[House Report 111-517]
[From the U.S. Government Publishing Office]
111th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 111-517
_______________________________________________________________________
DODD-FRANK WALL STREET REFORM AND CONSUMER PROTECTION ACT
----------
CONFERENCE REPORT
to accompany
H.R. 4173
June 29, 2010.--Ordered to be printed
DODD-FRANK WALL STREET REFORM
AND CONSUMER PROTECTION ACT
111th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 111-517
_______________________________________________________________________
DODD-FRANK WALL STREET REFORM AND CONSUMER PROTECTION ACT
__________
CONFERENCE REPORT
to accompany
H.R. 4173
June 29, 2010.--Ordered to be printed
111th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 111-517
======================================================================
DODD-FRANK WALL STREET REFORM AND CONSUMER PROTECTION ACT
_______
June 29, 2010.--Ordered to be printed
_______
Mr. Frank, from the Committee of Conference, submitted the following
CONFERENCE REPORT
[To accompany H.R. 4173]
The committee of conference on the disagreeing votes of
the two Houses on the amendments of the Senate to the bill
(H.R. 4173), to provide for financial regulatory reform, to
protect consumers and investors, to enhance Federal
understanding of insurance issues, to regulate the over-the-
counter derivatives markets, and for other purposes, having
met, after full and free conference, have agreed to recommend
and do recommend to their respective Houses as follows:
That the House recede from its disagreement to the
amendment of the Senate to the text of the bill and agree to
the same with an amendment as follows:
In lieu of the matter proposed to be inserted by the
Senate amendment, insert the following:
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Dodd-Frank
Wall Street Reform and Consumer Protection Act''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. Severability.
Sec. 4. Effective date.
Sec. 5. Budgetary effects.
Sec. 6. Antitrust savings clause.
TITLE I--FINANCIAL STABILITY
Sec. 101. Short title.
Sec. 102. Definitions.
Subtitle A--Financial Stability Oversight Council
Sec. 111. Financial Stability Oversight Council established.
Sec. 112. Council authority.
Sec. 113. Authority to require supervision and regulation of certain
nonbank financial companies.
Sec. 114. Registration of nonbank financial companies supervised by the
Board of Governors.
Sec. 115. Enhanced supervision and prudential standards for nonbank
financial companies supervised by the Board of Governors and
certain bank holding companies.
Sec. 116. Reports.
Sec. 117. Treatment of certain companies that cease to be bank holding
companies.
Sec. 118. Council funding.
Sec. 119. Resolution of supervisory jurisdictional disputes among member
agencies.
Sec. 120. Additional standards applicable to activities or practices for
financial stability purposes.
Sec. 121. Mitigation of risks to financial stability.
Sec. 122. GAO Audit of Council.
Sec. 123. Study of the effects of size and complexity of financial
institutions on capital market efficiency and economic growth.
Subtitle B--Office of Financial Research
Sec. 151. Definitions.
Sec. 152. Office of Financial Research established.
Sec. 153. Purpose and duties of the Office.
Sec. 154. Organizational structure; responsibilities of primary
programmatic units.
Sec. 155. Funding.
Sec. 156. Transition oversight.
Subtitle C--Additional Board of Governors Authority for Certain Nonbank
Financial Companies and Bank Holding Companies
Sec. 161. Reports by and examinations of nonbank financial companies by
the Board of Governors.
Sec. 162. Enforcement.
Sec. 163. Acquisitions.
Sec. 164. Prohibition against management interlocks between certain
financial companies.
Sec. 165. Enhanced supervision and prudential standards for nonbank
financial companies supervised by the Board of Governors and
certain bank holding companies.
Sec. 166. Early remediation requirements.
Sec. 167. Affiliations.
Sec. 168. Regulations.
Sec. 169. Avoiding duplication.
Sec. 170. Safe harbor.
Sec. 171. Leverage and risk-based capital requirements.
Sec. 172. Examination and enforcement actions for insurance and orderly
liquidation purposes.
Sec. 173. Access to United States financial market by foreign
institutions.
Sec. 174. Studies and reports on holding company capital requirements.
Sec. 175. International policy coordination.
Sec. 176. Rule of construction.
TITLE II--ORDERLY LIQUIDATION AUTHORITY
Sec. 201. Definitions.
Sec. 202. Judicial review.
Sec. 203. Systemic risk determination.
Sec. 204. Orderly liquidation of covered financial companies.
Sec. 205. Orderly liquidation of covered brokers and dealers.
Sec. 206. Mandatory terms and conditions for all orderly liquidation
actions.
Sec. 207. Directors not liable for acquiescing in appointment of
receiver.
Sec. 208. Dismissal and exclusion of other actions.
Sec. 209. Rulemaking; non-conflicting law.
Sec. 210. Powers and duties of the Corporation.
Sec. 211. Miscellaneous provisions.
Sec. 212. Prohibition of circumvention and prevention of conflicts of
interest.
Sec. 213. Ban on certain activities by senior executives and directors.
Sec. 214. Prohibition on taxpayer funding.
Sec. 215. Study on secured creditor haircuts.
Sec. 216. Study on bankruptcy process for financial and nonbank
financial institutions.
Sec. 217. Study on international coordination relating to bankruptcy
process for nonbank financial institutions.
TITLE III--TRANSFER OF POWERS TO THE COMPTROLLER OF THE CURRENCY, THE
CORPORATION, AND THE BOARD OF GOVERNORS
Sec. 300. Short title.
Sec. 301. Purposes.
Sec. 302. Definition.
Subtitle A--Transfer of Powers and Duties
Sec. 311. Transfer date.
Sec. 312. Powers and duties transferred.
Sec. 313. Abolishment.
Sec. 314. Amendments to the Revised Statutes.
Sec. 315. Federal information policy.
Sec. 316. Savings provisions.
Sec. 317. References in Federal law to Federal banking agencies.
Sec. 318. Funding.
Sec. 319. Contracting and leasing authority.
Subtitle B--Transitional Provisions
Sec. 321. Interim use of funds, personnel, and property of the Office of
Thrift Supervision.
Sec. 322. Transfer of employees.
Sec. 323. Property transferred.
Sec. 324. Funds transferred.
Sec. 325. Disposition of affairs.
Sec. 326. Continuation of services.
Sec. 327. Implementation plan and reports.
Subtitle C--Federal Deposit Insurance Corporation
Sec. 331. Deposit insurance reforms.
Sec. 332. Elimination of procyclical assessments.
Sec. 333. Enhanced access to information for deposit insurance purposes.
Sec. 334. Transition reserve ratio requirements to reflect new
assessment base.
Sec. 335. Permanent increase in deposit and share insurance.
Sec. 336. Management of the Federal Deposit Insurance Corporation.
Subtitle D--Other Matters
Sec. 341. Branching.
Sec. 342. Office of Minority and Women Inclusion.
Sec. 343. Insurance of transaction accounts.
Subtitle E--Technical and Conforming Amendments
Sec. 351. Effective date.
Sec. 352. Balanced Budget and Emergency Deficit Control Act of 1985.
Sec. 353. Bank Enterprise Act of 1991.
Sec. 354. Bank Holding Company Act of 1956.
Sec. 355. Bank Holding Company Act Amendments of 1970.
Sec. 356. Bank Protection Act of 1968.
Sec. 357. Bank Service Company Act.
Sec. 358. Community Reinvestment Act of 1977.
Sec. 359. Crime Control Act of 1990.
Sec. 360. Depository Institution Management Interlocks Act.
Sec. 361. Emergency Homeowners' Relief Act.
Sec. 362. Federal Credit Union Act.
Sec. 363. Federal Deposit Insurance Act.
Sec. 364. Federal Home Loan Bank Act.
Sec. 365. Federal Housing Enterprises Financial Safety and Soundness Act
of 1992.
Sec. 366. Federal Reserve Act.
Sec. 367. Financial Institutions Reform, Recovery, and Enforcement Act
of 1989.
Sec. 368. Flood Disaster Protection Act of 1973.
Sec. 369. Home Owners' Loan Act.
Sec. 370. Housing Act of 1948.
Sec. 371. Housing and Community Development Act of 1992.
Sec. 372. Housing and Urban-Rural Recovery Act of 1983.
Sec. 373. National Housing Act.
Sec. 374. Neighborhood Reinvestment Corporation Act.
Sec. 375. Public Law 93-100.
Sec. 376. Securities Exchange Act of 1934.
Sec. 377. Title 18, United States Code.
Sec. 378. Title 31, United States Code.
TITLE IV--REGULATION OF ADVISERS TO HEDGE FUNDS AND OTHERS
Sec. 401. Short title.
Sec. 402. Definitions.
Sec. 403. Elimination of private adviser exemption; limited exemption
for foreign private advisers; limited intrastate exemption.
Sec. 404. Collection of systemic risk data; reports; examinations;
disclosures.
Sec. 405. Disclosure provision amendment.
Sec. 406. Clarification of rulemaking authority.
Sec. 407. Exemption of venture capital fund advisers.
Sec. 408. Exemption of and record keeping by private equity fund
advisers.
Sec. 409. Family offices.
Sec. 410. State and Federal responsibilities; asset threshold for
Federal registration of investment advisers.
Sec. 411. Custody of client assets.
Sec. 412. Adjusting the accredited investor standard.
Sec. 413. GAO study and report on accredited investors.
Sec. 414. GAO study on self-regulatory organization for private funds.
Sec. 415. Commission study and report on short selling.
Sec. 416. Transition period.
TITLE V--INSURANCE
Subtitle A--Office of National Insurance
Sec. 501. Short title.
Sec. 502. Federal Insurance Office.
Subtitle B--State-Based Insurance Reform
Sec. 511. Short title.
Sec. 512. Effective date.
PART I--Nonadmitted Insurance
Sec. 521. Reporting, payment, and allocation of premium taxes.
Sec. 522. Regulation of nonadmitted insurance by insured's home State.
Sec. 523. Participation in national producer database.
Sec. 524. Uniform standards for surplus lines eligibility.
Sec. 525. Streamlined application for commercial purchasers.
Sec. 526. GAO study of nonadmitted insurance market.
Sec. 527. Definitions.
PART II--Reinsurance
Sec. 531. Regulation of credit for reinsurance and reinsurance
agreements.
Sec. 532. Regulation of reinsurer solvency.
Sec. 533. Definitions.
PART III--Rule of Construction
Sec. 541. Rule of construction.
Sec. 542. Severability.
TITLE VI--IMPROVEMENTS TO REGULATION OF BANK AND SAVINGS ASSOCIATION
HOLDING COMPANIES AND DEPOSITORY INSTITUTIONS
Sec. 601. Short title.
Sec. 602. Definition.
Sec. 603. Moratorium and study on treatment of credit card banks,
industrial loan companies, and certain other companies under
the Bank Holding Company Act of 1956.
Sec. 604. Reports and examinations of holding companies; regulation of
functionally regulated subsidiaries.
Sec. 605. Assuring consistent oversight of permissible activities of
depository institution subsidiaries of holding companies.
Sec. 606. Requirements for financial holding companies to remain well
capitalized and well managed.
Sec. 607. Standards for interstate acquisitions.
Sec. 608. Enhancing existing restrictions on bank transactions with
affiliates.
Sec. 609. Eliminating exceptions for transactions with financial
subsidiaries.
Sec. 610. Lending limits applicable to credit exposure on derivative
transactions, repurchase agreements, reverse repurchase
agreements, and securities lending and borrowing transactions.
Sec. 611. Consistent treatment of derivative transactions in lending
limits.
Sec. 612. Restriction on conversions of troubled banks.
Sec. 613. De novo branching into States.
Sec. 614. Lending limits to insiders.
Sec. 615. Limitations on purchases of assets from insiders.
Sec. 616. Regulations regarding capital levels.
Sec. 617. Elimination of elective investment bank holding company
framework.
Sec. 618. Securities holding companies.
Sec. 619. Prohibitions on proprietary trading and certain relationships
with hedge funds and private equity funds.
Sec. 620. Study of bank investment activities.
Sec. 621. Conflicts of interest.
Sec. 622. Concentration limits on large financial firms.
Sec. 623. Interstate merger transactions.
Sec. 624. Qualified thrift lenders.
Sec. 625. Treatment of dividends by certain mutual holding companies.
Sec. 626. Intermediate holding companies.
Sec. 627. Interest-bearing transaction accounts authorized.
Sec. 628. Credit card bank small business lending.
TITLE VII--WALL STREET TRANSPARENCY AND ACCOUNTABILITY
Sec. 701. Short title.
Subtitle A--Regulation of Over-the-Counter Swaps Markets
PART I--Regulatory Authority
Sec. 711. Definitions.
Sec. 712. Review of regulatory authority.
Sec. 713. Portfolio margining conforming changes.
Sec. 714. Abusive swaps.
Sec. 715. Authority to prohibit participation in swap activities.
Sec. 716. Prohibition against Federal Government bailouts of swaps
entities.
Sec. 717. New product approval CFTC--SEC process.
Sec. 718. Determining status of novel derivative products.
Sec. 719. Studies.
Sec. 720. Memorandum.
PART II--Regulation of Swap Markets
Sec. 721. Definitions.
Sec. 722. Jurisdiction.
Sec. 723. Clearing.
Sec. 724. Swaps; segregation and bankruptcy treatment.
Sec. 725. Derivatives clearing organizations.
Sec. 726. Rulemaking on conflict of interest.
Sec. 727. Public reporting of swap transaction data.
Sec. 728. Swap data repositories.
Sec. 729. Reporting and recordkeeping.
Sec. 730. Large swap trader reporting.
Sec. 731. Registration and regulation of swap dealers and major swap
participants.
Sec. 732. Conflicts of interest.
Sec. 733. Swap execution facilities.
Sec. 734. Derivatives transaction execution facilities and exempt boards
of trade.
Sec. 735. Designated contract markets.
Sec. 736. Margin.
Sec. 737. Position limits.
Sec. 738. Foreign boards of trade.
Sec. 739. Legal certainty for swaps.
Sec. 740. Multilateral clearing organizations.
Sec. 741. Enforcement.
Sec. 742. Retail commodity transactions.
Sec. 743. Other authority.
Sec. 744. Restitution remedies.
Sec. 745. Enhanced compliance by registered entities.
Sec. 746. Insider trading.
Sec. 747. Antidisruptive practices authority.
Sec. 748. Commodity whistleblower incentives and protection.
Sec. 749. Conforming amendments.
Sec. 750. Study on oversight of carbon markets.
Sec. 751. Energy and environmental markets advisory committee.
Sec. 752. International harmonization.
Sec. 753. Anti-manipulation authority.
Sec. 754. Effective date.
Subtitle B--Regulation of Security-Based Swap Markets
Sec. 761. Definitions under the Securities Exchange Act of 1934.
Sec. 762. Repeal of prohibition on regulation of security-based swap
agreements.
Sec. 763. Amendments to the Securities Exchange Act of 1934.
Sec. 764. Registration and regulation of security-based swap dealers and
major security-based swap participants.
Sec. 765. Rulemaking on conflict of interest.
Sec. 766. Reporting and recordkeeping.
Sec. 767. State gaming and bucket shop laws.
Sec. 768. Amendments to the Securities Act of 1933; treatment of
security-based swaps.
Sec. 769. Definitions under the Investment Company Act of 1940.
Sec. 770. Definitions under the Investment Advisers Act of 1940.
Sec. 771. Other authority.
Sec. 772. Jurisdiction.
Sec. 773. Civil penalties.
Sec. 774. Effective date.
TITLE VIII--PAYMENT, CLEARING, AND SETTLEMENT SUPERVISION
Sec. 801. Short title.
Sec. 802. Findings and purposes.
Sec. 803. Definitions.
Sec. 804. Designation of systemic importance.
Sec. 805. Standards for systemically important financial market
utilities and payment, clearing, or settlement activities.
Sec. 806. Operations of designated financial market utilities.
Sec. 807. Examination of and enforcement actions against designated
financial market utilities.
Sec. 808. Examination of and enforcement actions against financial
institutions subject to standards for designated activities.
Sec. 809. Requests for information, reports, or records.
Sec. 810. Rulemaking.
Sec. 811. Other authority.
Sec. 812. Consultation.
Sec. 813. Common framework for designated clearing entity risk
management.
Sec. 814. Effective date.
TITLE IX--INVESTOR PROTECTIONS AND IMPROVEMENTS TO THE REGULATION OF
SECURITIES
Sec. 901. Short title.
Subtitle A--Increasing Investor Protection
Sec. 911. Investor Advisory Committee established.
Sec. 912. Clarification of authority of the Commission to engage in
investor testing.
Sec. 913. Study and rulemaking regarding obligations of brokers,
dealers, and investment advisers.
Sec. 914. Study on enhancing investment adviser examinations.
Sec. 915. Office of the Investor Advocate.
Sec. 916. Streamlining of filing procedures for self-regulatory
organizations.
Sec. 917. Study regarding financial literacy among investors.
Sec. 918. Study regarding mutual fund advertising.
Sec. 919. Clarification of Commission authority to require investor
disclosures before purchase of investment products and
services.
Sec. 919A. Study on conflicts of interest.
Sec. 919B. Study on improved investor access to information on
investment advisers and broker-dealers.
Sec. 919C. Study on financial planners and the use of financial
designations.
Sec. 919D. Ombudsman.
Subtitle B--Increasing Regulatory Enforcement and Remedies
Sec. 921. Authority to restrict mandatory pre-dispute arbitration.
Sec. 922. Whistleblower protection.
Sec. 923. Conforming amendments for whistleblower protection.
Sec. 924. Implementation and transition provisions for whistleblower
protection.
Sec. 925. Collateral bars.
Sec. 926. Disqualifying felons and other ``bad actors'' from Regulation
D offerings.
Sec. 927. Equal treatment of self-regulatory organization rules.
Sec. 928. Clarification that section 205 of the Investment Advisers Act
of 1940 does not apply to State-registered advisers.
Sec. 929. Unlawful margin lending.
Sec. 929A. Protection for employees of subsidiaries and affiliates of
publicly traded companies.
Sec. 929B. Fair Fund amendments.
Sec. 929C. Increasing the borrowing limit on Treasury loans.
Sec. 929D. Lost and stolen securities.
Sec. 929E. Nationwide service of subpoenas.
Sec. 929F. Formerly associated persons.
Sec. 929G. Streamlined hiring authority for market specialists.
Sec. 929H. SIPC Reforms.
Sec. 929I. Protecting confidentiality of materials submitted to the
Commission.
Sec. 929J. Expansion of audit information to be produced and exchanged.
Sec. 929K. Sharing privileged information with other authorities.
Sec. 929L. Enhanced application of antifraud provisions.
Sec. 929M. Aiding and abetting authority under the Securities Act and
the Investment Company Act.
Sec. 929N. Authority to impose penalties for aiding and abetting
violations of the Investment Advisers Act.
Sec. 929O. Aiding and abetting standard of knowledge satisfied by
recklessness.
Sec. 929P. Strengthening enforcement by the Commission.
Sec. 929Q. Revision to recordkeeping rule.
Sec. 929R. Beneficial ownership and short-swing profit reporting.
Sec. 929S. Fingerprinting.
Sec. 929T. Equal treatment of self-regulatory organization rules.
Sec. 929U. Deadline for completing examinations, inspections and
enforcement actions.
Sec. 929V. Security Investor Protection Act amendments.
Sec. 929W. Notice to missing security holders.
Sec. 929X. Short sale reforms.
Sec. 929Y. Study on extraterritorial private rights of action.
Sec. 929Z. GAO study on securities litigation.
Subtitle C--Improvements to the Regulation of Credit Rating Agencies
Sec. 931. Findings.
Sec. 932. Enhanced regulation, accountability, and transparency of
nationally recognized statistical rating organizations.
Sec. 933. State of mind in private actions.
Sec. 934. Referring tips to law enforcement or regulatory authorities.
Sec. 935. Consideration of information from sources other than the
issuer in rating decisions.
Sec. 936. Qualification standards for credit rating analysts.
Sec. 937. Timing of regulations.
Sec. 938. Universal ratings symbols.
Sec. 939. Removal of statutory references to credit ratings.
Sec. 939A. Review of reliance on ratings.
Sec. 939B. Elimination of exemption from fair disclosure rule.
Sec. 939C. Securities and Exchange Commission study on strengthening
credit rating agency independence.
Sec. 939D. Government Accountability Office study on alternative
business models.
Sec. 939E. Government Accountability Office study on the creation of an
independent professional analyst organization.
Sec. 939F. Study and rulemaking on assigned credit ratings.
Sec. 939G. Effect of Rule 436(g).
Sec. 939H. Sense of Congress.
Subtitle D--Improvements to the Asset-Backed Securitization Process
Sec. 941. Regulation of credit risk retention.
Sec. 942. Disclosures and reporting for asset-backed securities.
Sec. 943. Representations and warranties in asset-backed offerings.
Sec. 944. Exempted transactions under the Securities Act of 1933.
Sec. 945. Due diligence analysis and disclosure in asset-backed
securities issues.
Sec. 946. Study on the macroeconomic effects of risk retention
requirements.
Subtitle E--Accountability and Executive Compensation
Sec. 951. Shareholder vote on executive compensation disclosures.
Sec. 952. Compensation committee independence.
Sec. 953. Executive compensation disclosures.
Sec. 954. Recovery of erroneously awarded compensation.
Sec. 955. Disclosure regarding employee and director hedging.
Sec. 956. Enhanced compensation structure reporting.
Sec. 957. Voting by brokers.
Subtitle F--Improvements to the Management of the Securities and
Exchange Commission
Sec. 961. Report and certification of internal supervisory controls.
Sec. 962. Triennial report on personnel management.
Sec. 963. Annual financial controls audit.
Sec. 964. Report on oversight of national securities associations.
Sec. 965. Compliance examiners.
Sec. 966. Suggestion program for employees of the Commission.
Sec. 967. Commission organizational study and reform.
Sec. 968. Study on SEC revolving door.
Subtitle G--Strengthening Corporate Governance
Sec. 971. Proxy access.
Sec. 972. Disclosures regarding chairman and CEO structures.
Subtitle H--Municipal Securities
Sec. 975. Regulation of municipal securities and changes to the board of
the MSRB.
Sec. 976. Government Accountability Office study of increased disclosure
to investors.
Sec. 977. Government Accountability Office study on the municipal
securities markets.
Sec. 978. Funding for Governmental Accounting Standards Board.
Sec. 979. Commission Office of Municipal Securities.
Subtitle I--Public Company Accounting Oversight Board, Portfolio
Margining, and Other Matters
Sec. 981. Authority to share certain information with foreign
authorities.
Sec. 982. Oversight of brokers and dealers.
Sec. 983. Portfolio margining.
Sec. 984. Loan or borrowing of securities.
Sec. 985. Technical corrections to Federal securities laws.
Sec. 986. Conforming amendments relating to repeal of the Public Utility
Holding Company Act of 1935.
Sec. 987. Amendment to definition of material loss and nonmaterial
losses to the Deposit Insurance Fund for purposes of Inspector
General reviews.
Sec. 988. Amendment to definition of material loss and nonmaterial
losses to the National Credit Union Share Insurance Fund for
purposes of Inspector General reviews.
Sec. 989. Government Accountability Office study on proprietary trading.
Sec. 989A. Senior investor protections.
Sec. 989B. Designated Federal entity inspectors general independence.
Sec. 989C. Strengthening Inspector General accountability.
Sec. 989D. Removal of Inspectors General of designated Federal entities.
Sec. 989E. Additional oversight of financial regulatory system.
Sec. 989F. GAO study of person to person lending.
Sec. 989G. Exemption for nonaccelerated filers.
Sec. 989H. Corrective responses by heads of certain establishments to
deficiencies identified by Inspectors General.
Sec. 989I. GAO study regarding exemption for smaller issuers.
Sec. 989J. Further promoting the adoption of the NAIC Model Regulations
that enhance protection of seniors and other consumers.
Subtitle J--Securities and Exchange Commission Match Funding
Sec. 991. Securities and Exchange Commission match funding.
TITLE X--BUREAU OF CONSUMER FINANCIAL PROTECTION
Sec. 1001. Short title.
Sec. 1002. Definitions.
Subtitle A--Bureau of Consumer Financial Protection
Sec. 1011. Establishment of the Bureau of Consumer Financial Protection.
Sec. 1012. Executive and administrative powers.
Sec. 1013. Administration.
Sec. 1014. Consumer Advisory Board.
Sec. 1015. Coordination.
Sec. 1016. Appearances before and reports to Congress.
Sec. 1017. Funding; penalties and fines.
Sec. 1018. Effective date.
Subtitle B--General Powers of the Bureau
Sec. 1021. Purpose, objectives, and functions.
Sec. 1022. Rulemaking authority.
Sec. 1023. Review of Bureau regulations.
Sec. 1024. Supervision of nondepository covered persons.
Sec. 1025. Supervision of very large banks, savings associations, and
credit unions.
Sec. 1026. Other banks, savings associations, and credit unions.
Sec. 1027. Limitations on authorities of the Bureau; preservation of
authorities.
Sec. 1028. Authority to restrict mandatory pre-dispute arbitration.
Sec. 1029. Exclusion for auto dealers.
Sec. 1029A. Effective date.
Subtitle C--Specific Bureau Authorities
Sec. 1031. Prohibiting unfair, deceptive, or abusive acts or practices.
Sec. 1032. Disclosures.
Sec. 1033. Consumer rights to access information.
Sec. 1034. Response to consumer complaints and inquiries.
Sec. 1035. Private education loan ombudsman.
Sec. 1036. Prohibited acts.
Sec. 1037. Effective date.
Subtitle D--Preservation of State Law
Sec. 1041. Relation to State law.
Sec. 1042. Preservation of enforcement powers of States.
Sec. 1043. Preservation of existing contracts.
Sec. 1044. State law preemption standards for national banks and
subsidiaries clarified.
Sec. 1045. Clarification of law applicable to nondepository institution
subsidiaries.
Sec. 1046. State law preemption standards for Federal savings
associations and subsidiaries clarified.
Sec. 1047. Visitorial standards for national banks and savings
associations.
Sec. 1048. Effective date.
Subtitle E--Enforcement Powers
Sec. 1051. Definitions.
Sec. 1052. Investigations and administrative discovery.
Sec. 1053. Hearings and adjudication proceedings.
Sec. 1054. Litigation authority.
Sec. 1055. Relief available.
Sec. 1056. Referrals for criminal proceedings.
Sec. 1057. Employee protection.
Sec. 1058. Effective date.
Subtitle F--Transfer of Functions and Personnel; Transitional Provisions
Sec. 1061. Transfer of consumer financial protection functions.
Sec. 1062. Designated transfer date.
Sec. 1063. Savings provisions.
Sec. 1064. Transfer of certain personnel.
Sec. 1065. Incidental transfers.
Sec. 1066. Interim authority of the Secretary.
Sec. 1067. Transition oversight.
Subtitle G--Regulatory Improvements
Sec. 1071. Small business data collection.
Sec. 1072. Assistance for economically vulnerable individuals and
families.
Sec. 1073. Remittance transfers.
Sec. 1074. Department of the Treasury study on ending the
conservatorship of Fannie Mae, Freddie Mac, and reforming the
housing finance system.
Sec. 1075. Reasonable fees and rules for payment card transactions.
Sec. 1076. Reverse mortgage study and regulations.
Sec. 1077. Report on private education loans and private educational
lenders.
Sec. 1078. Study and report on credit scores.
Sec. 1079. Review, report, and program with respect to exchange
facilitators.
Sec. 1079A. Financial fraud provisions.
Subtitle H--Conforming Amendments
Sec. 1081. Amendments to the Inspector General Act.
Sec. 1082. Amendments to the Privacy Act of 1974.
Sec. 1083. Amendments to the Alternative Mortgage Transaction Parity Act
of 1982.
Sec. 1084. Amendments to the Electronic Fund Transfer Act.
Sec. 1085. Amendments to the Equal Credit Opportunity Act.
Sec. 1086. Amendments to the Expedited Funds Availability Act.
Sec. 1087. Amendments to the Fair Credit Billing Act.
Sec. 1088. Amendments to the Fair Credit Reporting Act and the Fair and
Accurate Credit Transactions Act of 2003.
Sec. 1089. Amendments to the Fair Debt Collection Practices Act.
Sec. 1090. Amendments to the Federal Deposit Insurance Act.
Sec. 1091. Amendment to Federal Financial Institutions Examination
Council Act of 1978.
Sec. 1092. Amendments to the Federal Trade Commission Act.
Sec. 1093. Amendments to the Gramm-Leach-Bliley Act.
Sec. 1094. Amendments to the Home Mortgage Disclosure Act of 1975.
Sec. 1095. Amendments to the Homeowners Protection Act of 1998.
Sec. 1096. Amendments to the Home Ownership and Equity Protection Act of
1994.
Sec. 1097. Amendments to the Omnibus Appropriations Act, 2009.
Sec. 1098. Amendments to the Real Estate Settlement Procedures Act of
1974.
Sec. 1098A. Amendments to the Interstate Land Sales Full Disclosure Act.
Sec. 1099. Amendments to the Right to Financial Privacy Act of 1978.
Sec. 1100. Amendments to the Secure and Fair Enforcement for Mortgage
Licensing Act of 2008.
Sec. 1100A. Amendments to the Truth in Lending Act.
Sec. 1100B. Amendments to the Truth in Savings Act.
Sec. 1100C. Amendments to the Telemarketing and Consumer Fraud and Abuse
Prevention Act.
Sec. 1100D. Amendments to the Paperwork Reduction Act.
Sec. 1100E. Adjustments for inflation in the Truth in Lending Act.
Sec. 1100F. Use of consumer reports.
Sec. 1100G. Small business fairness and regulatory transparency.
Sec. 1100H. Effective date.
TITLE XI--FEDERAL RESERVE SYSTEM PROVISIONS
Sec. 1101. Federal Reserve Act amendments on emergency lending
authority.
Sec. 1102. Reviews of special Federal reserve credit facilities.
Sec. 1103. Public access to information.
Sec. 1104. Liquidity event determination.
Sec. 1105. Emergency financial stabilization.
Sec. 1106. Additional related amendments.
Sec. 1107. Federal Reserve Act amendments on Federal reserve bank
governance.
Sec. 1108. Federal Reserve Act amendments on supervision and regulation
policy.
Sec. 1109. GAO audit of the Federal Reserve facilities; publication of
Board actions.
TITLE XII--IMPROVING ACCESS TO MAINSTREAM FINANCIAL INSTITUTIONS
Sec. 1201. Short title.
Sec. 1202. Purpose.
Sec. 1203. Definitions.
Sec. 1204. Expanded access to mainstream financial institutions.
Sec. 1205. Low-cost alternatives to payday loans.
Sec. 1206. Grants to establish loan-loss reserve funds.
Sec. 1207. Procedural provisions.
Sec. 1208. Authorization of appropriations.
Sec. 1209. Regulations.
Sec. 1210. Evaluation and reports to Congress.
TITLE XIII--PAY IT BACK ACT
Sec. 1301. Short title.
Sec. 1302. Amendment to reduce TARP authorization.
Sec. 1303. Report.
Sec. 1304. Amendments to Housing and Economic Recovery Act of 2008.
Sec. 1305. Federal Housing Finance Agency report.
Sec. 1306. Repayment of unobligated ARRA funds.
TITLE XIV--MORTGAGE REFORM AND ANTI-PREDATORY LENDING ACT
Sec. 1400. Short title; designation as enumerated consumer law.
Subtitle A--Residential Mortgage Loan Origination Standards
Sec. 1401. Definitions.
Sec. 1402. Residential mortgage loan origination.
Sec. 1403. Prohibition on steering incentives.
Sec. 1404. Liability.
Sec. 1405. Regulations.
Sec. 1406. Study of shared appreciation mortgages.
Subtitle B--Minimum Standards For Mortgages
Sec. 1411. Ability to repay.
Sec. 1412. Safe harbor and rebuttable presumption.
Sec. 1413. Defense to foreclosure.
Sec. 1414. Additional standards and requirements.
Sec. 1415. Rule of construction.
Sec. 1416. Amendments to civil liability provisions.
Sec. 1417. Lender rights in the context of borrower deception.
Sec. 1418. Six-month notice required before reset of hybrid adjustable
rate mortgages.
Sec. 1419. Required disclosures.
Sec. 1420. Disclosures required in monthly statements for residential
mortgage loans.
Sec. 1421. Report by the GAO.
Sec. 1422. State attorney general enforcement authority.
Subtitle C--High-Cost Mortgages
Sec. 1431. Definitions relating to high-cost mortgages.
Sec. 1432. Amendments to existing requirements for certain mortgages.
Sec. 1433. Additional requirements for certain mortgages.
Subtitle D--Office of Housing Counseling
Sec. 1441. Short title.
Sec. 1442. Establishment of Office of Housing Counseling.
Sec. 1443. Counseling procedures.
Sec. 1444. Grants for housing counseling assistance.
Sec. 1445. Requirements to use HUD-certified counselors under HUD
programs.
Sec. 1446. Study of defaults and foreclosures.
Sec. 1447. Default and foreclosure database.
Sec. 1448. Definitions for counseling-related programs.
Sec. 1449. Accountability and transparency for grant recipients.
Sec. 1450. Updating and simplification of mortgage information booklet.
Sec. 1451. Home inspection counseling.
Sec. 1452. Warnings to homeowners of foreclosure rescue scams.
Subtitle E--Mortgage Servicing
Sec. 1461. Escrow and impound accounts relating to certain consumer
credit transactions.
Sec. 1462. Disclosure notice required for consumers who waive escrow
services.
Sec. 1463. Real Estate Settlement Procedures Act of 1974 amendments.
Sec. 1464. Truth in Lending Act amendments.
Sec. 1465. Escrows included in repayment analysis.
Subtitle F--Appraisal Activities
Sec. 1471. Property appraisal requirements.
Sec. 1472. Appraisal independence requirements.
Sec. 1473. Amendments relating to Appraisal Subcommittee of FFIEC,
Appraiser Independence Monitoring, Approved Appraiser
Education, Appraisal Management Companies, Appraiser Complaint
Hotline, Automated Valuation Models, and Broker Price
Opinions.
Sec. 1474. Equal Credit Opportunity Act amendment.
Sec. 1475. Real Estate Settlement Procedures Act of 1974 amendment
relating to certain appraisal fees.
Sec. 1476. GAO study on the effectiveness and impact of various
appraisal methods, valuation models and distributions
channels, and on the Home Valuation Code of conduct and the
Appraisal Subcommittee.
Subtitle G--Mortgage Resolution and Modification
Sec. 1481. Multifamily mortgage resolution program.
Sec. 1482. Home Affordable Modification Program guidelines.
Sec. 1483. Public availability of information of Making Home Affordable
Program.
Sec. 1484. Protecting tenants at foreclosure extension and
clarification.
Subtitle H--Miscellaneous Provisions
Sec. 1491. Sense of Congress regarding the importance of government-
sponsored enterprises reform to enhance the protection,
limitation, and regulation of the terms of residential
mortgage credit.
Sec. 1492. GAO study report on government efforts to combat mortgage
foreclosure rescue scams and loan modification fraud.
Sec. 1493. Reporting of mortgage data by State.
Sec. 1494. Study of effect of drywall presence on foreclosures.
Sec. 1495. Definition.
Sec. 1496. Emergency mortgage relief.
Sec. 1497. Additional assistance for Neighborhood Stabilization Program.
Sec. 1498. Legal assistance for foreclosure-related issues.
TITLE XV--MISCELLANEOUS PROVISIONS
Sec. 1501. Restrictions on use of United States funds for foreign
governments; protection of American taxpayers.
Sec. 1502. Conflict minerals.
Sec. 1503. Reporting requirements regarding coal or other mine safety.
Sec. 1504. Disclosure of payments by resource extraction issuers.
Sec. 1505. Study by the Comptroller General.
Sec. 1506. Study on core deposits and brokered deposits.
TITLE XVI--SECTION 1256 CONTRACTS
Sec. 1601. Certain swaps, etc., not treated as section 1256 contracts.
SEC. 2. DEFINITIONS.
As used in this Act, the following definitions shall apply,
except as the context otherwise requires or as otherwise
specifically provided in this Act:
(1) Affiliate.--The term ``affiliate'' has the same
meaning as in section 3 of the Federal Deposit
Insurance Act (12 U.S.C. 1813).
(2) Appropriate federal banking agency.--On and
after the transfer date, the term ``appropriate Federal
banking agency'' has the same meaning as in section
3(q) of the Federal Deposit Insurance Act (12 U.S.C.
1813(q)), as amended by title III.
(3) Board of governors.--The term ``Board of
Governors'' means the Board of Governors of the Federal
Reserve System.
(4) Bureau.--The term ``Bureau'' means the Bureau
of Consumer Financial Protection established under
title X.
(5) Commission.--The term ``Commission'' means the
Securities and Exchange Commission, except in the
context of the Commodity Futures Trading Commission.
(6) Commodity futures terms.--The terms ``futures
commission merchant'', ``swap'', ``swap dealer'',
``swap execution facility'', ``derivatives clearing
organization'', ``board of trade'', ``commodity trading
advisor'', ``commodity pool'', and ``commodity pool
operator'' have the same meanings as given the terms in
section 1a of the Commodity Exchange Act (7 U.S.C. 1 et
seq.).
(7) Corporation.--The term ``Corporation'' means
the Federal Deposit Insurance Corporation.
(8) Council.--The term ``Council'' means the
Financial Stability Oversight Council established under
title I.
(9) Credit union.--The term ``credit union'' means
a Federal credit union, State credit union, or State-
chartered credit union, as those terms are defined in
section 101 of the Federal Credit Union Act (12 U.S.C.
1752).
(10) Federal banking agency.--The term--
(A) ``Federal banking agency'' means,
individually, the Board of Governors, the
Office of the Comptroller of the Currency, and
the Corporation; and
(B) ``Federal banking agencies'' means all
of the agencies referred to in subparagraph
(A), collectively.
(11) Functionally regulated subsidiary.--The term
``functionally regulated subsidiary'' has the same
meaning as in section 5(c)(5) of the Bank Holding
Company Act of 1956 (12 U.S.C. 1844(c)(5)).
(12) Primary financial regulatory agency.--The term
``primary financial regulatory agency'' means--
(A) the appropriate Federal banking agency,
with respect to institutions described in
section 3(q) of the Federal Deposit Insurance
Act, except to the extent that an institution
is or the activities of an institution are
otherwise described in subparagraph (B), (C),
(D), or (E);
(B) the Securities and Exchange Commission,
with respect to--
(i) any broker or dealer that is
registered with the Commission under
the Securities Exchange Act of 1934,
with respect to the activities of the
broker or dealer that require the
broker or dealer to be registered under
that Act;
(ii) any investment company that is
registered with the Commission under
the Investment Company Act of 1940,
with respect to the activities of the
investment company that require the
investment company to be registered
under that Act;
(iii) any investment adviser that
is registered with the Commission under
the Investment Advisers Act of 1940,
with respect to the investment advisory
activities of such company and
activities that are incidental to such
advisory activities;
(iv) any clearing agency registered
with the Commission under the
Securities Exchange Act of 1934, with
respect to the activities of the
clearing agency that require the agency
to be registered under such Act;
(v) any nationally recognized
statistical rating organization
registered with the Commission under
the Securities Exchange Act of 1934;
(vi) any transfer agent registered
with the Commission under the
Securities Exchange Act of 1934;
(vii) any exchange registered as a
national securities exchange with the
Commission under the Securities
Exchange Act of 1934;
(viii) any national securities
association registered with the
Commission under the Securities
Exchange Act of 1934;
(ix) any securities information
processor registered with the
Commission under the Securities
Exchange Act of 1934;
(x) the Municipal Securities
Rulemaking Board established under the
Securities Exchange Act of 1934;
(xi) the Public Company Accounting
Oversight Board established under the
Sarbanes-Oxley Act of 2002 (15 U.S.C.
7211 et seq.);
(xii) the Securities Investor
Protection Corporation established
under the Securities Investor
Protection Act of 1970 (15 U.S.C. 78aaa
et seq.); and
(xiii) any security-based swap
execution facility, security-based swap
data repository, security-based swap
dealer or major security-based swap
participant registered with the
Commission under the Securities
Exchange Act of 1934, with respect to
the security-based swap activities of
the person that require such person to
be registered under such Act;
(C) the Commodity Futures Trading
Commission, with respect to--
(i) any futures commission merchant
registered with the Commodity Futures
Trading Commission under the Commodity
Exchange Act (7 U.S.C. 1 et seq.), with
respect to the activities of the
futures commission merchant that
require the futures commission merchant
to be registered under that Act;
(ii) any commodity pool operator
registered with the Commodity Futures
Trading Commission under the Commodity
Exchange Act (7 U.S.C. 1 et seq.), with
respect to the activities of the
commodity pool operator that require
the commodity pool operator to be
registered under that Act, or a
commodity pool, as defined in that Act;
(iii) any commodity trading advisor
or introducing broker registered with
the Commodity Futures Trading
Commission under the Commodity Exchange
Act (7 U.S.C. 1 et seq.), with respect
to the activities of the commodity
trading advisor or introducing broker
that require the commodity trading
adviser or introducing broker to be
registered under that Act;
(iv) any derivatives clearing
organization registered with the
Commodity Futures Trading Commission
under the Commodity Exchange Act (7
U.S.C. 1 et seq.), with respect to the
activities of the derivatives clearing
organization that require the
derivatives clearing organization to be
registered under that Act;
(v) any board of trade designated
as a contract market by the Commodity
Futures Trading Commission under the
Commodity Exchange Act (7 U.S.C. 1 et
seq.);
(vi) any futures association
registered with the Commodity Futures
Trading Commission under the Commodity
Exchange Act (7 U.S.C. 1 et seq.);
(vii) any retail foreign exchange
dealer registered with the Commodity
Futures Trading Commission under the
Commodity Exchange Act (7 U.S.C. 1 et
seq.), with respect to the activities
of the retail foreign exchange dealer
that require the retail foreign
exchange dealer to be registered under
that Act;
(viii) any swap execution facility,
swap data repository, swap dealer, or
major swap participant registered with
the Commodity Futures Trading
Commission under the Commodity Exchange
Act (7 U.S.C. 1 et seq.) with respect
to the swap activities of the person
that require such person to be
registered under that Act; and
(ix) any registered entity under
the Commodity Exchange Act (7 U.S.C. 1
et seq.), with respect to the
activities of the registered entity
that require the registered entity to
be registered under that Act;
(D) the State insurance authority of the
State in which an insurance company is
domiciled, with respect to the insurance
activities and activities that are incidental
to such insurance activities of an insurance
company that is subject to supervision by the
State insurance authority under State insurance
law; and
(E) the Federal Housing Finance Agency,
with respect to Federal Home Loan Banks or the
Federal Home Loan Bank System, and with respect
to the Federal National Mortgage Association or
the Federal Home Loan Mortgage Corporation.
(13) Prudential standards.--The term ``prudential
standards'' means enhanced supervision and regulatory
standards developed by the Board of Governors under
section 165.
(14) Secretary.--The term ``Secretary'' means the
Secretary of the Treasury.
(15) Securities terms.--The--
(A) terms ``broker'', ``dealer'',
``issuer'', ``nationally recognized statistical
rating organization'', ``security'', and
``securities laws'' have the same meanings as
in section 3 of the Securities Exchange Act of
1934 (15 U.S.C. 78c);
(B) term ``investment adviser'' has the
same meaning as in section 202 of the
Investment Advisers Act of 1940 (15 U.S.C. 80b-
2); and
(C) term ``investment company'' has the
same meaning as in section 3 of the Investment
Company Act of 1940 (15 U.S.C. 80a-3).
(16) State.--The term ``State'' means any State,
commonwealth, territory, or possession of the United
States, the District of Columbia, the Commonwealth of
Puerto Rico, the Commonwealth of the Northern Mariana
Islands, American Samoa, Guam, or the United States
Virgin Islands.
(17) Transfer date.--The term ``transfer date''
means the date established under section 311.
(18) Other incorporated definitions.--
(A) Federal deposit insurance act.--The
terms ``bank'', ``bank holding company'',
``control'', ``deposit'', ``depository
institution'', ``Federal depository
institution'', ``Federal savings association'',
``foreign bank'', ``including'', ``insured
branch'', ``insured depository institution'',
``national member bank'', ``national nonmember
bank'', ``savings association'', ``State
bank'', ``State depository institution'',
``State member bank'', ``State nonmember
bank'', ``State savings association'', and
``subsidiary'' have the same meanings as in
section 3 of the Federal Deposit Insurance Act
(12 U.S.C. 1813).
(B) Holding companies.--The term--
(i) ``bank holding company'' has
the same meaning as in section 2 of the
Bank Holding Company Act of 1956 (12
U.S.C. 1841);
(ii) ``financial holding company''
has the same meaning as in section 2(p)
of the Bank Holding Company Act of 1956
(12 U.S.C. 1841(p)); and
(iii) ``savings and loan holding
company'' has the same meaning as in
section 10 of the Home Owners' Loan Act
(12 U.S.C. 1467a(a)).
SEC. 3. SEVERABILITY.
If any provision of this Act, an amendment made by this
Act, or the application of such provision or amendment to any
person or circumstance is held to be unconstitutional, the
remainder of this Act, the amendments made by this Act, and the
application of the provisions of such to any person or
circumstance shall not be affected thereby.
SEC. 4. EFFECTIVE DATE.
Except as otherwise specifically provided in this Act or
the amendments made by this Act, this Act and such amendments
shall take effect 1 day after the date of enactment of this
Act.
SEC. 5. BUDGETARY EFFECTS.
The budgetary effects of this Act, for the purpose of
complying with the Statutory Pay-As-You-Go-Act of 2010, shall
be determined by reference to the latest statement titled
``Budgetary Effects of PAYGO Legislation'' for this Act,
jointly submitted for printing in the Congressional Record by
the Chairmen of the House and Senate Budget Committees,
provided that such statement has been submitted prior to the
vote on passage in the House acting first on this conference
report or amendment between the Houses.
SEC. 6. ANTITRUST SAVINGS CLAUSE.
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, unless otherwise
specified. For purposes of this section, the term ``antitrust
laws'' has the same meaning as 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.
TITLE I--FINANCIAL STABILITY
SEC. 101. SHORT TITLE.
This title may be cited as the ``Financial Stability Act of
2010''.
SEC. 102. DEFINITIONS.
(a) In General.--For purposes of this title, unless the
context otherwise requires, the following definitions shall
apply:
(1) Bank holding company.--The term ``bank holding
company'' has the same meaning as in section 2 of the
Bank Holding Company Act of 1956 (12 U.S.C. 1841). A
foreign bank or company that is treated as a bank
holding company for purposes of the Bank Holding
Company Act of 1956, pursuant to section 8(a) of the
International Banking Act of 1978 (12 U.S.C. 3106(a)),
shall be treated as a bank holding company for purposes
of this title.
(2) Chairperson.--The term ``Chairperson'' means
the Chairperson of the Council.
(3) Member agency.--The term ``member agency''
means an agency represented by a voting member of the
Council.
(4) Nonbank financial company definitions.--
(A) Foreign nonbank financial company.--The
term ``foreign nonbank financial company''
means a company (other than a company that is,
or is treated in the United States as, a bank
holding company) that is--
(i) incorporated or organized in a
country other than the United States;
and
(ii) predominantly engaged in,
including through a branch in the
United States, financial activities, as
defined in paragraph (6).
(B) U.S. nonbank financial company.--The
term ``U.S. nonbank financial company'' means a
company (other than a bank holding company, a
Farm Credit System institution chartered and
subject to the provisions of the Farm Credit
Act of 1971 (12 U.S.C. 2001 et seq.), or a
national securities exchange (or parent
thereof), clearing agency (or parent thereof,
unless the parent is a bank holding company),
security-based swap execution facility, or
security-based swap data repository registered
with the Commission, or a board of trade
designated as a contract market (or parent
thereof), or a derivatives clearing
organization (or parent thereof, unless the
parent is a bank holding company), swap
execution facility or a swap data repository
registered with the Commodity Futures Trading
Commission), that is--
(i) incorporated or organized under
the laws of the United States or any
State; and
(ii) predominantly engaged in
financial activities, as defined in
paragraph (6).
(C) Nonbank financial company.--The term
``nonbank financial company'' means a U.S.
nonbank financial company and a foreign nonbank
financial company.
(D) Nonbank financial company supervised by
the board of governors.--The term ``nonbank
financial company supervised by the Board of
Governors'' means a nonbank financial company
that the Council has determined under section
113 shall be supervised by the Board of
Governors.
(5) Office of financial research.--The term
``Office of Financial Research'' means the office
established under section 152.
(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) 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) 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) Significant institutions.--The terms
``significant nonbank financial company'' and
``significant bank holding company'' have the meanings
given those terms by rule of the Board of Governors,
but in no instance shall the term ``significant nonbank
financial company'' include those entities that are
excluded under paragraph (4)(B).
(b) Definitional Criteria.--The Board of Governors shall
establish, by regulation, the requirements for determining if a
company is predominantly engaged in financial activities, as
defined in subsection (a)(6).
(c) Foreign Nonbank Financial Companies.--For purposes of
the application of subtitles A and C (other than section
113(b)) with respect to a foreign nonbank financial company,
references in this title to ``company'' or ``subsidiary''
include only the United States activities and subsidiaries of
such foreign company, except as otherwise provided.
Subtitle A--Financial Stability Oversight Council
SEC. 111. FINANCIAL STABILITY OVERSIGHT COUNCIL ESTABLISHED.
(a) Establishment.--Effective on the date of enactment of
this Act, there is established the Financial Stability
Oversight Council.
(b) Membership.--The Council shall consist of the following
members:
(1) Voting members.--The voting members, who shall
each have 1 vote on the Council shall be--
(A) the Secretary of the Treasury, who
shall serve as Chairperson of the Council;
(B) the Chairman of the Board of Governors;
(C) the Comptroller of the Currency;
(D) the Director of the Bureau;
(E) the Chairman of the Commission;
(F) the Chairperson of the Corporation;
(G) the Chairperson of the Commodity
Futures Trading Commission;
(H) the Director of the Federal Housing
Finance Agency;
(I) the Chairman of the National Credit
Union Administration Board; and
(J) an independent member appointed by the
President, by and with the advice and consent
of the Senate, having insurance expertise.
(2) Nonvoting members.--The nonvoting members, who
shall serve in an advisory capacity as a nonvoting
member of the Council, shall be--
(A) the Director of the Office of Financial
Research;
(B) the Director of the Federal Insurance
Office;
(C) a State insurance commissioner, to be
designated by a selection process determined by
the State insurance commissioners;
(D) a State banking supervisor, to be
designated by a selection process determined by
the State banking supervisors; and
(E) a State securities commissioner (or an
officer performing like functions), to be
designated by a selection process determined by
such State securities commissioners.
(3) Nonvoting member participation.--The nonvoting
members of the Council shall not be excluded from any
of the proceedings, meetings, discussions, or
deliberations of the Council, except that the
Chairperson may, upon an affirmative vote of the member
agencies, exclude the nonvoting members from any of the
proceedings, meetings, discussions, or deliberations of
the Council when necessary to safeguard and promote the
free exchange of confidential supervisory information.
(c) Terms; Vacancy.--
(1) Terms.--The independent member of the Council
shall serve for a term of 6 years, and each nonvoting
member described in subparagraphs (C), (D), and (E) of
subsection (b)(2) shall serve for a term of 2 years.
(2) Vacancy.--Any vacancy on the Council shall be
filled in the manner in which the original appointment
was made.
(3) Acting officials may serve.--In the event of a
vacancy in the office of the head of a member agency or
department, and pending the appointment of a successor,
or during the absence or disability of the head of a
member agency or department, the acting head of the
member agency or department shall serve as a member of
the Council in the place of that agency or department
head.
(d) Technical and Professional Advisory Committees.--The
Council may appoint such special advisory, technical, or
professional committees as may be useful in carrying out the
functions of the Council, including an advisory committee
consisting of State regulators, and the members of such
committees may be members of the Council, or other persons, or
both.
(e) Meetings.--
(1) Timing.--The Council shall meet at the call of
the Chairperson or a majority of the members then
serving, but not less frequently than quarterly.
(2) Rules for conducting business.--The Council
shall adopt such rules as may be necessary for the
conduct of the business of the Council. Such rules
shall be rules of agency organization, procedure, or
practice for purposes of section 553 of title 5, United
States Code.
(f) Voting.--Unless otherwise specified, the Council shall
make all decisions that it is authorized or required to make by
a majority vote of the voting members then serving.
(g) Nonapplicability of FACA.--The Federal Advisory
Committee Act (5 U.S.C. App.) shall not apply to the Council,
or to any special advisory, technical, or professional
committee appointed by the Council, except that, if an
advisory, technical, or professional committee has one or more
members who are not employees of or affiliated with the United
States Government, the Council shall publish a list of the
names of the members of such committee.
(h) Assistance From Federal Agencies.--Any department or
agency of the United States may provide to the Council and any
special advisory, technical, or professional committee
appointed by the Council, such services, funds, facilities,
staff, and other support services as the Council may determine
advisable.
(i) Compensation of Members.--
(1) Federal employee members.--All members of the
Council who are officers or employees of the United
States shall serve without compensation in addition to
that received for their services as officers or
employees of the United States.
(2) Compensation for non-federal member.--Section
5314 of title 5, United States Code, is amended by
adding at the end the following:
``Independent Member of the Financial Stability
Oversight Council (1).''.
(j) Detail of Government Employees.--Any employee of the
Federal Government may be detailed to the Council without
reimbursement, and such detail shall be without interruption or
loss of civil service status or privilege. An employee of the
Federal Government detailed to the Council shall report to and
be subject to oversight by the Council during the assignment to
the Council, and shall be compensated by the department or
agency from which the employee was detailed.
SEC. 112. COUNCIL AUTHORITY.
(a) Purposes and Duties of the Council.--
(1) In general.--The purposes of the Council are--
(A) to identify risks to the financial
stability of the United States that could arise
from the material financial distress or
failure, or ongoing activities, of large,
interconnected bank holding companies or
nonbank financial companies, or that could
arise outside the financial services
marketplace;
(B) to promote market discipline, by
eliminating expectations on the part of
shareholders, creditors, and counterparties of
such companies that the Government will shield
them from losses in the event of failure; and
(C) to respond to emerging threats to the
stability of the United States financial
system.
(2) Duties.--The Council shall, in accordance with
this title--
(A) collect information from member
agencies, other Federal and State financial
regulatory agencies, the Federal Insurance
Office and, if necessary to assess risks to the
United States financial system, direct the
Office of Financial Research to collect
information from bank holding companies and
nonbank financial companies;
(B) provide direction to, and request data
and analyses from, the Office of Financial
Research to support the work of the Council;
(C) monitor the financial services
marketplace in order to identify potential
threats to the financial stability of the
United States;
(D) monitor domestic and international
financial regulatory proposals and
developments, including insurance and
accounting issues, and to advise Congress and
make recommendations in such areas that will
enhance the integrity, efficiency,
competitiveness, and stability of the U.S.
financial markets;
(E) facilitate information sharing and
coordination among the member agencies and
other Federal and State agencies regarding
domestic financial services policy development,
rulemaking, examinations, reporting
requirements, and enforcement actions;
(F) recommend to the member agencies
general supervisory priorities and principles
reflecting the outcome of discussions among the
member agencies;
(G) identify gaps in regulation that could
pose risks to the financial stability of the
United States;
(H) require supervision by the Board of
Governors for nonbank financial companies that
may pose risks to the financial stability of
the United States in the event of their
material financial distress or failure, or
because of their activities pursuant to section
113;
(I) make recommendations to the Board of
Governors concerning the establishment of
heightened prudential standards for risk-based
capital, leverage, liquidity, contingent
capital, resolution plans and credit exposure
reports, concentration limits, enhanced public
disclosures, and overall risk management for
nonbank financial companies and large,
interconnected bank holding companies
supervised by the Board of Governors;
(J) identify systemically important
financial market utilities and payment,
clearing, and settlement activities (as that
term is defined in title VIII);
(K) make recommendations to primary
financial regulatory agencies to apply new or
heightened standards and safeguards for
financial activities or practices that could
create or increase risks of significant
liquidity, credit, or other problems spreading
among bank holding companies, nonbank financial
companies, and United States financial markets;
(L) review and, as appropriate, may submit
comments to the Commission and any standard-
setting body with respect to an existing or
proposed accounting principle, standard, or
procedure;
(M) provide a forum for--
(i) discussion and analysis of
emerging market developments and
financial regulatory issues; and
(ii) resolution of jurisdictional
disputes among the members of the
Council; and
(N) annually report to and testify before
Congress on--
(i) the activities of the Council;
(ii) significant financial market
and regulatory developments, including
insurance and accounting regulations
and standards, along with an assessment
of those developments on the stability
of the financial system;
(iii) potential emerging threats to
the financial stability of the United
States;
(iv) all determinations made under
section 113 or title VIII, and the
basis for such determinations;
(v) all recommendations made under
section 119 and the result of such
recommendations; and
(vi) recommendations--
(I) to enhance the
integrity, efficiency,
competitiveness, and stability
of United States financial
markets;
(II) to promote market
discipline; and
(III) to maintain investor
confidence.
(b) Statements by Voting Members of the Council.--At the
time at which each report is submitted under subsection (a),
each voting member of the Council shall--
(1) if such member believes that the Council, the
Government, and the private sector are taking all
reasonable steps to ensure financial stability and to
mitigate systemic risk that would negatively affect the
economy, submit a signed statement to Congress stating
such belief; or
(2) if such member does not believe that all
reasonable steps described under paragraph (1) are
being taken, submit a signed statement to Congress
stating what actions such member believes need to be
taken in order to ensure that all reasonable steps
described under paragraph (1) are taken.
(c) Testimony by the Chairperson.--The Chairperson shall
appear before the Committee on Financial Services of the House
of Representatives and the Committee on Banking, Housing, and
Urban Affairs of the Senate at an annual hearing, after the
report is submitted under subsection (a)--
(1) to discuss the efforts, activities, objectives,
and plans of the Council; and
(2) to discuss and answer questions concerning such
report.
(d) Authority To Obtain Information.--
(1) In general.--The Council may receive, and may
request the submission of, any data or information from
the Office of Financial Research, member agencies, and
the Federal Insurance Office, as necessary--
(A) to monitor the financial services
marketplace to identify potential risks to the
financial stability of the United States; or
(B) to otherwise carry out any of the
provisions of this title.
(2) Submissions by the office and member
agencies.--Notwithstanding any other provision of law,
the Office of Financial Research, any member agency,
and the Federal Insurance Office, are authorized to
submit information to the Council.
(3) Financial data collection.--
(A) In general.--The Council, acting
through the Office of Financial Research, may
require the submission of periodic and other
reports from any nonbank financial company or
bank holding company for the purpose of
assessing the extent to which a financial
activity or financial market in which the
nonbank financial company or bank holding
company participates, or the nonbank financial
company or bank holding company itself, poses a
threat to the financial stability of the United
States.
(B) Mitigation of report burden.--Before
requiring the submission of reports from any
nonbank financial company or bank holding
company that is regulated by a member agency or
any primary financial regulatory agency, the
Council, acting through the Office of Financial
Research, shall coordinate with such agencies
and shall, whenever possible, rely on
information available from the Office of
Financial Research or such agencies.
(C) Mitigation in case of foreign financial
companies.--Before requiring the submission of
reports from a company that is a foreign
nonbank financial company or foreign-based bank
holding company, the Council shall, acting
through the Office of Financial Research, to
the extent appropriate, consult with the
appropriate foreign regulator of such company
and, whenever possible, rely on information
already being collected by such foreign
regulator, with English translation.
(4) Back-up examination by the board of
governors.--If the Council is unable to determine
whether the financial activities of a U.S. nonbank
financial company pose a threat to the financial
stability of the United States, based on information or
reports obtained under paragraphs (1) and (3),
discussions with management, and publicly available
information, the Council may request the Board of
Governors, and the Board of Governors is authorized, to
conduct an examination of the U.S. nonbank financial
company for the sole purpose of determining whether the
nonbank financial company should be supervised by the
Board of Governors for purposes of this title.
(5) Confidentiality.--
(A) In general.--The Council, the Office of
Financial Research, and the other member
agencies shall maintain the confidentiality of
any data, information, and reports submitted
under this title.
(B) Retention of privilege.--The submission
of any nonpublicly available data or
information under this subsection and subtitle
B shall not constitute a waiver of, or
otherwise affect, any privilege arising under
Federal or State law (including the rules of
any Federal or State court) to which the data
or information is otherwise subject.
(C) Freedom of information act.--Section
552 of title 5, United States Code, including
the exceptions thereunder, shall apply to any
data or information submitted under this
subsection and subtitle B.
SEC. 113. AUTHORITY TO REQUIRE SUPERVISION AND REGULATION OF CERTAIN
NONBANK FINANCIAL COMPANIES.
(a) U.S. Nonbank Financial Companies Supervised by the
Board of Governors.--
(1) Determination.--The Council, on a nondelegable
basis and by a vote of not fewer than \2/3\ of the
voting members then serving, including an affirmative
vote by the Chairperson, may determine that a U.S.
nonbank financial company shall be supervised by the
Board of Governors and shall be subject to prudential
standards, in accordance with this title, if the
Council determines that material financial distress at
the U.S. nonbank financial company, or the nature,
scope, size, scale, concentration, interconnectedness,
or mix of the activities of the U.S. nonbank financial
company, could pose a threat to the financial stability
of the United States.
(2) Considerations.--In making a determination
under paragraph (1), the Council shall consider--
(A) the extent of the leverage of the
company;
(B) the extent and nature of the off-
balance-sheet exposures of the company;
(C) the extent and nature of the
transactions and relationships of the company
with other significant nonbank financial
companies and significant bank holding
companies;
(D) the importance of the company as a
source of credit for households, businesses,
and State and local governments and as a source
of liquidity for the United States financial
system;
(E) the importance of the company as a
source of credit for low-income, minority, or
underserved communities, and the impact that
the failure of such company would have on the
availability of credit in such communities;
(F) the extent to which assets are managed
rather than owned by the company, and the
extent to which ownership of assets under
management is diffuse;
(G) the nature, scope, size, scale,
concentration, interconnectedness, and mix of
the activities of the company;
(H) the degree to which the company is
already regulated by 1 or more primary
financial regulatory agencies;
(I) the amount and nature of the financial
assets of the company;
(J) the amount and types of the liabilities
of the company, including the degree of
reliance on short-term funding; and
(K) any other risk-related factors that the
Council deems appropriate.
(b) Foreign Nonbank Financial Companies Supervised by the
Board of Governors.--
(1) Determination.--The Council, on a nondelegable
basis and by a vote of not fewer than \2/3\ of the
voting members then serving, including an affirmative
vote by the Chairperson, may determine that a foreign
nonbank financial company shall be supervised by the
Board of Governors and shall be subject to prudential
standards, in accordance with this title, if the
Council determines that material financial distress at
the foreign nonbank financial company, or the nature,
scope, size, scale, concentration, interconnectedness,
or mix of the activities of the foreign nonbank
financial company, could pose a threat to the financial
stability of the United States.
(2) Considerations.--In making a determination
under paragraph (1), the Council shall consider--
(A) the extent of the leverage of the
company;
(B) the extent and nature of the United
States related off-balance-sheet exposures of
the company;
(C) the extent and nature of the
transactions and relationships of the company
with other significant nonbank financial
companies and significant bank holding
companies;
(D) the importance of the company as a
source of credit for United States households,
businesses, and State and local governments and
as a source of liquidity for the United States
financial system;
(E) the importance of the company as a
source of credit for low-income, minority, or
underserved communities in the United States,
and the impact that the failure of such company
would have on the availability of credit in
such communities;
(F) the extent to which assets are managed
rather than owned by the company and the extent
to which ownership of assets under management
is diffuse;
(G) the nature, scope, size, scale,
concentration, interconnectedness, and mix of
the activities of the company;
(H) the extent to which the company is
subject to prudential standards on a
consolidated basis in its home country that are
administered and enforced by a comparable
foreign supervisory authority;
(I) the amount and nature of the United
States financial assets of the company;
(J) the amount and nature of the
liabilities of the company used to fund
activities and operations in the United States,
including the degree of reliance on short-term
funding; and
(K) any other risk-related factors that the
Council deems appropriate.
(c) Antievasion.--
(1) Determinations.--In order to avoid evasion of
this title, 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 voting members then serving, including an
affirmative vote by the Chairperson, that--
(A) material financial distress related to,
or the nature, scope, size, scale,
concentration, interconnectedness, or mix of,
the 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
(a)(2) or (b)(2), as applicable;
(B) the company is organized or operates in
such a manner as to evade the application of
this title; 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, consistent with
paragraph (3).
(2) Report.--Upon making a determination under
paragraph (1), the Council shall submit a report to the
appropriate committees of Congress detailing the
reasons for making such determination.
(3) Consolidated supervision of only financial
activities; establishment of an intermediate holding
company.--
(A) Establishment of an intermediate
holding company.--Upon a determination under
paragraph (1), the company that is the subject
of the determination may establish an
intermediate holding company in which the
financial activities of such company and its
subsidiaries shall be conducted (other than the
activities described in section 167(b)(2)) in
compliance with any regulations or guidance
provided by the Board of Governors. Such
intermediate holding company shall be subject
to the supervision of the Board of Governors
and to prudential standards under this title as
if the intermediate holding company were a
nonbank financial company supervised by the
Board of Governors.
(B) Action of the board of governors.--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, as if the
intermediate holding company were a nonbank
financial company supervised by the Board of
Governors.
(4) Notice and opportunity for hearing and final
determination; judicial review.--Subsections (d)
through (h) shall apply to determinations made by the
Council pursuant to paragraph (1) in the same manner as
such subsections apply to nonbank financial companies.
(5) Covered financial activities.--For purposes of
this subsection, the term ``financial activities''--
(A) means activities that are financial in
nature (as defined in section 4(k) of the Bank
Holding Company Act of 1956);
(B) includes the ownership or control of
one or more insured depository institutions;
and
(C) does not include internal financial
activities conducted for the company or any
affiliate thereof, including internal treasury,
investment, and employee benefit functions.
(6) 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 supervised by the Board of Governors.
Nothing in this paragraph shall prohibit or limit the
authority of the Board of Governors to apply prudential
standards under this title to the financial activities
that are subject to the determination in paragraph (1).
(d) Reevaluation and Rescission.--The Council shall--
(1) not less frequently than annually, reevaluate
each determination made under subsections (a) and (b)
with respect to such nonbank financial company
supervised by the Board of Governors; and
(2) rescind any such determination, if the Council,
by a vote of not fewer than \2/3\ of the voting members
then serving, including an affirmative vote by the
Chairperson, determines that the nonbank financial
company no longer meets the standards under subsection
(a) or (b), as applicable.
(e) Notice and Opportunity for Hearing and Final
Determination.--
(1) In general.--The Council shall provide to a
nonbank financial company written notice of a proposed
determination of the Council, including an explanation
of the basis of the proposed determination of the
Council, that a nonbank financial company shall be
supervised by the Board of Governors and shall be
subject to prudential standards in accordance with this
title.
(2) Hearing.--Not later than 30 days after the date
of receipt of any notice of a proposed determination
under paragraph (1), the nonbank financial company may
request, in writing, an opportunity for a written or
oral hearing before the Council to contest the proposed
determination. Upon receipt of a timely request, the
Council shall fix a time (not later than 30 days after
the date of receipt of the request) and place at which
such company may appear, personally or through counsel,
to submit written materials (or, at the sole discretion
of the Council, oral testimony and oral argument).
(3) Final determination.--Not later than 60 days
after the date of a hearing under paragraph (2), the
Council shall notify the nonbank financial company of
the final determination of the Council, which shall
contain a statement of the basis for the decision of
the Council.
(4) No hearing requested.--If a nonbank financial
company does not make a timely request for a hearing,
the Council shall notify the nonbank financial company,
in writing, of the final determination of the Council
under subsection (a) or (b), as applicable, not later
than 10 days after the date by which the company may
request a hearing under paragraph (2).
(f) Emergency Exception.--
(1) In general.--The Council may waive or modify
the requirements of subsection (e) with respect to a
nonbank financial company, if the Council determines,
by a vote of not fewer than \2/3\ of the voting members
then serving, including an affirmative vote by the
Chairperson, that such waiver or modification is
necessary or appropriate to prevent or mitigate threats
posed by the nonbank financial company to the financial
stability of the United States.
(2) Notice.--The Council shall provide notice of a
waiver or modification under this subsection to the
nonbank financial company concerned as soon as
practicable, but not later than 24 hours after the
waiver or modification is granted.
(3) International coordination.--In making a
determination under paragraph (1), the Council shall
consult with the appropriate home country supervisor,
if any, of the foreign nonbank financial company that
is being considered for such a determination.
(4) Opportunity for hearing.--The Council shall
allow a nonbank financial company to request, in
writing, an opportunity for a written or oral hearing
before the Council to contest a waiver or modification
under this subsection, not later than 10 days after the
date of receipt of notice of the waiver or modification
by the company. Upon receipt of a timely request, the
Council shall fix a time (not later than 15 days after
the date of receipt of the request) and place at which
the nonbank financial company may appear, personally or
through counsel, to submit written materials (or, at
the sole discretion of the Council, oral testimony and
oral argument).
(5) Notice of final determination.--Not later than
30 days after the date of any hearing under paragraph
(4), the Council shall notify the subject nonbank
financial company of the final determination of the
Council under this subsection, which shall contain a
statement of the basis for the decision of the Council.
(g) Consultation.--The Council shall consult with the
primary financial regulatory agency, if any, for each nonbank
financial company or subsidiary of a nonbank financial company
that is being considered for supervision by the Board of
Governors under this section before the Council makes any final
determination with respect to such nonbank financial company
under subsection (a), (b), or (c).
(h) Judicial Review.--If the Council makes a final
determination under this section with respect to a nonbank
financial company, such nonbank financial company may, not
later than 30 days after the date of receipt of the notice of
final determination under subsection (d)(2), (e)(3), or (f)(5),
bring an action in the United States district court for the
judicial district in which the home office of such nonbank
financial company is located, or in the United States District
Court for the District of Columbia, for an order requiring that
the final determination be rescinded, and the court shall, upon
review, dismiss such action or direct the final determination
to be rescinded. Review of such an action shall be limited to
whether the final determination made under this section was
arbitrary and capricious.
(i) International Coordination.--In exercising its duties
under this title with respect to foreign nonbank financial
companies, foreign-based bank holding companies, and cross-
border activities and markets, the Council shall consult with
appropriate foreign regulatory authorities, to the extent
appropriate.
SEC. 114. REGISTRATION OF NONBANK FINANCIAL COMPANIES SUPERVISED BY THE
BOARD OF GOVERNORS.
Not later than 180 days after the date of a final Council
determination under section 113 that a nonbank financial
company is to be supervised by the Board of Governors, such
company shall register with the Board of Governors, on forms
prescribed by the Board of Governors, which shall include such
information as the Board of Governors, in consultation with the
Council, may deem necessary or appropriate to carry out this
title.
SEC. 115. ENHANCED SUPERVISION AND PRUDENTIAL STANDARDS FOR NONBANK
FINANCIAL COMPANIES SUPERVISED BY THE BOARD OF
GOVERNORS AND CERTAIN BANK HOLDING COMPANIES.
(a) In General.--
(1) Purpose.--In order to prevent or mitigate risks
to the financial stability of the United States that
could arise from the material financial distress,
failure, or ongoing activities of large, interconnected
financial institutions, the Council may make
recommendations to the Board of Governors concerning
the establishment and refinement of prudential
standards and reporting and disclosure requirements
applicable to nonbank financial companies supervised by
the Board of Governors and large, interconnected bank
holding companies, that--
(A) are more stringent than those
applicable to other nonbank financial companies
and bank holding companies that do not present
similar risks to the financial stability of the
United States; and
(B) increase in stringency, based on the
considerations identified in subsection (b)(3).
(2) Recommended application of required
standards.--In making recommendations under this
section, the Council may--
(A) differentiate among companies that are
subject to heightened standards on an
individual basis or by category, taking into
consideration their capital structure,
riskiness, complexity, financial activities
(including the financial activities of their
subsidiaries), size, and any other risk-related
factors that the Council deems appropriate; or
(B) recommend an asset threshold that is
higher than $50,000,000,000 for the application
of any standard described in subsections (c)
through (g).
(b) Development of Prudential Standards.--
(1) In general.--The recommendations of the Council
under subsection (a) may include--
(A) risk-based capital requirements;
(B) leverage limits;
(C) liquidity requirements;
(D) resolution plan and credit exposure
report requirements;
(E) concentration limits;
(F) a contingent capital requirement;
(G) enhanced public disclosures;
(H) short-term debt limits; and
(I) overall risk management requirements.
(2) Prudential standards for foreign financial
companies.--In making recommendations concerning the
standards set forth in paragraph (1) that would apply
to foreign nonbank financial companies supervised by
the Board of Governors or foreign-based bank holding
companies, the Council shall--
(A) give due regard to the principle of
national treatment and equality of competitive
opportunity; and
(B) take into account the extent to which
the foreign nonbank financial company or
foreign-based bank holding company is subject
on a consolidated basis to home country
standards that are comparable to those applied
to financial companies in the United States.
(3) Considerations.--In making recommendations
concerning prudential standards under paragraph (1),
the Council shall--
(A) take into account differences among
nonbank financial companies supervised by the
Board of Governors and bank holding companies
described in subsection (a), based on--
(i) the factors described in
subsections (a) and (b) of section 113;
(ii) whether the company owns an
insured depository institution;
(iii) nonfinancial activities and
affiliations of the company; and
(iv) any other factors that the
Council determines appropriate;
(B) to the extent possible, ensure that
small changes in the factors listed in
subsections (a) and (b) of section 113 would
not result in sharp, discontinuous changes in
the prudential standards established under
section 165; and
(C) adapt its recommendations as
appropriate in light of any predominant line of
business of such company, including assets
under management or other activities for which
particular standards may not be appropriate.
(c) Contingent Capital.--
(1) Study required.--The Council shall conduct a
study of the feasibility, benefits, costs, and
structure of a contingent capital requirement for
nonbank financial companies supervised by the Board of
Governors and bank holding companies described in
subsection (a), which study shall include--
(A) an evaluation of the degree to which
such requirement would enhance the safety and
soundness of companies subject to the
requirement, promote the financial stability of
the United States, and reduce risks to United
States taxpayers;
(B) an evaluation of the characteristics
and amounts of contingent capital that should
be required;
(C) an analysis of potential prudential
standards that should be used to determine
whether the contingent capital of a company
would be converted to equity in times of
financial stress;
(D) an evaluation of the costs to
companies, the effects on the structure and
operation of credit and other financial
markets, and other economic effects of
requiring contingent capital;
(E) an evaluation of the effects of such
requirement on the international
competitiveness of companies subject to the
requirement and the prospects for international
coordination in establishing such requirement;
and
(F) recommendations for implementing
regulations.
