[House Report 115-153]
[From the U.S. Government Publishing Office]


  115th Congress    }                                 {  Rept. 115-153
                         HOUSE OF REPRESENTATIVES    
  1st  Session      }                                 { Part 1
_______________________________________________________________________

                                     


                      FINANCIAL CHOICE ACT OF 2010

                               ----------                              

                              R E P O R T

                                 of the

                    COMMITTEE ON FINANCIAL SERVICES

                             together with

                             MINORITY VIEWS

                         [to accompany H.R. 10]

                              BOOK 2 OF 2
                              

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]




  May 25, 2017.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed
              
              
              
              
              



                      FINANCIAL CHOICE ACT OF 2010

                             (Book 2 of 2)
                             
                             
                             
                             
                             
                             
 115th Congress    }                                       {  Rept. 115-153
                           HOUSE OF REPRESENTATIVES          
 1st Session       }                                       {   Part 1
_______________________________________________________________________

                                     

 
                      FINANCIAL CHOICE ACT OF 2010

                               __________

                              R E P O R T

                                 of the

                    COMMITTEE ON FINANCIAL SERVICES

                             together with

                             MINORITY VIEWS

                         [to accompany H.R. 10]

                              BOOK 2 OF 2

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


  May 25, 2017.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed
              
              
              
              
 
                                    _________ 
                          
                        U.S. GOVERNMENT PUBLISHING OFFICE
                        
26-562                          WASHINGTON : 2017                    
              
              
              
              
              
              
SEC. 10D. RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION POLICY.

  (a) Listing Standards.--The Commission shall, by rule, direct 
the national securities exchanges and national securities 
associations to prohibit the listing of any security of an 
issuer that does not comply with the requirements of this 
section.
  (b) Recovery of Funds.--The rules of the Commission under 
subsection (a) shall require each issuer to develop and 
implement a policy providing--
          (1) for disclosure of the policy of the issuer on 
        incentive-based compensation that is based on financial 
        information required to be reported under the 
        securities laws; and
          (2) that, in the event that the issuer is required to 
        prepare an accounting restatement due to the material 
        noncompliance of the issuer with any financial 
        reporting requirement under the securities laws, the 
        issuer will recover from any current or former 
        executive officer of the issuer who received incentive-
        based compensation (including stock options awarded as 
        compensation) during the 3-year period preceding the 
        date on which the issuer is required to prepare an 
        accounting restatement, based on the erroneous data, in 
        excess of what would have been paid to the executive 
        officer under the accounting restatement, where such 
        executive officer had control or authority over the 
        financial reporting that resulted in the accounting 
        restatement.

           *       *       *       *       *       *       *


                registration requirements for securities

  Sec. 12. (a) It shall be unlawful for any member, broker, or 
dealer to effect any transaction in any security (other than an 
exempted security) on a national securities exchange unless a 
registration is effective as to such security for such exchange 
in accordance with the provisions of this title and the rules 
and regulations thereunder. The provisions of this subsection 
shall not apply in respect of a security futures product traded 
on a national securities exchange.
  (b) A security may be registered on a national securities 
exchange by the issuer filing an application with the exchange 
(and filing with the Commission such duplicate originals 
thereof as the Commission may require), which application shall 
contain--
          (1) Such information, in such detail, as to the 
        issuer and any person directly or indirectly 
        controlling or controlled by, or under direct or 
        indirect common control with, the issuer, and any 
        guarantor of the security as to principal or interest 
        or both, as the Commission may by rules and regulations 
        require, as necessary or appropriate in the public 
        interest or for the protection of investors, in respect 
        of the following:
                  (A) the organization, financial structures, 
                and nature of the business;
                  (B) the terms, position, rights, and 
                privileges of the different classes of 
                securities outstanding;
                  (C) the terms on which their securities are 
                to be, and during the preceding three years 
                have been, offered to the public or otherwise;
                  (D) the directors, officers, and 
                underwriters, and each security holder of 
                record holding more than 10 per centum of any 
                class of any equity security of the issuer 
                (other than an exempted security), their 
                remuneration and their interests in the 
                securities of, and their material contracts 
                with, the issuer and any person directly or 
                indirectly controlling or controlled by, or 
                under direct or indirect common control with, 
                the issuer;
                  (E) remuneration to others than directors and 
                officers exceeding $20,000 per annum;
                  (F) bonus and profit-sharing arrangements;
                  (G) management and service contracts;
                  (H) options existing or to be created in 
                respect of their securities;
                  (I) material contracts, not made in the 
                ordinary course of business, which are to be 
                executed in whole or in part at or after the 
                filing of the application or which were made 
                not more than two years before such filing, and 
                every material patent or contract for a 
                material patent right shall be deemed a 
                material contract;
                  (J) balance sheets for not more than the 
                three preceding fiscal years, certified if 
                required by the rules and regulations of the 
                Commission by a registered public accounting 
                firm;
                  (K) profit and loss statements for not more 
                than the three preceding fiscal years, 
                certified if required by the rules and 
                regulations of the Commission by a registered 
                public accounting firm; and
                  (L) any further financial statements which 
                the Commission may deem necessary or 
                appropriate for the protection of investors.
          (2) Such copies of articles of incorporation, bylaws, 
        trust indentures, or corresponding documents by 
        whatever name known, underwriting arrangements, and 
        other similar documents of, and voting trust agreements 
        with respect to, the issuer and any person directly or 
        indirectly controlling or controlled by, or under 
        direct or indirect common control with, the issuer as 
        the Commission may require as necessary or appropriate 
        for the proper protection of investors and to insure 
        fair dealing in the security.
          (3) Such copies of material contracts, referred to in 
        paragraph (1)(I) above, as the Commission may require 
        as necessary or appropriate for the proper protection 
        of investors and to insure fair dealing in the 
        security.
  (c) If in the judgment of the Commission any information 
required under subsection (b) of this section is inapplicable 
to any specified class or classes of issuers, the Commission 
shall require in lieu thereof the submission of such other 
information of comparable character as it may deem applicable 
to such class of issuers.
  (d) If the exchange authorities certify to the Commission 
that the security has been approved by the exchange for listing 
and registration, the registration shall become effective 
thirty days after the receipt of such certification by the 
Commission or within such shorter period of time as the 
Commission may determine. A security registered with a national 
securities exchange may be withdrawn or stricken from listing 
and registration in accordance with the rules of the exchange 
and, upon such terms as the Commission may deem necessary to 
impose for the protection of investors, upon application by the 
issuer or the exchange to the Commission; whereupon the issuer 
shall be relieved from further compliance with the provisions 
of this section and section 13 of this title and any rules or 
regulations under such sections as to the securities so 
withdrawn or stricken. An unissued security may be registered 
only in accordance with such rules and regulations as the 
Commission may prescribe as necessary or appropriate in the 
public interest or for the protection of investors.
  (e) Notwithstanding the foregoing provisions of this section, 
the Commission may by such rules and regulations as it deems 
necessary or appropriate in the public interest or for the 
protection of investors permit securities listed on any 
exchange at the time the registration of such exchange as a 
national securities exchange becomes effective, to be 
registered for a period ending not later than July 1, 1935, 
without complying with the provisions of this section.
  (f)(1)(A) Notwithstanding the preceding subsections of this 
section, any national securities exchange, in accordance with 
the requirements of this subsection and the rules hereunder, 
may extend unlisted trading privileges to--
          (i) any security that is listed and registered on a 
        national securities exchange, subject to subparagraph 
        (B); and
          (ii) any security that is otherwise registered 
        pursuant to this section, or that would be required to 
        be so registered except for the exemption from 
        registration provided in subparagraph (B) or (G) of 
        subsection (g)(2), subject to subparagraph (E) of this 
        paragraph.
  (B) A national securities exchange may not extend unlisted 
trading privileges to a security described in subparagraph 
(A)(i) during such interval, if any, after the commencement of 
an initial public offering of such security, as is or may be 
required pursuant to subparagraph (C).
  (C) Not later than 180 days after the date of enactment of 
the Unlisted Trading Privileges Act of 1994, the Commission 
shall prescribe, by rule or regulation, the duration of the 
interval referred to in subparagraph (B), if any, as the 
Commission determines to be necessary or appropriate for the 
maintenance of fair and orderly markets, the protection of 
investors and the public interest, or otherwise in furtherance 
of the purposes of this title. Until the earlier of the 
effective date of such rule or regulation or 240 days after 
such date of enactment, such interval shall begin at the 
opening of trading on the day on which such security commences 
trading on the national securities exchange with which such 
security is registered and end at the conclusion of the next 
day of trading.
  (D) The Commission may prescribe, by rule or regulation such 
additional procedures or requirements for extending unlisted 
trading privileges to any security as the Commission deems 
necessary or appropriate for the maintenance of fair and 
orderly markets, the protection of investors and the public 
interest, or otherwise in furtherance of the purposes of this 
title.
  (E) No extension of unlisted trading privileges to securities 
described in subparagraph (A)(ii) may occur except pursuant to 
a rule, regulation, or order of the Commission approving such 
extension or extensions. In promulgating such rule or 
regulation or in issuing such order, the Commission--
          (i) shall find that such extension or extensions of 
        unlisted trading privileges is consistent with the 
        maintenance of fair and orderly markets, the protection 
        of investors and the public interest, and otherwise in 
        furtherance of the purposes of this title;
          (ii) shall take account of the public trading 
        activity in such securities, the character of such 
        trading, the impact of such extension on the existing 
        markets for such securities, and the desirability of 
        removing impediments to and the progress that has been 
        made toward the development of a national market 
        system; and
          (iii) shall not permit a national securities exchange 
        to extend unlisted trading privileges to such 
        securities if any rule of such national securities 
        exchange would unreasonably impair the ability of a 
        dealer to solicit or effect transactions in such 
        securities for its own account, or would unreasonably 
        restrict competition among dealers in such securities 
        or between such dealers acting in the capacity of 
        market makers who are specialists and such dealers who 
        are not specialists.
  (F) An exchange may continue to extend unlisted trading 
privileges in accordance with this paragraph only if the 
exchange and the subject security continue to satisfy the 
requirements for eligibility under this paragraph, including 
any rules and regulations issued by the Commission pursuant to 
this paragraph, except that unlisted trading privileges may 
continue with regard to securities which had been admitted on 
such exchange prior to July 1, 1964, notwithstanding the 
failure to satisfy such requirements. If unlisted trading 
privileges in a security are discontinued pursuant to this 
subparagraph, the exchange shall cease trading in that 
security, unless the exchange and the subject security 
thereafter satisfy the requirements of this paragraph and the 
rules issued hereunder.
  (G) For purposes of this paragraph--
          (i) a security is the subject of an initial public 
        offering if--
                  (I) the offering of the subject security is 
                registered under the Securities Act of 1933; 
                and
                  (II) the issuer of the security, immediately 
                prior to filing the registration statement with 
                respect to the offering, was not subject to the 
                reporting requirements of section 13 or 15(d) 
                of this title; and
          (ii) an initial public offering of such security 
        commences at the opening of trading on the day on which 
        such security commences trading on the national 
        securities exchange with which such security is 
        registered.
  (2)(A) At any time within 60 days of commencement of trading 
on an exchange of a security pursuant to unlisted trading 
privileges, the Commission may summarily suspend such unlisted 
trading privileges on the exchange. Such suspension shall not 
be reviewable under section 25 of this title and shall not be 
deemed to be a final agency action for purposes of section 704 
of title 5, United States Code. Upon such suspension--
          (i) the exchange shall cease trading in the security 
        by the close of business on the date of such 
        suspension, or at such time as the Commission may 
        prescribe by rule or order for the maintenance of fair 
        and orderly markets, the protection of investors and 
        the public interest, or otherwise in furtherance of the 
        purposes of this title; and
          (ii) if the exchange seeks to extend unlisted trading 
        privileges to the security, the exchange shall file an 
        application to reinstate its ability to do so with the 
        Commission pursuant to such procedures as the 
        Commission may prescribe by rule or order for the 
        maintenance of fair and orderly markets, the protection 
        of investors and the public interest, or otherwise in 
        furtherance of the purposes of this title.
  (B) A suspension under subparagraph (A) shall remain in 
effect until the Commission, by order, grants approval of an 
application to reinstate, as described in subparagraph (A)(ii).
  (C) A suspension under subparagraph (A) shall not affect the 
validity or force of an extension of unlisted trading 
privileges in effect prior to such suspension.
  (D) The Commission shall not approve an application by a 
national securities exchange to reinstate its ability to extend 
unlisted trading privileges to a security unless the Commission 
finds, after notice and opportunity for hearing, that the 
extension of unlisted trading privileges pursuant to such 
application is consistent with the maintenance of fair and 
orderly markets, the protection of investors and the public 
interest, and otherwise in furtherance of the purposes of this 
title. If the application is made to reinstate unlisted trading 
privileges to a security described in paragraph (1)(A)(ii), the 
Commission--
          (i) shall take account of the public trading activity 
        in such security, the character of such trading, the 
        impact of such extension on the existing markets for 
        such a security, and the desirability of removing 
        impediments to and the progress that has been made 
        toward the development of a national market system; and
          (ii) shall not grant any such application if any rule 
        of the national securities exchange making application 
        under this subsection would unreasonably impair the 
        ability of a dealer to solicit or effect transactions 
        in such security for its own account, or would 
        unreasonably restrict competition among dealers in such 
        security or between such dealers acting in the capacity 
        of marketmakers who are specialists and such dealers 
        who are not specialists.
  (3) Notwithstanding paragraph (2), the Commission shall by 
rules and regulations suspend unlisted trading privileges in 
whole or in part for any or all classes of securities for a 
period not exceeding twelve months, if it deems such suspension 
necessary or appropriate in the public interest or for the 
protection of investors or to prevent evasion of the purposes 
of this title.
  (4) On the application of the issuer of any security for 
which unlisted trading privileges on any exchange have been 
continued or extended pursuant to this subsection, or of any 
broker or dealer who makes or creates a market for such 
security, or of any other person having a bona fide interest in 
the question of termination or suspension of such unlisted 
trading privileges, or on its own motion, the Commission shall 
by order terminate, or suspend for a period not exceeding 
twelve months, such unlisted trading privileges for such 
security if the Commission finds, after appropriate notice and 
opportunity for hearing, that such termination or suspension is 
necessary or appropriate in the public interest or for the 
protection of investors.
  (5) In any proceeding under this subsection in which 
appropriate notice and opportunity for hearing are required, 
notice of not less than ten days to the applicant in such 
proceeding, to the issuer of the security involved, to the 
exchange which is seeking to continue or extend or has 
continued or extended unlisted trading privileges for such 
security, and to the exchange, if any, on which such security 
is listed and registered, shall be deemed adequate notice, and 
any broker or dealer who makes or creates a market for such 
security, and any other person having a bona fide interest in 
such proceeding, shall upon application be entitled to be 
heard.
  (6) Any security for which unlisted trading privileges are 
continued or extended pursuant to this subsection shall be 
deemed to be registered on a national securities exchange 
within the meaning of this title. The powers and duties of the 
Commission under this title shall be applicable to the rules of 
an exchange in respect to any such security. The Commission 
may, by such rules and regulations as it deems necessary or 
appropriate in the public interest or for the protection of 
investors, either unconditionally or upon specified terms and 
conditions, or for stated periods, exempt such securities from 
the operation of any provision of section 13, 14, or 16 of this 
title.
  (g)(1) Every issuer which is engaged in interstate commerce, 
or in a business affecting interstate commerce, or whose 
securities are traded by use of the mails or any means or 
instrumentality of interstate commerce [shall--]
          [(A) within 120 days after the last day of its first 
        fiscal year ended on which the issuer has total assets 
        exceeding $10,000,000 and a class of equity security 
        (other than an exempted security) held of record by 
        either--
          [(i) 2,000 persons, or
          [(ii) 500 persons who are not accredited investors 
        (as such term is defined by the Commission), and
          [(B) in the case of an issuer that is a bank, a 
        savings and loan holding company (as defined in section 
        10 of the Home Owners' Loan Act), or a bank holding 
        company, as such term is defined in section 2 of the 
        Bank Holding Company Act of 1956 (12 U.S.C. 1841), not 
        later than 120 days after the last day of its first 
        fiscal year ended after the effective date of this 
        subsection, on which the issuer has total assets 
        exceeding $10,000,000 and a class of equity security 
        (other than an exempted security) held of record by 
        2,000 or more persons,
 register such security] shall, not later than 120 days after 
the last day of its first fiscal year ended after the effective 
date of this subsection on which the issuer has total assets 
exceeding $10,000,000 (or such greater amount of assets as the 
Commission may establish by rule) and a class of equity 
security (other than an exempted security) held of record by 
2,000 or more persons (or such greater number of persons as the 
Commission may establish by rule), register such security  by 
filing with the Commission a registration statement (and such 
copies thereof as the Commission may require) with respect to 
such security containing such information and documents as the 
Commission may specify comparable to that which is required in 
an application to register a security pursuant to subsection 
(b) of this section. Each such registration statement shall 
become effective sixty days after filing with the Commission or 
within such shorter period as the Commission may direct. Until 
such registration statement becomes effective it shall not be 
deemed filed for the purposes of section 18 of this title. Any 
issuer may register any class of equity security not required 
to be registered by filing a registration statement pursuant to 
the provisions of this paragraph. The Commission is authorized 
to extend the date upon which any issuer or class of issuers is 
required to register a security pursuant to the provisions of 
this paragraph. The dollar figure in this paragraph shall be 
indexed for inflation every 5 years by the Commission to 
reflect the change in the Consumer Price Index for All Urban 
Consumers published by the Bureau of Labor Statistics, rounded 
to the nearest $100,000.
  (2) The provisions of this subsection shall not apply in 
respect of--
          (A) any security listed and registered on a national 
        securities exchange.
          (B) any security issued by an investment company 
        registered pursuant to section 8 of the Investment 
        Company Act of 1940.
          (C) any security, other than permanent stock, 
        guaranty stock, permanent reserve stock, or any similar 
        certificate evidencing nonwithdrawable capital, issued 
        by a savings and loan association, building and loan 
        association, cooperative bank, homestead association, 
        or similar institution, which is supervised and 
        examined by State or Federal authority having 
        supervision over any such institution.
          (D) any security of an issuer organized and operated 
        exclusively for religious, educational, benevolent, 
        fraternal, charitable, or reformatory purposes and not 
        for pecuniary profit, and no part of the net earnings 
        of which inures to the benefit of any private 
        shareholder or individual; or any security of a fund 
        that is excluded from the definition of an investment 
        company under section 3(c)(10)(B) of the Investment 
        Company Act of 1940.
          (E) any security of an issuer which is a 
        ``cooperative association'' as defined in the 
        Agricultural Marketing Act, approved June 15, 1929, as 
        amended, or a federation of such cooperative 
        associations, if such federation possesses no greater 
        powers or purposes than cooperative associations so 
        defined.
          (F) any security issued by a mutual or cooperative 
        organization which supplies a commodity or service 
        primarily for the benefit of its members and operates 
        not for pecuniary profit, but only if the security is 
        part of a class issuable only to persons who purchase 
        commodities or services from the issuer, the security 
        is transferable only to a successor in interest or 
        occupancy of premises serviced or to be served by the 
        issuer, and no dividends are payable to the holder of 
        the security.
          (G) any security issued by an insurance company if 
        all of the following conditions are met:
                  (i) Such insurance company is required to and 
                does file an annual statement with the 
                Commissioner of Insurance (or other officer or 
                agency performing a similar function) of its 
                domiciliary State, and such annual statement 
                conforms to that prescribed by the National 
                Association of Insurance Commissioners or in 
                the determination of such State commissioner, 
                officer or agency substantially conforms to 
                that so prescribed.
                  (ii) Such insurance company is subject to 
                regulation by its domiciliary State of proxies, 
                consents, or authorizations in respect of 
                securities issued by such company and such 
                regulation conforms to that prescribed by the 
                National Association of Insurance 
                Commissioners.
                  (iii) After July 1, 1966, the purchase and 
                sales of securities issued by such insurance 
                company by beneficial owners, directors, or 
                officers of such company are subject to 
                regulation (including reporting) by its 
                domiciliary State substantially in the manner 
                provided in section 16 of this title.
          (H) any interest or participation in any collective 
        trust funds maintained by a bank or in a separate 
        account maintained by an insurance company which 
        interest or participation is issued in connection with 
        (i) a stock-bonus, pension, or profit-sharing plan 
        which meets the requirements for qualification under 
        section 401 of the Internal Revenue Code of 1954, (ii) 
        an annuity plan which meets the requirements for 
        deduction of the employer's contribution under section 
        404(a)(2) of such Code, or (iii) a church plan, 
        company, or account that is excluded from the 
        definition of an investment company under section 
        3(c)(14) of the Investment Company Act of 1940.
  (3) The Commission may by rules or regulations or, on its own 
motion, after notice and opportunity for hearing, by order, 
exempt from this subsection any security of a foreign issuer, 
including any certificate of deposit for such a security, if 
the Commission finds that such exemption is in the public 
interest and is consistent with the protection of investors.
  (4) Registration of any class of security pursuant to this 
subsection shall be terminated ninety days, or such shorter 
period as the Commission may determine, after the issuer files 
a certification with the Commission that the number of holders 
of record of such class of security is reduced to less than 
[300 persons, or, in the case of a bank, a savings and loan 
holding company (as defined in section 10 of the Home Owners' 
Loan Act), or a bank holding company, as such term is defined 
in section 2 of the Bank Holding Company Act of 1956 (12 U.S.C. 
1841), 1,200 persons persons] 1,200 persons. The Commission 
shall after notice and opportunity for hearing deny termination 
of registration if it finds that the certification is untrue. 
Termination of registration shall be deferred pending final 
determination on the question of denial.
  [(5)] [For the purposes]
  (5) Definitions._
          (A) In general._For the purposes of this subsection 
        the term ``class'' shall include all securities of an 
        issuer which are of substantially similar character and 
        the holders of which enjoy substantially similar rights 
        and privileges. The Commission may for the purpose of 
        this subsection define by rules and regulations the 
        terms ``total assets'' and ``held of record'' as it 
        deems necessary or appropriate in the public interest 
        or for the protection of investors in order to prevent 
        circumvention of the provisions of this subsection. For 
        purposes of this subsection, a security futures product 
        shall not be considered a class of equity security of 
        the issuer of the securities underlying the security 
        futures product. For purposes of determining whether an 
        issuer is required to register a security with the 
        Commission pursuant to paragraph (1), the definition of 
        ``held of record'' shall not include securities held by 
        persons who received the securities pursuant to an 
        employee compensation plan in transactions exempted 
        from the registration requirements of section 5 of the 
        Securities Act of 1933.
          (B) Exclusion for persons holding certain 
        securities.--For purposes of this subsection, 
        securities held by persons who purchase such securities 
        in transactions described under section 4(a)(6) of the 
        Securities Act of 1933 shall not be deemed to be ``held 
        of record''.
          (6) Exclusion for persons holding certain 
        securities.--The Commission shall, by rule, exempt, 
        conditionally or unconditionally, securities acquired 
        pursuant to an offering made under section 4(6) of the 
        Securities Act of 1933 from the provisions of this 
        subsection.
  (h) The Commission may by rules and regulations, or upon 
application of an interested person, by order, after notice and 
opportunity for hearing, exempt in whole or in part any issuer 
or class of issuers from the provisions of subsection (g) of 
this section or from section 13, 14, or 15(d) or may exempt 
from section 16 any officer, director, or beneficial owner of 
securities of any issuer, any security of which is required to 
be registered pursuant to subsection (g) hereof, upon such 
terms and conditions and for such period as it deems necessary 
or appropriate, if the Commission finds, by reason of the 
number of public investors, amount of trading interest in the 
securities, the nature and extent of the activities of the 
issuer, income or assets of the issuer, or otherwise, that such 
action is not inconsistent with the public interest or the 
protection of investors. The Commission may, for the purposes 
of any of the above-mentioned sections or subsections of this 
title, classify issuers and prescribe requirements appropriate 
for each such class.
  (i) In respect of any securities issued by banks and savings 
associations the deposits of which are insured in accordance 
with the Federal Deposit Insurance Act, the powers, functions, 
and duties vested in the Commission to administer and enforce 
sections 10A(m), 12, 13, 14(a), 14(c), 14(d), 14(f), and 16 of 
this Act, and sections 302, 303, 304, 306, 401(b), 404, 406, 
and 407 of the Sarbanes-Oxley Act of 2002, (1) with respect to 
national banks and Federal savings associations, the accounts 
of which are insured by the Federal Deposit Insurance 
Corporation are vested in the Comptroller of the Currency, (2) 
with respect to all other member banks of the Federal Reserve 
System are vested in the Board of Governors of the Federal 
Reserve System, 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. The 
Comptroller of the Currency, the Board of Governors of the 
Federal Reserve System, and the Federal Deposit Insurance 
Corporation shall have the power to make such rules and 
regulations as may be necessary for the execution of the 
functions vested in them as provided in this subsection. In 
carrying out their responsibilities under this subsection, the 
agencies named in the first sentence of this subsection shall 
issue substantially similar regulations to regulations and 
rules issued by the Commission under sections 10A(m), 12, 13, 
14(a), 14(c), 14(d), 14(f) and 16 of this Act, and sections 
302, 303, 304, 306, 401(b), 404, 406, and 407 of the Sarbanes-
Oxley Act of 2002, unless they find that implementation of 
substantially similar regulations with respect to insured banks 
and insured institutions are not necessary or appropriate in 
the public interest or for protection of investors, and publish 
such findings, and the detailed reasons therefor, in the 
Federal Register. Such regulations of the above-named agencies, 
or the reasons for failure to publish such substantially 
similar regulations to those of the Commission, shall be 
published in the Federal Register within 120 days of the date 
of enactment of this subsection, and, thereafter, within 60 
days of any changes made by the Commission in its relevant 
regulations and rules.
  (j) The Commission is authorized, by order, as it deems 
necessary or appropriate for the protection of investors to 
deny, to suspend the effective date of, to suspend for a period 
not exceeding twelve months, or to revoke the registration of a 
security, if the Commission finds, on the record after notice 
and opportunity for hearing, that the issuer of such security 
has failed to comply with any provision of this title or the 
rules and regulations thereunder. No member of a national 
securities exchange, broker, or dealer shall make use of the 
mails or any means or instrumentality of interstate commerce to 
effect any transaction in, or to induce the purchase or sale 
of, any security the registration of which has been and is 
suspended or revoked pursuant to the preceding sentence.
  (k) Trading Suspensions; Emergency Authority.--
          (1) Trading suspensions.--If in its opinion the 
        public interest and the protection of investors so 
        require, the Commission is authorized by order--
                  (A) summarily to suspend trading in any 
                security (other than an exempted security) for 
                a period not exceeding 10 business days, and
                  (B) summarily to suspend all trading on any 
                national securities exchange or otherwise, in 
                securities other than exempted securities, for 
                a period not exceeding 90 calendar days.
        The action described in subparagraph (B) shall not take 
        effect unless the Commission notifies the President of 
        its decision and the President notifies the Commission 
        that the President does not disapprove of such 
        decision. If the actions described in subparagraph (A) 
        or (B) involve a security futures product, the 
        Commission shall consult with and consider the views of 
        the Commodity Futures Trading Commission.
          (2) Emergency orders.--
                  (A) In general.--The Commission, in an 
                emergency, may by order summarily take such 
                action to alter, supplement, suspend, or impose 
                requirements or restrictions with respect to 
                any matter or action subject to regulation by 
                the Commission or a self-regulatory 
                organization under the securities laws, as the 
                Commission determines is necessary in the 
                public interest and for the protection of 
                investors--
                          (i) to maintain or restore fair and 
                        orderly securities markets (other than 
                        markets in exempted securities);
                          (ii) to ensure prompt, accurate, and 
                        safe clearance and settlement of 
                        transactions in securities (other than 
                        exempted securities); or
                          (iii) to reduce, eliminate, or 
                        prevent the substantial disruption by 
                        the emergency of--
                                  (I) securities markets (other 
                                than markets in exempted 
                                securities), investment 
                                companies, or any other 
                                significant portion or segment 
                                of such markets; or
                                  (II) the transmission or 
                                processing of securities 
                                transactions (other than 
                                transactions in exempted 
                                securities).
                  (B) Effective period.--An order of the 
                Commission under this paragraph shall continue 
                in effect for the period specified by the 
                Commission, and may be extended. Except as 
                provided in subparagraph (C), an order of the 
                Commission under this paragraph may not 
                continue in effect for more than 10 business 
                days, including extensions.
                  (C) Extension.--An order of the Commission 
                under this paragraph may be extended to 
                continue in effect for more than 10 business 
                days if, at the time of the extension, the 
                Commission finds that the emergency still 
                exists and determines that the continuation of 
                the order beyond 10 business days is necessary 
                in the public interest and for the protection 
                of investors to attain an objective described 
                in clause (i), (ii), or (iii) of subparagraph 
                (A). In no event shall an order of the 
                Commission under this paragraph continue in 
                effect for more than 30 calendar days.
                  (D) Security futures.--If the actions 
                described in subparagraph (A) involve a 
                security futures product, the Commission shall 
                consult with and consider the views of the 
                Commodity Futures Trading Commission.
                  (E) Exemption.--In exercising its authority 
                under this paragraph, the Commission shall not 
                be required to comply with the provisions of--
                          (i) section 19(c); or
                          (ii) section 553 of title 5, United 
                        States Code.
          (3) Termination of emergency actions by president.--
        The President may direct that action taken by the 
        Commission under paragraph (1)(B) or paragraph (2) of 
        this subsection shall not continue in effect.
          (4) Compliance with orders.--No member of a national 
        securities exchange, broker, or dealer shall make use 
        of the mails or any means or instrumentality of 
        interstate commerce to effect any transaction in, or to 
        induce the purchase or sale of, any security in 
        contravention of an order of the Commission under this 
        subsection unless such order has been stayed, modified, 
        or set aside as provided in paragraph (5) of this 
        subsection or has ceased to be effective upon direction 
        of the President as provided in paragraph (3).
          (5) Limitations on review of orders.--An order of the 
        Commission pursuant to this subsection shall be subject 
        to review only as provided in section 25(a) of this 
        title. Review shall be based on an examination of all 
        the information before the Commission at the time such 
        order was issued. The reviewing court shall not enter a 
        stay, writ of mandamus, or similar relief unless the 
        court finds, after notice and hearing before a panel of 
        the court, that the Commission's action is arbitrary, 
        capricious, an abuse of discretion, or otherwise not in 
        accordance with law.
          (6) Consultation.--Prior to taking any action 
        described in paragraph (1)(B), the Commission shall 
        consult with and consider the views of the Secretary of 
        the Treasury, the Board of Governors of the Federal 
        Reserve System, and the Commodity Futures Trading 
        Commission, unless such consultation is impracticable 
        in light of the emergency.
          (7) Definition.--For purposes of this subsection, the 
        term ``emergency'' means--
                  (A) a major market disturbance characterized 
                by or constituting--
                          (i) sudden and excessive fluctuations 
                        of securities prices generally, or a 
                        substantial threat thereof, that 
                        threaten fair and orderly markets; or
                          (ii) a substantial disruption of the 
                        safe or efficient operation of the 
                        national system for clearance and 
                        settlement of transactions in 
                        securities, or a substantial threat 
                        thereof; or
                  (B) a major disturbance that substantially 
                disrupts, or threatens to substantially 
                disrupt--
                          (i) the functioning of securities 
                        markets, investment companies, or any 
                        other significant portion or segment of 
                        the securities markets; or
                          (ii) the transmission or processing 
                        of securities transactions.
  (l) It shall be unlawful for an issuer, any class of whose 
securities is registered pursuant to this section or would be 
required to be so registered except for the exemption from 
registration provided by subsection (g)(2)(B) or (g)(2)(G) of 
this section, by the use of any means or instrumentality of 
interstate commerce, or of the mails, to issue, either 
originally or upon transfer, any of such securities in a form 
or with a format which contravenes such rules and regulations 
as the Commission may prescribe as necessary or appropriate for 
the prompt and accurate clearance and settlement of 
transactions in securities. The provisions of this subsection 
shall not apply to variable annuity contracts or variable life 
policies issued by an insurance company or its separate 
accounts.

                      periodical and other reports

  Sec. 13. (a) Every issuer of a security registered pursuant 
to section 12 of this title shall file with the Commission, in 
accordance with such rules and regulations as the Commission 
may prescribe as necessary or appropriate for the proper 
protection of investors and to insure fair dealing in the 
security--
          (1) such information and documents (and such copies 
        thereof) as the Commission shall require to keep 
        reasonably current the information and documents 
        required to be included in or filed with an application 
        or registration statement filed pursuant to section 12, 
        except that the Commission may not require the filing 
        of any material contract wholly executed before July 1, 
        1962.
          (2) such annual reports (and such copies thereof), 
        certified if required by the rules and regulations of 
        the Commission by independent public accountants, and 
        such quarterly reports (and such copies thereof), as 
        the Commission may prescribe.
Every issuer of a security registered on a national securities 
exchange shall also file a duplicate original of such 
information, documents, and reports with the exchange. In any 
registration statement, periodic report, or other reports to be 
filed with the Commission, an emerging growth company need not 
present selected financial data in accordance with section 
229.301 of title 17, Code of Federal Regulations, for any 
period prior to the earliest audited period presented in 
connection with its first registration statement that became 
effective under this Act or the Securities Act of 1933 and, 
with respect to any such statement or reports, an emerging 
growth company may not be required to comply with any new or 
revised financial accounting standard until such date that a 
company that is not an issuer (as defined under section 2(a) of 
the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7201(a))) is required 
to comply with such new or revised accounting standard, if such 
standard applies to companies that are not issuers.
  (b)(1) The Commission may prescribe, in regard to reports 
made pursuant to this title, the form or forms in which the 
required information shall be set forth, the items or details 
to be shown in the balance sheet and the earnings statement, 
and the methods to be followed in the preparation of reports, 
in the appraisal or valuation of assets and liabilities, in the 
determination of depreciation and depletion, in the 
differentiation of recurring and nonrecurring income, in the 
differentiation of investment and operating income, and in the 
preparation, where the Commission deems it necessary or 
desirable, of separate and/or consolidated balance sheets or 
income accounts of any person directly or indirectly 
controlling or controlled by the issuer, or any person under 
direct or indirect common control with the issuer; but in the 
case of the reports of any person whose methods of accounting 
are prescribed under the provisions of any law of the United 
States, or any rule or regulation thereunder, the rules and 
regulations of the Commission with respect to reports shall not 
be inconsistent with the requirements imposed by such law or 
rule or regulation in respect of the same subject matter 
(except that such rules and regulations of the Commission may 
be inconsistent with such requirements to the extent that the 
Commission determines that the public interest or the 
protection of investors so requires).
  (2) Every issuer which has a class of securities registered 
pursuant to section 12 of this title and every issuer which is 
required to file reports pursuant to section 15(d) of this 
title shall--
          (A) make and keep books, records, and accounts, 
        which, in reasonable detail, accurately and fairly 
        reflect the transactions and dispositions of the assets 
        of the issuer;
          (B) devise and maintain a system of internal 
        accounting controls sufficient to provide reasonable 
        assurances that--
                  (i) transactions are executed in accordance 
                with management's general or specific 
                authorization;
                  (ii) transactions are recorded as necessary 
                (I) to permit preparation of financial 
                statements in conformity with generally 
                accepted accounting principles or any other 
                criteria applicable to such statements, and 
                (II) to maintain accountability for assets;
                  (iii) access to assets is permitted only in 
                accordance with management's general or 
                specific authorization; and
                  (iv) the recorded accountability for assets 
                is compared with the existing assets at 
                reasonable intervals and appropriate action is 
                taken with respect to any differences; and
          (C) notwithstanding any other provision of law, pay 
        the allocable share of such issuer of a reasonable 
        annual accounting support fee or fees, determined in 
        accordance with section 109 of the Sarbanes-Oxley Act 
        of 2002.
  (3)(A) With respect to matters concerning the national 
security of the United States, no duty or liability under 
paragraph (2) of this subsection shall be imposed upon any 
person acting in cooperation with the head of any Federal 
department or agency responsible for such matters if such act 
in cooperation with such head of a department or agency was 
done upon the specific, written directive of the head of such 
department or agency pursuant to Presidential authority to 
issue such directives. Each directive issued under this 
paragraph shall set forth the specific facts and circumstances 
with respect to which the provisions of this paragraph are to 
be invoked. Each such directive shall, unless renewed in 
writing, expire one year after the date of issuance.
  (B) Each head of a Federal department or agency of the United 
States who issues a directive pursuant to this paragraph shall 
maintain a complete file of all such directives and shall, on 
October 1 of each year, transmit a summary of matters covered 
by such directives in force at any time during the previous 
year to the Permanent Select Committee on Intelligence of the 
House of Representatives and the Select Committee on 
Intelligence of the Senate.
  (4) No criminal liability shall be imposed for failing to 
comply with the requirements of paragraph (2) of this 
subsection except as provided in paragraph (5) of this 
subsection.
  (5) No person shall knowingly circumvent or knowingly fail to 
implement a system of internal accounting controls or knowingly 
falsify any book, record, or account described in paragraph 
(2).
  (6) Where an issuer which has a class of securities 
registered pursuant to section 12 of this title or an issuer 
which is required to file reports pursuant to section 15(d) of 
this title holds 50 per centum or less of the voting power with 
respect to a domestic or foreign firm, the provisions of 
paragraph (2) require only that the issuer proceed in good 
faith to use its influence, to the extent reasonable under the 
issuer's circumstances, to cause such domestic or foreign firm 
to devise and maintain a system of internal accounting controls 
consistent with paragraph (2). Such circumstances include the 
relative degree of the issuer's ownership of the domestic or 
foreign firm and the laws and practices governing the business 
operations of the country in which such firm is located. An 
issuer which demonstrates good faith efforts to use such 
influence shall be conclusively presumed to have complied with 
the requirements of paragraph (2).
  (7) For the purpose of paragraph (2) of this subsection, the 
terms ``reasonable assurances'' and ``reasonable detail'' mean 
such level of detail and degree of assurance as would satisfy 
prudent officials in the conduct of their own affairs.
  (c) If in the judgment of the Commission any report required 
under subsection (a) is inapplicable to any specified class or 
classes of issuers, the Commission shall require in lieu 
thereof the submission of such reports of comparable character 
as it may deem applicable to such class or classes of issuers.
  (d)(1) Any person who, after acquiring directly or indirectly 
the beneficial ownership of any equity security of a class 
which is registered pursuant to section 12 of this title, or 
any equity security of an insurance company which would have 
been required to be so registered except for the exemption 
contained in section 12(g)(2)(G) of this title, or any equity 
security issued by a closed-end investment company registered 
under the Investment Company Act of 1940 or any equity security 
issued by a Native Corporation pursuant to section 37(d)(6) of 
the Alaska Native Claims Settlement Act, or otherwise becomes 
or is deemed to become a beneficial owner of any of the 
foregoing upon the purchase or sale of a security-based swap 
that the Commission may define by rule, and is directly or 
indirectly the beneficial owner of more than 5 per centum of 
such class shall, within ten days after such acquisition or 
within such shorter time as the Commission may establish by 
rule, file with the Commission, a statement containing such of 
the following information, and such additional information, as 
the Commission may by rules and regulations, prescribe as 
necessary or appropriate in the public interest or for the 
protection of investors--
          (A) the background, and identity, residence, and 
        citizenship of, and the nature of such beneficial 
        ownership by, such person and all other persons by whom 
        or on whose behalf the purchases have been or are to be 
        effected;
          (B) the source and amount of the funds or other 
        consideration used or to be used in making the 
        purchases, and if any part of the purchase price is 
        represented or is to be represented by funds or other 
        consideration borrowed or otherwise obtained for the 
        purpose of acquiring, holding, or trading such 
        security, a description of the transaction and the 
        names of the parties thereto, except that where a 
        source of funds is a loan made in the ordinary course 
        of business by a bank, as defined in section 3(a)(6) of 
        this title, if the person filing such statement so 
        requests, the name of the bank shall not be made 
        available to the public;
          (C) if the purpose of the purchases or prospective 
        purchases is to acquire control of the business of the 
        issuer of the securities any plans or proposals which 
        such persons may have to liquidate such issuer, to sell 
        its assets to or merge it with any other persons, or to 
        make any other major change in its business or 
        corporate structure;
          (D) the number of shares of such security which are 
        beneficially owned, and the number of shares concerning 
        which there is a right to acquire, directly or 
        indirectly, by (i) such person, and (ii) by each 
        associate of such person, giving the background, 
        identity, residence, and citizenship of each such 
        associate; and
          (E) information as to any contracts, arrangements, or 
        understandings with any person with respect to any 
        securities of the issuer, including but not limited to 
        transfer of any of the securities, joint ventures, loan 
        or option arrangements, puts or calls, guaranties of 
        loans, guaranties against loss or guaranties of 
        profits, division of losses or profits, or the giving 
        or withholding of proxies, naming the persons with whom 
        such contracts, arrangements, or understandings have 
        been entered into, and giving the details thereof.
  (2) If any material change occurs in the facts set forth in 
the statement filed with the Commission, an amendment shall be 
filed with the Commission, in accordance with such rules and 
regulations as the Commission may prescribe as necessary or 
appropriate in the public interest or for the protection of 
investors.
  (3) When two or more persons act as a partnership, limited 
partnership, syndicate, or other group for the purpose of 
acquiring, holding, or disposing of securities of an issuer, 
such syndicate or group shall be deemed a ``person'' for the 
purposes of this subsection.
  (4) In determining, for purposes of this subsection, any 
percentage of a class of any security, such class shall be 
deemed to consist of the amount of the outstanding securities 
of such class, exclusive of any securities of such class held 
by or for the account of the issuer or a subsidiary of the 
issuer.
  (5) The Commission, by rule or regulation or by order, may 
permit any person to file in lieu of the statement required by 
paragraph (1) of this subsection or the rules and regulations 
thereunder, a notice stating the name of such person, the 
number of shares of any equity securities subject to paragraph 
(1) which are owned by him, the date of their acquisition and 
such other information as the Commission may specify, if it 
appears to the Commission that such securities were acquired by 
such person in the ordinary course of his business and were not 
acquired for the purpose of and do not have the effect of 
changing or influencing the control of the issuer nor in 
connection with or as a participant in any transaction having 
such purpose or effect.
  (6) The provisions of this subsection shall not apply to--
          (A) any acquisition or offer to acquire securities 
        made or proposed to be made by means of a registration 
        statement under the Securities Act of 1933;
          (B) any acquisition of the beneficial ownership of a 
        security which, together with all other acquisitions by 
        the same person of securities of the same class during 
        the preceding twelve months, does not exceed 2 per 
        centum of that class;
          (C) any acquisition of an equity security by the 
        issuer of such security;
          (D) any acquisition or proposed acquisition of a 
        security which the Commission, by rules or regulations 
        or by order, shall exempt from the provisions of this 
        subsection as not entered into for the purpose of, and 
        not having the effect of, changing or influencing the 
        control of the issuer or otherwise as not comprehended 
        within the purposes of this subsection.
  (e)(1) It shall be unlawful for an issuer which has a class 
of equity securities registered pursuant to section 12 of this 
title, or which is a closed-end investment company registered 
under the Investment Company Act of 1940, to purchase any 
equity security issued by it if such purchase is in 
contravention of such rules and regulations as the Commission, 
in the public interest or for the protection of investors, may 
adopt (A) to define acts and practices which are fraudulent, 
deceptive, or manipulative, and (B) to prescribe means 
reasonably designed to prevent such acts and practices. Such 
rules and regulations may require such issuer to provide 
holders of equity securities of such class with such 
information relating to the reasons for such purchase, the 
source of funds, the number of shares to be purchased, the 
price to be paid for such securities, the method of purchase, 
and such additional information, as the Commission deems 
necessary or appropriate in the public interest or for the 
protection of investors, or which the Commission deems to be 
material to a determination whether such security should be 
sold.
  (2) For the purpose of this subsection, a purchase by or for 
the issuer or any person controlling, controlled by, or under 
common control with the issuer, or a purchase subject to 
control of the issuer or any such person, shall be deemed to be 
a purchase by the issuer. The Commission shall have power to 
make rules and regulations implementing this paragraph in the 
public interest and for the protection of investors, including 
exemptive rules and regulations covering situations in which 
the Commission deems it unnecessary or inappropriate that a 
purchase of the type described in this paragraph shall be 
deemed to be a purchase by the issuer for purposes of some or 
all of the provisions of paragraph (1) of this subsection.
  (3) At the time of filing such statement as the Commission 
may require by rule pursuant to paragraph (1) of this 
subsection, the person making the filing shall pay to the 
Commission a fee at a rate that, subject to paragraph (4), is 
equal to $92 per $1,000,000 of the value of securities proposed 
to be purchased. The fee shall be reduced with respect to 
securities in an amount equal to any fee paid with respect to 
any securities issued in connection with the proposed 
transaction under section 6(b) of the Securities Act of 1933, 
or the fee paid under that section shall be reduced in an 
amount equal to the fee paid to the Commission in connection 
with such transaction under this paragraph.
          (4) Annual adjustment.--For each fiscal year, the 
        Commission shall by order adjust the rate required by 
        paragraph (3) for such fiscal year to a rate that is 
        equal to the rate (expressed in dollars per million) 
        that is applicable under section 6(b) of the Securities 
        Act of 1933 for such fiscal year.
          [(5) Fee collections.--Fees collected pursuant to 
        this subsection for fiscal year 2012 and each fiscal 
        year thereafter shall be deposited and credited as 
        general revenue of the Treasury and shall not be 
        available for obligation.]
          (5) Offsetting collections.--Fees collected pursuant 
        to this subsection for any fiscal year--
                  (A) except as provided in section 31(i)(2), 
                shall be deposited and credited as offsetting 
                collections to the account providing 
                appropriations to the Commission; and
                  (B) except as provided in paragraph (8), 
                shall not be collected for any fiscal year 
                except to the extent provided in advance in 
                appropriations Acts.
          (6) Effective date; publication.--In exercising its 
        authority under this subsection, the Commission shall 
        not be required to comply with the provisions of 
        section 553 of title 5, United States Code. An adjusted 
        rate prescribed under paragraph (4) shall be published 
        and take effect in accordance with section 6(b) of the 
        Securities Act of 1933 (15 U.S.C. 77f(b)).
          (7) Pro rata application.--The rates per $1,000,000 
        required by this subsection shall be applied pro rata 
        to amounts and balances of less than $1,000,000.
          (8) Lapse of appropriation.--If on the first day of a 
        fiscal year a regular appropriation to the Commission 
        has not been enacted, the Commission shall continue to 
        collect fees (as offsetting collections) under this 
        subsection at the rate in effect during the preceding 
        fiscal year, until 5 days after the date such a regular 
        appropriation is enacted.
  (f)(1) Every institutional investment manager which uses the 
mails, or any means or instrumentality of interstate commerce 
in the course of its business as an institutional investment 
manager and which exercises investment discretion with respect 
to accounts holding equity securities of a class described in 
section 13(d)(1) of this title having an aggregate fair market 
value on the last trading day in any of the preceding twelve 
months of at least $100,000,000 or such lesser amount (but in 
no case less than $10,000,000) as the Commission, by rule, may 
determine, shall file reports with the Commission in such form, 
for such periods, and at such times after the end of such 
periods as the Commission, by rule, may prescribe, but in no 
event shall such reports be filed for periods longer than one 
year or shorter than one quarter. Such reports shall include 
for each such equity security held on the last day of the 
reporting period by accounts (in aggregate or by type as the 
Commission, by rule, may prescribe) with respect to which the 
institutional investment manager exercises investment 
discretion (other than securities held in amounts which the 
Commission, by rule, determines to be insignificant for 
purposes of this subsection), the name of the issuer and the 
title, class, CUSIP number, number of shares or principal 
amount, and aggregate fair market value of each such security. 
Such reports may also include for accounts (in aggregate or by 
type) with respect to which the institutional investment 
manager exercises investment discretion such of the following 
information as the Commission, by rule, prescribes--
          (A) the name of the issuer and the title, class, 
        CUSIP number, number of shares or principal amount, and 
        aggregate fair market value or cost or amortized cost 
        of each other security (other than an exempted 
        security) held on the last day of the reporting period 
        by such accounts;
          (B) the aggregate fair market value or cost or 
        amortized cost of exempted securities (in aggregate or 
        by class) held on the last day of the reporting period 
        by such accounts;
          (C) the number of shares of each equity security of a 
        class described in section 13(d)(1) of this title held 
        on the last day of the reporting period by such 
        accounts with respect to which the institutional 
        investment manager possesses sole or shared authority 
        to exercise the voting rights evidenced by such 
        securities;
          (D) the aggregate purchases and aggregate sales 
        during the reporting period of each security (other 
        than an exempted security) effected by or for such 
        accounts; and
          (E) with respect to any transaction or series of 
        transactions having a market value of at least $500,000 
        or such other amount as the Commission, by rule, may 
        determine, effected during the reporting period by or 
        for such accounts in any equity security of a class 
        described in section 13(d)(1) of this title--
                  (i) the name of the issuer and the title, 
                class, and CUSIP number of the security;
                  (ii) the number of shares or principal amount 
                of the security involved in the transaction;
                  (iii) whether the transaction was a purchase 
                or sale;
                  (iv) the per share price or prices at which 
                the transaction was effected;
                  (v) the date or dates of the transaction;
                  (vi) the date or dates of the settlement of 
                the transaction;
                  (vii) the broker or dealer through whom the 
                transaction was effected;
                  (viii) the market or markets in which the 
                transaction was effected; and
                  (ix) such other related information as the 
                Commission, by rule, may prescribe.
          (2) The Commission shall prescribe rules providing 
        for the public disclosure of the name of the issuer and 
        the title, class, CUSIP number, aggregate amount of the 
        number of short sales of each security, and any 
        additional information determined by the Commission 
        following the end of the reporting period. At a 
        minimum, such public disclosure shall occur every 
        month.
  (3) The Commission, by rule or order, may exempt, 
conditionally or unconditionally, any institutional investment 
manager or security or any class of institutional investment 
managers or securities from any or all of the provisions of 
this subsection or the rules thereunder.
  (4) The Commission shall make available to the public for a 
reasonable fee a list of all equity securities of a class 
described in section 13(d)(1) of this title, updated no less 
frequently than reports are required to be filed pursuant to 
paragraph (1) of this subsection. The Commission shall tabulate 
the information contained in any report filed pursuant to this 
subsection in a manner which will, in the view of the 
Commission, maximize the usefulness of the information to other 
Federal and State authorities and the public. Promptly after 
the filing of any such report, the Commission shall make the 
information contained therein conveniently available to the 
public for a reasonable fee in such form as the Commission, by 
rule, may prescribe, except that the Commission, as it 
determines to be necessary or appropriate in the public 
interest or for the protection of investors, may delay or 
prevent public disclosure of any such information in accordance 
with section 552 of title 5, United States Code. 
Notwithstanding the preceding sentence, any such information 
identifying the securities held by the account of a natural 
person or an estate or trust (other than a business trust or 
investment company) shall not be disclosed to the public.
  (5) In exercising its authority under this subsection, the 
Commission shall determine (and so state) that its action is 
necessary or appropriate in the public interest and for the 
protection of investors or to maintain fair and orderly markets 
or, in granting an exemption, that its action is consistent 
with the protection of investors and the purposes of this 
subsection. In exercising such authority the Commission shall 
take such steps as are within its power, including consulting 
with the Comptroller General of the United States, the Director 
of the Office of Management and Budget, the appropriate 
regulatory agencies, Federal and State authorities which, 
directly or indirectly, require reports from institutional 
investment managers of information substantially similar to 
that called for by this subsection, national securities 
exchanges, and registered securities associations, (A) to 
achieve uniform, centralized reporting of information 
concerning the securities holdings of and transactions by or 
for accounts with respect to which institutional investment 
managers exercise investment discretion, and (B) consistently 
with the objective set forth in the preceding subparagraph, to 
avoid unnecessarily duplicative reporting by, and minimize the 
compliance burden on, institutional investment managers. 
Federal authorities which, directly or indirectly, require 
reports from institutional investment managers of information 
substantially similar to that called for by this subsection 
shall cooperate with the Commission in the performance of its 
responsibilities under the preceding sentence. An institutional 
investment manager which is a bank, the deposits of which are 
insured in accordance with the Federal Deposit Insurance Act, 
shall file with the appropriate regulatory agency a copy of 
every report filed with the Commission pursuant to this 
subsection.
  (6)(A) For purposes of this subsection the term 
``institutional investment manager'' includes any person, other 
than a natural person, investing in or buying and selling 
securities for its own account, and any person exercising 
investment discretion with respect to the account of any other 
person.
  (B) The Commission shall adopt such rules as it deems 
necessary or appropriate to prevent duplicative reporting 
pursuant to this subsection by two or more institutional 
investment managers exercising investment discretion with 
respect to the same amount.
  (g)(1) Any person who is directly or indirectly the 
beneficial owner of more than 5 per centum of any security of a 
class described in subsection (d)(1) of this section or 
otherwise becomes or is deemed to become a beneficial owner of 
any security of a class described in subsection (d)(1) upon the 
purchase or sale of a security-based swap that the Commission 
may define by ruleshall file with the Commission a statement 
setting forth, in such form and at such time as the Commission 
may, by rule, prescribe--
          (A) such person's identity, residence, and 
        citizenship; and
          (B) the number and description of the shares in which 
        such person has an interest and the nature of such 
        interest.
  (2) If any material change occurs in the facts set forth in 
the statement filed with the Commission, an amendment shall be 
filed with the Commission, in accordance with such rules and 
regulations as the Commission may prescribe as necessary or 
appropriate in the public interest or for the protection of 
investors.
  (3) When two or more persons act as a partnership, limited 
partnership, syndicate, or other group for the purpose of 
acquiring, holding, or disposing of securities of an issuer, 
such syndicate or group shall be deemed a ``person'' for the 
purposes of this subsection.
  (4) In determining, for purposes of this subsection, any 
percentage of a class of any security, such class shall be 
deemed to consist of the amount of the outstanding securities 
of such class, exclusive of any securities of such class held 
by or for the account of the issuer or a subsidiary of the 
issuer.
  (5) In exercising its authority under this subsection, the 
Commission shall take such steps as it deems necessary or 
appropriate in the public interest or for the protection of 
investors (A) to achieve centralized reporting of information 
regarding ownership, (B) to avoid unnecessarily duplicative 
reporting by and minimize the compliance burden on persons 
required to report, and (C) to tabulate and promptly make 
available the information contained in any report filed 
pursuant to this subsection in a manner which will, in the view 
of the Commission, maximize the usefulness of the information 
to other Federal and State agencies and the public.
  (6) The Commission may, by rule or order, exempt, in whole or 
in part, any person or class of persons from any or all of the 
reporting requirements of this subsection as it deems necessary 
or appropriate in the public interest or for the protection of 
investors.
  (h) Large Trader Reporting.--
          (1) Identification requirements for large traders.--
        For the purpose of monitoring the impact on the 
        securities markets of securities transactions involving 
        a substantial volume or a large fair market value or 
        exercise value and for the purpose of otherwise 
        assisting the Commission in the enforcement of this 
        title, each large trader shall--
                  (A) provide such information to the 
                Commission as the Commission may by rule or 
                regulation prescribe as necessary or 
                appropriate, identifying such large trader and 
                all accounts in or through which such large 
                trader effects such transactions; and
                  (B) identify, in accordance with such rules 
                or regulations as the Commission may prescribe 
                as necessary or appropriate, to any registered 
                broker or dealer by or through whom such large 
                trader directly or indirectly effects 
                securities transactions, such large trader and 
                all accounts directly or indirectly maintained 
                with such broker or dealer by such large trader 
                in or through which such transactions are 
                effected.
          (2) Recordkeeping and reporting requirements for 
        brokers and dealers.--Every registered broker or dealer 
        shall make and keep for prescribed periods such records 
        as the Commission by rule or regulation prescribes as 
        necessary or appropriate in the public interest, for 
        the protection of investors, or otherwise in 
        furtherance of the purposes of this title, with respect 
        to securities transactions that equal or exceed the 
        reporting activity level effected directly or 
        indirectly by or through such registered broker or 
        dealer of or for any person that such broker or dealer 
        knows is a large trader, or any person that such broker 
        or dealer has reason to know is a large trader on the 
        basis of transactions in securities effected by or 
        through such broker or dealer. Such records shall be 
        available for reporting to the Commission, or any self-
        regulatory organization that the Commission shall 
        designate to receive such reports, on the morning of 
        the day following the day the transactions were 
        effected, and shall be reported to the Commission or a 
        self-regulatory organization designated by the 
        Commission immediately upon request by the Commission 
        or such a self-regulatory organization. Such records 
        and reports shall be in a format and transmitted in a 
        manner prescribed by the Commission (including, but not 
        limited to, machine readable form).
          (3) Aggregation rules.--The Commission may prescribe 
        rules or regulations governing the manner in which 
        transactions and accounts shall be aggregated for the 
        purpose of this subsection, including aggregation on 
        the basis of common ownership or control.
          (4) Examination of broker and dealer records.--All 
        records required to be made and kept by registered 
        brokers and dealers pursuant to this subsection with 
        respect to transactions effected by large traders are 
        subject at any time, or from time to time, to such 
        reasonable periodic, special, or other examinations by 
        representatives of the Commission as the Commission 
        deems necessary or appropriate in the public interest, 
        for the protection of investors, or otherwise in 
        furtherance of the purposes of this title.
          (5) Factors to be considered in commission actions.--
        In exercising its authority under this subsection, the 
        Commission shall take into account--
                  (A) existing reporting systems;
                  (B) the costs associated with maintaining 
                information with respect to transactions 
                effected by large traders and reporting such 
                information to the Commission or self-
                regulatory organizations; and
                  (C) the relationship between the United 
                States and international securities markets.
          (6) Exemptions.--The Commission, by rule, regulation, 
        or order, consistent with the purposes of this title, 
        may exempt any person or class of persons or any 
        transaction or class of transactions, either 
        conditionally or upon specified terms and conditions or 
        for stated periods, from the operation of this 
        subsection, and the rules and regulations thereunder.
          (7) Authority of commission to limit disclosure of 
        information.--Notwithstanding any other provision of 
        law, the Commission shall not be compelled to disclose 
        any information required to be kept or reported under 
        this subsection. Nothing in this subsection shall 
        authorize the Commission to withhold information from 
        Congress, or prevent the Commission from complying with 
        a request for information from any other Federal 
        department or agency requesting information for 
        purposes within the scope of its jurisdiction, or 
        complying with an order of a court of the United States 
        in an action brought by the United States or the 
        Commission. For purposes of section 552 of title 5, 
        United States Code, this subsection shall be considered 
        a statute described in subsection (b)(3)(B) of such 
        section 552.
          (8) Definitions.--For purposes of this subsection--
                  (A) the term ``large trader'' means every 
                person who, for his own account or an account 
                for which he exercises investment discretion, 
                effects transactions for the purchase or sale 
                of any publicly traded security or securities 
                by use of any means or instrumentality of 
                interstate commerce or of the mails, or of any 
                facility of a national securities exchange, 
                directly or indirectly by or through a 
                registered broker or dealer in an aggregate 
                amount equal to or in excess of the identifying 
                activity level;
                  (B) the term ``publicly traded security'' 
                means any equity security (including an option 
                on individual equity securities, and an option 
                on a group or index of such securities) listed, 
                or admitted to unlisted trading privileges, on 
                a national securities exchange, or quoted in an 
                automated interdealer quotation system;
                  (C) the term ``identifying activity level'' 
                means transactions in publicly traded 
                securities at or above a level of volume, fair 
                market value, or exercise value as shall be 
                fixed from time to time by the Commission by 
                rule or regulation, specifying the time 
                interval during which such transactions shall 
                be aggregated;
                  (D) the term ``reporting activity level'' 
                means transactions in publicly traded 
                securities at or above a level of volume, fair 
                market value, or exercise value as shall be 
                fixed from time to time by the Commission by 
                rule, regulation, or order, specifying the time 
                interval during which such transactions shall 
                be aggregated; and
                  (E) the term ``person'' has the meaning given 
                in section 3(a)(9) of this title and also 
                includes two or more persons acting as a 
                partnership, limited partnership, syndicate, or 
                other group, but does not include a foreign 
                central bank.
  (i) Accuracy of Financial Reports.--Each financial report 
that contains financial statements, and that is required to be 
prepared in accordance with (or reconciled to) generally 
accepted accounting principles under this title and filed with 
the Commission shall reflect all material correcting 
adjustments that have been identified by a registered public 
accounting firm in accordance with generally accepted 
accounting principles and the rules and regulations of the 
Commission.
  (j) Off-Balance Sheet Transactions.--Not later than 180 days 
after the date of enactment of the Sarbanes-Oxley Act of 2002, 
the Commission shall issue final rules providing that each 
annual and quarterly financial report required to be filed with 
the Commission shall disclose all material off-balance sheet 
transactions, arrangements, obligations (including contingent 
obligations), and other relationships of the issuer with 
unconsolidated entities or other persons, that may have a 
material current or future effect on financial condition, 
changes in financial condition, results of operations, 
liquidity, capital expenditures, capital resources, or 
significant components of revenues or expenses.
  (k) Prohibition on Personal Loans to Executives.--
          (1) In general.--It shall be unlawful for any issuer 
        (as defined in section 2 of the Sarbanes-Oxley Act of 
        2002), directly or indirectly, including through any 
        subsidiary, to extend or maintain credit, to arrange 
        for the extension of credit, or to renew an extension 
        of credit, in the form of a personal loan to or for any 
        director or executive officer (or equivalent thereof) 
        of that issuer. An extension of credit maintained by 
        the issuer on the date of enactment of this subsection 
        shall not be subject to the provisions of this 
        subsection, provided that there is no material 
        modification to any term of any such extension of 
        credit or any renewal of any such extension of credit 
        on or after that date of enactment.
          (2) Limitation.--Paragraph (1) does not preclude any 
        home improvement and manufactured home loans (as that 
        term is defined in section 5 of the Home Owners' Loan 
        Act (12 U.S.C. 1464)), consumer credit (as defined in 
        section 103 of the Truth in Lending Act (15 U.S.C. 
        1602)), or any extension of credit under an open end 
        credit plan (as defined in section 103 of the Truth in 
        Lending Act (15 U.S.C. 1602)), or a charge card (as 
        defined in section 127(c)(4)(e) of the Truth in Lending 
        Act (15 U.S.C. 1637(c)(4)(e)), or any extension of 
        credit by a broker or dealer registered under section 
        15 of this title to an employee of that broker or 
        dealer to buy, trade, or carry securities, that is 
        permitted under rules or regulations of the Board of 
        Governors of the Federal Reserve System pursuant to 
        section 7 of this title (other than an extension of 
        credit that would be used to purchase the stock of that 
        issuer), that is--
                  (A) made or provided in the ordinary course 
                of the consumer credit business of such issuer;
                  (B) of a type that is generally made 
                available by such issuer to the public; and
                  (C) made by such issuer on market terms, or 
                terms that are no more favorable than those 
                offered by the issuer to the general public for 
                such extensions of credit.
          (3) Rule of construction for certain loans.--
        Paragraph (1) does not apply to any loan made or 
        maintained by an insured depository institution (as 
        defined in section 3 of the Federal Deposit Insurance 
        Act (12 U.S.C. 1813)), if the loan is subject to the 
        insider lending restrictions of section 22(h) of the 
        Federal Reserve Act (12 U.S.C. 375b).
  (l) Real Time Issuer Disclosures.--Each issuer reporting 
under section 13(a) or 15(d) shall disclose to the public on a 
rapid and current basis such additional information concerning 
material changes in the financial condition or operations of 
the issuer, in plain English, which may include trend and 
qualitative information and graphic presentations, as the 
Commission determines, by rule, is necessary or useful for the 
protection of investors and in the public interest.
  (m) Public Availability of Security-based Swap Transaction 
Data.--
          (1) In general.--
                  (A) Definition of real-time public 
                reporting.--In this paragraph, the term ``real-
                time public reporting'' means to report data 
                relating to a security-based swap transaction, 
                including price and volume, as soon as 
                technologically practicable after the time at 
                which the security-based swap transaction has 
                been executed.
                  (B) Purpose.--The purpose of this subsection 
                is to authorize the Commission to make 
                security-based swap transaction and pricing 
                data available to the public in such form and 
                at such times as the Commission determines 
                appropriate to enhance price discovery.
                  (C) General rule.--The Commission is 
                authorized to provide by rule for the public 
                availability of security-based swap 
                transaction, volume, and pricing data as 
                follows:
                          (i) With respect to those security-
                        based swaps that are subject to the 
                        mandatory clearing requirement 
                        described in section 3C(a)(1) 
                        (including those security-based swaps 
                        that are excepted from the requirement 
                        pursuant to section 3C(g)), the 
                        Commission shall require real-time 
                        public reporting for such transactions.
                          (ii) With respect to those security-
                        based swaps that are not subject to the 
                        mandatory clearing requirement 
                        described in section 3C(a)(1), but are 
                        cleared at a registered clearing 
                        agency, the Commission shall require 
                        real-time public reporting for such 
                        transactions.
                          (iii) With respect to security-based 
                        swaps that are not cleared at a 
                        registered clearing agency and which 
                        are reported to a security-based swap 
                        data repository or the Commission under 
                        section 3C(a)(6), the Commission shall 
                        require real-time public reporting for 
                        such transactions, in a manner that 
                        does not disclose the business 
                        transactions and market positions of 
                        any person.
                          (iv) With respect to security-based 
                        swaps that are determined to be 
                        required to be cleared under section 
                        3C(b) but are not cleared, the 
                        Commission shall require real-time 
                        public reporting for such transactions.
                  (D) Registered entities and public 
                reporting.--The Commission may require 
                registered entities to publicly disseminate the 
                security-based swap transaction and pricing 
                data required to be reported under this 
                paragraph.
                  (E) Rulemaking required.--With respect to the 
                rule providing for the public availability of 
                transaction and pricing data for security-based 
                swaps described in clauses (i) and (ii) of 
                subparagraph (C), the rule promulgated by the 
                Commission shall contain provisions--
                          (i) to ensure such information does 
                        not identify the participants;
                          (ii) to specify the criteria for 
                        determining what constitutes a large 
                        notional security-based swap 
                        transaction (block trade) for 
                        particular markets and contracts;
                          (iii) to specify the appropriate time 
                        delay for reporting large notional 
                        security-based swap transactions (block 
                        trades) to the public; and
                          (iv) that take into account whether 
                        the public disclosure will materially 
                        reduce market liquidity.
                  (F) Timeliness of reporting.--Parties to a 
                security-based swap (including agents of the 
                parties to a security-based swap) shall be 
                responsible for reporting security-based swap 
                transaction information to the appropriate 
                registered entity in a timely manner as may be 
                prescribed by the Commission.
                  (G) Reporting of swaps to registered 
                security-based swap data repositories.--Each 
                security-based swap (whether cleared or 
                uncleared) shall be reported to a registered 
                security-based swap data repository.
                  (H) Registration of clearing agencies.--A 
                clearing agency may register as a security-
                based swap data repository.
          (2) Semiannual and annual public reporting of 
        aggregate security-based swap data.--
                  (A) In general.--In accordance with 
                subparagraph (B), the Commission shall issue a 
                written report on a semiannual and annual basis 
                to make available to the public information 
                relating to--
                          (i) the trading and clearing in the 
                        major security-based swap categories; 
                        and
                          (ii) the market participants and 
                        developments in new products.
                  (B) Use; consultation.--In preparing a report 
                under subparagraph (A), the Commission shall--
                          (i) use information from security-
                        based swap data repositories and 
                        clearing agencies; and
                          (ii) consult with the Office of the 
                        Comptroller of the Currency, the Bank 
                        for International Settlements, and such 
                        other regulatory bodies as may be 
                        necessary.
                  (C) Authority of commission.--The Commission 
                may, by rule, regulation, or order, delegate 
                the public reporting responsibilities of the 
                Commission under this paragraph in accordance 
                with such terms and conditions as the 
                Commission determines to be appropriate and in 
                the public interest.
  (n) Security-based Swap Data Repositories.--
          (1) Registration requirement.--It shall be unlawful 
        for any person, unless registered with the Commission, 
        directly or indirectly, to make use of the mails or any 
        means or instrumentality of interstate commerce to 
        perform the functions of a security-based swap data 
        repository.
          (2) Inspection and examination.--Each registered 
        security-based swap data repository shall be subject to 
        inspection and examination by any representative of the 
        Commission.
          (3) Compliance with core principles.--
                  (A) In general.--To be registered, and 
                maintain registration, as a security-based swap 
                data repository, the security-based swap data 
                repository shall comply with--
                          (i) the requirements and core 
                        principles described in this 
                        subsection; and
                          (ii) any requirement that the 
                        Commission may impose by rule or 
                        regulation.
                  (B) Reasonable discretion of security-based 
                swap data repository.--Unless otherwise 
                determined by the Commission, by rule or 
                regulation, a security-based swap data 
                repository described in subparagraph (A) shall 
                have reasonable discretion in establishing the 
                manner in which the security-based swap data 
                repository complies with the core principles 
                described in this subsection.
          (4) Standard setting.--
                  (A) Data identification.--
                          (i) In general.--In accordance with 
                        clause (ii), the Commission shall 
                        prescribe standards that specify the 
                        data elements for each security-based 
                        swap that shall be collected and 
                        maintained by each registered security-
                        based swap data repository.
                          (ii) Requirement.--In carrying out 
                        clause (i), the Commission shall 
                        prescribe consistent data element 
                        standards applicable to registered 
                        entities and reporting counterparties.
                  (B) Data collection and maintenance.--The 
                Commission shall prescribe data collection and 
                data maintenance standards for security-based 
                swap data repositories.
                  (C) Comparability.--The standards prescribed 
                by the Commission under this subsection shall 
                be comparable to the data standards imposed by 
                the Commission on clearing agencies in 
                connection with their clearing of security-
                based swaps.
          (5) Duties.--A security-based swap data repository 
        shall--
                  (A) accept data prescribed by the Commission 
                for each security-based swap under subsection 
                (b);
                  (B) confirm with both counterparties to the 
                security-based swap the accuracy of the data 
                that was submitted;
                  (C) maintain the data described in 
                subparagraph (A) in such form, in such manner, 
                and for such period as may be required by the 
                Commission;
                  (D)(i) provide direct electronic access to 
                the Commission (or any designee of the 
                Commission, including another registered 
                entity); and
                  (ii) provide the information described in 
                subparagraph (A) in such form and at such 
                frequency as the Commission may require to 
                comply with the public reporting requirements 
                set forth in subsection (m);
                  (E) at the direction of the Commission, 
                establish automated systems for monitoring, 
                screening, and analyzing security-based swap 
                data;
                  (F) maintain the privacy of any and all 
                security-based swap transaction information 
                that the security-based swap data repository 
                receives from a security-based swap dealer, 
                counterparty, or any other registered entity; 
                and
                  (G) on a confidential basis pursuant to 
                section 24, upon request, and after notifying 
                the Commission of the request, make available 
                security-based swap data obtained by the 
                security-based swap data repository, including 
                individual counterparty trade and position 
                data, to--
                          (i) each appropriate prudential 
                        regulator;
                          (ii) the Financial Stability 
                        Oversight Council;
                          (iii) the Commodity Futures Trading 
                        Commission;
                          (iv) the Department of Justice; and
                          (v) any other person that the 
                        Commission determines to be 
                        appropriate, including--
                                  (I) foreign financial 
                                supervisors (including foreign 
                                futures authorities);
                                  (II) foreign central banks;
                                  (III) foreign ministries; and
                                  (IV) other foreign 
                                authorities.
                  (H) Confidentiality agreement.--Before the 
                security-based swap data repository may share 
                information with any entity described in 
                subparagraph (G), the security-based swap data 
                repository shall receive a written agreement 
                from each entity stating that the entity shall 
                abide by the confidentiality requirements 
                described in section 24 relating to the 
                information on security-based swap transactions 
                that is provided.
          (6) Designation of chief compliance officer.--
                  (A) In general.--Each security-based swap 
                data repository shall designate an individual 
                to serve as a chief compliance officer.
                  (B) Duties.--The chief compliance officer 
                shall--
                          (i) report directly to the board or 
                        to the senior officer of the security-
                        based swap data repository;
                          (ii) review the compliance of the 
                        security-based swap data repository 
                        with respect to the requirements and 
                        core principles described in this 
                        subsection;
                          (iii) in consultation with the board 
                        of the security-based swap data 
                        repository, a body performing a 
                        function similar to the board of the 
                        security-based swap data repository, or 
                        the senior officer of the security-
                        based swap data repository, resolve any 
                        conflicts of interest that may arise;
                          (iv) be responsible for administering 
                        each policy and procedure that is 
                        required to be established pursuant to 
                        this section;
                          (v) ensure compliance with this title 
                        (including regulations) relating to 
                        agreements, contracts, or transactions, 
                        including each rule prescribed by the 
                        Commission under this section;
                          (vi) establish procedures for the 
                        remediation of noncompliance issues 
                        identified by the chief compliance 
                        officer through any--
                                  (I) compliance office review;
                                  (II) look-back;
                                  (III) internal or external 
                                audit finding;
                                  (IV) self-reported error; or
                                  (V) validated complaint; and
                          (vii) establish and follow 
                        appropriate procedures for the 
                        handling, management response, 
                        remediation, retesting, and closing of 
                        noncompliance issues.
                  (C) Annual reports.--
                          (i) In general.--In accordance with 
                        rules prescribed by the Commission, the 
                        chief compliance officer shall annually 
                        prepare and sign a report that contains 
                        a description of--
                                  (I) the compliance of the 
                                security-based swap data 
                                repository of the chief 
                                compliance officer with respect 
                                to this title (including 
                                regulations); and
                                  (II) each policy and 
                                procedure of the security-based 
                                swap data repository of the 
                                chief compliance officer 
                                (including the code of ethics 
                                and conflict of interest 
                                policies of the security-based 
                                swap data repository).
                          (ii) Requirements.--A compliance 
                        report under clause (i) shall--
                                  (I) accompany each 
                                appropriate financial report of 
                                the security-based swap data 
                                repository that is required to 
                                be furnished to the Commission 
                                pursuant to this section; and
                                  (II) include a certification 
                                that, under penalty of law, the 
                                compliance report is accurate 
                                and complete.
          (7) Core principles applicable to security-based swap 
        data repositories.--
                  (A) Antitrust considerations.--Unless 
                necessary or appropriate to achieve the 
                purposes of this title, the swap data 
                repository shall not--
                          (i) adopt any rule or take any action 
                        that results in any unreasonable 
                        restraint of trade; or
                          (ii) impose any material 
                        anticompetitive burden on the trading, 
                        clearing, or reporting of transactions.
                  (B) Governance arrangements.--Each security-
                based swap data repository shall establish 
                governance arrangements that are transparent--
                          (i) to fulfill public interest 
                        requirements; and
                          (ii) to support the objectives of the 
                        Federal Government, owners, and 
                        participants.
                  (C) Conflicts of interest.--Each security-
                based swap data repository shall--
                          (i) establish and enforce rules to 
                        minimize conflicts of interest in the 
                        decision-making process of the 
                        security-based swap data repository; 
                        and
                          (ii) establish a process for 
                        resolving any conflicts of interest 
                        described in clause (i).
                  (D) Additional duties developed by 
                commission.--
                          (i) In general.--The Commission may 
                        develop 1 or more additional duties 
                        applicable to security-based swap data 
                        repositories.
                          (ii) Consideration of evolving 
                        standards.--In developing additional 
                        duties under subparagraph (A), the 
                        Commission may take into consideration 
                        any evolving standard of the United 
                        States or the international community.
                          (iii) Additional duties for 
                        commission designees.--The Commission 
                        shall establish additional duties for 
                        any registrant described in section 
                        13(m)(2)(C) in order to minimize 
                        conflicts of interest, protect data, 
                        ensure compliance, and guarantee the 
                        safety and security of the security-
                        based swap data repository.
          (8) Required registration for security-based swap 
        data repositories.--Any person that is required to be 
        registered as a security-based swap data repository 
        under this subsection shall register with the 
        Commission, regardless of whether that person is also 
        licensed under the Commodity Exchange Act as a swap 
        data repository.
          (9) Rules.--The Commission shall adopt rules 
        governing persons that are registered under this 
        subsection.
  (o) Beneficial ownership.--For purposes ofthis section and 
section 16, a person shall be deemed to acquire 
beneficialownership of an equity security based on the purchase 
or sale of asecurity-based swap, only to the extent that the 
Commission, by rule,determines after consultation with the 
prudential regulators and the Secretaryof the Treasury, that 
the purchase or sale of the security-based swap, or classof 
security-based swap, provides incidents of ownership comparable 
to directownership of the equity security, and that it is 
necessary to achieve thepurposes of this section that the 
purchase or sale of the security-based swaps,or class of 
security-based swap, be deemed the acquisition of 
beneficialownership of the equitysecurity.
  (p) Disclosures Relating to Conflict Minerals Originating in 
the Democratic Republic of the Congo.--
          (1) Regulations.--
                  (A) In general.--Not later than 270 days 
                after the date of the enactment of this 
                subsection, the Commission shall promulgate 
                regulations requiring any person described in 
                paragraph (2) to disclose annually, beginning 
                with the person's first full fiscal year that 
                begins after the date of promulgation of such 
                regulations, whether conflict minerals that are 
                necessary as described in paragraph (2)(B), in 
                the year for which such reporting is required, 
                did originate in the Democratic Republic of the 
                Congo or an adjoining country and, in cases in 
                which such conflict minerals did originate in 
                any such country, submit to the Commission a 
                report that includes, with respect to the 
                period covered by the report--
                          (i) a description of the measures 
                        taken by the person to exercise due 
                        diligence on the source and chain of 
                        custody of such minerals, which 
                        measures shall include an independent 
                        private sector audit of such report 
                        submitted through the Commission that 
                        is conducted in accordance with 
                        standards established by the 
                        Comptroller General of the United 
                        States, in accordance with rules 
                        promulgated by the Commission, in 
                        consultation with the Secretary of 
                        State; and
                          (ii) a description of the products 
                        manufactured or contracted to be 
                        manufactured that are not DRC conflict 
                        free (``DRC conflict free'' is defined 
                        to mean the products that do not 
                        contain minerals that directly or 
                        indirectly finance or benefit armed 
                        groups in the Democratic Republic of 
                        the Congo or an adjoining country), the 
                        entity that conducted the independent 
                        private sector audit in accordance with 
                        clause (i), the facilities used to 
                        process the conflict minerals, the 
                        country of origin of the conflict 
                        minerals, and the efforts to determine 
                        the mine or location of origin with the 
                        greatest possible specificity.
                  (B) Certification.--The person submitting a 
                report under subparagraph (A) shall certify the 
                audit described in clause (i) of such 
                subparagraph that is included in such report. 
                Such a certified audit shall constitute a 
                critical component of due diligence in 
                establishing the source and chain of custody of 
                such minerals.
                  (C) Unreliable determination.--If a report 
                required to be submitted by a person under 
                subparagraph (A) relies on a determination of 
                an independent private sector audit, as 
                described under subparagraph (A)(i), or other 
                due diligence processes previously determined 
                by the Commission to be unreliable, the report 
                shall not satisfy the requirements of the 
                regulations promulgated under subparagraph 
                (A)(i).
                  (D) DRC conflict free.--For purposes of this 
                paragraph, a product may be labeled as ``DRC 
                conflict free'' if the product does not contain 
                conflict minerals that directly or indirectly 
                finance or benefit armed groups in the 
                Democratic Republic of the Congo or an 
                adjoining country.
                  (E) Information available to the public.--
                Each person described under paragraph (2) shall 
                make available to the public on the Internet 
                website of such person the information 
                disclosed by such person under subparagraph 
                (A).
          (2) Person described.--A person is described in this 
        paragraph if--
                  (A) the person is required to file reports 
                with the Commission pursuant to paragraph 
                (1)(A); and
                  (B) conflict minerals are necessary to the 
                functionality or production of a product 
                manufactured by such person.
          (3) Revisions and waivers.--The Commission shall 
        revise or temporarily waive the requirements described 
        in paragraph (1) if the President transmits to the 
        Commission a determination that--
                  (A) such revision or waiver is in the 
                national security interest of the United States 
                and the President includes the reasons 
                therefor; and
                  (B) establishes a date, not later than 2 
                years after the initial publication of such 
                exemption, on which such exemption shall 
                expire.
          (4) Termination of disclosure requirements.--The 
        requirements of paragraph (1) shall terminate on the 
        date on which the President determines and certifies to 
        the appropriate congressional committees, but in no 
        case earlier than the date that is one day after the 
        end of the 5-year period beginning on the date of the 
        enactment of this subsection, that no armed groups 
        continue to be directly involved and benefitting from 
        commercial activity involving conflict minerals.
          (5) Definitions.--For purposes of this subsection, 
        the terms ``adjoining country'', ``appropriate 
        congressional committees'', ``armed group'', and 
        ``conflict mineral'' have the meaning given those terms 
        under section 1502 of the Dodd-Frank Wall Street Reform 
        and Consumer Protection Act.
  (q) Disclosure of Payments by Resource Extraction Issuers.--
          (1) Definitions.--In this subsection--
                  (A) the term ``commercial development of oil, 
                natural gas, or minerals'' includes 
                exploration, extraction, processing, export, 
                and other significant actions relating to oil, 
                natural gas, or minerals, or the acquisition of 
                a license for any such activity, as determined 
                by the Commission;
                  (B) the term ``foreign government'' means a 
                foreign government, a department, agency, or 
                instrumentality of a foreign government, or a 
                company owned by a foreign government, as 
                determined by the Commission;
                  (C) the term ``payment''--
                          (i) means a payment that is--
                                  (I) made to further the 
                                commercial development of oil, 
                                natural gas, or minerals; and
                                  (II) not de minimis; and
                          (ii) includes taxes, royalties, fees 
                        (including license fees), production 
                        entitlements, bonuses, and other 
                        material benefits, that the Commission, 
                        consistent with the guidelines of the 
                        Extractive Industries Transparency 
                        Initiative (to the extent practicable), 
                        determines are part of the commonly 
                        recognized revenue stream for the 
                        commercial development of oil, natural 
                        gas, or minerals;
                  (D) the term ``resource extraction issuer'' 
                means an issuer that--
                          (i) is required to file an annual 
                        report with the Commission; and
                          (ii) engages in the commercial 
                        development of oil, natural gas, or 
                        minerals;
                  (E) the term ``interactive data format'' 
                means an electronic data format in which pieces 
                of information are identified using an 
                interactive data standard; and
                  (F) the term ``interactive data standard'' 
                means standardized list of electronic tags that 
                mark information included in the annual report 
                of a resource extraction issuer.
          (2) Disclosure.--
                  (A) Information required.--Not later than 270 
                days after the date of enactment of the Dodd-
                Frank Wall Street Reform and Consumer 
                Protection Act, the Commission shall issue 
                final rules that require each resource 
                extraction issuer to include in an annual 
                report of the resource extraction issuer 
                information relating to any payment made by the 
                resource extraction issuer, a subsidiary of the 
                resource extraction issuer, or an entity under 
                the control of the resource extraction issuer 
                to a foreign government or the Federal 
                Government for the purpose of the commercial 
                development of oil, natural gas, or minerals, 
                including--
                          (i) the type and total amount of such 
                        payments made for each project of the 
                        resource extraction issuer relating to 
                        the commercial development of oil, 
                        natural gas, or minerals; and
                          (ii) the type and total amount of 
                        such payments made to each government.
                  (B) Consultation in rulemaking.--In issuing 
                rules under subparagraph (A), the Commission 
                may consult with any agency or entity that the 
                Commission determines is relevant.
                  (C) Interactive data format.--The rules 
                issued under subparagraph (A) shall require 
                that the information included in the annual 
                report of a resource extraction issuer be 
                submitted in an interactive data format.
                  (D) Interactive data standard.--
                          (i) In general.--The rules issued 
                        under subparagraph (A) shall establish 
                        an interactive data standard for the 
                        information included in the annual 
                        report of a resource extraction issuer.
                          (ii) Electronic tags.--The 
                        interactive data standard shall include 
                        electronic tags that identify, for any 
                        payments made by a resource extraction 
                        issuer to a foreign government or the 
                        Federal Government--
                                  (I) the total amounts of the 
                                payments, by category;
                                  (II) the currency used to 
                                make the payments;
                                  (III) the financial period in 
                                which the payments were made;
                                  (IV) the business segment of 
                                the resource extraction issuer 
                                that made the payments;
                                  (V) the government that 
                                received the payments, and the 
                                country in which the government 
                                is located;
                                  (VI) the project of the 
                                resource extraction issuer to 
                                which the payments relate; and
                                  (VII) such other information 
                                as the Commission may determine 
                                is necessary or appropriate in 
                                the public interest or for the 
                                protection of investors.
                  (E) International transparency efforts.--To 
                the extent practicable, the rules issued under 
                subparagraph (A) shall support the commitment 
                of the Federal Government to international 
                transparency promotion efforts relating to the 
                commercial development of oil, natural gas, or 
                minerals.
                  (F) Effective date.--With respect to each 
                resource extraction issuer, the final rules 
                issued under subparagraph (A) shall take effect 
                on the date on which the resource extraction 
                issuer is required to submit an annual report 
                relating to the fiscal year of the resource 
                extraction issuer that ends not earlier than 1 
                year after the date on which the Commission 
                issues final rules under subparagraph (A).
          (3) Public availability of information.--
                  (A) In general.--To the extent practicable, 
                the Commission shall make available online, to 
                the public, a compilation of the information 
                required to be submitted under the rules issued 
                under paragraph (2)(A).
                  (B) Other information.--Nothing in this 
                paragraph shall require the Commission to make 
                available online information other than the 
                information required to be submitted under the 
                rules issued under paragraph (2)(A).
          (4) Authorization of appropriations.--There are 
        authorized to be appropriated to the Commission such 
        sums as may be necessary to carry out this subsection.
  (r) Disclosure of Certain Activities Relating to Iran.--
          (1) In general.--Each issuer required to file an 
        annual or quarterly report under subsection (a) shall 
        disclose in that report the information required by 
        paragraph (2) if, during the period covered by the 
        report, the issuer or any affiliate of the issuer--
                  (A) knowingly engaged in an activity 
                described in subsection (a) or (b) of section 5 
                of the Iran Sanctions Act of 1996 (Public Law 
                104-172; 50 U.S.C. 1701 note);
                  (B) knowingly engaged in an activity 
                described in subsection (c)(2) of section 104 
                of the Comprehensive Iran Sanctions, 
                Accountability, and Divestment Act of 2010 (22 
                U.S.C. 8513) or a transaction described in 
                subsection (d)(1) of that section;
                  (C) knowingly engaged in an activity 
                described in section 105A(b)(2) of that Act; or
                  (D) knowingly conducted any transaction or 
                dealing with--
                          (i) any person the property and 
                        interests in property of which are 
                        blocked pursuant to Executive Order No. 
                        13224 (66 Fed. Reg. 49079; relating to 
                        blocking property and prohibiting 
                        transactions with persons who commit, 
                        threaten to commit, or support 
                        terrorism);
                          (ii) any person the property and 
                        interests in property of which are 
                        blocked pursuant to Executive Order No. 
                        13382 (70 Fed. Reg. 38567; relating to 
                        blocking of property of weapons of mass 
                        destruction proliferators and their 
                        supporters); or
                          (iii) any person or entity identified 
                        under section 560.304 of title 31, Code 
                        of Federal Regulations (relating to the 
                        definition of the Government of Iran) 
                        without the specific authorization of a 
                        Federal department or agency.
          (2) Information required.--If an issuer or an 
        affiliate of the issuer has engaged in any activity 
        described in paragraph (1), the issuer shall disclose a 
        detailed description of each such activity, including--
                  (A) the nature and extent of the activity;
                  (B) the gross revenues and net profits, if 
                any, attributable to the activity; and
                  (C) whether the issuer or the affiliate of 
                the issuer (as the case may be) intends to 
                continue the activity.
          (3) Notice of disclosures.--If an issuer reports 
        under paragraph (1) that the issuer or an affiliate of 
        the issuer has knowingly engaged in any activity 
        described in that paragraph, the issuer shall 
        separately file with the Commission, concurrently with 
        the annual or quarterly report under subsection (a), a 
        notice that the disclosure of that activity has been 
        included in that annual or quarterly report that 
        identifies the issuer and contains the information 
        required by paragraph (2).
          (4) Public disclosure of information.--Upon receiving 
        a notice under paragraph (3) that an annual or 
        quarterly report includes a disclosure of an activity 
        described in paragraph (1), the Commission shall 
        promptly--
                  (A) transmit the report to--
                          (i) the President;
                          (ii) the Committee on Foreign Affairs 
                        and the Committee on Financial Services 
                        of the House of Representatives; and
                          (iii) the Committee on Foreign 
                        Relations and the Committee on Banking, 
                        Housing, and Urban Affairs of the 
                        Senate; and
                  (B) make the information provided in the 
                disclosure and the notice available to the 
                public by posting the information on the 
                Internet website of the Commission.
          (5) Investigations.--Upon receiving a report under 
        paragraph (4) that includes a disclosure of an activity 
        described in paragraph (1) (other than an activity 
        described in subparagraph (D)(iii) of that paragraph), 
        the President shall--
                  (A) initiate an investigation into the 
                possible imposition of sanctions under the Iran 
                Sanctions Act of 1996 (Public Law 104-172; 50 
                U.S.C. 1701 note), section 104 or 105A of the 
                Comprehensive Iran Sanctions, Accountability, 
                and Divestment Act of 2010, an Executive order 
                specified in clause (i) or (ii) of paragraph 
                (1)(D), or any other provision of law relating 
                to the imposition of sanctions with respect to 
                Iran, as applicable; and
                  (B) not later than 180 days after initiating 
                such an investigation, make a determination 
                with respect to whether sanctions should be 
                imposed with respect to the issuer or the 
                affiliate of the issuer (as the case may be).
          (6) Sunset.--The provisions of this subsection shall 
        terminate on the date that is 30 days after the date on 
        which the President makes the certification described 
        in section 401(a) of the Comprehensive Iran Sanctions, 
        Accountability, and Divestment Act of 2010 (22 U.S.C. 
        8551(a)).

