgate 
     rules or regulations to establish such prohibitions, 
     conditions, or limitations.'.
       ``(b) Amendment to the Investment Advisers Act of 1940.--
     Section 205 of the Investment Advisers Act of 1940 (15 U.S.C. 
     80b-5) is amended by adding at the end the following:
       ```(f) Authority to Issue Rules Related to Mandatory 
     Predispute Arbitration.--The Commission shall--
       ```(1) conduct a rulemaking on the use of agreements that 
     require customers or clients of any investment adviser to 
     arbitrate any dispute between such customers or clients and 
     such investment adviser that arises under the securities 
     laws, as defined in section 3 of the Securities Exchange Act 
     of 1934 (15 U.S.C. 78c), or the rules of a self-regulatory 
     organization; and
       ```(2) if the Commission finds that prohibition of, or 
     imposition of conditions or limitations on, the use of 
     agreements described in paragraph (1) is in the public 
     interest and for the protection of investors, promulgate 
     rules or regulations to establish such prohibitions, 
     conditions, or limitations.'.''
       (b) Section 1028.--Section 1028 of this Act is amended to 
     read as follows:

     ``SEC. 1028. AUTHORITY TO RESTRICT MANDATORY PRE-DISPUTE 
                   ARBITRATION.

       ``(a) Study and Report.--Not later than 1 year after the 
     designated transfer date, the Bureau shall conduct a study 
     and submit a report to Congress concerning the use of 
     agreements providing for arbitration of any future dispute 
     between covered persons and consumers in connection with the 
     offering or providing of consumer financial products or 
     services.
       ``(b) Further Authority.--The Bureau, by regulation, may 
     prohibit or impose conditions or limitations on the use of an 
     agreement between a covered person and a consumer for a 
     consumer financial product or service providing for 
     arbitration of any future dispute between the parties, if the 
     Bureau determines that such a prohibition or imposition of 
     conditions or limitations is in the public interest and for 
     the protection of consumers. The determination of the Bureau 
     under this subsection shall be consistent with the study 
     conducted under subsection (a).
       ``(c) Limitation.--The authority described in subsection 
     (b) may not be construed to prohibit or restrict a consumer 
     from entering into a voluntary arbitration agreement with a 
     covered person after a dispute has arisen.
       ``(d) Rule of Construction.--No other provision of Federal 
     law shall be construed to preempt or otherwise affect the 
     applicability of any regulation prescribed by the Bureau 
     under subsection (b).''.
                                 ______
                                 
  SA 4068. Mr. LEAHY submitted an amendment intended to be proposed to 
amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for himself and 
Mrs. Lincoln)) to the bill S. 3217, to promote the financial stability 
of the United States by improving accountability and transparency in 
the financial system, to end ``too big to fail'', to protect the 
American taxpayer by ending bailouts, to protect consumers from abusive 
financial services practices, and for other purposes; which was ordered 
to lie on the table; as follows:

       On page 89, after line 23, insert the following:
       (5) Hart-scott-rodino filing requirement.--Solely for 
     purposes of section 7A(c)(8) of the Clayton Act (15 U.S.C. 
     18a(c)(8)), the transactions subject to the requirements of 
     paragraph (1) shall be treated as if Board of Governors 
     approval is not required.

[[Page 8423]]

       On page 153, line 4, strike ``and''.
       On page 153, line 16, strike the period and insert ``; 
     and''.
       On page 153, after line 16, insert the following:

       (IV) if the Secretary, in consultation with the Chairman of 
     the Board of Governors, has found that the Corporation must 
     act immediately with regard to the covered financial company 
     (including any covered financial company that is an insurance 
     company) to preserve financial stability, the approval and 
     prior notification referred to in subclauses (II) and (III) 
     shall not be required and the transaction may be consummated 
     immediately by the Corporation, provided that nothing in this 
     subclause shall otherwise modify, impair, or supersede the 
     operation of any of the antitrust laws (as defined in 
     subsection (a) of the first section of the Clayton Act, 
     except that such term includes section 5 of the Federal Trade 
     Commission Act to the extent that such section relates to 
     unfair methods of competition).

       On page 264, strike line 6, and insert the following:
       Review.--
       (A) In general.--If a transaction involving the merger or
       On page 264, after line 25, insert the following:
       (B) Emergency.--If the Secretary, in consultation with the 
     Chairman of the Board of Governors, has found that the 
     Corporation must act immediately with regard to the bridge 
     financial company (including any bridge financial company 
     that is an insurance company) to preserve financial 
     stability, the approval and prior notification referred to in 
     subparagraph (A) shall not be required and the transaction 
     may be consummated immediately by the Corporation. The 
     preceding sentence shall not otherwise modify, impair, or 
     supersede the operation of any of the antitrust laws (as 
     defined in subsection (a) of the first section of the Clayton 
     Act, except that such term includes section 5 of the Federal 
     Trade Commission Act to the extent that such section relates 
     to unfair methods of competition).
       On page 296, after line 15, insert the following:
       (d) Antitrust Savings Clause.--Unless otherwise provided, 
     nothing in this Act, or any amendment made by this Act, shall 
     be construed to modify, impair, or supersede the operation of 
     any of the antitrust laws. For the purposes of this Act, the 
     term ``antitrust laws'' has the meaning given such term in 
     subsection (a) of the first section of the Clayton Act, 
     except that such term includes section 5 of the Federal Trade 
     Commission Act to the extent that such section 5 applies to 
     unfair methods of competition.
       On page 441, after line 12, insert the following:
       ``(iii) Hart-scott-rodino filing requirement.--Solely for 
     purposes of section 7A(c)(8) of the Clayton Act (15 U.S.C. 
     18a(c)(8)), the transactions subject to the requirements of 
     this paragraph shall be treated as if Board of Governors 
     approval is not required.''.
       On page 567, lines 7 and 8, strike ``, subject to the 
     requirements of section 5(b)''.
                                 ______
                                 
  SA 4069. Mrs. GILLIBRAND submitted an amendment intended to be 
proposed to amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for 
himself and Mrs. Lincoln)) to the bill S. 3217, to promote the 
financial stability of the United States by improving accountability 
and transparency in the financial system, to end ``too big to fail'', 
to protect the American taxpayer by ending bailouts, to protect 
consumers from abusive financial services practices, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 1219, line 25, strike the second period and insert 
     the following: ``.
       (7) Study and report on paper statement charges.--Not later 
     than 6 months after the designated transfer date, the Office 
     of Financial Literacy shall submit a report to Congress--
       (A) on the charging of fees for paper copies of statements 
     related to a consumer financial product or service by covered 
     persons under this title;
       (B) on the charging of fees for the use of paper checks as 
     payment to financial institutions;
       (C) on the impact of the imposition of such fees on 
     financial literacy, particularly among--
       (i) the elderly;
       (ii) low-income individuals; and
       (iii) individuals that lack computer access; and
       (D) that includes recommendations on how to ensure that the 
     individuals described in subparagraph (C) are not negatively 
     impacted by the imposition of fees to receive paper 
     statements, including recommendations--
       (i) on whether covered persons under this title should be--

       (I) prohibited from charging fees for paper statements;
       (II) prohibited from automatically enrolling individuals in 
     e-statement or other electronic delivery programs without the 
     express consent of the individual, in the manner described in 
     section 101(c)(1) of the Electronic Signatures in Global and 
     National Commerce Act (15 U.S.C. 7001(c)(1)); and
       (III) prevented from charging fees for the use of paper 
     checks as payment; and

       (ii) for proposed regulatory or statutory changes to ensure 
     that such individuals are able to access paper copies of 
     financial statements without fees or unnecessary hindrance.
                                 ______
                                 
  SA 4070. Mr. CORNYN submitted an amendment intended to be proposed to 
amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for himself and 
Mrs. Lincoln)) to the bill S. 3217, to promote the financial stability 
of the United States by improving accountability and transparency in 
the financial system, to end ``too big to fail'', to protect the 
American taxpayer by ending bailouts, to protect consumers from abusive 
financial services practices, and for other purposes; which was ordered 
to lie on the table; as follows:

       On page 1304, strike line 10 and all that follows through 
     page 1310, line 16, and insert the following:

     SEC. 1036. PROHIBITED ACTS.

       It shall be unlawful for any covered person--
       (1) to--
       (A) advertise, market, offer, or sell a consumer financial 
     product or service not in conformity with this title or 
     applicable rules or orders issued by the Bureau;
       (B) enforce, or attempt to enforce, any agreement with a 
     consumer (including any term or change in terms in respect of 
     such agreement), or impose, or attempt to impose, any fee or 
     charge on a consumer in connection with a consumer financial 
     product or service that is not in conformity with this title 
     or applicable rules or orders issued by the Bureau; or
       (C) engage in any unfair, deceptive, or abusive act or 
     practice that violates this title or applicable rules or 
     orders issued by the Bureau,

     except that no person shall be held to have violated this 
     paragraph solely by virtue of providing or selling time or 
     space to a person placing an advertisement;
       (2) to fail or refuse, as required by Federal consumer 
     financial law, or any rule or order issued by the Bureau 
     thereunder--
       (A) to permit access to or copying of records;
       (B) to establish or maintain records; or
       (C) to make reports or provide information to the Bureau; 
     or
       (3) knowingly or recklessly to provide substantial 
     assistance to another person in violation of the provisions 
     of section 1031, or any rule or order issued thereunder, and 
     notwithstanding any provision of this title, the provider of 
     such substantial assistance shall be deemed to be in 
     violation of that section to the same extent as the person to 
     whom such assistance is provided.

     SEC. 1037. EFFECTIVE DATE.

       This subtitle shall take effect on the designated transfer 
     date.

                 Subtitle D--Preservation of State Law

     SEC. 1041. RELATION TO STATE LAW.

       (a) In General.--
       (1) Rule of construction.--This title, other than sections 
     1044 through 1048, may not be construed as annulling, 
     altering, or affecting, or exempting any person subject to 
     the provisions of this title from complying with, the 
     statutes, regulations, orders, or interpretations in effect 
     in any State, except to the extent that any such provision of 
     law is inconsistent with the provisions of this title, and 
     then only to the extent of the inconsistency.
       (2) Greater protection under state law.--For purposes of 
     this subsection, a statute, regulation, order, or 
     interpretation in effect in any State is not inconsistent 
     with the provisions of this title if the protection that such 
     statute, regulation, order, or interpretation affords to 
     consumers is greater than the protection provided under this 
     title. A determination regarding whether a statute, 
     regulation, order, or interpretation in effect in any State 
     is inconsistent with the provisions of this title may be made 
     by the Bureau on its own motion or in response to a 
     nonfrivolous petition initiated by any interested person.
       (b) Relation to Other Provisions of Enumerated Consumer 
     Laws That Relate to State Law.--No provision of this title, 
     except as provided in section 1083, shall be construed as 
     modifying, limiting, or superseding the operation of any 
     provision of an enumerated consumer law that relates to the 
     application of a law in effect in any State with respect to 
     such Federal law.
       (c) Additional Consumer Protection Regulations in Response 
     to State Action.--
       (1) Notice of proposed rule required.--The Bureau shall 
     issue a notice of proposed rulemaking whenever a majority of 
     the States has enacted a resolution in support of the 
     establishment or modification of a consumer protection 
     regulation by the Bureau.

[[Page 8424]]

       (2) Bureau considerations required for issuance of final 
     regulation.--Before prescribing a final regulation based upon 
     a notice issued pursuant to paragraph (1), the Bureau shall 
     take into account whether--
       (A) the proposed regulation would afford greater protection 
     to consumers than any existing regulation;
       (B) the intended benefits of the proposed regulation for 
     consumers would outweigh any increased costs or 
     inconveniences for consumers, and would not discriminate 
     unfairly against any category or class of consumers; and
       (C) a Federal banking agency has advised that the proposed 
     regulation is likely to present an unacceptable safety and 
     soundness risk to insured depository institutions.
       (3) Explanation of considerations.--The Bureau--
       (A) shall include a discussion of the considerations 
     required in paragraph (2) in the Federal Register notice of a 
     final regulation prescribed pursuant to this subsection; and
       (B) whenever the Bureau determines not to prescribe a final 
     regulation, shall publish an explanation of such 
     determination in the Federal Register, and provide a copy of 
     such explanation to each State that enacted a resolution in 
     support of the proposed regulation, the Committee on 
     Financial Services of the House of Representatives, and the 
     Committee on Banking, Housing, and Urban Affairs of the 
     Senate.
       (4) Reservation of authority.--No provision of this 
     subsection shall be construed as limiting or restricting the 
     authority of the Bureau to enhance consumer protection 
     standards established pursuant to this title in response to 
     its own motion or in response to a request by any other 
     interested person.
       (5) Rule of construction.--No provision of this subsection 
     shall be construed as exempting the Bureau from complying 
     with subchapter II of chapter 5 of title 5, United States 
     Code.
       (6) Definition.--For purposes of this subsection, the term 
     ``consumer protection regulation'' means a regulation that 
     the Bureau is authorized to prescribe under the Federal 
     consumer financial laws.

     SEC. 1042. PRESERVATION OF ENFORCEMENT POWERS OF STATES.

       (a) In General.--
       (1) Action by state.--The attorney general (or the 
     equivalent thereof) of any State may bring a civil action in 
     the name of such State, as parens patriae on behalf of 
     natural persons residing in such State, in any district court 
     of the United States in that State or in State court having 
     jurisdiction over the defendant, to enforce provisions of 
     this title or regulations issued thereunder and to secure 
     remedies under provisions of this title or remedies otherwise 
     provided under other law. A State regulator may bring a civil 
     action or other appropriate proceeding to enforce the 
     provisions of this title or regulations issued thereunder 
     with respect to any entity that is State-chartered, 
     incorporated, licensed, or otherwise authorized to do 
     business under State law, and to secure remedies under 
     provisions of this title or remedies otherwise provided under 
     other provisions of law with respect to a State-chartered 
     entity.
       (2) Rule of construction.--Except as provided in paragraph 
     (3), no provision of this title shall be construed as 
     modifying, limiting, or superseding the operation of any 
     provision of an enumerated consumer law that relates to the 
     authority of a State attorney general or State regulator to 
     enforce such Federal law.
       (3) Fee structure.--
       (A) In general.--Neither an attorney general of a State nor 
     a State regulator may enter into a contingency fee agreement 
     for legal services relating to a civil action or other 
     proceeding under this section.
       (B) Definition.--For purposes of this paragraph, the term 
     ``contingency fee agreement'' means a contract or other 
     agreement to provide services under which the amount or the 
     payment of the fee for the services is contingent in whole or 
     in part on the outcome of the matter for which the services 
     were obtained.
                                 ______
                                 
  SA 4071.  Mr. CARPER (for himself, Mr. Bayh, Mr. Johnson, and Mr. 
Warner) submitted an amendment intended to be proposed to amendment SA 
3739 proposed by Mr. Reid (for Mr. Dodd (for himself and Mrs. Lincoln)) 
to the bill S. 3217, to promote the financial stability of the United 
States by improving accountability and transparency in the financial 
system, to end ``too big to fail'', to protect the American taxpayer by 
ending bailouts, to protect consumers from abusive financial services 
practices, and for other purposes; as follows:

       On page 1309, strike line 15, and all that follows through 
     page 1325, line 20 and insert the following:

     SEC. 1042. PRESERVATION OF ENFORCEMENT POWERS OF STATES.

       (a) In General.--
       (1) Action by state.--Except as provided in paragraph (2), 
     the attorney general (or the equivalent thereof) of any State 
     may bring a civil action in the name of such State in any 
     district court of the United States in that State or in State 
     court that is located in that State and that has jurisdiction 
     over the defendant, to enforce provisions of this title or 
     regulations issued under this title, and to secure remedies 
     under provisions of this title or remedies otherwise provided 
     under other law. A State regulator may bring a civil action 
     or other appropriate proceeding to enforce the provisions of 
     this title or regulations issued under this title with 
     respect to any entity that is State-chartered, incorporated, 
     licensed, or otherwise authorized to do business under State 
     law (except as provided in paragraph (2)), and to secure 
     remedies under provisions of this title or remedies otherwise 
     provided under other provisions of law with respect to such 
     an entity.
       (2) Action by state against national bank or federal 
     savings association to enforce rules.--
       (A) In general.--Except as permitted under subparagraph 
     (B), the attorney general (or equivalent thereof) of any 
     State may not bring a civil action in the name of such State 
     against a national bank or Federal savings association with 
     respect to an act or omission that would be a violation of a 
     provision of this title.
       (B) Enforcement of rules permitted.--The attorney general 
     (or the equivalent thereof) of any State may bring a civil 
     action in the name of such State against a national bank or 
     Federal savings association in any district court of the 
     United States in the State or in State court that is located 
     in that State and that has jurisdiction over the defendant to 
     enforce a regulation prescribed by the Bureau under a 
     provision of this title and to secure remedies under 
     provisions of this title or remedies otherwise provided under 
     other law.
       (3) Rule of construction.--No provision of this title shall 
     be construed as modifying, limiting, or superseding the 
     operation of any provision of an enumerated consumer law that 
     relates to the authority of a State attorney general or State 
     regulator to enforce such Federal law.
       (b) Consultation Required.--
       (1) Notice.--
       (A) In general.--Before initiating any action in a court or 
     other administrative or regulatory proceeding against any 
     covered person as authorized by subsection (a) to enforce any 
     provision of this title, including any regulation prescribed 
     by the Bureau under this title, a State attorney general or 
     State regulator shall timely provide a copy of the complete 
     complaint to be filed and written notice describing such 
     action or proceeding to the Bureau and the prudential 
     regulator, if any, or the designee thereof.
       (B) Emergency action.--If prior notice is not practicable, 
     the State attorney general or State regulator shall provide a 
     copy of the complete complaint and the notice to the Bureau 
     and the prudential regulator, if any, immediately upon 
     instituting the action or proceeding.
       (C) Contents of notice.--The notification required under 
     this paragraph shall, at a minimum, describe--
       (i) the identity of the parties;
       (ii) the alleged facts underlying the proceeding; and
       (iii) whether there may be a need to coordinate the 
     prosecution of the proceeding so as not to interfere with any 
     action, including any rulemaking, undertaken by the Bureau, a 
     prudential regulator, or another Federal agency.
       (2) Bureau response.--In any action described in paragraph 
     (1), the Bureau may--
       (A) intervene in the action as a party;
       (B) upon intervening--
       (i) remove the action to the appropriate United States 
     district court, if the action was not originally brought 
     there; and
       (ii) be heard on all matters arising in the action; and
       (C) appeal any order or judgment, to the same extent as any 
     other party in the proceeding may.
       (c) Regulations.--The Bureau shall prescribe regulations to 
     implement the requirements of this section and, from time to 
     time, provide guidance in order to further coordinate actions 
     with the State attorneys general and other regulators.
       (d) Preservation of State Authority.--
       (1) State claims.--No provision of this section shall be 
     construed as altering, limiting, or affecting the authority 
     of a State attorney general or any other regulatory or 
     enforcement agency or authority to bring an action or other 
     regulatory proceeding arising solely under the law in effect 
     in that State.
       (2) State securities regulators.--No provision of this 
     title shall be construed as altering, limiting, or affecting 
     the authority of a State securities commission (or any agency 
     or office performing like functions) under State law to adopt 
     rules, initiate enforcement proceedings, or take any other 
     action with respect to a person regulated by such commission 
     or authority.
       (3) State insurance regulators.--No provision of this title 
     shall be construed as altering, limiting, or affecting the 
     authority of a State insurance commission or State insurance 
     regulator under State law to adopt rules, initiate 
     enforcement proceedings, or take any other action with 
     respect to a person regulated by such commission or 
     regulator.

[[Page 8425]]



     SEC. 1043. PRESERVATION OF EXISTING CONTRACTS.

       This title, and regulations, orders, guidance, and 
     interpretations prescribed, issued, or established by the 
     Bureau, shall not be construed to alter or affect the 
     applicability of any regulation, order, guidance, or 
     interpretation prescribed, issued, and established by the 
     Comptroller of the Currency or the Director of the Office of 
     Thrift Supervision regarding the applicability of State law 
     under Federal banking law to any contract entered into on or 
     before the date of enactment of this Act, by national banks, 
     Federal savings associations, or subsidiaries thereof that 
     are regulated and supervised by the Comptroller of the 
     Currency or the Director of the Office of Thrift Supervision, 
     respectively.

     SEC. 1044. STATE LAW PREEMPTION STANDARDS FOR NATIONAL BANKS 
                   AND SUBSIDIARIES CLARIFIED.

       (a) In General.--Chapter one of title LXII of the Revised 
     Statutes of the United States (12 U.S.C. 21 et seq.) is 
     amended by inserting after section 5136B the following new 
     section:

     ``SEC. 5136C. STATE LAW PREEMPTION STANDARDS FOR NATIONAL 
                   BANKS AND SUBSIDIARIES CLARIFIED.

       ``(a) Definitions.--For purposes of this section, the 
     following definitions shall apply:
       ``(1) National bank.--The term `national bank' includes--
       ``(A) any bank organized under the laws of the United 
     States; and
       ``(B) any Federal branch established in accordance with the 
     International Banking Act of 1978.
       ``(2) State consumer financial laws.--The term `State 
     consumer financial law' means a State law that does not 
     directly or indirectly discriminate against national banks 
     and that directly and specifically regulates the manner, 
     content, or terms and conditions of any financial transaction 
     (as may be authorized for national banks to engage in), or 
     any account related thereto, with respect to a consumer.
       ``(3) Other definitions.--The terms `affiliate', 
     `subsidiary', `includes', and `including' have the same 
     meanings as in section 3 of the Federal Deposit Insurance 
     Act.
       ``(b) Preemption Standard.--
       ``(1) In general.--State consumer financial laws are 
     preempted, only if--
       ``(A) application of a State consumer financial law would 
     have a discriminatory effect on national banks, in comparison 
     with the effect of the law on a bank chartered by that State;
       ``(B) the State consumer financial law is preempted in 
     accordance with the legal standard of the decision of the 
     Supreme Court of the United States in Barnett Bank of Marion 
     County, N.A. v. Nelson, Florida Insurance Commissioner, et 
     al., 517 U.S. 25 (1996), and any preemption determination 
     under this subparagraph may be made by a court, or by 
     regulation or order of the Comptroller of the Currency on a 
     case-by-case basis, in accordance with applicable law; or
       ``(C) the State consumer financial law is preempted by a 
     provision of Federal law other than this title.
       ``(2) Savings clause.--This title and section 24 of the 
     Federal Reserve Act (12 U.S.C. 371) do not preempt, annul, or 
     affect the applicability of any State law to any subsidiary 
     or affiliate of a national bank (other than a subsidiary or 
     affiliate that is chartered as a national bank).
       ``(3) Case-by-case basis.--
       ``(A) Definition.--As used in this section the term `case-
     by-case basis' refers to a determination pursuant to this 
     section made by the Comptroller concerning the impact of a 
     particular State consumer financial law on any national bank 
     that is subject to that law, or the law of any other State 
     with substantively equivalent terms.
       ``(B) Consultation.--When making a determination on a case-
     by-case basis that a State consumer financial law of another 
     State has substantively equivalent terms as one that the 
     Comptroller is preempting, the Comptroller shall first 
     consult with the Bureau of Consumer Financial Protection and 
     shall take the views of the Bureau into account when making 
     the determination.
       ``(4) Rule of construction.--This title does not occupy the 
     field in any area of State law.
       ``(5) Standards of review.--
       ``(A) Preemption.--A court reviewing any determinations 
     made by the Comptroller regarding preemption of a State law 
     by this title or section 24 of the Federal Reserve Act (12 
     U.S.C. 371) shall assess the validity of such determinations, 
     depending upon the thoroughness evident in the consideration 
     of the agency, the validity of the reasoning of the agency, 
     the consistency with other valid determinations made by the 
     agency, and other factors which the court finds persuasive 
     and relevant to its decision.
       ``(B) Savings clause.--Except as provided in subparagraph 
     (A), nothing in this section shall affect the deference that 
     a court may afford to the Comptroller in making 
     determinations regarding the meaning or interpretation of 
     title LXII of the Revised Statutes of the United States or 
     other Federal laws.
       ``(6) Comptroller determination not delegable.--Any 
     regulation, order, or determination made by the Comptroller 
     of the Currency under paragraph (1)(B) shall be made by the 
     Comptroller, and shall not be delegable to another officer or 
     employee of the Comptroller of the Currency.
       ``(c) Substantial Evidence.--No regulation or order of the 
     Comptroller of the Currency prescribed under subsection 
     (b)(1)(B), shall be interpreted or applied so as to 
     invalidate, or otherwise declare inapplicable to a national 
     bank, the provision of the State consumer financial law, 
     unless substantial evidence, made on the record of the 
     proceeding, supports the specific finding regarding the 
     preemption of such provision in accordance with the legal 
     standard of the decision of the Supreme Court of the United 
     States in Barnett Bank of Marion County, N.A. v. Nelson, 
     Florida Insurance Commissioner, et al., 517 U.S. 25 (1996).
       ``(d) Periodic Review of Preemption Determinations.--
       ``(1) In general.--The Comptroller of the Currency shall 
     periodically conduct a review, through notice and public 
     comment, of each determination that a provision of Federal 
     law preempts a State consumer financial law. The agency shall 
     conduct such review within the 5-year period after 
     prescribing or otherwise issuing such determination, and at 
     least once during each 5-year period thereafter. After 
     conducting the review of, and inspecting the comments made 
     on, the determination, the agency shall publish a notice in 
     the Federal Register announcing the decision to continue or 
     rescind the determination or a proposal to amend the 
     determination. Any such notice of a proposal to amend a 
     determination and the subsequent resolution of such proposal 
     shall comply with the procedures set forth in subsections (a) 
     and (b) of section 5244 of the Revised Statutes of the United 
     States (12 U.S.C. 43 (a), (b)).
       ``(2) Reports to congress.--At the time of issuing a review 
     conducted under paragraph (1), the Comptroller of the 
     Currency shall submit a report regarding such review to the 
     Committee on Financial Services of the House of 
     Representatives and the Committee on Banking, Housing, and 
     Urban Affairs of the Senate. The report submitted to the 
     respective committees shall address whether the agency 
     intends to continue, rescind, or propose to amend any 
     determination that a provision of Federal law preempts a 
     State consumer financial law, and the reasons therefor.
       ``(e) Application of State Consumer Financial Law to 
     Subsidiaries and Affiliates.--Notwithstanding any provision 
     of this title or section 24 of Federal Reserve Act (12 U.S.C. 
     371), a State consumer financial law shall apply to a 
     subsidiary or affiliate of a national bank (other than a 
     subsidiary or affiliate that is chartered as a national bank) 
     to the same extent that the State consumer financial law 
     applies to any person, corporation, or other entity subject 
     to such State law.
       ``(f) Preservation of Powers Related to Charging 
     Interest.--No provision of this title shall be construed as 
     altering or otherwise affecting the authority conferred by 
     section 5197 of the Revised Statutes of the United States (12 
     U.S.C. 85) for the charging of interest by a national bank at 
     the rate allowed by the laws of the State, territory, or 
     district where the bank is located, including with respect to 
     the meaning of `interest' under such provision.
       ``(g) Transparency of OCC Preemption Determinations.--The 
     Comptroller of the Currency shall publish and update no less 
     frequently than quarterly, a list of preemption 
     determinations by the Comptroller of the Currency then in 
     effect that identifies the activities and practices covered 
     by each determination and the requirements and constraints 
     determined to be preempted.''.
       (b) Clerical Amendment.--The table of sections for chapter 
     one of title LXII of the Revised Statutes of the United 
     States is amended by inserting after the item relating to 
     section 5136B the following new item:
       ``Sec. 5136C. State law preemption standards for national 
           banks and subsidiaries clarified.''.

     SEC. 1045. CLARIFICATION OF LAW APPLICABLE TO NONDEPOSITORY 
                   INSTITUTION SUBSIDIARIES.

       Section 5136C of the Revised Statutes of the United States 
     (as added by this subtitle) is amended by adding at the end 
     the following:
       ``(h) Clarification of Law Applicable to Nondepository 
     Institution Subsidiaries and Affiliates of National Banks.--
       ``(1) Definitions.--For purposes of this subsection, the 
     terms `depository institution', `subsidiary', and `affiliate' 
     have the same meanings as in section 3 of the Federal Deposit 
     Insurance Act.
       ``(2) Rule of construction.--No provision of this title or 
     section 24 of the Federal Reserve Act (12 U.S.C. 371) shall 
     be construed as preempting, annulling, or affecting the 
     applicability of State law to any subsidiary, affiliate, or 
     agent of a national bank (other than a subsidiary, affiliate, 
     or agent that is chartered as a national bank).''.

     SEC. 1046. STATE LAW PREEMPTION STANDARDS FOR FEDERAL SAVINGS 
                   ASSOCIATIONS AND SUBSIDIARIES CLARIFIED.

       (a) In General.--The Home Owners' Loan Act (12 U.S.C. 1461 
     et seq.) is amended by inserting after section 5 the 
     following new section:

[[Page 8426]]



     ``SEC. 6. STATE LAW PREEMPTION STANDARDS FOR FEDERAL SAVINGS 
                   ASSOCIATIONS CLARIFIED.

       ``(a) In General.--Any determination by a court or by the 
     Director or any successor officer or agency regarding the 
     relation of State law to a provision of this Act or any 
     regulation or order prescribed under this Act shall be made 
     in accordance with the laws and legal standards applicable to 
     national banks regarding the preemption of State law.
       ``(b) Principles of Conflict Preemption Applicable.--
     Notwithstanding the authorities granted under sections 4 and 
     5, this Act does not occupy the field in any area of State 
     law.''.
       (b) Clerical Amendment.--The table of sections for the Home 
     Owners' Loan Act (12 U.S.C. 1461 et seq.) is amended by 
     striking the item relating to section 6 and inserting the 
     following new item:
         ``Sec. 6. State law preemption standards for Federal 
           savings associations and subsidiaries clarified.''.

     SEC. 1047. VISITORIAL STANDARDS FOR NATIONAL BANKS AND 
                   SAVINGS ASSOCIATIONS.

       (a) National Banks.--Section 5136C of the Revised Statutes 
     of the United States (as added by this subtitle) is amended 
     by adding at the end the following:
       ``(i) Visitorial Powers.--
       ``(1) In general.--In accordance with the decision of the 
     Supreme Court of the United States in Cuomo v. Clearing House 
     Assn., L. L. C. (129 S. Ct. 2710 (2009)), no provision of 
     this title which relates to visitorial powers or otherwise 
     limits or restricts the visitorial authority to which any 
     national bank is subject shall be construed as limiting or 
     restricting the authority of any attorney general (or other 
     chief law enforcement officer) of any State to bring an 
     action against a national bank in a court of appropriate 
     jurisdiction to enforce an applicable law and to seek relief 
     as authorized by such law.
       ``(j) Enforcement Actions.--The ability of the Comptroller 
     of the Currency to bring an enforcement action under this 
     title or section 5 of the Federal Trade Commission Act does 
     not preclude any private party from enforcing rights granted 
     under Federal or State law in the courts.''.
       (b) Savings Associations.--Section 6 of the Home Owners' 
     Loan Act (as added by this title) is amended by adding at the 
     end the following:
       ``(c) Visitorial Powers.--The provisions of sections 
     5136C(i) of the Revised Statutes of the United States shall 
     apply to Federal savings associations, and any subsidiary 
     thereof, to the same extent and in the same manner as if such 
     savings associations, or subsidiaries thereof, were national 
     banks or subsidiaries of national banks, respectively.
                                 ______
                                 
  SA 4072. Mr. GRASSLEY (for himself and Mrs. McCaskill) submitted an 
amendment intended to be proposed to amendment SA 3739 proposed by Mr. 
Reid (for Mr. Dodd (for himself and Mrs. Lincoln)) to the bill S. 3217, 
to promote the financial stability of the United States by improving 
accountability and transparency in the financial system, to end ``too 
big to fail'', to protect the American taxpayer by ending bailouts, to 
protect consumers from abusive financial services practices, and for 
other purposes; as follows:

       Strike 989B, insert the following:

     SEC. 989B. DESIGNATED FEDERAL ENTITY INSPECTORS GENERAL 
                   INDEPENDENCE.

       Section 8G of the Inspector General Act of 1978 (5 U.S.C. 
     App.) is amended--
       (1) in subsection (a)(4)--
       (A) in the matter preceding subparagraph (A), by inserting 
     ``the board or commission of the designated Federal entity, 
     or in the event the designated Federal entity does not have a 
     board or commission,'' after ``means'';
       (B) in subparagraph (A), by striking ``and'' after the 
     semicolon; and
       (C) by adding after subparagraph (B) the following:
       ``(C) with respect to the Federal Labor Relations 
     Authority, such term means the members of the Authority 
     (described under section 7104 of title 5, United States 
     Code);
       ``(D) with respect to the National Archives and Records 
     Administration, such term means the Archivist of the United 
     States;
       ``(E) with respect to the National Credit Union 
     Administration, such term means the National Credit Union 
     Administration Board (described under section 102 of the 
     Federal Credit Union Act (12 U.S.C. 1752a);
       ``(F) with respect to the National Endowment of the Arts, 
     such term means the National Council on the Arts;
       ``(G) with respect to the National Endowment for the 
     Humanities, such term means the National Council on the 
     Humanities; and
       ``(H) with respect to the Peace Corps, such term means the 
     Director of the Peace Corps;''; and
       (2) in subsection (h), by inserting ``if the designated 
     Federal entity is not a board or commission, include'' after 
     ``designated Federal entities and''.

     SEC. 989C. STRENGTHENING INSPECTOR GENERAL ACCOUNTABILITY.

       Section 5(a) of the Inspector General Act of 1978 (5 U.S.C. 
     App.) is amended--
       (1) in paragraph (12), by striking ``and'' after the 
     semicolon;
       (2) in paragraph (13), by striking the period and inserting 
     a semicolon; and
       (3) by adding at the end the following:
       ``(14)(A) an appendix containing the results of any peer 
     review conducted by another Office of Inspector General 
     during the reporting period; or
       ``(B) if no peer review was conducted within that reporting 
     period, a statement identifying the date of the last peer 
     review conducted by another Office of Inspector General;
       ``(15) a list of any outstanding recommendations from any 
     peer review conducted by another Office of Inspector General 
     that have not been fully implemented, including a statement 
     describing the status of the implementation and why 
     implementation is not complete; and
       ``(16) a list of any peer reviews conducted by the 
     Inspector General of another Office of the Inspector General 
     during the reporting period, including a list of any 
     outstanding recommendations made from any previous peer 
     review (including any peer review conducted before the 
     reporting period) that remain outstanding or have not been 
     fully implemented.''.

     SEC. 989D. REMOVAL OF INSPECTORS GENERAL OF DESIGNATED 
                   FEDERAL ENTITIES.

       Section 8G(e) of the Inspector General Act of 1978 (5 
     U.S.C. App.) is amended--
       (1) by redesignating the sentences following ``(e)'' as 
     paragraph (2); and
       (2) by striking ``(e)'' and inserting the following:
       ``(e)(1) In the case of a designated Federal entity for 
     which a board or commission is the head of the designated 
     Federal entity, a removal under this subsection may only be 
     made upon the written concurrence of a \2/3\ majority of the 
     board or commission.''.

     SEC. 989E. ADDITIONAL OVERSIGHT OF FINANCIAL REGULATORY 
                   SYSTEM.