(2) Report.--The Council shall submit a report to
Congress regarding the study required by paragraph (1)
not later than 2 years after the date of enactment of
this Act.
(3) Recommendations.--
(A) In general.--Subsequent to submitting a
report to Congress under paragraph (2), the
Council may make recommendations to the Board
of Governors to require any nonbank financial
company supervised by the Board of Governors
and any bank holding company described in
subsection (a) to maintain a minimum amount of
contingent capital that is convertible to
equity in times of financial stress.
(B) Factors to consider.--In making
recommendations under this subsection, the
Council shall consider--
(i) an appropriate transition
period for implementation of a
conversion under this subsection;
(ii) the factors described in
subsection (b)(3);
(iii) capital requirements
applicable to a nonbank financial
company supervised by the Board of
Governors or a bank holding company
described in subsection (a), and
subsidiaries thereof;
(iv) results of the study required
by paragraph (1); and
(v) any other factor that the
Council deems appropriate.
(d) Resolution Plan and Credit Exposure Reports.--
(1) Resolution plan.--The Council may make
recommendations to the Board of Governors concerning
the requirement that each nonbank financial company
supervised by the Board of Governors and each bank
holding company described in subsection (a) report
periodically to the Council, the Board of Governors,
and the Corporation, the plan of such company for rapid
and orderly resolution in the event of material
financial distress or failure.
(2) Credit exposure report.--The Council may make
recommendations to the Board of Governors concerning
the advisability of requiring each nonbank financial
company supervised by the Board of Governors and bank
holding company described in subsection (a) to report
periodically to the Council, the Board of Governors,
and the Corporation on--
(A) the nature and extent to which the
company has credit exposure to other
significant nonbank financial companies and
significant bank holding companies; and
(B) the nature and extent to which other
such significant nonbank financial companies
and significant bank holding companies have
credit exposure to that company.
(e) Concentration Limits.--In order to limit the risks that
the failure of any individual company could pose to nonbank
financial companies supervised by the Board of Governors or
bank holding companies described in subsection (a), the Council
may make recommendations to the Board of Governors to prescribe
standards to limit such risks, as set forth in section 165.
(f) Enhanced Public Disclosures.--The Council may make
recommendations to the Board of Governors to require periodic
public disclosures by bank holding companies described in
subsection (a) and by nonbank financial companies supervised by
the Board of Governors, in order to support market evaluation
of the risk profile, capital adequacy, and risk management
capabilities thereof.
(g) Short-term Debt Limits.--The Council may make
recommendations to the Board of Governors to require short-term
debt limits to mitigate the risks that an over-accumulation of
such debt could pose to bank holding companies described in
subsection (a), nonbank financial companies supervised by the
Board of Governors, or the financial system.
SEC. 116. REPORTS.
(a) In General.--Subject to subsection (b), the Council,
acting through the Office of Financial Research, may require a
bank holding company with total consolidated assets of
$50,000,000,000 or greater or a nonbank financial company
supervised by the Board of Governors, and any subsidiary
thereof, to submit certified reports to keep the Council
informed as to--
(1) the financial condition of the company;
(2) systems for monitoring and controlling
financial, operating, and other risks;
(3) transactions with any subsidiary that is a
depository institution; and
(4) the extent to which the activities and
operations of the company and any subsidiary thereof,
could, under adverse circumstances, have the potential
to disrupt financial markets or affect the overall
financial stability of the United States.
(b) Use of Existing Reports.--
(1) In general.--For purposes of compliance with
subsection (a), the Council, acting through the Office
of Financial Research, shall, to the fullest extent
possible, use--
(A) reports that a bank holding company,
nonbank financial company supervised by the
Board of Governors, or any functionally
regulated subsidiary of such company has been
required to provide to other Federal or State
regulatory agencies or to a relevant foreign
supervisory authority;
(B) information that is otherwise required
to be reported publicly; and
(C) externally audited financial
statements.
(2) Availability.--Each bank holding company
described in subsection (a) and nonbank financial
company supervised by the Board of Governors, and any
subsidiary thereof, shall provide to the Council, at
the request of the Council, copies of all reports
referred to in paragraph (1).
(3) Confidentiality.--The Council shall maintain
the confidentiality of the reports obtained under
subsection (a) and paragraph (1)(A) of this subsection.
SEC. 117. TREATMENT OF CERTAIN COMPANIES THAT CEASE TO BE BANK HOLDING
COMPANIES.
(a) Applicability.--This section shall apply to--
(1) any entity that--
(A) was a bank holding company having total
consolidated assets equal to or greater than
$50,000,000,000 as of January 1, 2010; and
(B) received financial assistance under or
participated in the Capital Purchase Program
established under the Troubled Asset Relief
Program authorized by the Emergency Economic
Stabilization Act of 2008; and
(2) any successor entity (as defined by the Board
of Governors, in consultation with the Council) to an
entity described in paragraph (1).
(b) Treatment.--If an entity described in subsection (a)
ceases to be a bank holding company at any time after January
1, 2010, then such entity shall be treated as a nonbank
financial company supervised by the Board of Governors, as if
the Council had made a determination under section 113 with
respect to that entity.
(c) Appeal.--
(1) Request for hearing.--An entity may request, in
writing, an opportunity for a written or oral hearing
before the Council to appeal its treatment as a nonbank
financial company supervised by the Board of Governors
in accordance with this section. Upon receipt of the
request, the Council shall fix a time (not later than
30 days after the date of receipt of the request) and
place at which such entity may appear, personally or
through counsel, to submit written materials (or, at
the sole discretion of the Council, oral testimony and
oral argument).
(2) Decision.--
(A) Proposed decision.--A Council decision
to grant an appeal under this subsection shall
be made by a vote of not fewer than \2/3\ of
the voting members then serving, including an
affirmative vote by the Chairperson. Not later
than 60 days after the date of a hearing under
paragraph (1), the Council shall submit a
report to, and may testify before, the
Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on
Financial Services of the House of
Representatives on the proposed decision of the
Council regarding an appeal under paragraph
(1), which report shall include a statement of
the basis for the proposed decision of the
Council.
(B) Notice of final decision.--The Council
shall notify the subject entity of the final
decision of the Council regarding an appeal
under paragraph (1), which notice shall contain
a statement of the basis for the final decision
of the Council, not later than 60 days after
the later of--
(i) the date of the submission of
the report under subparagraph (A); or
(ii) if, not later than 1 year
after the date of submission of the
report under subparagraph (A), the
Committee on Banking, Housing, and
Urban Affairs of the Senate or the
Committee on Financial Services of the
House of Representatives holds one or
more hearings regarding such report,
the date of the last such hearing.
(C) Considerations.--In making a decision
regarding an appeal under paragraph (1), the
Council shall consider whether the company
meets the standards under section 113(a) or
113(b), as applicable, and the definition of
the term ``nonbank financial company'' under
section 102. The decision of the Council shall
be final, subject to the review under paragraph
(3).
(3) Review.--If the Council denies an appeal under
this subsection, the Council shall, not less frequently
than annually, review and reevaluate the decision.
SEC. 118. COUNCIL FUNDING.
Any expenses of the Council shall be treated as expenses
of, and paid by, the Office of Financial Research.
SEC. 119. RESOLUTION OF SUPERVISORY JURISDICTIONAL DISPUTES AMONG
MEMBER AGENCIES.
(a) Request for Council Recommendation.--The Council shall
seek to resolve a dispute among 2 or more member agencies, if--
(1) a member agency has a dispute with another
member agency about the respective jurisdiction over a
particular bank holding company, nonbank financial
company, or financial activity or product (excluding
matters for which another dispute mechanism
specifically has been provided under title X);
(2) the Council determines that the disputing
agencies cannot, after a demonstrated good faith
effort, resolve the dispute without the intervention of
the Council; and
(3) any of the member agencies involved in the
dispute--
(A) provides all other disputants prior
notice of the intent to request dispute
resolution by the Council; and
(B) requests in writing, not earlier than
14 days after providing the notice described in
subparagraph (A), that the Council seek to
resolve the dispute.
(b) Council Recommendation.--The Council shall seek to
resolve each dispute described in subsection (a)--
(1) within a reasonable time after receiving the
dispute resolution request;
(2) after consideration of relevant information
provided by each agency party to the dispute; and
(3) by agreeing with 1 of the disputants regarding
the entirety of the matter, or by determining a
compromise position.
(c) Form of Recommendation.--Any Council recommendation
under this section shall--
(1) be in writing;
(2) include an explanation of the reasons therefor;
and
(3) be approved by the affirmative vote of \2/3\ of
the voting members of the Council then serving.
(d) Nonbinding Effect.--Any recommendation made by the
Council under subsection (c) shall not be binding on the
Federal agencies that are parties to the dispute.
SEC. 120. ADDITIONAL STANDARDS APPLICABLE TO ACTIVITIES OR PRACTICES
FOR FINANCIAL STABILITY PURPOSES.
(a) In General.--The Council may provide for more stringent
regulation of a financial activity by issuing recommendations
to the primary financial regulatory agencies to apply new or
heightened standards and safeguards, including standards
enumerated in section 115, for a financial activity or practice
conducted by bank holding companies or nonbank financial
companies under their respective jurisdictions, if the Council
determines that the conduct, scope, nature, size, scale,
concentration, or interconnectedness of such activity or
practice could create or increase the risk of significant
liquidity, credit, or other problems spreading among bank
holding companies and nonbank financial companies, financial
markets of the United States, or low-income, minority, or
underserved communities.
(b) Procedure for Recommendations to Regulators.--
(1) Notice and opportunity for comment.--The
Council shall consult with the primary financial
regulatory agencies and provide notice to the public
and opportunity for comment for any proposed
recommendation that the primary financial regulatory
agencies apply new or heightened standards and
safeguards for a financial activity or practice.
(2) Criteria.--The new or heightened standards and
safeguards for a financial activity or practice
recommended under paragraph (1)--
(A) shall take costs to long-term economic
growth into account; and
(B) may include prescribing the conduct of
the activity or practice in specific ways (such
as by limiting its scope, or applying
particular capital or risk management
requirements to the conduct of the activity) or
prohibiting the activity or practice.
(c) Implementation of Recommended Standards.--
(1) Role of primary financial regulatory agency.--
(A) In general.--Each primary financial
regulatory agency may impose, require reports
regarding, examine for compliance with, and
enforce standards in accordance with this
section with respect to those entities for
which it is the primary financial regulatory
agency.
(B) Rule of construction.--The authority
under this paragraph is in addition to, and
does not limit, any other authority of a
primary financial regulatory agency. Compliance
by an entity with actions taken by a primary
financial regulatory agency under this section
shall be enforceable in accordance with the
statutes governing the respective jurisdiction
of the primary financial regulatory agency over
the entity, as if the agency action were taken
under those statutes.
(2) Imposition of standards.--The primary financial
regulatory agency shall impose the standards
recommended by the Council in accordance with
subsection (a), or similar standards that the Council
deems acceptable, or shall explain in writing to the
Council, not later than 90 days after the date on which
the Council issues the recommendation, why the agency
has determined not to follow the recommendation of the
Council.
(d) Report to Congress.--The Council shall report to
Congress on--
(1) any recommendations issued by the Council under
this section;
(2) the implementation of, or failure to implement,
such recommendation on the part of a primary financial
regulatory agency; and
(3) in any case in which no primary financial
regulatory agency exists for the nonbank financial
company conducting financial activities or practices
referred to in subsection (a), recommendations for
legislation that would prevent such activities or
practices from threatening the stability of the
financial system of the United States.
(e) Effect of Rescission of Identification.--
(1) Notice.--The Council may recommend to the
relevant primary financial regulatory agency that a
financial activity or practice no longer requires any
standards or safeguards implemented under this section.
(2) Determination of primary financial regulatory
agency to continue.--
(A) In general.--Upon receipt of a
recommendation under paragraph (1), a primary
financial regulatory agency that has imposed
standards under this section shall determine
whether such standards should remain in effect.
(B) Appeal process.--Each primary financial
regulatory agency that has imposed standards
under this section shall promulgate regulations
to establish a procedure under which entities
under its jurisdiction may appeal a
determination by such agency under this
paragraph that standards imposed under this
section should remain in effect.
SEC. 121. MITIGATION OF RISKS TO FINANCIAL STABILITY.
(a) Mitigatory Actions.--If the Board of Governors
determines that a bank holding company with total consolidated
assets of $50,000,000,000 or more, or a nonbank financial
company supervised by the Board of Governors, poses a grave
threat to the financial stability of the United States, the
Board of Governors, upon an affirmative vote of not fewer than
\2/3\ of the voting members of the Council then serving,
shall--
(1) limit the ability of the company to merge with,
acquire, consolidate with, or otherwise become
affiliated with another company;
(2) restrict the ability of the company to offer a
financial product or products;
(3) require the company to terminate one or more
activities;
(4) impose conditions on the manner in which the
company conducts 1 or more activities; or
(5) if the Board of Governors determines that the
actions described in paragraphs (1) through (4) are
inadequate to mitigate a threat to the financial
stability of the United States in its recommendation,
require the company to sell or otherwise transfer
assets or off-balance-sheet items to unaffiliated
entities.
(b) Notice and Hearing.--
(1) In general.--The Board of Governors, in
consultation with the Council, shall provide to a
company described in subsection (a) written notice that
such company is being considered for mitigatory action
pursuant to this section, including an explanation of
the basis for, and description of, the proposed
mitigatory action.
(2) Hearing.--Not later than 30 days after the date
of receipt of notice under paragraph (1), the company
may request, in writing, an opportunity for a written
or oral hearing before the Board of Governors to
contest the proposed mitigatory action. Upon receipt of
a timely request, the Board of Governors shall fix a
time (not later than 30 days after the date of receipt
of the request) and place at which such company may
appear, personally or through counsel, to submit
written materials (or, at the discretion of the Board
of Governors, in consultation with the Council, oral
testimony and oral argument).
(3) Decision.--Not later than 60 days after the
date of a hearing under paragraph (2), or not later
than 60 days after the provision of a notice under
paragraph (1) if no hearing was held, the Board of
Governors shall notify the company of the final
decision of the Board of Governors, including the
results of the vote of the Council, as described in
subsection (a).
(c) Factors for Consideration.--The Board of Governors and
the Council shall take into consideration the factors set forth
in subsection (a) or (b) of section 113, as applicable, in
making any determination under subsection (a).
(d) Application to Foreign Financial Companies.--The Board
of Governors may prescribe regulations regarding the
application of this section to foreign nonbank financial
companies supervised by the Board of Governors and foreign-
based bank holding companies--
(1) giving due regard to the principle of national
treatment and equality of competitive opportunity; and
(2) taking into account the extent to which the
foreign nonbank financial company or foreign-based bank
holding company is subject on a consolidated basis to
home country standards that are comparable to those
applied to financial companies in the United States.
SEC. 122. GAO AUDIT OF COUNCIL.
(a) Authority To Audit.--The Comptroller General of the
United States may audit the activities of--
(1) the Council; and
(2) any person or entity acting on behalf of or
under the authority of the Council, to the extent that
such activities relate to work for the Council by such
person or entity.
(b) Access to Information.--
(1) In general.--Notwithstanding any other
provision of law, the Comptroller General shall, upon
request and at such reasonable time and in such
reasonable form as the Comptroller General may request,
have access to--
(A) any records or other information under
the control of or used by the Council;
(B) any records or other information under
the control of a person or entity acting on
behalf of or under the authority of the
Council, to the extent that such records or
other information is relevant to an audit under
subsection (a); and
(C) the officers, directors, employees,
financial advisors, staff, working groups, and
agents and representatives of the Council (as
related to the activities on behalf of the
Council of such agent or representative), at
such reasonable times as the Comptroller
General may request.
(2) Copies.--The Comptroller General may make and
retain copies of such books, accounts, and other
records, access to which is granted under this section,
as the Comptroller General considers appropriate.
SEC. 123. STUDY OF THE EFFECTS OF SIZE AND COMPLEXITY OF FINANCIAL
INSTITUTIONS ON CAPITAL MARKET EFFICIENCY AND
ECONOMIC GROWTH.
(a) Study Required.--
(1) In general.--The Chairperson of the Council
shall carry out a study of the economic impact of
possible financial services regulatory limitations
intended to reduce systemic risk. Such study shall
estimate the benefits and costs on the efficiency of
capital markets, on the financial sector, and on
national economic growth, of--
(A) explicit or implicit limits on the
maximum size of banks, bank holding companies,
and other large financial institutions;
(B) limits on the organizational complexity
and diversification of large financial
institutions;
(C) requirements for operational separation
between business units of large financial
institutions in order to expedite resolution in
case of failure;
(D) limits on risk transfer between
business units of large financial institutions;
(E) requirements to carry contingent
capital or similar mechanisms;
(F) limits on commingling of commercial and
financial activities by large financial
institutions;
(G) segregation requirements between
traditional financial activities and trading or
other high-risk operations in large financial
institutions; and
(H) other limitations on the activities or
structure of large financial institutions that
may be useful to limit systemic risk.
(2) Recommendations.--The study required by this
section shall include recommendations for the optimal
structure of any limits considered in subparagraphs (A)
through (E), in order to maximize their effectiveness
and minimize their economic impact.
(b) Report.--Not later than the end of the 180-day period
beginning on the date of enactment of this title, and not later
than every 5 years thereafter, the Chairperson shall issue a
report to the Congress containing any findings and
determinations made in carrying out the study required under
subsection (a).
Subtitle B--Office of Financial Research
SEC. 151. DEFINITIONS.
For purposes of this subtitle--
(1) the terms ``Office'' and ``Director'' mean the
Office of Financial Research established under this
subtitle and the Director thereof, respectively;
(2) the term ``financial company'' has the same
meaning as in title II, and includes an insured
depository institution and an insurance company;
(3) the term ``Data Center'' means the data center
established under section 154;
(4) the term ``Research and Analysis Center'' means
the research and analysis center established under
section 154;
(5) the term ``financial transaction data'' means
the structure and legal description of a financial
contract, with sufficient detail to describe the rights
and obligations between counterparties and make
possible an independent valuation;
(6) the term ``position data''--
(A) means data on financial assets or
liabilities held on the balance sheet of a
financial company, where positions are created
or changed by the execution of a financial
transaction; and
(B) includes information that identifies
counterparties, the valuation by the financial
company of the position, and information that
makes possible an independent valuation of the
position;
(7) the term ``financial contract'' means a legally
binding agreement between 2 or more counterparties,
describing rights and obligations relating to the
future delivery of items of intrinsic or extrinsic
value among the counterparties; and
(8) the term ``financial instrument'' means a
financial contract in which the terms and conditions
are publicly available, and the roles of one or more of
the counterparties are assignable without the consent
of any of the other counterparties (including common
stock of a publicly traded company, government bonds,
or exchange traded futures and options contracts).
SEC. 152. OFFICE OF FINANCIAL RESEARCH ESTABLISHED.
(a) Establishment.--There is established within the
Department of the Treasury the Office of Financial Research.
(b) Director.--
(1) In general.--The Office shall be headed by a
Director, who shall be appointed by the President, by
and with the advice and consent of the Senate.
(2) Term of service.--The Director shall serve for
a term of 6 years, except that, in the event that a
successor is not nominated and confirmed by the end of
the term of service of a Director, the Director may
continue to serve until such time as the next Director
is appointed and confirmed.
(3) Executive level.--The Director shall be
compensated at Level III of the Executive Schedule.
(4) Prohibition on dual service.--The individual
serving in the position of Director may not, during
such service, also serve as the head of any financial
regulatory agency.
(5) Responsibilities, duties, and authority.--The
Director shall have sole discretion in the manner in
which the Director fulfills the responsibilities and
duties and exercises the authorities described in this
subtitle.
(c) Budget.--The Director, in consultation with the
Chairperson, shall establish the annual budget of the Office.
(d) Office Personnel.--
(1) In general.--The Director, in consultation with
the Chairperson, may fix the number of, and appoint and
direct, all employees of the Office.
(2) Compensation.--The Director, in consultation
with the Chairperson, shall fix, adjust, and administer
the pay for all employees of the Office, without regard
to chapter 51 or subchapter III of chapter 53 of title
5, United States Code, relating to classification of
positions and General Schedule pay rates.
(3) Comparability.--Section 1206(a) of the
Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 (12 U.S.C. 1833b(a)) is
amended--
(A) by striking ``Finance Board,'' and
inserting ``Finance Board, the Office of
Financial Research, and the Bureau of Consumer
Financial Protection''; and
(B) by striking ``and the Office of Thrift
Supervision,''.
(4) Senior executives.--Section 3132(a)(1)(D) of
title 5, United States Code, is amended by striking
``and the National Credit Union Administration;'' and
inserting ``the National Credit Union Administration,
the Bureau of Consumer Financial Protection, and the
Office of Financial Research;''.
(e) Assistance From Federal Agencies.--Any department or
agency of the United States may provide to the Office and any
special advisory, technical, or professional committees
appointed by the Office, such services, funds, facilities,
staff, and other support services as the Office may determine
advisable. Any Federal Government employee may be detailed to
the Office without reimbursement, and such detail shall be
without interruption or loss of civil service status or
privilege.
(f) Procurement of Temporary and Intermittent Services.--
The Director may procure temporary and intermittent services
under section 3109(b) of title 5, United States Code, at rates
for individuals which do not exceed the daily equivalent of the
annual rate of basic pay prescribed for Level V of the
Executive Schedule under section 5316 of such title.
(g) Post-employment Prohibitions.--The Secretary, with the
concurrence of the Director of the Office of Government Ethics,
shall issue regulations prohibiting the Director and any
employee of the Office who has had access to the transaction or
position data maintained by the Data Center or other business
confidential information about financial entities required to
report to the Office from being employed by or providing advice
or consulting services to a financial company, for a period of
1 year after last having had access in the course of official
duties to such transaction or position data or business
confidential information, regardless of whether that entity is
required to report to the Office. For employees whose access to
business confidential information was limited, the regulations
may provide, on a case-by-case basis, for a shorter period of
post-employment prohibition, provided that the shorter period
does not compromise business confidential information.
(h) Technical and Professional Advisory Committees.--The
Office, in consultation with the Chairperson, may appoint such
special advisory, technical, or professional committees as may
be useful in carrying out the functions of the Office, and the
members of such committees may be staff of the Office, or other
persons, or both.
(i) Fellowship Program.--The Office, in consultation with
the Chairperson, may establish and maintain an academic and
professional fellowship program, under which qualified
academics and professionals shall be invited to spend not
longer than 2 years at the Office, to perform research and to
provide advanced training for Office personnel.
(j) Executive Schedule Compensation.--Section 5314 of title
5, United States Code, is amended by adding at the end the
following new item:
``Director of the Office of Financial Research.''.
SEC. 153. PURPOSE AND DUTIES OF THE OFFICE.
(a) Purpose and Duties.--The purpose of the Office is to
support the Council in fulfilling the purposes and duties of
the Council, as set forth in subtitle A, and to support member
agencies, by--
(1) collecting data on behalf of the Council, and
providing such data to the Council and member agencies;
(2) standardizing the types and formats of data
reported and collected;
(3) performing applied research and essential long-
term research;
(4) developing tools for risk measurement and
monitoring;
(5) performing other related services;
(6) making the results of the activities of the
Office available to financial regulatory agencies; and
(7) assisting such member agencies in determining
the types and formats of data authorized by this Act to
be collected by such member agencies.
(b) Administrative Authority.--The Office may--
(1) share data and information, including software
developed by the Office, with the Council, member
agencies, and the Bureau of Economic Analysis, which
shared data, information, and software--
(A) shall be maintained with at least the
same level of security as is used by the
Office; and
(B) may not be shared with any individual
or entity without the permission of the
Council;
(2) sponsor and conduct research projects; and
(3) assist, on a reimbursable basis, with financial
analyses undertaken at the request of other Federal
agencies that are not member agencies.
(c) Rulemaking Authority.--
(1) Scope.--The Office, in consultation with the
Chairperson, shall issue rules, regulations, and orders
only to the extent necessary to carry out the purposes
and duties described in paragraphs (1), (2), and (7) of
subsection (a).
(2) Standardization.--Member agencies, in
consultation with the Office, shall implement
regulations promulgated by the Office under paragraph
(1) to standardize the types and formats of data
reported and collected on behalf of the Council, as
described in subsection (a)(2). If a member agency
fails to implement such regulations prior to the
expiration of the 3-year period following the date of
publication of final regulations, the Office, in
consultation with the Chairperson, may implement such
regulations with respect to the financial entities
under the jurisdiction of the member agency. This
paragraph shall not supersede or interfere with the
independent authority of a member agency under other
law to collect data, in such format and manner as the
member agency requires.
(d) Testimony.--
(1) In general.--The Director of the Office shall
report to and testify before the Committee on Banking,
Housing, and Urban Affairs of the Senate and the
Committee on Financial Services of the House of
Representatives annually on the activities of the
Office, including the work of the Data Center and the
Research and Analysis Center, and the assessment of the
Office of significant financial market developments and
potential emerging threats to the financial stability
of the United States.
(2) No prior review.--No officer or agency of the
United States shall have any authority to require the
Director to submit the testimony required under
paragraph (1) or other congressional testimony to any
officer or agency of the United States for approval,
comment, or review prior to the submission of such
testimony. Any such testimony to Congress shall include
a statement that the views expressed therein are those
of the Director and do not necessarily represent the
views of the President.
(e) Additional Reports.--The Director may provide
additional reports to Congress concerning the financial
stability of the United States. The Director shall notify the
Council of any such additional reports provided to Congress.
(f) Subpoena.--
(1) In general.--The Director may require from a
financial company, by subpoena, the production of the
data requested under subsection (a)(1) and section
154(b)(1), but only upon a written finding by the
Director that--
(A) such data is required to carry out the
functions described under this subtitle; and
(B) the Office has coordinated with the
relevant primary financial regulatory agency,
as required under section 154(b)(1)(B)(ii).
(2) Format.--Subpoenas under paragraph (1) shall
bear the signature of the Director, and shall be served
by any person or class of persons designated by the
Director for that purpose.
(3) Enforcement.--In the case of contumacy or
failure to obey a subpoena, the subpoena shall be
enforceable by order of any appropriate district court
of the United States. Any failure to obey the order of
the court may be punished by the court as a contempt of
court.
SEC. 154. ORGANIZATIONAL STRUCTURE; RESPONSIBILITIES OF PRIMARY
PROGRAMMATIC UNITS.
(a) In General.--There are established within the Office,
to carry out the programmatic responsibilities of the Office--
(1) the Data Center; and
(2) the Research and Analysis Center.
(b) Data Center.--
(1) General duties.--
(A) Data collection.--The Data Center, on
behalf of the Council, shall collect, validate,
and maintain all data necessary to carry out
the duties of the Data Center, as described in
this subtitle. The data assembled shall be
obtained from member agencies, commercial data
providers, publicly available data sources, and
financial entities under subparagraph (B).
(B) Authority.--
(i) In general.--The Office may, as
determined by the Council or by the
Director in consultation with the
Council, require the submission of
periodic and other reports from any
financial company for the purpose of
assessing the extent to which a
financial activity or financial market
in which the financial company
participates, or the financial company
itself, poses a threat to the financial
stability of the United States.
(ii) Mitigation of report burden.--
Before requiring the submission of a
report from any financial company that
is regulated by a member agency, any
primary financial regulatory agency, a
foreign supervisory authority, or the
Office shall coordinate with such
agencies or authority, and shall,
whenever possible, rely on information
available from such agencies or
authority.
(iii) Collection of financial
transaction and position data.--The
Office shall collect, on a schedule
determined by the Director, in
consultation with the Council,
financial transaction data and position
data from financial companies.
(C) Rulemaking.--The Office shall
promulgate regulations pursuant to subsections
(a)(1), (a)(2), (a)(7), and (c)(1) of section
153 regarding the type and scope of the data to
be collected by the Data Center under this
paragraph.
(2) Responsibilities.--
(A) Publication.--The Data Center shall
prepare and publish, in a manner that is easily
accessible to the public--
(i) a financial company reference
database;
(ii) a financial instrument
reference database; and
(iii) formats and standards for
Office data, including standards for
reporting financial transaction and
position data to the Office.
(B) Confidentiality.--The Data Center shall
not publish any confidential data under
subparagraph (A).
(3) Information security.--The Director shall
ensure that data collected and maintained by the Data
Center are kept secure and protected against
unauthorized disclosure.
(4) Catalog of financial entities and
instruments.--The Data Center shall maintain a catalog
of the financial entities and instruments reported to
the Office.
(5) Availability to the council and member
agencies.--The Data Center shall make data collected
and maintained by the Data Center available to the
Council and member agencies, as necessary to support
their regulatory responsibilities.
(6) Other authority.--The Office shall, after
consultation with the member agencies, provide certain
data to financial industry participants and to the
general public to increase market transparency and
facilitate research on the financial system, to the
extent that intellectual property rights are not
violated, business confidential information is properly
protected, and the sharing of such information poses no
significant threats to the financial system of the
United States.
(c) Research and Analysis Center.--
(1) General duties.--The Research and Analysis
Center, on behalf of the Council, shall develop and
maintain independent analytical capabilities and
computing resources--
(A) to develop and maintain metrics and
reporting systems for risks to the financial
stability of the United States;
(B) to monitor, investigate, and report on
changes in systemwide risk levels and patterns
to the Council and Congress;
(C) to conduct, coordinate, and sponsor
research to support and improve regulation of
financial entities and markets;
(D) to evaluate and report on stress tests
or other stability-related evaluations of
financial entities overseen by the member
agencies;
(E) to maintain expertise in such areas as
may be necessary to support specific requests
for advice and assistance from financial
regulators;
(F) to investigate disruptions and failures
in the financial markets, report findings, and
make recommendations to the Council based on
those findings;
(G) to conduct studies and provide advice
on the impact of policies related to systemic
risk; and
(H) to promote best practices for financial
risk management.
(d) Reporting Responsibilities.--
(1) Required reports.--Not later than 2 years after
the date of enactment of this Act, and not later than
120 days after the end of each fiscal year thereafter,
the Office shall prepare and submit a report to
Congress.
(2) Content.--Each report required by this
subsection shall assess the state of the United States
financial system, including--
(A) an analysis of any threats to the
financial stability of the United States;
(B) the status of the efforts of the Office
in meeting the mission of the Office; and
(C) key findings from the research and
analysis of the financial system by the Office.
SEC. 155. FUNDING.
(a) Financial Research Fund.--
(1) Fund established.--There is established in the
Treasury of the United States a separate fund to be
known as the ``Financial Research Fund''.
(2) Fund receipts.--All amounts provided to the
Office under subsection (c), and all assessments that
the Office receives under subsection (d) shall be
deposited into the Financial Research Fund.
(3) Investments authorized.--
(A) Amounts in fund may be invested.--The
Director may request the Secretary to invest
the portion of the Financial Research Fund that
is not, in the judgment of the Director,
required to meet the needs of the Office.
(B) Eligible investments.--Investments
shall be made by the Secretary in obligations
of the United States or obligations that are
guaranteed as to principal and interest by the
United States, with maturities suitable to the
needs of the Financial Research Fund, as
determined by the Director.
(4) Interest and proceeds credited.--The interest
on, and the proceeds from the sale or redemption of,
any obligations held in the Financial Research Fund
shall be credited to and form a part of the Financial
Research Fund.
(b) Use of Funds.--
(1) In general.--Funds obtained by, transferred to,
or credited to the Financial Research Fund shall be
immediately available to the Office, and shall remain
available until expended, to pay the expenses of the
Office in carrying out the duties and responsibilities
of the Office.
(2) Fees, assessments, and other funds not
government funds.--Funds obtained by, transferred to,
or credited to the Financial Research Fund shall not be
construed to be Government funds or appropriated
moneys.
(3) Amounts not subject to apportionment.--
Notwithstanding any other provision of law, amounts in
the Financial Research Fund shall not be subject to
apportionment for purposes of chapter 15 of title 31,
United States Code, or under any other authority, or
for any other purpose.
(c) Interim Funding.--During the 2-year period following
the date of enactment of this Act, the Board of Governors shall
provide to the Office an amount sufficient to cover the
expenses of the Office.
(d) Permanent Self-funding.--Beginning 2 years after the
date of enactment of this Act, the Secretary shall establish,
by regulation, and with the approval of the Council, an
assessment schedule, including the assessment base and rates,
applicable to bank holding companies with total consolidated
assets of $50,000,000,000 or greater and nonbank financial
companies supervised by the Board of Governors, that takes into
account differences among such companies, based on the
considerations for establishing the prudential standards under
section 115, to collect assessments equal to the total expenses
of the Office.
SEC. 156. TRANSITION OVERSIGHT.
(a) Purpose.--The purpose of this section is to ensure that
the Office--
(1) has an orderly and organized startup;
(2) attracts and retains a qualified workforce; and
(3) establishes comprehensive employee training and
benefits programs.
(b) Reporting Requirement.--
(1) In general.--The Office shall submit an annual
report to the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Financial
Services of the House of Representatives that includes
the plans described in paragraph (2).
(2) Plans.--The plans described in this paragraph
are as follows:
(A) Training and workforce development
plan.--The Office shall submit a training and
workforce development plan that includes, to
the extent practicable--
(i) identification of skill and
technical expertise needs and actions
taken to meet those requirements;
(ii) steps taken to foster
innovation and creativity;
(iii) leadership development and
succession planning; and
(iv) effective use of technology by
employees.
(B) Workplace flexibility plan.--The Office
shall submit a workforce flexibility plan that
includes, to the extent practicable--
(i) telework;
(ii) flexible work schedules;
(iii) phased retirement;
(iv) reemployed annuitants;
(v) part-time work;
(vi) job sharing;
(vii) parental leave benefits and
childcare assistance;
(viii) domestic partner benefits;
(ix) other workplace flexibilities;
or
(x) any combination of the items
described in clauses (i) through (ix).
(C) Recruitment and retention plan.--The
Office shall submit a recruitment and retention
plan that includes, to the extent practicable,
provisions relating to--
(i) the steps necessary to target
highly qualified applicant pools with
diverse backgrounds;
(ii) streamlined employment
application processes;
(iii) the provision of timely
notification of the status of
employment applications to applicants;
and
(iv) the collection of information
to measure indicators of hiring
effectiveness.
(c) Expiration.--The reporting requirement under subsection
(b) shall terminate 5 years after the date of enactment of this
Act.
(d) Rule of Construction.--Nothing in this section may be
construed to affect--
(1) a collective bargaining agreement, as that term
is defined in section 7103(a)(8) of title 5, United
States Code, that is in effect on the date of enactment
of this Act; or
(2) the rights of employees under chapter 71 of
title 5, United States Code.
Subtitle C--Additional Board of Governors Authority for Certain Nonbank
Financial Companies and Bank Holding Companies
SEC. 161. REPORTS BY AND EXAMINATIONS OF NONBANK FINANCIAL COMPANIES BY
THE BOARD OF GOVERNORS.
(a) Reports.--
(1) In general.--The Board of Governors may require
each nonbank financial company supervised by the Board
of Governors, and any subsidiary thereof, to submit
reports under oath, to keep the Board of Governors
informed as to--
(A) the financial condition of the company
or subsidiary, systems of the company or
subsidiary for monitoring and controlling
financial, operating, and other risks, and the
extent to which the activities and operations
of the company or subsidiary pose a threat to
the financial stability of the United States;
and
(B) compliance by the company or subsidiary
with the requirements of this title.
(2) Use of existing reports and information.--In
carrying out subsection (a), the Board of Governors
shall, to the fullest extent possible, use--
(A) reports and supervisory information
that a nonbank financial company or subsidiary
thereof has been required to provide to other
Federal or State regulatory agencies;
(B) information otherwise obtainable from
Federal or State regulatory agencies;
(C) information that is otherwise required
to be reported publicly; and
(D) externally audited financial statements
of such company or subsidiary.
(3) Availability.--Upon the request of the Board of
Governors, a nonbank financial company supervised by
the Board of Governors, or a subsidiary thereof, shall
promptly provide to the Board of Governors any
information described in paragraph (2).
(b) Examinations.--
(1) In general.--Subject to paragraph (2), the
Board of Governors may examine any nonbank financial
company supervised by the Board of Governors and any
subsidiary of such company, to inform the Board of
Governors of--
(A) the nature of the operations and
financial condition of the company and such
subsidiary;
(B) the financial, operational, and other
risks of the company or such subsidiary that
may pose a threat to the safety and soundness
of such company or subsidiary or to the
financial stability of the United States;
(C) the systems for monitoring and
controlling such risks; and
(D) compliance by the company or such
subsidiary with the requirements of this title.
(2) Use of examination reports and information.--
For purposes of this subsection, the Board of Governors
shall, to the fullest extent possible, rely on reports
of examination of any subsidiary depository institution
or functionally regulated subsidiary made by the
primary financial regulatory agency for that
subsidiary, and on information described in subsection
(a)(2).
(c) Coordination With Primary Financial Regulatory
Agency.--The Board of Governors shall--
(1) provide reasonable notice to, and consult with,
the primary financial regulatory agency for any
subsidiary before requiring a report or commencing an
examination of such subsidiary under this section; and
(2) avoid duplication of examination activities,
reporting requirements, and requests for information,
to the fullest extent possible.
SEC. 162. ENFORCEMENT.
(a) In General.--Except as provided in subsection (b), a
nonbank financial company supervised by the Board of Governors
and any subsidiaries of such company (other than any depository
institution subsidiary) shall be subject to 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 company were a bank holding company, as
provided in section 8(b)(3) of the Federal Deposit Insurance
Act (12 U.S.C. 1818(b)(3)).
(b) Enforcement Authority for Functionally Regulated
Subsidiaries.--
(1) Referral.--If the Board of Governors determines
that a condition, practice, or activity of a depository
institution subsidiary or functionally regulated
subsidiary of a nonbank financial company supervised by
the Board of Governors does not comply with the
regulations or orders prescribed by the Board of
Governors under this Act, or otherwise poses a threat
to the financial stability of the United States, the
Board of Governors may recommend, in writing, to the
primary financial regulatory agency for the subsidiary
that such agency initiate a supervisory action or
enforcement proceeding. The recommendation shall be
accompanied by a written explanation of the concerns
giving rise to the recommendation.
(2) Back-up authority of the board of governors.--
If, during the 60-day period beginning on the date on
which the primary financial regulatory agency receives
a recommendation under paragraph (1), the primary
financial regulatory agency does not take supervisory
or enforcement action against a subsidiary that is
acceptable to the Board of Governors, the Board of
Governors (upon a vote of its members) may take the
recommended supervisory or enforcement action, as if
the subsidiary were a bank holding company subject to
supervision by the Board of Governors.
SEC. 163. ACQUISITIONS.
(a) Acquisitions of Banks; Treatment as a Bank Holding
Company.--For purposes of section 3 of the Bank Holding Company
Act of 1956 (12 U.S.C. 1842), a nonbank financial company
supervised by the Board of Governors shall be deemed to be, and
shall be treated as, a bank holding company.
(b) Acquisition of Nonbank Companies.--
(1) Prior notice for large acquisitions.--
Notwithstanding section 4(k)(6)(B) of the Bank Holding
Company Act of 1956 (12 U.S.C. 1843(k)(6)(B)), a bank
holding company with total consolidated assets equal to
or greater than $50,000,000,000 or a nonbank financial
company supervised by the Board of Governors shall not
acquire direct or indirect ownership or control of any
voting shares of any company (other than an insured
depository institution) that is engaged in activities
described in section 4(k) of the Bank Holding Company
Act of 1956 having total consolidated assets of
$10,000,000,000 or more, without providing written
notice to the Board of Governors in advance of the
transaction.
(2) Exemptions.--The prior notice requirement in
paragraph (1) shall not apply with regard to the
acquisition of shares that would qualify for the
exemptions in section 4(c) or section 4(k)(4)(E) of the
Bank Holding Company Act of 1956 (12 U.S.C. 1843(c) and
(k)(4)(E)).
(3) Notice procedures.--The notice procedures set
forth in section 4(j)(1) of the Bank Holding Company
Act of 1956 (12 U.S.C. 1843(j)(1)), without regard to
section 4(j)(3) of that Act, shall apply to an
acquisition of any company (other than an insured
depository institution) by a bank holding company with
total consolidated assets equal to or greater than
$50,000,000,000 or a nonbank financial company
supervised by the Board of Governors, as described in
paragraph (1), including any such company engaged in
activities described in section 4(k) of that Act.
(4) Standards for review.--In addition to the
standards provided in section 4(j)(2) of the Bank
Holding Company Act of 1956 (12 U.S.C. 1843(j)(2)), the
Board of Governors shall consider the extent to which
the proposed acquisition would result in greater or
more concentrated risks to global or United States
financial stability or the United States economy.
(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.
SEC. 164. PROHIBITION AGAINST MANAGEMENT INTERLOCKS BETWEEN CERTAIN
FINANCIAL COMPANIES.
A nonbank financial company supervised by the Board of
Governors shall be treated as a bank holding company for
purposes of the Depository Institutions Management Interlocks
Act (12 U.S.C. 3201 et seq.), except that the Board of
Governors shall not exercise the authority provided in section
7 of that Act (12 U.S.C. 3207) to permit service by a
management official of a nonbank financial company supervised
by the Board of Governors as a management official of any bank
holding company with total consolidated assets equal to or
greater than $50,000,000,000, or other nonaffiliated nonbank
financial company supervised by the Board of Governors (other
than to provide a temporary exemption for interlocks resulting
from a merger, acquisition, or consolidation).
SEC. 165. ENHANCED SUPERVISION AND PRUDENTIAL STANDARDS FOR NONBANK
FINANCIAL COMPANIES SUPERVISED BY THE BOARD OF
GOVERNORS AND CERTAIN BANK HOLDING COMPANIES.
(a) In General.--
(1) Purpose.--In order to prevent or mitigate risks
to the financial stability of the United States that
could arise from the material financial distress or
failure, or ongoing activities, of large,
interconnected financial institutions, the Board of
Governors shall, on its own or pursuant to
recommendations by the Council under section 115,
establish prudential standards for nonbank financial
companies supervised by the Board of Governors and bank
holding companies with total consolidated assets equal
to or greater than $50,000,000,000 that--
(A) are more stringent than the standards
and requirements applicable to nonbank
financial companies and bank holding companies
that do not present similar risks to the
financial stability of the United States; and
(B) increase in stringency, based on the
considerations identified in subsection (b)(3).
(2) Tailored application.--
(A) In general.--In prescribing more
stringent prudential standards under this
section, the Board of Governors may, on its own
or pursuant to a recommendation by the Council
in accordance with section 115, differentiate
among companies on an individual basis or by
category, taking into consideration their
capital structure, riskiness, complexity,
financial activities (including the financial
activities of their subsidiaries), size, and
any other risk-related factors that the Board
of Governors deems appropriate.
(B) Adjustment of threshold for application
of certain standards.--The Board of Governors
may, pursuant to a recommendation by the
Council in accordance with section 115,
establish an asset threshold above
$50,000,000,000 for the application of any
standard established under subsections (c)
through (g).
(b) Development of Prudential Standards.--
(1) In general.--
(A) Required standards.--The Board of
Governors shall establish prudential standards
for nonbank financial companies supervised by
the Board of Governors and bank holding
companies described in subsection (a), that
shall include--
(i) risk-based capital requirements
and leverage limits, unless the Board
of Governors, in consultation with the
Council, determines that such
requirements are not appropriate for a
company subject to more stringent
prudential standards because of the
activities of such company (such as
investment company activities or assets
under management) or structure, in
which case, the Board of Governors
shall apply other standards that result
in similarly stringent risk controls;
(ii) liquidity requirements;
(iii) overall risk management
requirements;
(iv) resolution plan and credit
exposure report requirements; and
(v) concentration limits.
(B) Additional standards authorized.--The
Board of Governors may establish additional
prudential standards for nonbank financial
companies supervised by the Board of Governors
and bank holding companies described in
subsection (a), that include--
(i) a contingent capital
requirement;
(ii) enhanced public disclosures;
(iii) short-term debt limits; and
(iv) such other prudential
standards as the Board or Governors, on
its own or pursuant to a recommendation
made by the Council in accordance with
section 115, determines are
appropriate.
(2) Standards for foreign financial companies.--In
applying the standards set forth in paragraph (1) to
any foreign nonbank financial company supervised by the
Board of Governors or foreign-based bank holding
company, the Board of Governors shall--
(A) give due regard to the principle of
national treatment and equality of competitive
opportunity; and
(B) take into account the extent to which
the foreign financial company is subject on a
consolidated basis to home country standards
that are comparable to those applied to
financial companies in the United States.
(3) Considerations.--In prescribing prudential
standards under paragraph (1), the Board of Governors
shall--
(A) take into account differences among
nonbank financial companies supervised by the
Board of Governors and bank holding companies
described in subsection (a), based on--
(i) the factors described in
subsections (a) and (b) of section 113;
(ii) whether the company owns an
insured depository institution;
(iii) nonfinancial activities and
affiliations of the company; and
(iv) any other risk-related factors
that the Board of Governors determines
appropriate;
(B) to the extent possible, ensure that
small changes in the factors listed in
subsections (a) and (b) of section 113 would
not result in sharp, discontinuous changes in
the prudential standards established under
paragraph (1) of this subsection;
(C) take into account any recommendations
of the Council under section 115; and
(D) adapt the required standards as
appropriate in light of any predominant line of
business of such company, including assets
under management or other activities for which
particular standards may not be appropriate.
(4) Consultation.--Before imposing prudential
standards or any other requirements pursuant to this
section, including notices of deficiencies in
resolution plans and more stringent requirements or
divestiture orders resulting from such notices, that
are likely to have a significant impact on a
functionally regulated subsidiary or depository
institution subsidiary of a nonbank financial company
supervised by the Board of Governors or a bank holding
company described in subsection (a), the Board of
Governors shall consult with each Council member that
primarily supervises any such subsidiary with respect
to any such standard or requirement.
(5) Report.--The Board of Governors shall submit an
annual report to Congress regarding the implementation
of the prudential standards required pursuant to
paragraph (1), including the use of such standards to
mitigate risks to the financial stability of the United
States.
(c) Contingent Capital.--
(1) In general.--Subsequent to submission by the
Council of a report to Congress under section 115(c),
the Board of Governors may issue regulations that
require each nonbank financial company supervised by
the Board of Governors and bank holding companies
described in subsection (a) to maintain a minimum
amount of contingent capital that is convertible to
equity in times of financial stress.
(2) Factors to consider.--In issuing regulations
under this subsection, the Board of Governors shall
consider--
(A) the results of the study undertaken by
the Council, and any recommendations of the
Council, under section 115(c);
(B) an appropriate transition period for
implementation of contingent capital under this
subsection;
(C) the factors described in subsection
(b)(3)(A);
(D) capital requirements applicable to the
nonbank financial company supervised by the
Board of Governors or a bank holding company
described in subsection (a), and subsidiaries
thereof; and
(E) any other factor that the Board of
Governors deems appropriate.
(d) Resolution Plan and Credit Exposure Reports.--
(1) Resolution plan.--The Board of Governors shall
require each nonbank financial company supervised by
the Board of Governors and bank holding companies
described in subsection (a) to report periodically to
the Board of Governors, the Council, and the
Corporation the plan of such company for rapid and
orderly resolution in the event of material financial
distress or failure, which shall include--
(A) information regarding the manner and
extent to which any insured depository
institution affiliated with the company is
adequately protected from risks arising from
the activities of any nonbank subsidiaries of
the company;
(B) full descriptions of the ownership
structure, assets, liabilities, and contractual
obligations of the company;
(C) identification of the cross-guarantees
tied to different securities, identification of
major counterparties, and a process for
determining to whom the collateral of the
company is pledged; and
(D) any other information that the Board of
Governors and the Corporation jointly require
by rule or order.
(2) Credit exposure report.--The Board of Governors
shall require each nonbank financial company supervised
by the Board of Governors and bank holding companies
described in subsection (a) to report periodically to
the Board of Governors, the Council, and the
Corporation on--
(A) the nature and extent to which the
company has credit exposure to other
significant nonbank financial companies and
significant bank holding companies; and
(B) the nature and extent to which other
significant nonbank financial companies and
significant bank holding companies have credit
exposure to that company.
(3) Review.--The Board of Governors and the
Corporation shall review the information provided in
accordance with this subsection by each nonbank
financial company supervised by the Board of Governors
and bank holding company described in subsection (a).
(4) Notice of deficiencies.--If the Board of
Governors and the Corporation jointly determine, based
on their review under paragraph (3), that the
resolution plan of a nonbank financial company
supervised by the Board of Governors or a bank holding
company described in subsection (a) is not credible or
would not facilitate an orderly resolution of the
company under title 11, United States Code--
(A) the Board of Governors and the
Corporation shall notify the company of the
deficiencies in the resolution plan; and
(B) the company shall resubmit the
resolution plan within a timeframe determined
by the Board of Governors and the Corporation,
with revisions demonstrating that the plan is
credible and would result in an orderly
resolution under title 11, United States Code,
including any proposed changes in business
operations and corporate structure to
facilitate implementation of the plan.
(5) Failure to resubmit credible plan.--
(A) In general.--If a nonbank financial
company supervised by the Board of Governors or
a bank holding company described in subsection
(a) fails to timely resubmit the resolution
plan as required under paragraph (4), with such
revisions as are required under subparagraph
(B), the Board of Governors and the Corporation
may jointly impose more stringent capital,
leverage, or liquidity requirements, or
restrictions on the growth, activities, or
operations of the company, or any subsidiary
thereof, until such time as the company
resubmits a plan that remedies the
deficiencies.
(B) Divestiture.--The Board of Governors
and the Corporation, in consultation with the
Council, may jointly direct a nonbank financial
company supervised by the Board of Governors or
a bank holding company described in subsection
(a), by order, to divest certain assets or
operations identified by the Board of Governors
and the Corporation, to facilitate an orderly
resolution of such company under title 11,
United States Code, in the event of the failure
of such company, in any case in which--
(i) the Board of Governors and the
Corporation have jointly imposed more
stringent requirements on the company
pursuant to subparagraph (A); and
(ii) the company has failed, within
the 2-year period beginning on the date
of the imposition of such requirements
under subparagraph (A), to resubmit the
resolution plan with such revisions as
were required under paragraph (4)(B).
(6) No limiting effect.--A resolution plan
submitted in accordance with this subsection shall not
be binding on a bankruptcy court, a receiver appointed
under title II, or any other authority that is
authorized or required to resolve the nonbank financial
company supervised by the Board, any bank holding
company, or any subsidiary or affiliate of the
foregoing.
(7) No private right of action.--No private right
of action may be based on any resolution plan submitted
in accordance with this subsection.
(8) Rules.--Not later than 18 months after the date
of enactment of this Act, the Board of Governors and
the Corporation shall jointly issue final rules
implementing this subsection.
(e) Concentration Limits.--
(1) Standards.--In order to limit the risks that
the failure of any individual company could pose to a
nonbank financial company supervised by the Board of
Governors or a bank holding company described in
subsection (a), the Board of Governors, by regulation,
shall prescribe standards that limit such risks.
(2) Limitation on credit exposure.--The regulations
prescribed by the Board of Governors under paragraph
(1) shall prohibit each nonbank financial company
supervised by the Board of Governors and bank holding
company described in subsection (a) from having credit
exposure to any unaffiliated company that exceeds 25
percent of the capital stock and surplus (or such lower
amount as the Board of Governors may determine by
regulation to be necessary to mitigate risks to the
financial stability of the United States) of the
company.
(3) Credit exposure.--For purposes of paragraph
(2), ``credit exposure'' to a company means--
(A) all extensions of credit to the
company, including loans, deposits, and lines
of credit;
(B) all repurchase agreements and reverse
repurchase agreements with the company, and all
securities borrowing and lending transactions
with the company, to the extent that such
transactions create credit exposure for the
nonbank financial company supervised by the
Board of Governors or a bank holding company
described in subsection (a);
(C) all guarantees, acceptances, or letters
of credit (including endorsement or standby
letters of credit) issued on behalf of the
company;
(D) all purchases of or investment in
securities issued by the company;
(E) counterparty credit exposure to the
company in connection with a derivative
transaction between the nonbank financial
company supervised by the Board of Governors or
a bank holding company described in subsection
(a) and the company; and
(F) any other similar transactions that the
Board of Governors, by regulation, determines
to be a credit exposure for purposes of this
section.
(4) Attribution rule.--For purposes of this
subsection, any transaction by a nonbank financial
company supervised by the Board of Governors or a bank
holding company described in subsection (a) with any
person is a transaction with a company, to the extent
that the proceeds of the transaction are used for the
benefit of, or transferred to, that company.
(5) Rulemaking.--The Board of Governors may issue
such regulations and orders, including definitions
consistent with this section, as may be necessary to
administer and carry out this subsection.
(6) Exemptions.--This subsection shall not apply to
any Federal home loan bank. The Board of Governors may,
by regulation or order, exempt transactions, in whole
or in part, from the definition of the term ``credit
exposure'' for purposes of this subsection, if the
Board of Governors finds that the exemption is in the
public interest and is consistent with the purpose of
this subsection.
(7) Transition period.--
(A) In general.--This subsection and any
regulations and orders of the Board of
Governors under this subsection shall not be
effective until 3 years after the date of
enactment of this Act.
(B) Extension authorized.--The Board of
Governors may extend the period specified in
subparagraph (A) for not longer than an
additional 2 years.
(f) Enhanced Public Disclosures.--The Board of Governors
may prescribe, by regulation, periodic public disclosures by
nonbank financial companies supervised by the Board of
Governors and bank holding companies described in subsection
(a) in order to support market evaluation of the risk profile,
capital adequacy, and risk management capabilities thereof.
(g) Short-term Debt Limits.--
(1) In general.--In order to mitigate the risks
that an over-accumulation of short-term debt could pose
to financial companies and to the stability of the
United States financial system, the Board of Governors
may, by regulation, prescribe a limit on the amount of
short-term debt, including off-balance sheet exposures,
that may be accumulated by any bank holding company
described in subsection (a) and any nonbank financial
company supervised by the Board of Governors.
(2) Basis of limit.--Any limit prescribed under
paragraph (1) shall be based on the short-term debt of
the company described in paragraph (1) as a percentage
of capital stock and surplus of the company or on such
other measure as the Board of Governors considers
appropriate.
(3) Short-term debt defined.--For purposes of this
subsection, the term ``short-term debt'' means such
liabilities with short-dated maturity that the Board of
Governors identifies, by regulation, except that such
term does not include insured deposits.
(4) Rulemaking authority.--In addition to
prescribing regulations under paragraphs (1) and (3),
the Board of Governors may prescribe such regulations,
including definitions consistent with this subsection,
and issue such orders, as may be necessary to carry out
this subsection.
(5) Authority to issue exemptions and
adjustments.--Notwithstanding the Bank Holding Company
Act of 1956 (12 U.S.C. 1841 et seq.), the Board of
Governors may, if it determines such action is
necessary to ensure appropriate heightened prudential
supervision, with respect to a company described in
paragraph (1) that does not control an insured
depository institution, issue to such company an
exemption from or adjustment to the limit prescribed
under paragraph (1).
(h) Risk Committee.--
(1) Nonbank financial companies supervised by the
board of governors.--The Board of Governors shall
require each nonbank financial company supervised by
the Board of Governors that is a publicly traded
company to establish a risk committee, as set forth in
paragraph (3), not later than 1 year after the date of
receipt of a notice of final determination under
section 113(e)(3) with respect to such nonbank
financial company supervised by the Board of Governors.
(2) Certain bank holding companies.--
(A) Mandatory regulations.--The Board of
Governors shall issue regulations requiring
each bank holding company that is a publicly
traded company and that has total consolidated
assets of not less than $10,000,000,000 to
establish a risk committee, as set forth in
paragraph (3).
(B) Permissive regulations.--The Board of
Governors may require each bank holding company
that is a publicly traded company and that has
total consolidated assets of less than
$10,000,000,000 to establish a risk committee,
as set forth in paragraph (3), as determined
necessary or appropriate by the Board of
Governors to promote sound risk management
practices.
(3) Risk committee.--A risk committee required by
this subsection shall--
(A) be responsible for the oversight of the
enterprise-wide risk management practices of
the nonbank financial company supervised by the
Board of Governors or bank holding company
described in subsection (a), as applicable;
(B) include such number of independent
directors as the Board of Governors may
determine appropriate, based on the nature of
operations, size of assets, and other
appropriate criteria related to the nonbank
financial company supervised by the Board of
Governors or a bank holding company described
in subsection (a), as applicable; and
(C) include at least 1 risk management
expert having experience in identifying,
assessing, and managing risk exposures of
large, complex firms.
(4) Rulemaking.--The Board of Governors shall issue
final rules to carry out this subsection, not later
than 1 year after the transfer date, to take effect not
later than 15 months after the transfer date.
(i) Stress Tests.--
(1) By the board of governors.--
(A) Annual tests required.--The Board of
Governors, in coordination with the appropriate
primary financial regulatory agencies and the
Federal Insurance Office, shall conduct annual
analyses in which nonbank financial companies
supervised by the Board of Governors and bank
holding companies described in subsection (a)
are subject to evaluation of whether such
companies have the capital, on a total
consolidated basis, necessary to absorb losses
as a result of adverse economic conditions.
(B) Test parameters and consequences.--The
Board of Governors--
(i) shall provide for at least 3
different sets of conditions under
which the evaluation required by this
subsection shall be conducted,
including baseline, adverse, and
severely adverse;
(ii) may require the tests
described in subparagraph (A) at bank
holding companies and nonbank financial
companies, in addition to those for
which annual tests are required under
subparagraph (A);
(iii) may develop and apply such
other analytic techniques as are
necessary to identify, measure, and
monitor risks to the financial
stability of the United States;
(iv) shall require the companies
described in subparagraph (A) to update
their resolution plans required under
subsection (d)(1), as the Board of
Governors determines appropriate, based
on the results of the analyses; and
(v) shall publish a summary of the
results of the tests required under
subparagraph (A) or clause (ii) of this
subparagraph.
(2) By the company.--
(A) Requirement.--A nonbank financial
company supervised by the Board of Governors
and a bank holding company described in
subsection (a) shall conduct semiannual stress
tests. All other financial companies that have
total consolidated assets of more than
$10,000,000,000 and are regulated by a primary
Federal financial regulatory agency shall
conduct annual stress tests. The tests required
under this subparagraph shall be conducted in
accordance with the regulations prescribed
under subparagraph (C).
(B) Report.--A company required to conduct
stress tests under subparagraph (A) shall
submit a report to the Board of Governors and
to its primary financial regulatory agency at
such time, in such form, and containing such
information as the primary financial regulatory
agency shall require.
(C) Regulations.--Each Federal primary
financial regulatory agency, in coordination
with the Board of Governors and the Federal
Insurance Office, shall issue consistent and
comparable regulations to implement this
paragraph that shall--
(i) define the term ``stress test''
for purposes of this paragraph;
(ii) establish methodologies for
the conduct of stress tests required by
this paragraph that shall provide for
at least 3 different sets of
conditions, including baseline,
adverse, and severely adverse;
(iii) establish the form and
content of the report required by
subparagraph (B); and
(iv) require companies subject to
this paragraph to publish a summary of
the results of the required stress
tests.
(j) Leverage Limitation.--
(1) Requirement.--The Board of Governors shall
require a bank holding company with total consolidated
assets equal to or greater than $50,000,000,000 or a
nonbank financial company supervised by the Board of
Governors to maintain a debt to equity ratio of no more
than 15 to 1, upon a determination by the Council that
such company poses a grave threat to the financial
stability of the United States and that the imposition
of such requirement is necessary to mitigate the risk
that such company poses to the financial stability of
the United States. Nothing in this paragraph shall
apply to a Federal home loan bank.
(2) Considerations.--In making a determination
under this subsection, the Council shall consider the
factors described in subsections (a) and (b) of section
113 and any other risk-related factors that the Council
deems appropriate.
(3) Regulations.--The Board of Governors shall
promulgate regulations to establish procedures and
timelines for complying with the requirements of this
subsection.
(k) Inclusion of Off-balance-sheet Activities in Computing
Capital Requirements.--
(1) In general.--In the case of any bank holding
company described in subsection (a) or nonbank
financial company supervised by the Board of Governors,
the computation of capital for purposes of meeting
capital requirements shall take into account any off-
balance-sheet activities of the company.
(2) Exemptions.--If the Board of Governors
determines that an exemption from the requirement under
paragraph (1) is appropriate, the Board of Governors
may exempt a company, or any transaction or
transactions engaged in by such company, from the
requirements of paragraph (1).
(3) Off-balance-sheet activities defined.--For
purposes of this subsection, the term ``off-balance-
sheet activities'' means an existing liability of a
company that is not currently a balance sheet
liability, but may become one upon the happening of
some future event, including the following
transactions, to the extent that they may create a
liability:
(A) Direct credit substitutes in which a
bank substitutes its own credit for a third
party, including standby letters of credit.
(B) Irrevocable letters of credit that
guarantee repayment of commercial paper or tax-
exempt securities.
(C) Risk participations in bankers'
acceptances.
(D) Sale and repurchase agreements.
(E) Asset sales with recourse against the
seller.
(F) Interest rate swaps.
(G) Credit swaps.
(H) Commodities contracts.
(I) Forward contracts.
(J) Securities contracts.
(K) Such other activities or transactions
as the Board of Governors may, by rule, define.
SEC. 166. EARLY REMEDIATION REQUIREMENTS.
(a) In General.--The Board of Governors, in consultation
with the Council and the Corporation, shall prescribe
regulations establishing requirements to provide for the early
remediation of financial distress of a nonbank financial
company supervised by the Board of Governors or a bank holding
company described in section 165(a), except that nothing in
this subsection authorizes the provision of financial
assistance from the Federal Government.
(b) Purpose of the Early Remediation Requirements.--The
purpose of the early remediation requirements under subsection
(a) shall be to establish a series of specific remedial actions
to be taken by a nonbank financial company supervised by the
Board of Governors or a bank holding company described in
section 165(a) that is experiencing increasing financial
distress, in order to minimize the probability that the company
will become insolvent and the potential harm of such insolvency
to the financial stability of the United States.
(c) Remediation Requirements.--The regulations prescribed
by the Board of Governors under subsection (a) shall--
(1) define measures of the financial condition of
the company, including regulatory capital, liquidity
measures, and other forward-looking indicators; and
(2) establish requirements that increase in
stringency as the financial condition of the company
declines, including--
(A) requirements in the initial stages of
financial decline, including limits on capital
distributions, acquisitions, and asset growth;
and
(B) requirements at later stages of
financial decline, including a capital
restoration plan and capital-raising
requirements, limits on transactions with
affiliates, management changes, and asset
sales.
SEC. 167. AFFILIATIONS.
(a) Affiliations.--Nothing in this subtitle shall be
construed to require a nonbank financial company supervised by
the Board of Governors, or a company that controls a nonbank
financial company supervised by the Board of Governors, to
conform the activities thereof to the requirements of section 4
of the Bank Holding Company Act of 1956 (12 U.S.C. 1843).
(b) Requirement.--
(1) In general.--
(A) Board authority.--If a nonbank
financial company supervised by the Board of
Governors conducts activities other than those
that are determined to be financial in nature
or incidental thereto under section 4(k) of the
Bank Holding Company Act of 1956, the Board of
Governors may require such company to establish
and conduct all or a portion of such activities
that are determined to be financial in nature
or incidental thereto in or through an
intermediate holding company established
pursuant to regulation of the Board of
Governors, not later than 90 days (or such
longer period as the Board of Governors may
deem appropriate) after the date on which the
nonbank financial company supervised by the
Board of Governors is notified of the
determination of the Board of Governors under
this section.
(B) Necessary actions.--Notwithstanding
subparagraph (A), the Board of Governors shall
require a nonbank financial company supervised
by the Board of Governors to establish an
intermediate holding company if the Board of
Governors makes a determination that the
establishment of such intermediate holding
company is necessary to--
(i) appropriately supervise
activities that are determined to be
financial in nature or incidental
thereto; or
(ii) to ensure that supervision by
the Board of Governors does not extend
to the commercial activities of such
nonbank financial company.
(2) Internal financial activities.--For purposes of
this subsection, activities that are determined to be
financial in nature or incidental thereto under section
4(k) of the Bank Holding Company Act of 1956, as
described in paragraph (1), shall not include internal
financial activities, including internal treasury,
investment, and employee benefit functions. With
respect to any internal financial activity engaged in
for the company or an affiliate and a non-affiliate of
such company during the year prior to the date of
enactment of this Act, such company (or an affiliate
that is not an intermediate holding company or
subsidiary of an intermediate holding company) may
continue to engage in such activity, as long as not
less than 2/3 of the assets or 2/3 of the revenues
generated from the activity are from or attributable to
such company or an affiliate, subject to review by the
Board of Governors, to determine whether engaging in
such activity presents undue risk to such company or to
the financial stability of the United States.
(3) Source of strength.--A company that directly or
indirectly controls an intermediate holding company
established under this section shall serve as a source
of strength to its subsidiary intermediate holding
company.
(4) Parent company reports.--The Board of Governors
may, from time to time, require reports under oath from
a company that controls an intermediate holding
company, and from the appropriate officers or directors
of such company, solely for purposes of ensuring
compliance with the provisions of this section,
including assessing the ability of the company to serve
as a source of strength to its subsidiary intermediate
holding company pursuant to paragraph (3) and enforcing
such compliance.
(5) Limited parent company enforcement.--
(A) In general.--In addition to any other
authority of the Board of Governors, the Board
of Governors may enforce compliance with the
provisions of this subsection that are
applicable to any company described in
paragraph (1) that controls an intermediate
holding company under section 8 of the Federal
Deposit Insurance Act, and such company shall
be subject to such section (solely for such
purposes) in the same manner and to the same
extent as if such company were a bank holding
company.
(B) Application of other act.--Any
violation of this subsection by any company
that controls an intermediate holding company
may also be treated as a violation of the
Federal Deposit Insurance Act for purposes of
subparagraph (A).
(C) No effect on other authority.--No
provision of this paragraph shall be construed
as limiting any authority of the Board of
Governors or any other Federal agency under any
other provision of law.
(c) Regulations.--The Board of Governors--
(1) shall promulgate regulations to establish the
criteria for determining whether to require a nonbank
financial company supervised by the Board of Governors
to establish an intermediate holding company under
subsection (b); and
(2) may promulgate regulations to establish any
restrictions or limitations on transactions between an
intermediate holding company or a nonbank financial
company supervised by the Board of Governors and its
affiliates, as necessary to prevent unsafe and unsound
practices in connection with transactions between such
company, or any subsidiary thereof, and its parent
company or affiliates that are not subsidiaries of such
company, except that such regulations shall not
restrict or limit any transaction in connection with
the bona fide acquisition or lease by an unaffiliated
person of assets, goods, or services.
SEC. 168. REGULATIONS.
The Board of Governors shall have authority to issue
regulations to implement subtitles A and C and the amendments
made thereunder. Except as otherwise specified in subtitle A or
C, not later than 18 months after the effective date of this
Act, the Board of Governors shall issue final regulations to
implement subtitles A and C, and the amendments made
thereunder.
SEC. 169. AVOIDING DUPLICATION.
The Board of Governors shall take any action that the Board
of Governors deems appropriate to avoid imposing requirements
under this subtitle that are duplicative of requirements
applicable to bank holding companies and nonbank financial
companies under other provisions of law.
SEC. 170. SAFE HARBOR.
(a) Regulations.--The Board of Governors shall promulgate
regulations on behalf of, and in consultation with, the Council
setting forth the criteria for exempting certain types or
classes of U.S. nonbank financial companies or foreign nonbank
financial companies from supervision by the Board of Governors.
(b) Considerations.--In developing the criteria under
subsection (a), the Board of Governors shall take into account
the factors for consideration described in subsections (a) and
(b) of section 113 in determining whether a U.S. nonbank
financial company or foreign nonbank financial company shall be
supervised by the Board of Governors.
(c) Rule of Construction.--Nothing in this section shall be
construed to require supervision by the Board of Governors of a
U.S. nonbank financial company or foreign nonbank financial
company, if such company does not meet the criteria for
exemption established under subsection (a).
(d) Revisions.--
(1) In general.--The Board of Governors shall, in
consultation with the Council, review the regulations
promulgated under subsection (a), not less frequently
than every 5 years, and based upon the review, the
Board of Governors may revise such regulations on
behalf of, and in consultation with, the Council to
update as necessary the criteria set forth in such
regulations.
(2) Transition period.--No revisions under
paragraph (1) shall take effect before the end of the
2-year period after the date of publication of such
revisions in final form.
(e) Report.--The Chairman of the Board of Governors and the
Chairperson of the Council shall submit a joint report to the
Committee on Banking, Housing, and Urban Affairs of the Senate
and the Committee on Financial Services of the House of
Representatives not later than 30 days after the date of the
issuance in final form of regulations under subsection (a), or
any subsequent revision to such regulations under subsection
(d), as applicable. Such report shall include, at a minimum,
the rationale for exemption and empirical evidence to support
the criteria for exemption.
SEC. 171. LEVERAGE AND RISK-BASED CAPITAL REQUIREMENTS.
(a) Definitions.--For purposes of this section, the
following definitions shall apply:
(1) Generally applicable leverage capital
requirements.--The term ``generally applicable leverage
capital requirements'' means--
(A) the minimum ratios of tier 1 capital to
average total assets, as established by the
appropriate Federal banking agencies to apply
to insured depository institutions under the
prompt corrective action regulations
implementing section 38 of the Federal Deposit
Insurance Act, regardless of total consolidated
asset size or foreign financial exposure; and
(B) includes the regulatory capital
components in the numerator of that capital
requirement, average total assets in the
denominator of that capital requirement, and
the required ratio of the numerator to the
denominator.
(2) Generally applicable risk-based capital
requirements.--The term ``generally applicable risk-
based capital requirements'' means--
(A) the risk-based capital requirements, as
established by the appropriate Federal banking
agencies to apply to insured depository
institutions under the prompt corrective action
regulations implementing section 38 of the
Federal Deposit Insurance Act, regardless of
total consolidated asset size or foreign
financial exposure; and
(B) includes the regulatory capital
components in the numerator of those capital
requirements, the risk-weighted assets in the
denominator of those capital requirements, and
the required ratio of the numerator to the
denominator.
(3) Definition of depository institution holding
company.--The term ``depository institution holding
company'' means a bank holding company or a savings and
loan holding company (as those terms are defined in
section 3 of the Federal Deposit Insurance Act) that is
organized in the United States, including any bank or
savings and loan holding company that is owned or
controlled by a foreign organization, but does not
include the foreign organization.
(b) Minimum Capital Requirements.--
(1) Minimum leverage capital requirements.--The
appropriate Federal banking agencies shall establish
minimum leverage capital requirements on a consolidated
basis for insured depository institutions, depository
institution holding companies, and nonbank financial
companies supervised by the Board of Governors. The
minimum leverage capital requirements established under
this paragraph shall not be less than the generally
applicable leverage capital requirements, which shall
serve as a floor for any capital requirements that the
agency may require, nor quantitatively lower than the
generally applicable leverage capital requirements that
were in
(2) Minimum risk-based capital requirements.--The
appropriate Federal banking agencies shall establish
minimum risk-based capital requirements on a
consolidated basis for insured depository institutions,
depository institution holding companies, and nonbank
financial companies supervised by the Board of
Governors. The minimum risk-based capital requirements
established under this paragraph shall not be less than
the generally applicable risk-based capital
requirements, which shall serve as a floor for any
capital requirements that the agency may require, nor
quantitatively lower than the generally applicable
risk-based capital requirements that were in effect for
insured depository institutions as of the date of
enactment of this Act.
(3) Investments in financial subsidiaries.--For
purposes of this section, investments in financial
subsidiaries that insured depository institutions are
required to deduct from regulatory capital under
section 5136A of the Revised Statutes of the United
States or section 46(a)(2) of the Federal Deposit
Insurance Act need not be deducted from regulatory
capital by depository institution holding companies or
nonbank financial companies supervised by the Board of
Governors, unless such capital deduction is required by
the Board of Governors or the primary financial
regulatory agency in the case of nonbank financial
companies supervised by the Board of Governors.
(4) Effective dates and phase-in periods.--
(A) Debt or equity instruments on or after
may 19, 2010.--For debt or equity instruments
issued on or after May 19, 2010, by depository
institution holding companies or by nonbank
financial companies supervised by the Board of
Governors, this section shall be deemed to have
become effective as of May 19, 2010.
(B) Debt or equity instruments issued
before may 19, 2010.--For debt or equity
instruments issued before May 19, 2010, by
depository institution holding companies or by
nonbank financial companies supervised by the
Board of Governors, any regulatory capital
deductions required under this section shall be
phased in incrementally over a period of 3
years, with the phase-in period to begin on
January 1, 2013, except as set forth in
subparagraph (C).
(C) Debt or equity instruments of smaller
institutions.--For debt or equity instruments
issued before May 19, 2010, by depository
institution holding companies with total
consolidated assets of less than
$15,000,000,000 as of December 31, 2009, and by
organizations that were mutual holding
companies on May 19, 2010, the capital
deductions that would be required for other
institutions under this section are not
required as a result of this section.
(D) Depository institution holding
companies not previously supervised by the
board of governors.--For any depository
institution holding company that was not
supervised by the Board of Governors as of May
19, 2010, the requirements of this section,
except as set forth in subparagraphs (A) and
(B), shall be effective 5 years after the date
of enactment of this Act.
(E) Certain bank holding company
subsidiaries of foreign banking
organizations.--For bank holding company
subsidiaries of foreign banking organizations
that have relied on Supervision and Regulation
Letter SR-01-1 issued by the Board of Governors
(as in effect on May 19, 2010), the
requirements of this section, except as set
forth in subparagraph (A), shall be effective 5
years after the date of enactment of this Act.
(5) Exceptions.--This section shall not apply to--
(A) debt or equity instruments issued to
the United States or any agency or
instrumentality thereof pursuant to the
Emergency Economic Stabilization Act of 2008,
and prior to October 4, 2010;
(B) any Federal home loan bank; or
(C) any small bank holding company that is
subject to the Small Bank Holding Company
Policy Statement of the Board of Governors, as
in effect on May 19, 2010.
(6) Study and report on small institution access to
capital.--
(A) Study required.--The Comptroller
General of the United States, after
consultation with the Federal banking agencies,
shall conduct a study of access to capital by
smaller insured depository institutions.
(B) Scope.--For purposes of this study
required by subparagraph (A), the term
``smaller insured depository institution''
means an insured depository institution with
total consolidated assets of $5,000,000,000 or
less.