           *       *       *       *       *       *       *


                                proxies

  Sec. 14. (a)(1) It shall be unlawful for any person, by the 
use of the mails or by any means or instrumentality of 
interstate commerce or of any facility of a national securities 
exchange or otherwise, in contravention of such rules and 
regulations as the Commission may prescribe as necessary or 
appropriate in the public interest or for the protection of 
investors, to solicit or to permit the use of his name to 
solicit any proxy or consent or authorization in respect of any 
security (other than an exempted security) registered pursuant 
to section 12 of this title.
  (2) The rules and regulations prescribed by the Commission 
under paragraph (1) may include--
          (A) a requirement that a solicitation of proxy, 
        consent, or authorization by (or on behalf of) an 
        issuer include a nominee submitted by a shareholder to 
        serve on the board of directors of the issuer; and
          (B) a requirement that an issuer follow a certain 
        procedure in relation to a solicitation described in 
        subparagraph (A).
  (b)(1) It shall be unlawful for any member of a national 
securities exchange, or any broker or dealer registered under 
this title, or any bank, association, or other entity that 
exercises fiduciary powers, in contravention of such rules and 
regulations as the Commission may prescribe as necessary or 
appropriate in the public interest or for the protection of 
investors, to give, or to refrain from giving a proxy, consent, 
authorization, or information statement in respect of any 
security registered pursuant to section 12 of this title, or 
any security issued by an investment company registered under 
the Investment Company Act of 1940, and carried for the account 
of a customer.
  (2) With respect to banks, the rules and regulations 
prescribed by the Commission under paragraph (1) shall not 
require the disclosure of the names of beneficial owners of 
securities in an account held by the bank on the date of 
enactment of this paragraph unless the beneficial owner 
consents to the disclosure. The provisions of this paragraph 
shall not apply in the case of a bank which the Commission 
finds has not made a good faith effort to obtain such consent 
from such beneficial owners.
  (c) Unless proxies, consents, or authorizations in respect of 
a security registered pursuant to section 12 of this title, or 
a security issued by an investment company registered under the 
Investment Company Act of 1940, are solicited by or on behalf 
of the management of the issuer from the holders of record of 
such security in accordance with the rules and regulations 
prescribed under subsection (a) of this section, prior to any 
annual or other meeting of the holders of such security, such 
issuer shall, in accordance with rules and regulations 
prescribed by the Commission, file with the Commission and 
transmit to all holders of record of such security information 
substantially equivalent to the information which would be 
required to be transmitted if a solicitation were made, but no 
information shall be required to be filed or transmitted 
pursuant to this subsection before July 1, 1964.
  (d)(1) It shall be unlawful for any person, directly or 
indirectly, by use of the mails or by any means or 
instrumentality of interstate commerce or of any facility of a 
national securities exchange or otherwise, to make a tender 
offer for, or a request or invitation for tenders of, any class 
of any equity security which is registered pursuant to section 
12 of this title, or any equity security of an insurance 
company which would have been required to be so registered 
except for the exemption contained in section 12(g)(2)(G) of 
this title, or any equity security issued by a closed-end 
investment company registered under the Investment Company Act 
of 1940, if, after consummation thereof, such person would, 
directly or indirectly, be the beneficial owner of more than 5 
per centum of such class, unless at the time copies of the 
offer or request or invitation are first published or sent or 
given to security holders such person has filed with the 
Commission a statement containing such of the information 
specified in section 13(d) of this title, and such additional 
information as the Commission may by rules and regulations 
prescribe as necessary or appropriate in the public interest or 
for the protection of investors. All requests or invitations 
for tenders or advertisements making a tender offer or 
requesting or inviting tenders, of such a security shall be 
filed as a part of such statement and shall contain such of the 
information contained in such statement as the Commission may 
by rules and regulations prescribe. Copies of any additional 
material soliciting or requesting such tender offers subsequent 
to the initial solicitation or request shall contain such 
information as the Commission may by rules and regulations 
prescribe as necessary or appropriate in the public interest or 
for the protection of investors, and shall be filed with the 
Commission not later than the time copies of such material are 
first published or sent or given to security holders. Copies of 
all statements, in the form in which such material is furnished 
to security holders and the Commission, shall be sent to the 
issuer not later than the date such material is first published 
or sent or given to any security holders.
  (2) When two or more persons act as a partnership, limited 
partnership, syndicate, or other group for the purpose of 
acquiring, holding, or disposing of securities of an issuer, 
such syndicate or group shall be deemed a ``person'' for 
purposes of this subsection.
  (3) In determining, for purposes of this subsection, any 
percentage of a class of any security, such class shall be 
deemed to consist of the amount of the outstanding securities 
of such class, exclusive of any securities of such class held 
by or for the account of the issuer or a subsidiary of the 
issuer.
  (4) Any solicitation or recommendation to the holders of such 
a security to accept or reject a tender offer or request or 
invitation for tenders shall be made in accordance with such 
rules and regulations as the Commission may prescribe as 
necessary or appropriate in the public interest or for the 
protection of investors.
  (5) Securities deposited pursuant to a tender offer or 
request or invitation for tenders may be withdrawn by or on 
behalf of the depositor at any time until the expiration of 
seven days after the time definitive copies of the offer or 
request or invitation are first published or sent or given to 
security holders, and at any time after sixty days from the 
date of the original tender offer or request or invitation, 
except as the Commission may otherwise prescribe by rules, 
regulations, or order as necessary or appropriate in the public 
interest or for the protection of investors.
  (6) Where any person makes a tender offer, or request or 
invitation for tenders, for less than all the outstanding 
equity securities of a class, and where a greater number of 
securities is deposited pursuant thereto within ten days after 
copies of the offer or request or invitation are first 
published or sent or given to security holders than such person 
is bound or willing to take up and pay for, the securities 
taken up shall be taken up as nearly as may be pro rata, 
disregarding fractions, according to the number of securities 
deposited by each depositor. The provisions of this subsection 
shall also apply to securities deposited within ten days after 
notice of an increase in the consideration offered to security 
holders, as described in paragraph (7), is first published or 
sent or given to security holders.
  (7) Where any person varies the terms of a tender offer or 
request or invitation for tenders before the expiration thereof 
by increasing the consideration offered to holders of such 
securities, such person shall pay the increased consideration 
to each security holder whose securities are taken up and paid 
for pursuant to the tender offer or request or invitation for 
tenders whether or not such securities have been taken up by 
such person before the variation of the tender offer or request 
or invitation.
  (8) The provisions of this subsection shall not apply to any 
offer for, or request or invitation for tenders of, any 
security--
          (A) if the acquisition of such security, together 
        with all other acquisitions by the same person of 
        securities of the same class during the preceding 
        twelve months, would not exceed 2 per centum of that 
        class;
          (B) by the issuer of such security; or
          (C) which the Commission, by rules or regulations or 
        by order, shall exempt from the provisions of this 
        subsection as not entered into for the purpose of, and 
        not having the effect of, changing or influencing the 
        control of the issuer or otherwise as not comprehended 
        within the purposes of this subsection.
  (e) It shall be unlawful for any person to make any untrue 
statement of a material fact or omit to state any material fact 
necessary in order to make the statements made, in the light of 
the circumstances under which they are made, not misleading, or 
to engage in any fraudulent, deceptive, or manipulative acts or 
practices, in connection with any tender offer or request or 
invitation for tenders, or any solicitation of security holders 
in opposition to or in favor of any such offer, request, or 
invitation. The Commission shall, for the purposes of this 
subsection, by rules and regulations define, and prescribe 
means reasonably designed to prevent, such acts and practices 
as are fraudulent, deceptive, or manipulative.
  (f) If, pursuant to any arrangement or understanding with the 
person or persons acquiring securities in a transaction subject 
to subsection (d) of this section or subsection (d) of section 
13 of this title, any persons are to be elected or designated 
as directors of the issuer, otherwise than at a meeting of 
security holders, and the persons so elected or designated will 
constitute a majority of the directors of the issuer, then, 
prior to the time any such person takes office as a director, 
and in accordance with rules and regulations prescribed by the 
Commission, the issuer shall file with the Commission, and 
transmit to all holders of record of securities of the issuer 
who would be entitled to vote at a meeting for election of 
directors, information substantially equivalent to the 
information which would be required by subsection (a) or (c) of 
this section to be transmitted if such person or persons were 
nominees for election as directors at a meeting of such 
security holders.
  (g)(1)(A) At the time of filing such preliminary proxy 
solicitation material as the Commission may require by rule 
pursuant to subsection (a) of this section that concerns an 
acquisition, merger, consolidation, or proposed sale or other 
disposition of substantially all the assets of a company, the 
person making such filing, other than a company registered 
under the Investment Company Act of 1940, shall pay to the 
Commission the following fees:
          (i) for preliminary proxy solicitation material 
        involving an acquisition, merger, or consolidation, if 
        there is a proposed payment of cash or transfer of 
        securities or property to shareholders, a fee at a rate 
        that, subject to paragraph (4), is equal to $92 per 
        $1,000,000 of such proposed payment, or of the value of 
        such securities or other property proposed to be 
        transferred; and
          (ii) for preliminary proxy solicitation material 
        involving a proposed sale or other disposition of 
        substantially all of the assets of a company, a fee at 
        a rate that, subject to paragraph (4), is equal to $92 
        per $1,000,000 of the cash or of the value of any 
        securities or other property proposed to be received 
        upon such sale or disposition.
  (B) The fee imposed under subparagraph (A) shall be reduced 
with respect to securities in an amount equal to any fee paid 
to the Commission with respect to such securities in connection 
with the proposed transaction under section 6(b) of the 
Securities Act of 1933 (15 U.S.C. 77f(b)), or the fee paid 
under that section shall be reduced in an amount equal to the 
fee paid to the Commission in connection with such transaction 
under this subsection. Where two or more companies involved in 
an acquisition, merger, consolidation, sale, or other 
disposition of substantially all the assets of a company must 
file such proxy material with the Commission, each shall pay a 
proportionate share of such fee.
  (2) At the time of filing such preliminary information 
statement as the Commission may require by rule pursuant to 
subsection (c) of this section, the issuer shall pay to the 
Commission the same fee as required for preliminary proxy 
solicitation material under paragraph (1) of this subsection.
  (3) At the time of filing such statement as the Commission 
may require by rule pursuant to subsection (d)(1) of this 
section, the person making the filing shall pay to the 
Commission a fee at a rate that, subject to paragraph (4), is 
equal to $92 per $1,000,000 of the aggregate amount of cash or 
of the value of securities or other property proposed to be 
offered. The fee shall be reduced with respect to securities in 
an amount equal to any fee paid with respect to such securities 
in connection with the proposed transaction under section 6(b) 
of the Securities Act of 1933 (15 U.S.C. 77f(b)), or the fee 
paid under that section shall be reduced in an amount equal to 
the fee paid to the Commission in connection with such 
transaction under this subsection.
          (4) Annual adjustment.--For each fiscal year, the 
        Commission shall by order adjust the rate required by 
        paragraphs (1) and (3) for such fiscal year to a rate 
        that is equal to the rate (expressed in dollars per 
        million) that is applicable under section 6(b) of the 
        Securities Act of 1933 (15 U.S.C. 77f(b)) for such 
        fiscal year.
          [(5) Fee collection.--Fees collected pursuant to this 
        subsection for fiscal year 2012 and each fiscal year 
        thereafter shall be deposited and credited as general 
        revenue of the Treasury and shall not be available for 
        obligation.]
          (5) Offsetting collections.--Fees collected pursuant 
        to this subsection for any fiscal year--
                  (A) except as provided in section 31(i)(2), 
                shall be deposited and credited as offsetting 
                collections to the account providing 
                appropriations to the Commission; and
                  (B) except as provided in paragraph (8), 
                shall not be collected for any fiscal year 
                except to the extent provided in advance in 
                appropriations Acts.
          (6) Review; effective date; publication.--In 
        exercising its authority under this subsection, the 
        Commission shall not be required to comply with the 
        provisions of section 553 of title 5, United States 
        Code. An adjusted rate prescribed under paragraph (4) 
        shall be published and take effect in accordance with 
        section 6(b) of the Securities Act of 1933 (15 U.S.C. 
        77f(b)).
          (7) Pro rata application.--The rates per $1,000,000 
        required by this subsection shall be applied pro rata 
        to amounts and balances of less than $1,000,000.
          (8) Lapse of appropriation.--If on the first day of a 
        fiscal year a regular appropriation to the Commission 
        has not been enacted, the Commission shall continue to 
        collect fees (as offsetting collections) under this 
        subsection at the rate in effect during the preceding 
        fiscal year, until 5 days after the date such a regular 
        appropriation is enacted.
  [(8)] (9) Notwithstanding any other provision of law, the 
Commission may impose fees, charges, or prices for matters not 
involving any acquisition, merger, consolidation, sale, or 
other disposition of assets described in this subsection, as 
authorized by section 9701 of title 31, United States Code, or 
otherwise.
  (h) Proxy Solicitations and Tender Offers in Connection With 
Limited Partnership Rollup Transactions.--
          (1) Proxy rules to contain special provisions.--It 
        shall be unlawful for any person to solicit any proxy, 
        consent, or authorization concerning a limited 
        partnership rollup transaction, or to make any tender 
        offer in furtherance of a limited partnership rollup 
        transaction, unless such transaction is conducted in 
        accordance with rules prescribed by the Commission 
        under subsections (a) and (d) as required by this 
        subsection. Such rules shall--
                  (A) permit any holder of a security that is 
                the subject of the proposed limited partnership 
                rollup transaction to engage in preliminary 
                communications for the purpose of determining 
                whether to solicit proxies, consents, or 
                authorizations in opposition to the proposed 
                limited partnership rollup transaction, without 
                regard to whether any such communication would 
                otherwise be considered a solicitation of 
                proxies, and without being required to file 
                soliciting material with the Commission prior 
                to making that determination, except that--
                          (i) nothing in this subparagraph 
                        shall be construed to limit the 
                        application of any provision of this 
                        title prohibiting, or reasonably 
                        designed to prevent, fraudulent, 
                        deceptive, or manipulative acts or 
                        practices under this title; and
                          (ii) any holder of not less than 5 
                        percent of the outstanding securities 
                        that are the subject of the proposed 
                        limited partnership rollup transaction 
                        who engages in the business of buying 
                        and selling limited partnership 
                        interests in the secondary market shall 
                        be required to disclose such ownership 
                        interests and any potential conflicts 
                        of interests in such preliminary 
                        communications;
                  (B) require the issuer to provide to holders 
                of the securities that are the subject of the 
                limited partnership rollup transaction such 
                list of the holders of the issuer's securities 
                as the Commission may determine in such form 
                and subject to such terms and conditions as the 
                Commission may specify;
                  (C) prohibit compensating any person 
                soliciting proxies, consents, or authorizations 
                directly from security holders concerning such 
                a limited partnership rollup transaction--
                          (i) on the basis of whether the 
                        solicited proxy, consent, or 
                        authorization either approves or 
                        disapproves the proposed limited 
                        partnership rollup transaction; or
                          (ii) contingent on the approval, 
                        disapproval, or completion of the 
                        limited partnership rollup transaction;
                  (D) set forth disclosure requirements for 
                soliciting material distributed in connection 
                with a limited partnership rollup transaction, 
                including requirements for clear, concise, and 
                comprehensible disclosure with respect to--
                          (i) any changes in the business plan, 
                        voting rights, form of ownership 
                        interest, or the compensation of the 
                        general partner in the proposed limited 
                        partnership rollup transaction from 
                        each of the original limited 
                        partnerships;
                          (ii) the conflicts of interest, if 
                        any, of the general partner;
                          (iii) whether it is expected that 
                        there will be a significant difference 
                        between the exchange values of the 
                        limited partnerships and the trading 
                        price of the securities to be issued in 
                        the limited partnership rollup 
                        transaction;
                          (iv) the valuation of the limited 
                        partnerships and the method used to 
                        determine the value of the interests of 
                        the limited partners to be exchanged 
                        for the securities in the limited 
                        partnership rollup transaction;
                          (v) the differing risks and effects 
                        of the limited partnership rollup 
                        transaction for investors in different 
                        limited partnerships proposed to be 
                        included, and the risks and effects of 
                        completing the limited partnership 
                        rollup transaction with less than all 
                        limited partnerships;
                          (vi) the statement by the general 
                        partner required under subparagraph 
                        (E);
                          (vii) such other matters deemed 
                        necessary or appropriate by the 
                        Commission;
                  (E) require a statement by the general 
                partner as to whether the proposed limited 
                partnership rollup transaction is fair or 
                unfair to investors in each limited 
                partnership, a discussion of the basis for that 
                conclusion, and an evaluation and a description 
                by the general partner of alternatives to the 
                limited partnership rollup transaction, such as 
                liquidation;
                  (F) provide that, if the general partner or 
                sponsor has obtained any opinion (other than an 
                opinion of counsel), appraisal, or report that 
                is prepared by an outside party and that is 
                materially related to the limited partnership 
                rollup transaction, such soliciting materials 
                shall contain or be accompanied by clear, 
                concise, and comprehensible disclosure with 
                respect to--
                          (i) the analysis of the transaction, 
                        scope of review, preparation of the 
                        opinion, and basis for and methods of 
                        arriving at conclusions, and any 
                        representations and undertakings with 
                        respect thereto;
                          (ii) the identity and qualifications 
                        of the person who prepared the opinion, 
                        the method of selection of such person, 
                        and any material past, existing, or 
                        contemplated relationships between the 
                        person or any of its affiliates and the 
                        general partner, sponsor, successor, or 
                        any other affiliate;
                          (iii) any compensation of the 
                        preparer of such opinion, appraisal, or 
                        report that is contingent on the 
                        transaction's approval or completion; 
                        and
                          (iv) any limitations imposed by the 
                        issuer on the access afforded to such 
                        preparer to the issuer's personnel, 
                        premises, and relevant books and 
                        records;
                  (G) provide that, if the general partner or 
                sponsor has obtained any opinion, appraisal, or 
                report as described in subparagraph (F) from 
                any person whose compensation is contingent on 
                the transaction's approval or completion or who 
                has not been given access by the issuer to its 
                personnel and premises and relevant books and 
                records, the general partner or sponsor shall 
                state the reasons therefor;
                  (H) provide that, if the general partner or 
                sponsor has not obtained any opinion on the 
                fairness of the proposed limited partnership 
                rollup transaction to investors in each of the 
                affected partnerships, such soliciting 
                materials shall contain or be accompanied by a 
                statement of such partner's or sponsor's 
                reasons for concluding that such an opinion is 
                not necessary in order to permit the limited 
                partners to make an informed decision on the 
                proposed transaction;
                  (I) require that the soliciting material 
                include a clear, concise, and comprehensible 
                summary of the limited partnership rollup 
                transaction (including a summary of the matters 
                referred to in clauses (i) through (vii) of 
                subparagraph (D) and a summary of the matter 
                referred to in subparagraphs (F), (G), and 
                (H)), with the risks of the limited partnership 
                rollup transaction set forth prominently in the 
                fore part thereof;
                  (J) provide that any solicitation or offering 
                period with respect to any proxy solicitation, 
                tender offer, or information statement in a 
                limited partnership rollup transaction shall be 
                for not less than the lesser of 60 calendar 
                days or the maximum number of days permitted 
                under applicable State law; and
                  (K) contain such other provisions as the 
                Commission determines to be necessary or 
                appropriate for the protection of investors in 
                limited partnership rollup transactions.
          (2) Exemptions.--The Commission may, consistent with 
        the public interest, the protection of investors, and 
        the purposes of this title, exempt by rule or order any 
        security or class of securities, any transaction or 
        class of transactions, or any person or class of 
        persons, in whole or in part, conditionally or 
        unconditionally, from the requirements imposed pursuant 
        to paragraph (1) or from the definition contained in 
        paragraph (4).
          (3) Effect on commission authority.--Nothing in this 
        subsection limits the authority of the Commission under 
        subsection (a) or (d) or any other provision of this 
        title or precludes the Commission from imposing, under 
        subsection (a) or (d) or any other provision of this 
        title, a remedy or procedure required to be imposed 
        under this subsection.
          (4) Definition of limited partnership rollup 
        transaction.--Except as provided in paragraph (5), as 
        used in this subsection, the term ``limited partnership 
        rollup transaction'' means a transaction involving the 
        combination or reorganization of one or more limited 
        partnerships, directly or indirectly, in which--
                  (A) some or all of the investors in any of 
                such limited partnerships will receive new 
                securities, or securities in another entity, 
                that will be reported under a transaction 
                reporting plan declared effective before the 
                date of enactment of this subsection by the 
                Commission under section 11A;
                  (B) any of the investors' limited partnership 
                securities are not, as of the date of filing, 
                reported under a transaction reporting plan 
                declared effective before the date of enactment 
                of this subsection by the Commission under 
                section 11A;
                  (C) investors in any of the limited 
                partnerships involved in the transaction are 
                subject to a significant adverse change with 
                respect to voting rights, the term of existence 
                of the entity, management compensation, or 
                investment objectives; and
                  (D) any of such investors are not provided an 
                option to receive or retain a security under 
                substantially the same terms and conditions as 
                the original issue.
          (5) Exclusions from definition.--Notwithstanding 
        paragraph (4), the term ``limited partnership rollup 
        transaction'' does not include--
                  (A) a transaction that involves only a 
                limited partnership or partnerships having an 
                operating policy or practice of retaining cash 
                available for distribution and reinvesting 
                proceeds from the sale, financing, or 
                refinancing of assets in accordance with such 
                criteria as the Commission determines 
                appropriate;
                  (B) a transaction involving only limited 
                partnerships wherein the interests of the 
                limited partners are repurchased, recalled, or 
                exchanged in accordance with the terms of the 
                preexisting limited partnership agreements for 
                securities in an operating company specifically 
                identified at the time of the formation of the 
                original limited partnership;
                  (C) a transaction in which the securities to 
                be issued or exchanged are not required to be 
                and are not registered under the Securities Act 
                of 1933;
                  (D) a transaction that involves only issuers 
                that are not required to register or report 
                under section 12, both before and after the 
                transaction;
                  (E) a transaction, except as the Commission 
                may otherwise provide by rule for the 
                protection of investors, involving the 
                combination or reorganization of one or more 
                limited partnerships in which a non-affiliated 
                party succeeds to the interests of a general 
                partner or sponsor, if--
                          (i) such action is approved by not 
                        less than 66\2/3\ percent of the 
                        outstanding units of each of the 
                        participating limited partnerships; and
                          (ii) as a result of the transaction, 
                        the existing general partners will 
                        receive only compensation to which they 
                        are entitled as expressly provided for 
                        in the preexisting limited partnership 
                        agreements; or
                  (F) a transaction, except as the Commission 
                may otherwise provide by rule for the 
                protection of investors, in which the 
                securities offered to investors are securities 
                of another entity that are reported under a 
                transaction reporting plan declared effective 
                before the date of enactment of this subsection 
                by the Commission under section 11A, if--
                          (i) such other entity was formed, and 
                        such class of securities was reported 
                        and regularly traded, not less than 12 
                        months before the date on which 
                        soliciting material is mailed to 
                        investors; and
                          (ii) the securities of that entity 
                        issued to investors in the transaction 
                        do not exceed 20 percent of the total 
                        outstanding securities of the entity, 
                        exclusive of any securities of such 
                        class held by or for the account of the 
                        entity or a subsidiary of the entity.
  (i) Disclosure of Pay Versus Performance.--The Commission 
shall, by rule, require each issuer to disclose in any proxy or 
consent solicitation material for an annual meeting of the 
shareholders of the issuer a clear description of any 
compensation required to be disclosed by the issuer under 
section 229.402 of title 17, Code of Federal Regulations (or 
any successor thereto), including, for any issuer other than an 
emerging growth company, information that shows the 
relationship between executive compensation actually paid and 
the financial performance of the issuer, taking into account 
any change in the value of the shares of stock and dividends of 
the issuer and any distributions. The disclosure under this 
subsection may include a graphic representation of the 
information required to be disclosed.
  (j) Disclosure of Hedging by Employees and Directors.--The 
Commission shall, by rule, require each issuer to disclose in 
any proxy or consent solicitation material for an annual 
meeting of the shareholders of the issuer whether any employee 
or member of the board of directors of the issuer, or any 
designee of such employee or member, is permitted to purchase 
financial instruments (including prepaid variable forward 
contracts, equity swaps, collars, and exchange funds) that are 
designed to hedge or offset any decrease in the market value of 
equity securities--
          (1) granted to the employee or member of the board of 
        directors by the issuer as part of the compensation of 
        the employee or member of the board of directors; or
          (2) held, directly or indirectly, by the employee or 
        member of the board of directors.
  (j) Shareholder Proposals by Proxies Not Permitted.--An 
issuer may not include in its proxy materials a shareholder 
proposal submitted by a person in such person's capacity as a 
proxy, representative, agent, or person otherwise acting on 
behalf of a shareholder.
  (k) Prohibition on Requiring a Single Ballot.--The Commission 
may not require that a solicitation of a proxy, consent, or 
authorization to vote a security of an issuer in an election of 
members of the board of directors of the issuer be made using a 
single ballot or card that lists both individuals nominated by 
(or on behalf of) the issuer and individuals nominated by (or 
on behalf of) other proponents and permits the person granting 
the proxy, consent, or authorization to select from among 
individuals in both groups.

SEC. 14A. SHAREHOLDER APPROVAL OF EXECUTIVE COMPENSATION.

  (a) Separate Resolution Required.--
          (1) In general.--[Not less frequently than once every 
        3 years] Each year in which there has been a material 
        change to the compensation of executives of an issuer 
        from the previous year, a proxy or consent or 
        authorization for an annual or other meeting of the 
        shareholders for which the proxy solicitation rules of 
        the Commission require compensation disclosure shall 
        include a separate resolution subject to shareholder 
        vote to approve the compensation of executives, as 
        disclosed pursuant to section 229.402 of title 17, Code 
        of Federal Regulations, or any successor thereto.
          [(2) Frequency of vote.--Not less frequently than 
        once every 6 years, a proxy or consent or authorization 
        for an annual or other meeting of the shareholders for 
        which the proxy solicitation rules of the Commission 
        require compensation disclosure shall include a 
        separate resolution subject to shareholder vote to 
        determine whether votes on the resolutions required 
        under paragraph (1) will occur every 1, 2, or 3 years.]
          [(3)] (2) Effective date.--The proxy or consent or 
        authorization for the first annual or other meeting of 
        the shareholders occurring after the end of the 6-month 
        period beginning on the date of enactment of this 
        section shall include--
                  (A) the resolution described in paragraph 
                (1); and
                  (B) a separate resolution subject to 
                shareholder vote to determine whether votes on 
                the resolutions required under paragraph (1) 
                will occur every 1, 2, or 3 years.
  (b) Shareholder Approval of Golden Parachute Compensation.--
          (1) Disclosure.--In any proxy or consent solicitation 
        material (the solicitation of which is subject to the 
        rules of the Commission pursuant to subsection (a)) for 
        a meeting of the shareholders occurring after the end 
        of the 6-month period beginning on the date of 
        enactment of this section, at which shareholders are 
        asked to approve an acquisition, merger, consolidation, 
        or proposed sale or other disposition of all or 
        substantially all the assets of an issuer, the person 
        making such solicitation shall disclose in the proxy or 
        consent solicitation material, in a clear and simple 
        form in accordance with regulations to be promulgated 
        by the Commission, any agreements or understandings 
        that such person has with any named executive officers 
        of such issuer (or of the acquiring issuer, if such 
        issuer is not the acquiring issuer) concerning any type 
        of compensation (whether present, deferred, or 
        contingent) that is based on or otherwise relates to 
        the acquisition, merger, consolidation, sale, or other 
        disposition of all or substantially all of the assets 
        of the issuer and the aggregate total of all such 
        compensation that may (and the conditions upon which it 
        may) be paid or become payable to or on behalf of such 
        executive officer.
          (2) Shareholder approval.--Any proxy or consent or 
        authorization relating to the proxy or consent 
        solicitation material containing the disclosure 
        required by paragraph (1) shall include a separate 
        resolution subject to shareholder vote to approve such 
        agreements or understandings and compensation as 
        disclosed, unless such agreements or understandings 
        have been subject to a shareholder vote under 
        subsection (a).
  (c) Rule of Construction.--The shareholder vote referred to 
in subsections (a) and (b) shall not be binding on the issuer 
or the board of directors of an issuer, and may not be 
construed--
          (1) as overruling a decision by such issuer or board 
        of directors;
          (2) to create or imply any change to the fiduciary 
        duties of such issuer or board of directors;
          (3) to create or imply any additional fiduciary 
        duties for such issuer or board of directors; or
          (4) to restrict or limit the ability of shareholders 
        to make proposals for inclusion in proxy materials 
        related to executive compensation.
  (d) Disclosure of Votes.--Every institutional investment 
manager subject to section 13(f) shall report at least annually 
how it voted on any shareholder vote pursuant to subsections 
(a) and (b), unless such vote is otherwise required to be 
reported publicly by rule or regulation of the Commission.
  (e) Exemption.--
           (1)  In general.--.--The Commission may, by rule or 
        order, exempt any other issuer or class of issuers from 
        the requirement under subsection (a) or (b). In 
        determining whether to make an exemption under this 
        subsection, the Commission shall take into account, 
        among other considerations, whether the requirements 
        under subsections (a) and (b) disproportionately 
        burdens small issuers.
          (2) Treatment of emerging growth companies.--
                  (A) In general.--An emerging growth company 
                shall be exempt from the requirements of 
                subsections (a) and (b).
                  (B) Compliance after termination of emerging 
                growth company treatment.--An issuer that was 
                an emerging growth company but is no longer an 
                emerging growth company shall include the first 
                separate resolution described under subsection 
                (a)(1) not later than the end of--
                          (i) in the case of an issuer that was 
                        an emerging growth company for less 
                        than 2 years after the date of first 
                        sale of common equity securities of the 
                        issuer pursuant to an effective 
                        registration statement under the 
                        Securities Act of 1933, the 3-year 
                        period beginning on such date; and
                          (ii) in the case of any other issuer, 
                        the 1-year period beginning on the date 
                        the issuer is no longer an emerging 
                        growth company.

           *       *       *       *       *       *       *


           registration and regulation of brokers and dealers

  Sec. 15. (a)(1) It shall be unlawful for any broker or dealer 
which is either a person other than a natural person or a 
natural person not associated with a broker or dealer which is 
a person other than a natural person (other than such a broker 
or dealer whose business is exclusively intrastate and who does 
not make use of any facility of a national securities exchange) 
to make use of the mails or any means or instrumentality of 
interstate commerce to effect any transactions in, or to induce 
or attempt to induce the purchase or sale of, any security 
(other than an exempted security or commercial paper, bankers' 
acceptances, or commercial bills) unless such broker or dealer 
is registered in accordance with subsection (b) of this 
section.
  (2) The Commission, by rule or order, as it deems consistent 
with the public interest and the protection of investors, may 
conditionally or unconditionally exempt from paragraph (1) of 
this subsection any broker or dealer or class of brokers or 
dealers specified in such rule or order.
  (b)(1) A broker or dealer may be registered by filing with 
the Commission an application for registration in such form and 
containing such information and documents concerning such 
broker or dealer and any persons associated with such broker or 
dealer as the Commission, by rule, may prescribe as necessary 
or appropriate in the public interest or for the protection of 
investors. Within forty-five days of the date of the filing of 
such application (or within such longer period as to which the 
applicant consents), the Commission shall--
          (A) by order grant registration, or
          (B) institute proceedings to determine whether 
        registration should be denied. Such proceedings shall 
        include notice of the grounds for denial under 
        consideration and opportunity for hearing and shall be 
        concluded within one hundred twenty days of the date of 
        the filing of the application for registration. At the 
        conclusion of such proceedings, the Commission, by 
        order, shall grant or deny such registration. The 
        Commission may extend the time for conclusion of such 
        proceedings for up to ninety days if it finds good 
        cause for such extension and publishes its reasons for 
        so finding or for such longer period as to which the 
        applicant consents.
The Commission shall grant such registration if the Commission 
finds that the requirements of this section are satisfied. The 
order granting registration shall not be effective until such 
broker or dealer has become a member of a registered securities 
association, or until such broker or dealer has become a member 
of a national securities exchange, if such broker or dealer 
effects transactions solely on that exchange, unless the 
Commission has exempted such broker or dealer, by rule or 
order, from such membership. The Commission shall deny such 
registration if it does not make such a finding or if it finds 
that if the applicant were so registered, its registration 
would be subject to suspension or revocation under paragraph 
(4) of this subsection.
  (2)(A) An application for registration of a broker or dealer 
to be formed or organized may be made by a broker or dealer to 
which the broker or dealer to be formed or organized is to be 
the successor. Such application, in such form as the 
Commission, by rule, may prescribe, shall contain such 
information and documents concerning the applicant, the 
successor, and any persons associated with the applicant or the 
successor, as the Commission, by rule, may prescribe as 
necessary or appropriate in the public interest or for the 
protection of investors. The grant or denial of registration to 
such an applicant shall be in accordance with the procedures 
set forth in paragraph (1) of this subsection. If the 
Commission grants such registration, the registration shall 
terminate on the forty-fifth day after the effective date 
thereof, unless prior thereto the successor shall, in 
accordance with such rules and regulations as the Commission 
may prescribe, adopt the application for registration as its 
own.
  (B) Any person who is a broker or dealer solely by reason of 
acting as a municipal securities dealer or municipal securities 
broker, who so acts through a separately identifiable 
department or division, and who so acted in such a manner on 
the date of enactment of the Securities Acts Amendments of 
1975, may, in accordance with such terms and conditions as the 
Commission, by rule, prescribes as necessary and appropriate in 
the public interest and for the protection of investors, 
register such separately identifiable department or division in 
accordance with this subsection. If any such department or 
division is so registered, the department or division and not 
such person himself shall be the broker or dealer for purposes 
of this title.
  (C) Within six months of the date of the granting of 
registration to a broker or dealer, the Commission, or upon the 
authorization and direction of the Commission, a registered 
securities association or national securities exchange of which 
such broker or dealer is a member, shall conduct an inspection 
of the broker or dealer to determine whether it is operating in 
conformity with the provisions of this title and the rules and 
regulations thereunder: Provided, however, That the Commission 
may delay such inspection of any class of brokers or dealers 
for a period not to exceed six months.
  (3) Any provision of this title (other than section 5 and 
subsection (a) of this section) which prohibits any act, 
practice, or course of business if the mails or any means or 
instrumentality of interstate commerce is used in connection 
therewith shall also prohibit any such act, practice, or course 
of business by any registered broker or dealer or any person 
acting on behalf of such a broker or dealer, irrespective of 
any use of the mails or any means or instrumentality of 
interstate commerce in connection therewith.
  (4) The Commission, by order, shall censure, place 
limitations on the activities, functions, or operations of, 
suspend for a period not exceeding twelve months, or revoke the 
registration of any broker or dealer if it finds, on the record 
after notice and opportunity for hearing, that such censure, 
placing of limitations, suspension, or revocation is in the 
public interest and that such broker or dealer, whether prior 
or subsequent to becoming such, or any person associated with 
such broker or dealer, whether prior or subsequent to becoming 
so associated--
          (A) has willfully made or caused to be made in any 
        application for registration or report required to be 
        filed with the Commission or with any other appropriate 
        regulatory agency under this title, or in any 
        proceeding before the Commission with respect to 
        registration, any statement which was at the time and 
        in the light of the circumstances under which it was 
        made false or misleading with respect to any material 
        fact, or has omitted to state in any such application 
        or report any material fact which is required to be 
        stated therein.
          (B) has been convicted within ten years preceding the 
        filing of any application for registration or at any 
        time thereafter of any felony or misdemeanor or of a 
        substantially equivalent crime by a foreign court of 
        competent jurisdiction which the Commission finds--
                  (i) involves the purchase or sale of any 
                security, the taking of a false oath, the 
                making of a false report, bribery, perjury, 
                burglary, any substantially equivalent activity 
                however denominated by the laws of the relevant 
                foreign government, or conspiracy to commit any 
                such offense;
                  (ii) arises out of the conduct of the 
                business of a broker, dealer, municipal 
                securities [dealer municipal advisor,,] dealer, 
                municipal advisor, government securities 
                broker, government securities dealer, 
                investment adviser, bank, insurance company, 
                fiduciary, transfer agent, nationally 
                recognized statistical rating organization, 
                foreign person performing a function 
                substantially equivalent to any of the above, 
                or entity or person required to be registered 
                under the Commodity Exchange Act (7 U.S.C. 1 et 
                seq.) or any substantially equivalent foreign 
                statute or regulation;
                  (iii) involves the larceny, theft, robbery, 
                extortion, forgery, counterfeiting, fraudulent 
                concealment, embezzlement, fraudulent 
                conversion, or misappropriation of funds, or 
                securities, or substantially equivalent 
                activity however denominated by the laws of the 
                relevant foreign government; or
                  (iv) involves the violation of section 152, 
                1341, 1342, or 1343 or chapter 25 or 47 of 
                title 18, United States Code, or a violation of 
                a substantially equivalent foreign statute.
          (C) is permanently or temporarily enjoined by order, 
        judgment, or decree of any court of competent 
        jurisdiction from acting as an investment adviser, 
        underwriter, broker, dealer, municipal securities 
        [dealer municipal advisor,,] dealer, municipal advisor, 
        government securities broker, government securities 
        dealer, security-based swap dealer, major security-
        based swap participant, transfer agent, nationally 
        recognized statistical rating organization, foreign 
        person performing a function substantially equivalent 
        to any of the above, or entity or person required to be 
        registered under the Commodity Exchange Act or any 
        substantially equivalent foreign statute or regulation, 
        or as an affiliated person or employee of any 
        investment company, bank, insurance company, foreign 
        entity substantially equivalent to any of the above, or 
        entity or person required to be registered under the 
        Commodity Exchange Act or any substantially equivalent 
        foreign statute or regulation, or from engaging in or 
        continuing any conduct or practice in connection with 
        any such activity, or in connection with the purchase 
        or sale of any security.
          (D) has willfully violated any provision of the 
        Securities Act of 1933, the Investment Advisers Act of 
        1940, the Investment Company Act of 1940, the Commodity 
        Exchange Act, this title, the rules or regulations 
        under any of such statutes, or the rules of the 
        Municipal Securities Rulemaking Board, or is unable to 
        comply with any such provision.
          (E) has willfully aided, abetted, counseled, 
        commanded, induced, or procured the violation by any 
        other person of any provision of the Securities Act of 
        1933, the Investment Advisers Act of 1940, the 
        Investment Company Act of 1940, the Commodity Exchange 
        Act, this title, the rules or regulations under any of 
        such statutes, or the rules of the Municipal Securities 
        Rulemaking Board, or has failed reasonably to 
        supervise, with a view to preventing violations of the 
        provisions of such statutes, rules, and regulations, 
        another person who commits such a violation, if such 
        other person is subject to his supervision. For the 
        purposes of this subparagraph (E) no person shall be 
        deemed to have failed reasonably to supervise any other 
        person, if--
                  (i) there have been established procedures, 
                and a system for applying such procedures, 
                which would reasonably be expected to prevent 
                and detect, insofar as practicable, any such 
                violation by such other person, and
                  (ii) such person has reasonably discharged 
                the duties and obligations incumbent upon him 
                by reason of such procedures and system without 
                reasonable cause to believe that such 
                procedures and system were not being complied 
                with.
          (F) is subject to any order of the Commission barring 
        or suspending the right of the person to be associated 
        with a broker, dealer, security-based swap dealer, or a 
        major security-based swap participant;
          (G) has been found by a foreign financial regulatory 
        authority to have--
                  (i) made or caused to be made in any 
                application for registration or report required 
                to be filed with a foreign financial regulatory 
                authority, or in any proceeding before a 
                foreign financial regulatory authority with 
                respect to registration, any statement that was 
                at the time and in the light of the 
                circumstances under which it was made false or 
                misleading with respect to any material fact, 
                or has omitted to state in any application or 
                report to the foreign financial regulatory 
                authority any material fact that is required to 
                be stated therein;
                  (ii) violated any foreign statute or 
                regulation regarding transactions in 
                securities, or contracts of sale of a commodity 
                for future delivery, traded on or subject to 
                the rules of a contract market or any board of 
                trade;
                  (iii) aided, abetted, counseled, commanded, 
                induced, or procured the violation by any 
                person of any provision of any statutory 
                provisions enacted by a foreign government, or 
                rules or regulations thereunder, empowering a 
                foreign financial regulatory authority 
                regarding transactions in securities, or 
                contracts of sale of a commodity for future 
                delivery, traded on or subject to the rules of 
                a contract market or any board of trade, or has 
                been found, by a foreign financial regulatory 
                authority, to have failed reasonably to 
                supervise, with a view to preventing violations 
                of such statutory provisions, rules, and 
                regulations, another person who commits such a 
                violation, if such other person is subject to 
                his supervision; or
          (H) is subject to any final order of a State 
        securities commission (or any agency or officer 
        performing like functions), State authority that 
        supervises or examines banks, savings associations, or 
        credit unions, State insurance commission (or any 
        agency or office performing like functions), an 
        appropriate Federal banking agency (as defined in 
        section 3 of the Federal Deposit Insurance Act (12 
        U.S.C. 1813(q))), or the National Credit Union 
        Administration, that--
                  (i) bars such person from association with an 
                entity regulated by such commission, authority, 
                agency, or officer, or from engaging in the 
                business of securities, insurance, banking, 
                savings association activities, or credit union 
                activities; or
                  (ii) constitutes a final order based on 
                violations of any laws or regulations that 
                prohibit fraudulent, manipulative, or deceptive 
                conduct.
  (5) Pending final determination whether any registration 
under this subsection shall be revoked, the Commission, by 
order, may suspend such registration, if such suspension 
appears to the Commission, after notice and opportunity for 
hearing, to be necessary or appropriate in the public interest 
or for the protection of investors. Any registered broker or 
dealer may, upon such terms and conditions as the Commission 
deems necessary or appropriate in the public interest or for 
the protection of investors, withdraw from registration by 
filing a written notice of withdrawal with the Commission. If 
the Commission finds that any registered broker or dealer is no 
longer in existence or has ceased to do business as a broker or 
dealer, the Commission, by order, shall cancel the registration 
of such broker or dealer.
  (6)(A) With respect to any person who is associated, who is 
seeking to become associated, or, at the time of the alleged 
misconduct, who was associated or was seeking to become 
associated with a broker or dealer, or any person 
participating, or, at the time of the alleged misconduct, who 
was participating, in an offering of any penny stock, the 
Commission, by order, shall censure, place limitations on the 
activities or functions of such person, or suspend for a period 
not exceeding 12 months, or bar any such person from being 
associated with a broker, dealer, investment adviser, municipal 
securities dealer, municipal advisor, transfer agent, or 
nationally recognized statistical rating organization, or from 
participating in an offering of penny stock, if the Commission 
finds, on the record after notice and opportunity for a 
hearing, that such censure, placing of limitations, suspension, 
or bar is in the public interest and that such person--
          (i) has committed or omitted any act, or is subject 
        to an order or finding, [enumerated in subparagraph 
        (A), (D), (E), (H), or (G) of paragraph (4) of this 
        subsection;] enumerated in subparagraph (A), (D), (E), 
        (G), or (H) of paragraph (4) of this subsection;
          (ii) has been convicted of any offense specified in 
        subparagraph (B) of such paragraph (4) within 10 years 
        of the commencement of the proceedings under this 
        paragraph; or
          (iii) is enjoined from any action, conduct, or 
        practice specified in subparagraph (C) of such 
        paragraph (4).
  (B) It shall be unlawful--
          (i) for any person as to whom an order under 
        subparagraph (A) is in effect, without the consent of 
        the Commission, willfully to become, or to be, 
        associated with a broker or dealer in contravention of 
        such order, or to participate in an offering of penny 
        stock in contravention of such order;
          (ii) for any broker or dealer to permit such a 
        person, without the consent of the Commission, to 
        become or remain, a person associated with the broker 
        or dealer in contravention of such order, if such 
        broker or dealer knew, or in the exercise of reasonable 
        care should have known, of such order; or
          (iii) for any broker or dealer to permit such a 
        person, without the consent of the Commission, to 
        participate in an offering of penny stock in 
        contravention of such order, if such broker or dealer 
        knew, or in the exercise of reasonable care should have 
        known, of such order and of such participation.
  (C) For purposes of this paragraph, the term ``person 
participating in an offering of penny stock'' includes any 
person acting as any promoter, finder, consultant, agent, or 
other person who engages in activities with a broker, dealer, 
or issuer for purposes of the issuance or trading in any penny 
stock, or inducing or attempting to induce the purchase or sale 
of any penny stock. The Commission may, by rule or regulation, 
define such term to include other activities, and may, by rule, 
regulation, or order, exempt any person or class of persons, in 
whole or in part, conditionally or unconditionally, from such 
term.
  (7) No registered broker or dealer or government securities 
broker or government securities dealer registered (or required 
to register) under section 15C(a)(1)(A) shall effect any 
transaction in, or induce the purchase or sale of, any security 
unless such broker or dealer meets such standards of 
operational capability and such broker or dealer and all 
natural persons associated with such broker or dealer meet such 
standards of training, experience, competence, and such other 
qualifications as the Commission finds necessary or appropriate 
in the public interest or for the protection of investors. The 
Commission shall establish such standards by rules and 
regulations, which may--
          (A) specify that all or any portion of such standards 
        shall be applicable to any class of brokers and dealers 
        and persons associated with brokers and dealers;
          (B) require persons in any such class to pass tests 
        prescribed in accordance with such rules and 
        regulations, which tests shall, with respect to any 
        class of partners, officers, or supervisory employees 
        (which latter term may be defined by the Commission's 
        rules and regulations and as so defined shall include 
        branch managers of brokers or dealers) engaged in the 
        management of the broker or dealer, include questions 
        relating to bookkeeping, accounting, internal control 
        over cash and securities, supervision of employees, 
        maintenance of records, and other appropriate matters; 
        and
          (C) provide that persons in any such class other than 
        brokers and dealers and partners, officers, and 
        supervisory employees of brokers or dealers, may be 
        qualified solely on the basis of compliance with such 
        standards of training and such other qualifications as 
        the Commission finds appropriate.
The Commission, by rule, may prescribe reasonable fees and 
charges to defray its costs in carrying out this paragraph, 
including, but not limited to, fees for any test administered 
by it or under its direction. The Commission may cooperate with 
registered securities associations and national securities 
exchanges in devising and administering tests and may require 
registered brokers and dealers and persons associated with such 
brokers and dealers to pass tests administered by or on behalf 
of any such association or exchange and to pay such association 
or exchange reasonable fees or charges to defray the costs 
incurred by such association or exchange in administering such 
tests.
  (8) It shall be unlawful for any registered broker or dealer 
to effect any transaction in, or induce or attempt to induce 
the purchase or sale of, any security (other than or commercial 
paper, bankers' acceptances, or commercial bills), unless such 
broker or dealer is a member of a securities association 
registered pursuant to section 15A of this title or effects 
transactions in securities solely on a national securities 
exchange of which it is a member.
  (9) The Commission by rule or order, as it deems consistent 
with the public interest and the protection of investors, may 
conditionally or unconditionally exempt from paragraph (8) of 
this subsection any broker or dealer or class of brokers or 
dealers specified in such rule or order.
  (10) For the purposes of determining whether a person is 
subject to a statutory disqualification under section 6(c)(2), 
15A(g)(2), or 17A(b)(4)(A) of this title, the term 
``Commission'' in paragraph (4)(B) of this subsection shall 
mean ``exchange'', ``association'', or ``clearing agency'', 
respectively.
          (11) Broker/dealer registration with respect to 
        transactions in security futures products.--
                  (A) Notice registration.--
                          (i) Contents of notice.--
                        Notwithstanding paragraphs (1) and (2), 
                        a broker or dealer required to register 
                        only because it effects transactions in 
                        security futures products on an 
                        exchange registered pursuant to section 
                        6(g) may register for purposes of this 
                        section by filing with the Commission a 
                        written notice in such form and 
                        containing such information concerning 
                        such broker or dealer and any persons 
                        associated with such broker or dealer 
                        as the Commission, by rule, may 
                        prescribe as necessary or appropriate 
                        in the public interest or for the 
                        protection of investors. A broker or 
                        dealer may not register under this 
                        paragraph unless that broker or dealer 
                        is a member of a national securities 
                        association registered under section 
                        15A(k).
                          (ii) Immediate effectiveness.--Such 
                        registration shall be effective 
                        contemporaneously with the submission 
                        of notice, in written or electronic 
                        form, to the Commission, except that 
                        such registration shall not be 
                        effective if the registration would be 
                        subject to suspension or revocation 
                        under paragraph (4).
                          (iii) Suspension.--Such registration 
                        shall be suspended immediately if a 
                        national securities association 
                        registered pursuant to section 15A(k) 
                        of this title suspends the membership 
                        of that broker or dealer.
                          (iv) Termination.--Such registration 
                        shall be terminated immediately if any 
                        of the above stated conditions for 
                        registration set forth in this 
                        paragraph are no longer satisfied.
                  (B) Exemptions for registered brokers and 
                dealers.--A broker or dealer registered 
                pursuant to the requirements of subparagraph 
                (A) shall be exempt from the following 
                provisions of this title and the rules 
                thereunder with respect to transactions in 
                security futures products:
                          (i) Section 8.
                          (ii) Section 11.
                          (iii) Subsections (c)(3) and (c)(5) 
                        of this section.
                          (iv) Section 15B.
                          (v) Section 15C.
                          (vi) Subsections (d), (e), (f), (g), 
                        (h), and (i) of section 17.
          (12) Exemption for security futures product exchange 
        members.--
                  (A) Registration exemption.--A natural person 
                shall be exempt from the registration 
                requirements of this section if such person--
                          (i) is a member of a designated 
                        contract market registered with the 
                        Commission as an exchange pursuant to 
                        section 6(g);
                          (ii) effects transactions only in 
                        securities on the exchange of which 
                        such person is a member; and
                          (iii) does not directly accept or 
                        solicit orders from public customers or 
                        provide advice to public customers in 
                        connection with the trading of security 
                        futures products.
                  (B) Other exemptions.--A natural person 
                exempt from registration pursuant to 
                subparagraph (A) shall also be exempt from the 
                following provisions of this title and the 
                rules thereunder:
                          (i) Section 8.
                          (ii) Section 11.
                          (iii) Subsections (c)(3), (c)(5), and 
                        (e) of this section.
                          (iv) Section 15B.
                          (v) Section 15C.
                          (vi) Subsections (d), (e), (f), (g), 
                        (h), and (i) of section 17.
          (13) Registration exemption for merger and 
        acquisition brokers.--
                  (A) In general.--Except as provided in 
                subparagraph (B), an M&A broker shall be exempt 
                from registration under this section.
                  (B) Excluded activities.--An M&A broker is 
                not exempt from registration under this 
                paragraph if such broker does any of the 
                following:
                          (i) Directly or indirectly, in 
                        connection with the transfer of 
                        ownership of an eligible privately held 
                        company, receives, holds, transmits, or 
                        has custody of the funds or securities 
                        to be exchanged by the parties to the 
                        transaction.
                          (ii) Engages on behalf of an issuer 
                        in a public offering of any class of 
                        securities that is registered, or is 
                        required to be registered, with the 
                        Commission under section 12 or with 
                        respect to which the issuer files, or 
                        is required to file, periodic 
                        information, documents, and reports 
                        under subsection (d).
                          (iii) Engages on behalf of any party 
                        in a transaction involving a public 
                        shell company.
                  (C) Disqualifications.--An M&A broker is not 
                exempt from registration under this paragraph 
                if such broker is subject to--
                          (i) suspension or revocation of 
                        registration under paragraph (4);
                          (ii) a statutory disqualification 
                        described in section 3(a)(39);
                          (iii) a disqualification under the 
                        rules adopted by the Commission under 
                        section 926 of the Investor Protection 
                        and Securities Reform Act of 2010 (15 
                        U.S.C. 77d note); or
                          (iv) a final order described in 
                        paragraph (4)(H).
                  (D) Rule of construction.--Nothing in this 
                paragraph shall be construed to limit any other 
                authority of the Commission to exempt any 
                person, or any class of persons, from any 
                provision of this title, or from any provision 
                of any rule or regulation thereunder.
                  (E) Definitions.--In this paragraph:
                          (i) Control.--The term ``control'' 
                        means the power, directly or 
                        indirectly, to direct the management or 
                        policies of a company, whether through 
                        ownership of securities, by contract, 
                        or otherwise. There is a presumption of 
                        control for any person who--
                                  (I) is a director, general 
                                partner, member or manager of a 
                                limited liability company, or 
                                officer exercising executive 
                                responsibility (or has similar 
                                status or functions);
                                  (II) has the right to vote 20 
                                percent or more of a class of 
                                voting securities or the power 
                                to sell or direct the sale of 
                                20 percent or more of a class 
                                of voting securities; or
                                  (III) in the case of a 
                                partnership or limited 
                                liability company, has the 
                                right to receive upon 
                                dissolution, or has 
                                contributed, 20 percent or more 
                                of the capital.
                          (ii) Eligible privately held 
                        company.--The term ``eligible privately 
                        held company'' means a privately held 
                        company that meets both of the 
                        following conditions:
                                  (I) The company does not have 
                                any class of securities 
                                registered, or required to be 
                                registered, with the Commission 
                                under section 12 or with 
                                respect to which the company 
                                files, or is required to file, 
                                periodic information, 
                                documents, and reports under 
                                subsection (d).
                                  (II) In the fiscal year 
                                ending immediately before the 
                                fiscal year in which the 
                                services of the M&A broker are 
                                initially engaged with respect 
                                to the securities transaction, 
                                the company meets either or 
                                both of the following 
                                conditions (determined in 
                                accordance with the historical 
                                financial accounting records of 
                                the company):
                                          (aa) The earnings of 
                                        the company before 
                                        interest, taxes, 
                                        depreciation, and 
                                        amortization are less 
                                        than $25,000,000.
                                          (bb) The gross 
                                        revenues of the company 
                                        are less than 
                                        $250,000,000.
                          (iii) M&A broker.--The term ``M&A 
                        broker'' means a broker, and any person 
                        associated with a broker, engaged in 
                        the business of effecting securities 
                        transactions solely in connection with 
                        the transfer of ownership of an 
                        eligible privately held company, 
                        regardless of whether the broker acts 
                        on behalf of a seller or buyer, through 
                        the purchase, sale, exchange, issuance, 
                        repurchase, or redemption of, or a 
                        business combination involving, 
                        securities or assets of the eligible 
                        privately held company, if the broker 
                        reasonably believes that--
                                  (I) upon consummation of the 
                                transaction, any person 
                                acquiring securities or assets 
                                of the eligible privately held 
                                company, acting alone or in 
                                concert, will control and, 
                                directly or indirectly, will be 
                                active in the management of the 
                                eligible privately held company 
                                or the business conducted with 
                                the assets of the eligible 
                                privately held company; and
                                  (II) if any person is offered 
                                securities in exchange for 
                                securities or assets of the 
                                eligible privately held 
                                company, such person will, 
                                prior to becoming legally bound 
                                to consummate the transaction, 
                                receive or have reasonable 
                                access to the most recent 
                                fiscal year-end financial 
                                statements of the issuer of the 
                                securities as customarily 
                                prepared by the management of 
                                the issuer in the normal course 
                                of operations and, if the 
                                financial statements of the 
                                issuer are audited, reviewed, 
                                or compiled, any related 
                                statement by the independent 
                                accountant, a balance sheet 
                                dated not more than 120 days 
                                before the date of the offer, 
                                and information pertaining to 
                                the management, business, 
                                results of operations for the 
                                period covered by the foregoing 
                                financial statements, and 
                                material loss contingencies of 
                                the issuer.
                          (iv) Public shell company.--The term 
                        ``public shell company'' is a company 
                        that at the time of a transaction with 
                        an eligible privately held company--
                                  (I) has any class of 
                                securities registered, or 
                                required to be registered, with 
                                the Commission under section 12 
                                or that is required to file 
                                reports pursuant to subsection 
                                (d);
                                  (II) has no or nominal 
                                operations; and
                                  (III) has--
                                          (aa) no or nominal 
                                        assets;
                                          (bb) assets 
                                        consisting solely of 
                                        cash and cash 
                                        equivalents; or
                                          (cc) assets 
                                        consisting of any 
                                        amount of cash and cash 
                                        equivalents and nominal 
                                        other assets.
                  (F) Inflation adjustment.--
                          (i) In general.--On the date that is 
                        5 years after the date of the enactment 
                        of this paragraph, and every 5 years 
                        thereafter, each dollar amount in 
                        subparagraph (E)(ii)(II) shall be 
                        adjusted by--
                                  (I) dividing the annual value 
                                of the Employment Cost Index 
                                For Wages and Salaries, Private 
                                Industry Workers (or any 
                                successor index), as published 
                                by the Bureau of Labor 
                                Statistics, for the calendar 
                                year preceding the calendar 
                                year in which the adjustment is 
                                being made by the annual value 
                                of such index (or successor) 
                                for the calendar year ending 
                                December 31, 2012; and
                                  (II) multiplying such dollar 
                                amount by the quotient obtained 
                                under subclause (I).
                          (ii) Rounding.--Each dollar amount 
                        determined under clause (i) shall be 
                        rounded to the nearest multiple of 
                        $100,000.
  (c)(1)(A) No broker or dealer shall make use of the mails or 
any means or instrumentality of interstate commerce to effect 
any transaction in, or to induce or attempt to induce the 
purchase or sale of, any security (other than commercial paper, 
bankers' acceptances, or commercial bills), or any security-
based swap agreement by means of any manipulative, deceptive, 
or other fraudulent device or contrivance.
  (B) No broker, dealer, or municipal securities dealer shall 
make use of the mails or any means or instrumentality of 
interstate commerce to effect any transaction in, or to induce 
or attempt to induce the purchase or sale of, any municipal 
security or any security-based swap agreement involving a 
municipal security by means of any manipulative, deceptive, or 
other fraudulent device or contrivance.
  (C) No government securities broker or government securities 
dealer shall make use of the mails or any means or 
instrumentality of interstate commerce to effect any 
transaction in, or to induce or to attempt to induce the 
purchase or sale of, any government security or any security-
based swap agreement involving a government security by means 
of any manipulative, deceptive, or other fraudulent device or 
contrivance.
  (2)(A) No broker or dealer shall make use of the mails or any 
means or instrumentality of interstate commerce to effect any 
transaction in, or to induce or attempt to induce the purchase 
or sale of, any security (other than an exempted security or 
commercial paper, bankers' acceptances, or commercial bills) 
otherwise than on a national securities exchange of which it is 
a member, in connection with which such broker or dealer 
engages in any fraudulent, deceptive, or manipulative act or 
practice, or makes any fictitious quotation.
  (B) No broker, dealer, or municipal securities dealer shall 
make use of the mails or any means or instrumentality of 
interstate commerce to effect any transaction in, or to induce 
or attempt to induce the purchase or sale of, any municipal 
security in connection with which such broker, dealer, or 
municipal securities dealer engages in any fraudulent, 
deceptive, or manipulative act or practice, or makes any 
fictitious quotation.
  (C) No government securities broker or government securities 
dealer shall make use of the mails or any means or 
instrumentality of interstate commerce to effect any 
transaction in, or induce or attempt to induce the purchase or 
sale of, any government security in connection with which such 
government securities broker or government securities dealer 
engages in any fraudulent, deceptive, or manipulative act or 
practice, or makes any fictitious quotation.
  (D) The Commission shall, for the purposes of this paragraph, 
by rules and regulations define, and prescribe means reasonably 
designed to prevent, such acts and practices as are fraudulent, 
deceptive, or manipulative and such quotations as are 
fictitious.
  (E) The Commission shall, prior to adopting any rule or 
regulation under subparagraph (C), consult with and consider 
the views of the Secretary of the Treasury and each appropriate 
regulatory agency. If the Secretary of the Treasury or any 
appropriate regulatory agency comments in writing on a proposed 
rule or regulation of the Commission under such subparagraph 
(C) that has been published for comment, the Commission shall 
respond in writing to such written comment before adopting the 
proposed rule. If the Secretary of the Treasury determines, and 
notifies the Commission, that such rule or regulation, if 
implemented, would, or as applied does (i) adversely affect the 
liquidity or efficiency of the market for government 
securities; or (ii) impose any burden on competition not 
necessary or appropriate in furtherance of the purposes of this 
section, the Commission shall, prior to adopting the proposed 
rule or regulation, find that such rule or regulation is 
necessary and appropriate in furtherance of the purposes of 
this section notwithstanding the Secretary's determination.
  (3)(A) No broker or dealer (other than a government 
securities broker or government securities dealer, except a 
registered broker or dealer) shall make use of the mails or any 
means or instrumentality of interstate commerce to effect any 
transaction in, or to induce or attempt to induce the purchase 
or sale of, any security (other than an exempted security 
(except a government security) or commercial paper, bankers' 
acceptances, or commercial bills) in contravention of such 
rules and regulations as the Commission shall prescribe as 
necessary or appropriate in the public interest or for the 
protection of investors to provide safeguards with respect to 
the financial responsibility and related practices of brokers 
and dealers including, but not limited to, the acceptance of 
custody and use of customers' securities and the carrying and 
use of customers' deposits or credit balances. Such rules and 
regulations shall (A) require the maintenance of reserves with 
respect to customers' deposits or credit balances, and (B) no 
later than September 1, 1975, establish minimum financial 
responsibility requirements for all brokers and dealers.
  (B) Consistent with this title, the Commission, in 
consultation with the Commodity Futures Trading Commission, 
shall issue such rules, regulations, or orders as are necessary 
to avoid duplicative or conflicting regulations applicable to 
any broker or dealer registered with the Commission pursuant to 
section 15(b) (except paragraph (11) thereof), that is also 
registered with the Commodity Futures Trading Commission 
pursuant to section 4f(a) of the Commodity Exchange Act (except 
paragraph (2) thereof), with respect to the application of: (i) 
the provisions of section 8, section 15(c)(3), and section 17 
of this title and the rules and regulations thereunder related 
to the treatment of customer funds, securities, or property, 
maintenance of books and records, financial reporting, or other 
financial responsibility rules, involving security futures 
products; and (ii) similar provisions of the Commodity Exchange 
Act and rules and regulations thereunder involving security 
futures products.
          (C) Notwithstanding any provision of sections 
        2(a)(1)(C)(i) or 4d(a)(2) of the Commodity Exchange Act 
        and the rules and regulations thereunder, and pursuant 
        to an exemption granted by the Commission under section 
        36 of this title or pursuant to a rule or regulation, 
        cash and securities may be held by a broker or dealer 
        registered pursuant to subsection (b)(1) and also 
        registered as a futures commission merchant pursuant to 
        section 4f(a)(1) of the Commodity Exchange Act, in a 
        portfolio margining account carried as a futures 
        account subject to section 4d of the Commodity Exchange 
        Act and the rules and regulations thereunder, pursuant 
        to a portfolio margining program approved by the 
        Commodity Futures Trading Commission, and subject to 
        subchapter IV of chapter 7 of title 11 of the United 
        States Code and the rules and regulations thereunder. 
        The Commission shall consult with the Commodity Futures 
        Trading Commission to adopt rules to ensure that such 
        transactions and accounts are subject to comparable 
        requirements to the extent practicable for similar 
        products.
  (4) If the Commission finds, after notice and opportunity for 
a hearing, that any person subject to the provisions of section 
12, 13, 14, or subsection (d) of section 15 of this title or 
any rule or regulation thereunder has failed to comply with any 
such provision, rule, or regulation in any material respect, 
the Commission may publish its findings and issue an order 
requiring such person, and any person who was a cause of the 
failure to comply due to an act or omission the person knew or 
should have known would contribute to the failure to comply, to 
comply, or to take steps to effect compliance, with such 
provision or such rule or regulation thereunder upon such terms 
and conditions and within such time as the Commission may 
specify in such order.
  (5) No dealer (other than a specialist registered on a 
national securities exchange) acting in the capacity of market 
maker or otherwise shall make use of the mails or any means or 
instrumentality of interstate commerce to effect any 
transaction in, or to induce or attempt to induce the purchase 
or sale of, any security (other than an exempted security or a 
municipal security) in contravention of such specified and 
appropriate standards with respect to dealing as the 
Commission, by rule, shall prescribe as necessary or 
appropriate in the public interest and for the protection of 
investors, to maintain fair and orderly markets, or to remove 
impediments to and perfect the mechanism of a national market 
system. Under the rules of the Commission a dealer in a 
security may be prohibited from acting as broker in that 
security.
  (6) No broker or dealer shall make use of the mails or any 
means or instrumentality of interstate commerce to effect any 
transaction in, or to induce or attempt to induce the purchase 
or sale of, any security (other than an exempted security, 
municipal security, commercial paper, bankers' acceptances, or 
commercial bills) in contravention of such rules and 
regulations as the Commission shall prescribe as necessary or 
appropriate in the public interest and for the protection of 
investors or to perfect or remove impediments to a national 
system for the prompt and accurate clearance and settlement of 
securities transactions, with respect to the time and method 
of, and the form and format of documents used in connection 
with, making settlements of and payments for transactions in 
securities, making transfers and deliveries of securities, and 
closing accounts. Nothing in this paragraph shall be construed 
(A) to affect the authority of the Board of Governors of the 
Federal Reserve System, pursuant to section 7 of this title, to 
prescribe rules and regulations for the purpose of preventing 
the excessive use of credit for the purchase or carrying of 
securities, or (B) to authorize the Commission to prescribe 
rules or regulations for such purpose.
  (7) In connection with any bid for or purchase of a 
government security related to an offering of government 
securities by or on behalf of an issuer, no government 
securities broker, government securities dealer, or bidder for 
or purchaser of securities in such offering shall knowingly or 
willfully make any false or misleading written statement or 
omit any fact necessary to make any written statement made not 
misleading.
  (8) Prohibition of referral fees.--No broker or dealer, or 
person associated with a broker or dealer, may solicit or 
accept, directly or indirectly, remuneration for assisting an 
attorney in obtaining the representation of any person in any 
private action arising under this title or under the Securities 
Act of 1933.
  (d) Supplementary and Periodic Information.--
          (1) In general.--Each issuer which has filed a 
        registration statement containing an undertaking which 
        is or becomes operative under this subsection as in 
        effect prior to the date of enactment of the Securities 
        Acts Amendments of 1964, and each issuer which shall 
        after such date file a registration statement which has 
        become effective pursuant to the Securities Act of 
        1933, as amended, shall file with the Commission, in 
        accordance with such rules and regulations as the 
        Commission may prescribe as necessary or appropriate in 
        the public interest or for the protection of investors, 
        such supplementary and periodic information, documents, 
        and reports as may be required pursuant to section 13 
        of this title in respect of a security registered 
        pursuant to section 12 of this title. The duty to file 
        under this subsection shall be automatically suspended 
        if and so long as any issue of securities of such 
        issuer is registered pursuant to section 12 of this 
        title. The duty to file under this subsection shall 
        also be automatically suspended as to any fiscal year, 
        other than the fiscal year within which such 
        registration statement became effective, if, at the 
        beginning of such fiscal year, the securities of each 
        class, other than any class of asset-backed securities, 
        to which the registration statement relates are held of 
        record by less than [300 persons, or, in the case of a 
        bank, a savings and loan holding company (as defined in 
        section 10 of the Home Owners' Loan Act), or a bank 
        holding company, as such term is defined in section 2 
        of the Bank Holding Company Act of 1956 (12 U.S.C. 
        1841), 1,200 persons persons] 1,200 persons. For the 
        purposes of this subsection, the term ``class'' shall 
        be construed to include all securities of an issuer 
        which are of substantially similar character and the 
        holders of which enjoy substantially similar rights and 
        privileges. The Commission may, for the purpose of this 
        subsection, define by rules and regulations the term 
        ``held of record'' as it deems necessary or appropriate 
        in the public interest or for the protection of 
        investors in order to prevent circumvention of the 
        provisions of this subsection. Nothing in this 
        subsection shall apply to securities issued by a 
        foreign government or political subdivision thereof.
          (2) Asset-backed securities.--
                  (A) Suspension of duty to file.--The 
                Commission may, by rule or regulation, provide 
                for the suspension or termination of the duty 
                to file under this subsection for any class of 
                asset-backed security, on such terms and 
                conditions and for such period or periods as 
                the Commission deems necessary or appropriate 
                in the public interest or for the protection of 
                investors.
                  (B) Classification of issuers.--The 
                Commission may, for purposes of this 
                subsection, classify issuers and prescribe 
                requirements appropriate for each class of 
                issuers of asset-backed securities.
  (e) Notices to Customers Regarding Securities Lending.--Every 
registered broker or dealer shall provide notice to its 
customers that they may elect not to allow their fully paid 
securities to be used in connection with short sales. If a 
broker or dealer uses a customer's securities in connection 
with short sales, the broker or dealer shall provide notice to 
its customer that the broker or dealer may receive compensation 
in connection with lending the customer's securities. The 
Commission, by rule, as it deems necessary or appropriate in 
the public interest and for the protection of investors, may 
prescribe the form, content, time, and manner of delivery of 
any notice required under this paragraph.
  (f) The Commission, by rule, as it deems necessary or 
appropriate in the public interest and for the protection of 
investors or to assure equal regulation, may require any member 
of a national securities exchange not required to register 
under section 15 of this title and any person associated with 
any such member to comply with any provision of this title 
(other than section 15(a)) or the rules or regulations 
thereunder which by its terms regulates or prohibits any act, 
practice, or course of business by a ``broker or dealer'' or 
``registered broker or dealer'' or a ``person associated with a 
broker or dealer,'' respectively.
  (g) Every registered broker or dealer shall establish, 
maintain, and enforce written policies and procedures 
reasonably designed, taking into consideration the nature of 
such broker's or dealer's business, to prevent the misuse in 
violation of this title, or the rules or regulations 
thereunder, of material, nonpublic information by such broker 
or dealer or any person associated with such broker or dealer. 
The Commission, as it deems necessary or appropriate in the 
public interest or for the protection of investors, shall adopt 
rules or regulations to require specific policies or procedures 
reasonably designed to prevent misuse in violation of this 
title (or the rules or regulations thereunder) of material, 
nonpublic information.
  (h) Requirements for Transactions in Penny Stocks.--
          (1) In general.--No broker or dealer shall make use 
        of the mails or any means or instrumentality of 
        interstate commerce to effect any transaction in, or to 
        induce or attempt to induce the purchase or sale of, 
        any penny stock by any customer except in accordance 
        with the requirements of this subsection and the rules 
        and regulations prescribed under this subsection.
          (2) Risk disclosure with respect to penny stocks.--
        Prior to effecting any transaction in any penny stock, 
        a broker or dealer shall give the customer a risk 
        disclosure document that--
                  (A) contains a description of the nature and 
                level of risk in the market for penny stocks in 
                both public offerings and secondary trading;
                  (B) contains a description of the broker's or 
                dealer's duties to the customer and of the 
                rights and remedies available to the customer 
                with respect to violations of such duties or 
                other requirements of Federal securities laws;
                  (C) contains a brief, clear, narrative 
                description of a dealer market, including 
                ``bid'' and ``ask'' prices for penny stocks and 
                the significance of the spread between the bid 
                and ask prices;
                  (D) contains the toll free telephone number 
                for inquiries on disciplinary actions 
                established pursuant to section 15A(i) of this 
                title;
                  (E) defines significant terms used in the 
                disclosure document or in the conduct of 
                trading in penny stocks; and
                  (F) contains such other information, and is 
                in such form (including language, type size, 
                and format), as the Commission shall require by 
                rule or regulation.
          (3) Commission rules relating to disclosure.--The 
        Commission shall adopt rules setting forth additional 
        standards for the disclosure by brokers and dealers to 
        customers of information concerning transactions in 
        penny stocks. Such rules--
                  (A) shall require brokers and dealers to 
                disclose to each customer, prior to effecting 
                any transaction in, and at the time of 
                confirming any transaction with respect to any 
                penny stock, in accordance with such procedures 
                and methods as the Commission may require 
                consistent with the public interest and the 
                protection of investors--
                          (i) the bid and ask prices for penny 
                        stock, or such other information as the 
                        Commission may, by rule, require to 
                        provide customers with more useful and 
                        reliable information relating to the 
                        price of such stock;
                          (ii) the number of shares to which 
                        such bid and ask prices apply, or other 
                        comparable information relating to the 
                        depth and liquidity of the market for 
                        such stock; and
                          (iii) the amount and a description of 
                        any compensation that the broker or 
                        dealer and the associated person 
                        thereof will receive or has received in 
                        connection with such transaction;
                  (B) shall require brokers and dealers to 
                provide, to each customer whose account with 
                the broker or dealer contains penny stocks, a 
                monthly statement indicating the market value 
                of the penny stocks in that account or 
                indicating that the market value of such stock 
                cannot be determined because of the 
                unavailability of firm quotes; and
                  (C) may, as the Commission finds necessary or 
                appropriate in the public interest or for the 
                protection of investors, require brokers and 
                dealers to disclose to customers additional 
                information concerning transactions in penny 
                stocks.
          (4) Exemptions.--The Commission, as it determines 
        consistent with the public interest and the protection 
        of investors, may by rule, regulation, or order exempt 
        in whole or in part, conditionally or unconditionally, 
        any person or class of persons, or any transaction or 
        class of transactions, from the requirements of this 
        subsection. Such exemptions shall include an exemption 
        for brokers and dealers based on the minimal percentage 
        of the broker's or dealer's commissions, commission-
        equivalents, and markups received from transactions in 
        penny stocks.
          (5) Regulations.--It shall be unlawful for any person 
        to violate such rules and regulations as the Commission 
        shall prescribe in the public interest or for the 
        protection of investors or to maintain fair and orderly 
        markets--
                  (A) as necessary or appropriate to carry out 
                this subsection; or
                  (B) as reasonably designed to prevent 
                fraudulent, deceptive, or manipulative acts and 
                practices with respect to penny stocks.
  (i) Limitations on State Law.--
          (1) Capital, margin, books and records, bonding, and 
        reports.--No law, rule, regulation, or order, or other 
        administrative action of any State or political 
        subdivision thereof shall establish capital, custody, 
        margin, financial responsibility, making and keeping 
        records, bonding, or financial or operational reporting 
        requirements for brokers, dealers, municipal securities 
        dealers, government securities brokers, or government 
        securities dealers that differ from, or are in addition 
        to, the requirements in those areas established under 
        this title. The Commission shall consult periodically 
        the securities commissions (or any agency or office 
        performing like functions) of the States concerning the 
        adequacy of such requirements as established under this 
        title.
          (2) Funding portals.--
                  (A) Limitation on state laws.--Except as 
                provided in subparagraph (B), no State or 
                political subdivision thereof may enforce any 
                law, rule, regulation, or other administrative 
                action against a registered funding portal with 
                respect to its business as such.
                  (B) Examination and enforcement authority.--
                Subparagraph (A) does not apply with respect to 
                the examination and enforcement of any law, 
                rule, regulation, or administrative action of a 
                State or political subdivision thereof in which 
                the principal place of business of a registered 
                funding portal is located, provided that such 
                law, rule, regulation, or administrative action 
                is not in addition to or different from the 
                requirements for registered funding portals 
                established by the Commission.
                  (C) Definition.--For purposes of this 
                paragraph, the term ``State'' includes the 
                District of Columbia and the territories of the 
                United States.
          (3) De minimis transactions by associated persons.--
        No law, rule, regulation, or order, or other 
        administrative action of any State or political 
        subdivision thereof may prohibit an associated person 
        of a broker or dealer from effecting a transaction 
        described in paragraph (3) for a customer in such State 
        if--
                  (A) such associated person is not ineligible 
                to register with such State for any reason 
                other than such a transaction;
                  (B) such associated person is registered with 
                a registered securities association and at 
                least one State; and
                  (C) the broker or dealer with which such 
                person is associated is registered with such 
                State.
          (4) Described transactions.--
                  (A) In general.--A transaction is described 
                in this paragraph if--
                          (i) such transaction is effected--
                                  (I) on behalf of a customer 
                                that, for 30 days prior to the 
                                day of the transaction, 
                                maintained an account with the 
                                broker or dealer; and
                                  (II) by an associated person 
                                of the broker or dealer--
                                          (aa) to which the 
                                        customer was assigned 
                                        for 14 days prior to 
                                        the day of the 
                                        transaction; and
                                          (bb) who is 
                                        registered with a State 
                                        in which the customer 
                                        was a resident or was 
                                        present for at least 30 
                                        consecutive days during 
                                        the 1-year period prior 
                                        to the day of the 
                                        transaction; or
                          (ii) the transaction is effected--
                                  (I) on behalf of a customer 
                                that, for 30 days prior to the 
                                day of the transaction, 
                                maintained an account with the 
                                broker or dealer; and
                                  (II) during the period 
                                beginning on the date on which 
                                such associated person files an 
                                application for registration 
                                with the State in which the 
                                transaction is effected and 
                                ending on the earlier of--
                                          (aa) 60 days after 
                                        the date on which the 
                                        application is filed; 
                                        or
                                          (bb) the date on 
                                        which such State 
                                        notifies the associated 
                                        person that it has 
                                        denied the application 
                                        for registration or has 
                                        stayed the pendency of 
                                        the application for 
                                        cause.
                  (B) Rules of construction.--For purposes of 
                subparagraph (A)(i)(II)--
                          (i) each of up to 3 associated 
                        persons of a broker or dealer who are 
                        designated to effect transactions 
                        during the absence or unavailability of 
                        the principal associated person for a 
                        customer may be treated as an 
                        associated person to which such 
                        customer is assigned; and
                          (ii) if the customer is present in 
                        another State for 30 or more 
                        consecutive days or has permanently 
                        changed his or her residence to another 
                        State, a transaction is not described 
                        in this paragraph, unless the 
                        associated person of the broker or 
                        dealer files an application for 
                        registration with such State not later 
                        than 10 business days after the later 
                        of the date of the transaction, or the 
                        date of the discovery of the presence 
                        of the customer in the other State for 
                        30 or more consecutive days or the 
                        change in the customer's residence.
  (j) Rulemaking To Extend Requirements to New Hybrid 
Products.--
          (1) Consultation.--Prior to commencing a rulemaking 
        under this subsection, the Commission shall consult 
        with and seek the concurrence of the Board concerning 
        the imposition of broker or dealer registration 
        requirements with respect to any new hybrid product. In 
        developing and promulgating rules under this 
        subsection, the Commission shall consider the views of 
        the Board, including views with respect to the nature 
        of the new hybrid product; the history, purpose, 
        extent, and appropriateness of the regulation of the 
        new product under the Federal banking laws; and the 
        impact of the proposed rule on the banking industry.
          (2) Limitation.--The Commission shall not--
                  (A) require a bank to register as a broker or 
                dealer under this section because the bank 
                engages in any transaction in, or buys or 
                sells, a new hybrid product; or
                  (B) bring an action against a bank for a 
                failure to comply with a requirement described 
                in subparagraph (A),
        unless the Commission has imposed such requirement by 
        rule or regulation issued in accordance with this 
        section.
          (3) Criteria for rulemaking.--The Commission shall 
        not impose a requirement under paragraph (2) of this 
        subsection with respect to any new hybrid product 
        unless the Commission determines that--
                  (A) the new hybrid product is a security; and
                  (B) imposing such requirement is necessary 
                and appropriate in the public interest and for 
                the protection of investors.
          (4) Considerations.--In making a determination under 
        paragraph (3), the Commission shall consider--
                  (A) the nature of the new hybrid product; and
                  (B) the history, purpose, extent, and 
                appropriateness of the regulation of the new 
                hybrid product under the Federal securities 
                laws and under the Federal banking laws.
          (5) Objection to commission regulation.--
                  (A) Filing of petition for review.--The Board 
                may obtain review of any final regulation 
                described in paragraph (2) in the United States 
                Court of Appeals for the District of Columbia 
                Circuit by filing in such court, not later than 
                60 days after the date of publication of the 
                final regulation, a written petition requesting 
                that the regulation be set aside. Any 
                proceeding to challenge any such rule shall be 
                expedited by the Court of Appeals.
                  (B) Transmittal of petition and record.--A 
                copy of a petition described in subparagraph 
                (A) shall be transmitted as soon as possible by 
                the Clerk of the Court to an officer or 
                employee of the Commission designated for that 
                purpose. Upon receipt of the petition, the 
                Commission shall file with the court the 
                regulation under review and any documents 
                referred to therein, and any other relevant 
                materials prescribed by the court.
                  (C) Exclusive jurisdiction.--On the date of 
                the filing of the petition under subparagraph 
                (A), the court has jurisdiction, which becomes 
                exclusive on the filing of the materials set 
                forth in subparagraph (B), to affirm and 
                enforce or to set aside the regulation at 
                issue.
                  (D) Standard of review.--The court shall 
                determine to affirm and enforce or set aside a 
                regulation of the Commission under this 
                subsection, based on the determination of the 
                court as to whether--
                          (i) the subject product is a new 
                        hybrid product, as defined in this 
                        subsection;
                          (ii) the subject product is a 
                        security; and
                          (iii) imposing a requirement to 
                        register as a broker or dealer for 
                        banks engaging in transactions in such 
                        product is appropriate in light of the 
                        history, purpose, and extent of 
                        regulation under the Federal securities 
                        laws and under the Federal banking 
                        laws, giving deference neither to the 
                        views of the Commission nor the Board.
                  (E) Judicial stay.--The filing of a petition 
                by the Board pursuant to subparagraph (A) shall 
                operate as a judicial stay, until the date on 
                which the determination of the court is final 
                (including any appeal of such determination).
                  (F) Other authority to challenge.--Any 
                aggrieved party may seek judicial review of the 
                Commission's rulemaking under this subsection 
                pursuant to section 25 of this title.
          (6) Definitions.--For purposes of this subsection:
                  (A) New hybrid product.--The term ``new 
                hybrid product'' means a product that--
                          (i) was not subjected to regulation 
                        by the Commission as a security prior 
                        to the date of the enactment of the 
                        Gramm-Leach-Bliley Act;
                          (ii) is not an identified banking 
                        product as such term is defined in 
                        section 206 of such Act; and
                          (iii) is not an equity swap within 
                        the meaning of section 206(a)(6) of 
                        such Act.
                  (B) Board.--The term ``Board'' means the 
                Board of Governors of the Federal Reserve 
                System.
  (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.
  (m) Harmonization of Enforcement.--The enforcement authority 
of the Commission with respect to violations of the standard of 
conduct applicable to a broker or dealer providing personalized 
investment advice about securities to a retail customer shall 
include--
          (1) the enforcement authority of the Commission with 
        respect to such violations provided under this Act; and
          (2) the enforcement authority of the Commission with 
        respect to violations of the standard of conduct 
        applicable to an investment adviser under the 
        Investment Advisers Act of 1940, including the 
        authority to impose sanctions for such violations, and
the Commission shall seek to prosecute and sanction violators 
of the standard of conduct applicable to a broker or dealer 
providing personalized investment advice about securities to a 
retail customer under this Act to the same extent as the 
Commission prosecutes and sanctions violators of the standard 
of conduct applicable to an investment advisor under the 
Investment Advisers Act of 1940.
  (n) Disclosures to Retail Investors.--
          (1) In general.--Notwithstanding any other provision 
        of the securities laws, the Commission may issue rules 
        designating documents or information that shall be 
        provided by a broker or dealer to a retail investor 
        before the purchase of an investment product or service 
        by the retail investor.
          (2) Considerations.--In developing any rules under 
        paragraph (1), the Commission shall consider whether 
        the rules will promote investor protection, efficiency, 
        competition, and capital formation.
          (3) Form and contents of documents and information.--
        Any documents or information designated under a rule 
        promulgated under paragraph (1) shall--
                  (A) be in a summary format; and
                  (B) contain clear and concise information 
                about--
                          (i) investment objectives, 
                        strategies, costs, and risks; and
                          (ii) any compensation or other 
                        financial incentive received by a 
                        broker, dealer, or other intermediary 
                        in connection with the purchase of 
                        retail investment products.
  (o) Authority to Restrict Mandatory Pre-dispute 
Arbitration.--The Commission, by rule, may prohibit, or impose 
conditions or limitations on the use of, agreements that 
require customers or clients of any broker, dealer, or 
municipal securities dealer to arbitrate any future dispute 
between them arising under the Federal securities laws, the 
rules and regulations thereunder, or the rules of a self-
regulatory organization if it finds that such prohibition, 
imposition of conditions, or limitations are in the public 
interest and for the protection of investors.
  [(k)] (q) Standard of Conduct.--
          (1) In general.--Notwithstanding any other provision 
        of this Act or the Investment Advisers Act of 1940, the 
        Commission may promulgate rules to provide that, with 
        respect to a broker or dealer, when providing 
        personalized investment advice about securities to a 
        retail customer (and such other customers as the 
        Commission may by rule provide), the standard of 
        conduct for such broker or dealer with respect to such 
        customer shall be the same as the standard of conduct 
        applicable to an investment adviser under section 211 
        of the Investment Advisers Act of 1940. The receipt of 
        compensation based on commission or other standard 
        compensation for the sale of securities shall not, in 
        and of itself, be considered a violation of such 
        standard applied to a broker or dealer. Nothing in this 
        section shall require a broker or dealer or registered 
        representative to have a continuing duty of care or 
        loyalty to the customer after providing personalized 
        investment advice about securities.
          (2) Disclosure of range of products offered.--Where a 
        broker or dealer sells only proprietary or other 
        limited range of products, as determined by the 
        Commission, the Commission may by rule require that 
        such broker or dealer provide notice to each retail 
        customer and obtain the consent or acknowledgment of 
        the customer. The sale of only proprietary or other 
        limited range of products by a broker or dealer shall 
        not, in and of itself, be considered a violation of the 
        standard set forth in paragraph (1).
          (3) Requirements prior to rulemaking.--The Commission 
        shall not promulgate a rule pursuant to paragraph (1) 
        before providing a report to the Committee on Financial 
        Services of the House of Representatives and the 
        Committee on Banking, Housing, and Urban Affairs of the 
        Senate describing whether--
                  (A) retail investors (and such other 
                customers as the Commission may provide) are 
                being harmed due to brokers or dealers 
                operating under different standards of conduct 
                than those that apply to investment advisors 
                under section 211 of the Investment Advisers 
                Act of 1940 (15 U.S.C. 80b-11);
                  (B) alternative remedies will reduce any 
                confusion or harm to retail investors due to 
                brokers or dealers operating under different 
                standards of conduct than those standards that 
                apply to investment advisors under section 211 
                of the Investment Advisers Act of 1940 (15 
                U.S.C. 80b-11), including--
                          (i) simplifying the titles used by 
                        brokers, dealers, and investment 
                        advisers; and
                          (ii) enhancing disclosure surrounding 
                        the different standards of conduct 
                        currently applicable to brokers, 
                        dealers, and investment advisers;
                  (C) the adoption of a uniform fiduciary 
                standard of conduct for brokers, dealers, and 
                investment advisors would adversely impact the 
                commissions of brokers and dealers, the 
                availability of proprietary products offered by 
                brokers and dealers, and the ability of brokers 
                and dealers to engage in principal transactions 
                with customers; and
                  (D) the adoption of a uniform fiduciary 
                standard of conduct for brokers or dealers and 
                investment advisors would adversely impact 
                retail investor access to personalized and 
                cost-effective investment advice, 
                recommendations about securities, or the 
                availability of such advice and 
                recommendations.
          (4) Economic analysis.--The Commission's conclusions 
        contained in the report described in paragraph (3) 
        shall be supported by economic analysis.
          (5) Requirements for promulgating a rule.--The 
        Commission shall publish in the Federal Register 
        alongside the rule promulgated pursuant to paragraph 
        (1) formal findings that such rule would reduce 
        confusion or harm to retail customers (and such other 
        customers as the Commission may by rule provide) due to 
        different standards of conduct applicable to brokers, 
        dealers, and investment advisors.
          (6) Requirements under investment advisers act of 
        1940.--In proposing rules under paragraph (1) for 
        brokers or dealers, the Commission shall consider the 
        differences in the registration, supervision, and 
        examination requirements applicable to brokers, 
        dealers, and investment advisors.
  [(l)] (r) Other Matters.--The Commission shall--
          (1) facilitate the provision of simple and clear 
        disclosures to investors regarding the terms of their 
        relationships with brokers, dealers, and investment 
        advisers, including any material conflicts of interest; 
        and
          (2) examine and, where appropriate, promulgate rules 
        prohibiting or restricting certain sales practices, 
        conflicts of interest, and compensation schemes for 
        brokers, dealers, and investment advisers that the 
        Commission deems contrary to the public interest and 
        the protection of investors.
  [(j)] (p) The authority of the Commission under this section 
with respect to security-based swap agreements shall be subject 
to the restrictions and limitations of section 3A(b) of this 
title.