       (a) Council of Inspectors General on Financial Oversight.--
       (1) Establishment and membership.--There is established a 
     Council of Inspectors General on Financial Oversight (in this 
     section referred to as the ``Council of Inspectors General'') 
     chaired by the Inspector General of the Department of the 
     Treasury and composed of the inspectors general of the 
     following:
       (A) The Board of Governors of the Federal Reserve System.
       (B) The Commodity Futures Trading Commission.
       (C) The Department of Housing and Urban Development.
       (D) The Department of the Treasury.
       (E) The Federal Deposit Insurance Corporation.
       (F) The Federal Housing Finance Agency.
       (G) The National Credit Union Administration.
       (H) The Securities and Exchange Commission.
       (I) The Troubled Asset Relief Program (until the 
     termination of the authority of the Special Inspector General 
     for such program under section 121(k) of the Emergency 
     Economic Stabilization Act of 2008 (12 U.S.C. 5231(k))).
       (2) Duties.--
       (A) Meetings.--The Council of Inspectors General shall meet 
     not less than once each quarter, or more frequently if the 
     chair considers it appropriate, to facilitate the sharing of 
     information among inspectors general and to discuss the 
     ongoing work of each inspector general who is a member of the 
     Council of Inspectors General, with a focus on concerns that 
     may apply to the broader financial sector and ways to improve 
     financial oversight.
       (B) Annual report.--Each year the Council of Inspectors 
     General shall submit to the Council and to Congress a report 
     including--
       (i) for each inspector general who is a member of the 
     Council of Inspectors General, a section within the exclusive 
     editorial control of such inspector general that highlights 
     the concerns and recommendations of such inspector general in 
     such inspector general's ongoing and completed work, with a 
     focus on issues that may apply to the broader financial 
     sector; and
       (ii) a summary of the general observations of the Council 
     of Inspectors General based on the views expressed by each 
     inspector general as required by clause (i), with a focus on 
     measures that should be taken to improve financial oversight.
       (3) Working groups to evaluate council.--
       (A) Convening a working group.--The Council of Inspectors 
     General may, by majority vote, convene a Council of 
     Inspectors General Working Group to evaluate the 
     effectiveness and internal operations of the Council.
       (B) Personnel and resources.--The inspectors general who 
     are members of the Council of Inspectors General may detail 
     staff and resources to a Council of Inspectors General 
     Working Group established under this paragraph to enable it 
     to carry out its duties.
       (C) Reports.--A Council of Inspectors General Working Group 
     established under this paragraph shall submit regular reports 
     to

[[Page 8427]]

     the Council and to Congress on its evaluations pursuant to 
     this paragraph.
       (b) Response to Report by Council.--The Council shall 
     respond to the concerns raised in the report of the Council 
     of Inspectors General under subsection (a)(2)(B) for such 
     year.
                                 ______
                                 
  SA 4073. Mr. ENZI (for himself and Mr. Shelby) submitted an amendment 
intended to be proposed to amendment SA 3739 proposed by Mr. Reid (for 
Mr. Dodd (for himself and Mrs. Lincoln)) to the bill S. 3217, to 
promote the financial stability of the United States by improving 
accountability and transparency in the financial system, to end ``too 
big to fail'', to protect the American taxpayer by ending bailouts, to 
protect consumers from abusive financial services practices, and for 
other purposes; which was ordered to lie on the table; as follows:

       On page 1290, line 4, strike ``respectively.'' insert the 
     following: ``respectively.
       (s) Consumer Privacy.--Notwithstanding any other provision 
     of this Act, the Bureau may not investigate an individual 
     transaction to which a consumer is a party without the 
     written permission of the consumer.
                                 ______
                                 
  SA 4074. Mr. KOHL submitted an amendment intended to be proposed to 
amendment SA 3962 submitted by Mr. Merkley (for himself, Ms. Klobuchar, 
Mr. Schumer, Ms. Snowe, Mr. Brown of Massachusetts, Mr. Begich, Mrs. 
Boxer, Mr. Dodd, Mr. Kerry, Mr. Franken, and Mr. Levin) to the 
amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for himself and 
Mrs. Lincoln)) to the bill S. 3217, to promote the financial stability 
of the United States by improving accountability and transparency in 
the financial system, to end ``too big to fail'', to protect the 
American taxpayer by ending bailouts, to protect consumers from abusive 
financial services practices, and for other purposes; which was ordered 
to lie on the table; as follows:

       On page 9, line 7, insert ``private mortgage insurance (as 
     defined in section 2 of the Homeowners Protection Act of 1998 
     (12 U.S.C. 4901)) and'' after ``premium for''.
                                 ______
                                 
  SA 4075. Ms. LANDRIEU (for herself, Mr. Dodd, and Mr. Kerry) 
submitted an amendment intended to be proposed by her to the bill S. 
3217, to promote the financial stability of the United States by 
improving accountability and transparency in the financial system, to 
end ``too big to fail'', to protect the American taxpayer by ending 
bailouts, to protect consumers from abusive financial services 
practices, and for other purposes; which was ordered to lie on the 
table; as follows:

       At the end of subtitle A of title X, add the following:

     SEC. __. SMALL BUSINESS CONSULTATION.

       (a) Small Business Advisory Board.--
       (1) Establishment required.--The Director shall establish a 
     Small Business Advisory Board, which shall be responsible for 
     advising and consulting with the Bureau regarding the effects 
     of actions by the Bureau on small businesses. The Small 
     Business Advisory Board may provide information on emerging 
     practices in consumer financial products or services, 
     including regional trends, and other matters of interest to 
     small businesses.
       (2) Membership.--In appointing the members of the Small 
     Business Advisory Board, the Director shall seek 
     representation of the interests of small businesses operating 
     in various markets for consumer financial products and 
     services, including depository institutions, credit unions, 
     and non-depository institutions.
       (3) Meetings.--The Small Business Advisory Board shall meet 
     from time to time, at the call of the Director, but not less 
     frequently than 4 times in each year.
       (4) Compensation and travel expenses.--Members of the Small 
     Business Advisory Board who are not full time employees of 
     the United States shall--
       (A) be entitled to receive compensation at a rate fixed by 
     the Director while attending meetings of the Small Business 
     Advisory Board, including travel time; and
       (B) be allowed travel expenses, including transportation 
     and subsistence, while away from their homes or regular 
     places of business.
       (b) Consideration of Impact on Small Businesses.--
       (1) Analysis.--When conducting an initial regulatory 
     flexibility analysis or final regulatory flexibility 
     analysis, as required under chapter 6 of part I of title 5, 
     United States Code (commonly referred to as the ``Regulatory 
     Flexibility Act'') regarding compliance burden on small 
     entities, the Bureau shall provide a description of any 
     increase in the cost of credit to small entities projected as 
     a result of the proposed or final rule, as applicable, and 
     any significant alternatives to the proposed or final rule 
     which would accomplish the stated objectives of applicable 
     statutes and which would minimize any increase in the cost of 
     credit to small entities.
       (2) Review panels.--
       (A) In general.--If the Bureau prepares an initial 
     regulatory flexibility analysis for a proposed rule, the 
     Bureau, after publishing notice of the proposed rulemaking, 
     shall follow the procedures specified in section 609(b) of 
     title 5, United States Code, as if the Bureau were a covered 
     agency.
       (B) Consideration of review panel report.--The Bureau shall 
     consider the report of the review panel issued under this 
     paragraph and include in the adopting release of the final 
     rule a description of the basis for any determination by the 
     Bureau concerning any issues raised by the panel and any 
     issue concerning the cost of credit to small entities, as 
     required in paragraph (1).
       (C) Deadline.--Notwithstanding any other provision of 
     chapter 6 of part I of title 5, United States Code, the 
     report of the review panel shall be submitted not later than 
     90 days after the date on which the Bureau notifies the Chief 
     Counsel of Advocacy of the Small Business Administration 
     concerning the proposed rule, and the Bureau may proceed with 
     its rulemaking if such report is not timely submitted.
                                 ______
                                 
  SA 4076. Mr. REED (for himself and Mr. Akaka) submitted an amendment 
intended to be proposed to amendment SA 3739 proposed by Mr. Reid (for 
Mr. Dodd (for himself and Mrs. Lincoln)) to the bill S. 3217, to 
promote the financial stability of the United States by improving 
accountability and transparency in the financial system, to end ``too 
big to fail'', to protect the American taxpayer by ending bailouts, to 
protect consumers from abusive financial services practices, and for 
other purposes; which was ordered to lie on the table; as follows:

       On page 1455, after line 25, insert the following:

     SEC. 1077. OVERSIGHT OF EFFORTS TO REDUCE MORTGAGE DEFAULTS 
                   AND FORECLOSURES.

       (a) Definitions.--In this section--
       (1) the term ``heads of appropriate agencies'' means the 
     Secretary of the Treasury, Comptroller of the Currency, the 
     Board of Governors, the Corporation, the National Credit 
     Union Administration, the Council, the Director of the 
     Bureau, the Office of Financial Research, the Federal Housing 
     Finance Agency, and a representative of State banking 
     regulators selected by the Secretary;
       (2) the term ``mortgagee'' means--
       (A) an original lender under a mortgage or the holder of a 
     residential mortgage at the time at which that mortgage 
     transaction is consummated;
       (B) any affiliate, agent, subsidiary, successor, or 
     assignee of an original lender under a mortgage or the holder 
     of a residential mortgage at the time at which that mortgage 
     transaction is consummated;
       (C) any servicer of a mortgage; and
       (D) any subsequent purchaser, trustee, or transferee of any 
     mortgage or credit instrument issued by an original lender;
       (3) the term ``Secretary'' means the Secretary of Housing 
     and Urban Development;
       (4) the term ``servicer'' means the person or entity 
     responsible for servicing of a loan (including the person or 
     entity who makes or holds a loan if such person or entity 
     also services the loan); and
       (5) the term ``servicing'' has the meaning given the term 
     in section 6(i) of the Real Estate Settlement Procedures Act 
     of 1974 (12 U.S.C. 2605(i)).
       (b) Monitoring of Home Loans.--
       (1) In general.--The Secretary, in consultation with the 
     heads of appropriate agencies, shall develop and implement a 
     plan to monitor--
       (A) conditions and trends in homeownership and the mortgage 
     industry, in order to predict trends in foreclosures and to 
     better understand other critical aspects of the mortgage 
     market; and
       (B) the effectiveness of public efforts to reduce mortgage 
     defaults and foreclosures.
       (2) Report to congress.--Not later than 1 year after the 
     development of the plan under paragraph (1), and each year 
     thereafter, the Secretary shall submit a report to Congress 
     that--
       (A) summarizes and describes the findings of the monitoring 
     required under paragraph (1); and
       (B) includes recommendations or proposals for legislative 
     or administrative action necessary--
       (i) to increase the authority of the Secretary to levy 
     penalties against any mortgagee, or other person or entity, 
     who fails to comply with the requirements described in this 
     section;
       (ii) to improve coordination between public and private 
     initiatives to reduce the overall rate of mortgage defaults 
     and foreclosures; and
       (iii) to improve coordination between initiatives 
     undertaken by Federal, State, and local governments.
       (c) National Database on Defaults and Foreclosures.--

[[Page 8428]]

       (1) In general.--The Secretary, in consultation with the 
     heads of appropriate agencies, shall develop recommendations 
     for a national database on mortgage defaults and foreclosures 
     that--
       (A) provides information to Federal regulatory agencies 
     on--
       (i) mortgagees that generate home loans that go into 
     default or foreclosure at a rate significantly higher than 
     the national average for such mortgagees;
       (ii) the factors associated with such higher rates; and
       (iii) other factors and indicators that the Secretary 
     determines are critical to monitoring the mortgage markets; 
     and
       (B) provides information to Federal, State, and local 
     governments on loans, delinquencies, defaults, foreclosures, 
     deeds in lieu of foreclosure, short sales, and sheriff sales 
     that--
       (i) is not otherwise readily available;
       (ii) would allow for a better understanding of local, 
     regional, and national trends; and
       (iii) helps improve public policies that reduce defaults 
     and foreclosures.
       (2) Considerations.--In developing the recommendations 
     under paragraph (1), the Secretary shall take into 
     consideration privacy concerns and legal issues relating to 
     such concerns, including the advisability of establishing 
     rules relating to access, including public access, to 
     information obtained under subsection (d).
       (3) Report to congress on national database.--Not later 
     than 6 months after the date of enactment of this Act, the 
     Secretary shall submit a report to Congress that contains--
       (A) the recommendations developed under paragraph (1);
       (B) an estimate of the cost of maintaining the database 
     described in paragraph (1); and
       (C) a reasonable timetable with a deadline by which a 
     national database on mortgage defaults and foreclosures shall 
     be established by the Secretary.
       (d) Provision of Data.--
       (1) Data report required.--Not later than 12 months after 
     the date of enactment of this Act, the Secretary, in 
     consultation with the heads of appropriate agencies, shall 
     issue final rules that require each mortgagee or servicer 
     that originates or services not fewer than 100 loans in the 
     prior calendar year (or any other person that the Secretary 
     determines can effectively provide the data described in 
     paragraph (2)) to submit a report to the Secretary not less 
     frequently than once each quarter that contains data the 
     Secretary determines are necessary to carry out this section.
       (2) Contents of report.--Each report submitted under 
     paragraph (1) shall contain data that--
       (A) for each loan, use the identification requirements that 
     are established under the Home Mortgage Disclosure Act (12 
     U.S.C. 2801 et seq.) for data reporting, including--
       (i) the date of origination;
       (ii) the agency code of the originator;
       (iii) the respondent identification number of the 
     originator; and
       (iv) the identifying number for the loan;
       (B) describe the characteristics of each home loan 
     originated in the preceding 12 months by the mortgagee or 
     servicer (or, in the case of the first report required to be 
     submitted under this subsection, all active loans originated 
     by the mortgagee or servicer), including--
       (i) the loan-to-value ratio at the time of origination for 
     each mortgage on the property; and
       (ii) the type of mortgage, such as a fixed-rate or 
     adjustable-rate mortgage; and
       (C) include the performance outcome of each home loan 
     originated in the preceding 12 months by the mortgagee or 
     servicer (or, in the case of the first report required to be 
     submitted under this subsection, all active loans originated 
     by the mortgagee or servicer), including--
       (i) whether such home loan was in delinquency at any point 
     in such 12-month period; and
       (ii) whether any judicial or non-judicial foreclosure was 
     initiated on such home loan during such 12-month period;
       (D) are sufficient to establish for each home loan that at 
     any point during the preceding 12 months had become 60 or 
     more days delinquent with respect to a payment on any amount 
     due under the home loan, or for which a judicial or non-
     judicial foreclosure was initiated, the interest rate on such 
     home loan at the time of such delinquency or foreclosure;
       (E) include information relating to foreclosures, 
     including--
       (i) the date of all foreclosures initiated by the mortgagee 
     or servicer; and
       (ii) the combined loan-to-value ratio of all mortgages on a 
     home at the time foreclosure was initiated;
       (F) for a home loan that is in foreclosure, include 
     information on all actions, including loan modifications, 
     taken to mitigate or resolve the problem that led to the 
     initiation of foreclosure and all actions undertaken prior to 
     initiation of a foreclosure to resolve a delinquency or 
     default;
       (G) identify each home loan for which foreclosure was 
     completed in the preceding 12 months, including--
       (i) foreclosures initiated in such 12-month period; and
       (ii) the date of the foreclosure completion; and
       (H) include any other information that the Secretary 
     determines is necessary to carry out this section.
       (3) Compliance plan and report.--The Secretary, in 
     consultation with the heads of appropriate agencies, shall--
       (A) develop a plan to monitor the compliance with the 
     requirements established in this subsection; and
       (B) submit to Congress a report on such plan.
       (4) Establishment of national database.--The Secretary 
     shall establish a national database on mortgage defaults and 
     foreclosures by the deadline established in the report to 
     Congress required by subsection (c)(3) and shall provide 
     public access to such database or portions thereof, subject 
     to the Secretary making reasonable efforts to ensure that 
     such public disclosure adequately addresses privacy, 
     confidentiality, or legal rights under Federal or State law 
     that may reasonably be raised.
       (e) Consolidated Database.--Not later than 6 months after 
     the establishment of the national database described in 
     subsection (d)(4), the Federal Financial Institutions 
     Examination Council, or any successor thereto, shall create a 
     consolidated database that establishes a connection between 
     the data provided under the Home Mortgage Disclosure Act (12 
     U.S.C. 2801 et seq.) and the data provided under this 
     section.
       (f) Authorization of Appropriations.--There are authorized 
     to be appropriated to carry out this section such sums as may 
     be necessary for each of fiscal years 2010 through 2014.
                                 ______
                                 
  SA 4077. Mr. REED (for himself, Mr. Grassley, Mr. Johnson, Mr. Brown 
of Ohio, and Mr. Levin) submitted an amendment intended to be proposed 
to amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for himself 
and Mrs. Lincoln)) to the bill S. 3217, to promote the financial 
stability of the United States by improving accountability and 
transparency in the financial system, to end ``too big to fail'', to 
protect the American taxpayer by ending bailouts, to protect consumers 
from abusive financial services practices, and for other purposes; 
which was ordered to lie on the table; as follows:

       On page 384, strike line 1 and all that follows through 
     page 387, line 3 and insert the following:

     SEC. 407. FAMILY OFFICES.

       (a) In General.--Section 202(a)(11) of the Investment 
     Advisers Act of 1940 (15 U.S.C. 80b-2(a)(11)) is amended by 
     striking ``or (G)'' and inserting the following: ``; (G) any 
     family office, as defined by rule, regulation, or order of 
     the Commission, in accordance with the purposes of this 
     title; or (H)''.
       (b) Rulemaking.--The rules, regulations, or orders issued 
     by the Commission pursuant to section 202(a)(11)(G) of the 
     Investment Advisers Act of 1940, as added by this section, 
     regarding the definition of the term ``family office'' shall 
     provide for an exemption that--
       (1) is consistent with the previous exemptive policy of the 
     Commission, as reflected in exemptive orders for family 
     offices in effect on the date of enactment of this Act; and
       (2) recognizes the range of organizational, management, and 
     employment structures and arrangements employed by family 
     offices.

     SEC. 408. STATE AND FEDERAL RESPONSIBILITIES; ASSET THRESHOLD 
                   FOR FEDERAL REGISTRATION OF INVESTMENT 
                   ADVISERS.

       Section 203A(a) of the of the Investment Advisers Act of 
     1940 (15 U.S.C. 80b-3a(a)) is amended--
       (1) by redesignating paragraph (2) as paragraph (3); and
       (2) by inserting after paragraph (1) the following:
       ``(2) Treatment of mid-sized investment advisers.--
       ``(A) In general.--No investment adviser described in 
     subparagraph (B) shall register under section 203, unless the 
     investment adviser is an adviser to an investment company 
     registered under the Investment Company Act of 1940, or a 
     company which has elected to be a business development 
     company pursuant to section 54 of the Investment Company Act 
     of 1940, and has not withdrawn the election, except that, if 
     by effect of this paragraph an investment adviser would be 
     required to register with 15 or more States, then the adviser 
     may register under section 203.
       ``(B) Covered persons.--An investment adviser described in 
     this subparagraph is an investment adviser that--
       ``(i) is required to be registered as an investment adviser 
     with the securities commissioner (or any agency or office 
     performing like functions) of the State in which it maintains 
     its principal office and place of business and, if 
     registered, would be subject to examination as an investment 
     adviser by any such commissioner, agency, or office; and
       ``(ii) has assets under management between--

[[Page 8429]]

       ``(I) the amount specified under subparagraph (A) of 
     paragraph (1), as such amount may have been adjusted by the 
     Commission pursuant to that subparagraph; and
       ``(II) $100,000,000, or such higher amount as the 
     Commission may, by rule, deem appropriate in accordance with 
     the purposes of this title.''.

     SEC. 409. CUSTODY OF CLIENT ASSETS.

                                 ______
                                 
  SA 4078. Mr. REED (for himself, Mr. Grassley, Mr. Johnson, Mr. Brown 
of Ohio, and Mr. Levin) submitted an amendment intended to be proposed 
to amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for himself 
and Mrs. Lincoln)) to the bill S. 3217, to promote the financial 
stability of the United States by improving accountability and 
transparency in the financial system, to end ``too big to fail'', to 
protect the American taxpayer by ending bailouts, to protect consumers 
from abusive financial services practices, and for other purposes; 
which was ordered to lie on the table; as follows:

       On page 384, strike line 1 and all that follows through 
     page 385, line 15.
       On page 385, line 16, strike ``409'' and insert ``407''.
       On page 386, strike line 10 and all that follows through 
     page 387, line 2 and insert the following:

     SEC. 408. STATE AND FEDERAL RESPONSIBILITIES; ASSET THRESHOLD 
                   FOR FEDERAL REGISTRATION OF INVESTMENT 
                   ADVISERS.

       Section 203A(a) of the of the Investment Advisers Act of 
     1940 (15 U.S.C. 80b-3a(a)) is amended--
       (1) by redesignating paragraph (2) as paragraph (3); and
       (2) by inserting after paragraph (1) the following:
       ``(2) Treatment of mid-sized investment advisers.--
       ``(A) In general.--No investment adviser described in 
     subparagraph (B) shall register under section 203, unless the 
     investment adviser is an adviser to an investment company 
     registered under the Investment Company Act of 1940, or a 
     company which has elected to be a business development 
     company pursuant to section 54 of the Investment Company Act 
     of 1940, and has not withdrawn the election, except that, if 
     by effect of this paragraph an investment adviser would be 
     required to register with 15 or more States, then the adviser 
     may register under section 203.
       ``(B) Covered persons.--An investment adviser described in 
     this subparagraph is an investment adviser that--
       ``(i) is required to be registered as an investment adviser 
     with the securities commissioner (or any agency or office 
     performing like functions) of the State in which it maintains 
     its principal office and place of business and, if 
     registered, would be subject to examination as an investment 
     adviser by any such commissioner, agency, or office; and
       ``(ii) has assets under management between--

       ``(I) the amount specified under subparagraph (A) of 
     paragraph (1), as such amount may have been adjusted by the 
     Commission pursuant to that subparagraph; and
       ``(II) $100,000,000, or such higher amount as the 
     Commission may, by rule, deem appropriate in accordance with 
     the purposes of this title.''.

       On page 387, line 3, strike ``411'' and insert ``409''
       On page 387, line 13, strike ``412'' and insert ``410''.
       On page 388, line 4, strike ``413'' and insert ``411''.
       On page 388, line 16, strike ``414'' and insert ``412''.
       On page 389, line 3, strike ``415'' and insert ``413''.
       On page 390, line 1, strike ``416'' and insert ``414''.
                                 ______
                                 
  SA 4079. Mr. REED submitted an amendment intended to be proposed to 
amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for himself and 
Mrs. Lincoln)) to the bill S. 3217, to promote the financial stability 
of the United States by improving accountability and transparency in 
the financial system, to end ``too big to fail'', to protect the 
American taxpayer by ending bailouts, to protect consumers from abusive 
financial services practices, and for other purposes; which was ordered 
to lie on the table; as follows:

       On page 71, strike lines 15 through 23 and insert the 
     following:
       (1) In general.--
       (A) Authority.--To assist the Office in assessing financial 
     stability or otherwise carrying out the functions described 
     in this subtitle, the Director may require, by subpoena, the 
     production of the data requested under subsection (a)(1) and 
     section 154(b)(1), upon a written finding by the Director 
     that--
       (i) such data is required to carry out the functions 
     described under this subtitle;
       (ii) attempts to obtain such data without the use of a 
     subpoena have been unsuccessful; and
       (iii) the Office has coordinated with such agency, as 
     required under section 154(b)(1)(B)(ii).
       (B) Considerations.--The Director shall take into 
     consideration the burden imposed by the request of the 
     Director under subparagraph (A).
                                 ______
                                 
  SA 4080. Mr. ENSIGN submitted an amendment intended to be proposed to 
amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for himself and 
Mrs. Lincoln)) to the bill S. 3217, to promote the financial stability 
of the United States by improving accountability and transparency in 
the financial system, to end ``too big to fail'', to protect the 
American taxpayer by ending bailouts, to protect consumers from abusive 
financial services practices, and for other purposes; which was ordered 
to lie on the table; as follows:

       On page 1089, strike line 6 and all that follows through 
     ``SEC. 973.''
                                 ______
                                 
  SA 4081. Mr. HATCH submitted an amendment intended to be proposed to 
amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for himself and 
Mrs. Lincoln)) to the bill S. 3217, to promote the financial stability 
of the United States by improving accountability and transparency in 
the financial system, to end ``too big to fail'', to protect the 
American taxpayer by ending bailouts, to protect consumers from abusive 
financial services practices, and for other purposes; which was ordered 
to lie on the table; as follows:

       On page 1235, line 10, before the semicolon insert ``and 
     shall certify that the costs of the rule will not be borne by 
     the consumer''.
                                 ______
                                 
  SA 4082. Mr. DODD submitted an amendment intended to be proposed to 
amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for himself and 
Mrs. Lincoln)) to the bill S. 3217, to promote the financial stability 
of the United States by improving accountability and transparency in 
the financial system, to end ``too big to fail'', to protect the 
American taxpayer by ending bailouts, to protect consumers from abusive 
financial services practices, and for other purposes; which was ordered 
to lie on the table; as follows:

       On page 1242, between lines 14 and 15, insert the 
     following:
       (7) Consumer privacy.--
       (A) In general.--The Bureau may not have access to, or 
     obtain copies of, any personally identifiable financial 
     information relating to a consumer contained in the financial 
     records of any covered person from a disclosure of such 
     information by the covered person to the Bureau, except--
       (i) if the financial records are reasonably described in a 
     request by the Bureau and the consumer provides written 
     permission for the disclosure of such information by the 
     covered person to the Bureau; or
       (ii) as may be specifically permitted or required under 
     other provisions of law, and in accordance with the Right to 
     Financial Privacy Act of 1978 (12 U.S.C. 3401 et seq.).
       (B) Treatment of covered person.--With respect to the 
     application of any provision of the Right to Financial 
     Privacy Act of 1978 to a disclosure by a covered person 
     subject to this subsection, the covered person shall be 
     treated as if it were a ``financial institution'', as that 
     term is defined in section 1101 of that Act (12 U.S.C. 3401).
                                 ______
                                 
  SA 4083. Mr. BROWN of Massachusetts submitted an amendment intended 
to be proposed to amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd 
(for himself and Mrs. Lincoln)) to the bill S. 3217, to promote the 
financial stability of the United States by improving accountability 
and transparency in the financial system, to end ``too big to fail'', 
to protect the American taxpayer by ending bailouts, to protect 
consumers from abusive financial services practices, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 485, strike line 1 and all that follows through 
     page 489, line 13, and insert the following:
       (2) the term ``insured depository institution'' does not 
     include an institution described in section 2(c)(2)(D) of the 
     Bank Holding Company Act of 1956 (12 U.S.C. 1841(c)(2)(D));
       (3) the term ``proprietary trading''--
       (A) means purchasing or selling, or otherwise acquiring or 
     disposing of, stocks, bonds, options, commodities, 
     derivatives, or other financial instruments by an insured 
     depository institution, a company that controls,

[[Page 8430]]

     directly or indirectly, an insured depository institution or 
     is treated as a bank holding company for purposes of the Bank 
     Holding Company Act of 1956 (12 U.S.C. 1841 et seq.), and any 
     subsidiary of such institution or company, for the trading 
     book (or such other portfolio as the Federal banking agencies 
     may determine) of such institution, company, or subsidiary;
       (B) subject to such restrictions as the Federal banking 
     agencies may determine, does not include purchasing or 
     selling, or otherwise acquiring or disposing of, stocks, 
     bonds, options, commodities, derivatives, or other financial 
     instruments on behalf of a customer, as part of market making 
     activities, or otherwise in connection with or in 
     facilitation of customer relationships, including risk-
     mitigating hedging activities related to such a purchase, 
     sale, acquisition, or disposal; and
       (C) does not include the investments by or on behalf of a 
     regulated insurance company, or a regulated insurance 
     affiliate or regulated insurance subsidiary thereof, if--
       (i) such investments are in compliance with, and subject 
     to, the insurance company investment laws, regulations, and 
     written guidance of the State or jurisdiction in which each 
     such insurance company is domiciled; and
       (ii) the Federal banking agencies, after consultation with 
     the Council and the relevant insurance commissioners of the 
     States and territories of the United States, have not jointly 
     determined, after notice and comment, that a law, a 
     regulation, or written guidance described in clause (i) is 
     insufficient to accomplish the purposes of this section; and
       (4) the term ``sponsoring'', when used with respect to a 
     hedge fund or private equity fund, means--
       (A) serving as a general partner, managing member, or 
     trustee of the fund;
       (B) in any manner selecting or controlling (or having 
     employees, officers, directors, or agents who constitute) a 
     majority of the directors, trustees, or management of the 
     fund; or
       (C) sharing with the fund, for corporate, marketing, 
     promotional, or other purposes, the same name or a variation 
     of the same name.
       (b) Prohibition on Proprietary Trading.--
       (1) In general.--Subject to the recommendations and 
     modifications of the Council under subsection (g), and except 
     as provided in paragraph (2) or (3), the appropriate Federal 
     banking agencies shall, through a rulemaking under subsection 
     (g), jointly prohibit proprietary trading by an insured 
     depository institution, a company that controls, directly or 
     indirectly, an insured depository institution or is treated 
     as a bank holding company for purposes of the Bank Holding 
     Company Act of 1956 (12 U.S.C. 1841 et seq.), and any 
     subsidiary of such institution or company.
       (2) Excepted obligations.--
       (A) In general.--The prohibition under this subsection 
     shall not apply with respect to an investment that is 
     otherwise authorized by Federal law in--
       (i) obligations of the United States or any agency of the 
     United States, including obligations fully guaranteed as to 
     principal and interest by the United States or an agency of 
     the United States;
       (ii) obligations, participations, or other instruments of, 
     or issued by, the Government National Mortgage Association, 
     the Federal National Mortgage Association, or the Federal 
     Home Loan Mortgage Corporation, including obligations fully 
     guaranteed as to principal and interest by such entities; and
       (iii) obligations of any State or any political subdivision 
     of a State.
       (B) Conditions.--The appropriate Federal banking agencies 
     may impose conditions on the conduct of investments described 
     in subparagraph (A).
       (C) Rule of construction.--Nothing in subparagraph (A) may 
     be construed to grant any authority to any person that is not 
     otherwise provided in Federal law.
       (3) Foreign activities.--An investment or activity 
     conducted by a company pursuant to paragraph (9) or (13) of 
     section 4(c) of the Bank Holding Company Act of 1956 (12 
     U.S.C. 1843(c)) solely outside of the United States shall not 
     be subject to the prohibition under paragraph (1), provided 
     that the company is not directly or indirectly controlled by 
     a company that is organized under the laws of the United 
     States or of a State.
       (c) Prohibition on Sponsoring and Investing in Hedge Funds 
     and Private Equity Funds.--
       (1) In general.--Except as provided in paragraph (2), and 
     subject to the recommendations and modifications of the 
     Council under subsection (g), the appropriate Federal banking 
     agencies shall, through a rulemaking under subsection (g), 
     jointly prohibit an insured depository institution, a company 
     that controls, directly or indirectly, an insured depository 
     institution or is treated as a bank holding company for 
     purposes of the Bank Holding Company Act of 1956 (12 U.S.C. 
     1841 et seq.), or any subsidiary of such institution or 
     company, from sponsoring or investing in a hedge fund or a 
     private equity fund.
       (2) Application to foreign activities of foreign firms.--An 
     investment or activity conducted by a company pursuant to 
     paragraph (9) or (13) of section 4(c) of the Bank Holding 
     Company Act of 1956 (12 U.S.C. 1843(c)) solely outside of the 
     United States shall not be subject to the prohibitions and 
     restrictions under paragraph (1), provided that the company 
     is not directly or indirectly controlled by a company that is 
     organized under the laws of the United States or of a State.
       (3) Exception.--Notwithstanding paragraph (1), an insured 
     depository institution, a company that controls, directly or 
     indirectly, an insured depository institution or is treated 
     as a bank holding company for purposes of the Bank Holding 
     Company Act of 1956 (12 U.S.C. 1841 et seq.), or any 
     subsidiary of such institution or company may sponsor or 
     invest in a hedge fund or a private equity fund, if--
       (A) such institution, company, or subsidiary provides 
     trust, fiduciary, or advisory services to the fund;
       (B) the fund is sponsored and offered in connection with 
     the provision of trust, fiduciary, or advisory services by 
     such institution, company, or subsidiary to persons who are, 
     or may be, customers or clients of such institution, company, 
     or subsidiary;
       (C) such institution, company, or subsidiary--
       (i) does not acquire or retain an equity, partnership, or 
     ownership interest in the fund; or
       (ii) acquires or retains an equity, partnership, or 
     ownership interest, if--

       (I) on the date that is 12 months after the date on which 
     the fund is established, the equity, partnership, or 
     ownership interest is not greater than 10 percent of the 
     total equity of the fund; and
       (II) the aggregate equity investments by such institution, 
     company, or subsidiary in the fund do not exceed 5 percent of 
     Tier 1 capital of such institution, company, or subsidiary;

       (D) such institution, company, or subsidiary does not enter 
     into or otherwise engage in any transaction with the fund 
     that is a covered transaction, as defined in section 23A of 
     the Federal Reserve Act (12 U.S.C. 371c), except on terms and 
     under circumstances specified in section 23B of the Federal 
     Reserve Act (12 U.S.C. 371c-1);
       (E) the obligations of the fund are not guaranteed, 
     directly or indirectly, by such institution, company, or 
     subsidiary any affiliate of such institution, company, or 
     subsidiary; and
       (F) such institution, company, or subsidiary does not share 
     with the fund, for corporate, marketing, promotional, or 
     other purposes, the same name or a variation of the same 
     name.
                                 ______
                                 
  SA 4084. Mr. REED submitted an amendment intended to be proposed to 
amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for himself and 
Mrs. Lincoln)) to the bill S. 3217, to promote the financial stability 
of the United States by improving accountability and transparency in 
the financial system, to end ``too big to fail'', to protect the 
American taxpayer by ending bailouts, to protect consumers from abusive 
financial services practices, and for other purposes; which was ordered 
to lie on the table; as follows:

       On page 502, strike lines 4 through 14.
       On page 502, between lines 15 and 16, insert the following:
       (a) Joint Rulemaking.--
       (1) Definition of terms.--
       (A) In general.--Notwithstanding any other provision of 
     this title, the Commodity Futures Trading Commission and the 
     Securities and Exchange Commission shall engage in joint 
     rulemaking to jointly adopt a rule or rules further defining 
     the terms ``swap'', ``security-based swap'', ``swap dealer'', 
     ``security-based swap dealer'', ``major swap participant'', 
     ``major security-based swap participant'', and ``eligible 
     contract participant'' and such other rules regarding such 
     definitions as the Commodity Futures Trading Commission and 
     the Securities and Exchange Commission determine are 
     necessary and appropriate, in the public interest, and for 
     the protection of investors.
       (B) Prevention of evasions.--The Commodity Futures Trading 
     Commission and the Securities and Exchange Commission may 
     jointly prescribe rules defining the term ``swap'' or 
     ``security-based swap'' to include transactions that have 
     been structured to evade this title.
       (2) Trade repository record keeping.--Notwithstanding any 
     other provision of this title, the Commodity Futures Trading 
     Commission and the Securities and Exchange Commission shall 
     engage in joint rulemaking to jointly adopt a rule or rules 
     governing the books and records that are required to be kept 
     and maintained regarding security-based swap agreements by 
     persons that are registered as swap data repositories under 
     the Commodity Exchange Act, including uniform rules that 
     specify the data elements that shall be collected and 
     maintained by each repository.
       (3) Capital and margin.--