(C) Report to congress.--Not later than 18
months after the date of enactment of this Act,
the Comptroller General of the United States
shall submit to the Committee on Banking,
Housing, and Urban Affairs of the Senate and
the Committee on Financial Services of the
House of Representatives a report summarizing
the results of the study conducted under
subparagraph (A), together with any
recommendations for legislative or regulatory
action that would enhance the access to capital
of smaller insured depository institutions, in
a manner that is consistent with safe and sound
banking operations.
(7) Capital requirements to address activities that
pose risks to the financial system.--
(A) In general.--Subject to the
recommendations of the Council, in accordance
with section 120, the Federal banking agencies
shall develop capital requirements applicable
to insured depository institutions, depository
institution holding companies, and nonbank
financial companies supervised by the Board of
Governors that address the risks that the
activities of such institutions pose, not only
to the institution engaging in the activity,
but to other public and private stakeholders in
the event of adverse performance, disruption,
or failure of the institution or the activity.
(B) Content.--Such rules shall address, at
a minimum, the risks arising from--
(i) significant volumes of activity
in derivatives, securitized products
purchased and sold, financial
guarantees purchased and sold,
securities borrowing and lending, and
repurchase agreements and reverse
repurchase agreements;
(ii) concentrations in assets for
which the values presented in financial
reports are based on models rather than
historical cost or prices deriving from
deep and liquid 2-way markets; and
(iii) concentrations in market
share for any activity that would
substantially disrupt financial markets
if the institution is forced to
unexpectedly cease the activity.
SEC. 172. EXAMINATION AND ENFORCEMENT ACTIONS FOR INSURANCE AND ORDERLY
LIQUIDATION PURPOSES.
(a) Examinations for Insurance and Resolution Purposes.--
Section 10(b)(3) of the Federal Deposit Insurance Act (12
U.S.C. 1820(b)(3)) is amended--
(1) by striking ``In addition'' and inserting the
following:
``(A) In general.--In addition''; and
(2) by striking ``whenever the board of directors
determines'' and all that follows through the period
and inserting the following: ``or nonbank financial
company supervised by the Board of Governors or a bank
holding company described in section 165(a) of the
Financial Stability Act of 2010, whenever the Board of
Directors determines that a special examination of any
such depository institution is necessary to determine
the condition of such depository institution for
insurance purposes, or of such nonbank financial
company supervised by the Board of Governors or bank
holding company described in section 165(a) of the
Financial Stability Act of 2010, for the purpose of
implementing its authority to provide for orderly
liquidation of any such company under title II of that
Act, provided that such authority may not be used with
respect to any such company that is in a generally
sound condition.
``(B) Limitation.--Before conducting a
special examination of a nonbank financial
company supervised by the Board of Governors or
a bank holding company described in section
165(a) of the Financial Stability Act of 2010,
the Corporation shall review any available and
acceptable resolution plan that the company has
submitted in accordance with section 165(d) of
that Act, consistent with the nonbinding effect
of such plan, and available reports of
examination, and shall coordinate to the
maximum extent practicable with the Board of
Governors, in order to minimize duplicative or
conflicting examinations.''.
(b) Enforcement Authority.--Section 8(t) of the Federal
Deposit Insurance Act (12 U.S.C. 1818(t)) is amended--
(1) in paragraph (1), by inserting ``, any
depository institution holding company,'' before ``or
any institution-affiliated party'';
(2) in paragraph (2)--
(A) by striking ``or'' at the end of
subparagraph (B);
(B) at the end of subparagraph (C), by
striking the period and inserting ``or''; and
(C) by inserting at the end the following
new subparagraph:
``(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, provided
that such authority may not be used with
respect to a depository institution holding
company that is in generally sound condition
and whose conduct does not pose a foreseeable
and material risk of loss to the Deposit
Insurance Fund;''; and
(3) by adding at the end the following:
``(6) Powers and duties with respect to depository
institution holding companies.--For purposes of
exercising the backup authority provided in this
subsection--
``(A) the Corporation shall have the same
powers with respect to a depository institution
holding company and its affiliates as the
appropriate Federal banking agency has with
respect to the holding company and its
affiliates; and
``(B) the holding company and its
affiliates shall have the same duties and
obligations with respect to the Corporation as
the holding company and its affiliates have
with respect to the appropriate Federal banking
agency.''.
(c) Rule of Construction.--Nothing in this Act shall be
construed to limit or curtail the Corporation's current
authority to examine or bring enforcement actions with respect
to any insured depository institution or institution-affiliated
party.
SEC. 173. ACCESS TO UNITED STATES FINANCIAL MARKET BY FOREIGN
INSTITUTIONS.
(a) Establishment of Foreign Bank Offices in the United
States.--Section 7(d)(3) of the International Banking Act of
1978 (12 U.S.C. 3105(d)(3)) is amended--
(1) in subparagraph (C), by striking ``and'' at the
end;
(2) in subparagraph (D), by striking the period at
the end of and inserting ``; and''; and
(3) by adding at the end the following new
subparagraph:
``(E) for a foreign bank that presents a
risk to the stability of United States
financial system, whether the home country of
the foreign bank has adopted, or is making
demonstrable progress toward adopting, an
appropriate system of financial regulation for
the financial system of such home country to
mitigate such risk.''.
(b) Termination of Foreign Bank Offices in the United
States.--Section 7(e)(1) of the International Banking Act of
1978 (12 U.S.C. 3105(e)(1)) is amended--
(1) in subparagraph (A), by striking ``or'' at the
end;
(2) in subparagraph (B), by striking the period at
the end of and inserting ``; or''; and
(3) by inserting after subparagraph (B), the
following new subparagraph:
``(C) for a foreign bank that presents a
risk to the stability of the United States
financial system, the home country of the
foreign bank has not adopted, or made
demonstrable progress toward adopting, an
appropriate system of financial regulation to
mitigate such risk.''.
(c) Registration or Succession to a United States Broker or
Dealer and Termination of Such Registration.--Section 15 of the
Securities Exchange Act of 1934 (15 U.S.C. 78o) is amended by
adding at the end the following new subsections:
``(k) Registration or Succession to a United States Broker
or Dealer.--In determining whether to permit a foreign person
or an affiliate of a foreign person to register as a United
States broker or dealer, or succeed to the registration of a
United States broker or dealer, the Commission may consider
whether, for a foreign person, or an affiliate of a foreign
person that presents a risk to the stability of the United
States financial system, the home country of the foreign person
has adopted, or made demonstrable progress toward adopting, an
appropriate system of financial regulation to mitigate such
risk.
``(l) Termination of a United States Broker or Dealer.--For
a foreign person or an affiliate of a foreign person that
presents such a risk to the stability of the United States
financial system, the Commission may determine to terminate the
registration of such foreign person or an affiliate of such
foreign person as a broker or dealer in the United States, if
the Commission determines that the home country of the foreign
person has not adopted, or made demonstrable progress toward
adopting, an appropriate system of financial regulation to
mitigate such risk.''.
SEC. 174. STUDIES AND REPORTS ON HOLDING COMPANY CAPITAL REQUIREMENTS.
(a) Study of Hybrid Capital Instruments.--The Comptroller
General of the United States, in consultation with the Board of
Governors, the Comptroller of the Currency, and the
Corporation, shall conduct a study of the use of hybrid capital
instruments as a component of Tier 1 capital for banking
institutions and bank holding companies. The study shall
consider--
(1) the current use of hybrid capital instruments,
such as trust preferred shares, as a component of Tier
1 capital;
(2) the differences between the components of
capital permitted for insured depository institutions
and those permitted for companies that control insured
depository institutions;
(3) the benefits and risks of allowing such
instruments to be used to comply with Tier 1 capital
requirements;
(4) the economic impact of prohibiting the use of
such capital instruments for Tier 1;
(5) a review of the consequences of disqualifying
trust preferred instruments, and whether it could lead
to the failure or undercapitalization of existing
banking organizations;
(6) the international competitive implications
prohibiting hybrid capital instruments for Tier 1;
(7) the impact on the cost and availability of
credit in the United States from such a prohibition;
(8) the availability of capital for financial
institutions with less than $10,000,000,000 in total
assets; and
(9) any other relevant factors relating to the
safety and soundness of our financial system and
potential economic impact of such a prohibition.
(b) Study of Foreign Bank Intermediate Holding Company
Capital Requirements.--The Comptroller General of the United
States, in consultation with the Secretary, the Board of
Governors, the Comptroller of the Currency, and the
Corporation, shall conduct a study of capital requirements
applicable to United States intermediate holding companies of
foreign banks that are bank holding companies or savings and
loan holding companies. The study shall consider--
(1) current Board of Governors policy regarding the
treatment of intermediate holding companies;
(2) the principle of national treatment and
equality of competitive opportunity for foreign banks
operating in the United States;
(3) the extent to which foreign banks are subject
on a consolidated basis to home country capital
standards comparable to United States capital
standards;
(4) potential effects on United States banking
organizations operating abroad of changes to United
States policy regarding intermediate holding companies;
(5) the impact on the cost and availability of
credit in the United States from a change in United
States policy regarding intermediate holding companies;
and
(6) any other relevant factors relating to the
safety and soundness of our financial system and
potential economic impact of such a prohibition.
(c) Report.--Not later than 18 months after the date of
enactment of this Act, the Comptroller General of the United
States shall submit reports to the Committee on Banking,
Housing, and Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representatives summarizing
the results of the studies required under subsection (a). The
reports shall include specific recommendations for legislative
or regulatory action regarding the treatment of hybrid capital
instruments, including trust preferred shares, and shall
explain the basis for such recommendations.
SEC. 175. INTERNATIONAL POLICY COORDINATION.
(a) By the President.--The President, or a designee of the
President, may coordinate through all available international
policy channels, similar policies as those found in United
States law relating to limiting the scope, nature, size, scale,
concentration, and interconnectedness of financial companies,
in order to protect financial stability and the global economy.
(b) By the Council.--The Chairperson of the Council, in
consultation with the other members of the Council, shall
regularly consult with the financial regulatory entities and
other appropriate organizations of foreign governments or
international organizations on matters relating to systemic
risk to the international financial system.
(c) By the Board of Governors and the Secretary.--The Board
of Governors and the Secretary shall consult with their foreign
counterparts and through appropriate multilateral organizations
to encourage comprehensive and robust prudential supervision
and regulation for all highly leveraged and interconnected
financial companies.
SEC. 176. RULE OF CONSTRUCTION.
No regulation or standard imposed under this title may be
construed in a manner that would lessen the stringency of the
requirements of any applicable primary financial regulatory
agency or any other Federal or State agency that are otherwise
applicable. This title, and the rules and regulations or orders
prescribed pursuant to this title, do not divest any such
agency of any authority derived from any other applicable law.
TITLE II--ORDERLY LIQUIDATION AUTHORITY
SEC. 201. DEFINITIONS.
(a) In General.--In this title, the following definitions
shall apply:
(1) Administrative expenses of the receiver.--The
term ``administrative expenses of the receiver''
includes--
(A) the actual, necessary costs and
expenses incurred by the Corporation as
receiver for a covered financial company in
liquidating a covered financial company; and
(B) any obligations that the Corporation as
receiver for a covered financial company
determines are necessary and appropriate to
facilitate the smooth and orderly liquidation
of the covered financial company.
(2) Bankruptcy code.--The term ``Bankruptcy Code''
means title 11, United States Code.
(3) Bridge financial company.--The term ``bridge
financial company'' means a new financial company
organized by the Corporation in accordance with section
210(h) for the purpose of resolving a covered financial
company.
(4) Claim.--The term ``claim'' means any right to
payment, whether or not such right is reduced to
judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal,
equitable, secured, or unsecured.
(5) Company.--The term ``company'' has the same
meaning as in section 2(b) of the Bank Holding Company
Act of 1956 (12 U.S.C. 1841(b)), except that such term
includes any company described in paragraph (11), the
majority of the securities of which are owned by the
United States or any State.
(6) Court.--The term ``Court'' means the United
States District Court for the District of Columbia,
unless the context otherwise requires.
(7) Covered broker or dealer.--The term ``covered
broker or dealer'' means a covered financial company
that is a broker or dealer that--
(A) is registered with the Commission under
section 15(b) of the Securities Exchange Act of
1934 (15 U.S.C. 78o(b)); and
(B) is a member of SIPC.
(8) Covered financial company.--The term ``covered
financial company''--
(A) means a financial company for which a
determination has been made under section
203(b); and
(B) does not include an insured depository
institution.
(9) Covered subsidiary.--The term ``covered
subsidiary'' means a subsidiary of a covered financial
company, other than--
(A) an insured depository institution;
(B) an insurance company; or
(C) a covered broker or dealer.
(10) Definitions relating to covered brokers and
dealers.--The terms ``customer'', ``customer name
securities'', ``customer property'', and ``net equity''
in the context of a covered broker or dealer, have the
same meanings as in section 16 of the Securities
Investor Protection Act of 1970 (15 U.S.C. 78lll).
(11) Financial company.--The term ``financial
company'' means any company that--
(A) is incorporated or organized under any
provision of Federal law or the laws of any
State;
(B) is--
(i) a bank holding company, as
defined in section 2(a) of the Bank
Holding Company Act of 1956 (12 U.S.C.
1841(a));
(ii) a nonbank financial company
supervised by the Board of Governors;
(iii) any company that is
predominantly engaged in activities
that the Board of Governors has
determined are financial in nature or
incidental thereto for purposes of
section 4(k) of the Bank Holding
Company Act of 1956 (12 U.S.C. 1843(k))
other than a company described in
clause (i) or (ii); or
(iv) any subsidiary of any company
described in any of clauses (i) through
(iii) that is predominantly engaged in
activities that the Board of Governors
has determined are financial in nature
or incidental thereto for purposes of
section 4(k) of the Bank Holding
Company Act of 1956 (12 U.S.C. 1843(k))
(other than a subsidiary that is an
insured depository institution or an
insurance company); and
(C) is not a Farm Credit System institution
chartered under and subject to the provisions
of the Farm Credit Act of 1971, as amended (12
U.S.C. 2001 et seq.), a governmental entity, or
a regulated entity, as defined under section
1303(20) of the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 (12
U.S.C. 4502(20)).
(12) Fund.--The term ``Fund'' means the Orderly
Liquidation Fund established under section 210(n).
(13) Insurance company.--The term ``insurance
company'' means any entity that is--
(A) engaged in the business of insurance;
(B) subject to regulation by a State
insurance regulator; and
(C) covered by a State law that is designed
to specifically deal with the rehabilitation,
liquidation, or insolvency of an insurance
company.
(14) Nonbank financial company.--The term ``nonbank
financial company'' has the same meaning as in section
102(a)(4)(C).
(15) Nonbank financial company supervised by the
board of governors.--The term ``nonbank financial
company supervised by the Board of Governors'' has the
same meaning as in section 102(a)(4)(D).
(16) SIPC.--The term ``SIPC'' means the Securities
Investor Protection Corporation.
(b) Definitional Criteria.--For purpose of the definition
of the term ``financial company'' under subsection (a)(11), no
company shall be deemed to be predominantly engaged in
activities that the Board of Governors has determined are
financial in nature or incidental thereto for purposes of
section 4(k) of the Bank Holding Company Act of 1956 (12 U.S.C.
1843(k)), if the consolidated revenues of such company from
such activities constitute less than 85 percent of the total
consolidated revenues of such company, as the Corporation, in
consultation with the Secretary, shall establish by regulation.
In determining whether a company is a financial company under
this title, the consolidated revenues derived from the
ownership or control of a depository institution shall be
included.
SEC. 202. JUDICIAL REVIEW.
(a) Commencement of Orderly Liquidation.--
(1) Petition to district court.--
(A) District court review.--
(i) Petition to district court.--
Subsequent to a determination by the
Secretary under section 203 that a
financial company satisfies the
criteria in section 203(b), the
Secretary shall notify the Corporation
and the covered financial company. If
the board of directors (or body
performing similar functions) of the
covered financial company acquiesces or
consents to the appointment of the
Corporation as receiver, the Secretary
shall appoint the Corporation as
receiver. If the board of directors (or
body performing similar functions) of
the covered financial company does not
acquiesce or consent to the appointment
of the Corporation as receiver, the
Secretary shall petition the United
States District Court for the District
of Columbia for an order authorizing
the Secretary to appoint the
Corporation as receiver.
(ii) Form and content of order.--
The Secretary shall present all
relevant findings and the
recommendation made pursuant to section
203(a) to the Court. The petition shall
be filed under seal.
(iii) Determination.--On a strictly
confidential basis, and without any
prior public disclosure, the Court,
after notice to the covered financial
company and a hearing in which the
covered financial company may oppose
the petition, shall determine whether
the determination of the Secretary that
the covered financial company is in
default or in danger of default and
satisfies the definition of a financial
company under section 201(a)(11) is
arbitrary and capricious.
(iv) Issuance of order.--If the
Court determines that the determination
of the Secretary that the covered
financial company is in default or in
danger of default and satisfies the
definition of a financial company under
section 201(a)(11)--
(I) is not arbitrary and
capricious, the Court shall
issue an order immediately
authorizing the Secretary to
appoint the Corporation as
receiver of the covered
financial company; or
(II) is arbitrary and
capricious, the Court shall
immediately provide to the
Secretary a written statement
of each reason supporting its
determination, and afford the
Secretary an immediate
opportunity to amend and refile
the petition under clause (i).
(v) Petition granted by operation
of law.--If the Court does not make a
determination within 24 hours of
receipt of the petition--
(I) the petition shall be
granted by operation of law;
(II) the Secretary shall
appoint the Corporation as
receiver; and
(III) liquidation under
this title shall automatically
and without further notice or
action be commenced and the
Corporation may immediately
take all actions authorized
under this title.
(B) Effect of determination.--The
determination of the Court under subparagraph
(A) shall be final, and shall be subject to
appeal only in accordance with paragraph (2).
The decision shall not be subject to any stay
or injunction pending appeal. Upon conclusion
of its proceedings under subparagraph (A), the
Court shall provide immediately for the record
a written statement of each reason supporting
the decision of the Court, and shall provide
copies thereof to the Secretary and the covered
financial company.
(C) Criminal penalties.--A person who
recklessly discloses a determination of the
Secretary under section 203(b) or a petition of
the Secretary under subparagraph (A), or the
pendency of court proceedings as provided for
under subparagraph (A), shall be fined not more
than $250,000, or imprisoned for not more than
5 years, or both.
(2) Appeal of decisions of the district court.--
(A) Appeal to court of appeals.--
(i) In general.--Subject to clause
(ii), the United States Court of
Appeals for the District of Columbia
Circuit shall have jurisdiction of an
appeal of a final decision of the Court
filed by the Secretary or a covered
financial company, through its board of
directors, notwithstanding section
210(a)(1)(A)(i), not later than 30 days
after the date on which the decision of
the Court is rendered or deemed
rendered under this subsection.
(ii) Condition of jurisdiction.--
The Court of Appeals shall have
jurisdiction of an appeal by a covered
financial company only if the covered
financial company did not acquiesce or
consent to the appointment of a
receiver by the Secretary under
paragraph (1)(A).
(iii) Expedition.--The Court of
Appeals shall consider any appeal under
this subparagraph on an expedited
basis.
(iv) Scope of review.--For an
appeal taken under this subparagraph,
review shall be limited to whether the
determination of the Secretary that a
covered financial company is in default
or in danger of default and satisfies
the definition of a financial company
under section 201(a)(11) is arbitrary
and capricious.
(B) Appeal to the supreme court.--
(i) In general.--A petition for a
writ of certiorari to review a decision
of the Court of Appeals under
subparagraph (A) may be filed by the
Secretary or the covered financial
company, through its board of
directors, notwithstanding section
210(a)(1)(A)(i), with the Supreme Court
of the United States, not later than 30
days after the date of the final
decision of the Court of Appeals, and
the Supreme Court shall have
discretionary jurisdiction to review
such decision.
(ii) Written statement.--In the
event of a petition under clause (i),
the Court of Appeals shall immediately
provide for the record a written
statement of each reason for its
decision.
(iii) Expedition.--The Supreme
Court shall consider any petition under
this subparagraph on an expedited
basis.
(iv) Scope of review.--Review by
the Supreme Court under this
subparagraph shall be limited to
whether the determination of the
Secretary that the covered financial
company is in default or in danger of
default and satisfies the definition of
a financial company under section
201(a)(11) is arbitrary and capricious.
(b) Establishment and Transmittal of Rules and
Procedures.--
(1) In general.--Not later than 6 months after the
date of enactment of this Act, the Court shall
establish such rules and procedures as may be necessary
to ensure the orderly conduct of proceedings, including
rules and procedures to ensure that the 24-hour
deadline is met and that the Secretary shall have an
ongoing opportunity to amend and refile petitions under
subsection (a)(1).
(2) Publication of rules.--The rules and procedures
established under paragraph (1), and any modifications
of such rules and procedures, shall be recorded and
shall be transmitted to--
(A) the Committee on the Judiciary of the
Senate;
(B) the Committee on Banking, Housing, and
Urban Affairs of the Senate;
(C) the Committee on the Judiciary of the
House of Representatives; and
(D) the Committee on Financial Services of
the House of Representatives.
(c) Provisions Applicable to Financial Companies.--
(1) Bankruptcy code.--Except as provided in this
subsection, the provisions of the Bankruptcy Code and
rules issued thereunder or otherwise applicable
insolvency law, and not the provisions of this title,
shall apply to financial companies that are not covered
financial companies for which the Corporation has been
appointed as receiver.
(2) This title.--The provisions of this title shall
exclusively apply to and govern all matters relating to
covered financial companies for which the Corporation
is appointed as receiver, and no provisions of the
Bankruptcy Code or the rules issued thereunder shall
apply in such cases, except as expressly provided in
this title.
(d) Time Limit on Receivership Authority.--
(1) Baseline period.--Any appointment of the
Corporation as receiver under this section shall
terminate at the end of the 3-year period beginning on
the date on which such appointment is made.
(2) Extension of time limit.--The time limit
established in paragraph (1) may be extended by the
Corporation for up to 1 additional year, if the
Chairperson of the Corporation determines and certifies
in writing to the Committee on Banking, Housing, and
Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representatives that
continuation of the receivership is necessary--
(A) to--
(i) maximize the net present value
return from the sale or other
disposition of the assets of the
covered financial company; or
(ii) minimize the amount of loss
realized upon the sale or other
disposition of the assets of the
covered financial company; and
(B) to protect the stability of the
financial system of the United States.
(3) Second extension of time limit.--
(A) In general.--The time limit under this
subsection, as extended under paragraph (2),
may be extended for up to 1 additional year, if
the Chairperson of the Corporation, with the
concurrence of the Secretary, submits the
certifications described in paragraph (2).
(B) Additional report required.--Not later
than 30 days after the date of commencement of
the extension under subparagraph (A), the
Corporation shall submit a report to the
Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on
Financial Services of the House of
Representatives describing the need for the
extension and the specific plan of the
Corporation to conclude the receivership before
the end of the second extension.
(4) Ongoing litigation.--The time limit under this
subsection, as extended under paragraph (3), may be
further extended solely for the purpose of completing
ongoing litigation in which the Corporation as receiver
is a party, provided that the appointment of the
Corporation as receiver shall terminate not later than
90 days after the date of completion of such
litigation, if--
(A) the Council determines that the
Corporation used its best efforts to conclude
the receivership in accordance with its plan
before the end of the time limit described in
paragraph (3);
(B) the Council determines that the
completion of longer-term responsibilities in
the form of ongoing litigation justifies the
need for an extension; and
(C) the Corporation submits a report
approved by the Council not later than 30 days
after the date of the determinations by the
Council under subparagraphs (A) and (B) to the
Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on
Financial Services of the House of
Representatives, describing--
(i) the ongoing litigation
justifying the need for an extension;
and
(ii) the specific plan of the
Corporation to complete the litigation
and conclude the receivership.
(5) Regulations.--The Corporation may issue
regulations governing the termination of receiverships
under this title.
(6) No liability.--The Corporation and the Deposit
Insurance Fund shall not be liable for unresolved
claims arising from the receivership after the
termination of the receivership.
(e) Study of Bankruptcy and Orderly Liquidation Process for
Financial Companies.--
(1) Study.--
(A) In general.--The Administrative Office
of the United States Courts and the Comptroller
General of the United States shall each monitor
the activities of the Court, and each such
Office shall conduct separate studies regarding
the bankruptcy and orderly liquidation process
for financial companies under the Bankruptcy
Code.
(B) Issues to be studied.--In conducting
the study under subparagraph (A), the
Administrative Office of the United States
Courts and the Comptroller General of the
United States each shall evaluate--
(i) the effectiveness of chapter 7
or chapter 11 of the Bankruptcy Code in
facilitating the orderly liquidation or
reorganization of financial companies;
(ii) ways to maximize the
efficiency and effectiveness of the
Court; and
(iii) ways to make the orderly
liquidation process under the
Bankruptcy Code for financial companies
more effective.
(2) Reports.--Not later than 1 year after the date
of enactment of this Act, in each successive year until
the third year, and every fifth year after that date of
enactment, the Administrative Office of the United
States Courts and the Comptroller General of the United
States shall submit to the Committee on Banking,
Housing, and Urban Affairs and the Committee on the
Judiciary of the Senate and the Committee on Financial
Services and the Committee on the Judiciary of the
House of Representatives separate reports summarizing
the results of the studies conducted under paragraph
(1).
(f) Study of International Coordination Relating to
Bankruptcy Process for Financial Companies.--
(1) Study.--
(A) In general.--The Comptroller General of
the United States shall conduct a study
regarding international coordination relating
to the orderly liquidation of financial
companies under the Bankruptcy Code.
(B) Issues to be studied.--In conducting
the study under subparagraph (A), the
Comptroller General of the United States shall
evaluate, with respect to the bankruptcy
process for financial companies--
(i) the extent to which
international coordination currently
exists;
(ii) current mechanisms and
structures for facilitating
international cooperation;
(iii) barriers to effective
international coordination; and
(iv) ways to increase and make more
effective international coordination.
(2) Report.--Not later than 1 year after the date
of enactment of this Act, the Comptroller General of
the United States shall submit to the Committee on
Banking, Housing, and Urban Affairs and the Committee
on the Judiciary of the Senate and the Committee on
Financial Services and the Committee on the Judiciary
of the House of Representatives and the Secretary a
report summarizing the results of the study conducted
under paragraph (1).
(g) Study of Prompt Corrective Action Implementation by the
Appropriate Federal Agencies.--
(1) Study.--The Comptroller General of the United
States shall conduct a study regarding the
implementation of prompt corrective action by the
appropriate Federal banking agencies.
(2) Issues to be studied.--In conducting the study
under paragraph (1), the Comptroller General shall
evaluate--
(A) the effectiveness of implementation of
prompt corrective action by the appropriate
Federal banking agencies and the resolution of
insured depository institutions by the
Corporation; and
(B) ways to make prompt corrective action a
more effective tool to resolve the insured
depository institutions at the least possible
long-term cost to the Deposit Insurance Fund.
(3) Report to council.--Not later than 1 year after
the date of enactment of this Act, the Comptroller
General shall submit a report to the Council on the
results of the study conducted under this subsection.
(4) Council report of action.--Not later than 6
months after the date of receipt of the report from the
Comptroller General under paragraph (3), the Council
shall submit a report to the Committee on Banking,
Housing, and Urban Affairs of the Senate and the
Committee on Financial Services of the House of
Representatives on actions taken in response to the
report, including any recommendations made to the
Federal primary financial regulatory agencies under
section 120.
SEC. 203. SYSTEMIC RISK DETERMINATION.
(a) Written Recommendation and Determination.--
(1) Vote required.--
(A) In general.--On their own initiative,
or at the request of the Secretary, the
Corporation and the Board of Governors shall
consider whether to make a written
recommendation described in paragraph (2) with
respect to whether the Secretary should appoint
the Corporation as receiver for a financial
company. Such recommendation shall be made upon
a vote of not fewer than \2/3\ of the members
of the Board of Governors then serving and \2/
3\ of the members of the board of directors of
the Corporation then serving.
(B) Cases involving brokers or dealers.--In
the case of a broker or dealer, or in which the
largest United States subsidiary (as measured
by total assets as of the end of the previous
calendar quarter) of a financial company is a
broker or dealer, the Commission and the Board
of Governors, at the request of the Secretary,
or on their own initiative, shall consider
whether to make the written recommendation
described in paragraph (2) with respect to the
financial company. Subject to the requirements
in paragraph (2), such recommendation shall be
made upon a vote of not fewer than \2/3\ of the
members of the Board of Governors then serving
and \2/3\ of the members of the Commission then
serving, and in consultation with the
Corporation.
(C) Cases involving insurance companies.--
In the case of an insurance company, or in
which the largest United States subsidiary (as
measured by total assets as of the end of the
previous calendar quarter) of a financial
company is an insurance company, the Director
of the Federal Insurance Office and the Board
of Governors, at the request of the Secretary
or on their own initiative, shall consider
whether to make the written recommendation
described in paragraph (2) with respect to the
financial company. Subject to the requirements
in paragraph (2), such recommendation shall be
made upon a vote of not fewer than \2/3\ of the
Board of Governors then serving and the
affirmative approval of the Director of the
Federal Insurance Office, and in consultation
with the Corporation.
(2) Recommendation required.--Any written
recommendation pursuant to paragraph (1) shall
contain--
(A) an evaluation of whether the financial
company is in default or in danger of default;
(B) a description of the effect that the
default of the financial company would have on
financial stability in the United States;
(C) a description of the effect that the
default of the financial company would have on
economic conditions or financial stability for
low income, minority, or underserved
communities;
(D) a recommendation regarding the nature
and the extent of actions to be taken under
this title regarding the financial company;
(E) an evaluation of the likelihood of a
private sector alternative to prevent the
default of the financial company;
(F) an evaluation of why a case under the
Bankruptcy Code is not appropriate for the
financial company;
(G) an evaluation of the effects on
creditors, counterparties, and shareholders of
the financial company and other market
participants; and
(H) an evaluation of whether the company
satisfies the definition of a financial company
under section 201.
(b) Determination by the Secretary.--Notwithstanding any
other provision of Federal or State law, the Secretary shall
take action in accordance with section 202(a)(1)(A), if, upon
the written recommendation under subsection (a), the Secretary
(in consultation with the President) determines that--
(1) the financial company is in default or in
danger of default;
(2) the failure of the financial company and its
resolution under otherwise applicable Federal or State
law would have serious adverse effects on financial
stability in the United States;
(3) no viable private sector alternative is
available to prevent the default of the financial
company;
(4) any effect on the claims or interests of
creditors, counterparties, and shareholders of the
financial company and other market participants as a
result of actions to be taken under this title is
appropriate, given the impact that any action taken
under this title would have on financial stability in
the United States;
(5) any action under section 204 would avoid or
mitigate such adverse effects, taking into
consideration the effectiveness of the action in
mitigating potential adverse effects on the financial
system, the cost to the general fund of the Treasury,
and the potential to increase excessive risk taking on
the part of creditors, counterparties, and shareholders
in the financial company;
(6) a Federal regulatory agency has ordered the
financial company to convert all of its convertible
debt instruments that are subject to the regulatory
order; and
(7) the company satisfies the definition of a
financial company under section 201.
(c) Documentation and Review.--
(1) In general.--The Secretary shall--
(A) document any determination under
subsection (b);
(B) retain the documentation for review
under paragraph (2); and
(C) notify the covered financial company
and the Corporation of such determination.
(2) Report to congress.--Not later than 24 hours
after the date of appointment of the Corporation as
receiver for a covered financial company, the Secretary
shall provide written notice of the recommendations and
determinations reached in accordance with subsections
(a) and (b) to the Majority Leader and the Minority
Leader of the Senate and the Speaker and the Minority
Leader of the House of Representatives, the Committee
on Banking, Housing, and Urban Affairs of the Senate,
and the Committee on Financial Services of the House of
Representatives, which shall consist of a summary of
the basis for the determination, including, to the
extent available at the time of the determination--
(A) the size and financial condition of the
covered financial company;
(B) the sources of capital and credit
support that were available to the covered
financial company;
(C) the operations of the covered financial
company that could have had a significant
impact on financial stability, markets, or
both;
(D) identification of the banks and
financial companies which may be able to
provide the services offered by the covered
financial company;
(E) any potential international
ramifications of resolution of the covered
financial company under other applicable
insolvency law;
(F) an estimate of the potential effect of
the resolution of the covered financial company
under other applicable insolvency law on the
financial stability of the United States;
(G) the potential effect of the appointment
of a receiver by the Secretary on consumers;
(H) the potential effect of the appointment
of a receiver by the Secretary on the financial
system, financial markets, and banks and other
financial companies; and
(I) whether resolution of the covered
financial company under other applicable
insolvency law would cause banks or other
financial companies to experience severe
liquidity distress.
(3) Reports to congress and the public.--
(A) In general.--Not later than 60 days
after the date of appointment of the
Corporation as receiver for a covered financial
company, the Corporation shall file a report
with the Committee on Banking, Housing, and
Urban Affairs of the Senate and the Committee
on Financial Services of the House of
Representatives--
(i) setting forth information on
the financial condition of the covered
financial company as of the date of the
appointment, including a description of
its assets and liabilities;
(ii) describing the plan of, and
actions taken by, the Corporation to
wind down the covered financial
company;
(iii) explaining each instance in
which the Corporation waived any
applicable requirements of part 366 of
title 12, Code of Federal Regulations
(or any successor thereto) with respect
to conflicts of interest by any person
in the private sector who was retained
to provide services to the Corporation
in connection with such receivership;
(iv) describing the reasons for the
provision of any funding to the
receivership out of the Fund;
(v) setting forth the expected
costs of the orderly liquidation of the
covered financial company;
(vi) setting forth the identity of
any claimant that is treated in a
manner different from other similarly
situated claimants under subsection
(b)(4), (d)(4), or (h)(5)(E), the
amount of any additional payment to
such claimant under subsection (d)(4),
and the reason for any such action; and
(vii) which report the Corporation
shall publish on an online website
maintained by the Corporation, subject
to maintaining appropriate
confidentiality.
(B) Amendments.--The Corporation shall, on
a timely basis, not less frequently than
quarterly, amend or revise and resubmit the
reports prepared under this paragraph, as
necessary.
(C) Congressional testimony.--The
Corporation and the primary financial
regulatory agency, if any, of the financial
company for which the Corporation was appointed
receiver under this title shall appear before
Congress, if requested, not later than 30 days
after the date on which the Corporation first
files the reports required under subparagraph
(A).
(4) Default or in danger of default.--For purposes
of this title, a financial company shall be considered
to be in default or in danger of default if, as
determined in accordance with subsection (b)--
(A) a case has been, or likely will
promptly be, commenced with respect to the
financial company under the Bankruptcy Code;
(B) the financial company has incurred, or
is likely to incur, losses that will deplete
all or substantially all of its capital, and
there is no reasonable prospect for the company
to avoid such depletion;
(C) the assets of the financial company
are, or are likely to be, less than its
obligations to creditors and others; or
(D) the financial company is, or is likely
to be, unable to pay its obligations (other
than those subject to a bona fide dispute) in
the normal course of business.
(5) GAO review.--The Comptroller General of the
United States shall review and report to Congress on
any determination under subsection (b), that results in
the appointment of the Corporation as receiver,
including--
(A) the basis for the determination;
(B) the purpose for which any action was
taken pursuant thereto;
(C) the likely effect of the determination
and such action on the incentives and conduct
of financial companies and their creditors,
counterparties, and shareholders; and
(D) the likely disruptive effect of the
determination and such action on the reasonable
expectations of creditors, counterparties, and
shareholders, taking into account the impact
any action under this title would have on
financial stability in the United States,
including whether the rights of such parties
will be disrupted.
(d) Corporation Policies and Procedures.--As soon as is
practicable after the date of enactment of this Act, the
Corporation shall establish policies and procedures that are
acceptable to the Secretary governing the use of funds
available to the Corporation to carry out this title, including
the terms and conditions for the provision and use of funds
under sections 204(d), 210(h)(2)(G)(iv), and 210(h)(9).
(e) Treatment of Insurance Companies and Insurance Company
Subsidiaries.--
(1) In general.--Notwithstanding subsection (b), if
an insurance company is a covered financial company or
a subsidiary or affiliate of a covered financial
company, the liquidation or rehabilitation of such
insurance company, and any subsidiary or affiliate of
such company that is not excepted under paragraph (2),
shall be conducted as provided under applicable State
law.
(2) Exception for subsidiaries and affiliates.--The
requirement of paragraph (1) shall not apply with
respect to any subsidiary or affiliate of an insurance
company that is not itself an insurance company.
(3) Backup authority.--Notwithstanding paragraph
(1), with respect to a covered financial company
described in paragraph (1), if, after the end of the
60-day period beginning on the date on which a
determination is made under section 202(a) with respect
to such company, the appropriate regulatory agency has
not filed the appropriate judicial action in the
appropriate State court to place such company into
orderly liquidation under the laws and requirements of
the State, the Corporation shall have the authority to
stand in the place of the appropriate regulatory agency
and file the appropriate judicial action in the
appropriate State court to place such company into
orderly liquidation under the laws and requirements of
the State.
SEC. 204. ORDERLY LIQUIDATION OF COVERED FINANCIAL COMPANIES.
(a) Purpose of Orderly Liquidation Authority.--It is the
purpose of this title to provide the necessary authority to
liquidate failing financial companies that pose a significant
risk to the financial stability of the United States in a
manner that mitigates such risk and minimizes moral hazard. The
authority provided in this title shall be exercised in the
manner that best fulfills such purpose, so that--
(1) creditors and shareholders will bear the losses
of the financial company;
(2) management responsible for the condition of the
financial company will not be retained; and
(3) the Corporation and other appropriate agencies
will take all steps necessary and appropriate to assure
that all parties, including management, directors, and
third parties, having responsibility for the condition
of the financial company bear losses consistent with
their responsibility, including actions for damages,
restitution, and recoupment of compensation and other
gains not compatible with such responsibility.
(b) Corporation as Receiver.--Upon the appointment of the
Corporation under section 202, the Corporation shall act as the
receiver for the covered financial company, with all of the
rights and obligations set forth in this title.
(c) Consultation.--The Corporation, as receiver--
(1) shall consult with the primary financial
regulatory agency or agencies of the covered financial
company and its covered subsidiaries for purposes of
ensuring an orderly liquidation of the covered
financial company;
(2) may consult with, or under subsection
(a)(1)(B)(v) or (a)(1)(L) of section 210, acquire the
services of, any outside experts, as appropriate to
inform and aid the Corporation in the orderly
liquidation process;
(3) shall consult with the primary financial
regulatory agency or agencies of any subsidiaries of
the covered financial company that are not covered
subsidiaries, and coordinate with such regulators
regarding the treatment of such solvent subsidiaries
and the separate resolution of any such insolvent
subsidiaries under other governmental authority, as
appropriate; and
(4) shall consult with the Commission and the
Securities Investor Protection Corporation in the case
of any covered financial company for which the
Corporation has been appointed as receiver that is a
broker or dealer registered with the Commission under
section 15(b) of the Securities Exchange Act of 1934
(15 U.S.C. 78o(b)) and is a member of the Securities
Investor Protection Corporation, for the purpose of
determining whether to transfer to a bridge financial
company organized by the Corporation as receiver,
without consent of any customer, customer accounts of
the covered financial company.
(d) Funding for Orderly Liquidation.--Upon its appointment
as receiver for a covered financial company, and thereafter as
the Corporation may, in its discretion, determine to be
necessary or appropriate, the Corporation may make available to
the receivership, subject to the conditions set forth in
section 206 and subject to the plan described in section
210(n)(9), funds for the orderly liquidation of the covered
financial company. All funds provided by the Corporation under
this subsection shall have a priority of claims under
subparagraph (A) or (B) of section 210(b)(1), as applicable,
including funds used for--
(1) making loans to, or purchasing any debt
obligation of, the covered financial company or any
covered subsidiary;
(2) purchasing or guaranteeing against loss the
assets of the covered financial company or any covered
subsidiary, directly or through an entity established
by the Corporation for such purpose;
(3) assuming or guaranteeing the obligations of the
covered financial company or any covered subsidiary to
1 or more third parties;
(4) taking a lien on any or all assets of the
covered financial company or any covered subsidiary,
including a first priority lien on all unencumbered
assets of the covered financial company or any covered
subsidiary to secure repayment of any transactions
conducted under this subsection;
(5) selling or transferring all, or any part, of
such acquired assets, liabilities, or obligations of
the covered financial company or any covered
subsidiary; and
(6) making payments pursuant to subsections (b)(4),
(d)(4), and (h)(5)(E) of section 210.
SEC. 205. ORDERLY LIQUIDATION OF COVERED BROKERS AND DEALERS.
(a) Appointment of SIPC as Trustee.--
(1) Appointment.--Upon the appointment of the
Corporation as receiver for any covered broker or
dealer, the Corporation shall appoint, without any need
for court approval, the Securities Investor Protection
Corporation to act as trustee for the liquidation under
the Securities Investor Protection Act of 1970 (15
U.S.C. 78aaa et seq.) of the covered broker or dealer.
(2) Actions by sipc.--
(A) Filing.--Upon appointment of SIPC under
paragraph (1), SIPC shall promptly file with
any Federal district court of competent
jurisdiction specified in section 21 or 27 of
the Securities Exchange Act of 1934 (15 U.S.C.
78u, 78aa), an application for a protective
decree under the Securities Investor Protection
Act of 1970 (15 U.S.C. 78aaa et seq.) as to the
covered broker or dealer. The Federal district
court shall accept and approve the filing,
including outside of normal business hours, and
shall immediately issue the protective decree
as to the covered broker or dealer.
(B) Administration by sipc.--Following
entry of the protective decree, and except as
otherwise provided in this section, the
determination of claims and the liquidation of
assets retained in the receivership of the
covered broker or dealer and not transferred to
the bridge financial company shall be
administered under the Securities Investor
Protection Act of 1970 (15 U.S.C. 78aaa et
seq.) by SIPC, as trustee for the covered
broker or dealer.
(C) Definition of filing date.--For
purposes of the liquidation proceeding, the
term ``filing date'' means the date on which
the Corporation is appointed as receiver of the
covered broker or dealer.
(D) Determination of claims.--As trustee
for the covered broker or dealer, SIPC shall
determine and satisfy, consistent with this
title and with the Securities Investor
Protection Act of 1970 (15 U.S.C. 78aaa et
seq.), all claims against the covered broker or
dealer arising on or before the filing date.
(b) Powers and Duties of SIPC.--
(1) In general.--Except as provided in this
section, upon its appointment as trustee for the
liquidation of a covered broker or dealer, SIPC shall
have all of the powers and duties provided by the
Securities Investor Protection Act of 1970 (15 U.S.C.
78aaa et seq.), including, without limitation, all
rights of action against third parties, and shall
conduct such liquidation in accordance with the terms
of the Securities Investor Protection Act of 1970 (15
U.S.C. 78aaa et seq.), except that SIPC shall have no
powers or duties with respect to assets and liabilities
transferred by the Corporation from the covered broker
or dealer to any bridge financial company established
in accordance with this title.
(2) Limitation of powers.--The exercise by SIPC of
powers and functions as trustee under subsection (a)
shall not impair or impede the exercise of the powers
and duties of the Corporation with regard to--
(A) any action, except as otherwise
provided in this title--
(i) to make funds available under
section 204(d);
(ii) to organize, establish,
operate, or terminate any bridge
financial company;
(iii) to transfer assets and
liabilities;
(iv) to enforce or repudiate
contracts; or
(v) to take any other action
relating to such bridge financial
company under section 210; or
(B) determining claims under subsection
(e).
(3) Protective decree.--SIPC and the Corporation,
in consultation with the Commission, shall jointly
determine the terms of the protective decree to be
filed by SIPC with any court of competent jurisdiction
under section 21 or 27 of the Securities Exchange Act
of 1934 (15 U.S.C. 78u, 78aa), as required by
subsection (a).
(4) Qualified financial contracts.--Notwithstanding
any provision of the Securities Investor Protection Act
of 1970 (15 U.S.C. 78aaa et seq.) to the contrary
(including section 5(b)(2)(C) of that Act (15 U.S.C.
78eee(b)(2)(C))), the rights and obligations of any
party to a qualified financial contract (as that term
is defined in section 210(c)(8)) to which a covered
broker or dealer for which the Corporation has been
appointed receiver is a party shall be governed
exclusively by section 210, including the limitations
and restrictions contained in section 210(c)(10)(B).
(c) Limitation on Court Action.--Except as otherwise
provided in this title, no court may take any action, including
any action pursuant to the Securities Investor Protection Act
of 1970 (15 U.S.C. 78aaa et seq.) or the Bankruptcy Code, to
restrain or affect the exercise of powers or functions of the
Corporation as receiver for a covered broker or dealer and any
claims against the Corporation as such receiver shall be
determined in accordance with subsection (e) and such claims
shall be limited to money damages.
(d) Actions by Corporation as Receiver.--
(1) In general.--Notwithstanding any other
provision of this title, no action taken by the
Corporation as receiver with respect to a covered
broker or dealer shall--
(A) adversely affect the rights of a
customer to customer property or customer name
securities;
(B) diminish the amount or timely payment
of net equity claims of customers; or
(C) otherwise impair the recoveries
provided to a customer under the Securities
Investor Protection Act of 1970 (15 U.S.C.
78aaa et seq.).
(2) Net proceeds.--The net proceeds from any
transfer, sale, or disposition of assets of the covered
broker or dealer, or proceeds thereof by the
Corporation as receiver for the covered broker or
dealer shall be for the benefit of the estate of the
covered broker or dealer, as provided in this title.
(e) Claims Against the Corporation as Receiver.--Any claim
against the Corporation as receiver for a covered broker or
dealer for assets transferred to a bridge financial company
established with respect to such covered broker or dealer--
(1) shall be determined in accordance with section
210(a)(2); and
(2) may be reviewed by the appropriate district or
territorial court of the United States in accordance
with section 210(a)(5).
(f) Satisfaction of Customer Claims.--
(1) Obligations to customers.--Notwithstanding any
other provision of this title, all obligations of a
covered broker or dealer or of any bridge financial
company established with respect to such covered broker
or dealer to a customer relating to, or net equity
claims based upon, customer property or customer name
securities shall be promptly discharged by SIPC, the
Corporation, or the bridge financial company, as
applicable, by the delivery of securities or the making
of payments to or for the account of such customer, in
a manner and in an amount at least as beneficial to the
customer as would have been the case had the actual
proceeds realized from the liquidation of the covered
broker or dealer under this title been distributed in a
proceeding under the Securities Investor Protection Act
of 1970 (15 U.S.C. 78aaa et seq.) without the
appointment of the Corporation as receiver and without
any transfer of assets or liabilities to a bridge
financial company, and with a filing date as of the
date on which the Corporation is appointed as receiver.
(2) Satisfaction of claims by sipc.--SIPC, as
trustee for a covered broker or dealer, shall satisfy
customer claims in the manner and amount provided under
the Securities Investor Protection Act of 1970 (15
U.S.C. 78aaa et seq.), as if the appointment of the
Corporation as receiver had not occurred, and with a
filing date as of the date on which the Corporation is
appointed as receiver. The Corporation shall satisfy
customer claims, to the extent that a customer would
have received more securities or cash with respect to
the allocation of customer property had the covered
financial company been subject to a proceeding under
the Securities Investor Protection Act (15 U.S.C. 78aaa
et seq.) without the appointment of the Corporation as
receiver, and with a filing date as of the date on
which the Corporation is appointed as receiver.
(g) Priorities.--
(1) Customer property.--As trustee for a covered
broker or dealer, SIPC shall allocate customer property
and deliver customer name securities in accordance with
section 8(c) of the Securities Investor Protection Act
of 1970 (15 U.S.C. 78fff-2(c)).
(2) Other claims.--All claims other than those
described in paragraph (1) (including any unpaid claim
by a customer for the allowed net equity claim of such
customer from customer property) shall be paid in
accordance with the priorities in section 210(b).
(h) Rulemaking.--The Commission and the Corporation, after
consultation with SIPC, shall jointly issue rules to implement
this section.
SEC. 206. MANDATORY TERMS AND CONDITIONS FOR ALL ORDERLY LIQUIDATION
ACTIONS.
In taking action under this title, the Corporation shall--
(1) determine that such action is necessary for
purposes of the financial stability of the United
States, and not for the purpose of preserving the
covered financial company;
(2) ensure that the shareholders of a covered
financial company do not receive payment until after
all other claims and the Fund are fully paid;
(3) ensure that unsecured creditors bear losses in
accordance with the priority of claim provisions in
section 210;
(4) ensure that management responsible for the
failed condition of the covered financial company is
removed (if such management has not already been
removed at the time at which the Corporation is
appointed receiver);
(5) ensure that the members of the board of
directors (or body performing similar functions)
responsible for the failed condition of the covered
financial company are removed, if such members have not
already been removed at the time the Corporation is
appointed as receiver; and
(6) not take an equity interest in or become a
shareholder of any covered financial company or any
covered subsidiary.
SEC. 207. DIRECTORS NOT LIABLE FOR ACQUIESCING IN APPOINTMENT OF
RECEIVER.
The members of the board of directors (or body performing
similar functions) of a covered financial company shall not be
liable to the shareholders or creditors thereof for acquiescing
in or consenting in good faith to the appointment of the
Corporation as receiver for the covered financial company under
section 203.
SEC. 208. DISMISSAL AND EXCLUSION OF OTHER ACTIONS.
(a) In General.--Effective as of the date of the
appointment of the Corporation as receiver for the covered
financial company under section 202 or the appointment of SIPC
as trustee for a covered broker or dealer under section 205, as
applicable, any case or proceeding commenced with respect to
the covered financial company under the Bankruptcy Code or the
Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et
seq.) shall be dismissed, upon notice to the bankruptcy court
(with respect to a case commenced under the Bankruptcy Code),
and upon notice to SIPC (with respect to a covered broker or
dealer) and no such case or proceeding may be commenced with
respect to a covered financial company at any time while the
orderly liquidation is pending.
(b) Revesting of Assets.--Effective as of the date of
appointment of the Corporation as receiver, the assets of a
covered financial company shall, to the extent they have vested
in any entity other than the covered financial company as a
result of any case or proceeding commenced with respect to the
covered financial company under the Bankruptcy Code, the
Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et
seq.), or any similar provision of State liquidation or
insolvency law applicable to the covered financial company,
revest in the covered financial company.
(c) Limitation.--Notwithstanding subsections (a) and (b),
any order entered or other relief granted by a bankruptcy court
prior to the date of appointment of the Corporation as receiver
shall continue with the same validity as if an orderly
liquidation had not been commenced.
SEC. 209. RULEMAKING; NON-CONFLICTING LAW.
The Corporation shall, in consultation with the Council,
prescribe such rules or regulations as the Corporation
considers necessary or appropriate to implement this title,
including rules and regulations with respect to the rights,
interests, and priorities of creditors, counterparties,
security entitlement holders, or other persons with respect to
any covered financial company or any assets or other property
of or held by such covered financial company, and address the
potential for conflicts of interest between or among individual
receiverships established under this title or under the Federal
Deposit Insurance Act. To the extent possible, the Corporation
shall seek to harmonize applicable rules and regulations
promulgated under this section with the insolvency laws that
would otherwise apply to a covered financial company.
SEC. 210. POWERS AND DUTIES OF THE CORPORATION.
(a) Powers and Authorities.--
(1) General powers.--
(A) Successor to covered financial
company.--The Corporation shall, upon
appointment as receiver for a covered financial
company under this title, succeed to--
(i) all rights, titles, powers, and
privileges of the covered financial
company and its assets, and of any
stockholder, member, officer, or
director of such company; and
(ii) title to the books, records,
and assets of any previous receiver or
other legal custodian of such covered
financial company.
(B) Operation of the covered financial
company during the period of orderly
liquidation.--The Corporation, as receiver for
a covered financial company, may--
(i) take over the assets of and
operate the covered financial company
with all of the powers of the members
or shareholders, the directors, and the
officers of the covered financial
company, and conduct all business of
the covered financial company;
(ii) collect all obligations and
money owed to the covered financial
company;
(iii) perform all functions of the
covered financial company, in the name
of the covered financial company;
(iv) manage the assets and property
of the covered financial company,
consistent with maximization of the
value of the assets in the context of
the orderly liquidation; and
(v) provide by contract for
assistance in fulfilling any function,
activity, action, or duty of the
Corporation as receiver.
(C) Functions of covered financial company
officers, directors, and shareholders.--The
Corporation may provide for the exercise of any
function by any member or stockholder,
director, or officer of any covered financial
company for which the Corporation has been
appointed as receiver under this title.
(D) Additional powers as receiver.--The
Corporation shall, as receiver for a covered
financial company, and subject to all legally
enforceable and perfected security interests
and all legally enforceable security
entitlements in respect of assets held by the
covered financial company, liquidate, and wind-
up the affairs of a covered financial company,
including taking steps to realize upon the
assets of the covered financial company, in
such manner as the Corporation deems
appropriate, including through the sale of
assets, the transfer of assets to a bridge
financial company established under subsection
(h), or the exercise of any other rights or
privileges granted to the receiver under this
section.
(E) Additional powers with respect to
failing subsidiaries of a covered financial
company.--
(i) In general.--In any case in
which a receiver is appointed for a
covered financial company under section
202, the Corporation may appoint itself
as receiver of any covered subsidiary
of the covered financial company that
is organized under Federal law or the
laws of any State, if the Corporation
and the Secretary jointly determine
that--
(I) the covered subsidiary
is in default or in danger of
default;
(II) such action would
avoid or mitigate serious
adverse effects on the
financial stability or economic
conditions of the United
States; and
(III) such action would
facilitate the orderly
liquidation of the covered
financial company.
(ii) Treatment as covered financial
company.--If the Corporation is
appointed as receiver of a covered
subsidiary of a covered financial
company under clause (i), the covered
subsidiary shall thereafter be
considered a covered financial company
under this title, and the Corporation
shall thereafter have all the powers
and rights with respect to that covered
subsidiary as it has with respect to a
covered financial company under this
title.
(F) Organization of bridge companies.--The
Corporation, as receiver for a covered
financial company, may organize a bridge
financial company under subsection (h).
(G) Merger; transfer of assets and
liabilities.--
(i) In general.--Subject to clauses
(ii) and (iii), the Corporation, as
receiver for a covered financial
company, may--
(I) merge the covered
financial company with another
company; or
(II) transfer any asset or
liability of the covered
financial company (including
any assets and liabilities held
by the covered financial
company for security
entitlement holders, any
customer property, or any
assets and liabilities
associated with any trust or
custody business) without
obtaining any approval,
assignment, or consent with
respect to such transfer.
(ii) Federal agency approval;
antitrust review.--With respect to a
transaction described in clause (i)(I)
that requires approval by a Federal
agency--
(I) the transaction may not
be consummated before the 5th
calendar day after the date of
approval by the Federal agency
responsible for such approval;
(II) if, in connection with
any such approval, a report on
competitive factors is
required, the Federal agency
responsible for such approval
shall promptly notify the
Attorney General of the United
States of the proposed
transaction, and the Attorney
General shall provide the
required report not later than
10 days after the date of the
request; and
(III) if notification under
section 7A of the Clayton Act
is required with respect to
such transaction, then the
required waiting period shall
end on the 15th day after the
date on which the Attorney
General and the Federal Trade
Commission receive such
notification, unless the
waiting period is terminated
earlier under subsection (b)(2)
of such section 7A, or is
extended pursuant to subsection
(e)(2) of such section 7A.
(iii) Setoff.--Subject to the other
provisions of this title, any
transferee of assets from a receiver,
including a bridge financial company,
shall be subject to such claims or
rights as would prevail over the rights
of such transferee in such assets under
applicable noninsolvency law.
(H) Payment of valid obligations.--The
Corporation, as receiver for a covered
financial company, shall, to the extent that
funds are available, pay all valid obligations
of the covered financial company that are due
and payable at the time of the appointment of
the Corporation as receiver, in accordance with
the prescriptions and limitations of this
title.
(I) Applicable noninsolvency law.--Except
as may otherwise be provided in this title, the
applicable noninsolvency law shall be
determined by the noninsolvency choice of law
rules otherwise applicable to the claims,
rights, titles, persons, or entities at issue.
(J) Subpoena authority.--
(i) In general.--The Corporation,
as receiver for a covered financial
company, may, for purposes of carrying
out any power, authority, or duty with
respect to the covered financial
company (including determining any
claim against the covered financial
company and determining and realizing
upon any asset of any person in the
course of collecting money due the
covered financial company), exercise
any power established under section
8(n) of the Federal Deposit Insurance
Act, as if the Corporation were the
appropriate Federal banking agency for
the covered financial company, and the
covered financial company were an
insured depository institution.
(ii) Rule of construction.--This
subparagraph may not be construed as
limiting any rights that the
Corporation, in any capacity, might
otherwise have to exercise any powers
described in clause (i) or under any
other provision of law.
(K) Incidental powers.--The Corporation, as
receiver for a covered financial company, may
exercise all powers and authorities
specifically granted to receivers under this
title, and such incidental powers as shall be
necessary to carry out such powers under this
title.
(L) Utilization of private sector.--In
carrying out its responsibilities in the
management and disposition of assets from the
covered financial company, the Corporation, as
receiver for a covered financial company, may
utilize the services of private persons,
including real estate and loan portfolio asset
management, property management, auction
marketing, legal, and brokerage services, if
such services are available in the private
sector, and the Corporation determines that
utilization of such services is practicable,
efficient, and cost effective.
(M) Shareholders and creditors of covered
financial company.--Notwithstanding any other
provision of law, the Corporation, as receiver
for a covered financial company, shall succeed
by operation of law to the rights, titles,
powers, and privileges described in
subparagraph (A), and shall terminate all
rights and claims that the stockholders and
creditors of the covered financial company may
have against the assets of the covered
financial company or the Corporation arising
out of their status as stockholders or
creditors, except for their right to payment,
resolution, or other satisfaction of their
claims, as permitted under this section. The
Corporation shall ensure that shareholders and
unsecured creditors bear losses, consistent
with the priority of claims provisions under
this section.
(N) Coordination with foreign financial
authorities.--The Corporation, as receiver for
a covered financial company, shall coordinate,
to the maximum extent possible, with the
appropriate foreign financial authorities
regarding the orderly liquidation of any
covered financial company that has assets or
operations in a country other than the United
States.
(O) Restriction on transfers.--
(i) Selection of accounts for
transfer.--If the Corporation
establishes one or more bridge
financial companies with respect to a
covered broker or dealer, the
Corporation shall transfer to one of
such bridge financial companies, all
customer accounts of the covered broker
or dealer, and all associated customer
name securities and customer property,
unless the Corporation, after
consulting with the Commission and
SIPC, determines that--
(I) the customer accounts,
customer name securities, and
customer property are likely to
be promptly transferred to
another broker or dealer that
is registered with the
Commission under section 15(b)
of the Securities Exchange Act
of 1934 (15 U.S.C. 73o(b)) and
is a member of SIPC; or
(II) the transfer of the
accounts to a bridge financial
company would materially
interfere with the ability of
the Corporation to avoid or
mitigate serious adverse
effects on financial stability
or economic conditions in the
United States.
(ii) Transfer of property.--SIPC,
as trustee for the liquidation of the
covered broker or dealer, and the
Commission shall provide any and all
reasonable assistance necessary to
complete such transfers by the
Corporation.
(iii) Customer consent and court
approval not required.--Neither
customer consent nor court approval
shall be required to transfer any
customer accounts or associated
customer name securities or customer
property to a bridge financial company
in accordance with this section.
(iv) Notification of sipc and
sharing of information.--The
Corporation shall identify to SIPC the
customer accounts and associated
customer name securities and customer
property transferred to the bridge
financial company. The Corporation and
SIPC shall cooperate in the sharing of
any information necessary for each
entity to discharge its obligations
under this title and under the
Securities Investor Protection Act of
1970 (15 U.S.C. 78aaa et seq.)
including by providing access to the
books and records of the covered
financial company and any bridge
financial company established in
accordance with this title.
(2) Determination of claims.--
(A) In general.--The Corporation, as
receiver for a covered financial company, shall
report on claims, as set forth in section
203(c)(3). Subject to paragraph (4) of this
subsection, the Corporation, as receiver for a
covered financial company, shall determine
claims in accordance with the requirements of
this subsection and regulations prescribed
under section 209.
(B) Notice requirements.--The Corporation,
as receiver for a covered financial company, in
any case involving the liquidation or winding
up of the affairs of a covered financial
company, shall--
(i) promptly publish a notice to
the creditors of the covered financial
company to present their claims,
together with proof, to the receiver by
a date specified in the notice, which
shall be not earlier than 90 days after
the date of publication of such notice;
and
(ii) republish such notice 1 month
and 2 months, respectively, after the
date of publication under clause (i).
(C) Mailing required.--The Corporation as
receiver shall mail a notice similar to the
notice published under clause (i) or (ii) of
subparagraph (B), at the time of such
publication, to any creditor shown on the books
and records of the covered financial company--
(i) at the last address of the
creditor appearing in such books;
(ii) in any claim filed by the
claimant; or
(iii) upon discovery of the name
and address of a claimant not appearing
on the books and records of the covered
financial company, not later than 30
days after the date of the discovery of
such name and address.
(3) Procedures for resolution of claims.--
(A) Decision period.--
(i) In general.--Prior to the 180th
day after the date on which a claim
against a covered financial company is
filed with the Corporation as receiver,
or such later date as may be agreed as
provided in clause (ii), the
Corporation shall notify the claimant
whether it allows or disallows the
claim, in accordance with subparagraphs
(B), (C), and (D).
(ii) Extension of time.--By written
agreement executed not later than 180
days after the date on which a claim
against a covered financial company is
filed with the Corporation, the period
described in clause (i) may be extended
by written agreement between the
claimant and the Corporation. Failure
to notify the claimant of any
disallowance within the time period set
forth in clause (i), as it may be
extended by agreement under this
clause, shall be deemed to be a
disallowance of such claim, and the
claimant may file or continue an action
in court, as provided in paragraph (4).
(iii) Mailing of notice
sufficient.--The requirements of clause
(i) shall be deemed to be satisfied if
the notice of any decision with respect
to any claim is mailed to the last
address of the claimant which appears--
(I) on the books, records,
or both of the covered
financial company;
(II) in the claim filed by
the claimant; or
(III) in documents
submitted in proof of the
claim.
(iv) Contents of notice of
disallowance.--If the Corporation as
receiver disallows any claim filed
under clause (i), the notice to the
claimant shall contain--
(I) a statement of each
reason for the disallowance;
and
(II) the procedures
required to file or continue an
action in court, as provided in
paragraph (4).
(B) Allowance of proven claim.--The
receiver shall allow any claim received by the
receiver on or before the date specified in the
notice under paragraph (2)(B)(i), which is
proved to the satisfaction of the receiver.
(C) Disallowance of claims filed after end
of filing period.--
(i) In general.--Except as provided
in clause (ii), claims filed after the
date specified in the notice published
under paragraph (2)(B)(i) shall be
disallowed, and such disallowance shall
be final.
(ii) Certain exceptions.--Clause
(i) shall not apply with respect to any
claim filed by a claimant after the
date specified in the notice published
under paragraph (2)(B)(i), and such
claim may be considered by the receiver
under subparagraph (B), if--
(I) the claimant did not
receive notice of the
appointment of the receiver in
time to file such claim before
such date; and
(II) such claim is filed in
time to permit payment of such
claim.
(D) Authority to disallow claims.--
(i) In general.--The Corporation
may disallow any portion of any claim
by a creditor or claim of a security,
preference, setoff, or priority which
is not proved to the satisfaction of
the Corporation.
(ii) Payments to undersecured
creditors.--In the case of a claim
against a covered financial company
that is secured by any property or
other asset of such covered financial
company, the receiver--
(I) may treat the portion
of such claim which exceeds an
amount equal to the fair market
value of such property or other
asset as an unsecured claim;
and
(II) may not make any
payment with respect to such
unsecured portion of the claim,
other than in connection with
the disposition of all claims
of unsecured creditors of the
covered financial company.
(iii) Exceptions.--No provision of
this paragraph shall apply with respect
to--
(I) any extension of credit
from any Federal reserve bank,
or the Corporation, to any
covered financial company; or
(II) subject to clause
(ii), any legally enforceable
and perfected security interest
in the assets of the covered
financial company securing any
such extension of credit.
(E) Legal effect of filing.--
(i) Statute of limitations
tolled.--For purposes of any applicable
statute of limitations, the filing of a
claim with the receiver shall
constitute a commencement of an action.
(ii) No prejudice to other
actions.--Subject to paragraph (8), the
filing of a claim with the receiver
shall not prejudice any right of the
claimant to continue any action which
was filed before the date of
appointment of the receiver for the
covered financial company.
(4) Judicial determination of claims.--
(A) In general.--Subject to subparagraph
(B), a claimant may file suit on a claim (or
continue an action commenced before the date of
appointment of the Corporation as receiver) in
the district or territorial court of the United
States for the district within which the
principal place of business of the covered
financial company is located (and such court
shall have jurisdiction to hear such claim).
(B) Timing.--A claim under subparagraph (A)
may be filed before the end of the 60-day
period beginning on the earlier of--
(i) the end of the period described
in paragraph (3)(A)(i) (or, if extended
by agreement of the Corporation and the
claimant, the period described in
paragraph (3)(A)(ii)) with respect to
any claim against a covered financial
company for which the Corporation is
receiver; or
(ii) the date of any notice of
disallowance of such claim pursuant to
paragraph (3)(A)(i).
(C) Statute of limitations.--If any
claimant fails to file suit on such claim (or
to continue an action on such claim commenced
before the date of appointment of the
Corporation as receiver) prior to the end of
the 60-day period described in subparagraph
(B), the claim shall be deemed to be disallowed
(other than any portion of such claim which was
allowed by the receiver) as of the end of such
period, such disallowance shall be final, and
the claimant shall have no further rights or
remedies with respect to such claim.
(5) Expedited determination of claims.--
(A) Procedure required.--The Corporation
shall establish a procedure for expedited
relief outside of the claims process
established under paragraph (3), for any
claimant that alleges--
(i) having a legally valid and
enforceable or perfected security
interest in property of a covered
financial company or control of any
legally valid and enforceable security
entitlement in respect of any asset
held by the covered financial company
for which the Corporation has been
appointed receiver; and
(ii) that irreparable injury will
occur if the claims procedure
established under paragraph (3) is
followed.
(B) Determination period.--Prior to the end
of the 90-day period beginning on the date on
which a claim is filed in accordance with the
procedures established pursuant to subparagraph
(A), the Corporation shall--
(i) determine--
(I) whether to allow or
disallow such claim, or any
portion thereof; or
(II) whether such claim
should be determined pursuant
to the procedures established
pursuant to paragraph (3);
(ii) notify the claimant of the
determination; and
(iii) if the claim is disallowed,
provide a statement of each reason for
the disallowance and the procedure for
obtaining a judicial determination.
(C) Period for filing or renewing suit.--
Any claimant who files a request for expedited
relief shall be permitted to file suit (or
continue a suit filed before the date of
appointment of the Corporation as receiver
seeking a determination of the rights of the
claimant with respect to such security interest
(or such security entitlement) after the
earlier of--
(i) the end of the 90-day period
beginning on the date of the filing of
a request for expedited relief; or
(ii) the date on which the
Corporation denies the claim or a
portion thereof.
(D) Statute of limitations.--If an action
described in subparagraph (C) is not filed, or
the motion to renew a previously filed suit is
not made, before the end of the 30-day period
beginning on the date on which such action or
motion may be filed in accordance with
subparagraph (C), the claim shall be deemed to
be disallowed as of the end of such period
(other than any portion of such claim which was
allowed by the receiver), such disallowance
shall be final, and the claimant shall have no
further rights or remedies with respect to such
claim.
(E) Legal effect of filing.--
(i) Statute of limitations
tolled.--For purposes of any applicable
statute of limitations, the filing of a
claim with the receiver shall
constitute a commencement of an action.
(ii) No prejudice to other
actions.--Subject to paragraph (8), the
filing of a claim with the receiver
shall not prejudice any right of the
claimant to continue any action which
was filed before the appointment of the
Corporation as receiver for the covered
financial company.
(6) Agreements against interest of the receiver.--
No agreement that tends to diminish or defeat the
interest of the Corporation as receiver in any asset
acquired by the receiver under this section shall be
valid against the receiver, unless such agreement--
(A) is in writing;
(B) was executed by an authorized officer
or representative of the covered financial
company, or confirmed in the ordinary course of
business by the covered financial company; and
(C) has been, since the time of its
execution, an official record of the company or
the party claiming under the agreement provides
documentation, acceptable to the receiver, of
such agreement and its authorized execution or
confirmation by the covered financial company.
(7) Payment of claims.--
(A) In general.--Subject to subparagraph
(B), the Corporation as receiver may, in its
discretion and to the extent that funds are
available, pay creditor claims, in such manner
and amounts as are authorized under this
section, which are--
(i) allowed by the receiver;
(ii) approved by the receiver
pursuant to a final determination
pursuant to paragraph (3) or (5), as
applicable; or
(iii) determined by the final
judgment of a court of competent
jurisdiction.
(B) Limitation.--A creditor shall, in no
event, receive less than the amount that the
creditor is entitled to receive under
paragraphs (2) and (3) of subsection (d), as
applicable.
(C) Payment of dividends on claims.--The
Corporation as receiver may, in its sole
discretion, and to the extent otherwise
permitted by this section, pay dividends on
proven claims at any time, and no liability
shall attach to the Corporation as receiver, by
reason of any such payment or for failure to
pay dividends to a claimant whose claim is not
proved at the time of any such payment.
(D) Rulemaking by the corporation.--The
Corporation may prescribe such rules, including
definitions of terms, as the Corporation deems
appropriate to establish an interest rate for
or to make payments of post-insolvency interest
to creditors holding proven claims against the
receivership estate of a covered financial
company, except that no such interest shall be
paid until the Corporation as receiver has
satisfied the principal amount of all creditor
claims.
(8) Suspension of legal actions.--
(A) In general.--After the appointment of
the Corporation as receiver for a covered
financial company, the Corporation may request
a stay in any judicial action or proceeding in
which such covered financial company is or
becomes a party, for a period of not to exceed
90 days.
(B) Grant of stay by all courts required.--
Upon receipt of a request by the Corporation
pursuant to subparagraph (A), the court shall
grant such stay as to all parties.
(9) Additional rights and duties.--
(A) Prior final adjudication.--The
Corporation shall abide by any final, non-
appealable judgment of any court of competent
jurisdiction that was rendered before the
appointment of the Corporation as receiver.
(B) Rights and remedies of receiver.--In
the event of any appealable judgment, the
Corporation as receiver shall--
(i) have all the rights and
remedies available to the covered
financial company (before the date of
appointment of the Corporation as
receiver under section 202) and the
Corporation, including removal to
Federal court and all appellate rights;
and
(ii) not be required to post any
bond in order to pursue such remedies.
(C) No attachment or execution.--No
attachment or execution may be issued by any
court upon assets in the possession of the
Corporation as receiver for a covered financial
company.
(D) Limitation on judicial review.--Except
as otherwise provided in this title, no court
shall have jurisdiction over--
(i) any claim or action for payment
from, or any action seeking a
determination of rights with respect
to, the assets of any covered financial
company for which the Corporation has
been appointed receiver, including any
assets which the Corporation may
acquire from itself as such receiver;
or
(ii) any claim relating to any act
or omission of such covered financial
company or the Corporation as receiver.
(E) Disposition of assets.--In exercising
any right, power, privilege, or authority as
receiver in connection with any covered
financial company for which the Corporation is
acting as receiver under this section, the
Corporation shall, to the greatest extent
practicable, conduct its operations in a manner
that--
(i) maximizes the net present value
return from the sale or disposition of
such assets;
(ii) minimizes the amount of any
loss realized in the resolution of
cases;
(iii) mitigates the potential for
serious adverse effects to the
financial system;
(iv) ensures timely and adequate
competition and fair and consistent
treatment of offerors; and
(v) prohibits discrimination on the
basis of race, sex, or ethnic group in
the solicitation and consideration of
offers.
(10) Statute of limitations for actions brought by
receiver.--
(A) In general.--Notwithstanding any
provision of any contract, the applicable
statute of limitations with regard to any
action brought by the Corporation as receiver
for a covered financial company shall be--
(i) in the case of any contract
claim, the longer of--
(I) the 6-year period
beginning on the date on which
the claim accrues; or
(II) the period applicable
under State law; and
(ii) in the case of any tort claim,
the longer of--
(I) the 3-year period
beginning on the date on which
the claim accrues; or
(II) the period applicable
under State law.
(B) Date on which a claim accrues.--For
purposes of subparagraph (A), the date on which
the statute of limitations begins to run on any
claim described in subparagraph (A) shall be
the later of--
(i) the date of the appointment of
the Corporation as receiver under this
title; or
(ii) the date on which the cause of
action accrues.
(C) Revival of expired state causes of
action.--
(i) In general.--In the case of any
tort claim described in clause (ii) for
which the applicable statute of
limitations under State law has expired
not more than 5 years before the date
of appointment of the Corporation as
receiver for a covered financial
company, the Corporation may bring an
action as receiver on such claim
without regard to the expiration of the
statute of limitations.
(ii) Claims described.--A tort
claim referred to in clause (i) is a
claim arising from fraud, intentional
misconduct resulting in unjust
enrichment, or intentional misconduct
resulting in substantial loss to the
covered financial company.
(11) Avoidable transfers.--
(A) Fraudulent transfers.--The Corporation,
as receiver for any covered financial company,
may avoid a transfer of any interest of the
covered financial company in property, or any
obligation incurred by the covered financial
company, that was made or incurred at or within
2 years before the date on which the
Corporation was appointed receiver, if--
(i) the covered financial company
voluntarily or involuntarily--
(I) made such transfer or
incurred such obligation with
actual intent to hinder, delay,
or defraud any entity to which
the covered financial company
was or became, on or after the
date on which such transfer was
made or such obligation was
incurred, indebted; or
(II) received less than a
reasonably equivalent value in
exchange for such transferor
obligation; and
(ii) the covered financial company
voluntarily or involuntarily--
(I) was insolvent on the
date that such transfer was
made or such obligation was
incurred, or became insolvent
as a result of such transfer or
obligation;
(II) was engaged in
business or a transaction, or
was about to engage in business
or a transaction, for which any
property remaining with the
covered financial company was
an unreasonably small capital;
(III) intended to incur, or
believed that the covered
financial company would incur,
debts that would be beyond the
ability of the covered
financial company to pay as
such debts matured; or
(IV) made such transfer to
or for the benefit of an
insider, or incurred such
obligation to or for the
benefit of an insider, under an
employment contract and not in
the ordinary course of
business.