           *       *       *       *       *       *       *


                          municipal securities

  Sec. 15B. (a)(1)(A) It shall be unlawful for any municipal 
securities dealer (other than one registered as a broker or 
dealer under section 15 of this title) to make use of the mails 
or any means or instrumentality of interstate commerce to 
effect any transaction in, or to induce or attempt to induce 
the purchase or sale of, any municipal security unless such 
municipal securities dealer is registered in accordance with 
this subsection.
                  (B) It shall be unlawful for a municipal 
                advisor to provide advice to or on behalf of a 
                municipal entity or obligated person with 
                respect to municipal financial products or the 
                issuance of municipal securities, or to 
                undertake a solicitation of a municipal entity 
                or obligated person, unless the municipal 
                advisor is registered in accordance with this 
                subsection.
  (2) A municipal securities dealer or municipal advisor may be 
registered by filing with the Commission an application for 
registration in such form and containing such information and 
documents concerning such municipal securities dealer or 
municipal advisor and any person associated with such municipal 
securities dealer or municipal advisor as the Commission, by 
rule, may prescribe as necessary or appropriate in the public 
interest or for the protection of investors. Within forty-five 
days of the date of the filing of such application (or within 
such longer period as to which the applicant consents), the 
Commission shall--
          (A) by order grant registration, or
          (B) institute proceedings to determine whether 
        registration should be denied. Such proceedings shall 
        include notice of the grounds for denial under 
        consideration and opportunity for hearing and shall be 
        concluded within one hundred twenty days of the date of 
        the filing of the application for registration. At the 
        conclusion of such proceedings the Commission, by 
        order, shall grant or deny such registration. The 
        Commission may extend the time for the conclusion of 
        such proceedings for up to ninety days if it finds good 
        cause for such extension and publishes its reasons for 
        so finding or for such longer period as to which the 
        applicant consents.
The Commission shall grant the registration of a municipal 
securities dealer or municipal advisor if the Commission finds 
that the requirements of this section are satisfied. The 
Commission shall deny such registration if it does not make 
such a finding or if it finds that if the applicant were so 
registered, its registration would be subject to suspension or 
revocation under subsection (c) of this section.
  (3) Any provision of this title (other than section 5 or 
paragraph (1) of this subsection) which prohibits any act, 
practice, or course of business if the mails or any means or 
instrumentality of interstate commerce is used in connection 
therewith shall also prohibit any such act, practice, or course 
of business by any registered municipal securities dealer or 
municipal advisor or any person acting on behalf of such 
municipal securities dealer or municipal advisor, irrespective 
of any use of the mails or any means or instrumentality of 
interstate commerce in connection therewith.
  (4) The Commission, by rule or order, upon its own motion or 
upon application, may conditionally or unconditionally exempt 
any broker, dealer, municipal securities dealer, or municipal 
advisor, or class of brokers, dealers, municipal securities 
dealers, or municipal advisors from any provision of this 
section or the rules or regulations thereunder, if the 
Commission finds that such exemption is consistent with the 
public interest, the protection of investors, and the purposes 
of this section.
          (5) No municipal advisor shall make use of the mails 
        or any means or instrumentality of interstate commerce 
        to provide advice to or on behalf of a municipal entity 
        or obligated person with respect to municipal financial 
        products, the issuance of municipal securities, or to 
        undertake a solicitation of a municipal entity or 
        obligated person, in connection with which such 
        municipal advisor engages in any fraudulent, deceptive, 
        or manipulative act or practice.
  (b)(1) The Municipal Securities Rulemaking Board shall be 
composed of 15 members, or such other number of members as 
specified by rules of the Board pursuant to paragraph (2)(B),, 
which shall perform the duties set forth in this section. The 
members of the Board shall serve as members for a term of 3 
years or for such other terms as specified by rules of the 
Board pursuant to paragraph (2)(B), and shall consist of (A) 8 
individuals who are independent of any municipal securities 
broker, municipal securities dealer, or municipal advisor, at 
least 1 of whom shall be representative of institutional or 
retail investors in municipal securities, at least 1 of whom 
shall be representative of municipal entities, and at least 1 
of whom shall be a member of the public with knowledge of or 
experience in the municipal industry (which members are 
hereinafter referred to as ``public representatives''); and (B) 
7 individuals who are associated with a broker, dealer, 
municipal securities dealer, or municipal advisor, including at 
least 1 individual who is associated with and representative of 
brokers, dealers, or municipal securities dealers that are not 
banks or subsidiaries or departments or divisions of banks 
(which members are hereinafter referred to as ``broker-dealer 
representatives''), at least 1 individual who is associated 
with and representative of municipal securities dealers which 
are banks or subsidiaries or departments or divisions of banks 
(which members are hereinafter referred to as ``bank 
representatives''), and at least 1 individual who is associated 
with a municipal advisor (which members are hereinafter 
referred to as ``advisor representatives'' and, together with 
the broker-dealer representatives and the bank representatives, 
are referred to as ``regulated representatives''). Each member 
of the board shall be knowledgeable of matters related to the 
municipal securities markets. Prior to the expiration of the 
terms of office of the initial members of the Board, an 
election shall be held under rules adopted by the Board 
(pursuant to subsection (b)(2)(B) of this section) of the 
members to succeed such initial members.
  (2) The Board shall propose and adopt rules to effect the 
purposes of this title with respect to transactions in 
municipal securities effected by brokers, dealers, and 
municipal securities dealers and advice provided to or on 
behalf of municipal entities or obligated persons by brokers, 
dealers, municipal securities dealers, and municipal advisors 
with respect to municipal financial products, the issuance of 
municipal securities, and solicitations of municipal entities 
or obligated persons undertaken by brokers, dealers, municipal 
securities dealers, and municipal advisors. The rules of the 
Board, as a minimum, shall:
          (A) provide that no municipal securities broker or 
        municipal securities dealer shall effect any 
        transaction in, or induce or attempt to induce the 
        purchase or sale of, any municipal security, and no 
        broker, dealer, municipal securities dealer, or 
        municipal advisor shall provide advice to or on behalf 
        of a municipal entity or obligated person with respect 
        to municipal financial products or the issuance of 
        municipal securities, unless such municipal securities 
        broker or municipal securities dealer meets such 
        standards of operational capability and such municipal 
        securities broker or municipal securities dealer and 
        every natural person associated with such municipal 
        securities broker or municipal securities dealer meets 
        such standards of training, experience, competence, and 
        such other qualifications as the Board finds necessary 
        or appropriate in the public interest or for the 
        protection of investors and municipal entities or 
        obligated persons. In connection with the definition 
        and application of such standards the Board may--
                  (i) appropriately classify municipal 
                securities brokers, municipal securities 
                dealers, and municipal advisors (taking into 
                account relevant matters, including types of 
                business done, nature of securities other than 
                municipal securities sold, and character of 
                business organization), and persons associated 
                with municipal securities brokers, municipal 
                securities dealers, and municipal advisors;
                  (ii) specify that all or any portion of such 
                standards shall be applicable to any such 
                class; and
                  (iii) require persons in any such class to 
                pass tests administered in accordance with 
                subsection (c)(7) of this section.
          (B) establish fair procedures for the nomination and 
        election of members of the Board and assure fair 
        representation in such nominations and elections of 
        public representatives, broker dealer representatives, 
        bank representatives, and advisor representatives. Such 
        rules--
                  (i) shall provide that the number of public 
                representatives of the Board shall at all times 
                exceed the total number of regulated 
                representatives and that the membership shall 
                at all times be as evenly divided in number as 
                possible between public representatives and 
                regulated representatives;
                  (ii) shall specify the length or lengths of 
                terms members shall serve;
                  (iii) may increase the number of members 
                which shall constitute the whole Board, 
                provided that such number is an odd number; and
                  (iv) shall establish requirements regarding 
                the independence of public representatives.
          (C) be designed to prevent fraudulent and 
        manipulative acts and practices, to promote just and 
        equitable principles of trade, to foster cooperation 
        and coordination with persons engaged in regulating, 
        clearing, settling, processing information with respect 
        to, and facilitating transactions in municipal 
        securities and municipal financial products, to remove 
        impediments to and perfect the mechanism of a free and 
        open market in municipal securities and municipal 
        financial products, and, in general, to protect 
        investors, municipal entities, obligated persons, and 
        the public interest; and not be designed to permit 
        unfair discrimination among customers, municipal 
        entities, obligated persons, municipal securities 
        brokers, municipal securities dealers, or municipal 
        advisors, to fix minimum profits, to impose any 
        schedule or fix rates of commissions, allowances, 
        discounts, or other fees to be charged by municipal 
        securities brokers, municipal securities dealers, or 
        municipal advisors, to regulate by virtue of any 
        authority conferred by this title matters not related 
        to the purpose of this title or the administration of 
        the Board, or to impose any burden on competition not 
        necessary or appropriate in furtherance of the purposes 
        of this title.
          (D) if the Board deems appropriate, provide for the 
        arbitration of claims, disputes, and controversies 
        relating to transactions in municipal securities and 
        advice concerning municipal financial products: 
        Provided, however, that no person other than a 
        municipal securities broker, municipal securities 
        dealer, municipal advisor, or person associated with 
        such a municipal securities broker, municipal 
        securities dealer, or municipal advisor may be 
        compelled to submit to such arbitration except at his 
        instance and in accordance with section 29 of this 
        title.
          (E) provide for the periodic examination in 
        accordance with subsection (c)(7) of this section of 
        municipal securities brokers, municipal securities 
        dealers, and municipal advisors to determine compliance 
        with applicable provisions of this title, the rules and 
        regulations thereunder, and the rules of the Board. 
        Such rules shall specify the minimum scope and 
        frequency of such examinations and shall be designed to 
        avoid unnecessary regulatory duplication or undue 
        regulatory burdens for any such municipal securities 
        broker, municipal securities dealer, or municipal 
        advisor.
          (F) include provisions governing the form and content 
        of quotations relating to municipal securities which 
        may be distributed or published by any municipal 
        securities broker, municipal securities dealer, or 
        person associated with such a municipal securities 
        broker or municipal securities dealer, and the persons 
        to whom such quotations may be supplied. Such rules 
        relating to quotations shall be designed to produce 
        fair and informative quotations, to prevent fictitious 
        or misleading quotations, and to promote orderly 
        procedures for collecting, distributing, and publishing 
        quotations.
          (G) prescribe records to be made and kept by 
        municipal securities brokers, municipal securities 
        dealers, and municipal advisors and the periods for 
        which such records shall be preserved.
          (H) define the term ``separately identifiable 
        department or division'', as that term is used in 
        section 3(a)(30) of this title, in accordance with 
        specified and appropriate standards to assure that a 
        bank is not deemed to be engaged in the business of 
        buying and selling municipal securities through a 
        separately identifiable department or division unless 
        such department or division is organized and 
        administered so as to permit independent examination 
        and enforcement of applicable provisions of this title, 
        the rules and regulations thereunder, and the rules of 
        the Board. A separately identifiable department or 
        division of a bank may be engaged in activities other 
        than those relating to municipal securities.
          (I) provide for the operation and administration of 
        the Board, including the selection of a Chairman from 
        among the members of the Board, the compensation of the 
        members of the Board, and the appointment and 
        compensation of such employees, attorneys, and 
        consultants as may be necessary or appropriate to carry 
        out the Board's functions under this section.
          (J) provide that each municipal securities broker, 
        municipal securities dealer, and municipal advisor 
        shall pay to the Board such reasonable fees and charges 
        as may be necessary or appropriate to defray the costs 
        and expenses of operating and administering the Board. 
        Such rules shall specify the amount of such fees and 
        charges, which may include charges for failure to 
        submit to the Board, or to any information system 
        operated by the Board, within the prescribed 
        timeframes, any items of information or documents 
        required to be submitted under any rule issued by the 
        Board.
          (K) establish the terms and conditions under which 
        any broker, dealer, or municipal securities dealer may 
        sell, or prohibit any broker, dealer, or municipal 
        securities dealer from selling, any part of a new issue 
        of municipal securities to a related account of a 
        broker, dealer, or municipal securities dealer during 
        the underwriting period.
          (L) with respect to municipal advisors--
                  (i) prescribe means reasonably designed to 
                prevent acts, practices, and courses of 
                business as are not consistent with a municipal 
                advisor's fiduciary duty to its clients;
                  (ii) provide continuing education 
                requirements for municipal advisors;
                  (iii) provide professional standards; and
                  (iv) not impose a regulatory burden on small 
                municipal advisors that is not necessary or 
                appropriate in the public interest and for the 
                protection of investors, municipal entities, 
                and obligated persons, provided that there is 
                robust protection of investors against fraud.
          (3) The Board, in conjunction with or on behalf of 
        any Federal financial regulator or self-regulatory 
        organization, may--
                  (A) establish information systems; and
                  (B) assess such reasonable fees and charges 
                for the submission of information to, or the 
                receipt of information from, such systems from 
                any persons which systems may be developed for 
                the purposes of serving as a repository of 
                information from municipal market participants 
                or otherwise in furtherance of the purposes of 
                the Board, a Federal financial regulator, or a 
                self-regulatory organization, except that the 
                Board--
                          (i) may not charge a fee to municipal 
                        entities or obligated persons to submit 
                        documents or other information to the 
                        Board or charge a fee to any person to 
                        obtain, directly from the Internet site 
                        of the Board, documents or information 
                        submitted by municipal entities, 
                        obligated persons, brokers, dealers, 
                        municipal securities dealers, or 
                        municipal advisors, including documents 
                        submitted under the rules of the Board 
                        or the Commission; and
                          (ii) shall not be prohibited from 
                        charging commercially reasonable fees 
                        for automated subscription-based feeds 
                        or similar services, or for charging 
                        for other data or document-based 
                        services customized upon request of any 
                        person, made available to commercial 
                        enterprises, municipal securities 
                        market professionals, or the general 
                        public, whether delivered through the 
                        Internet or any other means, that 
                        contain all or part of the documents or 
                        information, subject to approval of the 
                        fees by the Commission under section 
                        19(b).
          (4) The Board may provide guidance and assistance in 
        the enforcement of, and examination for, compliance 
        with the rules of the Board to the Commission, a 
        registered securities association under section 15A, or 
        any other appropriate regulatory agency, as applicable.
          (5) The Board, the Commission, and a registered 
        securities association under section 15A, or the 
        designees of the Board, the Commission, or such 
        association, shall meet not less frequently than 2 
        times a year--
                  (A) to describe the work of the Board, the 
                Commission, and the registered securities 
                association involving the regulation of 
                municipal securities; and
                  (B) to share information about--
                          (i) the interpretation of the Board, 
                        the Commission, and the registered 
                        securities association of Board rules; 
                        and
                          (ii) examination and enforcement of 
                        compliance with Board rules.
  (7) Nothing in this section shall be construed to impair or 
limit the power of the Commission under this title.
  (c)(1) No broker, dealer, or municipal securities dealer 
shall make use of the mails or any means or instrumentality of 
interstate commerce to effect any transaction in, or to induce 
or attempt to induce the purchase or sale of, any municipal 
security, and no broker, dealer, municipal securities dealer, 
or municipal advisor shall make use of the mails or any means 
or instrumentality of interstate commerce to provide advice to 
or on behalf of a municipal entity or obligated person with 
respect to municipal financial products, the issuance of 
municipal securities, or to undertake a solicitation of a 
municipal entity or obligated person, in contravention of any 
rule of the Board. A municipal advisor and any person 
associated with such municipal advisor shall be deemed to have 
a fiduciary duty to any municipal entity for whom such 
municipal advisor acts as a municipal advisor, and no municipal 
advisor may engage in any act, practice, or course of business 
which is not consistent with a municipal advisor's fiduciary 
duty or that is in contravention of any rule of the Board.
  (2) The Commission, by order, shall censure, place 
limitations on the activities, functions, or operations, 
suspend for a period not exceeding twelve months, or revoke the 
registration of any municipal securities dealer or municipal 
advisor, if it finds, on the record after notice and 
opportunity for hearing, that such censure, placing of 
limitations, denial, suspension, or revocation, is in the 
public interest and that such municipal securities dealer or 
municipal advisor has committed or omitted any act, or is 
subject to an order or finding, enumerated in subparagraph (A), 
(D), (E), (H), or (G) of paragraph (4) of section 15(b) of this 
title, has been convicted of any offense specified in 
subparagraph (B) of such paragraph (4) within ten years of the 
commencement of the proceedings under this paragraph, or is 
enjoined from any action, conduct, or practice specified in 
subparagraph (C) or such paragraph (4).
  (3) Pending final determination whether any registration 
under this section shall be revoked, the Commission, by order, 
may suspend such registration, if such suspension appears to 
the Commission, after notice and opportunity for hearing, to be 
necessary or appropriate in the public interest or for the 
protection of investors or municipal entities or obligated 
person. Any registered municipal securities dealer or municipal 
advisor may, upon such terms and conditions as the Commission 
may deem necessary in the public interest or for the protection 
of investors or municipal entities or obligated person, 
withdraw from registration by filing a written notice of 
withdrawal with the Commission. If the Commission finds that 
any registered municipal securities dealer or municipal advisor 
is no longer in existence or has ceased to do business as a 
municipal securities dealer or municipal advisor, the 
Commission, by order, shall cancel the registration of such 
municipal securities dealer or municipal advisor.
  (4) The Commission, by order, shall censure or place 
limitations on the activities or functions of any person 
associated, seeking to become associated, or, at the time of 
the alleged misconduct, associated or seeking to become 
associated with a municipal securities dealer, or suspend for a 
period not exceeding 12 months or bar any such person from 
being associated with a broker, dealer, investment adviser, 
municipal securities dealer, municipal advisor, transfer agent, 
or nationally recognized statistical rating organization, if 
the Commission finds, on the record after notice and 
opportunity for hearing, that such censure, placing of 
limitations, suspension, or bar is in the public interest and 
that such person has committed any act, or is subject to an 
order or finding, enumerated in subparagraph (A), (D), (E), 
(H), or (G) of paragraph (4) of section 15(b) of this title, 
has been convicted of any offense specified in subparagraph (B) 
of such paragraph (4) within 10 years of the commencement of 
the proceedings under this paragraph, or is enjoined from any 
action, conduct, or practice specified in subparagraph (C) of 
such paragraph (4). It shall be unlawful for any person as to 
whom an order entered pursuant to this paragraph or paragraph 
(5) of this subsection suspending or barring him from being 
associated with a municipal securities dealer is in effect 
willfully to become, or to be, associated with a municipal 
securities dealer without the consent of the Commission, and it 
shall be unlawful for any municipal securities dealer to permit 
such a person to become, or remain, a person associated with 
him without the consent of the Commission, if such municipal 
securities dealer knew, or, in the exercise of reasonable care 
should have known, of such order.
  (5) With respect to any municipal securities dealer for which 
the Commission is not the appropriate regulatory agency, the 
appropriate regulatory agency for such municipal securities 
dealer may sanction any such municipal securities dealer in the 
manner and for the reasons specified in paragraph (2) of this 
subsection and any person associated with such municipal 
securities dealer in the manner and for the reasons specified 
in paragraph (4) of this subsection. In addition, such 
appropriate regulatory agency may, in accordance with section 8 
of the Federal Deposit Insurance Act (12 U.S.C. 1818), enforce 
compliance by such municipal securities dealer or any person 
associated with such municipal securities dealer with the 
provisions of this section, section 17 of this title, the rules 
of the Board, and the rules of the Commission pertaining to 
municipal securities dealers, persons associated with municipal 
securities dealers, and transactions in municipal securities. 
For purposes of the preceding sentence, any violation of any 
such provision shall constitute adequate basis for the issuance 
of any order under section 8(b) or 8(c) of the Federal Deposit 
Insurance Act, and the customers of any such municipal 
securities dealer shall be deemed to be ``depositors'' as that 
term is used in section 8(c) of that Act. Nothing in this 
paragraph shall be construed to affect in any way the powers of 
such appropriate regulatory agency to proceed against such 
municipal securities dealer under any other provision of law.
  (6)(A) The Commission, prior to the entry of an order of 
investigation, or commencement of any proceedings, against any 
municipal securities dealer, or person associated with any 
municipal securities dealer, for which the Commission is not 
the appropriate regulatory agency, for violation of any 
provision of this section, section 15(c)(1) or 15(c)(2) of this 
title, any rule or regulation under any such section or any 
rule of the Board, shall (i) give notice to the appropriate 
regulatory agency for such municipal securities dealer of the 
identity of such municipal securities dealer or person 
associated with such municipal securities dealer, the nature of 
and basis for such proposed action, and whether the Commission 
is seeking a monetary penalty against such municipal securities 
dealer or such associated person pursuant to section 21B of 
this title; and (ii) consult with such appropriate regulatory 
agency concerning the effect of such proposed action on sound 
banking practices and the feasibility and desirability of 
coordinating such action with any proceeding or proposed 
proceeding by such appropriate regulatory agency against such 
municipal securities dealer or associated person.
  (B) The appropriate regulatory agency for a municipal 
securities dealer (if other than the Commission), prior to the 
entry of an order of investigation, or commencement of any 
proceedings, against such municipal securities dealer or person 
associated with such municipal securities dealer, for violation 
of any provision of this section, the rules of the Board, or 
the rules or regulations of the Commission pertaining to 
municipal securities dealers, persons associated with municipal 
securities dealers, or transactions in municipal securities 
shall (i) give notice to the Commission of the identity of such 
municipal securities dealer or person associated with such 
municipal securities dealer and the nature of and basis for 
such proposed action and (ii) consult with the Commission 
concerning the effect of such proposed action on the protection 
of investors or municipal entities or obligated person and the 
feasibility and desirability of coordinating such action with 
any proceeding or proposed proceeding by the Commission against 
such municipal securities dealer or associated person.
  (C) Nothing in this paragraph shall be construed to impair or 
limit (other than by the requirement of prior consultation) the 
power of the Commission or the appropriate regulatory agency 
for a municipal securities dealer to initiate any action of a 
class described in this paragraph or to affect in any way the 
power of the Commission or such appropriate regulatory agency 
to initiate any other action pursuant to this title or any 
other provision of law.
  (7)(A) Tests required pursuant to subsection (b)(2)(A)(iii) 
of this section shall be administered by or on behalf of and 
periodic examinations pursuant to subsection (b)(2)(E) of this 
section shall be conducted by--
          (i) a registered securities association, in the case 
        of municipal securities brokers and municipal 
        securities dealers who are members of such association;
          (ii) the appropriate regulatory agency for any 
        municipal securities broker or municipal securities 
        dealer, in the case of all other municipal securities 
        brokers and municipal securities dealers; and
                  (iii) the Commission, or its designee, in the 
                case of municipal advisors.
  (B) A registered securities association shall make a report 
of any examination conducted pursuant to subsection (b)(2)(E) 
of this section and promptly furnish the Commission a copy 
thereof and any data supplied to it in connection with such 
examination. Subject to such limitations as the Commission, by 
rule, determines to be necessary or appropriate in the public 
interest or for the protection of investors or municipal 
entities or obligated person, the Commission shall, on request, 
make available to the Board a copy of any report of an 
examination of a municipal securities broker or municipal 
securities dealer made by or furnished to the Commission 
pursuant to this paragraph or section 17(c)(3) of this title.
  (8) The Commission is authorized, by order, if in its opinion 
such action is necessary or appropriate in the public interest, 
for the protection of investors, or otherwise, in furtherance 
of the purposes of this title, to remove from office or censure 
any person who is, or at the time of the alleged violation or 
abuse was, a member or employee of the Board, who, the 
Commission finds, on the record after notice and opportunity 
for hearing, has willfully (A) violated any provision of this 
title, the rules and regulations thereunder, or the rules of 
the Board or (B) abused his authority.
          [(9)(A) Fines collected by the Commission for 
        violations of the rules of the Board shall be equally 
        divided between the Commission and the Board.
          [(B) Fines collected by a registered securities 
        association under section 15A(7) with respect to 
        violations of the rules of the Board shall be accounted 
        for by such registered securities association 
        separately from other fines collected under section 
        15A(7) and shall be allocated between such registered 
        securities association and the Board, and such 
        allocation shall require the registered securities 
        association to pay to the Board \1/3\ of all fines 
        collected by the registered securities association 
        reasonably allocable to violations of the rules of the 
        Board, or such other portion of such fines as may be 
        directed by the Commission upon agreement between the 
        registered securities association and the Board.]
  (9) Fines collected for violations of the rules of the Board 
shall be deposited and credited as general revenue of the 
Treasury, except as otherwise provided in section 308 of the 
Sarbanes-Oxley Act of 2002 or section 21F of this title.
  (d)(1) Neither the Commission nor the Board is authorized 
under this title, by rule or regulation, to require any issuer 
of municipal securities, directly or indirectly through a 
purchaser or prospective purchaser of securities from the 
issuer, to file with the Commission or the Board prior to the 
sale of such securities by the issuer any application, report, 
or document in connection with the issuance, sale, or 
distribution of such securities.
  (2) The Board is not authorized under this title to require 
any issuer of municipal securities, directly or indirectly 
through a municipal securities broker, municipal securities 
dealer, municipal advisor, or otherwise, or municipal advisors 
to furnish to the Board or to a purchaser or a prospective 
purchaser of such securities any application, report, document, 
or information with respect to such issuer: Provided, however, 
That the Board may require municipal securities brokers and 
municipal securities dealers to furnish to the Board or 
purchasers or prospective purchasers of municipal securities 
applications, reports, documents, and information with respect 
to the issuer thereof which is generally available from a 
source other than such issuer. Nothing in this paragraph shall 
be construed to impair or limit the power of the Commission 
under any provision of this title.
  (3) An issuer of municipal securities shall not be required 
to retain a municipal advisor prior to issuing any such 
securities.
  (e) Definitions.--For purposes of this section--
          (1) the term ``Board'' means the Municipal Securities 
        Rulemaking Board established under subsection (b)(1);
          (2) the term ``guaranteed investment contract'' 
        includes any investment that has specified withdrawal 
        or reinvestment provisions and a specifically 
        negotiated or bid interest rate, and also includes any 
        agreement to supply investments on 2 or more future 
        dates, such as a forward supply contract;
          (3) the term ``investment strategies'' includes plans 
        or programs for the investment of the proceeds of 
        municipal securities that are not municipal 
        derivatives, guaranteed investment contracts, and the 
        recommendation of and brokerage of municipal escrow 
        investments;
          (4) the term ``municipal advisor''--
                  (A) means a person (who is not a municipal 
                entity or an employee of a municipal entity) 
                that--
                          (i) provides advice to or on behalf 
                        of a municipal entity or obligated 
                        person with respect to municipal 
                        financial products or the issuance of 
                        municipal securities, including advice 
                        with respect to the structure, timing, 
                        terms, and other similar matters 
                        concerning such financial products or 
                        issues; or
                          (ii) undertakes a solicitation of a 
                        municipal entity;
                  (B) includes financial advisors, guaranteed 
                investment contract brokers, third-party 
                marketers, placement agents, solicitors, 
                finders, and swap advisors, if such persons are 
                described in any of clauses (i) through (iii) 
                of subparagraph (A); and
                  (C) does not include a broker, dealer, or 
                municipal securities dealer serving as an 
                underwriter (as defined in section 2(a)(11) of 
                the Securities Act of 1933) (15 U.S.C. 
                77b(a)(11)), any investment adviser registered 
                under the Investment Advisers Act of 1940, or 
                persons associated with such investment 
                advisers who are providing investment advice, 
                any commodity trading advisor registered under 
                the Commodity Exchange Act or persons 
                associated with a commodity trading advisor who 
                are providing advice related to swaps, 
                attorneys offering legal advice or providing 
                services that are of a traditional legal 
                nature, or engineers providing engineering 
                advice;
          (5) the term ``municipal financial product'' means 
        municipal derivatives, guaranteed investment contracts, 
        and investment strategies;
          (6) the term ``rules of the Board'' means the rules 
        proposed and adopted by the Board under subsection 
        (b)(2);
          (7) the term ``person associated with a municipal 
        advisor'' or ``associated person of an advisor'' 
        means--
                  (A) any partner, officer, director, or branch 
                manager of such municipal advisor (or any 
                person occupying a similar status or performing 
                similar functions);
                  (B) any other employee of such municipal 
                advisor who is engaged in the management, 
                direction, supervision, or performance of any 
                activities relating to the provision of advice 
                to or on behalf of a municipal entity or 
                obligated person with respect to municipal 
                financial products or the issuance of municipal 
                securities; and
                  (C) any person directly or indirectly 
                controlling, controlled by, or under common 
                control with such municipal advisor;
          (8) the term ``municipal entity'' means any State, 
        political subdivision of a State, or municipal 
        corporate instrumentality of a State, including--
                  (A) any agency, authority, or instrumentality 
                of the State, political subdivision, or 
                municipal corporate instrumentality;
                  (B) any plan, program, or pool of assets 
                sponsored or established by the State, 
                political subdivision, or municipal corporate 
                instrumentality or any agency, authority, or 
                instrumentality thereof; and
                  (C) any other issuer of municipal securities;
          (9) the term ``solicitation of a municipal entity or 
        obligated person'' means a direct or indirect 
        communication with a municipal entity or obligated 
        person made by a person, for direct or indirect 
        compensation, on behalf of a broker, dealer, municipal 
        securities dealer, municipal advisor, or investment 
        adviser (as defined in section 202 of the Investment 
        Advisers Act of 1940) that does not control, is not 
        controlled by, or is not under common control with the 
        person undertaking such solicitation for the purpose of 
        obtaining or retaining an engagement by a municipal 
        entity or obligated person of a broker, dealer, 
        municipal securities dealer, or municipal advisor for 
        or in connection with municipal financial products, the 
        issuance of municipal securities, or of an investment 
        adviser to provide investment advisory services to or 
        on behalf of a municipal entity; and
          (10) the term ``obligated person'' means any person, 
        including an issuer of municipal securities, who is 
        either generally or through an enterprise, fund, or 
        account of such person, committed by contract or other 
        arrangement to support the payment of all or part of 
        the obligations on the municipal securities to be sold 
        in an offering of municipal securities.

           *       *       *       *       *       *       *


SEC. 15E. REGISTRATION OF NATIONALLY RECOGNIZED STATISTICAL RATING 
                    ORGANIZATIONS.

  (a) Registration Procedures.--
          (1) Application for registration.--
                  (A) In general.--A credit rating agency that 
                elects to be treated as a nationally recognized 
                statistical rating organization for purposes of 
                this title (in this section referred to as the 
                ``applicant''), shall furnish to the Commission 
                an application for registration, in such form 
                as the Commission shall require, by rule or 
                regulation issued in accordance with subsection 
                (n), and containing the information described 
                in subparagraph (B).
                  (B) Required information.--An application for 
                registration under this section shall contain 
                information regarding--
                          (i) credit ratings performance 
                        measurement statistics over short-term, 
                        mid-term, and long-term periods (as 
                        applicable) of the applicant;
                          (ii) the procedures and methodologies 
                        that the applicant uses in determining 
                        credit ratings;
                          (iii) policies or procedures adopted 
                        and implemented by the applicant to 
                        prevent the misuse, in violation of 
                        this title (or the rules and 
                        regulations hereunder), of material, 
                        nonpublic information;
                          (iv) the organizational structure of 
                        the applicant;
                          (v) whether or not the applicant has 
                        in effect a code of ethics, and if not, 
                        the reasons therefor;
                          (vi) any conflict of interest 
                        relating to the issuance of credit 
                        ratings by the applicant;
                          (vii) the categories described in any 
                        of clauses (i) through (v) of section 
                        3(a)(62)(B) with respect to which the 
                        applicant intends to apply for 
                        registration under this section;
                          (viii) on a confidential basis, a 
                        list of the 20 largest issuers and 
                        subscribers that use the credit rating 
                        services of the applicant, by amount of 
                        net revenues received therefrom in the 
                        fiscal year immediately preceding the 
                        date of submission of the application;
                          (ix) on a confidential basis, as to 
                        each applicable category of obligor 
                        described in any of clauses (i) through 
                        (v) of section 3(a)(62)(B), written 
                        certifications described in 
                        subparagraph (C), except as provided in 
                        subparagraph (D); and
                          (x) any other information and 
                        documents concerning the applicant and 
                        any person associated with such 
                        applicant as the Commission, by rule, 
                        may prescribe as necessary or 
                        appropriate in the public interest or 
                        for the protection of investors.
                  (C) Written certifications.--Written 
                certifications required by subparagraph 
                (B)(ix)--
                          (i) shall be provided from not fewer 
                        than 10 qualified institutional buyers, 
                        none of which is affiliated with the 
                        applicant;
                          (ii) may address more than one 
                        category of obligors described in any 
                        of clauses (i) through (v) of section 
                        3(a)(62)(B);
                          (iii) shall include not fewer than 2 
                        certifications for each such category 
                        of obligor; and
                          (iv) shall state that the qualified 
                        institutional buyer--
                                  (I) meets the definition of a 
                                qualified institutional buyer 
                                under section 3(a)(64); and
                                  (II) has used the credit 
                                ratings of the applicant for at 
                                least the 3 years immediately 
                                preceding the date of the 
                                certification in the subject 
                                category or categories of 
                                obligors.
                  (D) Exemption from certification 
                requirement.--A written certification under 
                subparagraph (B)(ix) is not required with 
                respect to any credit rating agency which has 
                received, or been the subject of, a no-action 
                letter from the staff of the Commission prior 
                to August 2, 2006, stating that such staff 
                would not recommend enforcement action against 
                any broker or dealer that considers credit 
                ratings issued by such credit rating agency to 
                be ratings from a nationally recognized 
                statistical rating organization.
                  (E) Limitation on liability of qualified 
                institutional buyers.--No qualified 
                institutional buyer shall be liable in any 
                private right of action for any opinion or 
                statement expressed in a certification made 
                pursuant to subparagraph (B)(ix).
          (2) Review of application.--
                  (A) Initial determination.--Not later than 90 
                days after the date on which the application 
                for registration is furnished to the Commission 
                under paragraph (1) (or within such longer 
                period as to which the applicant consents) the 
                Commission shall--
                          (i) by order, grant such registration 
                        for ratings in the subject category or 
                        categories of obligors, as described in 
                        clauses (i) through (v) of section 
                        3(a)(62)(B); or
                          (ii) institute proceedings to 
                        determine whether registration should 
                        be denied.
                  (B) Conduct of proceedings.--
                          (i) Content.--Proceedings referred to 
                        in subparagraph (A)(ii) shall--
                                  (I) include notice of the 
                                grounds for denial under 
                                consideration and an 
                                opportunity for hearing; and
                                  (II) be concluded not later 
                                than 120 days after the date on 
                                which the application for 
                                registration is furnished to 
                                the Commission under paragraph 
                                (1).
                          (ii) Determination.--At the 
                        conclusion of such proceedings, the 
                        Commission, by order, shall grant or 
                        deny such application for registration.
                          (iii) Extension authorized.--The 
                        Commission may extend the time for 
                        conclusion of such proceedings for not 
                        longer than 90 days, if it finds good 
                        cause for such extension and publishes 
                        its reasons for so finding, or for such 
                        longer period as to which the applicant 
                        consents.
                  (C) Grounds for decision.--The Commission 
                shall grant registration under this 
                subsection--
                          (i) if the Commission finds that the 
                        requirements of this section are 
                        satisfied; and
                          (ii) unless the Commission finds (in 
                        which case the Commission shall deny 
                        such registration) that--
                                  (I) the applicant does not 
                                have adequate financial and 
                                managerial resources to 
                                consistently produce credit 
                                ratings with integrity and to 
                                materially comply with the 
                                procedures and methodologies 
                                disclosed under paragraph 
                                (1)(B) and with subsections 
                                (g), (h), (i), and (j); or
                                  (II) if the applicant were so 
                                registered, its registration 
                                would be subject to suspension 
                                or revocation under subsection 
                                (d).
          (3) Public availability of information.--Subject to 
        section 24, the Commission shall, by rule, require a 
        nationally recognized statistical rating organization, 
        upon the granting of registration under this section, 
        to make the information and documents submitted to the 
        Commission in its completed application for 
        registration, or in any amendment submitted under 
        paragraph (1) or (2) of subsection (b), publicly 
        available on its website, or through another 
        comparable, readily accessible means, except as 
        provided in clauses (viii) and (ix) of paragraph 
        (1)(B).
  (b) Update of Registration.--
          (1) Update.--Each nationally recognized statistical 
        rating organization shall promptly amend its 
        application for registration under this section if any 
        information or document provided therein becomes 
        materially inaccurate, except that a nationally 
        recognized statistical rating organization is not 
        required to amend--
                  (A) the information required to be filed 
                under subsection (a)(1)(B)(i) by filing 
                information under this paragraph, but shall 
                amend such information in the annual submission 
                of the organization under paragraph (2) of this 
                subsection; or
                  (B) the certifications required to be 
                provided under subsection (a)(1)(B)(ix) by 
                filing information under this paragraph.
          (2) Certification.--Not later than 90 days after the 
        end of each calendar year, each nationally recognized 
        statistical rating organization shall file with the 
        Commission an amendment to its registration, in such 
        form as the Commission, by rule, may prescribe as 
        necessary or appropriate in the public interest or for 
        the protection of investors--
                  (A) certifying that the information and 
                documents in the application for registration 
                of such nationally recognized statistical 
                rating organization (other than the 
                certifications required under subsection 
                (a)(1)(B)(ix)) continue to be accurate; and
                  (B) listing any material change that occurred 
                to such information or documents during the 
                previous calendar year.
  (c) Accountability for Ratings Procedures.--
          (1) Authority.--The Commission shall have exclusive 
        authority to enforce the provisions of this section in 
        accordance with this title with respect to any 
        nationally recognized statistical rating organization, 
        if such nationally recognized statistical rating 
        organization issues credit ratings in material 
        contravention of those procedures relating to such 
        nationally recognized statistical rating organization, 
        including procedures relating to the prevention of 
        misuse of nonpublic information and conflicts of 
        interest, that such nationally recognized statistical 
        rating organization--
                  (A) includes in its application for 
                registration under subsection (a)(1)(B)(ii); or
                  (B) makes and disseminates in reports 
                pursuant to section 17(a) or the rules and 
                regulations thereunder.
          (2) Limitation.--The rules and regulations that the 
        Commission may prescribe pursuant to this title, as 
        they apply to nationally recognized statistical rating 
        organizations, shall be narrowly tailored to meet the 
        requirements of this title applicable to nationally 
        recognized statistical rating organizations. 
        Notwithstanding any other provision of this section, or 
        any other provision of law, neither the Commission nor 
        any State (or political subdivision thereof) may 
        regulate the substance of credit ratings or the 
        procedures and methodologies by which any nationally 
        recognized statistical rating organization determines 
        credit ratings. Nothing in this paragraph may be 
        construed to afford a defense against any action or 
        proceeding brought by the Commission to enforce the 
        antifraud provisions of the securities laws.
          (3) Internal controls over processes for determining 
        credit ratings.--
                  (A) In general.--Each nationally recognized 
                statistical rating organization shall 
                establish, maintain, enforce, and document an 
                effective internal control structure governing 
                the implementation of and adherence to 
                policies, procedures, and methodologies for 
                determining credit ratings, taking into 
                consideration such factors as the Commission 
                may prescribe, by rule.
                  (B) Attestation requirement.--The Commission 
                shall prescribe rules requiring each nationally 
                recognized statistical rating organization to 
                submit to the Commission an annual internal 
                controls report, which shall contain--
                          (i) a description of the 
                        responsibility of the management of the 
                        nationally recognized statistical 
                        rating organization in establishing and 
                        maintaining an effective internal 
                        control structure under subparagraph 
                        (A); and
                          (ii) an assessment of the 
                        effectiveness of the internal control 
                        structure of the nationally recognized 
                        statistical rating organization[; and].
                          [(iii) the attestation of the chief 
                        executive officer, or equivalent 
                        individual, of the nationally 
                        recognized statistical rating 
                        organization.]
  (d) Censure, Denial, or Suspension of Registration; Notice 
and Hearing.--
          (1) In general.--The Commission, by order, shall 
        censure, place limitations on the activities, 
        functions, or operations of, suspend for a period not 
        exceeding 12 months, or revoke the registration of any 
        nationally recognized statistical rating organization, 
        or with respect to any person who is associated with, 
        who is seeking to become associated with, or, at the 
        time of the alleged misconduct, who was associated or 
        was seeking to become associated with a nationally 
        recognized statistical rating organization, the 
        Commission, by order, shall censure, place limitations 
        on the activities or functions of such person, suspend 
        for a period not exceeding 1 year, or bar such person 
        from being associated with a nationally recognized 
        statistical rating organization, if the Commission 
        finds, on the record after notice and opportunity for 
        hearing, that such censure, placing of limitations, 
        suspension, bar or revocation is necessary for the 
        protection of investors and in the public interest and 
        that such nationally recognized statistical rating 
        organization, or any person associated with such an 
        organization, whether prior to or subsequent to 
        becoming so associated--
                  (A) has committed or omitted any act, or is 
                subject to an order or finding, enumerated in 
                subparagraph (A), (D), (E), (H), or (G) of 
                section 15(b)(4), has been convicted of any 
                offense specified in section 15(b)(4)(B), or is 
                enjoined from any action, conduct, or practice 
                specified in subparagraph (C) of section 
                15(b)(4), during the 10-year period preceding 
                the date of commencement of the proceedings 
                under this subsection, or at any time 
                thereafter;
                  (B) has been convicted during the 10-year 
                period preceding the date on which an 
                application for registration is filed with the 
                Commission under this section, or at any time 
                thereafter, of--
                          (i) any crime that is punishable by 
                        imprisonment for 1 or more years, and 
                        that is not described in section 
                        15(b)(4)(B); or
                          (ii) a substantially equivalent crime 
                        by a foreign court of competent 
                        jurisdiction;
                  (C) is subject to any order of the Commission 
                barring or suspending the right of the person 
                to be associated with a nationally recognized 
                statistical rating organization;
                  (D) fails to file the certifications required 
                under subsection (b)(2);
                  (E) fails to maintain adequate financial and 
                managerial resources to consistently produce 
                credit ratings with integrity;
                  (F) has failed reasonably to supervise, with 
                a view to preventing a violation of the 
                securities laws, an individual who commits such 
                a violation, if the individual is subject to 
                the supervision of that person.
          (2) Suspension or revocation for particular class of 
        securities.--
                  (A) In general.--The Commission may 
                temporarily suspend or permanently revoke the 
                registration of a nationally recognized 
                statistical rating organization with respect to 
                a particular class or subclass of securities, 
                if the Commission finds, on the record after 
                notice and opportunity for hearing, that the 
                nationally recognized statistical rating 
                organization does not have adequate financial 
                and managerial resources to consistently 
                produce credit ratings with integrity.
                  (B) Considerations.--In making any 
                determination under subparagraph (A), the 
                Commission shall consider--
                          (i) whether the nationally recognized 
                        statistical rating organization has 
                        failed over a sustained period of time, 
                        as determined by the Commission, to 
                        produce ratings that are accurate for 
                        that class or subclass of securities; 
                        and
                          (ii) such other factors as the 
                        Commission may determine.
  (e) Termination of Registration.--
          (1) Voluntary withdrawal.--A nationally recognized 
        statistical rating organization may, upon such terms 
        and conditions as the Commission may establish as 
        necessary in the public interest or for the protection 
        of investors, withdraw from registration by furnishing 
        a written notice of withdrawal to the Commission.
          (2) Commission authority.--In addition to any other 
        authority of the Commission under this title, if the 
        Commission finds that a nationally recognized 
        statistical rating organization is no longer in 
        existence or has ceased to do business as a credit 
        rating agency, the Commission, by order, shall cancel 
        the registration under this section of such nationally 
        recognized statistical rating organization.
  (f) Representations.--
          (1) Ban on representations of sponsorship by united 
        states or agency thereof.--It shall be unlawful for any 
        nationally recognized statistical rating organization 
        to represent or imply in any manner whatsoever that 
        such nationally recognized statistical rating 
        organization has been designated, sponsored, 
        recommended, or approved, or that the abilities or 
        qualifications thereof have in any respect been passed 
        upon, by the United States or any agency, officer, or 
        employee thereof.
          (2) Ban on representation as nrsro of unregistered 
        credit rating agencies.--It shall be unlawful for any 
        credit rating agency that is not registered under this 
        section as a nationally recognized statistical rating 
        organization to state that such credit rating agency is 
        a nationally recognized statistical rating organization 
        registered under this title.
          (3) Statement of registration under securities 
        exchange act of 1934 provisions.--No provision of 
        paragraph (1) shall be construed to prohibit a 
        statement that a nationally recognized statistical 
        rating organization is a nationally recognized 
        statistical rating organization under this title, if 
        such statement is true in fact and if the effect of 
        such registration is not misrepresented.
  (g) Prevention of Misuse of Nonpublic Information.--
          (1) Organization policies and procedures.--Each 
        nationally recognized statistical rating organization 
        shall establish, maintain, and enforce written policies 
        and procedures reasonably designed, taking into 
        consideration the nature of the business of such 
        nationally recognized statistical rating organization, 
        to prevent the misuse in violation of this title, or 
        the rules or regulations hereunder, of material, 
        nonpublic information by such nationally recognized 
        statistical rating organization or any person 
        associated with such nationally recognized statistical 
        rating organization.
          (2) Commission authority.--The Commission shall issue 
        final rules in accordance with subsection (n) to 
        require specific policies or procedures that are 
        reasonably designed to prevent misuse in violation of 
        this title (or the rules or regulations hereunder) of 
        material, nonpublic information.
  (h) Management of Conflicts of Interest.--
          (1) Organization policies and procedures.--Each 
        nationally recognized statistical rating organization 
        shall establish, maintain, and enforce written policies 
        and procedures reasonably designed, taking into 
        consideration the nature of the business of such 
        nationally recognized statistical rating organization 
        and affiliated persons and affiliated companies 
        thereof, to address and manage any conflicts of 
        interest that can arise from such business.
          (2) Commission authority.--The Commission shall issue 
        final rules in accordance with subsection (n) to 
        prohibit, or require the management and disclosure of, 
        any conflicts of interest relating to the issuance of 
        credit ratings by a nationally recognized statistical 
        rating organization, including, without limitation, 
        conflicts of interest relating to--
                  (A) the manner in which a nationally 
                recognized statistical rating organization is 
                compensated by the obligor, or any affiliate of 
                the obligor, for issuing credit ratings or 
                providing related services;
                  (B) the provision of consulting, advisory, or 
                other services by a nationally recognized 
                statistical rating organization, or any person 
                associated with such nationally recognized 
                statistical rating organization, to the 
                obligor, or any affiliate of the obligor;
                  (C) business relationships, ownership 
                interests, or any other financial or personal 
                interests between a nationally recognized 
                statistical rating organization, or any person 
                associated with such nationally recognized 
                statistical rating organization, and the 
                obligor, or any affiliate of the obligor;
                  (D) any affiliation of a nationally 
                recognized statistical rating organization, or 
                any person associated with such nationally 
                recognized statistical rating organization, 
                with any person that underwrites the securities 
                or money market instruments that are the 
                subject of a credit rating; and
                  (E) any other potential conflict of interest, 
                as the Commission deems necessary or 
                appropriate in the public interest or for the 
                protection of investors.
          (3) Separation of ratings from sales and marketing.--
                  (A) Rules required.--The Commission shall 
                issue rules to prevent the sales and marketing 
                considerations of a nationally recognized 
                statistical rating organization from 
                influencing the production of ratings by the 
                nationally recognized statistical rating 
                organization.
                  (B) Contents of rules.--The rules issued 
                under subparagraph (A) shall provide for--
                          (i) exceptions for small nationally 
                        recognized statistical rating 
                        organizations with respect to which the 
                        Commission determines that the 
                        separation of the production of ratings 
                        and sales and marketing activities is 
                        not appropriate; and
                          (ii) suspension or revocation of the 
                        registration of a nationally recognized 
                        statistical rating organization, if the 
                        Commission finds, on the record, after 
                        notice and opportunity for a hearing, 
                        that--
                                  (I) the nationally recognized 
                                statistical rating organization 
                                has committed a violation of a 
                                rule issued under this 
                                subsection; and
                                  (II) the violation of a rule 
                                issued under this subsection 
                                affected a rating.
                  (C) Exception for providing certain material 
                information.--Rules issued under this paragraph 
                may not prohibit a person who participates in 
                sales or marketing of a product or service of a 
                nationally recognized statistical rating 
                organization from providing material 
                information, or information believed in good 
                faith to be material, to the issuance or 
                maintenance of a credit rating to a person who 
                participates in determining or monitoring the 
                credit rating, or developing or approving 
                procedures or methodologies used for 
                determining the credit rating, so long as the 
                information provided is not intended to 
                influence the determination of a credit rating, 
                or the procedures or methodologies used to 
                determine credit ratings.
          (4) Look-back requirement.--
                  (A) Review by the nationally recognized 
                statistical rating organization.--[Each 
                nationally]
                          (i) In general._Each nationally 
                        recognized statistical rating 
                        organization shall establish, maintain, 
                        and enforce policies and procedures 
                        reasonably designed to ensure that, in 
                        any case in which an employee of a 
                        person subject to a credit rating of 
                        the nationally recognized statistical 
                        rating organization or the issuer, 
                        [underwriter] lead underwriter, or 
                        sponsor of a security or money market 
                        instrument subject to a credit rating 
                        of the nationally recognized 
                        statistical rating organization was 
                        employed by the nationally recognized 
                        statistical rating organization and 
                        participated [in any capacity] in 
                        determining credit ratings for the 
                        person or the securities or money 
                        market instruments [during the 1-year 
                        period preceding the date an action was 
                        taken with respect to the credit 
                        rating], the nationally recognized 
                        statistical rating organization shall--
                                  [(i)] (I) conduct a review to 
                                determine whether any conflicts 
                                of interest of the employee 
                                influenced the credit rating 
                                during the 1-year period 
                                preceding the departure of the 
                                employee from the nationally 
                                recognized statistical rating 
                                organization; and
                                  [(ii)] (II) take action to 
                                revise the rating if 
                                appropriate, in accordance with 
                                such rules as the Commission 
                                shall prescribe.
                          (ii) Maintenance of ratings 
                        actions.--In the case of maintenance of 
                        ratings actions, the requirement under 
                        clause (i) shall only apply to 
                        employees of a person subject to a 
                        credit rating of the nationally 
                        recognized statistical rating 
                        organization or an issuer of a security 
                        or money market instrument subject to a 
                        credit rating of the nationally 
                        recognized statistical rating 
                        organization.
                  (B) Review by commission.--
                          (i) In general.--The Commission shall 
                        conduct periodic reviews of the 
                        policies described in subparagraph (A) 
                        and the implementation of the policies 
                        at each nationally recognized 
                        statistical rating organization to 
                        ensure they are reasonably designed and 
                        implemented to most effectively 
                        eliminate conflicts of interest.
                          (ii) Timing of reviews.--The 
                        Commission shall review the code of 
                        ethics and conflict of interest policy 
                        of each nationally recognized 
                        statistical rating organization--
                                  (I) not less frequently than 
                                annually; and
                                  (II) whenever such policies 
                                are materially modified or 
                                amended.
          (5) Report to commission on certain employment 
        transitions.--
                  (A) Report required.--Each nationally 
                recognized statistical rating organization 
                shall report to the Commission any case such 
                organization knows or can reasonably be 
                expected to know where a person associated with 
                such organization within the previous 5 years 
                obtains employment with any obligor, issuer, 
                underwriter, or sponsor of a security or money 
                market instrument for which the organization 
                issued a credit rating during the 12-month 
                period prior to such employment, if such 
                employee--
                          (i) was a senior officer of such 
                        organization;
                          (ii) participated in any capacity in 
                        determining credit ratings for such 
                        obligor, issuer, underwriter, or 
                        sponsor; or
                          (iii) supervised an employee 
                        described in clause (ii).
                  (B) Public disclosure.--Upon receiving such a 
                report, the Commission shall make such 
                information publicly available.
  (i) Prohibited Conduct.--
          (1) Prohibited acts and practices.--The Commission 
        shall issue final rules in accordance with subsection 
        (n) to prohibit any act or practice relating to the 
        issuance of credit ratings by a nationally recognized 
        statistical rating organization that the Commission 
        determines to be unfair, coercive, or abusive, 
        including any act or practice relating to--
                  (A) conditioning or threatening to condition 
                the issuance of a credit rating on the purchase 
                by the obligor or an affiliate thereof of other 
                services or products, including pre-credit 
                rating assessment products, of the nationally 
                recognized statistical rating organization or 
                any person associated with such nationally 
                recognized statistical rating organization;
                  (B) lowering or threatening to lower a credit 
                rating on, or refusing to rate, securities or 
                money market instruments issued by an asset 
                pool or as part of any asset-backed or 
                mortgage-backed securities transaction, unless 
                a portion of the assets within such pool or 
                part of such transaction, as applicable, also 
                is rated by the nationally recognized 
                statistical rating organization; or
                  (C) modifying or threatening to modify a 
                credit rating or otherwise departing from its 
                adopted systematic procedures and methodologies 
                in determining credit ratings, based on whether 
                the obligor, or an affiliate of the obligor, 
                purchases or will purchase the credit rating or 
                any other service or product of the nationally 
                recognized statistical rating organization or 
                any person associated with such organization.
          (2) Rule of construction.--Nothing in paragraph (1), 
        or in any rules or regulations adopted thereunder, may 
        be construed to modify, impair, or supersede the 
        operation of any of the antitrust laws (as defined in 
        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).
  (j) Designation of Compliance Officer.--
          (1) In general.--Each nationally recognized 
        statistical rating organization shall designate an 
        individual responsible for administering the policies 
        and procedures that are required to be established 
        pursuant to subsections (g) and (h), and for ensuring 
        compliance with the securities laws and the rules and 
        regulations thereunder, including those promulgated by 
        the Commission pursuant to this section.
          (2) Limitations.--
                  (A) In general.--Except as provided in 
                subparagraph (B), an individual designated 
                under paragraph (1) may not, while serving in 
                the designated capacity--
                          (i) perform credit ratings;
                          (ii) participate in the development 
                        of ratings methodologies or models;
                          (iii) perform marketing or sales 
                        functions; or
                          (iv) participate in establishing 
                        compensation levels, other than for 
                        employees working for that individual.
                  (B) Exception.--The Commission may exempt a 
                small nationally recognized statistical rating 
                organization from the limitations under this 
                paragraph, if the Commission finds that 
                compliance with such limitations would impose 
                an unreasonable burden on the nationally 
                recognized statistical rating organization.
          (3) Other duties.--Each individual designated under 
        paragraph (1) shall establish procedures for the 
        receipt, retention, and treatment of--
                  (A) complaints regarding credit ratings, 
                models, methodologies, and compliance with the 
                securities laws and the policies and procedures 
                developed under this section; and
                  (B) confidential, anonymous complaints by 
                employees or users of credit ratings.
          (4) Compensation.--The compensation of each 
        compliance officer appointed under paragraph (1) shall 
        not be linked to the financial performance of the 
        nationally recognized statistical rating organization 
        and shall be arranged so as to ensure the independence 
        of the officer's judgment.
          (5) Annual reports required.--
                  (A) Annual reports required.--Each individual 
                designated under paragraph (1) shall submit to 
                the nationally recognized statistical rating 
                organization an annual report on the compliance 
                of the nationally recognized statistical rating 
                organization with the securities laws and the 
                policies and procedures of the nationally 
                recognized statistical rating organization that 
                includes--
                          (i) a description of any material 
                        changes to the code of ethics and 
                        conflict of interest policies of the 
                        nationally recognized statistical 
                        rating organization; and
                          (ii) a certification that the report 
                        is accurate and complete.
                  (B) Submission of reports to the 
                commission.--Each nationally recognized 
                statistical rating organization shall file the 
                reports required under subparagraph (A) 
                together with the financial report that is 
                required to be submitted to the Commission 
                under this section.
  (k) Statements of Financial Condition.--Each nationally 
recognized statistical rating organization shall, on a 
confidential basis, file with the Commission, at intervals 
determined by the Commission, such financial statements, 
certified (if required by the rules or regulations of the 
Commission) by an independent public accountant, and 
information concerning its financial condition, as the 
Commission, by rule, may prescribe as necessary or appropriate 
in the public interest or for the protection of investors.
  (l) Sole Method of Registration.--
          (1) In general.--On and after the effective date of 
        this section, a credit rating agency may only be 
        registered as a nationally recognized statistical 
        rating organization for any purpose in accordance with 
        this section.
          (2) Prohibition on reliance on no-action relief.--On 
        and after the effective date of this section--
                  (A) an entity that, before that date, 
                received advice, approval, or a no-action 
                letter from the Commission or staff thereof to 
                be treated as a nationally recognized 
                statistical rating organization pursuant to the 
                Commission rule at section 240.15c3-1 of title 
                17, Code of Federal Regulations, may represent 
                itself or act as a nationally recognized 
                statistical rating organization only--
                          (i) during Commission consideration 
                        of the application, if such entity has 
                        filed an application for registration 
                        under this section; and
                          (ii) on and after the date of 
                        approval of its application for 
                        registration under this section; and
                  (B) the advice, approval, or no-action letter 
                described in subparagraph (A) shall be void.
          (3) Notice to other agencies.--Not later than 30 days 
        after the date of enactment of this section, the 
        Commission shall give notice of the actions undertaken 
        pursuant to this section to each Federal agency which 
        employs in its rules and regulations the term 
        ``nationally recognized statistical rating 
        organization'' (as that term is used under Commission 
        rule 15c3-1 (17 C.F.R. 240.15c3-1), as in effect on the 
        date of enactment of this section).
  (m) Accountability.--
          (1) In general.--The enforcement and penalty 
        provisions of this title shall apply to statements made 
        by a credit rating agency in the same manner and to the 
        same extent as such provisions apply to statements made 
        by a registered public accounting firm or a securities 
        analyst under the securities laws, and such statements 
        shall not be deemed forward-looking statements for the 
        purposes of section 21E.
          (2) Rulemaking.--The Commission shall issue such 
        rules as may be necessary to carry out this subsection.
  (n) Regulations.--
          (1) New provisions.--Such rules and regulations as 
        are required by this section or are otherwise necessary 
        to carry out this section, including the application 
        form required under subsection (a)--
                  (A) shall be issued by the Commission in 
                final form, not later than 270 days after the 
                date of enactment of this section; and
                  (B) shall become effective not later than 270 
                days after the date of enactment of this 
                section.
          (2) Review of existing regulations.--Not later than 
        270 days after the date of enactment of this section, 
        the Commission shall--
                  (A) review its existing rules and regulations 
                which employ the term ``nationally recognized 
                statistical rating organization'' or ``NRSRO''; 
                and
                  (B) amend or revise such rules and 
                regulations in accordance with the purposes of 
                this section, as the Commission may prescribe 
                as necessary or appropriate in the public 
                interest or for the protection of investors.
  (o) NRSROs Subject to Commission Authority.--
          (1) In general.--No provision of the laws of any 
        State or political subdivision thereof requiring the 
        registration, licensing, or qualification as a credit 
        rating agency or a nationally recognized statistical 
        rating organization shall apply to any nationally 
        recognized statistical rating organization or person 
        employed by or working under the control of a 
        nationally recognized statistical rating organization.
          (2) Limitation.--Nothing in this subsection prohibits 
        the securities commission (or any agency or office 
        performing like functions) of any State from 
        investigating and bringing an enforcement action with 
        respect to fraud or deceit against any nationally 
        recognized statistical rating organization or person 
        associated with a nationally recognized statistical 
        rating organization.
  (p) Regulation of Nationally Recognized Statistical Rating 
Organizations.--
          (1) Establishment of office of credit ratings.--
                  (A) Office established.--The Commission shall 
                establish [within the Commission] within the 
                Division of Trading and Markets an Office of 
                Credit Ratings (referred to in this subsection 
                as the ``Office'') to administer the rules of 
                the Commission--
                          (i) with respect to the practices of 
                        nationally recognized statistical 
                        rating organizations in determining 
                        ratings, for the protection of users of 
                        credit ratings and in the public 
                        interest;
                          (ii) to promote accuracy in credit 
                        ratings issued by nationally recognized 
                        statistical rating organizations; and
                          (iii) to ensure that such ratings are 
                        not unduly influenced by conflicts of 
                        interest.
                  (B) Director of the office.--The head of the 
                Office shall be the Director, who shall [report 
                to the Chairman] report to the head of the 
                Division of Trading and Markets.
          (2) Staffing.--The Office established under this 
        subsection shall be staffed sufficiently to carry out 
        fully the requirements of this section. The staff shall 
        include persons with knowledge of and expertise in 
        corporate, municipal, and structured debt finance.
          (3) Commission examinations.--
                  (A)  [Annual] Risk-based examinations 
                required.--The Office shall conduct [an 
                examination] examinations of each nationally 
                recognized statistical rating organization [at 
                least annually].
                  (B) Conduct of examinations.--Each 
                examination under subparagraph (A) shall 
                include, as appropriate, a review of--
                          (i) whether the nationally recognized 
                        statistical rating organization 
                        conducts business in accordance with 
                        the policies, procedures, and rating 
                        methodologies of the nationally 
                        recognized statistical rating 
                        organization;
                          (ii) the management of conflicts of 
                        interest by the nationally recognized 
                        statistical rating organization;
                          (iii) implementation of ethics 
                        policies by the nationally recognized 
                        statistical rating organization;
                          (iv) the internal supervisory 
                        controls of the nationally recognized 
                        statistical rating organization;
                          (v) the governance of the nationally 
                        recognized statistical rating 
                        organization;
                          (vi) the activities of the individual 
                        designated by the nationally recognized 
                        statistical rating organization under 
                        subsection (j)(1);
                          (vii) the processing of complaints by 
                        the nationally recognized statistical 
                        rating organization; and
                          (viii) the policies of the nationally 
                        recognized statistical rating 
                        organization governing the post-
                        employment activities of former staff 
                        of the nationally recognized 
                        statistical rating organization.
                  (C) Inspection reports.--The Commission shall 
                make available to the public, in an easily 
                understandable format, an annual report 
                summarizing--
                          (i) the essential findings of all 
                        examinations conducted under 
                        subparagraph (A), as deemed appropriate 
                        by the Commission;
                          (ii) the responses by the nationally 
                        recognized statistical rating 
                        organizations to any material 
                        regulatory deficiencies identified by 
                        the Commission under clause (i); and
                          (iii) whether the nationally 
                        recognized statistical rating 
                        organizations have appropriately 
                        addressed the recommendations of the 
                        Commission contained in previous 
                        reports under this subparagraph.
          (4) Rulemaking authority.--The Commission shall--
                  (A) establish, by rule, fines, and other 
                penalties applicable to any nationally 
                recognized statistical rating organization that 
                violates the requirements of this section and 
                the rules thereunder; and
                  (B) issue such rules as may be necessary to 
                carry out this section.
  (q) Transparency of Ratings Performance.--
          (1) Rulemaking required.--The Commission shall, by 
        rule, require that each nationally recognized 
        statistical rating organization publicly disclose 
        information on the initial credit ratings determined by 
        the nationally recognized statistical rating 
        organization for each type of obligor, security, and 
        money market instrument, and any subsequent changes to 
        such credit ratings, for the purpose of allowing users 
        of credit ratings to evaluate the accuracy of ratings 
        and compare the performance of ratings by different 
        nationally recognized statistical rating organizations.
          (2) Content.--The rules of the Commission under this 
        subsection shall require, at a minimum, disclosures 
        that--
                  (A) are comparable among nationally 
                recognized statistical rating organizations, to 
                allow users of credit ratings to compare the 
                performance of credit ratings across nationally 
                recognized statistical rating organizations;
                  (B) are clear and informative for investors 
                having a wide range of sophistication who use 
                or might use credit ratings;
                  (C) include performance information over a 
                range of years and for a variety of types of 
                credit ratings, including for credit ratings 
                withdrawn by the nationally recognized 
                statistical rating organization;
                  (D) are published and made freely available 
                by the nationally recognized statistical rating 
                organization, on an easily accessible portion 
                of its website, and in writing, when requested; 
                and
                  (E) are appropriate to the business model of 
                a nationally recognized statistical rating 
                organization[; and].
                  [(F) each nationally recognized statistical 
                rating organization include an attestation with 
                any credit rating it issues affirming that no 
                part of the rating was influenced by any other 
                business activities, that the rating was based 
                solely on the merits of the instruments being 
                rated, and that such rating was an independent 
                evaluation of the risks and merits of the 
                instrument.]
  (r) Credit Ratings Methodologies.--The Commission shall 
prescribe rules, for the protection of investors and in the 
public interest, with respect to the procedures and 
methodologies, including qualitative and quantitative data and 
models, used by nationally recognized statistical rating 
organizations that require each nationally recognized 
statistical rating organization--
          (1) to ensure that credit ratings are determined 
        using procedures and methodologies, including 
        qualitative and quantitative data and models, that 
        are--
                  (A) approved by the board of the nationally 
                recognized statistical rating organization, a 
                body performing a function similar to that of a 
                board, or the Chief Credit Officer; and
                  (B) in accordance with the policies and 
                procedures of the nationally recognized 
                statistical rating organization for the 
                development and modification of credit rating 
                procedures and methodologies;
          (2) to ensure that when material changes to credit 
        rating procedures and methodologies (including changes 
        to qualitative and quantitative data and models) are 
        made, that--
                  (A) the changes are applied consistently to 
                all credit ratings to which the changed 
                procedures and methodologies apply;
                  (B) to the extent that changes are made to 
                credit rating surveillance procedures and 
                methodologies, the changes are applied to then-
                current credit ratings by the nationally 
                recognized statistical rating organization 
                within a reasonable time period determined by 
                the Commission, by rule; and
                  (C) the nationally recognized statistical 
                rating organization publicly discloses the 
                reason for the change; and
          (3) to notify users of credit ratings--
                  (A) of the version of a procedure or 
                methodology, including the qualitative 
                methodology or quantitative inputs, used with 
                respect to a particular credit rating;
                  (B) when a material change is made to a 
                procedure or methodology, including to a 
                qualitative model or quantitative inputs;
                  (C) when a significant error is identified in 
                a procedure or methodology, including a 
                qualitative or quantitative model, that may 
                result in credit rating actions; and
                  (D) of the likelihood of a material change 
                described in subparagraph (B) resulting in a 
                change in current credit ratings.
  (s) Transparency of Credit Rating Methodologies and 
Information Reviewed.--
          (1) Form for disclosures.--The Commission shall 
        require, by rule, each nationally recognized 
        statistical rating organization to prescribe a form to 
        accompany the publication of each credit rating that 
        discloses--
                  (A) information relating to--
                          (i) the assumptions underlying the 
                        credit rating procedures and 
                        methodologies;
                          (ii) the data that was relied on to 
                        determine the credit rating; and
                          (iii) if applicable, how the 
                        nationally recognized statistical 
                        rating organization used servicer or 
                        remittance reports, and with what 
                        frequency, to conduct surveillance of 
                        the credit rating; and
                  (B) information that can be used by investors 
                and other users of credit ratings to better 
                understand credit ratings in each class of 
                credit rating issued by the nationally 
                recognized statistical rating organization.
          (2) Format.--The form developed under paragraph (1) 
        shall--
                  (A) be easy to use and helpful for users of 
                credit ratings to understand the information 
                contained in the report;
                  (B) require the nationally recognized 
                statistical rating organization to provide the 
                content described in paragraph (3)(B) in a 
                manner that is directly comparable across types 
                of securities rated by the nationally 
                recognized statistical rating agency; and
                  (C) be made readily available to users of 
                credit ratings, in electronic or paper form, as 
                the Commission may, by rule, determine.
          (3) Content of form.--
                  (A) Qualitative content.--Each nationally 
                recognized statistical rating organization 
                shall disclose on the form developed under 
                paragraph (1)--
                          (i) the credit ratings produced by 
                        the nationally recognized statistical 
                        rating organization;
                          (ii) the main assumptions and 
                        principles used in constructing 
                        procedures and methodologies, including 
                        qualitative methodologies and 
                        quantitative inputs and assumptions 
                        about the correlation of defaults 
                        across underlying assets used in rating 
                        structured products;
                          (iii) the potential limitations of 
                        the credit ratings, and the types of 
                        risks excluded from the credit ratings 
                        that the nationally recognized 
                        statistical rating organization does 
                        not comment on, including liquidity, 
                        market, and other risks;
                          (iv) information on the uncertainty 
                        of the credit rating, including--
                                  (I) information on the 
                                reliability, accuracy, and 
                                quality of the data relied on 
                                in determining the credit 
                                rating; and
                                  (II) a statement relating to 
                                the extent to which data 
                                essential to the determination 
                                of the credit rating were 
                                reliable or limited, 
                                including--
                                          (aa) any limits on 
                                        the scope of historical 
                                        data; and
                                          (bb) any limits in 
                                        accessibility to 
                                        certain documents or 
                                        other types of 
                                        information that would 
                                        have better informed 
                                        the credit rating;
                          (v) whether and to what extent third 
                        party due diligence services have been 
                        used by the nationally recognized 
                        statistical rating organization, a 
                        description of the information that 
                        such third party reviewed in conducting 
                        due diligence services, and a 
                        description of the findings or 
                        conclusions of such third party;
                          (vi) a description of the data about 
                        any obligor, issuer, security, or money 
                        market instrument that were relied upon 
                        for the purpose of determining the 
                        credit rating;
                          (vii) a statement containing an 
                        overall assessment of the quality of 
                        information available and considered in 
                        producing a rating for an obligor, 
                        security, or money market instrument, 
                        in relation to the quality of 
                        information available to the nationally 
                        recognized statistical rating 
                        organization in rating similar 
                        issuances;
                          (viii) information relating to 
                        conflicts of interest of the nationally 
                        recognized statistical rating 
                        organization; and
                          (ix) such additional information as 
                        the Commission may require, except that 
                        the Commission may not require the 
                        inclusion of references to statutory or 
                        regulatory requirements or statutory 
                        provision headings or enumerators for 
                        any specific disclosure.
                  (B) Quantitative content.--Each nationally 
                recognized statistical rating organization 
                shall disclose on the form developed under this 
                subsection--
                          (i) an explanation or measure of the 
                        potential volatility of the credit 
                        rating, including--
                                  (I) any factors that might 
                                lead to a change in the credit 
                                ratings; and
                                  (II) the magnitude of the 
                                change that a user can expect 
                                under different market 
                                conditions;
                          (ii) information on the content of 
                        the rating, including--
                                  (I) the historical 
                                performance of the rating; and
                                  (II) the expected probability 
                                of default and the expected 
                                loss in the event of default;
                          (iii) information on the sensitivity 
                        of the rating to assumptions made by 
                        the nationally recognized statistical 
                        rating organization, including--
                                  (I) 5 assumptions made in the 
                                ratings process that, without 
                                accounting for any other 
                                factor, would have the greatest 
                                impact on a rating if the 
                                assumptions were proven false 
                                or inaccurate; and
                                  (II) an analysis, using 
                                specific examples, of how each 
                                of the 5 assumptions identified 
                                under subclause (I) impacts a 
                                rating;
                          (iv) such additional information as 
                        may be required by the Commission, 
                        except that the Commission may not 
                        require the inclusion of references to 
                        statutory or regulatory requirements or 
                        statutory provision headings or 
                        enumerators for any specific 
                        disclosure.
                  (C) No mandate on the organization of 
                disclosures.--The Commission may not mandate 
                the specific organization of the disclosures 
                required under this paragraph.
          (4) Due diligence services for asset-backed 
        securities.--
                  (A) Findings.--The issuer or underwriter of 
                any asset-backed security shall make publicly 
                available the findings and conclusions of any 
                third-party due diligence report obtained by 
                the issuer or underwriter.
                  (B) Certification required.--In any case in 
                which third-party due diligence services are 
                employed by a nationally recognized statistical 
                rating organization, an issuer, or an 
                underwriter, the person providing the due 
                diligence services shall provide to any 
                nationally recognized statistical rating 
                organization that produces a rating to which 
                such services relate, written certification, as 
                provided in subparagraph (C).
                  (C) Format and content.--The Commission shall 
                establish the appropriate format and content 
                for the written certifications required under 
                subparagraph (B), to ensure that providers of 
                due diligence services have conducted a 
                thorough review of data, documentation, and 
                other relevant information necessary for a 
                nationally recognized statistical rating 
                organization to provide an accurate rating.
                  (D) Disclosure of certification.--The 
                Commission shall adopt rules requiring a 
                nationally recognized statistical rating 
                organization, at the time at which the 
                nationally recognized statistical rating 
                organization produces a rating, to disclose the 
                certification described in subparagraph (B) to 
                the public in a manner that allows the public 
                to determine the adequacy and level of due 
                diligence services provided by a third party.
  (t) Corporate Governance, Organization, and Management of 
Conflicts of Interest.--
          (1) Board of directors.--Each nationally recognized 
        statistical rating organization shall have a board of 
        directors.
          (2) Independent directors.--
                  (A) In general.--At least \1/2\ of the board 
                of directors, but not fewer than 2 of the 
                members thereof, shall be independent of the 
                nationally recognized statistical rating 
                agency. A portion of the independent directors 
                shall include users of ratings from a 
                nationally recognized statistical rating 
                organization.
                  (B) Independence determination.--In order to 
                be considered independent for purposes of this 
                subsection, a member of the board of directors 
                of a nationally recognized statistical rating 
                organization--
                          (i) may not, other than in his or her 
                        capacity as a member of the board of 
                        directors or any committee thereof--
                                  (I) accept any consulting, 
                                advisory, or other compensatory 
                                fee from the nationally 
                                recognized statistical rating 
                                organization; or
                                  (II) be a person associated 
                                with the nationally recognized 
                                statistical rating organization 
                                or with any affiliated company 
                                thereof; and
                          (ii) shall be disqualified from any 
                        deliberation involving a specific 
                        rating in which the independent board 
                        member has a financial interest in the 
                        outcome of the rating.
                  (C) Compensation and term.--The compensation 
                of the independent members of the board of 
                directors of a nationally recognized 
                statistical rating organization shall not be 
                linked to the business performance of the 
                nationally recognized statistical rating 
                organization, and shall be arranged so as to 
                ensure the independence of their judgment. The 
                term of office of the independent directors 
                shall be for a pre-agreed fixed period, not to 
                exceed 5 years, and shall not be renewable.
          (3) Duties of board of directors.--In addition to the 
        overall responsibilities of the board of directors, the 
        board shall oversee--
                  (A) the establishment, maintenance, and 
                enforcement of policies and procedures for 
                determining credit ratings;
                  (B) the establishment, maintenance, and 
                enforcement of policies and procedures to 
                address, manage, and disclose any conflicts of 
                interest;
                  (C) the effectiveness of the internal control 
                system with respect to policies and procedures 
                for determining credit ratings; and
                  (D) the compensation and promotion policies 
                and practices of the nationally recognized 
                statistical rating organization.
          (4) Treatment of nrsro subsidiaries.--If a nationally 
        recognized statistical rating organization is a 
        subsidiary of a parent entity, the board of the 
        directors of the parent entity may satisfy the 
        requirements of this subsection by assigning to a 
        committee of such board of directors the duties under 
        paragraph (3), if--
                  (A) at least \1/2\ of the members of the 
                committee (including the chairperson of the 
                committee) are independent, as defined in this 
                section; and
                  (B) at least 1 member of the committee is a 
                user of ratings from a nationally recognized 
                statistical rating organization.
          (5) Exception authority.--If the Commission finds 
        that compliance with the provisions of this subsection 
        present an unreasonable burden on a small nationally 
        recognized statistical rating organization, the 
        Commission may permit the nationally recognized 
        statistical rating organization to delegate such 
        responsibilities to a committee that includes at least 
        one individual who is a user of ratings of a nationally 
        recognized statistical rating organization.
  (u) Duty To Report Tips Alleging Material Violations of 
Law.--
          (1) Duty to report.--Each nationally recognized 
        statistical rating organization shall refer to the 
        appropriate law enforcement or regulatory authorities 
        any information that the nationally recognized 
        statistical rating organization receives from a third 
        party and finds credible that alleges that an issuer of 
        securities rated by the nationally recognized 
        statistical rating organization has committed or is 
        committing a material violation of law that has not 
        been adjudicated by a Federal or State court.
          (2) Rule of construction.--Nothing in paragraph (1) 
        may be construed to require a nationally recognized 
        statistical rating organization to verify the accuracy 
        of the information described in paragraph (1).
  (v) Information From Sources Other Than the Issuer.--In 
producing a credit rating, a nationally recognized statistical 
rating organization shall consider information about an issuer 
that the nationally recognized statistical rating organization 
has, or receives from a source other than the issuer or 
underwriter, that the nationally recognized statistical rating 
organization finds credible and potentially significant to a 
rating decision.
  (w) Commission Exemptive Authority.--The Commission, by rules 
and regulations upon its own motion, or by order upon 
application, may conditionally or unconditionally exempt any 
person from any provision or provisions of this title or of any 
rule or regulation thereunder, if and to the extent it 
determines that such rule, regulation, or requirement is 
creating a barrier to entry into the market for nationally 
recognized statistical rating organizations or impeding 
competition among such organizations, or that such an exemption 
is necessary or appropriate in the public interest and is 
consistent with the protection of investors.

SEC. 15F. REGISTRATION AND REGULATION OF SECURITY-BASED SWAP DEALERS 
                    AND MAJOR SECURITY-BASED SWAP PARTICIPANTS.