[[Page 8431]]

       (A) Notwithstanding any other provision of this title, the 
     Commodity Futures Trading Commission and the Securities and 
     Exchange Commission shall engage in joint rulemaking to 
     jointly adopt a rule or rules imposing capital and margin 
     requirements under the respective provisions of the Commodity 
     Exchange Act and the Securities Exchange Act of 1934 for swap 
     dealers, security-based swap dealers, major swap 
     participants, and major security-based swap participants for 
     which there is not a prudential regulator.
       (B) Notwithstanding any other provision of this title, 
     prudential regulators, the Commodity Futures Trading 
     Commission, and the Securities and Exchange Commission shall 
     engage in joint rulemaking to jointly adopt a rule or rules 
     imposing capital and margin requirements under the respective 
     provisions of the Commodity Exchange Act and the Securities 
     Exchange Act of 1934 for swap dealers, security-based swap 
     dealers, major swap participants, and major security-based 
     swap participants for which there is a prudential regulator.
       (4) Books and records.--Notwithstanding any other provision 
     of this title, the Commodity Futures Trading Commission and 
     the Securities and Exchange Commission shall engage in joint 
     rulemaking to jointly adopt a rule or rules governing books 
     and records regarding security-based swap agreements, 
     including daily trading records, for swap dealers, major swap 
     participants, security-based swap dealers, and major 
     security-based swap participants.
       (5) Joint rulemaking under this title.--
       (A) Comparable rules.--Rules and regulations prescribed 
     jointly under this title by the Commodity Futures Trading 
     Commission and the Securities and Exchange Commission shall 
     be comparable to the maximum extent possible, taking into 
     consideration differences in instruments and in the 
     applicable statutory requirements.
       (B) Consultation with the board of governors of the federal 
     reserve system.--Prior to prescribing jointly any rules and 
     regulations under this title, the Commodity Futures Trading 
     Commission and the Securities and Exchange Commission shall 
     consult with the Board of Governors of the Federal Reserve 
     System.
       (6) Financial stability oversight council.--In the event 
     that the Commodity Futures Trading Commission and the 
     Securities and Exchange Commission fail to jointly prescribe 
     rules pursuant to paragraphs (1), (2), (3), or (4) of 
     subsection (a) in a timely manner, at the request of either 
     Commission, the Financial Stability Oversight Council shall 
     resolve the dispute--
       (A) within a reasonable time after receiving the request;
       (B) after consideration of relevant information provided by 
     each Commission; and
       (C) by agreeing with one of the Commissions regarding the 
     entirety of the matter or by determining a compromise 
     position.
       (7) Treatment of similar products.--In adopting joint rules 
     and regulations under this title, the Commodity Futures 
     Trading Commission and the Securities and Exchange Commission 
     shall treat functionally or economically similar products 
     similarly.
       (8) Treatment of dissimilar products.--Nothing in this 
     title shall be construed to require the Commodity Futures 
     Trading Commission and the Securities and Exchange Commission 
     to adopt joint rules that treat functionally or economically 
     different products identically.
       (9) Joint interpretation.--Any Commission interpretation 
     of, or guidance regarding, a provision of this title, shall 
     be effective only if issued jointly by the Commodity Futures 
     Trading Commission and the Securities and Exchange Commission 
     if this title requires the Commodity Futures Trading 
     Commission and the Securities and Exchange Commission to 
     issue joint regulations to implement the provision.
       On page 502, line 15, strike ``REVIEW OF'' before 
     ``REGULATORY AUTHORITY''.
       On page 502, line 16, strike ``(a)'' and insert ``(b)''.
       On page 502, line 17, insert ``subsection (a) and'' after 
     ``provided in''.
       On page 505, line 7, strike ``(b)'' and insert ``(c)''.
       On page 506, strike line 23 and all that follows through 
     ``any other'' on page 507, line 2, and insert the following:
       (3) Prohibition on certain futures associations.--
     Notwithstanding any other
       On page 507, strike line 14 and all that follows through 
     page 508, line 2.
       On page 508, line 3, strike ``(c)'' and insert ``(d)''.
       On page 508, line 8, strike ``(a)'' and insert ``(b)''.
       On page 508, line 9, strike ``(b)'' and insert ``(c)''.
       On page 509, line 24, strike ``(a)(4) or (b)'' and insert 
     ``(b)(4) or (c)''.
       On page 510, line 8, strike ``(d)'' and insert ``(e)''.
       On page 510, line 9, strike ``(b) and (c)'' and insert 
     ``(c) and (d)''.
       On page 511, line 3, strike ``(e)'' and insert ``(f)''.
       On page 511, lines 3 and 4, strike ``(b) and (c)'' and 
     insert ``(c) and (d)''.
       On page 511, line 4, insert `` and including subsection 
     (a)'' before ``, the Commodity''.
       On page 511, line 11, strike ``(f)'' and insert ``(g)''.
       On page 511, strike line 20 and all that follows through 
     page 512, line 2.
       On page 524, line 6, insert ``issued pursuant to subsection 
     (a)(3)(A)'' after ``other Commission''.
       On page 524, lines 11 through 12, strike ``, including an 
     order or orders issued under subsection (a)(3)(A),''.
       On page 528, lines 11 and 12, strike ``, security futures 
     product,''.
       On page 528, strike lines 13 through 15.
       On page 528, line 16, strike ``(iii)'' and insert ``(ii)''.
       On page 528, line 16, strike ``(iv)'' and insert ``(iii)''.
       On page 528, strike line 20 and all that follows through 
     ``Act.'' on page 529, line 2.
       On page 529, line 19, strike ``, security futures 
     product,''.
       On page 529, strike lines 20 through 22.
       On page 529, line 23, strike ``(III)'' and insert ``(II)''.
       On page 530, line 1, strike ``(IV)'' and insert ``(III)''.
       On page 530, strike line 5 and all that follows through 
     ``Act.'' on line 13.
       On page 530, lines 20 and 21, strike ``, security futures 
     product,''.
       On page 530, strike line 22 and all that follows through 
     page 531, line 3.
       On page 531, line 5, strike ``(iv)'' and insert ``(ii)''.
       On page 531, line 5, strike ``(IV) (as so redesignated)'' 
     and insert ``(III)''.
       On page 531, line 8, strike ``a semicolon'' and insert the 
     following: ``the following: `; or'''.
       On page 531, line 11, strike ``; or'' and insert a period.
       On page 531, strike line 12 and all that follows through 
     ``Act.'' on line 15.
       On page 548, lines 9 and 10, strike ``, leverage contract 
     authorized under section 19,'' and insert ``or''.
       On page 548, line 11, insert ``traded on or subject to the 
     rules of a board of trade designated as a contract market 
     under section 5 or 5f'' after ``product''.
       On page 551, strike line 24 and all that follows through 
     page 552, line 14.
       On page 552, line 15, strike ``(E)'' and insert ``(D)''.
       On page 554, line 14, strike ``(F)'' and insert ``(E)''.
       On page 557, line 20, strike ``define--'' and all that 
     follows through ``the term'' on line 21, and insert ``define 
     the term''.
       On page 557, line 21, strike ``; and'' and insert a period.
       On page 557, strike lines 22 through 24.
       On page 563, line 25, after the first period, insert the 
     following:
       ``(i) Regulation of Swaps as Securities Under Federal and 
     State Law.--Nothing in this section or this Act shall limit 
     the jurisdiction conferred on the Securities and Exchange 
     Commission by the Wall Street Transparency and Accountability 
     Act of 2010 with regard to security-based swap agreements, as 
     such agreements are defined in section 3(a)(79) of the 
     Securities Exchange Act of 1934, and security-based swaps.''.
       On page 565, line 17, strike ``and (g)'' and insert ``(g), 
     (j), and (k)''.
       On page 565, line 22, strike ``and (f)'' and insert ``(f), 
     and (i)''.
       On page 566, line 1, insert ``by their terms'' before ``to 
     registered''.
       On page 566, line 7, after the first period insert the 
     following:
       ``(f) Exclusion for Securities.--Notwithstanding any other 
     provision of law, the Wall Street Transparency and 
     Accountability Act of 2010 shall not apply to, and the 
     Commodity Futures Trading Commission shall have no 
     jurisdiction under such Act (or any amendments to the 
     Commodity Exchange Act made by such Act) with respect to any 
     security other than a security-based swap.''.
       On page 567, line 8, strike ``5(b)'' and insert ``5b''.
       On page 616, line 15, strike ``books and records'' and 
     insert ``information (including information on a real-time 
     basis)''.
       On page 616, line 18, delete ``8'' and insert ``24 of the 
     Securities Exchange Act of 1934''.
       On page 617, between lines 15 and 16, insert the following:
       ``(ii) foreign financial regulatory authorities;''.
       On page 617, line 16, strike ``(ii)'' and insert ``(iii)''.
       On page 617, line 17, strike ``(iii)'' and insert ``(iv)''.
       On page 629, line 15, delete ``8'' and insert ``24 of the 
     Securities Exchange Act of 1934''.
       On page 631, between lines 10 and 11, insert the following:
       ``(ii) foreign financial regulatory authorities, as defined 
     in section 3(a)(52) of the Securities Exchange Act of 
     1934;''.
       On page 631, line 11, strike ``(ii)'' and insert ``(iii)''.
       On page 631, line 12, strike ``(iii)'' and insert ``(iv)''.
       On page 642, line 3, delete ``8'' and insert ``24 of the 
     Securities Exchange Act of 1934''.
       On page 646, lines 16 and 17, strike ``appropriate Federal 
     banking agency'' and insert ``prudential regulators''.
       On page 647, lines 12 and 13, strike ``appropriate Federal 
     banking agencies'' and insert ``prudential regulators''.
       On page 647, line 23, insert ``, in consultation with the 
     prudential regulators,'' after ``Commission''.

[[Page 8432]]

       On page 650, lines 24 and 25, strike ``appropriate Federal 
     banking agency'' and insert ``prudential regulators''.
       On page 651, lines 24 and 25, strike ``appropriate Federal 
     banking agency'' and insert ``prudential regulators''.
       On page 652, lines 24 and 25, strike ``appropriate Federal 
     banking agencies'' and insert ``prudential regulators''.
       On page 676, line 7, before the period insert ``taking into 
     consideration the impact of public disclosure on market 
     liquidity''.
       On page 676, line 20, strike ``and''.
       On page 677, line 2, strike the period and insert ``; 
     and''.
       On page 677, between lines 2 and 3, insert the following:
       ``(iii) make available to the Securities and Exchange 
     Commission, upon request, all information, including a 
     complete audit trail, relating to transactions in security-
     based swap agreements (as such term is defined in section 
     3(a)(79) of the Securities Exchange Act of 1934).''.
       On page 714, line 10, strike ``amended--'' and all that 
     follows through ``by striking'' on line 11, and insert 
     ``amended by striking''.
       On page 714, line 12, strike the semicolon and insert a 
     period.
       On page 714, strike lines 13 through 23.
       On page 714, line 25, strike ``amended--'' and all that 
     follows through ``by striking'' on page 716, line 1, and 
     insert ``amended by striking''.
       On page 715, line 2, strike the semicolon and insert a 
     period.
       On page 715, strike lines 3 through 23.
       On page 717, line 9, insert ``or any agreement, contract, 
     or transaction in one or more securities'' after 
     ``security''.
       On page 751, between lines 11 and 12, insert the following:

       ``(II) the Securities and Exchange Commission;''.

       On page 751, line 12, strike ``(II)'' and insert ``(III)''.
       On page 751, line 16, strike ``(III)'' and insert ``(IV)''.
       On page 751, line 21, strike ``(IV)'' and insert ``(V)''.
       On page 752, line 1, strike ``(V)'' and insert ``(VI)''.
       On page 752, line 3, strike ``and'' after 
     ``jurisdiction;''.
       On page 752, line 4, strike ``(VI)'' and insert ``(VII)''.
       On page 752, line 4, strike the period and insert ``; 
     and''.
       On page 752, between lines 4 and 5, insert the following:

       ``(VIII) a foreign financial regulatory authority.''.

       On page 752, line 7, strike ``described in clause (i)'' and 
     insert ``described in subclauses (I) through (VI) of clause 
     (i)''.
       On page 752, line 11, after the period insert the 
     following: ``Each of the entities described in subclauses 
     (VII) and (VIII) of clause (i) shall maintain such 
     information in accordance with such assurances of 
     confidentiality as the Commission determines appropriate.''
       On page 761, line 24, strike ``standards'' and insert 
     ``principles''.
       On page 767, line 18, insert ``(without regard to paragraph 
     (47)(B)(x) of such section)'' after ``Exchange Act''.
       On page 768, line 4, insert ``or single obligor on a loan'' 
     after ``a security''.
       On page 768, line 4, insert ``or obligors on loans'' after 
     ``securities''.
       On page 768, line 9, insert ``or obligor'' after 
     ``issuer''.
       On page 769, line 5, strike ``references,'' and insert 
     ``reference or''.
       On page 769, beginning line 6, strike ``, or settles 
     through the transfer'' and all that follows through ``other 
     option'' on line 16 and insert ``a government security''.
       On page 769, line 17, strike ``(D) Mixed swap.--The term'' 
     and insert the following:
       ``(D) Mixed swap.--
       ``(i) In general.--The term''.
       On page 770, between lines 6 and 7, insert the following:
       ``(ii) Rule of construction.--A security-based swap shall 
     not constitute, nor be construed to constitute, a mixed swap 
     solely because the obligations or rights of 1 party to the 
     swap agreement are defined by reference to 1 or more interest 
     rates or currencies.
       ``(E) Rule of construction regarding use of the term 
     index.--The term `index' means an index or group of 
     securities, including any interest therein or based on the 
     value thereof.''.
       On page 775, strike lines 7 through 19.
       On page 776, after line 25, insert the following:
       (c) Conforming Amendments to Gramm-Leach-Bliley.--Section 
     206A(a) of the Gramm-Leach-Bliley Act (15 U.S.C. 78c note) is 
     amended in the material preceding paragraph (1), by striking 
     ``Except as'' and all that follows through ``that--''and 
     inserting the following: ``Except as provided in subsection 
     (b), as used in this section, the term `swap agreement' means 
     any agreement, contract, or transaction that--''.
       On page 776, line 1, strike ``(b)'' and insert ``(c)''
       On page 777, line 1, strike ``(c)'' and insert ``(d)''.
       On page 780, line 3, insert ``, in each place that such 
     terms appear'' before the semicolon.
       On page 783, lines 5 through 6, strike ``, subject to the 
     requirements of section 5(b)''.
       On page 783, line 8, insert ``registered'' before 
     ``clearing agency''.
       On page 786, line 14, strike ``accepted'' and insert 
     ``approved''.
       On page 789, line 22, strike ``listed'' and insert 
     ``accepted''.
       On page 790, line 15, strike ``authorize'' and insert 
     ``authorizes''.
       On page 790, line 16, strike ``list'' and insert 
     ``accept''.
       On page 794, line 9, strike ``from'' and insert ``for''.
       On page 809, strike line 14 through 16, and insert the 
     following:
       ``(k) Exemptions.--The Commission may exempt, conditionally 
     or unconditionally, a clearing''.
       On page 810, strike lines 3 through 18.
       On page 832, line 5, strike ``as described in paragraph 
     (68) of section 3(a)''.
       On page 833 lines 18 and 19, strike ``or narrow-based 
     security narrow-based security index''.
       On page 834, line 1, strike ``narrow-based security''.
       On page 834, line 3, strike ``and''.
       On page 834, between lines 3 and 4, insert the following:
       ``(ii) any security or group or index of securities the 
     price, yield, value or volatility of which, or of which any 
     interest therein, is the basis for a material term of such 
     security-based swap; and''.
       On page 834, line 4, strike ``(ii)'' and insert ``(iii)''.
       On page 834, line 4, strike ``security-based swap and 
     any''.
       On page 834, line 6, strike ``narrow-based security''.
       On page 834, line 7, insert ``described under subparagraph 
     (B)(ii)'' after ``securities''.
       On page 834, line 13, strike ``or narrow-based security 
     index''.
       On page 834, lines 18 and 19, strike ``or narrow-based 
     security index''.
       On page 834, lines 20 and 21, strike ``or narrow-based 
     security index''.
       On page 843, between lines 8 and 9, insert the following:

       ``(II) foreign financial regulatory authorities;''.

       On page 843, line 9, strike ``(II)'' and insert ``(III)''.
       On page 843, line 9, strike ``(III)'' and insert ``(IV)''.
       On page 843, lines 11 and 12, strike ``and idemnification 
     agreement''.
       On page 843, line 15, strike ``(G)--'' and all that follows 
     through ``the security-based'' on line 16, and insert the 
     following: ``(G), the security-based''.
       On page 843, line 22, strike ``; and'' and insert a period.
       On page 843, strike line 23 and all that follows through 
     page 844, line 2.
       On page 853, lines 6 and 7, strike ``appropriate Federal 
     banking agency'' and insert ``prudential regulators''.
       On page 854, lines 5 and 6, strike ``appropriate Federal 
     banking agencies'' and insert ``prudential regulators''.
       On page 854, line 18, insert ``, in consultation with the 
     prudential regulators,'' after ``Commission''.
       On page 857, lines 17 and 18, strike ``appropriate Federal 
     banking agency'' and insert ``prudential regulators''.
       On page 858, lines 15 and 16, strike ``appropriate Federal 
     banking agency'' and insert ``prudential regulators''.
       On page 859, lines 5 and 6, strike ``appropriate Federal 
     banking agencies'' and insert ``prudential regulators''.
       On page 859, line 7, strike ``Securities and Exchange'' and 
     insert ``Commodity Futures Trading''.
       On page 886, line 4, insert ``or other derivative 
     instrument'' after ``security-based swap''.
       On page 886, lines 4 through 5, insert ``or has defined,'' 
     after ``Commission may define,''.
       On page 886, line 10, insert ``as the Commission may 
     designate or has designated by rule'' after ``section 
     (d)(1)''.
       On page 886, line 14, strike ``(1)'' after ``13(f)''.
       On page 886, line 15, strike ``(1)'' and all that follows 
     through ``section (d)(1) of this section'' on line 20 and 
     insert the following:
       (1) in paragraph (1)--
       (A) by inserting ``(A)'' after ``accounts holding''; and
       (B) by inserting ``or (B) security-based swaps or other 
     derivative securities that the Commission may determine or 
     has determined by rule, having such values as the Commission, 
     by rule, may determine'' after ``less than $10,000,000) as 
     the Commission, by rule, may determine.''; and
       (2) in paragraph (3), by striking ``section 13(d)(1) of 
     this title'' and inserting ``subsection (d)(1) of this 
     section and of security-based swaps or other derivative 
     instruments that the Commission may determine by rule.''.
       On page 892, line 23, strike ``the Commission'' and insert 
     ``Unless the Commission is expressly authorized, the 
     Commission''.
       On page 892, line 24, insert ``any provision described in 
     this subsection with respect to subtitle B'' after ``from''.
       On page 892, line 24, strike ``the security-based swap 
     provisions''.
       On page 893, lines 1 and 2, strike ``except as expressly 
     authorized under the provisions of

[[Page 8433]]

     that Act'' and insert ``with respect to paragraphs 65, 66, 
     68, 69, 70, 71, 72, 73, 74, 75, 76, and 79 of section 3(a), 
     and sections 10B(a), 10B(b), 10B(c), 13A, 15F, 17A(g), 
     17A(h), 17A(i), 17A(j), 17A(k), 17A(l); provided that the 
     Commission also shall have exemptive authority under that Act 
     with respect to security-based swaps as to the same matters 
     that the Commodity Futures Trading Commission has under that 
     Act with respect to swaps, including under section 4(c) of 
     the Commodity Exchange Act''.
       On page 893, line 2, after the first period insert the 
     following:
       ``(d) Express Authority.--The Commission is expressly 
     authorized to use any authority granted to the Commission 
     under subsection (a) to exempt any person, security, or 
     transaction, or any class or classes of persons, securities 
     or transactions from any provision or provisions of this 
     title, or of any rule or regulation thereunder, that applies 
     to such person, security, or transaction solely because a 
     `security-based swap' is a `security' under section 3(a).''.
       On page 548, line 11, insert ``traded on or subject to the 
     rules of a board of trade designated as a contract market 
     under section 5 or 5f, leverage contract authorized under 
     section 19,'' after ``product''.
       On page 551, line 5, strike ``subparagraph (D)'' and insert 
     ``other than a security-based swap as described in section 
     3(a)(68)(D) of the Securities Exchange Act of 1934''.
       On page 616, line 2, insert ``AND SECURITY-BASED SWAPS'' 
     after ``AGREEMENTS''.
       On page 616, line 13, insert ``or security-based swaps (as 
     defined in section 3(a)(68) of the Securities Exchange Act of 
     1934)'' after ``Act)''.
       On page 616, line 16, insert ``or security-based swaps'' 
     after ``agreements''.
       On page 616, line 18, delete ``8'' and insert ``24 of the 
     Securities Exchange Act of 1934''.
       On page 835, strike line 3 and all that follows through 
     page 839, line 12.
       On page 887, strike lines 8-25.
                                 ______
                                 
  SA 4085. Mr. HARKIN (for himself, Mr. Sanders, Mr. Whitehouse, Mr. 
Udall of New Mexico, and Mr. Schumer) submitted an amendment intended 
to be proposed by him to the bill S. 3217, to promote the financial 
stability of the United States by improving accountability and 
transparency in the financial system, to end ``too big to fail'', to 
protect the American taxpayer by ending bailouts, to protect consumers 
from abusive financial services practices, and for other purposes; 
which was ordered to lie on the table; as follows:

       At the end of subtitle G of title X, add the following:

     SEC. 1077. FAIR ATM FEES.

       (a) Amendment to the Electronic Fund Transfer Act.--Section 
     904(d)(3) of the Electronic Fund Transfer Act (15 U.S.C. 
     1693b(d)(3)) is amended--
       (1) in subparagraph (A), by striking the subparagraph 
     heading and inserting the following:
       ``(A) Fee disclosure.--'' ;
       (2) by redesignating subparagraph (D) as subparagraph (E); 
     and
       (3) by inserting after subparagraph (C) the following:
       ``(D) Regulation of fees.--The regulations prescribed under 
     paragraph (1) shall require any fee charged by an automated 
     teller machine operator for a transaction conducted at that 
     automated teller machine to bear a reasonable relation to the 
     cost of processing the transaction.
       (b) Effective Date.--The amendments made by this section 
     shall become effective not later than 6 months after the date 
     of enactment of this Act.
       (c) Rulemaking.--The Bureau shall issue such rules as may 
     be necessary to carry out this section, not later than 6 
     months after the date of enactment of this Act.
                                 ______
                                 
  SA 4086. Ms. CANTWELL (for herself and Mrs. Lincoln) submitted an 
amendment intended to be proposed to amendment SA 3739 proposed by Mr. 
Reid (for Mr. Dodd (for himself and Mrs. Lincoln)) to the bill S. 3217, 
to promote the financial stability of the United States by improving 
accountability and transparency in the financial system, to end ``too 
big to fail'', to protect the American taxpayer by ending bailouts, to 
protect consumers from abusive financial services practices, and for 
other purposes; which was ordered to lie on the table; as follows:

       On page 570, line 21, insert before ``In adopting'' the 
     following: ``Except as provided in paragraphs (3) and (10), 
     any swap that is required to be cleared is unlawful unless 
     the swap is cleared.''.
       On page 705, line 19, insert before the period the 
     following: ``unless there is a knowing failure by a party to 
     comply with, or reckless disregard for, the terms and 
     conditions of section 2(f) or regulations of the 
     Commission''.
       On page 705, line 20, strike ``No agreement'' and insert 
     the following: ``Unless there is a knowing failure by a party 
     to comply with, or a reckless disregard for, the definition 
     of the term `swap' under section 1(a) or the requirements of 
     section 2(h)(1), no agreement''.
       On page 708, line 17, strike ``and other prudential 
     requirements of this Act,''.
                                 ______
                                 
  SA 4087. Mr. PRYOR submitted an amendment intended to be proposed to 
amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for himself and 
Mrs. Lincoln)) to the bill S. 3217, to promote the financial stability 
of the United States by improving accountability and transparency in 
the financial system, to end ``too big to fail'', to protect the 
American taxpayer by ending bailouts, to protect consumers from abusive 
financial services practices, and for other purposes; which was ordered 
to lie on the table; as follows:

       On page 20, line 1, strike ``substantially'' and insert 
     ``predominantly''.
       On page 20, beginning on line 2, strike ``activities'' and 
     all that follows through line 5, and insert ``financial 
     activities, as defined in paragraph (6).''.
       On page 20, line 17, strike ``substantially'' and all that 
     follows through the end of line 20, and insert 
     ``predominantly engaged in financial activities as defined in 
     paragraph (6).''.
       On page 21, line 11, strike ``(6)'' and insert the 
     following:
       (6) Predominantly engaged.--A company is ``predominantly 
     engaged in financial activities'' if--
       (A) the annual gross revenues derived by the company and 
     all of its subsidiaries from activities that are financial in 
     nature (as defined in section 4(k) of the Bank Holding 
     Company Act of 1956) or are incidental to a financial 
     activity, and, if applicable, from the ownership or control 
     of one or more insured depository institutions, represents 85 
     percent or more of the consolidated annual gross revenues of 
     the company; or
       (B) the consolidated assets of the company and all of its 
     subsidiaries related to activities that are financial in 
     nature (as defined in section 4(k) of the Bank Holding 
     Company Act of 1956) or are incidental to a financial 
     activity, and, if applicable, related to the ownership or 
     control of one or more insured depository institutions, 
     represents 85 percent or more of the consolidated assets of 
     the company.
       (7)
       On page 21, line 16, strike ``criteria'' and all the 
     follows through line 22, and insert ``requirements for 
     determining if a company is predominantly engaged in 
     financial activities, as defined in paragraph (6).''.
       On page 37, line 3, strike ``(c)'' and insert the 
     following:
       (c) Anti-evasion.--
       (1) Determinations.--In order to avoid evasion of this Act, 
     the Council, on its own initiative or at the request of the 
     Board of Governors, may determine, on a nondelegable basis 
     and by a vote of not fewer than \2/3\ of the members then 
     serving, including an affirmative vote by the Chairperson, 
     that--
       (A) material financial distress related to financial 
     activities conducted directly or indirectly by a company 
     incorporated or organized under the laws of the United States 
     or any State or the financial activities in the United States 
     of a company incorporated or organized in a country other 
     than the United States would pose a threat to the financial 
     stability of the United States based on consideration of the 
     factors in subsection (b)(2);
       (B) the company is organized or operates in a manner that 
     evades the application of this Act; and
       (C) such financial activities of the company shall be 
     supervised by the Board of Governors and subject to 
     prudential standards in accordance with this title.
       (2) Notice and opportunity for hearing and final 
     determination; judicial review.--Subsections (d), (f), and 
     (g) shall apply to determinations made by the Council 
     pursuant to paragraph (1) in the same manner as such 
     subsections apply to nonbank financial companies.
       (3) Covered financial activities.--For purposes of this 
     subsection, the term ``financial activities'' means 
     activities that are financial in nature (as defined in 
     section 4(k) of the Bank Holding Company Act of 1956) and 
     related to the ownership or control of one or more insured 
     depository institutions and shall not include internal 
     financial activities conducted for the company or any 
     affiliates thereof including internal treasury, investment, 
     and employee benefit functions.
       (4) Treatment as a nonbank financial company.--
       (A) Only financial activities subject to prudential 
     supervision.--Nonfinancial activities of the company shall 
     not be subject to supervision by the Board of Governors and 
     prudential standards of the Board. For purposes of this Act, 
     the financial activities that are the subject of the 
     determination in paragraph (1) shall be subject to the same 
     requirements as a nonbank financial company. Nothing in this 
     paragraph shall prohibit or limit the authority of the Board 
     of Governors to apply prudential standards under

[[Page 8434]]

     this title to the financial activities that are subject to 
     the determination in paragraph (1).
       (B) Consolidated supervision of only financial 
     activities.--To facilitate the supervision of the financial 
     activities subject to the determination in paragraph (1), the 
     Board of Governors may require a company to establish an 
     intermediate holding company, as provided for in section 167, 
     which would be subject to the supervision of the Board of 
     Governors and to prudential standards under this title.
       (d)
       On page 37, line 15, strike ``(d)'' and insert ``(e)''.
       On page 39, line 3, strike ``(e)'' and insert ``(f)''.
       On page 40, line 13, strike ``(f)'' and insert ``(g)''.
       On page 40, line 21, strike ``(g)'' and insert ``(h)''.
                                 ______
                                 
  SA 4088. Mr. BAYH submitted an amendment intended to be proposed to 
amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for himself and 
Mrs. Lincoln)) to the bill S. 3217, to promote the financial stability 
of the United States by improving accountability and transparency in 
the financial system, to end ``too big to fail'', to protect the 
American taxpayer by ending bailouts, to protect consumers from abusive 
financial services practices, and for other purposes; which was ordered 
to lie on the table; as follows:

       On page 486, strike lines 1 through 12 and insert the 
     following:
       (3) the term ``sponsoring''--
       (A) when used with respect to a hedge fund or private 
     equity fund, means--
       (i) serving as a general partner, managing member, or 
     trustee of the fund;
       (ii) in any manner selecting or controlling (or having 
     employees, officers, directors, or agents who constitute) a 
     majority of the directors, trustees, or management of the 
     fund; or
       (iii) sharing with the fund, for corporate, marketing, 
     promotional, or other purposes, the same name or a variation 
     of the same name; and
       (B) does not include an activity of a banking entity with 
     respect to a hedge fund or private equity fund, if--
       (i) the banking entity provides bona fide trust, fiduciary 
     or investment advisory services;
       (ii) the fund is sponsored and offered only in connection 
     with the provision of bona fide trust, fiduciary, or 
     investment advisory services and only to persons that are 
     customers of such services of the banking entity;
       (iii) the banking entity does not acquire or retain an 
     equity interest, economic partnership interest, or ownership 
     interest in the fund, other than a partnership or ownership 
     interest acquired or retained solely in connection with the 
     provision of bona fide trust, fiduciary, or investment 
     advisory services;
       (iv) the banking entity does not enter into or otherwise 
     engage in any transaction with the fund that is a covered 
     transaction, as defined in section 23A of the Federal Reserve 
     Act (12 U.S.C. 371c);
       (v) the obligations of the fund are not guaranteed, 
     directly or indirectly, by the banking entity or any 
     subsidiary or affiliate of the banking entity; and
       (vi) the banking entity does not share with the fund, for 
     corporate, marketing, promotional, or other purposes, the 
     same name or a variation of the same name.
                                 ______
                                 
  SA 4089. Mr. CHAMBLISS submitted an amendment intended to be proposed 
to amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for himself 
and Mrs. Lincoln)) to the bill S. 3217, to promote the financial 
stability of the United States by improving accountability and 
transparency in the financial system, to end ``too big to fail'', to 
protect the American taxpayer by ending bailouts, to protect consumers 
from abusive financial services practices, and for other purposes; 
which was ordered to lie on the table; as follows:

       On page 567, line 8, strike ``5(b)'' and insert ``5b''.
                                 ______
                                 
  SA 4090. Mr. CORNYN submitted an amendment intended to be proposed by 
him to the bill S. 3217, to promote the financial stability of the 
United States by improving accountability and transparency in the 
financial system, to end ``too big to fail'', to protect the American 
taxpayer by ending bailouts, to protect consumers from abusive 
financial services practices, and for other purposes; which was ordered 
to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. STUDY AND REPORT ON A FEDERAL CHARTER FOR NONBANK 
                   FINANCIAL SERVICES BUSINESSES.

       (a) Study Required.--The research unit established by the 
     Director under section 1013 shall conduct a study on the 
     feasibility of establishing a Federal charter for nonbank 
     financial services businesses that offer credit products and 
     other financial services and products to consumers and small 
     businesses that are unbanked, underbanked, or have low credit 
     scores, low credit ratings, or below average credit histories 
     (in this section, referred to as ``underserved borrowers''), 
     including an analysis of--
       (1) common credit products and other financial services and 
     products available to underserved borrowers and the true 
     availability and costs of such products and services to all 
     underserved borrowers;
       (2) the true costs and expenses (including loan losses) of 
     creditors in providing credit products and other financial 
     services and products to underserved borrowers;
       (3) the merits, both positive and negative, of establishing 
     a Federal charter to enable nonbank financial services 
     businesses to provide reasonable and fair credit products and 
     other financial products and services to underserved 
     borrowers in a manner that is economically viable to nonbank 
     financial services businesses; and
       (4) the potential statutory and regulatory framework for 
     establishing a Federal charter for nonbank financial services 
     businesses that could reduce the costs for such businesses to 
     offer and deliver such products and services to underserved 
     borrowers and provide underserved borrowers throughout the 
     Nation with a reasonable and fair opportunity to access 
     credit and other financial services and products, and in turn 
     build their credit scores and histories.
       (b) Report to the Bureau.--Not later than 1 year after the 
     date of enactment of this Act, the research unit established 
     under section 1013 shall--
       (1) provide to the Bureau a report on the results of the 
     study conducted under subsection (a), together with--
       (A) a recommendation as to whether or not it would be in 
     the best interests of all underserved borrowers to establish 
     a Federal charter for nonbank financial services businesses 
     to provide credit products and other financial products and 
     services to underserved borrowers; and
       (B) a recommendation for the statutory and regulatory 
     framework for such a charter; and
       (2) make such report available to the public.
                                 ______
                                 
  SA 4091. Mr. JOHNSON (for himself, Ms. Landrieu, Mr. Burris, Mr. 
Brownback, Ms. Murkowski, Mr. Crapo, Mr. Roberts, Mr. Coburn, Mr. 
Tester, Mr. Brown of Ohio, Mr. Nelson of Nebraska, Mr. Cardin, and Mr. 
Bennett) submitted an amendment intended to be proposed to amendment SA 
3739 proposed by Mr. Reid (for Mr. Dodd (for himself and Mrs. Lincoln)) 
to the bill S. 3217, to promote the financial stability of the United 
States by improving accountability and transparency in the financial 
system, to end ``too big to fail'', to protect the American taxpayer by 
ending bailouts, to protect consumers from abusive financial services 
practices, and for other purposes; which was ordered to lie on the 
table; as follows:

       On page 99, line 14, strike ``risks.'' and insert the 
     following: ``risks, except that the Board of Governors may 
     not prescribe standards under this title that limit fully 
     secured extensions of credit by a Federal Home Loan Bank to 
     any member or former member of the Federal Home Loan Bank 
     made in compliance with the regulations of the Federal 
     Housing Finance Agency.''
                                 ______
                                 
  SA 4092. Mr. CHAMBLISS (for Mrs. Lincoln) submitted an amendment 
intended to be proposed by Mr. Chambliss to the bill S. 3217, to 
promote the financial stability of the United States by improving 
accountability and transparency in the financial system, to end ``too 
big to fail'', to protect the American taxpayer by ending bailouts, to 
protect consumers from abusive financial services practices, and for 
other purposes; which was ordered to lie on the table; as follows:

       Strike title VIII and insert the following:

       TITLE VIII--PAYMENT, CLEARING, AND SETTLEMENT SUPERVISION

     SEC. 801. SHORT TITLE.

       This title may be cited as the ``Payment, Clearing, and 
     Settlement Supervision Act of 2010''.