(B) Preferential transfers.--The
Corporation as receiver for any covered
financial company may avoid a transfer of an
interest of the covered financial company in
property--
(i) to or for the benefit of a
creditor;
(ii) for or on account of an
antecedent debt that was owed by the
covered financial company before the
transfer was made;
(iii) that was made while the
covered financial company was
insolvent;
(iv) that was made--
(I) 90 days or less before
the date on which the
Corporation was appointed
receiver; or
(II) more than 90 days, but
less than 1 year before the
date on which the Corporation
was appointed receiver, if such
creditor at the time of the
transfer was an insider; and
(v) that enables the creditor to
receive more than the creditor would
receive if--
(I) the covered financial
company had been liquidated
under chapter 7 of the
Bankruptcy Code;
(II) the transfer had not
been made; and
(III) the creditor received
payment of such debt to the
extent provided by the
provisions of chapter 7 of the
Bankruptcy Code.
(C) Post-receivership transactions.--The
Corporation as receiver for any covered
financial company may avoid a transfer of
property of the receivership that occurred
after the Corporation was appointed receiver
that was not authorized under this title by the
Corporation as receiver.
(D) Right of recovery.--To the extent that
a transfer is avoided under subparagraph (A),
(B), or (C), the Corporation may recover, for
the benefit of the covered financial company,
the property transferred or, if a court so
orders, the value of such property (at the time
of such transfer) from--
(i) the initial transferee of such
transfer or the person for whose
benefit such transfer was made; or
(ii) any immediate or mediate
transferee of any such initial
transferee.
(E) Rights of transferee or obligee.--The
Corporation may not recover under subparagraph
(D)(ii) from--
(i) any transferee that takes for
value, including in satisfaction of or
to secure a present or antecedent debt,
in good faith, and without knowledge of
the voidability of the transfer
avoided; or
(ii) any immediate or mediate good
faith transferee of such transferee.
(F) Defenses.--Subject to the other
provisions of this title--
(i) a transferee or obligee from
which the Corporation seeks to recover
a transfer or to avoid an obligation
under subparagraph (A), (B), (C), or
(D) shall have the same defenses
available to a transferee or obligee
from which a trustee seeks to recover a
transfer or avoid an obligation under
sections 547, 548, and 549 of the
Bankruptcy Code; and
(ii) the authority of the
Corporation to recover a transfer or
avoid an obligation shall be subject to
subsections (b) and (c) of section 546,
section 547(c), and section 548(c) of
the Bankruptcy Code.
(G) Rights under this section.--The rights
of the Corporation as receiver under this
section shall be superior to any rights of a
trustee or any other party (other than a
Federal agency) under the Bankruptcy Code.
(H) Rules of construction; definitions.--
For purposes of--
(i) subparagraphs (A) and (B)--
(I) the term ``insider''
has the same meaning as in
section 101(31) of the
Bankruptcy Code;
(II) a transfer is made
when such transfer is so
perfected that a bona fide
purchaser from the covered
financial company against whom
applicable law permits such
transfer to be perfected cannot
acquire an interest in the
property transferred that is
superior to the interest in
such property of the
transferee, but if such
transfer is not so perfected
before the date on which the
Corporation is appointed as
receiver for the covered
financial company, such
transfer is made immediately
before the date of such
appointment; and
(III) the term ``value''
means property, or satisfaction
or securing of a present or
antecedent debt of the covered
financial company, but does not
include an unperformed promise
to furnish support to the
covered financial company; and
(ii) subparagraph (B)--
(I) the covered financial
company is presumed to have
been insolvent on and during
the 90-day period immediately
preceding the date of
appointment of the Corporation
as receiver; and
(II) the term ``insolvent''
has the same meaning as in
section 101(32) of the
Bankruptcy Code.
(12) Setoff.--
(A) Generally.--Except as otherwise
provided in this title, any right of a creditor
to offset a mutual debt owed by the creditor to
any covered financial company that arose before
the Corporation was appointed as receiver for
the covered financial company against a claim
of such creditor may be asserted if enforceable
under applicable noninsolvency law, except to
the extent that--
(i) the claim of the creditor
against the covered financial company
is disallowed;
(ii) the claim was transferred, by
an entity other than the covered
financial company, to the creditor--
(I) after the Corporation
was appointed as receiver of
the covered financial company;
or
(II)(aa) after the 90-day
period preceding the date on
which the Corporation was
appointed as receiver for the
covered financial company; and
(bb) while the covered
financial company was insolvent
(except for a setoff in
connection with a qualified
financial contract); or
(iii) the debt owed to the covered
financial company was incurred by the
covered financial company--
(I) after the 90-day period
preceding the date on which the
Corporation was appointed as
receiver for the covered
financial company;
(II) while the covered
financial company was
insolvent; and
(III) for the purpose of
obtaining a right of setoff
against the covered financial
company (except for a setoff in
connection with a qualified
financial contract).
(B) Insufficiency.--
(i) In general.--Except with
respect to a setoff in connection with
a qualified financial contract, if a
creditor offsets a mutual debt owed to
the covered financial company against a
claim of the covered financial company
on or within the 90-day period
preceding the date on which the
Corporation is appointed as receiver
for the covered financial company, the
Corporation may recover from the
creditor the amount so offset, to the
extent that any insufficiency on the
date of such setoff is less than the
insufficiency on the later of--
(I) the date that is 90
days before the date on which
the Corporation is appointed as
receiver for the covered
financial company; or
(II) the first day on which
there is an insufficiency
during the 90-day period
preceding the date on which the
Corporation is appointed as
receiver for the covered
financial company.
(ii) Definition of insufficiency.--
In this subparagraph, the term
``insufficiency'' means the amount, if
any, by which a claim against the
covered financial company exceeds a
mutual debt owed to the covered
financial company by the holder of such
claim.
(C) Insolvency.--The term ``insolvent'' has
the same meaning as in section 101(32) of the
Bankruptcy Code.
(D) Presumption of insolvency.--For
purposes of this paragraph, the covered
financial company is presumed to have been
insolvent on and during the 90-day period
preceding the date of appointment of the
Corporation as receiver.
(E) Limitation.--Nothing in this paragraph
(12) shall be the basis for any right of setoff
where no such right exists under applicable
noninsolvency law.
(F) Priority claim.--Except as otherwise
provided in this title, the Corporation as
receiver for the covered financial company may
sell or transfer any assets free and clear of
the setoff rights of any party, except that
such party shall be entitled to a claim,
subordinate to the claims payable under
subparagraphs (A), (B), (C), and (D) of
subsection (b)(1), but senior to all other
unsecured liabilities defined in subsection
(b)(1)(E), in an amount equal to the value of
such setoff rights.
(13) Attachment of assets and other injunctive
relief.--Subject to paragraph (14), any court of
competent jurisdiction may, at the request of the
Corporation as receiver for a covered financial
company, issue an order in accordance with Rule 65 of
the Federal Rules of Civil Procedure, including an
order placing the assets of any person designated by
the Corporation under the control of the court and
appointing a trustee to hold such assets.
(14) Standards.--
(A) Showing.--Rule 65 of the Federal Rules
of Civil Procedure shall apply with respect to
any proceeding under paragraph (13), without
regard to the requirement that the applicant
show that the injury, loss, or damage is
irreparable and immediate.
(B) State proceeding.--If, in the case of
any proceeding in a State court, the court
determines that rules of civil procedure
available under the laws of the State provide
substantially similar protections of the right
of the parties to due process as provided under
Rule 65 (as modified with respect to such
proceeding by subparagraph (A)), the relief
sought by the Corporation pursuant to paragraph
(14) may be requested under the laws of such
State.
(15) Treatment of claims arising from breach of
contracts executed by the corporation as receiver.--
Notwithstanding any other provision of this title, any
final and non-appealable judgment for monetary damages
entered against the Corporation as receiver for a
covered financial company for the breach of an
agreement executed or approved by the Corporation after
the date of its appointment shall be paid as an
administrative expense of the receiver. Nothing in this
paragraph shall be construed to limit the power of a
receiver to exercise any rights under contract or law,
including to terminate, breach, cancel, or otherwise
discontinue such agreement.
(16) Accounting and recordkeeping requirements.--
(A) In general.--The Corporation as
receiver for a covered financial company shall,
consistent with the accounting and reporting
practices and procedures established by the
Corporation, maintain a full accounting of each
receivership or other disposition of any
covered financial company.
(B) Annual accounting or report.--With
respect to each receivership to which the
Corporation is appointed, the Corporation shall
make an annual accounting or report, as
appropriate, available to the Secretary and the
Comptroller General of the United States.
(C) Availability of reports.--Any report
prepared pursuant to subparagraph (B) and
section 203(c)(3) shall be made available to
the public by the Corporation.
(D) Recordkeeping requirement.--
(i) In general.--The Corporation
shall prescribe such regulations and
establish such retention schedules as
are necessary to maintain the documents
and records of the Corporation
generated in exercising the authorities
of this title and the records of a
covered financial company for which the
Corporation is appointed receiver, with
due regard for--
(I) the avoidance of
duplicative record retention;
and
(II) the expected
evidentiary needs of the
Corporation as receiver for a
covered financial company and
the public regarding the
records of covered financial
companies.
(ii) Retention of records.--Unless
otherwise required by applicable
Federal law or court order, the
Corporation may not, at any time,
destroy any records that are subject to
clause (i).
(iii) Records defined.--As used in
this subparagraph, the terms
``records'' and ``records of a covered
financial company'' mean any document,
book, paper, map, photograph,
microfiche, microfilm, computer or
electronically-created record generated
or maintained by the covered financial
company in the course of and necessary
to its transaction of business.
(b) Priority of Expenses and Unsecured Claims.--
(1) In general.--Unsecured claims against a covered
financial company, or the Corporation as receiver for
such covered financial company under this section, that
are proven to the satisfaction of the receiver shall
have priority in the following order:
(A) Administrative expenses of the
receiver.
(B) Any amounts owed to the United States,
unless the United States agrees or consents
otherwise.
(C) Wages, salaries, or commissions,
including vacation, severance, and sick leave
pay earned by an individual (other than an
individual described in subparagraph (G)), but
only to the extent of $11,725 for each
individual (as indexed for inflation, by
regulation of the Corporation) earned not later
than 180 days before the date of appointment of
the Corporation as receiver.
(D) Contributions owed to employee benefit
plans arising from services rendered not later
than 180 days before the date of appointment of
the Corporation as receiver, to the extent of
the number of employees covered by each such
plan, multiplied by $11,725 (as indexed for
inflation, by regulation of the Corporation),
less the aggregate amount paid to such
employees under subparagraph (C), plus the
aggregate amount paid by the receivership on
behalf of such employees to any other employee
benefit plan.
(E) Any other general or senior liability
of the covered financial company (which is not
a liability described under subparagraph (F),
(G), or (H)).
(F) Any obligation subordinated to general
creditors (which is not an obligation described
under subparagraph (G) or (H)).
(G) Any wages, salaries, or commissions,
including vacation, severance, and sick leave
pay earned, owed to senior executives and
directors of the covered financial company.
(H) Any obligation to shareholders,
members, general partners, limited partners, or
other persons, with interests in the equity of
the covered financial company arising as a
result of their status as shareholders,
members, general partners, limited partners, or
other persons with interests in the equity of
the covered financial company.
(2) Post-receivership financing priority.--In the
event that the Corporation, as receiver for a covered
financial company, is unable to obtain unsecured credit
for the covered financial company from commercial
sources, the Corporation as receiver may obtain credit
or incur debt on the part of the covered financial
company, which shall have priority over any or all
administrative expenses of the receiver under paragraph
(1)(A).
(3) Claims of the united states.--Unsecured claims
of the United States shall, at a minimum, have a higher
priority than liabilities of the covered financial
company that count as regulatory capital.
(4) Creditors similarly situated.--All claimants of
a covered financial company that are similarly situated
under paragraph (1) shall be treated in a similar
manner, except that the Corporation may take any action
(including making payments, subject to subsection
(o)(1)(D)(i)) that does not comply with this
subsection, if--
(A) the Corporation determines that such
action is necessary--
(i) to maximize the value of the
assets of the covered financial
company;
(ii) to initiate and continue
operations essential to implementation
of the receivership or any bridge
financial company;
(iii) to maximize the present value
return from the sale or other
disposition of the assets of the
covered financial company; or
(iv) to minimize the amount of any
loss realized upon the sale or other
disposition of the assets of the
covered financial company; and
(B) all claimants that are similarly
situated under paragraph (1) receive not less
than the amount provided in paragraphs (2) and
(3) of subsection (d).
(5) Secured claims unaffected.--This section shall
not affect secured claims or security entitlements in
respect of assets or property held by the covered
financial company, except to the extent that the
security is insufficient to satisfy the claim, and then
only with regard to the difference between the claim
and the amount realized from the security.
(6) Priority of expenses and unsecured claims in
the orderly liquidation of sipc member.--Where the
Corporation is appointed as receiver for a covered
broker or dealer, unsecured claims against such covered
broker or dealer, or the Corporation as receiver for
such covered broker or dealer under this section, that
are proven to the satisfaction of the receiver under
section 205(e), shall have the priority prescribed in
paragraph (1), except that--
(A) SIPC shall be entitled to recover
administrative expenses incurred in performing
its responsibilities under section 205 on an
equal basis with the Corporation, in accordance
with paragraph (1)(A);
(B) the Corporation shall be entitled to
recover any amounts paid to customers or to
SIPC pursuant to section 205(f), in accordance
with paragraph (1)(B);
(C) SIPC shall be entitled to recover any
amounts paid out of the SIPC Fund to meet its
obligations under section 205 and under the
Securities Investor Protection Act of 1970 (15
U.S.C. 78aaa et seq.), which claim shall be
subordinate to the claims payable under
subparagraphs (A) and (B) of paragraph (1), but
senior to all other claims; and
(D) the Corporation may, after paying any
proven claims to customers under section 205
and the Securities Investor Protection Act of
1970 (15 U.S.C. 78aaa et seq.), and as provided
above, pay dividends on other proven claims, in
its discretion, and to the extent that funds
are available, in accordance with the
priorities set forth in paragraph (1).
(c) Provisions Relating to Contracts Entered Into Before
Appointment of Receiver.--
(1) Authority to repudiate contracts.--In addition
to any other rights that a receiver may have, the
Corporation as receiver for any covered financial
company may disaffirm or repudiate any contract or
lease--
(A) to which the covered financial company
is a party;
(B) the performance of which the
Corporation as receiver, in the discretion of
the Corporation, determines to be burdensome;
and
(C) the disaffirmance or repudiation of
which the Corporation as receiver determines,
in the discretion of the Corporation, will
promote the orderly administration of the
affairs of the covered financial company.
(2) Timing of repudiation.--The Corporation, as
receiver for any covered financial company, shall
determine whether or not to exercise the rights of
repudiation under this section within a reasonable
period of time.
(3) Claims for damages for repudiation.--
(A) In general.--Except as provided in
paragraphs (4), (5), and (6) and in
subparagraphs (C), (D), and (E) of this
paragraph, the liability of the Corporation as
receiver for a covered financial company for
the disaffirmance or repudiation of any
contract pursuant to paragraph (1) shall be--
(i) limited to actual direct
compensatory damages; and
(ii) determined as of--
(I) the date of the
appointment of the Corporation
as receiver; or
(II) in the case of any
contract or agreement referred
to in paragraph (8), the date
of the disaffirmance or
repudiation of such contract or
agreement.
(B) No liability for other damages.--For
purposes of subparagraph (A), the term ``actual
direct compensatory damages'' does not
include--
(i) punitive or exemplary damages;
(ii) damages for lost profits or
opportunity; or
(iii) damages for pain and
suffering.
(C) Measure of damages for repudiation of
qualified financial contracts.--In the case of
any qualified financial contract or agreement
to which paragraph (8) applies, compensatory
damages shall be--
(i) deemed to include normal and
reasonable costs of cover or other
reasonable measures of damages utilized
in the industries for such contract and
agreement claims; and
(ii) paid in accordance with this
paragraph and subsection (d), except as
otherwise specifically provided in this
subsection.
(D) Measure of damages for repudiation or
disaffirmance of debt obligation.--In the case
of any debt for borrowed money or evidenced by
a security, actual direct compensatory damages
shall be no less than the amount lent plus
accrued interest plus any accreted original
issue discount as of the date the Corporation
was appointed receiver of the covered financial
company and, to the extent that an allowed
secured claim is secured by property the value
of which is greater than the amount of such
claim and any accrued interest through the date
of repudiation or disaffirmance, such accrued
interest pursuant to paragraph (1).
(E) Measure of damages for repudiation or
disaffirmance of contingent obligation.--In the
case of any contingent obligation of a covered
financial company consisting of any obligation
under a guarantee, letter of credit, loan
commitment, or similar credit obligation, the
Corporation may, by rule or regulation,
prescribe that actual direct compensatory
damages shall be no less than the estimated
value of the claim as of the date the
Corporation was appointed receiver of the
covered financial company, as such value is
measured based on the likelihood that such
contingent claim would become fixed and the
probable magnitude thereof.
(4) Leases under which the covered financial
company is the lessee.--
(A) In general.--If the Corporation as
receiver disaffirms or repudiates a lease under
which the covered financial company is the
lessee, the receiver shall not be liable for
any damages (other than damages determined
pursuant to subparagraph (B)) for the
disaffirmance or repudiation of such lease.
(B) Payments of rent.--Notwithstanding
subparagraph (A), the lessor under a lease to
which subparagraph (A) would otherwise apply
shall--
(i) be entitled to the contractual
rent accruing before the later of the
date on which--
(I) the notice of
disaffirmance or repudiation is
mailed; or
(II) the disaffirmance or
repudiation becomes effective,
unless the lessor is in default
or breach of the terms of the
lease;
(ii) have no claim for damages
under any acceleration clause or other
penalty provision in the lease; and
(iii) have a claim for any unpaid
rent, subject to all appropriate
offsets and defenses, due as of the
date of the appointment which shall be
paid in accordance with this paragraph
and subsection (d).
(5) Leases under which the covered financial
company is the lessor.--
(A) In general.--If the Corporation as
receiver for a covered financial company
repudiates an unexpired written lease of real
property of the covered financial company under
which the covered financial company is the
lessor and the lessee is not, as of the date of
such repudiation, in default, the lessee under
such lease may either--
(i) treat the lease as terminated
by such repudiation; or
(ii) remain in possession of the
leasehold interest for the balance of
the term of the lease, unless the
lessee defaults under the terms of the
lease after the date of such
repudiation.
(B) Provisions applicable to lessee
remaining in possession.--If any lessee under a
lease described in subparagraph (A) remains in
possession of a leasehold interest pursuant to
clause (ii) of subparagraph (A)--
(i) the lessee--
(I) shall continue to pay
the contractual rent pursuant
to the terms of the lease after
the date of the repudiation of
such lease; and
(II) may offset against any
rent payment which accrues
after the date of the
repudiation of the lease, any
damages which accrue after such
date due to the nonperformance
of any obligation of the
covered financial company under
the lease after such date; and
(ii) the Corporation as receiver
shall not be liable to the lessee for
any damages arising after such date as
a result of the repudiation, other than
the amount of any offset allowed under
clause (i)(II).
(6) Contracts for the sale of real property.--
(A) In general.--If the receiver repudiates
any contract (which meets the requirements of
subsection (a)(6)) for the sale of real
property, and the purchaser of such real
property under such contract is in possession
and is not, as of the date of such repudiation,
in default, such purchaser may either--
(i) treat the contract as
terminated by such repudiation; or
(ii) remain in possession of such
real property.
(B) Provisions applicable to purchaser
remaining in possession.--If any purchaser of
real property under any contract described in
subparagraph (A) remains in possession of such
property pursuant to clause (ii) of
subparagraph (A)--
(i) the purchaser--
(I) shall continue to make
all payments due under the
contract after the date of the
repudiation of the contract;
and
(II) may offset against any
such payments any damages which
accrue after such date due to
the nonperformance (after such
date) of any obligation of the
covered financial company under
the contract; and
(ii) the Corporation as receiver
shall--
(I) not be liable to the
purchaser for any damages
arising after such date as a
result of the repudiation,
other than the amount of any
offset allowed under clause
(i)(II);
(II) deliver title to the
purchaser in accordance with
the provisions of the contract;
and
(III) have no obligation
under the contract other than
the performance required under
subclause (II).
(C) Assignment and sale allowed.--
(i) In general.--No provision of
this paragraph shall be construed as
limiting the right of the Corporation
as receiver to assign the contract
described in subparagraph (A) and sell
the property, subject to the contract
and the provisions of this paragraph.
(ii) No liability after assignment
and sale.--If an assignment and sale
described in clause (i) is consummated,
the Corporation as receiver shall have
no further liability under the contract
described in subparagraph (A) or with
respect to the real property which was
the subject of such contract.
(7) Provisions applicable to service contracts.--
(A) Services performed before
appointment.--In the case of any contract for
services between any person and any covered
financial company for which the Corporation has
been appointed receiver, any claim of such
person for services performed before the date
of appointment shall be--
(i) a claim to be paid in
accordance with subsections (a), (b),
and (d); and
(ii) deemed to have arisen as of
the date on which the receiver was
appointed.
(B) Services performed after appointment
and prior to repudiation.--If, in the case of
any contract for services described in
subparagraph (A), the Corporation as receiver
accepts performance by the other person before
making any determination to exercise the right
of repudiation of such contract under this
section--
(i) the other party shall be paid
under the terms of the contract for the
services performed; and
(ii) the amount of such payment
shall be treated as an administrative
expense of the receivership.
(C) Acceptance of performance no bar to
subsequent repudiation.--The acceptance by the
Corporation as receiver for services referred
to in subparagraph (B) in connection with a
contract described in subparagraph (B) shall
not affect the right of the Corporation as
receiver to repudiate such contract under this
section at any time after such performance.
(8) Certain qualified financial contracts.--
(A) Rights of parties to contracts.--
Subject to subsection (a)(8) and paragraphs (9)
and (10) of this subsection, and
notwithstanding any other provision of this
section, any other provision of Federal law, or
the law of any State, no person shall be stayed
or prohibited from exercising--
(i) any right that such person has
to cause the termination, liquidation,
or acceleration of any qualified
financial contract with a covered
financial company which arises upon the
date of appointment of the Corporation
as receiver for such covered financial
company or at any time after such
appointment;
(ii) any right under any security
agreement or arrangement or other
credit enhancement related to one or
more qualified financial contracts
described in clause (i); or
(iii) any right to offset or net
out any termination value, payment
amount, or other transfer obligation
arising under or in connection with 1
or more contracts or agreements
described in clause (i), including any
master agreement for such contracts or
agreements.
(B) Applicability of other provisions.--
Subsection (a)(8) shall apply in the case of
any judicial action or proceeding brought
against the Corporation as receiver referred to
in subparagraph (A), or the subject covered
financial company, by any party to a contract
or agreement described in subparagraph (A)(i)
with such covered financial company.
(C) Certain transfers not avoidable.--
(i) In general.--Notwithstanding
subsection (a)(11), (a)(12), or
(c)(12), section 5242 of the Revised
Statutes of the United States, or any
other provision of Federal or State law
relating to the avoidance of
preferential or fraudulent transfers,
the Corporation, whether acting as the
Corporation or as receiver for a
covered financial company, may not
avoid any transfer of money or other
property in connection with any
qualified financial contract with a
covered financial company.
(ii) Exception for certain
transfers.--Clause (i) shall not apply
to any transfer of money or other
property in connection with any
qualified financial contract with a
covered financial company if the
transferee had actual intent to hinder,
delay, or defraud such company, the
creditors of such company, or the
Corporation as receiver appointed for
such company.
(D) Certain contracts and agreements
defined.--For purposes of this subsection, the
following definitions shall apply:
(i) Qualified financial contract.--
The term ``qualified financial
contract'' means any securities
contract, commodity contract, forward
contract, repurchase agreement, swap
agreement, and any similar agreement
that the Corporation determines by
regulation, resolution, or order to be
a qualified financial contract for
purposes of this paragraph.
(ii) Securities contract.--The term
``securities contract''--
(I) means a contract for
the purchase, sale, or loan of
a security, a certificate of
deposit, a mortgage loan, any
interest in a mortgage loan, a
group or index of securities,
certificates of deposit, or
mortgage loans or interests
therein (including any interest
therein or based on the value
thereof), or any option on any
of the foregoing, including any
option to purchase or sell any
such security, certificate of
deposit, mortgage loan,
interest, group or index, or
option, and including any
repurchase or reverse
repurchase transaction on any
such security, certificate of
deposit, mortgage loan,
interest, group or index, or
option (whether or not such
repurchase or reverse
repurchase transaction is a
``repurchase agreement'', as
defined in clause (v));
(II) does not include any
purchase, sale, or repurchase
obligation under a
participation in a commercial
mortgage loan unless the
Corporation determines by
regulation, resolution, or
order to include any such
agreement within the meaning of
such term;
(III) means any option
entered into on a national
securities exchange relating to
foreign currencies;
(IV) means the guarantee
(including by novation) by or
to any securities clearing
agency of any settlement of
cash, securities, certificates
of deposit, mortgage loans or
interests therein, group or
index of securities,
certificates of deposit or
mortgage loans or interests
therein (including any interest
therein or based on the value
thereof) or an option on any of
the foregoing, including any
option to purchase or sell any
such security, certificate of
deposit, mortgage loan,
interest, group or index, or
option (whether or not such
settlement is in connection
with any agreement or
transaction referred to in
subclauses (I) through (XII)
(other than subclause (II)));
(V) means any margin loan;
(VI) means any extension of
credit for the clearance or
settlement of securities
transactions;
(VII) means any loan
transaction coupled with a
securities collar transaction,
any prepaid securities forward
transaction, or any total
return swap transaction coupled
with a securities sale
transaction;
(VIII) means any other
agreement or transaction that
is similar to any agreement or
transaction referred to in this
clause;
(IX) means any combination
of the agreements or
transactions referred to in
this clause;
(X) means any option to
enter into any agreement or
transaction referred to in this
clause;
(XI) means a master
agreement that provides for an
agreement or transaction
referred to in any of
subclauses (I) through (X),
other than subclause (II),
together with all supplements
to any such master agreement,
without regard to whether the
master agreement provides for
an agreement or transaction
that is not a securities
contract under this clause,
except that the master
agreement shall be considered
to be a securities contract
under this clause only with
respect to each agreement or
transaction under the master
agreement that is referred to
in any of subclauses (I)
through (X), other than
subclause (II); and
(XII) means any security
agreement or arrangement or
other credit enhancement
related to any agreement or
transaction referred to in this
clause, including any guarantee
or reimbursement obligation in
connection with any agreement
or transaction referred to in
this clause.
(iii) Commodity contract.--The term
``commodity contract'' means--
(I) with respect to a
futures commission merchant, a
contract for the purchase or
sale of a commodity for future
delivery on, or subject to the
rules of, a contract market or
board of trade;
(II) with respect to a
foreign futures commission
merchant, a foreign future;
(III) with respect to a
leverage transaction merchant,
a leverage transaction;
(IV) with respect to a
clearing organization, a
contract for the purchase or
sale of a commodity for future
delivery on, or subject to the
rules of, a contract market or
board of trade that is cleared
by such clearing organization,
or commodity option traded on,
or subject to the rules of, a
contract market or board of
trade that is cleared by such
clearing organization;
(V) with respect to a
commodity options dealer, a
commodity option;
(VI) any other agreement or
transaction that is similar to
any agreement or transaction
referred to in this clause;
(VII) any combination of
the agreements or transactions
referred to in this clause;
(VIII) any option to enter
into any agreement or
transaction referred to in this
clause;
(IX) a master agreement
that provides for an agreement
or transaction referred to in
any of subclauses (I) through
(VIII), together with all
supplements to any such master
agreement, without regard to
whether the master agreement
provides for an agreement or
transaction that is not a
commodity contract under this
clause, except that the master
agreement shall be considered
to be a commodity contract
under this clause only with
respect to each agreement or
transaction under the master
agreement that is referred to
in any of subclauses (I)
through (VIII); or
(X) any security agreement
or arrangement or other credit
enhancement related to any
agreement or transaction
referred to in this clause,
including any guarantee or
reimbursement obligation in
connection with any agreement
or transaction referred to in
this clause.
(iv) Forward contract.--The term
``forward contract'' means--
(I) a contract (other than
a commodity contract) for the
purchase, sale, or transfer of
a commodity or any similar
good, article, service, right,
or interest which is presently
or in the future becomes the
subject of dealing in the
forward contract trade, or
product or byproduct thereof,
with a maturity date that is
more than 2 days after the date
on which the contract is
entered into, including a
repurchase or reverse
repurchase transaction (whether
or not such repurchase or
reverse repurchase transaction
is a ``repurchase agreement'',
as defined in clause (v)),
consignment, lease, swap, hedge
transaction, deposit, loan,
option, allocated transaction,
unallocated transaction, or any
other similar agreement;
(II) any combination of
agreements or transactions
referred to in subclauses (I)
and (III);
(III) any option to enter
into any agreement or
transaction referred to in
subclause (I) or (II);
(IV) a master agreement
that provides for an agreement
or transaction referred to in
subclause (I), (II), or (III),
together with all supplements
to any such master agreement,
without regard to whether the
master agreement provides for
an agreement or transaction
that is not a forward contract
under this clause, except that
the master agreement shall be
considered to be a forward
contract under this clause only
with respect to each agreement
or transaction under the master
agreement that is referred to
in subclause (I), (II), or
(III); or
(V) any security agreement
or arrangement or other credit
enhancement related to any
agreement or transaction
referred to in subclause (I),
(II), (III), or (IV), including
any guarantee or reimbursement
obligation in connection with
any agreement or transaction
referred to in any such
subclause.
(v) Repurchase agreement.--The term
``repurchase agreement'' (which
definition also applies to a reverse
repurchase agreement)--
(I) means an agreement,
including related terms, which
provides for the transfer of
one or more certificates of
deposit, mortgage related
securities (as such term is
defined in section 3 of the
Securities Exchange Act of
1934), mortgage loans,
interests in mortgage-related
securities or mortgage loans,
eligible bankers' acceptances,
qualified foreign government
securities (which, for purposes
of this clause, means a
security that is a direct
obligation of, or that is fully
guaranteed by, the central
government of a member of the
Organization for Economic
Cooperation and Development, as
determined by regulation or
order adopted by the Board of
Governors), or securities that
are direct obligations of, or
that are fully guaranteed by,
the United States or any agency
of the United States against
the transfer of funds by the
transferee of such certificates
of deposit, eligible bankers'
acceptances, securities,
mortgage loans, or interests
with a simultaneous agreement
by such transferee to transfer
to the transferor thereof
certificates of deposit,
eligible bankers' acceptances,
securities, mortgage loans, or
interests as described above,
at a date certain not later
than 1 year after such
transfers or on demand, against
the transfer of funds, or any
other similar agreement;
(II) does not include any
repurchase obligation under a
participation in a commercial
mortgage loan, unless the
Corporation determines, by
regulation, resolution, or
order to include any such
participation within the
meaning of such term;
(III) means any combination
of agreements or transactions
referred to in subclauses (I)
and (IV);
(IV) means any option to
enter into any agreement or
transaction referred to in
subclause (I) or (III);
(V) means a master
agreement that provides for an
agreement or transaction
referred to in subclause (I),
(III), or (IV), together with
all supplements to any such
master agreement, without
regard to whether the master
agreement provides for an
agreement or transaction that
is not a repurchase agreement
under this clause, except that
the master agreement shall be
considered to be a repurchase
agreement under this subclause
only with respect to each
agreement or transaction under
the master agreement that is
referred to in subclause (I),
(III), or (IV); and
(VI) means any security
agreement or arrangement or
other credit enhancement
related to any agreement or
transaction referred to in
subclause (I), (III), (IV), or
(V), including any guarantee or
reimbursement obligation in
connection with any agreement
or transaction referred to in
any such subclause.
(vi) Swap agreement.--The term
``swap agreement'' means--
(I) any agreement,
including the terms and
conditions incorporated by
reference in any such
agreement, which is an interest
rate swap, option, future, or
forward agreement, including a
rate floor, rate cap, rate
collar, cross-currency rate
swap, and basis swap; a spot,
same day-tomorrow, tomorrow-
next, forward, or other foreign
exchange, precious metals, or
other commodity agreement; a
currency swap, option, future,
or forward agreement; an equity
index or equity swap, option,
future, or forward agreement; a
debt index or debt swap,
option, future, or forward
agreement; a total return,
credit spread or credit swap,
option, future, or forward
agreement; a commodity index or
commodity swap, option, future,
or forward agreement; weather
swap, option, future, or
forward agreement; an emissions
swap, option, future, or
forward agreement; or an
inflation swap, option, future,
or forward agreement;
(II) any agreement or
transaction that is similar to
any other agreement or
transaction referred to in this
clause and that is of a type
that has been, is presently, or
in the future becomes, the
subject of recurrent dealings
in the swap or other
derivatives markets (including
terms and conditions
incorporated by reference in
such agreement) and that is a
forward, swap, future, option,
or spot transaction on one or
more rates, currencies,
commodities, equity securities
or other equity instruments,
debt securities or other debt
instruments, quantitative
measures associated with an
occurrence, extent of an
occurrence, or contingency
associated with a financial,
commercial, or economic
consequence, or economic or
financial indices or measures
of economic or financial risk
or value;
(III) any combination of
agreements or transactions
referred to in this clause;
(IV) any option to enter
into any agreement or
transaction referred to in this
clause;
(V) a master agreement that
provides for an agreement or
transaction referred to in
subclause (I), (II), (III), or
(IV), together with all
supplements to any such master
agreement, without regard to
whether the master agreement
contains an agreement or
transaction that is not a swap
agreement under this clause,
except that the master
agreement shall be considered
to be a swap agreement under
this clause only with respect
to each agreement or
transaction under the master
agreement that is referred to
in subclause (I), (II), (III),
or (IV); and
(VI) any security agreement
or arrangement or other credit
enhancement related to any
agreement or transaction
referred to in any of
subclauses (I) through (V),
including any guarantee or
reimbursement obligation in
connection with any agreement
or transaction referred to in
any such clause.
(vii) Definitions relating to
default.--When used in this paragraph
and paragraphs (9) and (10)--
(I) the term ``default''
means, with respect to a
covered financial company, any
adjudication or other official
decision by any court of
competent jurisdiction, or
other public authority pursuant
to which the Corporation has
been appointed receiver; and
(II) the term ``in danger
of default'' means a covered
financial company with respect
to which the Corporation or
appropriate State authority has
determined that--
(aa) in the opinion
of the Corporation or
such authority--
(AA) the
covered
financial
company is not
likely to be
able to pay its
obligations in
the normal
course of
business; and
(BB) there
is no
reasonable
prospect that
the covered
financial
company will be
able to pay
such
obligations
without Federal
assistance; or
(bb) in the opinion
of the Corporation or
such authority--
(AA) the
covered
financial
company has
incurred or is
likely to incur
losses that
will deplete
all or
substantially
all of its
capital; and
(BB) there
is no
reasonable
prospect that
the capital
will be
replenished
without Federal
assistance.
(viii) Treatment of master
agreement as one agreement.--Any master
agreement for any contract or agreement
described in any of clauses (i) through
(vi) (or any master agreement for such
master agreement or agreements),
together with all supplements to such
master agreement, shall be treated as a
single agreement and a single qualified
financial contact. If a master
agreement contains provisions relating
to agreements or transactions that are
not themselves qualified financial
contracts, the master agreement shall
be deemed to be a qualified financial
contract only with respect to those
transactions that are themselves
qualified financial contracts.
(ix) Transfer.--The term
``transfer'' means every mode, direct
or indirect, absolute or conditional,
voluntary or involuntary, of disposing
of or parting with property or with an
interest in property, including
retention of title as a security
interest and foreclosure of the equity
of redemption of the covered financial
company.
(x) Person.--The term ``person''
includes any governmental entity in
addition to any entity included in the
definition of such term in section 1,
title 1, United States Code.
(E) Clarification.--No provision of law
shall be construed as limiting the right or
power of the Corporation, or authorizing any
court or agency to limit or delay, in any
manner, the right or power of the Corporation
to transfer any qualified financial contract or
to disaffirm or repudiate any such contract in
accordance with this subsection.
(F) Walkaway clauses not effective.--
(i) In general.--Notwithstanding
the provisions of subparagraph (A) of
this paragraph and sections 403 and 404
of the Federal Deposit Insurance
Corporation Improvement Act of 1991, no
walkaway clause shall be enforceable in
a qualified financial contract of a
covered financial company in default.
(ii) Limited suspension of certain
obligations.--In the case of a
qualified financial contract referred
to in clause (i), any payment or
delivery obligations otherwise due from
a party pursuant to the qualified
financial contract shall be suspended
from the time at which the Corporation
is appointed as receiver until the
earlier of--
(I) the time at which such
party receives notice that such
contract has been transferred
pursuant to paragraph (10)(A);
or
(II) 5:00 p.m. (eastern
time) on the business day
following the date of the
appointment of the Corporation
as receiver.
(iii) Walkaway clause defined.--For
purposes of this subparagraph, the term
``walkaway clause'' means any provision
in a qualified financial contract that
suspends, conditions, or extinguishes a
payment obligation of a party, in whole
or in part, or does not create a
payment obligation of a party that
would otherwise exist, solely because
of the status of such party as a
nondefaulting party in connection with
the insolvency of a covered financial
company that is a party to the contract
or the appointment of or the exercise
of rights or powers by the Corporation
as receiver for such covered financial
company, and not as a result of the
exercise by a party of any right to
offset, setoff, or net obligations that
exist under the contract, any other
contract between those parties, or
applicable law.
(G) Certain obligations to clearing
organizations.--In the event that the
Corporation has been appointed as receiver for
a covered financial company which is a party to
any qualified financial contract cleared by or
subject to the rules of a clearing organization
(as defined in paragraph (9)(D)), the receiver
shall use its best efforts to meet all margin,
collateral, and settlement obligations of the
covered financial company that arise under
qualified financial contracts (other than any
margin, collateral, or settlement obligation
that is not enforceable against the receiver
under paragraph (8)(F)(i) or paragraph
(10)(B)), as required by the rules of the
clearing organization when due. Notwithstanding
any other provision of this title, if the
receiver fails to satisfy any such margin,
collateral, or settlement obligations under the
rules of the clearing organization, the
clearing organization shall have the immediate
right to exercise, and shall not be stayed from
exercising, all of its rights and remedies
under its rules and applicable law with respect
to any qualified financial contract of the
covered financial company, including, without
limitation, the right to liquidate all
positions and collateral of such covered
financial company under the company's qualified
financial contracts, and suspend or cease to
act for such covered financial company, all in
accordance with the rules of the clearing
organization.
(H) Recordkeeping.--
(i) Joint rulemaking.--The Federal
primary financial regulatory agencies
shall jointly prescribe regulations
requiring that financial companies
maintain such records with respect to
qualified financial contracts
(including market valuations) that the
Federal primary financial regulatory
agencies determine to be necessary or
appropriate in order to assist the
Corporation as receiver for a covered
financial company in being able to
exercise its rights and fulfill its
obligations under this paragraph or
paragraph (9) or (10).
(ii) Time frame.--The Federal
primary financial regulatory agencies
shall prescribe joint final or interim
final regulations not later than 24
months after the date of enactment of
this Act.
(iii) Back-up rulemaking
authority.--If the Federal primary
financial regulatory agencies do not
prescribe joint final or interim final
regulations within the time frame in
clause (ii), the Chairperson of the
Council shall prescribe, in
consultation with the Corporation, the
regulations required by clause (i).
(iv) Categorization and tiering.--
The joint regulations prescribed under
clause (i) shall, as appropriate,
differentiate among financial companies
by taking into consideration their
size, risk, complexity, leverage,
frequency and dollar amount of
qualified financial contracts,
interconnectedness to the financial
system, and any other factors deemed
appropriate.
(9) Transfer of qualified financial contracts.--
(A) In general.--In making any transfer of
assets or liabilities of a covered financial
company in default, which includes any
qualified financial contract, the Corporation
as receiver for such covered financial company
shall either--
(i) transfer to one financial
institution, other than a financial
institution for which a conservator,
receiver, trustee in bankruptcy, or
other legal custodian has been
appointed or which is otherwise the
subject of a bankruptcy or insolvency
proceeding--
(I) all qualified financial
contracts between any person or
any affiliate of such person
and the covered financial
company in default;
(II) all claims of such
person or any affiliate of such
person against such covered
financial company under any
such contract (other than any
claim which, under the terms of
any such contract, is
subordinated to the claims of
general unsecured creditors of
such company);
(III) all claims of such
covered financial company
against such person or any
affiliate of such person under
any such contract; and
(IV) all property securing
or any other credit enhancement
for any contract described in
subclause (I) or any claim
described in subclause (II) or
(III) under any such contract;
or
(ii) transfer none of the qualified
financial contracts, claims, property
or other credit enhancement referred to
in clause (i) (with respect to such
person and any affiliate of such
person).
(B) Transfer to foreign bank, financial
institution, or branch or agency thereof.--In
transferring any qualified financial contracts
and related claims and property under
subparagraph (A)(i), the Corporation as
receiver for the covered financial company
shall not make such transfer to a foreign bank,
financial institution organized under the laws
of a foreign country, or a branch or agency of
a foreign bank or financial institution unless,
under the law applicable to such bank,
financial institution, branch or agency, to the
qualified financial contracts, and to any
netting contract, any security agreement or
arrangement or other credit enhancement related
to one or more qualified financial contracts,
the contractual rights of the parties to such
qualified financial contracts, netting
contracts, security agreements or arrangements,
or other credit enhancements are enforceable
substantially to the same extent as permitted
under this section.
(C) Transfer of contracts subject to the
rules of a clearing organization.--In the event
that the Corporation as receiver for a
financial institution transfers any qualified
financial contract and related claims,
property, or credit enhancement pursuant to
subparagraph (A)(i) and such contract is
cleared by or subject to the rules of a
clearing organization, the clearing
organization shall not be required to accept
the transferee as a member by virtue of the
transfer.
(D) Definitions.--For purposes of this
paragraph--
(i) the term ``financial
institution'' means a broker or dealer,
a depository institution, a futures
commission merchant, a bridge financial
company, or any other institution
determined by the Corporation, by
regulation, to be a financial
institution; and
(ii) the term ``clearing
organization'' has the same meaning as
in section 402 of the Federal Deposit
Insurance Corporation Improvement Act
of 1991.
(10) Notification of transfer.--
(A) In general.--
(i) Notice.--The Corporation shall
provide notice in accordance with
clause (ii), if--
(I) the Corporation as
receiver for a covered
financial company in default or
in danger of default transfers
any assets or liabilities of
the covered financial company;
and
(II) the transfer includes
any qualified financial
contract.
(ii) Timing.--The Corporation as
receiver for a covered financial
company shall notify any person who is
a party to any contract described in
clause (i) of such transfer not later
than 5:00 p.m. (eastern time) on the
business day following the date of the
appointment of the Corporation as
receiver.
(B) Certain rights not enforceable.--
(i) Receivership.--A person who is
a party to a qualified financial
contract with a covered financial
company may not exercise any right that
such person has to terminate,
liquidate, or net such contract under
paragraph (8)(A) solely by reason of or
incidental to the appointment under
this section of the Corporation as
receiver for the covered financial
company (or the insolvency or financial
condition of the covered financial
company for which the Corporation has
been appointed as receiver)--
(I) until 5:00 p.m.
(eastern time) on the business
day following the date of the
appointment; or
(II) after the person has
received notice that the
contract has been transferred
pursuant to paragraph (9)(A).
(ii) Notice.--For purposes of this
paragraph, the Corporation as receiver
for a covered financial company shall
be deemed to have notified a person who
is a party to a qualified financial
contract with such covered financial
company, if the Corporation has taken
steps reasonably calculated to provide
notice to such person by the time
specified in subparagraph (A).
(C) Treatment of bridge financial
company.--For purposes of paragraph (9), a
bridge financial company shall not be
considered to be a financial institution for
which a conservator, receiver, trustee in
bankruptcy, or other legal custodian has been
appointed, or which is otherwise the subject of
a bankruptcy or insolvency proceeding.
(D) Business day defined.--For purposes of
this paragraph, the term ``business day'' means
any day other than any Saturday, Sunday, or any
day on which either the New York Stock Exchange
or the Federal Reserve Bank of New York is
closed.
(11) Disaffirmance or repudiation of qualified
financial contracts.--In exercising the rights of
disaffirmance or repudiation of the Corporation as
receiver with respect to any qualified financial
contract to which a covered financial company is a
party, the Corporation shall either--
(A) disaffirm or repudiate all qualified
financial contracts between--
(i) any person or any affiliate of
such person; and
(ii) the covered financial company
in default; or
(B) disaffirm or repudiate none of the
qualified financial contracts referred to in
subparagraph (A) (with respect to such person
or any affiliate of such person).
(12) Certain security and customer interests not
avoidable.--No provision of this subsection shall be
construed as permitting the avoidance of any--
(A) legally enforceable or perfected
security interest in any of the assets of any
covered financial company, except in accordance
with subsection (a)(11); or
(B) legally enforceable interest in
customer property, security entitlements in
respect of assets or property held by the
covered financial company for any security
entitlement holder.
(13) Authority to enforce contracts.--
(A) In general.--The Corporation, as
receiver for a covered financial company, may
enforce any contract, other than a liability
insurance contract of a director or officer, a
financial institution bond entered into by the
covered financial company, notwithstanding any
provision of the contract providing for
termination, default, acceleration, or exercise
of rights upon, or solely by reason of,
insolvency, the appointment of or the exercise
of rights or powers by the Corporation as
receiver, the filing of the petition pursuant
to section 202(a)(1), or the issuance of the
recommendations or determination, or any
actions or events occurring in connection
therewith or as a result thereof, pursuant to
section 203.
(B) Certain rights not affected.--No
provision of this paragraph may be construed as
impairing or affecting any right of the
Corporation as receiver to enforce or recover
under a liability insurance contract of a
director or officer or financial institution
bond under other applicable law.
(C) Consent requirement and ipso facto
clauses.--
(i) In general.--Except as
otherwise provided by this section, no
person may exercise any right or power
to terminate, accelerate, or declare a
default under any contract to which the
covered financial company is a party
(and no provision in any such contract
providing for such default,
termination, or acceleration shall be
enforceable), or to obtain possession
of or exercise control over any
property of the covered financial
company or affect any contractual
rights of the covered financial
company, without the consent of the
Corporation as receiver for the covered
financial company during the 90 day
period beginning from the appointment
of the Corporation as receiver.
(ii) Exceptions.--No provision of
this subparagraph shall apply to a
director or officer liability insurance
contract or a financial institution
bond, to the rights of parties to
certain qualified financial contracts
pursuant to paragraph (8), or to the
rights of parties to netting contracts
pursuant to subtitle A of title IV of
the Federal Deposit Insurance
Corporation Improvement Act of 1991 (12
U.S.C. 4401 et seq.), or shall be
construed as permitting the Corporation
as receiver to fail to comply with
otherwise enforceable provisions of
such contract.
(D) Contracts to extend credit.--
Notwithstanding any other provision in this
title, if the Corporation as receiver enforces
any contract to extend credit to the covered
financial company or bridge financial company,
any valid and enforceable obligation to repay
such debt shall be paid by the Corporation as
receiver, as an administrative expense of the
receivership.
(14) Exception for federal reserve banks and
corporation security interest.--No provision of this
subsection shall apply with respect to--
(A) any extension of credit from any
Federal reserve bank or the Corporation to any
covered financial company; or
(B) any security interest in the assets of
the covered financial company securing any such
extension of credit.
(15) Savings clause.--The meanings of terms used in
this subsection are applicable for purposes of this
subsection only, and shall not be construed or applied
so as to challenge or affect the characterization,
definition, or treatment of any similar terms under any
other statute, regulation, or rule, including the
Gramm-Leach-Bliley Act, the Legal Certainty for Bank
Products Act of 2000, the securities laws (as that term
is defined in section 3(a)(47) of the Securities
Exchange Act of 1934), and the Commodity Exchange Act.
(16) Enforcement of contracts guaranteed by the
covered financial company.--
(A) In general.--The Corporation, as
receiver for a covered financial company or as
receiver for a subsidiary of a covered
financial company (including an insured
depository institution) shall have the power to
enforce contracts of subsidiaries or affiliates
of the covered financial company, the
obligations under which are guaranteed or
otherwise supported by or linked to the covered
financial company, notwithstanding any
contractual right to cause the termination,
liquidation, or acceleration of such contracts
based solely on the insolvency, financial
condition, or receivership of the covered
financial company, if--
(i) such guaranty or other support
and all related assets and liabilities
are transferred to and assumed by a
bridge financial company or a third
party (other than a third party for
which a conservator, receiver, trustee
in bankruptcy, or other legal custodian
has been appointed, or which is
otherwise the subject of a bankruptcy
or insolvency proceeding) within the
same period of time as the Corporation
is entitled to transfer the qualified
financial contracts of such covered
financial company; or
(ii) the Corporation, as receiver,
otherwise provides adequate protection
with respect to such obligations.
(B) Rule of construction.--For purposes of
this paragraph, a bridge financial company
shall not be considered to be a third party for
which a conservator, receiver, trustee in
bankruptcy, or other legal custodian has been
appointed, or which is otherwise the subject of
a bankruptcy or insolvency proceeding.
(d) Valuation of Claims in Default.--
(1) In general.--Notwithstanding any other
provision of Federal law or the law of any State, and
regardless of the method utilized by the Corporation
for a covered financial company, including transactions
authorized under subsection (h), this subsection shall
govern the rights of the creditors of any such covered
financial company.
(2) Maximum liability.--The maximum liability of
the Corporation, acting as receiver for a covered
financial company or in any other capacity, to any
person having a claim against the Corporation as
receiver or the covered financial company for which the
Corporation is appointed shall equal the amount that
such claimant would have received if--
(A) the Corporation had not been appointed
receiver with respect to the covered financial
company; and
(B) the covered financial company had been
liquidated under chapter 7 of the Bankruptcy
Code, or any similar provision of State
insolvency law applicable to the covered
financial company.
(3) Special provision for orderly liquidation by
sipc.--The maximum liability of the Corporation, acting
as receiver or in its corporate capacity for any
covered broker or dealer to any customer of such
covered broker or dealer, with respect to customer
property of such customer, shall be--
(A) equal to the amount that such customer
would have received with respect to such
customer property in a case initiated by SIPC
under the Securities Investor Protection Act of
1970 (15 U.S.C. 78aaa et seq.); and
(B) determined as of the close of business
on the date on which the Corporation is
appointed as receiver.
(4) Additional payments authorized.--
(A) In general.--Subject to subsection
(o)(1)(D)(i), the Corporation, with the
approval of the Secretary, may make additional
payments or credit additional amounts to or
with respect to or for the account of any
claimant or category of claimants of the
covered financial company, if the Corporation
determines that such payments or credits are
necessary or appropriate to minimize losses to
the Corporation as receiver from the orderly
liquidation of the covered financial company
under this section.
(B) Limitations.--
(i) Prohibition.--The Corporation
shall not make any payments or credit
amounts to any claimant or category of
claimants that would result in any
claimant receiving more than the face
value amount of any claim that is
proven to the satisfaction of the
Corporation.
(ii) No obligation.--
Notwithstanding any other provision of
Federal or State law, or the
Constitution of any State, the
Corporation shall not be obligated, as
a result of having made any payment
under subparagraph (A) or credited any
amount described in subparagraph (A) to
or with respect to, or for the account,
of any claimant or category of
claimants, to make payments to any
other claimant or category of
claimants.
(C) Manner of payment.--The Corporation may
make payments or credit amounts under
subparagraph (A) directly to the claimants or
may make such payments or credit such amounts
to a company other than a covered financial
company or a bridge financial company
established with respect thereto in order to
induce such other company to accept liability
for such claims.
(e) Limitation on Court Action.--Except as provided in this
title, no court may take any action to restrain or affect the
exercise of powers or functions of the receiver hereunder, and
any remedy against the Corporation or receiver shall be limited
to money damages determined in accordance with this title.
(f) Liability of Directors and Officers.--
(1) In general.--A director or officer of a covered
financial company may be held personally liable for
monetary damages in any civil action described in
paragraph (2) by, on behalf of, or at the request or
direction of the Corporation, which action is
prosecuted wholly or partially for the benefit of the
Corporation--
(A) acting as receiver for such covered
financial company;
(B) acting based upon a suit, claim, or
cause of action purchased from, assigned by, or
otherwise conveyed by the Corporation as
receiver; or
(C) acting based upon a suit, claim, or
cause of action purchased from, assigned by, or
otherwise conveyed in whole or in part by a
covered financial company or its affiliate in
connection with assistance provided under this
title.
(2) Actions covered.--Paragraph (1) shall apply
with respect to actions for gross negligence, including
any similar conduct or conduct that demonstrates a
greater disregard of a duty of care (than gross
negligence) including intentional tortious conduct, as
such terms are defined and determined under applicable
State law.
(3) Savings clause.--Nothing in this subsection
shall impair or affect any right of the Corporation
under other applicable law.
(g) Damages.--In any proceeding related to any claim
against a director, officer, employee, agent, attorney,
accountant, or appraiser of a covered financial company, or any
other party employed by or providing services to a covered
financial company, recoverable damages determined to result
from the improvident or otherwise improper use or investment of
any assets of the covered financial company shall include
principal losses and appropriate interest.
(h) Bridge Financial Companies.--
(1) Organization.--
(A) Purpose.--The Corporation, as receiver
for one or more covered financial companies or
in anticipation of being appointed receiver for
one or more covered financial companies, may
organize one or more bridge financial companies
in accordance with this subsection.
(B) Authorities.--Upon the creation of a
bridge financial company under subparagraph (A)
with respect to a covered financial company,
such bridge financial company may--
(i) assume such liabilities
(including liabilities associated with
any trust or custody business, but
excluding any liabilities that count as
regulatory capital) of such covered
financial company as the Corporation
may, in its discretion, determine to be
appropriate;
(ii) purchase such assets
(including assets associated with any
trust or custody business) of such
covered financial company as the
Corporation may, in its discretion,
determine to be appropriate; and
(iii) perform any other temporary
function which the Corporation may, in
its discretion, prescribe in accordance
with this section.
(2) Charter and establishment.--
(A) Establishment.--Except as provided in
subparagraph (H), where the covered financial
company is a covered broker or dealer, the
Corporation, as receiver for a covered
financial company, may grant a Federal charter
to and approve articles of association for one
or more bridge financial company or companies,
with respect to such covered financial company
which shall, by operation of law and
immediately upon issuance of its charter and
approval of its articles of association, be
established and operate in accordance with, and
subject to, such charter, articles, and this
section.
(B) Management.--Upon its establishment, a
bridge financial company shall be under the
management of a board of directors appointed by
the Corporation.
(C) Articles of association.--The articles
of association and organization certificate of
a bridge financial company shall have such
terms as the Corporation may provide, and shall
be executed by such representatives as the
Corporation may designate.
(D) Terms of charter; rights and
privileges.--Subject to and in accordance with
the provisions of this subsection, the
Corporation shall--
(i) establish the terms of the
charter of a bridge financial company
and the rights, powers, authorities,
and privileges of a bridge financial
company granted by the charter or as an
incident thereto; and
(ii) provide for, and establish the
terms and conditions governing, the
management (including the bylaws and
the number of directors of the board of
directors) and operations of the bridge
financial company.
(E) Transfer of rights and privileges of
covered financial company.--
(i) In general.--Notwithstanding
any other provision of Federal or State
law, the Corporation may provide for a
bridge financial company to succeed to
and assume any rights, powers,
authorities, or privileges of the
covered financial company with respect
to which the bridge financial company
was established and, upon such
determination by the Corporation, the
bridge financial company shall
immediately and by operation of law
succeed to and assume such rights,
powers, authorities, and privileges.
(ii) Effective without approval.--
Any succession to or assumption by a
bridge financial company of rights,
powers, authorities, or privileges of a
covered financial company under clause
(i) or otherwise shall be effective
without any further approval under
Federal or State law, assignment, or
consent with respect thereto.
(F) Corporate governance and election and
designation of body of law.--To the extent
permitted by the Corporation and consistent
with this section and any rules, regulations,
or directives issued by the Corporation under
this section, a bridge financial company may
elect to follow the corporate governance
practices and procedures that are applicable to
a corporation incorporated under the general
corporation law of the State of Delaware, or
the State of incorporation or organization of
the covered financial company with respect to
which the bridge financial company was
established, as such law may be amended from
time to time.
(G) Capital.--
(i) Capital not required.--
Notwithstanding any other provision of
Federal or State law, a bridge
financial company may, if permitted by
the Corporation, operate without any
capital or surplus, or with such
capital or surplus as the Corporation
may in its discretion determine to be
appropriate.
(ii) No contribution by the
corporation required.--The Corporation
is not required to pay capital into a
bridge financial company or to issue
any capital stock on behalf of a bridge
financial company established under
this subsection.
(iii) Authority.--If the
Corporation determines that such action
is advisable, the Corporation may cause
capital stock or other securities of a
bridge financial company established
with respect to a covered financial
company to be issued and offered for
sale in such amounts and on such terms
and conditions as the Corporation may,
in its discretion, determine.
(iv) Operating funds in lieu of
capital and implementation plan.--Upon
the organization of a bridge financial
company, and thereafter as the
Corporation may, in its discretion,
determine to be necessary or advisable,
the Corporation may make available to
the bridge financial company, subject
to the plan described in subsection
(n)(9), funds for the operation of the
bridge financial company in lieu of
capital.
(H) Bridge brokers or dealers.--
(i) In general.--The Corporation,
as receiver for a covered broker or
dealer, may approve articles of
association for one or more bridge
financial companies with respect to
such covered broker or dealer, which
bridge financial company or companies
shall, by operation of law and
immediately upon approval of its
articles of association--
(I) be established and
deemed registered with the
Commission under the Securities
Exchange Act of 1934 and a
member of SIPC;
(II) operate in accordance
with such articles and this
section; and
(III) succeed to any and
all registrations and
memberships of the covered
financial company with or in
any self-regulatory
organizations.
(ii) Other requirements.--Except as
provided in clause (i), and
notwithstanding any other provision of
this section, the bridge financial
company shall be subject to the Federal
securities laws and all requirements
with respect to being a member of a
self-regulatory organization, unless
exempted from any such requirements by
the Commission, as is necessary or
appropriate in the public interest or
for the protection of investors.
(iii) Treatment of customers.--
Except as otherwise provided by this
title, any customer of the covered
broker or dealer whose account is
transferred to a bridge financial
company shall have all the rights,
privileges, and protections under
section 205(f) and under the Securities
Investor Protection Act of 1970 (15
U.S.C. 78aaa et seq.), that such
customer would have had if the account
were not transferred from the covered
financial company under this
subparagraph.
(iv) Operation of bridge brokers or
dealers.--Notwithstanding any other
provision of this title, the
Corporation shall not operate any
bridge financial company created by the
Corporation under this title with
respect to a covered broker or dealer
in such a manner as to adversely affect
the ability of customers to promptly
access their customer property in
accordance with applicable law.
(3) Interests in and assets and obligations of
covered financial company.--Notwithstanding paragraph
(1) or (2) or any other provision of law--
(A) a bridge financial company shall
assume, acquire, or succeed to the assets or
liabilities of a covered financial company
(including the assets or liabilities associated
with any trust or custody business) only to the
extent that such assets or liabilities are
transferred by the Corporation to the bridge
financial company in accordance with, and
subject to the restrictions set forth in,
paragraph (1)(B); and
(B) a bridge financial company shall not
assume, acquire, or succeed to any obligation
that a covered financial company for which the
Corporation has been appointed receiver may
have to any shareholder, member, general
partner, limited partner, or other person with
an interest in the equity of the covered
financial company that arises as a result of
the status of that person having an equity
claim in the covered financial company.
(4) Bridge financial company treated as being in
default for certain purposes.--A bridge financial
company shall be treated as a covered financial company
in default at such times and for such purposes as the
Corporation may, in its discretion, determine.
(5) Transfer of assets and liabilities.--
(A) Authority of corporation.--The
Corporation, as receiver for a covered
financial company, may transfer any assets and
liabilities of a covered financial company
(including any assets or liabilities associated
with any trust or custody business) to one or
more bridge financial companies, in accordance
with and subject to the restrictions of
paragraph (1).
(B) Subsequent transfers.--At any time
after the establishment of a bridge financial
company with respect to a covered financial
company, the Corporation, as receiver, may
transfer any assets and liabilities of such
covered financial company as the Corporation
may, in its discretion, determine to be
appropriate in accordance with and subject to
the restrictions of paragraph (1).
(C) Treatment of trust or custody
business.--For purposes of this paragraph, the
trust or custody business, including fiduciary
appointments, held by any covered financial
company is included among its assets and
liabilities.
(D) Effective without approval.--The
transfer of any assets or liabilities,
including those associated with any trust or
custody business of a covered financial
company, to a bridge financial company shall be
effective without any further approval under
Federal or State law, assignment, or consent
with respect thereto.
(E) Equitable treatment of similarly
situated creditors.--The Corporation shall
treat all creditors of a covered financial
company that are similarly situated under
subsection (b)(1), in a similar manner in
exercising the authority of the Corporation
under this subsection to transfer any assets or
liabilities of the covered financial company to
one or more bridge financial companies
established with respect to such covered
financial company, except that the Corporation
may take any action (including making payments,
subject to subsection (o)(1)(D)(i)) that does
not comply with this subparagraph, if--
(i) the Corporation determines that
such action is necessary--
(I) to maximize the value
of the assets of the covered
financial company;
(II) to maximize the
present value return from the
sale or other disposition of
the assets of the covered
financial company; or
(III) to minimize the
amount of any loss realized
upon the sale or other
disposition of the assets of
the covered financial company;
and
(ii) all creditors that are
similarly situated under subsection
(b)(1) receive not less than the amount
provided under paragraphs (2) and (3)
of subsection (d).
(F) Limitation on transfer of
liabilities.--Notwithstanding any other
provision of law, the aggregate amount of
liabilities of a covered financial company that
are transferred to, or assumed by, a bridge
financial company from a covered financial
company may not exceed the aggregate amount of
the assets of the covered financial company
that are transferred to, or purchased by, the
bridge financial company from the covered
financial company.
(6) Stay of judicial action.--Any judicial action
to which a bridge financial company becomes a party by
virtue of its acquisition of any assets or assumption
of any liabilities of a covered financial company shall
be stayed from further proceedings for a period of not
longer than 45 days (or such longer period as may be
agreed to upon the consent of all parties) at the
request of the bridge financial company.
(7) Agreements against interest of the bridge
financial company.--No agreement that tends to diminish
or defeat the interest of the bridge financial company
in any asset of a covered financial company acquired by
the bridge financial company shall be valid against the
bridge financial company, unless such agreement--
(A) is in writing;
(B) was executed by an authorized officer
or representative of the covered financial
company or confirmed in the ordinary course of
business by the covered financial company; and
(C) has been on the official record of the
company, since the time of its execution, or
with which, the party claiming under the
agreement provides documentation of such
agreement and its authorized execution or
confirmation by the covered financial company
that is acceptable to the receiver.
(8) No federal status.--
(A) Agency status.--A bridge financial
company is not an agency, establishment, or
instrumentality of the United States.
(B) Employee status.--Representatives for
purposes of paragraph (1)(B), directors,
officers, employees, or agents of a bridge
financial company are not, solely by virtue of
service in any such capacity, officers or
employees of the United States. Any employee of
the Corporation or of any Federal
instrumentality who serves at the request of
the Corporation as a representative for
purposes of paragraph (1)(B), director,
officer, employee, or agent of a bridge
financial company shall not--
(i) solely by virtue of service in
any such capacity lose any existing
status as an officer or employee of the
United States for purposes of title 5,
United States Code, or any other
provision of law; or
(ii) receive any salary or benefits
for service in any such capacity with
respect to a bridge financial company
in addition to such salary or benefits
as are obtained through employment with
the Corporation or such Federal
instrumentality.
(9) Funding authorized.--The Corporation may,
subject to the plan described in subsection (n)(9),
provide funding to facilitate any transaction described
in subparagraph (A), (B), (C), or (D) of paragraph (13)
with respect to any bridge financial company, or
facilitate the acquisition by a bridge financial
company of any assets, or the assumption of any
liabilities, of a covered financial company for which
the Corporation has been appointed receiver.
(10) Exempt tax status.--Notwithstanding any other
provision of Federal or State law, a bridge financial
company, its franchise, property, and income shall be
exempt from all taxation now or hereafter imposed by
the United States, by any territory, dependency, or
possession thereof, or by any State, county,
municipality, or local taxing authority.
(11) Federal agency approval; antitrust review.--If
a transaction involving the merger or sale of a bridge
financial company requires approval by a Federal
agency, the transaction may not be consummated before
the 5th calendar day after the date of approval by the
Federal agency responsible for such approval with
respect thereto. If, in connection with any such
approval a report on competitive factors from the
Attorney General is required, the Federal agency
responsible for such approval shall promptly notify the
Attorney General of the proposed transaction and the
Attorney General shall provide the required report
within 10 days of the request. If a notification is
required under section 7A of the Clayton Act with
respect to such transaction, the required waiting
period shall end on the 15th day after the date on
which the Attorney General and the Federal Trade
Commission receive such notification, unless the
waiting period is terminated earlier under section
7A(b)(2) of the Clayton Act, or extended under section
7A(e)(2) of that Act.
(12) Duration of bridge financial company.--Subject
to paragraphs (13) and (14), the status of a bridge
financial company as such shall terminate at the end of
the 2-year period following the date on which it was
granted a charter. The Corporation may, in its
discretion, extend the status of the bridge financial
company as such for no more than 3 additional 1-year
periods.
(13) Termination of bridge financial company
status.--The status of any bridge financial company as
such shall terminate upon the earliest of--
(A) the date of the merger or consolidation
of the bridge financial company with a company
that is not a bridge financial company;
(B) at the election of the Corporation, the
sale of a majority of the capital stock of the
bridge financial company to a company other
than the Corporation and other than another
bridge financial company;
(C) the sale of 80 percent, or more, of the
capital stock of the bridge financial company
to a person other than the Corporation and
other than another bridge financial company;
(D) at the election of the Corporation,
either the assumption of all or substantially
all of the liabilities of the bridge financial
company by a company that is not a bridge
financial company, or the acquisition of all or
substantially all of the assets of the bridge
financial company by a company that is not a
bridge financial company, or other entity as
permitted under applicable law; and
(E) the expiration of the period provided
in paragraph (12), or the earlier dissolution
of the bridge financial company, as provided in
paragraph (15).
(14) Effect of termination events.--
(A) Merger or consolidation.--A merger or
consolidation, described in paragraph (13)(A)
shall be conducted in accordance with, and
shall have the effect provided in, the
provisions of applicable law. For the purpose
of effecting such a merger or consolidation,
the bridge financial company shall be treated
as a corporation organized under the laws of
the State of Delaware (unless the law of
another State has been selected by the bridge
financial company in accordance with paragraph
(2)(F)), and the Corporation shall be treated
as the sole shareholder thereof,
notwithstanding any other provision of State or
Federal law.
(B) Charter conversion.--Following the sale
of a majority of the capital stock of the
bridge financial company, as provided in
paragraph (13)(B), the Corporation may amend
the charter of the bridge financial company to
reflect the termination of the status of the
bridge financial company as such, whereupon the
company shall have all of the rights, powers,
and privileges under its constituent documents
and applicable Federal or State law. In
connection therewith, the Corporation may take
such steps as may be necessary or convenient to
reincorporate the bridge financial company
under the laws of a State and, notwithstanding
any provisions of Federal or State law, such
State-chartered corporation shall be deemed to
succeed by operation of law to such rights,
titles, powers, and interests of the bridge
financial company as the Corporation may
provide, with the same effect as if the bridge
financial company had merged with the State-
chartered corporation under provisions of the
corporate laws of such State.
(C) Sale of stock.--Following the sale of
80 percent or more of the capital stock of a
bridge financial company, as provided in
paragraph (13)(C), the company shall have all
of the rights, powers, and privileges under its
constituent documents and applicable Federal or
State law. In connection therewith, the
Corporation may take such steps as may be
necessary or convenient to reincorporate the
bridge financial company under the laws of a
State and, notwithstanding any provisions of
Federal or State law, the State-chartered
corporation shall be deemed to succeed by
operation of law to such rights, titles, powers
and interests of the bridge financial company
as the Corporation may provide, with the same
effect as if the bridge financial company had
merged with the State-chartered corporation
under provisions of the corporate laws of such
State.
(D) Assumption of liabilities and sale of
assets.--Following the assumption of all or
substantially all of the liabilities of the
bridge financial company, or the sale of all or
substantially all of the assets of the bridge
financial company, as provided in paragraph
(13)(D), at the election of the Corporation,
the bridge financial company may retain its
status as such for the period provided in
paragraph (12) or may be dissolved at the
election of the Corporation.
(E) Amendments to charter.--Following the
consummation of a transaction described in
subparagraph (A), (B), (C), or (D) of paragraph
(13), the charter of the resulting company
shall be amended to reflect the termination of
bridge financial company status, if
appropriate.
(15) Dissolution of bridge financial company.--
(A) In general.--Notwithstanding any other
provision of Federal or State law, if the
status of a bridge financial company as such
has not previously been terminated by the
occurrence of an event specified in
subparagraph (A), (B), (C), or (D) of paragraph
(13)--
(i) the Corporation may, in its
discretion, dissolve the bridge
financial company in accordance with
this paragraph at any time; and
(ii) the Corporation shall promptly
commence dissolution proceedings in
accordance with this paragraph upon the
expiration of the 2-year period
following the date on which the bridge
financial company was chartered, or any
extension thereof, as provided in
paragraph (12).
(B) Procedures.--The Corporation shall
remain the receiver for a bridge financial
company for the purpose of dissolving the
bridge financial company. The Corporation as
receiver for a bridge financial company shall
wind up the affairs of the bridge financial
company in conformity with the provisions of
law relating to the liquidation of covered
financial companies under this title. With
respect to any such bridge financial company,
the Corporation as receiver shall have all the
rights, powers, and privileges and shall
perform the duties related to the exercise of
such rights, powers, or privileges granted by
law to the Corporation as receiver for a
covered financial company under this title and,
notwithstanding any other provision of law, in
the exercise of such rights, powers, and
privileges, the Corporation shall not be
subject to the direction or supervision of any
State agency or other Federal agency.
(16) Authority to obtain credit.--
(A) In general.--A bridge financial company
may obtain unsecured credit and issue unsecured
debt.
(B) Inability to obtain credit.--If a
bridge financial company is unable to obtain
unsecured credit or issue unsecured debt, the
Corporation may authorize the obtaining of
credit or the issuance of debt by the bridge
financial company--
(i) with priority over any or all
of the obligations of the bridge
financial company;
(ii) secured by a lien on property
of the bridge financial company that is
not otherwise subject to a lien; or
(iii) secured by a junior lien on
property of the bridge financial
company that is subject to a lien.
(C) Limitations.--
(i) In general.--The Corporation,
after notice and a hearing, may
authorize the obtaining of credit or
the issuance of debt by a bridge
financial company that is secured by a
senior or equal lien on property of the
bridge financial company that is
subject to a lien, only if--
(I) the bridge financial
company is unable to otherwise
obtain such credit or issue
such debt; and
(II) there is adequate
protection of the interest of
the holder of the lien on the
property with respect to which
such senior or equal lien is
proposed to be granted.
(ii) Hearing.--The hearing required
pursuant to this subparagraph shall be
before a court of the United States,
which shall have jurisdiction to
conduct such hearing and to authorize a
bridge financial company to obtain
secured credit under clause (i).
(D) Burden of proof.--In any hearing under
this paragraph, the Corporation has the burden
of proof on the issue of adequate protection.
(E) Qualified financial contracts.--No
credit or debt obtained or issued by a bridge
financial company may contain terms that impair
the rights of a counterparty to a qualified
financial contract upon a default by the bridge
financial company, other than the priority of
such counterparty's unsecured claim (after the
exercise of rights) relative to the priority of
the bridge financial company's obligations in
respect of such credit or debt, unless such
counterparty consents in writing to any such
impairment.
(17) Effect on debts and liens.--The reversal or
modification on appeal of an authorization under this
subsection to obtain credit or issue debt, or of a
grant under this section of a priority or a lien, does
not affect the validity of any debt so issued, or any
priority or lien so granted, to an entity that extended
such credit in good faith, whether or not such entity
knew of the pendency of the appeal, unless such
authorization and the issuance of such debt, or the
granting of such priority or lien, were stayed pending
appeal.
(i) Sharing Records.--If the Corporation has been appointed
as receiver for a covered financial company, other Federal
regulators shall make all records relating to the covered
financial company available to the Corporation, which may be
used by the Corporation in any manner that the Corporation
determines to be appropriate.
(j) Expedited Procedures for Certain Claims.--
(1) Time for filing notice of appeal.--The notice
of appeal of any order, whether interlocutory or final,
entered in any case brought by the Corporation against
a director, officer, employee, agent, attorney,
accountant, or appraiser of the covered financial
company, or any other person employed by or providing
services to a covered financial company, shall be filed
not later than 30 days after the date of entry of the
order. The hearing of the appeal shall be held not
later than 120 days after the date of the notice of
appeal. The appeal shall be decided not later than 180
days after the date of the notice of appeal.
(2) Scheduling.--The court shall expedite the
consideration of any case brought by the Corporation
against a director, officer, employee, agent, attorney,
accountant, or appraiser of a covered financial company
or any other person employed by or providing services
to a covered financial company. As far as practicable,
the court shall give such case priority on its docket.
(3) Judicial discretion.--The court may modify the
schedule and limitations stated in paragraphs (1) and
(2) in a particular case, based on a specific finding
that the ends of justice that would be served by making
such a modification would outweigh the best interest of
the public in having the case resolved expeditiously.
(k) Foreign Investigations.--The Corporation, as receiver
for any covered financial company, and for purposes of carrying
out any power, authority, or duty with respect to a covered
financial company--
(1) may request the assistance of any foreign
financial authority and provide assistance to any
foreign financial authority in accordance with section
8(v) of the Federal Deposit Insurance Act, as if the
covered financial company were an insured depository
institution, the Corporation were the appropriate
Federal banking agency for the company, and any foreign
financial authority were the foreign banking authority;
and
(2) may maintain an office to coordinate foreign
investigations or investigations on behalf of foreign
financial authorities.
(l) Prohibition on Entering Secrecy Agreements and
Protective Orders.--The Corporation may not enter into any
agreement or approve any protective order which prohibits the
Corporation from disclosing the terms of any settlement of an
administrative or other action for damages or restitution
brought by the Corporation in its capacity as receiver for a
covered financial company.