  (a) Registration.--
          (1) Security-based swap dealers.--It shall be 
        unlawful for any person to act as a security-based swap 
        dealer unless the person is registered as a security-
        based swap dealer with the Commission.
          (2) Major security-based swap participants.--It shall 
        be unlawful for any person to act as a major security-
        based swap participant unless the person is registered 
        as a major security-based swap participant with the 
        Commission.
  (b) Requirements.--
          (1) In general.--A person shall register as a 
        security-based swap dealer or major security-based swap 
        participant by filing a registration application with 
        the Commission.
          (2) Contents.--
                  (A) In general.--The application shall be 
                made in such form and manner as prescribed by 
                the Commission, and shall contain such 
                information, as the Commission considers 
                necessary concerning the business in which the 
                applicant is or will be engaged.
                  (B) Continual reporting.--A person that is 
                registered as a security-based swap dealer or 
                major security-based swap participant shall 
                continue to submit to the Commission reports 
                that contain such information pertaining to the 
                business of the person as the Commission may 
                require.
          (3) Expiration.--Each registration under this section 
        shall expire at such time as the Commission may 
        prescribe by rule or regulation.
          (4) Rules.--Except as provided in subsections (d) and 
        (e), the Commission may prescribe rules applicable to 
        security-based swap dealers and major security-based 
        swap participants, including rules that limit the 
        activities of non-bank security-based swap dealers and 
        major security-based swap participants.
          (5) Transition.--Not later than 1 year after the date 
        of enactment of the Wall Street Transparency and 
        Accountability Act of 2010, the Commission shall issue 
        rules under this section to provide for the 
        registration of security-based swap dealers and major 
        security-based swap participants.
          (6) Statutory disqualification.--Except to the extent 
        otherwise specifically provided by rule, regulation, or 
        order of the Commission, it shall be unlawful for a 
        security-based swap dealer or a major security-based 
        swap participant to permit any person associated with a 
        security-based swap dealer or a major security-based 
        swap participant who is subject to a statutory 
        disqualification to effect or be involved in effecting 
        security-based swaps on behalf of the security-based 
        swap dealer or major security-based swap participant, 
        if the security-based swap dealer or major security-
        based swap participant knew, or in the exercise of 
        reasonable care should have known, of the statutory 
        disqualification.
  (c) Dual Registration.--
          (1) Security-based swap dealer.--Any person that is 
        required to be registered as a security-based swap 
        dealer under this section shall register with the 
        Commission, regardless of whether the person also is 
        registered with the Commodity Futures Trading 
        Commission as a swap dealer.
          (2) Major security-based swap participant.--Any 
        person that is required to be registered as a major 
        security-based swap participant under this section 
        shall register with the Commission, regardless of 
        whether the person also is registered with the 
        Commodity Futures Trading Commission as a major swap 
        participant.
  (d) Rulemaking.--
          (1) In general.--The Commission shall adopt rules for 
        persons that are registered as security-based swap 
        dealers or major security-based swap participants under 
        this section.
          (2) Exception for prudential requirements.--
                  (A) In general.--The Commission may not 
                prescribe rules imposing prudential 
                requirements on security-based swap dealers or 
                major security-based swap participants for 
                which there is a prudential regulator.
                  (B) Applicability.--Subparagraph (A) does not 
                limit the authority of the Commission to 
                prescribe rules as directed under this section.
  (e) Capital and Margin Requirements.--
          (1) In general.--
                  (A) Security-based swap dealers and major 
                security-based swap participants that are 
                banks.--Each registered security-based swap 
                dealer and major security-based swap 
                participant for which there is not a prudential 
                regulator shall meet such minimum capital 
                requirements and minimum initial and variation 
                margin requirements as the prudential regulator 
                shall by rule or regulation prescribe under 
                paragraph (2)(A).
                  (B) Security-based swap dealers and major 
                security-based swap participants that are not 
                banks.--Each registered security-based swap 
                dealer and major security-based swap 
                participant for which there is not a prudential 
                regulator shall meet such minimum capital 
                requirements and minimum initial and variation 
                margin requirements as the Commission shall by 
                rule or regulation prescribe under paragraph 
                (2)(B).
          (2) Rules.--
                  (A) Security-based swap dealers and major 
                security-based swap participants that are 
                banks.--The prudential regulators, in 
                consultation with the Commission and the 
                Commodity Futures Trading Commission, shall 
                adopt rules for security-based swap dealers and 
                major security-based swap participants, with 
                respect to their activities as a swap dealer or 
                major swap participant, for which there is a 
                prudential regulator imposing--
                          (i) capital requirements; and
                          (ii) both initial and variation 
                        margin requirements on all security-
                        based swaps that are not cleared by a 
                        registered clearing agency.
                  (B) Security-based swap dealers and major 
                security-based swap participants that are not 
                banks.--The Commission shall adopt rules for 
                security-based swap dealers and major security-
                based swap participants, with respect to their 
                activities as a swap dealer or major swap 
                participant, for which there is not a 
                prudential regulator imposing--
                          (i) capital requirements; and
                          (ii) both initial and variation 
                        margin requirements on all swaps that 
                        are not cleared by a registered 
                        clearing agency.
                  (C) Capital.--In setting capital requirements 
                for a person that is designated as a security-
                based swap dealer or a major security-based 
                swap participant for a single type or single 
                class or category of security-based swap or 
                activities, the prudential regulator and the 
                Commission shall take into account the risks 
                associated with other types of security-based 
                swaps or classes of security-based swaps or 
                categories of security-based swaps engaged in 
                and the other activities conducted by that 
                person that are not otherwise subject to 
                regulation applicable to that person by virtue 
                of the status of the person.
          (3) Standards for capital and margin.--
                  (A) In general.--To offset the greater risk 
                to the security-based swap dealer or major 
                security-based swap participant and the 
                financial system arising from the use of 
                security-based swaps that are not cleared, the 
                requirements imposed under paragraph (2) shall 
                --
                          (i) help ensure the safety and 
                        soundness of the security-based swap 
                        dealer or major security-based swap 
                        participant; and
                          (ii) be appropriate for the risk 
                        associated with the non-cleared 
                        security-based swaps held as a 
                        security-based swap dealer or major 
                        security-based swap participant.
                  (B) Rule of construction.--
                          (i) In general.--Nothing in this 
                        section shall limit, or be construed to 
                        limit, the authority--
                                  (I) of the Commission to set 
                                financial responsibility rules 
                                for a broker or dealer 
                                registered pursuant to section 
                                15(b) (except for section 
                                15(b)(11) thereof) in 
                                accordance with section 
                                15(c)(3); or
                                  (II) of the Commodity Futures 
                                Trading Commission to set 
                                financial responsibility rules 
                                for a futures commission 
                                merchant or introducing broker 
                                registered pursuant to section 
                                4f(a) of the Commodity Exchange 
                                Act (except for section 
                                4f(a)(3) thereof) in accordance 
                                with section 4f(b) of the 
                                Commodity Exchange Act.
                          (ii) Futures commission merchants and 
                        other dealers.--A futures commission 
                        merchant, introducing broker, broker, 
                        or dealer shall maintain sufficient 
                        capital to comply with the stricter of 
                        any applicable capital requirements to 
                        which such futures commission merchant, 
                        introducing broker, broker, or dealer 
                        is subject to under this title or the 
                        Commodity Exchange Act.
                  (C) Margin requirements.--In prescribing 
                margin requirements under this subsection, the 
                prudential regulator with respect to security-
                based swap dealers and major security-based 
                swap participants that are depository 
                institutions, and the Commission with respect 
                to security-based swap dealers and major 
                security-based swap participants that are not 
                depository institutions shall permit the use of 
                noncash collateral, as the regulator or the 
                Commission determines to be consistent with--
                          (i) preserving the financial 
                        integrity of markets trading security-
                        based swaps; and
                          (ii) preserving the stability of the 
                        United States financial system.
                  (D) Comparability of capital and margin 
                requirements.--
                          (i) In general.--The prudential 
                        regulators, the Commission, and the 
                        Securities and Exchange Commission 
                        shall periodically (but not less 
                        frequently than annually) consult on 
                        minimum capital requirements and 
                        minimum initial and variation margin 
                        requirements.
                          (ii) Comparability.--The entities 
                        described in clause (i) shall, to the 
                        maximum extent practicable, establish 
                        and maintain comparable minimum capital 
                        requirements and minimum initial and 
                        variation margin requirements, 
                        including the use of noncash 
                        collateral, for--
                                  (I) security-based swap 
                                dealers; and
                                  (II) major security-based 
                                swap participants.
          (4) Applicability with respect to counterparties.--
        The requirements of paragraphs (2)(A)(ii) and 
        (2)(B)(ii) shall not apply to a security-based swap in 
        which a counterparty qualifies for an exception under 
        section 3C(g)(1) or satisfies the criteria in section 
        3C(g)(4).
  (f) Reporting and Recordkeeping.--
          (1) In general.--Each registered security-based swap 
        dealer and major security-based swap participant--
                  (A) shall make such reports as are required 
                by the Commission, by rule or regulation, 
                regarding the transactions and positions and 
                financial condition of the registered security-
                based swap dealer or major security-based swap 
                participant;
                  (B)(i) for which there is a prudential 
                regulator, shall keep books and records of all 
                activities related to the business as a 
                security-based swap dealer or major security-
                based swap participant in such form and manner 
                and for such period as may be prescribed by the 
                Commission by rule or regulation; and
                  (ii) for which there is no prudential 
                regulator, shall keep books and records in such 
                form and manner and for such period as may be 
                prescribed by the Commission by rule or 
                regulation; and
                  (C) shall keep books and records described in 
                subparagraph (B) open to inspection and 
                examination by any representative of the 
                Commission.
          (2) Rules.--The Commission shall adopt rules 
        governing reporting and recordkeeping for security-
        based swap dealers and major security-based swap 
        participants.
  (g) Daily Trading Records.--
          (1) In general.--Each registered security-based swap 
        dealer and major security-based swap participant shall 
        maintain daily trading records of the security-based 
        swaps of the registered security-based swap dealer and 
        major security-based swap participant and all related 
        records (including related cash or forward 
        transactions) and recorded communications, including 
        electronic mail, instant messages, and recordings of 
        telephone calls, for such period as may be required by 
        the Commission by rule or regulation.
          (2) Information requirements.--The daily trading 
        records shall include such information as the 
        Commission shall require by rule or regulation.
          (3) Counterparty records.--Each registered security-
        based swap dealer and major security-based swap 
        participant shall maintain daily trading records for 
        each counterparty in a manner and form that is 
        identifiable with each security-based swap transaction.
          (4) Audit trail.--Each registered security-based swap 
        dealer and major security-based swap participant shall 
        maintain a complete audit trail for conducting 
        comprehensive and accurate trade reconstructions.
          (5) Rules.--The Commission shall adopt rules 
        governing daily trading records for security-based swap 
        dealers and major security-based swap participants.
  (h) Business Conduct Standards.--
          (1) In general.--Each registered security-based swap 
        dealer and major security-based swap participant shall 
        conform with such business conduct standards as 
        prescribed in paragraph (3) and as may be prescribed by 
        the Commission by rule or regulation that relate to--
                  (A) fraud, manipulation, and other abusive 
                practices involving security-based swaps 
                (including security-based swaps that are 
                offered but not entered into);
                  (B) diligent supervision of the business of 
                the registered security-based swap dealer and 
                major security-based swap participant;
                  (C) adherence to all applicable position 
                limits; and
                  (D) such other matters as the Commission 
                determines to be appropriate.
          (2) Responsibilities with respect to special 
        entities.--
                  (A) Advising special entities.--A security-
                based swap dealer or major security-based swap 
                participant that acts as an advisor to a 
                special entity regarding a security-based swap 
                shall comply with the requirements of paragraph 
                (4) with respect to such special entity.
                  (B) Entering of security-based swaps with 
                respect to special entities.--A security-based 
                swap dealer that enters into or offers to enter 
                into a security-based swap with a special 
                entity shall comply with the requirements of 
                paragraph (5) with respect to such special 
                entity.
                  (C) Special entity defined.--For purposes of 
                this subsection, the term ``special entity'' 
                means--
                          (i) a Federal agency;
                          (ii) a State, State agency, city, 
                        county, municipality, or other 
                        political subdivision of a State or;
                          (iii) any employee benefit plan, as 
                        defined in section 3 of the Employee 
                        Retirement Income Security Act of 1974 
                        (29 U.S.C. 1002);
                          (iv) any governmental plan, as 
                        defined in section 3 of the Employee 
                        Retirement Income Security Act of 1974 
                        (29 U.S.C. 1002); or
                          (v) any endowment, including an 
                        endowment that is an organization 
                        described in section 501(c)(3) of the 
                        Internal Revenue Code of 1986.
          (3) Business conduct requirements.--Business conduct 
        requirements adopted by the Commission shall--
                  (A) establish a duty for a security-based 
                swap dealer or major security-based swap 
                participant to verify that any counterparty 
                meets the eligibility standards for an eligible 
                contract participant;
                  (B) require disclosure by the security-based 
                swap dealer or major security-based swap 
                participant to any counterparty to the 
                transaction (other than a security-based swap 
                dealer, major security-based swap participant, 
                security-based swap dealer, or major security-
                based swap participant) of--
                          (i) information about the material 
                        risks and characteristics of the 
                        security-based swap;
                          (ii) any material incentives or 
                        conflicts of interest that the 
                        security-based swap dealer or major 
                        security-based swap participant may 
                        have in connection with the security-
                        based swap; and
                          (iii)(I) for cleared security-based 
                        swaps, upon the request of the 
                        counterparty, receipt of the daily mark 
                        of the transaction from the appropriate 
                        derivatives clearing organization; and
                          (II) for uncleared security-based 
                        swaps, receipt of the daily mark of the 
                        transaction from the security-based 
                        swap dealer or the major security-based 
                        swap participant;
                  (C) establish a duty for a security-based 
                swap dealer or major security-based swap 
                participant to communicate in a fair and 
                balanced manner based on principles of fair 
                dealing and good faith; and
                  (D) establish such other standards and 
                requirements as the Commission may determine 
                are appropriate in the public interest, for the 
                protection of investors, or otherwise in 
                furtherance of the purposes of this Act.
          (4) Special requirements for security-based swap 
        dealers acting as advisors.--
                  (A) In general.--It shall be unlawful for a 
                security-based swap dealer or major security-
                based swap participant--
                          (i) to employ any device, scheme, or 
                        artifice to defraud any special entity 
                        or prospective customer who is a 
                        special entity;
                          (ii) to engage in any transaction, 
                        practice, or course of business that 
                        operates as a fraud or deceit on any 
                        special entity or prospective customer 
                        who is a special entity; or
                          (iii) to engage in any act, practice, 
                        or course of business that is 
                        fraudulent, deceptive, or manipulative.
                  (B) Duty.--Any security-based swap dealer 
                that acts as an advisor to a special entity 
                shall have a duty to act in the best interests 
                of the special entity.
                  (C) Reasonable efforts.--Any security-based 
                swap dealer that acts as an advisor to a 
                special entity shall make reasonable efforts to 
                obtain such information as is necessary to make 
                a reasonable determination that any security-
                based swap recommended by the security-based 
                swap dealer is in the best interests of the 
                special entity, including information relating 
                to--
                          (i) the financial status of the 
                        special entity;
                          (ii) the tax status of the special 
                        entity;
                          (iii) the investment or financing 
                        objectives of the special entity; and
                          (iv) any other information that the 
                        Commission may prescribe by rule or 
                        regulation.
          (5) Special requirements for security-based swap 
        dealers as counterparties to special entities.--
                  (A) In general.--Any security-based swap 
                dealer or major security-based swap participant 
                that offers to or enters into a security-based 
                swap with a special entity shall--
                          (i) comply with any duty established 
                        by the Commission for a security-based 
                        swap dealer or major security-based 
                        swap participant, with respect to a 
                        counterparty that is an eligible 
                        contract participant within the meaning 
                        of subclause (I) or (II) of clause 
                        (vii) of section 1a(18)(A) of the 
                        Commodity Exchange Act, that requires 
                        the security-based swap dealer or major 
                        security-based swap participant to have 
                        a reasonable basis to believe that the 
                        counterparty that is a special entity 
                        has an independent representative 
                        that--
                                  (I) has sufficient knowledge 
                                to evaluate the transaction and 
                                risks;
                                  (II) is not subject to a 
                                statutory disqualification;
                                  (III) is independent of the 
                                security-based swap dealer or 
                                major security-based swap 
                                participant;
                                  (IV) undertakes a duty to act 
                                in the best interests of the 
                                counterparty it represents;
                                  (V) makes appropriate 
                                disclosures;
                                  (VI) will provide written 
                                representations to the special 
                                entity regarding fair pricing 
                                and the appropriateness of the 
                                transaction; and
                                  (VII) in the case of employee 
                                benefit plans subject to the 
                                Employee Retirement Income 
                                Security [act of] Act of 1974, 
                                is a fiduciary as defined in 
                                section 3 of that Act (29 
                                U.S.C. 1002); and
                          (ii) before the initiation of the 
                        transaction, disclose to the special 
                        entity in writing the capacity in which 
                        the security-based swap dealer is 
                        acting.
                  (B) Commission authority.--The Commission may 
                establish such other standards and requirements 
                under this paragraph as the Commission may 
                determine are appropriate in the public 
                interest, for the protection of investors, or 
                otherwise in furtherance of the purposes of 
                this Act.
          (6) Rules.--The Commission shall prescribe rules 
        under this subsection governing business conduct 
        standards for security-based swap dealers and major 
        security-based swap participants.
          (7) Applicability.--This subsection shall not apply 
        with respect to a transaction that is--
                  (A) initiated by a special entity on an 
                exchange or security-based swaps execution 
                facility; and
                  (B) the security-based swap dealer or major 
                security-based swap participant does not know 
                the identity of the counterparty to the 
                transaction.''
  (i) Documentation Standards.--
          (1) In general.--Each registered security-based swap 
        dealer and major security-based swap participant shall 
        conform with such standards as may be prescribed by the 
        Commission, by rule or regulation, that relate to 
        timely and accurate confirmation, processing, netting, 
        documentation, and valuation of all security-based 
        swaps.
          (2) Rules.--The Commission shall adopt rules 
        governing documentation standards for security-based 
        swap dealers and major security-based swap 
        participants.
  (j) Duties.--Each registered security-based swap dealer and 
major security-based swap participant shall, at all times, 
comply with the following requirements:
          (1) Monitoring of trading.--The security-based swap 
        dealer or major security-based swap participant shall 
        monitor its trading in security-based swaps to prevent 
        violations of applicable position limits.
          (2) Risk management procedures.--The security-based 
        swap dealer or major security-based swap participant 
        shall establish robust and professional risk management 
        systems adequate for managing the day-to-day business 
        of the security-based swap dealer or major security-
        based swap participant.
          (3) Disclosure of general information.--The security-
        based swap dealer or major security-based swap 
        participant shall disclose to the Commission and to the 
        prudential regulator for the security-based swap dealer 
        or major security-based swap participant, as 
        applicable, information concerning--
                  (A) terms and conditions of its security-
                based swaps;
                  (B) security-based swap trading operations, 
                mechanisms, and practices;
                  (C) financial integrity protections relating 
                to security-based swaps; and
                  (D) other information relevant to its trading 
                in security-based swaps.
          (4) Ability to obtain information.--The security-
        based swap dealer or major security-based swap 
        participant shall--
                  (A) establish and enforce internal systems 
                and procedures to obtain any necessary 
                information to perform any of the functions 
                described in this section; and
                  (B) provide the information to the Commission 
                and to the prudential regulator for the 
                security-based swap dealer or major security-
                based swap participant, as applicable, on 
                request.
          (5) Conflicts of interest.--The security-based swap 
        dealer and major security-based swap participant shall 
        implement conflict-of-interest systems and procedures 
        that--
                  (A) establish structural and institutional 
                safeguards to ensure that the activities of any 
                person within the firm relating to research or 
                analysis of the price or market for any 
                security-based swap or acting in a role of 
                providing clearing activities or making 
                determinations as to accepting clearing 
                customers are separated by appropriate 
                informational partitions within the firm from 
                the review, pressure, or oversight of persons 
                whose involvement in pricing, trading, or 
                clearing activities might potentially bias 
                their judgment or supervision and contravene 
                the core principles of open access and the 
                business conduct standards described in this 
                title; and
                  (B) address such other issues as the 
                Commission determines to be appropriate.
          (6) Antitrust considerations.--Unless necessary or 
        appropriate to achieve the purposes of this title, the 
        security-based swap dealer or major security-based swap 
        participant shall not--
                  (A) adopt any process or take any action that 
                results in any unreasonable restraint of trade; 
                or
                  (B) impose any material anticompetitive 
                burden on trading or clearing.
          (7) Rules.--The Commission shall prescribe rules 
        under this subsection governing duties of security-
        based swap dealers and major security-based swap 
        participants.
  (k) Designation of Chief Compliance Officer.--
          (1) In general.--Each security-based swap dealer and 
        major security-based swap participant shall designate 
        an individual to serve as a chief compliance officer.
          (2) Duties.--The chief compliance officer shall--
                  (A) report directly to the board or to the 
                senior officer of the security-based swap 
                dealer or major security-based swap 
                participant;
                  (B) review the compliance of the security-
                based swap dealer or major security-based swap 
                participant with respect to the security-based 
                swap dealer and major security-based swap 
                participant requirements described in this 
                section;
                  (C) in consultation with the board of 
                directors, a body performing a function similar 
                to the board, or the senior officer of the 
                organization, resolve any conflicts of interest 
                that may arise;
                  (D) be responsible for administering each 
                policy and procedure that is required to be 
                established pursuant to this section;
                  (E) ensure compliance with this title 
                (including regulations) relating to security-
                based swaps, including each rule prescribed by 
                the Commission under this section;
                  (F) establish procedures for the remediation 
                of noncompliance issues identified by the chief 
                compliance officer through any--
                          (i) compliance office review;
                          (ii) look-back;
                          (iii) internal or external audit 
                        finding;
                          (iv) self-reported error; or
                          (v) validated complaint; and
                  (G) establish and follow appropriate 
                procedures for the handling, management 
                response, remediation, retesting, and closing 
                of noncompliance issues.
          (3) Annual reports.--
                  (A) In general.--In accordance with rules 
                prescribed by the Commission, the chief 
                compliance officer shall annually prepare and 
                sign a report that contains a description of--
                          (i) the compliance of the security-
                        based swap dealer or major swap 
                        participant with respect to this title 
                        (including regulations); and
                          (ii) each policy and procedure of the 
                        security-based swap dealer or major 
                        security-based swap participant of the 
                        chief compliance officer (including the 
                        code of ethics and conflict of interest 
                        policies).
                  (B) Requirements.--A compliance report under 
                subparagraph (A) shall--
                          (i) accompany each appropriate 
                        financial report of the security-based 
                        swap dealer or major security-based 
                        swap participant that is required to be 
                        furnished to the Commission pursuant to 
                        this section; and
                          (ii) include a certification that, 
                        under penalty of law, the compliance 
                        report is accurate and complete.
  (l) Enforcement and Administrative Proceeding Authority.--
          (1) Primary enforcement authority.--
                  (A) Securities and exchange commission.--
                Except as provided in subparagraph (B), (C), or 
                (D), the Commission shall have primary 
                authority to enforce subtitle B, and the 
                amendments made by subtitle B of the Wall 
                Street Transparency and Accountability Act of 
                2010, with respect to any person.
                  (B) Prudential regulators.--The prudential 
                regulators shall have exclusive authority to 
                enforce the provisions of subsection (e) and 
                other prudential requirements of this title 
                (including risk management standards), with 
                respect to security-based swap dealers or major 
                security-based swap participants for which they 
                are the prudential regulator.
                  (C) Referral.--
                          (i) Violations of nonprudential 
                        requirements.--If the appropriate 
                        Federal banking agency for security-
                        based swap dealers or major security-
                        based swap participants that are 
                        depository institutions has cause to 
                        believe that such security-based swap 
                        dealer or major security-based swap 
                        participant may have engaged in conduct 
                        that constitutes a violation of the 
                        nonprudential requirements of this 
                        section or rules adopted by the 
                        Commission thereunder, the agency may 
                        recommend in writing to the Commission 
                        that the Commission initiate an 
                        enforcement proceeding as authorized 
                        under this title. The recommendation 
                        shall be accompanied by a written 
                        explanation of the concerns giving rise 
                        to the recommendation.
                          (ii) Violations of prudential 
                        requirements.--If the Commission has 
                        cause to believe that a securities-
                        based swap dealer or major securities-
                        based swap participant that has a 
                        prudential regulator may have engaged 
                        in conduct that constitute a violation 
                        of the prudential requirements of 
                        subsection (e) or rules adopted 
                        thereunder, the Commission may 
                        recommend in writing to the prudential 
                        regulator that the prudential regulator 
                        initiate an enforcement proceeding as 
                        authorized under this title. The 
                        recommendation shall be accompanied by 
                        a written explanation of the concerns 
                        giving rise to the recommendation.
                  (D) Backstop enforcement authority.--
                          (i) Initiation of enforcement 
                        proceeding by prudential regulator.--If 
                        the Commission does not initiate an 
                        enforcement proceeding before the end 
                        of the 90-day period beginning on the 
                        date on which the Commission receives a 
                        written report under subsection (C)(i), 
                        the prudential regulator may initiate 
                        an enforcement proceeding.
                          (ii) Initiation of enforcement 
                        proceeding by commission.--If the 
                        prudential regulator does not initiate 
                        an enforcement proceeding before the 
                        end of the 90-day period beginning on 
                        the date on which the prudential 
                        regulator receives a written report 
                        under subsection (C)(ii), the 
                        Commission may initiate an enforcement 
                        proceeding.
          (2) Censure, denial, suspension; notice and 
        hearing.--The Commission, by order, shall censure, 
        place limitations on the activities, functions, or 
        operations of, or revoke the registration of any 
        security-based swap dealer or major security-based swap 
        participant that has registered with the Commission 
        pursuant to subsection (b) if the Commission finds, on 
        the record after notice and opportunity for hearing, 
        that such censure, placing of limitations, or 
        revocation is in the public interest and that such 
        security-based swap dealer or major security-based swap 
        participant, or any person associated with such 
        security-based swap dealer or major security-based swap 
        participant effecting or involved in effecting 
        transactions in security-based swaps on behalf of such 
        security-based swap dealer or major security-based swap 
        participant, whether prior or subsequent to becoming so 
        associated--
                  (A) has committed or omitted any act, or is 
                subject to an order or finding, enumerated in 
                subparagraph (A), (D), or (E) of paragraph (4) 
                of section 15(b);
                  (B) has been convicted of any offense 
                specified in subparagraph (B) of such paragraph 
                (4) within 10 years of the commencement of the 
                proceedings under this subsection;
                  (C) is enjoined from any action, conduct, or 
                practice specified in subparagraph (C) of such 
                paragraph (4);
                  (D) is subject to an order or a final order 
                specified in subparagraph (F) or (H), 
                respectively, of such paragraph (4); or
                  (E) has been found by a foreign financial 
                regulatory authority to have committed or 
                omitted any act, or violated any foreign 
                statute or regulation, enumerated in 
                subparagraph (G) of such paragraph (4).
          (3) Associated persons.--With respect to any person 
        who is associated, who is seeking to become associated, 
        or, at the time of the alleged misconduct, who was 
        associated or was seeking to become associated with a 
        security-based swap dealer or major security-based swap 
        participant for the purpose of effecting or being 
        involved in effecting security-based swaps on behalf of 
        such security-based swap dealer or major security-based 
        swap participant, the Commission, by order, shall 
        censure, place limitations on the activities or 
        functions of such person, or suspend for a period not 
        exceeding 12 months, or bar such person from being 
        associated with a security-based swap dealer or major 
        security-based swap participant, if the Commission 
        finds, on the record after notice and opportunity for a 
        hearing, that such censure, placing of limitations, 
        suspension, or bar is in the public interest and that 
        such person--
                  (A) has committed or omitted any act, or is 
                subject to an order or finding, enumerated in 
                subparagraph (A), (D), or (E) of paragraph (4) 
                of section 15(b);
                  (B) has been convicted of any offense 
                specified in subparagraph (B) of such paragraph 
                (4) within 10 years of the commencement of the 
                proceedings under this subsection;
                  (C) is enjoined from any action, conduct, or 
                practice specified in subparagraph (C) of such 
                paragraph (4);
                  (D) is subject to an order or a final order 
                specified in subparagraph (F) or (H), 
                respectively, of such paragraph (4); or
                  (E) has been found by a foreign financial 
                regulatory authority to have committed or 
                omitted any act, or violated any foreign 
                statute or regulation, enumerated in 
                subparagraph (G) of such paragraph (4).
          (4) Unlawful conduct.--It shall be unlawful--
                  (A) for any person as to whom an order under 
                paragraph (3) is in effect, without the consent 
                of the Commission, willfully to become, or to 
                be, associated with a security-based swap 
                dealer or major security-based swap participant 
                in contravention of such order; or
                  (B) for any security-based swap dealer or 
                major security-based swap participant to permit 
                such a person, without the consent of the 
                Commission, to become or remain a person 
                associated with the security-based swap dealer 
                or major security-based swap participant in 
                contravention of such order, if such security-
                based swap dealer or major security-based swap 
                participant knew, or in the exercise of 
                reasonable care should have known, of such 
                order.

SEC. 15G. CREDIT RISK RETENTION.

  (a) Definitions.--In this section--
          (1) the term ``Federal banking agencies'' means the 
        Office of the Comptroller of the Currency, the Board of 
        Governors of the Federal Reserve System, and the 
        Federal Deposit Insurance Corporation;
          (2) the term ``insured depository institution'' has 
        the same meaning as in section 3(c) of the Federal 
        Deposit Insurance Act (12 U.S.C. 1813(c));
          (3) the term ``securitizer'' means--
                  (A) an issuer of an asset-backed security; or
                  (B) a person who organizes and initiates an 
                asset-backed securities transaction by selling 
                or transferring assets, either directly or 
                indirectly, including through an affiliate, to 
                the issuer; [and]
          (4) the term ``originator'' means a person who--
                  (A) through the extension of credit or 
                otherwise, creates a financial asset that 
                collateralizes an asset-backed security; and
                  (B) sells an asset directly or indirectly to 
                a securitizer[.]; and
          (5) the term ``asset-backed security'' refers only to 
        an asset-backed security that is comprised wholly of 
        residential mortgages.
  (b) Regulations Required.--
          [(1) In general.--Not later than 270 days after the 
        date of enactment of this section, the Federal banking 
        agencies and the Commission shall jointly prescribe 
        regulations to require any securitizer to retain an 
        economic interest in a portion of the credit risk for 
        any asset that the securitizer, through the issuance of 
        an asset-backed security, transfers, sells, or conveys 
        to a third party.
          [(2) Residential mortgages.--] Not later than 270 
        days after the date of the enactment of this section, 
        the Federal banking agencies, the Commission, the 
        Secretary of Housing and Urban Development, and the 
        Board of Directors of the Federal Housing Finance 
        Agency, shall jointly prescribe regulations to require 
        any securitizer to retain an economic interest in a 
        portion of the credit risk for any residential mortgage 
        asset that the securitizer, through the issuance of an 
        asset-backed security, transfers, sells, or conveys to 
        a third party.
  (c) Standards for Regulations.--
          (1) Standards.--The regulations prescribed under 
        subsection (b) shall--
                  (A) prohibit a securitizer from directly or 
                indirectly hedging or otherwise transferring 
                the credit risk that the securitizer is 
                required to retain with respect to an asset;
                  (B) require a securitizer to retain--
                          (i) not less than 5 percent of the 
                        credit risk for any asset--
                                  (I) that is not a qualified 
                                residential mortgage that is 
                                transferred, sold, or conveyed 
                                through the issuance of an 
                                asset-backed security by the 
                                securitizer; or
                                  (II) that is a qualified 
                                residential mortgage that is 
                                transferred, sold, or conveyed 
                                through the issuance of an 
                                asset-backed security by the 
                                securitizer, if 1 or more of 
                                the assets that collateralize 
                                the asset-backed security are 
                                not qualified residential 
                                mortgages; or
                          (ii) less than 5 percent of the 
                        credit risk for an asset that is not a 
                        qualified residential mortgage that is 
                        transferred, sold, or conveyed through 
                        the issuance of an asset-backed 
                        security by the securitizer, if the 
                        originator of the asset meets the 
                        underwriting standards prescribed under 
                        paragraph (2)(B);
                  (C) specify--
                          (i) the permissible forms of risk 
                        retention for purposes of this section;
                          (ii) the minimum duration of the risk 
                        retention required under this section; 
                        and
                          (iii) that a securitizer is not 
                        required to retain any part of the 
                        credit risk for an asset that is 
                        transferred, sold or conveyed through 
                        the issuance of an asset-backed 
                        security by the securitizer, if all of 
                        the assets that collateralize the 
                        asset-backed security are qualified 
                        residential mortgages;
                  (D) apply, regardless of whether the 
                securitizer is an insured depository 
                institution;
                  (E) with respect to a commercial mortgage, 
                specify the permissible types, forms, and 
                amounts of risk retention that would meet the 
                requirements of subparagraph (B), which in the 
                determination of the Federal banking agencies 
                and the Commission may include--
                          (i) retention of a specified amount 
                        or percentage of the total credit risk 
                        of the asset;
                          (ii) retention of the first-loss 
                        position by a third-party purchaser 
                        that specifically negotiates for the 
                        purchase of such first loss position, 
                        holds adequate financial resources to 
                        back losses, provides due diligence on 
                        all individual assets in the pool 
                        before the issuance of the asset-backed 
                        securities, and meets the same 
                        standards for risk retention as the 
                        Federal banking agencies and the 
                        Commission require of the securitizer;
                          (iii) a determination by the Federal 
                        banking agencies and the Commission 
                        that the underwriting standards and 
                        controls for the asset are adequate; 
                        and
                          (iv) provision of adequate 
                        representations and warranties and 
                        related enforcement mechanisms; and
                  (F) establish appropriate standards for 
                retention of an economic interest with respect 
                to collateralized debt obligations, securities 
                collateralized by collateralized debt 
                obligations, and similar instruments 
                collateralized by other asset-backed 
                securities; and
                  (G) provide for--
                          (i) a total or partial exemption of 
                        any securitization, as may be 
                        appropriate in the public interest and 
                        for the protection of investors;
                          (ii) a total or partial exemption for 
                        the securitization of an asset issued 
                        or guaranteed by the United States, or 
                        an agency of the United States, as the 
                        Federal banking agencies and the 
                        Commission jointly determine 
                        appropriate in the public interest and 
                        for the protection of investors, except 
                        that, for purposes of this clause, the 
                        Federal National Mortgage Association 
                        and the Federal Home Loan Mortgage 
                        Corporation are not agencies of the 
                        United States;
                          (iii) a total or partial exemption 
                        for any asset-backed security that is a 
                        security issued or guaranteed by any 
                        State of the United States, or by any 
                        political subdivision of a State or 
                        territory, or by any public 
                        instrumentality of a State or territory 
                        that is exempt from the registration 
                        requirements of the Securities Act of 
                        1933 by reason of section 3(a)(2) of 
                        that Act (15 U.S.C. 77c(a)(2)), or a 
                        security defined as a qualified 
                        scholarship funding bond in section 
                        150(d)(2) of the Internal Revenue Code 
                        of 1986, as may be appropriate in the 
                        public interest and for the protection 
                        of investors; and
                          (iv) the allocation of risk retention 
                        obligations between a securitizer and 
                        an originator in the case of a 
                        securitizer that purchases assets from 
                        an originator, as the Federal banking 
                        agencies and the Commission jointly 
                        determine appropriate.
          (2) Asset classes.--
                  (A) Asset classes.--The regulations 
                prescribed under subsection (b) shall establish 
                asset classes with separate rules for 
                securitizers of different classes of assets, 
                including residential mortgages, commercial 
                mortgages, commercial loans, auto loans, and 
                any other class of assets that the Federal 
                banking agencies and the Commission deem 
                appropriate.
                  (B) Contents.--For each asset class 
                established under subparagraph (A), the 
                regulations prescribed under subsection (b) 
                shall include underwriting standards 
                established by the Federal banking agencies 
                that specify the terms, conditions, and 
                characteristics of a loan within the asset 
                class that indicate a low credit risk with 
                respect to the loan.
  (d) Originators.--In determining how to allocate risk 
retention obligations between a securitizer and an originator 
under subsection (c)(1)(E)(iv), the Federal banking agencies 
and the Commission shall--
          (1) reduce the percentage of risk retention 
        obligations required of the securitizer by the 
        percentage of risk retention obligations required of 
        the originator; and
          (2) consider--
                  (A) whether the assets sold to the 
                securitizer have terms, conditions, and 
                characteristics that reflect low credit risk;
                  (B) whether the form or volume of 
                transactions in securitization markets creates 
                incentives for imprudent origination of the 
                type of loan or asset to be sold to the 
                securitizer; and
                  (C) the potential impact of the risk 
                retention obligations on the access of 
                consumers and businesses to credit on 
                reasonable terms, which may not include the 
                transfer of credit risk to a third party.
  (e) Exemptions, Exceptions, and Adjustments.--
          (1) In general.--The Federal banking agencies and the 
        Commission may jointly adopt or issue exemptions, 
        exceptions, or adjustments to the rules issued under 
        this section, including exemptions, exceptions, or 
        adjustments for classes of institutions or assets 
        relating to the risk retention requirement and the 
        prohibition on hedging under subsection (c)(1).
          (2) Applicable standards.--Any exemption, exception, 
        or adjustment adopted or issued by the Federal banking 
        agencies and the Commission under this paragraph 
        shall--
                  (A) help ensure high quality underwriting 
                standards for the securitizers and originators 
                of assets that are securitized or available for 
                securitization; and
                  (B) encourage appropriate risk management 
                practices by the securitizers and originators 
                of assets, improve the access of consumers and 
                businesses to credit on reasonable terms, or 
                otherwise be in the public interest and for the 
                protection of investors.
          (3) Certain institutions and programs exempt.--
                  (A) Farm credit system institutions.--
                Notwithstanding any other provision of this 
                section, the requirements of this section shall 
                not apply to any loan or other financial asset 
                made, insured, guaranteed, or purchased by any 
                institution that is subject to the supervision 
                of the Farm Credit Administration, including 
                the Federal Agricultural Mortgage Corporation.
                  (B) Other federal programs.--This section 
                shall not apply to any residential, 
                multifamily, or health care facility mortgage 
                loan asset, or securitization based directly or 
                indirectly on such an asset, which is insured 
                or guaranteed by the United States or an agency 
                of the United States. For purposes of this 
                subsection, the Federal National Mortgage 
                Association, the Federal Home Loan Mortgage 
                Corporation, and the Federal home loan banks 
                shall not be considered an agency of the United 
                States.
          (4) Exemption for qualified residential mortgages.--
                  (A) In general.--The Federal banking 
                agencies, the Commission, the Secretary of 
                Housing and Urban Development, and the Director 
                of the Federal Housing Finance Agency shall 
                jointly issue regulations to exempt qualified 
                residential mortgages from the risk retention 
                requirements of this [subsection] section.
                  (B) Qualified residential mortgage.--The 
                Federal banking agencies, the Commission, the 
                Secretary of Housing and Urban Development, and 
                the Director of the Federal Housing Finance 
                Agency shall jointly define the term 
                ``qualified residential mortgage'' for purposes 
                of this subsection, taking into consideration 
                underwriting and product features that 
                historical loan performance data indicate 
                result in a lower risk of default, such as--
                          (i) documentation and verification of 
                        the financial resources relied upon to 
                        qualify the mortgagor;
                          (ii) standards with respect to--
                                  (I) the residual income of 
                                the mortgagor after all monthly 
                                obligations;
                                  (II) the ratio of the housing 
                                payments of the mortgagor to 
                                the monthly income of the 
                                mortgagor;
                                  (III) the ratio of total 
                                monthly installment payments of 
                                the mortgagor to the income of 
                                the mortgagor;
                          (iii) mitigating the potential for 
                        payment shock on adjustable rate 
                        mortgages through product features and 
                        underwriting standards;
                          (iv) mortgage guarantee insurance or 
                        other types of insurance or credit 
                        enhancement obtained at the time of 
                        origination, to the extent such 
                        insurance or credit enhancement reduces 
                        the risk of default; and
                          (v) prohibiting or restricting the 
                        use of balloon payments, negative 
                        amortization, prepayment penalties, 
                        interest-only payments, and other 
                        features that have been demonstrated to 
                        exhibit a higher risk of borrower 
                        default.
                  (C) Limitation on definition.--The Federal 
                banking agencies, the Commission, the Secretary 
                of Housing and Urban Development, and the 
                Director of the Federal Housing Finance Agency 
                in defining the term ``qualified residential 
                mortgage'', as required by subparagraph (B), 
                shall define that term to be no broader than 
                the definition ``qualified mortgage'' as the 
                term is defined under section [129C(c)(2)] 
                129C(b)(2)(A) of the Truth in Lending Act (15 
                U.S.C. 1639c(b)(2)(A)), as amended by the 
                Consumer Financial Protection Act of 2010, and 
                regulations adopted thereunder.
          (5) Condition for qualified residential mortgage 
        exemption.--The regulations issued under paragraph (4) 
        shall provide that an asset-backed security that is 
        collateralized by tranches of other asset-backed 
        securities shall not be exempt from the risk retention 
        requirements of this [subsection] section.
          (6) Certification.--The Commission shall require an 
        issuer to certify, for each issuance of an asset-backed 
        security collateralized exclusively by qualified 
        residential mortgages, that the issuer has evaluated 
        the effectiveness of the internal supervisory controls 
        of the issuer with respect to the process for ensuring 
        that all assets that collateralize the asset-backed 
        security are qualified residential mortgages.
  (f) Enforcement.--The regulations issued under this section 
shall be enforced by--
          (1) the appropriate Federal banking agency, with 
        respect to any securitizer that is an insured 
        depository institution; and
          (2) the Commission, with respect to any securitizer 
        that is not an insured depository institution.
  (g) Authority of Commission.--The authority of the Commission 
under this section shall be in addition to the authority of the 
Commission to otherwise enforce the securities laws.
  [(h) Authority to Coordinate on Rulemaking.--The Chairperson 
of the Financial Stability Oversight Council shall coordinate 
all joint rulemaking required under this section.]
  [(i)] (h) Effective Date of Regulations.--The regulations 
issued under this section shall become [effective--]
          [(1)] [with respect to] effective with respect to 
        securitizers and originators of asset-backed securities 
        backed by residential mortgages, 1 year after the date 
        on which final rules under this section are published 
        in the Federal Register[; and].
          [(2) with respect to securitizers and originators of 
        all other classes of asset-backed securities, 2 years 
        after the date on which final rules under this section 
        are published in the Federal Register.]

SEC. 15H. REGISTRATION OF PROXY ADVISORY FIRMS.

  (a) Conduct Prohibited.--It shall be unlawful for a proxy 
advisory firm to make use of the mails or any means or 
instrumentality of interstate commerce to provide proxy voting 
research, analysis, or recommendations to any client, unless 
such proxy advisory firm is registered under this section.
  (b) Registration Procedures.--
          (1) Application for registration.--
                  (A) In general.--A proxy advisory firm must 
                file with the Commission an application for 
                registration, in such form as the Commission 
                shall require, by rule or regulation, and 
                containing the information described in 
                subparagraph (B).
                  (B) Required information.--An application for 
                registration under this section shall contain 
                information regarding--
                          (i) a certification that the 
                        applicant has adequate financial and 
                        managerial resources to consistently 
                        provide proxy advice based on accurate 
                        information;
                          (ii) the procedures and methodologies 
                        that the applicant uses in developing 
                        proxy voting recommendations, including 
                        whether and how the applicant considers 
                        the size of a company when making proxy 
                        voting recommendations;
                          (iii) the organizational structure of 
                        the applicant;
                          (iv) whether or not the applicant has 
                        in effect a code of ethics, and if not, 
                        the reasons therefor;
                          (v) any potential or actual conflict 
                        of interest relating to the ownership 
                        structure of the applicant or the 
                        provision of proxy advisory services by 
                        the applicant, including whether the 
                        proxy advisory firm engages in services 
                        ancillary to the provision of proxy 
                        advisory services such as consulting 
                        services for corporate issuers, and if 
                        so the revenues derived therefrom;
                          (vi) the policies and procedures in 
                        place to manage conflicts of interest 
                        under subsection (f); and
                          (vii) any other information and 
                        documents concerning the applicant and 
                        any person associated with such 
                        applicant as the Commission, by rule, 
                        may prescribe as necessary or 
                        appropriate in the public interest or 
                        for the protection of investors.
          (2) Review of application.--
                  (A) Initial determination.--Not later than 90 
                days after the date on which the application 
                for registration is filed with the Commission 
                under paragraph (1) (or within such longer 
                period as to which the applicant consents) the 
                Commission shall--
                          (i) by order, grant registration; or
                          (ii) institute proceedings to 
                        determine whether registration should 
                        be denied.
                  (B) Conduct of proceedings.--
                          (i) Content.--Proceedings referred to 
                        in subparagraph (A)(ii) shall--
                                  (I) include notice of the 
                                grounds for denial under 
                                consideration and an 
                                opportunity for hearing; and
                                  (II) be concluded not later 
                                than 120 days after the date on 
                                which the application for 
                                registration is filed with the 
                                Commission under paragraph (1).
                          (ii) Determination.--At the 
                        conclusion of such proceedings, the 
                        Commission, by order, shall grant or 
                        deny such application for registration.
                          (iii) Extension authorized.--The 
                        Commission may extend the time for 
                        conclusion of such proceedings for not 
                        longer than 90 days, if it finds good 
                        cause for such extension and publishes 
                        its reasons for so finding, or for such 
                        longer period as to which the applicant 
                        consents.
                  (C) Grounds for decision.--The Commission 
                shall grant registration under this 
                subsection--
                          (i) if the Commission finds that the 
                        requirements of this section are 
                        satisfied; and
                          (ii) unless the Commission finds (in 
                        which case the Commission shall deny 
                        such registration) that--
                                  (I) the applicant has failed 
                                to certify to the Commission's 
                                satisfaction that it has 
                                adequate financial and 
                                managerial resources to 
                                consistently provide proxy 
                                advice based on accurate 
                                information and to materially 
                                comply with the procedures and 
                                methodologies disclosed under 
                                paragraph (1)(B) and with 
                                subsections (f) and (g); or
                                  (II) if the applicant were so 
                                registered, its registration 
                                would be subject to suspension 
                                or revocation under subsection 
                                (e).
          (3) Public availability of information.--Subject to 
        section 24, the Commission shall make the information 
        and documents submitted to the Commission by a proxy 
        advisory firm in its completed application for 
        registration, or in any amendment submitted under 
        paragraph (1) or (2) of subsection (c), publicly 
        available on the Commission's website, or through 
        another comparable, readily accessible means.
  (c) Update of Registration.--
          (1) Update.--Each registered proxy advisory firm 
        shall promptly amend and update its application for 
        registration under this section if any information or 
        document provided therein becomes materially 
        inaccurate, except that a registered proxy advisory 
        firm is not required to amend the information required 
        to be filed under subsection (b)(1)(B)(i) by filing 
        information under this paragraph, but shall amend such 
        information in the annual submission of the 
        organization under paragraph (2) of this subsection.
          (2) Certification.--Not later than 90 calendar days 
        after the end of each calendar year, each registered 
        proxy advisory firm shall file with the Commission an 
        amendment to its registration, in such form as the 
        Commission, by rule, may prescribe as necessary or 
        appropriate in the public interest or for the 
        protection of investors--
                  (A) certifying that the information and 
                documents in the application for registration 
                of such registered proxy advisory firm continue 
                to be accurate in all material respects; and
                  (B) listing any material change that occurred 
                to such information or documents during the 
                previous calendar year.
  (d) Censure, Denial, or Suspension of Registration; Notice 
and Hearing.--The Commission, by order, shall censure, place 
limitations on the activities, functions, or operations of, 
suspend for a period not exceeding 12 months, or revoke the 
registration of any registered proxy advisory firm if the 
Commission finds, on the record after notice and opportunity 
for hearing, that such censure, placing of limitations, 
suspension, or revocation is necessary for the protection of 
investors and in the public interest and that such registered 
proxy advisory firm, or any person associated with such an 
organization, whether prior to or subsequent to becoming so 
associated--
          (1) has committed or omitted any act, or is subject 
        to an order or finding, enumerated in subparagraph (A), 
        (D), (E), (H), or (G) of section 15(b)(4), has been 
        convicted of any offense specified in section 
        15(b)(4)(B), or is enjoined from any action, conduct, 
        or practice specified in subparagraph (C) of section 
        15(b)(4), during the 10-year period preceding the date 
        of commencement of the proceedings under this 
        subsection, or at any time thereafter;
          (2) has been convicted during the 10-year period 
        preceding the date on which an application for 
        registration is filed with the Commission under this 
        section, or at any time thereafter, of--
                  (A) any crime that is punishable by 
                imprisonment for one or more years, and that is 
                not described in section 15(b)(4)(B); or
                  (B) a substantially equivalent crime by a 
                foreign court of competent jurisdiction;
          (3) is subject to any order of the Commission barring 
        or suspending the right of the person to be associated 
        with a registered proxy advisory firm;
          (4) fails to furnish the certifications required 
        under subsections (b)(2)(C)(ii)(I) and (c)(2);
          (5) has engaged in one or more prohibited acts 
        enumerated in paragraph (1); or
          (6) fails to maintain adequate financial and 
        managerial resources to consistently offer advisory 
        services with integrity, including by failing to comply 
        with subsections (f) or (g).
  (e) Termination of Registration.--
          (1) Voluntary withdrawal.--A registered proxy 
        advisory firm may, upon such terms and conditions as 
        the Commission may establish as necessary in the public 
        interest or for the protection of investors, which 
        terms and conditions shall include at a minimum that 
        the registered proxy advisory firm will no longer 
        conduct such activities as to bring it within the 
        definition of proxy advisory firm in section 3(a)(83) 
        of the Securities Exchange Act of 1934, withdraw from 
        registration by filing a written notice of withdrawal 
        to the Commission.
          (2) Commission authority.--In addition to any other 
        authority of the Commission under this title, if the 
        Commission finds that a registered proxy advisory firm 
        is no longer in existence or has ceased to do business 
        as a proxy advisory firm, the Commission, by order, 
        shall cancel the registration under this section of 
        such registered proxy advisory firm.
  (f) Management of Conflicts of Interest.--
          (1) Organization policies and procedures.--Each 
        registered proxy advisory firm shall establish, 
        maintain, and enforce written policies and procedures 
        reasonably designed, taking into consideration the 
        nature of the business of such registered proxy 
        advisory firm and associated persons, to address and 
        manage any conflicts of interest that can arise from 
        such business.
          (2) Commission authority.--The Commission shall issue 
        final rules to prohibit, or require the management and 
        disclosure of, any conflicts of interest relating to 
        the offering of proxy advisory services by a registered 
        proxy advisory firm, including, without limitation, 
        conflicts of interest relating to--
                  (A) the manner in which a registered proxy 
                advisory firm is compensated by the client, or 
                any affiliate of the client, for providing 
                proxy advisory services;
                  (B) the provision of consulting, advisory, or 
                other services by a registered proxy advisory 
                firm, or any person associated with such 
                registered proxy advisory firm, to the client;
                  (C) business relationships, ownership 
                interests, or any other financial or personal 
                interests between a registered proxy advisory 
                firm, or any person associated with such 
                registered proxy advisory firm, and any client, 
                or any affiliate of such client;
                  (D) transparency around the formulation of 
                proxy voting policies;
                  (E) the execution of proxy votes if such 
                votes are based upon recommendations made by 
                the proxy advisory firm in which someone other 
                than the issuer is a proponent;
                  (F) issuing recommendations where proxy 
                advisory firms provide advisory services to a 
                company; and
                  (G) any other potential conflict of interest, 
                as the Commission deems necessary or 
                appropriate in the public interest or for the 
                protection of investors.
  (g) Reliability of Proxy Advisory Firm Services.--
          (1) In general.--Each registered proxy advisory firm 
        shall have staff sufficient to produce proxy voting 
        recommendations that are based on accurate and current 
        information. Each registered proxy advisory firm shall 
        detail procedures sufficient to permit companies 
        receiving proxy advisory firm recommendations access in 
        a reasonable time to the draft recommendations, with an 
        opportunity to provide meaningful comment thereon, 
        including the opportunity to present details to the 
        person responsible for developing the recommendation in 
        person or telephonically. Each registered proxy 
        advisory firm shall employ an ombudsman to receive 
        complaints about the accuracy of voting information 
        used in making recommendations from the subjects of the 
        proxy advisory firm's voting recommendations, and shall 
        resolve those complaints in a timely fashion and in any 
        event prior to voting on the matter to which the 
        recommendation relates.
          (2) Draft recommendations defined.--For purposes of 
        this subsection, the term ``draft recommendations''--
                  (A) means the overall conclusions of proxy 
                voting recommendations prepared for the clients 
                of a proxy advisory firm, including any public 
                data cited therein, any company information or 
                substantive analysis impacting the 
                recommendation, and the specific voting 
                recommendations on individual proxy ballot 
                issues; and
                  (B) does not include the entirety of the 
                proxy advisory firm's final report to its 
                clients.
  (h) Designation of Compliance Officer.--Each registered proxy 
advisory firm shall designate an individual responsible for 
administering the policies and procedures that are required to 
be established pursuant to subsections (f) and (g), and for 
ensuring compliance with the securities laws and the rules and 
regulations thereunder, including those promulgated by the 
Commission pursuant to this section.
  (i) Prohibited Conduct.--
          (1) Prohibited acts and practices.--The Commission 
        shall issue final rules to prohibit any act or practice 
        relating to the offering of proxy advisory services by 
        a registered proxy advisory firm that the Commission 
        determines to be unfair or coercive, including any act 
        or practice relating to--
                  (A) conditioning a voting recommendation or 
                other proxy advisory firm recommendation on the 
                purchase by an issuer or an affiliate thereof 
                of other services or products, of the 
                registered proxy advisory firm or any person 
                associated with such registered proxy advisory 
                firm; and
                  (B) modifying a voting recommendation or 
                otherwise departing from its adopted systematic 
                procedures and methodologies in the provision 
                of proxy advisory services, based on whether an 
                issuer, or affiliate thereof, subscribes or 
                will subscribe to other services or product of 
                the registered proxy advisory firm or any 
                person associated with such organization.
          (2) Rule of construction.--Nothing in paragraph (1), 
        or in any rules or regulations adopted thereunder, may 
        be construed to modify, impair, or supersede the 
        operation of any of the antitrust laws (as defined in 
        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).
  (j) Statements of Financial Condition.--Each registered proxy 
advisory firm shall, on a confidential basis, file with the 
Commission, at intervals determined by the Commission, such 
financial statements, certified (if required by the rules or 
regulations of the Commission) by an independent public 
auditor, and information concerning its financial condition, as 
the Commission, by rule, may prescribe as necessary or 
appropriate in the public interest or for the protection of 
investors.
  (k) Annual Report.--Each registered proxy advisory firm 
shall, at the beginning of each fiscal year of such firm, 
report to the Commission on the number of shareholder proposals 
its staff reviewed in the prior fiscal year, the number of 
recommendations made in the prior fiscal year, the number of 
staff who reviewed and made recommendations on such proposals 
in the prior fiscal year, and the number of recommendations 
made in the prior fiscal year where the proponent of such 
recommendation was a client of or received services from the 
proxy advisory firm.
  (l) Transparent Policies.--Each registered proxy advisory 
firm shall file with the Commission and make publicly available 
its methodology for the formulation of proxy voting policies 
and voting recommendations.
  (m) Rules of Construction.--
          (1) No waiver of rights, privileges, or defenses.--
        Registration under and compliance with this section 
        does not constitute a waiver of, or otherwise diminish, 
        any right, privilege, or defense that a registered 
        proxy advisory firm may otherwise have under any 
        provision of State or Federal law, including any rule, 
        regulation, or order thereunder.
          (2) No private right of action.--Nothing in this 
        section may be construed as creating any private right 
        of action, and no report filed by a registered proxy 
        advisory firm in accordance with this section or 
        section 17 shall create a private right of action under 
        section 18 or any other provision of law.
  (n) Regulations.--
          (1) New provisions.--Such rules and regulations as 
        are required by this section or are otherwise necessary 
        to carry out this section, including the application 
        form required under subsection (a)--
                  (A) shall be issued by the Commission, not 
                later than 180 days after the date of enactment 
                of this section; and
                  (B) shall become effective not later than 1 
                year after the date of enactment of this 
                section.
          (2) Review of existing regulations.--Not later than 
        270 days after the date of enactment of this section, 
        the Commission shall--
                  (A) review its existing rules and regulations 
                which affect the operations of proxy advisory 
                firms;
                  (B) amend or revise such rules and 
                regulations in accordance with the purposes of 
                this section, and issue such guidance, as the 
                Commission may prescribe as necessary or 
                appropriate in the public interest or for the 
                protection of investors; and
                  (C) direct Commission staff to withdraw the 
                Egan Jones Proxy Services (May 27, 2004) and 
                Institutional Shareholder Services, Inc. 
                (September 15, 2004) no-action letters.
  (o) Applicability.--This section, other than subsection (n), 
which shall apply on the date of enactment of this section, 
shall apply on the earlier of--
          (1) the date on which regulations are issued in final 
        form under subsection (n)(1); or
          (2) 270 days after the date of enactment of this 
        section.

  accounts and records, examinations of exchanges, members, and others

  Sec. 17. (a)(1) Every national securities exchange, member 
thereof, broker or dealer who transacts a business in 
securities through the medium of any such member, registered 
securities association, registered broker or dealer, registered 
municipal securities dealer municipal advisor,, registered 
securities information processor, registered transfer agent, 
nationally recognized statistical rating organization, proxy 
advisory firm, and registered clearing agency and the Municipal 
Securities Rulemaking Board shall make and keep for prescribed 
periods such records, furnish such copies thereof, and make and 
disseminate such reports as the Commission, by rule, prescribes 
as necessary or appropriate in the public interest, for the 
protection of investors, or otherwise in furtherance of the 
purposes of this title. Any report that a nationally recognized 
statistical rating organization is required by Commission rules 
under this paragraph to make and disseminate to the Commission 
shall be deemed furnished to the Commission.
  (2) Every registered clearing agency shall also make and keep 
for prescribed periods such records, furnish such copies 
thereof, and make and disseminate such reports, as the 
appropriate regulatory agency for such clearing agency, by 
rule, prescribes as necessary or appropriate for the 
safeguarding of securities and funds in the custody or control 
of such clearing agency or for which it is responsible.
  (3) Every registered transfer agent shall also make and keep 
for prescribed periods such records, furnish such copies 
thereof, and make such reports as the appropriate regulatory 
agency for such transfer agent, by rule, prescribes as 
necessary or appropriate in furtherance of the purposes of 
section 17A of this title.
  (b) Records Subject to Examination.--
          (1) Procedures for cooperation with other agencies.--
        All records of persons described in subsection (a) of 
        this section are subject at any time, or from time to 
        time, to such reasonable periodic, special, or other 
        examinations by representatives of the Commission and 
        the appropriate regulatory agency for such persons as 
        the Commission or the appropriate regulatory agency for 
        such persons deems necessary or appropriate in the 
        public interest, for the protection of investors, or 
        otherwise in furtherance of the purposes of this title: 
        Provided, however, That the Commission shall, prior to 
        conducting any such examination of a--
                  (A) registered clearing agency, registered 
                transfer agent, or registered municipal 
                securities dealer for which it is not the 
                appropriate regulatory agency, give notice to 
                the appropriate regulatory agency for such 
                clearing agency, transfer agent, or municipal 
                securities dealer of such proposed examination 
                and consult with such appropriate regulatory 
                agency concerning the feasibility and 
                desirability of coordinating such examination 
                with examinations conducted by such appropriate 
                regulatory agency with a view to avoiding 
                unnecessary regulatory duplication or undue 
                regulatory burdens for such clearing agency, 
                transfer agent, or municipal securities dealer; 
                or
                  (B) broker or dealer registered pursuant to 
                section 15(b)(11), exchange registered pursuant 
                to section 6(g), or national securities 
                association registered pursuant to section 
                15A(k), give notice to the Commodity Futures 
                Trading Commission of such proposed examination 
                and consults with the Commodity Futures Trading 
                Commission concerning the feasibility and 
                desirability of coordinating such examination 
                with examinations conducted by the Commodity 
                Futures Trading Commission in order to avoid 
                unnecessary regulatory duplication or undue 
                regulatory burdens for such broker or dealer or 
                exchange.
          (2) Furnishing data and reports to cftc.--The 
        Commission shall notify the Commodity Futures Trading 
        Commission of any examination conducted of any broker 
        or dealer registered pursuant to section 15(b)(11), 
        exchange registered pursuant to section 6(g), or 
        national securities association registered pursuant to 
        section 15A(k) and, upon request, furnish to the 
        Commodity Futures Trading Commission any examination 
        report and data supplied to, or prepared by, the 
        Commission in connection with such examination.
          (3) Use of cftc reports.--Prior to conducting an 
        examination under paragraph (1), the Commission shall 
        use the reports of examinations, if the information 
        available therein is sufficient for the purposes of the 
        examination, of--
                  (A) any broker or dealer registered pursuant 
                to section 15(b)(11);
                  (B) exchange registered pursuant to section 
                6(g); or
                  (C) national securities association 
                registered pursuant to section 15A(k);
        that is made by the Commodity Futures Trading 
        Commission, a national securities association 
        registered pursuant to section 15A(k), or an exchange 
        registered pursuant to section 6(g).
          (4) Rules of construction.--
                  (A) Notwithstanding any other provision of 
                this subsection, the records of a broker or 
                dealer registered pursuant to section 
                15(b)(11), an exchange registered pursuant to 
                section 6(g), or a national securities 
                association registered pursuant to section 
                15A(k) described in this subparagraph shall not 
                be subject to routine periodic examinations by 
                the Commission.
                  (B) Any recordkeeping rules adopted under 
                this subsection for a broker or dealer 
                registered pursuant to section 15(b)(11), an 
                exchange registered pursuant to section 6(g), 
                or a national securities association registered 
                pursuant to section 15A(k) shall be limited to 
                records with respect to persons, accounts, 
                agreements, contracts, and transactions 
                involving security futures products.
                  (C) Nothing in the proviso in paragraph (1) 
                shall be construed to impair or limit (other 
                than by the requirement of prior consultation) 
                the power of the Commission under this 
                subsection to examine any clearing agency, 
                transfer agent, or municipal securities dealer 
                or to affect in any way the power of the 
                Commission under any other provision of this 
                title or otherwise to inspect, examine, or 
                investigate any such clearing agency, transfer 
                agent, or municipal securities dealer.
  (c)(1) Every clearing agency, transfer agent, and municipal 
securities dealer for which the Commission is not the 
appropriate regulatory agency shall (A) file with the 
appropriate regulatory agency for such clearing agency, 
transfer agent, or municipal securities dealer a copy of any 
application, notice, proposal, report, or document filed with 
the Commission by reason of its being a clearing agency, 
transfer agent, or municipal securities dealer and (B) file 
with the Commission a copy of any application, notice, 
proposal, report, or document filed with such appropriate 
regulatory agency by reason of its being a clearing agency, 
transfer agent, or municipal securities dealer. The Municipal 
Securities Rulemaking Board shall file with each agency 
enumerated in section 3(a)(34)(A) of this title copies of every 
proposed rule change filed with the Commission pursuant to 
section 19(b) of this title.
  (2) The appropriate regulatory agency for a clearing agency, 
transfer agent, or municipal securities dealer for which the 
Commission is not the appropriate regulatory agency shall file 
with the Commission notice of the commencement of any 
proceeding and a copy of any order entered by such appropriate 
regulatory agency against any clearing agency, transfer agent, 
municipal securities dealer, or person associated with a 
transfer agent or municipal securities dealer, and the 
Commission shall file with such appropriate regulatory agency, 
if any, notice of the commencement of any proceeding and a copy 
of any order entered by the Commission against the clearing 
agency, transfer agent, or municipal securities dealer, or 
against any person associated with a transfer agent or 
municipal securities dealer for which the agency is the 
appropriate regulatory agency.
  (3) The Commission and the appropriate regulatory agency for 
a clearing agency, transfer agent, or municipal securities 
dealer for which the Commission is not the appropriate 
regulatory agency shall each notify the other and make a report 
of any examination conducted by it of such clearing agency, 
transfer agent, or municipal securities dealer, and, upon 
request, furnish to the other a copy of such report and any 
data supplied to it in connection with such examination.
  (4) The Commission or the appropriate regulatory agency may 
specify that documents required to be filed pursuant to this 
subsection with the Commission or such agency, respectively, 
may be retained by the originating clearing agency, transfer 
agent, or municipal securities dealer, or filed with another 
appropriate regulatory agency. The Commission or the 
appropriate regulatory agency (as the case may be) making such 
a specification shall continue to have access to the document 
on request.
  (d)(1) The Commission, by rule or order, as it deems 
necessary or appropriate in the public interest and for the 
protection of investors, to foster cooperation and coordination 
among self-regulatory organizations, or to remove impediments 
to and foster the development of a national market system and 
national system for the clearance and settlement of securities 
transactions, may--
          (A) with respect to any person who is a member of or 
        participant in more than one self-regulatory 
        organization, relieve any such self-regulatory 
        organization of any responsibility under this title (i) 
        to receive regulatory reports from such person, (ii) to 
        examine such person for compliance, or to enforce 
        compliance by such person, with specified provisions of 
        this title, the rules and regulations thereunder, and 
        its own rules, or (iii) to carry out other specified 
        regulatory functions with respect to such person, and
          (B) allocate among self-regulatory organizations the 
        authority to adopt rules with respect to matters as to 
        which, in the absence of such allocation, such self-
        regulatory organizations share authority under this 
        title.
In making any such rule or entering any such order, the 
Commission shall take into consideration the regulatory 
capabilities and procedures of the self-regulatory 
organizations, availability of staff, convenience of location, 
unnecessary regulatory duplication, and such other factors as 
the Commission may consider germane to the protection of 
investors, cooperation and coordination among self-regulatory 
organizations, and the development of a national market system 
and a national system for the clearance and settlement of 
securities transactions. The Commission, by rule or order, as 
it deems necessary or appropriate in the public interest and 
for the protection of investors, may require any self-
regulatory organization relieved of any responsibility pursuant 
to this paragraph, and any person with respect to whom such 
responsibility relates, to take such steps as are specified in 
any such rule or order to notify customers of, and persons 
doing business with, such person of the limited nature of such 
self-regulatory organization's responsibility for such person's 
acts, practices, and course of business.
  (2) A self-regulatory organization shall furnish copies of 
any report of examination of any person who is a member of or a 
participant in such self-regulatory organization to any other 
self-regulatory organization of which such person is a member 
or in which such person is a participant upon the request of 
such person, such other self-regulatory organization, or the 
Commission.
  (e)(1)(A) Every registered broker or dealer shall annually 
file with the Commission a balance sheet and income statement 
certified by a independent public accounting firm, or by a 
registered public accounting firm if the firm is required to be 
registered under the Sarbanes-Oxley Act of 2002,, prepared on a 
calendar or fiscal year basis, and such other financial 
statements (which shall, as the Commission specifies, be 
certified) and information concerning its financial condition 
as the Commission, by rule may prescribe as necessary or 
appropriate in the public interest or for the protection of 
investors.
  (B) Every registered broker and dealer shall annually send to 
its customers its certified balance sheet and such other 
financial statements and information concerning its financial 
condition as the Commission, by rule, may prescribe pursuant to 
subsection (a) of this section.
  (C) The Commission, by rule or order, may conditionally or 
unconditionally exempt any registered broker or dealer, or 
class of such brokers or dealers, from any provision of this 
paragraph if the Commission determines that such exemption is 
consistent with the public interest and the protection of 
investors.
  (2) The Commission, by rule, as it deems necessary or 
appropriate in the public interest or for the protection of 
investors, may prescribe the form and content of financial 
statements filed pursuant to this title and the accounting 
principles and accounting standards used in their preparation.
  (f)(1) Every national securities exchange, member thereof, 
registered securities association, broker, dealer, municipal 
securities dealer, government securities broker, government 
securities dealer, registered transfer agent, registered 
clearing agency, participant therein, member of the Federal 
Reserve System, and bank whose deposits are insured by the 
Federal Deposit Insurance Corporation shall--
          (A) report to the Commission or other person 
        designated by the Commission and, in the case of 
        securities issued pursuant to chapter 31 of title 31, 
        United States Code, to the Secretary of the Treasury 
        such information about securities that are missing, 
        lost, counterfeit, stolen, or cancelled, in such form 
        and within such time as the Commission, by rule, 
        determines is necessary or appropriate in the public 
        interest or for the protection of investors; such 
        information shall be available on request for a 
        reasonable fee, to any such exchange, member, 
        association, broker, dealer, municipal securities 
        dealer, transfer agent, clearing agency, participant, 
        member of the Federal Reserve System, or insured bank, 
        and such other persons as the Commission, by rule, 
        designates; and
          (B) make such inquiry with respect to information 
        reported pursuant to this subsection as the Commission, 
        by rule, prescribes as necessary or appropriate in the 
        public interest or for the protection of investors, to 
        determine whether securities in their custody or 
        control, for which they are responsible, or in which 
        they are effecting, clearing, or settling a transaction 
        have been reported as missing, lost, counterfeit, 
        stolen, cancelled, or reported in such other manner as 
        the Commission, by rule, may prescribe.
  (2) Every member of a national securities exchange, broker, 
dealer, registered transfer agent, registered clearing agency, 
registered securities information processor, national 
securities exchange, and national securities association shall 
require that each of its partners, directors, officers, and 
employees be fingerprinted and shall submit such fingerprints, 
or cause the same to be submitted, to the Attorney General of 
the United States for identification and appropriate 
processing. The Commission, by rule, may exempt from the 
provisions of this paragraph upon specified terms, conditions, 
and periods, any class of partners, directors, officers, or 
employees of any such member, broker, dealer, transfer agent, 
clearing agency, securities information processor, national 
securities exchange, or national securities association, if the 
Commission finds that such action is not inconsistent with the 
public interest or the protection of investors. Notwithstanding 
any other provision of law, in providing identification and 
processing functions, the Attorney General shall provide the 
Commission and self-regulatory organizations designated by the 
Commission with access to all criminal history record 
information.
  (3)(A) In order to carry out the authority under paragraph 
(1) above, the Commission or its designee may enter into 
agreement with the Attorney General to use the facilities of 
the National Crime Information Center (``NCIC'') to receive, 
store, and disseminate information in regard to missing, lost, 
counterfeit, or stolen securities and to permit direct inquiry 
access to NCIC's file on such securities for the financial 
community.
  (B) In order to carry out the authority under paragraph (1) 
of this subsection, the Commission or its designee and the 
Secretary of the Treasury shall enter into an agreement whereby 
the Commission or its designee will receive, store, and 
disseminate information in the possession, and which comes into 
the possession, of the Department of the Treasury in regard to 
missing, lost, counterfeit, or stolen securities.
  (4) In regard to paragraphs (1), (2), and (3), above insofar 
as such paragraphs apply to any bank or member of the Federal 
Reserve System, the Commission may delegate its authority to:
          (A) the Comptroller of the Currency as to national 
        banks;
          (B) the Federal Reserve Board in regard to any member 
        of the Federal Reserve System which is not a national 
        bank; and
          (C) the Federal Deposit Insurance Corporation for any 
        State bank which is insured by the Federal Deposit 
        Insurance Corporation but which is not a member of the 
        Federal Reserve System.
  (5) The Commission shall encourage the insurance industry to 
require their insured to report expeditiously instances of 
missing, lost, counterfeit, or stolen securities to the 
Commission or to such other person as the Commission may, by 
rule, designate to receive such information.
  (g) Any broker, dealer, or other person extending credit who 
is subject to the rules and regulations prescribed by the Board 
of Governors of the Federal Reserve System pursuant to this 
title shall make such reports to the Board as it may require as 
necessary or appropriate to enable it to perform the functions 
conferred upon it by this title. If any such broker, dealer, or 
other person shall fail to make any such report or fail to 
furnish full information therein, or, if in the judgment of the 
Board it is otherwise necessary, such broker, dealer, or other 
person shall permit such inspections to be made by the Board 
with respect to the business operations of such broker, dealer, 
or other person as the Board may deem necessary to enable it to 
obtain the required information.
  (h) Risk Assessment for Holding Company Systems.--
          (1) Obligations to obtain, maintain, and report 
        information.--Every person who is (A) a registered 
        broker or dealer, or (B) a registered municipal 
        securities dealer for which the Commission is the 
        appropriate regulatory agency, shall obtain such 
        information and make and keep such records as the 
        Commission by rule prescribes concerning the registered 
        person's policies, procedures, or systems for 
        monitoring and controlling financial and operational 
        risks to it resulting from the activities of any of its 
        associated persons, other than a natural person. Such 
        records shall describe, in the aggregate, each of the 
        financial and securities activities conducted by, and 
        the customary sources of capital and funding of, those 
        of its associated persons whose business activities are 
        reasonably likely to have a material impact on the 
        financial or operational condition of such registered 
        person, including its net capital, its liquidity, or 
        its ability to conduct or finance its operations. The 
        Commission, by rule, may require summary reports of 
        such information to be filed with the Commission no 
        more frequently than quarterly.
          (2) Authority to require additional information.--If, 
        as a result of adverse market conditions or based on 
        reports provided to the Commission pursuant to 
        paragraph (1) of this subsection or other available 
        information, the Commission reasonably concludes that 
        it has concerns regarding the financial or operational 
        condition of (A) any registered broker or dealer, or 
        (B) any registered municipal securities dealer, 
        government securities broker, or government securities 
        dealer for which the Commission is the appropriate 
        regulatory agency, the Commission may require the 
        registered person to make reports concerning the 
        financial and securities activities of any of such 
        person's associated persons, other than a natural 
        person, whose business activities are reasonably likely 
        to have a material impact on the financial or 
        operational condition of such registered person. The 
        Commission, in requiring reports pursuant to this 
        paragraph, shall specify the information required, the 
        period for which it is required, the time and date on 
        which the information must be furnished, and whether 
        the information is to be furnished directly to the 
        Commission or to a self-regulatory organization with 
        primary responsibility for examining the registered 
        person's financial and operational condition.
          (3) Special provisions with respect to associated 
        persons subject to federal banking agency regulation.--
                  (A) Cooperation in implementation.--In 
                developing and implementing reporting 
                requirements pursuant to paragraph (1) of this 
                subsection with respect to associated persons 
                subject to examination by or reporting 
                requirements of a Federal banking agency, the 
                Commission shall consult with and consider the 
                views of each such Federal banking agency. If a 
                Federal banking agency comments in writing on a 
                proposed rule of the Commission under this 
                subsection that has been published for comment, 
                the Commission shall respond in writing to such 
                written comment before adopting the proposed 
                rule. The Commission shall, at the request of 
                the Federal banking agency, publish such 
                comment and response in the Federal Register at 
                the time of publishing the adopted rule.
                  (B) Use of banking agency reports.--A 
                registered broker, dealer, or municipal 
                securities dealer shall be in compliance with 
                any recordkeeping or reporting requirement 
                adopted pursuant to paragraph (1) of this 
                subsection concerning an associated person that 
                is subject to examination by or reporting 
                requirements of a Federal banking agency if 
                such broker, dealer, or municipal securities 
                dealer utilizes for such recordkeeping or 
                reporting requirement copies of reports filed 
                by the associated person with the Federal 
                banking agency pursuant to section 5211 of the 
                Revised Statutes, section 9 of the Federal 
                Reserve Act, section 7(a) of the Federal 
                Deposit Insurance Act, section 10(b) of the 
                Home Owners' Loan Act, or section 8 of the Bank 
                Holding Company Act of 1956. The Commission 
                may, however, by rule adopted pursuant to 
                paragraph (1), require any broker, dealer, or 
                municipal securities dealer filing such reports 
                with the Commission to obtain, maintain, or 
                report supplemental information if the 
                Commission makes an explicit finding that such 
                supplemental information is necessary to inform 
                the Commission regarding potential risks to 
                such broker, dealer, or municipal securities 
                dealer. Prior to requiring any such 
                supplemental information, the Commission shall 
                first request the Federal banking agency to 
                expand its reporting requirements to include 
                such information.
                  (C) Procedure for requiring additional 
                information.--Prior to making a request 
                pursuant to paragraph (2) of this subsection 
                for information with respect to an associated 
                person that is subject to examination by or 
                reporting requirements of a Federal banking 
                agency, the Commission shall--
                          (i) notify such agency of the 
                        information required with respect to 
                        such associated person; and
                          (ii) consult with such agency to 
                        determine whether the information 
                        required is available from such agency 
                        and for other purposes, unless the 
                        Commission determines that any delay 
                        resulting from such consultation would 
                        be inconsistent with ensuring the 
                        financial and operational condition of 
                        the broker, dealer, municipal 
                        securities dealer, government 
                        securities broker, or government 
                        securities dealer or the stability or 
                        integrity of the securities markets.
                  (D) Exclusion for examination reports.--
                Nothing in this subsection shall be construed 
                to permit the Commission to require any 
                registered broker or dealer, or any registered 
                municipal securities dealer, government 
                securities broker, or government securities 
                dealer for which the Commission is the 
                appropriate regulatory agency, to obtain, 
                maintain, or furnish any examination report of 
                any Federal banking agency or any supervisory 
                recommendations or analysis contained therein.
                  (E) Confidentiality of information 
                provided.--No information provided to or 
                obtained by the Commission from any Federal 
                banking agency pursuant to a request by the 
                Commission under subparagraph (C) of this 
                paragraph regarding any associated person which 
                is subject to examination by or reporting 
                requirements of a Federal banking agency may be 
                disclosed to any other person (other than a 
                self-regulatory organization), without the 
                prior written approval of the Federal banking 
                agency. Nothing in this subsection shall 
                authorize the Commission to withhold 
                information from Congress, or prevent the 
                Commission from complying with a request for 
                information from any other Federal department 
                or agency requesting the information for 
                purposes within the scope of its jurisdiction, 
                or complying with an order of a court of the 
                United States in an action brought by the 
                United States or the Commission.
                  (F) Notice to banking agencies concerning 
                financial and operational condition concerns.--
                The Commission shall notify the Federal banking 
                agency of any concerns of the Commission 
                regarding significant financial or operational 
                risks resulting from the activities of any 
                registered broker or dealer, or any registered 
                municipal securities dealer, government 
                securities broker, or government securities 
                dealer for which the Commission is the 
                appropriate regulatory agency, to any 
                associated person thereof which is subject to 
                examination by or reporting requirements of the 
                Federal banking agency.
                  (G) Definition.--For purposes of this 
                paragraph, the term ``Federal banking agency'' 
                shall have the same meaning as the term 
                ``appropriate Federal bank agency'' in section 
                3(q) of the Federal Deposit Insurance Act (12 
                U.S.C. 1813(q)).
          (4) Exemptions.--The Commission by rule or order may 
        exempt any person or class of persons, under such terms 
        and conditions and for such periods as the Commission 
        shall provide in such rule or order, from the 
        provisions of this subsection, and the rules 
        thereunder. In granting such exemptions, the Commission 
        shall consider, among other factors--
                  (A) whether information of the type required 
                under this subsection is available from a 
                supervisory agency (as defined in section 
                1101(6) of the Right to Financial Privacy Act 
                of 1978 (12 U.S.C. 3401(6))), a State insurance 
                commission or similar State agency, the 
                Commodity Futures Trading Commission, or a 
                similar foreign regulator;
                  (B) the primary business of any associated 
                person;
                  (C) the nature and extent of domestic or 
                foreign regulation of the associated person's 
                activities;
                  (D) the nature and extent of the registered 
                person's securities activities; and
                  (E) with respect to the registered person and 
                its associated persons, on a consolidated 
                basis, the amount and proportion of assets 
                devoted to, and revenues derived from, 
                activities in the United States securities 
                markets.
          (5) Authority to limit disclosure of information.--
        Notwithstanding any other provision of law, the 
        Commission shall not be compelled to disclose any 
        information required to be reported under this 
        subsection, or any information supplied to the 
        Commission by any domestic or foreign regulatory agency 
        that relates to the financial or operational condition 
        of any associated person of a registered broker, 
        dealer, government securities broker, government 
        securities dealer, or municipal securities dealer. 
        Nothing in this subsection shall authorize the 
        Commission to withhold information from Congress, or 
        prevent the Commission from complying with a request 
        for information from any other Federal department or 
        agency requesting the information for purposes within 
        the scope of its jurisdiction, or complying with an 
        order of a court of the United States in an action 
        brought by the United States or the Commission. For 
        purposes of section 552 of title 5, United States Code, 
        this subsection shall be considered a statute described 
        in subsection (b)(3)(B) of such section 552. In 
        prescribing regulations to carry out the requirements 
        of this subsection, the Commission shall designate 
        information described in or obtained pursuant to 
        subparagraph (B) or (C) of paragraph (3) of this 
        subsection as confidential information for purposes of 
        section 24(b)(2) of this title.
  (i) Authority To Limit Disclosure of Information.--
Notwithstanding any other provision of law, the Commission 
shall not be compelled to disclose any information required to 
be reported under subsection (h) or (i) or any information 
supplied to the Commission by any domestic or foreign 
regulatory agency that relates to the financial or operational 
condition of any associated person of a broker or dealer, 
investment bank holding company, or any affiliate of an 
investment bank holding company. Nothing in this subsection 
shall authorize the Commission to withhold information from 
Congress, or prevent the Commission from complying with a 
request for information from any other Federal department or 
agency or any self-regulatory organization requesting the 
information for purposes within the scope of its jurisdiction, 
or complying with an order of a court of the United States in 
an action brought by the United States or the Commission. For 
purposes of section 552 of title 5, United States Code, this 
subsection shall be considered a statute described in 
subsection (b)(3)(B) of such section 552. In prescribing 
regulations to carry out the requirements of this subsection, 
the Commission shall designate information described in or 
obtained pursuant to subparagraphs (A), (B), and (C) of 
subsection (i)(5) as confidential information for purposes of 
section 24(b)(2) of this title.
  (j) Coordination of Examining Authorities.--
          (1) Elimination of duplication.--The Commission and 
        the examining authorities, through cooperation and 
        coordination of examination and oversight activities, 
        shall eliminate any unnecessary and burdensome 
        duplication in the examination process.
          (2) Coordination of examinations.--The Commission and 
        the examining authorities shall share such information, 
        including reports of examinations, customer complaint 
        information, and other nonpublic regulatory 
        information, as appropriate to foster a coordinated 
        approach to regulatory oversight of brokers and dealers 
        that are subject to examination by more than one 
        examining authority.
          (3) Examinations for cause.--At any time, any 
        examining authority may conduct an examination for 
        cause of any broker or dealer subject to its 
        jurisdiction.
          (4) Confidentiality.--
                  (A) In general.--Section 24 shall apply to 
                the sharing of information in accordance with 
                this subsection. The Commission shall take 
                appropriate action under section 24(c) to 
                ensure that such information is not 
                inappropriately disclosed.
                  (B) Appropriate disclosure not prohibited.--
                Nothing in this paragraph authorizes the 
                Commission or any examining authority to 
                withhold information from the Congress, or 
                prevent the Commission or any examining 
                authority from complying with a request for 
                information from any other Federal department 
                or agency requesting the information for 
                purposes within the scope of its jurisdiction, 
                or complying with an order of a court of the 
                United States in an action brought by the 
                United States or the Commission.
          (5) Definition.--For purposes of this subsection, the 
        term ``examining authority'' means a self-regulatory 
        organization registered with the Commission under this 
        title (other than a registered clearing agency) with 
        the authority to examine, inspect, and otherwise 
        oversee the activities of a registered broker or 
        dealer.