     SEC. 802. FINDINGS.

       Congress finds the following:
       (1) The proper functioning of the financial markets is 
     dependent upon safe and efficient arrangements for the 
     clearing and settlement of payment, securities, and other 
     financial transactions.
       (2) Financial market utilities that conduct or support 
     multilateral payment, clearing, or settlement activities may 
     reduce risks for their participants and the broader financial 
     system, but such utilities may also concentrate and create 
     new risks and thus must

[[Page 8435]]

     be well designed and operated in a safe and sound manner.
       (3) Payment, clearing, and settlement activities conducted 
     by financial institutions also present important risks to the 
     participating financial institutions and to the financial 
     system.
       (4) Enhancements to the regulation and supervision of 
     systemically important financial market utilities and the 
     conduct of systemically important payment, clearing, and 
     settlement activities by financial institutions are 
     necessary--
       (A) to provide consistency;
       (B) to promote robust risk management and safety and 
     soundness;
       (C) to reduce systemic risks; and
       (D) to support the stability of the broader financial 
     system.

     SEC. 803. DEFINITIONS.

       In this title, the following definitions shall apply:
       (1) Designated activity.--The term ``designated activity'' 
     means a payment, clearing, or settlement activity (other than 
     a payment, clearing, or settlement activity that is regulated 
     by the Commodity Futures Trading Commission or the Securities 
     and Exchange Commission) that the Council has designated as 
     systemically important under section 804.
       (2) Designated financial market utility.--The term 
     ``designated financial market utility'' means a financial 
     market utility that the Council has designated as 
     systemically important under section 804.
       (3) Financial institution.--The term ``financial 
     institution'' means--
       (A) a depository institution, as defined in section 3 of 
     the Federal Deposit Insurance Act (12 U.S.C. 1813);
       (B) a branch or agency of a foreign bank, as defined in 
     section 1(b) of the International Banking Act of 1978 (12 
     U.S.C. 3101);
       (C) an organization operating under section 25 or 25A of 
     the Federal Reserve Act (12 U.S.C. 601-604a and 611 through 
     631);
       (D) a credit union, as defined in section 101 of the 
     Federal Credit Union Act (12 U.S.C. 1752);
       (E) a broker or dealer, as defined in section 3 of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78c);
       (F) an investment company, as defined in section 3 of the 
     Investment Company Act of 1940 (15 U.S.C. 80a-3);
       (G) an insurance company, as defined in section 2 of the 
     Investment Company Act of 1940 (15 U.S.C. 80a-2);
       (H) an investment adviser, as defined in section 202 of the 
     Investment Advisers Act of 1940 (15 U.S.C. 80b-2);
       (I) a futures commission merchant, commodity trading 
     advisor, or commodity pool operator, as defined in section 1a 
     of the Commodity Exchange Act (7 U.S.C. 1a); and
       (J) any company engaged in activities that are financial in 
     nature or incidental to a financial activity, as described in 
     section 4 of the Bank Holding Company Act of 1956 (12 U.S.C. 
     1843(k)).
       (4) Financial market utility.--The term ``financial market 
     utility'' means any person that manages or operates a 
     multilateral system for the purpose of transferring, 
     clearing, or settling payments, securities, or other 
     financial transactions among financial institutions or 
     between financial institutions and the person.
       (5) Payment, clearing, or settlement activity.--
       (A) In general.--The term ``payment, clearing, or 
     settlement activity'' means an activity carried out by 1 or 
     more financial institutions to facilitate the completion of 
     financial transactions.
       (B) Financial transaction.--For the purposes of 
     subparagraph (A), the term ``financial transaction'' 
     includes--
       (i) funds transfers;
       (ii) securities contracts;
       (iii) contracts of sale of a commodity for future delivery;
       (iv) forward contracts;
       (v) repurchase agreements;
       (vi) swaps;
       (vii) security-based swaps;
       (viii) foreign exchange swaps and forwards; and
       (ix) any similar transaction that the Council determines to 
     be a financial transaction for purposes of this title.
       (C) Included activities.--When conducted with respect to a 
     financial transaction, payment, clearing, and settlement 
     activities may include--
       (i) the calculation and communication of unsettled 
     financial transactions between counterparties;
       (ii) the netting of transactions;
       (iii) provision and maintenance of trade, contract, or 
     instrument information;
       (iv) the management of risks and activities associated with 
     continuing financial transactions;
       (v) transmittal and storage of payment instructions;
       (vi) the movement of funds;
       (vii) the final settlement of financial transactions; and
       (viii) other similar functions that the Council may 
     determine.
       (6) Supervisory agency.--
       (A) In general.--The term ``Supervisory Agency'' means the 
     Federal agency that has primary jurisdiction over a 
     designated financial market utility under Federal banking, 
     securities, or commodity futures laws, including--
       (i) the Securities and Exchange Commission, with respect to 
     a designated financial market utility that is registered with 
     the Securities and Exchange Commission;
       (ii) the Commodity Futures Trading Commission, with respect 
     to a designated financial market utility that is registered 
     with the Commodity Futures Trading Commission;
       (iii) the appropriate Federal banking agency, with respect 
     to a designated financial market utility that is an 
     institution described in section 3(q) of the Federal Deposit 
     Insurance Act; and
       (iv) the Board of Governors, with respect to a designated 
     financial market utility that is otherwise not subject to the 
     jurisdiction of any agency listed in clauses (i), (ii), and 
     (iii).
       (B) Multiple agency jurisdiction.--
       (i) If a designated financial market utility is subject to 
     the primary jurisdictional supervision of more than 1 agency 
     listed in clauses (iii) or (iv) of subparagraph (A), then 
     such agencies should agree on 1 agency to act as the 
     Supervisory Agency, and if such agencies cannot agree on 
     which agency has primary jurisdiction, the Council shall 
     decide which agency is the Supervisory Agency for purposes of 
     this title.
       (ii) If a designated financial market utility is subject to 
     the primary jurisdictional supervision of more than 1 agency 
     listed in clauses (i) through (iv) of subparagraph (A), and 
     such designated financial market utility is registered with 
     either the Commodity Futures Trading Commission or the 
     Securities and Exchange Commission, the Commodity Futures 
     Trading Commission or the Securities and Exchange Commission, 
     as applicable, shall be the Supervisory Agency for purposes 
     of this title. If the designated financial market utility is 
     registered with both the Commodity Futures Trading Commission 
     and the Securities and Exchange Commission, then the agency 
     which oversees the predominance of the payment, clearing, and 
     settlement activities conducted by the designated financial 
     market utility shall be the Supervisory Agency for purposes 
     of this title.
       (7) Systemically important and systemic importance.--The 
     terms ``systemically important'' and ``systemic importance'' 
     mean a situation where the failure of or a disruption to the 
     functioning of a financial market utility or the conduct of a 
     payment, clearing, or settlement activity could create, or 
     increase, the risk of significant liquidity or credit 
     problems spreading among financial institutions or markets 
     and thereby threaten the stability of the financial system.

     SEC. 804. DESIGNATION OF SYSTEMIC IMPORTANCE.

       (a) Designation.--
       (1) Financial stability oversight council.--The Council, on 
     a nondelegable basis and by a vote of not fewer than \2/3\ of 
     members then serving, including an affirmative vote by the 
     Chairperson, shall designate those financial market utilities 
     or payment, clearing, or settlement activities that the 
     Council determines are, or are likely to become, systemically 
     important.
       (2) Considerations.--In determining whether a financial 
     market utility or payment, clearing, or settlement activity 
     is, or is likely to become, systemically important, the 
     Council shall take into consideration the following:
       (A) The aggregate monetary value of transactions processed 
     by the financial market utility or carried out through the 
     payment, clearing, or settlement activity.
       (B) The aggregate exposure of the financial market utility 
     or a financial institution engaged in payment, clearing, or 
     settlement activities to its counterparties.
       (C) The relationship, interdependencies, or other 
     interactions of the financial market utility or payment, 
     clearing, or settlement activity with other financial market 
     utilities or payment, clearing, or settlement activities.
       (D) The effect that the failure of or a disruption to the 
     financial market utility or payment, clearing, or settlement 
     activity would have on critical markets, financial 
     institutions, or the broader financial system.
       (E) Any other factors that the Council deems appropriate.
       (b) Rescission of Designation.--
       (1) In general.--The Council, on a nondelegable basis and 
     by a vote of not fewer than \2/3\ of members then serving, 
     including an affirmative vote by the Chairperson, shall 
     rescind a designation of systemic importance for a designated 
     financial market utility or designated activity if the 
     Council determines that the utility or activity no longer 
     meets the standards for systemic importance.
       (2) Effect of rescission.--Upon rescission, the financial 
     market utility or financial institutions conducting the 
     activity will no longer be subject to the provisions of this 
     title or any rules or orders prescribed by the Council under 
     this title.
       (c) Consultation and Notice and Opportunity for Hearing.--
       (1) Consultation.--Before making any determination under 
     subsection (a) or (b), the Council shall consult with the 
     relevant Supervisory Agency.
       (2) Advance notice and opportunity for hearing.--

[[Page 8436]]

       (A) In general.--Before making any determination under 
     subsection (a) or (b), the Council shall provide the 
     financial market utility or, in the case of a payment, 
     clearing, or settlement activity, financial institutions with 
     advance notice of the proposed determination of the Council.
       (B) Notice in federal register.--The Council shall provide 
     such advance notice to financial institutions by publishing a 
     notice in the Federal Register.
       (C) Requests for hearing.--Within 30 days from the date of 
     any notice of the proposed determination of the Council, the 
     financial market utility or, in the case of a payment, 
     clearing, or settlement activity, a financial institution 
     engaged in the designated activity may request, in writing, 
     an opportunity for a written or oral hearing before the 
     Council to demonstrate that the proposed designation or 
     rescission of designation is not supported by substantial 
     evidence.
       (D) Written submissions.--Upon receipt of a timely request, 
     the Council shall fix a time, not more than 30 days after 
     receipt of the request, unless extended at the request of the 
     financial market utility or financial institution, and place 
     at which the financial market utility or financial 
     institution may appear, personally or through counsel, to 
     submit written materials, or, at the sole discretion of the 
     Council, oral testimony or oral argument.
       (3) Emergency exception.--
       (A) Waiver or modification by vote of the council.--The 
     Council may waive or modify the requirements of paragraph (2) 
     if the Council determines, by an affirmative vote of not less 
     than \2/3\ of all members then serving, including an 
     affirmative vote by the Chairperson, that the waiver or 
     modification is necessary to prevent or mitigate an immediate 
     threat to the financial system posed by the financial market 
     utility or the payment, clearing, or settlement activity.
       (B) Notice of waiver or modification.--The Council shall 
     provide notice of the waiver or modification to the financial 
     market utility concerned or, in the case of a payment, 
     clearing, or settlement activity, to financial institutions, 
     as soon as practicable, which shall be no later than 24 hours 
     after the waiver or modification in the case of a financial 
     market utility and 3 business days in the case of financial 
     institutions. The Council shall provide the notice to 
     financial institutions by posting a notice on the website of 
     the Council and by publishing a notice in the Federal 
     Register.
       (d) Notification of Final Determination.--
       (1) After hearing.--Within 60 days of any hearing under 
     subsection (c)(2), the Council shall notify the financial 
     market utility or financial institutions of the final 
     determination of the Council in writing, which shall include 
     findings of fact upon which the determination of the Council 
     is based.
       (2) When no hearing requested.--If the Council does not 
     receive a timely request for a hearing under subsection 
     (c)(2), the Council shall notify the financial market utility 
     or financial institutions of the final determination of the 
     Council in writing not later than 30 days after the 
     expiration of the date by which a financial market utility or 
     a financial institution could have requested a hearing. All 
     notices to financial institutions under this subsection shall 
     be published in the Federal Register.
       (e) Extension of Time Periods.--The Council may extend the 
     time periods established in subsections (c) and (d) as the 
     Council determines to be necessary or appropriate.

     SEC. 805. STANDARDS FOR SYSTEMICALLY IMPORTANT DESIGNATED 
                   FINANCIAL MARKET UTILITIES AND PAYMENT, 
                   CLEARING, OR SETTLEMENT ACTIVITIES.

       (a) Authority To Prescribe Standards.--The Board of 
     Governors, by rule or order, and in consultation with the 
     Council and the Supervisory Agencies, shall prescribe risk 
     management standards, taking into consideration relevant 
     international standards and existing prudential requirements, 
     governing--
       (1) the operations related to the payment, clearing, and 
     settlement activities of designated financial market 
     utilities other than designated financial market utilities 
     for which the Supervisory Agency is either the Commodity 
     Futures Trading Commission or the Securities and Exchange 
     Commission; and
       (2) the conduct of designated activities by financial 
     institutions.
       (b) Recommended Standards.--
       (1) In general.--The Council may recommend risk management 
     standards regarding the operations of payment, clearing, and 
     settlement activities of designated financial market 
     utilities for which the Commodity Futures Trading Commission 
     or the Securities and Exchange Commission is the Supervisory 
     Agency, taking into consideration relevant international 
     standards and existing prudential requirements.
       (2) Procedure for recommendation.--The Council shall 
     consult with the Commodity Futures Trading Commission or the 
     Securities and Exchange Commission, as applicable, and shall 
     provide notice to the public and opportunity for comment for 
     any proposed recommendation under paragraph (1).
       (3) Consideration and implementation.--The Commodity 
     Futures Trading Commission or the Securities and Exchange 
     Commission, as applicable, may impose the standards 
     recommended by the Council under paragraph (1), or shall 
     explain in writing to the Council, not later than 90 days 
     after the date on which it receives the Council's 
     recommendation, why the agency has determined not to follow 
     the recommendation of the Council.
       (c) Objectives and Principles.--The objectives and 
     principles for the risk management standards prescribed under 
     subsection (a) or recommended under subsection (b) shall be 
     to--
       (1) promote robust risk management;
       (2) promote safety and soundness;
       (3) reduce systemic risks; and
       (4) support the stability of the broader financial system.
       (d) Scope.--The standards prescribed under subsection (a) 
     or recommended under subsection (b) may address areas such 
     as--
       (1) risk management policies and procedures;
       (2) margin and collateral requirements;
       (3) participant or counterparty default policies and 
     procedures;
       (4) the ability to complete timely clearing and settlement 
     of financial transactions;
       (5) capital and financial resource requirements for 
     designated financial market utilities; and
       (6) other areas that the Board of Governors determines are 
     necessary to achieve the objectives and principles in 
     subsection (c).
       (e) Threshold Level.--The standards prescribed under 
     subsection (a) governing the conduct of designated activities 
     by financial institutions shall, where appropriate, establish 
     a threshold as to the level or significance of engagement in 
     the activity at which a financial institution will become 
     subject to the standards with respect to that activity.
       (f) Compliance Required.--Designated financial market 
     utilities and financial institutions subject to the standards 
     prescribed by the Board of Governors under subsection (a) for 
     a designated activity shall conduct their operations in 
     compliance with the applicable risk management standards 
     prescribed by the Board of Governors.

     SEC. 806. OPERATIONS OF DESIGNATED FINANCIAL MARKET 
                   UTILITIES.

       (a) Federal Reserve Account and Services.--The Board of 
     Governors may authorize a Federal Reserve Bank to establish 
     and maintain an account for a designated financial market 
     utility and provide services to the designated financial 
     market utility that the Federal Reserve Bank is authorized 
     under the Federal Reserve Act to provide to a depository 
     institution, subject to any applicable rules, orders, 
     standards, or guidelines prescribed by the Board of 
     Governors.
       (b) Advances.--The Board of Governors may authorize a 
     Federal Reserve Bank to provide to a designated financial 
     market utility the same discount and borrowing privileges as 
     the Federal Reserve Bank may provide to a depository 
     institution under the Federal Reserve Act, subject to any 
     applicable rules, orders, standards, or guidelines prescribed 
     by the Board of Governors.
       (c) Earnings on Federal Reserve Balances.--A Federal 
     Reserve Bank may pay earnings on balances maintained by or on 
     behalf of a designated financial market utility in the same 
     manner and to the same extent as the Federal Reserve Bank may 
     pay earnings to a depository institution under the Federal 
     Reserve Act, subject to any applicable rules, orders, 
     standards, or guidelines prescribed by the Board of 
     Governors.
       (d) Reserve Requirements.--The Board of Governors may 
     exempt a designated financial market utility from, or modify 
     any, reserve requirements under section 19 of the Federal 
     Reserve Act (12 U.S.C. 461) applicable to a designated 
     financial market utility.
       (e) Changes to Rules, Procedures, or Operations.--
       (1) Advance notice.--
       (A) Advance notice of proposed changes required.--A 
     designated financial market utility shall provide 60-days' 
     advance notice to its Supervisory Agency and the Board of 
     Governors of any proposed change to its rules, procedures, or 
     operations that could, as defined in rules of the Board of 
     Governors, materially affect, the nature or level of risks 
     presented by the designated financial market utility.
       (B) Terms and standards prescribed by the board of 
     governors.--The Board of Governors shall prescribe 
     regulations that define and describe the standards for 
     determining when notice is required to be provided under 
     subparagraph (A).
       (C) Contents of notice.--The notice of a proposed change 
     shall describe--
       (i) the nature of the change and expected effects on risks 
     to the designated financial market utility, its participants, 
     or the market; and
       (ii) how the designated financial market utility plans to 
     manage any identified risks.
       (D) Additional information.--The Supervisory Agency or the 
     Board of Governors may require a designated financial market 
     utility to provide any information necessary to assess the 
     effect the proposed change would have on the nature or level 
     of risks associated with the designated financial market 
     utility's payment, clearing, or settlement activities and the 
     sufficiency of any proposed risk management techniques.

[[Page 8437]]

       (E) Notice of objection.--The Supervisory Agency or the 
     Board of Governors shall notify the designated financial 
     market utility of any objection regarding the proposed change 
     within 60 days from the later of--
       (i) the date that the notice of the proposed change is 
     received; or
       (ii) the date any further information requested for 
     consideration of the notice is received.
       (F) Change not allowed if objection.--A designated 
     financial market utility shall not implement a change to 
     which the Board of Governors or the Supervisory Agency has an 
     objection.
       (G) Change allowed if no objection within 60 days.--A 
     designated financial market utility may implement a change if 
     it has not received an objection to the proposed change 
     within 60 days of the later of--
       (i) the date that the Supervisory Agency or the Board of 
     Governors receives the notice of proposed change; or
       (ii) the date the Supervisory Agency or the Board of 
     Governors receives any further information it requests for 
     consideration of the notice.
       (H) Review extension for novel or complex issues.--The 
     Supervisory Agency or the Board of Governors may, during the 
     60-day review period, extend the review period for an 
     additional 60 days for proposed changes that raise novel or 
     complex issues, subject to the Supervisory Agency or the 
     Board of Governors providing the designated financial market 
     utility with prompt written notice of the extension. Any 
     extension under this subparagraph will extend the time 
     periods under subparagraphs (E) and (G).
       (I) Change allowed earlier if notified of no objection.--A 
     designated financial market utility may implement a change in 
     less than 60 days from the date of receipt of the notice of 
     proposed change by the Supervisory Agency or the Board of 
     Governors, or the date the Supervisory Agency or the Board of 
     Governors receives any further information it requested, if 
     the Supervisory Agency or the Board of Governors notifies the 
     designated financial market utility in writing that it does 
     not object to the proposed change and authorizes the 
     designated financial market utility to implement the change 
     on an earlier date, subject to any conditions imposed by the 
     Supervisory Agency or the Board of Governors.
       (2) Emergency changes.--
       (A) In general.--A designated financial market utility may 
     implement a change that would otherwise require advance 
     notice under this subsection if it determines that--
       (i) an emergency exists; and
       (ii) immediate implementation of the change is necessary 
     for the designated financial market utility to continue to 
     provide its services in a safe and sound manner.
       (B) Notice required within 24 hours.--The designated 
     financial market utility shall provide notice of any such 
     emergency change to its Supervisory Agency and the Board of 
     Governors, as soon as practicable, which shall be no later 
     than 24 hours after implementation of the change.
       (C) Contents of emergency notice.--In addition to the 
     information required for changes requiring advance notice, 
     the notice of an emergency change shall describe--
       (i) the nature of the emergency; and
       (ii) the reason the change was necessary for the designated 
     financial market utility to continue to provide its services 
     in a safe and sound manner.
       (D) Modification or rescission of change may be required.--
     The Supervisory Agency or the Board of Governors may require 
     modification or rescission of the change if it finds that the 
     change is not consistent with the purposes of this Act or any 
     rules, orders, or standards prescribed by the Board of 
     Governors hereunder.
       (3) Copying the board of governors.--The Supervisory Agency 
     shall provide the Board of Governors concurrently with a 
     complete copy of any notice, request, or other information it 
     issues, submits, or receives under this subsection.
       (4) Consultation with board of governors.--Before taking 
     any action on, or completing its review of, a change proposed 
     by a designated financial market utility, the Supervisory 
     Agency shall consult with the Board of Governors.
       (f) Applicability.--Nothing in this section shall be 
     applicable to any designated financial market utility for 
     which the Supervisory Agency is the Commodity Futures Trading 
     Commission or the Securities and Exchange Commission. 
     Notwithstanding the previous sentence, nothing in this 
     subsection shall limit or be construed to limit the authority 
     of the Board under section 13(3) of the Federal Reserve Act 
     (12 U.S.C. 343).

     SEC. 807. EXAMINATION OF AND ENFORCEMENT ACTIONS AGAINST 
                   DESIGNATED FINANCIAL MARKET UTILITIES.

       (a) Examination.--Notwithstanding any other provision of 
     law and subject to subsection (d), the Supervisory Agency 
     shall conduct examinations of a designated financial market 
     utility at least once annually in order to determine the 
     following:
       (1) The nature of the operations of, and the risks borne 
     by, the designated financial market utility.
       (2) The financial and operational risks presented by the 
     designated financial market utility to financial 
     institutions, critical markets, or the broader financial 
     system.
       (3) The resources and capabilities of the designated 
     financial market utility to monitor and control such risks.
       (4) The safety and soundness of the designated financial 
     market utility.
       (5) For a designated financial market utility for which the 
     Supervisory Agency is not the Commodity Futures Trading 
     Commission or the Securities and Exchange Commission, the 
     designated financial market utility's compliance with--
       (A) this title; and
       (B) the rules and orders prescribed by the Board of 
     Governors under this title.
       (b) Service Providers.--Whenever a service integral to the 
     operation of a designated financial market utility is 
     performed for the designated financial market utility by 
     another entity, whether an affiliate or non-affiliate and 
     whether on or off the premises of the designated financial 
     market utility, the Supervisory Agency may examine whether 
     the provision of that service is in compliance with 
     applicable law, rules, orders, and standards to the same 
     extent as if the designated financial market utility were 
     performing the service on its own premises.
       (c) Enforcement.--For purposes of enforcing the provisions 
     of this section, a designated financial market utility shall 
     be subject to, and the appropriate Supervisory Agency shall 
     have authority under the provisions of subsections (b) 
     through (n) of section 8 of the Federal Deposit Insurance Act 
     (12 U.S.C. 1818) in the same manner and to the same extent as 
     if the designated financial market utility was an insured 
     depository institution and the Supervisory Agency was the 
     appropriate Federal banking agency for such insured 
     depository institution.
       (d) Board of Governors Involvement in Examinations.--
       (1) Board of governors consultation on examination 
     planning.--The Supervisory Agency shall consult with the 
     Board of Governors regarding the scope and methodology of any 
     examination conducted under subsections (a) and (b).
       (2) Board of governors participation in examination.--The 
     Board of Governors may, in its discretion, participate in any 
     examination led by a Supervisory Agency and conducted under 
     subsections (a) and (b).
       (e) Board of Governors Enforcement Recommendations.--
       (1) Recommendation.--The Board of Governors may at any time 
     recommend to the Supervisory Agency that such agency take 
     enforcement action against a designated financial market 
     utility. Any such recommendation for enforcement action shall 
     provide a detailed analysis supporting the recommendation of 
     the Board of Governors.
       (2) Consideration.--The Supervisory Agency shall consider 
     the recommendation of the Board of Governors and submit a 
     response to the Board of Governors within 60 days.
       (3) Mediation.--If the Supervisory Agency rejects, in whole 
     or in part, the recommendation of the Board of Governors, the 
     Board of Governors may dispute the matter by referring the 
     recommendation to the Council, which shall attempt to resolve 
     the dispute.
       (4) Enforcement action.--If the Council is unable to 
     resolve the dispute under paragraph (3) within 30 days from 
     the date of referral, the Board of Governors may, upon a vote 
     of its members--
       (A) exercise the enforcement authority referenced in 
     subsection (c) as if it were the Supervisory Agency; and
       (B) take enforcement action against the designated 
     financial market utility.
       (f) Emergency Enforcement Actions by the Board of 
     Governors.--
       (1) Imminent risk of substantial harm.--The Board of 
     Governors may, after consulting with the Council and the 
     Supervisory Agency, take enforcement action against a 
     designated financial market utility if the Board of Governors 
     has reasonable cause to believe that--
       (A) either--
       (i) an action engaged in, or contemplated by, a designated 
     financial market utility (including any change proposed by 
     the designated financial market utility to its rules, 
     procedures, or operations that would otherwise be subject to 
     section 806(e)) poses an imminent risk of substantial harm to 
     financial institutions, critical markets, or the broader 
     financial system; or
       (ii) the condition of a designated financial market 
     utility, poses an imminent risk of substantial harm to 
     financial institutions, critical markets, or the broader 
     financial system; and
       (B) the imminent risk of substantial harm precludes the 
     Board of Governors' use of the procedures in subsection (e).
       (2) Enforcement authority.--For purposes of taking 
     enforcement action under paragraph (1), a designated 
     financial market utility shall be subject to, and the Board 
     of Governors shall have authority under the provisions of 
     subsections (b) through (n) of section 8 of the Federal 
     Deposit Insurance Act (12 U.S.C. 1818) in the same manner and 
     to the same extent as if the designated financial market 
     utility was an insured depository institution and the Board 
     of Governors was the appropriate Federal banking agency for 
     such insured depository institution.
       (3) Prompt notice to supervisory agency of enforcement 
     action.--Within 24 hours of

[[Page 8438]]

     taking an enforcement action under this subsection, the Board 
     of Governors shall provide written notice to the designated 
     financial market utility's Supervisory Agency containing a 
     detailed analysis of the action of the Board of Governors, 
     with supporting documentation included.
       (g) Rule of Construction.--Nothing in this section shall be 
     construed to make the provisions of subsections (c), (d), 
     (e), or (f) applicable with respect to any designated 
     financial market utility for which the Supervisory Agency is 
     the Commodity Futures Trading Commission or the Securities 
     and Exchange Commission.

     SEC. 808. EXAMINATION OF AND ENFORCEMENT ACTIONS AGAINST 
                   FINANCIAL INSTITUTIONS SUBJECT TO STANDARDS FOR 
                   DESIGNATED ACTIVITIES.

       (a) Examination.--The primary financial regulatory agency 
     is authorized to examine a financial institution subject to 
     the standards prescribed by the Board of Governors for a 
     designated activity in order to determine the following:
       (1) The nature and scope of the designated activities 
     engaged in by the financial institution.
       (2) The financial and operational risks the designated 
     activities engaged in by the financial institution may pose 
     to the safety and soundness of the financial institution.
       (3) The financial and operational risks the designated 
     activities engaged in by the financial institution may pose 
     to other financial institutions, critical markets, or the 
     broader financial system.
       (4) The resources available to and the capabilities of the 
     financial institution to monitor and control the risks 
     described in paragraphs (2) and (3).
       (5) The financial institution's compliance with this title 
     and the rules and orders prescribed by the Board of Governors 
     under this title.
       (b) Enforcement.--For purposes of enforcing the provisions 
     of this section, and the rules and orders prescribed by the 
     Board of Governors under this section, a financial 
     institution subject to the standards prescribed by the Board 
     of Governors for a designated activity shall be subject to, 
     and the primary financial regulatory agency shall have 
     authority under the provisions of subsections (b) through (n) 
     of section 8 of the Federal Deposit Insurance Act (12 U.S.C. 
     1818) in the same manner and to the same extent as if the 
     financial institution was an insured depository institution 
     and the primary financial regulatory agency was the 
     appropriate Federal banking agency for such insured 
     depository institution.
       (c) Technical Assistance.--The Board of Governors shall 
     consult with and provide such technical assistance as may be 
     required by the primary financial regulatory agencies to 
     ensure that the rules and orders prescribed by the Board of 
     Governors with respect to a designated activity under this 
     title are interpreted and applied in as consistent and 
     uniform a manner as practicable.
       (d) Delegation.--
       (1) Examination.--
       (A) Request to board of governors.--The primary financial 
     regulatory agency may request the Board of Governors to 
     conduct or participate in an examination of a financial 
     institution subject to the standards prescribed by the Board 
     of Governors for a designated activity in order to assess the 
     compliance of such financial institution with--
       (i) this title; or
       (ii) the rules or orders prescribed by the Board of 
     Governors under this title.
       (B) Examination by board of governors.--Upon receipt of an 
     appropriate written request, the Board of Governors will 
     conduct the examination under such terms and conditions to 
     which the Board of Governors and the primary financial 
     regulatory agency mutually agree.
       (2) Enforcement.--
       (A) Request to board of governors.--The primary financial 
     regulatory agency may request the Board of Governors to 
     enforce this title or the rules or orders prescribed by the 
     Board of Governors under this title against a financial 
     institution that is subject to the standards prescribed by 
     the Board of Governors for a designated activity.
       (B) Enforcement by board of governors.--Upon receipt of an 
     appropriate written request, the Board of Governors shall 
     determine whether an enforcement action is warranted, and, if 
     so, it shall enforce compliance with this title or the rules 
     or orders prescribed by the Board of Governors with respect 
     to a designated activity under this title and, if so, the 
     financial institution shall be subject to, and the Board of 
     Governors shall have authority under the provisions of 
     subsections (b) through (n) of section 8 of the Federal 
     Deposit Insurance Act (12 U.S.C. 1818) in the same manner and 
     to the same extent as if the financial institution was an 
     insured depository institution and the Board of Governors was 
     the appropriate Federal banking agency for such insured 
     depository institution
       (e) Back-up Authority of the Board of Governors.--
       (1) Examination and enforcement.--Notwithstanding any other 
     provision of law, the Board of Governors may--
       (A) conduct an examination of the type described in 
     subsection (a) of any financial institution that is subject 
     to the standards prescribed by the Board of Governors for a 
     designated activity; and
       (B) enforce the provisions of this title or any rules or 
     orders prescribed by the Board of Governors under this title 
     against any financial institution that is subject to the 
     standards prescribed by the Board of Governors for a 
     designated activity.
       (2) Limitations.--
       (A) Examination.--The Board of Governors may exercise the 
     authority described in paragraph (1)(A) only if the Board of 
     Governors has--
       (i) reasonable cause to believe that a financial 
     institution is not in compliance with this title or the rules 
     or orders prescribed by the Board of Governors under this 
     title with respect to a designated activity;
       (ii) notified, in writing, the primary financial regulatory 
     agency and the Council of its belief under clause (i) with 
     supporting documentation included;
       (iii) requested the primary financial regulatory agency to 
     conduct a prompt examination of the financial institution; 
     and
       (iv) either--

       (I) not been afforded a reasonable opportunity to 
     participate in an examination of the financial institution by 
     the primary financial regulatory agency within 30 days after 
     the date of the Board's notification under clause (ii); or
       (II) reasonable cause to believe that the financial 
     institution's noncompliance with this title or the rules or 
     orders prescribed by the Board of Governors with respect to a 
     designated activity under this title poses a substantial risk 
     to other financial institutions, critical markets, or the 
     broader financial system, subject to the Board of Governors 
     affording the primary financial regulatory agency a 
     reasonable opportunity to participate in the examination.

       (B) Enforcement.--The Board of Governors may exercise the 
     authority described in paragraph (1)(B) only if the Board of 
     Governors has--
       (i) reasonable cause to believe that a financial 
     institution is not in compliance with this title or the rules 
     or orders prescribed by the Board of Governors under this 
     title with respect to a designated activity;
       (ii) notified, in writing, the primary financial regulatory 
     agency and the Council of its belief under clause (i) with 
     supporting documentation included and with a recommendation 
     that the primary financial regulatory agency take 1 or more 
     specific enforcement actions against the financial 
     institution; and
       (iii) either--

       (I) not been notified, in writing, by the primary financial 
     regulatory agency of the commencement of an enforcement 
     action recommended by the Board of Governors against the 
     financial institution within 60 days from the date of the 
     notification under clause (ii); or
       (II) reasonable cause to believe that the financial 
     institution's noncompliance with this title or the rules or 
     orders prescribed by the Board of Governors with respect to a 
     designated activity under this title poses a substantial risk 
     to other financial institutions, critical markets, or the 
     broader financial system, subject to the Board of Governors 
     notifying the primary financial regulatory agency of the 
     Board's enforcement action.

       (3) Enforcement provisions.--For purposes of taking 
     enforcement action under paragraph (1), the financial 
     institution shall be subject to, and the Board of Governors 
     shall have authority under the provisions of subsections (b) 
     through (n) of section 8 of the Federal Deposit Insurance Act 
     (12 U.S.C. 1818) in the same manner and to the same extent as 
     if the financial institution was an insured depository 
     institution and the Board of Governors was the appropriate 
     Federal banking agency for such insured depository 
     institution.

     SEC. 809. REQUESTS FOR INFORMATION, REPORTS, OR RECORDS.

       (a) Information To Assess Systemic Importance.--
       (1) Financial market utilities.--The Council is authorized 
     to require any financial market utility to submit such 
     information as the Council may require for the sole purpose 
     of assessing whether that financial market utility is 
     systemically important, but only if the Council has 
     reasonable cause to believe that the financial market utility 
     meets the standards for systemic importance set forth in 
     section 804.
       (2) Financial institutions engaged in payment, clearing, or 
     settlement activities.--The Council is authorized to require 
     any financial institution to submit such information as the 
     Council may require for the sole purpose of assessing whether 
     any payment, clearing, or settlement activity engaged in or 
     supported by a financial institution is systemically 
     important, but only if the Council has reasonable cause to 
     believe that the activity meets the standards for systemic 
     importance set forth in section 804.
       (b) Reporting After Designation.--
       (1) Designated financial market utilities.--The Board of 
     Governors and the Council may require a designated financial 
     market utility to submit reports or data to the Board of 
     Governors and the Council in such frequency and form as 
     deemed necessary by the Board of Governors and the Council in 
     order to assess the safety and soundness of the utility and 
     the systemic risk that the utility's operations pose to the 
     financial system.