(m) Liquidation of Certain Covered Financial Companies or
Bridge Financial Companies.--
(1) In general.--Except as specifically provided in
this section, and notwithstanding any other provision
of law, the Corporation, in connection with the
liquidation of any covered financial company or bridge
financial company with respect to which the Corporation
has been appointed as receiver, shall--
(A) in the case of any covered financial
company or bridge financial company that is a
stockbroker, but is not a member of the
Securities Investor Protection Corporation,
apply the provisions of subchapter III of
chapter 7 of the Bankruptcy Code, in respect of
the distribution to any customer of all
customer name security and customer property
and member property, as if such covered
financial company or bridge financial company
were a debtor for purposes of such subchapter;
or
(B) in the case of any covered financial
company or bridge financial company that is a
commodity broker, apply the provisions of
subchapter IV of chapter 7 the Bankruptcy Code,
in respect of the distribution to any customer
of all customer property and member property,
as if such covered financial company or bridge
financial company were a debtor for purposes of
such subchapter.
(2) Definitions.--For purposes of this subsection--
(A) the terms ``customer'', ``customer name
security'', and ``customer property and member
property'' have the same meanings as in
sections 741 and 761 of title 11, United States
Code; and
(B) the terms ``commodity broker'' and
``stockbroker'' have the same meanings as in
section 101 of the Bankruptcy Code.
(n) Orderly Liquidation Fund.--
(1) Establishment.--There is established in the
Treasury of the United States a separate fund to be
known as the ``Orderly Liquidation Fund'', which shall
be available to the Corporation to carry out the
authorities contained in this title, for the cost of
actions authorized by this title, including the orderly
liquidation of covered financial companies, payment of
administrative expenses, the payment of principal and
interest by the Corporation on obligations issued under
paragraph (5), and the exercise of the authorities of
the Corporation under this title.
(2) Proceeds.--Amounts received by the Corporation,
including assessments received under subsection (o),
proceeds of obligations issued under paragraph (5),
interest and other earnings from investments, and
repayments to the Corporation by covered financial
companies, shall be deposited into the Fund.
(3) Management.--The Corporation shall manage the
Fund in accordance with this subsection and the
policies and procedures established under section
203(d).
(4) Investments.--At the request of the
Corporation, the Secretary may invest such portion of
amounts held in the Fund that are not, in the judgment
of the Corporation, required to meet the current needs
of the Corporation, in obligations of the United States
having suitable maturities, as determined by the
Corporation. The interest on and the proceeds from the
sale or redemption of such obligations shall be
credited to the Fund.
(5) Authority to issue obligations.--
(A) Corporation authorized to issue
obligations.--Upon appointment by the Secretary
of the Corporation as receiver for a covered
financial company, the Corporation is
authorized to issue obligations to the
Secretary.
(B) Secretary authorized to purchase
obligations.--The Secretary may, under such
terms and conditions as the Secretary may
require, purchase or agree to purchase any
obligations issued under subparagraph (A), and
for such purpose, the Secretary is authorized
to use as a public debt transaction the
proceeds of the sale of any securities issued
under chapter 31 of title 31, United States
Code, and the purposes for which securities may
be issued under chapter 31 of title 31, United
States Code, are extended to include such
purchases.
(C) Interest rate.--Each purchase of
obligations by the Secretary under this
paragraph shall be upon such terms and
conditions as to yield a return at a rate
determined by the Secretary, taking into
consideration the current average yield on
outstanding marketable obligations of the
United States of comparable maturity, plus an
interest rate surcharge to be determined by the
Secretary, which shall be greater than the
difference between--
(i) the current average rate on an
index of corporate obligations of
comparable maturity; and
(ii) the current average rate on
outstanding marketable obligations of
the United States of comparable
maturity.
(D) Secretary authorized to sell
obligations.--The Secretary may sell, upon such
terms and conditions as the Secretary shall
determine, any of the obligations acquired
under this paragraph.
(E) Public debt transactions.--All
purchases and sales by the Secretary of such
obligations under this paragraph shall be
treated as public debt transactions of the
United States, and the proceeds from the sale
of any obligations acquired by the Secretary
under this paragraph shall be deposited into
the Treasury of the United States as
miscellaneous receipts.
(6) Maximum obligation limitation.--The Corporation
may not, in connection with the orderly liquidation of
a covered financial company, issue or incur any
obligation, if, after issuing or incurring the
obligation, the aggregate amount of such obligations
outstanding under this subsection for each covered
financial company would exceed--
(A) an amount that is equal to 10 percent
of the total consolidated assets of the covered
financial company, based on the most recent
financial statement available, during the 30-
day period immediately following the date of
appointment of the Corporation as receiver (or
a shorter time period if the Corporation has
calculated the amount described under
subparagraph (B)); and
(B) the amount that is equal to 90 percent
of the fair value of the total consolidated
assets of each covered financial company that
are available for repayment, after the time
period described in subparagraph (A).
(7) Rulemaking.--The Corporation and the Secretary
shall jointly, in consultation with the Council,
prescribe regulations governing the calculation of the
maximum obligation limitation defined in this
paragraph.
(8) Rule of construction.--
(A) In general.--Nothing in this section
shall be construed to affect the authority of
the Corporation under subsection (a) or (b) of
section 14 or section 15(c)(5) of the Federal
Deposit Insurance Act (12 U.S.C. 1824,
1825(c)(5)), the management of the Deposit
Insurance Fund by the Corporation, or the
resolution of insured depository institutions,
provided that--
(i) the authorities of the
Corporation contained in this title
shall not be used to assist the Deposit
Insurance Fund or to assist any
financial company under applicable law
other than this Act;
(ii) the authorities of the
Corporation relating to the Deposit
Insurance Fund, or any other
responsibilities of the Corporation
under applicable law other than this
title, shall not be used to assist a
covered financial company pursuant to
this title; and
(iii) the Deposit Insurance Fund
may not be used in any manner to
otherwise circumvent the purposes of
this title.
(B) Valuation.--For purposes of determining
the amount of obligations under this
subsection--
(i) the Corporation shall include
as an obligation any contingent
liability of the Corporation pursuant
to this title; and
(ii) the Corporation shall value
any contingent liability at its
expected cost to the Corporation.
(9) Orderly liquidation and repayment plans.--
(A) Orderly liquidation plan.--Amounts in
the Fund shall be available to the Corporation
with regard to a covered financial company for
which the Corporation is appointed receiver
after the Corporation has developed an orderly
liquidation plan that is acceptable to the
Secretary with regard to such covered financial
company, including the provision and use of
funds, including taking any actions specified
under section 204(d) and subsection
(h)(2)(G)(iv) and (h)(9) of this section, and
payments to third parties. The orderly
liquidation plan shall take into account
actions to avoid or mitigate potential adverse
effects on low income, minority, or underserved
communities affected by the failure of the
covered financial company, and shall provide
for coordination with the primary financial
regulatory agencies, as appropriate, to ensure
that such actions are taken. The Corporation
may, at any time, amend any orderly liquidation
plan approved by the Secretary with the
concurrence of the Secretary.
(B) Mandatory repayment plan.--
(i) In general.--No amount
authorized under paragraph (6)(B) may
be provided by the Secretary to the
Corporation under paragraph (5), unless
an agreement is in effect between the
Secretary and the Corporation that--
(I) provides a specific
plan and schedule to achieve
the repayment of the
outstanding amount of any
borrowing under paragraph (5);
and
(II) demonstrates that
income to the Corporation from
the liquidated assets of the
covered financial company and
assessments under subsection
(o) will be sufficient to
amortize the outstanding
balance within the period
established in the repayment
schedule and pay the interest
accruing on such balance within
the time provided in subsection
(o)(1)(B).
(ii) Consultation with and report
to congress.--The Secretary and the
Corporation shall--
(I) consult with the
Committee on Banking, Housing,
and Urban Affairs of the Senate
and the Committee on Financial
Services of the House of
Representatives on the terms of
any repayment schedule
agreement; and
(II) submit a copy of the
repayment schedule agreement to
the Committees described in
subclause (I) before the end of
the 30-day period beginning on
the date on which any amount is
provided by the Secretary to
the Corporation under paragraph
(5).
(10) Implementation expenses.--
(A) In general.--Reasonable implementation
expenses of the Corporation incurred after the
date of enactment of this Act shall be treated
as expenses of the Council.
(B) Requests for reimbursement.--The
Corporation shall periodically submit a request
for reimbursement for implementation expenses
to the Chairperson of the Council, who shall
arrange for prompt reimbursement to the
Corporation of reasonable implementation
expenses.
(C) Definition.--As used in this paragraph,
the term ``implementation expenses''--
(i) means costs incurred by the
Corporation beginning on the date of
enactment of this Act, as part of its
efforts to implement this title that do
not relate to a particular covered
financial company; and
(ii) includes the costs incurred in
connection with the development of
policies, procedures, rules, and
regulations and other planning
activities of the Corporation
consistent with carrying out this
title.
(o) Assessments.--
(1) Risk-based assessments.--
(A) Eligible financial companies defined.--
For purposes of this subsection, the term
``eligible financial company'' means any bank
holding company with total consolidated assets
equal to or greater than $50,000,000,000 and
any nonbank financial company supervised by the
Board of Governors.
(B) Assessments.--The Corporation shall
charge one or more risk-based assessments in
accordance with the provisions of subparagraph
(D), if such assessments are necessary to pay
in full the obligations issued by the
Corporation to the Secretary under this title
within 60 months of the date of issuance of
such obligations.
(C) Extensions authorized.--The Corporation
may, with the approval of the Secretary, extend
the time period under subparagraph (B), if the
Corporation determines that an extension is
necessary to avoid a serious adverse effect on
the financial system of the United States.
(D) Application of assessments.--To meet
the requirements of subparagraph (B), the
Corporation shall--
(i) impose assessments, as soon as
practicable, on any claimant that
received additional payments or amounts
from the Corporation pursuant to
subsection (b)(4), (d)(4), or
(h)(5)(E), except for payments or
amounts necessary to initiate and
continue operations essential to
implementation of the receivership or
any bridge financial company, to
recover on a cumulative basis, the
entire difference between--
(I) the aggregate value the
claimant received from the
Corporation on a claim pursuant
to this title (including
pursuant to subsection (b)(4),
(d)(4), and (h)(5)(E)), as of
the date on which such value
was received; and
(II) the value the claimant
was entitled to receive from
the Corporation on such claim
solely from the proceeds of the
liquidation of the covered
financial company under this
title; and
(ii) if the amounts to be recovered
on a cumulative basis under clause (i)
are insufficient to meet the
requirements of subparagraph (B), after
taking into account the considerations
set forth in paragraph (4), impose
assessments on--
(I) eligible financial
companies; and
(II) financial companies
with total consolidated assets
equal to or greater than
$50,000,000,000 that are not
eligible financial companies.
(E) Provision of financing.--Payments or
amounts necessary to initiate and continue
operations essential to implementation of the
receivership or any bridge financial company
described in subparagraph (D)(i) shall not
include the provision of financing, as defined
by rule of the Corporation, to third parties.
(2) Graduated assessment rate.--The Corporation
shall impose assessments on a graduated basis, with
financial companies having greater assets and risk
being assessed at a higher rate.
(3) Notification and payment.--The Corporation
shall notify each financial company of that company's
assessment under this subsection. Any financial company
subject to assessment under this subsection shall pay
such assessment in accordance with the regulations
prescribed pursuant to paragraph (6).
(4) Risk-based assessment considerations.--In
imposing assessments under paragraph (1)(D)(ii), the
Corporation shall use a risk matrix. The Council shall
make a recommendation to the Corporation on the risk
matrix to be used in imposing such assessments, and the
Corporation shall take into account any such
recommendation in the establishment of the risk matrix
to be used to impose such assessments. In recommending
or establishing such risk matrix, the Council and the
Corporation, respectively, shall take into account--
(A) economic conditions generally affecting
financial companies so as to allow assessments
to increase during more favorable economic
conditions and to decrease during less
favorable economic conditions;
(B) any assessments imposed on a financial
company or an affiliate of a financial company
that--
(i) is an insured depository
institution, assessed pursuant to
section 7 or 13(c)(4)(G) of the Federal
Deposit Insurance Act;
(ii) is a member of the Securities
Investor Protection Corporation,
assessed pursuant to section 4 of the
Securities Investor Protection Act of
1970 (15 U.S.C. 78ddd);
(iii) is an insured credit union,
assessed pursuant to section
202(c)(1)(A)(i) of the Federal Credit
Union Act (12 U.S.C. 1782(c)(1)(A)(i));
or
(iv) is an insurance company,
assessed pursuant to applicable State
law to cover (or reimburse payments
made to cover) the costs of the
rehabilitation, liquidation, or other
State insolvency proceeding with
respect to 1 or more insurance
companies;
(C) the risks presented by the financial
company to the financial system and the extent
to which the financial company has benefitted,
or likely would benefit, from the orderly
liquidation of a financial company under this
title, including--
(i) the amount, different
categories, and concentrations of
assets of the financial company and its
affiliates, including both on-balance
sheet and off-balance sheet assets;
(ii) the activities of the
financial company and its affiliates;
(iii) the relevant market share of
the financial company and its
affiliates;
(iv) the extent to which the
financial company is leveraged;
(v) the potential exposure to
sudden calls on liquidity precipitated
by economic distress;
(vi) the amount, maturity,
volatility, and stability of the
company's financial obligations to, and
relationship with, other financial
companies;
(vii) the amount, maturity,
volatility, and stability of the
liabilities of the company, including
the degree of reliance on short-term
funding, taking into consideration
existing systems for measuring a
company's risk-based capital;
(viii) the stability and variety of
the company's sources of funding;
(ix) the company's importance as a
source of credit for households,
businesses, and State and local
governments and as a source of
liquidity for the financial system;
(x) the extent to which assets are
simply managed and not owned by the
financial company and the extent to
which ownership of assets under
management is diffuse; and
(xi) the amount, different
categories, and concentrations of
liabilities, both insured and
uninsured, contingent and
noncontingent, including both on-
balance sheet and off-balance sheet
liabilities, of the financial company
and its affiliates;
(D) any risks presented by the financial
company during the 10-year period immediately
prior to the appointment of the Corporation as
receiver for the covered financial company that
contributed to the failure of the covered
financial company; and
(E) such other risk-related factors as the
Corporation, or the Council, as applicable, may
determine to be appropriate.
(5) Collection of information.--The Corporation may
impose on covered financial companies such collection
of information requirements as the Corporation deems
necessary to carry out this subsection after the
appointment of the Corporation as receiver under this
title.
(6) Rulemaking.--
(A) In general.--The Corporation shall
prescribe regulations to carry out this
subsection. The Corporation shall consult with
the Secretary in the development and
finalization of such regulations.
(B) Equitable treatment.--The regulations
prescribed under subparagraph (A) shall take
into account the differences in risks posed to
the financial stability of the United States by
financial companies, the differences in the
liability structures of financial companies,
and the different bases for other assessments
that such financial companies may be required
to pay, to ensure that assessed financial
companies are treated equitably and that
assessments under this subsection reflect such
differences.
(p) Unenforceability of Certain Agreements.--
(1) In general.--No provision described in
paragraph (2) shall be enforceable against or impose
any liability on any person, as such enforcement or
liability shall be contrary to public policy.
(2) Prohibited provisions.--A provision described
in this paragraph is any term contained in any existing
or future standstill, confidentiality, or other
agreement that, directly or indirectly--
(A) affects, restricts, or limits the
ability of any person to offer to acquire or
acquire;
(B) prohibits any person from offering to
acquire or acquiring; or
(C) prohibits any person from using any
previously disclosed information in connection
with any such offer to acquire or acquisition
of,
all or part of any covered financial company, including
any liabilities, assets, or interest therein, in
connection with any transaction in which the
Corporation exercises its authority under this title.
(q) Other Exemptions.--
(1) In general.--When acting as a receiver under
this title--
(A) the Corporation, including its
franchise, its capital, reserves and surplus,
and its income, shall be exempt from all
taxation imposed by any State, county,
municipality, or local taxing authority, except
that any real property of the Corporation shall
be subject to State, territorial, county,
municipal, or local taxation to the same extent
according to its value as other real property
is taxed, except that, notwithstanding the
failure of any person to challenge an
assessment under State law of the value of such
property, such value, and the tax thereon,
shall be determined as of the period for which
such tax is imposed;
(B) no property of the Corporation shall be
subject to levy, attachment, garnishment,
foreclosure, or sale without the consent of the
Corporation, nor shall any involuntary lien
attach to the property of the Corporation; and
(C) the Corporation shall not be liable for
any amounts in the nature of penalties or
fines, including those arising from the failure
of any person to pay any real property,
personal property, probate, or recording tax or
any recording or filing fees when due; and
(D) the Corporation shall be exempt from
all prosecution by the United States or any
State, county, municipality, or local authority
for any criminal offense arising under Federal,
State, county, municipal, or local law, which
was allegedly committed by the covered
financial company, or persons acting on behalf
of the covered financial company, prior to the
appointment of the Corporation as receiver.
(2) Limitation.--Paragraph (1) shall not apply with
respect to any tax imposed (or other amount arising)
under the Internal Revenue Code of 1986.
(r) Certain Sales of Assets Prohibited.--
(1) Persons who engaged in improper conduct with,
or caused losses to, covered financial companies.--The
Corporation shall prescribe regulations which, at a
minimum, shall prohibit the sale of assets of a covered
financial company by the Corporation to--
(A) any person who--
(i) has defaulted, or was a member
of a partnership or an officer or
director of a corporation that has
defaulted, on 1 or more obligations,
the aggregate amount of which exceeds
$1,000,000, to such covered financial
company;
(ii) has been found to have engaged
in fraudulent activity in connection
with any obligation referred to in
clause (i); and
(iii) proposes to purchase any such
asset in whole or in part through the
use of the proceeds of a loan or
advance of credit from the Corporation
or from any covered financial company;
(B) any person who participated, as an
officer or director of such covered financial
company or of any affiliate of such company, in
a material way in any transaction that resulted
in a substantial loss to such covered financial
company; or
(C) any person who has demonstrated a
pattern or practice of defalcation regarding
obligations to such covered financial company.
(2) Convicted debtors.--Except as provided in
paragraph (3), a person may not purchase any asset of
such institution from the receiver, if that person--
(A) has been convicted of an offense under
section 215, 656, 657, 1005, 1006, 1007, 1008,
1014, 1032, 1341, 1343, or 1344 of title 18,
United States Code, or of conspiring to commit
such an offense, affecting any covered
financial company; and
(B) is in default on any loan or other
extension of credit from such covered financial
company which, if not paid, will cause
substantial loss to the Fund or the
Corporation.
(3) Settlement of claims.--Paragraphs (1) and (2)
shall not apply to the sale or transfer by the
Corporation of any asset of any covered financial
company to any person, if the sale or transfer of the
asset resolves or settles, or is part of the resolution
or settlement, of 1 or more claims that have been, or
could have been, asserted by the Corporation against
the person.
(4) Definition of default.--For purposes of this
subsection, the term ``default'' means a failure to
comply with the terms of a loan or other obligation to
such an extent that the property securing the
obligation is foreclosed upon.
(s) Recoupment of Compensation From Senior Executives and
Directors.--
(1) In general.--The Corporation, as receiver of a
covered financial company, may recover from any current
or former senior executive or director substantially
responsible for the failed condition of the covered
financial company any compensation received during the
2-year period preceding the date on which the
Corporation was appointed as the receiver of the
covered financial company, except that, in the case of
fraud, no time limit shall apply.
(2) Cost considerations.--In seeking to recover any
such compensation, the Corporation shall weigh the
financial and deterrent benefits of such recovery
against the cost of executing the recovery.
(3) Rulemaking.--The Corporation shall promulgate
regulations to implement the requirements of this
subsection, including defining the term
``compensation'' to mean any financial remuneration,
including salary, bonuses, incentives, benefits,
severance, deferred compensation, or golden parachute
benefits, and any profits realized from the sale of the
securities of the covered financial company.
SEC. 211. MISCELLANEOUS PROVISIONS.
(a) Clarification of Prohibition Regarding Concealment of
Assets From Receiver or Liquidating Agent.--Section 1032(1) of
title 18, United States Code, is amended by inserting ``the
Federal Deposit Insurance Corporation acting as receiver for a
covered financial company, in accordance with title II of the
Dodd-Frank Wall Street Reform and Consumer Protection Act,''
before ``or the National Credit''.
(b) Conforming Amendment.--Section 1032 of title 18, United
States Code, is amended in the section heading, by striking
``of financial institution''.
(c) Federal Deposit Insurance Corporation Improvement Act
of 1991.--Section 403(a) of the Federal Deposit Insurance
Corporation Improvement Act of 1991 (12 U.S.C. 4403(a)) is
amended by inserting ``section 210(c) of the Dodd-Frank Wall
Street Reform and Consumer Protection Act, section 1367 of the
Federal Housing Enterprises Financial Safety and Soundness Act
of 1992 (12 U.S.C. 4617(d)),'' after ``section 11(e) of the
Federal Deposit Insurance Act,''.
(d) FDIC Inspector General Reviews.--
(1) Scope.--The Inspector General of the
Corporation shall conduct, supervise, and coordinate
audits and investigations of the liquidation of any
covered financial company by the Corporation as
receiver under this title, including collecting and
summarizing--
(A) a description of actions taken by the
Corporation as receiver;
(B) a description of any material sales,
transfers, mergers, obligations, purchases, and
other material transactions entered into by the
Corporation;
(C) an evaluation of the adequacy of the
policies and procedures of the Corporation
under section 203(d) and orderly liquidation
plan under section 210(n)(14);
(D) an evaluation of the utilization by the
Corporation of the private sector in carrying
out its functions, including the adequacy of
any conflict-of-interest reviews; and
(E) an evaluation of the overall
performance of the Corporation in liquidating
the covered financial company, including
administrative costs, timeliness of liquidation
process, and impact on the financial system.
(2) Frequency.--Not later than 6 months after the
date of appointment of the Corporation as receiver
under this title and every 6 months thereafter, the
Inspector General of the Corporation shall conduct the
audit and investigation described in paragraph (1).
(3) Reports and testimony.--The Inspector General
of the Corporation shall include in the semiannual
reports required by section 5(a) of the Inspector
General Act of 1978 (5 U.S.C. App.), a summary of the
findings and evaluations under paragraph (1), and shall
appear before the appropriate committees of Congress,
if requested, to present each such report.
(4) Funding.--
(A) Initial funding.--The expenses of the
Inspector General of the Corporation in
carrying out this subsection shall be
considered administrative expenses of the
receivership.
(B) Additional funding.--If the maximum
amount available to the Corporation as receiver
under this title is insufficient to enable the
Inspector General of the Corporation to carry
out the duties under this subsection, the
Corporation shall pay such additional amounts
from assessments imposed under section 210.
(5) Termination of responsibilities.--The duties
and responsibilities of the Inspector General of the
Corporation under this subsection shall terminate 1
year after the date of termination of the receivership
under this title.
(e) Treasury Inspector General Reviews.--
(1) Scope.--The Inspector General of the Department
of the Treasury shall conduct, supervise, and
coordinate audits and investigations of actions taken
by the Secretary related to the liquidation of any
covered financial company under this title, including
collecting and summarizing--
(A) a description of actions taken by the
Secretary under this title;
(B) an analysis of the approval by the
Secretary of the policies and procedures of the
Corporation under section 203 and acceptance of
the orderly liquidation plan of the Corporation
under section 210; and
(C) an assessment of the terms and
conditions underlying the purchase by the
Secretary of obligations of the Corporation
under section 210.
(2) Frequency.--Not later than 6 months after the
date of appointment of the Corporation as receiver
under this title and every 6 months thereafter, the
Inspector General of the Department of the Treasury
shall conduct the audit and investigation described in
paragraph (1).
(3) Reports and testimony.--The Inspector General
of the Department of the Treasury shall include in the
semiannual reports required by section 5(a) of the
Inspector General Act of 1978 (5 U.S.C. App.), a
summary of the findings and assessments under paragraph
(1), and shall appear before the appropriate committees
of Congress, if requested, to present each such report.
(4) Termination of responsibilities.--The duties
and responsibilities of the Inspector General of the
Department of the Treasury under this subsection shall
terminate 1 year after the date on which the
obligations purchased by the Secretary from the
Corporation under section 210 are fully redeemed.
(f) Primary Financial Regulatory Agency Inspector General
Reviews.--
(1) Scope.--Upon the appointment of the Corporation
as receiver for a covered financial company supervised
by a Federal primary financial regulatory agency or the
Board of Governors under section 165, the Inspector
General of the agency or the Board of Governors shall
make a written report reviewing the supervision by the
agency or the Board of Governors of the covered
financial company, which shall--
(A) evaluate the effectiveness of the
agency or the Board of Governors in carrying
out its supervisory responsibilities with
respect to the covered financial company;
(B) identify any acts or omissions on the
part of agency or Board of Governors officials
that contributed to the covered financial
company being in default or in danger of
default;
(C) identify any actions that could have
been taken by the agency or the Board of
Governors that would have prevented the company
from being in default or in danger of default;
and
(D) recommend appropriate administrative or
legislative action.
(2) Reports and testimony.--Not later than 1 year
after the date of appointment of the Corporation as
receiver under this title, the Inspector General of the
Federal primary financial regulatory agency or the
Board of Governors shall provide the report required by
paragraph (1) to such agency or the Board of Governors,
and along with such agency or the Board of Governors,
as applicable, shall appear before the appropriate
committees of Congress, if requested, to present the
report required by paragraph (1). Not later than 90
days after the date of receipt of the report required
by paragraph (1), such agency or the Board of
Governors, as applicable, shall provide a written
report to Congress describing any actions taken in
response to the recommendations in the report, and if
no such actions were taken, describing the reasons why
no actions were taken.
SEC. 212. PROHIBITION OF CIRCUMVENTION AND PREVENTION OF CONFLICTS OF
INTEREST.
(a) No Other Funding.--Funds for the orderly liquidation of
any covered financial company under this title shall only be
provided as specified under this title.
(b) Limit on Governmental Actions.--No governmental entity
may take any action to circumvent the purposes of this title.
(c) Conflict of Interest.--In the event that the
Corporation is appointed receiver for more than 1 covered
financial company or is appointed receiver for a covered
financial company and receiver for any insured depository
institution that is an affiliate of such covered financial
company, the Corporation shall take appropriate action, as
necessary to avoid any conflicts of interest that may arise in
connection with multiple receiverships.
SEC. 213. BAN ON CERTAIN ACTIVITIES BY SENIOR EXECUTIVES AND DIRECTORS.
(a) Prohibition Authority.--The Board of Governors or, if
the covered financial company was not supervised by the Board
of Governors, the Corporation, may exercise the authority
provided by this section.
(b) Authority To Issue Order.--The appropriate agency
described in subsection (a) may take any action authorized by
subsection (c), if the agency determines that--
(1) a senior executive or a director of the covered
financial company, prior to the appointment of the
Corporation as receiver, has, directly or indirectly--
(A) violated--
(i) any law or regulation;
(ii) any cease-and-desist order
which has become final;
(iii) any condition imposed in
writing by a Federal agency in
connection with any action on any
application, notice, or request by such
company or senior executive; or
(iv) any written agreement between
such company and such agency;
(B) engaged or participated in any unsafe
or unsound practice in connection with any
financial company; or
(C) committed or engaged in any act,
omission, or practice which constitutes a
breach of the fiduciary duty of such senior
executive or director;
(2) by reason of the violation, practice, or breach
described in any subparagraph of paragraph (1), such
senior executive or director has received financial
gain or other benefit by reason of such violation,
practice, or breach and such violation, practice, or
breach contributed to the failure of the company; and
(3) such violation, practice, or breach--
(A) involves personal dishonesty on the
part of such senior executive or director; or
(B) demonstrates willful or continuing
disregard by such senior executive or director
for the safety or soundness of such company.
(c) Authorized Actions.--
(1) In general.--The appropriate agency for a
financial company, as described in subsection (a), may
serve upon a senior executive or director described in
subsection (b) a written notice of the intention of the
agency to prohibit any further participation by such
person, in any manner, in the conduct of the affairs of
any financial company for a period of time determined
by the appropriate agency to be commensurate with such
violation, practice, or breach, provided such period
shall be not less than 2 years.
(2) Procedures.--The due process requirements and
other procedures under section 8(e) of the Federal
Deposit Insurance Act (12 U.S.C. 1818(e)) shall apply
to actions under this section as if the covered
financial company were an insured depository
institution and the senior executive or director were
an institution-affiliated party, as those terms are
defined in that Act.
(d) Regulations.--The Corporation and the Board of
Governors, in consultation with the Council, shall jointly
prescribe rules or regulations to administer and carry out this
section, including rules, regulations, or guidelines to further
define the term senior executive for the purposes of this
section.
SEC. 214. PROHIBITION ON TAXPAYER FUNDING.
(a) Liquidation Required.--All financial companies put into
receivership under this title shall be liquidated. No taxpayer
funds shall be used to prevent the liquidation of any financial
company under this title.
(b) Recovery of Funds.--All funds expended in the
liquidation of a financial company under this title shall be
recovered from the disposition of assets of such financial
company, or shall be the responsibility of the financial
sector, through assessments.
(c) No Losses to Taxpayers.--Taxpayers shall bear no losses
from the exercise of any authority under this title.
SEC. 215. STUDY ON SECURED CREDITOR HAIRCUTS.
(a) Study Required.--The Council shall conduct a study
evaluating the importance of maximizing United States taxpayer
protections and promoting market discipline with respect to the
treatment of fully secured creditors in the utilization of the
orderly liquidation authority authorized by this Act. In
carrying out such study, the Council shall--
(1) not be prejudicial to current or past laws or
regulations with respect to secured creditor treatment
in a resolution process;
(2) study the similarities and differences between
the resolution mechanisms authorized by the Bankruptcy
Code, the Federal Deposit Insurance Corporation
Improvement Act of 1991, and the orderly liquidation
authority authorized by this Act;
(3) determine how various secured creditors are
treated in such resolution mechanisms and examine how a
haircut (of various degrees) on secured creditors could
improve market discipline and protect taxpayers;
(4) compare the benefits and dynamics of prudent
lending practices by depository institutions in secured
loans for consumers and small businesses to the lending
practices of secured creditors to large, interconnected
financial firms;
(5) consider whether credit differs according to
different types of collateral and different terms and
timing of the extension of credit; and
(6) include an examination of stakeholders who were
unsecured or under-collateralized and seek collateral
when a firm is failing, and the impact that such
behavior has on financial stability and an orderly
resolution that protects taxpayers if the firm fails.
(b) Report.--Not later than the end of the 1-year period
beginning on the date of enactment of this Act, the Council
shall issue a report to the Congress containing all findings
and conclusions made by the Council in carrying out the study
required under subsection (a).
SEC. 216. STUDY ON BANKRUPTCY PROCESS FOR FINANCIAL AND NONBANK
FINANCIAL INSTITUTIONS.
(a) Study.--
(1) In general.--Upon enactment of this Act, the
Board of Governors, in consultation with the
Administrative Office of the United States Courts,
shall conduct a study regarding the resolution of
financial companies under the Bankruptcy Code, under
chapter 7 or 11 thereof.
(2) Issues to be studied.--Issues to be studied
under this section include--
(A) the effectiveness of chapter 7 and
chapter 11 of the Bankruptcy Code in
facilitating the orderly resolution or
reorganization of systemic financial companies;
(B) whether a special financial resolution
court or panel of special masters or judges
should be established to oversee cases
involving financial companies to provide for
the resolution of such companies under the
Bankruptcy Code, in a manner that minimizes
adverse impacts on financial markets without
creating moral hazard;
(C) whether amendments to the Bankruptcy
Code should be adopted to enhance the ability
of the Code to resolve financial companies in a
manner that minimizes adverse impacts on
financial markets without creating moral
hazard;
(D) whether amendments should be made to
the Bankruptcy Code, the Federal Deposit
Insurance Act, and other insolvency laws to
address the manner in which qualified financial
contracts of financial companies are treated;
and
(E) the implications, challenges, and
benefits to creating a new chapter or
subchapter of the Bankruptcy Code to deal with
financial companies.
(b) Reports to Congress.--Not later than 1 year after the
date of enactment of this Act, and in each successive year
until the fifth year after the date of enactment of this Act,
the Administrative Office of the United States courts shall
submit to the Committees on Banking, Housing, and Urban Affairs
and the Judiciary of the Senate and the Committees on Financial
Services and the Judiciary of the House of Representatives a
report summarizing the results of the study conducted under
subsection (a).
SEC. 217. STUDY ON INTERNATIONAL COORDINATION RELATING TO BANKRUPTCY
PROCESS FOR NONBANK FINANCIAL INSTITUTIONS.
(a) Study.--
(1) In general.--The Board of Governors, in
consultation with the Administrative Office of the
United States Courts, shall conduct a study regarding
international coordination relating to the resolution
of systemic financial companies under the United States
Bankruptcy Code and applicable foreign law.
(2) Issues to be studied.--With respect to the
bankruptcy process for financial companies, issues to
be studied under this section include--
(A) the extent to which international
coordination currently exists;
(B) current mechanisms and structures for
facilitating international cooperation;
(C) barriers to effective international
coordination; and
(D) ways to increase and make more
effective international coordination of the
resolution of financial companies, so as to
minimize the impact on the financial system
without creating moral hazard.
(b) Report to Congress.--Not later than 1 year after the
date of enactment of this Act, the Administrative office of the
United States Courts shall submit to the Committees on Banking,
Housing, and Urban Affairs and the Judiciary of the Senate and
the Committees on Financial Services and the Judiciary of the
House of Representatives a report summarizing the results of
the study conducted under subsection (a).
TITLE III--TRANSFER OF POWERS TO THE COMPTROLLER OF THE CURRENCY, THE
CORPORATION, AND THE BOARD OF GOVERNORS
SEC. 300. SHORT TITLE.
This title may be cited as the ``Enhancing Financial
Institution Safety and Soundness Act of 2010''.
SEC. 301. PURPOSES.
The purposes of this title are--
(1) to provide for the safe and sound operation of
the banking system of the United States;
(2) to preserve and protect the dual system of
Federal and State-chartered depository institutions;
(3) to ensure the fair and appropriate supervision
of each depository institution, regardless of the size
or type of charter of the depository institution; and
(4) to streamline and rationalize the supervision
of depository institutions and the holding companies of
depository institutions.
SEC. 302. DEFINITION.
In this title, the term ``transferred employee'' means, as
the context requires, an employee transferred to the Office of
the Comptroller of the Currency or the Corporation under
section 322.
Subtitle A--Transfer of Powers and Duties
SEC. 311. TRANSFER DATE.
(a) Transfer Date.--Except as provided in subsection (b),
the term ``transfer date'' means the date that is 1 year after
the date of enactment of this Act.
(b) Extension Permitted.--
(1) Notice required.--The Secretary, in
consultation with the Comptroller of the Currency, the
Director of the Office of Thrift Supervision, the
Chairman of the Board of Governors, and the Chairperson
of the Corporation, may extend the period under
subsection (a) and designate a transfer date that is
not later than 18 months after the date of enactment of
this Act, if the Secretary transmits to the Committee
on Banking, Housing, and Urban Affairs of the Senate
and the Committee on Financial Services of the House of
Representatives--
(A) a written determination that
commencement of the orderly process to
implement this title is not feasible by the
date that is 1 year after the date of enactment
of this Act;
(B) an explanation of why an extension is
necessary to commence the process of orderly
implementation of this title;
(C) the transfer date designated under this
subsection; and
(D) a description of the steps that will be
taken to initiate the process of an orderly and
timely implementation of this title within the
extended time period.
(2) Publication of notice.--Not later than 270 days
after the date of enactment of this Act, the Secretary
shall publish in the Federal Register notice of any
transfer date designated under paragraph (1).
SEC. 312. POWERS AND DUTIES TRANSFERRED.
(a) Effective Date.--This section, and the amendments made
by this section, shall take effect on the transfer date.
(b) Functions of the Office of Thrift Supervision.--
(1) Savings and loan holding company functions
transferred.--
(A) Transfer of functions.--There are
transferred to the Board of Governors all
functions of the Office of Thrift Supervision
and the Director of the Office of Thrift
Supervision (including the authority to issue
orders) relating to--
(i) the supervision of--
(I) any savings and loan
holding company; and
(II) any subsidiary (other
than a depository institution)
of a savings and loan holding
company; and
(ii) all rulemaking authority of
the Office of Thrift Supervision and
the Director of the Office of Thrift
Supervision relating to savings and
loan holding companies.
(B) Powers, authorities, rights, and
duties.--The Board of Governors shall succeed
to all powers, authorities, rights, and duties
that were vested in the Office of Thrift
Supervision and the Director of the Office of
Thrift Supervision on the day before the
transfer date relating to the functions and
authority transferred under subparagraph (A).
(2) All other functions transferred.--
(A) Board of governors.--All rulemaking
authority of the Office of Thrift Supervision
and the Director of the Office of Thrift
Supervision under section 11 of the Home
Owners' Loan Act (12 U.S.C. 1468) relating to
transactions with affiliates and extensions of
credit to executive officers, directors, and
principal shareholders and under section 5(q)
of such Act relating to tying arrangements is
transferred to the Board of Governors.
(B) Comptroller of the currency.--Except as
provided in paragraph (1) and subparagraph
(A)--
(i) there are transferred to the
Office of the Comptroller of the
Currency and the Comptroller of the
Currency--
(I) all functions of the
Office of Thrift Supervision
and the Director of the Office
of Thrift Supervision,
respectively, relating to
Federal savings associations;
and
(II) all rulemaking
authority of the Office of
Thrift Supervision and the
Director of the Office of
Thrift Supervision,
respectively, relating to
savings associations; and
(ii) the Office of the Comptroller
of the Currency and the Comptroller of
the Currency shall succeed to all
powers, authorities, rights, and duties
that were vested in the Office of
Thrift Supervision and the Director of
the Office of Thrift Supervision,
respectively, on the day before the
transfer date relating to the functions
and authority transferred under clause
(i).
(C) Corporation.--Except as provided in
paragraph (1) and subparagraphs (A) and (B)--
(i) all functions of the Office of
Thrift Supervision and the Director of
the Office of Thrift Supervision
relating to State savings associations
are transferred to the Corporation; and
(ii) the Corporation shall succeed
to all powers, authorities, rights, and
duties that were vested in the Office
of Thrift Supervision and the Director
of the Office of Thrift Supervision on
the day before the transfer date
relating to the functions transferred
under clause (i).
(c) Conforming Amendments.--Section 3 of the Federal
Deposit Insurance Act (12 U.S.C. 1813) is amended--
(1) in subsection (q), by striking paragraphs (1)
through (4) and inserting the following:
``(1) the Office of the Comptroller of the
Currency, in the case of--
``(A) any national banking association;
``(B) any Federal branch or agency of a
foreign bank; and
``(C) any Federal savings association;
``(2) the Federal Deposit Insurance Corporation, in
the case of--
``(A) any State nonmember insured bank;
``(B) any foreign bank having an insured
branch; and
``(C) any State savings association;
``(3) the Board of Governors of the Federal Reserve
System, in the case of--
``(A) any State member bank;
``(B) any branch or agency of a foreign
bank with respect to any provision of the
Federal Reserve Act which is made applicable
under the International Banking Act of 1978;
``(C) any foreign bank which does not
operate an insured branch;
``(D) any agency or commercial lending
company other than a Federal agency;
``(E) supervisory or regulatory proceedings
arising from the authority given to the Board
of Governors under section 7(c)(1) of the
International Banking Act of 1978, including
such proceedings under the Financial
Institutions Supervisory Act of 1966;
``(F) any bank holding company and any
subsidiary (other than a depository
institution) of a bank holding company; and
``(G) any savings and loan holding company
and any subsidiary (other than a depository
institution) of a savings and loan holding
company.''; and
(2) in paragraphs (1) and (3) of subsection (u), by
striking ``(other than a bank holding company'' and
inserting ``(other than a bank holding company or
savings and loan holding company''.
(d) Consumer Protection.--Nothing in this section may be
construed to limit or otherwise affect the transfer of powers
under title X.
SEC. 313. ABOLISHMENT.
Effective 90 days after the transfer date, the Office of
Thrift Supervision and the position of Director of the Office
of Thrift Supervision are abolished.
SEC. 314. AMENDMENTS TO THE REVISED STATUTES.
(a) Amendment to Section 324.--Section 324 of the Revised
Statutes of the United States (12 U.S.C. 1) is amended to read
as follows:
``SEC. 324. COMPTROLLER OF THE CURRENCY.
``(a) Office of the Comptroller of the Currency
Established.--There is established in the Department of the
Treasury a bureau to be known as the `Office of the Comptroller
of the Currency' which is charged with assuring the safety and
soundness of, and compliance with laws and regulations, fair
access to financial services, and fair treatment of customers
by, the institutions and other persons subject to its
jurisdiction.
``(b) Comptroller of the Currency.--
``(1) In general.--The chief officer of the Office
of the Comptroller of the Currency shall be known as
the Comptroller of the Currency. The Comptroller of the
Currency shall perform the duties of the Comptroller of
the Currency under the general direction of the
Secretary of the Treasury. The Secretary of the
Treasury may not delay or prevent the issuance of any
rule or the promulgation of any regulation by the
Comptroller of the Currency, and may not intervene in
any matter or proceeding before the Comptroller of the
Currency (including agency enforcement actions), unless
otherwise specifically provided by law.
``(2) Additional authority.--The Comptroller of the
Currency shall have the same authority with respect to
functions transferred to the Comptroller of the
Currency under the Enhancing Financial Institution
Safety and Soundness Act of 2010 as was vested in the
Director of the Office of Thrift Supervision on the
transfer date, as defined in section 311 of that
Act.''.
(b) Supervision of Federal Savings Associations.--Chapter 9
of title VII of the Revised Statutes of the United States (12
U.S.C. 1 et seq.) is amended by inserting after section 327A
(12 U.S.C. 4a) the following:
``SEC. 327B. DEPUTY COMPTROLLER FOR THE SUPERVISION AND EXAMINATION OF
FEDERAL SAVINGS ASSOCIATIONS.
``The Comptroller of the Currency shall designate a Deputy
Comptroller, who shall be responsible for the supervision and
examination of Federal savings associations.''.
(c) Amendment to Section 329.--Section 329 of the Revised
Statutes of the United States (12 U.S.C. 11) is amended by
inserting before the period at the end the following: ``or any
Federal savings association''.
(d) Effective Date.--This section, and the amendments made
by this section, shall take effect on the transfer date.
SEC. 315. FEDERAL INFORMATION POLICY.
Section 3502(5) of title 44, United States Code, is amended
by inserting ``Office of the Comptroller of the Currency,''
after ``the Securities and Exchange Commission,''.
SEC. 316. SAVINGS PROVISIONS.
(a) Office of Thrift Supervision.--
(1) Existing rights, duties, and obligations not
affected.--Sections 312(b) and 313 shall not affect the
validity of any right, duty, or obligation of the
United States, the Director of the Office of Thrift
Supervision, the Office of Thrift Supervision, or any
other person, that existed on the day before the
transfer date.
(2) Continuation of suits.--This title shall not
abate any action or proceeding commenced by or against
the Director of the Office of Thrift Supervision or the
Office of Thrift Supervision before the transfer date,
except that--
(A) for any action or proceeding arising
out of a function of the Office of Thrift
Supervision or the Director of the Office of
Thrift Supervision transferred to the Board of
Governors by this title, the Board of Governors
shall be substituted for the Office of Thrift
Supervision or the Director of the Office of
Thrift Supervision as a party to the action or
proceeding on and after the transfer date;
(B) for any action or proceeding arising
out of a function of the Office of Thrift
Supervision or the Director of the Office of
Thrift Supervision transferred to the Office of
the Comptroller of the Currency or the
Comptroller of the Currency by this title, the
Office of the Comptroller of the Currency or
the Comptroller of the Currency shall be
substituted for the Office of Thrift
Supervision or the Director of the Office of
Thrift Supervision, as the case may be, as a
party to the action or proceeding on and after
the transfer date; and
(C) for any action or proceeding arising
out of a function of the Office of Thrift
Supervision or the Director of the Office of
Thrift Supervision transferred to the
Corporation by this title, the Corporation
shall be substituted for the Office of Thrift
Supervision or the Director of the Office of
Thrift Supervision as a party to the action or
proceeding on and after the transfer date.
(b) Continuation of Existing OTS Orders, Resolutions,
Determinations, Agreements, Regulations, etc.--All orders,
resolutions, determinations, agreements, and regulations,
interpretative rules, other interpretations, guidelines,
procedures, and other advisory materials, that have been
issued, made, prescribed, or allowed to become effective by the
Office of Thrift Supervision or the Director of the Office of
Thrift Supervision, or by a court of competent jurisdiction, in
the performance of functions that are transferred by this title
and that are in effect on the day before the transfer date,
shall continue in effect according to the terms of such orders,
resolutions, determinations, agreements, and regulations,
interpretative rules, other interpretations, guidelines,
procedures, and other advisory materials, and shall be
enforceable by or against--
(1) the Board of Governors, in the case of a
function of the Office of Thrift Supervision or the
Director of the Office of Thrift Supervision
transferred to the Board of Governors, until modified,
terminated, set aside, or superseded in accordance with
applicable law by the Board of Governors, by any court
of competent jurisdiction, or by operation of law;
(2) the Office of the Comptroller of the Currency
or the Comptroller of the Currency, in the case of a
function of the Office of Thrift Supervision or the
Director of the Office of Thrift Supervision
transferred to the Office of the Comptroller of the
Currency or the Comptroller of the Currency,
respectively, until modified, terminated, set aside, or
superseded in accordance with applicable law by the
Office of the Comptroller of the Currency or the
Comptroller of the Currency, by any court of competent
jurisdiction, or by operation of law; and
(3) the Corporation, in the case of a function of
the Office of Thrift Supervision or the Director of the
Office of Thrift Supervision transferred to the
Corporation, until modified, terminated, set aside, or
superseded in accordance with applicable law by the
Corporation, by any court of competent jurisdiction, or
by operation of law.
(c) Identification of Regulations Continued.--
(1) By the board of governors.--Not later than the
transfer date, the Board of Governors shall--
(A) identify the regulations continued
under subsection (b) that will be enforced by
the Board of Governors; and
(B) publish a list of the regulations
identified under subparagraph (A) in the
Federal Register.
(2) By office of the comptroller of the currency.--
Not later than the transfer date, the Office of the
Comptroller of the Currency shall--
(A) after consultation with the
Corporation, identify the regulations continued
under subsection (b) that will be enforced by
the Office of the Comptroller of the Currency;
and
(B) publish a list of the regulations
identified under subparagraph (A) in the
Federal Register.
(3) By the corporation.--Not later than the
transfer date, the Corporation shall--
(A) after consultation with the Office of
the Comptroller of the Currency, identify the
regulations continued under subsection (b) that
will be enforced by the Corporation; and
(B) publish a list of the regulations
identified under subparagraph (A) in the
Federal Register.
(d) Status of Regulations Proposed or Not Yet Effective.--
(1) Proposed regulations.--Any proposed regulation
of the Office of Thrift Supervision, which the Office
of Thrift Supervision in performing functions
transferred by this title, has proposed before the
transfer date but has not published as a final
regulation before such date, shall be deemed to be a
proposed regulation of the Office of the Comptroller of
the Currency or the Board of Governors, as appropriate,
according to the terms of the proposed regulation.
(2) Regulations not yet effective.--Any interim or
final regulation of the Office of Thrift Supervision,
which the Office of Thrift Supervision, in performing
functions transferred by this title, has published
before the transfer date but which has not become
effective before that date, shall become effective as a
regulation of the Office of the Comptroller of the
Currency or the Board of Governors, as appropriate,
according to the terms of the interim or final
regulation, unless modified, terminated, set aside, or
superseded in accordance with applicable law by the
Office of the Comptroller of the Currency or the Board
of Governors, as appropriate, by any court of competent
jurisdiction, or by operation of law.
SEC. 317. REFERENCES IN FEDERAL LAW TO FEDERAL BANKING AGENCIES.
On and after the transfer date, any reference in Federal
law to the Director of the Office of Thrift Supervision or the
Office of Thrift Supervision, in connection with any function
of the Director of the Office of Thrift Supervision or the
Office of Thrift Supervision transferred under section 312(b)
or any other provision of this subtitle, shall be deemed to be
a reference to the Comptroller of the Currency, the Office of
the Comptroller of the Currency, the Chairperson of the
Corporation, the Corporation, the Chairman of the Board of
Governors, or the Board of Governors, as appropriate and
consistent with the amendments made in subtitle E.
SEC. 318. FUNDING.
(a) Compensation of Examiners.--Section 5240 of the Revised
Statutes of the United States (12 U.S.C. 481 et seq.) is
amended--
(1) in the second undesignated paragraph (12 U.S.C.
481), in the fourth sentence, by striking ``without
regard to the provisions of other laws applicable to
officers or employees of the United States'' and
inserting the following: ``set and adjusted subject to
chapter 71 of title 5, United States Code, and without
regard to the provisions of other laws applicable to
officers or employees of the United States''; and
(2) in the third undesignated paragraph (12 U.S.C.
482), in the first sentence, by striking ``shall fix''
and inserting ``shall, subject to chapter 71 of title
5, United States Code, fix''.
(b) Funding of Office of the Comptroller of the Currency.--
Chapter 4 of title LXII of the Revised Statutes is amended by
inserting after section 5240 (12 U.S.C. 481, 482) the
following:
``Sec. 5240A. The Comptroller of the Currency may collect
an assessment, fee, or other charge from any entity described
in section 3(q)(1) of the Federal Deposit Insurance Act (12
U.S.C. 1813(q)(1)), as the Comptroller determines is necessary
or appropriate to carry out the responsibilities of the Office
of the Comptroller of the Currency. In establishing the amount
of an assessment, fee, or charge collected from an entity under
this section, the Comptroller of the Currency may take into
account the nature and scope of the activities of the entity,
the amount and type of assets that the entity holds, the
financial and managerial condition of the entity, and any other
factor, as the Comptroller of the Currency determines is
appropriate. Funds derived from any assessment, fee, or charge
collected or payment made pursuant to this section may be
deposited by the Comptroller of the Currency in accordance with
the provisions of section 5234. Such funds shall not be
construed to be Government funds or appropriated monies, and
shall not be subject to apportionment for purposes of chapter
15 of title 31, United States Code, or any other provision of
law. The authority of the Comptroller of the Currency under
this section shall be in addition to the authority under
section 5240.
``The Comptroller of the Currency shall have sole authority
to determine the manner in which the obligations of the Office
of the Comptroller of the Currency shall be incurred and its
disbursements and expenses allowed and paid, in accordance with
this section, except as provided in chapter 71 of title 5,
United States Code (with respect to compensation).''.
(c) Funding of Board of Governors.--Section 11 of the
Federal Reserve Act (12 U.S.C. 248) is amended by adding at the
end the following:
``(s) Assessments, Fees, and Other Charges for Certain
Companies.--
``(1) In general.--The Board shall collect a total
amount of assessments, fees, or other charges from the
companies described in paragraph (2) that is equal to
the total expenses the Board estimates are necessary or
appropriate to carry out the supervisory and regulatory
responsibilities of the Board with respect to such
companies.
``(2) Companies.--The companies described in this
paragraph are--
``(A) all bank holding companies having
total consolidated assets of $50,000,000,000 or
more;
``(B) all savings and loan holding
companies having total consolidated assets of
$50,000,000,000 or more; and
``(C) all nonbank financial companies
supervised by the Board under section 113 of
the Dodd-Frank Wall Street Reform and Consumer
Protection Act.''.
(d) Corporation Examination Fees.--Section 10(e) of the
Federal Deposit Insurance Act (12 U.S.C. 1820(e)) is amended by
striking paragraph (1) and inserting the following:
``(1) Regular and special examinations of
depository institutions.--The cost of conducting any
regular examination or special examination of any
depository institution under subsection (b)(2), (b)(3),
or (d) or of any entity described in section 3(q)(2)
may be assessed by the Corporation against the
institution or entity to meet the expenses of the
Corporation in carrying out such examinations.''.
(e) Effective Date.--This section, and the amendments made
by this section, shall take effect on the transfer date.
SEC. 319. CONTRACTING AND LEASING AUTHORITY.
Notwithstanding the Federal Property and Administrative
Services Act of 1949 (41 U.S.C. 251 et seq.) or any other
provision of law (except the full and open competition
requirements of the Competition in Contracting Act), the Office
of the Comptroller of the Currency may--
(1) enter into and perform contracts, execute
instruments, and acquire real property (or property
interest) as the Comptroller deems necessary to carry
out the duties and responsibilities of the Office of
the Comptroller of the Currency; and
(2) hold, maintain, sell, lease, or otherwise
dispose of the property (or property interest) acquired
under paragraph (1).
Subtitle B--Transitional Provisions
SEC. 321. INTERIM USE OF FUNDS, PERSONNEL, AND PROPERTY OF THE OFFICE
OF THRIFT SUPERVISION.
(a) In General.--Before the transfer date, the Office of
the Comptroller of the Currency, the Corporation, and the Board
of Governors shall--
(1) consult and cooperate with the Office of Thrift
Supervision to facilitate the orderly transfer of
functions to the Office of the Comptroller of the
Currency, the Corporation, and the Board of Governors
in accordance with this title;
(2) determine jointly, from time to time--
(A) the amount of funds necessary to pay
any expenses associated with the transfer of
functions (including expenses for personnel,
property, and administrative services) during
the period beginning on the date of enactment
of this Act and ending on the transfer date;
(B) which personnel are appropriate to
facilitate the orderly transfer of functions by
this title; and
(C) what property and administrative
services are necessary to support the Office of
the Comptroller of the Currency, the
Corporation, and the Board of Governors during
the period beginning on the date of enactment
of this Act and ending on the transfer date;
and
(3) take such actions as may be necessary to
provide for the orderly implementation of this title.
(b) Agency Consultation.--When requested jointly by the
Office of the Comptroller of the Currency, the Corporation, and
the Board of Governors to do so before the transfer date, the
Office of Thrift Supervision shall--
(1) pay to the Office of the Comptroller of the
Currency, the Corporation, or the Board of Governors,
as applicable, from funds obtained by the Office of
Thrift Supervision through assessments, fees, or other
charges that the Office of Thrift Supervision is
authorized by law to impose, such amounts as the Office
of the Comptroller of the Currency, the Corporation,
and the Board of Governors jointly determine to be
necessary under subsection (a);
(2) detail to the Office of the Comptroller of the
Currency, the Corporation, or the Board of Governors,
as applicable, such personnel as the Office of the
Comptroller of the Currency, the Corporation, and the
Board of Governors jointly determine to be appropriate
under subsection (a); and
(3) make available to the Office of the Comptroller
of the Currency, the Corporation, or the Board of
Governors, as applicable, such property and provide to
the Office of the Comptroller of the Currency, the
Corporation, or the Board of Governors, as applicable,
such administrative services as the Office of the
Comptroller of the Currency, the Corporation, and the
Board of Governors jointly determine to be necessary
under subsection (a).
(c) Notice Required.--The Office of the Comptroller of the
Currency, the Corporation, and the Board of Governors shall
jointly give the Office of Thrift Supervision reasonable prior
notice of any request that the Office of the Comptroller of the
Currency, the Corporation, and the Board of Governors jointly
intend to make under subsection (b).
SEC. 322. TRANSFER OF EMPLOYEES.
(a) In General.--
(1) Office of thrift supervision employees.--
(A) In general.--Except as provided in
section 1064, all employees of the Office of
Thrift Supervision shall be transferred to the
Office of the Comptroller of the Currency or
the Corporation for employment in accordance
with this section.
(B) Allocating employees for transfer to
receiving agencies.--The Director of the Office
of Thrift Supervision, the Comptroller of the
Currency, and the Chairperson of the
Corporation shall--
(i) jointly determine the number of
employees of the Office of Thrift
Supervision necessary to perform or
support the functions that are
transferred to the Office of the
Comptroller of the Currency or the
Corporation by this title; and
(ii) consistent with the
determination under clause (i), jointly
identify employees of the Office of
Thrift Supervision for transfer to the
Office of the Comptroller of the
Currency or the Corporation.
(2) Employees transferred; service periods
credited.--For purposes of this section, periods of
service with a Federal home loan bank, a joint office
of Federal home loan banks, or a Federal reserve bank
shall be credited as periods of service with a Federal
agency.
(3) Appointment authority for excepted service
transferred.--
(A) In general.--Except as provided in
subparagraph (B), any appointment authority of
the Office of Thrift Supervision under Federal
law that relates to the functions transferred
under section 312, including the regulations of
the Office of Personnel Management, for filling
the positions of employees in the excepted
service shall be transferred to the Comptroller
of the Currency or the Chairperson of the
Corporation, as appropriate.
(B) Declining transfers allowed.--The
Comptroller of the Currency or the Chairperson
of the Corporation may decline to accept a
transfer of authority under subparagraph (A)
(and the employees appointed under that
authority) to the extent that such authority
relates to positions excepted from the
competitive service because of their
confidential, policy-making, policy-
determining, or policy-advocating character.
(4) Additional appointment authority.--
Notwithstanding any other provision of law, the Office
of the Comptroller of the Currency and the Corporation
may appoint transferred employees to positions in the
Office of the Comptroller of the Currency or the
Corporation, respectively.
(b) Timing of Transfers and Position Assignments.--Each
employee to be transferred under subsection (a)(1) shall--
(1) be transferred not later than 90 days after the
transfer date; and
(2) receive notice of the position assignment of
the employee not later than 120 days after the
effective date of the transfer of the employee.
(c) Transfer of Functions.--
(1) In general.--Notwithstanding any other
provision of law, the transfer of employees under this
subtitle shall be deemed a transfer of functions for
the purpose of section 3503 of title 5, United States
Code.
(2) Priority.--If any provision of this subtitle
conflicts with any protection provided to a transferred
employee under section 3503 of title 5, United States
Code, the provisions of this subtitle shall control.
(d) Employee Status and Eligibility.--The transfer of
functions and employees under this subtitle, and the
abolishment of the Office of Thrift Supervision under section
313, shall not affect the status of the transferred employees
as employees of an agency of the United States under any
provision of law.
(e) Equal Status and Tenure Positions.--
(1) Status and tenure.--Each transferred employee
from the Office of Thrift Supervision shall be placed
in a position at the Office of the Comptroller of the
Currency or the Corporation with the same status and
tenure as the transferred employee held on the day
before the date on which the employee was transferred.
(2) Functions.--To the extent practicable, each
transferred employee shall be placed in a position at
the Office of the Comptroller of the Currency or the
Corporation, as applicable, responsible for the same
functions and duties as the transferred employee had on
the day before the date on which the employee was
transferred, in accordance with the expertise and
preferences of the transferred employee.
(f) No Additional Certification Requirements.--An examiner
who is a transferred employee shall not be subject to any
additional certification requirements before being placed in a
comparable position at the Office of the Comptroller of the
Currency or the Corporation, if the examiner carries out
examinations of the same type of institutions as an employee of
the Office of the Comptroller of the Currency or the
Corporation as the employee was responsible for carrying out
before the date on which the employee was transferred.
(g) Personnel Actions Limited.--
(1) Protection.--
(A) In general.--Except as provided in
paragraph (2), each affected employee shall
not, during the 30-month period beginning on
the transfer date, be involuntarily separated,
or involuntarily reassigned outside his or her
locality pay area.
(B) Affected employees.--For purposes of
this paragraph, the term ``affected employee''
means--
(i) an employee transferred from
the Office of Thrift Supervision
holding a permanent position on the day
before the transfer date; and
(ii) an employee of the Office of
the Comptroller of the Currency or the
Corporation holding a permanent
position on the day before the transfer
date.
(2) Exceptions.--Paragraph (1) does not limit the
right of the Office of the Comptroller of the Currency
or the Corporation to--
(A) separate an employee for cause or for
unacceptable performance;
(B) terminate an appointment to a position
excepted from the competitive service because
of its confidential policy-making, policy-
determining, or policy-advocating character; or
(C) reassign an employee outside such
employee's locality pay area when the Office of
the Comptroller of the Currency or the
Corporation determines that the reassignment is
necessary for the efficient operation of the
agency.
(h) Pay.--
(1) 30-month protection.--Except as provided in
paragraph (2), during the 30-month period beginning on
the date on which the employee was transferred under
this subtitle, a transferred employee shall be paid at
a rate that is not less than the basic rate of pay,
including any geographic differential, that the
transferred employee received during the pay period
immediately preceding the date on which the employee
was transferred. Notwithstanding the preceding
sentence, if the employee was receiving a higher rate
of basic pay on a temporary basis (because of a
temporary assignment, temporary promotion, or other
temporary action) immediately before the transfer, the
Agency may reduce the rate of basic pay on the date the
rate would have been reduced but for the transfer, and
the protected rate for the remainder of the 30-month
period will be the reduced rate that would have applied
but for the transfer.
(2) Exceptions.--The Comptroller of the Currency or
the Corporation may reduce the rate of basic pay of a
transferred employee--
(A) for cause, including for unacceptable
performance; or
(B) with the consent of the transferred
employee.
(3) Protection only while employed.--This
subsection shall apply to a transferred employee only
during the period that the transferred employee remains
employed by Office of the Comptroller of the Currency
or the Corporation.
(4) Pay increases permitted.--Nothing in this
subsection shall limit the authority of the Comptroller
of the Currency or the Chairperson of the Corporation
to increase the pay of a transferred employee.
(i) Benefits.--
(1) Retirement benefits for transferred
employees.--
(A) In general.--
(i) Continuation of existing
retirement plan.--Each transferred
employee shall remain enrolled in the
retirement plan of the transferred
employee, for as long as the
transferred employee is employed by the
Office of the Comptroller of the
Currency or the Corporation.
(ii) Employer's contribution.--The
Comptroller of the Currency or the
Chairperson of the Corporation, as
appropriate, shall pay any employer
contributions to the existing
retirement plan of each transferred
employee, as required under each such
existing retirement plan.
(B) Definition.--In this paragraph, the
term ``existing retirement plan'' means, with
respect to a transferred employee, the
retirement plan (including the Financial
Institutions Retirement Fund), and any
associated thrift savings plan, of the agency
from which the employee was transferred in
which the employee was enrolled on the day
before the date on which the employee was
transferred.
(2) Benefits other than retirement benefits.--
(A) During first year.--
(i) Existing plans continue.--
During the 1-year period following the
transfer date, each transferred
employee may retain membership in any
employee benefit program (other than a
retirement benefit program) of the
agency from which the employee was
transferred under this title, including
any dental, vision, long term care, or
life insurance program to which the
employee belonged on the day before the
transfer date.
(ii) Employer's contribution.--The
Office of the Comptroller of the
Currency or the Corporation, as
appropriate, shall pay any employer
cost required to extend coverage in the
benefit program to the transferred
employee as required under that program
or negotiated agreements.
(B) Dental, vision, or life insurance after
first year.--If, after the 1-year period
beginning on the transfer date, the Office of
the Comptroller of the Currency or the
Corporation determines that the Office of the
Comptroller of the Currency or the Corporation,
as the case may be, will not continue to
participate in any dental, vision, or life
insurance program of an agency from which an
employee was transferred, a transferred
employee who is a member of the program may,
before the decision takes effect and without
regard to any regularly scheduled open season,
elect to enroll in--
(i) the enhanced dental benefits
program established under chapter 89A
of title 5, United States Code;
(ii) the enhanced vision benefits
established under chapter 89B of title
5, United States Code; and
(iii) the Federal Employees' Group
Life Insurance Program established
under chapter 87 of title 5, United
States Code, without regard to any
requirement of insurability.
(C) Long term care insurance after 1st
year.--If, after the 1-year period beginning on
the transfer date, the Office of the
Comptroller of the Currency or the Corporation
determines that the Office of the Comptroller
of the Currency or the Corporation, as
appropriate, will not continue to participate
in any long term care insurance program of an
agency from which an employee transferred, a
transferred employee who is a member of such a
program may, before the decision takes effect,
elect to apply for coverage under the Federal
Long Term Care Insurance Program established
under chapter 90 of title 5, United States
Code, under the underwriting requirements
applicable to a new active workforce member, as
described in part 875 of title 5, Code of
Federal Regulations (or any successor thereto).
(D) Contribution of transferred employee.--
(i) In general.--Subject to clause
(ii), a transferred employee who is
enrolled in a plan under the Federal
Employees Health Benefits Program shall
pay any employee contribution required
under the plan.
(ii) Cost differential.--The Office
of the Comptroller of the Currency or
the Corporation, as applicable, shall
pay any difference in cost between the
employee contribution required under
the plan provided to transferred
employees by the agency from which the
employee transferred on the date of
enactment of this Act and the plan
provided by the Office of the
Comptroller of the Currency or the
Corporation, as the case may be, under
this section.
(iii) Funds transfer.--The Office
of the Comptroller of the Currency or
the Corporation, as the case may be,
shall transfer to the Employees Health
Benefits Fund established under section
8909 of title 5, United States Code, an
amount determined by the Director of
the Office of Personnel Management,
after consultation with the Comptroller
of the Currency or the Chairperson of
the Corporation, as the case may be,
and the Office of Management and
Budget, to be necessary to reimburse
the Fund for the cost to the Fund of
providing any benefits under this
subparagraph that are not otherwise
paid for by a transferred employee
under clause (i).
(E) Special provisions to ensure
continuation of life insurance benefits.--
(i) In general.--An annuitant, as
defined in section 8901 of title 5,
United States Code, who is enrolled in
a life insurance plan administered by
an agency from which employees are
transferred under this title on the day
before the transfer date shall be
eligible for coverage by a life
insurance plan under sections 8706(b),
8714a, 8714b, or 8714c of title 5,
United States Code, or by a life
insurance plan established by the
Office of the Comptroller of the
Currency or the Corporation, as
applicable, without regard to any
regularly scheduled open season or any
requirement of insurability.
(ii) Contribution of transferred
employee.--
(I) In general.--Subject to
subclause (II), a transferred
employee enrolled in a life
insurance plan under this
subparagraph shall pay any
employee contribution required
by the plan.
(II) Cost differential.--
The Office of the Comptroller
of the Currency or the
Corporation, as the case may
be, shall pay any difference in
cost between the benefits
provided by the agency from
which the employee transferred
on the date of enactment of
this Act and the benefits
provided under this section.
(III) Funds transfer.--The
Office of the Comptroller of
the Currency or the
Corporation, as the case may
be, shall transfer to the
Federal Employees' Group Life
Insurance Fund established
under section 8714 of title 5,
United States Code, an amount
determined by the Director of
the Office of Personnel
Management, after consultation
with the Comptroller of the
Currency or the Chairperson of
the Corporation, as the case
may be, and the Office of
Management and Budget, to be
necessary to reimburse the
Federal Employees' Group Life
Insurance Fund for the cost to
the Federal Employees' Group
Life Insurance Fund of
providing benefits under this
subparagraph not otherwise paid
for by a transferred employee
under subclause (I).
(IV) Credit for time
enrolled in other plans.--For
any transferred employee,
enrollment in a life insurance
plan administered by the agency
from which the employee
transferred, immediately before
enrollment in a life insurance
plan under chapter 87 of title
5, United States Code, shall be
considered as enrollment in a
life insurance plan under that
chapter for purposes of section
8706(b)(1)(A) of title 5,
United States Code.
(j) Incorporation Into Agency Pay System.--Not later than
30 months after the transfer date, the Comptroller of the
Currency and the Chairperson of the Corporation shall place
each transferred employee into the established pay system and
structure of the appropriate employing agency.
(k) Equitable Treatment.--In administering the provisions
of this section, the Comptroller of the Currency and the
Chairperson of the Corporation--
(1) may not take any action that would unfairly
disadvantage a transferred employee relative to any
other employee of the Office of the Comptroller of the
Currency or the Corporation on the basis of prior
employment by the Office of Thrift Supervision;
(2) may take such action as is appropriate in an
individual case to ensure that a transferred employee
receives equitable treatment, with respect to the
status, tenure, pay, benefits (other than benefits
under programs administered by the Office of Personnel
Management), and accrued leave or vacation time for
prior periods of service with any Federal agency of the
transferred employee;
(3) shall, jointly with the Director of the Office
of Thrift Supervision, develop and adopt procedures and
safeguards designed to ensure that the requirements of
this subsection are met; and
(4) shall conduct a study detailing the position
assignments of all employees transferred pursuant to
subsection (a), describing the procedures and
safeguards adopted pursuant to paragraph (3), and
demonstrating that the requirements of this subsection
have been met; and shall, not later than 365 days after
the transfer date, submit a copy of such study to
Congress.
(l) Reorganization.--
(1) In general.--If the Comptroller of the Currency
or the Chairperson of the Corporation determines,
during the 2-year period beginning 1 year after the
transfer date, that a reorganization of the staff of
the Office of the Comptroller of the Currency or the
Corporation, respectively, is required, the
reorganization shall be deemed a ``major
reorganization'' for purposes of affording affected
employees retirement under section 8336(d)(2) or
8414(b)(1)(B) of title 5, United States Code.
(2) Service credit.--For purposes of this
subsection, periods of service with a Federal home loan
bank or a joint office of Federal home loan banks shall
be credited as periods of service with a Federal
agency.
SEC. 323. PROPERTY TRANSFERRED.
(a) Property Defined.--For purposes of this section, the
term ``property'' includes all real property (including
leaseholds) and all personal property, including computers,
furniture, fixtures, equipment, books, accounts, records,
reports, files, memoranda, paper, reports of examination, work
papers, and correspondence related to such reports, and any
other information or materials.
(b) Property of the Office of Thrift Supervision.--
(1) In general.--No later than 90 days after the
transfer date, all property of the Office of Thrift
Supervision (other than property described under
paragraph (b)(2)) that the Comptroller of the Currency
and the Chairperson of the Corporation jointly
determine is used, on the day before the transfer date,
to perform or support the functions of the Office of
Thrift Supervision transferred to the Office of the
Comptroller of the Currency or the Corporation under
this title, shall be transferred to the Office of the
Comptroller of the Currency or the Corporation in a
manner consistent with the transfer of employees under
this subtitle.
(2) Personal property.--All books, accounts,
records, reports, files, memoranda, papers, documents,
reports of examination, work papers, and correspondence
of the Office of Thrift Supervision that the
Comptroller of the Currency, the Chairperson of the
Corporation, and the Chairman of the Board of Governors
jointly determine is used, on the day before the
transfer date, to perform or support the functions of
the Office of Thrift Supervision transferred to the
Board of Governors under this title shall be
transferred to the Board of Governors in a manner
consistent with the purposes of this title.
(c) Contracts Related to Property Transferred.--Each
contract, agreement, lease, license, permit, and similar
arrangement relating to property transferred to the Office of
the Comptroller of the Currency or the Corporation by this
section shall be transferred to the Office of the Comptroller
of the Currency or the Corporation, as appropriate, together
with the property to which it relates.
(d) Preservation of Property.--Property identified for
transfer under this section shall not be altered, destroyed, or
deleted before transfer under this section.
SEC. 324. FUNDS TRANSFERRED.
The funds that, on the day before the transfer date, the
Director of the Office of Thrift Supervision (in consultation
with the Comptroller of the Currency, the Chairperson of the
Corporation, and the Chairman of the Board of Governors)
determines are not necessary to dispose of the affairs of the
Office of Thrift Supervision under section 325 and are
available to the Office of Thrift Supervision to pay the
expenses of the Office of Thrift Supervision--
(1) relating to the functions of the Office of
Thrift Supervision transferred under section
312(b)(2)(B), shall be transferred to the Office of the
Comptroller of the Currency on the transfer date;
(2) relating to the functions of the Office of
Thrift Supervision transferred under section
312(b)(2)(C), shall be transferred to the Corporation
on the transfer date; and
(3) relating to the functions of the Office of
Thrift Supervision transferred under section
312(b)(1)(A), shall be transferred to the Board of
Governors on the transfer date.
SEC. 325. DISPOSITION OF AFFAIRS.
(a) Authority of Director.--During the 90-day period
beginning on the transfer date, the Director of the Office of
Thrift Supervision--
(1) shall, solely for the purpose of winding up the
affairs of the Office of Thrift Supervision relating to
any function transferred to the Office of the
Comptroller of the Currency, the Corporation, or the
Board of Governors under this title--
(A) manage the employees of the Office of
Thrift Supervision who have not yet been
transferred and provide for the payment of the
compensation and benefits of the employees that
accrue before the date on which the employees
are transferred under this title; and
(B) manage any property of the Office of
Thrift Supervision, until the date on which the
property is transferred under section 323; and
(2) may take any other action necessary to wind up
the affairs of the Office of Thrift Supervision.
(b) Status of Director.--
(1) In general.--Notwithstanding the transfer of
functions under this subtitle, during the 90-day period
beginning on the transfer date, the Director of the
Office of Thrift Supervision shall retain and may
exercise any authority vested in the Director of the
Office of Thrift Supervision on the day before the
transfer date, only to the extent necessary--
(A) to wind up the Office of Thrift
Supervision; and
(B) to carry out the transfer under this
subtitle during such 90-day period.
(2) Other provisions.--For purposes of paragraph
(1), the Director of the Office of Thrift Supervision
shall, during the 90-day period beginning on the
transfer date, continue to be--
(A) treated as an officer of the United
States; and
(B) entitled to receive compensation at the
same annual rate of basic pay that the Director
of the Office of Thrift Supervision received on
the day before the transfer date.
SEC. 326. CONTINUATION OF SERVICES.
Any agency, department, or other instrumentality of the
United States, and any successor to any such agency,
department, or instrumentality, that was, before the transfer
date, providing support services to the Office of Thrift
Supervision in connection with functions transferred to the
Office of the Comptroller of the Currency, the Corporation or
the Board of Governors under this title, shall--
(1) continue to provide such services, subject to
reimbursement by the Office of the Comptroller of the
Currency, the Corporation, or the Board of Governors,
until the transfer of functions under this title is
complete; and
(2) consult with the Comptroller of the Currency,
the Chairperson of the Corporation, or the Chairman of
the Board of Governors, as appropriate, to coordinate
and facilitate a prompt and orderly transition.
SEC. 327. IMPLEMENTATION PLAN AND REPORTS.
(a) Plan Submission.--Within 180 days of the enactment of
the Dodd-Frank Wall Street Reform and Consumer Protection Act,
the Board of Governors, the Corporation, the Office of the
Comptroller of the Currency, and the Office of Thrift
Supervision, shall jointly submit a plan to the Committee on
Banking, Housing, and Urban Affairs of the Senate, the
Committee on Financial Services of the House of
Representatives, and the Inspectors General of the Department
of the Treasury, the Corporation, and the Board of Governors
detailing the steps the Board of Governors, the Corporation,
the Office of the Comptroller of the Currency, and the Office
of Thrift Supervision will take to implement the provisions of
sections 301 through 326, and the provisions of the amendments
made by such sections.