national system for clearance and settlement of securities transactions

  Sec. 17A. (a)(1) The Congress finds that--
          (A) The prompt and accurate clearance and settlement 
        of securities transactions, including the transfer of 
        record ownership and the safeguarding of securities and 
        funds related thereto, are necessary for the protection 
        of investors and persons facilitating transactions by 
        and acting on behalf of investors.
          (B) Inefficient procedures for clearance and 
        settlement impose unnecessary costs on investors and 
        persons facilitating transactions by and acting on 
        behalf of investors.
          (C) New data processing and communications techniques 
        create the opportunity for more efficient, effective, 
        and safe procedures for clearance and settlement.
          (D) The linking of all clearance and settlement 
        facilities and the development of uniform standards and 
        procedures for clearance and settlement will reduce 
        unnecessary costs and increase the protection of 
        investors and persons facilitating transactions by and 
        acting on behalf of investors.
  (2)(A) The Commission is directed, therefore, having due 
regard for the public interest, the protection of investors, 
the safeguarding of securities and funds, and maintenance of 
fair competition among brokers and dealers, clearing agencies, 
and transfer agents, to use its authority under this title--
          (i) to facilitate the establishment of a national 
        system for the prompt and accurate clearance and 
        settlement of transactions in securities (other than 
        exempt securities); and
          (ii) to facilitate the establishment of linked or 
        coordinated facilities for clearance and settlement of 
        transactions in securities, securities options, 
        contracts of sale for future delivery and options 
        thereon, and commodity options;
in accordance with the findings and to carry out the objectives 
set forth in paragraph (1) of this subsection.
  (B) The Commission shall use its authority under this title 
to assure equal regulation under this title of registered 
clearing agencies and registered transfer agents. In carrying 
out its responsibilities set forth in subparagraph (A)(ii) of 
this paragraph, the Commission shall coordinate with the 
Commodity Futures Trading Commission and consult with the Board 
of Governors of the Federal Reserve System.
  (b)(1) Except as otherwise provided in this section, it shall 
be unlawful for any clearing agency, unless registered in 
accordance with this subsection, directly or indirectly, to 
make use of the mails or any means or instrumentality of 
interstate commerce to perform the functions of a clearing 
agency with respect to any security (other than an exempted 
security). The Commission, by rule or order, upon its own 
motion or upon application, may conditionally or 
unconditionally exempt any clearing agency or security or any 
class of clearing agencies or securities from any provisions of 
this section or the rules or regulations thereunder, if the 
Commission finds that such exemption is consistent with the 
public interest, the protection of investors, and the purposes 
of this section, including the prompt and accurate clearance 
and settlement of securities transactions and the safeguarding 
of securities and funds. A clearing agency or transfer agent 
shall not perform the functions of both a clearing agency and a 
transfer agent unless such clearing agency or transfer agent is 
registered in accordance with this subsection and subsection 
(c) of this section.
  (2) A clearing agency may be registered under the terms and 
conditions hereinafter provided in this subsection and in 
accordance with the provisions of section 19(a) of this title, 
by filing with the Commission an application for registration 
in such form as the Commission, by rule, may prescribe 
containing the rules of the clearing agency and such other 
information and documents as the Commission, by rule, may 
prescribe as necessary or appropriate in the public interest or 
for the prompt and accurate clearance and settlement of 
securities transactions.
  (3) A clearing agency shall not be registered unless the 
Commission determines that--
          (A) Such clearing agency is so organized and has the 
        capacity to be able to facilitate the prompt and 
        accurate clearance and settlement of securities 
        transactions and derivative agreements, contracts, and 
        transactions for which it is responsible, to safeguard 
        securities and funds in its custody or control or for 
        which it is responsible, to comply with the provisions 
        of this title and the rules and regulations thereunder, 
        to enforce (subject to any rule or order of the 
        Commission pursuant to section 17(d) or 19(g)(2) of 
        this title) compliance by its participants with the 
        rules of the clearing agency, and to carry out the 
        purposes of this section.
          (B) Subject to the provisions of paragraph (4) of 
        this subsection, the rules of the clearing agency 
        provide that any (i) registered broker or dealer, (ii) 
        other registered clearing agency, (iii) registered 
        investment company, (iv) bank, (v) insurance company, 
        or (vi) other person or class of persons as the 
        Commission, by rule, may from time to time designate as 
        appropriate to the development of a national system or 
        the prompt and accurate clearance and settlement of 
        securities transactions may become a participant in 
        such clearing agency.
          (C) The rules of the clearing agency assure a fair 
        representation of its shareholders (or members) and 
        participants in the selection of its directors and 
        administration of its affairs. (The Commission may 
        determine that the representation of participants is 
        fair if they are afforded a reasonable opportunity to 
        acquire voting stock of the clearing agency, directly 
        or indirectly, in reasonable proportion to their use of 
        such clearing agency.)
          (D) The rules of the clearing agency provide for the 
        equitable allocation of reasonable dues, fees, and 
        other charges among its participants.
          (E) The rules of the clearing agency do not impose 
        any schedule of prices, or fix rates or other fees, for 
        services rendered by its participants.
          (F) The rules of the clearing agency are designed to 
        promote the prompt and accurate clearance and 
        settlement of securities transactions and, to the 
        extent applicable, derivative agreements, contracts, 
        and transactions, to assure the safeguarding of 
        securities and funds which are in the custody or 
        control of the clearing agency or for which it is 
        responsible, to foster cooperation and coordination 
        with persons engaged in the clearance and settlement of 
        securities transactions, to remove impediments to and 
        perfect the mechanism of a national system for the 
        prompt and accurate clearance and settlement of 
        securities transactions, and, in general, to protect 
        investors and the public interest; and are not designed 
        to permit unfair discrimination in the admission of 
        participants or among participants in the use of the 
        clearing agency, or to regulate by virtue of any 
        authority conferred by this title matters not related 
        to the purposes of this section or the administration 
        of the clearing agency.
          (G) The rules of the clearing agency provide that 
        (subject to any rule or order of the Commission 
        pursuant to section 17(d) or 19(g)(2) of this title) 
        its participants shall be appropriately disciplined for 
        violation of any provision of the rules of the clearing 
        agency by expulsion, suspension, limitation of 
        activities, functions, and operations, fine, censure, 
        or any other fitting sanction.
          (H) The rules of the clearing agency are in 
        accordance with the provisions of paragraph (5) of this 
        subsection, and, in general, provide a fair procedure 
        with respect to the disciplining of participants, the 
        denial of participation to any persons seeking 
        participation therein, and the prohibition or 
        limitation by the clearing agency of any person with 
        respect to access to services offered by the clearing 
        agency.
          (I) The rules of the clearing agency do not impose 
        any burden on competition not necessary or appropriate 
        in furtherance of the purposes of this title.
  (4)(A) A registered clearing agency may, and in cases in 
which the Commission, by order, directs as appropriate in the 
public interest shall, deny participation to any person subject 
to a statutory disqualification. A registered clearing agency 
shall file notice with the Commission not less than thirty days 
prior to admitting any person to participation, if the clearing 
agency knew, or in the exercise of reasonable care should have 
known, that such person was subject to a statutory 
disqualification. The notice shall be in such form and contain 
such information as the Commission, by rule, may prescribe as 
necessary or appropriate in the public interest or for the 
protection of investors.
  (B) A registered clearing agency may deny participation to, 
or condition the participation of, any person if such person 
does not meet such standards of financial responsibility, 
operational capability, experience, and competence as are 
prescribed by the rules of the clearing agency. A registered 
clearing agency may examine and verify the qualifications of an 
applicant to be a participant in accordance with procedures 
established by the rules of the clearing agency.
  (5)(A) In any proceeding by a registered clearing agency to 
determine whether a participant should be disciplined (other 
than a summary proceeding pursuant to subparagraph (C) of this 
paragraph), the clearing agency shall bring specific charges, 
notify such participant of, and give him an opportunity to 
defend against such charges, and keep a record. A determination 
by the clearing agency to impose a disciplinary sanction shall 
be supported by a statement setting forth--
          (i) any act or practice in which such participant has 
        been found to have engaged, or which such participant 
        has been found to have omitted;
          (ii) the specific provisions of the rules of the 
        clearing agency which any such act or practice, or 
        omission to act, is deemed to violate; and
          (iii) the sanction imposed and the reasons therefor.
  (B) In any proceeding by a registered clearing agency to 
determine whether a person shall be denied participation or 
prohibited or limited with respect to access to services 
offered by the clearing agency, the clearing agency shall 
notify such person of, and give him an opportunity to be heard 
upon, the specific grounds for denial or prohibition or 
limitation under consideration and keep a record. A 
determination by the clearing agency to deny participation or 
prohibit or limit a person with respect to access to services 
offered by the clearing agency shall be supported by a 
statement setting forth the specific grounds on which the 
denial or prohibition or limitation is based.
  (C) A registered clearing agency may summarily suspend and 
close the accounts of a participant who (i) has been and is 
expelled or suspended from any self-regulatory organization, 
(ii) is in default of any delivery of funds or securities to 
the clearing agency, or (iii) is in such financial or operating 
difficulty that the clearing agency determines and so notifies 
the appropriate regulatory agency for such participant that 
such suspension and closing of accounts are necessary for the 
protection of the clearing agency, its participants, creditors, 
or investors. A participant so summarily suspended shall be 
promptly afforded an opportunity for a hearing by the clearing 
agency in accordance with the provisions of subparagraph (A) of 
this paragraph. The appropriate regulatory agency for such 
participant, by order, may stay any such summary suspension on 
its own motion or upon application by any person aggrieved 
thereby, if such appropriate regulatory agency determines 
summarily or after notice and opportunity for hearing (which 
hearing may consist solely of the submission of affidavits or 
presentation of oral arguments) that such stay is consistent 
with the public interest and protection of investors.
  (6) No registered clearing agency shall prohibit or limit 
access by any person to services offered by any participant 
therein.
  (7)(A) A clearing agency that is regulated directly or 
indirectly by the Commodity Futures Trading Commission through 
its association with a designated contract market for security 
futures products that is a national securities exchange 
registered pursuant to section 6(g), and that would be required 
to register pursuant to paragraph (1) of this subsection only 
because it performs the functions of a clearing agency with 
respect to security futures products effected pursuant to the 
rules of the designated contract market with which such agency 
is associated, is exempted from the provisions of this section 
and the rules and regulations thereunder, except that if such a 
clearing agency performs the functions of a clearing agency 
with respect to a security futures product that is not cash 
settled, it must have arrangements in place with a registered 
clearing agency to effect the payment and delivery of the 
securities underlying the security futures product.
  (B) Any clearing agency that performs the functions of a 
clearing agency with respect to security futures products must 
coordinate with and develop fair and reasonable links with any 
and all other clearing agencies that perform the functions of a 
clearing agency with respect to security futures products, in 
order to permit, as of the compliance date (as defined in 
section 6(h)(6)(C)), security futures products to be purchased 
on one market and offset on another market that trades such 
products.
  (8) A registered clearing agency shall be permitted to 
provide facilities for the clearance and settlement of any 
derivative agreements, contracts, or transactions that are 
excluded from the Commodity Exchange Act, subject to the 
requirements of this section and to such rules and regulations 
as the Commission may prescribe as necessary or appropriate in 
the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of this title.
  (c)(1) Except as otherwise provided in this section, it shall 
be unlawful for any transfer agent, unless registered in 
accordance with this section, directly or indirectly, to make 
use of the mails or any means or instrumentality of interstate 
commerce to perform the function of a transfer agent with 
respect to any security registered under section 12 of this 
title or which would be required to be registered except for 
the exemption from registration provided by subsection 
(g)(2)(B) or (g)(2)(G) of that section. The appropriate 
regulatory agency, by rule or order, upon its own motion or 
upon application, may conditionally or unconditionally exempt 
any person or security or class of persons or securities from 
any provision of this section or any rule or regulation 
prescribed under this section, if the appropriate regulatory 
agency finds (A) that such exemption is in the public interest 
and consistent with the protection of investors and the 
purposes of this section, including the prompt and accurate 
clearance and settlement of securities transactions and the 
safeguarding of securities and funds, and (B) the Commission 
does not object to such exemption.
  (2) A transfer agent may be registered by filing with the 
appropriate regulatory agency for such transfer agent an 
application for registration in such form and containing such 
information and documents concerning such transfer agent and 
any persons associated with the transfer agent as such 
appropriate regulatory agency may prescribe as necessary or 
appropriate in furtherance of the purposes of this section. 
Except as hereinafter provided, such registration shall become 
effective 45 days after receipt of such application by such 
appropriate regulatory agency or within such shorter period of 
time as such appropriate regulatory agency may determine.
  (3) The appropriate regulatory agency for a transfer agent, 
by order, shall deny registration to, censure, place 
limitations on the activities, functions, or operations of, 
suspend for a period not exceeding 12 months, or revoke the 
registration of such transfer agent, if such appropriate 
regulatory agency finds, on the record after notice and 
opportunity for hearing, that such denial, censure, placing of 
limitations, suspension, or revocation is in the public 
interest and that such transfer agent, whether prior or 
subsequent to becoming such, or any person associated with such 
transfer agent, whether prior or subsequent to becoming so 
associated--
          (A) has committed or omitted any act, or is subject 
        to an order or finding, enumerated in subparagraph (A), 
        (D), (E), (H), or (G) of paragraph (4) of section 15(b) 
        of this title, has been convicted of any offense 
        specified in subparagraph (B) of such paragraph (4) 
        within ten years of the commencement of the proceedings 
        under this paragraph, or is enjoined from any action, 
        conduct, or practice specified in subparagraph (C) of 
        such paragraph (4); or
          (B) is subject to an order entered pursuant to 
        subparagraph (C) of paragraph (4) of this subsection 
        barring or suspending the right of such person to be 
        associated with a transfer agent.
  (4)(A) Pending final determination whether any registration 
by a transfer agent under this subsection shall be denied, the 
appropriate regulatory agency for such transfer agent, by 
order, may postpone the effective date of such registration for 
a period not to exceed fifteen days, but if, after notice and 
opportunity for hearing (which may consist solely of affidavits 
and oral arguments), it shall appear to such appropriate 
regulatory agency to be necessary or appropriate in the public 
interest or for the protection of investors to postpone the 
effective date of such registration until final determination, 
such appropriate regulatory agency shall so order. Pending 
final determination whether any registration under this 
subsection shall be revoked, such appropriate regulatory 
agency, by order, may suspend such registration, if such 
suspension appears to such appropriate regulatory agency, after 
notice and opportunity for hearing, to be necessary or 
appropriate in the public interest or for the protection of 
investors.
  (B) A registered transfer agent may, upon such terms and 
conditions as the appropriate regulatory agency for such 
transfer agent deems necessary or appropriate in the public 
interest, for the protection of investors, or in furtherance of 
the purposes of this section, withdraw from registration by 
filing a written notice of withdrawal with such appropriate 
regulatory agency. If such appropriate regulatory agency finds 
that any transfer agent for which it is the appropriate 
regulatory agency, is no longer in existence or has ceased to 
do business as a transfer agent, such appropriate regulatory 
agency, by order, shall cancel or deny the registration.
  (C) The appropriate regulatory agency for a transfer agent, 
by order, shall censure or place limitations on the activities 
or functions of any person associated, seeking to become 
associated, or, at the time of the alleged misconduct, 
associated or seeking to become associated with the transfer 
agent, or suspend for a period not exceeding 12 months or bar 
any such person from being associated with any transfer agent, 
broker, dealer, investment adviser, municipal securities 
dealer, municipal advisor, or nationally recognized statistical 
rating organization, if the appropriate regulatory agency 
finds, on the record after notice and opportunity for hearing, 
that such censure, placing of limitations, suspension, or bar 
is in the public interest and that such person has committed or 
omitted any act, or is subject to an order or finding, 
enumerated in subparagraph (A), (D), (E), (H), or (G) or 
paragraph (4) of section 15(b) of this title, has been 
convicted of any offense specified in subparagraph (B) of such 
paragraph (4) within ten years of the commencement of the 
proceedings under this paragraph, or is enjoined from any 
action, conduct, or practice specified in subparagraph (C) of 
such paragraph (4). It shall be unlawful for any person as to 
whom such an order suspending or barring him from being 
associated with a transfer agent is in effect willfully to 
become, or to be, associated with a transfer agent without the 
consent of the appropriate regulatory agency that entered the 
order and the appropriate regulatory agency for that transfer 
agent. It shall be unlawful for any transfer agent to permit 
such a person to become, or remain, a person associated with it 
without the consent of such appropriate regulatory agencies, if 
the transfer agent knew, or in the exercise of reasonable care 
should have known, of such order. The Commission may establish, 
by rule, procedures by which a transfer agent reasonably can 
determine whether a person associated or seeking to become 
associated with it is subject to any such order, and may 
require, by rule, that any transfer agent comply with such 
procedures.
  (d)(1) No registered clearing agency or registered transfer 
agent shall, directly or indirectly, engage in any activity as 
clearing agency or transfer agent in contravention of such 
rules and regulations (A) as the Commission may prescribe as 
necessary or appropriate in the public interest, for the 
protection of investors, or otherwise in furtherance of the 
purposes of this title, or (B) as the appropriate regulatory 
agency for such clearing agency or transfer agent may prescribe 
as necessary or appropriate for the safeguarding of securities 
and funds.
  (2) With respect to any clearing agency or transfer agent for 
which the Commission is not the appropriate regulatory agency, 
the appropriate regulatory agency for such clearing agency or 
transfer agent may, in accordance with section 8 of the Federal 
Deposit Insurance Act (12 U.S.C. 1818), enforce compliance by 
such clearing agency or transfer agent with the provisions of 
this section, sections 17 and 19 of this title, and the rules 
and regulations thereunder. For purposes of the preceding 
sentence, any violation of any such provision shall constitute 
adequate basis for the issuance of an order under section 8(b) 
or 8(c) of the Federal Deposit Insurance Act, and the 
participants in any such clearing agency and the persons doing 
business with any such transfer agent shall be deemed to be 
``depositors'' as that term is used in section 8(c) of that 
Act.
  (3)(A) With respect to any clearing agency or transfer agent 
for which the Commission is not the appropriate regulatory 
agency, the Commission and the appropriate regulatory agency 
for such clearing agency or transfer agent shall consult and 
cooperate with each other, and, as may be appropriate, with 
State banking authorities having supervision over such clearing 
agency or transfer agent toward the end that, to the maximum 
extent practicable, their respective regulatory 
responsibilities may be fulfilled and the rules and regulations 
applicable to such clearing agency or transfer agent may be in 
accord with both sound banking practices and a national system 
for the prompt and accurate clearance and settlement of 
securities transactions. In accordance with this objective--
          (i) the Commission and such appropriate regulatory 
        agency shall, at least fifteen days prior to the 
        issuance for public comment of any proposed rule or 
        regulation or adoption of any rule or regulation 
        concerning such clearing agency or transfer agent, 
        consult and request the views of the other; and
          (ii) such appropriate regulatory agency shall assume 
        primary responsibility to examine and enforce 
        compliance by such clearing agency or transfer agent 
        with the provisions of this section and sections 17 and 
        19 of this title.
  (B) Nothing in the preceding subparagraph or elsewhere in 
this title shall be construed to impair or limit (other than by 
the requirement of notification) the Commission's authority to 
make rules under any provision of this title or to enforce 
compliance pursuant to any provision of this title by any 
clearing agency, transfer agent, or person associated with a 
transfer agent with the provisions of this title and the rules 
and regulations thereunder.
  (4) Nothing in this section shall be construed to impair the 
authority of any State banking authority or other State or 
Federal regulatory authority having jurisdiction over a person 
registered as a clearing agency, transfer agent, or person 
associated with a transfer agent, to make and enforce rules 
governing such person which are not inconsistent with this 
title and the rules and regulations thereunder.
  (5) A registered transfer agent may not, directly or 
indirectly, engage in any activity in connection with the 
guarantee of a signature of an endorser of a security, 
including the acceptance or rejection of such guarantee, in 
contravention of such rules and regulations as the Commission 
may prescribe as necessary or appropriate in the public 
interest, for the protection of investors, to facilitate the 
equitable treatment of financial institutions which issue such 
guarantees, or otherwise in furtherance of the purposes of this 
title.
  (e) The Commission shall use its authority under this title 
to end the physical movement of securities certificates in 
connection with the settlement among brokers and dealers of 
transactions in securities consummated by means of the mails or 
any means or instrumentalities of interstate commerce.
  (f)(1) Notwithstanding any provision of State law, except as 
provided in paragraph (3), if the Commission makes each of the 
findings described in paragraph (2)(A), the Commission may 
adopt rules concerning--
          (A) the transfer of certificated or uncertificated 
        securities (other than government securities issued 
        pursuant to chapter 31 of title 31, United States Code, 
        or securities otherwise processed within a book-entry 
        system operated by the Federal Reserve banks pursuant 
        to a Federal book-entry regulation) or limited 
        interests (including security interests) therein; and
          (B) rights and obligations of purchasers, sellers, 
        owners, lenders, borrowers, and financial 
        intermediaries (including brokers, dealers, banks, and 
        clearing agencies) involved in or affected by such 
        transfers, and the rights of third parties whose 
        interests in such securities devolve from such 
        transfers.
  (2)(A) The findings described in this paragraph are findings 
by the Commission that--
          (i) such rule is necessary or appropriate for the 
        protection of investors or in the public interest and 
        is reasonably designed to promote the prompt, accurate, 
        and safe clearance and settlement of securities 
        transactions;
          (ii) in the absence of a uniform rule, the safe and 
        efficient operation of the national system for 
        clearance and settlement of securities transactions 
        will be, or is, substantially impeded; and
          (iii) to the extent such rule will impair or 
        diminish, directly or indirectly, rights of persons 
        specified in paragraph (1)(B) under State law 
        concerning transfers of securities (or limited 
        interests therein), the benefits of such rule outweigh 
        such impairment or diminution of rights.
  (B) In making the findings described in subparagraph (A), the 
Commission shall give consideration to the recommendations of 
the Advisory Committee established under paragraph (4), and it 
shall consult with and consider the views of the Secretary of 
the Treasury and the Board of Governors of the Federal Reserve 
System. If the Secretary of the Treasury objects, in writing, 
to any proposed rule of the Commission on the basis of the 
Secretary's view on the issues described in clauses (i), (ii), 
and (iii) of subparagraph (A), the Commission shall consider 
all feasible alternatives to the proposed rule, and it shall 
not adopt any such rule unless the Commission makes an explicit 
finding that the rule is the most practicable method for 
achieving safe and efficient operation of the national 
clearance and settlement system.
  (3) Any State may, prior to the expiration of 2 years after 
the Commission adopts a rule under this subsection, enact a 
statute that specifically refers to this subsection and the 
specific rule thereunder and establishes, prospectively from 
the date of enactment of the State statute, a provision that 
differs from that applicable under the Commission's rule.
  (4)(A) Within 90 days after the date of enactment of this 
subsection, the Commission shall (and at such times thereafter 
as the Commission may determine, the Commission may), after 
consultation with the Secretary of the Treasury and the Board 
of Governors of the Federal Reserve System, establish an 
advisory committee under the Federal Advisory Committee Act (5 
U.S.C. App.). The Advisory Committee shall be directed to 
consider and report to the Commission on such matters as the 
Commission, after consultation with the Secretary of the 
Treasury and the Board of Governors of the Federal Reserve 
System, determines, including the areas, if any, in which State 
commercial laws and related Federal laws concerning the 
transfer of certificated or uncertificated securities, limited 
interests (including security interests) in such securities, or 
the creation or perfection of security interests in such 
securities do not provide the necessary certainty, uniformity, 
and clarity for purchasers, sellers, owners, lenders, 
borrowers, and financial intermediaries concerning their 
respective rights and obligations.
  (B) The Advisory Committee shall consist of 15 members, of 
which--
          (i) 11 shall be designated by the Commission in 
        accordance with the Federal Advisory Committee Act; and
          (ii) 2 each shall be designated by the Board of 
        Governors of the Federal Reserve System and the 
        Secretary of the Treasury.
  (C) The Advisory Committee shall conduct its activities in 
accordance with the Federal Advisory Committee Act. Within 6 
months of its designation, or such longer time as the 
Commission may designate, the Advisory Committee shall issue a 
report to the Commission, and shall cause copies of that report 
to be delivered to the Secretary of the Treasury and the 
Chairman of the Board of Governors of the Federal Reserve 
System.
  (g) Registration Requirement.--It shall be unlawful for a 
clearing agency, unless registered with the Commission, 
directly or indirectly to make use of the mails or any means or 
instrumentality of interstate commerce to perform the functions 
of a clearing agency with respect to a security-based swap.
  (h) Voluntary Registration.--A person that clears agreements, 
contracts, or transactions that are not required to be cleared 
under this title may register with the Commission as a clearing 
agency.
  (i) Standards for Clearing Agencies Clearing Security-based 
Swap Transactions.--To be registered and to maintain 
registration as a clearing agency that clears security-based 
swap transactions, a clearing agency shall comply with such 
standards as the Commission may establish by rule. In 
establishing any such standards, and in the exercise of its 
oversight of such a clearing agency pursuant to this title, the 
Commission may conform such standards or oversight to reflect 
evolving United States and international standards. Except 
where the Commission determines otherwise by rule or 
regulation, a clearing agency shall have reasonable discretion 
in establishing the manner in which it complies with any such 
standards.
  (j) Rules.--The Commission shall adopt rules governing 
persons that are registered as clearing agencies for security-
based swaps under this title.
  (k) Exemptions.--The Commission may exempt, conditionally or 
unconditionally, a clearing agency from registration under this 
section for the clearing of security-based swaps if the 
Commission determines that the clearing agency is subject to 
comparable, comprehensive supervision and regulation by the 
Commodity Futures Trading Commission or the appropriate 
government authorities in the home country of the agency. Such 
conditions may include, but are not limited to, requiring that 
the clearing agency be available for inspection by the 
Commission and make available all information requested by the 
Commission.
  (l) Existing Depository Institutions and Derivative Clearing 
Organizations.--
          (1) In general.--A depository institution or 
        derivative clearing organization registered with the 
        Commodity Futures Trading Commission under the 
        Commodity Exchange Act that is required to be 
        registered as a clearing agency under this section is 
        deemed to be registered under this section solely for 
        the purpose of clearing security-based swaps to the 
        extent that, before the date of enactment of this 
        subsection--
                  (A) the depository institution cleared swaps 
                as a multilateral clearing organization; or
                  (B) the derivative clearing organization 
                cleared swaps pursuant to an exemption from 
                registration as a clearing agency.
          (2) Conversion of depository institutions.--A 
        depository institution to which this subsection applies 
        may, by the vote of the shareholders owning not less 
        than 51 percent of the voting interests of the 
        depository institution, be converted into a State 
        corporation, partnership, limited liability company, or 
        similar legal form pursuant to a plan of conversion, if 
        the conversion is not in contravention of applicable 
        State law.
          (3) Sharing of information.--The Commodity Futures 
        Trading Commission shall make available to the 
        Commission, upon request, all information determined to 
        be relevant by the Commodity Futures Trading Commission 
        regarding a derivatives clearing organization deemed to 
        be registered with the Commission under paragraph (1).
  (m) Modification of Core Principles.--The Commission may 
conform the core principles established in this section to 
reflect evolving United States and international standards.
  [(g)] (n) Due Diligence for the Delivery of Dividends, 
Interest, and Other Valuable Property Rights.--
          (1) Revision of rules required.--The Commission shall 
        revise its regulations in section 240.17Ad-17 of title 
        17, Code of Federal Regulations, as in effect on 
        December 8, 1997, to extend the application of such 
        section to brokers and dealers and to provide for the 
        following:
                  (A) A requirement that the paying agent 
                provide a single written notification to each 
                missing security holder that the missing 
                security holder has been sent a check that has 
                not yet been negotiated. The written 
                notification may be sent along with a check or 
                other mailing subsequently sent to the missing 
                security holder but must be provided no later 
                than 7 months after the sending of the not yet 
                negotiated check.
                  (B) An exclusion for paying agents from the 
                notification requirements when the value of the 
                not yet negotiated check is less than $25.
                  (C) A provision clarifying that the 
                requirements described in subparagraph (A) 
                shall have no effect on State escheatment laws.
                  (D) For purposes of such revised 
                regulations--
                          (i) a security holder shall be 
                        considered a ``missing security 
                        holder'' if a check is sent to the 
                        security holder and the check is not 
                        negotiated before the earlier of the 
                        paying agent sending the next regularly 
                        scheduled check or the elapsing of 6 
                        months after the sending of the not yet 
                        negotiated check; and
                          (ii) the term ``paying agent'' 
                        includes any issuer, transfer agent, 
                        broker, dealer, investment adviser, 
                        indenture trustee, custodian, or any 
                        other person that accepts payments from 
                        the issuer of a security and 
                        distributes the payments to the holders 
                        of the security.
          (2) Rulemaking.--The Commission shall adopt such 
        rules, regulations, and orders necessary to implement 
        this subsection no later than 1 year after the date of 
        enactment of this subsection. In proposing such rules, 
        the Commission shall seek to minimize disruptions to 
        current systems used by or on behalf of paying agents 
        to process payment to account holders and avoid 
        requiring multiple paying agents to send written 
        notification to a missing security holder regarding the 
        same not yet negotiated check.

           *       *       *       *       *       *       *


        investigations; injunctions and prosecution of offenses

  Sec. 21. (a)(1) The Commission may, in its discretion, make 
such investigations as it deems necessary to determine whether 
any person has violated, is violating, or is about to violate 
any provision of this title, the rules or regulations 
thereunder, the rules of a national securities exchange or 
registered securities association of which such person is a 
member or a person associated, or, as to any act or practice, 
or omission to act, while associated with a member, formerly 
associated with a member, the rules of a registered clearing 
agency in which such person is a participant, or, as to any act 
or practice, or omission to act, while a participant, was a 
participant, the rules of the Public Company Accounting 
Oversight Board, of which such person is a registered public 
accounting firm, a person associated with such a firm, or, as 
to any act, practice, or omission to act, while associated with 
such firm, a person formerly associated with such a firm, or 
the rules of the Municipal Securities Rulemaking Board, and may 
require or permit any person to file with it a statement in 
writing, under oath or otherwise as the Commission shall 
determine, as to all the facts and circumstances concerning the 
matter to be investigated. The Commission is authorized in its 
discretion, to publish information concerning any such 
violations, and to investigate any facts, conditions, 
practices, or matters which it may deem necessary or proper to 
aid in the enforcement of such provisions, in the prescribing 
of rules and regulations under this title, or in securing 
information to serve as a basis for recommending further 
legislation concerning the matters to which this title relates.
  (2) On request from a foreign securities authority, the 
Commission may provide assistance in accordance with this 
paragraph if the requesting authority states that the 
requesting authority is conducting an investigation which it 
deems necessary to determine whether any person has violated, 
is violating, or is about to violate any laws or rules relating 
to securities matters that the requesting authority administers 
or enforces. The Commission may, in its discretion, conduct 
such investigation as the Commission deems necessary to collect 
information and evidence pertinent to the request for 
assistance. Such assistance may be provided without regard to 
whether the facts stated in the request would also constitute a 
violation of the laws of the United States. In deciding whether 
to provide such assistance, the Commission shall consider 
whether (A) the requesting authority has agreed to provide 
reciprocal assistance in securities matters to the Commission; 
and (B) compliance with the request would prejudice the public 
interest of the United States.
  (b) Supoena.--[For the purpose of]
          (1) In general._For the purpose of  any such 
        investigation, or any other proceeding under this 
        title, any member of the Commission or any officer 
        designated by it is empowered to administer oaths and 
        affirmations, subpoena witnesses, compel their 
        attendance, take evidence, and require the production 
        of any books, papers, correspondence, memoranda, or 
        other records which the Commission deems relevant or 
        material to the inquiry. Such attendance of witnesses 
        and the production of any such records may be required 
        from any place in the United States or any State at any 
        designated place of hearing.
          (2) Omnibus orders of investigation.--
                  (A) Duration and renewal.--An omnibus order 
                of investigation shall not be for an indefinite 
                duration and may be renewed only by Commission 
                action.
                  (B) Definition.--In paragraph (A), the term 
                ``omnibus order of investigation'' means an 
                order of the Commission authorizing 1 of more 
                members of the Commission or its staff to issue 
                subpoenas under paragraph (1) to multiple 
                persons in relation to a particular subject 
                matter area.
  (c) In case of contumacy by, or refusal to obey a subpoena 
issued to, any person, the Commission may invoke the aid of any 
court of the United States within the jurisdiction of which 
such investigation or proceeding is carried on, or where such 
person resides or carries on business, in requiring the 
attendance and testimony of witnesses and the production of 
books, papers, correspondence, memoranda, and other records. 
And such court may issue an order requiring such person to 
appear before the Commission or member or officer designated by 
the Commission, there to produce records, if so ordered, or to 
give testimony touching the matter under investigation or in 
question; and any failure to obey such order of the court may 
be punished by such court as a contempt thereof. All process in 
any such case may be served in the judicial district whereof 
such person is an inhabitant or wherever he may be found. Any 
person who shall, without just cause, fail or refuse to attend 
and testify or to answer any lawful inquiry or to produce 
books, papers, correspondence, memoranda, and other records, if 
in his power so to do, in obedience to the subpoena of the 
Commission, shall be guilty of a misdemeanor and, upon 
conviction, shall be subject to a fine of not more than $1,000 
or to imprisonment for a term of not more than one year, or 
both.
  (d)(1) Whenever it shall appear to the Commission that any 
person is engaged or is about to engage in acts or practices 
constituting a violation of any provision of this title, the 
rules or regulations thereunder, the rules of a national 
securities exchange or registered securities association of 
which such person is a member or a person associated with a 
member, the rules of a registered clearing agency in which such 
person is a participant, the rules of the Public Company 
Accounting Oversight Board, of which such person is a 
registered public accounting firm or a person associated with 
such a firm, or the rules of the Municipal Securities 
Rulemaking Board, it may in its discretion bring an action in 
the proper district court of the United States, the United 
States District Court for the District of Columbia, or the 
United States courts of any territory or other place subject to 
the jurisdiction of the United States, to enjoin such acts or 
practices, and upon a proper showing a permanent or temporary 
injunction or restraining order shall be granted without bond. 
The Commission may transmit such evidence as may be available 
concerning such acts or practices as may constitute a violation 
of any provision of this title or the rules or regulations 
thereunder to the Attorney General, who may, in his discretion, 
institute the necessary criminal proceedings under this title.
  (2) Authority of a Court To Prohibit Persons From Serving as 
Officers and Directors.--In any proceeding under paragraph (1) 
of this subsection, the court may prohibit, conditionally or 
unconditionally, and permanently or for such period of time as 
it shall determine, any person who violated section 10(b) of 
this title or the rules or regulations thereunder from acting 
as an officer or director of any issuer that has a class of 
securities registered pursuant to section 12 of this title or 
that is required to file reports pursuant to section 15(d) of 
this title if the person's conduct demonstrates unfitness to 
serve as an officer or director of any such issuer.
  (3) Money Penalties in Civil Actions.--
          (A) Authority of commission.--Whenever it shall 
        appear to the Commission that any person has violated 
        any provision of this title, the rules or regulations 
        thereunder, a Federal court injunction or a bar 
        obtained or entered by the Commission under this title, 
        or a cease-and-desist order entered by the Commission 
        pursuant to section 21C of this title, other than by 
        committing a violation subject to a penalty pursuant to 
        section 21A, the Commission may bring an action in a 
        United States district court to seek, and the court 
        shall have jurisdiction to impose, upon a proper 
        showing, a civil penalty to be paid by the person who 
        committed such violation.
          (B) Amount of penalty.--
                  (i) First tier.--The amount of the penalty 
                shall be determined by the court in light of 
                the facts and circumstances. For each 
                violation, the amount of the penalty shall not 
                exceed the greater of (I) [$5,000] $10,000 for 
                a natural person or [$50,000] $100,000 for any 
                other person, or (II) the gross amount of 
                pecuniary gain to such defendant as a result of 
                the violation.
                  (ii) Second tier.--Notwithstanding clause 
                (i), the amount of penalty for each such 
                violation shall not exceed the greater of (I) 
                [$50,000] $100,000 for a natural person or 
                [$250,000] $500,000 for any other person, or 
                (II) the gross amount of pecuniary gain to such 
                defendant as a result of the violation, if the 
                violation described in subparagraph (A) 
                involved fraud, deceit, manipulation, or 
                deliberate or reckless disregard of a 
                regulatory requirement.
                  [(iii) Third tier.--Notwithstanding clauses 
                (i) and (ii), the amount of penalty for each 
                such violation shall not exceed the greater of 
                (I) $100,000 for a natural person or $500,000 
                for any other person, or (II) the gross amount 
                of pecuniary gain to such defendant as a result 
                of the violation, if--
                          [(aa) the violation described in 
                        subparagraph (A) involved fraud, 
                        deceit, manipulation, or deliberate or 
                        reckless disregard of a regulatory 
                        requirement; and
                          [(bb) such violation directly or 
                        indirectly resulted in substantial 
                        losses or created a significant risk of 
                        substantial losses to other persons.]
                  (iii) Third tier.--
                          (I) In general.--Notwithstanding 
                        clauses (i) and (ii), the amount of 
                        penalty for each such violation shall 
                        not exceed the amount specified in 
                        subclause (II) if--
                                  (aa) the violation described 
                                in subparagraph (A) involved 
                                fraud, deceit, manipulation, or 
                                deliberate or reckless 
                                disregard of a regulatory 
                                requirement; and
                                  (bb) such violation directly 
                                or indirectly resulted in 
                                substantial losses or created a 
                                significant risk of substantial 
                                losses to other persons.
                          (II) Maximum amount of penalty.--The 
                        amount referred to in subclause (I) is 
                        the greatest of--
                                  (aa) $300,000 for a natural 
                                person or $1,450,000 for any 
                                other person;
                                  (bb) 3 times the gross amount 
                                of pecuniary gain to such 
                                defendant as a result of the 
                                violation; or
                                  (cc) the amount of losses 
                                incurred by victims as a result 
                                of the violation.
                  (iv) Fourth tier.--Notwithstanding clauses 
                (i), (ii), and (iii), the maximum amount of 
                penalty for each such violation shall be 3 
                times the otherwise applicable amount in such 
                clauses if, within the 5-year period preceding 
                such violation, the defendant was criminally 
                convicted for securities fraud or became 
                subject to a judgment or order imposing 
                monetary, equitable, or administrative relief 
                in any Commission action alleging fraud by that 
                defendant.
          (C) Procedures for collection.--
                  (i) Payment of penalty to treasury.--A 
                penalty imposed under this section shall be 
                payable into the Treasury of the United States, 
                except as otherwise provided in section 308 of 
                the Sarbanes-Oxley Act of 2002 and section 21F 
                of this title.
                  (ii) Collection of penalties.--If a person 
                upon whom such a penalty is imposed shall fail 
                to pay such penalty within the time prescribed 
                in the court's order, the Commission may refer 
                the matter to the Attorney General who shall 
                recover such penalty by action in the 
                appropriate United States district court.
                  (iii) Remedy not exclusive.--The actions 
                authorized by this paragraph may be brought in 
                addition to any other action that the 
                Commission or the Attorney General is entitled 
                to bring.
                  (iv) Jurisdiction and venue.--For purposes of 
                section 27 of this title, actions under this 
                paragraph shall be actions to enforce a 
                liability or a duty created by this title.
          [(D) Special provisions relating to a violation of a 
        cease-and-desist order.--In an action to enforce a 
        cease-and-desist order entered by the Commission 
        pursuant to section 21C, each separate violation of 
        such order shall be a separate offense, except that in 
        the case of a violation through a continuing failure to 
        comply with the order, each day of the failure to 
        comply shall be deemed a separate offense.]
          (D) Special provisions relating to a violation of an 
        injunction or certain orders.--
                  (i) In general.--Each separate violation of 
                an injunction or order described in clause (ii) 
                shall be a separate offense, except that in the 
                case of a violation through a continuing 
                failure to comply with such injunction or 
                order, each day of the failure to comply with 
                the injunction or order shall be deemed a 
                separate offense.
                  (ii) Injunctions and orders.--Clause (i) 
                shall apply with respect to an action to 
                enforce--
                          (I) a Federal court injunction 
                        obtained pursuant to this title;
                          (II) an order entered or obtained by 
                        the Commission pursuant to this title 
                        that bars, suspends, places limitations 
                        on the activities or functions of, or 
                        prohibits the activities of, a person; 
                        or
                          (III) a cease-and-desist order 
                        entered by the Commission pursuant to 
                        section 21C.
          (4) Prohibition of attorneys' fees paid from 
        commission disgorgement funds.--Except as otherwise 
        ordered by the court upon motion by the Commission, or, 
        in the case of an administrative action, as otherwise 
        ordered by the Commission, funds disgorged as the 
        result of an action brought by the Commission in 
        Federal court, or as a result of any Commission 
        administrative action, shall not be distributed as 
        payment for attorneys' fees or expenses incurred by 
        private parties seeking distribution of the disgorged 
        funds.
  (5) Equitable Relief.--In any action or proceeding brought or 
instituted by the Commission under any provision of the 
securities laws, the Commission may seek, and any Federal court 
may grant, any equitable relief that may be appropriate or 
necessary for the benefit of investors.
  (6) Authority of a court to prohibit persons from 
participating in an offering of penny stock.--
          (A) In general.--In any proceeding under paragraph 
        (1) against any person participating in, or, at the 
        time of the alleged misconduct who was participating 
        in, an offering of penny stock, the court may prohibit 
        that person from participating in an offering of penny 
        stock, conditionally or unconditionally, and 
        permanently or for such period of time as the court 
        shall determine.
          (B) Definition.--For purposes of this paragraph, the 
        term ``person participating in an offering of penny 
        stock'' includes any person engaging in activities with 
        a broker, dealer, or issuer for purposes of issuing, 
        trading, or inducing or attempting to induce the 
        purchase or sale of, any penny stock. The Commission 
        may, by rule or regulation, define such term to include 
        other activities, and may, by rule, regulation, or 
        order, exempt any person or class of persons, in whole 
        or in part, conditionally or unconditionally, from 
        inclusion in such term.
  (e) Upon application of the Commission the district courts of 
the United States and the United States courts of any territory 
or other place subject to the jurisdiction of the United States 
shall have jurisdiction to issue writs of mandamus, 
injunctions, and orders commanding (1) any person to comply 
with the provisions of this title, the rules, regulations, and 
orders thereunder, the rules of a national securities exchange 
or registered securities association of which such person is a 
member or person associated with a member, the rules of a 
registered clearing agency in which such person is a 
participant, the rules of the Public Company Accounting 
Oversight Board, of which such person is a registered public 
accounting firm or a person associated with such a firm, the 
rules of the Municipal Securities Rulemaking Board, or any 
undertaking contained in a registration statement as provided 
in subsection (d) of section 15 of this title, (2) any national 
securities exchange or registered securities association to 
enforce compliance by its members and persons associated with 
its members with the provisions of this title, the rules, 
regulations, and orders thereunder, and the rules of such 
exchange or association, or (3) any registered clearing agency 
to enforce compliance by its participants with the provisions 
of the rules of such clearing agency.
  (f) Notwithstanding any other provision of this title, the 
Commission shall not bring any action pursuant to subsection 
(d) or (e) of this section against any person for violation of, 
or to command compliance with, the rules of a self-regulatory 
organization or the Public Company Accounting Oversight Board 
unless it appears to the Commission that (1) such self-
regulatory organization or the Public Company Accounting 
Oversight Board is unable or unwilling to take appropriate 
action against such person in the public interest and for the 
protection of investors, or (2) such action is otherwise 
necessary or appropriate in the public interest or for the 
protection of investors.
  (g) Notwithstanding the provisions of section 1407(a) of 
title 28, United States Code, or any other provision of law, no 
action for equitable relief instituted by the Commission 
pursuant to the securities laws shall be consolidated or 
coordinated with other actions not brought by the Commission, 
even though such other actions may involve common questions of 
fact, unless such consolidation is consented to by the 
Commission.
  (h)(1) The Right to Financial Privacy Act of 1978 shall apply 
with respect to the Commission, except as otherwise provided in 
this subsection.
  (2) Notwithstanding section 1105 or 1107 of the Right to 
Financial Privacy Act of 1978, the Commission may have access 
to and obtain copies of, or the information contained in 
financial records of a customer from a financial institution 
without prior notice to the customer upon an ex parte showing 
to an appropriate United States district court that the 
Commission seeks such financial records pursuant to a subpoena 
issued in conformity with the requirements of section 19(b) of 
the Securities Act of 1933, section 21(b) of the Securities 
Exchange Act of 1934, section 42(b) of the Investment Company 
Act of 1940, or section 209(b) of the Investment Advisers Act 
of 1940, and that the Commission has reason to believe that--
          (A) delay in obtaining access to such financial 
        records, or the required notice, will result in--
                  (i) flight from prosecution;
                  (ii) destruction of or tampering with 
                evidence;
                  (iii) transfer of assets or records outside 
                the territorial limits of the United States;
                  (iv) improper conversion of investor assets; 
                or
                  (v) impeding the ability of the Commission to 
                identify or trace the source or disposition of 
                funds involved in any securities transaction;
          (B) such financial records are necessary to identify 
        or trace the record or beneficial ownership interest in 
        any security;
          (C) the acts, practices or course of conduct under 
        investigation involve--
                  (i) the dissemination of materially false or 
                misleading information concerning any security, 
                issuer, or market, or the failure to make 
                disclosures required under the securities laws, 
                which remain uncorrected; or
                  (ii) a financial loss to investors or other 
                persons protected under the securities laws 
                which remains substantially uncompensated; or
          (D) the acts, practices or course of conduct under 
        investigation--
                  (i) involve significant financial speculation 
                in securities; or
                  (ii) endanger the stability of any financial 
                or investment intermediary.
  (3) Any application under paragraph (2) for a delay in notice 
shall be made with reasonable specificity.
  (4)(A) Upon a showing described in paragraph (2), the 
presiding judge or magistrate shall enter an ex parte order 
granting the requested delay for a period not to exceed ninety 
days and an order prohibiting the financial institution 
involved from disclosing that records have been obtained or 
that a request for records has been made.
  (B) Extensions of the period of delay of notice provided in 
subparagraph (A) of up to ninety days each may be granted by 
the court upon application, but only in accordance with this 
subsection or section 1109(a), (b)(1), or (b)(2) of the Right 
to Financial Privacy Act of 1978.
  (C) Upon expiration of the period of delay of notification 
ordered under subparagraph (A) or (B), the customer shall be 
served with or mailed a copy of the subpena insofar as it 
applies to the customer together with the following notice 
which shall describe with reasonable specificity the nature of 
the investigation for which the Commission sought the financial 
records:``Records or information concerning your transactions 
which are held by the financial institution named in the 
attached subpena were supplied to the Securities and Exchange 
Commission on (date). Notification was withheld pursuant to a 
determination by the (title of court so ordering) under section 
21(h) of the Securities Exchange Act of 1934 that (state 
reason). The purpose of the investigation or official 
proceeding was (state purpose).''
  (5) Upon application by the Commission, all proceedings 
pursuant to paragraphs (2) and (4) shall be held in camera and 
the records thereof sealed until expiration of the period of 
delay or such other date as the presiding judge or magistrate 
may permit.
  (7)(A) Following the expiration of the period of delay of 
notification ordered by the court pursuant to paragraph (4) of 
this subsection, the customer may, upon motion, reopen the 
proceeding in the district court which issued the order. If the 
presiding judge or magistrate finds that the movant is the 
customer to whom the records obtained by the Commission 
pertain, and that the Commission has obtained financial records 
or information contained therein in violation of this 
subsection, other than paragraph (1), it may order that the 
customer be granted civil penalties against the Commission in 
an amount equal to the sum of--
          (i) $100 without regard to the volume of records 
        involved;
          (ii) any out-of-pocket damages sustained by the 
        customer as a direct result of the disclosure; and
          (iii) if the violation is found to have been willful, 
        intentional, and without good faith, such punitive 
        damages as the court may allow, together with the costs 
        of the action and reasonable attorney's fees as 
        determined by the court.
  (B) Upon a finding that the Commission has obtained financial 
records or information contained therein in violation of this 
subsection, other than paragraph (1), the court, in its 
discretion, may also or in the alternative issue injunctive 
relief to require the Commission to comply with this subsection 
with respect to any subpena which the Commission issues in the 
future for financial records of such customer for purposes of 
the same investigation.
  (C) Whenever the court determines that the Commission has 
failed to comply with this subsection, other than paragraph 
(1), and the court finds that the circumstances raise questions 
of whether an officer or employee of the Commission acted in a 
willful and intentional manner and without good faith with 
respect to the violation, the Office of Personnel Management 
shall promptly initiate a proceeding to determine whether 
disciplinary action is warranted against the agent or employee 
who was primarily responsible for the violation. After 
investigating and considering the evidence submitted, the 
Office of Personnel Management shall submit its findings and 
recommendations to the Commission and shall send copies of the 
findings and recommendations to the officer or employee or his 
representative. The Commission shall take the corrective action 
that the Office of Personnel Management recommends.
  (8) The relief described in paragraphs (7) and (10) shall be 
the only remedies or sanctions available to a customer for a 
violation of this subsection, other than paragraph (1), and 
nothing herein or in the Right to Financial Privacy Act of 1978 
shall be deemed to prohibit the use in any investigation or 
proceeding of financial records, or the information contained 
therein, obtained by a subpena issued by the Commission. In the 
case of an unsuccessful action under paragraph (7), the court 
shall award the costs of the action and attorney's fees to the 
Commission if the presiding judge or magistrate finds that the 
customer's claims were made in bad faith.
  (9)(A) The Commission may transfer financial records or the 
information contained therein to any government authority if 
the Commission proceeds as a transferring agency in accordance 
with section 1112 of the Right to Financial Privacy Act of 
1978, except that the customer notice required under section 
1112(b) or (c) of such Act may be delayed upon a showing by the 
Commission, in accordance with the procedure set forth in 
paragraphs (4) and (5), that one or more of subparagraphs (A) 
through (D) of paragraph (2) apply.
  (B) The Commission may, without notice to the customer 
pursuant to section 1112 of the Right to Financial Privacy Act 
of 1978, transfer financial records or the information 
contained therein to a State securities agency or to the 
Department of Justice. Financial records or information 
transferred by the Commission to the Department of Justice or 
to a State securities agency pursuant to the provisions of this 
subparagraph may be disclosed or used only in an 
administrative, civil, or criminal action or investigation by 
the Department of Justice or the State securities agency which 
arises out of or relates to the acts, practices, or courses of 
conduct investigated by the Commission, except that if the 
Department of Justice or the State securities agency determines 
that the information should be disclosed or used for any other 
purpose, it may do so if it notifies the customer, except as 
otherwise provided in the Right to Financial Privacy Act of 
1978, within 30 days of its determination, or complies with the 
requirements of section 1109 of such Act regarding delay of 
notice.
  (10) Any government authority violating paragraph (9) shall 
be subject to the procedures and penalties applicable to the 
Commission under paragraph (7)(A) with respect to a violation 
by the Commission in obtaining financial records.
  (11) Notwithstanding the provisions of this subsection, the 
Commission may obtain financial records from a financial 
institution or transfer such records in accordance with 
provisions of the Right to Financial Privacy Act of 1978.
  (12) Nothing in this subsection shall enlarge or restrict any 
rights of a financial institution to challenge requests for 
records made by the Commission under existing law. Nothing in 
this subsection shall entitle a customer to assert any rights 
of a financial institution.
  (13) Unless the context otherwise requires, all terms defined 
in the Right to Financial Privacy Act of 1978 which are common 
to this subsection shall have the same meaning as in such Act.
  (i) Information to CFTC.--The Commission shall provide the 
Commodity Futures Trading Commission with notice of the 
commencement of any proceeding and a copy of any order entered 
by the Commission against any broker or dealer registered 
pursuant to section 15(b)(11), any exchange registered pursuant 
to section 6(g), or any national securities association 
registered pursuant to section 15A(k).
  (k) Adequate Notice Required Before Bringing an Enforcement 
Action.--
          (1) In general.--No person shall be subject to an 
        enforcement action by the Commission for an alleged 
        violation of the securities laws or the rules and 
        regulations issued thereunder if such person did not 
        have adequate notice of such law, rule, or regulation.
          (2) Publishing of interpretation deemed adequate 
        notice.--With respect to an enforcement action, 
        adequate notice of a securities law or a rule or 
        regulation issued thereunder shall be deemed to have 
        been provided to a person if the Commission approved a 
        statement or guidance, in accordance with Section 4I, 
        with respect to the conduct that is the subject of the 
        enforcement action, prior to the time that the person 
        engaged in the conduct that is the subject of the 
        enforcement action.

                  civil penalties for insider trading

  Sec. 21A. (a) Authority To Impose Civil Penalties.--
          (1) Judicial actions by commission authorized.--
        Whenever it shall appear to the Commission that any 
        person has violated any provision of this title or the 
        rules or regulations thereunder by purchasing or 
        selling a security or security-based swap agreement 
        while in possession of material, nonpublic information 
        in, or has violated any such provision by communicating 
        such information in connection with, a transaction on 
        or through the facilities of a national securities 
        exchange or from or through a broker or dealer, and 
        which is not part of a public offering by an issuer of 
        securities other than standardized options or security 
        futures products, the Commission--
                  (A) may bring an action in a United States 
                district court to seek, and the court shall 
                have jurisdiction to impose, a civil penalty to 
                be paid by the person who committed such 
                violation; and
                  (B) may, subject to subsection (b)(1), bring 
                an action in a United States district court to 
                seek, and the court shall have jurisdiction to 
                impose, a civil penalty to be paid by a person 
                who, at the time of the violation, directly or 
                indirectly controlled the person who committed 
                such violation.
          (2) Amount of penalty for person who committed 
        violation.--The amount of the penalty which may be 
        imposed on the person who committed such violation 
        shall be determined by the court in light of the facts 
        and circumstances, but shall not exceed three times the 
        profit gained or loss avoided as a result of such 
        unlawful purchase, sale, or communication.
          (3) Amount of penalty for controlling person.--The 
        amount of the penalty which may be imposed on any 
        person who, at the time of the violation, directly or 
        indirectly controlled the person who committed such 
        violation, shall be determined by the court in light of 
        the facts and circumstances, but shall not exceed the 
        greater of [$1,000,000] $2,500,000, or three times the 
        amount of the profit gained or loss avoided as a result 
        of such controlled person's violation. If such 
        controlled person's violation was a violation by 
        communication, the profit gained or loss avoided as a 
        result of the violation shall, for purposes of this 
        paragraph only, be deemed to be limited to the profit 
        gained or loss avoided by the person or persons to whom 
        the controlled person directed such communication.
  (b) Limitations on Liability.--
          (1) Liability of controlling persons.--No controlling 
        person shall be subject to a penalty under subsection 
        (a)(1)(B) unless the Commission establishes that--
                  (A) such controlling person knew or 
                recklessly disregarded the fact that such 
                controlled person was likely to engage in the 
                act or acts constituting the violation and 
                failed to take appropriate steps to prevent 
                such act or acts before they occurred; or
                  (B) such controlling person knowingly or 
                recklessly failed to establish, maintain, or 
                enforce any policy or procedure required under 
                section 15(f) of this title or section 204A of 
                the Investment Advisers Act of 1940 and such 
                failure substantially contributed to or 
                permitted the occurrence of the act or acts 
                constituting the violation.
          (2) Additional restrictions on liability.--No person 
        shall be subject to a penalty under subsection (a) 
        solely by reason of employing another person who is 
        subject to a penalty under such subsection, unless such 
        employing person is liable as a controlling person 
        under paragraph (1) of this subsection. Section 20(a) 
        of this title shall not apply to actions under 
        subsection (a) of this section.
  (c) Authority of Commission.--the Commission, by such rules, 
regulations, and orders as it considers necessary or 
appropriate in the public interest or for the protection of 
investors, may exempt, in whole or in part, either 
unconditionally or upon specific terms and conditions, any 
person or transaction or class of persons or transactions from 
this section.
  (d) Procedures for Collection.--
          (1) Payment of penalty to treasury.--A penalty 
        imposed under this section shall be payable into the 
        Treasury of the United States, except as otherwise 
        provided in section 308 of the Sarbanes-Oxley Act of 
        2002 and section 21F of this title.
          (2) Collection of penalties.--If a person upon whom 
        such a penalty is imposed shall fail to pay such 
        penalty within the time prescribed in the court's 
        order, the Commission may refer the matter to the 
        Attorney General who shall recover such penalty by 
        action in the appropriate United States district court.
          (3) Remedy not exclusive.--The actions authorized by 
        this section may be brought in addition to any other 
        actions that the Commission or the Attorney General are 
        entitled to bring.
          (4) Jurisdiction and venue.--For purposes of section 
        27 of this title, actions under this section shall be 
        actions to enforce a liability or a duty created by 
        this title.
          (5) Statute of limitations.--No action may be brought 
        under this section more than 5 years after the date of 
        the purchase or sale. This section shall not be 
        construed to bar or limit in any manner any action by 
        the Commission or the Attorney General under any other 
        provision of this title, nor shall it bar or limit in 
        any manner any action to recover penalties, or to seek 
        any other order regarding penalties, imposed in an 
        action commenced within 5 years of such transaction.
  (e) Definition.--For purposes of this section, ``profit 
gained'' or ``loss avoided'' is the difference between the 
purchase or sale price of the security and the value of that 
security as measured by the trading price of the security a 
reasonable period after public dissemination of the nonpublic 
information.
  (f) The authority of the Commission under this section with 
respect to security-based swap agreements (as defined in 
section 206B of the Gramm-Leach-Bliley Act) shall be subject to 
the restrictions and limitations of section 3A(b) of this 
title.
  (g) Duty of Members and Employees of Congress.--
          (1) In general.--Subject to the rule of construction 
        under section 10 of the STOCK Act and solely for 
        purposes of the insider trading prohibitions arising 
        under this Act, including section 10(b) and Rule 10b-5 
        thereunder, each Member of Congress or employee of 
        Congress owes a duty arising from a relationship of 
        trust and confidence to the Congress, the United States 
        Government, and the citizens of the United States with 
        respect to material, nonpublic information derived from 
        such person's position as a Member of Congress or 
        employee of Congress or gained from the performance of 
        such person's official responsibilities.
          (2) Definitions.--In this subsection--
                  (A) the term ``Member of Congress'' means a 
                member of the Senate or House of 
                Representatives, a Delegate to the House of 
                Representatives, and the Resident Commissioner 
                from Puerto Rico; and
                  (B) the term ``employee of Congress'' means--
                          (i) any individual (other than a 
                        Member of Congress), whose compensation 
                        is disbursed by the Secretary of the 
                        Senate or the Chief Administrative 
                        Officer of the House of 
                        Representatives; and
                          (ii) any other officer or employee of 
                        the legislative branch (as defined in 
                        section 109(11) of the Ethics in 
                        Government Act of 1978 (5 U.S.C. App. 
                        109(11))).
          (3) Rule of construction.--Nothing in this subsection 
        shall be construed to impair or limit the construction 
        of the existing antifraud provisions of the securities 
        laws or the authority of the Commission under those 
        provisions.
  (h) Duty of Other Federal Officials.--
          (1) In general.--Subject to the rule of construction 
        under section 10 of the STOCK Act and solely for 
        purposes of the insider trading prohibitions arising 
        under this Act, including section 10(b), and Rule 10b-5 
        thereunder, each executive branch employee, each 
        judicial officer, and each judicial employee owes a 
        duty arising from a relationship of trust and 
        confidence to the United States Government and the 
        citizens of the United States with respect to material, 
        nonpublic information derived from such person's 
        position as an executive branch employee, judicial 
        officer, or judicial employee or gained from the 
        performance of such person's official responsibilities.
          (2) Definitions.--In this subsection--
                  (A) the term ``executive branch employee''--
                          (i) has the meaning given the term 
                        ``employee'' under section 2105 of 
                        title 5, United States Code;
                          (ii) includes--
                                  (I) the President;
                                  (II) the Vice President; and
                                  (III) an employee of the 
                                United States Postal Service or 
                                the Postal Regulatory 
                                Commission;
                  (B) the term ``judicial employee'' has the 
                meaning given that term in section 109(8) of 
                the Ethics in Government Act of 1978 (5 U.S.C. 
                App. 109(8)); and
                  (C) the term ``judicial officer'' has the 
                meaning given that term under section 109(10) 
                of the Ethics in Government Act of 1978 (5 
                U.S.C. App. 109(10)).
          (3) Rule of construction.--Nothing in this subsection 
        shall be construed to impair or limit the construction 
        of the existing antifraud provisions of the securities 
        laws or the authority of the Commission under those 
        provisions.
  (i) Participation in Initial Public Offerings.--An individual 
described in section 101(f) of the Ethics in Government Act of 
1978 may not purchase securities that are the subject of an 
initial public offering (within the meaning given such term in 
section 12(f)(1)(G)(i)) in any manner other than is available 
to members of the public generally.

              CIVIL REMEDIES IN ADMINISTRATIVE PROCEEDINGS

  Sec. 21B. (a) Commission Authority To Assess Money 
Penalties.--
          (1) In general.--In any proceeding instituted 
        pursuant to sections 15(b)(4), 15(b)(6), 15D, 15B, 15C, 
        15E, or 17A of this title against any person, the 
        Commission or the appropriate regulatory agency may 
        impose a civil penalty if it finds, on the record after 
        notice and opportunity for hearing, that such penalty 
        is in the public interest and that such person--
                  (A) has willfully violated any provision of 
                the Securities Act of 1933, the Investment 
                Company Act of 1940, the Investment Advisers 
                Act of 1940, or this title, or the rules or 
                regulations thereunder, or the rules of the 
                Municipal Securities Rulemaking Board;
                  (B) has willfully aided, abetted, counseled, 
                commanded, induced, or procured such a 
                violation by any other person;
                  (C) has willfully made or caused to be made 
                in any application for registration or report 
                required to be filed with the Commission or 
                with any other appropriate regulatory agency 
                under this title, or in any proceeding before 
                the Commission with respect to registration, 
                any statement which was, at the time and in the 
                light of the circumstances under which it was 
                made, false or misleading with respect to any 
                material fact, or has omitted to state in any 
                such application or report any material fact 
                which is required to be stated therein; or
                  (D) has failed reasonably to supervise, 
                within the meaning of section 15(b)(4)(E) of 
                this title, with a view to preventing 
                violations of the provisions of such statutes, 
                rules and regulations, another person who 
                commits such a violation, if such other person 
                is subject to his supervision;
          (2) Cease-and-desist proceedings.--In any proceeding 
        instituted under section 21C against any person, the 
        Commission may impose a civil penalty, if the 
        Commission finds, on the record after notice and 
        opportunity for hearing, that such person--
                  (A) is violating or has violated any 
                provision of this title, or any rule or 
                regulation issued under this title; or
                  (B) is or was a cause of the violation of any 
                provision of this title, or any rule or 
                regulation issued under this title.
  (b) Maximum Amount of Penalty.--
          (1) First tier.--The maximum amount of penalty for 
        each act or omission described in subsection (a) shall 
        be [$5,000] $10,000 for a natural person or [$50,000] 
        $100,000 for any other person.
          (2) Second tier.--Notwithstanding paragraph (1), the 
        maximum amount of penalty for each such act or omission 
        shall be [$50,000] $100,000 for a natural person or 
        [$250,000] $500,000 for any other person if the act or 
        omission described in subsection (a) involved fraud, 
        deceit, manipulation, or deliberate or reckless 
        disregard of a regulatory requirement.
          [(3) Third tier.--Notwithstanding paragraphs (1) and 
        (2), the maximum amount of penalty for each such act or 
        omission shall be $100,000 for a natural person or 
        $500,000 for any other person if--
                  [(A) the act or omission described in 
                subsection (a) involved fraud, deceit, 
                manipulation, or deliberate or reckless 
                disregard of a regulatory requirement; and
                  [(B) such act or omission directly or 
                indirectly resulted in substantial losses or 
                created a significant risk of substantial 
                losses to other persons or resulted in 
                substantial pecuniary gain to the person who 
                committed the act or omission.]
          (3) Third tier.--
                  (A) In general.--Notwithstanding paragraphs 
                (1) and (2), the amount of penalty for each 
                such act or omission shall not exceed the 
                amount specified in subparagraph (B) if--
                          (i) the act or omission described in 
                        subsection (a) involved fraud, deceit, 
                        manipulation, or deliberate or reckless 
                        disregard of a regulatory requirement; 
                        and
                          (ii) such act or omission directly or 
                        indirectly resulted in substantial 
                        losses or created a significant risk of 
                        substantial losses to other persons or 
                        resulted in substantial pecuniary gain 
                        to the person who committed the act or 
                        omission.
                  (B) Maximum amount of penalty.--The amount 
                referred to in subparagraph (A) is the greatest 
                of--
                          (i) $300,000 for a natural person or 
                        $1,450,000 for any other person;
                          (ii) 3 times the gross amount of 
                        pecuniary gain to the person who 
                        committed the act or omission; or
                          (iii) the amount of losses incurred 
                        by victims as a result of the act or 
                        omission.
          (4) Fourth tier.--Notwithstanding paragraphs (1), 
        (2), and (3), the maximum amount of penalty for each 
        such act or omission shall be 3 times the otherwise 
        applicable amount in such paragraphs if, within the 5-
        year period preceding such act or omission, the person 
        who committed the act or omission was criminally 
        convicted for securities fraud or became subject to a 
        judgment or order imposing monetary, equitable, or 
        administrative relief in any Commission action alleging 
        fraud by that person.
  (c) Determination of Public Interest.--In considering under 
this section whether a penalty is in the public interest, the 
Commission or the appropriate regulatory agency may consider--
          (1) whether the act or omission for which such 
        penalty is assessed involved fraud, deceit, 
        manipulation, or deliberate or reckless disregard of a 
        regulatory requirement;
          (2) the harm to other persons resulting either 
        directly or indirectly from such act or omission;
          (3) the extent to which any person was unjustly 
        enriched, taking into account any restitution made to 
        persons injured by such behavior;
          (4) whether such person previously has been found by 
        the Commission, another appropriate regulatory agency, 
        or a self-regulatory organization to have violated the 
        Federal securities laws, State securities laws, or the 
        rules of a self-regulatory organization, has been 
        enjoined by a court of competent jurisdiction from 
        violations of such laws or rules, or has been convicted 
        by a court of competent jurisdiction of violations of 
        such laws or of any felony or misdemeanor described in 
        section 15(b)(4)(B) of this title;
          (5) the need to deter such person and other persons 
        from committing such acts or omissions; and
          (6) such other matters as justice may require.
  (d) Evidence Concerning Ability To Pay.--In any proceeding in 
which the Commission or the appropriate regulatory agency may 
impose a penalty under this section, a respondent may present 
evidence of the respondent's ability to pay such penalty. The 
Commission or the appropriate regulatory agency may, in its 
discretion, consider such evidence in determining whether such 
penalty is in the public interest. Such evidence may relate to 
the extent of such person's ability to continue in business and 
the collectability of a penalty, taking into account any other 
claims of the United States or third parties upon such person's 
assets and the amount of such person's assets.
  (e) Authority To Enter an Order Requiring an Accounting and 
Disgorgement.--In any proceeding in which the Commission or the 
appropriate regulatory agency may impose a penalty under this 
section, the Commission or the appropriate regulatory agency 
may enter an order requiring accounting and disgorgement, 
including reasonable interest. The Commission is authorized to 
adopt rules, regulations, and orders concerning payments to 
investors, rates of interest, periods of accrual, and such 
other matters as it deems appropriate to implement this 
subsection.
  (f) Security-based Swaps.--
          (1) Clearing agency.--Any clearing agency that 
        knowingly or recklessly evades or participates in or 
        facilitates an evasion of the requirements of section 
        3C shall be liable for a civil money penalty in twice 
        the amount otherwise available for a violation of 
        section 3C.
          (2) Security-based swap dealer or major security-
        based swap participant.--Any security-based swap dealer 
        or major security-based swap participant that knowingly 
        or recklessly evades or participates in or facilitates 
        an evasion of the requirements of section 3C shall be 
        liable for a civil money penalty in twice the amount 
        otherwise available for a violation of section 3C.

                      CEASE-AND-DESIST PROCEEDINGS

  Sec. 21C. (a) Authority of the Commission.--If the Commission 
finds, after notice and opportunity for hearing, that any 
person is violating, has violated, or is about to violate any 
provision of this title, or any rule or regulation thereunder, 
the Commission may publish its findings and enter an order 
requiring such person, and any other person that is, was, or 
would be a cause of the violation, due to an act or omission 
the person knew or should have known would contribute to such 
violation, to cease and desist from committing or causing such 
violation and any future violation of the same provision, rule, 
or regulation. Such order may, in addition to requiring a 
person to cease and desist from committing or causing a 
violation, require such person to comply, or to take steps to 
effect compliance, with such provision, rule, or regulation, 
upon such terms and conditions and within such time as the 
Commission may specify in such order. Any such order may, as 
the Commission deems appropriate, require future compliance or 
steps to effect future compliance, either permanently or for 
such period of time as the Commission may specify, with such 
provision, rule, or regulation with respect to any security, 
any issuer, or any other person.
  (b) Hearing.--The notice instituting proceedings pursuant to 
subsection (a) shall fix a hearing date not earlier than 30 
days nor later than 60 days after service of the notice unless 
an earlier or a later date is set by the Commission with the 
consent of any respondent so served.
  (c) Temporary Order.--
          (1) In general.--Whenever the Commission determines 
        that the alleged violation or threatened violation 
        specified in the notice instituting proceedings 
        pursuant to subsection (a), or the continuation 
        thereof, is likely to result in significant dissipation 
        or conversion of assets, significant harm to investors, 
        or substantial harm to the public interest, including, 
        but not limited to, losses to the Securities Investor 
        Protection Corporation, prior to the completion of the 
        proceedings, the Commission may enter a temporary order 
        requiring the respondent to cease and desist from the 
        violation or threatened violation and to take such 
        action to prevent the violation or threatened violation 
        and to prevent dissipation or conversion of assets, 
        significant harm to investors, or substantial harm to 
        the public interest as the Commission deems appropriate 
        pending completion of such proceedings. Such an order 
        shall be entered only after notice and opportunity for 
        a hearing, unless the Commission determines that notice 
        and hearing prior to entry would be impracticable or 
        contrary to the public interest. A temporary order 
        shall become effective upon service upon the respondent 
        and, unless set aside, limited, or suspended by the 
        Commission or a court of competent jurisdiction, shall 
        remain effective and enforceable pending the completion 
        of the proceedings.
          (2) Applicability.--Paragraph (1) shall apply only to 
        a respondent that acts, or, at the time of the alleged 
        misconduct acted, as a broker, dealer, investment 
        adviser, investment company, municipal securities 
        dealer, government securities broker, government 
        securities dealer, registered public accounting firm 
        (as defined in section 2 of the Sarbanes-Oxley Act of 
        2002), or transfer agent, or is, or was at the time of 
        the alleged misconduct, an associated person of, or a 
        person seeking to become associated with, any of the 
        foregoing.
          (3) Temporary freeze.--
                  (A) In general.--
                          (i) Issuance of temporary order.--
                        Whenever, during the course of a lawful 
                        investigation involving possible 
                        violations of the Federal securities 
                        laws by an issuer of publicly traded 
                        securities or any of its directors, 
                        officers, partners, controlling 
                        persons, agents, or employees, it shall 
                        appear to the Commission that it is 
                        likely that the issuer will make 
                        extraordinary payments (whether 
                        compensation or otherwise) to any of 
                        the foregoing persons, the Commission 
                        may petition a Federal district court 
                        for a temporary order requiring the 
                        issuer to escrow, subject to court 
                        supervision, those payments in an 
                        interest-bearing account for 45 days.
                          (ii) Standard.--A temporary order 
                        shall be entered under clause (i), only 
                        after notice and opportunity for a 
                        hearing, unless the court determines 
                        that notice and hearing prior to entry 
                        of the order would be impracticable or 
                        contrary to the public interest.
                          (iii) Effective period.--A temporary 
                        order issued under clause (i) shall--
                                  (I) become effective 
                                immediately;
                                  (II) be served upon the 
                                parties subject to it; and
                                  (III) unless set aside, 
                                limited or suspended by a court 
                                of competent jurisdiction, 
                                shall remain effective and 
                                enforceable for 45 days.
                          (iv) Extensions authorized.--The 
                        effective period of an order under this 
                        subparagraph may be extended by the 
                        court upon good cause shown for not 
                        longer than 45 additional days, 
                        provided that the combined period of 
                        the order shall not exceed 90 days.
                  (B) Process on Determination of violations.--
                          (i) Violations charged.--If the 
                        issuer or other person described in 
                        subparagraph (A) is charged with any 
                        violation of the Federal securities 
                        laws before the expiration of the 
                        effective period of a temporary order 
                        under subparagraph (A) (including any 
                        applicable extension period), the order 
                        shall remain in effect, subject to 
                        court approval, until the conclusion of 
                        any legal proceedings related thereto, 
                        and the affected issuer or other 
                        person, shall have the right to 
                        petition the court for review of the 
                        order.
                          (ii) Violations not charged.--If the 
                        issuer or other person described in 
                        subparagraph (A) is not charged with 
                        any violation of the Federal securities 
                        laws before the expiration of the 
                        effective period of a temporary order 
                        under subparagraph (A) (including any 
                        applicable extension period), the 
                        escrow shall terminate at the 
                        expiration of the 45-day effective 
                        period (or the expiration of any 
                        extension period, as applicable), and 
                        the disputed payments (with accrued 
                        interest) shall be returned to the 
                        issuer or other affected person.
  (d) Review of Temporary Orders.--
          (1) Commission review.--At any time after the 
        respondent has been served with a temporary cease-and-
        desist order pursuant to subsection (c), the respondent 
        may apply to the Commission to have the order set 
        aside, limited, or suspended. If the respondent has 
        been served with a temporary cease-and-desist order 
        entered without a prior Commission hearing, the 
        respondent may, within 10 days after the date on which 
        the order was served, request a hearing on such 
        application and the Commission shall hold a hearing and 
        render a decision on such application at the earliest 
        possible time.
          (2) Judicial review.--Within--
                  (A) 10 days after the date the respondent was 
                served with a temporary cease-and-desist order 
                entered with a prior Commission hearing, or
                  (B) 10 days after the Commission renders a 
                decision on an application and hearing under 
                paragraph (1), with respect to any temporary 
                cease-and-desist order entered without a prior 
                Commission hearing,
        the respondent may apply to the United States district 
        court for the district in which the respondent resides 
        or has its principal place of business, or for the 
        District of Columbia, for an order setting aside, 
        limiting, or suspending the effectiveness or 
        enforcement of the order, and the court shall have 
        jurisdiction to enter such an order. A respondent 
        served with a temporary cease-and-desist order entered 
        without a prior Commission hearing may not apply to the 
        court except after hearing and decision by the 
        Commission on the respondent's application under 
        paragraph (1) of this subsection.
          (3) No automatic stay of temporary order.--The 
        commencement of proceedings under paragraph (2) of this 
        subsection shall not, unless specifically ordered by 
        the court, operate as a stay of the Commission's order.
          (4) Exclusive review.--Section 25 of this title shall 
        not apply to a temporary order entered pursuant to this 
        section.
  (e) Authority To Enter an Order Requiring an Accounting and 
Disgorgement.--In any cease-and-desist proceeding under 
subsection (a), the Commission may enter an order requiring 
accounting and disgorgement, including reasonable interest. The 
Commission is authorized to adopt rules, regulations, and 
orders concerning payments to investors, rates of interest, 
periods of accrual, and such other matters as it deems 
appropriate to implement this subsection.
  [(f) Authority of the Commission to Prohibit Persons From 
Serving as Officers or Directors.--In any cease-and-desist 
proceeding under subsection (a), the Commission may issue an 
order to prohibit, conditionally or unconditionally, and 
permanently or for such period of time as it shall determine, 
any person who has violated section 10(b) or the rules or 
regulations thereunder, from acting as an officer or director 
of any issuer that has a class of securities registered 
pursuant to section 12, or that is required to file reports 
pursuant to section 15(d), if the conduct of that person 
demonstrates unfitness to serve as an officer or director of 
any such issuer.]

           *       *       *       *       *       *       *


SEC. 21F. SECURITIES WHISTLEBLOWER INCENTIVES AND PROTECTION.

  (a) Definitions.--In this section the following definitions 
shall apply:
          (1) Covered judicial or administrative action.--The 
        term ``covered judicial or administrative action'' 
        means any judicial or administrative action brought by 
        the Commission under the securities laws that results 
        in monetary sanctions exceeding $1,000,000.
          (2) Fund.--The term ``Fund'' means the Securities and 
        Exchange Commission Investor Protection Fund.
          (3) Original information.--The term ``original 
        information'' means information that--
                  (A) is derived from the independent knowledge 
                or analysis of a whistleblower;
                  (B) is not known to the Commission from any 
                other source, unless the whistleblower is the 
                original source of the information; and
                  (C) is not exclusively derived from an 
                allegation made in a judicial or administrative 
                hearing, in a governmental report, hearing, 
                audit, or investigation, or from the news 
                media, unless the whistleblower is a source of 
                the information.
          (4) Monetary sanctions.--The term ``monetary 
        sanctions'', when used with respect to any judicial or 
        administrative action, means--
                  (A) any monies, including penalties, 
                disgorgement, and interest, [ordered] required 
                to be paid; and
                  (B) any monies deposited into a disgorgement 
                fund or other fund pursuant to section 308(b) 
                of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 
                7246(b)), as a result of such action or any 
                settlement of such action.
          (5) Related action.--The term ``related action'', 
        when used with respect to any judicial or 
        administrative action brought by the Commission under 
        the securities laws, means any judicial or 
        administrative action brought by an entity described in 
        subclauses (I) through (IV) of subsection (h)(2)(D)(i) 
        that is based upon the original information provided by 
        a whistleblower pursuant to subsection (a) that led to 
        the successful enforcement of the Commission action.
          (6) Whistleblower.--The term ``whistleblower'' means 
        any individual who provides, or 2 or more individuals 
        acting jointly who provide, information relating to a 
        violation of the securities laws to the Commission, in 
        a manner established, by rule or regulation, by the 
        Commission.
  (b) Awards.--
          (1) In general.--In any covered judicial or 
        administrative action, or related action, the 
        Commission, under regulations prescribed by the 
        Commission and subject to subsection (c), shall pay an 
        award or awards to 1 or more whistleblowers who 
        voluntarily provided original information to the 
        Commission that led to the successful enforcement of 
        the covered judicial or administrative action, or 
        related action, in an aggregate amount equal to--
                  (A) not less than 10 percent, in total, of 
                what has been collected of the monetary 
                sanctions imposed in the action or related 
                actions; and
                  (B) not more than 30 percent, in total, of 
                what has been collected of the monetary 
                sanctions imposed in the action or related 
                actions.
          (2) Payment of awards.--Any amount paid under 
        paragraph (1) shall be paid from the Fund.
  (c) Determination of Amount of Award; Denial of Award.--
          (1) Determination of amount of award.--
                  (A) Discretion.--The determination of the 
                amount of an award made under subsection (b) 
                shall be in the discretion of the Commission.
                  (B) Criteria.--In determining the amount of 
                an award made under subsection (b), the 
                Commission--
                          (i) shall take into consideration--
                                  (I) the significance of the 
                                information provided by the 
                                whistleblower to the success of 
                                the covered judicial or 
                                administrative action;
                                  (II) the degree of assistance 
                                provided by the whistleblower 
                                and any legal representative of 
                                the whistleblower in a covered 
                                judicial or administrative 
                                action;
                                  (III) the programmatic 
                                interest of the Commission in 
                                deterring violations of the 
                                securities laws by making 
                                awards to whistleblowers who 
                                provide information that lead 
                                to the successful enforcement 
                                of such laws; and
                                  (IV) such additional relevant 
                                factors as the Commission may 
                                establish by rule or 
                                regulation; and
                          (ii) shall not take into 
                        consideration the balance of the Fund.
          (2) Denial of award.--No award under subsection (b) 
        shall be made--
                  (A) to any whistleblower who is, or was at 
                the time the whistleblower acquired the 
                original information submitted to the 
                Commission, a member, officer, or employee of--
                          (i) an appropriate regulatory agency;
                          (ii) the Department of Justice;
                          (iii) a self-regulatory organization;
                          (iv) the Public Company Accounting 
                        Oversight Board; or
                          (v) a law enforcement organization;
                  (B) to any whistleblower who is convicted of 
                a criminal violation related to the judicial or 
                administrative action for which the 
                whistleblower otherwise could receive an award 
                under this section;
                  (C) to any whistleblower who gains the 
                information through the performance of an audit 
                of financial statements required under the 
                securities laws and for whom such submission 
                would be contrary to the requirements of 
                section 10A of the Securities Exchange Act of 
                1934 (15 U.S.C. 78j-1); [or]
                  (D) to any whistleblower who fails to submit 
                information to the Commission in such form as 
                the Commission may, by rule, require[.]; or
                  (E) to any whistleblower who is responsible 
                for, or complicit in, the violation of the 
                securities laws for which the whistleblower 
                provided information to the Commission.
          (3) Definition.--For purposes of paragraph (2)(E), a 
        person is responsible for, or complicit in, a violation 
        of the securities laws if, with the intent to promote 
        or assist the violation, the person--
                  (A) procures, induces, or causes another 
                person to commit the offense;
                  (B) aids or abets another person in 
                committing the offense; or
                  (C) having a duty to prevent the violation, 
                fails to make an effort the person is required 
                to make.
  (d) Representation.--
          (1) Permitted representation.--Any whistleblower who 
        makes a claim for an award under subsection (b) may be 
        represented by counsel.
          (2) Required representation.--
                  (A) In general.--Any whistleblower who 
                anonymously makes a claim for an award under 
                subsection (b) shall be represented by counsel 
                if the whistleblower anonymously submits the 
                information upon which the claim is based.
                  (B) Disclosure of identity.--Prior to the 
                payment of an award, a whistleblower shall 
                disclose the identity of the whistleblower and 
                provide such other information as the 
                Commission may require, directly or through 
                counsel for the whistleblower.
  (e) No Contract Necessary.--No contract with the Commission 
is necessary for any whistleblower to receive an award under 
subsection (b), unless otherwise required by the Commission by 
rule or regulation.
  (f) Appeals.--Any determination made under this section, 
including whether, to whom, or in what amount to make awards, 
shall be in the discretion of the Commission. Any such 
determination, except the determination of the amount of an 
award if the award was made in accordance with subsection (b), 
may be appealed to the appropriate court of appeals of the 
United States not more than 30 days after the determination is 
issued by the Commission. The court shall review the 
determination made by the Commission in accordance with section 
706 of title 5, United States Code.
  (g) Investor Protection Fund.--
          (1) Fund established.--There is established in the 
        Treasury of the United States a fund to be known as the 
        ``Securities and Exchange Commission Investor 
        Protection Fund''.
          (2) Use of fund.--The Fund shall be available to the 
        Commission, without further appropriation or fiscal 
        year limitation, for--
                  (A) paying awards to whistleblowers as 
                provided in subsection (b); and
                  (B) funding the activities of the Inspector 
                General of the Commission under section 4(i).
          (3) Deposits and credits.--
                  (A) In general.--There shall be deposited 
                into or credited to the Fund an amount equal 
                to--
                          (i) any monetary sanction collected 
                        by the Commission in any judicial or 
                        administrative action brought by the 
                        Commission under the securities laws 
                        that is not added to a disgorgement 
                        fund or other fund under section 308 of 
                        the Sarbanes-Oxley Act of 2002 (15 
                        U.S.C. 7246) or otherwise distributed 
                        to victims of a violation of the 
                        securities laws, or the rules and 
                        regulations thereunder, underlying such 
                        action, unless the balance of the Fund 
                        at the time the monetary sanction is 
                        collected exceeds $300,000,000;
                          (ii) any monetary sanction added to a 
                        disgorgement fund or other fund under 
                        section 308 of the Sarbanes-Oxley Act 
                        of 2002 (15 U.S.C. 7246) that is not 
                        distributed to the victims for whom the 
                        Fund was established, unless the 
                        balance of the disgorgement fund at the 
                        time the determination is made not to 
                        distribute the monetary sanction to 
                        such victims exceeds $200,000,000; and
                          (iii) all income from investments 
                        made under paragraph (4).
                  (B) Additional amounts.--If the amounts 
                deposited into or credited to the Fund under 
                subparagraph (A) are not sufficient to satisfy 
                an award made under subsection (b), there shall 
                be deposited into or credited to the Fund an 
                amount equal to the unsatisfied portion of the 
                award from any monetary sanction collected by 
                the Commission in the covered judicial or 
                administrative action on which the award is 
                based.
          (4) Investments.--
                  (A) Amounts in fund may be invested.--The 
                Commission may request the Secretary of the 
                Treasury to invest the portion of the Fund that 
                is not, in the discretion of the Commission, 
                required to meet the current needs of the Fund.
                  (B) Eligible investments.--Investments shall 
                be made by the Secretary of the Treasury 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 Fund as determined 
                by the Commission on the record.
                  (C) Interest and proceeds credited.--The 
                interest on, and the proceeds from the sale or 
                redemption of, any obligations held in the Fund 
                shall be credited to the Fund.
          (5) Reports to congress.--Not later than October 30 
        of each fiscal year beginning after the date of 
        enactment of this subsection, the Commission 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--
                  (A) the whistleblower award program, 
                established under this section, including--
                          (i) a description of the number of 
                        awards granted; and
                          (ii) the types of cases in which 
                        awards were granted during the 
                        preceding fiscal year;
                  (B) the balance of the Fund at the beginning 
                of the preceding fiscal year;
                  (C) the amounts deposited into or credited to 
                the Fund during the preceding fiscal year;
                  (D) the amount of earnings on investments 
                made under paragraph (4) during the preceding 
                fiscal year;
                  (E) the amount paid from the Fund during the 
                preceding fiscal year to whistleblowers 
                pursuant to subsection (b);
                  (F) the balance of the Fund at the end of the 
                preceding fiscal year; and
                  (G) a complete set of audited financial 
                statements, including--
                          (i) a balance sheet;
                          (ii) income statement; and
                          (iii) cash flow analysis.
  (h) Protection of Whistleblowers.--
          (1) Prohibition against retaliation.--
                  (A) In general.--No employer may discharge, 
                demote, suspend, threaten, harass, directly or 
                indirectly, or in any other manner discriminate 
                against, a whistleblower in the terms and 
                conditions of employment because of any lawful 
                act done by the whistleblower--
                          (i) in providing information to the 
                        Commission in accordance with this 
                        section;
                          (ii) in initiating, testifying in, or 
                        assisting in any investigation or 
                        judicial or administrative action of 
                        the Commission based upon or related to 
                        such information; or
                          (iii) in making disclosures that are 
                        required or protected under the 
                        Sarbanes-Oxley Act of 2002 (15 U.S.C. 
                        7201 et seq.), the Securities Exchange 
                        Act of 1934 (15 U.S.C. 78a et seq.), 
                        including section 10A(m) of such Act 
                        (15 U.S.C. 78f(m)), section 1513(e) of 
                        title 18, United States Code, and any 
                        other law, rule, or regulation subject 
                        to the jurisdiction of the Commission.
                  (B) Enforcement.--
                          (i) Cause of action.--An individual 
                        who alleges discharge or other 
                        discrimination in violation of 
                        subparagraph (A) may bring an action 
                        under this subsection in the 
                        appropriate district court of the 
                        United States for the relief provided 
                        in subparagraph (C).
                          (ii) Subpoenas.--A subpoena requiring 
                        the attendance of a witness at a trial 
                        or hearing conducted under this section 
                        may be served at any place in the 
                        United States.
                          (iii) Statute of limitations.--
                                  (I) In general.--An action 
                                under this subsection may not 
                                be brought--
                                          (aa) more than 6 
                                        years after the date on 
                                        which the violation of 
                                        subparagraph (A) 
                                        occurred; or
                                          (bb) more than 3 
                                        years after the date 
                                        when facts material to 
                                        the right of action are 
                                        known or reasonably 
                                        should have been known 
                                        by the employee 
                                        alleging a violation of 
                                        subparagraph (A).
                                  (II) Required action within 
                                10 years.--Notwithstanding 
                                subclause (I), an action under 
                                this subsection may not in any 
                                circumstance be brought more 
                                than 10 years after the date on 
                                which the violation occurs.
                  (C) Relief.--Relief for an individual 
                prevailing in an action brought under 
                subparagraph (B) shall include--
                          (i) reinstatement with the same 
                        seniority status that the individual 
                        would have had, but for the 
                        discrimination;
                          (ii) 2 times the amount of back pay 
                        otherwise owed to the individual, with 
                        interest; and
                          (iii) compensation for litigation 
                        costs, expert witness fees, and 
                        reasonable attorneys' fees.
          (2) Confidentiality.--
                  (A) In general.--Except as provided in 
                subparagraphs (B) and (C), the Commission and 
                any officer or employee of the Commission shall 
                not disclose any information, including 
                information provided by a whistleblower to the 
                Commission, which could reasonably be expected 
                to reveal the identity of a whistleblower, 
                except in accordance with the provisions of 
                section 552a of title 5, United States Code, 
                unless and until required to be disclosed to a 
                defendant or respondent in connection with a 
                public proceeding instituted by the Commission 
                or any entity described in subparagraph (C). 
                For purposes of section 552 of title 5, United 
                States Code, this paragraph shall be considered 
                a statute described in subsection (b)(3)(B) of 
                such section.
                  (B) Exempted statute.--For purposes of 
                section 552 of title 5, United States Code, 
                this paragraph shall be considered a statute 
                described in subsection (b)(3)(B) of such 
                section 552.
                  (C) Rule of construction.--Nothing in this 
                section is intended to limit, or shall be 
                construed to limit, the ability of the Attorney 
                General to present such evidence to a grand 
                jury or to share such evidence with potential 
                witnesses or defendants in the course of an 
                ongoing criminal investigation.
                  (D) Availability to government agencies.--
                          (i) In general.--Without the loss of 
                        its status as confidential in the hands 
                        of the Commission, all information 
                        referred to in subparagraph (A) may, in 
                        the discretion of the Commission, when 
                        determined by the Commission to be 
                        necessary to accomplish the purposes of 
                        this Act and to protect investors, be 
                        made available to--
                                  (I) the Attorney General of 
                                the United States;
                                  (II) an appropriate 
                                regulatory authority;
                                  (III) a self-regulatory 
                                organization;
                                  (IV) a State attorney general 
                                in connection with any criminal 
                                investigation;
                                  (V) any appropriate State 
                                regulatory authority;
                                  (VI) the Public Company 
                                Accounting Oversight Board;
                                  (VII) a foreign securities 
                                authority; and
                                  (VIII) a foreign law 
                                enforcement authority.
                          (ii) Confidentiality.--
                                  (I) In general.--Each of the 
                                entities described in 
                                subclauses (I) through (VI) of 
                                clause (i) shall maintain such 
                                information as confidential in 
                                accordance with the 
                                requirements established under 
                                subparagraph (A).
                                  (II) Foreign authorities.--
                                Each of the entities described 
                                in subclauses (VII) and (VIII) 
                                of clause (i) shall maintain 
                                such information in accordance 
                                with such assurances of 
                                confidentiality as the 
                                Commission determines 
                                appropriate.
          (3) Rights retained.--Nothing in this section shall 
        be deemed to diminish the rights, privileges, or 
        remedies of any whistleblower under any Federal or 
        State law, or under any collective bargaining 
        agreement.
  (i) Provision of False Information.--A whistleblower shall 
not be entitled to an award under this section if the 
whistleblower--
          (1) knowingly and willfully makes any false, 
        fictitious, or fraudulent statement or representation; 
        or
          (2) uses any false writing or document knowing the 
        writing or document contains any false, fictitious, or 
        fraudulent statement or entry.
  (j) Rulemaking Authority.--The Commission shall have the 
authority to issue such rules and regulations as may be 
necessary or appropriate to implement the provisions of this 
section consistent with the purposes of this section.