[[Page 8439]]

       (2) Financial institutions subject to standards designated 
     activities.--The Board of Governors and the Council may 
     require 1 or more financial institutions subject to the 
     standards prescribed by the Board of Governors for a 
     designated activity to submit, in such frequency and form as 
     deemed necessary by the Board of Governors and the Council, 
     reports and data to the Board of Governors and the Council 
     solely with respect to the conduct of the designated activity 
     and solely to assess whether--
       (A) the rules, orders, or standards prescribed by the Board 
     of Governors with respect to the designated activity 
     appropriately address the risks to the financial system 
     presented by such activity; and
       (B) the financial institutions are in compliance with this 
     title and the rules and orders prescribed by the Board of 
     Governors under this title with respect to the designated 
     activity.
       (c) Coordination With Appropriate Federal Supervisory 
     Agency.--
       (1) Advance coordination.--Before directly requesting any 
     material information from, or imposing reporting or 
     recordkeeping requirements on, any financial market utility 
     or any financial institution engaged in a payment, clearing, 
     or settlement activity as provided in subsections (a) and 
     (b), the Board of Governors and the Council shall coordinate 
     with the Supervisory Agency for a financial market utility or 
     the primary financial regulatory agency for a financial 
     institution to determine if the information is available from 
     or may be obtained by the agency in the form, format, or 
     detail required by the Board of Governors and the Council.
       (2) Supervisory reports.--For purposes of the coordination 
     required by paragraph (1), and notwithstanding any other 
     provision of law, the Supervisory Agency, the primary 
     financial regulatory agency, and the Board of Governors are 
     authorized to disclose to each other and the Council copies 
     of its examination reports or similar reports regarding any 
     financial market utility or any financial institution engaged 
     in payment, clearing, or settlement activities.
       (d) Timing of Response From Appropriate Federal Supervisory 
     Agency.--
       (1) In general.--If the information, report, records, or 
     data requested by the Board of Governors or the Council under 
     subsection (c)(1) are not provided in full by the Supervisory 
     Agency or the primary financial regulatory agency in less 
     than 15 days after the date on which the material is 
     requested, the Board of Governors or the Council may request 
     the information or impose recordkeeping or reporting 
     requirements directly on such persons as provided in 
     subsections (a) and (b) with notice to the agency.
       (2) Rule of construction.--Nothing in this section 
     authorizes or shall be construed to authorize the Board of 
     Governors or the Council to prescribe any recordkeeping or 
     reporting requirements on designated financial market 
     utilities for which the Supervisory Agency is the Commodity 
     Futures Trading Commission or the Securities and Exchange 
     Commission.
       (e) Sharing of Information.--
       (1) Material concerns.--Notwithstanding any other provision 
     of law, the Board of Governors, the Council, the primary 
     financial regulatory agency, and any Supervisory Agency are 
     authorized to--
       (A) promptly notify each other of material concerns about a 
     designated financial market utility or any financial 
     institution engaged in designated activities; and
       (B) share appropriate reports, information or data relating 
     to such concerns.
       (2) Other information.--Notwithstanding any other provision 
     of law, the Board of Governors, the Council, the primary 
     financial regulatory agency, or any Supervisory Agency may, 
     under such terms and conditions as it deems appropriate, 
     provide confidential supervisory information and other 
     information obtained under this title to other persons it 
     deems appropriate, including the Secretary, State financial 
     institution supervisory agencies, foreign financial 
     supervisors, foreign central banks, and foreign finance 
     ministries, subject to reasonable assurances of 
     confidentiality.
       (f) Privilege Maintained.--The Board of Governors, the 
     Council, the primary financial regulatory agency, and any 
     Supervisory Agency providing reports or data under this 
     section shall not be deemed to have waived any privilege 
     applicable to those reports or data, or any portion thereof, 
     by providing the reports or data under this section or by 
     permitting the reports or data, or any copies thereof, to be 
     used pursuant to this section.
       (g) Disclosure Exemption.--Information obtained by the 
     Board of Governors or the Council under this section and any 
     materials prepared by the Board of Governors or the Council 
     regarding its assessment of the systemic importance of 
     financial market utilities or any payment, clearing, or 
     settlement activities engaged in by financial institutions, 
     and in connection with its supervision of designated 
     financial market utilities and designated activities, shall 
     be confidential supervisory information exempt from 
     disclosure under section 552 of title 5, United States Code. 
     For purposes of such section 552, this subsection shall be 
     considered a statute described in subsection (b)(3) of such 
     section 552.

     SEC. 810. RULEMAKING.

       The Board of Governors and the Council are authorized to 
     prescribe such rules and issue such orders as may be 
     necessary to administer and carry out the authorities and 
     duties granted to the Board of Governors or the Council, 
     respectively, under this title and prevent evasions thereof.

     SEC. 811. OTHER AUTHORITY.

       Unless otherwise provided by its terms, this title does not 
     divest any primary financial regulatory agency, any 
     Supervisory Agency, or any other Federal or State agency, of 
     any authority derived from any other applicable law, except 
     that any standards prescribed by the Board of Governors under 
     section 805 shall supersede any less stringent requirements 
     established under other authority to the extent of any 
     conflict.

     SEC. 812. EFFECTIVE DATE.

       This title is effective as of the date of enactment of this 
     Act.
                                 ______
                                 
  SA 4093. Mr. NELSON of Florida submitted an amendment intended to be 
proposed to amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for 
himself and Mrs. Lincoln)) to the bill S. 3217, to promote the 
financial stability of the United States by improving accountability 
and transparency in the financial system, to end ``too big to fail'', 
to protect the American taxpayer by ending bailouts, to protect 
consumers from abusive financial services practices, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 296, between lines 15 and 16, insert the following:
       (d) Repeal of Safe Harbor Treatment in the Bankruptcy 
     Code.--Title 11, United States Code, is amended--
       (1) in section 103(a), by striking ``chapter'' and all that 
     follows through ``apply'' and inserting ``chapter, sections 
     307, 362(n), 557, and 562 apply'':
       (2) in section 362--
       (A) in subsection (b)--
       (i) by striking paragraphs (6), (7), (17), and (27);
       (ii) by redesignating paragraphs (8) through (16) as 
     paragraphs (5) through (13), respectively;
       (iii) by redesignating paragraphs (18) through (26) as 
     paragraphs (14) through (22), respectively;
       (iv) by redesignating paragraph (28) as paragraph (23); and
       (v) in the undesignated matter at the end, by striking 
     ``(12) and (13)'' and inserting ``(9) and (10)''; and
       (B) by striking subsection (o);
       (3) in section 546--
       (A) in subsection (e)--
       (i) by striking ``101 or'';
       (ii) by striking ``101, 741,'' and inserting ``741''; and
       (iii) by inserting ``and except in a case under chapter 11 
     or 15,'' before ``the trustee'';
       (B) in subsection (f), by inserting ``and except in a case 
     under chapter 11 or chapter 15,'' before ``the trustee'';
       (C) by striking subsections (g) and (j); and
       (D) by redesignating subsections (h) and (i) as subsections 
     (g) and (h), respectively;
       (4) in section 548(d)(2)--
       (A) by striking subparagraphs (C) through (E);
       (B) in subparagraph (A), by adding ``and'' at the end; and
       (C) in subparagraph (B), by striking the semicolon at the 
     end and inserting a period;
       (5) in section 553--
       (A) in subsection (a), by striking ``(except for a setoff 
     of a kind described in section 362(b)(6), 362(b)(7), 
     362(b)(17), 362(b)(27), 555, 556, 559, 560, or 561)'' each 
     place that term appears; and
       (B) in subsection (b), by striking ``Except with respect to 
     a setoff of a kind described in section 362(b)(6), 362(b)(7), 
     362(b)(17), 362(b)(27), 555, 556, 559, 560, or 561, if a'' 
     and inserting ``If a'';
       (6) by striking sections 555, 556, 559, 560, and 561 and 
     inserting ``[Repealed].'';
       (7) in the table of sections for subchapter III of chapter 
     5, by striking the items relating to sections 555, 556, 559, 
     560, and 561;
       (8) in section 901--
       (A) by striking ``555, 556,''; and
       (B) by striking ``559, 560, 561,'';
       (9) in section 1519, by striking subsection (f); and
       (10) in section 1521, by striking subsection (f).
       At the end of title II, add the following:

     SEC. __. BANKRUPTCY CODE AMENDMENTS.

       (a) Definition.--Section 101 of title 11, United States 
     Code, is amended by inserting after paragraph (43) the 
     following:
       ``(43A) The term `qualified financial contract' means any 
     securities contract, commodity contract, forward contract, 
     repurchase agreement, or swap agreement, that is cleared by 
     or subject to the rules of a clearing organization (as 
     defined in section 201(c)(9)(D) of the Restoring American 
     Financial Stability Act of 2010.''.
       (b) Limitation on Stay of Exercise of Certain Contractual 
     Rights.--Section 541 of title 11, United States Code, is 
     amended by adding at the end the following:
       ``(g) Notwithstanding any other provision of this title, if 
     the trustee does not assume

[[Page 8440]]

     or reject a qualified financial contract of the debtor within 
     3 days after the order for relief, the exercise of any 
     contractual right of any counterparty to such qualified 
     financial contract to cause the liquidation, termination, or 
     acceleration of one or more qualified financial contracts 
     because of a condition of the kind specified in section 
     365(e)(1), or to offset or net out any termination values or 
     payment amounts arising under or in connection with the 
     termination, liquidation, or acceleration of one or more 
     qualified financial contracts shall not be stayed, avoided, 
     or otherwise limited by operation of any provision of this 
     title or by order of a court or administrative agency in any 
     proceeding under this title. During such 3-day period the 
     trustee shall make a good faith effort to meet all margin, 
     collateral, and settlement obligations of the debtor that 
     arise under qualified financial contracts, other than any 
     such obligation that is not enforceable against the 
     trustee.''.
       (c) Limitation on Avoidance of Transfer.--Section 546(j) of 
     title 11, United States Code, is amended to read as follows:
       ``(j) Notwithstanding any Federal or State law relating to 
     the avoidance of preferential or fraudulent transfers, the 
     trustee may not avoid any transfer of money or other property 
     in connection with any qualified financial contract of the 
     debtor, unless the transferee had actual intent to hinder, 
     delay, or defraud the debtor, the creditors of the debtor, or 
     the trustee.''.
                                 ______
                                 
  SA 4094. Mr. NELSON of Florida submitted an amendment intended to be 
proposed to amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for 
himself and Mrs. Lincoln)) to the bill S. 3217, to promote the 
financial stability of the United States by improving accountability 
and transparency in the financial system, to end ``too big to fail'', 
to protect the American taxpayer by ending bailouts, to protect 
consumers from abusive financial services practices, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 209, line 9, insert before the period the 
     following: ``, that is cleared by or subject to the rules of 
     a clearing organization (as defined in paragraph (9)(D))''.
                                 ______
                                 
  SA 4095. Mr. NELSON of Florida submitted an amendment intended to be 
proposed to amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for 
himself and Mrs. Lincoln)) to the bill S. 3217, to promote the 
financial stability of the United States by improving accountability 
and transparency in the financial system, to end ``too big to fail'', 
to protect the American taxpayer by ending bailouts, to protect 
consumers from abusive financial services practices, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 209, line 9, insert before the period the 
     following: ``, that is cleared by or subject to the rules of 
     a clearing organization (as defined in paragraph (9)(D))''.
       On page 296, between lines 15 and 16, insert the following:
       (d) Repeal of Safe Harbor Treatment in the Bankruptcy 
     Code.--Title 11, United States Code, is amended--
       (1) in section 103(a), by striking ``chapter'' and all that 
     follows through ``apply'' and inserting ``chapter, sections 
     307, 362(n), 557, and 562 apply'':
       (2) in section 362--
       (A) in subsection (b)--
       (i) by striking paragraphs (6), (7), (17), and (27);
       (ii) by redesignating paragraphs (8) through (16) as 
     paragraphs (5) through (13), respectively;
       (iii) by redesignating paragraphs (18) through (26) as 
     paragraphs (14) through (22), respectively;
       (iv) by redesignating paragraph (28) as paragraph (23); and
       (v) in the undesignated matter at the end, by striking 
     ``(12) and (13)'' and inserting ``(9) and (10)''; and
       (B) by striking subsection (o);
       (3) in section 546--
       (A) in subsection (e)--
       (i) by striking ``101 or'';
       (ii) by striking ``101, 741,'' and inserting ``741''; and
       (iii) by inserting ``and except in a case under chapter 11 
     or 15,'' before ``the trustee'';
       (B) in subsection (f), by inserting ``and except in a case 
     under chapter 11 or chapter 15,'' before ``the trustee'';
       (C) by striking subsections (g) and (j); and
       (D) by redesignating subsections (h) and (i) as subsections 
     (g) and (h), respectively;
       (4) in section 548(d)(2)--
       (A) by striking subparagraphs (C) through (E);
       (B) in subparagraph (A), by adding ``and'' at the end; and
       (C) in subparagraph (B), by striking the semicolon at the 
     end and inserting a period;
       (5) in section 553--
       (A) in subsection (a), by striking ``(except for a setoff 
     of a kind described in section 362(b)(6), 362(b)(7), 
     362(b)(17), 362(b)(27), 555, 556, 559, 560, or 561)'' each 
     place that term appears; and
       (B) in subsection (b), by striking ``Except with respect to 
     a setoff of a kind described in section 362(b)(6), 362(b)(7), 
     362(b)(17), 362(b)(27), 555, 556, 559, 560, or 561, if a'' 
     and inserting ``If a'';
       (6) by striking sections 555, 556, 559, 560, and 561 and 
     inserting ``[Repealed].'';
       (7) in the table of sections for subchapter III of chapter 
     5, by striking the items relating to sections 555, 556, 559, 
     560, and 561;
       (8) in section 901--
       (A) by striking ``555, 556,''; and
       (B) by striking ``559, 560, 561,'';
       (9) in section 1519, by striking subsection (f); and
       (10) in section 1521, by striking subsection (f).
       At the end of title II, add the following:

     SEC. __. BANKRUPTCY CODE AMENDMENTS.

       (a) Definition.--Section 101 of title 11, United States 
     Code, is amended by inserting after paragraph (43) the 
     following:
       ``(43A) The term `qualified financial contract' means any 
     securities contract, commodity contract, forward contract, 
     repurchase agreement, or swap agreement, that is cleared by 
     or subject to the rules of a clearing organization (as 
     defined in section 201(c)(9)(D) of the Restoring American 
     Financial Stability Act of 2010.''.
       (b) Limitation on Stay of Exercise of Certain Contractual 
     Rights.--Section 541 of title 11, United States Code, is 
     amended by adding at the end the following:
       ``(g) Notwithstanding any other provision of this title, if 
     the trustee does not assume or reject a qualified financial 
     contract of the debtor within 3 days after the order for 
     relief, the exercise of any contractual right of any 
     counterparty to such qualified financial contract to cause 
     the liquidation, termination, or acceleration of one or more 
     qualified financial contracts because of a condition of the 
     kind specified in section 365(e)(1), or to offset or net out 
     any termination values or payment amounts arising under or in 
     connection with the termination, liquidation, or acceleration 
     of one or more qualified financial contracts shall not be 
     stayed, avoided, or otherwise limited by operation of any 
     provision of this title or by order of a court or 
     administrative agency in any proceeding under this title. 
     During such 3-day period the trustee shall make a good faith 
     effort to meet all margin, collateral, and settlement 
     obligations of the debtor that arise under qualified 
     financial contracts, other than any such obligation that is 
     not enforceable against the trustee.''.
       (c) Limitation on Avoidance of Transfer.--Section 546(j) of 
     title 11, United States Code, is amended to read as follows:
       ``(j) Notwithstanding any Federal or State law relating to 
     the avoidance of preferential or fraudulent transfers, the 
     trustee may not avoid any transfer of money or other property 
     in connection with any qualified financial contract of the 
     debtor, unless the transferee had actual intent to hinder, 
     delay, or defraud the debtor, the creditors of the debtor, or 
     the trustee.''.
                                 ______
                                 
  SA 4096. Mr. LEVIN (for himself, Mr. Kaufman, and Mr. Reed) submitted 
an amendment intended to be proposed to amendment SA 3739 proposed by 
Mr. Reid (for Mr. Dodd (for himself and Mrs. Lincoln)) to the bill S. 
3217, to promote the financial stability of the United States by 
improving accountability and transparency in the financial system, to 
end ``too big to fail'', to protect the American taxpayer by ending 
bailouts, to protect consumers from abusive financial services 
practices, and for other purposes; which was ordered to lie on the 
table; as follows:

       On page 370, between lines 13 and 14, insert the following:

     SEC. 333. FDIC EXAMINATION AUTHORITY.

       (a) Examination Authority for Insurance and Orderly 
     Liquidation Purposes.--Section 10(b)(3) of the Federal 
     Deposit Insurance Act (12 U.S.C. 1820(b)(3)) is amended by 
     striking ``whenever the Board'' and all that follows through 
     the period at the end and inserting the following: ``or 
     depository institution holding company whenever the 
     Chairperson or the Board of Directors determines that a 
     special examination of any such depository institution or 
     depository institution holding company is necessary to 
     determine the condition of such depository institution or 
     depository institution holding company for insurance purposes 
     or for purposes of title II of the Restoring American 
     Financial Stability Act of 2010.''.
       (b) Enforcement Authority.--Section 8(t) of the Federal 
     Deposit Insurance Act (12 U.S.C. 1818(t)) is amended--
       (1) in paragraph (1)--
       (A) by striking ``based on an examination of an insured 
     depository institution'' and inserting ``based on an 
     examination of an insured depository institution or 
     depository institution holding company''; and
       (B) by striking ``with respect to any insured depository 
     institution or'' and inserting ``with respect to any insured 
     depository

[[Page 8441]]

     institution, depository institution holding company, or'';
       (2) in paragraph (2)--
       (A) by striking ``Board of Directors determines, upon a 
     vote of its members,'' and inserting ``Board of Directors, 
     upon a vote of its members, or the Chairperson determines'';
       (B) in subparagraph (B), by striking ``or'' at the end;
       (C) in subparagraph (C), by striking the period at the end 
     and inserting ``; or''; and
       (D) by adding at the end the following:
       ``(D) the conduct or threatened conduct (including any acts 
     or omissions) of the depository institution holding company 
     poses a risk to the Deposit Insurance Fund or of the exercise 
     of authority under title II of the Restoring American 
     Financial Stability Act of 2010, or may prejudice the 
     interests of the depositors of an affiliated institution.'';
       (3) in paragraph (3)(A), by striking ``upon a vote of the 
     Board of Directors'' and inserting ``upon a determination by 
     the Chairperson or upon a vote of the Board of Directors'';
       (4) in paragraph (4)(A)--
       (A) by striking ``any insured depository institution'' and 
     inserting ``any insured depository institution, depository 
     institution holding company,''; and
       (B) by striking ``the institution'' and inserting ``the 
     institution, holding company,'';
       (5) in paragraph (4)(B), by striking ``the institution'' 
     each place that term appears and inserting ``the institution, 
     holding company,''; and
       (6) in paragraph (5)(A), by striking ``an insured 
     depository institution'' and inserting ``an insured 
     depository institution, depository institution holding 
     company,''.
       (c) Back-up Examination Authority for Orderly Liquidation 
     Purposes.--The Federal Deposit Insurance Act (12 U.S.C. 1811 
     et seq.) is amended by adding at the end the following:

     ``SEC. 51. BACK-UP EXAMINATION AUTHORITY FOR ORDERLY 
                   LIQUIDATION PURPOSES.

       ``The Corporation may conduct a special examination of a 
     nonbank financial company supervised by the Board of 
     Governors of the Federal Reserve System under section 113 of 
     the Restoring American Financial Stability Act of 2010, if 
     the Chairperson or the Board of Directors determines an 
     examination is necessary to determine the condition of the 
     company for purposes of title II of that Act.''.
       (d) Access to Information for Insurance and Orderly 
     Liquidation Purposes.--The Federal Deposit Insurance Act is 
     amended by adding at the end the following:

     ``SEC. 52. ACCESS TO INFORMATION FOR INSURANCE AND ORDERLY 
                   LIQUIDATION PURPOSES.

       ``(a) Access to Information.--The Corporation may, if the 
     Corporation determines that such action is necessary to carry 
     out its responsibilities relating to deposit insurance or 
     orderly liquidation--
       ``(1) obtain information from an insured depository 
     institution, depository institution holding company, or 
     nonbank financial company supervised by the Board of 
     Governors of the Federal Reserve System under section 113 of 
     the Restoring American Financial Stability Act of 2010;
       ``(2) obtain information from the appropriate Federal 
     banking agency, or any regulator of a nonbank financial 
     company supervised by the Board of Governors of the Federal 
     Reserve System under section 113 of the Restoring American 
     Financial Stability Act of 2010, including examination 
     reports; and
       ``(3) participate in any examination, visitation, or risk-
     scoping activity of an insured depository institution, 
     depository institution holding company, or nonbank financial 
     company supervised by the Board of Governors of the Federal 
     Reserve System under section 113 of the Restoring American 
     Financial Stability Act of 2010.
       ``(b) Enforcement.--The Corporation shall have the 
     authority to take any enforcement action under section 8 
     against any institution or company described in paragraph (1) 
     of subsection (a) that fails to provide any information 
     requested under that paragraph.
       ``(c) Use of Available Information.--The Corporation shall 
     use, in lieu of a request for information under subsection 
     (a), information provided to another Federal or State 
     regulatory agency, publicly available information, or 
     externally audited financial statements to the extent that 
     the Corporation determines such information is adequate to 
     the needs of the Corporation.''.
                                 ______
                                 
  SA 4097. Mr. LEVIN (for himself, Mr. Kaufman, and Mr. Franken) 
submitted an amendment intended to be proposed to amendment SA 3739 
proposed by Mr. Reid (for Mr. Dodd (for himself and Mrs. Lincoln)) to 
the bill S. 3217, to promote the financial stability of the United 
States by improving accountability and transparency in the financial 
system, to end ``too big to fail'', to protect the American taxpayer by 
ending bailouts, to protect consumers from abusive financial services 
practices, and for other purposes; which was ordered to lie on the 
table; as follows:

       On page 1006, strike line 17 and all that follows through 
     page 1007, line 2, and insert the following:
       (A) by striking paragraph (2) and inserting the following:
       ``(2) Standards and oversight.--The Commission shall set 
     standards and exercise oversight of the procedures and 
     methodologies, including qualitative and quantitative data 
     and models, used by nationally recognized statistical rating 
     organizations, to ensure that the credit ratings issued by 
     the nationally recognized statistical rating organizations 
     have a reasonable foundation.''; and
                                 ______
                                 
  SA 4098. Mr. LEVIN (for himself, Mr. Kaufman, Mr. Reed, and Mrs. 
McCaskill) submitted an amendment intended to be proposed to amendment 
SA 3739 proposed by Mr. Reid (for Mr. Dodd (for himself and Mrs. 
Lincoln)) to the bill S. 3217, to promote the financial stability of 
the United States by improving accountability and transparency in the 
financial system, to end ``too big to fail'', to protect the American 
taxpayer by ending bailouts, to protect consumers from abusive 
financial services practices, and for other purposes; which was ordered 
to lie on the table; as follows:

       On page 1056, line 17, strike the second period and insert 
     the following: ``.

     SEC. 946. RESTRICTION ON SYNTHETIC ASSET-BACKED SECURITIES.

       The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) 
     is amended by inserting after section 15G, as added by this 
     Act, the following new section:

     ``SEC. 15H. RESTRICTION ON SYNTHETIC ASSET-BACKED SECURITIES.

       ``(a) Definition.--For purposes of this section, the term 
     `synthetic asset-backed security' means an asset-backed 
     security with respect to which, by design, the self-
     liquidating financial assets referenced in the synthetic 
     securitization do not provide any direct payment or cash flow 
     to the holder of the security.
       ``(b) Restriction.--No issuer, underwriter, placement 
     agent, sponsor, or initial purchaser may offer, sell, or 
     transfer a synthetic asset-backed security that has no 
     substantial or material economic purpose apart from 
     speculation on a possible future gain or loss associated with 
     the value or condition of the referenced assets. The 
     Commission may determine whether a synthetic asset-backed 
     security meets the requirements of this section. A 
     determination by the Commission under the preceding sentence 
     is not subject to judicial review.''.
                                 ______
                                 
  SA 4099. Mr. LEVIN (for himself, Mr. Kaufman, and Mr. Franken) 
submitted an amendment intended to be proposed to amendment SA 3739 
proposed by Mr. Reid (for Mr. Dodd (for himself and Mrs. Lincoln)) to 
the bill S. 3217, to promote the financial stability of the United 
States by improving accountability and transparency in the financial 
system, to end ``too big to fail'', to protect the American taxpayer by 
ending bailouts, to protect consumers from abusive financial services 
practices, and for other purposes; which was ordered to lie on the 
table; as follows:

       On page 1028 between lines 4 and 5 insert the following:
       ``(E) No reliance on inadequate report.--A nationally 
     recognized statistical rating organization may not rely on a 
     third-party due diligence report if the nationally recognized 
     statistical rating organization has reason to believe that 
     the report is inadequate.
                                 ______
                                 
  SA 4100. Mr. DODD submitted an amendment intended to be proposed to 
amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for himself and 
Mrs. Lincoln)) to the bill S. 3217, to promote the financial stability 
of the United States by improving accountability and transparency in 
the financial system, to end ``too big to fail'', to protect the 
American taxpayer by ending bailouts, to protect consumers from abusive 
financial services practices, and for other purposes; which was ordered 
to lie on the table; as follows:

       On page 584, line 7, after the first period insert the 
     following:
       ``(k) Clearing Requirements for Credit Default Swaps.--
     Subject to the exemption requirements of paragraphs (9) and 
     (10) of subsection (h), all credit default swaps that are 
     swaps shall be cleared pursuant to the requirements of 
     subsection (h)(1).
       ``(l) Ban on Risky Undisclosed Naked Credit Default 
     Swaps.--
       ``(1) Prohibition.--
       ``(A) In general.--It shall be unlawful for a protection 
     buyer to enter into a credit default swap that establishes a 
     short position in a reference entity's credit instrument 
     unless the protection buyer can demonstrate to

[[Page 8442]]

     the Commission, in such manner and in such form as may be 
     prescribed jointly by the Commission and the Securities and 
     Exchange Commission, that the protection buyer--
       ``(i) is undertaking such action to establish a legitimate 
     short position in credit default swaps; or
       ``(ii) is regulated by the Commission as a swap dealer in 
     credit default swaps, and is acting as a market-maker or is 
     otherwise engaged in a financial transaction on behalf of a 
     customer.
       ``(B) Legitimate short position in credit default swaps.--A 
     protection buyer's short position in credit default swaps 
     shall be considered a legitimate short position in credit 
     default swaps if--
       ``(i) the value of the protection buyer's holdings in valid 
     credit instruments is equal to or greater than the absolute 
     notional value of the protection buyer's position in credit 
     default swaps; and
       ``(ii) the reference entity or entities for the protection 
     buyer's credit default swaps in clause (i), whether in a 
     single-name, or a narrow-based index or a non-narrow-based 
     index credit default swap, is the same as the borrower or 
     issuer, or borrowers or issuers, of the valid credit 
     instrument or valid credit instruments the protection buyer 
     owns.
       ``(C) Determination of the commission.--
       ``(i) In general.--The Commission and the Securities and 
     Exchange Commission shall jointly establish and adopt rules, 
     regulations, or orders, in accordance with the public 
     interest, defining the term `valid credit instrument'.
       ``(ii) Considerations and requirements.--In defining the 
     term `valid credit instrument', the Commission and the 
     Securities and Exchange Commission shall consider which 
     group, category, type, or class of credit instruments can be 
     effectively hedged using credit default swaps.
       ``(iii) Rule of construction.--For purposes of this 
     subsection, any instrument with an equity risk exposure or 
     equity-like features shall not be considered by the 
     Commission and the Securities and Exchange Commission to be a 
     valid credit instrument.
       ``(D) Reporting.--Each protection buyer shall report all of 
     its legitimate short positions in credit default swaps, as 
     well as any other credit default swap positions and the valid 
     credit instruments that it owns to the Commission, in such 
     manner, in such frequency, and in such form as the Commission 
     may prescribe.
       ``(E) Holding of short positions in credit default swaps by 
     swap dealers.--Any swap dealer in credit default swaps 
     seeking to establish, possess, or otherwise obtain a short 
     position as the protection buyer of any credit default swap 
     for more than 60 consecutive calendar days or for more than 
     two-thirds of the days in any calendar quarter, shall 
     demonstrate to the Commission, in such manner and in such 
     form as shall be prescribed jointly by the Commission and the 
     Securities and Exchange Commission, that--
       ``(i) the value of the swap dealer's holdings in valid 
     credit instruments is equal to or greater than the absolute 
     notional value of the swap dealer's position in credit 
     default swaps; and
       ``(ii) the reference entity or entities for the swap 
     dealer's credit default swaps in clause (i), whether in a 
     single-name, or a narrow-based index or a non-narrow-based 
     index credit default swap, are the same as the borrower or 
     issuer, or borrowers or issuers, of the valid credit 
     instrument or valid credit instruments the swap dealer owns.
       ``(F) Prohibition on evasions and structuring of 
     transactions.--No person, including any protection buyer, 
     protection seller, or counterparty, may take any action in 
     connection with a credit default swap to structure such swap 
     for the purpose and with the intent of evading the provisions 
     of this subsection.
       ``(G) Authority of the commission.--The Commission, in 
     consultation with the Securities and Exchange Commission, 
     may, in the public interest, for the protection of investors, 
     for the protection of market participants, and the 
     maintenance of fair and orderly markets, prohibit any other 
     action, practice, or conduct in connection with or related to 
     the direct or indirect purchase or sale credit default swaps 
     that are swaps.
       ``(2) Definitions.--
       ``(A) In general.--In this subsection, the following 
     definitions shall apply:
       ``(i) Credit default swap.--The term `credit default 
     swap'--

       ``(I) means a swap or security-based swap whose payout is 
     determined by the occurrence of a credit event with respect 
     to a single referenced credit instrument or reference entity 
     or multiple referenced credit instruments or reference 
     entities; and
       ``(II) is not a security issued by a corporation, State, 
     municipality, or sovereign entity.

       ``(ii) Credit event.--The term `credit event' includes a 
     default, restructuring, insolvency, bankruptcy, credit 
     downgrade, and a violation of a debt covenant.
       ``(iii) Protection buyer.--The term `protection buyer' 
     means a person that enters into a credit default swap to 
     obtain a payoff from a third party (commonly referred to as 
     the `protection seller') upon the occurrence of one or more 
     credit events.
       ``(iv) Reference entity.--The term `reference entity' means 
     any borrower, such as a corporation, State, municipality, 
     sovereign entity, or special purpose entity, which has issued 
     a debt obligation or obtained a loan that is referenced by a 
     credit default swap.
       ``(B) Further definition of terms.--The Commission and the 
     Securities and Exchange Commission shall jointly establish 
     and adopt rules, regulations, or order, in accordance with 
     the public interest, further defining the terms `credit 
     default swap', `credit event', `protection buyer', and 
     `reference entity'.
       ``(3) Effective date.--This subsection shall take effect 2 
     years following the date on which the Wall Street 
     Transparency and Accountability Act of 2010 becomes 
     effective, except that the Commission and the Securities and 
     Exchange Commission may require disclosure and reporting of 
     positions and holdings as set forth in this subsection at 
     such earlier date as they may jointly determine.
       ``(m) Public Reporting of Credit Default Swaps.--
       ``(1) In general.--Notwithstanding paragraphs (8), (9), and 
     (10) of subsection (h), the Commission and the Securities and 
     Exchange Commission shall jointly adopt rules requiring 
     public reporting by counterparties of all net notional amount 
     of credit default swaps purchased or sold referencing a 
     specific reference entity in an amount greater than 1 percent 
     of the outstanding debt of that reference entity.
       ``(2) Rulemaking.--The Commission and the Securities and 
     Exchange Commission may adopt rules setting the public 
     reporting requirement threshold of subparagraph (A) in an 
     amount less than 1 percent and may set a lower reporting 
     requirement threshold for credit default swaps purchased or 
     sold on governmental entities. In adopting rules implementing 
     this requirement, the Commission and the Securities and 
     Exchange Commission shall require counterparties to report 
     both hedged and unhedged positions. The Commission and the 
     Securities and Exchange Commission shall prescribe rules to 
     specify the form, manner, and timing of such reports.
       ``(3) Further definition of terms.--For purposes of this 
     subsection, the Commission and the Securities and Exchange 
     Commission shall jointly establish and adopt rules, 
     regulation, or orders in accordance with the public interest, 
     defining the terms `credit default swap', `reference entity', 
     `outstanding debt', `net notional amount of credit default 
     swaps', and `governmental entities'.''.
       On page 808, line 8, after the first period, insert the 
     following:
       ``(e) Clearing Requirements for Credit Default Swaps.--
     Subject to the exemption requirements of paragraphs (9) and 
     (10) of subsection (a), all credit default swaps that are 
     security-based swaps shall be cleared pursuant to the 
     requirements of subsection (a)(1).

     ``SEC. 3C-1. BAN ON RISKY UNDISCLOSED NAKED CREDIT DEFAULT 
                   SWAPS.

       ``(a) Prohibition.--
       ``(1) In general.--It shall be unlawful for a protection 
     buyer to enter into a credit default swap that establishes a 
     short position in a reference entity's credit instrument 
     unless the protection buyer can demonstrate to the 
     Commission, in such manner and in such form as may be 
     prescribed jointly by the Commission and the Commodity 
     Futures Trading Commission, that the protection buyer--
       ``(A) is undertaking such action to establish a legitimate 
     short position in credit default swaps; or
       ``(B) is regulated by the Commission as a security-based 
     swap dealer in credit default swaps, and is acting as a 
     market-maker or is otherwise engaged in a financial 
     transaction on behalf of a customer.
       ``(2) Legitimate short position in credit default swaps.--A 
     protection buyer's short position in credit default swaps 
     shall be considered a legitimate short position in credit 
     default swaps if--
       ``(A) the value of the protection buyer's holdings in valid 
     credit instruments is equal to or greater than the absolute 
     notional value of the protection buyer's position in credit 
     default swaps; and
       ``(B) the reference entity or entities for the protection 
     buyer's credit default swaps in subparagraph (A), whether in 
     a single-name, or a narrow-based index or a non-narrow-based 
     index credit default swap, is the same as the borrower or 
     issuer, or borrowers or issuers, of the valid credit 
     instrument or valid credit instruments the protection buyer 
     owns.
       ``(3) Determination of the commission.--
       ``(A) In general.--The Commission and the Commodity Futures 
     Trading Commission shall jointly establish and adopt rules, 
     regulations, or orders, in accordance with the public 
     interest, defining the term `valid credit instrument'.
       ``(B) Considerations and requirements.--In defining the 
     term `valid credit instrument', the Commission and the 
     Commodity Futures Trading Commission shall consider which 
     group, category, type, or class of credit instruments can be 
     effectively hedged using credit default swaps.
       ``(C) Rule of construction.--For purposes of this section, 
     any instrument with an equity risk exposure or equity-like 
     features

[[Page 8443]]

     shall not be considered by the Commission and the Commodity 
     Futures Trading Commission to be a valid credit instrument.
       ``(4) Reporting.--Each protection buyer shall report all of 
     its legitimate short positions in credit default swaps, as 
     well as any other credit default swap positions and the valid 
     credit instruments that it owns to the Commission, in such 
     manner, in such frequency, and in such form as the Commission 
     may prescribe.
       ``(5) Holding of short positions in credit default swaps by 
     security-based swap dealers.--Any security-based swap dealer 
     in credit default swaps seeking to establish, possess, or 
     otherwise obtain a short position as the protection buyer of 
     any credit default swap for more than 60 consecutive calendar 
     days or for more than two-thirds of the days in any calendar 
     quarter, shall demonstrate to the Commission, in such manner 
     and in such form as shall be prescribed jointly by the 
     Commission and the Commodity Futures Trading Commission, 
     that--
       ``(A) the value of the security-based swap dealer's 
     holdings in valid credit instruments is equal to or greater 
     than the absolute notional value of the security-based swap 
     dealer's position in credit default swaps; and
       ``(B) the reference entity or entities for the security-
     based swap dealer's credit default swaps in subparagraph (A), 
     whether in a single-name, or a narrow-based index or a non-
     narrow-based index credit default swap, are the same as the 
     borrower or issuer, or borrowers or issuers, of the valid 
     credit instrument or valid credit instruments the security-
     based swap dealer owns.
       ``(6) Prohibition on evasions and structuring of 
     transactions.--No person, including any protection buyer, 
     protection seller, or counterparty, may take any action in 
     connection with a credit default swap to structure such swap 
     for the purpose and with the intent of evading the provisions 
     of this section.
       ``(7) Authority of the commission.--The Commission, in 
     consultation with the Commodity Futures Trading Commission, 
     may, in the public interest, for the protection of investors, 
     for the protection of market participants, and the 
     maintenance of fair and orderly markets, prohibit any other 
     action, practice, or conduct in connection with or related to 
     the direct or indirect purchase or sale credit default swaps 
     that are security-based swaps.
       ``(b) Definitions.--
       ``(1) In general.--In this section, the following 
     definitions shall apply:
       ``(A) Credit default swap.--The term `credit default 
     swap'--
       ``(i) means a swap or security-based swap whose payout is 
     determined by the occurrence of a credit event with respect 
     to a single referenced credit instrument or reference entity 
     or multiple referenced credit instruments or reference 
     entities; and
       ``(ii) is not a security issued by a corporation, State, 
     municipality, or sovereign entity.
       ``(B) Credit event.--The term `credit event' includes a 
     default, restructuring, insolvency, bankruptcy, credit 
     downgrade, and a violation of a debt covenant.
       ``(C) Protection buyer.--The term `protection buyer' means 
     a person that enters into a credit default swap to obtain a 
     payoff from a third party (commonly referred to as the 
     `protection seller') upon the occurrence of one or more 
     credit events.
       ``(D) Reference entity.--The term `reference entity' means 
     any borrower, such as a corporation, State, municipality, 
     sovereign entity, or special purpose entity, which has issued 
     a debt obligation or obtained a loan that is referenced by a 
     credit default swap.
       ``(2) Further definition of terms.--The Commission and the 
     Commodity Futures Trading Commission shall jointly establish 
     and adopt rules, regulations, or order, in accordance with 
     the public interest, further defining the terms `credit 
     default swap', `credit event', `protection buyer', and 
     `reference entity'.
       ``(c) Effective Date.--This section shall take effect 2 
     years following the date on which the Wall Street 
     Transparency and Accountability Act of 2010 becomes 
     effective, except that the Commission and the Commodity 
     Futures Trading Commission may require disclosure and 
     reporting of positions and holdings as set forth in this 
     section at such earlier date as they may jointly determine.