(b) Inspectors General Review of the Plan.--Within 60 days
of receiving the plan required under subsection (a), the
Inspectors General of the Department of the Treasury, the
Corporation, and the Board of Governors shall jointly provide a
written report to the Board of Governors, the Corporation, the
Office of the Comptroller of the Currency, and the Office of
Thrift Supervision and shall submit a copy to the Committee on
Banking, Housing, and Urban Affairs of the Senate and the
Committee on Financial Services of the House of Representatives
detailing whether the plan conforms with the provisions of
sections 301 through 326, and the provisions of the amendments
made by such sections, including--
(1) whether the plan sufficiently takes into
consideration the orderly transfer of personnel;
(2) whether the plan describes procedures and
safeguards to ensure that the Office of Thrift
Supervision employees are not unfairly disadvantaged
relative to employees of the Office of the Comptroller
of the Currency and the Corporation;
(3) whether the plan sufficiently takes into
consideration the orderly transfer of authority and
responsibilities;
(4) whether the plan sufficiently takes into
consideration the effective transfer of funds;
(5) whether the plan sufficiently takes in
consideration the orderly transfer of property; and
(6) any additional recommendations for an orderly
and effective process.
(c) Implementation Reports.--Not later than 6 months after
the date on which the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Financial Services
of the House of Representatives receives the report required
under subsection (b), and every 6 months thereafter until all
aspects of the plan have been implemented, the Inspectors
General of the Department of the Treasury, the Corporation, and
the Board of Governors shall jointly provide a written report
on the status of the implementation of the plan to the Board of
Governors, the Corporation, the Office of the Comptroller of
the Currency, and the Office of Thrift Supervision and shall
submit a copy to the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Financial Services
of the House of Representatives.
Subtitle C--Federal Deposit Insurance Corporation
SEC. 331. DEPOSIT INSURANCE REFORMS.
(a) Size Distinctions.--Section 7(b)(2) of the Federal
Deposit Insurance Act (12 U.S.C. 1817(b)(2)) is amended--
(1) by striking subparagraph (D); and
(2) by redesignating subparagraph (C) as
subparagraph (D).
(b) Assessment Base.--The Corporation shall amend the
regulations issued by the Corporation under section 7(b)(2) of
the Federal Deposit Insurance Act (12 U.S.C. 1817(b)(2)) to
define the term ``assessment base'' with respect to an insured
depository institution for purposes of that section 7(b)(2), as
an amount equal to--
(1) the average consolidated total assets of the
insured depository institution during the assessment
period; minus
(2) the sum of--
(A) the average tangible equity of the
insured depository institution during the
assessment period; and
(B) in the case of an insured depository
institution that is a custodial bank (as
defined by the Corporation, based on factors
including the percentage of total revenues
generated by custodial businesses and the level
of assets under custody) or a banker's bank (as
that term is used in section 5136 of the
Revised Statutes (12 U.S.C. 24)), an amount
that the Corporation determines is necessary to
establish assessments consistent with the
definition under section 7(b)(1) of the Federal
Deposit Insurance Act (12 U.S.C. 1817(b)(1))
for a custodial bank or a banker's bank.
SEC. 332. ELIMINATION OF PROCYCLICAL ASSESSMENTS.
Section 7(e) of the Federal Deposit Insurance Act is
amended--
(1) in paragraph (2)--
(A) by amending subparagraph (B) to read as
follows:
``(B) Limitation.--The Board of Directors
may, in its sole discretion, suspend or limit
the declaration of payment of dividends under
subparagraph (A).'';
(B) by amending subparagraph (C) to read as
follows:
``(C) Notice and opportunity for comment.--
The Corporation shall prescribe, by regulation,
after notice and opportunity for comment, the
method for the declaration, calculation,
distribution, and payment of dividends under
this paragraph''; and
(C) by striking subparagraphs (D) through
(G); and
(2) in paragraph (4)(A) by striking ``paragraphs
(2)(D) and'' and inserting ``paragraphs (2) and''.
SEC. 333. ENHANCED ACCESS TO INFORMATION FOR DEPOSIT INSURANCE
PURPOSES.
(a) Section 7(a)(2)(B) of the Federal Deposit Insurance Act
is amended by striking ``agreement'' and inserting
``consultation''.
(b) Section 7(b)(1)(E) of the Federal Deposit Insurance Act
is amended--
(1) in clause (i), by striking ``such as'' and
inserting ``including''; and
(2) in clause (iii), by striking ``Corporation''
and inserting ``Corporation, except as provided in
section 7(a)(2)(B)''.
SEC. 334. TRANSITION RESERVE RATIO REQUIREMENTS TO REFLECT NEW
ASSESSMENT BASE.
(a) Section 7(b)(3)(B) of the Federal Deposit Insurance Act
is amended to read as follows:
``(B) Minimum reserve ratio.--The reserve
ratio designated by the Board of Directors for
any year may not be less than 1.35 percent of
estimated insured deposits, or the comparable
percentage of the assessment base set forth in
paragraph (2)(C).''.
(b) Section 3(y)(3) of the Federal Deposit Insurance Act is
amended by inserting ``, or such comparable percentage of the
assessment base set forth in section 7(b)(2)(C)'' before the
period.
(c) For a period of not less than 5 years after the date of
the enactment of this title, the Federal Deposit Insurance
Corporation shall make available to the public the reserve
ratio and the designated reserve ratio using both estimated
insured deposits and the assessment base under section
7(b)(2)(C) of the Federal Deposit Insurance Act.
(d) Reserve ratio.--Notwithstanding the timing requirements
of section 7(b)(3)(E)(ii) of the Federal Deposit Insurance Act,
the Corporation shall take such steps as may be necessary for
the reserve ratio of the Deposit Insurance Fund to reach 1.35
percent of estimated insured deposits by September 30, 2020.
(e) Offset.--In setting the assessments necessary to meet
the requirements of subsection (d), the Corporation shall
offset the effect of subsection (d) on insured depository
institutions with total consolidated assets of less than
$10,000,000,000.
SEC. 335. PERMANENT INCREASE IN DEPOSIT AND SHARE INSURANCE.
(a) Permanent Increase in Deposit Insurance.--Section
11(a)(1)(E) of the Federal Deposit Insurance Act (12 U.S.C.
1821(a)(1)(E)) is amended--
(1) by striking ``$100,000'' and inserting
``$250,000''; and
(2) by adding at the end the following new
sentences: ``Notwithstanding any other provision of
law, the increase in the standard maximum deposit
insurance amount to $250,000 shall apply to depositors
in any institution for which the Corporation was
appointed as receiver or conservator on or after
January 1, 2008, and before October 3, 2008. The
Corporation shall take such actions as are necessary to
carry out the requirements of this section with respect
to such depositors, without regard to any time
limitations under this Act. In implementing this and
the preceding 2 sentences, any payment on a deposit
claim made by the Corporation as receiver or
conservator to a depositor above the standard maximum
deposit insurance amount in effect at the time of the
appointment of the Corporation as receiver or
conservator shall be deemed to be part of the net
amount due to the depositor under subparagraph (B).''
(b) Permanent Increase in Share Insurance.--Section
207(k)(5) of the Federal Credit Union Act (12 U.S.C.
1787(k)(5)) is amended by striking ``$100,000'' and inserting
``$250,000''.
SEC. 336. MANAGEMENT OF THE FEDERAL DEPOSIT INSURANCE CORPORATION.
(a) In General.--Section 2 of the Federal Deposit Insurance
Act (12 U.S.C. 1812) is amended--
(1) in subsection (a)(1)(B), by striking ``Director
of the Office of Thrift Supervision'' and inserting
``Director of the Consumer Financial Protection
Bureau'';
(2) by amending subsection (d)(2) to read as
follows:
``(2) Acting officials may serve.--In the event of
a vacancy in the office of the Comptroller of the
Currency or the office of Director of the Consumer
Financial Protection Bureau and pending the appointment
of a successor, or during the absence or disability of
the Comptroller of the Currency or the Director of the
Consumer Financial Protection Bureau, the acting
Comptroller of the Currency or the acting Director of
the Consumer Financial Protection Bureau, as the case
may be, shall be a member of the Board of Directors in
the place of the Comptroller or Director.''; and
(3) in subsection (f)(2), by striking ``Office of
Thrift Supervision'' and inserting ``Consumer Financial
Protection Bureau''.
(b) Effective Date.--This section, and the amendments made
by this section, shall take effect on the transfer date.
Subtitle D--Other Matters
SEC. 341. BRANCHING.
Notwithstanding the Federal Deposit Insurance Act (12
U.S.C. 1811 et seq.), the Bank Holding Company Act of 1956 (12
U.S.C. 1841 et seq.), or any other provision of Federal or
State law, a savings association that becomes a bank may--
(1) continue to operate any branch or agency that
the savings association operated immediately before the
savings association became a bank; and
(2) establish, acquire, and operate additional
branches and agencies at any location within any State
in which the savings association operated a branch
immediately before the savings association became a
bank, if the law of the State in which the branch is
located, or is to be located, would permit
establishment of the branch if the bank were a State
bank chartered by such State.
SEC. 342. OFFICE OF MINORITY AND WOMEN INCLUSION.
(a) Office of Minority and Women Inclusion.--
(1) Establishment.--
(A) In general.--Except as provided in
subparagraph (B), not later than 6 months after
the date of enactment of this Act, each agency
shall establish an Office of Minority and Women
Inclusion that shall be responsible for all
matters of the agency relating to diversity in
management, employment, and business
activities.
(B) Bureau.--The Bureau shall establish an
Office of Minority and Women Inclusion not
later than 6 months after the designated
transfer date established under section 1062.
(2) Transfer of responsibilities.--Each agency
that, on the day before the date of enactment of this
Act, assigned the responsibilities described in
paragraph (1) (or comparable responsibilities) to
another office of the agency shall ensure that such
responsibilities are transferred to the Office.
(3) Duties with respect to civil rights laws.--The
responsibilities described in paragraph (1) do not
include enforcement of statutes, regulations, or
executive orders pertaining to civil rights, except
each Director shall coordinate with the agency
administrator, or the designee of the agency
administrator, regarding the design and implementation
of any remedies resulting from violations of such
statutes, regulations, or executive orders.
(b) Director.--
(1) In general.--The Director of each Office shall
be appointed by, and shall report to, the agency
administrator. The position of Director shall be a
career reserved position in the Senior Executive
Service, as that position is defined in section 3132 of
title 5, United States Code, or an equivalent
designation.
(2) Duties.--Each Director shall develop standards
for--
(A) equal employment opportunity and the
racial, ethnic, and gender diversity of the
workforce and senior management of the agency;
(B) increased participation of minority-
owned and women-owned businesses in the
programs and contracts of the agency, including
standards for coordinating technical assistance
to such businesses; and
(C) assessing the diversity policies and
practices of entities regulated by the agency.
(3) Other duties.--Each Director shall advise the
agency administrator on the impact of the policies and
regulations of the agency on minority-owned and women-
owned businesses.
(4) Rule of construction.--Nothing in paragraph
(2)(C) may be construed to mandate any requirement on
or otherwise affect the lending policies and practices
of any regulated entity, or to require any specific
action based on the findings of the assessment.
(c) Inclusion in All Levels of Business Activities.--
(1) In general.--The Director of each Office shall
develop and implement standards and procedures to
ensure, to the maximum extent possible, the fair
inclusion and utilization of minorities, women, and
minority-owned and women-owned businesses in all
business and activities of the agency at all levels,
including in procurement, insurance, and all types of
contracts.
(2) Contracts.--The procedures established by each
agency for review and evaluation of contract proposals
and for hiring service providers shall include, to the
extent consistent with applicable law, a component that
gives consideration to the diversity of the applicant.
Such procedure shall include a written statement, in a
form and with such content as the Director shall
prescribe, that a contractor shall ensure, to the
maximum extent possible, the fair inclusion of women
and minorities in the workforce of the contractor and,
as applicable, subcontractors.
(3) Termination.--
(A) Determination.--The standards and
procedures developed and implemented under this
subsection shall include a procedure for the
Director to make a determination whether an
agency contractor, and, as applicable, a
subcontractor has failed to make a good faith
effort to include minorities and women in their
workforce.
(B) Effect of determination.--
(i) Recommendation to agency
administrator.--Upon a determination
described in subparagraph (A), the
Director shall make a recommendation to
the agency administrator that the
contract be terminated.
(ii) Action by agency
administrator.--Upon receipt of a
recommendation under clause (i), the
agency administrator may--
(I) terminate the contract;
(II) make a referral to the
Office of Federal Contract
Compliance Programs of the
Department of Labor; or
(III) take other
appropriate action.
(d) Applicability.--This section shall apply to all
contracts of an agency for services of any kind, including the
services of financial institutions, investment banking firms,
mortgage banking firms, asset management firms, brokers,
dealers, financial services entities, underwriters,
accountants, investment consultants, and providers of legal
services. The contracts referred to in this subsection include
all contracts for all business and activities of an agency, at
all levels, including contracts for the issuance or guarantee
of any debt, equity, or security, the sale of assets, the
management of the assets of the agency, the making of equity
investments by the agency, and the implementation by the agency
of programs to address economic recovery.
(e) Reports.--Each Office shall submit to Congress an
annual report regarding the actions taken by the agency and the
Office pursuant to this section, which shall include--
(1) a statement of the total amounts paid by the
agency to contractors since the previous report;
(2) the percentage of the amounts described in
paragraph (1) that were paid to contractors described
in subsection (c)(1);
(3) the successes achieved and challenges faced by
the agency in operating minority and women outreach
programs;
(4) the challenges the agency may face in hiring
qualified minority and women employees and contracting
with qualified minority-owned and women-owned
businesses; and
(5) any other information, findings, conclusions,
and recommendations for legislative or agency action,
as the Director determines appropriate.
(f) Diversity in Agency Workforce.--Each agency shall take
affirmative steps to seek diversity in the workforce of the
agency at all levels of the agency in a manner consistent with
applicable law. Such steps shall include--
(1) recruiting at historically black colleges and
universities, Hispanic-serving institutions, women's
colleges, and colleges that typically serve majority
minority populations;
(2) sponsoring and recruiting at job fairs in urban
communities;
(3) placing employment advertisements in newspapers
and magazines oriented toward minorities and women;
(4) partnering with organizations that are focused
on developing opportunities for minorities and women to
place talented young minorities and women in industry
internships, summer employment, and full-time
positions;
(5) where feasible, partnering with inner-city high
schools, girls' high schools, and high schools with
majority minority populations to establish or enhance
financial literacy programs and provide mentoring; and
(6) any other mass media communications that the
Office determines necessary.
(g) Definitions.--For purposes of this section, the
following definitions shall apply:
(1) Agency.--The term ``agency'' means--
(A) the Departmental Offices of the
Department of the Treasury;
(B) the Corporation;
(C) the Federal Housing Finance Agency;
(D) each of the Federal reserve banks;
(E) the Board;
(F) the National Credit Union
Administration;
(G) the Office of the Comptroller of the
Currency;
(H) the Commission; and
(I) the Bureau.
(2) Agency administrator.--The term ``agency
administrator'' means the head of an agency.
(3) Minority.--The term ``minority'' has the same
meaning as in section 1204(c) of the Financial
Institutions Reform, Recovery, and Enforcement Act of
1989 (12 U.S.C. 1811 note).
(4) Minority-owned business.--The term ``minority-
owned business'' has the same meaning as in section
21A(r)(4)(A) of the Federal Home Loan Bank Act (12
U.S.C. 1441a(r)(4)(A)), as in effect on the day before
the transfer date.
(5) Office.--The term ``Office'' means the Office
of Minority and Women Inclusion established by an
agency under subsection (a).
(6) Women-owned business.--The term ``women-owned
business'' has the meaning given the term ``women's
business'' in section 21A(r)(4)(B) of the Federal Home
Loan Bank Act (12 U.S.C. 1441a(r)(4)(B)), as in effect
on the day before the transfer date.
SEC. 343. INSURANCE OF TRANSACTION ACCOUNTS.
(a) Banks and Savings Associations.--
(1) Amendments.--Section 11(a)(1) of the Federal
Deposit Insurance Act (12 U.S.C. 1821(a)(1)) is
amended--
(A) in subparagraph (B)--
(i) by striking ``The net amount''
and inserting the following:
``(i) In general.--Subject to
clause (ii), the net amount''; and
(ii) by adding at the end the
following new clauses:
``(ii) Insurance for noninterest-
bearing transaction accounts.--
Notwithstanding clause (i), the
Corporation shall fully insure the net
amount that any depositor at an insured
depository institution maintains in a
noninterest-bearing transaction
account. Such amount shall not be taken
into account when computing the net
amount due to such depositor under
clause (i).
``(iii) Noninterest-bearing
transaction account defined.--For
purposes of this subparagraph, the term
`noninterest-bearing transaction
account' means a deposit or account
maintained at an insured depository
institution--
``(I) with respect to which
interest is neither accrued nor
paid;
``(II) on which the
depositor or account holder is
permitted to make withdrawals
by negotiable or transferable
instrument, payment orders of
withdrawal, telephone or other
electronic media transfers, or
other similar items for the
purpose of making payments or
transfers to third parties or
others; and
``(III) on which the
insured depository institution
does not reserve the right to
require advance notice of an
intended withdrawal.''; and
(B) in subparagraph (C), by striking
``subparagraph (B)'' and inserting
``subparagraph (B)(i)''.
(2) Effective date.--The amendments made by
paragraph (1) shall take effect on December 31, 2010.
(3) Prospective repeal.--Effective January 1, 2013,
section 11(a)(1) of the Federal Deposit Insurance Act
(12 U.S.C. 1821(a)(1)), as amended by paragraph (1), is
amended--
(A) in subparagraph (B)--
(i) by striking ``deposit.--'' and
all that follows through ``clause (ii),
the net amount'' and insert
``deposit.--The net amount''; and
(ii) by striking clauses (ii) and
(iii); and
(B) in subparagraph (C), by striking
``subparagraph (B)(i)'' and inserting
``subparagraph (B)''.
(b) Credit Unions.--
(1) Amendments.--Section 207(k)(1) of the Federal
Credit Union Act (12 U.S.C. 1787(k)(1)) is amended--
(A) in subparagraph (A)--
(i) by striking ``Subject to the
provisions of paragraph (2), the net
amount'' and inserting the following:
``(i) Net amount of insurance
payable.--Subject to clause (ii) and
the provisions of paragraph (2), the
net amount''; and
(ii) by adding at the end the
following new clauses:
``(ii) Insurance for noninterest-
bearing transaction accounts.--
Notwithstanding clause (i), the Board
shall fully insure the net amount that
any member or depositor at an insured
credit union maintains in a
noninterest-bearing transaction
account. Such amount shall not be taken
into account when computing the net
amount due to such member or depositor
under clause (i).
``(iii) Noninterest-bearing
transaction account defined.--For
purposes of this subparagraph, the term
`noninterest-bearing transaction
account' means an account or deposit
maintained at an insured credit union--
``(I) with respect to which
interest is neither accrued nor
paid;
``(II) on which the account
holder or depositor is
permitted to make withdrawals
by negotiable or transferable
instrument, payment orders of
withdrawal, telephone or other
electronic media transfers, or
other similar items for the
purpose of making payments or
transfers to third parties or
others; and
``(III) on which the
insured credit union does not
reserve the right to require
advance notice of an intended
withdrawal.''; and
(B) in subparagraph (B), by striking
``subparagraph (A)'' and inserting
``subparagraph (A)(i)''.
(2) Effective date.--The amendments made by
paragraph (1) shall take effect upon the date of the
enactment of this Act.
(3) Prospective repeal.--Effective January 1, 2013,
section 207(k)(1) of the Federal Credit Union Act (12
U.S.C. 1787(k)(1)), as amended by paragraph (1), is
amended--
(A) in subparagraph (A)--
(i) by striking ``(i) net amount of
insurance payable.--'' and all that
follows through ``paragraph (2), the
net amount'' and inserting ``Subject to
the provisions of paragraph (2), the
net amount''; and
(ii) by striking clauses (ii) and
(iii); and
(B) in subparagraph (B), by striking
``subparagraph (A)(i)'' and inserting
``subparagraph (A)''.
Subtitle E--Technical and Conforming Amendments
SEC. 351. EFFECTIVE DATE.
Except as provided in section 364(a), the amendments made
by this subtitle shall take effect on the transfer date.
SEC. 352. BALANCED BUDGET AND EMERGENCY DEFICIT CONTROL ACT OF 1985.
Section 256(h) of the Balanced Budget and Emergency Deficit
Control Act of 1985 (2 U.S.C. 906(h)) is amended--
(1) in paragraph (4), by striking subparagraphs (C)
and (G); and
(2) by redesignating subparagraphs (D), (E), (F),
and (H) as subparagraphs (C), (D), (E), and (F),
respectively.
SEC. 353. BANK ENTERPRISE ACT OF 1991.
Section 232(a) of the Bank Enterprise Act of 1991 (12
U.S.C. 1834(a)) is amended--
(1) in the subsection heading, by striking ``by
Federal Reserve Board'';
(2) in paragraph (1)--
(A) by striking ``The Board of Governors of
the Federal Reserve System,'' and inserting
``The Comptroller of the Currency''; and
(B) by striking ``section 7(b)(2)(H)'' and
inserting ``section 7(b)(2)(E)'';
(3) in paragraph (2)(A), by striking ``Board'' and
inserting ``Comptroller''; and
(4) in paragraph (3)--
(A) by redesignating subparagraphs (A)
through (C) as subparagraphs (B) through (D),
respectively; and
(B) by inserting before subparagraph (B)
the following:
``(A) Comptroller.--The term `Comptroller'
means the Comptroller of the Currency.''.
SEC. 354. BANK HOLDING COMPANY ACT OF 1956.
The Bank Holding Company Act of 1956 (12 U.S.C. 1841 et
seq.) is amended--
(1) in section 2(j)(3) (12 U.S.C. 1841(j)(3)),
strike ``Director of the Office of Thrift Supervision''
and inserting ``appropriate Federal banking agency'';
(2) in section 4 (12 U.S.C. 1843)--
(A) in subsection (i)--
(i) in paragraph (4)--
(I) in subparagraph (A)--
(aa) in the
subparagraph heading,
by striking ``to
director''; and
(bb) by striking
``Board'' and all that
follows through the end
of the subparagraph and
inserting ``Board shall
solicit comments and
recommendations from--
``(i) the Comptroller of the
Currency, with respect to the
acquisition of a Federal savings
association; and
``(ii) the Federal Deposit
Insurance Corporation, with respect to
the acquisition of a State savings
association.''.
(II) in subparagraph (B),
by striking ``Director'' each
place that term appears and
inserting ``Comptroller of the
Currency or the Federal Deposit
Insurance Corporation, as
applicable,'';
(ii) in paragraph (5)--
(I) in subparagraph (B), by
striking ``Director with'' and
inserting ``Comptroller of the
Currency or the Federal Deposit
Insurance Corporation, as
applicable, with''; and
(II) by striking
``Director'' each place that
term appears and inserting
``Comptroller of the Currency
or the Federal Deposit
Insurance Corporation'';
(iii) in paragraph (6), by striking
``Director'' and inserting
``Comptroller of the Currency or the
Federal Deposit Insurance Corporation,
as applicable,''; and
(iv) by striking paragraph (7); and
(3) in section 5(f) (12 U.S.C. 1844(f))--
(A) by striking ``subpena'' each place that
term appears and inserting ``subpoena'';
(B) by striking ``subpenas'' each place
that term appears and inserting ``subpoenas'';
and
(C) by striking ``subpenaed'' and inserting
``subpoenaed''.
SEC. 355. BANK HOLDING COMPANY ACT AMENDMENTS OF 1970.
Section 106(b)(1) of the Bank Holding Company Act
Amendments of 1970 (12 U.S.C. 1972(1)) is amended in the
undesignated matter following subparagraph (E) by inserting
``issue such regulations as are necessary to carry out this
section, and, in consultation with the Comptroller of the
Currency and the Federal Deposit Insurance Company, may'' after
``The Board may''.
SEC. 356. BANK PROTECTION ACT OF 1968.
The Bank Protection Act of 1968 (12 U.S.C. 1881 et seq.) is
amended--
(1) in section 2 (12 U.S.C. 1881), by striking
``the term'' and all that follows through the end of
the section and inserting ``the term `Federal
supervisory agency' means the appropriate Federal
banking agency, as defined in section 3(q) of the
Federal Deposit Insurance Act (12 U.S.C. 1813(q)).'';
(2) in section 3 (12 U.S.C. 1882), by striking
``and loan'' each place that term appears; and
(3) in section 5 (12 U.S.C. 1884), by striking
``and loan''.
SEC. 357. BANK SERVICE COMPANY ACT.
The Bank Service Company Act (12 U.S.C. 1861 et seq.) is
amended--
(1) in section 1(b)(4) (12 U.S.C. 1861(b)(4))--
(A) by inserting after ``an insured bank,''
the following: ``a savings association,'';
(B) by striking ``Director of the Office of
Thrift Supervision'' and inserting
``appropriate Federal banking agency''; and
(C) by striking ``, the Federal Savings and
Loan Insurance Corporation,'';
(2) in section 1(b)(5), by striking ``term `insured
depository institution' has the same meaning as in
section 3(c)'' and inserting ``terms `depository
institution' and `savings association' have the same
meanings as in section 3''; and
(3) in section 7(c)(2) (12 U.S.C. 1867(c)(2)), by
inserting ``each'' after ``notify''.
SEC. 358. COMMUNITY REINVESTMENT ACT OF 1977.
The Community Reinvestment Act of 1977 (12 U.S.C. 2901 et
seq.) is amended--
(1) in section 803 (12 U.S.C. 2902)--
(A) in paragraph (1)--
(i) in subparagraph (A), by
inserting ``and Federal savings
associations (the deposits of which are
insured by the Federal Deposit
Insurance Corporation)'' after
``banks'';
(ii) in subparagraph (B), by
striking ``and bank holding companies''
and inserting ``, bank holding
companies, and savings and loan holding
companies''; and
(iii) in subparagraph (C), by
striking ``; and'' and inserting ``,
and State savings associations (the
deposits of which are insured by the
Federal Deposit Insurance
Corporation).''; and
(B) by striking paragraph (2) (relating to
the Office of Thrift Supervision), as added by
section 744(q) of the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989
(Public Law 101-73; 103 Stat. 440); and
(2) in section 806 (12 U.S.C. 2905), by inserting
``, except that the Comptroller of the Currency shall
prescribe regulations applicable to savings
associations and the Board of Governors shall prescribe
regulations applicable to insured State member banks,
bank holding companies and savings and loan holding
companies,'' after ``supervisory agency''.
SEC. 359. CRIME CONTROL ACT OF 1990.
The Crime Control Act of 1990 is amended--
(1) in section 2539(c)(2) (28 U.S.C. 509 note)--
(A) by striking subparagraphs (C) and (D);
and
(B) by redesignating subparagraphs (E)
through (H) as subparagraphs (C) through (G),
respectively; and
(2) in section 2554(b)(2) (Public Law 101-647; 104
Stat. 4890)--
(A) in subparagraph (A), by striking ``,
the Director of the Office of Thrift
Supervision,'' and inserting ``the Comptroller
of the Currency''; and
(B) in subparagraph (B), by striking ``,
the Director'' and all that follows through
``Trust Corporation'' and inserting ``or the
Federal Deposit Insurance Corporation''.
SEC. 360. DEPOSITORY INSTITUTION MANAGEMENT INTERLOCKS ACT.
The Depository Institution Management Interlocks Act (12
U.S.C. 3201 et seq.) is amended--
(1) in section 207 (12 U.S.C. 3206)--
(A) in paragraph (1), by inserting before
the comma at the end the following: ``and
Federal savings associations (the deposits of
which are insured by the Federal Deposit
Insurance Corporation)'';
(B) in paragraph (2), by striking ``, and
bank holding companies'' and inserting ``, bank
holding companies, and savings and loan holding
companies'';
(C) in paragraph (3), by striking
``Corporation,'' and inserting ``Corporation
and State savings associations (the deposits of
which are insured by the Federal Deposit
Insurance Corporation),'';
(D) by striking paragraph (4);
(E) by redesignating paragraphs (5) and (6)
as paragraphs (4) and (5), respectively; and
(F) in paragraph (5), as so redesignated,
by striking ``through (5)'' and inserting
``through (4)'';
(2) in section 209 (12 U.S.C. 3207)--
(A) in paragraph (1), by inserting before
the comma at the end the following: ``and
Federal savings associations (the deposits of
which are insured by the Federal Deposit
Insurance Corporation)'';
(B) in paragraph (2), by striking ``, and
bank holding companies'' and inserting ``, bank
holding companies, and savings and loan holding
companies'';
(C) in paragraph (3), by striking
``Corporation,'' and inserting ``Corporation
and State savings associations (the deposits of
which are insured by the Federal Deposit
Insurance Corporation),'';
(D) by striking paragraph (4); and
(E) by redesignating paragraph (5) as
paragraph (4); and
(3) in section 210(a) (12 U.S.C. 3208(a))--
(A) by striking ``his'' and inserting
``the''; and
(B) by inserting ``of the Attorney
General'' after ``enforcement functions''.
SEC. 361. EMERGENCY HOMEOWNERS' RELIEF ACT.
Section 110 of the Emergency Homeowners' Relief Act (12
U.S.C. 2709) is amended in the second sentence, by striking
``Home Loan Bank Board, the Federal Savings and Loan Insurance
Corporation'' and inserting ``Housing Finance Agency''.
SEC. 362. FEDERAL CREDIT UNION ACT.
The Federal Credit Union Act (12 U.S.C. 1751 et seq.) is
amended--
(1) in section 107(8) (12 U.S.C. 1757(8)), by
striking ``or the Federal Savings and Loan Insurance
Corporation'';
(2) in section 205 (12 U.S.C. 1785)--
(A) in subsection (b)(2)(G)(i), by striking
``the Office of Thrift Supervision and''; and
(B) in subsection (i)(1), by striking ``or
the Federal Savings and Loan Insurance
Corporation''; and
(3) in section 206(g)(7) (12 U.S.C. 1786(g)(7))--
(A) in subparagraph (A)--
(i) in clause (ii), by striking
``(b)(8)'' and inserting ``(b)(9)'';
(ii) in clause (v)--
(I) by striking
``depository'' and inserting
``financial''; and
(II) by adding ``and'' at
the end;
(iii) in clause (vi)--
(I) by striking ``Board''
and inserting ``Agency''; and
(II) by striking ``; and''
and inserting a period; and
(iv) by striking clause (vii); and
(B) in subparagraph (D)--
(i) in clause (iii), by adding
``and'' at the end;
(ii) in clause (iv)--
(I) by striking ``Board''
and inserting ``Agency''; and
(II) by striking ``and'' at
the end; and
(iii) by striking clause (v).
SEC. 363. FEDERAL DEPOSIT INSURANCE ACT.
The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.)
is amended--
(1) in section 3 (12 U.S.C. 1813)--
(A) in subsection (b)(1)(C), by striking
``Director of the Office of Thrift
Supervision'' and inserting ``Comptroller of
the Currency'';
(B) in subsection (l)(5), in the matter
preceding subparagraph (A), by striking
``Director of the Office of Thrift
Supervision,''; and
(C) in subsection (z), by striking ``the
Director of the Office of Thrift
Supervision,'';
(2) in section 7 (12 U.S.C. 1817)--
(A) in subsection (a)--
(i) in paragraph (2)--
(I) in subparagraph (A)--
(aa) in the first
sentence, by striking
``the Director of the
Office of Thrift
Supervision,'';
(bb) in the second
sentence--
(AA) by striking
``the Director of the
Office of Thrift
Supervision,'' and
inserting ``to''; and
(BB) by inserting
``to'' before ``any
Federal home''; and
(cc) by striking
``Finance Board'' each
place that term appears
and inserting ``Finance
Agency''; and
(II) in subparagraph (B),
by striking ``the Comptroller
of the Currency, the Board of
Governors of the Federal
Reserve System, and the
Director of the Office of
Thrift Supervision,'' and
inserting ``the Comptroller of
the Currency and the Board of
Governors of the Federal
Reserve System,'';
(ii) in paragraph (3), in the first
sentence, by striking ``Comptroller of
the Currency, the Chairman of the Board
of Governors of the Federal Reserve
System, and the Director of the Office
of Thrift Supervision.'' and inserting
``Comptroller of the Currency, and the
Chairman of the Board of Governors of
the Federal Reserve System.'';
(iii) in paragraph (6), by striking
``section 232(a)(3)(C)'' and inserting
``section 232(a)(3)(D)''; and
(iv) in paragraph (7), by striking
``, the Director of the Office of
Thrift Supervision,''; and
(B) in subsection (n)--
(i) in the heading, by striking
``Director of the Office of Thrift
Supervision'' and inserting
``Comptroller of the Currency'';
(ii) in the first sentence--
(I) by striking ``the
Director of the Office of
Thrift Supervision'' and
inserting ``the Comptroller of
the Currency''; and
(II) by inserting
``Federal'' before ``savings
associations'';
(iii) in the third sentence, by
striking ``, the Financing Corporation,
and the Resolution Funding
Corporation''; and
(iv) by striking ``the Director''
each place that term appears and
inserting ``the Comptroller'';
(3) in section 8 (12 U.S.C. 1818)--
(A) in subsection (a)(8)(B)(ii), in the
last sentence, by striking ``Director of the
Office of Thrift Supervision'' each place that
term appears and inserting ``Comptroller of the
Currency'';
(B) in subsection (b)(3)--
(i) by inserting ``any savings and
loan holding company and any subsidiary
(other than a depository institution)
of a savings and loan holding company
(as such terms are defined in section
10 of Home Owners' Loan Act), any
noninsured State member bank'' after
``Bank Holding Company Act of 1956,'';
and
(ii) by inserting ``or against a
savings and loan holding company or any
subsidiary thereof (other than a
depository institution or a subsidiary
of such depository institution)''
before the period at the end;
(C) by striking paragraph (9) of subsection
(b) and inserting the following new paragraph:
``(9) [Repealed]''.
(D) in subsection (e)(7)--
(i) in subparagraph (A)--
(I) in clause (v), by
inserting ``and'' after the
semicolon;
(II) in clause (vi)--
(aa) by striking
``Board'' and inserting
``Agency''; and
(bb) by striking
``; and'' and inserting
a period; and
(III) by striking clause
(vii); and
(ii) in subparagraph (D)--
(I) in clause (iii), by
inserting ``and'' after the
semicolon;
(II) in clause (iv)--
(aa) by striking
``Board'' and inserting
``Agency''; and
(bb) by striking
``; and'' and inserting
a period; and
(III) by striking clause
(v);
(E) in subsection (j)--
(i) in paragraph (2), by striking
``, or as a savings association under
subsection (b)(9) of this section'';
(ii) in paragraph (3), by inserting
``or'' after the semicolon;
(iii) in paragraph (4), by striking
``; or'' and inserting a comma; and
(iv) by striking paragraph (5);
(F) in subsection (o), by striking
``Director of the Office of Thrift
Supervision'' and inserting ``Comptroller of
the Currency''; and
(G) in subsection (w)(3)(A), by striking
``and the Office of Thrift Supervision'';
(4) in section 10 (12 U.S.C. 1820)--
(A) in subsection (d)(5), by striking ``or
the Resolution Trust Corporation'' each place
that term appears; and
(B) in subsection (k)(5)(B)--
(i) in clause (ii), by inserting
``and'' after the semicolon;
(ii) in clause (iii), by striking
``; and'' and inserting a period; and
(iii) by striking clause (iv);
(5) in section 11 (12 U.S.C. 1821)--
(A) in subsection (c)--
(i) in paragraph (2)(A)(ii), by
striking ``(other than section 21A of
the Federal Home Loan Bank Act)'';
(ii) in paragraph (4), by striking
``Except as otherwise provided in
section 21A of the Federal Home Loan
Bank Act and notwithstanding'' and
inserting ``Notwithstanding'';
(iii) in paragraph (6)--
(I) in the heading, by
striking ``Director of the
office of thrift supervision''
and inserting ``Comptroller of
the currency'';
(II) in subparagraph (A)--
(aa) by striking
``or the Resolution
Trust Corporation'';
and
(bb) by striking
``Director of the
Office of Thrift
Supervision'' and
inserting ``Comptroller
of the Currency''; and
(III) by amending
subparagraph (B) to read as
follows:
``(B) Receiver.--The Corporation may, at
the discretion of the Comptroller of the
Currency, be appointed receiver and the
Corporation may accept any such appointment.'';
(iv) in paragraph (12)(A), by
striking ``or the Resolution Trust
Corporation'';
(B) in subsection (d)--
(i) in paragraph (17)(A), by
striking ``or the Director of the
Office of Thrift Supervision''; and
(ii) in paragraph (18)(B), by
striking ``or the Director of the
Office of Thrift Supervision'';
(C) in subsection (m)--
(i) in paragraph (9), by striking
``or the Director of the Office of
Thrift Supervision, as appropriate'';
(ii) in paragraph (16), by striking
``or the Director of the Office of
Thrift Supervision, as appropriate''
each place that term appears; and
(iii) in paragraph (18), by
striking ``or the Director of the
Office of Thrift Supervision, as
appropriate'' each place that term
appears;
(D) in subsection (n)--
(i) in paragraph (1)(A)--
(I) by striking ``, or the
Director of the Office of
Thrift Supervision, with
respect to'' and inserting
``or''; and
(II) by striking
``applicable,,'' and inserting
``applicable,'';
(ii) in paragraph (2)(A), by
striking ``or the Director of the
Office of Thrift Supervision'';
(iii) in paragraph (4)(D), by
striking ``and the Director of the
Office of Thrift Supervision, as
appropriate,'';
(iv) in paragraph (4)(G), by
striking ``and the Director of the
Office of Thrift Supervision, as
appropriate,''; and
(v) in paragraph (12)(B)--
(I) by inserting ``as''
after ``shall appoint the
Corporation'';
(II) by striking ``or the
Director of the Office of
Thrift Supervision, as
appropriate,'' each place such
term appears;
(E) in subsection (p)--
(i) in paragraph (2)(B), by
striking ``the Corporation, the FSLIC
Resolution Fund, or the Resolution
Trust Corporation,'' and inserting ``or
the Corporation,''; and
(ii) in paragraph (3)(B), by
striking ``, the FSLIC Resolution Fund,
the Resolution Trust Corporation,'';
and
(F) in subsection (r), by striking ``and
the Resolution Trust Corporation'';
(6) in section 13(k)(1)(A)(iv) (12 U.S.C.
1823(k)(1)(A)(iv)), by striking ``Director of the
Office of Thrift Supervision'' and inserting
``Comptroller of the Currency'';
(7) in section 18 (12 U.S.C. 1828)--
(A) in subsection (c)(2)--
(i) in subparagraph (A), by
inserting ``or a Federal savings
association'' before the semicolon;
(ii) in subparagraph (B), by adding
``and'' at the end;
(iii) in subparagraph (C), by
striking ``(except'' and all that
follows through ``; and'' and inserting
``or a State savings association.'';
and
(iv) by striking subparagraph (D);
(B) in subsection (g)(1), by striking ``the
Director of the Office of Thrift Supervision''
and inserting ``the Comptroller of the
Currency'';
(C) in subsection (i)(2)(C), by striking
``Director of the Office of Thrift
Supervision'' and inserting ``Corporation'';
and
(D) in subsection (m)--
(i) in paragraph (1)--
(I) in subparagraph (A), by
striking ``and the Director of
the Office of Thrift
Supervision'' and inserting
``or the Comptroller of the
Currency, as appropriate,'';
and
(II) in subparagraph (B),
by striking ``and orders of the
Director of the Office of
Thrift Supervision'' and
inserting ``of the Comptroller
of the Currency and orders of
the Corporation and the
Comptroller of the Currency'';
(ii) in paragraph (2)--
(I) in subparagraph (A), by
striking ``Director of the
Office of Thrift Supervision''
and inserting ``Comptroller of
the Currency, as
appropriate,''; and
(II) in subparagraph (B)--
(aa) in the matter
before clause (i), by
striking ``Director of
the Office of Thrift
Supervision'' and
inserting ``Corporation
or the Comptroller of
the Currency, as
appropriate,''; and
(bb) in the matter
following clause (ii)--
(AA) in the
first sentence,
by striking
``Director of
the Office of
Thrift
Supervision''
and inserting
``Office of the
Comptroller of
the Currency,
as
appropriate,'';
and
(BB) by
striking the
second sentence
and inserting
the following:
``The
Corporation or
the Comptroller
of the
Currency, as
appropriate,
may take any
other
corrective
measures with
respect to the
subsidiary,
including the
authority to
require the
subsidiary to
terminate the
activities or
operations
posing such
risks, as the
Corporation or
the Comptroller
of the
Currency,
respectively,
may deem
appropriate.'';
and
(iii) in paragraph (3)--
(I) in subparagraph (A), in
the second sentence--
(aa) by inserting
``, in the case of a
Federal savings
association,'' before
``consult with''; and
(bb) by striking
``Director of the
Office of Thrift
Supervision'' and
inserting ``Comptroller
of the Currency''; and
(II) in subparagraph (B)--
(aa) in the
subparagraph heading,
by striking
``Director'' and
inserting ``Comptroller
of the currency'';
(bb) by striking
``Office of Thrift
Supervision'' and
inserting ``Comptroller
of the Currency'';
(cc) by inserting a
comma after
``soundness''; and
(dd) by inserting
``as to Federal savings
associations'' after
``compliance'';
(8) in section 19(e) (12 U.S.C. 1829(e))--
(A) in paragraph (1), by striking
``Director of the Office of Thrift
Supervision'' and inserting ``Board of
Governors of the Federal Reserve System''; and
(B) in paragraph (2), by striking
``Director of the Office of Thrift
Supervision'' and inserting ``Board of
Governors of the Federal Reserve System'';
(9) in section 28 (12 U.S.C. 1831e)--
(A) in subsection (e)--
(i) in paragraph (2)--
(I) in subparagraph
(A)(ii), by striking ``Director
of the Office of Thrift
Supervision'' and inserting
``Comptroller of the Currency
or the Corporation, as
appropriate'';
(II) in subparagraph (C),
by striking ``Director of the
Office of Thrift Supervision''
and inserting ``Comptroller of
the Currency or the
Corporation, as appropriate,'';
and
(III) in subparagraph (F),
by striking ``Director of the
Office of Thrift Supervision''
and inserting ``Comptroller of
the Currency or the
Corporation, as appropriate'';
and
(ii) in paragraph (3)--
(I) in subparagraph (A), by
striking ``Director of the
Office of Thrift Supervision''
and inserting ``Comptroller of
the Currency or the
Corporation, as appropriate'';
and
(II) in subparagraph (B),
by striking ``Director of the
Office of Thrift Supervision''
and inserting ``Comptroller of
the Currency or the
Corporation, as appropriate,'';
and
(B) in subsection (h)(2), by striking
``Director of the Office of Thrift
Supervision'' and inserting ``Comptroller of
the Currency, of the Corporation,''; and
(10) in section 33(e) (12 U.S.C. 1831j(e)), by
striking ``Federal Housing Finance Board, the
Comptroller of the Currency, and the Director of the
Office of Thrift Supervision'' and inserting ``Federal
Housing Finance Agency and the Comptroller of the
Currency''.
SEC. 364. FEDERAL HOME LOAN BANK ACT.
(a) Repeal of Section 18(c).--Effective 90 days after the
transfer date, section 18(c) of the Federal Home Loan Bank Act
(12 U.S.C. 1438(c)) is repealed.
(b) Repeal of Section 21A.--Section 21A of the Federal Home
Loan Bank Act (12 U.S.C. 1441a) is repealed.
SEC. 365. FEDERAL HOUSING ENTERPRISES FINANCIAL SAFETY AND SOUNDNESS
ACT OF 1992.
The Federal Housing Enterprises Financial Safety and
Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is amended--
(1) in section 1315(b) (12 U.S.C. 4515(b)), by
striking ``the Federal Deposit Insurance Corporation,
and the Office of Thrift Supervision.'' and inserting
``and the Federal Deposit Insurance Corporation.''; and
(2) in section 1317(c) (12 U.S.C. 4517(c)), by
striking ``the Federal Deposit Insurance Corporation,
or the Director of the Office of Thrift Supervision''
and inserting ``or the Federal Deposit Insurance
Corporation''.
SEC. 366. FEDERAL RESERVE ACT.
The Federal Reserve Act (12 U.S.C. 221 et seq.) is
amended--
(1) in section 11(a)(2) (12 U.S.C. 248(a)(2))--
(A) by inserting ``State savings
associations that are insured depository
institutions (as defined in section 3 of the
Federal Deposit Insurance Act),'' after ``case
of insured'';
(B) by striking ``Director of the Office of
Thrift Supervision'' and inserting
``Comptroller of the Currency'';
(C) by inserting ``Federal'' before
``savings association which''; and
(D) by striking ``savings and loan
association'' and inserting ``savings
association''; and
(2) in section 19(b) (12 U.S.C. 461(b))--
(A) in paragraph (1)(F), by striking
``Director of the Office of Thrift
Supervision'' and inserting ``Comptroller of
the Currency''; and
(B) in paragraph (4)(B), by striking
``Director of the Office of Thrift
Supervision'' and inserting ``Comptroller of
the Currency''.
SEC. 367. FINANCIAL INSTITUTIONS REFORM, RECOVERY, AND ENFORCEMENT ACT
OF 1989.
The Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 is amended--
(1) in section 203 (12 U.S.C. 1812 note), by
striking subsection (b);
(2) in section 302(1) (12 U.S.C. 1467a note), by
striking ``Director of the Office of Thrift
Supervision'' and inserting ``Comptroller of the
Currency'';
(3) in section 305 (12 U.S.C. 1464 note), by
striking subsection (b);
(4) in section 308 (12 U.S.C. 1463 note)--
(A) in subsection (a), by striking
``Director of the Office of Thrift
Supervision'' and inserting ``Chairman of the
Board of Governors of the Federal Reserve
System, the Comptroller of the Currency, the
Chairman of the National Credit Union
Administration,''; and
(B) by adding at the end the following new
subsection:
``(c) Reports.--The Secretary of the Treasury, the Chairman
of the Board of Governors of the Federal Reserve System, the
Comptroller of the Currency, the Chairman of the National
Credit Union Administration, and the Chairperson of Board of
Directors of the Federal Deposit Insurance Corporation shall
each submit an annual report to the Congress containing a
description of actions taken to carry out this section.'';
(5) in section 402 (12 U.S.C. 1437 note)--
(A) in subsection (a), by striking
``Director of the Office of Thrift
Supervision'' and inserting ``Comptroller of
the Currency'';
(B) by striking subsection (b);
(C) in subsection (e)--
(i) in paragraph (1), by striking
``Office of Thrift Supervision'' and
inserting ``Comptroller of the
Currency''; and
(ii) in each of paragraphs (2),
(3), and (4), by striking ``Director of
the Office of Thrift Supervision'' each
place that term appears and inserting
``Comptroller of the Currency''; and
(D) by striking ``Federal Housing Finance
Board'' each place that term appears and
inserting ``Federal Housing Finance Agency'';
(6) in section 1103(a) (12 U.S.C. 3332(a)), by
striking ``and the Resolution Trust Corporation'';
(7) in section 1205(b) (12 U.S.C. 1818 note)--
(A) in paragraph (1)--
(i) by striking subparagraph (B);
and
(ii) by redesignating subparagraphs
(C) through (F) as subparagraphs (B)
through (E), respectively; and
(B) in paragraph (2), by striking
``paragraph (1)(F)'' and inserting ``paragraph
(1)(E)'';
(8) in section 1206 (12 U.S.C. 1833b)--
(A) by striking ``Board, the Oversight
Board of the Resolution Trust Corporation'' and
inserting ``Agency, and''; and
(B) by striking ``, and the Office of
Thrift Supervision'';
(9) in section 1216 (12 U.S.C. 1833e)--
(A) in subsection (a)--
(i) in paragraph (3), by adding
``and'' at the end;
(ii) in paragraph (4), by striking
the semicolon at the end and inserting
a period;
(iii) by striking paragraphs (2),
(5), and (6); and
(iv) by redesignating paragraphs
(3) and (4), as paragraphs (2) and (3),
respectively;
(B) in subsection (c)--
(i) by striking ``the Director of
the Office of Thrift Supervision,'' and
inserting ``and''; and
(ii) by striking ``the Thrift
Depositor Protection Oversight Board of
the Resolution Trust Corporation, and
the Resolution Trust Corporation''; and
(C) in subsection (d)--
(i) by striking paragraphs (3),
(5), and (6); and
(ii) by redesignating paragraphs
(4), (7), and (8) as paragraphs (3),
(4), and (5), respectively.
SEC. 368. FLOOD DISASTER PROTECTION ACT OF 1973.
Section 3(a)(5) of the Flood Disaster Protection Act of
1973 (42 U.S.C. 4003(a)(5)) is amended by striking ``, the
Office of Thrift Supervision''.
SEC. 369. HOME OWNERS' LOAN ACT.
The Home Owners' Loan Act (12 U.S.C. 1461 et seq.) is
amended--
(1) in section 1 (12 U.S.C. 1461), by striking the
table of contents;
(2) in section 2 (12 U.S.C. 1462), as amended by
this Act--
(A) by striking paragraphs (1) and (3);
(B) by redesignating paragraph (2) as
paragraph (1);
(C) by redesignating paragraphs (4) through
(9) as paragraphs (2) through (7),
respectively; and
(D) by adding at the end the following:
``(8) Board.--The term `Board', other than in the
context of the Board of Directors of the Corporation,
means the Board of Governors of the Federal Reserve
System.
``(9) Comptroller.--The term `Comptroller' means
the Comptroller of the Currency.'';
(3) in section 3 (12 U.S.C. 1462a)--
(A) by striking the section heading and
inserting the following:
``SEC. 3. ADMINISTRATIVE PROVISIONS.'';
(B) by striking subsections (a), (b), (c),
(d), (g), (h), (i), and (j);
(C) by redesignating subsections (e) and
(f) as subsections (a) and (b), respectively;
(D) in subsection (a), as so redesignated--
(i) in the heading by striking ``of
the Director''; and
(ii) in the matter preceding
paragraph (1), by striking ``The
Director'' and inserting ``In
accordance with subtitle A of title III
of the Dodd-Frank Wall Street Reform
and Consumer Protection Act, the
appropriate Federal banking agency'';
and
(E) in subsection (b), as so redesignated,
by striking ``Director'' and inserting
``appropriate Federal banking agency'';
(4) in section 4 (12 U.S.C. 1463)--
(A) in subsection (a)--
(i) in the subsection heading, by
striking ``Federal'';
(ii) by striking paragraphs (1) and
(2) and inserting the following:
``(1) Examination and safe and sound operation.--
``(A) Federal savings associations.--The
Comptroller shall provide for the examination
and safe and sound operation of Federal savings
associations.
``(B) State savings associations.--The
Corporation shall provide for the examination
and safe and sound operation of State savings
associations.
``(2) Regulations for savings associations.--The
Comptroller may prescribe regulations with respect to
savings associations, as the Comptroller determines to
be appropriate to carry out the purposes of this
Act.''; and
(iii) in paragraph (3), by striking
``Director'' each place that term
appears and inserting ``Comptroller and
the Corporation'';
(B) in subsection (b)--
(i) in paragraph (2)--
(I) in subparagraph (A), by
adding ``and'' at the end;
(II) in subparagraph (B),
by striking ``; and'' and
inserting a period; and
(III) by striking
subparagraph (C); and
(ii) by striking ``Director'' each
place that term appears and inserting
``Comptroller'';
(C) in subsection (c)--
(i) by striking ``All regulations
and policies of the Director'' and
inserting ``The regulations of the
Comptroller and the policies of the
Comptroller and the Corporation''; and
(ii) by striking ``of the
Currency'';
(D) in subsection (e)(5), by striking
``Director'' and inserting ``Comptroller'';
(E) in subsection (f), by striking
``Director'' each place that term appears and
inserting ``appropriate Federal banking
agency''; and
(F) in subsection (h), by striking
``Director'' each place that term appears and
inserting ``appropriate Federal banking
agency'';
(5) in section 5 (12 U.S.C. 1464)--
(A) in subsection (a), by striking
``Director'', each place such term appears and
inserting ``Comptroller of the Currency'';
(B) in subsection (b), by striking
``Director'', each place such term appears and
inserting ``Comptroller of the Currency'';
(C) in subsection (c)--
(i) in paragraph (5)--
(I) in subparagraph (A), by
striking ``Director'' and
inserting ``appropriate Federal
banking agency''; and
(II) in subparagraph (B)--
(aa) by striking
``The Director'' and
inserting ``The
appropriate Federal
banking agency''; and
(bb) by striking
``the Director'' and
inserting ``the
appropriate Federal
banking agency'';
(D) in subsection (d)--
(i) in paragraph (1)--
(I) in subparagraph (A)--
(aa) in the first
sentence, by striking
``Director'' and
inserting ``appropriate
Federal banking
agency'';
(bb) in the second
sentence--
(AA) by
striking
``Director's
own name and
through the
Director's own
attorneys'' and
inserting
``name of the
appropriate
Federal banking
agency and
through the
attorneys of
the appropriate
Federal banking
agency''; and
(BB) by
striking
``Director''
each place that
term appears
and inserting
``appropriate
Federal banking
agency''; and
(cc) in the third
sentence, by striking
``Director'' each place
that term appears and
inserting
``Comptroller'';
(II) in subparagraph (B)--
(aa) in clauses (i)
through (iv), by
striking ``Director''
each place that term
appears and inserting
``appropriate Federal
banking agency'';
(III) in clause (v)--
(aa) in the matter
preceding subclause
(I), by striking
``Director'' and
inserting ``appropriate
Federal banking
agency'';
(bb) in subclause
(II), by striking
``subpenas'' and
inserting
``subpoenas''; and
(cc) in the matter
following subclause
(II), by striking
``subpena'' and
inserting ``subpoena'';
(IV) in clause (vi)--
(aa) in the first
sentence, by striking
``Director'' and
inserting ``appropriate
Federal banking
agency''; and
(bb) in the second
sentence, by striking
``Director'' and
inserting
``Comptroller'';
(V) in clause (vii)--
(aa) in the first
sentence, by striking
``subpena'' and
inserting ``subpoena'';
(bb) in the second
sentence, by striking
``subpenaed'' and
inserting
``subpoenaed''; and
(cc) in the third
sentence, by striking
``Director'' and
inserting ``appropriate
Federal banking
agency'';
(ii) in paragraph (2)--
(I) in subparagraph (A)--
(aa) by striking
``Director of the
Office of Thrift
Supervision'' and
inserting ``appropriate
Federal banking
agency'';
(bb) by striking
``any insured savings
association'' and
inserting ``an insured
savings association'';
and
(cc) by striking
``Director determines,
in the Director's
discretion'' and
inserting ``appropriate
Federal banking agency
determines, in the
discretion of the
appropriate Federal
banking agency'';
(II) in subparagraph (B),
by striking ``Director'' each
place that term appears and
inserting ``appropriate Federal
banking agency'';
(III) in subparagraphs (C)
and (D), by striking
``Director'' and inserting
``appropriate Federal banking
agency'';
(IV) in subparagraph (E)--
(aa) in clause
(ii)--
(AA) in the clause
heading, by striking
``or rtc''; and
(BB) by striking
``or the Resolution
Trust Corporation, as
appropriate,'' each
place that term
appears; and
(bb) by striking
``Director'' each place
that term appears and
inserting ``appropriate
Federal banking
agency''; and
(iii) in paragraph (3)--
(I) in subparagraph (A), by
striking ``Director'' each
place that term appears and
inserting ``Comptroller''; and
(II) in subparagraph (B)--
(aa) in the
subparagraph heading,
by striking ``or rtc'';
(bb) by striking
``Corporation or the
Resolution Trust''; and
(cc) by striking
``Director'' and
inserting
``Comptroller'';
(iv) in paragraph (4), by striking
``Director'' and inserting
``appropriate Federal banking agency'';
(v) in paragraph (6)--
(I) in subparagraph (A), by
striking ``Director'' and
inserting ``Comptroller''; and
(II) in subparagraphs (B)
and (C), by striking
``Director'' each place that
term appears and inserting
``appropriate Federal banking
agency'';
(vi) in paragraph (7)--
(I) in subparagraphs (A),
(B), and (D), by striking
``Director'' each place that
term appears and inserting
``appropriate Federal banking
agency'';
(II) in subparagraph (C),
by striking ``Director'' and
inserting ``Federal Deposit
Insurance Corporation or the
Comptroller, as appropriate,'';
and
(III) by striking
subparagraph (E) and inserting
the following:
``(E) Administration by the comptroller and
the corporation.--The Comptroller may issue
such regulations, and the appropriate Federal
banking agency may issue such orders, including
those issued pursuant to section 8 of the
Federal Deposit Insurance Act, as may be
necessary to administer and carry out this
paragraph and to prevent evasion of this
paragraph.'';
(E) in subsection (e)(2), strike
``Director'' and insert ``Comptroller'';
(F) in subsection (i)--
(i) by striking ``Director'', each
place such term appears, and inserting
``Comptroller'';
(ii) in paragraph (2), in the
heading, by striking ``director'' and
inserting ``Comptroller'';
(iii) in paragraph (5)(A), by
striking ``of the Currency''; and
(iv) except as provided in clauses
(i) through (iii), by striking
``Director'' each place such term
appears and inserting ``Comptroller'';
(G) in subsection (o)--
(i) in paragraph (1), by striking
``Director'' and inserting
``Comptroller''; and
(ii) in paragraph (2)(B), by
striking ``Director's determination''
and inserting ``determination of the
Comptroller'';
(H) in subsections (m), (n), (o), and (p),
by striking ``Director'', each place such term
appears, and inserting ``Comptroller'';
(I) in subsection (q)--
(i) in paragraph (6), by striking
``of Governors of the Federal Reserve
System'';
(ii) by striking ``Director'' each
place that term appears and inserting
``Board''; and
(iii) by inserting ``in
consultation with the Comptroller and
the Corporation,'' before
``considers'';
(J) in subsection (r)(3), by striking
``Director'' and inserting ``Comptroller of the
Currency'';
(K) in subsection (s)--
(i) in paragraph (1), strike
``Director'' and insert ``Comptroller
of the Currency'';
(ii) in paragraph (2), strike
``Director'' and insert ``Comptroller
of the Currency'';
(iii) in paragraph (3), by striking
``Director's discretion, the Director''
and inserting ``discretion of the
appropriate Federal banking agency, the
appropriate Federal banking agency,'';
(iv) in paragraph (4), by striking
``Director'' each place that term
appears and inserting ``appropriate
Federal banking agency''; and
(v) in paragraph (5)--
(I) by striking
``Director'', each place such
term appears, and inserting
``appropriate Federal banking
agency''; and
(II) by striking
``Director's approval'' and
inserting ``approval of the
appropriate Federal banking
agency'';
(L) in subsection (t)--
(i) in paragraph (1), by striking
subparagraph (D);
(ii) by striking paragraph (3) and
inserting the following:
``(3) [Repealed].'';
(iii) in paragraph (5)--
(I) in subparagraph (B), by
striking ``Corporation, in its
sole discretion'' and inserting
``appropriate Federal banking
agency, in the sole discretion
of the appropriate Federal
banking agency''; and
(II) by striking
subparagraph (D);
(iv) in paragraph (6)--
(I) by striking
subparagraph (A) and inserting
the following:
``(A) [Reserved].'';
(II) in subparagraph (B),
by striking ``Director'' each
place that term appears and
inserting ``appropriate Federal
banking agency'';
(III) in subparagraph (C)--
(aa) in clause (i),
by striking
``Director's prior
approval'' and
inserting ``prior
approval of the
appropriate Federal
banking agency'';
(bb) in clause
(ii), by striking
``Director's
discretion'' and
inserting ``discretion
of the appropriate
Federal banking
agency''; and
(cc) by striking
``Director'' each place
that term appears and
inserting ``appropriate
Federal banking
agency'';
(IV) in subparagraph (E),
by striking ``Director shall''
and inserting ``appropriate
Federal banking agency may'';
and
(V) in subparagraph (F), by
striking ``Director'' and all
that follows through the end of
the subparagraph and inserting
``appropriate Federal banking
agency under this Act or any
other provision of law.'';
(v) in paragraph (7), by striking
``Director'' each place that term
appears and inserting ``appropriate
Federal banking agency'';
(vi) by striking paragraph (8) and
inserting the following:
``(8) [Repealed].'';
(vii) in paragraph (9)--
(I) in subparagraph (A), by
striking ``Director'' and
inserting ``Comptroller'';
(II) in subparagraph (C),
by striking ``of the
Currency''; and
(III) by striking
subparagraph (B) and
redesignating subparagraphs (C)
and (D) as subparagraphs (B)
and (C), respectively; and
(viii) except as provided in
clauses (i) through (vii), by striking
``Director'' each place that term
appears and inserting ``appropriate
Federal banking agency'';
(M) in subsection (u), by striking
``Director'' each place that term appears and
inserting ``appropriate Federal banking
agency'';
(N) in subsection (v)--
(i) in paragraph (2), by striking
``Director's determinations'' and
inserting ``determinations of the
appropriate Federal banking agency'';
and
(ii) by striking ``Director'' each
place that term appears and inserting
``appropriate Federal banking agency'';
(O) in subsection (w)(1)--
(i) in subparagraph (A)(II), by
striking ``Director's intention'' and
inserting ``intention of the
Comptroller''; and
(ii) in subparagraph (B), by
striking ``Director's intention'' and
inserting ``intention of the
Comptroller''; and
(P) except as provided in subparagraphs (A)
through (J), by striking ``Director'' each
place that term appears and inserting
``Comptroller'';
(6) in section 8 (12 U.S.C. 1466a), by striking
``Director'' each place that term appears and inserting
``Comptroller'';
(7) in section 9 (12 U.S.C. 1467)--
(A) in subsection (a), by striking
``assessed by the Director'' and all that
follows through the end of the subsection and
inserting the following: ``assessed by--
``(1) the Comptroller, against each such Federal
savings association, as the Comptroller deems necessary
or appropriate; and
``(2) the Corporation, against each such State
savings association, as the Corporation deems necessary
or appropriate.'';
(B) in subsection (b), by striking
``Director'', each place such term appears, and
inserting ``Comptroller or Corporation, as
appropriate'';
(C) in subsection (e)--
(i) by striking ``Only the
Director'' and inserting ``The
Comptroller''; and
(ii) by striking ``Director's
designee'' and inserting ``designee of
the Comptroller'';
(D) by striking subsection (f) and
inserting the following:
``(f) [Reserved].'';
(E) in subsection (g)--
(i) in paragraph (1), by striking
``Director'' and inserting
``appropriate Federal banking agency'';
and
(ii) in paragraph (2), by striking
``Director, or the Corporation, as the
case may be,'' and inserting
``appropriate Federal banking agency
for the savings association'';
(F) in subsection (i), by striking
``Director'' each place that term appears and
inserting ``appropriate Federal banking
agency'';
(G) in subsection (j), by striking
``Director's sole discretion'' and inserting
``sole discretion of the appropriate Federal
banking agency'';
(H) in subsection (k), by striking
``Director may assess against institutions for
which the Director is the appropriate Federal
banking agency, as defined in section 3 of the
Federal Deposit Insurance Act,'' and inserting
``appropriate Federal banking agency may assess
against an institution''; and
(I) except as provided in subparagraphs (A)
through (G), by striking ``Director'' each
place that term appears and inserting
``appropriate Federal banking agency'';
(8) in section 10 (12 U.S.C. 1467a)--
(A) in subsection (a)(1), by striking
``Director'' each place that term appears and
inserting ``appropriate Federal banking
agency'';
(B) in subsection (b)--
(i) in paragraph (2), by striking
``and the regional office of the
Director of the district in which its
principal office is located,''; and
(ii) in paragraph (6), by striking
``Director's own motion or
application'' and inserting ``motion or
application of the Board'';
(C) in subsection (c)--
(i) in paragraph (2)(F), by
striking ``of Governors of the Federal
Reserve System'';
(ii) in paragraph (4)(B), in the
subparagraph heading, by striking ``by
director'';
(iii) in paragraph (6)(D), in the
subparagraph heading, by striking ``by
director''; and
(iv) in paragraph (9)(E), by
inserting ``(in consultation with the
appropriate Federal banking agency)''
after ``including a determination'';
(D) in subsection (g)(5)(B), by striking
``the Director's discretion'' and inserting
``the discretion of the Board'';
(E) in subsection (l), by striking
``Director'' each place that term appears and
inserting ``appropriate Federal banking
agency'';
(F) in subsection (m), by striking
``Director'' and inserting ``appropriate
Federal banking agency'';
(G) in subsection (p)--
(i) in paragraph (1)--
(I) by striking ``Director
determines'' the 1st place such
term appears and inserting
``Board or the appropriate
Federal banking agency for the
savings association
determines'';
(II) by striking ``Director
may'' and inserting ``Board
may''; and
(III) by striking
``Director determines'' the 2nd
place such term appears and
inserting ``Board, in
consultation with the
appropriate Federal banking
agency for the savings
association determines''; and
(ii) in paragraph (2), by striking
``Director'', each place such term
appears, and inserting ``Board'';
(H) in subsection (q), by striking
``Director'', each place such term appears, and
inserting ``Board'';
(I) in subsection (r), by striking
``Director'', each place such term appears, and
inserting ``Board or appropriate Federal
banking agency'';
(J) in subsection (s)--
(i) in paragraph (2)--
(I) in subparagraph
(B)(ii), by striking
``Director's judgment'' and
inserting ``judgment of the
appropriate Federal banking
agency for the savings
association''; and
(II) by striking
``Director'' each place that
term appears and inserting
``appropriate Federal banking
agency for the savings
association''; and
(ii) in paragraph (4), by striking
``Director'' and inserting
``Comptroller''; and
(K) except as provided in subparagraphs (A)
through (J), by striking ``Director'' each
place that term appears and inserting
``Board'';
(9) in section 11 (12 U.S.C. 1468), by striking
``Director'' each place that term appears and inserting
``appropriate Federal banking agency'';
(10) in section 12 (12 U.S.C. 1468a), by striking
``the Director'' and inserting ``a Federal banking
agency''; and
(11) in section 13 (12 U.S.C. 1468a) is amended by
striking ``Director'' and inserting ``a Federal banking
agency''.
SEC. 370. HOUSING ACT OF 1948.
Section 502(c) of the Housing Act of 1948 (12 U.S.C.
1701c(c)) is amended--
(1) in the matter preceding paragraph (1), by
striking ``and the Director of the Office of Thrift
Supervision'' and inserting ``, the Comptroller of the
Currency, and the Federal Deposit Insurance
Corporation''; and
(2) in paragraph (3), by striking ``Board'' and
inserting ``Agency''.
SEC. 371. HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1992.
Section 543 of the Housing and Community Development Act of
1992 (Public Law 102-550; 106 Stat. 3798) is amended--
(1) in subsection (c)(1)--
(A) by striking subparagraphs (D) through
(F); and
(B) by redesignating subparagraphs (G) and
(H) as subparagraphs (D) and (E), respectively;
and
(2) in subsection (f)--
(A) in paragraph (2), by striking ``the
Office of Thrift Supervision,'' each place that
term appears; and
(B) in paragraph (3)--
(i) in the matter preceding
subparagraph (A), by striking ``the
Office of Thrift Supervision,''; and
(ii) in subparagraph (D), by
striking ``Office of Thrift
Supervision,''.
SEC. 372. HOUSING AND URBAN-RURAL RECOVERY ACT OF 1983.
Section 469 of the Housing and Urban-Rural Recovery Act of
1983 (12 U.S.C. 1701p-1) is amended in the first sentence, by
striking ``Federal Home Loan Bank Board'' and inserting
``Federal Housing Finance Agency''.
SEC. 373. NATIONAL HOUSING ACT.
Section 202(f) of the National Housing Act (12 U.S.C.
1708(f)) is amended--
(1) by striking paragraph (5) and inserting the
following:
``(5) if the mortgagee is a national bank, a
subsidiary or affiliate of such bank, a Federal savings
association or a subsidiary or affiliate of a savings
association, the Comptroller of the Currency;'';
(2) in paragraph (6), by adding ``and'' at the end;
(3) in paragraph (7)--
(A) by inserting ``or State savings
association'' after ``State bank''; and
(B) by striking ``; and'' and inserting a
period; and
(4) by striking paragraph (8).
SEC. 374. NEIGHBORHOOD REINVESTMENT CORPORATION ACT.
Section 606(c)(3) of the Neighborhood Reinvestment
Corporation Act (42 U.S.C. 8105(c)(3)) is amended by striking
``Federal Home Loan Bank Board'' and inserting ``Federal
Housing Finance Agency''.
SEC. 375. PUBLIC LAW 93-100.
Section 5(d) of Public Law 93-100 (12 U.S.C. 1470(a)) is
amended--
(1) in paragraph (1), by striking ``Federal Savings
and Loan Insurance Corporation with respect to insured
institutions, the Board of Governors of the Federal
Reserve System with respect to State member insured
banks, and the Federal Deposit Insurance Corporation
with respect to State nonmember insured banks'' and
inserting ``appropriate Federal banking agency, with
respect to the institutions subject to the jurisdiction
of each such agency,''; and
(2) in paragraph (2), by striking ``supervisory''
and inserting ``banking''.
SEC. 376. SECURITIES EXCHANGE ACT OF 1934.
The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.)
is amended--
(1) in section 3(a)(34) (15 U.S.C. 78c(a)(34))--
(A) in subparagraph (A)--
(i) in clause (i), by striking ``or
a subsidiary or a department or
division of any such bank'' and
inserting ``a subsidiary or a
department or division of any such
bank, a Federal savings association (as
defined in section 3(b)(2) of the
Federal Deposit Insurance Act (12
U.S.C. 1813(b)(2))), the deposits of
which are insured by the Federal
Deposit Insurance Corporation, or a
subsidiary or department or division of
any such Federal savings association'';
(ii) in clause (ii), by striking
``or a subsidiary or a department or
division of such subsidiary'' and
inserting ``a subsidiary or a
department or division of such
subsidiary, or a savings and loan
holding company'';
(iii) in clause (iii), by striking
``or a subsidiary or department or
division thereof;'' and inserting ``a
subsidiary or department or division of
any such bank, a State savings
association (as defined in section
3(b)(3) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(b)(3))),
the deposits of which are insured by
the Federal Deposit Insurance
Corporation, or a subsidiary or a
department or division of any such
State savings association; and'';
(iv) by striking clause (iv); and
(v) by redesignating clause (v) as
clause (iv);
(B) in subparagraph (B)--
(i) in clause (i), by striking ``or
a subsidiary of any such bank'' and
inserting ``a subsidiary of any such
bank, a Federal savings association (as
defined in section 3(b)(2) of the
Federal Deposit Insurance Act (12
U.S.C. 1813(b)(2))), the deposits of
which are insured by the Federal
Deposit Insurance Corporation, or a
subsidiary of any such Federal savings
association'';
(ii) in clause (ii), by striking
``or a subsidiary of a bank holding
company which is a bank other than a
bank specified in clause (i), (iii), or
(iv) of this subparagraph'' and
inserting ``a subsidiary of a bank
holding company that is a bank other
than a bank specified in clause (i) or
(iii) of this subparagraph, or a
savings and loan holding company'';
(iii) in clause (iii), by striking
``or a subsidiary thereof;'' and
inserting ``a subsidiary of any such
bank, a State savings association (as
defined in section 3(b)(3) of the
Federal Deposit Insurance Act (12
U.S.C. 1813(b)(3))), the deposits of
which are insured by the Federal
Deposit Insurance Corporation, or a
subsidiary of any such State savings
association; and'';
(iv) by striking clause (iv); and
(v) by redesignating clause (v) as
clause (iv);
(C) in subparagraph (C)--
(i) in clause (i), by striking
``bank'' and inserting ``bank or a
Federal savings association (as defined
in section 3(b)(2) of the Federal
Deposit Insurance Act (12 U.S.C.
1813(b)(2))), the deposits of which are
insured by the Federal Deposit
Insurance Corporation'';
(ii) in clause (ii), by striking
``or a subsidiary of a bank holding
company which is a bank other than a
bank specified in clause (i), (iii), or
(iv) of this subparagraph'' and
inserting ``a subsidiary of a bank
holding company that is a bank other
than a bank specified in clause (i) or
(iii) of this subparagraph, or a
savings and loan holding company'';
(iii) in clause (iii), by striking
``System)'' and inserting, ``System) or
a State savings association (as defined
in section 3(b)(3) of the Federal
Deposit Insurance Act (12 U.S.C.
1813(b)(3))), the deposits of which are
insured by the Federal Deposit
Insurance Corporation; and'';
(iv) by striking clause (iv); and
(v) by redesignating clause (v) as
clause (iv);
(D) in subparagraph (D)--
(i) in clause (i), by inserting
after ``bank'' the following: ``or a
Federal savings association (as defined
in section 3(b)(2) of the Federal
Deposit Insurance Act (12 U.S.C.
1813(b)(2))), the deposits of which are
insured by the Federal Deposit
Insurance Corporation'';
(ii) in clause (ii), by adding
``and'' at the end;
(iii) by striking clause (iii);
(iv) by redesignating clause (iv)
as clause (iii); and
(v) in clause (iii), as so
redesignated, by inserting after
``bank'' the following: ``or a State
savings association (as defined in
section 3(b)(3) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(b)(3))),
the deposits of which are insured by
the Federal Deposit Insurance
Corporation'';
(E) in subparagraph (F)--
(i) in clause (i), by inserting
after ``bank'' the following: ``or a
Federal savings association (as defined
in section 3(b)(2) of the Federal
Deposit Insurance Act (12 U.S.C.
1813(b)(2))), the deposits of which are
insured by the Federal Deposit
Insurance Corporation'';
(ii) by striking clause (ii);
(iii) by redesignating clauses
(iii), (iv), and (v) as clauses (ii),
(iii), and (iv), respectively; and
(iv) in clause (iii), as so
redesignated, by inserting before the
semicolon the following: ``or a State
savings association (as defined in
section 3(b)(3) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(b)(3))),
the deposits of which are insured by
the Federal Deposit Insurance
Corporation'';
(F) in subparagraph (G)--
(i) in clause (i), by inserting
after ``national bank'' the following:
``, a Federal savings association (as
defined in section 3(b)(2) of the
Federal Deposit Insurance Act), the
deposits of which are insured by the
Federal Deposit Insurance
Corporation,'';
(ii) in clause (iii)--
(I) by inserting after
``bank)'' the following: ``, a
State savings association (as
defined in section 3(b)(3) of
the Federal Deposit Insurance
Act), the deposits of which are
insured by the Federal Deposit
Insurance Corporation,''; and
(II) by adding ``and'' at
the end;
(iii) by striking clause (iv); and
(iv) by redesignating clause (v) as
clause (iv); and
(G) in the undesignated matter following
subparagraph (H), by striking ``, and the term
`District of Columbia savings and loan
association' means any association subject to
examination and supervision by the Office of
Thrift Supervision under section 8 of the Home
Owners' Loan Act of 1933'';
(2) in section 12(i) (15 U.S.C. 78l(i))--
(A) in paragraph (1), by inserting after
``national banks'' the following: ``and Federal
savings associations, the accounts of which are
insured by the Federal Deposit Insurance
Corporation'';
(B) by striking ``(3)'' and all that
follows through ``vested in the Office of
Thrift Supervision'' and inserting ``and (3)
with respect to all other insured banks and
State savings associations, the accounts of
which are insured by the Federal Deposit
Insurance Corporation, are vested in the
Federal Deposit Insurance Corporation''; and
(C) in the second sentence, by striking
``the Federal Deposit Insurance Corporation,
and the Office of Thrift Supervision'' and
inserting ``and the Federal Deposit Insurance
Corporation'';
(3) in section 15C(g)(1) (15 U.S.C. 78o-5(g)(1)),
by striking ``the Director of the Office of Thrift
Supervision, the Federal Savings and Loan Insurance
Corporation,''; and
(4) in section 23(b)(1) (15 U.S.C. 78w(b)(1)), by
striking ``, other than the Office of Thrift
Supervision,''.