           *       *       *       *       *       *       *


             rules, regulations, and orders; annual reports

  Sec. 23. (a)(1) The Commission, the Board of Governors of the 
Federal Reserve System, and the other agencies enumerated in 
section 3(a)(34) of this title shall each have power to make 
such rules and regulations as may be necessary or appropriate 
to implement the provisions of this title for which they are 
responsible or for the execution of the functions vested in 
them by this title, and may for such purposes classify persons, 
securities, transactions, statements, applications, reports, 
and other matters within their respective jurisdictions, and 
prescribe greater, lesser, or different requirements for 
different classes thereof. No provision of this title imposing 
any liability shall apply to any act done or omitted in good 
faith in conformity with a rule, regulation, or order of the 
Commission, the Board of Governors of the Federal Reserve 
System, other agency enumerated in section 3(a)(34) of this 
title, or any self-regulatory organization, notwithstanding 
that such rule, regulation, or order may thereafter be amended 
or rescinded or determined by judicial or other authority to be 
invalid for any reason.
  (2) The Commission and the Secretary of the Treasury, in 
making rules and regulations pursuant to any provisions of this 
title, shall consider among other matters the impact any such 
rule or regulation would have on competition. The Commission 
and the Secretary of the Treasury shall not adopt any such rule 
or regulation which would impose a burden on competition not 
necessary or appropriate in furtherance of the purposes of this 
title. The Commission and the Secretary of the Treasury shall 
include in the statement of basis and purpose incorporated in 
any rule or regulation adopted under this title, the reasons 
for the Commission's or the Secretary's determination that any 
burden on competition imposed by such rule or regulation is 
necessary or appropriate in furtherance of the purposes of this 
title.
  (3) The Commission and the Secretary, in making rules and 
regulations pursuant to any provision of this title, 
considering any application for registration in accordance with 
section 19(a) of this title, or reviewing any proposed rule 
change of a self-regulatory organization in accordance with 
section 19(b) of this title, shall keep in a public file and 
make available for copying all written statements filed with 
the Commission and the Secretary and all written communications 
between the Commission or the Secretary and any person relating 
to the proposed rule, regulation, application, or proposed rule 
change: Provided, however, That the Commission and the 
Secretary shall not be required to keep in a public file or 
make available for copying any such statement or communication 
which it may withhold from the public in accordance with the 
provisions of section 552 of title 5, United States Code.
  (b)(1) The Commission, the Board of Governors of the Federal 
Reserve System, and the other agencies enumerated in section 
3(a)(34) of this title shall each make an annual report to the 
Congress on its work for the preceding year, and shall include 
in each such report whatever information, data, and 
recommendations for further legislation it considers advisable 
with regard to matters within its respective jurisdiction under 
this title.
  (2) The appropriate regulatory agency for a self-regulatory 
organization shall include in its annual report to the Congress 
for each fiscal year, a summary of its oversight activities 
under this title with respect to such self-regulatory 
organization, including a description of any examination 
conducted as part of such activities of any organization, any 
material recommendation presented as part of such activities to 
such organization for changes in its organization or rules, and 
any such action by such organization in response to any such 
recommendation.
  (3) The appropriate regulatory agency for any class of 
municipal securities dealers shall include in its annual report 
to the Congress for each fiscal year a summary of its 
regulatory activities pursuant to this title with respect to 
such municipal securities dealers, including the nature of and 
reason for any sanction imposed pursuant to this title against 
any such municipal securities dealer.
  (4) The Commission shall also include in its annual report to 
the Congress for each fiscal year--
          (A) a summary of the Commission's oversight 
        activities with respect to self-regulatory 
        organizations for which it is not the appropriate 
        regulatory agency, including a description of any 
        examination of any such organization, any material 
        recommendation presented to any such organization for 
        changes in its organization or rules, and any action by 
        any such organization in response to any such 
        recommendations;
          (B) a statement and analysis of the expenses and 
        operations of each self-regulatory organization in 
        connection with the performance of its responsibilities 
        under this title, for which purpose data pertaining to 
        such expenses and operations shall be made available by 
        such organization to the Commission at its request;
          (C) the steps the Commission has taken and the 
        progress it has made toward ending the physical 
        movement of the securities certificate in connection 
        with the settlement of securities transactions, and its 
        recommendations, if any, for legislation to eliminate 
        the securities certificate;
          (D) the number of requests for exemptions from 
        provisions of this title received, the number granted, 
        and the basis upon which any such exemption was 
        granted;
          (E) a summary of the Commission's regulatory 
        activities with respect to municipal securities dealers 
        for which it is not the appropriate regulatory agency, 
        including the nature of, and reason for, any sanction 
        imposed in proceedings against such municipal 
        securities dealers;
          (F) a statement of the time elapsed between the 
        filing of reports pursuant to section 13(f) of this 
        title and the public availability of the information 
        contained therein, the costs involved in the 
        Commission's processing of such reports and tabulating 
        such information, the manner in which the Commission 
        uses such information, and the steps the Commission has 
        taken and the progress it has made toward requiring 
        such reports to be filed and such information to be 
        made available to the public in machine language;
          (G) information concerning (i) the effects its rules 
        and regulations are having on the viability of small 
        brokers and dealers; (ii) its attempts to reduce any 
        unnecessary reporting burden on such brokers and 
        dealers; and (iii) its efforts to help to assure the 
        continued participation of small brokers and dealers in 
        the United States securities markets;
          (H) a statement detailing its administration of the 
        Freedom of Information Act, section 552 of title 5, 
        United States Code, including a copy of the report 
        filed pursuant to subsection (d) of such section; and
          (I) the steps that have been taken and the progress 
        that has been made in promoting the timely public 
        dissemination and availability for analytical purposes 
        (on a fair, reasonable, and nondiscriminatory basis) of 
        information concerning government securities 
        transactions and quotations, and its recommendations, 
        if any, for legislation to assure timely dissemination 
        of (i) information on transactions in regularly traded 
        government securities sufficient to permit the 
        determination of the prevailing market price for such 
        securities, and (ii) reports of the highest published 
        bids and lowest published offers for government 
        securities (including the size at which persons are 
        willing to trade with respect to such bids and offers).
  (c) The Commission, by rule, shall prescribe the procedure 
applicable to every case pursuant to this title of adjudication 
(as defined in section 551 of title 5, United States Code) not 
required to be determined on the record after notice and 
opportunity for hearing. Such rules shall, as a minimum, 
provide that prompt notice shall be given of any adverse action 
or final disposition and that such notice and the entry of any 
order shall be accompanied by a statement of written reasons.
  (d) Cease-and-Desist Procedures.--Within 1 year after the 
date of enactment of this subsection, the Commission shall 
establish regulations providing for the expeditious conduct of 
hearings and rendering of decisions under section 21C of this 
title, section 8A of the Securities Act of 1933, section 9(f) 
of the Investment Company Act of 1940, and section 203(k) of 
the Investment Advisers Act of 1940.
  (e) Report on Unobligated Appropriations.--If, at the end of 
any fiscal year, there remain unobligated any funds that were 
appropriated to the Commission for such fiscal year, the 
Commission shall, not later than 30 days after the last day of 
such fiscal year, submit to the Committee on Financial Services 
and the Committee on Appropriations of the House of 
Representatives and the Committee on Banking, Housing, and 
Urban Affairs and the Committee on Appropriations of the Senate 
a report stating the amount of such unobligated funds. If there 
is any material change in the amount stated in the report, the 
Commission shall, not later than 7 days after determining the 
amount of the change, submit to such committees a supplementary 
report stating the amount of and reason for the change.
  (e) Procedure for Obtaining Certain Intellectual Property.--
The Commission is not authorized to compel under this title a 
person to produce or furnish source code, including algorithmic 
trading source code or similar intellectual property, to the 
Commission unless the Commission first issues a subpoena.

                   public availability of information

  Sec. 24. (a) For purposes of section 552 of title 5, United 
States Code, the term ``records'' includes all applications, 
statements, reports, contracts, correspondence, notices, and 
other documents filed with or otherwise obtained by the 
Commission pursuant to this title or otherwise.
  (b) It shall be unlawful for any member, officer, or employee 
of the Commission to disclose to any person other than a 
member, officer, or employee of the Commission, or to use for 
personal benefit, any information contained in any application, 
statement, report, contract, correspondence, notice, or other 
document filed with or otherwise obtained by the Commission (1) 
in contravention of the rules and regulations of the Commission 
under section 552 of Title 5, United States Code, or (2) in 
circumstances where the Commission has determined pursuant to 
such rules to accord confidential treatment to such 
information.
  (c) Confidential Disclosures.--The Commission may, in its 
discretion and upon a showing that such information is needed, 
provide all ``records'' (as defined in subsection (a)) and 
other information in its possession to such persons, both 
domestic and foreign, as the Commission by rule deems 
appropriate if the person receiving such records or information 
provides such assurances of confidentiality as the Commission 
deems appropriate.
  [(d) Records Obtained from Foreign Securities Authorities.--
Except as provided in subsection (g), the Commission shall not 
be compelled to disclose records obtained from a foreign 
securities authority if (1) the foreign securities authority 
has in good faith determined and represented to the Commission 
that public disclosure of such records would violate the laws 
applicable to that foreign securities authority, and (2) the 
Commission obtains such records pursuant to (A) such procedure 
as the Commission may authorize for use in connection with the 
administration or enforcement of the securities laws, or (B) a 
memorandum of understanding. For purposes of section 552 of 
title 5, United States Code, this subsection shall be 
considered a statute described in subsection (b)(3)(B) of such 
section 552.]
  (d) Records Obtained From Foreign Securities and Law 
Enforcement Authorities.--Except as provided in subsection (g), 
the Commission shall not be compelled to disclose records 
obtained from a foreign securities authority, or from a foreign 
law enforcement authority as defined in subsection (f)(4), if--
          (1) the foreign securities authority or foreign law 
        enforcement authority has in good faith determined and 
        represented to the Commission that the records are 
        confidential under the laws of the country of such 
        authority; and
          (2) the Commission obtains such records pursuant to--
                  (A) such procedure as the Commission may 
                authorize for use in connection with the 
                administration or enforcement of the securities 
                laws; or
                  (B) a memorandum of understanding.
For purposes of section 552 of title 5, United States Code, 
this subsection shall be considered a statute described in 
subsection (b)(3)(B) of such section 552.
  (e) Freedom of Information Act.--For purposes of section 
552(b)(8) of title 5, United States Code, (commonly referred to 
as the Freedom of Information Act)--
          (1) the Commission is an agency responsible for the 
        regulation or supervision of financial institutions; 
        and
          (2) any entity for which the Commission is 
        responsible for regulating, supervising, or examining 
        under this title is a financial institution.
  (f) Sharing Privileged Information With Other Authorities.--
          (1) Privileged information provided by the 
        commission.--The Commission shall not be deemed to have 
        waived any privilege applicable to any information by 
        transferring that information to or permitting that 
        information to be used by--
                  (A) any agency (as defined in section 6 of 
                title 18, United States Code);
                  (B) the Public Company Accounting Oversight 
                Board;
                  (C) any self-regulatory organization;
                  (D) any foreign securities authority;
                  (E) any foreign law enforcement authority; or
                  (F) any State securities or law enforcement 
                authority.
          (2) Nondisclosure of privileged information provided 
        to the commission.--The Commission shall not be 
        compelled to disclose privileged information obtained 
        from any foreign securities authority, or foreign law 
        enforcement authority, if the authority has in good 
        faith determined and represented to the Commission that 
        the information is privileged.
          (3) Nonwaiver of privileged information provided to 
        the commission.--
                  (A) In general.--Federal agencies, State 
                securities and law enforcement authorities, 
                self-regulatory organizations, and the Public 
                Company Accounting Oversight Board shall not be 
                deemed to have waived any privilege applicable 
                to any information by transferring that 
                information to or permitting that information 
                to be used by the Commission.
                  (B) Exception.--The provisions of 
                subparagraph (A) shall not apply to a self-
                regulatory organization or the Public Company 
                Accounting Oversight Board with respect to 
                information used by the Commission in an action 
                against such organization.
          (4) Definitions.--For purposes of this subsection--
                  (A) the term ``privilege'' includes any work-
                product privilege, attorney-client privilege, 
                governmental privilege, or other privilege 
                recognized under Federal, State, or foreign 
                law;
                  (B) the term ``foreign law enforcement 
                authority'' means any foreign authority that is 
                empowered under foreign law to detect, 
                investigate or prosecute potential violations 
                of law; and
                  (C) the term ``State securities or law 
                enforcement authority'' means the authority of 
                any State or territory that is empowered under 
                State or territory law to detect, investigate, 
                or prosecute potential violations of law.
  (g) Savings Provisions.--Nothing in this section shall--
          (1) alter the Commission's responsibilities under the 
        Right to Financial Privacy Act (12 U.S.C. 3401 et 
        seq.), as limited by section 21(h) of this Act, with 
        respect to transfers of records covered by such 
        statutes, or
          (2) authorize the Commission to withhold information 
        from the Congress or prevent the Commission from 
        complying with an order of a court of the United States 
        in an action commenced by the United States or the 
        Commission.

           *       *       *       *       *       *       *


SEC. 31. TRANSACTION FEES.

  [(a) Recovery of Costs of Annual Appropriation.--The 
Commission shall, in accordance with this section, collect 
transaction fees and assessments that are designed to recover 
the costs to the Government of the annual appropriation to the 
Commission by Congress.
  (a) Collection.--The Commission shall, in accordance with 
this section, collect transaction fees and assessments.
  (b) Exchange-Traded Securities.--Subject to subsection (j), 
each national securities exchange shall pay to the Commission a 
fee at a rate equal to $15 per $1,000,000 of the aggregate 
dollar amount of sales of securities (other than bonds, 
debentures, other evidences of indebtedness, security futures 
products, and options on securities indexes (excluding a 
narrow-based security index)) transacted on such national 
securities exchange.
  (c) Off-Exchange Trades of Exchange Registered and Last-Sale-
Reported Securities.--Subject to subsection (j), each national 
securities association shall pay to the Commission a fee at a 
rate equal to $15 per $1,000,000 of the aggregate dollar amount 
of sales transacted by or through any member of such 
association otherwise than on a national securities exchange of 
securities (other than bonds, debentures, other evidences of 
indebtedness, security futures products, and options on 
securities indexes (excluding a narrow-based security index)) 
registered on a national securities exchange or subject to 
prompt last sale reporting pursuant to the rules of the 
Commission or a registered national securities association.
  (d) Assessments on Security Futures Transactions.--Each 
national securities exchange and national securities 
association shall pay to the Commission an assessment equal to 
$0.009 for each round turn transaction (treated as including 
one purchase and one sale of a contract of sale for future 
delivery) on a security future traded on such national 
securities exchange or by or through any member of such 
association otherwise than on a national securities exchange, 
except that for fiscal year 2007 and each succeeding fiscal 
year such assessment shall be equal to $0.0042 for each such 
transaction.
  (e) Dates for Payments.--The fees and assessments required by 
subsections (b), (c), and (d) of this section shall be paid--
          (1) on or before March 15, with respect to 
        transactions and sales occurring during the period 
        beginning on the preceding September 1 and ending at 
        the close of the preceding December 31; and
          (2) on or before September 25, with respect to 
        transactions and sales occurring during the period 
        beginning on the preceding January 1 and ending at the 
        close of the preceding August 31.
  (f) Exemptions.--The Commission, by rule, may exempt any sale 
of securities or any class of sales of securities from any fee 
or assessment imposed by this section, if the Commission finds 
that such exemption is consistent with the public interest, the 
equal regulation of markets and brokers and dealers, and the 
development of a national market system.
  (g) Publication.--The Commission shall publish in the Federal 
Register notices of the fee or assessment rates applicable 
under this section for each fiscal year not later than 30 days 
after the date on which an Act making a regular appropriation 
to the Commission for such fiscal year is enacted, together 
with any estimates or projections on which such fees are based.
  (h) Pro Rata Application.--The rates per $1,000,000 required 
by this section shall be applied pro rata to amounts and 
balances of less than $1,000,000.
  (i) Deposit of Fees.--
          (1) Offsetting collections.--Fees collected pursuant 
        to subsections (b), (c), and (d) for any fiscal year--
                  (A) except as provided in paragraph (2), 
                shall be deposited and credited as offsetting 
                collections to the account providing 
                appropriations to the Commission; and
                  (B) except as provided in subsection (k), 
                shall not be collected for any fiscal year 
                except to the extent provided in advance in 
                appropriation Acts.
          [(2) General revenues prohibited.--No fees collected 
        pursuant to subsections (b), (c), and (d) for fiscal 
        year 2002 or any succeeding fiscal year shall be 
        deposited and credited as general revenue of the 
        Treasury.]
          (2) General revenue.--Any fees collected for a fiscal 
        year pursuant to this section, sections 13(e) and 14(g) 
        of this title, and section 6(b) of the Securities Act 
        of 1933 in excess of the amount provided in 
        appropriation Acts for collection for such fiscal year 
        pursuant to such sections shall be deposited and 
        credited as general revenue of the Treasury.
  (j) Adjustments to Fee Rates.--
          (1) Annual adjustment.--Subject to subsections 
        (i)(1)(B) and (k), for each fiscal year, the Commission 
        shall by order adjust each of the rates applicable 
        under subsections (b) and (c) for such fiscal year to a 
        uniform adjusted rate that, when applied to the 
        baseline estimate of the aggregate dollar amount of 
        sales for such fiscal year, is reasonably likely to 
        produce aggregate fee collections under this section 
        (including assessments collected under subsection (d) 
        of this section) that are equal to [the regular 
        appropriation to the Commission by Congress for such 
        fiscal year] the target offsetting collection amount 
        for such fiscal year.
          (2) Mid-year adjustment.--Subject to subsections 
        (i)(1)(B) and (k), for each fiscal year, the Commission 
        shall determine, by March 1 of such fiscal year, 
        whether, based on the actual aggregate dollar volume of 
        sales during the first 5 months of such fiscal year, 
        the baseline estimate of the aggregate dollar volume of 
        sales used under paragraph (1) for such fiscal year is 
        reasonably likely to be 10 percent (or more) greater or 
        less than the actual aggregate dollar volume of sales 
        for such fiscal year. If the Commission so determines, 
        the Commission shall by order, no later than March 1, 
        adjust each of the rates applicable under subsections 
        (b) and (c) for such fiscal year to a uniform adjusted 
        rate that, when applied to the revised estimate of the 
        aggregate dollar amount of sales for the remainder of 
        such fiscal year, is reasonably likely to produce 
        aggregate fee collections under this section (including 
        fees collected during such five-month period and 
        assessments collected under subsection (d) of this 
        section) that are equal to [the regular appropriation 
        to the Commission by Congress for such fiscal year] the 
        target offsetting collection amount for such fiscal 
        year. In making such revised estimate, the Commission 
        shall, after consultation with the Congressional Budget 
        Office and the Office of Management and Budget, use the 
        same methodology required by [subsection (l)] 
        subsection (l)(2).
          (3) Review.--In exercising its authority under this 
        subsection, the Commission shall not be required to 
        comply with the provisions of section 553 of title 5, 
        United States Code. An adjusted rate prescribed under 
        paragraph (1) or (2) and published under subsection (g) 
        shall not be subject to judicial review.
          (4) Effective date.--
                  (A) Annual adjustment.--Subject to 
                subsections (i)(1)(B) and (k), an adjusted rate 
                prescribed under paragraph (1) shall take 
                effect on the later of--
                          (i) the first day of the fiscal year 
                        to which such rate applies; or
                          (ii) 60 days after the date on which 
                        an Act making a regular appropriation 
                        to the Commission for such fiscal year 
                        is enacted.
                  (B) Mid-year adjustment.--An adjusted rate 
                prescribed under paragraph (2) shall take 
                effect on April 1 of the fiscal year to which 
                such rate applies.
  (k) Lapse of Appropriation.--If on the first day of a fiscal 
year a regular appropriation to the Commission has not been 
enacted, the Commission shall continue to collect (as 
offsetting collections) the fees and assessments under 
subsections (b), (c), and (d) at the rate in effect during the 
preceding fiscal year, until 60 days after the date such a 
regular appropriation is enacted.
  [(l) Baseline Estimate of the Aggregate Dollar Amount of 
Sales.--The baseline estimate of the aggregate dollar amount of 
sales for any fiscal year is the baseline estimate of the 
aggregate dollar amount of sales of securities (other than 
bonds, debentures, other evidences of indebtedness, security 
futures products, and options on securities indexes (excluding 
a narrow-based security index)) to be transacted on each 
national securities exchange and by or through any member of 
each national securities association (otherwise than on a 
national securities exchange) during such fiscal year as 
determined by the Commission, after consultation with the 
Congressional Budget Office and the Office of Management and 
Budget, using the methodology required for making projections 
pursuant to section 257 of the Balanced Budget and Emergency 
Deficit Control Act of 1985.
  (l) Definitions.--For purposes of this section:
          (1) Target offsetting collection amount.--The target 
        offsetting collection amount for a fiscal year is--
                  (A) for fiscal year 2017, $1,400,000,000; and
                  (B) for each succeeding fiscal year, the 
                target offsetting collection amount for the 
                prior fiscal year, adjusted by the rate of 
                inflation.
          (2) Baseline estimate of the aggregate dollar amount 
        of sales.--The baseline estimate of the aggregate 
        dollar amount of sales for any fiscal year is the 
        baseline estimate of the aggregate dollar amount of 
        sales of securities (other than bonds, debentures, 
        other evidences of indebtedness, security futures 
        products, and options on securities indexes (excluding 
        a narrow-based security index)) to be transacted on 
        each national securities exchange and by or through any 
        member of each national securities association 
        (otherwise than on a national securities exchange) 
        during such fiscal year as determined by the 
        Commission, after consultation with the Congressional 
        Budget Office and the Office of Management and Budget, 
        using the methodology required for making projections 
        pursuant to section 257 of the Balanced Budget and 
        Emergency Deficit Control Act of 1985.
  (m) Transmittal of Commission Budget Requests.--
          (1) Budget required.--For fiscal year 2012, and each 
        fiscal year thereafter, the Commission shall prepare 
        and submit a budget to the President. Whenever the 
        Commission submits a budget estimate or request to the 
        President or the Office of Management and Budget, the 
        Commission shall concurrently transmit copies of the 
        estimate or request to the Committee on Appropriations 
        of the Senate, the Committee on Appropriations 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.
          (2) Submission to congress.--The President shall 
        submit each budget submitted under paragraph (1) to 
        Congress, in unaltered form, together with the annual 
        budget for the Administration submitted by the 
        President.
          (3) Contents.--The Commission shall include in each 
        budget submitted under paragraph (1)--
                  (A) an itemization of the amount of funds 
                necessary to carry out the functions of the 
                Commission.
                  (B) an amount to be designated as contingency 
                funding to be used by the Commission to address 
                unanticipated needs; and
                  (C) a designation of any activities of the 
                Commission for which multi-year budget 
                authority would be suitable.
  (n) Overpayment.--If a national securities exchange or 
national securities association pays to the Commission an 
amount in excess of fees and assessments due under this section 
and informs the Commission of such amount paid in excess within 
10 years of the date of the payment, the Commission shall 
offset future fees and assessments due by such exchange or 
association in an amount equal to such excess amount.
  Sec. 32. (a) Any person who willfully violates any provision 
of this title (other than section 30A), or any rule or 
regulation thereunder the violation of which is made unlawful 
or the observance of which is required under the terms of this 
title, or any person who willfully and knowingly makes, or 
causes to be made, any statement in any application, report, or 
document required to be filed under this title or any rule or 
regulation thereunder or undertaking contained in a 
registration statement as provided in subsection (d) of section 
15 of this title, or by any self-regulatory organization in 
connection with an application for membership or participation 
therein or to become associated with a member thereof, which 
statement was false or misleading with respect to any material 
fact, shall upon conviction be fined not more than [$5,000,000] 
$7,000,000, or imprisoned not more than 20 years, or both, 
except that when such person is a person other than a natural 
person, a fine not exceeding $25,000,000 may be imposed; but no 
person shall be subject to imprisonment under this section for 
the violation of any rule or regulation if he proves that he 
had no knowledge of such rule or regulation.
  (b) Any issuer which fails to file information, documents, or 
reports required to be filed under subsection (d) of section 15 
of this title or any rule or regulation thereunder shall 
forfeit to the United States the sum of $100 for each and every 
day such failure to file shall continue. Such forfeiture, which 
shall be in lieu of any criminal penalty for such failure to 
file which might be deemed to arise under subsection (a) of 
this section, shall be payable into the Treasury of the United 
States and shall be recoverable in a civil suit in the name of 
the United States.
  (c)(1)(A) Any issuer that violates subsection (a) or (g) of 
section 30A shall be fined not more than [$2,000,000] 
$4,000,000.
  (B) Any issuer that violates subsection (a) or (g) of section 
30A shall be subject to a civil penalty of not more than 
[$10,000] $50,000 imposed in an action brought by the 
Commission.
  (2)(A) Any officer, director, employee, or agent of an 
issuer, or stockholder acting on behalf of such issuer, who 
willfully violates subsection (a) or (g) of section 30A of this 
title shall be fined not more than [$100,000] $250,000, or 
imprisoned not more than 5 years, or both.
  (B) Any officer, director, employee, or agent of an issuer, 
or stockholder acting on behalf of such issuer, who violates 
subsection (a) or (g) of section 30A of this title shall be 
subject to a civil penalty of not more than [$10,000] $50,000 
imposed in an action brought by the Commission.
  (3) Whenever a fine is imposed under paragraph (2) upon any 
officer, director, employee, agent, or stockholder of an 
issuer, such fine may not be paid, directly or indirectly, by 
such issuer.

           *       *       *       *       *       *       *


SEC. 35. AUTHORIZATION OF APPROPRIATIONS.

   In addition to any other funds authorized to be appropriated 
to the Commission, there are authorized to be appropriated to 
carry out the functions, powers, and duties of the Commission--
          [(1) for fiscal year 2011, $1,300,000,000;
          [(2) for fiscal year 2012, $1,500,000,000;
          [(3) for fiscal year 2013, $1,750,000,000;
          [(4) for fiscal year 2014, $2,000,000,000; and
          [(5) for fiscal year 2015, $2,250,000,000.]
          (1) for fiscal year 2017, $1,555,000,000;
          (2) for fiscal year 2018, $1,605,000,000;
          (3) for fiscal year 2019, $1,655,000,000;
          (4) for fiscal year 2020, $1,705,000,000;
          (5) for fiscal year 2021, $1,755,000,000; and
          (6) for fiscal year 2022, $1,805,000,000.

           *       *       *       *       *       *       *


SEC. 39. INVESTOR ADVISORY COMMITTEE.

  (a) Establishment and Purpose.--
          (1) Establishment.--There is established within the 
        Commission the Investor Advisory Committee (referred to 
        in this section as the ``Committee'').
          (2) Purpose.--The Committee shall--
                  (A) advise and consult with the Commission 
                on--
                          (i) regulatory priorities of the 
                        Commission;
                          (ii) issues relating to the 
                        regulation of securities products, 
                        trading strategies, and fee structures, 
                        and the effectiveness of disclosure;
                          (iii) initiatives to protect investor 
                        interest; and
                          (iv) initiatives to promote investor 
                        confidence and the integrity of the 
                        securities marketplace; and
                  (B) [submit] in consultation with the Small 
                Business Capital Formation Advisory Committee 
                established under section 40, submit to the 
                Commission such findings and recommendations as 
                the Committee determines are appropriate, 
                including recommendations for proposed 
                legislative changes.
  (b) Membership.--
          (1) In general.--The members of the Committee shall 
        be--
                  (A) the Investor Advocate;
                  (B) a representative of State securities 
                commissions;
                  (C) a representative of the interests of 
                senior citizens; [and]
                  (D) not fewer than 10, and not more than 20, 
                members appointed by the Commission, from among 
                individuals who--
                          (i) represent the interests of 
                        individual equity and debt investors, 
                        including investors in mutual funds;
                          (ii) represent the interests of 
                        institutional investors, including the 
                        interests of pension funds and 
                        registered investment companies;
                          (iii) are knowledgeable about 
                        investment issues and decisions; and
                          (iv) have reputations of 
                        integrity[.]; and
                  (E) a member of the Small Business Capital 
                Formation Advisory Committee who shall be a 
                nonvoting member.
          [(2) Term.--Each member of the Committee appointed 
        under paragraph (1)(B) shall serve for a term of 4 
        years.]
          (2) Term.--
                  (A) Length of term for members of the 
                committee.--Each member of the Committee 
                appointed under paragraph (1), other than the 
                Investor Advocate, shall serve for a term of 4 
                years.
                  (B) Limitation on multiple terms.--A member 
                of the Committee may not serve for more than 
                one term, except for the Investor Advocate, a 
                representative of State securities commissions, 
                and the member of the Small Business Capital 
                Formation Advisory Committee.
          (3) Members not commission employees.--Members 
        appointed under [paragraph (1)(B)] paragraph (1) shall 
        not be deemed to be employees or agents of the 
        Commission solely because of membership on the 
        Committee.
  (c) Chairman; Vice Chairman; Secretary; Assistant 
Secretary.--
          (1) In general.--The members of the Committee shall 
        elect, from among the members of the Committee--
                  (A) a chairman, who may not be employed by an 
                issuer;
                  (B) a vice chairman, who may not be employed 
                by an issuer;
                  (C) a secretary; and
                  (D) an assistant secretary.
          [(2) Term.--Each member elected under paragraph (1) 
        shall serve for a term of 3 years in the capacity for 
        which the member was elected under paragraph (1).]
          (2) Term.--
                  (A) Length of term.--Each member elected 
                under paragraph (1) shall serve for a term of 3 
                years in the capacity for which the member was 
                elected under paragraph (1).
                  (B) Limitation on multiple terms.--A member 
                elected under paragraph (1) may not serve for 
                more than one term in the capacity for which 
                the member was elected under paragraph (1).
  (d) Meetings.--
          (1) Frequency of meetings.--The Committee shall 
        meet--
                  (A) not less frequently than twice annually, 
                at the call of the chairman of the Committee; 
                and
                  (B) from time to time, at the call of the 
                Commission.
          (2) Notice.--The chairman of the Committee shall give 
        the members of the Committee written notice of each 
        meeting, not later than 2 weeks before the date of the 
        meeting.
  (e) Compensation and Travel Expenses.--Each member of the 
Committee who is not a full-time employee of the United States 
shall--
          (1) be entitled to receive compensation at a rate not 
        to exceed the daily equivalent of the annual rate of 
        basic pay in effect for a position at level V of the 
        Executive Schedule under section 5316 of title 5, 
        United States Code, for each day during which the 
        member is engaged in the actual performance of the 
        duties of the Committee; and
          (2) while away from the home or regular place of 
        business of the member in the performance of services 
        for the Committee, be allowed travel expenses, 
        including per diem in lieu of subsistence, in the same 
        manner as persons employed intermittently in the 
        Government service are allowed expenses under section 
        5703(b) of title 5, United States Code.
  (f) Staff.--The Commission shall make available to the 
Committee such staff as the chairman of the Committee 
determines are necessary to carry out this section.
  (g) Review by Commission.--The Commission shall--
          (1) review the findings and recommendations of the 
        Committee; and
          (2) each time the Committee submits a finding or 
        recommendation to the Commission, promptly issue a 
        public statement--
                  (A) assessing the finding or recommendation 
                of the Committee; and
                  (B) disclosing the action, if any, the 
                Commission intends to take with respect to the 
                finding or recommendation.
  (h) Committee Findings.--Nothing in this section shall 
require the Commission to agree to or act upon any finding or 
recommendation of the Committee.
  [(i) Federal Advisory Committee Act.--The Federal Advisory 
Committee Act (5 U.S.C. App.) shall not apply with respect to 
the Committee and its activities.
  [(j) Authorization of Appropriations.--There is authorized to 
be appropriated to the Commission such sums as are necessary to 
carry out this section.]

SEC. 40. SMALL BUSINESS CAPITAL FORMATION ADVISORY COMMITTEE.

  (a) Establishment and Purpose.--
          (1) Establishment.--There is established within the 
        Commission the Small Business Capital Formation 
        Advisory Committee (hereafter in this section referred 
        to as the ``Committee'').
          (2) Functions.--
                  (A) In general.--The Committee shall provide 
                the Commission with advice on the Commission's 
                rules, regulations, and policies with regard to 
                the Commission's mission of protecting 
                investors, maintaining fair, orderly, and 
                efficient markets, and facilitating capital 
                formation, as such rules, regulations, and 
                policies relate to--
                          (i) capital raising by emerging, 
                        privately held small businesses 
                        (``emerging companies'') and publicly 
                        traded companies with less than 
                        $250,000,000 in public market 
                        capitalization (``smaller public 
                        companies'') through securities 
                        offerings, including private and 
                        limited offerings and initial and other 
                        public offerings;
                          (ii) trading in the securities of 
                        emerging companies and smaller public 
                        companies; and
                          (iii) public reporting and corporate 
                        governance requirements of emerging 
                        companies and smaller public companies.
                  (B) Limitation.--The Committee shall not 
                provide any advice with respect to any 
                policies, practices, actions, or decisions 
                concerning the Commission's enforcement 
                program.
  (b) Membership.--
          (1) In general.--The members of the Committee shall 
        be--
                  (A) the Advocate for Small Business Capital 
                Formation;
                  (B) not fewer than 10, and not more than 20, 
                members appointed by the Commission, from among 
                individuals--
                          (i) who represent--
                                  (I) emerging companies 
                                engaging in private and limited 
                                securities offerings or 
                                considering initial public 
                                offerings (``IPO'') (including 
                                the companies' officers and 
                                directors);
                                  (II) the professional 
                                advisors of such companies 
                                (including attorneys, 
                                accountants, investment 
                                bankers, and financial 
                                advisors); and
                                  (III) the investors in such 
                                companies (including angel 
                                investors, venture capital 
                                funds, and family offices);
                          (ii) who are officers or directors of 
                        minority-owned small businesses or 
                        women-owned small businesses;
                          (iii) who represent--
                                  (I) smaller public companies 
                                (including the companies' 
                                officers and directors);
                                  (II) the professional 
                                advisors of such companies 
                                (including attorneys, auditors, 
                                underwriters, and financial 
                                advisors); and
                                  (III) the pre-IPO and post-
                                IPO investors in such companies 
                                (both institutional, such as 
                                venture capital funds, and 
                                individual, such as angel 
                                investors); and
                          (iv) who represent participants in 
                        the marketplace for the securities of 
                        emerging companies and smaller public 
                        companies, such as securities 
                        exchanges, alternative trading systems, 
                        analysts, information processors, and 
                        transfer agents; and
                  (C) three non-voting members--
                          (i) one of whom shall be appointed by 
                        the Investor Advocate;
                          (ii) one of whom shall be appointed 
                        by the North American Securities 
                        Administrators Association; and
                          (iii) one of whom shall be appointed 
                        by the Administrator of the Small 
                        Business Administration.
          (2) Term.--Each member of the Committee appointed 
        under subparagraph (B), (C)(ii), or (C)(iii) of 
        paragraph (1) shall serve for a term of 4 years.
          (3) Members not commission employees.--Members 
        appointed under subparagraph (B), (C)(ii), or (C)(iii) 
        of paragraph (1) shall not be treated as employees or 
        agents of the Commission solely because of membership 
        on the Committee.
  (c) Chairman; Vice Chairman; Secretary; Assistant 
Secretary.--
          (1) In general.--The members of the Committee shall 
        elect, from among the members of the Committee--
                  (A) a chairman;
                  (B) a vice chairman;
                  (C) a secretary; and
                  (D) an assistant secretary.
          (2) Term.--Each member elected under paragraph (1) 
        shall serve for a term of 3 years in the capacity for 
        which the member was elected under paragraph (1).
  (d) Meetings.--
          (1) Frequency of meetings.--The Committee shall 
        meet--
                  (A) not less frequently than four times 
                annually, at the call of the chairman of the 
                Committee; and
                  (B) from time to time, at the call of the 
                Commission.
          (2) Notice.--The chairman of the Committee shall give 
        the members of the Committee written notice of each 
        meeting, not later than 2 weeks before the date of the 
        meeting.
  (e) Compensation and Travel Expenses.--Each member of the 
Committee who is not a full-time employee of the United States 
shall--
          (1) be entitled to receive compensation at a rate not 
        to exceed the daily equivalent of the annual rate of 
        basic pay in effect for a position at level V of the 
        Executive Schedule under section 5316 of title 5, 
        United States Code, for each day during which the 
        member is engaged in the actual performance of the 
        duties of the Committee; and
          (2) while away from the home or regular place of 
        business of the member in the performance of services 
        for the Committee, be allowed travel expenses, 
        including per diem in lieu of subsistence, in the same 
        manner as persons employed intermittently in the 
        Government service are allowed expenses under section 
        5703 of title 5, United States Code.
  (f) Staff.--The Commission shall make available to the 
Committee such staff as the chairman of the Committee 
determines are necessary to carry out this section.
  (g) Review by Commission.--The Commission shall--
          (1) review the findings and recommendations of the 
        Committee; and
          (2) each time the Committee submits a finding or 
        recommendation to the Commission, promptly issue a 
        public statement--
                  (A) assessing the finding or recommendation 
                of the Committee; and
                  (B) disclosing the action, if any, the 
                Commission intends to take with respect to the 
                finding or recommendation.
  [(h) Federal Advisory Committee Act.--The Federal Advisory 
Committee Act (5 U.S.C. App.) shall not apply with respect to 
the Committee and its activities.]

SEC. 41. PRIVATE PARTIES AUTHORIZED TO COMPEL THE COMMISSION TO SEEK 
                    SANCTIONS BY FILING CIVIL ACTIONS.

  (a) Termination of Administrative Proceeding.--In the case of 
any person who is a party to a proceeding brought by the 
Commission under a securities law, to which section 554 of 
title 5, United States Code, applies, and against whom an order 
imposing a cease and desist order and a penalty may be issued 
at the conclusion of the proceeding, that person may, not later 
than 20 days after receiving notice of such proceeding, and at 
that person's discretion, require the Commission to terminate 
the proceeding.
  (b) Civil Action Authorized.--If a person requires the 
Commission to terminate a proceeding pursuant to subsection 
(a), the Commission may bring a civil action against that 
person for the same remedy that might be imposed.
  (c) Standard of Proof in Administrative Proceeding.--
Notwithstanding any other provision of law, in the case of a 
proceeding brought by the Commission under a securities law, to 
which section 554 of title 5, United States Code, applies, a 
legal or equitable remedy may be imposed on the person against 
whom the proceeding was brought only on a showing by the 
Commission of clear and convincing evidence that the person has 
violated the relevant provision of law.
                              ----------                              


                     INVESTMENT COMPANY ACT OF 1940


TITLE I--INVESTMENT COMPANIES

           *       *       *       *       *       *       *



                          general definitions

  Sec. 2. (a) When used in this title, unless the context 
otherwise requires--
          (1) ``Advisory board'' means a board, whether elected 
        or appointed, which is distinct from the board of 
        directors or board of trustees, of an investment 
        company, and which is composed solely of persons who do 
        not serve such company in any other capacity, whether 
        or not the functions of such board are such as to 
        render its members ``directors'' within the definition 
        of that term, which board has advisory functions as to 
        investments but has no power to determine that any 
        security or other investment shall be purchased or sold 
        by such company.
          (2) ``Affiliated company'' means a company which is 
        an affiliated person.
          (3) ``Affiliated person'' of another person means (A) 
        any person directly or indirectly owning, controlling, 
        or holding with power to vote, 5 per centum or more of 
        the outstanding voting securities of such other person; 
        (B) any person 5 per centum or more of whose 
        outstanding voting securities are directly or 
        indirectly owned, controlled, or held with power to 
        vote, by such other person; (C) any person directly or 
        indirectly controlling, controlled by, or under common 
        control with, such other person; (D) any officer, 
        director, partner, copartner, or employee of such other 
        person; (E) if such other person is an investment 
        company, any investment adviser thereof or any member 
        of an advisory board thereof; and (F) if such other 
        person is an unincorporated investment company not 
        having a board of directors, the depositor thereof.
          (4) ``Assignment'' includes any direct or indirect 
        transfer or hypothecation of a contract or chose in 
        action by the assignor, or of a controlling block of 
        the assignor's outstanding voting securities by a 
        security holder of the assignor; but does not include 
        an assignment of partnership interests incidental to 
        the death or withdrawal of a minority of the members of 
        the partnership having only a minority interest in the 
        partnership business or to the admission to the 
        partnership of one or more members who, after such 
        admission, shall be only a minority of the members and 
        shall have only a minority interest in the business.
          (5) ``Bank'' means (A) a depository institution (as 
        defined in section 3 of the Federal Deposit Insurance 
        Act) or a branch or agency of a foreign bank (as such 
        terms are defined in section 1(b) of the International 
        Banking Act of 1978), (B) a member bank of the Federal 
        Reserve System, (C) any other banking institution or 
        trust company, whether incorporated or not, doing 
        business under the laws of any State or of the United 
        States, a substantial portion of the business of which 
        consists of receiving deposits or exercising fiduciary 
        powers similar to those permitted to national banks 
        under the authority of the Comptroller of the Currency, 
        and which is supervised and examined by State or 
        Federal authority having supervision over banks, and 
        which is not operated for the purpose of evading the 
        provisions of this title, and (D) a receiver, 
        conservator, or other liquidating agent of any 
        institution or firm included in clause (A), (B), or (C) 
        of this paragraph.
          (6) The term ``broker'' has the same meaning as given 
        in section 3 of the Securities Exchange Act of 1934, 
        except that such term does not include any person 
        solely by reason of the fact that such person is an 
        underwriter for one or more investment companies.
          (7) ``Commission'' means the Securities and Exchange 
        Commission.
          (8) ``Company'' means a corporation, a partnership, 
        an association, a joint-stock company, a trust, a fund, 
        or any organized group of persons whether incorporated 
        or not; or any receiver, trustee in a case under title 
        11 of the United States Code or similar official or any 
        liquidating agent for any of the foregoing, in his 
        capacity as such.
          (9) ``Control'' means the power to exercise a 
        controlling influence over the management or policies 
        of a company, unless such power is solely the result of 
        an official position with such company.
          Any person who owns beneficially, either directly or 
        through one or more controlled companies, more than 25 
        per centum of the voting securities of a company shall 
        be presumed to control such company. Any person who 
        does not so own more than 25 per centum of the voting 
        securities of any company shall be presumed not to 
        control such company. A natural person shall be 
        presumed not to be a controlled person within the 
        meaning of this title. Any such presumption may be 
        rebutted by evidence, but except as hereinafter 
        provided, shall continue until a determination to the 
        contrary made by the Commission by order either on its 
        own motion or on application by an interested person. 
        If an application filed hereunder is not granted or 
        denied by the Commission within sixty days after filing 
        thereof, the determination sought by the application 
        shall be deemed to have been temporarily granted 
        pending final determination of the Commission thereon. 
        The Commission, upon its own motion or upon 
        application, may by order revoke or modify any order 
        issued under this paragraph whenever it shall find that 
        the determination embraced in such original order is no 
        longer consistent with the facts.
          (10) ``Convicted'' includes a verdict, judgment, or 
        plea of guilty, or a finding of guilt on a plea of nolo 
        contendere, if such verdict, judgment, plea, or finding 
        has not been reversed, set aside, or withdrawn, whether 
        or not sentence has been imposed.
          (11) The term ``dealer'' has the same meaning as 
        given in the Securities Exchange Act of 1934, but does 
        not include an insurance company or investment company.
          (12) ``Director'' means any director of a corporation 
        or any person performing similar functions with respect 
        to any organization, whether incorporated or 
        unincorporated, including any natural person who is a 
        member of a board of trustees of a management company 
        created as a common-law trust.
          (13) ``Employees' securities company'' means any 
        investment company or similar issuer all of the 
        outstanding securities of which (other than short-term 
        paper) are beneficially owned (A) by the employees or 
        persons on retainer of a single employer or of two or 
        more employers each of which is an affiliated company 
        of the other, (B) by former employees of such employer 
        or employers, (C) by members of the immediate family of 
        such employees, persons on retainer, or former 
        employees, (D) by any two or more of the foregoing 
        classes of persons, or (E) by such employer or 
        employers together with any one or more of the 
        foregoing classes of persons.
          (14) ``Exchange'' means any organization, 
        association, or group of persons, whether incorporated 
        or unincorporated, which constitutes, maintains, or 
        provides a market place or facilities for bringing 
        together purchasers and sellers of securities or for 
        otherwise performing with respect to securities the 
        functions commonly performed by a stock exchange as 
        that term is generally understood, and includes the 
        market place and the market facilities maintained by 
        such exchange.
          (15) ``Face-amount certificate'' means any 
        certificate, investment contract, or other security 
        which represents an obligation on the part of its 
        issuer to pay a stated or determinable sum or sums at a 
        fixed or determinable date or dates more than twenty-
        four months after the date of issuance, in 
        consideration of the payment of periodic installments 
        of a stated or determinable amount (which security 
        shall be known as a face-amount certificate of the 
        ``installment type''); or any security which represents 
        a similar obligation on the part of a face-amount 
        certificate company, the consideration for which is the 
        payment of a single lump sum (which security shall be 
        known as a ``fully paid'' face-amount certificate).
          (16) ``Government security'' means any security 
        issued or guaranteed as to principal or interest by the 
        United States, or by a person controlled or supervised 
        by and acting as an instrumentality of the Government 
        of the United States pursuant to authority granted by 
        the Congress of the United States; or any certificate 
        of deposit for any of the foregoing.
          (17) ``Insurance company'' means a company which is 
        organized as an insurance company, whose primary and 
        predominant business activity is the writing of 
        insurance or the reinsuring of risks underwritten by 
        insurance companies, and which is subject to 
        supervision by the insurance commissioner or a similar 
        official or agency of a State; or any receiver or 
        similar official or any liquidating agent for such a 
        company, in his capacity as such.
          (18) ``Interstate commerce'' means trade, commerce, 
        transportation, or communication among the several 
        States, or between any foreign country and any State, 
        or between any State and any place or ship outside 
        thereof.
          (19) ``Interested person'' of another person means--
                  (A) when used with respect to an investment 
                company--
                          (i) any affiliated person of such 
                        company,
                          (ii) any member of the immediate 
                        family of any natural person who is an 
                        affiliated person of such company,
                          (iii) any interested person of any 
                        investment adviser of or principal 
                        underwriter for such company,
                          (iv) any person or partner or 
                        employee of any person who at any time 
                        since the beginning of the last two 
                        completed fiscal years of such company 
                        has acted as legal counsel for such 
                        company,
                          (v) any person or any affiliated 
                        person of a person (other than a 
                        registered investment company) that, at 
                        any time during the 6-month period 
                        preceding the date of the determination 
                        of whether that person or affiliated 
                        person is an interested person, has 
                        executed any portfolio transactions 
                        for, engaged in any principal 
                        transactions with, or distributed 
                        shares for--
                                  (I) the investment company;
                                  (II) any other investment 
                                company having the same 
                                investment adviser as such 
                                investment company or holding 
                                itself out to investors as a 
                                related company for purposes of 
                                investment or investor 
                                services; or
                                  (III) any account over which 
                                the investment company's 
                                investment adviser has 
                                brokerage placement discretion,
                          (vi) any person or any affiliated 
                        person of a person (other than a 
                        registered investment company) that, at 
                        any time during the 6-month period 
                        preceding the date of the determination 
                        of whether that person or affiliated 
                        person is an interested person, has 
                        loaned money or other property to--
                                  (I) the investment company;
                                  (II) any other investment 
                                company having the same 
                                investment adviser as such 
                                investment company or holding 
                                itself out to investors as a 
                                related company for purposes of 
                                investment or investor 
                                services; or
                                  (III) any account for which 
                                the investment company's 
                                investment adviser has 
                                borrowing authority, and
                          (vii) any natural person whom the 
                        Commission by order shall have 
                        determined to be an interested person 
                        by reason of having had, at any time 
                        since the beginning of the last two 
                        completed fiscal years of such company, 
                        a material business or professional 
                        relationship with such company or with 
                        the principal executive officer of such 
                        company or with any other investment 
                        company having the same investment 
                        adviser or principal underwriter or 
                        with the principal executive officer of 
                        such other investment company:
                 Provided, That no person shall be deemed to be 
                an interested person of an investment company 
                solely by reason of (aa) his being a member of 
                its board of directors or advisory board or an 
                owner of its securities, or (bb) his membership 
                in the immediate family of any person specified 
                in clause (aa) of this proviso; and
                  (B) when used with respect to an investment 
                adviser of or principal underwriter for any 
                investment company--
                          (i) any affiliated person of such 
                        investment adviser or principal 
                        underwriter,
                          (ii) any member of the immediate 
                        family of any natural person who is an 
                        affiliated person of such investment 
                        advisor or principal underwiter,
                          (iii) any person who knowingly has 
                        any direct or indirect beneficial 
                        interest in, or who is designated as 
                        trustee, executor, or guardian of any 
                        legal interest in, any security issued 
                        either by such investment adviser or 
                        principal underwriter or by a 
                        controlling person of such investment 
                        adviser or principal underwriter,
                          (iv) any person or partner or 
                        employee of any person who at any time 
                        since the beginning of the last two 
                        completed fiscal years of such 
                        investment company has acted as legal 
                        counsel for such investment adviser or 
                        principal underwriter,
                          (v) any person or any affiliated 
                        person of a person (other than a 
                        registered investment company) that, at 
                        any time during the 6-month period 
                        preceding the date of the determination 
                        of whether that person or affiliated 
                        person is an interested person, has 
                        executed any portfolio transactions 
                        for, engaged in any principal 
                        transactions with, or distributed 
                        shares for--
                                  (I) any investment company 
                                for which the investment 
                                adviser or principal 
                                underwriter serves as such;
                                  (II) any investment company 
                                holding itself out to 
                                investors, for purposes of 
                                investment or investor 
                                services, as a company related 
                                to any investment company for 
                                which the investment adviser or 
                                principal underwriter serves as 
                                such; or
                                  (III) any account over which 
                                the investment adviser has 
                                brokerage placement discretion,
                          (vi) any person or any affiliated 
                        person of a person (other than a 
                        registered investment company) that, at 
                        any time during the 6-month period 
                        preceding the date of the determination 
                        of whether that person or affiliated 
                        person is an interested person, has 
                        loaned money or other property to--
                                  (I) any investment company 
                                for which the investment 
                                adviser or principal 
                                underwriter serves as such;
                                  (II) any investment company 
                                holding itself out to 
                                investors, for purposes of 
                                investment or investor 
                                services, as a company related 
                                to any investment company for 
                                which the investment adviser or 
                                principal underwriter serves as 
                                such; or
                                  (III) any account for which 
                                the investment adviser has 
                                borrowing authority, and
                          (vii) any natural person whom the 
                        Commission by order shall have 
                        determined to be an interested person 
                        by reason of having had at any time 
                        since the beginning of the last two 
                        completed fiscal years of such 
                        investment company a material business 
                        or professional relationship with such 
                        investment adviser or principal 
                        underwriter or with the principal 
                        executive officer or any controlling 
                        person of such investment adviser or 
                        principal underwriter.
                For the purposes of this paragraph (19), 
                ``member of the immediate family'' means any 
                parent, spouse of a parent, child, spouse of a 
                child, spouse, brother, or sister, and includes 
                step and adoptive relationships. The Commission 
                may modify or revoke any order issued under 
                clause (vii) of subparagaph (A) or (B) of this 
                paragraph whenever it finds that such order is 
                no longer consistent with the facts. No order 
                issued pursuant to clause (vii) of subparagraph 
                (A) or (B) of this paragraph shall become 
                effective until at least sixty days after the 
                entry thereof, and no such order shall affect 
                the status of any person for the purposes of 
                this title or for any other purpose for any 
                period prior to the effective date of such 
                order.
          (20) ``Investment adviser'' of an investment company 
        means (A) any person (other than a bona fide officer, 
        director, trustee, member of an advisory board, or 
        employee of such company, as such) who pursuant to 
        contract with such company regularly furnishes advice 
        to such company with respect to the desirability of 
        investing in, purchasing or selling securities or other 
        property, or is empowered to determine what securities 
        or other property shall be purchased or sold by such 
        company, and (B) any other person who pursuant to 
        contract with a person described in clause (A) 
        regularly performs substantially all of the duties 
        undertaken by such person described in clause (A); but 
        does not include (i) a person whose advice is furnished 
        solely through uniform publications distributed to 
        subscribers thereto, (ii) a person who furnishes only 
        statistical and other factual information, advice 
        regarding economic factors and trends, or advice as to 
        occasional transactions in specific securities, but 
        without generally furnishing advice or making 
        recommendations regarding the purchase or sale of 
        securities, (iii) a company furnishing such services at 
        cost to one or more investment companies, insurance 
        companies, or other financial institutions, (iv) any 
        person the character and amount of whose compensation 
        for such services must be approved by a court, or (v) 
        such other persons as the Commission may by rules and 
        regulations or order determine not to be within the 
        intent of this definition.
          (21) ``Investment banker'' means any person engaged 
        in the business of underwriting securities issued by 
        other persons, but does not include an investment 
        company, any person who acts as an underwriter in 
        isolated transactions but not as a part of a regular 
        business, or any person solely by reason of the fact 
        that such person is an underwriter for one or more 
        investment companies.
          (22) ``Issuer'' means every person who issues or 
        proposes to issue any security, or has outstanding any 
        security which it has issued.
          (23) ``Lend'' includes a purchase coupled with an 
        agreement by the vendor to repurchase; ``borrow'' 
        includes a sale coupled with a similar agreement.
          (24) ``Majority-owned subsidiary'' of a person means 
        a company 50 per centum or more of the outstanding 
        voting securities of which are owned by such person, or 
        by a company which, within the meaning of this 
        paragraph, is a majority-owned subsidiary of such 
        person.
          (25) ``Means or instrumentality of interstate 
        commerce'' includes any facility of a national 
        securities exchange.
          (26) ``National securities exchange'' means an 
        exchange registered under section 6 of the Securities 
        Exchange Act of 1934.
          (27) ``Periodic payment plan certificate'' means (A) 
        any certificate, investment contract, or other security 
        providing for a series of periodic payments by the 
        holder, and representing an undivided interest in 
        certain specified securities or in a unit or fund of 
        securities purchased wholly or partly with the proceeds 
        of such payments, and (B) any security the issuer of 
        which is also issuing securities of the character 
        described in clause (A) and the holder of which has 
        substantially the same rights and privileges as those 
        which holders of securities of the character described 
        in clause (A) have upon completing the periodic 
        payments for which such securities provide.
          (28) ``Person'' means a natural person or a company.
          (29) ``Principal underwriter'' of or for any 
        investment company other than a closed-end company, or 
        of any security issued by such a company, means any 
        underwriter who as principal purchases from such 
        company, or pursuant to contract has the right (whether 
        absolute or conditional) from time to time to purchase 
        from such company, any such security for distribution, 
        or who as agent for such company sells or has the right 
        to sell any such security to a dealer or to the public 
        or both, but does not include a dealer who purchases 
        from such company through a principal underwriter 
        acting as agent for such company. ``Principal 
        underwriter'' of or for a closed-end company or any 
        issuer which is not an investment company, or of any 
        security issued by such a company or issuer, means any 
        underwriter who, in connection with a primary 
        distribution of securities, (A) is in privity of 
        contract with the issuer or an affiliated person of the 
        issuer; (B) acting alone or in concert with one or more 
        other persons, initiates or directs the formation of an 
        underwriting syndicate; or (C) is allowed a rate of 
        gross commission, spread, or other profit greater than 
        the rate allowed another underwriter participating in 
        the distribution.
          (30) ``Promoter'' of a company or a proposed company 
        means a person who, acting alone or in concert with 
        other persons, is initiating or directing, or has 
        within one year initiated or directed, the organization 
        of such company.
          (31) ``Prospectus'', as used in section 22, means a 
        written prospectus intended to meet the requirements of 
        section 10(a) of the Securities Act of 1933 and 
        currently in use. As used elsewhere, ``prospectus'' 
        means a prospectus as defined in the Securities Act of 
        1933.
          (32) ``Redeemable security'' means any security, 
        other than short-term paper, under the terms of which 
        the holder, upon its presentation to the issuer or to a 
        person designated by the issuer, is entitled (whether 
        absolutely or only out of surplus) to receive 
        approximately his proportionate share of the issuer's 
        current net assets, or the cash equivalent thereof.
          (33) ``Reorganization'' means (A) a reorganization 
        under the supervision of a court of competent 
        jurisdiction; (B) a merger or consolidation; (C) a sale 
        of 75 per centum or more in value of the assets of a 
        company; (D) a restatement of the capital of a company, 
        or an exchange of securities issued by a company for 
        any of its own outstanding securities; (E) a voluntary 
        dissolution or liquidation of a company; (F) a 
        recapitalization or other procedure or transaction 
        which has for its purpose the alteration, modification, 
        or elimination of any of the rights, preferences, or 
        privileges of any class of securities issued by a 
        company, as provided in its charter or other instrument 
        creating or defining such rights, preferences, and 
        privileges; (G) an exchange of securities issued by a 
        company for outstanding securities issued by another 
        company or companies, preliminary to and for the 
        purpose of effecting or consummating any of the 
        foregoing; or (H) any exchange of securities by a 
        company which is not an investment company for 
        securities issued by a registered investment company.
          (34) ``Sale'', ``sell'', ``offer to sell'', or 
        ``offer for sale'' includes every contract of sale or 
        disposition of, attempt or offer to dispose of, or 
        solicitation of an offer to buy, a security or interest 
        in a security, for value. Any security given or 
        delivered with, or as a bonus on account of, any 
        purchase of securities or any other thing, shall be 
        conclusively presumed to constitute a part of the 
        subject of such purchase and to have been sold for 
        value.
          (35) ``Sales load'' means the difference between the 
        price of a security to the public and that portion of 
        the proceeds from its sale which is received and 
        invested or held for investment by the issuer (or in 
        the case of a unit investment trust, by the depositor 
        or trustee), less any portion of such difference 
        deducted for trustee's or custodian's fee, insurance 
        premiums, issue taxes, or administrative expenses or 
        fees which are not properly chargeable to sales or 
        promotional activities. In the case of a periodic 
        payment plan certificate, ``sales load'' includes the 
        sales load on any investment company securities in 
        which the payments made on such certificate are 
        invested, as well as the sales load on the certificate 
        itself.
          (36) ``Security'' means any note, stock, treasury 
        stock, security future, bond, debenture, evidence of 
        indebtedness, certificate of interest or participation 
        in any profit-sharing agreement, collateral-trust 
        certificate, preorganization certificate or 
        subsciption, transferable share, investment contract, 
        voting-trust certificate, certificate of deposit for a 
        security, fractional undivided interest in oil, gas, or 
        other mineral rights, any put, call, straddle, option, 
        or privilege on any security (including a certificate 
        of deposit) or on any group or index of securities 
        (including any interest therein or based on the value 
        thereof), or any put, call, straddle, option, or 
        privilege entered into on a national securities 
        exchange relating to foreign currency, or, in general, 
        any interest or instrument commonly known as a 
        ``security'', or any certificate of interest or 
        participation in, temporary or interim certificate for, 
        receipt for, guarantee of, or warrant or right to 
        subscribe to or purchase, any of the foregoing.
          (37) ``Separate account'' means an account 
        established and maintained by an insurance company 
        pursuant to the laws of any State or territory of the 
        United States, or of Canada or any province thereof, 
        under which income, gains and losses, whether or not 
        realized, from assets allocated to such account, are, 
        in accordance with the applicable contract, credited to 
        or charged against such account without regard to other 
        income, gains, or losses of the insurance company.
          (38) ``Short-term paper'' means any note, draft, bill 
        of exchange, or banker's acceptance payable on demand 
        or having a maturity at the time of issuance of not 
        exceeding nine months, exclusive of days of grace, or 
        any renewal thereof payable on demand or having a 
        maturity likewise limited; and such other classes of 
        securities, of a commercial rather than an investment 
        character, as the Commission may designate by rules and 
        regulations.
          (39) ``State'' means any State of the United States, 
        the District of Columbia, Puerto Rico, the Virgin 
        Islands, or any other possession of the United States.
          (40) ``Underwriter'' means any person who has 
        purchased from an issuer with a view to, or sells for 
        an issuer in connection with, the distribution of any 
        security, or participates or has a direct or indirect 
        participation in any such undertaking, or participates 
        or has a participation in the direct or indirect 
        underwriting of any such undertaking; but such term 
        shall not include a person whose interest is limited to 
        a commission from an underwriter or dealer not in 
        excess of the usual and customary distributor's or 
        seller's commission. As used in this paragraph the term 
        ``issuer'' shall include, in addition to an issuer, any 
        person directly or indirectly controlling or controlled 
        by the issuer, or any person under direct or indirect 
        common control with the issuer. When the distribution 
        of the securities in respect of which any person is an 
        underwriter is completed such person shall cease to be 
        an underwriter in respect of such securities or the 
        issuer thereof.
          (41) ``Value'', with respect to assets of registered 
        investment companies, except as provided in subsection 
        (b) of section 28 of this title, means--
                  (A) as used in sections 3, 5, and 12 of this 
                title, (i) with respect to securities owned at 
                the end of the last preceding fiscal quarter 
                for which market quotations are readily 
                available, the market value at the end of such 
                quarter; (ii) with respect to other securities 
                and assets owned at the end of the last 
                preceding fiscal quarter, fair value at the end 
                of such quarter, as determined in good faith by 
                the board of directors; and (iii) with respect 
                to securities and other assets acquired after 
                the end of the last preceding fiscal quarter, 
                the cost thereof; and
                  (B) as used elsewhere in this title, (i) with 
                respect to securities for which market 
                quotations are readily available, the market 
                value of such securities; and (ii) with respect 
                to other securities and assets, fair value as 
                determined in good faith by the board of 
                directors;
        in each case as of such time or times as determined 
        pursuant to this title, and the rules and regulations 
        issued by the Commission hereunder. Notwithstanding the 
        fact that market quotations for securities issued by 
        controlled companies are available, the board of 
        directors may in good faith determine the value of such 
        securities: Provided, That the value so determined is 
        not in excess of the higher of market value or asset 
        value of such securities in the case of majority-owned 
        subsidiaries, and is not in excess of market value in 
        the case of other controlled companies.
                  
  For purposes of the valuation of those assets of a registered 
diversified company which are not subject to the limitations 
provided for in section 5(b)(1), the Commission may, by rules 
and regulations or orders, permit any security to be carried at 
cost, if it shall determine that such procedure is consistent 
with the general intent and purposes of this title. For 
purposes of sections 5 and 12, in lieu of values determined as 
provided in clause (A) above, the Commission shall by rules and 
regulations permit valuation of securities at cost or other 
basis in cases where it may be more convenient for such company 
to make its computations on such basis by reason of the 
necessity or desirability of complying with the provisions of 
any United States revenue laws or rules and regulations issued 
thereunder, or the laws or the rules and regulations issued 
thereunder of any State in which the securities of such company 
may be qualified for sale.
  The foregoing definition shall not derogate from the 
authority of the Commission with respect to the reports, 
information, and documents to be filed with the Commission by 
any registered company, or with respect to the accounting 
policies and principles to be following by any such company, as 
provided in sections 8, 30, and 31.
          (42) ``Voting security'' means any security presently 
        entitling the owner or holder thereof to vote for the 
        election of directors of a company. A specified 
        percentage of the outstanding voting securities of a 
        company means such amount of its outstanding voting 
        securities as entitles the holder or holders thereof to 
        cast said specified percentage of the aggregate votes 
        which the holders of all the outstanding voting 
        securities of such company are entitled to cast. The 
        vote of a majority of the outstanding voting securities 
        of a company means the vote, at the annual or a special 
        meeting of the security holders of such company duly 
        called, (A) of 67 per centum or more of the voting 
        securities present at such meeting, if the holders of 
        more than 50 per centum of the outstanding voting 
        securities of such company are present or represented 
        by proxy; or (B) of more than 50 per centum of the 
        outstanding voting securities of such company, 
        whichever is the less.
          (43) ``Wholly-owned subsidiary'' of a person means a 
        company 95 per centum or more of the outstanding voting 
        securities of which are owned by such person, or by a 
        company which, within the meaning of this paragraph, is 
        a wholly-owned subsidiary of such person.
          (44) ``Securities Act of 1933'', ``Securities 
        Exchange Act of 1934'', and ``Trust Indenture Act of 
        1939'' means those Acts, respectively, as heretofore or 
        hereafter amended.
          (45) ``Savings and loan association'' means a savings 
        and loan association, building and loan association, 
        cooperative bank, homestead association, or similar 
        institution, which is supervised and examined by State 
        or Federal authority having supervision over any such 
        institution, and a receiver, conservator, or other 
        liquidating agent of any such institution.
          (46) ``Eligible portfolio company'' means any issuer 
        which--
                  (A) is organized under the laws of, and has 
                its principal place of business in, any State 
                or States;
                  (B) is neither an investment company as 
                defined in section 3 (other than a small 
                business investment company which is licensed 
                by the Small Business Administration to operate 
                under the Small Business Investment Act of 1958 
                and which is a wholly-owned subsidiary of the 
                business development company) nor a company 
                which would be an investment company except for 
                the exclusion from the definition of investment 
                company in section 3(c) (unless it is described 
                in paragraph (2), (3), (4), (5), (6), or (9) of 
                such section); and
                  (C) satisfies one of the following:
                          (i) it does not have any class of 
                        securities with respect to which a 
                        member of a national securities 
                        exchange, broker, or dealer may extend 
                        or maintain credit to or for a customer 
                        pursuant to rules or regulations 
                        adopted by the Board of Governors of 
                        the Federal Reserve System under 
                        section 7 of the Securities Exchange 
                        Act of 1934;
                          (ii) it is controlled by a business 
                        development company, either alone or as 
                        part of a group acting together, and 
                        such business development company in 
                        fact exercises a controlling influence 
                        over the management or policies of such 
                        eligible portfolio company and, as a 
                        result of such control, has an 
                        affiliated person who is a director of 
                        such eligible portfolio company;
                          (iii) it has total assets of not more 
                        than $4,000,000, and capital and 
                        surplus (shareholders' equity less 
                        retained earnings) of not less than 
                        $2,000,000, except that the Commission 
                        may adjust such amounts by rule, 
                        regulation, or order to reflect changes 
                        in 1 or more generally accepted indices 
                        or other indicators for small 
                        businesses; or
                          (iv) it meets such other criteria as 
                        the Commission may, by rule, establish 
                        as consistent with the public interest, 
                        the protection of investors, and the 
                        purposes fairly intended by the policy 
                        and provisions of this title.
          (47) ``Making available significant managerial 
        assistance'' by a business development company means--
                  (A) any arrangement whereby a business 
                development company, through its directors, 
                officers, employees, or general partners, 
                offers to provide, and, if accepted, does so 
                provide, significant guidance and counsel 
                concerning the management, operations, or 
                business objectives and policies of a portfolio 
                company;
                  (B) the exercise by a business development 
                company of a controlling influence over the 
                management or policies of a portfolio company 
                by the business development company acting 
                individually or as part of a group acting 
                together which controls such portfolio company; 
                or
                  (C) with respect to a small business 
                investment company licensed by the Small 
                Business Administration to operate under the 
                Small Business Investment Act of 1958, the 
                making of loans to a portfolio company.
        For purposes of subparagraph (A), the requirement that 
        a business development company make available 
        significant managerial assistance shall be deemed to be 
        satisfied with respect to any particular portfolio 
        company where the business development company 
        purchases securities of such portfolio company in 
        conjunction with one or more other persons acting 
        together, and at least one of the persons in the group 
        makes available significant managerial assistance to 
        such portfolio company, except that such requirement 
        will not be deemed to be satisfied if the business 
        development company, in all cases, makes available 
        significant managerial assistance solely in the manner 
        described in this sentence.
          (48) ``Business development company'' means any 
        closed-end company which--
                  (A) is organized under the laws of, and has 
                its principal place of business in, any State 
                or States;
                  (B) is operated for the purpose of making 
                investments in securities described in 
                paragraphs (1) through (3) of section 55(a), 
                and makes available significant managerial 
                assistance with respect to the issuers of such 
                securities, provided that a business 
                development company must make available 
                significant managerial assistance only with 
                respect to the companies which are treated by 
                such business development company as satisfying 
                the 70 per centum of the value of its total 
                assets condition of section 55; and provided 
                further that a business development company 
                need not make available significant managerial 
                assistance with respect to any company 
                described in paragraph (46)(C)(iii), or with 
                respect to any other company that meets such 
                criteria as the Commission may by rule, 
                regulation, or order permit, as consistent with 
                the public interest, the protection of 
                investors, and the purposes of this title; and
                  (C) has elected pursuant to section 54(a) to 
                be subject to the provisions of sections 55 
                through 65.
          (49) ``Foreign securities authority'' means any 
        foreign government or any governmental body or 
        regulatory organization empowered by a foreign 
        government to administer or enforce its laws as they 
        relate to securities matters.
          (50) ``Foreign financial regulatory authority'' means 
        any (A) foreign securities authority, (B) other 
        governmental body or foreign equivalent of a self-
        regulatory organization empowered by a foreign 
        government to administer or enforce its laws relating 
        to the regulation of fiduciaries, trusts, commercial 
        lending, insurance, trading in contracts of sale of a 
        commodity for future delivery, or other instruments 
        traded on or subject to the rules of a contract market, 
        board of trade or foreign equivalent, or other 
        financial activities, or (C) membership organization a 
        function of which is to regulate the participation of 
        its members in activities listed above.
          (51)(A) ``Qualified purchaser'' means--
                  (i) any natural person (including any person 
                who holds a joint, community property, or other 
                similar shared ownership interest in an issuer 
                that is excepted under section 3(c)(7) with 
                that person's qualified purchaser spouse) who 
                owns not less than $5,000,000 in investments, 
                as defined by the Commission;
                  (ii) any company that owns not less than 
                $5,000,000 in investments and that is owned 
                directly or indirectly by or for 2 or more 
                natural persons who are related as siblings or 
                spouse (including former spouses), or direct 
                lineal descendants by birth or adoption, 
                spouses of such persons, the estates of such 
                persons, or foundations, charitable 
                organizations, or trusts established by or for 
                the benefit of such persons;
                  (iii) any trust that is not covered by clause 
                (ii) and that was not formed for the specific 
                purpose of acquiring the securities offered, as 
                to which the trustee or other person authorized 
                to make decisions with respect to the trust, 
                and each settlor or other person who has 
                contributed assets to the trust, is a person 
                described in clause (i), (ii), or (iv); or
                  (iv) any person, acting for its own account 
                or the accounts of other qualified purchasers, 
                who in the aggregate owns and invests on a 
                discretionary basis, not less than $25,000,000 
                in investments.
          (B) The Commission may adopt such rules and 
        regulations applicable to the persons and trusts 
        specified in clauses (i) through (iv) of subparagraph 
        (A) as it determines are necessary or appropriate in 
        the public interest or for the protection of investors.
          (C) The term ``qualified purchaser'' does not include 
        a company that, but for the exceptions provided for in 
        paragraph (1) or (7) of section 3(c), would be an 
        investment company (hereafter in this paragraph 
        referred to as an ``excepted investment company''), 
        unless all beneficial owners of its outstanding 
        securities (other than short-term paper), determined in 
        accordance with section 3(c)(1)(A), that acquired such 
        securities on or before April 30, 1996 (hereafter in 
        this paragraph referred to as ``pre-amendment 
        beneficial owners''), and all pre-amendment beneficial 
        owners of the outstanding securities (other than short-
        term paper) of any excepted investment company that, 
        directly or indirectly, owns any outstanding securities 
        of such excepted investment company, have consented to 
        its treatment as a qualified purchaser. Unanimous 
        consent of all trustees, directors, or general partners 
        of a company or trust referred to in clause (ii) or 
        (iii) of subparagraph (A) shall constitute consent for 
        purposes of this subparagraph.
          (52) The terms ``security future'' and ``narrow-based 
        security index'' have the same meanings as provided in 
        section 3(a)(55) of the Securities Exchange Act of 
        1934.
          (53) The term ``credit rating agency'' has the same 
        meaning as in section 3 of the Securities Exchange Act 
        of 1934.
          (54) The terms ``commodity pool'', ``commodity pool 
        operator'', ``commodity trading advisor'', ``major swap 
        participant'', ``swap'', ``swap dealer'', and ``swap 
        execution facility'' have the same meanings as in 
        section 1a of the Commodity Exchange Act (7 U.S.C. 
        1a).''.
  (b) No provision in this title shall apply to, or be deemed 
to include, the United States, a State, or any political 
subdivision of a State, or any agency, authority, or 
instrumentality of any one or more of the foregoing, or any 
corporation which is wholly owned directly or indirectly by any 
one or more of the foregoing, or any officer, agent, or 
employee of any of the foregoing acting as such in the course 
of his official duty, unless such provision makes specific 
reference thereto.
  (c) Consideration of Promotion of Efficiency, Competition, 
and Capital Formation.--Whenever pursuant to this title the 
Commission is engaged in rulemaking and is required to consider 
or determine whether an action is consistent with the public 
interest, the Commission shall also consider, in addition to 
the protection of investors, whether the action will promote 
efficiency, competition, and capital formation.

                    definition of investment company

  Sec. 3. (a)(1) When used in this title, ``investment 
company'' means any issuer which--
          (A) is or holds itself out as being engaged 
        primarily, or proposes to engage primarily, in the 
        business of investing, reinvesting, or trading in 
        securities;
          (B) is engaged or proposes to engage in the business 
        of issuing face-amount certificates of the installment 
        type, or has been engaged in such business and has any 
        such certificate outstanding; or
          (C) is engaged or proposes to engage in the business 
        of investing, reinvesting, owning, holding, or trading 
        in securities, and owns or proposes to acquire 
        investment securities having a value exceeding 40 per 
        centum of the value of such issuer's total assets 
        (exclusive of Government securities and cash items) on 
        an unconsolidated basis.
  (2) As used in this section, ``investment securities'' 
includes all securities except (A) Government securities, (B) 
securities issued by employees' securities companies, and (C) 
securities issued by majority-owned subsidiaries of the owner 
which (i) are not investment companies, and (ii) are not 
relying on the exception from the definition of investment 
company in paragraph (1) or (7) of subsection (c).
  (b) Notwithstanding paragraph (1)(C) of subsection (a), none 
of the following persons is an investment company within the 
meaning of this title:
          (1) Any issuer primarily engaged, directly or through 
        a wholly-owned subsidiary or subsidiaries, in a 
        business or businesses other than that of investing, 
        reinvesting, owning, holding, or trading in securities.
          (2) Any issuer which the Commission, upon application 
        by such issuer, finds and by order declares to be 
        primarily engaged in a business or businesses other 
        than that of investing, reinvesting, owning, holding, 
        or trading in securities either directly or (A) through 
        majority-owned subsidiaries or (B) through controlled 
        companies conducting similar types of businesses. The 
        filing of an application under this paragraph in good 
        faith by an issuer other than a registered investment 
        company shall exempt the applicant for a period of 
        sixty days from all provisions of this title applicable 
        to investment companies as such. For cause shown, the 
        Commission by order may extend such period of exemption 
        for an additional period or periods. Whenever the 
        Commission, upon its own motion or upon application, 
        finds that the circumstances which gave rise to the 
        issuance of an order granting an application under this 
        paragraph no longer exist, the Commission shall by 
        order revoke such order.
          (3) Any issuer all the outstanding securities of 
        which (other than short-term paper and directors' 
        qualifying shares) are directly or indirectly owned by 
        a company excepted from the definition of investment 
        company by paragraph (1) or (2) of this subsection.
  (c) Notwithstanding subsection (a), none of the following 
persons is an investment company within the meaning of this 
title:
          (1) Any issuer whose outstanding securities (other 
        than short-term paper) are beneficially owned by not 
        more than one hundred persons (or, with respect to a 
        qualifying venture capital fund, 500 persons) and which 
        is not making and does not presently propose to make a 
        public offering of its securities. Such issuer shall be 
        deemed to be an investment company for purposes of the 
        limitations set forth in subparagraphs (A)(i) and 
        (B)(i) of section 12(d)(1) governing the purchase or 
        other acquisition by such issuer of any security issued 
        by any registered investment company and the sale of 
        any security issued by any registered open-end 
        investment company to any such issuer. For purposes of 
        this paragraph:
                  (A) Beneficial ownership by a company shall 
                be deemed to be beneficial ownership by one 
                person, except that, if the company owns 10 per 
                centum or more of the outstanding voting 
                securities of the issuer, and is or, but for 
                the exception provided for in this paragraph or 
                paragraph (7), would be an investment company, 
                the beneficial ownership shall be deemed to be 
                that of the holders of such company's 
                outstanding securities (other than short-term 
                paper).
                  (B) Beneficial ownership by any person who 
                acquires securities or interests in securities 
                of an issuer described in the first sentence of 
                this paragraph shall be deemed to be beneficial 
                ownership by the person from whom such transfer 
                was made, pursuant to such rules and 
                regulations as the Commission shall prescribe 
                as necessary or appropriate in the public 
                interest and consistent with the protection of 
                investors and the purposes fairly intended by 
                the policy and provisions of this title, where 
                the transfer was caused by legal separation, 
                divorce, death, or other involuntary event.
                  (C) The term ``qualifying venture capital 
                fund'' means any venture capital fund (as 
                defined pursuant to section 203(l)(1) of the 
                Investment Advisers Act of 1940 (15 U.S.C. 80b-
                3(l)(1)) with no more than $50,000,000 in 
                aggregate capital contributions and uncalled 
                committed capital, as such dollar amount is 
                annually adjusted by the Commission to reflect 
                the change in the Consumer Price Index for All 
                Urban Consumers published by the Bureau of 
                Labor Statistics of the Department of Labor.
          (2)(A) Any person primarily engaged in the business 
        of underwriting and distributing securities issued by 
        other persons, selling securities to customers, acting 
        as broker, and acting as market intermediary, or any 
        one or more of such activities, whose gross income 
        normally is derived principally from such business and 
        related activities.
          (B) For purposes of this paragraph--
                  (i) the term ``market intermediary'' means 
                any person that regularly holds itself out as 
                being willing contemporaneously to engage in, 
                and that is regularly engaged in, the business 
                of entering into transactions on both sides of 
                the market for a financial contract or one or 
                more such financial contracts; and
                  (ii) the term ``financial contract'' means 
                any arrangement that--
                          (I) takes the form of an individually 
                        negotiated contract, agreement, or 
                        option to buy, sell, lend, swap, or 
                        repurchase, or other similar 
                        individually negotiated transaction 
                        commonly entered into by participants 
                        in the financial markets;
                          (II) is in respect of securities, 
                        commodities, currencies, interest or 
                        other rates, other measures of value, 
                        or any other financial or economic 
                        interest similar in purpose or function 
                        to any of the foregoing; and
                          (III) is entered into in response to 
                        a request from a counter party for a 
                        quotation, or is otherwise entered into 
                        and structured to accommodate the 
                        objectives of the counter party to such 
                        arrangement.
          (3) Any bank or insurance company; any savings and 
        loan association, building and loan association, 
        cooperative bank, homestead association, or similar 
        institution, or any receiver, conservator, liquidator, 
        liquidating agent, or similar official or person 
        thereof or therefor; or any common trust fund or 
        similar fund maintained by a bank exclusively for the 
        collective investment and reinvestment of moneys 
        contributed thereto by the bank in its capacity as a 
        trustee, executor, administrator, or guardian, if--
                  (A) such fund is employed by the bank solely 
                as an aid to the administration of trusts, 
                estates, or other accounts created and 
                maintained for a fiduciary purpose;
                  (B) except in connection with the ordinary 
                advertising of the bank's fiduciary services, 
                interests in such fund are not--
                          (i) advertised; or
                          (ii) offered for sale to the general 
                        public; and
                  (C) fees and expenses charged by such fund 
                are not in contravention of fiduciary 
                principles established under applicable Federal 
                or State law.
          (4) Any person substantially all of whose business is 
        confined to making small loans, industrial banking, or 
        similar businesses.
          (5) Any person who is not engaged in the business of 
        issuing redeemable securities, face-amount certificates 
        of the installment type or periodic payment plan 
        certificates, and who is primarily engaged in one or 
        more of the following businesses: (A) Purchasing or 
        otherwise acquiring notes, drafts, acceptances, open 
        accounts receivable, and other obligations representing 
        part or all of the sales price of merchandise, 
        insurance, and services; (B) making loans to 
        manufacturers, wholesalers, and retailers of, and to 
        prospective purchasers of, specified merchandise, 
        insurance, and services; and (C) purchasing or 
        otherwise acquiring mortgages and other liens on and 
        interests in real estate.
          (6) Any company primarily engaged, directly or 
        through majority-owned subsidiaries, in one or more of 
        the businesses described in paragraphs (3), (4), and 
        (5), or in one or more of such businesses (from which 
        not less than 25 centum of such company's gross income 
        during its last fiscal year was derived) together with 
        an additional business or businesses other than 
        investing, reinvesting, owning, holding, or trading in 
        securities.
          (7)(A) Any issuer, the outstanding securities of 
        which are owned exclusively by persons who, at the time 
        of acquisition of such securities, are qualified 
        purchasers, and which is not making and does not at 
        that time propose to make a public offering of such 
        securities. Securities that are owned by persons who 
        received the securities from a qualified purchaser as a 
        gift or bequest, or in a case in which the transfer was 
        caused by legal separation, divorce, death, or other 
        involuntary event, shall be deemed to be owned by a 
        qualified purchaser, subject to such rules, 
        regulations, and orders as the Commission may prescribe 
        as necessary or appropriate in the public interest or 
        for the protection of investors.
          (B) Notwithstanding subparagraph (A), an issuer is 
        within the exception provided by this paragraph if--
                  (i) in addition to qualified purchasers, 
                outstanding securities of that issuer are 
                beneficially owned by not more than 100 persons 
                who are not qualified purchasers, if--
                          (I) such persons acquired any portion 
                        of the securities of such issuer on or 
                        before September 1, 1996; and
                          (II) at the time at which such 
                        persons initially acquired the 
                        securities of such issuer, the issuer 
                        was excepted by paragraph (1); and
                  (ii) prior to availing itself of the 
                exception provided by this paragraph--
                          (I) such issuer has disclosed to each 
                        beneficial owner, as determined under 
                        paragraph (1), that future investors 
                        will be limited to qualified 
                        purchasers, and that ownership in such 
                        issuer is no longer limited to not more 
                        than 100 persons; and
                          (II) concurrently with or after such 
                        disclosure, such issuer has provided 
                        each beneficial owner, as determined 
                        under paragraph (1), with a reasonable 
                        opportunity to redeem any part or all 
                        of their interests in the issuer, 
                        notwithstanding any agreement to the 
                        contrary between the issuer and such 
                        persons, for that person's 
                        proportionate share of the issuer's net 
                        assets.
          (C) Each person that elects to redeem under 
        subparagraph (B)(ii)(II) shall receive an amount in 
        cash equal to that person's proportionate share of the 
        issuer's net assets, unless the issuer elects to 
        provide such person with the option of receiving, and 
        such person agrees to receive, all or a portion of such 
        person's share in assets of the issuer. If the issuer 
        elects to provide such persons with such an 
        opportunity, disclosure concerning such opportunity 
        shall be made in the disclosure required by 
        subparagraph (B)(ii)(I).
          (D) An issuer that is excepted under this paragraph 
        shall nonetheless be deemed to be an investment company 
        for purposes of the limitations set forth in 
        subparagraphs (A)(i) and (B)(i) of section 12(d)(1) 
        relating to the purchase or other acquisition by such 
        issuer of any security issued by any registered 
        investment company and the sale of any security issued 
        by any registered open-end investment company to any 
        such issuer.
          (E) For purposes of determining compliance with this 
        paragraph and paragraph (1), an issuer that is 
        otherwise excepted under this paragraph and an issuer 
        that is otherwise excepted under paragraph (1) shall 
        not be treated by the Commission as being a single 
        issuer for purposes of determining whether the 
        outstanding securities of the issuer excepted under 
        paragraph (1) are beneficially owned by not more than 
        100 persons or whether the outstanding securities of 
        the issuer excepted under this paragraph are owned by 
        persons that are not qualified purchasers. Nothing in 
        this subparagraph shall be construed to establish that 
        a person is a bona fide qualified purchaser for 
        purposes of this paragraph or a bona fide beneficial 
        owner for purposes of paragraph (1).
          (9) Any person substantially all of whose business 
        consists of owning or holding oil, gas, or other 
        mineral royalties or leases, or fractional interests 
        therein, or certificates of interest or participation 
        in or investment contracts relative to such royalties, 
        leases, or fractional interests.
          (10)(A) Any company organized and operated 
        exclusively for religious, educational, benevolent, 
        fraternal, charitable, or reformatory purposes--
                  (i) no part of the net earnings of which 
                inures to the benefit of any private 
                shareholder or individual; or
                  (ii) which is or maintains a fund described 
                in subparagraph (B).
          (B) For the purposes of subparagraph (A)(ii), a fund 
        is described in this subparagraph if such fund is a 
        pooled income fund, collective trust fund, collective 
        investment fund, or similar fund maintained by a 
        charitable organization exclusively for the collective 
        investment and reinvestment of one or more of the 
        following:
                  (i) assets of the general endowment fund or 
                other funds of one or more charitable 
                organizations;
                  (ii) assets of a pooled income fund;
                  (iii) assets contributed to a charitable 
                organization in exchange for the issuance of 
                charitable gift annuities;
                  (iv) assets of a charitable remainder trust 
                or of any other trust, the remainder interests 
                of which are irrevocably dedicated to any 
                charitable organization;
                  (v) assets of a charitable lead trust;
                  (vi) assets of a trust, the remainder 
                interests of which are revocably dedicated to 
                or for the benefit of 1 or more charitable 
                organizations, if the ability to revoke the 
                dedication is limited to circumstances 
                involving--
                          (I) an adverse change in the 
                        financial circumstances of a settlor or 
                        an income beneficiary of the trust;
                          (II) a change in the identity of the 
                        charitable organization or 
                        organizations having the remainder 
                        interest, provided that the new 
                        beneficiary is also a charitable 
                        organization; or
                          (III) both the changes described in 
                        subclauses (I) and (II);
                  (vii) assets of a trust not described in 
                clauses (i) through (v), the remainder 
                interests of which are revocably dedicated to a 
                charitable organization, subject to 
                subparagraph (C); or
                  (viii) such assets as the Commission may 
                prescribe by rule, regulation, or order in 
                accordance with section 6(c).
          (C) A fund that contains assets described in clause 
        (vii) of subparagraph (B) shall be excluded from the 
        definition of an investment company for a period of 3 
        years after the date of enactment of this subparagraph, 
        but only if--
                  (i) such assets were contributed before the 
                date which is 60 days after the date of 
                enactment of this subparagraph; and
                  (ii) such assets are commingled in the fund 
                with assets described in one or more of clauses 
                (i) through (vi) and (viii) of subparagraph 
                (B).
          (D) For purposes of this paragraph--
                  (i) a trust or fund is ``maintained'' by a 
                charitable organization if the organization 
                serves as a trustee or administrator of the 
                trust or fund or has the power to remove the 
                trustees or administrators of the trust or fund 
                and to designate new trustees or 
                administrators;
                  (ii) the term ``pooled income fund'' has the 
                same meaning as in section 642(c)(5) of the 
                Internal Revenue Code of 1986;
                  (iii) the term ``charitable organization'' 
                means an organization described in paragraphs 
                (1) through (5) of section 170(c) or section 
                501(c)(3) of the Internal Revenue Code of 1986;
                  (iv) the term ``charitable lead trust'' means 
                a trust described in section 170(f)(2)(B), 
                2055(e)(2)(B), or 2522(c)(2)(B) of the Internal 
                Revenue Code of 1986;
                  (v) the term ``charitable remainder trust'' 
                means a charitable remainder annuity trust or a 
                charitable remainder unitrust, as those terms 
                are defined in section 664(d) of the Internal 
                Revenue Code of 1986; and
                  (vi) the term ``charitable gift annuity'' 
                means an annuity issued by a charitable 
                organization that is described in section 
                501(m)(5) of the Internal Revenue Code of 1986.
          (11) Any employee's stock bonus, pension, or profit-
        sharing trust which meets the requirements for 
        qualification under section 401 of the Internal Revenue 
        Code of 1986; or any governmental plan described in 
        section 3(a)(2)(C) of the Securities Act of 1933; or 
        any collective trust fund maintained by a bank 
        consisting solely of assets of one or more of such 
        trusts, government plans, or church plans, companies or 
        accounts that are excluded from the definition of an 
        investment company under paragraph (14) of this 
        subsection; or any separate account the assets of which 
        are derived solely from (A) contributions under pension 
        or profit-sharing plans which meet the requirements of 
        section 401 of the Internal Revenue Code of 1986 or the 
        requirements for deduction of the employer's 
        contribution under section 404(a)(2) of such Code, (B) 
        contributions under governmental plans in connection 
        with which interests, participations, or securities are 
        exempted from the registration provisions of section 5 
        of the Securities Act of 1933 by section 3(a)(2)(C) of 
        such Act, and (C) advances made by an insurance company 
        in connection with the operation of such separate 
        account.
          (12) Any voting trust the assets of which consist 
        exclusively of securities of a single issuer which is 
        not an investment company.
          (13) Any security holders' protective committee or 
        similar issuer having outstanding and issuing no 
        securities other than certificates of deposit and 
        short-term paper.
          (14) Any church plan described in section 414(e) of 
        the Internal Revenue Code of 1986, if, under any such 
        plan, no part of the assets may be used for, or 
        diverted to, purposes other than the exclusive benefit 
        of plan participants or beneficiaries, or any company 
        or account that is--
                  (A) established by a person that is eligible 
                to establish and maintain such a plan under 
                section 414(e) of the Internal Revenue Code of 
                1986; and
                  (B) substantially all of the activities of 
                which consist of--
                          (i) managing or holding assets 
                        contributed to such church plans or 
                        other assets which are permitted to be 
                        commingled with the assets of church 
                        plans under the Internal Revenue Code 
                        of 1986; or
                          (ii) administering or providing 
                        benefits pursuant to church plans.