     ``SEC. 3C-2. PUBLIC REPORTING OF CREDIT DEFAULT SWAPS.

       ``(a) In General.--Notwithstanding paragraphs (8), (9), and 
     (10) of section 3C(a), the Commission and the Commodity 
     Futures Trading Commission shall jointly adopt rules 
     requiring public reporting by counterparties of all net 
     notional amount of credit default swaps purchased or sold 
     referencing a specific reference entity in an amount greater 
     than 1 percent of the outstanding debt of that reference 
     entity.
       ``(b) Rulemaking.--The Commission and the Commodity Futures 
     Trading Commission may adopt rules setting the public 
     reporting requirement threshold of subsection (a) in an 
     amount less than 1 percent and may set a lower reporting 
     requirement threshold for credit default swaps purchased or 
     sold on governmental entities. In adopting rules implementing 
     this requirement, the Commission and the Commodity Futures 
     Trading Commission shall require counterparties to report 
     both hedged and unhedged positions. The Commission and the 
     Commodity Futures Trading Commission shall prescribe rules to 
     specify the form, manner, and timing of such reports.
       ``(c) Further Definition of Terms.--For purposes of this 
     section, the Commission and the Commodity Futures Trading 
     Commission shall jointly establish and adopt rules, 
     regulation, or orders in accordance with the public interest, 
     defining the terms `credit default swap', `reference entity', 
     `outstanding debt', `net notional amount of credit default 
     swaps', and `governmental entities'.''.
       On page 893, after line 25, insert the following:

     SEC. 774. COUNCIL STUDY AND ACTION REGARDING CERTAIN 
                   PROHIBITIONS.

       (a) In General.--
       (1) In general.--The Financial Stability Oversight Council 
     shall conduct a study of issues involving the purchase and 
     sale of credit default swaps and naked credit default swaps.
       (2) Rule of construction.--For purposes of this section, a 
     naked credit default swap is a credit default swap entered 
     into by a person that does not own the valid debt instrument 
     or valid debt instruments referenced in the credit default 
     swap or own a valid debt instrument or valid debt instruments 
     of the issuer or borrower, or issuers or borrowers, 
     referenced in the credit default swap, or a similar risk 
     exposure.
       (b) Matters To Be Addressed.--The study required under 
     subsection (a) shall address--
       (1) the impact of trading of credit default swaps on debt 
     issuers, credit availability, financial markets, and the 
     overall economy of the United States;
       (2) the potential uses of naked credit default swaps;
       (3) the potential systemic impact of short positions in 
     naked credit default swaps;
       (4) existing authority of regulators to address risks to 
     market participants and systemic risk of credit default swaps 
     and naked credit default swaps; and
       (5) such other relevant matters as the Council deems 
     necessary or appropriate to address.
       (c) Report.--Not later than 1 year after the date of 
     enactment of this Act, if the Financial Stability Oversight 
     Council agrees by an affirmative vote of the majority of its 
     members then serving to the conclusions and findings of the 
     study required under subsection (a), and to any 
     recommendations for legislative action the Council deems 
     necessary and appropriate based on such conclusions and 
     findings, the Council shall submit such report, together with 
     such recommendations, to Congress.
       (d) Action by Chairperson of the Council.--Following 
     receipt of the report required by subsection (c), and 
     notwithstanding section 2(l) of the Commodity Exchange Act, 
     section 5A of the Securities Act of 1933, and section 3C-1 of 
     the Securities Exchange Act of 1934, the Chairperson of the 
     Council may make a written determination suspending, in whole 
     or in part, the prohibitions of section 2(l) of the Commodity 
     Exchange Act, section 5A of the Securities Act of 1933, and 
     section 3C-1 of the Securities Exchange Act of 1934.
       (e) Finding by Chairperson of the Council.--Based upon the 
     conclusions and findings of the study required under 
     subsection (a), the Chairperson of the Council may make a 
     written determination as provided in subsection (d) only upon 
     a finding that the prohibitions in section 2(l) of the 
     Commodity Exchange Act, section 5A of the Securities Act of 
     1933, and section 3C-1 of the Securities Exchange Act of 1934 
     would have a material adverse effect on the financial markets 
     and economy of the United States.
       (f) Congressional Notice; Effectiveness.--The Chairperson 
     of the Council shall submit any written determination made 
     pursuant to subsection (d) to the Committees on Banking, 
     Housing, and Urban Affairs and the Committee on Agriculture, 
     Nutrition, and Forestry of the United States Senate and the 
     Committees on Financial Services and Agriculture of the 
     United States House of Representatives. Any such written 
     determination by the Chairperson of the Council shall not be 
     effective until such determination has been submitted to the 
     appropriate committees of Congress.
       On page 1056, line 17, strike the second period and insert 
     the following: ``.

     SEC. 946. RESTRICTION ON SYNTHETIC ASSET-BACKED SECURITIES.

       The Securities Act of 1933 (15 U.S.C. 77a et seq.) is 
     amended by inserting after section 5 the following:

     ``SEC. 5A. RESTRICTION ON SYNTHETIC ASSET-BACKED SECURITIES.

       ``(a) Definition.--For purposes of this section, the term 
     `synthetic asset-backed security' means an asset-backed 
     security, as defined in section 3(a)(77) of the Securities 
     Exchange Act of 1934, with respect to which, by design, the 
     self-liquidating financial assets referenced in the synthetic 
     securitization do not provide any direct payment or cash flow 
     to the holders of the security.
       ``(b) Restriction.--
       ``(1) In general.--No issuer, underwriter, placement agent, 
     sponsor, or initial purchaser may offer, sell, or transfer a 
     synthetic asset-backed security that has no purpose

[[Page 8444]]

     apart from speculation on a possible future gain or loss 
     associated with the value or condition of the referenced 
     assets. The Commission may determine, by rule or otherwise, 
     whether a security is included within the description set 
     forth in the preceding sentence. Any such determination by 
     the Commission, other than by rule, is not subject to 
     judicial review.
       ``(2) Rulemaking.--Not later than 270 days after the date 
     of enactment of this section, the Commission shall issue 
     rules carry out this section and to prevent evasions thereof.
       ``(c) Effective Date.--This section shall take effect 2 
     years following the date on which the Wall Street 
     Transparency and Accountability Act of 2010 becomes 
     effective, except that the Commission may require any 
     disclosure or reporting of information or data pursuant this 
     section at such earlier date as the Commission may 
     determine.''.
                                 ______
                                 
  SA 4101. Mr. MERKLEY (for himself and Mr. Levin) submitted an 
amendment intended to be proposed to amendment SA 3739 proposed by Mr. 
Reid (for Mr. Dodd (for himself and Mrs. Lincoln)) to the bill S. 3217, 
to promote the financial stability of the United States by improving 
accountability and transparency in the financial system, to end ``too 
big to fail'', to protect the American taxpayer by ending bailouts, to 
protect consumers from abusive financial services practices, and for 
other purposes; which was ordered to lie on the table; as follows:

       On page 484, strike line 16 and all that follows through 
     page 497, line 8, and insert the following:

     SEC. 619. PROHIBITIONS ON PROPRIETARY TRADING AND CERTAIN 
                   RELATIONSHIPS WITH HEDGE FUNDS AND PRIVATE 
                   EQUITY FUNDS.

       The Bank Holding Company Act of 1956 (12 U.S.C. 1841 et 
     seq.) is amended by adding at the end the following:

     ``SEC. 13. PROHIBITIONS ON PROPRIETARY TRADING AND CERTAIN 
                   RELATIONSHIPS WITH HEDGE FUNDS AND PRIVATE 
                   EQUITY FUNDS.

       ``(a) In General.--
       ``(1) Prohibition.--Unless otherwise provided in this 
     section, a banking entity shall not--
       ``(A) engage in proprietary trading; or
       ``(B) acquire or retain any equity, partnership, or other 
     ownership interest in or sponsor a hedge fund or a private 
     equity fund.
       ``(2) Nonbank financial companies supervised by the 
     board.--Any nonbank financial company supervised by the Board 
     that engages in proprietary trading or takes or retains any 
     equity, partnership, or other ownership interest in or 
     sponsors a hedge fund or a private equity fund shall be 
     subject by the Board to additional capital requirements for 
     and additional quantitative limits with regards to such 
     proprietary trading and taking or retaining any equity, 
     partnership, or other ownership interest in or sponsorship of 
     a hedge fund or a private equity fund, except that permitted 
     activities as described in subsection (d) shall be subject to 
     additional capital and additional quantitative limits as 
     prescribed pursuant to subsection (d)(3).
       ``(b) Study and Rulemaking.--
       ``(1) Study.--Not later than 6 months after the date of 
     enactment of this section, the Financial Stability Oversight 
     Council shall study and make recommendations on implementing 
     the provisions of this section so as to--
       ``(A) promote and enhance the safety and soundness of 
     banking entities;
       ``(B) protect taxpayers and enhance financial stability by 
     minimizing the risk that insured depository institutions and 
     the affiliates of insured depository institutions will engage 
     in unsafe and unsound activities;
       ``(C) limit the inappropriate transfer of Federal subsidies 
     from institutions that benefit from deposit insurance and 
     liquidity facilities of the Federal Government to unregulated 
     entities;
       ``(D) reduce conflicts of interest between the self-
     interest of banking entities and nonbank financial companies 
     supervised by the Board, and the interests of the customers 
     of such entities and companies;
       ``(E) limit activities that have caused undue risk or loss 
     in banking entities and nonbank financial companies 
     supervised by the Board, or that might reasonably be expected 
     to create undue risk or loss in such banking entities and 
     nonbank financial companies supervised by the Board;
       ``(F) appropriately accommodate the business of insurance 
     within an insurance company subject to regulation in 
     accordance with the relevant insurance company investment 
     laws while protecting the safety and soundness of any banking 
     entity with which such insurance company is affiliated, and 
     of the United States financial system; and
       ``(G) appropriately time the divestiture of illiquid assets 
     that are affected by the implementation of the prohibitions 
     under subsection (a).
       ``(2) Rulemaking.--
       ``(A) In general.--Not later than 9 months after the 
     completion of the study under paragraph (1), the appropriate 
     Federal banking agencies, the Securities and Exchange 
     Commission, and the Commodity Futures Trading Commission, 
     (unless otherwise provided in this section) shall consider 
     the findings of the study under paragraph (1) and adopt rules 
     to carry out this section, as provided in subparagraph (B).
       ``(B) Coordinated rulemaking.--
       ``(i) Regulatory authority.--The regulations issued under 
     this paragraph and subsections (d) and (e) shall be issued 
     by--

       ``(I) the appropriate Federal banking agencies, jointly, 
     with respect to insured depository institutions;
       ``(II) the Board, with respect to any company that controls 
     an insured depository institution, or that is treated as a 
     bank holding company for purposes of section 8 of the 
     International Banking Act, any subsidiary of such a company 
     (other than a subsidiary described in subparagraph (A) or 
     (C)), and any nonbank financial company supervised by the 
     Board;
       ``(III) the Commodity Futures Trading Commission, with 
     respect to any entity for which the Commodity Futures Trading 
     Commission is the primary financial regulatory agency, as 
     defined in section 2 of the Restoring American Financial 
     Stability Act of 2010; and
       ``(IV) the Securities and Exchange Commission, with respect 
     to any entity for which the Securities and Exchange 
     Commission is the primary financial regulatory agency, as 
     defined in section 2 of the Restoring American Financial 
     Stability Act of 2010.

       ``(ii) Coordination, consistency, and comparability.--In 
     developing and issuing regulations pursuant to this section, 
     the appropriate Federal banking agencies, the Securities and 
     Exchange Commission, and the Commodity Futures Trading 
     Commission shall consult and coordinate with each other, as 
     appropriate, for the purposes of assuring, to the extent 
     possible, that such regulations are comparable and provide 
     for consistent application and implementation of the 
     applicable provisions of this section to avoid providing 
     advantages or imposing disadvantages to the companies 
     affected by this subsection and to protect the safety and 
     soundness of banking entities and nonbank financial companies 
     supervised by the Board.
       ``(iii) Council role.--The Chairperson of the Council shall 
     be responsible for coordination of the regulations issued 
     under this section.
       ``(c) Effective Date.--
       ``(1) In general.--Except as provided in paragraphs (2) and 
     (3), this section shall take effect on the earlier of--
       ``(A) 12 months after the issuance of final rules under 
     subsection (b); or
       ``(B) 2 years after the date of enactment of this section.
       ``(2) Transition period for divestiture of hedge funds or 
     private equity funds by banking entities.--
       ``(A) No new investments.--
       ``(i) No new funds.--On and after the date of enactment of 
     this section, a banking entity may not sponsor or invest in a 
     hedge fund or private equity fund that the banking entity did 
     not sponsor or in which the banking entity was not invested 
     on May 1, 2010.
       ``(ii) No additional capital or assets.--On and after the 
     date of enactment of this section, a banking entity may not 
     sell, transfer, loan, or otherwise provide any additional 
     capital or assets to a hedge fund or private equity fund 
     sponsored by the banking entity or in which the banking 
     entity invests, except to the extent necessary to fulfill a 
     contractual obligation that was in effect on May 1, 2010.
       ``(B) Reduction of existing investments.--Except as 
     provided in paragraph (3), on and after the date that is 2 
     years after the effective date of this section, the aggregate 
     amount of equity, partnership, or other ownership interests 
     in all hedge funds and private equity funds held by a banking 
     entity shall not exceed 2 percent of the Tier I capital of 
     the banking entity.
       ``(C) Total divestiture.--On and after the date that is 5 
     years after the effective date of this section, no banking 
     entity may engage in any activity prohibited under subsection 
     (a)(1)(B), except as provided in paragraph (3).
       ``(3) Transition period for illiquid funds.--
       ``(A) Definition.--In this paragraph, the term `illiquid 
     fund' means a hedge fund or private equity fund that, as of 
     May 1, 2010, was principally invested in or is invested in 
     illiquid assets, and committed to principally invest in 
     illiquid assets, such as portfolio companies, real estate 
     investments, and venture capital investments, and that 
     maintains the investment strategy of the fund that was in 
     place as of May 1, 2010, regarding principally investing in 
     illiquid assets. In issuing rules under this subparagraph, 
     the Board shall take into consideration the terms of 
     investment for the hedge fund or private equity fund, 
     including contractual obligations, the ability of the fund to 
     divest of assets held by the fund, and any other factors that 
     the Board determines are appropriate.
       ``(B) Transition.--
       ``(i) In general.--During the 4-year period beginning on 
     the date of enactment of this section, a banking entity may 
     only take an equity, partnership, or ownership interest in, 
     or otherwise provide additional capital to, an illiquid fund 
     to the extent necessary to fulfill a contractual obligation 
     of the banking entity to the illiquid fund that was in effect 
     on May 1, 2010.

[[Page 8445]]

       ``(ii) Limitations.--A banking entity may not exercise an 
     option to renew, or otherwise extend the duration of, any 
     contractual obligation described in clause (i) and shall 
     exercise any contractual option permitting the banking entity 
     to exit the illiquid fund if and when such option becomes 
     available. A banking entity may elect not to exercise an 
     option described in the preceding sentence, to the extent 
     that the maintenance of an investment would be permitted 
     under paragraph (2).
       ``(iii) Extension.--

       ``(I) Approval required.--If a contractual obligation of a 
     banking entity described in clause (i) extends beyond the 4-
     year period beginning on the date of enactment of this 
     section, the banking entity may not continue to make the 
     investment required under the contractual obligation without 
     the prior written approval of the Board. In determining 
     whether to grant an extension under this clause, the Board 
     shall evaluate whether the proposed investment meets the 
     requirements of this subparagraph.
       ``(II) Time limit on approval.--The Board may approve an 
     investment described in subclause (I) for a period of not 
     longer than 2 years for each extension.
       ``(III) Limit on number of approvals.--The Board may not 
     approve an investment described in subclause (I) more than 3 
     times.

       ``(iv) Divestiture required.--Except as otherwise permitted 
     under subsection (d), no banking entity may engage in any 
     activity prohibited under subsection (a)(1)(B) after the 
     earlier of --

       ``(I) the date on which the contractual obligation to 
     invest in the illiquid fund terminates; and
       ``(II) the date on which the approval by the Board under 
     clause (iii) expires.

       ``(4) Additional capital.--Notwithstanding paragraph (2) or 
     (3), on and after the effective date under paragraph (1), the 
     Board may impose additional capital requirements, and any 
     other restrictions, as the Board determines appropriate, on 
     any equity, partnership, or ownership interest in or 
     sponsorship of a hedge fund or private equity fund by a 
     banking entity or nonbank financial company supervised by the 
     Board, including on a case-by-case basis, as the Board 
     determines appropriate.
       ``(5) Rulemaking.--Not later than 6 months after the date 
     of enactment of this section, the Board shall issues rules to 
     implement paragraphs (2), (3), and (4).
       ``(d) Permitted Activities.--
       ``(1) In general.--Notwithstanding the restrictions in 
     subsection (a), to the extent permitted by any other 
     provision of Federal or State law, and subject to the 
     limitations under paragraph (2) and any restrictions or 
     limitations that the appropriate Federal banking agencies, 
     the Securities and Exchange Commission, and the Commodity 
     Futures Trading Commission, may determine, the following 
     activities (in this section referred to as `permitted 
     activities') are permitted:
       ``(A) The purchase, sale, acquisition, or disposition of 
     obligations of the United States or any agency thereof; 
     obligations, participations, or other instruments of or 
     issued by the Government National Mortgage Association, the 
     Federal National Mortgage Association, the Federal Home Loan 
     Mortgage Corporation, a Federal Home Loan Bank, the Federal 
     Agricultural Mortgage Corporation, or a Farm Credit System 
     institution chartered under and subject to the provisions of 
     the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.), and 
     obligations of any State or of any political subdivision 
     thereof.
       ``(B) The purchase, sale, acquisition, or disposition of 
     securities and other instruments described in subsection 
     (h)(4) in connection with underwriting, market-making, or in 
     facilitation of customer relationships, to the extent that 
     any such activities permitted by this subparagraph are 
     designed to not exceed the reasonably expected near term 
     demands of clients, customers, or counterparties.
       ``(C) Risk-mitigating hedging activities designed to reduce 
     the specific risks to a banking entity or nonbank financial 
     company supervised by the Board.
       ``(D) The purchase, sale, acquisition, or disposition of 
     securities and other instruments described in subsection 
     (h)(4) on behalf of customers.
       ``(E) Investments in one or more small business investment 
     companies, as defined in section 102 of the Small Business 
     Investment Act of 1958 (15 U.S.C. 662), or investments 
     designed primarily to promote the public welfare, as provided 
     in paragraph (11) of section 5136 of the Revised Statutes of 
     the United States (12 U.S.C. 24).
       ``(F) The purchase, sale, acquisition, or disposition of 
     securities and other instruments described in subsection 
     (h)(4) by a regulated insurance company directly engaged in 
     the business of insurance for the general account of the 
     company and by any affiliate of such regulated insurance 
     company, provided that such activities by any affiliate are 
     solely for the general account of the regulated insurance 
     company, if--
       ``(i) the purchase, sale, acquisition, or disposition is 
     conducted in compliance with, and subject to, the insurance 
     company investment laws, regulations, and written guidance of 
     the State or jurisdiction in which each such insurance 
     company is domiciled; and
       ``(ii) the appropriate Federal banking agencies, after 
     consultation with the Financial Stability Oversight Council 
     and the relevant insurance commissioners of the States and 
     territories of the United States, have not jointly 
     determined, after notice and comment, that a particular law, 
     regulation, or written guidance described in clause (i) is 
     insufficient to protect the safety and soundness of the 
     banking entity or nonbank financial company supervised by the 
     Board, or of the financial stability of the United States.
       ``(G) Organizing and offering a private equity or hedge 
     fund, including serving as a general partner, managing 
     member, or trustee of the fund and in any manner selecting or 
     controlling (or having employees, officers, directors, or 
     agents who constitute) a majority of the directors, trustees, 
     or management of the fund, including any necessary expenses 
     for the foregoing, only if--
       ``(i) the banking entity provides bona fide trust, 
     fiduciary, or investment advisory services;
       ``(ii) the fund is organized and offered only in connection 
     with the provision of bona fide trust, fiduciary, or 
     investment advisory services and only to persons that are 
     customers of such services of the banking entity;
       ``(iii) the banking entity does not acquire or retain an 
     equity interest, partnership interest, or other ownership 
     interest in the funds;
       ``(iv) the banking entity does not enter into or otherwise 
     engage in any transaction with the hedge fund or private 
     equity fund that is a covered transaction, as defined in 
     section 23A of the Federal Reserve Act (12 U.S.C. 371c);
       ``(v) the obligations or performance of the hedge fund or 
     private equity fund are not guaranteed, assumed, or otherwise 
     covered, directly or indirectly, by the banking entity or any 
     subsidiary or affiliate of the banking entity;
       ``(vi) the banking entity does not share with the hedge 
     fund or private equity fund, for corporate, marketing, 
     promotional, or other purposes, the same name or a variation 
     of the same name;
       ``(vii) no director or employee of the banking entity takes 
     or retains an equity interest, partnership interest, or other 
     ownership interest in, except for any director or employee of 
     the banking entity who is directly engaged in providing 
     investment advisory or other services to the hedge fund or 
     private equity fund; and
       ``(viii) the banking entity complies with any rules of the 
     appropriate Federal banking agencies, the Securities and 
     Exchange Commission, or the Commodity Futures Trading 
     Commission designed to ensure that losses in such hedge fund 
     or private equity fund are borne solely by investors in the 
     fund and not by the banking entity.
       ``(H) Proprietary trading conducted by a company pursuant 
     to paragraph (9) or (13) of section 4(c), provided that the 
     trading occurs solely outside of the United States and that 
     the banking entity or nonbank financial company supervised by 
     the Board is not directly or indirectly controlled by a 
     United States person.
       ``(I) The acquisition or retention of any equity, 
     partnership, or other ownership interest in, or the 
     sponsorship of, a hedge fund or a private equity fund by a 
     banking entity or nonbank financial company supervised by the 
     Board pursuant to paragraph (9) or (13) of section 4(c) 
     solely outside of the United States, provided that no 
     ownership interest in such hedge fund or private equity fund 
     is offered for sale or sold to a resident of the United 
     States and that the banking entity or nonbank financial 
     company supervised by the Board is not directly or indirectly 
     controlled by a company that is organized in the United 
     States.
       ``(J) Such other activity as the appropriate Federal 
     banking agencies, the Securities and Exchange Commission, and 
     the Commodity Futures Trading Commission determine through 
     regulation, as provided in subsection (b)(2)(B), would 
     promote and protect the safety and soundness of the banking 
     entity or nonbank financial company supervised by the Board 
     and the financial stability of the United States.
       ``(2) Limitation on permitted activities.--
       ``(A) In general.--No transaction, class of transactions, 
     or activity may be deemed a permitted activity under 
     paragraph (1) if it--
       ``(i) would involve or result in a material conflict of 
     interest (as such term shall be defined jointly by rule) 
     between the banking entity or the nonbank financial company 
     supervised by the Board and its clients, customers, or 
     counterparties;
       ``(ii) would result, directly or indirectly, in an unsafe 
     and unsound exposure by the banking entity or nonbank 
     financial company supervised by the Board to high-risk assets 
     or high-risk trading strategies (as such terms shall be 
     defined jointly by rule);
       ``(iii) would pose a threat to the safety and soundness of 
     such banking entity or nonbank financial company supervised 
     by the Board; or
       ``(iv) would pose a threat to the financial stability of 
     the United States.
       ``(B) Rulemaking.--The appropriate Federal banking 
     agencies, the Securities and Exchange Commission, and the 
     Commodity Futures Trading Commission shall issue regulations 
     to implement subparagraph (A), as part

[[Page 8446]]

     of the regulations issued under subsection (b)(2).
       ``(3) Capital and quantitative limitations.--The Board 
     shall adopt rules, as provided under subsection (b)(2), 
     imposing additional capital requirements and quantitative 
     limitations regarding the activities permitted under this 
     section if the Board determines that additional capital and 
     quantitative limitations are appropriate to protect the 
     safety and soundness of the banking entities and nonbank 
     financial companies supervised by the Board engaged in such 
     activities.
       ``(e) Anti-evasion.--
       ``(1) Rulemaking.--The appropriate Federal banking 
     agencies, the Securities and Exchange Commission, and the 
     Commodity Futures Trading Commission shall issue regulations 
     as part of the rulemaking provided for in subsection (b)(2) 
     regarding internal controls and recordkeeping in order to 
     insure compliance with this section.
       ``(2) Termination of activities or investment.--
     Notwithstanding any other provision of law, whenever an 
     appropriate Federal banking agency, the Securities and 
     Exchange Commission, or the Commodity Futures Trading 
     Commission, as appropriate, has reasonable cause to believe 
     that a banking entity or nonbank financial company supervised 
     by the Board under the respective agency's jurisdiction has 
     made an investment or engaged in an activity in a manner that 
     functions as an evasion of the requirements of this section 
     (including through an abuse of any permitted activity) or 
     otherwise violates the restrictions under this section, the 
     appropriate Federal banking agency, the Securities and 
     Exchange Commission, or the Commodity Futures Trading 
     Commission, as appropriate, shall order, after due notice and 
     opportunity for hearing, the banking entity or nonbank 
     financial company supervised by the Board to terminate the 
     activity and, as relevant, dispose of the investment. Nothing 
     in this subparagraph shall be construed to limit the inherent 
     authority of any Federal agency or State regulatory authority 
     to further restrict any investments or activities under 
     otherwise applicable provisions of law.
       ``(f) Limitations on Relationships With Hedge Funds and 
     Private Equity Funds.--
       ``(1) In general.--No banking entity that serves, directly 
     or indirectly, as the investment manager or investment 
     adviser to a hedge fund or private equity fund may enter into 
     a covered transaction, as defined in section 23A of the 
     Federal Reserve Act (12 U.S.C. 371c) with the hedge fund or 
     private equity fund.
       ``(2) Treatment as member bank.--A banking entity that 
     serves, directly or indirectly, as the investment manager or 
     investment adviser to a hedge fund or private equity fund 
     shall be subject to section 23B of the Federal Reserve Act 
     (12 U.S.C. 371c-1), as if such person were a member bank and 
     such hedge fund or private equity fund were an affiliate 
     thereof.
       ``(3) Covered transactions with unaffiliated hedge funds 
     and private equity funds.--No banking entity may enter into a 
     covered transaction, as defined in section 23A of the Federal 
     Reserve Act (12 U.S.C. 371c), with any hedge fund or private 
     equity fund organized and offered by the banking entity or 
     with any hedge fund or private equity fund in which such 
     hedge fund or private equity fund has taken any equity, 
     partnership, or other ownership interest.
       ``(g) Rules of Construction.--
       ``(1) Limitation on contrary authority.--Any prohibitions 
     or restrictions under this section shall apply even though 
     such activities may be authorized for a banking entity or a 
     nonbank financial company supervised by the Board under any 
     other provision of law.
       ``(2) Sale or securitization of loans.--Nothing in this 
     section shall be construed to limit or restrict the ability 
     of a banking entity or nonbank financial company supervised 
     by the Board to sell or securitize loans in a manner 
     otherwise permitted by law.
       ``(3) Authority of federal agencies and state regulatory 
     authorities.--Nothing in this section shall be construed to 
     limit the inherent authority of any Federal agency or State 
     regulatory authority under otherwise applicable provisions of 
     law.
       ``(h) Definitions.--In this section, the following 
     definitions shall apply:
       ``(1) Banking entity.--The term `banking entity' means any 
     insured depository institution (as defined in section 3 of 
     the Federal Deposit Insurance Act (12 U.S.C. 1813)), any 
     company that controls an insured depository institution, or 
     that is treated as a bank holding company for purposes of 
     section 8 of the International Banking Act, and any affiliate 
     or subsidiary of any such entity. For purposes of this 
     paragraph, the term `insured depository institution' does not 
     include an institution that functions solely in a trust or 
     fiduciary capacity, if--
       ``(A) all or substantially all of the deposits of such 
     institution are in trust funds and are received in a bona 
     fide fiduciary capacity;
       ``(B) no deposits of such institution which are insured by 
     the Federal Deposit Insurance Corporation are offered or 
     marketed by or through an affiliate of such institution;
       ``(C) such institution does not accept demand deposits or 
     deposits that the depositor may withdraw by check or similar 
     means for payment to third parties or others or make 
     commercial loans; and
       ``(D) such institution does not--
       ``(i) obtain payment or payment related services from any 
     Federal Reserve bank, including any service referred to in 
     section 11(a) of the Federal Reserve Act (12 U.S.C. 248a); or
       ``(ii) exercise discount or borrowing privileges pursuant 
     to section 19(b)(7) of the Federal Reserve Act (12 U.S.C. 
     461(b)(7)).
       ``(2) Hedge fund; private equity fund.--The terms `hedge 
     fund' and `private equity fund' mean a company or other 
     entity that is exempt from registration as an investment 
     company pursuant to section 3(c)(1) or 3(c)(7) of the 
     Investment Company Act of 1940 (15 U.S.C. 80a-3(c)(1) or 80a-
     3(c)(7)), or such similar funds as jointly determined 
     appropriate by the appropriate Federal banking agencies, the 
     Securities and Exchange Commission, and the Commodity Futures 
     Trading Commission.
       ``(3) Nonbank financial company supervised by the board.--
     The term `nonbank financial company supervised by the Board' 
     means a nonbank financial company supervised by the Board of 
     Governors, as defined in section 102 of the Financial 
     Stability Act of 2010.
       ``(4) Proprietary trading.--The term `proprietary trading' 
     means engaging as a principal for its own trading account in 
     any transaction to purchase or sell, or otherwise acquire or 
     dispose of, any security, any derivative, any contract of 
     sale of a commodity for future delivery, any option on any 
     such security, derivative, or contract, or any other security 
     or financial instrument that the appropriate Federal banking 
     agencies, the Securities and Exchange Commission, and the 
     Commodity Futures Trading Commission may jointly, by rule, 
     determine.
       ``(5) Sponsor.--The term to `sponsor' a fund means--
       ``(A) to serve as a general partner, managing member, or 
     trustee of a fund;
       ``(B) in any manner to select or to control (or to have 
     employees, officers, or directors, or agents who constitute) 
     a majority of the directors, trustees, or management of a 
     fund; or
       ``(C) to share with a fund, for corporate, marketing, 
     promotional, or other purposes, the same name or a variation 
     of the same name.
       ``(6) Trading account.--The term `trading account' means 
     any account used for acquiring or taking positions in the 
     securities and instruments described in paragraph (4) 
     principally for the purpose of selling in the near term (or 
     otherwise with the intent to resell in order to profit from 
     short-term price movements), and any such other accounts as 
     the appropriate Federal banking agencies, the Securities and 
     Exchange Commission, and the Commodity Futures Trading 
     Commission may jointly, by rule, determine.''.

     SEC. 619A. STUDY OF BANK ACTIVITIES.

       (a) Study.--
       (1) In general.--Not later than 18 months after the date of 
     enactment of this Act, the Federal banking agencies shall 
     jointly review and prepare a report on activities that a 
     banking entity may engage in under Federal and State law 
     including activities authorized by statute and by order, 
     interpretation and guidance.
       (2) Content.--In carrying out the study under paragraph 
     (1), the Federal banking agencies shall review and consider--
       (A) the type of activities or investment;
       (B) any financial, operational, managerial, or reputation 
     risks associated with or presented as a result of the banking 
     entity engaged in the activity or making the investment; and
       (C) risk mitigation activities undertaken by the banking 
     entity with regard to the risks.
       (b) Report and Recommendations to the Council and to 
     Congress.--The appropriate Federal banking agencies shall 
     submit to the Council, the Committee on Financial Services of 
     the House of Representatives, and the Committee on Banking, 
     Housing, and Urban Affairs of the Senate the study conducted 
     pursuant to subsection (a) no later than 2 months after its 
     completion. In addition to the information described in 
     subsection (a), the report shall include recommendations 
     regarding--
       (1) whether each activity or investment has or could have a 
     negative effect on the safety and soundness of the banking 
     entity or the United States financial system;
       (2) the appropriateness of the conduct of each activity or 
     type of investment by banking entities; and
       (3) additional restrictions as may be necessary to address 
     risks to safety and soundness arising from the activities or 
     types of investments described in subsection (a).

     SEC. 619B. CONFLICTS OF INTEREST.

       The Securities Act of 1933 (15 U.S.C. 77a et seq.) is 
     amended by inserting after section 27A the following:

     ``SEC. 27B. CONFLICTS OF INTEREST RELATING TO CERTAIN 
                   SECURITIZATIONS.