SEC. 377. TITLE 18, UNITED STATES CODE.
Title 18, United States Code, is amended--
(1) in section 212(c)(2)--
(A) by striking subparagraph (C); and
(B) by redesignating subparagraphs (D)
through (H) as subparagraphs (C) through (G),
respectively;
(2) in section 657, by striking ``Office of Thrift
Supervision, the Resolution Trust Corporation,'';
(3) in section 981(a)(1)(D)--
(A) by striking ``Resolution Trust
Corporation,''; and
(B) by striking ``or the Office of Thrift
Supervision'';
(4) in section 982(a)(3)--
(A) by striking ``Resolution Trust
Corporation,''; and
(B) by striking ``or the Office of Thrift
Supervision'';
(5) in section 1006--
(A) by striking ``Office of Thrift
Supervision,''; and
(B) by striking ``the Resolution Trust
Corporation,'';
(6) in section 1014--
(A) by striking ``the Office of Thrift
Supervision''; and
(B) by striking ``the Resolution Trust
Corporation,''; and
(7) in section 1032(1)--
(A) by striking ``the Resolution Trust
Corporation,''; and
(B) by striking ``or the Director of the
Office of Thrift Supervision''.
SEC. 378. TITLE 31, UNITED STATES CODE.
Title 31, United States Code, is amended--
(1) in section 321--
(A) in subsection (c)--
(i) in paragraph (1), by adding
``and'' at the end;
(ii) in paragraph (2), by striking
``; and'' and inserting a period; and
(iii) by striking paragraph (3);
and
(B) by striking subsection (e); and
(2) in section 714(a), by striking ``the Office of
the Comptroller of the Currency, and the Office of
Thrift Supervision.'' and inserting ``and the Office of
the Comptroller of the Currency.''.
TITLE IV--REGULATION OF ADVISERS TO HEDGE FUNDS AND OTHERS
SEC. 401. SHORT TITLE.
This title may be cited as the ``Private Fund Investment
Advisers Registration Act of 2010''.
SEC. 402. DEFINITIONS.
(a) Investment Advisers Act of 1940 Definitions.--Section
202(a) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-
2(a)) is amended by adding at the end the following:
``(29) The term `private fund' means an issuer that
would be an investment company, as defined in section 3
of the Investment Company Act of 1940 (15 U.S.C. 80a-
3), but for section 3(c)(1) or 3(c)(7) of that Act.
``(30) The term `foreign private adviser' means any
investment adviser who--
``(A) has no place of business in the
United States;
``(B) has, in total, fewer than 15 clients
and investors in the United States in private
funds advised by the investment adviser;
``(C) has aggregate assets under management
attributable to clients in the United States
and investors in the United States in private
funds advised by the investment adviser of less
than $25,000,000, or such higher amount as the
Commission may, by rule, deem appropriate in
accordance with the purposes of this title; and
``(D) neither--
``(i) holds itself out generally to
the public in the United States as an
investment adviser; nor
``(ii) acts as--
``(I) an investment adviser
to any investment company
registered under the Investment
Company Act of 1940; or
``(II) a company that has
elected to be a business
development company pursuant to
section 54 of the Investment
Company Act of 1940 (15 U.S.C.
80a-53), and has not withdrawn
its election.''.
(b) Other Definitions.--As used in this title, the terms
``investment adviser'' and ``private fund'' have the same
meanings as in section 202 of the Investment Advisers Act of
1940, as amended by this title.
SEC. 403. ELIMINATION OF PRIVATE ADVISER EXEMPTION; LIMITED EXEMPTION
FOR FOREIGN PRIVATE ADVISERS; LIMITED INTRASTATE
EXEMPTION.
Section 203(b) of the Investment Advisers Act of 1940 (15
U.S.C. 80b-3(b)) is amended--
(1) in paragraph (1), by inserting ``, other than
an investment adviser who acts as an investment adviser
to any private fund,'' before ``all of whose'';
(2) by striking paragraph (3) and inserting the
following:
``(3) any investment adviser that is a foreign
private adviser;''; and
(3) in paragraph (5), by striking ``or'' at the
end;
(4) in paragraph (6)--
(A) by striking ``any investment adviser''
and inserting ``(A) any investment adviser'';
(B) by redesignating subparagraphs (A) and
(B) as clauses (i) and (ii), respectively; and
(C) in clause (ii) (as so redesignated), by
striking the period at the end and inserting
``; or''; and
(D) by adding at the end the following:
``(B) any investment adviser that is registered with the
Commodity Futures Trading Commission as a commodity trading
advisor and advises a private fund, provided that, if after the
date of enactment of the Private Fund Investment Advisers
Registration Act of 2010, the business of the advisor should
become predominately the provision of securities-related
advice, then such adviser shall register with the
Commission.''.
(5) by adding at the end the following:
``(7) any investment adviser, other than any entity
that has elected to be regulated or is regulated as a
business development company pursuant to section 54 of
the Investment Company Act of 1940 (15 U.S.C. 80a-54),
who solely advises--
``(A) small business investment companies
that are licensees under the Small Business
Investment Act of 1958;
``(B) entities that have received from the
Small Business Administration notice to proceed
to qualify for a license as a small business
investment company under the Small Business
Investment Act of 1958, which notice or license
has not been revoked; or
``(C) applicants that are affiliated with 1
or more licensed small business investment
companies described in subparagraph (A) and
that have applied for another license under the
Small Business Investment Act of 1958, which
application remains pending.''.
SEC. 404. COLLECTION OF SYSTEMIC RISK DATA; REPORTS; EXAMINATIONS;
DISCLOSURES.
Section 204 of the Investment Advisers Act of 1940 (15
U.S.C. 80b-4) is amended--
(1) by redesignating subsections (b) and (c) as
subsections (c) and (d), respectively; and
(2) by inserting after subsection (a) the
following:
``(b) Records and Reports of Private Funds.--
``(1) In general.--The Commission may require any
investment adviser registered under this title--
``(A) to maintain such records of, and file
with the Commission such reports regarding,
private funds advised by the investment
adviser, as necessary and appropriate in the
public interest and for the protection of
investors, or for the assessment of systemic
risk by the Financial Stability Oversight
Council (in this subsection referred to as the
`Council'); and
``(B) to provide or make available to the
Council those reports or records or the
information contained therein.
``(2) Treatment of records.--The records and
reports of any private fund to which an investment
adviser registered under this title provides investment
advice shall be deemed to be the records and reports of
the investment adviser.
``(3) Required information.--The records and
reports required to be maintained by an investment
adviser and subject to inspection by the Commission
under this subsection shall include, for each private
fund advised by the investment adviser, a description
of--
``(A) the amount of assets under management
and use of leverage, including off-balance-
sheet leverage;
``(B) counterparty credit risk exposure;
``(C) trading and investment positions;
``(D) valuation policies and practices of
the fund;
``(E) types of assets held;
``(F) side arrangements or side letters,
whereby certain investors in a fund obtain more
favorable rights or entitlements than other
investors;
``(G) trading practices; and
``(H) such other information as the
Commission, in consultation with the Council,
determines is necessary and appropriate in the
public interest and for the protection of
investors or for the assessment of systemic
risk, which may include the establishment of
different reporting requirements for different
classes of fund advisers, based on the type or
size of private fund being advised.
``(4) Maintenance of records.--An investment
adviser registered under this title shall maintain such
records of private funds advised by the investment
adviser for such period or periods as the Commission,
by rule, may prescribe as necessary and appropriate in
the public interest and for the protection of
investors, or for the assessment of systemic risk.
``(5) Filing of records.--The Commission shall
issue rules requiring each investment adviser to a
private fund to file reports containing such
information as the Commission deems necessary and
appropriate in the public interest and for the
protection of investors or for the assessment of
systemic risk.
``(6) Examination of records.--
``(A) Periodic and special examinations.--
The Commission--
``(i) shall conduct periodic
inspections of the records of private
funds maintained by an investment
adviser registered under this title in
accordance with a schedule established
by the Commission; and
``(ii) may conduct at any time and
from time to time such additional,
special, and other examinations as the
Commission may prescribe as necessary
and appropriate in the public interest
and for the protection of investors, or
for the assessment of systemic risk.
``(B) Availability of records.--An
investment adviser registered under this title
shall make available to the Commission any
copies or extracts from such records as may be
prepared without undue effort, expense, or
delay, as the Commission or its representatives
may reasonably request.
``(7) Information sharing.--
``(A) In general.--The Commission shall
make available to the Council copies of all
reports, documents, records, and information
filed with or provided to the Commission by an
investment adviser under this subsection as the
Council may consider necessary for the purpose
of assessing the systemic risk posed by a
private fund.
``(B) Confidentiality.--The Council shall
maintain the confidentiality of information
received under this paragraph in all such
reports, documents, records, and information,
in a manner consistent with the level of
confidentiality established for the Commission
pursuant to paragraph (8). The Council shall be
exempt from section 552 of title 5, United
States Code, with respect to any information in
any report, document, record, or information
made available, to the Council under this
subsection.''.
``(8) Commission confidentiality of reports.--
Notwithstanding any other provision of law, the
Commission may not be compelled to disclose any report
or information contained therein required to be filed
with the Commission under this subsection, except that
nothing in this subsection authorizes the Commission--
``(A) to withhold information from
Congress, upon an agreement of confidentiality;
or
``(B) prevent the Commission from complying
with--
``(i) a request for information
from any other Federal department or
agency or any self-regulatory
organization requesting the report or
information for purposes within the
scope of its jurisdiction; or
``(ii) an order of a court of the
United States in an action brought by
the United States or the Commission.
``(9) Other recipients confidentiality.--Any
department, agency, or self-regulatory organization
that receives reports or information from the
Commission under this subsection shall maintain the
confidentiality of such reports, documents, records,
and information in a manner consistent with the level
of confidentiality established for the Commission under
paragraph (8).
``(10) Public information exception.--
``(A) In general.--The Commission, the
Council, and any other department, agency, or
self-regulatory organization that receives
information, reports, documents, records, or
information from the Commission under this
subsection, shall be exempt from the provisions
of section 552 of title 5, United States Code,
with respect to any such report, document,
record, or information. Any proprietary
information of an investment adviser
ascertained by the Commission from any report
required to be filed with the Commission
pursuant to this subsection shall be subject to
the same limitations on public disclosure as
any facts ascertained during an examination, as
provided by section 210(b) of this title.
``(B) Proprietary information.--For
purposes of this paragraph, proprietary
information includes sensitive, non-public
information regarding--
``(i) the investment or trading
strategies of the investment adviser;
``(ii) analytical or research
methodologies;
``(iii) trading data;
``(iv) computer hardware or
software containing intellectual
property; and
``(v) any additional information
that the Commission determines to be
proprietary.
``(11) Annual report to congress.--The Commission
shall report annually to Congress on how the Commission
has used the data collected pursuant to this subsection
to monitor the markets for the protection of investors
and the integrity of the markets.''.
SEC. 405. DISCLOSURE PROVISION AMENDMENT.
Section 210(c) of the Investment Advisers Act of 1940 (15
U.S.C. 80b-10(c)) is amended by inserting before the period at
the end the following: ``or for purposes of assessment of
potential systemic risk''.
SEC. 406. CLARIFICATION OF RULEMAKING AUTHORITY.
Section 211 of the Investment Advisers Act of 1940 (15
U.S.C. 80b-11) is amended--
(1) in subsection (a), by inserting before the
period at the end of the first sentence the following:
``, including rules and regulations defining technical,
trade, and other terms used in this title, except that
the Commission may not define the term `client' for
purposes of paragraphs (1) and (2) of section 206 to
include an investor in a private fund managed by an
investment adviser, if such private fund has entered
into an advisory contract with such adviser''; and
(2) by adding at the end the following:
``(e) Disclosure Rules on Private Funds.--The Commission
and the Commodity Futures Trading Commission shall, after
consultation with the Council but not later than 12 months
after the date of enactment of the Private Fund Investment
Advisers Registration Act of 2010, jointly promulgate rules to
establish the form and content of the reports required to be
filed with the Commission under subsection 204(b) and with the
Commodity Futures Trading Commission by investment advisers
that are registered both under this title and the Commodity
Exchange Act (7 U.S.C. 1a et seq.).''.
SEC. 407. EXEMPTION OF AND REPORTING BY VENTURE CAPITAL FUND ADVISERS.
Section 203 of the Investment Advisers Act of 1940 (15
U.S.C. 80b-3) is amended by adding at the end the following:
``(l) Exemption of Venture Capital Fund Advisers.--No
investment adviser that acts as an investment adviser solely to
1 or more venture capital funds shall be subject to the
registration requirements of this title with respect to the
provision of investment advice relating to a venture capital
fund. Not later than 1 year after the date of enactment of this
subsection, the Commission shall issue final rules to define
the term `venture capital fund' for purposes of this
subsection. The Commission shall require such advisers to
maintain such records and provide to the Commission such annual
or other reports as the Commission determines necessary or
appropriate in the public interest or for the protection of
investors.''.
SEC. 408. EXEMPTION OF AND REPORTING BY CERTAIN PRIVATE FUND ADVISERS.
Section 203 of the Investment Advisers Act of 1940 (15
U.S.C. 80b-3) is amended by adding at the end the following:
``(m) Exemption of and Reporting by Certain Private Fund
Advisers.--
``(1) In general.--The Commission shall provide an
exemption from the registration requirements under this
section to any investment adviser of private funds, if
each of such investment adviser acts solely as an
adviser to private funds and has assets under
management in the United States of less than
$150,000,000.
``(2) Reporting.--The Commission shall require
investment advisers exempted by reason of this
subsection to maintain such records and provide to the
Commission such annual or other reports as the
Commission determines necessary or appropriate in the
public interest or for the protection of investors.
``(n) Registration and Examination of Mid-Sized Private
Fund Advisers.--In prescribing regulations to carry out the
requirements of this section with respect to investment
advisers acting as investment advisers to mid-sized private
funds, the Commission shall take into account the size,
governance, and investment strategy of such funds to determine
whether they pose systemic risk, and shall provide for
registration and examination procedures with respect to the
investment advisers of such funds which reflect the level of
systemic risk posed by such funds.''.
SEC. 409. 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 the grandfathering
provisions in paragraph (3);
(2) recognizes the range of organizational,
management, and employment structures and arrangements
employed by family offices; and
(3) does not exclude any person who was not
registered or required to be registered under the
Investment Advisers Act of 1940 on January 1, 2010 from
the definition of the term ``family office'', solely
because such person provides investment advice to, and
was engaged before January 1, 2010 in providing
investment advice to--
(A) natural persons who, at the time of
their applicable investment, are officers,
directors, or employees of the family office
who--
(i) have invested with the family
office before January 1, 2010; and
(ii) are accredited investors, as
defined in Regulation D of the
Commission (or any successor thereto)
under the Securities Act of 1933, or,
as the Commission may prescribe by
rule, the successors-in-interest
thereto;
(B) any company owned exclusively and
controlled by members of the family of the
family office, or as the Commission may
prescribe by rule;
(C) any investment adviser registered under
the Investment Adviser Act of 1940 that
provides investment advice to the family office
and who identifies investment opportunities to
the family office, and invests in such
transactions on substantially the same terms as
the family office invests, but does not invest
in other funds advised by the family office,
and whose assets as to which the family office
directly or indirectly provides investment
advice represent, in the aggregate, not more
than 5 percent of the value of the total assets
as to which the family office provides
investment advice.
(c) Antifraud Authority.--A family office that would not be
a family office, but for subsection (b)(3), shall be deemed to
be an investment adviser for the purposes of paragraphs (1),
(2) and (4) of section 206 of the Investment Advisers Act of
1940.
SEC. 410. 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.''.
SEC. 411. CUSTODY OF CLIENT ASSETS.
The Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et
seq.) is amended by adding at the end the following new
section:
``SEC. 223. CUSTODY OF CLIENT ACCOUNTS.
``An investment adviser registered under this title shall
take such steps to safeguard client assets over which such
adviser has custody, including, without limitation,
verification of such assets by an independent public
accountant, as the Commission may, by rule, prescribe.''.
SEC. 412. COMPTROLLER GENERAL STUDY ON CUSTODY RULE COSTS.
The Comptroller General of the United States shall--
(1) conduct a study of--
(A) the compliance costs associated with
the current Securities and Exchange Commission
rules 204-2 (17 C.F.R. Parts 275.204-2) and
rule 206(4)-2 (17 C.F.R. 275.206(4)-2) under
the Investment Advisers Act of 1940 regarding
custody of funds or securities of clients by
investment advisers; and
(B) the additional costs if subsection
(b)(6) of rule 206(4)-2 (17 C.F.R. 275.206(4)-
2(b)(6)) relating to operational independence
were eliminated; and
(2) submit a report to the Committee on Banking,
Housing, and Urban Affairs of the Senate and the
Committee on Financial Services of the House of
Representatives on the results of such study, not later
than 3 years after the date of enactment of this Act.
SEC. 413. ADJUSTING THE ACCREDITED INVESTOR STANDARD.
(a) In General.--The Commission shall adjust any net worth
standard for an accredited investor, as set forth in the rules
of the Commission under the Securities Act of 1933, so that the
individual net worth of any natural person, or joint net worth
with the spouse of that person, at the time of purchase, is
more than $1,000,000 (as such amount is adjusted periodically
by rule of the Commission), excluding the value of the primary
residence of such natural person, except that during the 4-year
period that begins on the date of enactment of this Act, any
net worth standard shall be $1,000,000, excluding the value of
the primary residence of such natural person.
(b) Review and Adjustment.--
(1) Initial review and adjustment.--
(A) Initial review.--The Commission may
undertake a review of the definition of the
term ``accredited investor'', as such term
applies to natural persons, to determine
whether the requirements of the definition,
excluding the requirement relating to the net
worth standard described in subsection (a),
should be adjusted or modified for the
protection of investors, in the public
interest, and in light of the economy.
(B) Adjustment or modification.--Upon
completion of a review under subparagraph (A),
the Commission may, by notice and comment
rulemaking, make such adjustments to the
definition of the term ``accredited investor'',
excluding adjusting or modifying the
requirement relating to the net worth standard
described in subsection (a), as such term
applies to natural persons, as the Commission
may deem appropriate for the protection of
investors, in the public interest, and in light
of the economy.
(2) Subsequent reviews and adjustment.--
(A) Subsequent reviews.--Not earlier than 4
years after the date of enactment of this Act,
and not less frequently than once every 4 years
thereafter, the Commission shall undertake a
review of the definition, in its entirety, of
the term ``accredited investor'', as defined in
section 230.215 of title 17, Code of Federal
Regulations, or any successor thereto, as such
term applies to natural persons, to determine
whether the requirements of the definition
should be adjusted or modified for the
protection of investors, in the public
interest, and in light of the economy.
(B) Adjustment or modification.--Upon
completion of a review under subparagraph (A),
the Commission may, by notice and comment
rulemaking, make such adjustments to the
definition of the term ``accredited investor'',
as defined in section 230.215 of title 17, Code
of Federal Regulations, or any successor
thereto, as such term applies to natural
persons, as the Commission may deem appropriate
for the protection of investors, in the public
interest, and in light of the economy.
SEC. 414. RULE OF CONSTRUCTION RELATING TO THE COMMODITIES EXCHANGE
ACT.
The Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et
seq.) is further amended by adding at the end the following new
section:
``SEC. 224. RULE OF CONSTRUCTION RELATING TO THE COMMODITIES EXCHANGE
ACT.
``Nothing in this title shall relieve any person of any
obligation or duty, or affect the availability of any right or
remedy available to the Commodity Futures Trading Commission or
any private party, arising under the Commodity Exchange Act (7
U.S.C. 1 et seq.) governing commodity pools, commodity pool
operators, or commodity trading advisors.''.
SEC. 415. GAO STUDY AND REPORT ON ACCREDITED INVESTORS.
The Comptroller General of the United States shall conduct
a study on the appropriate criteria for determining the
financial thresholds or other criteria needed to qualify for
accredited investor status and eligibility to invest in private
funds, and shall submit a report to the Committee on Banking,
Housing, and Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representatives on the
results of such study not later than 3 years after the date of
enactment of this Act.
SEC. 416. GAO STUDY ON SELF-REGULATORY ORGANIZATION FOR PRIVATE FUNDS.
The Comptroller General of the United States shall--
(1) conduct a study of the feasibility of forming a
self-regulatory organization to oversee private funds;
and
(2) submit a report to the Committee on Banking,
Housing, and Urban Affairs of the Senate and the
Committee on Financial Services of the House of
Representatives on the results of such study, not later
than 1 year after the date of enactment of this Act.
SEC. 417. COMMISSION STUDY AND REPORT ON SHORT SELLING.
(a) Studies.--The Division of Risk, Strategy, and Financial
Innovation of the Commission shall conduct--
(1) a study, taking into account current
scholarship, on the state of short selling on national
securities exchanges and in the over-the-counter
markets, with particular attention to the impact of
recent rule changes and the incidence of--
(A) the failure to deliver shares sold
short; or
(B) delivery of shares on the fourth day
following the short sale transaction; and
(2) a study of--
(A) the feasibility, benefits, and costs of
requiring reporting publicly, in real time
short sale positions of publicly listed
securities, or, in the alternative, reporting
such short positions in real time only to the
Commission and the Financial Industry
Regulatory Authority; and
(B) the feasibility, benefits, and costs of
conducting a voluntary pilot program in which
public companies will agree to have all trades
of their shares marked ``short'', ``market
maker short'', ``buy'', ``buy-to-cover'', or
``long'', and reported in real time through the
Consolidated Tape.
(b) Reports.--The Commission shall submit a report to the
Committee on Banking, Housing, and Urban Affairs of the Senate
and the Committee on Financial Services of the House of
Representatives--
(1) on the results of the study required under
subsection (a)(1), including recommendations for market
improvements, not later than 2 years after the date of
enactment of this Act; and
(2) on the results of the study required under
subsection (a)(2), not later than 1 year after the date
of enactment of this Act.
SEC. 418. QUALIFIED CLIENT STANDARD.
Section 205(e) of the Investment Advisers Act of 1940 (15
U.S.C. 80b-5(e)) is amended by adding at the end the following:
``With respect to any factor used in any rule or regulation by
the Commission in making a determination under this subsection,
if the Commission uses a dollar amount test in connection with
such factor, such as a net asset threshold, the Commission
shall, by order, not later than 1 year after the date of
enactment of the Private Fund Investment Advisers Registration
Act of 2010, and every 5 years thereafter, adjust for the
effects of inflation on such test. Any such adjustment that is
not a multiple of $100,000 shall be rounded to the nearest
multiple of $100,000.''.
SEC. 419. TRANSITION PERIOD.
Except as otherwise provided in this title, this title and
the amendments made by this title shall become effective 1 year
after the date of enactment of this Act, except that any
investment adviser may, at the discretion of the investment
adviser, register with the Commission under the Investment
Advisers Act of 1940 during that 1-year period, subject to the
rules of the Commission.
TITLE V--INSURANCE
Subtitle A--Federal Insurance Office
SEC. 501. SHORT TITLE.
This subtitle may be cited as the ``Federal Insurance
Office Act of 2010''.
SEC. 502. FEDERAL INSURANCE OFFICE.
(a) Establishment of Office.--Subchapter I of chapter 3 of
subtitle I of title 31, United States Code, is amended--
(1) by redesignating section 312 as section 315;
(2) by redesignating section 313 as section 312;
and
(3) by inserting after section 312 (as so
redesignated) the following new sections:
``SEC. 313. FEDERAL INSURANCE OFFICE.
``(a) Establishment.--There is established within the
Department of the Treasury the Federal Insurance Office.
``(b) Leadership.--The Office shall be headed by a
Director, who shall be appointed by the Secretary of the
Treasury. The position of Director shall be a career reserved
position in the Senior Executive Service, as that position is
defined under section 3132 of title 5, United States Code.
``(c) Functions.--
``(1) Authority pursuant to direction of
secretary.--The Office, pursuant to the direction of
the Secretary, shall have the authority--
``(A) to monitor all aspects of the
insurance industry, including identifying
issues or gaps in the regulation of insurers
that could contribute to a systemic crisis in
the insurance industry or the United States
financial system;
``(B) to monitor the extent to which
traditionally underserved communities and
consumers, minorities (as such term is defined
in section 1204(c) of the Financial
Institutions Reform, Recovery, and Enforcement
Act of 1989 (12 U.S.C. 1811 note)), and low-
and moderate-income persons have access to
affordable insurance products regarding all
lines of insurance, except health insurance;
``(C) to recommend to the Financial
Stability Oversight Council that it designate
an insurer, including the affiliates of such
insurer, as an entity subject to regulation as
a nonbank financial company supervised by the
Board of Governors pursuant to title I of the
Dodd-Frank Wall Street Reform and Consumer
Protection Act;
``(D) to assist the Secretary in
administering the Terrorism Insurance Program
established in the Department of the Treasury
under the Terrorism Risk Insurance Act of 2002
(15 U.S.C. 6701 note);
``(E) to coordinate Federal efforts and
develop Federal policy on prudential aspects of
international insurance matters, including
representing the United States, as appropriate,
in the International Association of Insurance
Supervisors (or a successor entity) and
assisting the Secretary in negotiating covered
agreements (as such term is defined in
subsection (r));
``(F) to determine, in accordance with
subsection (f), whether State insurance
measures are preempted by covered agreements;
``(G) to consult with the States (including
State insurance regulators) regarding insurance
matters of national importance and prudential
insurance matters of international importance;
and
``(H) to perform such other related duties
and authorities as may be assigned to the
Office by the Secretary.
``(2) Advisory functions.--The Office shall advise
the Secretary on major domestic and prudential
international insurance policy issues.
``(3) Advisory capacity on council.--The Director
shall serve in an advisory capacity on the Financial
Stability Oversight Council established under the
Financial Stability Act of 2010.
``(d) Scope.--The authority of the Office shall extend to
all lines of insurance except--
``(1) health insurance, as determined by the
Secretary in coordination with the Secretary of Health
and Human Services based on section 2791 of the Public
Health Service Act (42 U.S.C. 300gg-91);
``(2) long-term care insurance, except long-term
care insurance that is included with life or annuity
insurance components, as determined by the Secretary in
coordination with the Secretary of Health and Human
Services, and in the case of long-term care insurance
that is included with such components, the Secretary
shall coordinate with the Secretary of Health and Human
Services in performing the functions of the Office; and
``(3) crop insurance, as established by the Federal
Crop Insurance Act (7 U.S.C. 1501 et seq.).
``(e) Gathering of Information.--
``(1) In general.--In carrying out the functions
required under subsection (c), the Office may--
``(A) receive and collect data and
information on and from the insurance industry
and insurers;
``(B) enter into information-sharing
agreements;
``(C) analyze and disseminate data and
information; and
``(D) issue reports regarding all lines of
insurance except health insurance.
``(2) Collection of information from insurers and
affiliates.--
``(A) In general.--Except as provided in
paragraph (3), the Office may require an
insurer, or any affiliate of an insurer, to
submit such data or information as the Office
may reasonably require in carrying out the
functions described under subsection (c).
``(B) Rule of construction.--
Notwithstanding any other provision of this
section, for purposes of subparagraph (A), the
term `insurer' means any entity that writes
insurance or reinsures risks and issues
contracts or policies in 1 or more States.
``(3) Exception for small insurers.--Paragraph (2)
shall not apply with respect to any insurer or
affiliate thereof that meets a minimum size threshold
that the Office may establish, whether by order or
rule.
``(4) Advance coordination.--Before collecting any
data or information under paragraph (2) from an
insurer, or affiliate of an insurer, the Office shall
coordinate with each relevant Federal agency and State
insurance regulator (or other relevant Federal or State
regulatory agency, if any, in the case of an affiliate
of an insurer) and any publicly available sources to
determine if the information to be collected is
available from, and may be obtained in a timely manner
by, such Federal agency or State insurance regulator,
individually or collectively, other regulatory agency,
or publicly available sources. If the Director
determines that such data or information is available,
and may be obtained in a timely manner, from such an
agency, regulator, regulatory agency, or source, the
Director shall obtain the data or information from such
agency, regulator, regulatory agency, or source. If the
Director determines that such data or information is
not so available, the Director may collect such data or
information from an insurer (or affiliate) only if the
Director complies with the requirements of subchapter I
of chapter 35 of title 44, United States Code (relating
to Federal information policy; commonly known as the
Paperwork Reduction Act), in collecting such data or
information. Notwithstanding any other provision of
law, each such relevant Federal agency and State
insurance regulator or other Federal or State
regulatory agency is authorized to provide to the
Office such data or information.
``(5) Confidentiality.--
``(A) Retention of privilege.--The
submission of any nonpublicly available data
and information to the Office under this
subsection shall not constitute a waiver of, or
otherwise affect, any privilege arising under
Federal or State law (including the rules of
any Federal or State court) to which the data
or information is otherwise subject.
``(B) Continued application of prior
confidentiality agreements.--Any requirement
under Federal or State law to the extent
otherwise applicable, or any requirement
pursuant to a written agreement in effect
between the original source of any nonpublicly
available data or information and the source of
such data or information to the Office,
regarding the privacy or confidentiality of any
data or information in the possession of the
source to the Office, shall continue to apply
to such data or information after the data or
information has been provided pursuant to this
subsection to the Office.
``(C) Information-sharing agreement.--Any
data or information obtained by the Office may
be made available to State insurance
regulators, individually or collectively,
through an information-sharing agreement that--
``(i) shall comply with applicable
Federal law; and
``(ii) shall not constitute a
waiver of, or otherwise affect, any
privilege under Federal or State law
(including the rules of any Federal or
State court) to which the data or
information is otherwise subject.
``(D) Agency disclosure requirements.--
Section 552 of title 5, United States Code,
shall apply to any data or information
submitted to the Office by an insurer or an
affiliate of an insurer.
``(6) Subpoenas and enforcement.--The Director
shall have the power to require by subpoena the
production of the data or information requested under
paragraph (2), but only upon a written finding by the
Director that such data or information is required to
carry out the functions described under subsection (c)
and that the Office has coordinated with such regulator
or agency as required under paragraph (4). Subpoenas
shall bear the signature of the Director and shall be
served by any person or class of persons designated by
the Director for that purpose. In the case of contumacy
or failure to obey a subpoena, the subpoena shall be
enforceable by order of any appropriate district court
of the United States. Any failure to obey the order of
the court may be punished by the court as a contempt of
court.
``(f) Preemption of State Insurance Measures.--
``(1) Standard.--A State insurance measure shall be
preempted pursuant to this section or section 314 if,
and only to the extent that the Director determines, in
accordance with this subsection, that the measure--
``(A) results in less favorable treatment
of a non-United States insurer domiciled in a
foreign jurisdiction that is subject to a
covered agreement than a United States insurer
domiciled, licensed, or otherwise admitted in
that State; and
``(B) is inconsistent with a covered
agreement.
``(2) Determination.--
``(A) Notice of potential inconsistency.--
Before making any determination under paragraph
(1), the Director shall--
``(i) notify and consult with the
appropriate State regarding any
potential inconsistency or preemption;
``(ii) notify and consult with the
United States Trade Representative
regarding any potential inconsistency
or preemption;
``(iii) cause to be published in
the Federal Register notice of the
issue regarding the potential
inconsistency or preemption, including
a description of each State insurance
measure at issue and any applicable
covered agreement;
``(iv) provide interested parties a
reasonable opportunity to submit
written comments to the Office; and
``(v) consider any comments
received.
``(B) Scope of review.--For purposes of
this subsection, any determination of the
Director regarding State insurance measures,
and any preemption under paragraph (1) as a
result of such determination, shall be limited
to the subject matter contained within the
covered agreement involved and shall achieve a
level of protection for insurance or
reinsurance consumers that is substantially
equivalent to the level of protection achieved
under State insurance or reinsurance
regulation.
``(C) Notice of determination of
inconsistency.--Upon making any determination
under paragraph (1), the Director shall--
``(i) notify the appropriate State
of the determination and the extent of
the inconsistency;
``(ii) establish a reasonable
period of time, which shall not be less
than 30 days, before the determination
shall become effective; and
``(iii) notify the Committees on
Financial Services and Ways and Means
of the House of Representatives and the
Committees on Banking, Housing, and
Urban Affairs and Finance of the
Senate.
``(3) Notice of effectiveness.--Upon the conclusion
of the period referred to in paragraph (2)(C)(ii), if
the basis for such determination still exists, the
determination shall become effective and the Director
shall--
``(A) cause to be published a notice in the
Federal Register that the preemption has become
effective, as well as the effective date; and
``(B) notify the appropriate State.
``(4) Limitation.--No State may enforce a State
insurance measure to the extent that such measure has
been preempted under this subsection.
``(g) Applicability of Administrative Procedures Act.--
Determinations of inconsistency made pursuant to subsection
(f)(2) shall be subject to the applicable provisions of
subchapter II of chapter 5 of title 5, United States Code
(relating to administrative procedure), and chapter 7 of such
title (relating to judicial review), except that in any action
for judicial review of a determination of inconsistency, the
court shall determine the matter de novo.
``(h) Regulations, Policies, and Procedures.--The Secretary
may issue orders, regulations, policies, and procedures to
implement this section.
``(i) Consultation.--The Director shall consult with State
insurance regulators, individually or collectively, to the
extent the Director determines appropriate, in carrying out the
functions of the Office.
``(j) Savings Provisions.--Nothing in this section shall--
``(1) preempt--
``(A) any State insurance measure that
governs any insurer's rates, premiums,
underwriting, or sales practices;
``(B) any State coverage requirements for
insurance;
``(C) the application of the antitrust laws
of any State to the business of insurance; or
``(D) any State insurance measure governing
the capital or solvency of an insurer, except
to the extent that such State insurance measure
results in less favorable treatment of a non-
United States insurer than a United States
insurer;
``(2) be construed to alter, amend, or limit any
provision of the Consumer Financial Protection Agency
Act of 2010; or
``(3) affect the preemption of any States insurance
measure otherwise inconsistent with and preempted by
Federal law.
``(k) Retention of Existing State Regulatory Authority.--
Nothing in this section or section 314 shall be construed to
establish or provide the Office or the Department of the
Treasury with general supervisory or regulatory authority over
the business of insurance.
``(l) Retention of Authority of Federal Financial
Regulatory Agencies.--Nothing in this section or section 314
shall be construed to limit the authority of any Federal
financial regulatory agency, including the authority to develop
and coordinate policy, negotiate, and enter into agreements
with foreign governments, authorities, regulators, and
multinational regulatory committees and to preempt State
measures to affect uniformity with international regulatory
agreements.
``(m) Retention of Authority of United States Trade
Representative.--Nothing in this section or section 314 shall
be construed to affect the authority of the Office of the
United States Trade Representative pursuant to section 141 of
the Trade Act of 1974 (19 U.S.C. 2171) or any other provision
of law, including authority over the development and
coordination of United States international trade policy and
the administration of the United States trade agreements
program.
``(n) Annual Reports to Congress.--
``(1) Section 313(f) reports.--Beginning September
30, 2011, the Director shall submit a report on or
before September 30 of each calendar year to the
President and to the Committees on Financial Services
and Ways and Means of the House of Representatives and
the Committees on Banking, Housing, and Urban Affairs
and Finance of the Senate on any actions taken by the
Office pursuant to subsection (f) (regarding preemption
of inconsistent State insurance measures).
``(2) Insurance industry.--Beginning September 30,
2011, the Director shall submit a report on or before
September 30 of each calendar year to the President and
to the Committee on Financial Services of the House of
Representatives and the Committee on Banking, Housing,
and Urban Affairs of the Senate on the insurance
industry and any other information as deemed relevant
by the Director or requested by such Committees.
``(o) Reports on U.S. and Global Reinsurance Market.--The
Director shall submit to the Committee on Financial Services of
the House of Representatives and the Committee on Banking,
Housing, and Urban Affairs of the Senate--
``(1) a report received not later than September
30, 2012, describing the breadth and scope of the
global reinsurance market and the critical role such
market plays in supporting insurance in the United
States; and
``(2) a report received not later than January 1,
2013, and updated not later than January 1, 2015,
describing the impact of part II of the Nonadmitted and
Reinsurance Reform Act of 2010 on the ability of State
regulators to access reinsurance information for
regulated companies in their jurisdictions.
``(p) Study and Report on Regulation of Insurance.--
``(1) In general.--Not later than 18 months after
the date of enactment of this section, the Director
shall conduct a study and submit a report to Congress
on how to modernize and improve the system of insurance
regulation in the United States.
``(2) Considerations.--The study and report
required under paragraph (1) shall be based on and
guided by the following considerations:
``(A) Systemic risk regulation with respect
to insurance.
``(B) Capital standards and the
relationship between capital allocation and
liabilities, including standards relating to
liquidity and duration risk.
``(C) Consumer protection for insurance
products and practices, including gaps in State
regulation.
``(D) The degree of national uniformity of
State insurance regulation.
``(E) The regulation of insurance companies
and affiliates on a consolidated basis.
``(F) International coordination of
insurance regulation.
``(3) Additional factors.--The study and report
required under paragraph (1) shall also examine the
following factors:
``(A) The costs and benefits of potential
Federal regulation of insurance across various
lines of insurance (except health insurance).
``(B) The feasibility of regulating only
certain lines of insurance at the Federal
level, while leaving other lines8 of insurance
to be regulated at the State level.
``(C) The ability of any potential Federal
regulation or Federal regulators to eliminate
or minimize regulatory arbitrage.
``(D) The impact that developments in the
regulation of insurance in foreign
jurisdictions might have on the potential
Federal regulation of insurance.
``(E) The ability of any potential Federal
regulation or Federal regulator to provide
robust consumer protection for policyholders.
``(F) The potential consequences of
subjecting insurance companies to a Federal
resolution authority, including the effects of
any Federal resolution authority--
``(i) on the operation of State
insurance guaranty fund systems,
including the loss of guaranty fund
coverage if an insurance company is
subject to a Federal resolution
authority;
``(ii) on policyholder protection,
including the loss of the priority
status of policyholder claims over
other unsecured general creditor
claims;
``(iii) in the case of life
insurance companies, on the loss of the
special status of separate account
assets and separate account
liabilities; and
``(iv) on the international
competitiveness of insurance companies.
``(G) Such other factors as the Director
determines necessary or appropriate, consistent
with the principles set forth in paragraph (2).
``(4) Required recommendations.--The study and
report required under paragraph (1) shall also contain
any legislative, administrative, or regulatory
recommendations, as the Director determines
appropriate, to carry out or effectuate the findings
set forth in such report.
``(5) Consultation.--With respect to the study and
report required under paragraph (1), the Director shall
consult with the State insurance regulators, consumer
organizations, representatives of the insurance
industry and policyholders, and other organizations and
experts, as appropriate.
``(q) Use of Existing Resources.--To carry out this
section, the Office may employ personnel, facilities, and any
other resource of the Department of the Treasury available to
the Secretary and the Secretary shall dedicate specific
personnel to the Office.
``(r) Definitions.--In this section and section 314, the
following definitions shall apply:
``(1) Affiliate.--The term `affiliate' means, with
respect to an insurer, any person who controls, is
controlled by, or is under common control with the
insurer.
``(2) Covered agreement.--The term `covered
agreement' means a written bilateral or multilateral
agreement regarding prudential measures with respect to
the business of insurance or reinsurance that--
``(A) is entered into between the United
States and one or more foreign governments,
authorities, or regulatory entities; and
``(B) relates to the recognition of
prudential measures with respect to the
business of insurance or reinsurance that
achieves a level of protection for insurance or
reinsurance consumers that is substantially
equivalent to the level of protection achieved
under State insurance or reinsurance
regulation.
``(3) Insurer.--The term `insurer' means any person
engaged in the business of insurance, including
reinsurance.
``(4) Federal financial regulatory agency.--The
term `Federal financial regulatory agency' means the
Department of the Treasury, the Board of Governors of
the Federal Reserve System, the Office of the
Comptroller of the Currency, the Office of Thrift
Supervision, the Securities and Exchange Commission,
the Commodity Futures Trading Commission, the Federal
Deposit Insurance Corporation, the Federal Housing
Finance Agency, or the National Credit Union
Administration.
``(5) Non-united states insurer.--The term `non-
United States insurer' means an insurer that is
organized under the laws of a jurisdiction other than a
State, but does not include any United States branch of
such an insurer.
``(6) Office.--The term `Office' means the Federal
Insurance Office established by this section.
``(7) State insurance measure.--The term `State
insurance measure' means any State law, regulation,
administrative ruling, bulletin, guideline, or practice
relating to or affecting prudential measures applicable
to insurance or reinsurance.
``(8) State insurance regulator.--The term `State
insurance regulator' means any State regulatory
authority responsible for the supervision of insurers.
``(9) Substantially equivalent to the level of
protection achieved.--The term `substantially
equivalent to the level of protection achieved' means
the prudential measures of a foreign government,
authority, or regulatory entity achieve a similar
outcome in consumer protection as the outcome achieved
under State insurance or reinsurance regulation.
``(10) United states insurer.--The term `United
States insurer' means--
``(A) an insurer that is organized under
the laws of a State; or
``(B) a United States branch of a non-
United States insurer.
``(s) Authorization of Appropriations.--There are
authorized to be appropriated for the Office for each fiscal
year such sums as may be necessary.
``SEC. 314. COVERED AGREEMENTS.
``(a) Authority.--The Secretary and the United States Trade
Representative are authorized, jointly, to negotiate and enter
into covered agreements on behalf of the United States.
``(b) Requirements for Consultation With Congress.--
``(1) In general.--Before initiating negotiations
to enter into a covered agreement under subsection (a),
during such negotiations, and before entering into any
such agreement, the Secretary and the United States
Trade Representative shall jointly consult with the
Committee on Financial Services and the Committee on
Ways and Means of the House of Representatives and the
Committee on Banking, Housing, and Urban Affairs and
the Committee on Finance of the Senate.
``(2) Scope.--The consultation described in
paragraph (1) shall include consultation with respect
to--
``(A) the nature of the agreement;
``(B) how and to what extent the agreement
will achieve the applicable purposes, policies,
priorities, and objectives of section 313 and
this section; and
``(C) the implementation of the agreement,
including the general effect of the agreement
on existing State laws.
``(c) Submission and Layover Provisions.--A covered
agreement under subsection (a) may enter into force with
respect to the United States only if--
``(1) the Secretary and the United States Trade
Representative jointly submit to the congressional
committees specified in subsection (b)(1), on a day on
which both Houses of Congress are in session, a copy of
the final legal text of the agreement; and
``(2) a period of 90 calendar days beginning on the
date on which the copy of the final legal text of the
agreement is submitted to the congressional committees
under paragraph (1) has expired.''.
(b) Duties of Secretary.--Section 321(a) of title 31,
United States Code, is amended--
(1) in paragraph (7), by striking ``; and'' and
inserting a semicolon;
(2) in paragraph (8)(C), by striking the period at
the end and inserting ``; and''; and
(3) by adding at the end the following new
paragraph:
``(9) advise the President on major domestic and
international prudential policy issues in connection
with all lines of insurance except health insurance.''.
(c) Clerical Amendment.--The table of sections for
subchapter I of chapter 3 of title 31, United States Code, is
amended by striking the item relating to section 312 and
inserting the following new items:
``Sec. 312. Terrorism and financial intelligence.
``Sec. 313. Federal Insurance Office.
``Sec. 314. Covered agreements.
``Sec. 315. Continuing in office.''.
Subtitle B--State-Based Insurance Reform
SEC. 511. SHORT TITLE.
This subtitle may be cited as the ``Nonadmitted and
Reinsurance Reform Act of 2010''.
SEC. 512. EFFECTIVE DATE.
Except as otherwise specifically provided in this subtitle,
this subtitle shall take effect upon the expiration of the 12-
month period beginning on the date of the enactment of this
subtitle.
PART I--NONADMITTED INSURANCE
SEC. 521. REPORTING, PAYMENT, AND ALLOCATION OF PREMIUM TAXES.
(a) Home State's Exclusive Authority.--No State other than
the home State of an insured may require any premium tax
payment for nonadmitted insurance.
(b) Allocation of Nonadmitted Premium Taxes.--
(1) In general.--The States may enter into a
compact or otherwise establish procedures to allocate
among the States the premium taxes paid to an insured's
home State described in subsection (a).
(2) Effective date.--Except as expressly otherwise
provided in such compact or other procedures, any such
compact or other procedures--
(A) if adopted on or before the expiration
of the 330-day period that begins on the date
of the enactment of this subtitle, shall apply
to any premium taxes that, on or after such
date of enactment, are required to be paid to
any State that is subject to such compact or
procedures; and
(B) if adopted after the expiration of such
330-day period, shall apply to any premium
taxes that, on or after January 1 of the first
calendar year that begins after the expiration
of such 330-day period, are required to be paid
to any State that is subject to such compact or
procedures.
(3) Report.--Upon the expiration of the 330-day
period referred to in paragraph (2), the NAIC may
submit a report to the Committee on Financial Services
and the Committee on the Judiciary of the House of
Representatives and the Committee on Banking, Housing,
and Urban Affairs of the Senate identifying and
describing any compact or other procedures for
allocation among the States of premium taxes that have
been adopted during such period by any States.
(4) Nationwide system.--The Congress intends that
each State adopt nationwide uniform requirements,
forms, and procedures, such as an interstate compact,
that provide for the reporting, payment, collection,
and allocation of premium taxes for nonadmitted
insurance consistent with this section.
(c) Allocation Based on Tax Allocation Report.--To
facilitate the payment of premium taxes among the States, an
insured's home State may require surplus lines brokers and
insureds who have independently procured insurance to annually
file tax allocation reports with the insured's home State
detailing the portion of the nonadmitted insurance policy
premium or premiums attributable to properties, risks, or
exposures located in each State. The filing of a nonadmitted
insurance tax allocation report and the payment of tax may be
made by a person authorized by the insured to act as its agent.
SEC. 522. REGULATION OF NONADMITTED INSURANCE BY INSURED'S HOME STATE.
(a) Home State Authority.--Except as otherwise provided in
this section, the placement of nonadmitted insurance shall be
subject to the statutory and regulatory requirements solely of
the insured's home State.
(b) Broker Licensing.--No State other than an insured's
home State may require a surplus lines broker to be licensed in
order to sell, solicit, or negotiate nonadmitted insurance with
respect to such insured.
(c) Enforcement Provision.--With respect to section 521 and
subsections (a) and (b) of this section, any law, regulation,
provision, or action of any State that applies or purports to
apply to nonadmitted insurance sold to, solicited by, or
negotiated with an insured whose home State is another State
shall be preempted with respect to such application.
(d) Workers' Compensation Exception.--This section may not
be construed to preempt any State law, rule, or regulation that
restricts the placement of workers' compensation insurance or
excess insurance for self-funded workers' compensation plans
with a nonadmitted insurer.
SEC. 523. PARTICIPATION IN NATIONAL PRODUCER DATABASE.
After the expiration of the 2-year period beginning on the
date of the enactment of this subtitle, a State may not collect
any fees relating to licensing of an individual or entity as a
surplus lines broker in the State unless the State has in
effect at such time laws or regulations that provide for
participation by the State in the national insurance producer
database of the NAIC, or any other equivalent uniform national
database, for the licensure of surplus lines brokers and the
renewal of such licenses.
SEC. 524. UNIFORM STANDARDS FOR SURPLUS LINES ELIGIBILITY.
A State may not--
(1) impose eligibility requirements on, or
otherwise establish eligibility criteria for,
nonadmitted insurers domiciled in a United States
jurisdiction, except in conformance with such
requirements and criteria in sections 5A(2) and
5C(2)(a) of the Non-Admitted Insurance Model Act,
unless the State has adopted nationwide uniform
requirements, forms, and procedures developed in
accordance with section 521(b) of this subtitle that
include alternative nationwide uniform eligibility
requirements; or
(2) prohibit a surplus lines broker from placing
nonadmitted insurance with, or procuring nonadmitted
insurance from, a nonadmitted insurer domiciled outside
the United States that is listed on the Quarterly
Listing of Alien Insurers maintained by the
International Insurers Department of the NAIC.
SEC. 525. STREAMLINED APPLICATION FOR COMMERCIAL PURCHASERS.
A surplus lines broker seeking to procure or place
nonadmitted insurance in a State for an exempt commercial
purchaser shall not be required to satisfy any State
requirement to make a due diligence search to determine whether
the full amount or type of insurance sought by such exempt
commercial purchaser can be obtained from admitted insurers
if--
(1) the broker procuring or placing the surplus
lines insurance has disclosed to the exempt commercial
purchaser that such insurance may or may not be
available from the admitted market that may provide
greater protection with more regulatory oversight; and
(2) the exempt commercial purchaser has
subsequently requested in writing the broker to procure
or place such insurance from a nonadmitted insurer.
SEC. 526. GAO STUDY OF NONADMITTED INSURANCE MARKET.
(a) In General.--The Comptroller General of the United
States shall conduct a study of the nonadmitted insurance
market to determine the effect of the enactment of this part on
the size and market share of the nonadmitted insurance market
for providing coverage typically provided by the admitted
insurance market.
(b) Contents.--The study shall determine and analyze--
(1) the change in the size and market share of the
nonadmitted insurance market and in the number of
insurance companies and insurance holding companies
providing such business in the 18-month period that
begins upon the effective date of this subtitle;
(2) the extent to which insurance coverage
typically provided by the admitted insurance market has
shifted to the nonadmitted insurance market;
(3) the consequences of any change in the size and
market share of the nonadmitted insurance market,
including differences in the price and availability of
coverage available in both the admitted and nonadmitted
insurance markets;
(4) the extent to which insurance companies and
insurance holding companies that provide both admitted
and nonadmitted insurance have experienced shifts in
the volume of business between admitted and nonadmitted
insurance; and
(5) the extent to which there has been a change in
the number of individuals who have nonadmitted
insurance policies, the type of coverage provided under
such policies, and whether such coverage is available
in the admitted insurance market.
(c) Consultation With NAIC.--In conducting the study under
this section, the Comptroller General shall consult with the
NAIC.
(d) Report.--The Comptroller General shall complete the
study under this section and submit a report to the Committee
on Banking, Housing, and Urban Affairs of the Senate and the
Committee on Financial Services of the House of Representatives
regarding the findings of the study not later than 30 months
after the effective date of this subtitle.
SEC. 527. DEFINITIONS.
For purposes of this part, the following definitions shall
apply:
(1) Admitted insurer.--The term ``admitted
insurer'' means, with respect to a State, an insurer
licensed to engage in the business of insurance in such
State.
(2) Affiliate.--The term ``affiliate'' means, with
respect to an insured, any entity that controls, is
controlled by, or is under common control with the
insured.
(3) Affiliated group.--The term ``affiliated
group'' means any group of entities that are all
affiliated.
(4) Control.--An entity has ``control'' over
another entity if--
(A) the entity directly or indirectly or
acting through 1 or more other persons owns,
controls, or has the power to vote 25 percent
or more of any class of voting securities of
the other entity; or
(B) the entity controls in any manner the
election of a majority of the directors or
trustees of the other entity.
(5) Exempt commercial purchaser.--The term ``exempt
commercial purchaser'' means any person purchasing
commercial insurance that, at the time of placement,
meets the following requirements:
(A) The person employs or retains a
qualified risk manager to negotiate insurance
coverage.
(B) The person has paid aggregate
nationwide commercial property and casualty
insurance premiums in excess of $100,000 in the
immediately preceding 12 months.
(C)(i) The person meets at least 1 of the
following criteria:
(I) The person possesses a net
worth in excess of $20,000,000, as such
amount is adjusted pursuant to clause
(ii).
(II) The person generates annual
revenues in excess of $50,000,000, as
such amount is adjusted pursuant to
clause (ii).
(III) The person employs more than
500 full-time or full-time equivalent
employees per individual insured or is
a member of an affiliated group
employing more than 1,000 employees in
the aggregate.
(IV) The person is a not-for-profit
organization or public entity
generating annual budgeted expenditures
of at least $30,000,000, as such amount
is adjusted pursuant to clause (ii).
(V) The person is a municipality
with a population in excess of 50,000
persons.
(ii) Effective on the fifth January 1
occurring after the date of the enactment of
this subtitle and each fifth January 1
occurring thereafter, the amounts in subclauses
(I), (II), and (IV) of clause (i) shall be
adjusted to reflect the percentage change for
such 5-year period in the Consumer Price Index
for All Urban Consumers published by the Bureau
of Labor Statistics of the Department of Labor.
(6) Home state.--
(A) In general.--Except as provided in
subparagraph (B), the term ``home State''
means, with respect to an insured--
(i) the State in which an insured
maintains its principal place of
business or, in the case of an
individual, the individual's principal
residence; or
(ii) if 100 percent of the insured
risk is located out of the State
referred to in clause (i), the State to
which the greatest percentage of the
insured's taxable premium for that
insurance contract is allocated.
(B) Affiliated groups.--If more than 1
insured from an affiliated group are named
insureds on a single nonadmitted insurance
contract, the term ``home State'' means the
home State, as determined pursuant to
subparagraph (A), of the member of the
affiliated group that has the largest
percentage of premium attributed to it under
such insurance contract.
(7) Independently procured insurance.--The term
``independently procured insurance'' means insurance
procured directly by an insured from a nonadmitted
insurer.
(8) NAIC.--The term ``NAIC'' means the National
Association of Insurance Commissioners or any successor
entity.
(9) Nonadmitted insurance.--The term ``nonadmitted
insurance'' means any property and casualty insurance
permitted to be placed directly or through a surplus
lines broker with a nonadmitted insurer eligible to
accept such insurance.
(10) Non-admitted insurance model act.--The term
``Non-Admitted Insurance Model Act'' means the
provisions of the Non-Admitted Insurance Model Act, as
adopted by the NAIC on August 3, 1994, and amended on
September 30, 1996, December 6, 1997, October 2, 1999,
and June 8, 2002.
(11) Nonadmitted insurer.--The term ``nonadmitted
insurer''--
(A) means, with respect to a State, an
insurer not licensed to engage in the business
of insurance in such State; but
(B) does not include a risk retention
group, as that term is defined in section
2(a)(4) of the Liability Risk Retention Act of
1986 (15 U.S.C. 3901(a)(4)).
(12) Premium tax.--The term ``premium tax'' means,
with respect to surplus lines or independently procured
insurance coverage, any tax, fee, assessment, or other
charge imposed by a government entity directly or
indirectly based on any payment made as consideration
for an insurance contract for such insurance, including
premium deposits, assessments, registration fees, and
any other compensation given in consideration for a
contract of insurance.
(13) Qualified risk manager.--The term ``qualified
risk manager'' means, with respect to a policyholder of
commercial insurance, a person who meets all of the
following requirements:
(A) The person is an employee of, or third-
party consultant retained by, the commercial
policyholder.
(B) The person provides skilled services in
loss prevention, loss reduction, or risk and
insurance coverage analysis, and purchase of
insurance.
(C) The person--
(i)(I) has a bachelor's degree or
higher from an accredited college or
university in risk management, business
administration, finance, economics, or
any other field determined by a State
insurance commissioner or other State
regulatory official or entity to
demonstrate minimum competence in risk
management; and
(II)(aa) has 3 years of experience
in risk financing, claims
administration, loss prevention, risk
and insurance analysis, or purchasing
commercial lines of insurance; or
(bb) has--
(AA) a designation as a
Chartered Property and Casualty
Underwriter (in this
subparagraph referred to as
``CPCU'') issued by the
American Institute for CPCU/
Insurance Institute of America;
(BB) a designation as an
Associate in Risk Management
(ARM) issued by the American
Institute for CPCU/Insurance
Institute of America;
(CC) a designation as
Certified Risk Manager (CRM)
issued by the National Alliance
for Insurance Education &
Research;
(DD) a designation as a
RIMS Fellow (RF) issued by the
Global Risk Management
Institute; or
(EE) any other designation,
certification, or license
determined by a State insurance
commissioner or other State
insurance regulatory official
or entity to demonstrate
minimum competency in risk
management;
(ii)(I) has at least 7 years of
experience in risk financing, claims
administration, loss prevention, risk
and insurance coverage analysis, or
purchasing commercial lines of
insurance; and
(II) has any 1 of the designations
specified in subitems (AA) through (EE)
of clause (i)(II)(bb);
(iii) has at least 10 years of
experience in risk financing, claims
administration, loss prevention, risk
and insurance coverage analysis, or
purchasing commercial lines of
insurance; or
(iv) has a graduate degree from an
accredited college or university in
risk management, business
administration, finance, economics, or
any other field determined by a State
insurance commissioner or other State
regulatory official or entity to
demonstrate minimum competence in risk
management.
(14) Reinsurance.--The term ``reinsurance'' means
the assumption by an insurer of all or part of a risk
undertaken originally by another insurer.
(15) Surplus lines broker.--The term ``surplus
lines broker'' means an individual, firm, or
corporation which is licensed in a State to sell,
solicit, or negotiate insurance on properties, risks,
or exposures located or to be performed in a State with
nonadmitted insurers.
(16) State.--The term ``State'' includes any State
of the United States, the District of Columbia, the
Commonwealth of Puerto Rico, Guam, the Northern Mariana
Islands, the Virgin Islands, and American Samoa.
PART II--REINSURANCE
SEC. 531. REGULATION OF CREDIT FOR REINSURANCE AND REINSURANCE
AGREEMENTS.
(a) Credit for Reinsurance.--If the State of domicile of a
ceding insurer is an NAIC-accredited State, or has financial
solvency requirements substantially similar to the requirements
necessary for NAIC accreditation, and recognizes credit for
reinsurance for the insurer's ceded risk, then no other State
may deny such credit for reinsurance.
(b) Additional Preemption of Extraterritorial Application
of State Law.--In addition to the application of subsection
(a), all laws, regulations, provisions, or other actions of a
State that is not the domiciliary State of the ceding insurer,
except those with respect to taxes and assessments on insurance
companies or insurance income, are preempted to the extent that
they--
(1) restrict or eliminate the rights of the ceding
insurer or the assuming insurer to resolve disputes
pursuant to contractual arbitration to the extent such
contractual provision is not inconsistent with the
provisions of title 9, United States Code;
(2) require that a certain State's law shall govern
the reinsurance contract, disputes arising from the
reinsurance contract, or requirements of the
reinsurance contract;
(3) attempt to enforce a reinsurance contract on
terms different than those set forth in the reinsurance
contract, to the extent that the terms are not
inconsistent with this part; or
(4) otherwise apply the laws of the State to
reinsurance agreements of ceding insurers not domiciled
in that State.
SEC. 532. REGULATION OF REINSURER SOLVENCY.
(a) Domiciliary State Regulation.--If the State of domicile
of a reinsurer is an NAIC-accredited State or has financial
solvency requirements substantially similar to the requirements
necessary for NAIC accreditation, such State shall be solely
responsible for regulating the financial solvency of the
reinsurer.
(b) Nondomiciliary States.--
(1) Limitation on financial information
requirements.--If the State of domicile of a reinsurer
is an NAIC-accredited State or has financial solvency
requirements substantially similar to the requirements
necessary for NAIC accreditation, no other State may
require the reinsurer to provide any additional
financial information other than the information the
reinsurer is required to file with its domiciliary
State.
(2) Receipt of information.--No provision of this
section shall be construed as preventing or prohibiting
a State that is not the State of domicile of a
reinsurer from receiving a copy of any financial
statement filed with its domiciliary State.
SEC. 533. DEFINITIONS.
For purposes of this part, the following definitions shall
apply:
(1) Ceding insurer.--The term ``ceding insurer''
means an insurer that purchases reinsurance.
(2) Domiciliary state.--The terms ``State of
domicile'' and ``domiciliary State'' mean, with respect
to an insurer or reinsurer, the State in which the
insurer or reinsurer is incorporated or entered
through, and licensed.
(3) NAIC.--The term ``NAIC'' means the National
Association of Insurance Commissioners or any successor
entity.
(4) Reinsurance.--The term ``reinsurance'' means
the assumption by an insurer of all or part of a risk
undertaken originally by another insurer.
(5) Reinsurer.--
(A) In general.--The term ``reinsurer''
means an insurer to the extent that the
insurer--
(i) is principally engaged in the
business of reinsurance;
(ii) does not conduct significant
amounts of direct insurance as a
percentage of its net premiums; and
(iii) is not engaged in an ongoing
basis in the business of soliciting
direct insurance.
(B) Determination.--A determination of
whether an insurer is a reinsurer shall be made
under the laws of the State of domicile in
accordance with this paragraph.
(6) State.--The term ``State'' includes any State
of the United States, the District of Columbia, the
Commonwealth of Puerto Rico, Guam, the Northern Mariana
Islands, the Virgin Islands, and American Samoa.
PART III--RULE OF CONSTRUCTION
SEC. 541. RULE OF CONSTRUCTION.
Nothing in this subtitle or the amendments made by this
subtitle shall be construed to modify, impair, or supersede the
application of the antitrust laws. Any implied or actual
conflict between this subtitle and any amendments to this
subtitle and the antitrust laws shall be resolved in favor of
the operation of the antitrust laws.
SEC. 542. SEVERABILITY.
If any section or subsection of this subtitle, or any
application of such provision to any person or circumstance, is
held to be unconstitutional, the remainder of this subtitle,
and the application of the provision to any other person or
circumstance, shall not be affected.
TITLE VI--IMPROVEMENTS TO REGULATION OF BANK AND SAVINGS ASSOCIATION
HOLDING COMPANIES AND DEPOSITORY INSTITUTIONS
SEC. 601. SHORT TITLE.
This title may be cited as the ``Bank and Savings
Association Holding Company and Depository Institution
Regulatory Improvements Act of 2010''.
SEC. 602. DEFINITION.
For purposes of this title, a company is a ``commercial
firm'' if the annual gross revenues derived by the company and
all of its affiliates from activities that are financial in
nature (as defined in section 4(k) of the Bank Holding Company
Act of 1956 (12 U.S.C. 1843(k))) and, if applicable, from the
ownership or control of one or more insured depository
institutions, represent less than 15 percent of the
consolidated annual gross revenues of the company.
SEC. 603. MORATORIUM AND STUDY ON TREATMENT OF CREDIT CARD BANKS,
INDUSTRIAL LOAN COMPANIES, AND CERTAIN OTHER
COMPANIES UNDER THE BANK HOLDING COMPANY ACT OF
1956.
(a) Moratorium.--
(1) Definitions.--In this subsection--
(A) the term ``credit card bank'' means an
institution described in section 2(c)(2)(F) of
the Bank Holding Company Act of 1956 (12 U.S.C.
1841(c)(2)(F));
(B) the term ``industrial bank'' means an
institution described in section 2(c)(2)(H) of
the Bank Holding Company Act of 1956 (12 U.S.C.
1841(c)(2)(H)); and
(C) the term ``trust bank'' means 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)).
(2) Moratorium on provision of deposit insurance.--
The Corporation may not approve an application for
deposit insurance under section 5 of the Federal
Deposit Insurance Act (12 U.S.C. 1815) that is received
after November 23, 2009, for an industrial bank, a
credit card bank, or a trust bank that is directly or
indirectly owned or controlled by a commercial firm.
(3) Change in control.--
(A) In general.--Except as provided in
subparagraph (B), the appropriate Federal
banking agency shall disapprove a change in
control, as provided in section 7(j) of the
Federal Deposit Insurance Act (12 U.S.C.
1817(j)), of an industrial bank, a credit card
bank, or a trust bank if the change in control
would result in direct or indirect control of
the industrial bank, credit card bank, or trust
bank by a commercial firm.
(B) Exceptions.--Subparagraph (A) shall not
apply to a change in control of an industrial
bank, credit card bank, or trust bank--
(i) that--
(I) is in danger of
default, as determined by the
appropriate Federal banking
agency;
(II) results from the
merger or whole acquisition of
a commercial firm that directly
or indirectly controls the
industrial bank, credit card
bank, or trust bank in a bona
fide merger with or acquisition
by another commercial firm, as
determined by the appropriate
Federal banking agency; or
(III) results from an
acquisition of voting shares of
a publicly traded company that
controls an industrial bank,
credit card bank, or trust
bank, if, after the
acquisition, the acquiring
shareholder (or group of
shareholders acting in concert)
holds less than 25 percent of
any class of the voting shares
of the company; and
(ii) that has obtained all
regulatory approvals otherwise required
for such change of control under any
applicable Federal or State law,
including section 7(j) of the Federal
Deposit Insurance Act (12 U.S.C.
1817(j)).
(4) Sunset.--This subsection shall cease to have
effect 3 years after the date of enactment of this Act.
(b) Government Accountability Office Study of Exceptions
Under the Bank Holding Company Act of 1956.--
(1) Study required.--The Comptroller General of the
United States shall carry out a study to determine
whether it is necessary, in order to strengthen the
safety and soundness of institutions or the stability
of the financial system, to eliminate the exceptions
under section 2 of the Bank Holding Company Act of 1956
(12 U.S.C. 1841) for institutions described in--
(A) section 2(a)(5)(E) of the Bank Holding
Company Act of 1956 (12 U.S.C. 1841(a)(5)(E));
(B) section 2(a)(5)(F) of the Bank Holding
Company Act of 1956 (12 U.S.C. 1841(a)(5)(F));
(C) section 2(c)(2)(D) of the Bank Holding
Company Act of 1956 (12 U.S.C. 1841(c)(2)(D));
(D) section 2(c)(2)(F) of the Bank Holding
Company Act of 1956 (12 U.S.C. 1841(c)(2)(F));
(E) section 2(c)(2)(H) of the Bank Holding
Company Act of 1956 (12 U.S.C. 1841(c)(2)(H));
and
(F) section 2(c)(2)(B) of the Bank Holding
Company Act of 1956 (12 U.S.C. 1841(c)(2)(B)).
(2) Content of study.--
(A) In general.--The study required under
paragraph (1), with respect to the institutions
referenced in each of subparagraphs (A) through
(E) of paragraph (1), shall, to the extent
feasible be based on information provided to
the Comptroller General by the appropriate
Federal or State regulator, and shall--
(i) identify the types and number
of institutions excepted from section 2
of the Bank Holding Company Act of 1956
(12 U.S.C. 1841) under each of the
subparagraphs described in
subparagraphs (A) through (E) of
paragraph (1);
(ii) generally describe the size
and geographic locations of the
institutions described in clause (i);
(iii) determine the extent to which
the institutions described in clause
(i) are held by holding companies that
are commercial firms;
(iv) determine whether the
institutions described in clause (i)
have any affiliates that are commercial
firms;
(v) identify the Federal banking
agency responsible for the supervision
of the institutions described in clause
(i) on and after the transfer date;
(vi) determine the adequacy of the
Federal bank regulatory framework
applicable to each category of
institution described in clause (i),
including any restrictions (including
limitations on affiliate transactions
or cross-marketing) that apply to
transactions between an institution,
the holding company of the institution,
and any other affiliate of the
institution; and
(vii) evaluate the potential
consequences of subjecting the
institutions described in clause (i) to
the requirements of the Bank Holding
Company Act of 1956, including with
respect to the availability and
allocation of credit, the stability of
the financial system and the economy,
the safe and sound operation of each
category of institution, and the impact
on the types of activities in which
such institutions, and the holding
companies of such institutions, may
engage.
(B) Savings associations.--With respect to
institutions described in paragraph (1)(F), the
study required under paragraph (1) shall--
(i) determine the adequacy of the
Federal bank regulatory framework
applicable to such institutions,
including any restrictions (including
limitations on affiliate transactions
or cross-marketing) that apply to
transactions between an institution,
the holding company of the institution,
and any other affiliate of the
institution; and
(ii) evaluate the potential
consequences of subjecting the
institutions described in paragraph
(1)(F) to the requirements of the Bank
Holding Company Act of 1956, including
with respect to the availability and
allocation of credit, the stability of
the financial system and the economy,
the safe and sound operation of such
institutions, and the impact on the
types of activities in which such
institutions, and the holding companies
of such institutions, may engage.
(3) Report.--Not later than 18 months after the
date of enactment of this Act, the Comptroller General
shall submit to the Committee on Banking, Housing, and
Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representatives a
report on the study required under paragraph (1).
SEC. 604. REPORTS AND EXAMINATIONS OF HOLDING COMPANIES; REGULATION OF
FUNCTIONALLY REGULATED SUBSIDIARIES.
(a) Reports by Bank Holding Companies.--Sections 5(c)(1) of
the Bank Holding Company Act of 1956 (12 U.S.C. 1844(c)(1)) is
amended--
(1) by striking subclause (A)(ii) and inserting the
following:
``(ii) compliance by the bank
holding company or subsidiary with--
``(I) this Act;
``(II) Federal laws that
the Board has specific
jurisdiction to enforce against
the company or subsidiary; and
``(III) other than in the
case of an insured depository
institution or functionally
regulated subsidiary, any other
applicable provision of Federal
law.'';
(2) by striking subparagraph (B) and inserting the
following:
``(B) Use of existing reports and other
supervisory information.--The Board shall, to
the fullest extent possible, use--
``(i) reports and other supervisory
information that the bank holding
company or any subsidiary thereof has
been required to provide to other
Federal or State regulatory agencies;
``(ii) externally audited financial
statements of the bank holding company
or subsidiary;
``(iii) information otherwise
available from Federal or State
regulatory agencies; and
``(iv) information that is
otherwise required to be reported
publicly.''; and
(3) by adding at the end the following:
``(C) Availability.--Upon the request of
the Board, the bank holding company or a
subsidiary of the bank holding company shall
promptly provide to the Board any information
described in clauses (i) through (iii) of
subparagraph (B).''.
(b) Examinations of Bank Holding Companies.--Section
5(c)(2) of the Bank Holding Company Act of 1956 (12 U.S.C.
1844(c)(2)) is amended to read as follows:
``(2) Examinations.--
``(A) In general.--Subject to subtitle B of
the Consumer Financial Protection Act of 2010,
the Board may make examinations of a bank
holding company and each subsidiary of a bank
holding company in order to--
``(i) inform the Board of--
``(I) the nature of the
operations and financial
condition of the bank holding
company and the subsidiary;
``(II) the financial,
operational, and other risks
within the bank holding company
system that may pose a threat
to--
``(aa) the safety
and soundness of the
bank holding company or
of any depository
institution subsidiary
of the bank holding
company; or
``(bb) the
stability of the
financial system of the
United States; and
``(III) the systems of the
bank holding company for
monitoring and controlling the
risks described in subclause
(II); and
``(ii) monitor the compliance of
the bank holding company and the
subsidiary with--
``(I) this Act;
``(II) Federal laws that
the Board has specific
jurisdiction to enforce against
the company or subsidiary; and
``(III) other than in the
case of an insured depository
institution or functionally
regulated subsidiary, any other
applicable provisions of
Federal law.
``(B) Use of reports to reduce
examinations.--For purposes of this paragraph,
the Board shall, to the fullest extent
possible, rely on--
``(i) examination reports made by
other Federal or State regulatory
agencies relating to a bank holding
company and any subsidiary of a bank
holding company; and
``(ii) the reports and other
information required under paragraph
(1).
``(C) Coordination with other regulators.--
The Board shall--
``(i) provide reasonable notice to,
and consult with, the appropriate
Federal banking agency, the Securities
and Exchange Commission, the Commodity
Futures Trading Commission, or State
regulatory agency, as appropriate, for
a subsidiary that is a depository
institution or a functionally regulated
subsidiary of a bank holding company
before commencing an examination of the
subsidiary under this section; and
``(ii) to the fullest extent
possible, avoid duplication of
examination activities, reporting
requirements, and requests for
information.''.
(c) Authority To Regulate Functionally Regulated
Subsidiaries of Bank Holding Companies.--The Bank Holding
Company Act of 1956 (12 U.S.C. 1841 et seq.) is amended--
(1) in section 5(c)(5)(B) (12 U.S.C.
1844(c)(5)(B)), by striking clause (v) and inserting
the following:
``(v) an entity that is subject to
regulation by, or registration with,
the Commodity Futures Trading
Commission, with respect to activities
conducted as a futures commission
merchant, commodity trading adviser,
commodity pool, commodity pool
operator, swap execution facility, swap
data repository, swap dealer, major
swap participant, and activities that
are incidental to such commodities and
swaps activities.''; and
(2) by striking section 10A (12 U.S.C. 1848a).
(d) Acquisitions of Banks.--Section 3(c) of the Bank
Holding Company Act of 1956 (12 U.S.C. 1842(c)) is amended by
adding at the end the following:
``(7) Financial stability.--In every case, the
Board shall take into consideration the extent to which
a proposed acquisition, merger, or consolidation would
result in greater or more concentrated risks to the
stability of the United States banking or financial
system.''.
(e) Acquisitions of Nonbanks.--
(1) Notice procedures.--Section 4(j)(2)(A) of the
Bank Holding Company Act of 1956 (12 U.S.C.
1843(j)(2)(A)) is amended by striking ``or unsound
banking practices'' and inserting ``unsound banking
practices, or risk to the stability of the United
States banking or financial system''.
(2) Activities that are financial in nature.--
Section 4(k)(6)(B) of the Bank Holding Company Act of
1956 (12 U.S.C. 1843(k)(6)(B)) is amended to read as
follows:
``(B) Approval not required for certain
financial activities.--
``(i) In general.--Except as
provided in subsection (j) with regard
to the acquisition of a savings
association and clause (ii), a
financial holding company may commence
any activity, or acquire any company,
pursuant to paragraph (4) or any
regulation prescribed or order issued
under paragraph (5), without prior
approval of the Board.
``(ii) Exception.--A financial
holding company may not acquire a
company, without the prior approval of
the Board, in a transaction in which
the total consolidated assets to be
acquired by the financial holding
company exceed $10,000,000,000.
``(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 the
approval of the Board is not
required.''.