           *       *       *       *       *       *       *


                               exemptions

  Sec. 6. (a) The following investment companies are exempt 
from the provisions of this title:
          (1) Any company organized or otherwise created under 
        the laws of and having its principal office and place 
        of business in Puerto Rico, the Virgin Islands, or any 
        other possession of the United States; but such 
        exemption shall terminate if any security of which such 
        company is the issuer is offered for sale or sold after 
        the effective date of this title, by such company or an 
        underwriter therefor, to a resident of any State other 
        than the State in which such company is organized.
          (2) Any company which since the effective date of 
        this title or within five years prior to such date has 
        been reorganized under the supervision of a court of 
        competent jurisdiction, if (A) such company was not an 
        investment company at the commencement of such 
        reorganization proceedings, (B) at the conclusion of 
        such proceedings all outstanding securities of such 
        company were owned by creditors of such company or by 
        persons to whom such securities were issued on account 
        of creditors' claims, and (C) more than 50 per centum 
        of the voting securities of such company, and 
        securities representing more than 50 per centum of the 
        net asset value of such company, are currently owned 
        beneficially by not more than twenty-five persons; but 
        such exemption shall terminate if any security of which 
        such company is the issuer is offered for sale or sold 
        to the public after the conclusion of such proceedings 
        by the issuer or by or through any underwriter. For the 
        purposes of this paragraph, any new company organized 
        as part of the reorganization shall be deemed the same 
        company as its predecessor; and beneficial ownership 
        shall be determined in the manner provided in section 
        3(c)(1).
          (3) Any issuer as to which there is outstanding a 
        writing filed with the Commission by the Federal 
        Savings and Loan Insurance Corporation stating that 
        exemption of such issuer from the provisions of this 
        title is consistent with the public interest and the 
        protection of investors and is necessary or appropriate 
        by reason of the fact that such issuer holds or 
        proposes to acquire any assets or any product of any 
        assets which have been segregated (A) from assets of 
        any company which at the filing of such writing is an 
        insured institution within the meaning of section 
        401(a) of the National Housing Act, as heretofore or 
        hereafter amended, or (B) as a part of or in connection 
        with any plan for or condition to the insurance of 
        accounts of any company by said corporation or the 
        conversion of any company into a Federal savings and 
        loan association. Any such writing shall expire when 
        canceled by a writing similarly filed or at the 
        expiration of two years after the date of its filing, 
        whichever first occurs; but said corporation may, 
        nevertheless, before, at, or after the expiration of 
        any such writing file another writing or writings with 
        respect to such issuer.
          (4) Any company which prior to March 15, 1940, was 
        and now is a wholly-owned subsidiary of a registered 
        face-amount certificate company and was prior to said 
        date and now is organized and operating under the 
        insurance laws of any State and subject to supervision 
        and examination by the insurance commissioner thereof, 
        and which prior to March 15, 1940, was and now is 
        engaged, subject to such laws, in business 
        substantially all of which consists of issuing and 
        selling only to residents of such State and investing 
        the proceeds from, securities providing for or 
        representing participations or interests in intangible 
        assets consisting of mortgages or other liens on real 
        estate or notes or bonds secured thereby or in a fund 
        or deposit of mortgages or other liens on real estate 
        or notes or bonds secured thereby or having outstanding 
        such securities so issued and sold.
          (5)(A) Any company that is not engaged in the 
        business of issuing redeemable securities, the 
        operations of which are subject to regulation by the 
        State in which the company is organized under a statute 
        governing entities that provide financial or managerial 
        assistance to enterprises doing business, or proposing 
        to do business, in that State if--
                  (i) the organizational documents of the 
                company state that the activities of the 
                company are limited to the promotion of 
                economic, business, or industrial development 
                in the State through the provision of financial 
                or managerial assistance to enterprises doing 
                business, or proposing to do business, in that 
                State, and such other activities that are 
                incidental or necessary to carry out that 
                purpose;
                  (ii) immediately following each sale of the 
                securities of the company by the company or any 
                underwriter for the company, not less than 80 
                percent of the securities of the company being 
                offered in such sale, on a class-by-class 
                basis, are held by persons who reside or who 
                have a substantial business presence in that 
                State;
                  (iii) the securities of the company are sold, 
                or proposed to be sold, by the company or by 
                any underwriter for the company, solely to 
                accredited investors, as that term is defined 
                in section 2(a)(15) of the Securities Act of 
                1933, or to such other persons that the 
                Commission, as necessary or appropriate in the 
                public interest and consistent with the 
                protection of investors, may permit by rule, 
                regulation, or order; and
                  (iv) the company does not purchase any 
                security issued by an investment company or by 
                any company that would be an investment company 
                except for the exclusions from the definition 
                of the term ``investment company'' under 
                paragraph (1) or (7) of section 3(c), other 
                than--
                          (I) any debt security that meets such 
                        standards of credit-worthiness as the 
                        Commission shall adopt; or
                          (II) any security issued by a 
                        registered open-end investment company 
                        that is required by its investment 
                        policies to invest not less than 65 
                        percent of its total assets in 
                        securities described in subclause (I) 
                        or securities that are determined by 
                        such registered open-end investment 
                        company to be comparable in quality to 
                        securities described in subclause (I).
          (B) Notwithstanding the exemption provided by this 
        paragraph, section 9 (and, to the extent necessary to 
        enforce section 9, sections 38 through 51) shall apply 
        to a company described in this paragraph as if the 
        company were an investment company registered under 
        this title.
          (C) Any company proposing to rely on the exemption 
        provided by this paragraph shall file with the 
        Commission a notification stating that the company 
        intends to do so, in such form and manner as the 
        Commission may prescribe by rule.
          (D) Any company meeting the requirements of this 
        paragraph may rely on the exemption provided by this 
        paragraph upon filing with the Commission the 
        notification required by subparagraph (C), until such 
        time as the Commission determines by order that such 
        reliance is not in the public interest or is not 
        consistent with the protection of investors.
          (E) The exemption provided by this paragraph may be 
        subject to such additional terms and conditions as the 
        Commission may by rule, regulation, or order determine 
        are necessary or appropriate in the public interest or 
        for the protection of investors.
  (b) Upon application by any employees' security company, the 
Commission shall by order exempt such company from the 
provisions of this title and of the rules and regulations 
hereunder, if and to the extent that such exemption is 
consistent with the protection of investors. In determining the 
provisions to which such an order of exemption shall apply, the 
Commission shall give due weight, among other things, to the 
form of organization and the capital structure of such company, 
the persons by whom its voting securities, evidences of 
indebtedness, and other securities are owned and controlled, 
the prices at which securities issued by such company are sold 
and the sales load thereon, the disposition of the proceeds of 
such sales, the character of the securities in which such 
proceeds are invested, and any relationship between such 
company and the issuer of any such security.
  [(c)] [The Commission] (c)  General Exemptive Authority._
          (1) In general._The Commission, by rules and 
        regulations upon its own motion, or by order upon 
        application, may conditionally or unconditionally 
        exempt any person, security, or transaction, or any 
        class or classes of persons, securities, or 
        transactions, from any provision or provisions of this 
        title or of any rule or regulation thereunder, if and 
        to the extent that such exemption is necessary or 
        appropriate in the public interest and consistent with 
        the protection of investors and the purposes fairly 
        intended by the policy and provisions of this title.
          (2) Application process.--
                  (A) In general.--A person who wishes to 
                receive an exemption from the Commission 
                pursuant to paragraph (1) shall file an 
                application with the Commission in such form 
                and manner and containing such information as 
                the Commission may require.
                  (B) Publication; rejection of invalid 
                applications.--
                          (i) In general.--Not later than the 
                        end of the 5-day period beginning on 
                        the date that the Commission receives 
                        an application under subparagraph (A), 
                        the Commission shall either--
                                  (I) publish the application, 
                                including by publication on the 
                                website of the Commission; or
                                  (II) if the Commission 
                                determines that the application 
                                does not comply with the proper 
                                form, manner, or information 
                                requirements described under 
                                subparagraph (A), reject such 
                                application and notify the 
                                applicant of the specific 
                                reasons the application was 
                                rejected.
                          (ii) Failure to publish 
                        application.--If the Commission does 
                        not reject an application under clause 
                        (i)(II), but fails to publish the 
                        application by the end of the time 
                        period specified under clause (i), such 
                        application shall be deemed to have 
                        been published on the date that is the 
                        end of such time period.
          (3) Determination by commission.--
                  (A) In general.--Not later than 45 days after 
                the date that the Commission publishes an 
                application pursuant to paragraph (2)(B), the 
                Commission shall, by order--
                          (i) approve the application;
                          (ii) if the Commission determines 
                        that the application would have been 
                        approved had the applicant provided 
                        additional supporting documentation or 
                        made certain amendments to the 
                        application--
                                  (I) provide the applicant 
                                with the specific additional 
                                supporting documentation or 
                                amendments that the Commission 
                                believes are necessary for the 
                                applicant to provide in order 
                                for the application to be 
                                approved; and
                                  (II) request that the 
                                applicant withdraw the 
                                application and re-submit the 
                                application with such 
                                additional supporting 
                                documentation and amendments; 
                                or
                          (iii) deny the application.
                  (B) Extension of time period.--The Commission 
                may extend the time period described under 
                subparagraph (A) by not more than an additional 
                45 days, if--
                          (i) the Commission determines that a 
                        longer period is appropriate and 
                        publishes the reasons for such 
                        determination; or
                          (ii) the applicant consents to the 
                        longer period.
                  (C) Time period for withdrawal.--If the 
                Commission makes a request under subparagraph 
                (A)(ii) for an applicant to withdraw an 
                application, such application shall be deemed 
                to be denied if the applicant informs the 
                Commission that the applicant will not withdraw 
                the application or if the applicant does not 
                withdraw the application before the end of the 
                30-day period beginning on the date the 
                Commission makes such request.
          (4) Proceedings; notice and hearing.--If an 
        application is denied pursuant to paragraph (3), the 
        Commission shall provide the applicant with--
                  (A) a written explanation for why the 
                application was not approved; and
                  (B) an opportunity for hearing, if requested 
                by the applicant not later than 20 days after 
                the date of such denial, with such hearing to 
                be commenced not later than 30 days after the 
                date of such denial.
          (5) Result of failure to institute or commence 
        proceedings.--An application shall be deemed to have 
        been approved by the Commission, if--
                  (A) the Commission fails to either approve, 
                request the withdrawal of, or deny the 
                application, as required under paragraph 
                (3)(A), within the time period required under 
                paragraph (3)(A), as such time period may have 
                been extended pursuant to paragraph (3)(B); or
                  (B) the applicant requests an opportunity for 
                hearing, pursuant to paragraph (4)(B), but the 
                Commission does not commence such hearing 
                within the time period required under paragraph 
                (4)(B).
          (6) Rulemaking.--Not later than 180 days after the 
        date of enactment of this paragraph, the Commission 
        shall issue rules to carry out this subsection.
  (d) The Commission, by rules and regulations or order, shall 
exempt a closed-end investment company from any or all 
provisions of this title, but subject to such terms and 
conditions as may be necessary or appropriate in the public 
interest or for the protection of investors, if--
          (1) the aggregate sums received by such company from 
        the sale of all its outstanding securities, plus the 
        aggregate offering price of all securities of which 
        such company is the issuer and which it proposes to 
        offer for sale, do not exceed $10,000,000, or such 
        other amount as the Commission may set by rule, 
        regulation, or order;
          (2) no security of which such company is the issuer 
        has been or is proposed to be sold by such company or 
        any underwriter therefor, in connection with a public 
        offering, to any person who is not a resident of the 
        State under the laws of which such company is organized 
        or otherwise created; and
          (3) such exemption is not contrary to the public 
        interest or inconsistent with the protection of 
        investors.
  (e) If, in connection with any rule, regulation, or order 
under this section exempting any investment company from any 
provision of section 7, the Commission deems it necessary or 
appropriate in the public interest or for the protection of 
investors that certain specified provisions of this title 
pertaining to registered investment companies shall be 
applicable in respect of such company, the provisions so 
specified shall apply to such company, and to other persons in 
their transactions and relations with such company, as though 
such company were a registered investment company.
  (f) Any closed-end company which--
          (1) elects to be treated as a business development 
        company pursuant to section 54; or
          (2) would be excluded from the definition of an 
        investment company by section 3(c)(1), except that it 
        presently proposes to make a public offering of its 
        securities as a business development company, and has 
        notified the Commission, in a form and manner which the 
        Commission may, by rule, prescribe, that it intends in 
        good faith to file, within 90 days, a notification of 
        election to become subject to the provisions of 
        sections 55 through 65,
shall be exempt from sections 1 through 53, except to the 
extent provided in sections 59 through 65.

           *       *       *       *       *       *       *


      ineligibility of certain affiliated persons and underwriters

  Sec. 9. (a) It shall be unlawful for any of the following 
persons to serve or act in the capacity of employee, officer, 
director, member of an advisory board, investment adviser, or 
depositor of any registered investment company, or principal 
underwriter for any registered open-end company, registered 
unit investment trust, or registered face-amount certificate 
company:
          (1) any person who within 10 years has been convicted 
        of any felony or misdemeanor involving the purchase or 
        sale of any security or arising out of such person's 
        conduct as an underwriter, broker, dealer, investment 
        adviser, municipal securities dealer, government 
        securities broker, government securities dealer, bank, 
        transfer agent, credit rating agency, or entity or 
        person required to be registered under the Commodity 
        Exchange Act, or as an affiliated person, salesman, or 
        employee of any investment company, bank, insurance 
        company, or entity or person required to be registered 
        under the Commodity Exchange Act;
          (2) any person who, by reason of any misconduct, is 
        permanently or temporarily enjoined by order, judgment, 
        or decree of any court of competent jurisdiction from 
        acting as an underwriter, broker, dealer, investment 
        adviser, municipal securities dealer, government 
        securities broker, government securities dealer, bank, 
        transfer agent, credit rating agency, or entity or 
        person required to be registered under the Commodity 
        Exchange Act, or as an affiliated person, salesman, or 
        employee of any investment company, bank, insurance 
        company, or entity or person required to be registered 
        under the Commodity Exchange Act, or from engaging in 
        or continuing any conduct or practice in connection 
        with any such activity or in connection with the 
        purchase or sale of any security; or
          (3) a company any affiliated person of which is 
        ineligible, by reason of paragraph (1) or (2), to serve 
        or act in the foregoing capacities.
For the purposes of paragraphs (1), (2), and (3) of this 
subsection, the term ``investment adviser'' shall include an 
investment adviser as defined in title II of this Act.
  (b) The Commission may, after notice and opportunity for 
hearing, by order prohibit, conditionally or unconditionally, 
either permanently or for such period of time as it in its 
discretion shall deem appropriate in the public interest, any 
person from serving or acting as an employee, officer, 
director, member of an advisory board, investment adviser or 
depositor of, or principal underwriter for, a registered 
investment company or affiliated person of such investment 
adviser, depositor, or principal underwriter, if such person--
          (1) has willfully made or caused to be made in any 
        registration statement, application or report filed 
        with the Commission under this title any statement 
        which was at the time and in the light of the 
        circumstances under which it was made false or 
        misleading with respect to any material fact, or has 
        omitted to state in any such registration statement, 
        application, or report any material fact which was 
        required to be stated therein;
          (2) has willfully violated any provision of the 
        Securities Act of 1933, or of the Securities Exchange 
        Act of 1934, or of title II of this Act, or of this 
        title, or of the Commodity Exchange Act, or of any rule 
        or regulation under any of such statutes;
          (3) has willfully aided, abetted, counseled, 
        commanded, induced, or procured the violation by any 
        other person of the Securities Act of 1933, or of the 
        Securities Exchange Act of 1934, or of title II of this 
        Act, or of this title, or of the Commodity Exchange 
        Act, or of any rule or regulation under any of such 
        statutes;
          (4) has been found by a foreign financial regulatory 
        authority to have--
                  (A) made or caused to be made in any 
                application for registration or report required 
                to be filed with a foreign securities 
                authority, or in any proceeding before a 
                foreign securities authority with respect to 
                registration, any statement that was at the 
                time and in light of the circumstances under 
                which it was made false or misleading with 
                respect to any material fact, or has omitted to 
                state in any application or report to a foreign 
                securities authority any material fact that is 
                required to be stated therein;
                  (B) violated any foreign statute or 
                regulation regarding transactions in securities 
                or contracts of sale of a commodity for future 
                delivery traded on or subject to the rules of a 
                contract market or any board of trade; or
                  (C) aided, abetted, counseled, commanded, 
                induced, or procured the violation by any other 
                person of any foreign statute or regulation 
                regarding transactions in securities or 
                contracts of sale of a commodity for future 
                delivery traded on or subject to the rules of a 
                contract market or any board of trade;
          (5) within 10 years has been convicted by a foreign 
        court of competent jurisdiction of a crime, however 
        denominated by the laws of the relevant foreign 
        government, that is substantially equivalent to an 
        offense set forth in paragraph (1) of subsection (a); 
        or
          (6) by reason of any misconduct, is temporarily or 
        permanently enjoined by any foreign court of competent 
        jurisdiction from acting in any of the capacities, set 
        forth in paragraph (2) of subsection (a), or a 
        substantially equivalent foreign capacity, or from 
        engaging in or continuing any conduct or practice in 
        connection with any such activity or in connection with 
        the purchase or sale of any security.
  (c) Any person who is ineligible, by reason of subsection 
(a), to serve or act in the capacities enumerated in that 
subsection, may file with the Commission an application for an 
exemption from the provisions of that subsection. The 
Commission shall by order grant such application, either 
unconditionally or on an appropriate temporary or other 
conditional basis, if it is established that the prohibitions 
of subsection (a), as applied to such person, are unduly or 
disproportionately severe or that the conduct of such person 
has been such as not to make it against the public interest or 
protection of investors to grant such application.
  (d) Money Penalties in Administrative Proceedings.--
          (1) Authority of commission.--
                  (A) In general.--In any proceeding instituted 
                pursuant to subsection (b) against any person, 
                the Commission may impose a civil penalty if it 
                finds, on the record after notice and 
                opportunity for hearing, that such penalty is 
                in the public interest, and that such person--
                          (i) has willfully violated any 
                        provision of the Securities Act of 
                        1933, the Securities Exchange Act of 
                        1934, the Investment Advisers Act of 
                        1940, or this title, or the rules or 
                        regulations thereunder;
                          (ii) has willfully aided, abetted, 
                        counseled, commanded, induced, or 
                        procured such a violation by any other 
                        person; or
                          (iii) has willfully made or caused to 
                        be made in any registration statement, 
                        application, or report required to be 
                        filed with the Commission under this 
                        title, any statement which was, at the 
                        time and in the light of the 
                        circumstances under which it was made, 
                        false or misleading with respect to any 
                        material fact, or has omitted to state 
                        in any such registration statement, 
                        application, or report any material 
                        fact which was required to be stated 
                        therein;
                  (B) Cease-and-desist proceedings.--In any 
                proceeding instituted pursuant to subsection 
                (f) against any person, the Commission may 
                impose a civil penalty if the Commission finds, 
                on the record, after notice and opportunity for 
                hearing, that such person--
                          (i) is violating or has violated any 
                        provision of this title, or any rule or 
                        regulation issued under this title; or
                          (ii) is or was a cause of the 
                        violation of any provision of this 
                        title, or any rule or regulation issued 
                        under this title.
          (2) Maximum amount of penalty.--
                  (A) First tier.--The maximum amount of 
                penalty for each act or omission described in 
                paragraph (1) shall be [$5,000] $10,000 for a 
                natural person or [$50,000] $100,000 for any 
                other person.
                  (B) Second tier.--Notwithstanding 
                subparagraph (A), the maximum amount of penalty 
                for each such act or omission shall be 
                [$50,000] $100,000 for a natural person or 
                [$250,000] $500,000 for any other person if the 
                act or omission described in paragraph (1) 
                involved fraud, deceit, manipulation, or 
                deliberate or reckless disregard of a 
                regulatory requirement.
                  [(C) Third tier.--Notwithstanding 
                subparagraphs (A) and (B), the maximum amount 
                of penalty for each such act or omission shall 
                be $100,000 for a natural person or $500,000 
                for any other person if--
                          [(i) the act or omission described in 
                        paragraph (1) involved fraud, deceit, 
                        manipulation, or deliberate or reckless 
                        disregard of a regulatory requirement; 
                        and
                          [(ii) such act or omission directly 
                        or indirectly resulted in substantial 
                        losses or created a significant risk of 
                        substantial losses to other persons or 
                        resulted in substantial pecuniary gain 
                        to the person who committed the act or 
                        omission.]
                  (C) Third tier.--
                          (i) In general.--Notwithstanding 
                        subparagraphs (A) and (B), the amount 
                        of penalty for each such act or 
                        omission shall not exceed the amount 
                        specified in clause (ii) if--
                                  (I) the act or omission 
                                described in paragraph (1) 
                                involved fraud, deceit, 
                                manipulation, or deliberate or 
                                reckless disregard of a 
                                regulatory requirement; and
                                  (II) such act or omission 
                                directly or indirectly resulted 
                                in substantial losses or 
                                created a significant risk of 
                                substantial losses to other 
                                persons or resulted in 
                                substantial pecuniary gain to 
                                the person who committed the 
                                act or omission.
                          (ii) Maximum amount of penalty.--The 
                        amount referred to in clause (i) is the 
                        greatest of--
                                  (I) $300,000 for a natural 
                                person or $1,450,000 for any 
                                other person;
                                  (II) 3 times the gross amount 
                                of pecuniary gain to the person 
                                who committed the act or 
                                omission; or
                                  (III) the amount of losses 
                                incurred by victims as a result 
                                of the act or omission.
                  (D) Fourth tier.--Notwithstanding 
                subparagraphs (A), (B), and (C), the maximum 
                amount of penalty for each such act or omission 
                shall be 3 times the otherwise applicable 
                amount in such subparagraphs if, within the 5-
                year period preceding such act or omission, the 
                person who committed the act or omission was 
                criminally convicted for securities fraud or 
                became subject to a judgment or order imposing 
                monetary, equitable, or administrative relief 
                in any Commission action alleging fraud by that 
                person.
          (3) Determination of public interest.--In considering 
        under this section whether a penalty is in the public 
        interest, the Commission may consider--
                  (A) whether the act or omission for which 
                such penalty is assessed involved fraud, 
                deceit, manipulation, or deliberate or reckless 
                disregard of a regulatory requirement;
                  (B) the harm to other persons resulting 
                either directly or indirectly from such act or 
                omission;
                  (C) the extent to which any person was 
                unjustly enriched, taking into account any 
                restitution made to persons injured by such 
                behavior;
                  (D) whether such person previously has been 
                found by the Commission, another appropriate 
                regulatory agency, or a self-regulatory 
                organization to have violated the Federal 
                securities laws, State securities laws, or the 
                rules of a self-regulatory organization, has 
                been enjoined by a court of competent 
                jurisdiction from violations of such laws or 
                rules, or has been convicted by a court of 
                competent jurisdiction of violations of such 
                laws or of any felony or misdemeanor described 
                in section 203(e)(2) of the Investment Advisers 
                Act of 1940;
                  (E) the need to deter such person and other 
                persons from committing such acts or omissions; 
                and
                  (F) such other matters as justice may 
                require.
          (4) Evidence concerning ability to pay.--In any 
        proceeding in which the Commission may impose a penalty 
        under this section, a respondent may present evidence 
        of the respondent's ability to pay such penalty. The 
        Commission may, in its discretion, consider such 
        evidence in determining whether such penalty is in the 
        public interest. Such evidence may relate to the extent 
        of such person's ability to continue in business and 
        the collectability of a penalty, taking into account 
        any other claims of the United States or third parties 
        upon such person's assets and the amount of such 
        person's assets.
  (e) Authority To Enter an Order Requiring an Accounting and 
Disgorgement.--In any proceeding in which the Commission may 
impose a penalty under this section, the Commission may enter 
an order requiring accounting and disgorgement, including 
reasonable interest. The Commission is authorized to adopt 
rules, regulations, and orders concerning payments to 
investors, rates of interest, periods of accrual, and such 
other matters as it deems appropriate to implement this 
subsection.
  (f) Cease-and-Desist Proceedings.--
          (1) Authority of the commission.--If the Commission 
        finds, after notice and opportunity for hearing, that 
        any person is violating, has violated, or is about to 
        violate any provision of this title, or any rule or 
        regulation thereunder, the Commission may publish its 
        findings and enter an order requiring such person, and 
        any other person that is, was, or would be a cause of 
        the violation, due to an act or omission the person 
        knew or should have known would contribute to such 
        violation, to cease and desist from committing or 
        causing such violation and any future violation of the 
        same provision, rule, or regulation. Such order may, in 
        addition to requiring a person to cease and desist from 
        committing or causing a violation, require such person 
        to comply, or to take steps to effect compliance, with 
        such provision, rule, or regulation, upon such terms 
        and conditions and within such time as the Commission 
        may specify in such order. Any such order may, as the 
        Commission deems appropriate, require future compliance 
        or steps to effect future compliance, either 
        permanently or for such period of time as the 
        Commission may specify, with such provision, rule, or 
        regulation with respect to any security, any issuer, or 
        any other person.
          (2) Hearing.--The notice instituting proceedings 
        pursuant to paragraph (1) shall fix a hearing date not 
        earlier than 30 days nor later than 60 days after 
        service of the notice unless an earlier or a later date 
        is set by the Commission with the consent of any 
        respondent so served.
          (3) Temporary order.--
                  (A) In general.--Whenever the Commission 
                determines that the alleged violation or 
                threatened violation specified in the notice 
                instituting proceedings pursuant to paragraph 
                (1), or the continuation thereof, is likely to 
                result in significant dissipation or conversion 
                of assets, significant harm to investors, or 
                substantial harm to the public interest, 
                including, but not limited to, losses to the 
                Securities Investor Protection Corporation, 
                prior to the completion of the proceeding, the 
                Commission may enter a temporary order 
                requiring the respondent to cease and desist 
                from the violation or threatened violation and 
                to take such action to prevent the violation or 
                threatened violation and to prevent dissipation 
                or conversion of assets, significant harm to 
                investors, or substantial harm to the public 
                interest as the Commission deems appropriate 
                pending completion of such proceedings. Such an 
                order shall be entered only after notice and 
                opportunity for a hearing, unless the 
                Commission, notwithstanding section 40(a) of 
                this title, determines that notice and hearing 
                prior to entry would be impracticable or 
                contrary to the public interest. A temporary 
                order shall become effective upon service upon 
                the respondent and, unless set aside, limited, 
                or suspended by the Commission or a court of 
                competent jurisdiction, shall remain effective 
                and enforceable pending the completion of the 
                proceedings.
                  (B) Applicability.--This paragraph shall 
                apply only to a respondent that acts, or, at 
                the time of the alleged misconduct acted, as a 
                broker, dealer, investment adviser, investment 
                company, municipal securities dealer, 
                government securities broker, government 
                securities dealer, or transfer agent, or is, or 
                was at the time of the alleged misconduct, an 
                associated person of, or a person seeking to 
                become associated with, any of the foregoing.
          (4) Review of temporary orders.--
                  (A) Commission review.--At any time after the 
                respondent has been served with a temporary 
                cease-and-desist order pursuant to paragraph 
                (3), the respondent may apply to the Commission 
                to have the order set aside, limited, or 
                suspended. If the respondent has been served 
                with a temporary cease-and-desist order entered 
                without a prior Commission hearing, the 
                respondent may, within 10 days after the date 
                on which the order was served, request a 
                hearing on such application and the Commission 
                shall hold a hearing and render a decision on 
                such application at the earliest possible time.
                  (B) Judicial review.--Within--
                          (i) 10 days after the date the 
                        respondent was served with a temporary 
                        cease-and-desist order entered with a 
                        prior Commission hearing, or
                          (ii) 10 days after the Commission 
                        renders a decision on an application 
                        and hearing under subparagraph (A), 
                        with respect to any temporary cease-
                        and-desist order entered without a 
                        prior Commission hearing,
                the respondent may apply to the United States 
                district court for the district in which the 
                respondent resides or has its principal place 
                of business, or for the District of Columbia, 
                for an order setting aside, limiting, or 
                suspending the effectiveness or enforcement of 
                the order, and the court shall have 
                jurisdiction to enter such an order. A 
                respondent served with a temporary cease-and-
                desist order entered without a prior Commission 
                hearing may not apply to the court except after 
                hearing and decision by the Commission on the 
                respondent's application under subparagraph (A) 
                of this paragraph.
                  (C) No automatic stay of temporary order.--
                The commencement of proceedings under 
                subparagraph (B) of this paragraph shall not, 
                unless specifically ordered by the court, 
                operate as a stay of the Commission's order.
                  (D) Exclusive review.--Section 43 of this 
                title shall not apply to a temporary order 
                entered pursuant to this section.
          (5) Authority to enter an order requiring an 
        accounting and disgorgement.--In any cease-and-desist 
        proceeding under subsection (f)(1), the Commission may 
        enter an order requiring accounting and disgorgement, 
        including reasonable interest. The Commission is 
        authorized to adopt rules, regulations, and orders 
        concerning payments to investors, rates of interest, 
        periods of accrual, and such other matters as it deems 
        appropriate to implement this subsection.
  (g) For the purposes of this section, the term ``investment 
adviser'' includes a corporate or other trustee performing the 
functions of an investment adviser.

           *       *       *       *       *       *       *


                          accounts and records

  Sec. 31. (a) Maintenance of Records.--
          (1) In general.--Each registered investment company, 
        and each underwriter, broker, dealer, or investment 
        adviser that is a majority-owned subsidiary of such a 
        company, shall maintain and preserve such records (as 
        defined in section 3(a)(37) of the Securities Exchange 
        Act of 1934) for such period or periods as the 
        Commission, by rules and regulations, may prescribe as 
        necessary or appropriate in the public interest or for 
        the protection of investors. Each investment adviser 
        that is not a majority-owned subsidiary of, and each 
        depositor of any registered investment company, and 
        each principal underwriter for any registered 
        investment company other than a closed-end company, 
        shall maintain and preserve for such period or periods 
        as the Commission shall prescribe by rules and 
        regulations, such records as are necessary or 
        appropriate to record such person's transactions with 
        such registered company. Each person having custody or 
        use of the securities, deposits, or credits of a 
        registered investment company shall maintain and 
        preserve all records that relate to the custody or use 
        by such person of the securities, deposits, or credits 
        of the registered investment company for such period or 
        periods as the Commission, by rule or regulation, may 
        prescribe, as necessary or appropriate in the public 
        interest or for the protection of investors.
          (2) Minimizing compliance burden.--In exercising its 
        authority under this subsection, the Commission shall 
        take such steps as it deems necessary or appropriate, 
        consistent with the public interest and for the 
        protection of investors, to avoid unnecessary 
        recordkeeping by, and minimize the compliance burden 
        on, persons required to maintain records under this 
        subsection (hereafter in this section referred to as 
        ``subject persons''). Such steps shall include 
        considering, and requesting public comment on--
                  (A) feasible alternatives that minimize the 
                recordkeeping burdens on subject persons;
                  (B) the necessity of such records in view of 
                the public benefits derived from the 
                independent scrutiny of such records through 
                Commission examination;
                  (C) the costs associated with maintaining the 
                information that would be required to be 
                reflected in such records; and
                  (D) the effects that a proposed recordkeeping 
                requirement would have on internal compliance 
                policies and procedures.
  (b) Examinations of Records.--
          (1) In general.--All records required to be 
        maintained and preserved in accordance with subsection 
        (a) shall be subject at any time and from time to time 
        to such reasonable periodic, special, and other 
        examinations by the Commission, or any member or 
        representative thereof, as the Commission may 
        prescribe.
          (2) Availability.--For purposes of examinations 
        referred to in paragraph (1), any subject person shall 
        make available to the Commission or its representatives 
        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.
          (3) Commission action.--The Commission shall exercise 
        its authority under this subsection with due regard for 
        the benefits of internal compliance policies and 
        procedures and the effective implementation and 
        operation thereof.
          (4) Records of persons with custody or use.--
                  (A) In general.--Records of persons having 
                custody or use of the securities, deposits, or 
                credits of a registered investment company that 
                relate to such custody or use, are subject at 
                any time, or from time to time, to such 
                reasonable periodic, special, or other 
                examinations and other information and document 
                requests by representatives of the Commission, 
                as the Commission deems necessary or 
                appropriate in the public interest or for the 
                protection of investors.
                  (B) Certain persons subject to other 
                regulation.--Any person that is subject to 
                regulation and examination by a Federal 
                financial institution regulatory agency (as 
                such term is defined under section 212(c)(2) of 
                title 18, United States Code) may satisfy any 
                examination request, information request, or 
                document request described under subparagraph 
                (A), by providing to the Commission a detailed 
                listing, in writing, of the securities, 
                deposits, or credits of the registered 
                investment company within the custody or use of 
                such person.
  (c) Regulatory Authority.--The Commission may, in the public 
interest or for the protection of investors, issue rules and 
regulations providing for a reasonable degree of uniformity in 
the accounting policies and principles to be followed by 
registered investment companies in maintaining their accounting 
records and in preparing financial statements required pursuant 
to this title.
  (d) Exemption Authority.--The Commission, upon application 
made by any registered investment company, may by order exempt 
a specific transaction or transactions from the provisions of 
any rule or regulation made pursuant to subsection (e), if the 
Commission finds that such rule or regulation should not 
reasonably be applied to such transaction.
  (e) Procedure for Obtaining Certain Intellectual Property.--
The Commission is not authorized to compel under this title an 
investment company to produce or furnish source code, including 
algorithmic trading source code or similar intellectual 
property, to the Commission unless the Commission first issues 
a subpoena.

           *       *       *       *       *       *       *


                        breach of fiduciary duty

  Sec. 36. (a) The Commission is authorized to bring an action 
in the proper district court of the United States, or in the 
United States court of any territory or other place subject to 
the jurisdiction of the United States, alleging that a person 
who is, or at the time of the alleged misconduct was, serving 
or acting in one or more of the following capacities has 
engaged within five years of the commencement of the action or 
is about to engage in any act or practice constituting a breach 
of fiduciary duty involving personal misconduct in respect of 
any registered investment company for which such person so 
serves or acts, or at the time of the alleged misconduct, so 
served or acted--
          (1) as officer, director, member of any advisory 
        board, investment adviser, or depositor; or
          (2) as principal underwriter, if such registered 
        company is an open-end company, unit investment trust, 
        or face-amount certificate company.
If such allegations are established, the court may enjoin such 
persons from acting in any or all such capacities either 
permanently or temporarily and award such injunctive or other 
relief against such person as may be reasonable and appropriate 
in the circumstances, having due regard to the protection of 
investors and to the effectuation of the policies declared in 
section 1(b) of this title.
  (b) For the purposes of this subsection, the investment 
adviser of a registered investment company shall be deemed to 
have a fiduciary duty with respect to the receipt of 
compensation for services, or of payments of a material nature, 
paid by such registered investment company, or by the security 
holders thereof, to such investment adviser or any affiliated 
person of such investment adviser. An action may be brought 
under this subsection by the Commission, or by a security 
holder of such registered investment company on behalf of such 
company, against such investment adviser, or any affiliated 
person of such investment adviser, or any other person 
enumerated in subsection (a) of this section who has a 
fiduciary duty concerning such compensation or payments, for 
breach of fiduciary duty in respect of such compensation or 
payments paid by such registered investment company or by the 
security holders thereof to such investment adviser or person. 
With respect to any such action the following provisions shall 
apply:
          (1) It shall not be necessary to allege or prove that 
        any defendant engaged in personal misconduct, and the 
        plaintiff shall have the burden of proving a breach of 
        fiduciary duty.
          (2) In any such action approval by the board of 
        directors of such investment company of such 
        compensation or payments, or of contracts or other 
        arrangements providing for such compensation or 
        payments, and ratification or approval of such 
        compensation or payments, or of contracts or other 
        arrangements providing for such compensation or 
        payments, by the shareholders of such investment 
        company, shall be given such consideration by the court 
        as is deemed appropriate under all the circumstances.
          (3) No such action shall be brought or maintained 
        against any person other than the recipient of such 
        compensation or payments, and no damages or other 
        relief shall be granted against any person other than 
        the recipient of such compensation or payments. No 
        award of damages shall be recoverable for any period 
        prior to one year before the action was instituted. Any 
        award of damages against such recipient shall be 
        limited to the actual damages resulting from the breach 
        of fiduciary duty and shall in no event exceed the 
        amount of compensation or payments received from such 
        investment company, or the security holders thereof, by 
        such recipient.
          (4) This subsection shall not apply to compensation 
        or payments made in connection with transactions 
        subject to section 17 of this title, or rules, 
        regulations, or orders thereunder, or to sales loads 
        for the acquisition of any security issued by a 
        registered investment company.
          (5) Any action pursuant to this subsection may be 
        brought only in an appropriate district court of the 
        United States.
          (6) No finding by a court with respect to a breach of 
        fiduciary duty under this subsection shall be made a 
        basis (A) for a finding of a violation of this title 
        for the purposes of sections 9 and 49 of this title, 
        section 15 of the Securities Exchange Act of 1934, or 
        section 203 of title II of this Act, or (B) for an 
        injunction to prohibit any person from serving in any 
        of the capacities enumerated in subsection (a) of this 
        section.
          (7) In any such action brought by a security holder 
        of a registered investment company on behalf of such 
        company--
                  (A) the complaint shall state with 
                particularity all facts establishing a breach 
                of fiduciary duty, and, if an allegation of any 
                such facts is based on information and belief, 
                the complaint shall state with particularity 
                all facts on which that belief is formed; and
                  (B) such security holder shall have the 
                burden of proving a breach of fiduciary duty by 
                clear and convincing evidence.
  (c) For the purposes of subsections (a) and (b) of this 
section, the term ``investment adviser'' includes a corporate 
or other trustee performing the functions of an investment 
adviser.

           *       *       *       *       *       *       *


                          enforcement of title

  Sec. 42. (a) The Commission may make such investigations as 
it deems necessary to determine whether any person has violated 
or is about to violate any provision of this title or of any 
rule, regulation, or order hereunder, or to determine whether 
any action in any court or any proceeding before the Commission 
shall be instituted under this title against a particular 
person or persons, or with respect to a particular transaction 
or transactions. The Commission shall permit any person to file 
with it a statement in writing, under oath or otherwise as the 
Commission shall determine, as to all the facts and 
circumstances concerning the matter to be investigated.
  (b) For the purpose of any investigation or any other 
proceeding under this title, any member of the Commission, or 
any officer thereof designated by it, is empowered to 
administer oaths and affirmations, subpena witnesses, compel 
their attendance, take evidence, and require the production of 
any books, papers, correspondence, memoranda, contracts, 
agreements, or other records which are relevant or material to 
the inquiry. Such attendance of witnesses and the production of 
any such records may be required from any place in any State or 
in any Territory or other place subject to the jurisdiction of 
the United States at any designated place of hearing.
  (c) In case of contumacy by, or refusal to obey a subpena 
issued to, any person, the Commission may invoke the aid of any 
court of the United States within the jurisdiction of which 
such investigation or proceeding is carried on, or where such 
person resides or carries on business, in requiring the 
attendance and testimony of witnesses and the production of 
books, papers, correspondence, memoranda, contracts, 
agreements, and other records. And such court may issue an 
order requiring such person to appear before the Commission or 
member or officer designated by the Commission, there to 
produce records, if so ordered, or to give testimony touching 
the matter under investigation or in question; any failure to 
obey such order of the court may be punished by such court as a 
contempt thereof. All process in any such case may be served in 
the judicial district whereof such person is an inhabitant or 
wherever he may be found. Any person who without just cause 
shall fail or refuse to attend and testify or to answer any 
lawful inquiry or to produce books, papers, correspondence, 
memoranda, contracts, agreements, or other records, if in his 
or its power so to do, in obedience to the subpena of the 
Commission, shall be guilty of a misdemeanor, and upon 
conviction shall be subject to a fine of not more than $1,000 
or to imprisonment for a term of not more than one year, or 
both.
  (d) Whenever it shall appear to the Commission that any 
person has engaged or is about to engage in any act or practice 
constituting a violation of any provision of this title, or of 
any rule, regulation, or order hereunder, it may in its 
discretion bring an action in the proper district court of the 
United States, or the proper United States court of any 
Territory or other place subject to the jurisdiction of the 
United States, to enjoin such acts or practices and to enforce 
compliance with this title or any rule, regulation, or order 
hereunder. Upon a showing that such person has engaged or is 
about to engage in any such act or practice, a permanent or 
temporary injunction or decree or restraining order shall be 
granted without bond. In any proceeding under this subsection 
to enforce compliance with section 7, the court as a court of 
equity may, to the extent it deems necessary or appropriate, 
take exclusive jurisdiction and possession of the investment 
company or companies involved and the books, records, and 
assets thereof, wherever located; and the court shall have 
jurisdiction to appoint a trustee, who with the approval of the 
court shall have power to dispose of any or all of such assets, 
subject to such terms and conditions as the court may 
prescribe. The Commission may transmit such evidence as may be 
available concerning any violation of the provisions of this 
title, or of any rule, regulation, or order thereunder, to the 
Attorney General, who, in his discretion, may institute the 
appropriate criminal proceedings under this title.
  (e) Money Penalties in Civil Actions.--
          (1) Authority of commission.--Whenever it shall 
        appear to the Commission that any person has violated 
        any provision of this title, the rules or regulations 
        thereunder, a Federal court injunction or a bar 
        obtained or entered by the Commission under this title, 
        or a cease-and-desist order entered by the Commission 
        pursuant to section 9(f) of this title, the Commission 
        may bring an action in a United States district court 
        to seek, and the court shall have jurisdiction to 
        impose, upon a proper showing, a civil penalty to be 
        paid by the person who committed such violation.
          (2) Amount of penalty.--
                  (A) First tier.--The amount of the penalty 
                shall be determined by the court in light of 
                the facts and circumstances. For each 
                violation, the amount of the penalty shall not 
                exceed the greater of (i) [$5,000] $10,000 for 
                a natural person or [$50,000] $100,000 for any 
                other person, or (ii) the gross amount of 
                pecuniary gain to such defendant as a result of 
                the violation.
                  (B) Second tier.--Notwithstanding 
                subparagraph (A), the amount of penalty for 
                each such violation shall not exceed the 
                greater of (i) [$50,000] $100,000 for a natural 
                person or [$250,000] $500,000 for any other 
                person, or (ii) the gross amount of pecuniary 
                gain to such defendant as a result of the 
                violation, if the violation described in 
                paragraph (1) involved fraud, deceit, 
                manipulation, or deliberate or reckless 
                disregard of a regulatory requirement.
                  [(C) Third tier.--Notwithstanding 
                subparagraphs (A) and (B), the amount of 
                penalty for each such violation shall not 
                exceed the greater of (i) $100,000 for a 
                natural person or $500,000 for any other 
                person, or (ii) the gross amount of pecuniary 
                gain to such defendant as a result of the 
                violation, if--
                          [(I) the violation described in 
                        paragraph (1) involved fraud, deceit, 
                        manipulation, or deliberate or reckless 
                        disregard of a regulatory requirement; 
                        and
                          [(II) such violation directly or 
                        indirectly resulted in substantial 
                        losses or created a significant risk of 
                        substantial losses to other persons.]
                  (C) Third tier.--
                          (i) In general.--Notwithstanding 
                        subparagraphs (A) and (B), the amount 
                        of penalty for each such violation 
                        shall not exceed the amount specified 
                        in clause (ii) if--
                                  (I) the violation described 
                                in paragraph (1) involved 
                                fraud, deceit, manipulation, or 
                                deliberate or reckless 
                                disregard of a regulatory 
                                requirement; and
                                  (II) such violation directly 
                                or indirectly resulted in 
                                substantial losses or created a 
                                significant risk of substantial 
                                losses to other persons.
                          (ii) Maximum amount of penalty.--The 
                        amount referred to in clause (i) is the 
                        greatest of--
                                  (I) $300,000 for a natural 
                                person or $1,450,000 for any 
                                other person;
                                  (II) 3 times the gross amount 
                                of pecuniary gain to such 
                                defendant as a result of the 
                                violation; or
                                  (III) the amount of losses 
                                incurred by victims as a result 
                                of the violation.
                  (D) Fourth tier.--Notwithstanding 
                subparagraphs (A), (B), and (C), the maximum 
                amount of penalty for each such violation shall 
                be 3 times the otherwise applicable amount in 
                such subparagraphs if, within the 5-year period 
                preceding such violation, the defendant was 
                criminally convicted for securities fraud or 
                became subject to a judgment or order imposing 
                monetary, equitable, or administrative relief 
                in any Commission action alleging fraud by that 
                defendant.
          (3) Procedures for collection.--
                  (A) Payment of penalty to treasury.--A 
                penalty imposed under this section shall be 
                payable into the Treasury of the United States, 
                except as otherwise provided in section 308 of 
                the Sarbanes-Oxley Act of 2002 and section 21F 
                of the Securities Exchange Act of 1934.
                  (B) Collection of penalties.--If a person 
                upon whom such a penalty is imposed shall fail 
                to pay such penalty within the time prescribed 
                in the court's order, the Commission may refer 
                the matter to the Attorney General who shall 
                recover such penalty by action in the 
                appropriate United States district court.
                  (C) Remedy not exclusive.--The actions 
                authorized by this subsection may be brought in 
                addition to any other action that the 
                Commission or the Attorney General is entitled 
                to bring.
                  (D) Jurisdiction and venue.--For purposes of 
                section 44 of this title, actions under this 
                paragraph shall be actions to enforce a 
                liability or a duty created by this title.
          [(4) Special provisions relating to a violation of a 
        cease-and-desist order.--In an action to enforce a 
        cease-and-desist order entered by the Commission 
        pursuant to section 9(f), each separate violation of 
        such order shall be a separate offense, except that in 
        the case of a violation through a continuing failure to 
        comply with the order, each day of the failure to 
        comply shall be deemed a separate offense.]
          (4) Special provisions relating to a violation of an 
        injunction or certain orders.--
                  (A) In general.--Each separate violation of 
                an injunction or order described in 
                subparagraph (B) shall be a separate offense, 
                except that in the case of a violation through 
                a continuing failure to comply with such 
                injunction or order, each day of the failure to 
                comply with the injunction or order shall be 
                deemed a separate offense.
                  (B) Injunctions and orders.--Subparagraph (A) 
                shall apply with respect to any action to 
                enforce--
                          (i) a Federal court injunction 
                        obtained pursuant to this title;
                          (ii) an order entered or obtained by 
                        the Commission pursuant to this title 
                        that bars, suspends, places limitations 
                        on the activities or functions of, or 
                        prohibits the activities of, a person; 
                        or
                          (iii) a cease-and-desist order 
                        entered by the Commission pursuant to 
                        section 9(f).

           *       *       *       *       *       *       *


       functions and activities of business development companies

  Sec. 55. (a) It shall be unlawful for a business development 
company to acquire any assets (other than those described in 
paragraphs (1) through (7) of this subsection) unless, at the 
time the acquisition is made, assets described in paragraphs 
(1) through (6) below represent at least 70 per centum of the 
value of its total assets (other than assets described in 
paragraph (7) below), provided that no more 15 than 50 percent 
of its total assets are assets described in section 3(c):
          (1) securities purchased, in transactions not 
        involving any public offering or in such other 
        transactions as the Commission may, by rule, prescribe 
        if it finds that enforcement of this title and of the 
        Securities Act of 1933 with respect to such 
        transactions is not necessary in the public interest or 
        for the protection of investors by reason of the small 
        amount, or the limited nature of the public offering, 
        involved in such transactions--
                  (A) from the issuer of such securities, which 
                issuer is an eligible portfolio company, from 
                any person who is, or who within the preceding 
                thirteen months has been, an affiliated person 
                of such eligible portfolio company, or from any 
                other person, subject to such rules and 
                regulations as the Commission may prescribe as 
                necessary or appropriate in the public interest 
                or for the protection of investors; or
                  (B) from the issuer of such securities, which 
                issuer is described in section 2(a)(46) (A) and 
                (B) but is not an eligible portfolio company 
                because it has issued a class of securities 
                with respect to which a member of a national 
                securities exchange, broker, or dealer may 
                extend or maintain credit to or for a customer 
                pursuant to rules or regulations adopted by the 
                Board of Governors of the Federal Reserve 
                System under section 7 of the Securities 
                Exchange Act of 1934, or from any person who is 
                an officer or employee of such issuer, if--
                          (i) at the time of the purchase, the 
                        business development company owns at 
                        least 50 per centum of--
                                  (I) the greatest number of 
                                equity securities of such 
                                issuer and securities 
                                convertible into or 
                                exchangeable for such 
                                securities; and
                                  (II) the greatest amount of 
                                debt securities of such issuer,
                        held by such business development 
                        company at any point in time during the 
                        period when such issuer was an eligible 
                        portfolio company, except that options, 
                        warrants, and similar securities which 
                        have by their terms expired and debt 
                        securities which have been converted, 
                        or repaid or prepaid in the ordinary 
                        course of business or incident to a 
                        public offering of securities of such 
                        issuer, shall not be considered to have 
                        been held by such business development 
                        company for purposes of this 
                        requirement; and
                          (ii) the business development company 
                        is one of the 20 largest holders of 
                        record of such issuer's outstanding 
                        voting securities;
          (2) securities of any eligible portfolio company with 
        respect to which the business development company 
        satisfies the requirements of section 2(a)(46)(C)(ii);
          (3) securities purchased in transactions not 
        involving any public offering from an issuer described 
        in sections 2(a)(46) (A) and (B) or from a person who 
        is, or who within the preceding thirteen months has 
        been, an affiliated person of such issuer, or from any 
        person in transactions incident thereto, if such 
        securities were--
                  (A) issued by an issuer that is, or was 
                immediately prior to the purchase of its 
                securities by the business development company, 
                in bankruptcy proceedings, subject to 
                reorganization under the supervision of a court 
                of competent jurisdiction, or subject to a plan 
                or arrangement resulting from such bankruptcy 
                proceedings or reorganization;
                  (B) issued by an issuer pursuant to or in 
                consummation of such a plan or arrangement; or
                  (C) issued by an issuer that, immediately 
                prior to the purchase of such issuer's 
                securities by the business development company, 
                was not in bankruptcy proceedings but was 
                unable to meet its obligations as they came due 
                without material assistance other than 
                conventional lending or financing arrangements;
          (4) securities of eligible portfolio companies 
        purchased from any person in transactions not involving 
        any public offering, if there is no ready market for 
        such securities and if immediately prior to such 
        purchase the business development company owns at least 
        60 per centum of the outstanding equity securities of 
        such issuer (giving effect to all securities presently 
        convertible into or exchangeable for equity securities 
        of such issuer as if such securities were so converted 
        or exchanged);
          (5) securities received in exchange for or 
        distributed on or with respect to securities described 
        in paragraphs (1) through (4) of this subsection, or 
        pursuant to the exercise of options, warrants, or 
        rights relating to securities described in such 
        paragraphs;
          (6) cash, cash items, Government securities, or high 
        quality debt securities maturing in one year or less 
        from the time of investment in such high quality debt 
        securities; and
          (7) office furniture and equipment, interests in real 
        estate and leasehold improvements and facilities 
        maintained to conduct the business operations of the 
        business development company, deferred organization and 
        operating expenses, and other noninvestment assets 
        necessary and appropriate to its operations as a 
        business development company, including notes of 
        indebtedness of directors, officers, employees, and 
        general partners held by a business development company 
        as payment for securities of such company issued in 
        connection with an executive compensation plan 
        described in section 57(j).
  (b) For purposes of this section, the value of a business 
development company's assets shall be determined as of the date 
of the most recent financial statements filed by such company 
with the Commission pursuant to section 13 of the Securities 
Exchange Act of 1934, and shall be determined no less 
frequently than annually.

           *       *       *       *       *       *       *


                  transactions with certain affiliates

  Sec. 57. (a) It shall be unlawful for any person who is 
related to a business development company in a manner described 
in subsection (b) of this section, acting as principal--
          (1) knowingly to sell any security or other property 
        to such business development company or to any company 
        controlled by such business development company, unless 
        such sale involves solely (A) securities of which the 
        buyer is the issuer, or (B) securities of which the 
        seller is the issuer and which are part of a general 
        offering to the holders of a class of its securities;
          (2) knowingly to purchase from such business 
        development company or from any company controlled by 
        such business development company, any security or 
        other property (except securities of which the seller 
        is the issuer);
          (3) knowingly to borrow money or other property from 
        such business development company or from any company 
        controlled by such business development company (unless 
        the borrower is controlled by the lender), except as 
        permitted in section 21(b) or section 62; or
          (4) knowingly to effect any transaction in which such 
        business development company or a company controlled by 
        such business development company is a joint or a joint 
        and several participant with such person in 
        contravention of such rules and regulations as the 
        Commission may prescribe for the purpose of limiting or 
        preventing participation by such business development 
        company or controlled company on a basis less 
        advantageous than that of such person, except that 
        nothing contained in this paragraph shall be deemed to 
        preclude any person from acting as manager of any 
        underwriting syndicate or other group in which such 
        business development company or controlled company is a 
        participant and receiving compensation therefor.
  (b) The provisions of subsection (a) of this section shall 
apply to the following persons:
          (1) Any director, officer, employee, or member of an 
        advisory board of a business development company or any 
        person (other than the business development company 
        itself) who is, within the meaning of section 
        2(a)(3)(C) of this title, an affiliated person of any 
        such person specified in this paragraph.
          (2) Any investment adviser or promoter of, general 
        partner in, principal underwriter for, or person 
        directly or indirectly either controlling, controlled 
        by, or under common control with, a business 
        development company (except the business development 
        company itself and any person who, if it were not 
        directly or indirectly controlled by the business 
        development company, would not be directly or 
        indirectly under the control of a person who controls 
        the business development company), or any person who 
        is, within the meaning of section 2(a)(3) (C) or (D), 
        an affiliated person of any such person specified in 
        this paragraph.
  (c) Notwithstanding paragraphs (1), (2), and (3) of 
subsection (a), any person may file with the Commission an 
application for an order exempting a proposed transaction of 
the applicant from one or more provisions of such paragraphs. 
The Commission shall grant such application and issue such 
order of exemption if evidence establishes that--
          (1) the terms of the proposed transaction, including 
        the consideration to be paid or received, are 
        reasonable and fair and do not involve overreaching of 
        the business development company or its shareholders or 
        partners on the part of any person concerned;
          (2) the proposed transaction is consistent with the 
        policy of the business development company as recited 
        in the filings made by such company with the Commission 
        under the Securities Act of 1933, its registration 
        statement and reports filed under the Securities 
        Exchange Act of 1934, and its reports to shareholders 
        or partners; and
          (3) the proposed transaction is consistent with the 
        general purposes of this title.
  (d) It shall be unlawful for any person who is related to a 
business development company in the manner described in 
subsection (e) of this section and who is not subject to the 
prohibitions of subsection (a) of this section, acting as 
principal--
          (1) knowingly to sell any security or other property 
        to such business development company or to any company 
        controlled by such business development company, unless 
        such sale involves solely (A) securities of which the 
        buyer is the issuer, or (B) securities of which the 
        seller is the issuer and which are part of a general 
        offering to the holders of a class of its securities;
          (2) knowingly to purchase from such business 
        development company or from any company controlled by 
        such business development company, any security or 
        other property (except securities of which the seller 
        is the issuer);
          (3) knowingly to borrow money or other property from 
        such business development company or from any company 
        controlled by such business development company (unless 
        the borrower is controlled by the lender), except as 
        permitted in section 21(b); or
          (4) knowingly to effect any transaction in which such 
        business development company or a company controlled by 
        such business development company is a joint or a joint 
        and several participant with such affiliated person in 
        contravention of such rules and regulations as the 
        Commission may prescribe for the purpose of limiting or 
        preventing participation by such business development 
        company or controlled company on a basis less 
        advantageous than that of such affiliated person, 
        except that nothing contained in this paragraph shall 
        be deemed to preclude any person from acting as manager 
        of any underwriting syndicate or other group in which 
        such business development company or controlled company 
        is a participant and receiving compensation therefor.
  (e) The provisions of subsection (d) of this section shall 
apply to the following persons:
          (1) Any person (A) who is, within the meaning of 
        section 2(a)(3)(A), an affiliated person of a business 
        development company, (B) who is an executive officer or 
        a director of, or general partner in, any such 
        affiliated person, or (C) who directly or indirectly 
        either controls, is controlled by, or is under common 
        control with, such affiliated person.
          (2) Any person who is an affiliated person of a 
        director, officer, employee, investment adviser, member 
        of an advisory board or promoter of, principal 
        underwriter for, general partner in, or an affiliated 
        person of any person directly or indirectly either 
        controlling or under common control with a business 
        development company (except the business development 
        company itself and any person who, if it were not 
        directly or indirectly controlled by the business 
        development company, would not be directly or 
        indirectly under the control of a person who controls 
        the business development company).
For purposes of this subsection, the term ``executive officer'' 
means the president, secretary, treasurer, any vice president 
in charge of a principal business function, and any other 
person who performs similar policymaking functions.
  (f) Notwithstanding subsection (d) of this section, a person 
described in subsection (e) may engage in a proposed 
transaction described in subsection (d) if such proposed 
transaction is approved by the required majority (as defined in 
subsection (o)) of the directors of or general partners in the 
business development company on the basis that--
          (1) the terms thereof, including the consideration to 
        be paid or received, are reasonable and fair to the 
        shareholders or partners of the business development 
        company and do not involve overreaching of such company 
        or its shareholders or partners on the part of any 
        person concerned;
          (2) the proposed transaction is consistent with the 
        interests of the shareholders or partners of the 
        business development company and is consistent with the 
        policy of such company as recited in filings made by 
        such company with the Commission under the Securities 
        Act of 1933, its registration statement and reports 
        filed under the Securities Exchange Act of 1934, and 
        its reports to shareholders or partners; and
          (3) the directors or general partners record in their 
        minutes and preserve in their records, for such periods 
        as if such records were required to be maintained 
        pursuant to section 31(a), a description of such 
        transaction, their findings, the information or 
        materials upon which their findings were based, and the 
        basis therefor.
  (g) Notwithstanding subsection (a) or (d), a person may, in 
the ordinary course of business, sell to or purchase from any 
company merchandise or may enter into a lessor-lessee 
relationship with any person and furnish the services incident 
thereto.
  (h) The directors of or general partners in any business 
development company shall adopt, and periodically review and 
update as appropriate, procedures reasonably designed to ensure 
that reasonable inquiry is made, prior to the consummation of 
any transaction in which such business development company or a 
company controlled by such business development company 
proposes to participate, with respect to the possible 
involvement in the transaction of persons described in 
subsections (b) and (e) of this section.
  (i) Until the adoption by the Commission of rules or 
regulations under subsections (a) and (d) of this section, the 
rules and regulations of the Commission under subsections (a) 
and (d) of section 17 applicable to registered closed-end 
investment companies shall be deemed to apply to transactions 
subject to subsections (a) and (d) of this section. Any rules 
or regulations adopted by the Commission to implement this 
section shall be no more restrictive than the rules or 
regulations adopted by the Commission under subsections (a) and 
(d) of section 17 that are applicable to all registered closed-
end investment companies.
  (j) Notwithstanding subsections (a) and (d) of this section, 
any director, officer, or employee of, or general partner in, a 
business development company may--
          (1) acquire warrants, options, and rights to purchase 
        voting securities of such business development company, 
        and securities issued upon the exercise or conversion 
        thereof, pursuant to an executive compensation plan 
        offered by such company which meets the requirements of 
        [section 61(a)(3)(B)] section 61(a)(4)(B); and
          (2) borrow money from such business development 
        company for the purpose of purchasing securities issued 
        by such company pursuant to an executive compensation 
        plan, if each such loan--
                  (A) has a term of not more than ten years;
                  (B) becomes due within a reasonable time, not 
                to exceed sixty days, after the termination of 
                such person's employment or service;
                  (C) bears interest at no less than the 
                prevailing rate applicable to 90-day United 
                States Treasury bills at the time the loan is 
                made;
                  (D) at all times is fully collateralized 
                (such collateral may include any securities 
                issued by such business development company); 
                and
                  (E)(i) in the case of a loan to any officer 
                or employee of such business development 
                company (including any officer or employee who 
                is also a director of such company), is 
                approved by the required majority (as defined 
                in subsection (o)) of the directors of or 
                general partners in such company on the basis 
                that the loan is in the best interests of such 
                company and its shareholders or partners; or
                  (ii) in the case of a loan to any director of 
                such business development company who is not 
                also an officer or employee of such company, or 
                to any general partner in such company, is 
                approved by order of the Commission, upon 
                application, on the basis that the terms of the 
                loan are fair and reasonable and do not involve 
                overreaching of such company or its 
                shareholders or partners.
  (k) It shall be unlawful for any person described in 
subsection (l)--
          (1) acting as agent, to accept from any source any 
        compensation (other than a regular salary or wages from 
        the business development company) for the purchase or 
        sale of any property to or for such business 
        development company or any controlled company thereof, 
        except in the course of such person's business as an 
        underwriter or broker; or
          (2) acting as broker, in connection with the sale of 
        securities to or by the business development company or 
        any controlled company thereof, to receive from any 
        source a commission, fee, or other remuneration for 
        effecting such transaction which exceeds--
                  (A) the usual and customary broker's 
                commission if the sale is effected on a 
                securities exchange;
                  (B) 2 per centum of the sales price if the 
                sale is effected in connection with a secondary 
                distribution of such securities; or
                  (C) 1 per centum of the purchase or sale 
                price of such securities if the sale is 
                otherwise effected,
unless the Commission, by rules and regulations or order in the 
public interest and consistent with the protection of 
investors, permits a larger commission.
  (l) The provisions of subsection (k) of this section shall 
apply to the following persons:
          (1) Any affiliated person of a business development 
        company.
          (2)(A) Any person who is, within the meaning of 
        section 2(a)(3) (B), (C), or (D), an affiliated person 
        of any director, officer, employee, or member of an 
        advisory board of the business development company.
          (B) Any person who is, within the meaning of section 
        2(a)(3) (A), (B), (C), or (D), an affiliated person of 
        any investment adviser of, general partner in, or 
        person directly or indirectly either controlling, 
        controlled by, or under common control with, the 
        business development company.
          (C) Any person who is, within the meaning of section 
        2(a)(3)(C), an affiliated person of any person who is 
        an affiliated person of the business development 
        company within the meaning of section 2(a)(3)(A).
  (m) For purposes of subsections (a) and (d), a person who is 
a director, officer, or employee of a party to a transaction 
and who receives his usual and ordinary fee or salary for usual 
and customary services as a director, officer, or employee from 
such party shall not be deemed to have a financial interest or 
to participate in the transaction solely by reason of his 
receipt of such fee or salary.
  (n)(1) Notwithstanding subsection (a)(4) of this section, a 
business development company may establish and maintain a 
profit-sharing plan for its directors, officers, employees, and 
general partners and such directors, officers, employees, and 
general partners may participate in such profit-sharing plan, 
if--
          (A)(i) in the case of a profit-sharing plan for 
        officers and employees of the business development 
        company (including any officer or employee who is also 
        a director of such company), such profit-sharing plan 
        is approved by the required majority (as defined in 
        subsection (o)) of the directors of or general partners 
        in such company on the basis that such plan is 
        reasonable and fair to the shareholders or partners of 
        such company, does not involve overreaching of such 
        company or its shareholders or partners on the part of 
        any person concerned, and is consistent with the 
        interests of the shareholders or partners of such 
        company; or
          (ii) in the case of a profit-sharing plan which 
        includes one or more directors of the business 
        development company who are not also officers or 
        employees of such company, or one or more general 
        partners in such company, such profit-sharing plan is 
        approved by order of the Commission, upon application, 
        on the basis that such plan is reasonable and fair to 
        the shareholders or partners of such company, does not 
        involve overreaching of such company or its 
        shareholders or partners on the part of any person 
        concerned, and is consistent with the interests of the 
        shareholders or partners of such company; and
          (B) the aggregate amount of benefits which would be 
        paid or accrued under such plan shall not exceed 20 per 
        centum of the business development company's net income 
        after taxes in any fiscal year.
  (2) This subsection may not be used where the business 
development company has outstanding any stock option, warrant, 
or right issued as part of an executive compensation plan, 
including a plan pursuant to [section 61(a)(3)(B)] section 
61(a)(4)(B), or has an investment adviser registered or 
required to be registered under title II of this Act.
  (o) The term ``required majority'', when used with respect to 
the approval of a proposed transaction, plan, or arrangement, 
means both a majority of a business development company's 
directors or general partners who have no financial interest in 
such transaction, plan, or arrangement and a majority of such 
directors or general partners who are not interested persons of 
such company.

           *       *       *       *       *       *       *


       functions and activities of business development companies

  Sec. 60. [Notwithstanding] (a) Notwithstanding the exemption 
set forth in section 6(f), section 12 shall apply to a business 
development company to the same extent as if it were a 
registered closed-end investment company, [except that the 
Commission shall not] except that--
          (1) section 12 shall not apply to the purchasing, 
        otherwise acquiring, or holding by a business 
        development company of any security issued by, or any 
        other interest in the business of, any person who is an 
        investment adviser registered under title II of this 
        Act, who is an investment adviser to an investment 
        company, or who is an eligible portfolio company; and
          (2) the Commission shall not prescribe any rule, 
        regulation, or order pursuant to section 12(a)(1) 
        governing the circumstances in which a business 
        development company may borrow from a bank in order to 
        purchase any security.
  (b) Nothing in this section shall prevent the Commission from 
issuing rules to address potential conflicts of interest 
between business development companies and investment advisers.

                           capital structure

  Sec. 61. (a) Notwithstanding the exemption set forth in 
section 6(f), section 18 shall apply to a business development 
company to the same extent as if it were a registered closed-
end investment company, except as follows:
          [(1) The asset coverage requirements of section 
        18(a)(1) (A) and (B) applicable to business development 
        companies shall be 200 per centum.]
          (1) Except as provided in paragraph (2), the asset 
        coverage requirements of subparagraphs (A) and (B) of 
        section 18(a)(1) (and any related rule promulgated 
        under this Act) applicable to business development 
        companies shall be 200 percent.
          (2) The asset coverage requirements of subparagraphs 
        (A) and (B) of section 18(a)(1) and of subparagraphs 
        (A) and (B) of section 18(a)(2) (and any related rule 
        promulgated under this Act) applicable to a business 
        development company shall be 150 percent if--
                  (A) within five business days of the approval 
                of the adoption of the asset coverage 
                requirements described in clause (ii), the 
                business development company discloses such 
                approval and the date of its effectiveness in a 
                Form 8-K filed with the Commission and in a 
                notice on its website and discloses in its 
                periodic filings made under section 13 of the 
                Securities and Exchange Act of 1934 (15 U.S.C. 
                78m)--
                          (i) the aggregate value of the senior 
                        securities issued by such company and 
                        the asset coverage percentage as of the 
                        date of such company's most recent 
                        financial statements; and
                          (ii) that such company has adopted 
                        the asset coverage requirements of this 
                        subparagraph and the effective date of 
                        such requirements;
                  (B) with respect to a business development 
                company that issues equity securities that are 
                registered on a national securities exchange, 
                the periodic filings of the company under 
                section 13(a) of the Securities Exchange Act of 
                1934 (15 U.S.C. 78m) include disclosures 
                reasonably designed to ensure that shareholders 
                are informed of--
                          (i) the amount of indebtedness and 
                        asset coverage ratio of the company, 
                        determined as of the date of the 
                        financial statements of the company 
                        dated on or most recently before the 
                        date of such filing; and
                          (ii) the principal risk factors 
                        associated with such indebtedness, to 
                        the extent such risk is incurred by the 
                        company; and
                  (C)(i) the application of this paragraph to 
                the company is approved by the required 
                majority (as defined in section 57(o)) of the 
                directors of or general partners of such 
                company who are not interested persons of the 
                business development company, which application 
                shall become effective on the date that is 1 
                year after the date of the approval, and, with 
                respect to a business development company that 
                issues equity securities that are not 
                registered on a national securities exchange, 
                the company extends, to each person who is a 
                shareholder as of the date of the approval, an 
                offer to repurchase the equity securities held 
                by such person as of such approval date, with 
                25 percent of such securities to be repurchased 
                in each of the four quarters following such 
                approval date; or
                  (ii) the company obtains, at a special or 
                annual meeting of shareholders or partners at 
                which a quorum is present, the approval of more 
                than 50 percent of the votes cast of the 
                application of this paragraph to the company, 
                which application shall become effective on the 
                date immediately after the date of the 
                approval.
          [(2)] (3) Notwithstanding section 18(c), a business 
        development company may issue more than one class of 
        senior security representing indebtedness or which is a 
        stock.
          [(3)] (4) Notwithstanding section 18(d)--
                  (A) a business development company may issue 
                warrants, options, or rights to subscribe or 
                convert to [voting] securities of such company, 
                accompanied by securities, if--
                          (i) such warrants, options, or rights 
                        expire by their terms within ten years;
                          (ii) such warrants, options, or 
                        rights are not separately transferable 
                        unless no class of such warrants, 
                        options, or rights and the securities 
                        accompanying them has been publicly 
                        distributed;
                          [(iii) the exercise or conversion 
                        price is not less than the current 
                        market value at the date of issuance, 
                        or if no such market value exists, the 
                        current net asset value of such voting 
                        securities; and]
                          (iii) the exercise or conversion 
                        price at the date of issuance of such 
                        warrants, options, or rights is not 
                        less than--
                                  (I) the market value of the 
                                securities issuable upon the 
                                exercise of such warrants, 
                                options, or rights at the date 
                                of issuance of such warrants, 
                                options, or rights; or
                                  (II) if no such market value 
                                exists, the net asset value of 
                                the securities issuable upon 
                                the exercise of such warrants, 
                                options, or rights at the date 
                                of issuance of such warrants, 
                                options, or rights; and
                          (iv) the proposal to issue such 
                        securities is authorized by the 
                        shareholders or partners of such 
                        business development company, and such 
                        issuance is approved by the required 
                        majority (as defined in section 57(o)) 
                        of the directors of or general partners 
                        in such company on the basis that such 
                        issuance is in the best interests of 
                        such company and its shareholders or 
                        partners;
                  (B) a business development company may issue, 
                to its directors, officers, employees, and 
                general partners, warrants, options, and rights 
                to purchase voting securities of such company 
                pursuant to an executive compensation plan, 
                if--
                          (i)(I) in the case of warrants, 
                        options, or rights issued to any 
                        officer or employee of such business 
                        development company (including any 
                        officer or employee who is also a 
                        director of such company), such 
                        securities satisfy the conditions in 
                        clauses (i), (iii), and (iv) of 
                        subparagraph (A); or (II) in the case 
                        of warrants, options, or rights issued 
                        to any director of such business 
                        development company who is not also an 
                        officer or employee of such company, or 
                        to any general partner in such company, 
                        the proposal to issue such securities 
                        satisfies the conditions in clauses (i) 
                        and (iii) of subparagraph (A), is 
                        authorized by the shareholders or 
                        partners of such company, and is 
                        approved by order of the Commission, 
                        upon application, on the basis that the 
                        terms of the proposal are fair and 
                        reasonable and do not involve 
                        overreaching of such company or its 
                        shareholders or partners;
                          (ii) such securities are not 
                        transferable except for disposition by 
                        gift, will, or intestacy;
                          (iii) no investment adviser of such 
                        business development company receives 
                        any compensation described in section 
                        205(a)(1) of title II of this Act, 
                        except to the extent permitted by 
                        paragraph (1) or (2) of section 205(b); 
                        and
                          (iv) such business development 
                        company does not have a profit-sharing 
                        plan described in section 57(n); and
                  (C) a business development company may issue 
                warrants, options, or rights to subscribe to, 
                convert to, or purchase voting securities not 
                accompanied by securities, if--
                          (i) such warrants, options, or rights 
                        satisfy the conditions in clauses (i) 
                        and (iii) of subparagraph (A); and
                          (ii) the proposal to issue such 
                        warrants, options, or rights is 
                        authorized by the shareholders or 
                        partners of such business development 
                        company, and such issuance is approved 
                        by the required majority (as defined in 
                        section 57(o)) of the directors of or 
                        general partners in such company on the 
                        basis that such issuance is in the best 
                        interests of the company and its 
                        shareholders or partners.
        Notwithstanding this paragraph, the amount of voting 
        securities that would result from the exercise of all 
        outstanding warrants, options, and rights at the time 
        of issuance shall not exceed 25 per centum of the 
        outstanding voting securities of the business 
        development company, except that if the amount of 
        voting securities that would result from the exercise 
        of all outstanding warrants, options, and rights issued 
        to such company's directors, officers, employees, and 
        general partners pursuant to any executive compensation 
        plan meeting the requirements of subparagraph (B) of 
        this paragraph would exceed 15 per centum of the 
        outstanding voting securities of such company, then the 
        total amount of voting securities that would result 
        from the exercise of all outstanding warrants, options, 
        and rights at the time of issuance shall not exceed 20 
        per centum of the outstanding voting securities of such 
        company.
          [(4)] (5) For purposes of measuring the asset 
        coverage requirements of section 18(a), a senior 
        security created by the guarantee by a business 
        development company of indebtedness issued by another 
        company shall be the amount of the maximum potential 
        liability less the fair market value of the net 
        unencumbered assets (plus the indebtedness which has 
        been guaranteed) available in the borrowing company 
        whose debts have been guaranteed, except that a 
        guarantee issued by a business development company of 
        indebtedness issued by a company which is a wholly-
        owned subsidiary of the business development company 
        and is licensed as a small business investment company 
        under the Small Business Investment Act of 1958 shall 
        not be deemed to be a senior security of such business 
        development company for purposes of section 18(a) if 
        the amount of the indebtedness at the time of its 
        issuance by the borrowing company is itself taken fully 
        into account as a liability by such business 
        development company, as if it were issued by such 
        business development company, in determining whether 
        such business development company, at that time, 
        satisfies the asset coverage requirements of section 
        18(a).
          (6)(A) Except as provided in subparagraph (B), the 
        following shall not apply to a business development 
        company:
                  (i) Subparagraphs (C) and (D) of section 
                18(a)(2).
                  (ii) Subparagraph (E) of section 18(a)(2), to 
                the extent such subparagraph requires any 
                priority over any other class of stock as to 
                distribution of assets upon liquidation.
                  (iii) With respect to a senior security which 
                is a stock, subsections (c) and (i) of section 
                18.
          (B) Subparagraph (A) shall not apply with respect to 
        preferred stock issued to a person who is not known by 
        the company to be a qualified institutional buyer (as 
        defined in section 3(a) of the Securities Exchange Act 
        of 1934).
  (b) A business development company shall comply with the 
provisions of this section at the time it becomes subject to 
sections 55 through 65, as if it were issuing a security of 
each class which it has outstanding at such time.

           *       *       *       *       *       *       *


               distribution and repurchase of securities

  Sec. 63. Notwithstanding the exemption set forth in section 
6(f), section 23 shall apply to a business development company 
to the same extent as if it were a registered closed-end 
investment company, except as follows:
          (1) The prohibitions of section 23(a)(2) shall not 
        apply to any company which (A) is a wholly-owned 
        subsidiary of, or directly or indirectly controlled by, 
        a business development company, and (B) immediately 
        after the issuance of any of its securities for 
        property other than cash or securities, will not be an 
        investment company within the meaning of section 3(a).
          (2) Notwithstanding the provisions of section 23(b), 
        a business development company may sell any common 
        stock of which it is the issuer at a price below the 
        current net asset value of such stock, and may sell 
        warrants, options, or rights to acquire any such common 
        stock at a price below the current net asset value of 
        such stock, if--
                  (A) the holders of a majority of such 
                business development company's outstanding 
                voting securities, and the holders of a 
                majority of such company's outstanding voting 
                securities that are not affiliated persons of 
                such company, approved such company's policy 
                and practice of making such sales of securities 
                at the last annual meeting of shareholders or 
                partners within one year immediately prior to 
                any such sale, except that the shareholder 
                approval requirements of this subparagraph 
                shall not apply to the initial public offering 
                by a business development company of its 
                securities;
                  (B) a required majority (as defined in 
                section 57(o)) of the directors of or general 
                partners in such business development company 
                have determined that any such sale would be in 
                the best interests of such company and its 
                shareholders or partners; and
                  (C) a required majority (as defined in 
                section 57(o)) of the directors of or general 
                partners in such business development company, 
                in consultation with the underwriter or 
                underwriters of the offering if it is to be 
                underwritten, have determined in good faith, 
                and as of a time immediately prior to the first 
                solicitation by or on behalf of such company of 
                firm commitments to purchase such securities or 
                immediately prior to the issuance of such 
                securities, that the price at which such 
                securities are to be sold is not less than a 
                price which closely approximates the market 
                value of those securities, less any 
                distributing commission or discount.
          (3) A business development company may sell any 
        common stock of which it is the issuer at a price below 
        the current net asset value of such stock upon the 
        exercise of any warrant, option, or right issued in 
        accordance with [section 61(a)(3)] section 61(a)(4).