       ``(a) In General.--An underwriter, placement agent, initial 
     purchaser, or sponsor, or any affiliate or subsidiary of any 
     such entity, of an asset-backed security (as such term is 
     defined in section 3 of the Securities and Exchange Act of 
     1934 (15 U.S.C. 78c), which for the purposes of this section 
     shall include a synthetic asset-backed security), shall not,

[[Page 8447]]

     during such period as the asset-backed security is 
     outstanding or such lesser period as the Commission 
     determines is appropriate, engage in any transaction that 
     would involve or result in any material conflict of interest 
     with respect to any investor in a transaction arising out of 
     such activity.
       ``(b) Rulemaking.--Not later than 180 days after the date 
     of enactment of this section, the Commission shall issue 
     rules for the purpose of implementing subsection (a) 
     including any appropriate disclosures or other measures.
       ``(c) Exception.--The prohibitions of subsection (a) shall 
     not apply to risk-mitigating hedging activities in connection 
     with positions or holdings arising out of the underwriting, 
     placement, initial purchase, or sponsorship of an asset-
     backed security, provided that such activities are designed 
     to reduce the specific risks to the underwriter, placement 
     agent, initial purchaser, or sponsor associated with 
     positions or holdings arising out of such underwriting, 
     placement, initial purchase, or sponsorship. This subsection 
     shall not otherwise limit the application of section 15G of 
     the Securities Exchange Act of 1934.''.
                                 ______
                                 
  SA 4102. Mr. MERKLEY submitted an amendment intended to be proposed 
to amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for himself 
and Mrs. Lincoln)) to the bill S. 3217, to promote the financial 
stability of the United States by improving accountability and 
transparency in the financial system, to end ``too big to fail'', to 
protect the American taxpayer by ending bailouts, to protect consumers 
from abusive financial services practices, and for other purposes; 
which was ordered to lie on the table; as follows:

       On page 485, strike line 1 and all that follows through 
     page 496, line 2, and insert the following:
       (2) the term ``proprietary trading''--
       (A) means purchasing or selling, or otherwise acquiring or 
     disposing of, stocks, bonds, options, commodities, 
     derivatives, or other financial instruments by an insured 
     depository institution, a company that controls, directly or 
     indirectly, an insured depository institution or is treated 
     as a bank holding company for purposes of the Bank Holding 
     Company Act of 1956 (12 U.S.C. 1841 et seq.), and any 
     subsidiary of such institution or company, for the trading 
     book (or such other portfolio as the Federal banking agencies 
     may determine) of such institution, company, or subsidiary, 
     except that the Federal banking agencies may, for the 
     purposes of this subparagraph, exclude from the definition of 
     the term ``insured depository institution'' an institution 
     that functions principally in a trust or fiduciary capacity; 
     and
       (B) subject to such restrictions as the Federal banking 
     agencies may determine, does not include purchasing or 
     selling, or otherwise acquiring or disposing of, stocks, 
     bonds, options, commodities, derivatives, or other financial 
     instruments on behalf of a customer, as part of market making 
     activities, otherwise in connection with or in facilitation 
     of customer relationships, including risk-mitigating hedging 
     activities related to such a purchase, sale, acquisition, or 
     disposal, or in the conduct of regulated insurance 
     investments;
       (3) the term ``sponsoring'', when used with respect to a 
     hedge fund or private equity fund, means--
       (A) serving as a general partner, managing member, or 
     trustee of the fund;
       (B) in any manner selecting or controlling (or having 
     employees, officers, directors, or agents who constitute) a 
     majority of the directors, trustees, or management of the 
     fund; or
       (C) sharing with the fund, for corporate, marketing, 
     promotional, or other purposes, the same name or a variation 
     of the same name.
       (b) Prohibition on Proprietary Trading.--
       (1) In general.--Subject to the recommendations of the 
     Council under subsection (g), and except as provided in 
     paragraph (2) or (3), the appropriate Federal banking 
     agencies shall, through a rulemaking under subsection (g), 
     jointly prohibit proprietary trading by an insured depository 
     institution, a company that controls, directly or indirectly, 
     an insured depository institution or is treated as a bank 
     holding company for purposes of the Bank Holding Company Act 
     of 1956 (12 U.S.C. 1841 et seq.), and any subsidiary of such 
     institution or company.
       (2) Excepted obligations.--
       (A) In general.--The prohibition under this subsection 
     shall not apply with respect to an investment that is 
     otherwise authorized by Federal law in--
       (i) obligations of the United States or any agency of the 
     United States, including obligations fully guaranteed as to 
     principal and interest by the United States or an agency of 
     the United States;
       (ii) obligations, participations, or other instruments of, 
     or issued by, the Government National Mortgage Association, 
     the Federal National Mortgage Association, the Federal Home 
     Loan Mortgage Corporation, or other similar Government-
     sponsored enterprises, including obligations fully guaranteed 
     as to principal and interest by such entities; and
       (iii) obligations of any State or any political subdivision 
     of a State.
       (B) Conditions.--The appropriate Federal banking agencies 
     may impose conditions on the conduct of investments described 
     in subparagraph (A).
       (C) Rule of construction.--Nothing in subparagraph (A) may 
     be construed to grant any authority to any person that is not 
     otherwise provided in Federal law.
       (3) Foreign activities.--An investment or activity 
     conducted by a company pursuant to paragraph (9) or (13) of 
     section 4(c) of the Bank Holding Company Act of 1956 (12 
     U.S.C. 1843(c)) solely outside of the United States shall not 
     be subject to the prohibition under paragraph (1), provided 
     that the company is not directly or indirectly controlled by 
     a company that is organized under the laws of the United 
     States or of a State.
       (c) Prohibition on Sponsoring and Investing in Hedge Funds 
     and Private Equity Funds.--
       (1) In general.--Except as provided in paragraph (2), and 
     subject to the recommendations of the Council under 
     subsection (g), the appropriate Federal banking agencies 
     shall, through a rulemaking under subsection (g), jointly 
     prohibit an insured depository institution, a company that 
     controls, directly or indirectly, an insured depository 
     institution or is treated as a bank holding company for 
     purposes of the Bank Holding Company Act of 1956 (12 U.S.C. 
     1841 et seq.), or any subsidiary of such institution or 
     company, from sponsoring or investing in a hedge fund or a 
     private equity fund.
       (2) Application to foreign activities of foreign firms.--An 
     investment or activity conducted by a company pursuant to 
     paragraph (9) or (13) of section 4(c) of the Bank Holding 
     Company Act of 1956 (12 U.S.C. 1843(c)) solely outside of the 
     United States shall not be subject to the prohibitions and 
     restrictions under paragraph (1), provided that the company 
     is not directly or indirectly controlled by a company that is 
     organized under the laws of the United States or of a State.
       (d) Investments in Small Business Investment Companies and 
     Investments Designed To Promote the Public Welfare.--
       (1) In general.--A prohibition imposed by the appropriate 
     Federal banking agencies under subsection (c) shall not apply 
     with respect an investment otherwise authorized under Federal 
     law that is--
       (A) an investment in a small business investment company, 
     as that term is defined in section 103 of the Small Business 
     Investment Act of 1958 (15 U.S.C. 662); or
       (B) designed primarily to promote the public welfare, as 
     provided in the 11th paragraph of section 5136 of the Revised 
     Statutes (12 U.S.C. 24).
       (2) Rule of construction.--Nothing in paragraph (1) may be 
     construed to grant any authority to any person that is not 
     otherwise provided in Federal law.
       (e) Limitations on Relationships With Hedge Funds and 
     Private Equity Funds.--
       (1) Covered transactions.--An insured depository 
     institution, a company that controls, directly or indirectly, 
     an insured depository institution or is treated as a bank 
     holding company for purposes of the Bank Holding Company Act 
     of 1956 (12 U.S.C. 1841 et seq.), and any subsidiary of such 
     institution or company that serves, directly or indirectly, 
     as the investment manager or investment adviser to a hedge 
     fund or private equity fund may not enter into a covered 
     transaction, as defined in section 23A of the Federal Reserve 
     Act (12 U.S.C. 371c) with such hedge fund or private equity 
     fund.
       (2) Affiliation.--An insured depository institution, a 
     company that controls, directly or indirectly, an insured 
     depository institution or is treated as a bank holding 
     company for purposes of the Bank Holding Company Act of 1956 
     (12 U.S.C. 1841 et seq.), and any subsidiary of such 
     institution or company that serves, directly or indirectly, 
     as the investment manager or investment adviser to a hedge 
     fund or private equity fund shall be subject to section 23B 
     of the Federal Reserve Act (12 U.S.C. 371c-1) as if such 
     institution, company, or subsidiary were a member bank and 
     such hedge fund or private equity fund were an affiliate.
       (f) Capital and Quantitative Limitations for Certain 
     Nonbank Financial Companies.--
       (1) In general.--Except as provided in paragraph (2), and 
     subject to the recommendations of the Council under 
     subsection (g), the Board of Governors shall adopt rules 
     imposing additional capital requirements and specifying 
     additional quantitative limits for nonbank financial 
     companies supervised by the Board of Governors under section 
     113 that engage in proprietary trading or sponsoring and 
     investing in hedge funds and private equity funds.
       (2) Exceptions.--The rules under this subsection shall not 
     apply with respect to the trading of an investment that is 
     otherwise authorized by Federal law--
       (A) in obligations of the United States or any agency of 
     the United States, including obligations fully guaranteed as 
     to principal and interest by the United States or an agency 
     of the United States;

[[Page 8448]]

       (B) in obligations, participations, or other instruments 
     of, or issued by, the Government National Mortgage 
     Association, the Federal National Mortgage Association, the 
     Federal Home Loan Mortgage Corporation, or other similar 
     Government-sponsored enterprises, including obligations fully 
     guaranteed as to principal and interest by such entities;
       (C) in obligations of any State or any political 
     subdivision of a State;
       (D) in a small business investment company, as that term is 
     defined in section 103 of the Small Business Investment Act 
     of 1958 (15 U.S.C. 662); or
       (E) that is designed primarily to promote the public 
     welfare, as provided in the 11th paragraph of section 5136 of 
     the Revised Statutes (12 U.S.C. 24).
       (g) Council Study and Rulemaking.--
       (1) Study and recommendations.--Not later than 6 months 
     after the date of enactment of this Act, the Council--
       (A) shall complete a study of the definitions under 
     subsection (a) and the other provisions under subsections (b) 
     through (f), to assess the manner in which to implement this 
     section so as to--
       (i) promote and enhance the safety and soundness of 
     depository institutions and the affiliates of depository 
     institutions;
       (ii) protect taxpayers and enhance financial stability by 
     minimizing the risk that depository institutions and the 
     affiliates of depository institutions will engage in unsafe 
     and unsound activities;
       (iii) limit the inappropriate transfer of Federal subsidies 
     from institutions that benefit from deposit insurance and 
     liquidity facilities of the Federal Government to unregulated 
     entities;
       (iv) reduce inappropriate conflicts of interest between the 
     self-interest of depository institutions, affiliates of 
     depository institutions, and financial companies supervised 
     by the Board, and the interests of the customers of such 
     institutions and companies;
       (v) not raise the cost of credit or other financial 
     services, reduce the availability of credit or other 
     financial services, or impose other costs on households and 
     businesses in the United States;
       (vi) limit activities that have caused undue risk or loss 
     in depository institutions, affiliates of depository 
     institutions, and financial companies supervised by the Board 
     of Governors, or that might reasonably be expected to create 
     undue risk or loss in such institutions, affiliates, and 
     companies; and
       (vii) appropriately accommodates the business of insurance 
     within an insurance company subject to regulation in 
     accordance with State insurance company investment laws;
       (B) shall make recommendations regarding the definitions 
     under subsection (a) and the implementation of other 
     provisions under subsections (b) through (f).
       (2) Rulemaking.--Not earlier than the date of completion of 
     the study required under paragraph (1), and not later than 9 
     months after the date of completion of such study--
       (A) the appropriate Federal banking agencies shall--
       (i) jointly issue final regulations implementing 
     subsections (b) through (e); and
       (ii) evaluate and consider any recommendations made by the 
     Council pursuant to paragraph (1)(B); and
       (B) the Board of Governors shall--
       (i) issue final regulations implementing subsection (f); 
     and
       (ii) evaluate and consider any recommendations made by the 
     Council pursuant to paragraph (1)(B).
                                 ______
                                 
  SA 4103. Mr. BURRIS submitted an amendment intended to be proposed to 
amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for himself and 
Mrs. Lincoln)) to the bill S. 3217, to promote the financial stability 
of the United States by improving accountability and transparency in 
the financial system, to end ``too big to fail'', to protect the 
American taxpayer by ending bailouts, to protect consumers from abusive 
financial services practices, and for other purposes; which was ordered 
to lie on the table; as follows:

       On page 1023, strike lines 12 through 18 and insert the 
     following:
       ``(ii) the main assumptions and principles used in 
     constructing procedures and methodologies, including--

       ``(I) qualitative methodologies and quantitative inputs;
       ``(II) assumptions about the correlation of defaults across 
     obligors used in rating structured products; and
       ``(III) the 5 assumptions made in the ratings process that, 
     without accounting for any other factor, would have the 
     greatest impact on a rating if such assumptions were proven 
     false or inaccurate, together with an analysis, using 
     concrete examples, of how each of the 5 assumptions impacts 
     the credit rating;

                                 ______
                                 
  SA 4104. Mr. MENENDEZ (for himself, Mr. Bayh, and Mr. Schumer) 
submitted an amendment intended to be proposed to amendment SA 3739 
proposed by Mr. Reid (for Mr. Dodd (for himself and Mrs. Lincoln)) to 
the bill S. 3217, to promote the financial stability of the United 
States by improving accountability and transparency in the financial 
system, to end ``too big to fail'', to protect the American taxpayer by 
ending bailouts, to protect consumers from abusive financial services 
practices, and for other purposes; which was ordered to lie on the 
table; as follows:

       On page 615, line 18, strike ``all'' and all that follows 
     through line 21, and insert the following: ``or to the 
     registered swap data repositories, as the Commission may by 
     rule prescribe, all information that is determined by the 
     Commission to be necessary for each to perform their 
     respective responsibilities under this Act''.
       On page 623, line 12, strike ``In this paragraph'' and 
     insert ``Subject to subparagraph (E), in this paragraph''.
       On page 624, line 18, strike ``With'' and all that follows 
     through ``subsection (h),'' on line 22, and insert the 
     following: ``The registered swap data repositories and''.
       On page 625, strike line 2, and insert the following: 
     ``swap trading volumes and positions for both cleared and 
     uncleared trades.''.
       On page 625, line 3, strike ``With respect'' and insert 
     ``Subject to subparagraph (E), with respect''.
       On page 625, line 6, strike ``(10)'' and insert ``(9)''.
       On page 630, line 14, insert ``for both cleared and 
     uncleared trades'' after ``swap data''.
       On page 637, strike line 17 and all that follows through 
     page 638, line 12.
       On page 810, line 22, after the first period, insert the 
     following:
       ``(m) Duty of Clearing Agency.--Each clearing agency that 
     clears security-based swaps shall provide to the Commission 
     or to the registered security-based swap data repositories, 
     as the Commission may by rule prescribe, all information that 
     is determined by the Commission to be necessary for each to 
     perform their respective responsibilities under this Act.
       On page 835, line 7, strike ``In this paragraph'' and 
     insert ``Subject to subparagraph (E), in this paragraph''.
       On page 836, line 14, strike ``With'' and all that follows 
     through ``section 3C(a),'' on line 18, and insert the 
     following: ``The registered security-based swap data 
     repositories and''.
       On page 836, strike lines 23 and 24, and insert the 
     following: ``security-based swap trading volumes and 
     positions for both cleared and uncleared trades.''.
       On page 837, lines 3 and 4, strike ``but are subject to the 
     requirements of section 3C(a)(8)'' and insert ``pursuant to 
     section 3C(a)(9)''.
       On page 842, line 9, before the semicolon insert ``for both 
     cleared and uncleared trades, including compliance and 
     frequency of end user clearing exemption claims by individual 
     and affiliated entities''.
       On page 883, strike line 7 and all that follows through 
     page 884, line 9.
                                 ______
                                 
  SA 4105. Mr. DURBIN submitted an amendment intended to be proposed to 
amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for himself and 
Mrs. Lincoln)) to the bill S. 3217, to promote the financial stability 
of the United States by improving accountability and transparency in 
the financial system, to end ``too big to fail'', to protect the 
American taxpayer by ending bailouts, to protect consumers from abusive 
financial services practices, and for other purposes; which was ordered 
to lie on the table; as follows:

       On page 621, after line 23, insert the following:
       (h) Linking of Regulated Clearing Facilities.--Section 
     5b(f)(1) of the Commodity Exchange Act (7 U.S.C. 7a-1) is 
     amended to read as follows:
       ``(1) In general.--The Commission shall facilitate the 
     linking or coordination of derivatives clearing organizations 
     registered under this chapter with other regulated clearance 
     facilities for the coordinated settlement of cleared 
     transactions. In order to minimize systemic risk, under no 
     circumstances shall a derivatives clearing organization be 
     compelled to accept the counterparty credit risk of another 
     clearing organization.''.
                                 ______
                                 
  SA 4106. Mr. MERKLEY submitted an amendment intended to be proposed 
by him to the bill S. 3217, to promote the financial stability of the 
United States by improving accountability and transparency in the 
financial system, to end ``too big to fail'', to protect the American 
taxpayer by ending bailouts, to protect consumers from abusive 
financial services practices, and for other purposes; which was ordered 
to lie on the table; as follows:

       At the end of title X, insert the following:

     SEC. 1111. COMPLIANCE WITH OTHER RULES.

       Chapter 2 of the Truth in Lending Act (15 U.S.C. 1631 et 
     seq.) is amended by inserting before section 130 the 
     following:

[[Page 8449]]



     ``SEC. 129B. COMPLIANCE WITH CONSUMER FINANCIAL PROTECTION 
                   LAWS.

       ``A creditor or other person shall comply with all rules 
     promulgated pursuant to sections 1031 through 1033 of the 
     Consumer Financial Protection Act of 2010 applicable to that 
     person in connection with consumer credit.''.

     SEC. 1112. CONSUMER LEASING ACT OF 1976.

       Section 183 of the Consumer Leasing Act of 1976 (15 U.S.C. 
     1667b) is amended--
       (1) by striking the section heading and inserting the 
     following:

     ``SEC. 183. LESSEE LIABILITY AND LESSOR COMPLIANCE.''; AND

       (2) by adding at the end the following:
       ``(d) Compliance With Consumer Financial Protection Laws.--
     A lessor shall comply with all rules promulgated pursuant to 
     sections 1031 through 1033 of the Consumer Financial 
     Protection Act of 2010 applicable to the lessor in connection 
     with consumer leases.''.

     SEC. 1113. ELECTRONIC FUND TRANSFER ACT.

       The Electronic Fund Transfer Act (15 U.S.C. 1693 et seq.) 
     is amended by adding at the end the following:

     ``SEC. 922. COMPLIANCE WITH CONSUMER FINANCIAL PROTECTION 
                   LAWS.

       ``A person shall comply with all rules promulgated pursuant 
     to sections 1031 through 1033 of the Consumer Financial 
     Protection Act of 2010 applicable to that person in 
     connection with electronic fund transfers.''.

     SEC. 1114. FAIR CREDIT REPORTING ACT.

       The Fair Credit Reporting Act (15 U.S.C. 1681 et seq.) is 
     amended by inserting after section 615 the following:

     ``SEC. 615A. COMPLIANCE WITH CONSUMER FINANCIAL PROTECTION 
                   LAWS.

       ``A person shall comply with all rules promulgated pursuant 
     to sections 1031 through 1033 of the Consumer Financial 
     Protection Act of 2010 applicable to that person in 
     connection with consumer reports.''.

     SEC. 1115. FAIR DEBT COLLECTION PRACTICES ACT.

       The Fair Debt Collection Practices Act (15 U.S.C. 1692 et 
     seq.) is amended by inserting after section 812 the 
     following:

     ``SEC. 812A. COMPLIANCE WITH CONSUMER FINANCIAL PROTECTION 
                   LAWS.

       ``A person shall comply with all rules promulgated pursuant 
     to sections 1031 through 1033 of the Consumer Financial 
     Protection Act of 2010 applicable to that person in 
     connection with the collection of debt.''.

     SEC. 1116. REAL ESTATE SETTLEMENT PROCEDURES ACT OF 1974.

       (a) Compliance With Consumer Financial Protection Laws.--
     The Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 
     2601 et. seq) is amended by inserting after section 12 the 
     following:

     ``SEC. 13. COMPLIANCE WITH CONSUMER FINANCIAL PROTECTION 
                   LAWS.

       ``A person shall comply with all rules promulgated pursuant 
     to sections 1031 through 1033 of the Consumer Financial 
     Protection Act of 2010 applicable to that person in 
     connection with settlement services or the servicing of 
     federally related mortgage loans.''.
       (b) Jurisdiction.--Notwithstanding section 1096(8) of this 
     Act, section 16 of the Real Estate Settlement Procedures Act 
     of 1974 (12 U.S.C. 2614) is amended to read as follows:

     ``SEC. 16. COMPLIANCE WITH CONSUMER FINANCIAL PROTECTION 
                   LAWS; JURISDICTION; LIMITATIONS.

       ``Any action pursuant to the provisions of section 6, 8, 9, 
     or 13 may be brought in the United States district court or 
     in any other court of competent jurisdiction, for the 
     district in which the property involved is located, or where 
     the violation is alleged to have occurred, within 3 years in 
     the case of a violation of section 6 and 1 year in the case 
     of a violation of section 8, 9, or 13 from the date of the 
     occurrence of the violation, except that actions brought by 
     the Bureau, the Secretary, the Attorney General of any State, 
     or the insurance commissioner of any State may be brought 
     within 3 years from the date of the occurrence of the 
     violation.''.

     SEC. 1117. HOMEOWNERS PROTECTION ACT OF 1998.

       The Homeowners Protection Act of 1998 (12 U.S.C. 4901 et. 
     seq) is amended by inserting after section 7 (12 U.S.C. 4906) 
     the following:

     ``SEC. 7A. COMPLIANCE WITH CONSUMER FINANCIAL PROTECTION 
                   LAWS.

       ``A servicer, mortgagee, or mortgage insurer shall comply 
     with all rules promulgated pursuant to sections 1031 through 
     1033 of the Consumer Financial Protection Act of 2010 
     applicable to that person in connection with private mortgage 
     insurance.''.

     SEC. 1118. TRUTH IN SAVINGS ACT.

       Section 269 of the Truth in Savings Act (12 U.S.C. 4308) is 
     amended by adding at the end the following:
       ``(c) Compliance With Consumer Financial Protection Laws.--
     Any regulation promulgated pursuant to sections 1031 through 
     1033 of the Consumer Financial Protection Act of 2010 
     regarding disclosures, payment of interest, or periodic 
     statements in connection with accounts within the scope this 
     Act shall be considered a regulation pursuant to this Act.''.
                                 ______
                                 
  SA 4107. Mr. WARNER submitted an amendment intended to be proposed by 
him to the bill S. 3217, to promote the financial stability of the 
United States by improving accountability and transparency in the 
financial system, to end ``too big to fail'', to protect the American 
taxpayer by ending bailouts, to protect consumers from abusive 
financial services practices, and for other purposes; which was ordered 
to lie on the table; as follows:

       Sec. 154(1)(A) is amended by inserting on page 69, line 4 
     after the word `maintain' the following new language, `within 
     a single electronic database,'.
       Sec. 154(b)(1) is amended by striking on page 70 line 3, 
     subparagraph `(C)' and adding the following new 
     subparagraph--
       `(C) Administration and use of data.--The database 
     described in subparagraph (A) shall--
       (i) use accurate data structures and taxonomies to allow 
     for easy cross-referencing, compiling, and reporting of 
     numerous data elements;
       (ii) provide for filtering of data content to allow users 
     to screen for events most relevant to identifying waste, 
     fraud, and abuse, such as management changes and material 
     corporate events;
       (iii) provide geospatial analysis capabilities; and
       (iv) provide for the daily collection of any data necessary 
     to implement this subsection.
       `(D) Data standard.--The Office shall adopt and require a 
     single data standard for the submission of data to the Office 
     by member agencies. The Office shall update the standard as 
     necessary to address changes in technology over time. The 
     standard shall--
       (i) be common across all member agencies, to the maximum 
     extent practicable;
       (ii) be a widely accepted, non-proprietary, searchable, 
     computer-readable format for business and financial data;
       (iii) be consistent with and implement United States 
     generally accepted accounting principles or Federal financial 
     accounting standards (as appropriate), industry best 
     practices, and Federal regulatory requirements; and
       (iv) improve the transparency, consistency, and usability 
     of business and financial information.
       `(E) Transition and implementation.--
       (i) Transition.--Not later than 60 days after date of 
     enactment of this subsection, the Office, or the Secretary if 
     a Director has not been confirmed, shall issue a request for 
     proposal for the establishment of the database described in 
     subparagraph (A) and award contract service as required by 
     this subsection.
       (ii) Implementation of database.--The Office, or the 
     Secretary, if a Director has not been confirmed, shall make 
     operational the database described in subparagraph (A) not 
     later than 180 days after the issuance of request for 
     proposal under clause (i) of this subparagraph.'
       (iii) Future modifications.--Modifications to the database 
     following its becoming operational shall be determined by the 
     Office.
       Sec. 154(b)(2) is amended by inserting on page 70, line 20 
     the following subparagraph and reletter accordingly--
       (B) The Data Center shall make the database described in 
     subparagraph (1)(A) of this section available to the 
     Comptroller General of the United States and to the Special 
     Inspector General and the Congressional Oversight Panel 
     established under sections 121 and 125 of the Emergency 
     Economic Stabilization Act respectively.'
                                 ______
                                 
  SA 4108. Mr. WARNER submitted an amendment intended to be proposed by 
him to the bill S. 3217, to promote the financial stability of the 
United States by improving accountability and transparency in the 
financial system, to end ``too big to fail'', to protect the American 
taxpayer by ending bailouts, to protect consumers from abusive 
financial services practices, and for other purposes; which was ordered 
to lie on the table; as follows:

       Sec. 154(b)(1) is amended by striking on page 70 line 3, 
     subparagraph `(C)' and adding the following new 
     subparagraph--
       `(C) Data standard.--The Office shall adopt and require a 
     single data standard for submission of data to the Office by 
     member agencies. The Office shall update the standard as 
     necessary to address changes in technology over time. The 
     standard shall--
       (i) be common across all member agencies, to the maximum 
     extent practicable;
       (ii) be widely accepted, non-proprietary, searchable, 
     computer-readable format for business and financial data;
       (iii) be consistent with and implement United States 
     generally accepted accounting principles or Federal financial 
     accounting standards (as appropriate), industry best 
     practices, and Federal regulatory requirements; and
       (iv) improve the transparency, consistency, and usability 
     of business and financial information.
                                 ______
                                 
  SA 4109. Mr. DORGAN submitted an amendment intended to be proposed to 
amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for himself and 
Mrs. Lincoln)) to the bill S. 3217, to promote the financial stability 
of the

[[Page 8450]]

United States by improving accountability and transparency in the 
financial system, to end ``too big to fail'', to protect the American 
taxpayer by ending bailouts, to protect consumers from abusive 
financial services practices, and for other purposes; which was ordered 
to lie on the table; as follows:

       On page 893, after line 25, insert the following:

     SEC. 774. CLEARING OF CREDIT DEFAULT SWAPS.

       (a) Clearing of Credit Default Swaps Under the Commodity 
     Exchange Act.--Section 2 of the Commodity Exchange Act (7 
     U.S.C. 2), as amended by this title, is amended by adding at 
     the end the following:
       ``(k) Clearing of Credit Default Swaps.--
       ``(1) Submission.--It shall be unlawful for any party to 
     enter into a credit default swap unless that person shall 
     submit such credit default swap for clearing to a derivatives 
     clearing organization that is registered under this Act or a 
     derivatives clearing organization that is exempt from 
     registration under section 5b(i) of this Act.
       ``(2) Prohibition.--Notwithstanding any other provisions in 
     this section or of this Act, if no derivatives clearing 
     organization will accept a credit default swap for clearing, 
     it shall be unlawful for any party to enter into the credit 
     default swap.
       ``(3) Limitation on short positions.--
       ``(A) In general.--It shall be unlawful for a protection 
     buyer to enter into a credit default swap which establishes a 
     short position in a reference entity's credit instrument 
     unless the protection buyer can demonstrate to the 
     Commission, in such manner and in such form as may be 
     prescribed by the Commission, that the protection buyer--
       ``(i) is undertaking such action to establish a legitimate 
     short position in credit default swaps; or
       ``(ii) is regulated by the Commission as a swap dealer in 
     credit default swaps, and is acting as a market-maker or is 
     otherwise engaged in a financial transaction on behalf of a 
     customer.
       ``(B) Legitimate short position in credit default swaps.--A 
     protection buyer's short position in credit default swaps 
     shall be considered a legitimate short position in credit 
     default swaps if--
       ``(i) the value of the protection buyer's holdings in valid 
     credit instruments is equal to or greater than the absolute 
     notional value of the protection buyer's credit default 
     swaps; and
       ``(ii) the reference entity or entities for the protection 
     buyer's credit default swaps in clause (i), whether in a 
     single-name, or a narrow-based index or a broad-based index 
     credit default swap transaction, must be the same as the 
     borrower or issuer, or borrowers or issuers, of the valid 
     credit instrument or valid credit instruments the protection 
     buyer owns.
       ``(C) Determination of the commission.--
       ``(i) In general.--The Commission and the Securities and 
     Exchange Commission, shall jointly establish and adopt rules, 
     regulations, or orders, in accordance with the public 
     interest, defining the term `valid credit instrument'.
       ``(ii) Considerations and requirements.--In defining the 
     term `valid credit instrument', the Commission and the 
     Securities and Exchange Commission shall consider which 
     group, category, type, or class of credit instruments can be 
     effectively hedged using credit default swaps.
       ``(iii) Rule of construction.--For purposes of this 
     paragraph, any instrument with an equity risk exposure or 
     equity-like features shall not be considered by the 
     Commission to be a valid credit instrument.
       ``(D) Reporting.--Each protection buyer shall report all of 
     its legitimate short positions in credit default swaps, as 
     well as any other credit default swap positions and the valid 
     credit instruments that it owns to the Commission, in such 
     manner, in such frequency, and in such form as may be 
     prescribed by the Commission.
       ``(E) Holding of short positions in credit default swaps by 
     swap dealers.--Any swap dealer in credit default swaps 
     seeking to establish, possess, or otherwise obtain a short 
     position as the protection buyer of any credit default swap 
     for more than 60 consecutive calendar days or for more than 
     two-thirds of the days in any calendar quarter, shall 
     demonstrate to the Commission, in such manner and in such 
     form as may be prescribed by the Commission, that--
       ``(i) the value of the swap dealer's holdings in valid 
     credit instruments is equal to or greater than the absolute 
     notional value of the swap dealer's position in credit 
     default swaps; and
       ``(ii) the reference entity or entities for the swap 
     dealer's credit default swaps in clause (i), whether in a 
     single-name, or a narrow-based index or a broad-based index 
     credit default swap transaction, must be the same as the 
     borrower or issuer, or borrowers or issuers, of the valid 
     credit instrument or valid credit instruments the swap dealer 
     owns.
       ``(F) Prohibition on evasions and structuring of 
     transactions.--No person, including any protection buyer, 
     protection seller, or counterparty, may take any action in 
     connection with a credit default swap to structure such swap 
     for the purpose and with the intent of evading the provisions 
     of this subsection.
       ``(G) Authority of the commission.--The Commission, in 
     consultation with the Securities and Exchange Commission, 
     may, in the public interest, for the protection of investors, 
     for the protection of market participants, and the 
     maintenance of fair and orderly markets, prohibit any other 
     action, practice, or conduct in connection with or related to 
     the direct or indirect purchase or sale of credit default 
     swaps.
       ``(4) Determination of the council; phase in.--
       ``(A) Effective date.--Subject to subparagraph (B), this 
     subsection shall take effect on the earlier of--
       ``(i) the effective date established under section 753 of 
     the Wall Street Transparency and Accountability Act of 2010; 
     or
       ``(ii) the date on which the Chairperson of the Financial 
     Stability Oversight Council makes a determination that the 
     prohibitions and limitations established under this 
     subsection would not cause undue market disruptions.
       ``(B) Determination of market disruption.--Not later than 
     the effective date established under section 753 of the Wall 
     Street Transparency and Accountability Act of 2010, if the 
     Chairperson of the Financial Stability Oversight Council 
     determines that a phase in of the prohibitions and 
     limitations established under this subsection is necessary to 
     avoid undue market disruptions, then the Chairperson shall 
     recommend, and the Commission shall adopt, a phase in period 
     for such prohibitions and limitations. Any phase in period 
     described under this subparagraph shall not exceed 18 months.
       ``(5) Definitions.--
       ``(A) In general.--In this subsection, the following 
     definitions shall apply:
       ``(i) Credit default swap.--The term `credit default 
     swap'--

       ``(I) means a swap or security-based swap whose payout is 
     determined by the occurrence of a credit event with respect 
     to a single referenced credit instrument or reference entity 
     or multiple referenced credit instruments or reference 
     entities; and
       ``(II) is not a debt security registered with the 
     Securities and Exchange Commission and issued by a 
     corporation, State, municipality, or sovereign entity.

       ``(ii) Credit event.--The term `credit event' includes a 
     default, restructuring, insolvency, bankruptcy, credit 
     downgrade, and a violation of a debt covenant.
       ``(iii) Protection buyer.--The term `protection buyer' 
     means a person that enters into a credit default swap to 
     obtain a payoff from a third party (commonly referred to as 
     the `protection seller') upon the occurrence of one or more 
     credit events.
       ``(iv) Reference entity.--The term `reference entity' means 
     any borrower, such as a corporation, State, municipality, 
     sovereign entity, or special purpose entity, which has issued 
     a public debt obligation or obtained a loan that is 
     referenced by a credit default swap.
       ``(B) Further definition of terms.--The Commission and the 
     Securities and Exchange Commission, shall jointly establish 
     and adopt rules, regulations, or orders, in accordance with 
     the public interest, further defining the terms `credit 
     default swap', `credit event', `protection buyer', and 
     `reference entity'.''.
       (b) Clearing of Credit Default Swaps Under Securities 
     Exchange Act of 1934.--The Securities Exchange Act of 1934 
     (15 U.S.C. 78a et seq.) is amended by inserting after section 
     3C, as added by this title, the following:

     ``SEC. 3C-1. CLEARING OF CREDIT DEFAULT SWAPS.