(f) Bank Merger Act Transactions.--Section 18(c)(5) of the
Federal Deposit Insurance Act (12 U.S.C. 1828(c)(5)) is
amended, in the matter immediately following subparagraph (B),
by striking ``and the convenience and needs of the community to
be served'' and inserting ``the convenience and needs of the
community to be served, and the risk to the stability of the
United States banking or financial system''.
(g) Reports by Savings and Loan Holding Companies.--Section
10(b)(2) of the Home Owners' Loan Act (12 U.S.C. 1467a(b)(2) is
amended--
(1) by striking ``Each savings'' and inserting the
following:
``(A) In general.--Each savings''; and
(2) by adding at the end the following:
``(B) Use of existing reports and other
supervisory information.--The Board shall, to
the fullest extent possible, use--
``(i) reports and other supervisory
information that the savings and loan
holding company or any subsidiary
thereof has been required to provide to
other Federal or State regulatory
agencies;
``(ii) externally audited financial
statements of the savings and loan
holding company or subsidiary;
``(iii) information that is
otherwise available from Federal or
State regulatory agencies; and
``(iv) information that is
otherwise required to be reported
publicly.
``(C) Availability.--Upon the request of
the Board, a savings and loan holding company
or a subsidiary of a savings and loan holding
company shall promptly provide to the Board any
information described in clauses (i) through
(iii) of subparagraph (B).''.
(h) Examination of Savings and Loan Holding Companies.--
(1) Definitions.--Section 2 of the Home Owners'
Loan Act (12 U.S.C. 1462) is amended by adding at the
end the following:
``(10) Appropriate federal banking agency.--The
term `appropriate Federal banking agency' has the same
meaning as in section 3(q) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(q)).
``(11) Functionally regulated subsidiary.--The term
`functionally regulated subsidiary' has the same
meaning as in section 5(c)(5) of the Bank Holding
Company Act of 1956 (12 U.S.C. 1844(c)(5)).''.
(2) Examination.--Section 10(b) of the Home Owners'
Loan Act (12 U.S.C. 1467a(b)) is amended by striking
paragraph (4) and inserting the following:
``(4) Examinations.--
``(A) In general.--Subject to subtitle B of
the Consumer Financial Protection Act of 2010,
the Board may make examinations of a savings
and loan holding company and each subsidiary of
a savings and loan holding company system, in
order to--
``(i) inform the Board of--
``(I) the nature of the
operations and financial
condition of the savings and
loan holding company and the
subsidiary;
``(II) the financial,
operational, and other risks
within the savings and loan
holding company system that may
pose a threat to--
``(aa) the safety
and soundness of the
savings and loan
holding company or of
any depository
institution subsidiary
of the savings and loan
holding company; or
``(bb) the
stability of the
financial system of the
United States; and
``(III) the systems of the
savings and loan holding
company for monitoring and
controlling the risks described
in subclause (II); and
``(ii) monitor the compliance of
the savings and loan holding company
and the subsidiary with--
``(I) this Act;
``(II) Federal laws that
the Board has specific
jurisdiction to enforce against
the company or subsidiary; and
``(III) other than in the
case of an insured depository
institution or functionally
regulated subsidiary, any other
applicable provisions of
Federal law.
``(B) Use of reports to reduce
examinations.--For purposes of this subsection,
the Board shall, to the fullest extent
possible, rely on--
``(i) the examination reports made
by other Federal or State regulatory
agencies relating to a savings and loan
holding company and any subsidiary; and
``(ii) the reports and other
information required under paragraph
(2).
``(C) Coordination with other regulators.--
The Board shall--
``(i) provide reasonable notice to,
and consult with, the appropriate
Federal banking agency, the Securities
and Exchange Commission, the Commodity
Futures Trading Commission, or State
regulatory agency, as appropriate, for
a subsidiary that is a depository
institution or a functionally regulated
subsidiary of a savings and loan
holding company before commencing an
examination of the subsidiary under
this section; and
``(ii) to the fullest extent
possible, avoid duplication of
examination activities, reporting
requirements, and requests for
information.''.
(i) Definition of the Term ``Savings and Loan Holding
Company''.--Section 10(a)(1)(D)(ii) of the Home Owners' Loan
Act (12 U.S.C. 1467a(a)(1)(D)(ii)) is amended to read as
follows:
``(ii) Exclusion.--The term
`savings and loan holding company' does
not include--
``(I) a bank holding
company that is registered
under, and subject to, the Bank
Holding Company Act of 1956 (12
U.S.C. 1841 et seq.), or to any
company directly or indirectly
controlled by such company
(other than a savings
association);
``(II) a company that
controls a savings association
that functions solely in a
trust or fiduciary capacity as
described in section 2(c)(2)(D)
of the Bank Holding Company Act
of 1956 (12 U.S.C.
1841(c)(2)(D)); or
``(III) a company described
in subsection (c)(9)(C) solely
by virtue of such company's
control of an intermediate
holding company established
pursuant to section 10A.''.
(j) Effective Date.--The amendments made by this section
shall take effect on the transfer date.
SEC. 605. ASSURING CONSISTENT OVERSIGHT OF PERMISSIBLE ACTIVITIES OF
DEPOSITORY INSTITUTION SUBSIDIARIES OF HOLDING
COMPANIES.
(a) In General.--The Federal Deposit Insurance Act (12
U.S.C. 1811 et seq.) is amended by inserting after section 25
the following new section:
``SEC. 26. ASSURING CONSISTENT OVERSIGHT OF SUBSIDIARIES OF HOLDING
COMPANIES.
``(a) Definitions.--For purposes of this section:
``(1) Board.--The term `Board' means the Board of
Governors of the Federal Reserve System.
``(2) Functionally regulated subsidiary.--The term
`functionally regulated subsidiary' has the same
meaning as in section 5(c)(5) of the Bank Holding
Company Act.
``(3) Lead insured depository institution.--The
term `lead insured depository institution' has the same
meaning as in section 2(o)(8) of the Bank Holding
Company Act.
``(b) Examination Requirements.--Subject to subtitle B of
the Consumer Financial Protection Act of 2010, the Board shall
examine the activities of a nondepository institution
subsidiary (other than a functionally regulated subsidiary or a
subsidiary of a depository institution) of a depository
institution holding company that are permissible for the
insured depository institution subsidiaries of the depository
institution holding company in the same manner, subject to the
same standards, and with the same frequency as would be
required if such activities were conducted in the lead insured
depository institution of the depository institution holding
company.
``(c) State Coordination.--
``(1) Consultation and coordination.--If a
nondepository institution subsidiary is supervised by a
State bank supervisor or other State regulatory
authority, the Board, in conducting the examinations
required in subsection (b), shall consult and
coordinate with such State regulator.
``(2) Alternating examinations permitted.--The
examinations required under subsection (b) may be
conducted in joint or alternating manner with a State
regulator, if the Board determines that an examination
of a nondepository institution subsidiary conducted by
the State carries out the purposes of this section.
``(d) Appropriate Federal Banking Agency Backup Examination
Authority.--
``(1) In general.--In the event that the Board does
not conduct examinations required under subsection (b)
in the same manner, subject to the same standards, and
with the same frequency as would be required if such
activities were conducted by the lead insured
depository institution subsidiary of the depository
institution holding company, the appropriate Federal
banking agency for the lead insured depository
institution may recommend in writing (which shall
include a written explanation of the concerns giving
rise to the recommendation) that the Board perform the
examination required under subsection (b).
``(2) Examination by an appropriate federal banking
agency.--If the Board does not, before the end of the
60-day period beginning on the date on which the Board
receives a recommendation under paragraph (1), begin an
examination as required under subsection (b) or provide
a written explanation or plan to the appropriate
Federal banking agency making such recommendation
responding to the concerns raised by the appropriate
Federal banking agency for the lead insured depository
institution, the appropriate Federal banking agency for
the lead insured depository institution may, subject to
the Consumer Financial Protection Act of 2010, examine
the activities that are permissible for a depository
institution subsidiary conducted by such nondepository
institution subsidiary (other than a functionally
regulated subsidiary or a subsidiary of a depository
institution) of the depository institution holding
company as if the nondepository institution subsidiary
were an insured depository institution for which the
appropriate Federal banking agency of the lead insured
depository institution was the appropriate Federal
banking agency, to determine whether the activities--
``(A) pose a material threat to the safety
and soundness of any insured depository
institution subsidiary of the depository
institution holding company;
``(B) are conducted in accordance with
applicable Federal law; and
``(C) are subject to appropriate systems
for monitoring and controlling the financial,
operating, and other material risks of the
activities that may pose a material threat to
the safety and soundness of the insured
depository institution subsidiaries of the
holding company.
``(3) Agency coordination with the board.--An
appropriate Federal banking agency that conducts an
examination pursuant to paragraph (2) shall coordinate
examination of the activities of nondepository
institution subsidiaries described in subsection (b)
with the Board in a manner that--
``(A) avoids duplication;
``(B) shares information relevant to the
supervision of the depository institution
holding company;
``(C) achieves the objectives of subsection
(b); and
``(D) ensures that the depository
institution holding company and the
subsidiaries of the depository institution
holding company are not subject to conflicting
supervisory demands by such agency and the
Board.
``(4) Fee permitted for examination costs.--An
appropriate Federal banking agency that conducts an
examination or enforcement action pursuant to this
section may collect an assessment, fee, or such other
charge from the subsidiary as the appropriate Federal
banking agency determines necessary or appropriate to
carry out the responsibilities of the appropriate
Federal banking agency in connection with such
examination.
``(e) Referrals for Enforcement by Appropriate Federal
Banking Agency.--
``(1) Recommendation of enforcement action.--The
appropriate Federal banking agency for the lead insured
depository institution, based upon its examination of a
nondepository institution subsidiary conducted pursuant
to subsection (d), or other relevant information, may
submit to the Board, in writing, a recommendation that
the Board take enforcement action against such
nondepository institution subsidiary, together with an
explanation of the concerns giving rise to the
recommendation, if the appropriate Federal banking
agency determines (by a vote of its members, if
applicable) that the activities of the nondepository
institution subsidiary pose a material threat to the
safety and soundness of any insured depository
institution subsidiary of the depository institution
holding company.
``(2) Back-up authority of the appropriate federal
banking agency.--If, within the 60-day period beginning
on the date on which the Board receives a
recommendation under paragraph (1), the Board does not
take enforcement action against the nondepository
institution subsidiary or provide a plan for
supervisory or enforcement action that is acceptable to
the appropriate Federal banking agency that made the
recommendation pursuant to paragraph (1), such agency
may take the recommended enforcement action against the
nondepository institution subsidiary, in the same
manner as if the nondepository institution subsidiary
were an insured depository institution for which the
agency was the appropriate Federal banking agency.
``(f) Coordination Among Appropriate Federal Banking
Agencies.--Each Federal banking agency, prior to or when
exercising authority under subsection (d) or (e) shall--
``(1) provide reasonable notice to, and consult
with, the appropriate Federal banking agency or State
bank supervisor (or other State regulatory agency) of
the nondepository institution subsidiary of a
depository institution holding company that is
described in subsection (d) before commencing any
examination of the subsidiary;
``(2) to the fullest extent possible--
``(A) rely on the examinations,
inspections, and reports of the appropriate
Federal banking agency or the State bank
supervisor (or other State regulatory agency)
of the subsidiary;
``(B) avoid duplication of examination
activities, reporting requirements, and
requests for information; and
``(C) ensure that the depository
institution holding company and the
subsidiaries of the depository institution
holding company are not subject to conflicting
supervisory demands by the appropriate Federal
banking agencies.
``(g) Rule of Construction.--No provision of this section
shall be construed as limiting any authority of the Board, the
Corporation, or the Comptroller of the Currency under any other
provision of law.''.
(b) Effective Date.--The amendment made by subsection (a)
shall take effect on the transfer date.
SEC. 606. REQUIREMENTS FOR FINANCIAL HOLDING COMPANIES TO REMAIN WELL
CAPITALIZED AND WELL MANAGED.
(a) Amendment.--Section 4(l)(1) of the Bank Holding Company
Act of 1956 (12 U.S.C. 1843(l)(1)) is amended--
(1) in subparagraph (B), by striking ``and'' at the
end;
(2) by redesignating subparagraph (C) as
subparagraph (D);
(3) by inserting after subparagraph (B) the
following:
``(C) the bank holding company is well
capitalized and well managed; and''; and
(4) in subparagraph (D)(ii), as so redesignated, by
striking ``subparagraphs (A) and (B)'' and inserting
``subparagraphs (A), (B), and (C)''.
(b) Home Owners' Loan Act Amendment.--Section 10(c)(2) of
the Home Owners' Loan Act (12 U.S.C. 1467a(c)(2)) is amended by
adding at the end the following new subparagraph:
``(H) Any activity that is permissible for
a financial holding company (as such term is
defined under section 2(p) of the Bank Holding
Company Act of 1956 (12 U.S.C. 1841(p)) to
conduct under section 4(k) of the Bank Holding
Company Act of 1956 if--
``(i) the savings and loan holding
company meets all of the criteria to
qualify as a financial holding company,
and complies with all of the
requirements applicable to a financial
holding company, under sections 4(l)
and 4(m) of the Bank Holding Company
Act and section 804(c) of the Community
Reinvestment Act of 1977 (12 U.S.C.
2903(c)) as if the savings and loan
holding company was a bank holding
company; and
``(ii) the savings and loan holding
company conducts the activity in
accordance with the same terms,
conditions, and requirements that apply
to the conduct of such activity by a
bank holding company under the Bank
Holding Company Act of 1956 and the
Board's regulations and interpretations
under such Act.''.
(c) Effective Date.--The amendments made by this section
shall take effect on the transfer date.
SEC. 607. STANDARDS FOR INTERSTATE ACQUISITIONS.
(a) Acquisition of Banks.--Section 3(d)(1)(A) of the Bank
Holding Company Act of 1956 (12 U.S.C. 1842(d)(1)(A)) is
amended by striking ``adequately capitalized and adequately
managed'' and inserting ``well capitalized and well managed''.
(b) Interstate Bank Mergers.--Section 44(b)(4)(B) of the
Federal Deposit Insurance Act (12 U.S.C. 1831u(b)(4)(B)) is
amended by striking ``will continue to be adequately
capitalized and adequately managed'' and inserting ``will be
well capitalized and well managed''.
(c) Effective Date.--The amendments made by this section
shall take effect on the transfer date.
SEC. 608. ENHANCING EXISTING RESTRICTIONS ON BANK TRANSACTIONS WITH
AFFILIATES.
(a) Affiliate Transactions.--Section 23A of the Federal
Reserve Act (12 U.S.C. 371c) is amended--
(1) in subsection (b)--
(A) in paragraph (1), by striking
subparagraph (D) and inserting the following:
``(D) any investment fund with respect to
which a member bank or affiliate thereof is an
investment adviser; and''; and
(B) in paragraph (7)--
(i) in subparagraph (A), by
inserting before the semicolon at the
end the following: ``, including a
purchase of assets subject to an
agreement to repurchase'';
(ii) in subparagraph (C), by
striking ``, including assets subject
to an agreement to repurchase,'';
(iii) in subparagraph (D)--
(I) by inserting ``or other
debt obligations'' after
``acceptance of securities'';
and
(II) by striking ``or'' at
the end; and
(iv) by adding at the end the
following:
``(F) a transaction with an affiliate that
involves the borrowing or lending of
securities, to the extent that the transaction
causes a member bank or a subsidiary to have
credit exposure to the affiliate; or
``(G) a derivative transaction, as defined
in paragraph (3) of section 5200(b) of the
Revised Statutes of the United States (12
U.S.C. 84(b)), with an affiliate, to the extent
that the transaction causes a member bank or a
subsidiary to have credit exposure to the
affiliate;'';
(2) in subsection (c)--
(A) in paragraph (1)--
(i) in the matter preceding
subparagraph (A), by striking
``subsidiary'' and all that follows
through ``time of the transaction'' and
inserting ``subsidiary, and any credit
exposure of a member bank or a
subsidiary to an affiliate resulting
from a securities borrowing or lending
transaction, or a derivative
transaction, shall be secured at all
times''; and
(ii) in each of subparagraphs (A)
through (D), by striking ``or letter of
credit'' and inserting ``letter of
credit, or credit exposure'';
(B) by striking paragraph (2);
(C) by redesignating paragraphs (3) through
(5) as paragraphs (2) through (4),
respectively;
(D) in paragraph (2), as so redesignated,
by inserting before the period at the end ``,
or credit exposure to an affiliate resulting
from a securities borrowing or lending
transaction, or derivative transaction''; and
(E) in paragraph (3), as so redesignated--
(i) by inserting ``or other debt
obligations'' after ``securities''; and
(ii) by striking ``or guarantee''
and all that follows through ``behalf
of,'' and inserting ``guarantee,
acceptance, or letter of credit issued
on behalf of, or credit exposure from a
securities borrowing or lending
transaction, or derivative transaction
to,'';
(3) in subsection (d)(4), in the matter preceding
subparagraph (A), by striking ``or issuing'' and all
that follows through ``behalf of,'' and inserting
``issuing a guarantee, acceptance, or letter of credit
on behalf of, or having credit exposure resulting from
a securities borrowing or lending transaction, or
derivative transaction to,''; and
(4) in subsection (f)--
(A) in paragraph (2)--
(i) by striking ``or order'';
(ii) by striking ``if it finds''
and all that follows through the end of
the paragraph and inserting the
following: ``if--
``(i) the Board finds the exemption
to be in the public interest and
consistent with the purposes of this
section, and notifies the Federal
Deposit Insurance Corporation of such
finding; and
``(ii) before the end of the 60-day
period beginning on the date on which
the Federal Deposit Insurance
Corporation receives notice of the
finding under clause (i), the Federal
Deposit Insurance Corporation does not
object, in writing, to the finding,
based on a determination that the
exemption presents an unacceptable risk
to the Deposit Insurance Fund.'';
(iii) by striking the Board and
inserting the following:
``(A) In general.--The Board''; and
(iv) by adding at the end the
following:
``(B) Additional exemptions.--
``(i) National banks.--The
Comptroller of the Currency may, by
order, exempt a transaction of a
national bank from the requirements of
this section if--
``(I) the Board and the
Office of the Comptroller of
the Currency jointly find the
exemption to be in the public
interest and consistent with
the purposes of this section
and notify the Federal Deposit
Insurance Corporation of such
finding; and
``(II) before the end of
the 60-day period beginning on
the date on which the Federal
Deposit Insurance Corporation
receives notice of the finding
under subclause (I), the
Federal Deposit Insurance
Corporation does not object, in
writing, to the finding, based
on a determination that the
exemption presents an
unacceptable risk to the
Deposit Insurance Fund.
``(ii) State banks.--The Federal
Deposit Insurance Corporation may, by
order, exempt a transaction of a State
nonmember bank, and the Board may, by
order, exempt a transaction of a State
member bank, from the requirements of
this section if--
``(I) the Board and the
Federal Deposit Insurance
Corporation jointly find that
the exemption is in the public
interest and consistent with
the purposes of this section;
and
``(II) the Federal Deposit
Insurance Corporation finds
that the exemption does not
present an unacceptable risk to
the Deposit Insurance Fund.'';
and
(B) by adding at the end the following:
``(4) Amounts of covered transactions.--The Board
may issue such regulations or interpretations as the
Board determines are necessary or appropriate with
respect to the manner in which a netting agreement may
be taken into account in determining the amount of a
covered transaction between a member bank or a
subsidiary and an affiliate, including the extent to
which netting agreements between a member bank or a
subsidiary and an affiliate may be taken into account
in determining whether a covered transaction is fully
secured for purposes of subsection (d)(4). An
interpretation under this paragraph with respect to a
specific member bank, subsidiary, or affiliate shall be
issued jointly with the appropriate Federal banking
agency for such member bank, subsidiary, or
affiliate.''.
(b) Transactions With Affiliates.--Section 23B(e) of the
Federal Reserve Act (12 U.S.C. 371c-1(e)) is amended--
(1) by striking the undesignated matter following
subparagraph (B);
(2) by redesignating subparagraphs (A) and (B) as
clauses (i) and (ii), respectively, and adjusting the
clause margins accordingly;
(3) by redesignating paragraphs (1) and (2) as
subparagraphs (A) and (B), respectively, and adjusting
the subparagraph margins accordingly;
(4) by striking ``The Board'' and inserting the
following:
``(1) In general.--The Board'';
(5) in paragraph (1)(B), as so redesignated--
(A) in the matter preceding clause (i), by
inserting before ``regulations'' the following:
``subject to paragraph (2), if the Board finds
that an exemption or exclusion is in the public
interest and is consistent with the purposes of
this section, and notifies the Federal Deposit
Insurance Corporation of such finding,''; and
(B) in clause (ii), by striking the comma
at the end and inserting a period; and
(6) by adding at the end the following:
``(2) Exception.--The Board may grant an exemption
or exclusion under this subsection only if, during the
60-day period beginning on the date of receipt of
notice of the finding from the Board under paragraph
(1)(B), the Federal Deposit Insurance Corporation does
not object, in writing, to such exemption or exclusion,
based on a determination that the exemption presents an
unacceptable risk to the Deposit Insurance Fund.''.
(c) Home Owners' Loan Act.--Section 11 of the Home Owners'
Loan Act (12 U.S.C. 1468) is amended by adding at the end the
following:
``(d) Exemptions.--
``(1) Federal savings associations.--The
Comptroller of the Currency may, by order, exempt a
transaction of a Federal savings association from the
requirements of this section if--
``(A) the Board and the Office of the
Comptroller of the Currency jointly find the
exemption to be in the public interest and
consistent with the purposes of this section
and notify the Federal Deposit Insurance
Corporation of such finding; and
``(B) before the end of the 60-day period
beginning on the date on which the Federal
Deposit Insurance Corporation receives notice
of the finding under subparagraph (A), the
Federal Deposit Insurance Corporation does not
object, in writing, to the finding, based on a
determination that the exemption presents an
unacceptable risk to the Deposit Insurance
Fund.
``(2) State savings association.--The Federal
Deposit Insurance Corporation may, by order, exempt a
transaction of a State savings association from the
requirements of this section if the Board and the
Federal Deposit Insurance Corporation jointly find
that--
``(A) the exemption is in the public
interest and consistent with the purposes of
this section; and
``(B) the exemption does not present an
unacceptable risk to the Deposit Insurance
Fund.''.
(d) Effective Date.--The amendments made by this section
shall take effect 1 year after the transfer date.
SEC. 609. ELIMINATING EXCEPTIONS FOR TRANSACTIONS WITH FINANCIAL
SUBSIDIARIES.
(a) Amendment.--Section 23A(e) of the Federal Reserve Act
(12 U.S.C. 371c(e)) is amended--
(1) by striking paragraph (3); and
(2) by redesignating paragraph (4) as paragraph
(3).
(b) Prospective Application of Amendment.--The amendments
made by this section shall apply with respect to any covered
transaction between a bank and a subsidiary of the bank, as
those terms are defined in section 23A of the Federal Reserve
Act (12 U.S.C. 371c), that is entered into on or after the date
of enactment of this Act.
(c) Effective Date.--The amendments made by this section
shall take effect 1 year after the transfer date.
SEC. 610. LENDING LIMITS APPLICABLE TO CREDIT EXPOSURE ON DERIVATIVE
TRANSACTIONS, REPURCHASE AGREEMENTS, REVERSE
REPURCHASE AGREEMENTS, AND SECURITIES LENDING AND
BORROWING TRANSACTIONS.
(a) National Banks.--Section 5200(b) of the Revised
Statutes of the United States (12 U.S.C. 84(b)) is amended--
(1) in paragraph (1), by striking ``shall include''
and all that follows through the end of the paragraph
and inserting the following: ``shall include--
``(A) all direct or indirect advances of
funds to a person made on the basis of any
obligation of that person to repay the funds or
repayable from specific property pledged by or
on behalf of the person;
``(B) to the extent specified by the
Comptroller of the Currency, any liability of a
national banking association to advance funds
to or on behalf of a person pursuant to a
contractual commitment; and
``(C) any credit exposure to a person
arising from a derivative transaction,
repurchase agreement, reverse repurchase
agreement, securities lending transaction, or
securities borrowing transaction between the
national banking association and the person;'';
(2) in paragraph (2), by striking the period at the
end and inserting ``; and''; and
(3) by adding at the end the following:
``(3) the term `derivative transaction' includes
any transaction that is a contract, agreement, swap,
warrant, note, or option that is based, in whole or in
part, on the value of, any interest in, or any
quantitative measure or the occurrence of any event
relating to, one or more commodities, securities,
currencies, interest or other rates, indices, or other
assets.''.
(b) Savings Associations.--Section 5(u)(3) of the Home
Owners' Loan Act (12 U.S.C. 1464(u)(3)) is amended by striking
``Director'' each place that term appears and inserting
``Comptroller of the Currency''.
(c) Effective Date.--The amendments made by this section
shall take effect 1 year after the transfer date.
SEC. 611. CONSISTENT TREATMENT OF DERIVATIVE TRANSACTIONS IN LENDING
LIMITS.
(a) Amendment.--Section 18 of the Federal Deposit Insurance
Act (12 U.S.C. 1828) is amended by adding at the end the
following:
``(y) State Lending Limit Treatment of Derivatives
Transactions.--An insured State bank may engage in a derivative
transaction, as defined in section 5200(b)(3) of the Revised
Statutes of the United States (12 U.S.C. 84(b)(3)), only if the
law with respect to lending limits of the State in which the
insured State bank is chartered takes into consideration credit
exposure to derivative transactions.''.
(b) Effective Date.--The amendment made by this section
shall take effect 18 months after the transfer date.
SEC. 612. RESTRICTION ON CONVERSIONS OF TROUBLED BANKS.
(a) Conversion of a National Banking Association.--The Act
entitled ``An Act to provide for the conversion of national
banking associations into and their merger or consolidation
with State banks, and for other purposes.'' (12 U.S.C. 214 et
seq.) is amended by adding at the end the following:
``SEC. 10. PROHIBITION ON CONVERSION.
``A national banking association may not convert to a State
bank or State savings association during any period in which
the national banking association is subject to a cease and
desist order (or other formal enforcement order) issued by, or
a memorandum of understanding entered into with, the
Comptroller of the Currency with respect to a significant
supervisory matter.''.
(b) Conversion of a State Bank or Savings Association.--
Section 5154 of the Revised Statutes of the United States (12
U.S.C. 35) is amended by adding at the end the following: ``The
Comptroller of the Currency may not approve the conversion of a
State bank or State savings association to a national banking
association or Federal savings association during any period in
which the State bank or State savings association is subject to
a cease and desist order (or other formal enforcement order)
issued by, or a memorandum of understanding entered into with,
a State bank supervisor or the appropriate Federal banking
agency with respect to a significant supervisory matter or a
final enforcement action by a State Attorney General.''.
(c) Conversion of a Federal Savings Association.--Section
5(i) of the Home Owners' Loan Act (12 U.S.C. 1464(i)) is
amended by adding at the end the following:
``(6) Limitation on certain conversions by federal
savings associations.--A Federal savings association
may not convert to a State bank or State savings
association during any period in which the Federal
savings association is subject to a cease and desist
order (or other formal enforcement order) issued by, or
a memorandum of understanding entered into with, the
Office of Thrift Supervision or the Comptroller of the
Currency with respect to a significant supervisory
matter.''.
(d) Exception.--The prohibition on the approval of
conversions under the amendments made by subsections (a), (b),
and (c) shall not apply, if--
(1) the Federal banking agency that would be the
appropriate Federal banking agency after the proposed
conversion gives the appropriate Federal banking agency
or State bank supervisor that issued the cease and
desist order (or other formal enforcement order) or
memorandum of understanding, as appropriate, written
notice of the proposed conversion including a plan to
address the significant supervisory matter in a manner
that is consistent with the safe and sound operation of
the institution;
(2) within 30 days of receipt of the written notice
required under paragraph (1), the appropriate Federal
banking agency or State bank supervisor that issued the
cease and desist order (or other formal enforcement
order) or memorandum of understanding, as appropriate,
does not object to the conversion or the plan to
address the significant supervisory matter;
(3) after conversion of the insured depository
institution, the appropriate Federal banking agency
after the conversion implements such plan; and
(4) in the case of a final enforcement action by a
State Attorney General, approval of the conversion is
conditioned on compliance by the insured depository
institution with the terms of such final enforcement
action.
(e) Notification of Pending Enforcement Actions.--
(1) Copy of conversion application.--At the time an
insured depository institution files a conversion
application, the insured depository institution shall
transmit a copy of the conversion application to--
(A) the appropriate Federal banking agency
for the insured depository institution; and
(B) the Federal banking agency that would
be the appropriate Federal banking agency of
the insured depository institution after the
proposed conversion.
(2) Notification and access to information.--Upon
receipt of a copy of the application described in
paragraph (1), the appropriate Federal banking agency
for the insured depository institution proposing the
conversion shall--
(A) notify the Federal banking agency that
would be the appropriate Federal banking agency
for the institution after the proposed
conversion in writing of any ongoing
supervisory or investigative proceedings that
the appropriate Federal banking agency for the
institution proposing to convert believes is
likely to result, in the near term and absent
the proposed conversion, in a cease and desist
order (or other formal enforcement order) or
memorandum of understanding with respect to a
significant supervisory matter; and
(B) provide the Federal banking agency that
would be the appropriate Federal banking agency
for the institution after the proposed
conversion access to all investigative and
supervisory information relating to the
proceedings described in subparagraph (A).
SEC. 613. DE NOVO BRANCHING INTO STATES.
(a) National Banks.--Section 5155(g)(1)(A) of the Revised
Statutes of the United States (12 U.S.C. 36(g)(1)(A)) is
amended to read as follows:
``(A) the law of the State in which the
branch is located, or is to be located, would
permit establishment of the branch, if the
national bank were a State bank chartered by
such State; and''.
(b) State Insured Banks.--Section 18(d)(4)(A)(i) of the
Federal Deposit Insurance Act (12 U.S.C. 1828(d)(4)(A)(i)) is
amended to read as follows:
``(i) the law of the State in which
the branch is located, or is to be
located, would permit establishment of
the branch, if the bank were a State
bank chartered by such State; and''.
SEC. 614. LENDING LIMITS TO INSIDERS.
(a) Extensions of Credit.--Section 22(h)(9)(D)(i) of the
Federal Reserve Act (12 U.S.C. 375b(9)(D)(i)) is amended--
(1) by striking the period at the end and inserting
``; or'';
(2) by striking ``a person'' and inserting ``the
person'';
(3) by striking ``extends credit by making'' and
inserting the following: ``extends credit to a person
by--
``(I) making''; and
(4) by adding at the end the following:
``(II) having credit
exposure to the person arising
from a derivative transaction
(as defined in section 5200(b)
of the Revised Statutes of the
United States (12 U.S.C.
84(b))), repurchase agreement,
reverse repurchase agreement,
securities lending transaction,
or securities borrowing
transaction between the member
bank and the person.''.
(b) Effective Date.--The amendments made by this section
shall take effect 1 year after the transfer date.
SEC. 615. LIMITATIONS ON PURCHASES OF ASSETS FROM INSIDERS.
(a) Amendment to the Federal Deposit Insurance Act.--
Section 18 of the Federal Deposit Insurance Act (12 U.S.C.
1828) is amended by adding at the end the following:
``(z) General Prohibition on Sale of Assets.--
``(1) In general.--An insured depository
institution may not purchase an asset from, or sell an
asset to, an executive officer, director, or principal
shareholder of the insured depository institution, or
any related interest of such person (as such terms are
defined in section 22(h) of Federal Reserve Act),
unless--
``(A) the transaction is on market terms;
and
``(B) if the transaction represents more
than 10 percent of the capital stock and
surplus of the insured depository institution,
the transaction has been approved in advance by
a majority of the members of the board of
directors of the insured depository institution
who do not have an interest in the transaction.
``(2) Rulemaking.--The Board of Governors of the
Federal Reserve System may issue such rules as may be
necessary to define terms and to carry out the purposes
of this subsection. Before proposing or adopting a rule
under this paragraph, the Board of Governors of the
Federal Reserve System shall consult with the
Comptroller of the Currency and the Corporation as to
the terms of the rule.''.
(b) Amendments to the Federal Reserve Act.--Section 22(d)
of the Federal Reserve Act (12 U.S.C. 375) is amended to read
as follows:
``(d) [Reserved]''.
(c) Effective Date.--The amendments made by this section
shall take effect on the transfer date.
SEC. 616. REGULATIONS REGARDING CAPITAL LEVELS.
(a) Capital Levels of Bank Holding Companies.--Section 5(b)
of the Bank Holding Company Act of 1956 (12 U.S.C. 1844(b)) is
amended--
(1) by inserting after ``orders'' the following:
``, including regulations and orders relating to the
capital requirements for bank holding companies,''; and
(2) by adding at the end the following: ``In
establishing capital regulations pursuant to this
subsection, the Board shall seek to make such
requirements countercyclical, so that the amount of
capital required to be maintained by a company
increases in times of economic expansion and decreases
in times of economic contraction, consistent with the
safety and soundness of the company.''.
(b) Capital Levels of Savings and Loan Holding Companies.--
Section 10(g)(1) of the Home Owners' Loan Act (12 U.S.C.
1467a(g)(1)) is amended--
(1) by inserting after ``orders'' the following:
``, including regulations and orders relating to
capital requirements for savings and loan holding
companies,''; and
(2) by inserting at the end the following: ``In
establishing capital regulations pursuant to this
subsection, the appropriate Federal banking agency
shall seek to make such requirements countercyclical so
that the amount of capital required to be maintained by
a company increases in times of economic expansion and
decreases in times of economic contraction, consistent
with the safety and soundness of the company.''.
(c) Capital Levels of Insured Depository Institutions.--
Section 908(a)(1) of the International Lending Supervision Act
of 1983 (12 U.S.C. 3907(a)(1)) is amended by adding at the end
the following: ``Each appropriate Federal banking agency shall
seek to make the capital standards required under this section
or other provisions of Federal law for insured depository
institutions countercyclical so that the amount of capital
required to be maintained by an insured depository institution
increases in times of economic expansion and decreases in times
of economic contraction, consistent with the safety and
soundness of the insured depository institution.''
(d) Source of Strength.--The Federal Deposit Insurance Act
(12 U.S.C. 1811 et seq.) is amended by inserting after section
38 (12 U.S.C. 1831o) the following:
``SEC. 38A. SOURCE OF STRENGTH.
``(a) Holding Companies.--The appropriate Federal banking
agency for a bank holding company or savings and loan holding
company shall require the bank holding company or savings and
loan holding company to serve as a source of financial strength
for any subsidiary of the bank holding company or savings and
loan holding company that is a depository institution.
``(b) Other Companies.--If an insured depository
institution is not the subsidiary of a bank holding company or
savings and loan holding company, the appropriate Federal
banking agency for the insured depository institution shall
require any company that directly or indirectly controls the
insured depository institution to serve as a source of
financial strength for such institution.
``(c) Reports.--The appropriate Federal banking agency for
an insured depository institution described in subsection (b)
may, from time to time, require the company, or a company that
directly or indirectly controls the insured depository
institution, to submit a report, under oath, for the purposes
of--
``(1) assessing the ability of such company to
comply with the requirement under subsection (b); and
``(2) enforcing the compliance of such company with
the requirement under subsection (b).
``(d) Rules.--Not later than 1 year after the transfer
date, as defined in section 311 of the Enhancing Financial
Institution Safety and Soundness Act of 2010, the appropriate
Federal banking agencies shall jointly issue final rules to
carry out this section.
``(e) Definition.--In this section, the term `source of
financial strength' means the ability of a company that
directly or indirectly owns or controls an insured depository
institution to provide financial assistance to such insured
depository institution in the event of the financial distress
of the insured depository institution.''.
(e) Effective Date.--The amendments made by this section
shall take effect on the transfer date.
SEC. 617. ELIMINATION OF ELECTIVE INVESTMENT BANK HOLDING COMPANY
FRAMEWORK.
(a) Amendment.--Section 17 of the Securities Exchange Act
of 1934 (15 U.S.C. 78q) is amended--
(1) by striking subsection (i); and
(2) by redesignating subsections (j) and (k) as
subsections (i) and (j), respectively.
(b) Effective Date.--The amendments made by this section
shall take effect on the transfer date.
SEC. 618. SECURITIES HOLDING COMPANIES.
(a) Definitions.--In this section--
(1) the term ``associated person of a securities
holding company'' means a person directly or indirectly
controlling, controlled by, or under common control
with, a securities holding company;
(2) the term ``foreign bank'' has the same meaning
as in section 1(b)(7) of the International Banking Act
of 1978 (12 U.S.C. 3101(7));
(3) the term ``insured bank'' has the same meaning
as in section 3 of the Federal Deposit Insurance Act
(12 U.S.C. 1813);
(4) the term ``securities holding company''--
(A) means--
(i) a person (other than a natural
person) that owns or controls 1 or more
brokers or dealers registered with the
Commission; and
(ii) the associated persons of a
person described in clause (i); and
(B) does not include a person that is--
(i) a nonbank financial company
supervised by the Board under title I;
(ii) an insured bank (other than an
institution described in subparagraphs
(D), (F), or (H) of section 2(c)(2) of
the Bank Holding Company Act of 1956
(12 U.S.C. 1841(c)(2)) or a savings
association;
(iii) an affiliate of an insured
bank (other than an institution
described in subparagraphs (D), (F), or
(H) of section 2(c)(2) of the Bank
Holding Company Act of 1956 (12 U.S.C.
1841(c)(2)) or an affiliate of a
savings association;
(iv) a foreign bank, foreign
company, or company that is described
in section 8(a) of the International
Banking Act of 1978 (12 U.S.C.
3106(a));
(v) a foreign bank that controls,
directly or indirectly, a corporation
chartered under section 25A of the
Federal Reserve Act (12 U.S.C. 611 et
seq.); or
(vi) subject to comprehensive
consolidated supervision by a foreign
regulator;
(5) the term ``supervised securities holding
company'' means a securities holding company that is
supervised by the Board of Governors under this
section; and
(6) the terms ``affiliate'', ``bank'', ``bank
holding company'', ``company'', ``control'', ``savings
association'', and ``subsidiary'' have the same
meanings as in section 2 of the Bank Holding Company
Act of 1956.
(b) Supervision of a Securities Holding Company Not Having
a Bank or Savings Association Affiliate.--
(1) In general.--A securities holding company that
is required by a foreign regulator or provision of
foreign law to be subject to comprehensive consolidated
supervision may register with the Board of Governors
under paragraph (2) to become a supervised securities
holding company. Any securities holding company filing
such a registration shall be supervised in accordance
with this section, and shall comply with the rules and
orders prescribed by the Board of Governors applicable
to supervised securities holding companies.
(2) Registration as a supervised securities holding
company.--
(A) Registration.--A securities holding
company that elects to be subject to
comprehensive consolidated supervision shall
register by filing with the Board of Governors
such information and documents as the Board of
Governors, by regulation, may prescribe as
necessary or appropriate in furtherance of the
purposes of this section.
(B) Effective date.--A securities holding
company that registers under subparagraph (A)
shall be deemed to be a supervised securities
holding company, effective on the date that is
45 days after the date of receipt of the
registration information and documents under
subparagraph (A) by the Board of Governors, or
within such shorter period as the Board of
Governors, by rule or order, may determine.
(c) Supervision of Securities Holding Companies.--
(1) Recordkeeping and reporting.--
(A) Recordkeeping and reporting required.--
Each supervised securities holding company and
each affiliate of a supervised securities
holding company shall make and keep for periods
determined by the Board of Governors such
records, furnish copies of such records, and
make such reports, as the Board of Governors
determines to be necessary or appropriate to
carry out this section, to prevent evasions
thereof, and to monitor compliance by the
supervised securities holding company or
affiliate with applicable provisions of law.
(B) Form and contents.--
(i) In general.--Any record or
report required to be made, furnished,
or kept under this paragraph shall--
(I) be prepared in such
form and according to such
specifications (including
certification by a registered
public accounting firm), as the
Board of Governors may require;
and
(II) be provided promptly
to the Board of Governors at
any time, upon request by the
Board of Governors.
(ii) Contents.--Records and reports
required to be made, furnished, or kept
under this paragraph may include--
(I) a balance sheet or
income statement of the
supervised securities holding
company or an affiliate of a
supervised securities holding
company;
(II) an assessment of the
consolidated capital and
liquidity of the supervised
securities holding company;
(III) a report by an
independent auditor attesting
to the compliance of the
supervised securities holding
company with the internal risk
management and internal control
objectives of the supervised
securities holding company; and
(IV) a report concerning
the extent to which the
supervised securities holding
company or affiliate has
complied with the provisions of
this section and any
regulations prescribed and
orders issued under this
section.
(2) Use of existing reports.--
(A) In general.--The Board of Governors
shall, to the fullest extent possible, accept
reports in fulfillment of the requirements of
this paragraph that a supervised securities
holding company or an affiliate of a supervised
securities holding company has been required to
provide to another regulatory agency or a self-
regulatory organization.
(B) Availability.--A supervised securities
holding company or an affiliate of a supervised
securities holding company shall promptly
provide to the Board of Governors, at the
request of the Board of Governors, any report
described in subparagraph (A), as permitted by
law.
(3) Examination authority.--
(A) Focus of examination authority.--The
Board of Governors may make examinations of any
supervised securities holding company and any
affiliate of a supervised securities holding
company to carry out this subsection, to
prevent evasions thereof, and to monitor
compliance by the supervised securities holding
company or affiliate with applicable provisions
of law.
(B) Deference to other examinations.--For
purposes of this subparagraph, the Board of
Governors shall, to the fullest extent
possible, use the reports of examination made
by other appropriate Federal or State
regulatory authorities with respect to any
functionally regulated subsidiary or any
institution described in subparagraph (D), (F),
or (H) of section 2(c)(2) of the Bank Holding
Company Act of 1956 (12 U.S.C. 1841(c)(2)).
(d) Capital and Risk Management.--
(1) In general.--The Board of Governors shall, by
regulation or order, prescribe capital adequacy and
other risk management standards for supervised
securities holding companies that are appropriate to
protect the safety and soundness of the supervised
securities holding companies and address the risks
posed to financial stability by supervised securities
holding companies.
(2) Differentiation.--In imposing standards under
this subsection, the Board of Governors may
differentiate among supervised securities holding
companies on an individual basis, or by category,
taking into consideration the requirements under
paragraph (3).
(3) Content.--Any standards imposed on a supervised
securities holding company under this subsection shall
take into account--
(A) the differences among types of business
activities carried out by the supervised
securities holding company;
(B) the amount and nature of the financial
assets of the supervised securities holding
company;
(C) the amount and nature of the
liabilities of the supervised securities
holding company, including the degree of
reliance on short-term funding;
(D) the extent and nature of the off-
balance sheet exposures of the supervised
securities holding company;
(E) the extent and nature of the
transactions and relationships of the
supervised securities holding company with
other financial companies;
(F) the importance of the supervised
securities holding company as a source of
credit for households, businesses, and State
and local governments, and as a source of
liquidity for the financial system; and
(G) the nature, scope, and mix of the
activities of the supervised securities holding
company.
(4) Notice.--A capital requirement imposed under
this subsection may not take effect earlier than 180
days after the date on which a supervised securities
holding company is provided notice of the capital
requirement.
(e) Other Provisions of Law Applicable to Supervised
Securities Holding Companies.--
(1) Federal deposit insurance act.--Subsections
(b), (c) through (s), and (u) of section 8 of the
Federal Deposit Insurance Act (12 U.S.C. 1818) shall
apply to any supervised securities holding company, and
to any subsidiary (other than a bank or an institution
described in subparagraph (D), (F), or (H) of section
2(c)(2) of the Bank Holding Company Act of 1956 (12
U.S.C. 1841(c)(2))) of a supervised securities holding
company, in the same manner as such subsections apply
to a bank holding company for which the Board of
Governors is the appropriate Federal banking agency.
For purposes of applying such subsections to a
supervised securities holding company or a subsidiary
(other than a bank or an institution described in
subparagraph (D), (F), or (H) of section 2(c)(2) of the
Bank Holding Company Act of 1956 (12 U.S.C.
1841(c)(2))) of a supervised securities holding
company, the Board of Governors shall be deemed the
appropriate Federal banking agency for the supervised
securities holding company or subsidiary.
(2) Bank holding company act of 1956.--Except as
the Board of Governors may otherwise provide by
regulation or order, a supervised securities holding
company shall be subject to the provisions of the Bank
Holding Company Act of 1956 (12 U.S.C. 1841 et seq.) in
the same manner and to the same extent a bank holding
company is subject to such provisions, except that a
supervised securities holding company may not, by
reason of this paragraph, be deemed to be a bank
holding company for purposes of section 4 of the Bank
Holding Company Act of 1956 (12 U.S.C. 1843).
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 rule, as provided in
subsection (b)(2), 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 not be subject to the additional
capital and additional quantitative limits except as
provided in subsection (d)(3), as if the nonbank
financial company supervised by the Board were a
banking entity.
``(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 consumers 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.--Unless otherwise
provided in this section, 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, 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
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
nonbank financial company
supervised by the Board, and
any subsidiary of any of the
foregoing (other than a
subsidiary for which an agency
described in subclause (I),
(III), or (IV) is the primary
financial regulatory agency);
``(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 Dodd-Frank Wall Street
Reform and Consumer Protection
Act; 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
Dodd-Frank Wall Street Reform
and Consumer Protection Act.
``(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 Financial Stability
Oversight 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 date of the
issuance of final rules under subsection (b);
or
``(B) 2 years after the date of enactment
of this section.
``(2) Conformance period for divestiture.--A
banking entity or nonbank financial company supervised
by the Board shall bring its activities and investments
into compliance with the requirements of this section
not later than 2 years after the date on which the
requirements become effective pursuant to this section
or 2 years after the date on which the entity or
company becomes a nonbank financial company supervised
by the Board. The Board may, by rule or order, extend
this two-year period for not more than one year at a
time, if, in the judgment of the Board, such an
extension is consistent with the purposes of this
section and would not be detrimental to the public
interest. The extensions made by the Board under the
preceding sentence may not exceed an aggregate of 3
years.
``(3) Extended transition for illiquid funds.--
``(A) Application.--The Board may, upon the
application of a banking entity, extend the
period during which the banking entity, to the
extent necessary to fulfill a contractual
obligation that was in effect on May 1, 2010,
may take or retain its equity, partnership, or
other ownership interest in, or otherwise
provide additional capital to, an illiquid
fund.
``(B) Time limit on approval.--The Board
may grant 1 extension under subparagraph (A),
which may not exceed 5 years.
``(4) Divestiture required.--Except as otherwise
provided in subsection (d)(1)(G), a banking entity may
not engage in any activity prohibited under subsection
(a)(1)(B) after the earlier of--
``(A) the date on which the contractual
obligation to invest in the illiquid fund
terminates; and
``(B) the date on which any extensions
granted by the Board under paragraph (3)
expire.
``(5) Additional capital during transition
period.--Notwithstanding paragraph (2), on the date on
which the rules are issued under subsection (b)(2), the
appropriate Federal banking agencies, the Securities
and Exchange Commission, and the Commodity Futures
Trading Commission shall issue rules, as provided in
subsection (b)(2), to impose additional capital
requirements, and any other restrictions, as
appropriate, on any equity, partnership, or ownership
interest in or sponsorship of a hedge fund or private
equity fund by a banking entity.
``(6) Special rulemaking.--Not later than 6 months
after the date of enactment of this section, the Board
shall issue rules to implement paragraphs (2) and (3).
``(d) Permitted Activities.--
``(1) In general.--Notwithstanding the restrictions
under 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 or market-making-related
activities, to the extent that any such
activities permitted by this subparagraph are
designed not to exceed the reasonably expected
near term demands of clients, customers, or
counterparties.
``(C) Risk-mitigating hedging activities in
connection with and related to individual or
aggregated positions, contracts, or other
holdings of a banking entity that are designed
to reduce the specific risks to the banking
entity in connection with and related to such
positions, contracts, or other holdings.
``(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), investments
designed primarily to promote the public
welfare, of the type permitted under paragraph
(11) of section 5136 of the Revised Statutes of
the United States (12 U.S.C. 24), or
investments that are qualified rehabilitation
expenditures with respect to a qualified
rehabilitated building or certified historic
structure, as such terms are defined in section
47 of the Internal Revenue Code of 1986 or a
similar State historic tax credit program.
``(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 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 except
for a de minimis investment subject to
and in compliance with paragraph (4);
``(iv) the banking entity complies
with the restrictions under paragraphs
(1) and (2) of subparagraph (f);
``(v) the banking entity does not,
directly or indirectly, guarantee,
assume, or otherwise insure the
obligations or performance of the hedge
fund or private equity fund or of any
hedge fund or private equity fund in
which such hedge fund or private equity
fund invests;
``(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 the
hedge fund or private equity fund,
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
discloses to prospective and actual
investors in the fund, in writing, that
any losses in such hedge fund or
private equity fund are borne solely by
investors in the fund and not by the
banking entity, and otherwise complies
with any additional rules of the
appropriate Federal banking agencies,
the Securities and Exchange Commission,
or the Commodity Futures Trading
Commission, as provided in subsection
(b)(2), 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
banking entity 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 is not directly or
indirectly controlled by a banking entity that
is organized under the laws of the United
States or of one or more States.
``(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 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 is
not directly or indirectly controlled by a
banking entity that is organized under the laws
of the United States or of one or more States.
``(J) Such other activity as the
appropriate Federal banking agencies, the
Securities and Exchange Commission, and the
Commodity Futures Trading Commission determine,
by rule, as provided in subsection (b)(2),
would promote and protect the safety and
soundness of the banking entity 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 the
transaction, class of transactions, or
activity--
``(i) would involve or result in a
material conflict of interest (as such
term shall be defined by rule as
provided in subsection (b)(2)) between
the banking entity and its clients,
customers, or counterparties;
``(ii) would result, directly or
indirectly, in a material exposure by
the banking entity to high-risk assets
or high-risk trading strategies (as
such terms shall be defined by rule as
provided in subsection (b)(2));
``(iii) would pose a threat to the
safety and soundness of such banking
entity; 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 of the regulations
issued under subsection (b)(2).
``(3) Capital and quantitative limitations.--The
appropriate Federal banking agencies, the Securities
and Exchange Commission, and the Commodity Futures
Trading Commission shall, as provided in subsection
(b)(2), adopt rules imposing additional capital
requirements and quantitative limitations, including
diversification requirements, regarding the activities
permitted under this section if the appropriate Federal
banking agencies, the Securities and Exchange
Commission, and the Commodity Futures Trading
Commission determine that additional capital and
quantitative limitations are appropriate to protect the
safety and soundness of banking entities engaged in
such activities.
``(4) De minimis investment.--
``(A) In general.--A banking entity may
make and retain an investment in a hedge fund
or private equity fund that the banking entity
organizes and offers, subject to the
limitations and restrictions in subparagraph
(B) for the purposes of--
``(i) establishing the fund and
providing the fund with sufficient
initial equity for investment to permit
the fund to attract unaffiliated
investors; or
``(ii) making a de minimis
investment.
``(B) Limitations and restrictions on
investments.--
``(i) Requirement to seek other
investors.--A banking entity shall
actively seek unaffiliated investors to
reduce or dilute the investment of the
banking entity to the amount permitted
under clause (ii).
``(ii) Limitations on size of
investments.--Notwithstanding any other
provision of law, investments by a
banking entity in a hedge fund or
private equity fund shall--
``(I) not later than 1 year
after the date of establishment
of the fund, be reduced through
redemption, sale, or dilution
to an amount that is not more
than 3 percent of the total
ownership interests of the
fund;
``(II) be immaterial to the
banking entity, as defined, by
rule, pursuant to subsection
(b)(2), but in no case may the
aggregate of all of the
interests of the banking entity
in all such funds exceed 3
percent of the Tier 1 capital
of the banking entity.
``(iii) Capital.--For purposes of
determining compliance with applicable
capital standards under paragraph (3),
the aggregate amount of the outstanding
investments by a banking entity under
this paragraph, including retained
earnings, shall be deducted from the
assets and tangible equity of the
banking entity, and the amount of the
deduction shall increase commensurate
with the leverage of the hedge fund or
private equity fund.
``(C) Extension.--Upon an application by a
banking entity, the Board may extend the period
of time to meet the requirements under
subparagraph (B)(ii)(I) for 2 additional years,
if the Board finds that an extension would be
consistent with safety and soundness and in the
public interest.
``(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 paragraph 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,
investment adviser, or sponsor to a hedge fund or
private equity fund, or that organizes and offers a
hedge fund or private equity fund pursuant to paragraph
(d)(1)(G), and no affiliate of such entity, may enter
into a transaction with the fund, or with any other
hedge fund or private equity fund that is controlled by
such fund, that would be 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, as if such banking entity and the affiliate
thereof were a member bank and the hedge fund or
private equity fund were an affiliate thereof.
``(2) Treatment as member bank.--A banking entity
that serves, directly or indirectly, as the investment
manager, investment adviser, or sponsor to a hedge fund
or private equity fund, or that organizes and offers a
hedge fund or private equity fund pursuant to paragraph
(d)(1)(G), shall be subject to section 23B of the
Federal Reserve Act (12 U.S.C. 371c-1), as if such
banking entity were a member bank and such hedge fund
or private equity fund were an affiliate thereof.
``(3) Permitted services.--
``(A) In general.--Notwithstanding
paragraph (1), the Board may permit a banking
entity to enter into any prime brokerage
transaction with any hedge fund or private
equity fund in which a hedge fund or private
equity fund managed, sponsored, or advised by
such banking entity has taken an equity,
partnership, or other ownership interest, if--
``(i) the banking entity is in
compliance with each of the limitations
set forth in subsection (d)(1)(G) with
regard to a hedge fund or private
equity fund organized and offered by
such banking entity;
``(ii) the chief executive officer
(or equivalent officer) of the banking
entity certifies in writing annually
(with a duty to update the
certification if the information in the
certification materially changes) that
the conditions specified in subsection
(d)(1)(g)(v) are satisfied; and
``(iii) the Board has determined
that such transaction is consistent
with the safe and sound operation and
condition of the banking entity.
``(B) Treatment of prime brokerage
transactions.--For purposes of subparagraph
(A), a prime brokerage transaction described in
subparagraph (A) shall be subject to section
23B of the Federal Reserve Act (12 U.S.C. 371c-
1) as if the counterparty were an affiliate of
the banking entity.
``(4) Application to nonbank financial companies
supervised by the board.--The appropriate Federal
banking agencies, the Securities and Exchange
Commission, and the Commodity Futures Trading
Commission shall adopt rules, as provided in subsection
(b)(2), imposing additional capital charges or other
restrictions for nonbank financial companies supervised
by the Board to address the risks to and conflicts of
interest of banking entities described in paragraphs
(1), (2), and (3) of this subsection.
``(g) Rules of Construction.--
``(1) Limitation on contrary authority.--Except as
provided in this section, notwithstanding any other
provision of law, the prohibitions and restrictions
under this section shall apply to activities of a
banking entity or nonbank financial company supervised
by the Board, even if such activities are authorized
for a banking entity or nonbank financial company
supervised by the Board.
``(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 of 1978, 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 11A 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 an issuer
that would be an investment company, as defined in the
Investment Company Act of 1940 (15 U.S.C. 80a-1 et
seq.), but for section 3(c)(1) or 3(c)(7) of that Act,
or such similar funds as the appropriate Federal
banking agencies, the Securities and Exchange
Commission, and the Commodity Futures Trading
Commission may, by rule, as provided in subsection
(b)(2), determine.
``(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', when used with respect to a banking entity or
nonbank financial company supervised by the Board,
means engaging as a principal for the trading account
of the banking entity or nonbank financial company
supervised by the Board 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, by rule as provided in subsection
(b)(2), 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, by rule as provided in
subsection (b)(2), determine.
``(7) Illiquid fund.--
``(A) In general.--The term `illiquid fund'
means a hedge fund or private equity fund
that--
``(i) as of May 1, 2010, was
principally invested in, or was
invested and contractually committed to
principally invest in, illiquid assets,
such as portfolio companies, real
estate investments, and venture capital
investments; and
``(ii) makes all investments
pursuant to, and consistent with, an
investment strategy to principally
invest in illiquid assets. In issuing
rules regarding 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) Hedge fund.--For the purposes of this
paragraph, the term `hedge fund' means any fund
identified under subsection (h)(2), and does
not include a private equity fund, as such term
is used in section 203(m) of the Investment
Advisers Act of 1940 (15 U.S.C. 80b-3(m)).''.
SEC. 620. STUDY OF BANK INVESTMENT ACTIVITIES.
(a) Study.--
(1) In general.--Not later than 18 months after the
date of enactment of this Act, the appropriate Federal
banking agencies shall jointly review and prepare a
report on the activities that a banking entity, as such
term is defined in the Bank Holding Company Act of 1956
(12 U.S.C. 1841 et seq.), 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 appropriate Federal banking agencies
shall review and consider--
(A) the type of activities or investments;
(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. 621. CONFLICTS OF INTEREST.
(a) In General.--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, at any
time for a period ending on the date that is one year after the
date of the first closing of the sale of the asset-backed
security, 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 270 days after the date
of enactment of this section, the Commission shall issue rules
for the purpose of implementing subsection (a).
``(c) Exception.--The prohibitions of subsection (a) shall
not apply to--
``(1) 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; or
``(2) purchases or sales of asset-backed securities
made pursuant to and consistent with--
``(A) commitments of the underwriter,
placement agent, initial purchaser, or sponsor,
or any affiliate or subsidiary of any such
entity, to provide liquidity for the asset-
backed security, or
``(B) bona fide market-making in the asset
backed security.
``(d) Rule of Construction.--This subsection shall not
otherwise limit the application of section 15G of the
Securities Exchange Act of 1934.''.
(b) Effective Date.--Section 27B of the Securities Act of
1933, as added by this section, shall take effect on the
effective date of final rules issued by the Commission under
subsection (b) of such section 27B, except that subsections (b)
and (d) of such section 27B shall take effect on the date of
enactment of this Act.
SEC. 622. CONCENTRATION LIMITS ON LARGE FINANCIAL FIRMS.
The Bank Holding Company Act of 1956 (12 U.S.C. 1841 et
seq.) is amended by adding at the end the following:
``SEC. 14. CONCENTRATION LIMITS ON LARGE FINANCIAL FIRMS.
``(a) Definitions.--In this section--
``(1) the term `Council' means the Financial
Stability Oversight Council;
``(2) the term `financial company' means--
``(A) an insured depository institution;
``(B) a bank holding company;
``(C) a savings and loan holding company;
``(D) a company that controls an insured
depository institution;
``(E) a nonbank financial company
supervised by the Board under title I of the
Dodd-Frank Wall Street Reform and Consumer
Protection Act; and
``(F) a foreign bank or company that is
treated as a bank holding company for purposes
of this Act; and
``(3) the term `liabilities' means--
``(A) with respect to a United States
financial company--
``(i) the total risk-weighted
assets of the financial company, as
determined under the risk-based capital
rules applicable to bank holding
companies, as adjusted to reflect
exposures that are deducted from
regulatory capital; less
``(ii) the total regulatory capital
of the financial company under the
risk-based capital rules applicable to
bank holding companies;
``(B) with respect to a foreign-based
financial company--
``(i) the total risk-weighted
assets of the United States operations
of the financial company, as determined
under the applicable risk-based capital
rules, as adjusted to reflect exposures
that are deducted from regulatory
capital; less
``(ii) the total regulatory capital
of the United States operations of the
financial company, as determined under
the applicable risk-based capital
rules; and
``(C) with respect to an insurance company
or other nonbank financial company supervised
by the Board, such assets of the company as the
Board shall specify by rule, in order to
provide for consistent and equitable treatment
of such companies.
``(b) Concentration Limit.--Subject to the recommendations
by the Council under subsection (e), a financial company may
not merge or consolidate with, acquire all or substantially all
of the assets of, or otherwise acquire control of, another
company, if the total consolidated liabilities of the acquiring
financial company upon consummation of the transaction would
exceed 10 percent of the aggregate consolidated liabilities of
all financial companies at the end of the calendar year
preceding the transaction.
``(c) Exception to Concentration Limit.--With the prior
written consent of the Board, the concentration limit under
subsection (b) shall not apply to an acquisition--
``(1) of a bank in default or in danger of default;
``(2) with respect to which assistance is provided
by the Federal Deposit Insurance Corporation under
section 13(c) of the Federal Deposit Insurance Act (12
U.S.C. 1823(c)); or
``(3) that would result only in a de minimis
increase in the liabilities of the financial company.
``(d) Rulemaking and Guidance.--The Board shall issue
regulations implementing this section in accordance with the
recommendations of the Council under subsection (e), including
the definition of terms, as necessary. The Board may issue
interpretations or guidance regarding the application of this
section to an individual financial company or to financial
companies in general.
``(e) Council Study and Rulemaking.--
``(1) Study and recommendations.--Not later than 6
months after the date of enactment of this section, the
Council shall--
``(A) complete a study of the extent to
which the concentration limit under this
section would affect financial stability, moral
hazard in the financial system, the efficiency
and competitiveness of United States financial
firms and financial markets, and the cost and
availability of credit and other financial
services to households and businesses in the
United States; and
``(B) make recommendations regarding any
modifications to the concentration limit that
the Council determines would more effectively
implement this section.
``(2) Rulemaking.--Not later than 9 months after
the date of completion of the study under paragraph
(1), and notwithstanding subsections (b) and (d), the
Board shall issue final regulations implementing this
section, which shall reflect any recommendations by the
Council under paragraph (1)(B).''.
SEC. 623. INTERSTATE MERGER TRANSACTIONS.
(a) Interstate Merger Transactions.--Section 18(c) of the
Federal Deposit Insurance Act (12 U.S.C. 1828(c)) is amended by
adding at the end the following:
``(13)(A) Except as provided in subparagraph (B), the
responsible agency may not approve an application for an
interstate merger transaction if the resulting insured
depository institution (including all insured depository
institutions which are affiliates of the resulting insured
depository institution), upon consummation of the transaction,
would control more than 10 percent of the total amount of
deposits of insured depository institutions in the United
States.
``(B) Subparagraph (A) shall not apply to an interstate
merger transaction that involves 1 or more insured depository
institutions in default or in danger of default, or with
respect to which the Corporation provides assistance under
section 13.
``(C) In this paragraph--
``(i) the term `interstate merger transaction'
means a merger transaction involving 2 or more insured
depository institutions that have different home States
and that are not affiliates; and
``(ii) the term `home State' means--
``(I) with respect to a national bank, the
State in which the main office of the bank is
located;
``(II) with respect to a State bank or
State savings association, the State by which
the State bank or State savings association is
chartered; and
``(III) with respect to a Federal savings
association, the State in which the home office
(as defined by the regulations of the Director
of the Office of Thrift Supervision, or, on and
after the transfer date, the Comptroller of the
Currency) of the Federal savings association is
located.''.
(b) Acquisitions by Bank Holding Companies.--
(1) In general.--Section 4 of the Bank Holding
Company Act of 1956 (12 U.S.C. 1843) is amended--
(A) in subsection (i), by adding at the end
the following:
``(8) Interstate acquisitions.--
``(A) In general.--The Board may not
approve an application by a bank holding
company to acquire an insured depository
institution under subsection (c)(8) or any
other provision of this Act if--
``(i) the home State of such
insured depository institution is a
State other than the home State of the
bank holding company; and
``(ii) the applicant (including all
insured depository institutions which
are affiliates of the applicant)
controls, or upon consummation of the
transaction would control, more than 10
percent of the total amount of deposits
of insured depository institutions in
the United States.
``(B) Exception.--Subparagraph (A) shall
not apply to an acquisition that involves an
insured depository institution in default or in
danger of default, or with respect to which the
Federal Deposit Insurance Corporation provides
assistance under section 13 of the Federal
Deposit Insurance Act (12 U.S.C. 1823).''; and
(B) in subsection (k)(6)(B), by striking
``savings association'' and inserting ``insured
depository institution''.
(2) Definitions.--Section 2(o)(4) of the Bank
Holding Company Act of 1956 (12 U.S.C. 1841(o)(4)) is
amended--
(A) in subparagraph (B), by striking
``and'' at the end;
(B) in subparagraph (C)(ii), by striking
the period at the end and inserting a
semicolon; and
(C) by adding at the end the following:
``(D) with respect to a State savings
association, the State by which the savings
association is chartered; and
``(E) with respect to a Federal savings
association, the State in which the home office
(as defined by the regulations of the Director
of the Office of Thrift Supervision, or, on and
after the transfer date, the Comptroller of the
Currency) of the Federal savings association is
located.''.
(c) Acquisitions by Savings and Loan Holding Companies.--
Section 10(e)(2) of the Home Owners' Loan Act (12 U.S.C.
1467a(e)(2)) is amended--
(1) in paragraph (2)--
(A) in subparagraph (C), by striking ``or''
at the end;
(B) in subparagraph (D), by striking the
period at the end and inserting ``, or''; and
(C) by adding at the end the following:
``(E) in the case of an application by a
savings and loan holding company to acquire an
insured depository institution, if--
``(i) the home State of the insured
depository institution is a State other
than the home State of the savings and
loan holding company;
``(ii) the applicant (including all
insured depository institutions which
are affiliates of the applicant)
controls, or upon consummation of the
transaction would control, more than 10
percent of the total amount of deposits
of insured depository institutions in
the United States; and
``(iii) the acquisition does not
involve an insured depository
institution in default or in danger of
default, or with respect to which the
Federal Deposit Insurance Corporation
provides assistance under section 13 of
the Federal Deposit Insurance Act (12
U.S.C. 1823).''; and
(2) by adding at the end the following:
``(7) Definitions.--For purposes of paragraph
(2)(E)--
``(A) the terms `default', `in danger of
default', and `insured depository institution'
have the same meanings as in section 3 of the
Federal Deposit Insurance Act (12 U.S.C. 1813);
and
``(B) the term `home State' means--
``(i) with respect to a national
bank, the State in which the main
office of the bank is located;
``(ii) with respect to a State bank
or State savings association, the State
by which the savings association is
chartered;
``(iii) with respect to a Federal
savings association, the State in which
the home office (as defined by the
regulations of the Director of the
Office of Thrift Supervision, or, on
and after the transfer date, the
Comptroller of the Currency) of the
Federal savings association is located;
and
``(iv) with respect to a savings
and loan holding company, the State in
which the amount of total deposits of
all insured depository institution
subsidiaries of such company was the
greatest on the date on which the
company became a savings and loan
holding company.''.
SEC. 624. QUALIFIED THRIFT LENDERS.
Section 10(m)(3) of the Home Owners' Loan Act (12 U.S.C.
1467a(m)(3)) is amended--
(1) by striking subparagraph (A) and inserting the
following:
``(A) In general.--A savings association
that fails to become or remain a qualified
thrift lender shall immediately be subject to
the restrictions under subparagraph (B).''; and
(2) in subparagraph (B)(i), by striking subclause
(III) and inserting the following:
``(III) Dividends.--The
savings association may not pay
dividends, except for dividends
that--
``(aa) would be
permissible for a
national bank;
``(bb) are
necessary to meet
obligations of a
company that controls
such savings
association; and
``(cc) are
specifically approved
by the Comptroller of
the Currency and the
Board after a written
request submitted to
the Comptroller of the
Currency and the Board
by the savings
association not later
than 30 days before the
date of the proposed
payment.
``(IV) Regulatory
authority.--A savings
association that fails to
become or remain a qualified
thrift lender shall be deemed
to have violated section 5 of
the Home Owners' Loan Act (12
U.S.C. 1464) and subject to
actions authorized by section
5(d) of the Home Owners' Loan
Act (12 U.S.C. 1464(d)).''.
SEC. 625. TREATMENT OF DIVIDENDS BY CERTAIN MUTUAL HOLDING COMPANIES.
(a) In General.--Section 10(o) of the Home Owners' Loan Act
(12 U.S.C. 1467a(o) is amended by adding at the end the
following:
``(11) Dividends.--
``(A) Declaration of dividends.--
``(i) Advance notice required.--
Each subsidiary of a mutual holding
company that is a savings association
shall give the appropriate Federal
banking agency and the Board notice not
later than 30 days before the date of a
proposed declaration by the board of
directors of the savings association of
any dividend on the guaranty,
permanent, or other nonwithdrawable
stock of the savings association.
``(ii) Invalid dividends.--Any
dividend described in clause (i) that
is declared without giving notice to
the appropriate Federal banking agency
and the Board under clause (i), or that
is declared during the 30-day period
preceding the date of a proposed
declaration for which notice is given
to the appropriate Federal banking
agency and the Board under clause (i),
shall be invalid and shall confer no
rights or benefits upon the holder of
any such stock.
``(B) Waiver of dividends.--A mutual
holding company may waive the right to receive
any dividend declared by a subsidiary of the
mutual holding company, if--
``(i) no insider of the mutual
holding company, associate of an
insider, or tax-qualified or non-tax-
qualified employee stock benefit plan
of the mutual holding company holds any
share of the stock in the class of
stock to which the waiver would apply;
or
``(ii) the mutual holding company
gives written notice to the Board of
the intent of the mutual holding
company to waive the right to receive
dividends, not later than 30 days
before the date of the proposed date of
payment of the dividend, and the Board
does not object to the waiver.
``(C) Resolution included in waiver
notice.--A notice of a waiver under
subparagraph (B) shall include a copy of the
resolution of the board of directors of the
mutual holding company, in such form and
substance as the Board may determine, together
with any supporting materials relied upon by
the board of directors of the mutual holding
company, concluding that the proposed dividend
waiver is consistent with the fiduciary duties
of the board of directors to the mutual members
of the mutual holding company.
``(D) Standards for waiver of dividend.--
The Board may not object to a waiver of
dividends under subparagraph (B) if--
``(i) the waiver would not be
detrimental to the safe and sound
operation of the savings association;
``(ii) the board of directors of
the mutual holding company expressly
determines that a waiver of the
dividend by the mutual holding company
is consistent with the fiduciary duties
of the board of directors to the mutual
members of the mutual holding company;
and
``(iii) the mutual holding company
has, prior to December 1, 2009--
``(I) reorganized into a
mutual holding company under
subsection (o);
``(II) issued minority
stock either from its mid-tier
stock holding company or its
subsidiary stock savings
association; and
``(III) waived dividends it
had a right to receive from the
subsidiary stock savings
association.
``(E) Valuation.--
``(i) In general.--The appropriate
Federal banking agency shall consider
waived dividends in determining an
appropriate exchange ratio in the event
of a full conversion to stock form.
``(ii) Exception.--In the case of a
savings association that has
reorganized into a mutual holding
company, has issued minority stock from
a mid-tier stock holding company or a
subsidiary stock savings association of
the mutual holding company, and has
waived dividends it had a right to
receive from a subsidiary savings
association before December 1, 2009,
the appropriate Federal banking agency
shall not consider waived dividends in
determining an appropriate exchange
ratio in the event of a full conversion
to stock form.''.
(b) Effective Date.--The amendment made by subsection (a)
shall take effect on the transfer date.
SEC. 626. INTERMEDIATE HOLDING COMPANIES.
The Home Owners' Loan Act (12 U.S.C. 1461 et seq.) is
amended by inserting after section 10 (12 U.S.C. 1467a) the
following new section:
``SEC. 10A. INTERMEDIATE HOLDING COMPANIES.
``(a) Definition.--For purposes of this section:
``(1) Financial activities.--The term `financial
activities' means activities described in clauses (i)
and (ii) of section 10(c)(9)(A).
``(2) Grandfathered unitary savings and loan
holding company.--The term `grandfathered unitary
savings and loan holding company' means a company
described in section 10(c)(9)(C).
``(3) Internal financial activities.--The term
`internal financial activities' includes--
``(A) internal financial activities
conducted by a grandfathered savings and loan
holding company or any affiliate; and
``(B) internal treasury, investment, and
employee benefit functions.
``(b) Requirement.--
``(1) In general.--
``(A) Activities other than financial
activities.--If a grandfathered unitary savings
and loan holding company conducts activities
other than financial activities, the Board may
require such company to establish and conduct
all or a portion of such financial activities
in or through an intermediate holding company,
which shall be a savings and loan holding
company, established pursuant to regulations of
the Board, not later than 90 days (or such
longer period as the Board may deem
appropriate) after the transfer date.
``(B) Other activities.--Notwithstanding
subparagraph (A), the Board shall require a
grandfathered unitary savings and loan holding
company to establish an intermediate holding
company if the Board makes a determination that
the establishment of such intermediate holding
company is necessary--
``(i) to appropriately supervise
activities that are determined to be
financial activities; or
``(ii) to ensure that supervision
by the Board does not extend to the
activities of such company that are not
financial activities.
``(2) Internal financial activities.--
``(A) Treatment of internal financial
activities.--For purposes of this subsection,
the internal financial activities of a
grandfathered unitary savings and loan holding
company shall not be required to be placed in
an intermediate holding company.
``(B) Grandfathered activities.--A
grandfathered unitary savings and loan holding
company may continue to engage in an internal
financial activity, subject to review by the
Board to determine whether engaging in such
activity presents undue risk to the
grandfathered unitary savings and loan holding
company or to the financial stability of the
United States, if--
``(i) the grandfathered unitary
savings and loan holding company
engaged in the activity during the year
before the date of enactment of this
section; and
``(ii) at least \2/3\ of the assets
or \2/3\ of the revenues generated from
the activity are from or attributable
to the grandfathered unitary savings
and loan holding company.
``(3) Source of strength.--A grandfathered unitary
savings and loan holding company that directly or
indirectly controls an intermediate holding company
established under this section shall serve as a source
of strength to its subsidiary intermediate holding
company.
``(4) Parent company reports.--The Board, may from
time to time, examine and require reports under oath
from a grandfathered unitary savings and loan holding
company that controls an intermediate holding company,
and from the appropriate officers or directors of such
company, solely for purposes of ensuring compliance
with the provisions of this section, including
assessing the ability of the company to serve as a
source of strength to its subsidiary intermediate
holding company as required under paragraph (3) and
enforcing compliance with such requirement.
``(5) Limited parent company enforcement.--
``(A) In general.--In addition to any other
authority of the Board, the Board may enforce
compliance with the provisions of this
subsection that are applicable to any company
described in paragraph (1)(A) that controls an
intermediate holding company under section 8 of
the Federal Deposit Insurance Act, and a
company described in paragraph (1)(A) shall be
subject to such section (solely for purposes of
this subparagraph) in the same manner and to
the same extent as if the company described in
paragraph (1)(A) were a savings and loan
holding company.
``(B) Application of other act.--Any
violation of this subsection by a grandfathered
unitary savings and loan holding company that
controls an intermediate holding company may
also be treated as a violation of the Federal
Deposit Insurance Act for purposes of
subparagraph (A).
``(C) No effect on other authority.--No
provision of this paragraph shall be construed
as limiting any authority of the Board or any