       ``(a) Submission.--It shall be unlawful for any party to 
     enter into a credit default swap unless that person shall 
     submit such credit default swap for clearing to a clearing 
     agency that is registered under section 17A of this Act.
       ``(b) Prohibition.--Notwithstanding any other provisions in 
     this section or of this Act, if no clearing agency will 
     accept a credit default swap for clearing, it shall be 
     unlawful for any party to enter into the credit default swap.
       ``(c) Limitation on Short Positions.--
       ``(1) In general.--It shall be unlawful for a protection 
     buyer to enter into a credit default swap which establishes a 
     short position in a reference entity's credit unless the 
     protection buyer can demonstrate to the Commission, in such 
     manner and in such form as may be prescribed by the 
     Commission, that the protection buyer--
       ``(A) is undertaking such action to establish a legitimate 
     short position in credit default swaps; or
       ``(B) is regulated by the Commission as a security-based 
     swap dealer in credit default swaps, and is acting as a 
     market-maker or otherwise for the purpose of serving clients.
       ``(2) Legitimate short position in credit default swaps.--A 
     protection buyer's short position in credit default swaps 
     shall be considered a legitimate short position in credit 
     default swaps if --
       ``(A) the value of the protection buyer's holdings in valid 
     credit instruments is equal to or greater than the absolute 
     notional

[[Page 8451]]

     value of the protection buyer's credit default swaps; and
       ``(B) the reference entity or entities for the protection 
     buyer's credit default swaps in subparagraph (A), whether in 
     a single-name, or a narrow-based index or a broad-based index 
     credit default swap transaction, must be the same as the 
     borrower or issuer, or borrowers or issuers, of the valid 
     credit instrument or valid credit instruments the protection 
     buyer owns.
       ``(3) Determination of the commission.--
       ``(A) In general.--The Commission and the Commodity Futures 
     Trading Commission, shall jointly establish and adopt rules, 
     regulations, or orders, in accordance with the public 
     interest, defining the term `valid credit instrument'.
       ``(B) Considerations and requirements.--In defining the 
     term `valid credit instrument', the Commission and the 
     Commodity Futures Trading Commission shall consider which 
     group, category, type, or class of credit instruments can be 
     effectively hedged using credit default swaps.
       ``(C) Rule of construction.--For purposes of this 
     subsection, any instrument with an equity risk exposure or 
     equity-like features shall not be considered by the 
     Commission to be a valid credit instrument.
       ``(4) Reporting.--Each protection buyer shall report all of 
     its legitimate short positions in credit default swaps, as 
     well as any other credit default swap positions and the valid 
     credit instruments that it owns to the Commission, in such 
     manner, in such frequency, and in such form as may be 
     prescribed by the Commission.
       ``(5) Holdings of short positions in credit default swaps 
     by security-based swap dealers.--Any security-based swap 
     dealer in credit default swaps seeking to establish, possess, 
     or otherwise obtain a short position as the protection buyer 
     of any credit default swap for more than 60 consecutive 
     calendar days or for more than two-thirds of the days in any 
     calendar quarter, shall demonstrate to the Commission, in 
     such manner and in such form as may be prescribed by the 
     Commission, that--
       ``(A) the value of the security-based swap dealer's long 
     holdings in valid credit instruments is equal to or greater 
     than the absolute notional value of the security-based swap 
     dealer's position in credit default swaps; and
       ``(B) the reference entity or entities for the security-
     based swap dealer's credit default swaps in subparagraph (A), 
     whether in a single-name, or a narrow-based index or a broad-
     based index credit default swap transaction, must be the same 
     as the borrower or issuer, or borrowers or issuers, of the 
     valid credit instrument or valid credit instruments the 
     security-based swaps dealer owns.
       ``(6) Prohibition on evasions and structuring of 
     transactions.--No person, including any protection buyer, 
     protection seller, or counterparty, may take any action in 
     connection with a credit default swap to structure such swap 
     for the purpose and with the intent of evading the provisions 
     of this section.
       ``(7) Authority of the commission.--The Commission, in 
     consultation with the Commodity Futures Trading Commission, 
     may, in the public interest, for the protection of investors, 
     for the protection of market participants, and the 
     maintenance of fair and orderly markets, prohibit any other 
     action, practice, or conduct in connection with or related to 
     the direct or indirect purchase or sale of credit default 
     swaps.
       ``(d) Determination of the Council; Phase in.--
       ``(1) Effective date.--Subject to paragraph (2), this 
     section shall take effect on the earlier of--
       ``(A) the effective date established under section 773 of 
     the Wall Street Transparency and Accountability Act of 2010; 
     or
       ``(B) the date on which the Chairperson of the Financial 
     Stability Oversight Council makes a determination that the 
     prohibitions and limitations established under this 
     subsection would not cause undue market disruptions.
       ``(2) Determination of market disruption.--Not later than 
     the effective date established under section 773 of the Wall 
     Street Transparency and Accountability Act of 2010, if the 
     Chairperson of the Financial Stability Oversight Council 
     determines that a phase in of the prohibitions and 
     limitations established under this section is necessary to 
     avoid undue market disruptions, then the Chairperson shall 
     recommend, and the Commission shall adopt, a phase in period 
     for such prohibitions and limitations. Any phase in period 
     described under this paragraph shall not exceed 18 months.
       ``(e) Definitions.--
       ``(1) In general.--In this section, the following 
     definitions shall apply:
       ``(A) Credit default swap.--The term `credit default 
     swap'--
       ``(i) means a swap or security-based swap whose payout is 
     determined by the occurrence of a credit event with respect 
     to a single referenced credit instrument or reference entity 
     or multiple referenced credit instruments or reference 
     entities; and
       ``(ii) is not a debt security registered with the 
     Commission and issued by a corporation, State, municipality, 
     or sovereign entity.
       ``(B) Credit event.--The term `credit event' includes a 
     default, restructuring, insolvency, bankruptcy, credit 
     downgrade, and a violation of a debt covenant.
       ``(C) Protection buyer.--The term `protection buyer' means 
     a person that enters into a credit default swap to obtain a 
     payoff from a third party (commonly referred to as the 
     `protection seller') upon the occurrence of one or more 
     credit events.
       ``(D) Reference entity.--The term `reference entity' means 
     any borrower, such as a corporation, State, municipality, 
     sovereign entity, or special purpose entity, which has issued 
     a public debt obligation or obtained a loan that is 
     referenced by a credit default swap.
       ``(2) Further definition of terms.--The Commission and the 
     Commodity Futures Trading Commission, shall jointly establish 
     and adopt rules, regulations, or orders, in accordance with 
     the public interest, further defining the terms `credit 
     default swap', `credit event', `protection buyer', and 
     `reference entity'.''.

     SEC. 775. RESTRICTION ON SYNTHETIC ASSET-BACKED SECURITIES.

       The Securities Act of 1933 (15 U.S.C. 77a et seq.) is 
     amended by inserting after section 5 the following:

     ``SEC. 5A. RESTRICTION ON SYNTHETIC ASSET-BACKED SECURITIES.

       ``(a) Definition.--For purposes of this section, the term 
     `synthetic asset-backed security' means an asset-backed 
     security, as defined in section 3(a)(77) of the Securities 
     Exchange Act of 1934, with respect to which, by design, the 
     self-liquidating financial assets referenced in the synthetic 
     securitization do not provide any direct payment or cash flow 
     to the holders of the security.
       ``(b) Restriction.--
       ``(1) In general.--No issuer, underwriter, placement agent, 
     sponsor, or initial purchaser may offer, sell, or transfer a 
     synthetic asset-backed security that has no purpose apart 
     from speculation on a possible future gain or loss associated 
     with the value or condition of the referenced assets. The 
     Commission may determine, by rule or otherwise, whether a 
     security is included within the description set forth in the 
     preceding sentence. Any such determination by the Commission, 
     other than by rule, is not subject to judicial review.
       ``(2) Rulemaking.--Not later than 270 days after the date 
     of enactment of this section, the Commission shall issue 
     rules carry out this section and to prevent evasions 
     thereof.''.
                                 ______
                                 
  SA 4110. Mr. DODD submitted an amendment intended to be proposed to 
amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for himself and 
Mrs. Lincoln)) to the bill S. 3217, to promote the financial stability 
of the United States by improving accountability and transparency in 
the financial system, to end ``too big to fail'', to protect the 
American taxpayer by ending bailouts, to protect consumers from abusive 
financial services practices, and for other purposes; which was ordered 
to lie on the table; as follows:

       On page 515, between lines 11 and 12, insert the following:
       (c) Prohibition on Proprietary Trading.--No insured 
     depository institution, or company that controls, directly or 
     indirectly, an insured depository institution or is treated 
     as a bank holding company for purposes of the Bank Holding 
     Company Act of 1956 (12 U.S.C. 1841 et seq.), or any 
     subsidiary of such depository institution or company may 
     purchase or sell, or otherwise acquire or dispose of 
     derivatives, including swaps, security-based swaps, mixed 
     swaps, and security-based swap agreements except in 
     accordance with section 619 of the Restoring American 
     Financial Stability Act of 2010.
       (d) Study and Report.--
       (1) Study.--The Financial Stability Oversight Council shall 
     conduct a study of the impact of the prohibitions of this 
     section on the swaps and security-based swaps markets, 
     including the effect of such prohibitions on central clearing 
     and exchange trading of standardized swaps.
       (2) Report.--Not later than 1 year after the date of 
     enactment of this Act, if the Financial Stability Oversight 
     Council agrees by an affirmative vote of the majority of its 
     members then serving to the conclusions and findings of the 
     study required under paragraph (1), and to any 
     recommendations for legislative action the Council deems 
     necessary and appropriate based on such conclusions and 
     findings, the Council shall make such report, together with 
     such recommendations, available to the public.
       (e) Determination and Finding.--
       (1) Determination.--Following issuance of the report 
     required under subsection (d) and based upon consideration of 
     the findings and conclusions of the study mandated by such 
     subsection, the Chairperson of the Financial Stability 
     Oversight Council may make a written determination 
     suspending, in whole or in part, the prohibitions of 
     subsection (a) upon the consideration of the recommendations 
     of such report and a finding that the prohibitions in 
     subsection (a) would have a material adverse effect on the 
     financial markets and economy of the United States.

[[Page 8452]]

       (2) Congressional notice; effectiveness.--The Chairperson 
     of the Financial Stability Oversight Council shall submit any 
     written determination under this subsection, together with 
     the report required under subsection (d), and any 
     recommendations for legislative actions, to the Committee on 
     Banking, Housing, and Urban Affairs and the Committee on 
     Agriculture, Nutrition, and Forestry of the Senate and the 
     Committee on Financial Services and the Committee on 
     Agriculture of the House of Representatives. Any such written 
     determination by the Chairperson of the Financial Stability 
     Oversight Council shall not be effective until such 
     determination has been submitted to the appropriate 
     committees of Congress described in the prior sentence.
       (f) Prudential Matters.--If the prohibition established 
     under subsection (a) is suspended, in whole or in part, 
     pursuant to subsection (e), the swaps entity shall conduct 
     its swap, security-based swap, or other activities in 
     compliance with such minimum standards as shall be prescribed 
     in regulations issued by the prudential regulator of such 
     swaps entity as appropriate and which are reasonably 
     calculated to permit the swaps entity to conduct its swap, 
     security-based swap, or other activities in a safe and sound 
     manner and consistent with protecting taxpayers and the 
     financial system of the United States.
       (g) Rules.--In prescribing regulations described in 
     subsection (f), the prudential regulator for a swaps entity 
     shall consider the following factors:
       (1) The expertise and managerial strength of the swaps 
     entity, including systems for effective oversight of the 
     swaps entity.
       (2) The financial strength of the swaps entity.
       (3) Systems for identifying, measuring, and controlling 
     risks arising from the swaps entity's operations and 
     activities.
       (4) Systems for identifying, measuring, and controlling the 
     swaps entity's participation in existing markets.
       (5) Systems for controlling the swaps entity's 
     participation or entry into in new markets and products.
       (h) Effective Date.--Subject to subsection (e), the 
     prohibition established under subsection (a) shall take 
     effect 2 years after the date on which the Wall Street 
     Transparency and Accountability Act of 2010 becomes 
     effective.
                                 ______
                                 
  SA 4111. Ms. STABENOW submitted an amendment intended to be proposed 
to amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for himself 
and Mrs. Lincoln)) to the bill S. 3217, to promote the financial 
stability of the United States by improving accountability and 
transparency in the financial system, to end ``too big to fail'', to 
protect the American taxpayer by ending bailouts, to protect consumers 
from abusive financial services practices, and for other purposes; 
which was ordered to lie on the table, as follows:

       On page 707, line 19, strike the first period and insert 
     the following:
       ``(6) Rules, regulations, and orders.--Notwithstanding any 
     other provision of law, including any authority granted 
     pursuant to this title or title VII of the Restoring American 
     Financial Stability Act of 2010, the Commission, the 
     Securities and Exchange Commission, or the appropriate 
     Federal banking agencies shall not issue any rule, 
     regulation, or order that would void, terminate, or require 
     the renegotiation, modification, or amendment of any contract 
     or transaction (including any related credit support 
     arrangement) entered into before the date of enactment of the 
     Wall Street Transparency and Accountability Act of 2010.
                                 ______
                                 
  SA 4112. Mr. MERKLEY (for himself and Mr. Levin) submitted an 
amendment intended to be proposed to amendment SA 3739 proposed by Mr. 
Reid (for Mr. Dodd (for himself and Mrs. Lincoln)) to the bill S. 3217, 
to promote the financial stability of the United States by improving 
accountability and transparency in the financial system, to end ``too 
big to fail'', to protect the American taxpayer by ending bailouts, to 
protect consumers from abusive financial services practices, and for 
other purposes; which was ordered to lie on the table, as follows:

       On page 1054, between lines 10 and 11, insert the 
     following:
       (c) Conflicts of Interest.--The Securities Act of 1933 (15 
     U.S.C. 77a et seq.) is amended by inserting after section 27A 
     the following:

     ``SEC. 27B. CONFLICTS OF INTEREST RELATING TO CERTAIN 
                   SECURITIZATIONS.

       ``(a) In General.--An underwriter, placement agent, initial 
     purchaser, or sponsor, or any affiliate or subsidiary of any 
     such entity, of an asset-backed security (as such term is 
     defined in section 3 of the Securities and Exchange Act of 
     1934 (15 U.S.C. 78c), which for the purposes of this section 
     shall include a synthetic asset-backed security), shall not, 
     during such period as the asset-backed security is 
     outstanding or such lesser period as the Commission 
     determines is appropriate, engage in any transaction that 
     would involve or result in any material conflict of interest 
     with respect to any investor in a transaction arising out of 
     such activity.
       ``(b) Rulemaking.--Not later than 180 days after the date 
     of enactment of this section, the Commission shall issue 
     rules for the purpose of implementing subsection (a) 
     including any appropriate disclosures or other measures. The 
     disclosure by a person of a material conflict of interest 
     with respect to a transaction prohibited under subsection (a) 
     may not be construed to permit any person to engage in the 
     transaction.
       ``(c) Exception.--The prohibitions of subsection (a) shall 
     not apply to risk-mitigating hedging activities in connection 
     with positions or holdings arising out of the underwriting, 
     placement, initial purchase, or sponsorship of an asset-
     backed security, provided that such activities are designed 
     to reduce the specific risks to the underwriter, placement 
     agent, initial purchaser, or sponsor associated with 
     positions or holdings arising out of such underwriting, 
     placement, initial purchase, or sponsorship. This subsection 
     shall not otherwise limit the application of section 15G of 
     the Securities Exchange Act of 1934.''.
                                 ______
                                 
  SA 4113. Mrs. FEINSTEIN submitted an amendment intended to be 
proposed to amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for 
himself and Mrs. Lincoln)) to the bill S. 3217, to promote the 
financial stability of the United States by improving accountability 
and transparency in the financial system, to end ``too big to fail'', 
to protect the American taxpayer by ending bailouts, to protect 
consumers from abusive financial services practices, and for other 
purposes; which was ordered to lie the table; as follows:

       Beginning on page 699, strike line 20 and all that follows 
     through page 704, line 13, and insert the following:
       ``(A) Registration.--The Commission may adopt rules and 
     regulations requiring registration with the Commission for a 
     foreign board of trade that provides the members of the 
     foreign board of trade or other participants located in the 
     United States with direct access to the electronic trading 
     and order matching system of the foreign board of trade, 
     including rules and regulations prescribing procedures and 
     requirements applicable to the registration of such foreign 
     boards of trade. For purposes of this paragraph, `direct 
     access' refers to an explicit grant of authority by a foreign 
     board of trade to an identified member or other participant 
     located in the United States to enter trades directly into 
     the trade matching system of the foreign board of trade. In 
     adopting such rules and regulations, the commission shall 
     consider: (i) whether any such foreign board of trade is 
     subject to comparable, comprehensive supervision and 
     regulation by the appropriate governmental authorities in the 
     foreign board of trade's home country; and (ii) any previous 
     commission findings that the foreign board of trade is 
     subject to comparable comprehensive supervision and 
     regulation by the appropriate government authorities in the 
     foreign board of trade's home country.
       ``(B) Linked contracts.--It shall be unlawful for a foreign 
     board of trade to provide to the members of the foreign board 
     of trade or other participants located in the United States 
     direct access to the electronic trading and order-matching 
     system of the foreign board of trade with respect to an 
     agreement, contract, or transaction that settles against any 
     price (including the daily or final settlement price) of 1 or 
     more contracts listed for trading on a registered entity, 
     unless the Commission determines that--
       ``(i) the foreign board of trade makes public daily trading 
     information regarding the agreement, contract, or transaction 
     that is comparable to the daily trading information published 
     by the registered entity for the 1 or more contracts against 
     which the agreement, contract, or transaction traded on the 
     foreign board of trade settles; and
       ``(ii) the foreign board of trade (or the foreign futures 
     authority that oversees the foreign board of trade)--

       ``(I) adopts position limits (including related hedge 
     exemption provisions) for the agreement, contract, or 
     transaction that are comparable to the position limits 
     (including related hedge exemption provisions) adopted by the 
     registered entity for the 1 or more contracts against which 
     the agreement, contract, or transaction traded on the foreign 
     board of trade settles;
       ``(II) has the authority to require or direct market 
     participants to limit, reduce, or liquidate any position the 
     foreign board of trade (or the foreign futures authority that 
     oversees the foreign board of trade) determines to be 
     necessary to prevent or reduce the threat of price 
     manipulation, excessive speculation as described in section 
     4a, price distortion, or disruption of delivery or the cash 
     settlement process;
       ``(III) agrees to promptly notify the Commission, with 
     regard to the agreement, contract, or transaction that 
     settles against any

[[Page 8453]]

     price (including the daily or final settlement price) of 1 or 
     more contracts listed for trading on a registered entity, of 
     any change regarding--

       ``(aa) the information that the foreign board of trade will 
     make publicly available;
       ``(bb) the position limits that the foreign board of trade 
     or foreign futures authority will adopt and enforce;
       ``(cc) the position reductions required to prevent 
     manipulation, excessive speculation as described in section 
     4a, price distortion, or disruption of delivery or the cash 
     settlement process; and
       ``(dd) any other area of interest expressed by the 
     Commission to the foreign board of trade or foreign futures 
     authority;

       ``(IV) provides information to the Commission regarding 
     large trader positions in the agreement, contract, or 
     transaction that is comparable to the large trader position 
     information collected by the Commission for the 1 or more 
     contracts against which the agreement, contract, or 
     transaction traded on the foreign board of trade settles; and
       ``(V) provides the Commission such information as is 
     necessary to publish reports on aggregate trader positions 
     for the agreement, contract, or transaction traded on the 
     foreign board of trade that are comparable to such reports on 
     aggregate trader positions for the 1 or more contracts 
     against which the agreement, contract, or transaction traded 
     on the foreign board of trade settles.

       ``(C) Existing foreign boards of trade.--Subparagraphs (A) 
     and (B) shall not be effective with respect to any foreign 
     board of trade to which, prior to the date of enactment of 
     this paragraph, the Commission granted direct access 
     permission until the date that is 180 days after that date of 
     enactment.''.
       (b) Liability of Registered Persons Trading on a Foreign 
     Board of Trade.--Section 4 of the Commodity Exchange Act (7 
     U.S.C. 6) is amended--
       (1) in subsection (a), in the matter preceding paragraph 
     (1), by inserting ``or by subsection (e)'' after ``Unless 
     exempted by the Commission pursuant to subsection (c)''; and
       (2) by adding at the end the following:
       ``(e) Liability of Registered Persons Trading on a Foreign 
     Board of Trade.--A person registered with the Commission, or 
     exempt from registration by the Commission, under this Act 
     may not be found to have violated subsection (a) with respect 
     to a transaction in, or in connection with, a contract of 
     sale of a commodity for future delivery if the person has 
     reason to believe that the transaction and the contract is 
     made on or subject to the rules of a foreign board of trade 
     that has complied with subparagraphs (A) and (B) of 
     subsection (b)(1).''.
                                 ______
                                 
  SA 4114. Mr. DORGAN proposed an amendment to amendment SA 4072 
submitted by Mr. Grassley (for himself and Mrs. McCaskill) to the 
amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for himself and 
Mrs. Lincoln)) to the bill S. 3217, to promote the financial stability 
of the United States by improving accountability and transparency in 
the financial system, to end ``too big to fail'', to protect the 
American taxpayer by ending bailouts, to protect consumers from abusive 
financial services practices, and for other purposes; which was ordered 
to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. CLEARING OF CREDIT DEFAULT SWAPS.

       (a) Clearing of Credit Default Swaps Under the Commodity 
     Exchange Act.--Section 2 of the Commodity Exchange Act (7 
     U.S.C. 2), as amended by this title, is amended by adding at 
     the end the following:
       ``(k) Clearing of Credit Default Swaps.--
       ``(1) Submission.--It shall be unlawful for any party to 
     enter into a credit default swap unless that person shall 
     submit such credit default swap for clearing to a derivatives 
     clearing organization that is registered under this Act or a 
     derivatives clearing organization that is exempt from 
     registration under section 5b(i) of this Act.
       ``(2) Prohibition.--Notwithstanding any other provisions in 
     this section or of this Act, if no derivatives clearing 
     organization will accept a credit default swap for clearing, 
     it shall be unlawful for any party to enter into the credit 
     default swap.
       ``(3) Limitation on short positions.--
       ``(A) In general.--It shall be unlawful for a protection 
     buyer to enter into a credit default swap which establishes a 
     short position in a reference entity's credit instrument 
     unless the protection buyer can demonstrate to the 
     Commission, in such manner and in such form as may be 
     prescribed by the Commission, that the protection buyer--
       ``(i) is undertaking such action to establish a legitimate 
     short position in credit default swaps; or
       ``(ii) is regulated by the Commission as a swap dealer in 
     credit default swaps, and is acting as a market-maker or is 
     otherwise engaged in a financial transaction on behalf of a 
     customer.
       ``(B) Legitimate short position in credit default swaps.--A 
     protection buyer's short position in credit default swaps 
     shall be considered a legitimate short position in credit 
     default swaps if--
       ``(i) the value of the protection buyer's holdings in valid 
     credit instruments is equal to or greater than the absolute 
     notional value of the protection buyer's credit default 
     swaps; and
       ``(ii) the reference entity or entities for the protection 
     buyer's credit default swaps in clause (i), whether in a 
     single-name, or a narrow-based index or a broad-based index 
     credit default swap transaction, must be the same as the 
     borrower or issuer, or borrowers or issuers, of the valid 
     credit instrument or valid credit instruments the protection 
     buyer owns.
       ``(C) Determination of the commission.--
       ``(i) In general.--The Commission and the Securities and 
     Exchange Commission, shall jointly establish and adopt rules, 
     regulations, or orders, in accordance with the public 
     interest, defining the term `valid credit instrument'.
       ``(ii) Considerations and requirements.--In defining the 
     term `valid credit instrument', the Commission and the 
     Securities and Exchange Commission shall consider which 
     group, category, type, or class of credit instruments can be 
     effectively hedged using credit default swaps.
       ``(iii) Rule of construction.--For purposes of this 
     paragraph, any instrument with an equity risk exposure or 
     equity-like features shall not be considered by the 
     Commission to be a valid credit instrument.
       ``(D) Reporting.--Each protection buyer shall report all of 
     its legitimate short positions in credit default swaps, as 
     well as any other credit default swap positions and the valid 
     credit instruments that it owns to the Commission, in such 
     manner, in such frequency, and in such form as may be 
     prescribed by the Commission.
       ``(E) Holding of short positions in credit default swaps by 
     swap dealers.--Any swap dealer in credit default swaps 
     seeking to establish, possess, or otherwise obtain a short 
     position as the protection buyer of any credit default swap 
     for more than 60 consecutive calendar days or for more than 
     two-thirds of the days in any calendar quarter, shall 
     demonstrate to the Commission, in such manner and in such 
     form as may be prescribed by the Commission, that--
       ``(i) the value of the swap dealer's holdings in valid 
     credit instruments is equal to or greater than the absolute 
     notional value of the swap dealer's position in credit 
     default swaps; and
       ``(ii) the reference entity or entities for the swap 
     dealer's credit default swaps in clause (i), whether in a 
     single-name, or a narrow-based index or a broad-based index 
     credit default swap transaction, must be the same as the 
     borrower or issuer, or borrowers or issuers, of the valid 
     credit instrument or valid credit instruments the swap dealer 
     owns.
       ``(F) Prohibition on evasions and structuring of 
     transactions.--No person, including any protection buyer, 
     protection seller, or counterparty, may take any action in 
     connection with a credit default swap to structure such swap 
     for the purpose and with the intent of evading the provisions 
     of this subsection.
       ``(G) Authority of the commission.--The Commission, in 
     consultation with the Securities and Exchange Commission, 
     may, in the public interest, for the protection of investors, 
     for the protection of market participants, and the 
     maintenance of fair and orderly markets, prohibit any other 
     action, practice, or conduct in connection with or related to 
     the direct or indirect purchase or sale of credit default 
     swaps.
       ``(4) Determination of the council; phase in.--
       ``(A) Effective date.--Subject to subparagraph (B), this 
     subsection shall take effect on the earlier of--
       ``(i) the effective date established under section 753 of 
     the Wall Street Transparency and Accountability Act of 2010; 
     or
       ``(ii) the date on which the Chairperson of the Financial 
     Stability Oversight Council makes a determination that the 
     prohibitions and limitations established under this 
     subsection would not cause undue market disruptions.
       ``(B) Determination of market disruption.--Not later than 
     the effective date established under section 753 of the Wall 
     Street Transparency and Accountability Act of 2010, if the 
     Chairperson of the Financial Stability Oversight Council 
     determines that a phase in of the prohibitions and 
     limitations established under this subsection is necessary to 
     avoid undue market disruptions, then the Chairperson shall 
     recommend, and the Commission shall adopt, a phase in period 
     for such prohibitions and limitations. Any phase in period 
     described under this subparagraph shall not exceed 18 months.
       ``(5) Definitions.--
       ``(A) In general.--In this subsection, the following 
     definitions shall apply:
       ``(i) Credit default swap.--The term `credit default 
     swap'--

       ``(I) means a swap or security-based swap whose payout is 
     determined by the occurrence of a credit event with respect 
     to a single referenced credit instrument or reference entity 
     or multiple referenced credit instruments or reference 
     entities; and

[[Page 8454]]

       ``(II) is not a debt security registered with the 
     Securities and Exchange Commission and issued by a 
     corporation, State, municipality, or sovereign entity.

       ``(ii) Credit event.--The term `credit event' includes a 
     default, restructuring, insolvency, bankruptcy, credit 
     downgrade, and a violation of a debt covenant.
       ``(iii) Protection buyer.--The term `protection buyer' 
     means a person that enters into a credit default swap to 
     obtain a payoff from a third party (commonly referred to as 
     the `protection seller') upon the occurrence of one or more 
     credit events.
       ``(iv) Reference entity.--The term `reference entity' means 
     any borrower, such as a corporation, State, municipality, 
     sovereign entity, or special purpose entity, which has issued 
     a public debt obligation or obtained a loan that is 
     referenced by a credit default swap.
       ``(B) Further definition of terms.--The Commission and the 
     Securities and Exchange Commission, shall jointly establish 
     and adopt rules, regulations, or orders, in accordance with 
     the public interest, further defining the terms `credit 
     default swap', `credit event', `protection buyer', and 
     `reference entity'.''.
       (b) Clearing of Credit Default Swaps Under Securities 
     Exchange Act of 1934.--The Securities Exchange Act of 1934 
     (15 U.S.C. 78a et seq.) is amended by inserting after section 
     3C, as added by this title, the following:

     ``SEC. 3C-1. CLEARING OF CREDIT DEFAULT SWAPS.

       ``(a) Submission.--It shall be unlawful for any party to 
     enter into a credit default swap unless that person shall 
     submit such credit default swap for clearing to a clearing 
     agency that is registered under section 17A of this Act.
       ``(b) Prohibition.--Notwithstanding any other provisions in 
     this section or of this Act, if no clearing agency will 
     accept a credit default swap for clearing, it shall be 
     unlawful for any party to enter into the credit default swap.
       ``(c) Limitation on Short Positions.--
       ``(1) In general.--It shall be unlawful for a protection 
     buyer to enter into a credit default swap which establishes a 
     short position in a reference entity's credit unless the 
     protection buyer can demonstrate to the Commission, in such 
     manner and in such form as may be prescribed by the 
     Commission, that the protection buyer--
       ``(A) is undertaking such action to establish a legitimate 
     short position in credit default swaps; or
       ``(B) is regulated by the Commission as a security-based 
     swap dealer in credit default swaps, and is acting as a 
     market-maker or otherwise for the purpose of serving clients.
       ``(2) Legitimate short position in credit default swaps.--A 
     protection buyer's short position in credit default swaps 
     shall be considered a legitimate short position in credit 
     default swaps if --
       ``(A) the value of the protection buyer's holdings in valid 
     credit instruments is equal to or greater than the absolute 
     notional value of the protection buyer's credit default 
     swaps; and
       ``(B) the reference entity or entities for the protection 
     buyer's credit default swaps in subparagraph (A), whether in 
     a single-name, or a narrow-based index or a broad-based index 
     credit default swap transaction, must be the same as the 
     borrower or issuer, or borrowers or issuers, of the valid 
     credit instrument or valid credit instruments the protection 
     buyer owns.
       ``(3) Determination of the commission.--
       ``(A) In general.--The Commission and the Commodity Futures 
     Trading Commission, shall jointly establish and adopt rules, 
     regulations, or orders, in accordance with the public 
     interest, defining the term `valid credit instrument'.
       ``(B) Considerations and requirements.--In defining the 
     term `valid credit instrument', the Commission and the 
     Commodity Futures Trading Commission shall consider which 
     group, category, type, or class of credit instruments can be 
     effectively hedged using credit default swaps.
       ``(C) Rule of construction.--For purposes of this 
     subsection, any instrument with an equity risk exposure or 
     equity-like features shall not be considered by the 
     Commission to be a valid credit instrument.
       ``(4) Reporting.--Each protection buyer shall report all of 
     its legitimate short positions in credit default swaps, as 
     well as any other credit default swap positions and the valid 
     credit instruments that it owns to the Commission, in such 
     manner, in such frequency, and in such form as may be 
     prescribed by the Commission.
       ``(5) Holdings of short positions in credit default swaps 
     by security-based swap dealers.--Any security-based swap 
     dealer in credit default swaps seeking to establish, possess, 
     or otherwise obtain a short position as the protection buyer 
     of any credit default swap for more than 60 consecutive 
     calendar days or for more than two-thirds of the days in any 
     calendar quarter, shall demonstrate to the Commission, in 
     such manner and in such form as may be prescribed by the 
     Commission, that--
       ``(A) the value of the security-based swap dealer's long 
     holdings in valid credit instruments is equal to or greater 
     than the absolute notional value of the security-based swap 
     dealer's position in credit default swaps; and
       ``(B) the reference entity or entities for the security-
     based swap dealer's credit default swaps in subparagraph (A), 
     whether in a single-name, or a narrow-based index or a broad-
     based index credit default swap transaction, must be the same 
     as the borrower or issuer, or borrowers or issuers, of the 
     valid credit instrument or valid credit instruments the 
     security-based swaps dealer owns.
       ``(6) Prohibition on evasions and structuring of 
     transactions.--No person, including any protection buyer, 
     protection seller, or counterparty, may take any action in 
     connection with a credit default swap to structure such swap 
     for the purpose and with the intent of evading the provisions 
     of this section.
       ``(7) Authority of the commission.--The Commission, in 
     consultation with the Commodity Futures Trading Commission, 
     may, in the public interest, for the protection of investors, 
     for the protection of market participants, and the 
     maintenance of fair and orderly markets, prohibit any other 
     action, practice, or conduct in connection with or related to 
     the direct or indirect purchase or sale of credit default 
     swaps.
       ``(d) Determination of the Council; Phase in.--
       ``(1) Effective date.--Subject to paragraph (2), this 
     section shall take effect on the earlier of--
       ``(A) the effective date established under section 773 of 
     the Wall Street Transparency and Accountability Act of 2010; 
     or
       ``(B) the date on which the Chairperson of the Financial 
     Stability Oversight Council makes a determination that the 
     prohibitions and limitations established under this 
     subsection would not cause undue market disruptions.
       ``(2) Determination of market disruption.--Not later than 
     the effective date established under section 773 of the Wall 
     Street Transparency and Accountability Act of 2010, if the 
     Chairperson of the Financial Stability Oversight Council 
     determines that a phase in of the prohibitions and 
     limitations established under this section is necessary to 
     avoid undue market disruptions, then the Chairperson shall 
     recommend, and the Commission shall adopt, a phase in period 
     for such prohibitions and limitations. Any phase in period 
     described under this paragraph shall not exceed 18 months.
       ``(e) Definitions.--
       ``(1) In general.--In this section, the following 
     definitions shall apply:
       ``(A) Credit default swap.--The term `credit default 
     swap'--
       ``(i) means a swap or security-based swap whose payout is 
     determined by the occurrence of a credit event with respect 
     to a single referenced credit instrument or reference entity 
     or multiple referenced credit instruments or reference 
     entities; and
       ``(ii) is not a debt security registered with the 
     Commission and issued by a corporation, State, municipality, 
     or sovereign entity.
       ``(B) Credit event.--The term `credit event' includes a 
     default, restructuring, insolvency, bankruptcy, credit 
     downgrade, and a violation of a debt covenant.
       ``(C) Protection buyer.--The term `protection buyer' means 
     a person that enters into a credit default swap to obtain a 
     payoff from a third party (commonly referred to as the 
     `protection seller') upon the occurrence of one or more 
     credit events.
       ``(D) Reference entity.--The term `reference entity' means 
     any borrower, such as a corporation, State, municipality, 
     sovereign entity, or special purpose entity, which has issued 
     a public debt obligation or obtained a loan that is 
     referenced by a credit default swap.
       ``(2) Further definition of terms.--The Commission and the 
     Commodity Futures Trading Commission, shall jointly establish 
     and adopt rules, regulations, or orders, in accordance with 
     the public interest, further defining the terms `credit 
     default swap', `credit event', `protection buyer', and 
     `reference entity'.''.

     SEC. 775. RESTRICTION ON SYNTHETIC ASSET-BACKED SECURITIES.

       The Securities Act of 1933 (15 U.S.C. 77a et seq.) is 
     amended by inserting after section 5 the following:

     ``SEC. 5A. RESTRICTION ON SYNTHETIC ASSET-BACKED SECURITIES.

       ``(a) Definition.--For purposes of this section, the term 
     `synthetic asset-backed security' means an asset-backed 
     security, as defined in section 3(a)(77) of the Securities 
     Exchange Act of 1934, with respect to which, by design, the 
     self-liquidating financial assets referenced in the synthetic 
     securitization do not provide any direct payment or cash flow 
     to the holders of the security.
       ``(b) Restriction.--
       ``(1) In general.--No issuer, underwriter, placement agent, 
     sponsor, or initial purchaser may offer, sell, or transfer a 
     synthetic asset-backed security that has no purpose apart 
     from speculation on a possible future gain or loss associated 
     with the value or condition of the referenced assets. The 
     Commission may determine, by rule or otherwise, whether a 
     security is included within the description set forth in the 
     preceding sentence. Any such determination by the Commission, 
     other than by rule, is not subject to judicial review.

[[Page 8455]]

       ``(2) Rulemaking.--Not later than 270 days after the date 
     of enactment of this section, the Commission shall issue 
     rules carry out this section and to prevent evasions 
     thereof.''.

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