           *       *       *       *       *       *       *

                              ----------                              


                    INVESTMENT ADVISERS ACT OF 1940


TITLE II--INVESTMENT ADVISERS

           *       *       *       *       *       *       *



                  registration of investment advisers

  Sec. 203. (a) Except as provided in subsection (b) and 
section 203A, it shall be unlawful for any investment adviser, 
unless registered under this section, to make use of the mails 
or any means or instrumentality of interstate commerce in 
connection with his or its business as an investment adviser.
  (b) The provisions of subsection (a) shall not apply to--
          (1) any investment adviser, other than an investment 
        adviser who acts as an investment adviser to any 
        private fund, all of whose clients are residents of the 
        State within which such investment adviser maintains 
        his or its principal office and place of business, and 
        who does not furnish advice or issue analyses or 
        reports with respect to securities listed or admitted 
        to unlisted trading privileges on any national 
        securities exchange;
          (2) any investment adviser whose only clients are 
        insurance companies;
          (3) any investment adviser that is a foreign private 
        adviser;
          (4) any investment adviser that is a charitable 
        organization, as defined in section 3(c)(10)(D) of the 
        Investment Company Act of 1940, or is a trustee, 
        director, officer, employee, or volunteer of such a 
        charitable organization acting within the scope of such 
        person's employment or duties with such organization, 
        whose advice, analyses, or reports are provided only to 
        one or more of the following:
                  (A) any such charitable organization;
                  (B) a fund that is excluded from the 
                definition of an investment company under 
                section 3(c)(10)(B) of the Investment Company 
                Act of 1940; or
                  (C) a trust or other donative instrument 
                described in section 3(c)(10)(B) of the 
                Investment Company Act of 1940, or the 
                trustees, administrators, settlors (or 
                potential settlors), or beneficiaries of any 
                such trust or other instrument;
          (5) any plan described in section 414(e) of the 
        Internal Revenue Code of 1986, any person or entity 
        eligible to establish and maintain such a plan under 
        the Internal Revenue Code of 1986, or any trustee, 
        director, officer, or employee of or volunteer for any 
        such plan or person, if such person or entity, acting 
        in such capacity, provides investment advice 
        exclusively to, or with respect to, any plan, person, 
        or entity or any company, account, or fund that is 
        excluded from the definition of an investment company 
        under section 3(c)(14) of the Investment Company Act of 
        1940;
          (6)(A) any investment adviser that is registered with 
        the Commodity Futures Trading Commission as a commodity 
        trading advisor whose business does not consist 
        primarily of acting as an investment adviser, as 
        defined in section 202(a)(11) of this title, and that 
        does not act as an investment adviser to--
                  (i) an investment company registered under 
                title I of this Act; or
                  (ii) a company which has elected to be a 
                business development company pursuant to 
                section 54 of title I of this Act and has not 
                withdrawn its election; or
  (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.
          (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.
  (c)(1) An investment adviser, or any person who presently 
contemplates becoming an investment adviser, may be registered 
by filing with the Commission an application for registration 
in such form and containing such of the following information 
and documents as the Commission, by rule, may prescribe as 
necessary or appropriate in the public interest or for the 
protection of investors:
          (A) the name and form of organization under which the 
        investment adviser engages or intends to engage in 
        business; the name of the State or other sovereign 
        power under which such investment adviser is organized; 
        the location of his or its principal office, principal 
        place of business, and branch offices, if any; the 
        names and addresses of his or its partners, officers, 
        directors, and persons performing similar functions or, 
        if such an investment adviser be an individual, of such 
        individual; and the number of his or its employees;
          (B) the education, the business affiliations for the 
        past ten years, and the present business affiliations 
        of such investment adviser and of his or its partners, 
        officers, directors, and persons performing similar 
        functions and of any controlling person thereof;
          (C) the nature of the business of such investment 
        adviser, including the manner of giving advice and 
        rendering analyses or reports;
          (D) a balance sheet certified by an independent 
        public accountant and other financial statements (which 
        shall, as the Commission specifies, be certified);
          (E) the nature and scope of the authority of such 
        investment adviser with respect to clients' funds and 
        accounts;
          (F) the basis or bases upon which such investment 
        adviser is compensated;
          (G) whether such investment adviser, or any person 
        associated with such investment adviser, is subject to 
        any disqualification which would be a basis for denial, 
        suspension, or revocation of registration of such 
        investment adviser under the provisions of subsection 
        (e) of this section; and
          (H) a statement as to whether the principal business 
        of such investment adviser consists or is to consist of 
        acting as investment adviser and a statement as to 
        whether a substantial part of the business of such 
        investment adviser, consists or is to consist of 
        rendering investment supervisory services.
  (2) Within forty-five days of the date of the filing of such 
application (or within such longer period as to which the 
applicant consents) the Commission shall--
          (A) by order grant such registration; or
          (B) institute proceedings to determine whether 
        registration should be denied. Such proceedings shall 
        include notice of the grounds for denial under 
        consideration and opportunity for hearing and shall be 
        concluded within one hundred twenty days of the date of 
        the filing of the application for registration. At the 
        conclusion of such proceedings the Commission, by 
        order, shall grant or deny such registration. The 
        Commission may extend the time for conclusion of such 
        proceedings for up to ninety days if it finds good 
        cause for such extension and publishes its reasons for 
        so finding or for such longer period as to which the 
        applicant consents.
The Commission shall grant such registration if the Commission 
finds that the requirements of this section are satisfied and 
that the applicant is not prohibited from registering as an 
investment adviser under section 203A. The Commission shall 
deny such registration if it does not make such a finding or if 
it finds that if the applicant were so registered, its 
registration would be subject to suspension or revocation under 
subsection (e) of this section.
  (d) Any provision of this title (other than subsection (a) of 
this section) which prohibits any act, practice, or course of 
business if the mails or any means or instrumentality of 
interstate commerce are used in connection therewith shall also 
prohibit any such act, practice, or course of business by any 
investment adviser registered pursuant to this section or any 
person acting on behalf of such an investment adviser, 
irrespective of any use of the mails or any means or 
instrumentality of interstate commerce in connection therewith.
  (e) The Commission, by order, shall censure, place 
limitations on the activities, functions, or operations of, 
suspend for a period not exceeding twelve months, or revoke the 
registration of any investment adviser if it finds, on the 
record after notice and opportunity for hearing, that such 
censure, placing of limitations, suspension, or revocation is 
in the public interest and that such investment adviser, or any 
person associated with such investment adviser, whether prior 
to or subsequent to becoming so associated--
          (1) has willfully made or caused to be made in any 
        application for registration or report required to be 
        filed with the Commission under this title, or in any 
        proceeding before the Commission with respect to 
        registration, any statement which was at the time and 
        in the light of the circumstances under which it was 
        made false or misleading with respect to any material 
        fact, or has omitted to state in any such application 
        or report any material fact which is required to be 
        stated therein.
          (2) has been convicted within ten years preceding the 
        filing of any application for registration or at any 
        time thereafter of any felony or misdemeanor or of a 
        substantially equivalent crime by a foreign court of 
        competent jurisdiction which the Commission finds--
                  (A) involves the purchase or sale of any 
                security, the taking of a false oath, the 
                making of a false report, bribery, perjury, 
                burglary, any substantially equivalent activity 
                however denominated by the laws of the relevant 
                foreign government, or conspiracy to commit any 
                such offense;
                  (B) arises out of the conduct of the business 
                of a broker, dealer, municipal securities 
                dealer, investment adviser, bank, insurance 
                company, government securities broker, 
                government securities dealer, fiduciary, 
                transfer agent, credit rating agency, foreign 
                person performing a function substantially 
                equivalent to any of the above, or entity or 
                person required to be registered under the 
                Commodity Exchange Act or any substantially 
                equivalent statute or regulation;
                  (C) involves the larceny, theft, robbery, 
                extortion, forgery, counterfeiting, fraudulent 
                concealment, embezzlement, fraudulent 
                conversion, or misappropriation of funds or 
                securities or substantially equivalent activity 
                however denominated by the laws of the relevant 
                foreign government; or
                  (D) involves the violation of section 152, 
                1341, 1342, or 1343 or chapter 25 or 47 of 
                title 18, United States Code, or a violation of 
                substantially equivalent foreign statute.
          (3) has been convicted during the 10-year period 
        preceding the date of filing of any application for 
        registration, or at any time thereafter, of--
                  (A) any crime that is punishable by 
                imprisonment for 1 or more years, and that is 
                not described in paragraph (2); or
                  (B) a substantially equivalent crime by a 
                foreign court of competent jurisdiction.
          (4) is permanently or temporarily enjoined by order, 
        judgment, or decree of any court of competent 
        jurisdiction, including any foreign court of competent 
        jurisdiction, from acting as an investment adviser, 
        underwriter, broker, dealer, municipal securities 
        dealer, government securities broker, government 
        securities dealer, transfer agent, credit rating 
        agency, foreign person performing a function 
        substantially equivalent to any of the above, or entity 
        or person required to be registered under the Commodity 
        Exchange Act or any substantially equivalent statute or 
        regulation, or as an affiliated person or employee of 
        any investment company, bank, insurance company, 
        foreign entity substantially equivalent to any of the 
        above, or entity or person required to be registered 
        under the Commodity Exchange Act or any substantially 
        equivalent statute or regulation, or from engaging in 
        or continuing any conduct or practice in connection 
        with any such activity, or in connection with the 
        purchase or sale of any security.
          (5) has willfully violated any provision of the 
        Securities Act of 1933, the Securities Exchange Act of 
        1934, the Investment Company Act of 1940, this title, 
        the Commodity Exchange Act, or the rules or regulations 
        under any such statutes or any rule of the Municipal 
        Securities Rulemaking Board, or is unable to comply 
        with any such provision.
          (6) has willfully aided, abetted, counseled, 
        commanded, induced, or procured the violation by any 
        other person of any provision of the Securities Act of 
        1933, the Securities Exchange Act of 1934, the 
        Investment Company Act of 1940, this title, the 
        Commodity Exchange Act, the rules or regulations under 
        any of such statutes, or the rules of the Municipal 
        Securities Rulemaking Board, or has failed reasonably 
        to supervise, with a view to preventing violations of 
        the provisions of such statutes, rules, and 
        regulations, another person who commits such a 
        violation, if such other person is subject to his 
        supervision. For the purposes of this paragraph no 
        person shall be deemed to have failed reasonably to 
        supervise any person, if--
                  (A) there have been established procedures, 
                and a system for applying such procedures, 
                which would reasonably be expected to prevent 
                and detect, insofar as practicable, any such 
                violation by such other person, and
                  (B) such person has reasonably discharged the 
                duties and obligations incumbent upon him by 
                reason of such procedures and system without 
                reasonable cause to believe that such 
                procedures and system were not being complied 
                with.
          (7) is subject to any order of the Commission barring 
        or suspending the right of the person to be associated 
        with an investment adviser;
          (8) has been found by a foreign financial regulatory 
        authority to have--
                  (A) made or caused to be made in any 
                application for registration or report required 
                to be filed with a foreign securities 
                authority, or in any proceeding before a 
                foreign securities authority with respect to 
                registration, any statement that was at the 
                time and in light of the circumstances under 
                which it was made false or misleading with 
                respect to any material fact, or has omitted to 
                state in any application or report to a foreign 
                securities authority any material fact that is 
                required to be stated therein;
                  (B) violated any foreign statute or 
                regulation regarding transactions in securities 
                or contracts of sale of a commodity for future 
                delivery traded on or subject to the rules of a 
                contract market or any board of trade; or
                  (C) aided, abetted, counseled, commanded, 
                induced, or procured the violation by any other 
                person of any foreign statute or regulation 
                regarding transactions in securities or 
                contracts of sale of a commodity for future 
                delivery traded on or subject to the rules of a 
                contract market or any board of trade, or has 
                been found, by the foreign finanical regulatory 
                authority, to have failed reasonably to 
                supervise, with a view to preventing violations 
                of statutory provisions, and rules and 
                regulations promulgated thereunder, another 
                person who commits such a violation, if such 
                other person is subject to his supervision; or
          (9) is subject to any final order of a State 
        securities commission (or any agency or officer 
        performing like functions), State authority that 
        supervises or examines banks, savings associations, or 
        credit unions, State insurance commission (or any 
        agency or office performing like functions), an 
        appropriate Federal banking agency (as defined in 
        section 3 of the Federal Deposit Insurance Act (12 
        U.S.C. 1813(q))), or the National Credit Union 
        Administration, that--
                  (A) bars such person from association with an 
                entity regulated by such commission, authority, 
                agency, or officer, or from engaging in the 
                business of securities, insurance, banking, 
                savings association activities, or credit union 
                activities; or
                  (B) constitutes a final order based on 
                violations of any laws or regulations that 
                prohibit fraudulent, manipulative, or deceptive 
                conduct.
  (f) The Commission, by order, shall censure or place 
limitations on the activities of any person associated, seeking 
to become associated, or, at the time of the alleged 
misconduct, associated or seeking to become associated with an 
investment adviser, or suspend for a period not exceeding 12 
months or bar any such person from being associated with an 
investment adviser, broker, dealer, municipal securities 
dealer, municipal advisor, transfer agent, or nationally 
recognized statistical rating organization, if the Commission 
finds, on the record after notice and opportunity for hearing, 
that such censure, placing of limitations, suspension, or bar 
is in the public interest and that such person has committed or 
omitted any act or omission enumerated in paragraph (1), (5), 
(6), (8), or (9) of subsection (e) or has been convicted of any 
offense specified in paragraph (2) or (3) of subsection (e) 
within ten years of the commencement of the proceedings under 
this subsection, or is enjoined from any action, conduct, or 
practice specified in paragraph (4) of subsection (e). It shall 
be unlawful for any person as to whom such an order suspending 
or barring him from being associated with an investment adviser 
is in effect willfully to become, or to be, associated with an 
investment adviser without the consent of the Commission, and 
it shall be unlawful for any investment adviser to permit such 
a person to become, or remain, a person associated with him 
without the consent of the Commission, if such investment 
adviser knew, or in the exercise of reasonable care, should 
have known, of such order.
  (g) Any successor to the business of an investment adviser 
registered under this section shall be deemed likewise 
registered hereunder, if within thirty days from its succession 
to such business it shall file an application for registration 
under this section, unless and until the Commission, pursuant 
to subsection (c) or subsection (e) of this section, shall deny 
registration to or revoke or suspend the registration of such 
successor.
  (h) Any person registered under this section may, upon such 
terms and conditions as the Commission finds necessary in the 
public interest or for the protection of investors, withdraw 
from registration by filing a written notice of withdrawal with 
the Commission. If the Commission finds that any person 
registered under this section, or who has pending an 
application for registration filed under this section, is no 
longer in existence, is not engaged in business as an 
investment adviser, or is prohibited from registering as an 
investment adviser under section 203A, the Commission shall by 
order cancel the registration of such person.
  (i) Money Penalties in Administrative Proceedings.--
          (1) Authority of commission.--
                  (A) In general.--In any proceeding instituted 
                pursuant to subsection (e) or (f) against any 
                person, the Commission may impose a civil 
                penalty if it finds, on the record after notice 
                and opportunity for hearing, that such penalty 
                is in the public interest and that such 
                person--
                          (i) has willfully violated any 
                        provision of the Securities Act of 
                        1933, the Securities Exchange Act of 
                        1934, the Investment Company Act of 
                        1940, or this title, or the rules or 
                        regulations thereunder;
                          (ii) has willfully aided, abetted, 
                        counseled, commanded, induced, or 
                        procured such a violation by any other 
                        person;
                          (iii) has willfully made or caused to 
                        be made in any application for 
                        registration or report required to be 
                        filed with the Commission under this 
                        title, or in any proceeding before the 
                        Commission with respect to 
                        registration, any statement which was, 
                        at the time and in the light of the 
                        circumstances under which it was made, 
                        false or misleading with respect to any 
                        material fact, or has omitted to state 
                        in any such application or report any 
                        material fact which was required to be 
                        stated therein; or
                          (iv) has failed reasonably to 
                        supervise, within the meaning of 
                        subsection (e)(6), with a view to 
                        preventing violations of the provisions 
                        of this title and the rules and 
                        regulations thereunder, another person 
                        who commits such a violation, if such 
                        other person is subject to his 
                        supervision;
                  (B) Cease-and-desist proceedings.--In any 
                proceeding instituted pursuant to subsection 
                (k) against any person, the Commission may 
                impose a civil penalty if the Commission finds, 
                on the record, after notice and opportunity for 
                hearing, that such person--
                          (i) is violating or has violated any 
                        provision of this title, or any rule or 
                        regulation issued under this title; or
                          (ii) is or was a cause of the 
                        violation of any provision of this 
                        title, or any rule or regulation issued 
                        under this title.
          (2) Maximum amount of penalty.--
                  (A) First tier.--The maximum amount of 
                penalty for each act or omission described in 
                paragraph (1) shall be [$5,000] $10,000 for a 
                natural person or [$50,000] $100,000 for any 
                other person.
                  (B) Second tier.--Notwithstanding 
                subparagraph (A), the maximum amount of penalty 
                for each such act or omission shall be 
                [$50,000] $100,000 for a natural person or 
                [$250,000] $500,000 for any other person if the 
                act or omission described in paragraph (1) 
                involved fraud, deceit, manipulation, or 
                deliberate or reckless disregard of a 
                regulatory requirement.
                  [(C) Third tier.--Notwithstanding 
                subparagraphs (A) and (B), the maximum amount 
                of penalty for each such act or omission shall 
                be $100,000 for a natural person or $500,000 
                for any other person if--
                          [(i) the act or omission described in 
                        paragraph (1) involved fraud, deceit, 
                        manipulation, or deliberate or reckless 
                        disregard of a regulatory requirement; 
                        and
                          [(ii) such act or omission directly 
                        or indirectly resulted in substantial 
                        losses or created a significant risk of 
                        substantial losses to other persons or 
                        resulted in substantial pecuniary gain 
                        to the person who committed the act or 
                        omission.]
                  (C) Third tier.--
                          (i) In general.--Notwithstanding 
                        subparagraphs (A) and (B), the amount 
                        of penalty for each such act or 
                        omission shall not exceed the amount 
                        specified in clause (ii) if--
                                  (I) the act or omission 
                                described in paragraph (1) 
                                involved fraud, deceit, 
                                manipulation, or deliberate or 
                                reckless disregard of a 
                                regulatory requirement; and
                                  (II) such act or omission 
                                directly or indirectly resulted 
                                in substantial losses or 
                                created a significant risk of 
                                substantial losses to other 
                                persons or resulted in 
                                substantial pecuniary gain to 
                                the person who committed the 
                                act or omission.
                          (ii) Maximum amount of penalty.--The 
                        amount referred to in clause (i) is the 
                        greatest of--
                                  (I) $300,000 for a natural 
                                person or $1,450,000 for any 
                                other person;
                                  (II) 3 times the gross amount 
                                of pecuniary gain to the person 
                                who committed the act or 
                                omission; or
                                  (III) the amount of losses 
                                incurred by victims as a result 
                                of the act or omission.
                  (D) Fourth tier.--Notwithstanding 
                subparagraphs (A), (B), and (C), the maximum 
                amount of penalty for each such act or omission 
                shall be 3 times the otherwise applicable 
                amount in such subparagraphs if, within the 5-
                year period preceding such act or omission, the 
                person who committed the act or omission was 
                criminally convicted for securities fraud or 
                became subject to a judgment or order imposing 
                monetary, equitable, or administrative relief 
                in any Commission action alleging fraud by that 
                person.
          (3) Determination of public interest.--In considering 
        under this section whether a penalty is in the public 
        interest, the Commission may consider--
                  (A) whether the act or omission for which 
                such penalty is assessed involved fraud, 
                deceit, manipulation, or deliberate or reckless 
                disregard of a regulatory requirement;
                  (B) the harm to other persons resulting 
                either directly or indirectly from such act or 
                omission;
                  (C) the extent to which any person was 
                unjustly enriched, taking into account any 
                restitution made to persons injured by such 
                behavior;
                  (D) whether such person previously has been 
                found by the Commission, another appropriate 
                regulatory agency, or a self-regulatory 
                organization to have violated the Federal 
                securities laws, State securities laws, or the 
                rules of a self-regulatory organization, has 
                been enjoined by a court of competent 
                jurisdiction from violations of such laws or 
                rules, or has been convicted by a court of 
                competent jurisdiction of violations of such 
                laws or of any felony or misdemeanor described 
                in section 203(e)(2) of this title;
                  (E) the need to deter such person and other 
                persons from committing such acts or omissions; 
                and
                  (F) such other matters as justice may 
                require.
          (4) Evidence concerning ability to pay.--In any 
        proceeding in which the Commission may impose a penalty 
        under this section, a respondent may present evidence 
        of the respondent's ability to pay such penalty. The 
        Commission may, in its discretion, consider such 
        evidence in determining whether such penalty is in the 
        public interest. Such evidence may relate to the extent 
        of such person's ability to continue in business and 
        the collectability of a penalty, taking into account 
        any other claims of the United States or third parties 
        upon such person's assets and the amount of such 
        person's assets.
  (j) Authority To Enter an Order Requiring an Accounting and 
Disgorgement.--In any proceeding in which the Commission may 
impose a penalty under this section, the Commission may enter 
an order requiring accounting and disgorgement, including 
reasonable interest. The Commission is authorized to adopt 
rules, regulations, and orders concerning payments to 
investors, rates of interest, periods of accrual, and such 
other matters as it deems appropriate to implement this 
subsection.
  (k) Cease-and-Desist Proceedings.--
          (1) Authority of the commission.--If the Commission 
        finds, after notice and opportunity for hearing, that 
        any person is violating, has violated, or is about to 
        violate any provision of this title, or any rule or 
        regulation thereunder, the Commission may publish its 
        findings and enter an order requiring such person, and 
        any other person that is, was, or would be a cause of 
        the violation, due to an act or omission the person 
        knew or should have known would contribute to such 
        violation, to cease and desist from committing or 
        causing such violation and any future violation of the 
        same provision, rule, or regulation. Such order may, in 
        addition to requiring a person to cease and desist from 
        committing or causing a violation, require such person 
        to comply, or to take steps to effect compliance, with 
        such provision, rule, or regulation, upon such terms 
        and conditions and within such time as the Commission 
        may specify in such order. Any such order may, as the 
        Commission deems appropriate, require future compliance 
        or steps to effect future compliance, either 
        permanently or for such period of time as the 
        Commission may specify, with such provision, rule, or 
        regulation with respect to any security, any issuer, or 
        any other person.
          (2) Hearing.--The notice instituting proceedings 
        pursuant to paragraph (1) shall fix a hearing date not 
        earlier than 30 days nor later than 60 days after 
        service of the notice unless an earlier or a later date 
        is set by the Commission with the consent of any 
        respondent so served.
          (3) Temporary order.--
                  (A) In general.--Whenever the Commission 
                determines that the alleged violation or 
                threatened violation specified in the notice 
                instituting proceedings pursuant to paragraph 
                (1), or the continuation thereof, is likely to 
                result in significant dissipation or conversion 
                of assets, significant harm to investors, or 
                substantial harm to the public interest, 
                including, but not limited to, losses to the 
                Securities Investor Protection Corporation, 
                prior to the completion of the proceedings, the 
                Commission may enter a temporary order 
                requiring the respondent to cease and desist 
                from the violation or threatened violation and 
                to take such action to prevent the violation or 
                threatened violation and to prevent dissipation 
                or conversion of assets, significant harm to 
                investors, or substantial harm to the public 
                interest as the Commission deems appropriate 
                pending completion of such proceedings. Such an 
                order shall be entered only after notice and 
                opportunity for a hearing, unless the 
                Commission, notwithstanding section 211(c) of 
                this title, determines that notice and hearing 
                prior to entry would be impracticable or 
                contrary to the public interest. A temporary 
                order shall become effective upon service upon 
                the respondent and, unless set aside, limited, 
                or suspended by the Commission or a court of 
                competent jurisdiction, shall remain effective 
                and enforceable pending the completion of the 
                proceedings.
                  (B) Applicability.--This paragraph shall 
                apply only to a respondent that acts, or, at 
                the time of the alleged misconduct acted, as a 
                broker, dealer, investment adviser, investment 
                company, municipal securities dealer, 
                government securities broker, government 
                securities dealer, or transfer agent, or is, or 
                was at the time of the alleged misconduct, an 
                associated person of, or a person seeking to 
                become associated with, any of the foregoing.
          (4) Review of temporary orders.--
                  (A) Commission review.--At any time after the 
                respondent has been served with a temporary 
                cease-and-desist order pursuant to paragraph 
                (3), the respondent may apply to the Commission 
                to have the order set aside, limited, or 
                suspended. If the respondent has been served 
                with a temporary cease-and-desist order entered 
                without a prior Commission hearing, the 
                respondent may, within 10 days after the date 
                on which the order was served, request a 
                hearing on such application and the Commission 
                shall hold a hearing and render a decision on 
                such application at the earliest possible time.
                  (B) Judicial review.--Within--
                          (i) 10 days after the date the 
                        respondent was served with a temporary 
                        cease-and-desist order entered with a 
                        prior Commission hearing, or
                          (ii) 10 days after the Commission 
                        renders a decision on an application 
                        and hearing under subparagraph (A), 
                        with respect to any temporary cease-
                        and-desist order entered without a 
                        prior Commission hearing,
                the respondent may apply to the United States 
                district court for the district in which the 
                respondent resides or has its principal office 
                or place of business, or for the District of 
                Columbia, for an order setting aside, limiting, 
                or suspending the effectiveness or enforcement 
                of the order, and the court shall have 
                jurisdiction to enter such an order. A 
                respondent served with a temporary cease-and-
                desist order entered without a prior Commission 
                hearing may not apply to the court except after 
                hearing and decision by the Commission on the 
                respondent's application under subparagraph (A) 
                of this paragraph.
                  (C) No automatic stay of temporary order.--
                The commencement of proceedings under 
                subparagraph (B) of this paragraph shall not, 
                unless specifically ordered by the court, 
                operate as a stay of the Commission's order.
                  (D) Exclusive review.--Section 213 of this 
                title shall not apply to a temporary order 
                entered pursuant to this section.
          (5) Authority to enter an order requiring an 
        accounting and disgorgement.--In any cease-and-desist 
        proceeding under paragraph (1), the Commission may 
        enter an order requiring accounting and disgorgement, 
        including reasonable interest. The Commission is 
        authorized to adopt rules, regulations, and orders 
        concerning payments to investors, rates of interest, 
        periods of accrual, and such other matters as it deems 
        appropriate to implement this subsection.
  (l) Exemption of Venture Capital Fund Advisers.--
          (1) In general.--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.
          (2) Advisers of sbics.--For purposes of this 
        subsection, a venture capital fund includes an entity 
        described in subparagraph (A), (B), or (C) of 
        subsection (b)(7) (other than an 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).
  (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.
          (3) Advisers of sbics.--For purposes of this 
        subsection, the assets under management of a private 
        fund that is an entity described in subparagraph (A), 
        (B), or (C) of subsection (b)(7) (other than an 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) shall be excluded 
        from the limit set forth in paragraph (1).
  (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.
  (o) Exemption of and Reporting by Private Equity Fund 
Advisers.--
          (1) In general.--Except as provided in this 
        subsection, no investment adviser shall be subject to 
        the registration or reporting requirements of this 
        title with respect to the provision of investment 
        advice relating to a private equity fund.
          (2) Maintenance of records and access by 
        commission.--Not later than 6 months after the date of 
        enactment of this subsection, the Commission shall 
        issue final rules--
                  (A) to require investment advisers described 
                in paragraph (1) to maintain such records and 
                provide to the Commission such annual or other 
                reports as the Commission, taking into account 
                fund size, governance, investment strategy, 
                risk, and other factors, determines necessary 
                and appropriate in the public interest and for 
                the protection of investors; and
                  (B) to define the term ``private equity 
                fund'' for purposes of this subsection.

                        annual and other reports

  Sec. 204. (a) In General.--Every investment adviser who makes 
use of the mails or of any means or instrumentality of 
interstate commerce in connection with his or its business as 
an investment adviser (other than one specifically exempted 
from registration pursuant to section 203(b) of this title), 
shall make and keep for prescribed periods such records (as 
defined in section 3(a)(37) of the Securities Exchange Act of 
1934), furnish such copies thereof, and make and disseminate 
such reports as the Commission, by rule, may prescribe as 
necessary or appropriate in the public interest or for the 
protection of investors. All records (as so defined) of such 
investment advisers are subject at any time, or from time to 
time, to such reasonable periodic, special, or other 
examinations by representatives of the Commission as the 
Commission deems necessary or appropriate in the public 
interest or for the protection of investors.
  (b) Records and Reports of Private Funds.--
          (1) In general.--The Commission may require any 
        investment adviser registered under [this title--]
                  [(A) to maintain] this title 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] investors.
                  [(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)] (7) 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)] (8) 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)] paragraph (7).
          [(10)] (9) 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)] (10) 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.
  (c) Filing Depositories.--The Commission may, by rule, 
require an investment adviser--
          (1) to file with the Commission any fee, application, 
        report, or notice required to be filed by this title or 
        the rules issued under this title through any entity 
        designated by the Commission for that purpose; and
          (2) to pay the reasonable costs associated with such 
        filing and the establishment and maintenance of the 
        systems required by subsection (c).
  (d) Access to Disciplinary and Other Information.--
          (1) Maintenance of system to respond to inquiries.--
                  (A) In general.--The Commission shall require 
                the entity designated by the Commission under 
                subsection (b)(1) to establish and maintain a 
                toll-free telephone listing, or a readily 
                accessible electronic or other process, to 
                receive and promptly respond to inquiries 
                regarding registration information (including 
                disciplinary actions, regulatory, judicial, and 
                arbitration proceedings, and other information 
                required by law or rule to be reported) 
                involving investment advisers and persons 
                associated with investment advisers.
                  (B) Applicability.--This subsection shall 
                apply to any investment adviser (and the 
                persons associated with that adviser), whether 
                the investment adviser is registered with the 
                Commission under section 203 or regulated 
                solely by a State, as described in section 
                203A.
          (2) Recovery of costs.--An entity designated by the 
        Commission under subsection (b)(1) may charge persons 
        making inquiries, other than individual investors, 
        reasonable fees for responses to inquiries described in 
        paragraph (1).
          (3) Limitation on liability.--An entity designated by 
        the Commission under subsection (b)(1) shall not have 
        any liability to any person for any actions taken or 
        omitted in good faith under this subsection.
  [(d)] (e) Records of Persons With Custody or Use.--
          (1) In general.--Records of persons having custody or 
        use of the securities, deposits, or credits of a 
        client, that relate to such custody or use, are subject 
        at any time, or from time to time, to such reasonable 
        periodic, special, or other examinations and other 
        information and document requests by representatives of 
        the Commission, as the Commission deems necessary or 
        appropriate in the public interest or for the 
        protection of investors.
          (2) Certain persons subject to other regulation.--Any 
        person that is subject to regulation and examination by 
        a Federal financial institution regulatory agency (as 
        such term is defined under section 212(c)(2) of title 
        18, United States Code) may satisfy any examination 
        request, information request, or document request 
        described under paragraph (1), by providing the 
        Commission with a detailed listing, in writing, of the 
        securities, deposits, or credits of the client within 
        the custody or use of such person.
  (f) Procedure for Obtaining Certain Intellectual Property.--
The Commission is not authorized to compel under this title an 
investment adviser to produce or furnish source code, including 
algorithmic trading source code or similar intellectual 
property, to the Commission unless the Commission first issues 
a subpoena.

           *       *       *       *       *       *       *


                          enforcement of title

  Sec. 209. (a) Whenever it shall appear to the Commission, 
either upon complaint or otherwise, that the provisions of this 
title or of any rule or regulation prescribed under the 
authority thereof, have been or are about to be violated by any 
person, it may in its discretion require, and in any event 
shall permit, such person to file with it a statement in 
writing, under oath or otherwise, as to all the facts and 
circumstances relevant to such violation, and may otherwise 
investigate all such facts and circumstances.
  (b) For the purposes of any investigation or any proceeding 
under this title, any member of the Commission or any officer 
thereof designated by it is empowered to administer oaths and 
affirmations, subpena witnesses, compel their attendance, take 
evidence, and require the production of any books, papers, 
correspondence, memoranda, contracts, agreements, or other 
records which are relevant or material to the inquiry. Such 
attendance of witnesses and the production of any such records 
may be required from any place in any State or in any Territory 
or other place subject to the jurisdiction of the United States 
at any designated place of hearing.
  (c) In case of contumacy by, or refusal to obey a subpena 
issued to, any person, the Commission may invoke the aid of any 
court of the United States within the jurisdiction of which 
such investigation or proceeding is carried on, or where such 
person resides or carries on business, in requiring the 
attendance and testimony of witnesses and the production of 
books, papers, correspondence, memoranda, contracts, 
agreements, and other records. And such court may issue an 
order requiring such person to appear before the Commission or 
member or officer designated by the Commission, there to 
produce records, if so ordered or to give testimony touching 
the matter under investigation or in question; and any failure 
to obey such order of the court may be punished by such court 
as a contempt thereof. All process in any such case may be 
served in the judicial district whereof such person is an 
inhabitant or wherever he may be found. Any person who without 
just cause shall fail or refuse to attend and testify or to 
answer any lawful inquiry or to produce books, papers, 
correspondence, memoranda, contracts, agreements, or other 
records, if in his or its power so to do, in obedience to the 
subpena of the Commission, shall be guilty of a misdemeanor, 
and upon conviction shall be subject to a fine of not more than 
$1,000 or to imprisonment for a term of not more than one year, 
or both.
  (d) Whenever it shall appear to the Commission that any 
person has engaged, is engaged, or is about to engage in any 
act or practice constituting a violation of any provision of 
this title, or of any rule, regulation, or order hereunder, or 
that any person has aided, abetted, counseled, commanded, 
induced, or procured, is aiding, abetting, counseling, 
commanding, inducing, or procuring, or is about to aid, abet, 
counsel, command, induce, or procure such a violation, it may 
in its discretion bring an action in the proper district court 
of the United States, or the proper United States court of any 
Territory or other place subject to the jurisdiction of the 
United States, to enjoin such acts or practices and to enforce 
compliance with this title or any rule, regulation, or order 
hereunder. Upon a showing that such person has engaged, is 
engaged, or is about to engage in any such act or practice, or 
in aiding, abetting, counseling, commanding, inducing, or 
procuring any such act or practice, a permanent or temporary 
injunction or decree or restraining order shall be granted 
without bond. The Commission may transmit such evidence as may 
be available concerning any violation of the provisions of this 
title, or of any rule, regulation, or order thereunder, to the 
Attorney General, who, in his discretion, may institute the 
appropriate criminal proceedings under this title.
  (e) Money Penalties in Civil Actions.--
          (1) Authority of commission.--Whenever it shall 
        appear to the Commission that any person has violated 
        any provision of this title, the rules or regulations 
        thereunder, a Federal court injunction or a bar 
        obtained or entered by the Commission under this title, 
        or a cease-and-desist order entered by the Commission 
        pursuant to section 203(k) of this title, the 
        Commission may bring an action in a United States 
        district court to seek, and the court shall have 
        jurisdiction to impose, upon a proper showing, a civil 
        penalty to be paid by the person who committed such 
        violation.
          (2) Amount of penalty.--
                  (A) First tier.--The amount of the penalty 
                shall be determined by the court in light of 
                the facts and circumstances. For each 
                violation, the amount of the penalty shall not 
                exceed the greater of (i) [$5,000] $10,000 for 
                a natural person or [$50,000] $100,000 for any 
                other person, or (ii) the gross amount of 
                pecuniary gain to such defendant as a result of 
                the violation.
                  (B) Second tier.--Notwithstanding 
                subparagraph (A), the amount of penalty for 
                each such violation shall not exceed the 
                greater of (i) [$50,000] $100,000 for a natural 
                person or [$250,000] $500,000 for any other 
                person, or (ii) the gross amount of pecuniary 
                gain to such defendant as a result of the 
                violation, if the violation described in 
                paragraph (1) involved fraud, deceit, 
                manipulation, or deliberate or reckless 
                disregard of a regulatory requirement.
                  [(C) Third tier.--Notwithstanding 
                subparagraphs (A) and (B), the amount of 
                penalty for each such violation shall not 
                exceed the greater of (i) $100,000 for a 
                natural person or $500,000 for any other 
                person, or (ii) the gross amount of pecuniary 
                gain to such defendant as a result of the 
                violation, if--
                          [(I) the violation described in 
                        paragraph (1) involved fraud, deceit, 
                        manipulation, or deliberate or reckless 
                        disregard of a regulatory requirement; 
                        and
                          [(II) such violation directly or 
                        indirectly resulted in substantial 
                        losses or created a significant risk of 
                        substantial losses to other persons.]
                  (C) Third tier.--
                          (i) In general.--Notwithstanding 
                        subparagraphs (A) and (B), the amount 
                        of penalty for each such violation 
                        shall not exceed the amount specified 
                        in clause (ii) if--
                                  (I) the violation described 
                                in paragraph (1) involved 
                                fraud, deceit, manipulation, or 
                                deliberate or reckless 
                                disregard of a regulatory 
                                requirement; and
                                  (II) such violation directly 
                                or indirectly resulted in 
                                substantial losses or created a 
                                significant risk of substantial 
                                losses to other persons.
                          (ii) Maximum amount of penalty.--The 
                        amount referred to in clause (i) is the 
                        greatest of--
                                  (I) $300,000 for a natural 
                                person or $1,450,000 for any 
                                other person;
                                  (II) 3 times the gross amount 
                                of pecuniary gain to such 
                                defendant as a result of the 
                                violation; or
                                  (III) the amount of losses 
                                incurred by victims as a result 
                                of the violation.
                  (D) Fourth tier.--Notwithstanding 
                subparagraphs (A), (B), and (C), the maximum 
                amount of penalty for each such violation shall 
                be 3 times the otherwise applicable amount in 
                such subparagraphs if, within the 5-year period 
                preceding such violation, the defendant was 
                criminally convicted for securities fraud or 
                became subject to a judgment or order imposing 
                monetary, equitable, or administrative relief 
                in any Commission action alleging fraud by that 
                defendant.
          (3) Procedures for collection.--
                  (A) Payment of penalty to treasury.--A 
                penalty imposed under this section shall be 
                payable into the Treasury of the United States, 
                except as otherwise provided in section 308 of 
                the Sarbanes-Oxley Act of 2002 and section 21F 
                of the Securities Exchange Act of 1934.
                  (B) Collection of penalties.--If a person 
                upon whom such a penalty is imposed shall fail 
                to pay such penalty within the time prescribed 
                in the court's order, the Commission may refer 
                the matter to the Attorney General who shall 
                recover such penalty by action in the 
                appropriate United States district court.
                  (C) Remedy not exclusive.--The actions 
                authorized by this subsection may be brought in 
                addition to any other action that the 
                Commission or the Attorney General is entitled 
                to bring.
                  (D) Jurisdiction and venue.--For purposes of 
                section 214 of this title, actions under this 
                paragraph shall be actions to enforce a 
                liability or a duty created by this title.
          [(4) Special provisions relating to a violation of a 
        cease-and-desist order.--In an action to enforce a 
        cease-and-desist order entered by the Commission 
        pursuant to section 203(k), each separate violation of 
        such order shall be a separate offense, except that in 
        the case of a violation through a continuing failure to 
        comply with the order, each day of the failure to 
        comply shall be deemed a separate offense.]
          (4) Special provisions relating to a violation of an 
        injunction or certain orders.--
                  (A) In general.--Each separate violation of 
                an injunction or order described in 
                subparagraph (B) shall be a separate offense, 
                except that in the case of a violation through 
                a continuing failure to comply with such 
                injunction or order, each day of the failure to 
                comply with the injunction or order shall be 
                deemed a separate offense.
                  (B) Injunctions and orders.--Subparagraph (A) 
                shall apply with respect to any action to 
                enforce--
                          (i) a Federal court injunction 
                        obtained pursuant to this title;
                          (ii) an order entered or obtained by 
                        the Commission pursuant to this title 
                        that bars, suspends, places limitations 
                        on the activities or functions of, or 
                        prohibits the activities of, a person; 
                        or
                          (iii) a cease-and-desist order 
                        entered by the Commission pursuant to 
                        section 203(k).
  (f) Aiding and Abetting.--For purposes of any action brought 
by the Commission under subsection (e), any person that 
knowingly or recklessly has aided, abetted, counseled, 
commanded, induced, or procured a violation of any provision of 
this Act, or of any rule, regulation, or order hereunder, shall 
be deemed to be in violation of such provision, rule, 
regulation, or order to the same extent as the person that 
committed such violation.

           *       *       *       *       *       *       *


                     rules, regulations, and orders

  Sec. 211. (a) The Commission shall have authority from time 
to time to make, issue, amend, and rescind such rules and 
regulations and such orders as are necessary or appropriate to 
the exercise of the functions and powers conferred upon the 
Commission elsewhere in this title, 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. For the purposes of its 
rules or regulations the Commission may classify persons and 
matters within its jurisdiction and prescribe different 
requirements for different classes of persons or matters.
  (b) Subject to the provisions of chapter 15 of title 44, 
United States Code, and regulations prescribed under the 
authority thereof, the rules and regulations of the Commission 
under this title, and amendments thereof, shall be effective 
upon publication in the manner which the Commission shall 
prescribe, or upon such later date as may be provided in such 
rules and regulations.
  (c) Orders of the Commission under this title shall be issued 
only after appropriate notice and opportunity for hearing. 
Notice to the parties to a proceeding before the Commission 
shall be given by personal service upon each party or by 
registered mail or certified mail or confirmed telegraphic 
notice to the party's last known business address. Notice to 
interested persons, if any, other than parties may be given in 
the same manner or by publication in the Federal Register.
  (d) No provision of this title imposing any liability shall 
apply to any act done or omitted in good faith in conformity 
with any rule, regulation, or order of the Commission, 
notwithstanding that such rule, regulation, or order may, after 
such act or omission, be amended or rescinded or be determined 
by judicial or other authority to be invalid for any reason.
  (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)] section 
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.).
  (g) Standard of Conduct.--
          (1) In general.--The Commission may promulgate rules 
        to provide that the standard of conduct for all 
        brokers, dealers, and investment advisers, when 
        providing personalized investment advice about 
        securities to retail customers (and such other 
        customers as the Commission may by rule provide), shall 
        be to act in the best interest of the customer without 
        regard to the financial or other interest of the 
        broker, dealer, or investment adviser providing the 
        advice. In accordance with such rules, any material 
        conflicts of interest shall be disclosed and may be 
        consented to by the customer. Such rules shall provide 
        that such standard of conduct shall be no less 
        stringent than the standard applicable to investment 
        advisers under section 206(1) and (2) of this Act when 
        providing personalized investment advice about 
        securities, except the Commission shall not ascribe a 
        meaning to the term ``customer'' that would include an 
        investor in a private fund managed by an investment 
        adviser, where such private fund has entered into an 
        advisory contract with such adviser. The receipt of 
        compensation based on commission or fees shall not, in 
        and of itself, be considered a violation of such 
        standard applied to a broker, dealer, or investment 
        adviser.
          (2) Retail customer defined.--For purposes of this 
        subsection, the term ``retail customer'' means a 
        natural person, or the legal representative of such 
        natural person, who--
                  (A) receives personalized investment advice 
                about securities from a broker, dealer, or 
                investment adviser; and
                  (B) uses such advice primarily for personal, 
                family, or household purposes.
  (h) Other Matters.--The Commission shall--
          (1) facilitate the provision of simple and clear 
        disclosures to investors regarding the terms of their 
        relationships with brokers, dealers, and investment 
        advisers, including any material conflicts of interest; 
        and
          (2) examine and, where appropriate, promulgate rules 
        prohibiting or restricting certain sales practices, 
        conflicts of interest, and compensation schemes for 
        brokers, dealers, and investment advisers that the 
        Commission deems contrary to the public interest and 
        the protection of investors.
  (i) Harmonization of Enforcement.--The enforcement authority 
of the Commission with respect to violations of the standard of 
conduct applicable to an investment adviser shall include--
          (1) the enforcement authority of the Commission with 
        respect to such violations provided under this Act; and
          (2) the enforcement authority of the Commission with 
        respect to violations of the standard of conduct 
        applicable to a broker or dealer providing personalized 
        investment advice about securities to a retail customer 
        under the Securities Exchange Act of 1934, including 
        the authority to impose sanctions for such violations, 
        and
the Commission shall seek to prosecute and sanction violators 
of the standard of conduct applicable to an investment adviser 
under this Act to same extent as the Commission prosecutes and 
sanctions violators of the standard of conduct applicable to a 
broker or dealer providing personalized investment advice about 
securities to a retail customer under the Securities Exchange 
Act of 1934.

           *       *       *       *       *       *       *

                              ----------                              


SARBANES-OXLEY ACT OF 2002

           *       *       *       *       *       *       *



TITLE I--PUBLIC COMPANY ACCOUNTING OVERSIGHT BOARD

           *       *       *       *       *       *       *


SEC. 105. INVESTIGATIONS AND DISCIPLINARY PROCEEDINGS.

  (a) In General.--The Board shall establish, by rule, subject 
to the requirements of this section, fair procedures for the 
investigation and disciplining of registered public accounting 
firms and associated persons of such firms.
  (b) Investigations.--
          (1) Authority.--In accordance with the rules of the 
        Board, the Board may conduct an investigation of any 
        act or practice, or omission to act, by a registered 
        public accounting firm, any associated person of such 
        firm, or both, that may violate any provision of this 
        Act, the rules of the Board, the provisions of the 
        securities laws relating to the preparation and 
        issuance of audit reports and the obligations and 
        liabilities of accountants with respect thereto, 
        including the rules of the Commission issued under this 
        Act, or professional standards, regardless of how the 
        act, practice, or omission is brought to the attention 
        of the Board.
          (2) Testimony and document production.--In addition 
        to such other actions as the Board determines to be 
        necessary or appropriate, the rules of the Board may--
                  (A) require the testimony of the firm or of 
                any person associated with a registered public 
                accounting firm, with respect to any matter 
                that the Board considers relevant or material 
                to an investigation;
                  (B) require the production of audit work 
                papers and any other document or information in 
                the possession of a registered public 
                accounting firm or any associated person 
                thereof, wherever domiciled, that the Board 
                considers relevant or material to the 
                investigation, and may inspect the books and 
                records of such firm or associated person to 
                verify the accuracy of any documents or 
                information supplied;
                  (C) request the testimony of, and production 
                of any document in the possession of, any other 
                person, including any client of a registered 
                public accounting firm that the Board considers 
                relevant or material to an investigation under 
                this section, with appropriate notice, subject 
                to the needs of the investigation, as permitted 
                under the rules of the Board; and
                  (D) provide for procedures to seek issuance 
                by the Commission, in a manner established by 
                the Commission, of a subpoena to require the 
                testimony of, and production of any document in 
                the possession of, any person, including any 
                client of a registered public accounting firm, 
                that the Board considers relevant or material 
                to an investigation under this section.
          (3) Noncooperation with investigations.--
                  (A) In general.--If a registered public 
                accounting firm or any associated person 
                thereof refuses to testify, produce documents, 
                or otherwise cooperate with the Board in 
                connection with an investigation under this 
                section, the Board may--
                          (i) suspend or bar such person from 
                        being associated with a registered 
                        public accounting firm, or require the 
                        registered public accounting firm to 
                        end such association;
                          (ii) suspend or revoke the 
                        registration of the public accounting 
                        firm; and
                          (iii) invoke such other lesser 
                        sanctions as the Board considers 
                        appropriate, and as specified by rule 
                        of the Board.
                  (B) Procedure.--Any action taken by the Board 
                under this paragraph shall be subject to the 
                terms of section 107(c).
          (4) Coordination and referral of investigations.--
                  (A) Coordination.--The Board shall notify the 
                Commission of any pending Board investigation 
                involving a potential violation of the 
                securities laws, and thereafter coordinate its 
                work with the work of the Commission's Division 
                of Enforcement, as necessary to protect an 
                ongoing Commission investigation.
                  (B) Referral.--The Board may refer an 
                investigation under this section--
                          (i) to the Commission;
                          (ii) to a self-regulatory 
                        organization, in the case of an 
                        investigation that concerns an audit 
                        report for a broker or dealer that is 
                        under the jurisdiction of such self-
                        regulatory organization;
                          (iii) to any other Federal functional 
                        regulator (as defined in section 509 of 
                        the Gramm-Leach-Bliley Act (15 U.S.C. 
                        6809)), in the case of an investigation 
                        that concerns an audit report for an 
                        institution that is subject to the 
                        jurisdiction of such regulator; and
                          (iv) at the direction of the 
                        Commission, to--
                                  (I) the Attorney General of 
                                the United States;
                                  (II) the attorney general of 
                                1 or more States; and
                                  (III) the appropriate State 
                                regulatory authority.
          (5) Use of documents.--
                  (A) Confidentiality.--Except as provided in 
                [subparagraphs (B) and (C)] subparagraphs (B), 
                (C) and (D), all documents and information 
                prepared or received by or specifically for the 
                Board, and deliberations of the Board and its 
                employees and agents, in connection with an 
                inspection under section 104 or with an 
                investigation under this section, shall be 
                confidential and privileged as an evidentiary 
                matter (and shall not be subject to civil 
                discovery or other legal process) in any 
                proceeding in any Federal or State court or 
                administrative agency, and shall be exempt from 
                disclosure, in the hands of an agency or 
                establishment of the Federal Government, under 
                the Freedom of Information Act (5 U.S.C. 552a), 
                or otherwise, unless and until presented in 
                connection with a public proceeding or released 
                in accordance with subsection (c).
                  (B) Availability to government agencies.--
                Without the loss of its status as confidential 
                and privileged in the hands of the Board, all 
                information referred to in subparagraph (A) 
                may--
                          (i) be made available to the 
                        Commission; and
                          (ii) in the discretion of the Board, 
                        when determined by the Board to be 
                        necessary to accomplish the purposes of 
                        this Act or to protect investors, be 
                        made available to--
                                  (I) the Attorney General of 
                                the United States;
                                  (II) the appropriate Federal 
                                functional regulator (as 
                                defined in section 509 of the 
                                Gramm-Leach-Bliley Act (15 
                                U.S.C. 6809)), other than the 
                                Commission, and the Director of 
                                the Federal Housing Finance 
                                Agency, with respect to an 
                                audit report for an institution 
                                subject to the jurisdiction of 
                                such regulator;
                                  (III) State attorneys general 
                                in connection with any criminal 
                                investigation;
                                  (IV) any appropriate State 
                                regulatory authority; and
                                  (V) a self-regulatory 
                                organization, with respect to 
                                an audit report for a broker or 
                                dealer that is under the 
                                jurisdiction of such self-
                                regulatory organization,
                each of which shall maintain such information 
                as confidential and privileged.
                  (C) Availability to foreign oversight 
                authorities.--Without the loss of its status as 
                confidential and privileged in the hands of the 
                Board, all information referred to in 
                subparagraph (A) that relates to a public 
                accounting firm that a foreign government has 
                empowered a foreign auditor oversight authority 
                to inspect or otherwise enforce laws with 
                respect to, may, at the discretion of the 
                Board, be made available to the foreign auditor 
                oversight authority, if--
                          (i) the Board finds that it is 
                        necessary to accomplish the purposes of 
                        this Act or to protect investors;
                          (ii) the foreign auditor oversight 
                        authority provides--
                                  (I) such assurances of 
                                confidentiality as the Board 
                                may request;
                                  (II) a description of the 
                                applicable information systems 
                                and controls of the foreign 
                                auditor oversight authority; 
                                and
                                  (III) a description of the 
                                laws and regulations of the 
                                foreign government of the 
                                foreign auditor oversight 
                                authority that are relevant to 
                                information access; and
                          (iii) the Board determines that it is 
                        appropriate to share such information.
                  (D) Availability to the congressional 
                committees.--The Board shall make available to 
                the Committees specified under section 101(h)--
                          (i) such information as the 
                        Committees shall request; and
                          (ii) with respect to any confidential 
                        or privileged information provided in 
                        response to a request under clause (i), 
                        including any information subject to 
                        section 104(g) and subparagraph (A), or 
                        any confidential or privileged 
                        information provided orally in response 
                        to such a request, such information 
                        shall maintain the protections provided 
                        in subparagraph (A), and shall retain 
                        its confidential and privileged status 
                        in the hands of the Board and the 
                        Committees.
          (6) Immunity.--Any employee of the Board engaged in 
        carrying out an investigation under this Act shall be 
        immune from any civil liability arising out of such 
        investigation in the same manner and to the same extent 
        as an employee of the Federal Government in similar 
        circumstances.
  (c) Disciplinary Procedures.--
          (1) Notification; recordkeeping.--The rules of the 
        Board shall provide that in any proceeding by the Board 
        to determine whether a registered public accounting 
        firm, or an associated person thereof, should be 
        disciplined, the Board shall--
                  (A) bring specific charges with respect to 
                the firm or associated person;
                  (B) notify such firm or associated person of, 
                and provide to the firm or associated person an 
                opportunity to defend against, such charges; 
                and
                  (C) keep a record of the proceedings.
          (2) Public hearings.--Hearings under this section 
        shall not be public, unless otherwise ordered by the 
        Board for good cause shown, with the consent of the 
        parties to such hearing.
          (3) Supporting statement.--A determination by the 
        Board to impose a sanction under this subsection shall 
        be supported by a statement setting forth--
                  (A) each act or practice in which the 
                registered public accounting firm, or 
                associated person, has engaged (or omitted to 
                engage), or that forms a basis for all or a 
                part of such sanction;
                  (B) the specific provision of this Act, the 
                securities laws, the rules of the Board, or 
                professional standards which the Board 
                determines has been violated; and
                  (C) the sanction imposed, including a 
                justification for that sanction.
          (4) Sanctions.--If the Board finds, based on all of 
        the facts and circumstances, that a registered public 
        accounting firm or associated person thereof has 
        engaged in any act or practice, or omitted to act, in 
        violation of this Act, the rules of the Board, the 
        provisions of the securities laws relating to the 
        preparation and issuance of audit reports and the 
        obligations and liabilities of accountants with respect 
        thereto, including the rules of the Commission issued 
        under this Act, or professional standards, the Board 
        may impose such disciplinary or remedial sanctions as 
        it determines appropriate, subject to applicable 
        limitations under paragraph (5), including--
                  (A) temporary suspension or permanent 
                revocation of registration under this title;
                  (B) temporary or permanent suspension or bar 
                of a person from further association with any 
                registered public accounting firm;
                  (C) temporary or permanent limitation on the 
                activities, functions, or operations of such 
                firm or person (other than in connection with 
                required additional professional education or 
                training);
                  (D) a civil money penalty for each such 
                violation, in an amount equal to--
                          (i) not more than [$100,000] $200,000 
                        for a natural person or [$2,000,000] 
                        $4,000,000 for any other person; and
                          (ii) in any case to which paragraph 
                        (5) applies, not more than [$750,000] 
                        $1,500,000 for a natural person or 
                        [$15,000,000] $22,000,000 for any other 
                        person;
                  (E) censure;
                  (F) required additional professional 
                education or training; or
                  (G) any other appropriate sanction provided 
                for in the rules of the Board.
          (5) Intentional or other knowing conduct.--The 
        sanctions and penalties described in subparagraphs (A) 
        through (C) and (D)(ii) of paragraph (4) shall only 
        apply to--
                  (A) intentional or knowing conduct, including 
                reckless conduct, that results in violation of 
                the applicable statutory, regulatory, or 
                professional standard; or
                  (B) repeated instances of negligent conduct, 
                each resulting in a violation of the applicable 
                statutory, regulatory, or professional 
                standard.
          (6) Failure to supervise.--
                  (A) In general.--The Board may impose 
                sanctions under this section on a registered 
                accounting firm or upon any person who is, or 
                at the time of the alleged failure reasonably 
                to supervise was, a supervisory person of such 
                firm, if the Board finds that--
                          (i) the firm has failed reasonably to 
                        supervise an associated person, either 
                        as required by the rules of the Board 
                        relating to auditing or quality control 
                        standards, or otherwise, with a view to 
                        preventing violations of this Act, the 
                        rules of the Board, the provisions of 
                        the securities laws relating to the 
                        preparation and issuance of audit 
                        reports and the obligations and 
                        liabilities of accountants with respect 
                        thereto, including the rules of the 
                        Commission under this Act, or 
                        professional standards; and
                          (ii) such associated person commits a 
                        violation of this Act, or any of such 
                        rules, laws, or standards.
                  (B) Rule of construction.--No current or 
                former supervisory person of a registered 
                public accounting firm shall be deemed to have 
                failed reasonably to supervise any associated 
                person for purposes of subparagraph (A), if--
                          (i) there have been established in 
                        and for that firm procedures, and a 
                        system for applying such procedures, 
                        that comply with applicable rules of 
                        the Board and that would reasonably be 
                        expected to prevent and detect any such 
                        violation by such associated person; 
                        and
                          (ii) such person has reasonably 
                        discharged the duties and obligations 
                        incumbent upon that person by reason of 
                        such procedures and system, and had no 
                        reasonable cause to believe that such 
                        procedures and system were not being 
                        complied with.
          (7) Effect of suspension.--
                  (A) Association with a public accounting 
                firm.--It shall be unlawful for any person that 
                is suspended or barred from being associated 
                with a registered public accounting firm under 
                this subsection willfully to become or remain 
                associated with any registered public 
                accounting firm, or for any registered public 
                accounting firm that knew, or, in the exercise 
                of reasonable care should have known, of the 
                suspension or bar, to permit such an 
                association, without the consent of the Board 
                or the Commission.
                  (B) Association with an issuer, broker, or 
                dealer.--It shall be unlawful for any person 
                that is suspended or barred from being 
                associated with a registered public accounting 
                firm under this subsection willfully to become 
                or remain associated with any issuer, broker, 
                or dealer in an accountancy or a financial 
                management capacity, and for any issuer, 
                broker, or dealer that knew, or in the exercise 
                of reasonable care should have known, of such 
                suspension or bar, to permit such an 
                association, without the consent of the Board 
                or the Commission.
  (d) Reporting of Sanctions.--
          (1) Recipients.--If the Board imposes a disciplinary 
        sanction, in accordance with this section, the Board 
        shall report the sanction to--
                  (A) the Commission;
                  (B) any appropriate State regulatory 
                authority or any foreign accountancy licensing 
                board with which such firm or person is 
                licensed or certified; and
                  (C) the public (once any stay on the 
                imposition of such sanction has been lifted).
          (2) Contents.--The information reported under 
        paragraph (1) shall include--
                  (A) the name of the sanctioned person;
                  (B) a description of the sanction and the 
                basis for its imposition; and
                  (C) such other information as the Board deems 
                appropriate.
  (e) Stay of Sanctions.--
          (1) In general.--Application to the Commission for 
        review, or the institution by the Commission of review, 
        of any disciplinary action of the Board shall operate 
        as a stay of any such disciplinary action, unless and 
        until the Commission orders (summarily or after notice 
        and opportunity for hearing on the question of a stay, 
        which hearing may consist solely of the submission of 
        affidavits or presentation of oral arguments) that no 
        such stay shall continue to operate.
          (2) Expedited procedures.--The Commission shall 
        establish for appropriate cases an expedited procedure 
        for consideration and determination of the question of 
        the duration of a stay pending review of any 
        disciplinary action of the Board under this subsection.

           *       *       *       *       *       *       *


SEC. 109. FUNDING.

  (a) In General.--The Board, and the standard setting body 
designated pursuant to section 19(b) of the Securities Act of 
1933, as amended by section 108, shall be funded as provided in 
this section.
  (b) Annual Budgets.--The Board and the standard setting body 
referred to in subsection (a) shall each establish a budget for 
each fiscal year, which shall be reviewed and approved 
according to their respective internal procedures not less than 
1 month prior to the commencement of the fiscal year to which 
the budget pertains (or at the beginning of the Board's first 
fiscal year, which may be a short fiscal year). The budget of 
the Board shall be subject to approval by the Commission. The 
budget for the first fiscal year of the Board shall be prepared 
and approved promptly following the appointment of the initial 
five Board members, to permit action by the Board of the 
organizational tasks contemplated by section 101(d).
  (c) Sources and [Uses of Funds.--]
          [(1) Recoverable budget expenses.--The budget] Uses 
        of Funds._The budget of the Board (reduced by any 
        registration or annual fees received under section 
        102(e) for the year preceding the year for which the 
        budget is being computed), and all of the budget of the 
        standard setting body referred to in subsection (a), 
        for each fiscal year of each of those 2 entities, shall 
        be payable from annual accounting support fees, in 
        accordance with subsections (d) and (e). Accounting 
        support fees and other receipts of the Board and of 
        such standard-setting body shall not be considered 
        public monies of the United States.
          [(2) Funds generated from the collection of monetary 
        penalties.--Subject to the availability in advance in 
        an appropriations Act, and notwithstanding subsection 
        (j), all funds collected by the Board as a result of 
        the assessment of monetary penalties shall be used to 
        fund a merit scholarship program for undergraduate and 
        graduate students enrolled in accredited accounting 
        degree programs, which program is to be administered by 
        the Board or by an entity or agent identified by the 
        Board.]
  (d) Annual Accounting Support Fee for the Board.--
          (1) Establishment of fee.--The Board shall establish, 
        with the approval of the Commission, a reasonable 
        annual accounting support fee (or a formula for the 
        computation thereof), as may be necessary or 
        appropriate to establish and maintain the Board. Such 
        fee may also cover costs incurred in the Board's first 
        fiscal year (which may be a short fiscal year), or may 
        be levied separately with respect to such short fiscal 
        year.
          (2) Assessments.--The rules of the Board under 
        paragraph (1) shall provide for the equitable 
        allocation, assessment, and collection by the Board (or 
        an agent appointed by the Board) of the fee established 
        under paragraph (1), among issuers, in accordance with 
        subsection (g), and among brokers and dealers, in 
        accordance with subsection (h), and allowing for 
        differentiation among classes of issuers, brokers and 
        dealers, as appropriate.
          (3) Brokers and dealers.--The Board shall begin the 
        allocation, assessment, and collection of fees under 
        paragraph (2) with respect to brokers and dealers with 
        the payment of support fees to fund the first full 
        fiscal year beginning after the date of enactment of 
        the Investor Protection and Securities Reform Act of 
        2010.
  (e) Annual Accounting Support Fee for Standard Setting 
Body.--The annual accounting support fee for the standard 
setting body referred to in subsection (a)--
          (1) shall be allocated in accordance with subsection 
        (g), and assessed and collected against each issuer, on 
        behalf of the standard setting body, by 1 or more 
        appropriate designated collection agents, as may be 
        necessary or appropriate to pay for the budget and 
        provide for the expenses of that standard setting body, 
        and to provide for an independent, stable source of 
        funding for such body, subject to review by the 
        Commission; and
          (2) may differentiate among different classes of 
        issuers.
  (f) Limitation on Fee.--The amount of fees collected under 
this section for a fiscal year on behalf of the Board or the 
standards setting body, as the case may be, shall not exceed 
the recoverable budget expenses of the Board or body, 
respectively (which may include operating, capital, and accrued 
items), referred to in [subsection (c)(1)] subsection (c).
  (g) Allocation of Accounting Support Fees Among Issuers.--Any 
amount due from issuers (or a particular class of issuers) 
under this section to fund the budget of the Board or the 
standard setting body referred to in subsection (a) shall be 
allocated among and payable by each issuer (or each issuer in a 
particular class, as applicable) in an amount equal to the 
total of such amount, multiplied by a fraction--
          (1) the numerator of which is the average monthly 
        equity market capitalization of the issuer for the 12-
        month period immediately preceding the beginning of the 
        fiscal year to which such budget relates; and
          (2) the denominator of which is the average monthly 
        equity market capitalization of all such issuers for 
        such 12-month period.
  (h) Allocation of Accounting Support Fees Among Brokers and 
Dealers.--
          (1) Obligation to pay.--Each broker or dealer shall 
        pay to the Board the annual accounting support fee 
        allocated to such broker or dealer under this section.
          (2) Allocation.--Any amount due from a broker or 
        dealer (or from a particular class of brokers and 
        dealers) under this section shall be allocated among 
        brokers and dealers and payable by the broker or dealer 
        (or the brokers and dealers in the particular class, as 
        applicable).
          (3) Proportionality.--The amount due from a broker or 
        dealer shall be in proportion to the net capital of the 
        broker or dealer (before or after any adjustments), 
        compared to the total net capital of all brokers and 
        dealers (before or after any adjustments), in 
        accordance with rules issued by the Board.
  (i) Conforming Amendments.--Section 13(b)(2) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78m(b)(2)) is 
amended--
          (1) in subparagraph (A), by striking ``and'' at the 
        end; and
          (2) in subparagraph (B), by striking the period at 
        the end and inserting the following: ``; and
          ``(C) notwithstanding any other provision of law, pay 
        the allocable share of such issuer of a reasonable 
        annual accounting support fee or fees, determined in 
        accordance with section 109 of the Sarbanes-Oxley Act 
        of 2002.''.
  (j) Rule of Construction.--Nothing in this section shall be 
construed to render either the Board, the standard setting body 
referred to in subsection (a), or both, subject to procedures 
in Congress to authorize or appropriate public funds, or to 
prevent such organization from utilizing additional sources of 
revenue for its activities, such as earnings from publication 
sales, provided that each additional source of revenue shall 
not jeopardize, in the judgment of the Commission, the actual 
and perceived independence of such organization.
  (k) Start-Up Expenses of the Board.--From the unexpended 
balances of the appropriations to the Commission for fiscal 
year 2003, the Secretary of the Treasury is authorized to 
advance to the Board not to exceed the amount necessary to 
cover the expenses of the Board during its first fiscal year 
(which may be a short fiscal year).

           *       *       *       *       *       *       *


TITLE III--CORPORATE RESPONSIBILITY

           *       *       *       *       *       *       *


SEC. 308. FAIR FUNDS FOR INVESTORS.

  [(a) Civil Penalties to Be Used for the Relief of Victims.--
If, in any judicial or administrative action brought by the 
Commission under the securities laws, the Commission obtains a 
civil penalty against any person for a violation of such laws, 
or such person agrees, in settlement of any such action, to 
such civil penalty, the amount of such civil penalty shall, on 
the motion or at the direction of the Commission, be added to 
and become part of a disgorgement fund or other fund 
established for the benefit of the victims of such violation.]
  (a) Monetary Sanctions to Be Used for the Relief of 
Victims.--
          (1) In general.--If, in any judicial or 
        administrative action brought by the Commission under 
        the securities laws, the Commission obtains a monetary 
        sanction (as defined in section 21F(a) of the 
        Securities Exchange Act of 1934) against any person for 
        a violation of such laws, or such person agrees, in 
        settlement of any such action, to such monetary 
        sanction, the amount of such monetary sanction shall, 
        on the motion or at the direction of the Commission, be 
        added to and become part of a disgorgement fund or 
        other fund established for the benefit of the victims 
        of such violation.
          (2) Definition of victim.--In this subsection, the 
        term ``victim'' has the meaning given the term ``crime 
        victim'' in section 3771(e) of title 18, United States 
        Code.
  (b) Acceptance of Additional Donations.--The Commission is 
authorized to accept, hold, administer, and utilize gifts, 
bequests and devises of property, both real and personal, to 
the United States for a disgorgement fund or other fund 
described in subsection (a). Such gifts, bequests, and devises 
of money and proceeds from sales of other property received as 
gifts, bequests, or devises shall be deposited in such fund and 
shall be available for allocation in accordance with subsection 
(a).
  (c) Study Required.--
          (1) Subject of study.--The Commission shall review 
        and analyze--
                  (A) enforcement actions by the Commission 
                over the five years preceding the date of the 
                enactment of this Act that have included 
                proceedings to obtain civil penalties or 
                disgorgements to identify areas where such 
                proceedings may be utilized to efficiently, 
                effectively, and fairly provide restitution for 
                injured investors; and
                  (B) other methods to more efficiently, 
                effectively, and fairly provide restitution to 
                injured investors, including methods to improve 
                the collection rates for civil penalties and 
                disgorgements.
          (2) Report Required.--The Commission shall report its 
        findings to the Committee on Financial Services of the 
        House of Representatives and the Committee on Banking, 
        Housing, and Urban Affairs of the Senate within 180 
        days after of the date of the enactment of this Act, 
        and shall use such findings to revise its rules and 
        regulations as necessary. The report shall include a 
        discussion of regulatory or legislative actions that 
        are recommended or that may be necessary to address 
        concerns identified in the study.

           *       *       *       *       *       *       *


TITLE IV--ENHANCED FINANCIAL DISCLOSURES

           *       *       *       *       *       *       *


SEC. 404. MANAGEMENT ASSESSMENT OF INTERNAL CONTROLS.

  (a) Rules Required.--The Commission shall prescribe rules 
requiring each annual report required by section 13(a) or 15(d) 
of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 
78o(d)) to contain an internal control report, which shall--
          (1) state the responsibility of management for 
        establishing and maintaining an adequate internal 
        control structure and procedures for financial 
        reporting; and
          (2) contain an assessment, as of the end of the most 
        recent fiscal year of the issuer, of the effectiveness 
        of the internal control structure and procedures of the 
        issuer for financial reporting.
  (b) Internal Control Evaluation and Reporting.--With respect 
to the internal control assessment required by subsection (a), 
each registered public accounting firm that prepares or issues 
the audit report for the issuer, other than an issuer that is 
an emerging growth company (as defined in section 3 of the 
Securities Exchange Act of 1934), shall attest to, and report 
on, the assessment made by the management of the issuer. An 
attestation made under this subsection shall be made in 
accordance with standards for attestation engagements issued or 
adopted by the Board. Any such attestation shall not be the 
subject of a separate engagement.
  [(c) Exemption for Smaller Issuers.--Subsection (b) shall not 
apply with respect to any audit report prepared for an issuer 
that is neither a ``large accelerated filer'' nor an 
``accelerated filer'' as those terms are defined in Rule 12b-2 
of the Commission (17 C.F.R. 240.12b-2).]
  (c) Exemption for Smaller Issuers.--Subsection (b) shall not 
apply with respect to any audit report prepared for an issuer 
that has total market capitalization of less than $500,000,000, 
nor to any issuer that is a depository institution with assets 
of less than $1,000,000,000.
  (d) Temporary Exemption for Low-Revenue Issuers.--
          (1) Low-revenue exemption.--Subsection (b) shall not 
        apply with respect to an audit report prepared for an 
        issuer that--
                  (A) ceased to be an emerging growth company 
                on the last day of the fiscal year of the 
                issuer following the fifth anniversary of the 
                date of the first sale of common equity 
                securities of the issuer pursuant to an 
                effective registration statement under the 
                Securities Act of 1933;
                  (B) had average annual gross revenues of less 
                than $50,000,000 as of its most recently 
                completed fiscal year; and
                  (C) is not a large accelerated filer.
          (2) Expiration of temporary exemption.--An issuer 
        ceases to be eligible for the exemption described under 
        paragraph (1) at the earliest of--
                  (A) the last day of the fiscal year of the 
                issuer following the tenth anniversary of the 
                date of the first sale of common equity 
                securities of the issuer pursuant to an 
                effective registration statement under the 
                Securities Act of 1933;
                  (B) the last day of the fiscal year of the 
                issuer during which the average annual gross 
                revenues of the issuer exceed $50,000,000; or
                  (C) the date on which the issuer becomes a 
                large accelerated filer.
          (3) Definitions.--For purposes of this subsection:
                  (A) Average annual gross revenues.--The term 
                ``average annual gross revenues'' means the 
                total gross revenues of an issuer over its most 
                recently completed three fiscal years divided 
                by three.
                  (B) Emerging growth company.--The term 
                ``emerging growth company'' has the meaning 
                given such term under section 3 of the 
                Securities Exchange Act of 1934 (15 U.S.C. 
                78c).
                  (C) Large accelerated filer.--The term 
                ``large accelerated filer'' has the meaning 
                given that term under section 240.12b-2 of 
                title 17, Code of Federal Regulations, or any 
                successor thereto.

           *       *       *       *       *       *       *

                              ----------                              


FINANCIAL INSTITUTIONS REFORM, RECOVERY, AND ENFORCEMENT ACT OF 1989

           *       *       *       *       *       *       *



TITLE IX--REGULATORY ENFORCEMENT AUTHORITY AND CRIMINAL ENHANCEMENTS

           *       *       *       *       *       *       *


    Subtitle E--Civil Penalties For Violations Involving Financial 
                              Institutions

SEC. 951. CIVIL PENALTIES.

  (a) In General.--Whoever violates any provision of law to 
which this section is made applicable by subsection (c) shall 
be subject to a civil penalty in an amount assessed by the 
court in a civil action under this section.
  (b) Maximum Amount of Penalty.--
          (1) Generally.--The amount of the civil penalty shall 
        not exceed [$1,000,000] $1,500,000.
          (2) Special rule for continuing violations.--In the 
        case of a continuing violation, the amount of the civil 
        penalty may exceed the amount described in paragraph 
        (1) but may not exceed the lesser of [$1,000,000 per 
        day or $5,000,000] $1,500,000 per day or $7,500,000.
          (3) Special rule for violations creating gain or 
        loss.--(A) If any person derives pecuniary gain from 
        the violation, or if the violation results in pecuniary 
        loss to a person other than the violator, the amount of 
        the civil penalty may exceed the amounts described in 
        paragraphs (1) and (2) but may not exceed the amount of 
        such gain or loss.
          (B) As used in this paragraph, the term ``person'' 
        includes the Bank Insurance Fund, the Savings 
        Association Insurance Fund, and after the merger of 
        such funds, the Deposit Insurance Fund, and the 
        National Credit Union Share Insurance Fund.
  (c) Violations to Which Penalty Is Applicable.--This section 
applies to a violation of, or a conspiracy to violate--
          (1) section 215, 656, 657, 1005, 1006, 1007, 1014, or 
        1344 of title 18, United States Code;
          (2) section 287, 1001, 1032, 1341 or 1343 of title 
        18, United States Code, [affecting a federally insured 
        financial institution] against a federally insured 
        financial institution or by a federally insured 
        financial institution against an unaffiliated third 
        person; or
          (3) section 16(a) of the Small Business Act (15 
        U.S.C. 645(a)).
  (d) Effective Date.--This section shall apply to violations 
occurring on or after August 10, 1984.
  (e) Attorney General to Bring Action.--A civil action to 
recover a civil penalty under this section shall be commenced 
by the Attorney General.
  (f) Burden of Proof.--In a civil action to recover a civil 
penalty under this section, the Attorney General must establish 
the right to recovery by a preponderance of the evidence.
  (g) Administrative [Subpoenas] Investigations.--
          (1) In general.--For the purpose of conducting a 
        civil investigation in contemplation of a civil 
        proceeding under this section, the Attorney General 
        may--
                  (A) administer oaths and affirmations;
                  (B) take evidence; and
                  [(C) by subpoena, summon witnesses and 
                require the production of any books, papers, 
                correspondence, memoranda, or other records 
                which the Attorney General deems relevant or 
                material to the inquiry. Such subpoena may 
                require the attendance of witnesses and the 
                production of any such records from any place 
                in the United States at any place in the United 
                States designated by the Attorney General.]
                  (C) summon witnesses and require the 
                production of any books, papers, 
                correspondence, memoranda, or other records 
                which the Attorney General deems relevant or 
                material to the inquiry, if the Attorney 
                General--
                          (i) requests a court order from a 
                        court of competent jurisdiction for 
                        such actions and offers specific and 
                        articulable facts showing that there 
                        are reasonable grounds to believe that 
                        the information or testimony sought is 
                        relevant and material for conducting an 
                        investigation under this section; or
                          (ii) either personally or through 
                        delegation no lower than the Deputy 
                        Attorney General, issues and signs a 
                        subpoena for such actions and such 
                        subpoena is supported by specific and 
                        articulable facts showing that there 
                        are reasonable grounds to believe that 
                        the information or testimony sought is 
                        relevant for conducting an 
                        investigation under this section.
          (2) Procedures applicable.--The same procedures and 
        limitations as are provided with respect to civil 
        investigative demands in subsections (g), (h), and (j) 
        of section 1968 of title 18, United States Code, apply 
        with respect to a subpoena issued under this 
        subsection. Process required by such subsections to be 
        served upon the custodian shall be served on the 
        Attorney General. Failure to comply with an order of 
        the court to enforce such subpoena shall be punishable 
        as contempt.
          (3) Limitation.--In the case of a subpoena for which 
        the return date is less than 5 days after the date of 
        service, no person shall be found in contempt for 
        failure to comply by the return date if such person 
        files a petition under paragraph (2) not later than 5 
        days after the date of service.
  (h) Statute of Limitations.--A civil action under this 
section may not be commenced later than 10 years after the 
cause of action accrues.

           *       *       *       *       *       *       *


TITLE XI--REAL ESTATE APPRAISAL REFORM AMENDMENTS

           *       *       *       *       *       *       *


SEC. 1112. FUNCTIONS OF THE FEDERAL FINANCIAL INSTITUTIONS REGULATORY 
                    AGENCIES RELATING TO APPRAISER QUALIFICATIONS.

  (a) In General.--Each Federal financial institutions 
regulatory agency and the Resolution Trust Corporation shall 
prescribe, in accordance with sections 1113 and 1114 of this 
title, which categories of federally related transactions 
should be appraised by a State certified appraiser and which by 
a State licensed appraiser under this title.
  (b) Threshold Level.--Each Federal financial institutions 
regulatory agency and the Resolution Trust Corporation may 
establish a threshold level at or below which a certified or 
licensed appraiser is not required to perform appraisals in 
connection with federally related transactions, if such agency 
determines in writing that such threshold level does not 
represent a threat to the safety and soundness of financial 
institutions, and receives concurrence from the [Bureau of 
Consumer Financial Protection] Consumer Law Enforcement Agency 
that such threshold level provides reasonable protection for 
consumers who purchase 1-4 unit single-family residences.
  (c) GAO Study of Appraisals in Connection With Real Estate 
Related Financial Transactions Below the Threshold Level.--
          (1) GAO studies.--The Comptroller General of the 
        United States may conduct, under such conditions as the 
        Comptroller General determines appropriate, studies on 
        the adequacy and quality of appraisals or evaluations 
        conducted in connection with real estate related 
        financial transactions below the threshold level 
        established under subsection (b), taking into account--
                  (A) the cost to any financial institution 
                involved in any such transaction;
                  (B) the possibility of losses to the Deposit 
                Insurance Fund or the National Credit Union 
                Share Insurance Fund;
                  (C) the cost to any customer involved in any 
                such transaction; and
                  (D) the effect on low-income housing.
          (2) Reports to congress and the appropriate federal 
        financial institutions regulatory agencies.--Upon 
        completing each of the studies referred to in paragraph 
        (1), the Comptroller General shall submit a report on 
        the Comptroller General's findings and conclusions with 
        respect to such study to the Federal financial 
        institutions regulatory agencies, the Committee on 
        Banking, Finance and Urban Affairs of the House of 
        Representatives, and the Committee on Banking, Housing, 
        and Urban Affairs of the Senate, together with such 
        recommendations for legislative or administrative 
        action as the Comptroller General determines to be 
        appropriate.

           *       *       *       *       *       *       *


SEC. 1121. DEFINITIONS.

   For purposes of this title:
          (1) State appraiser certifying and licensing 
        agency.--The term ``State appraiser certifying and 
        licensing agency'' means a State agency established in 
        compliance with this title.
          (2) Appraisal subcommittee; subcommittee.--The terms 
        ``Appraisal Subcommittee'' and ``subcommittee'' mean 
        the Appraisal Subcommittee of the Federal Financial 
        Institutions Examination Council.
          (3) Council.--The term ``Council'' means the Federal 
        Financial Institutions Examinations Council.
          (4) Federally related transaction.--The term 
        ``federally related transaction'' means any real 
        estate-related financial transaction which--
                  (A) a federal financial institutions 
                regulatory agency or the Resolution Trust 
                Corporation engages in, contracts for, or 
                regulates; and
                  (B) requires the services of an appraiser.
          (5) Real estate related financial transaction.--The 
        term ``real estate-related financial transaction'' 
        means any transaction involving--
                  (A) the sale, lease, purchase, investment in 
                or exchange of real property, including 
                interests in property, or the financing 
                thereof;
                  (B) the refinancing of real property or 
                interests in real property; and
                  (C) the use of real property or interests in 
                property as security for a loan or investment, 
                including mortgage-backed securities.
          (6) Federal financial institutions regulatory 
        agencies.--The term ``Federal financial institutions 
        regulatory agencies'' means the Board of Governors of 
        the Federal Reserve System, the Federal Deposit 
        Insurance Corporation, the Office of the Comptroller of 
        the Currency, [the Office of Thrift Supervision,] and 
        the National Credit Union Administration.
          (7) Financial institution.--The term ``financial 
        institution'' means an insured depository institution 
        as defined in section 3 of the Federal Deposit 
        Insurance Act or an insured credit union as defined in 
        section 101 of the Federal Credit Union Act.
          (8) Chairperson.--The term ``Chairperson'' means the 
        Chairperson of the Appraisal Subcommittee selected by 
        the Council.
          (9) Foundation.--The terms ``Appraisal Foundation'' 
        and ``Foundation'' means the Appraisal Foundation 
        established on November 30, 1987, as a not for profit 
        corporation under the laws of Illinois.
          (10) Written appraisal.--The term ``written 
        appraisal'' means a written statement used in 
        connection with a federally related transaction that is 
        independently and impartially prepared by a licensed or 
        certified appraiser setting forth an opinion of defined 
        value of an adequately described property as of a 
        specific date, supported by presentation and analysis 
        of relevant market information.
          (11) Appraisal management company.--The term 
        ``appraisal management company'' means, in connection 
        with valuing properties collateralizing mortgage loans 
        or mortgages incorporated into a securitization, any 
        external third party authorized either by a creditor of 
        a consumer credit transaction secured by a consumer's 
        principal dwelling or by an underwriter of or other 
        principal in the secondary mortgage markets, that 
        oversees a network or panel of more than 15 certified 
        or licensed appraisers in a State or 25 or more 
        nationally within a given year--
                  (A) to recruit, select, and retain 
                appraisers;
                  (B) to contract with licensed and certified 
                appraisers to perform appraisal assignments;
                  (C) to manage the process of having an 
                appraisal performed, including providing 
                administrative duties such as receiving 
                appraisal orders and appraisal reports, 
                submitting completed appraisal reports to 
                creditors and underwriters, collecting fees 
                from creditors and underwriters for services 
                provided, and reimbursing appraisers for 
                services performed; or
                  (D) to review and verify the work of 
                appraisers.

           *       *       *       *       *       *       *


SEC. 1124. APPRAISAL MANAGEMENT COMPANY MINIMUM REQUIREMENTS.

  (a) In General.--The Board of Governors of the Federal 
Reserve System, the Comptroller of the Currency, the Federal 
Deposit Insurance Corporation, the National Credit Union 
Administration Board, the Federal Housing Finance Agency, and 
the [Bureau of Consumer Financial Protection] Consumer Law 
Enforcement Agency shall jointly, by rule, establish minimum 
requirements to be applied by a State in the registration of 
appraisal management companies. Such requirements shall include 
a requirement that such companies--
          (1) register with and be subject to supervision by a 
        State appraiser certifying and licensing agency in each 
        State in which such company operates;
          (2) verify that only licensed or certified appraisers 
        are used for federally related transactions;
          (3) require that appraisals coordinated by an 
        appraisal management company comply with the Uniform 
        Standards of Professional Appraisal Practice; and
          (4) require that appraisals are conducted 
        independently and free from inappropriate influence and 
        coercion pursuant to the appraisal independence 
        standards established under section 129E of the Truth 
        in Lending Act.
  (b) Relation to State Law.--Nothing in this section shall be 
construed to prevent States from establishing requirements in 
addition to any rules promulgated under subsection (a).
  (c) Federally Regulated Financial Institutions.--The 
requirements of subsection (a) shall apply to an appraisal 
management company that is a subsidiary owned and controlled by 
a financial institution and regulated by a Federal financial 
institution regulatory agency. An appraisal management company 
that is a subsidiary owned and controlled by a financial 
institution regulated by a Federal financial institution 
regulatory agency shall not be required to register with a 
State.
  (d) Registration Limitations.--An appraisal management 
company shall not be registered by a State or included on the 
national registry if such company, in whole or in part, 
directly or indirectly, is owned by any person who has had an 
appraiser license or certificate refused, denied, cancelled, 
surrendered in lieu of revocation, or revoked in any State. 
Additionally, each person that owns more than 10 percent of an 
appraisal management company shall be of good moral character, 
as determined by the State appraiser certifying and licensing 
agency, and shall submit to a background investigation carried 
out by the State appraiser certifying and licensing agency.
  (e) Reporting.--The Board of Governors of the Federal Reserve 
System, the Comptroller of the Currency, the Federal Deposit 
Insurance Corporation, the National Credit Union Administration 
Board, the Federal Housing Finance Agency, and the [Bureau of 
Consumer Financial Protection] Consumer Law Enforcement Agency 
shall jointly promulgate regulations for the reporting of the 
activities of appraisal management companies to the Appraisal 
Subcommittee in determining the payment of the annual registry 
fee.
  (f) Effective Date.--
          (1) In general.--No appraisal management company may 
        perform services related to a federally related 
        transaction in a State after the date that is 36 months 
        after the date on which the regulations required to be 
        prescribed under subsection (a) are prescribed in final 
        form unless such company is registered with such State 
        or subject to oversight by a Federal financial 
        institutions regulatory agency.
          (2) Extension of effective date.--Subject to the 
        approval of the Council, the Appraisal Subcommittee may 
        extend by an additional 12 months the requirements for 
        the registration and supervision of appraisal 
        management companies if it makes a written finding that 
        a State has made substantial progress in establishing a 
        State appraisal management company registration and 
        supervision system that appears to conform with the 
        provisions of this title.

SEC. 1125. AUTOMATED VALUATION MODELS USED TO ESTIMATE COLLATERAL VALUE 
                    FOR MORTGAGE LENDING PURPOSES.

  (a) In General.--Automated valuation models shall adhere to 
quality control standards designed to--
          (1) ensure a high level of confidence in the 
        estimates produced by automated valuation models;
          (2) protect against the manipulation of data;
          (3) seek to avoid conflicts of interest;
          (4) require random sample testing and reviews; and
          (5) account for any other such factor that the 
        agencies listed in subsection (b) determine to be 
        appropriate.
  (b) Adoption of Regulations.--The Board, the Comptroller of 
the Currency, the Federal Deposit Insurance Corporation, the 
National Credit Union Administration Board, the Federal Housing 
Finance Agency, and the [Bureau of Consumer Financial 
Protection] Consumer Law Enforcement Agency, in consultation 
with the staff of the Appraisal Subcommittee and the Appraisal 
Standards Board of the Appraisal Foundation, shall promulgate 
regulations to implement the quality control standards required 
under this section.
  (c) Enforcement.--Compliance with regulations issued under 
this subsection shall be enforced by--
          (1) with respect to a financial institution, or 
        subsidiary owned and controlled by a financial 
        institution and regulated by a Federal financial 
        institution regulatory agency, the Federal financial 
        institution regulatory agency that acts as the primary 
        Federal supervisor of such financial institution or 
        subsidiary; and
          (2) with respect to other participants in the market 
        for appraisals of 1-to-4 unit single family residential 
        real estate, the Federal Trade Commission, the [Bureau 
        of Consumer Financial Protection] Consumer Law 
        Enforcement Agency, and a State attorney general.
  (d) Automated Valuation Model Defined.--For purposes of this 
section, the term ``automated valuation model'' means any 
computerized model used by mortgage originators and secondary 
market issuers to determine the collateral worth of a mortgage 
secured by a consumer's principal dwelling.

           *       *       *       *       *       *       *


TITLE XII--MISCELLANEOUS PROVISIONS

           *       *       *       *       *       *       *


SEC. 1206. COMPARABILITY IN COMPENSATION SCHEDULES.

  (a) In General.--The Federal Deposit Insurance Corporation, 
the Comptroller of the Currency, the National Credit Union 
Administration Board, the [Federal Housing Finance Board, the 
Office of Financial Research, and the Bureau of Consumer 
Financial Protection the Oversight Board of the Resolution 
Trust Corporation, the Farm Credit Administration] Federal 
Housing Finance Board, the Consumer Law Enforcement Agency, and 
the Farm Credit Administration, in establishing and adjusting 
schedules of compensation and benefits which are to be 
determined solely by each agency under applicable provisions of 
law, shall inform the heads of the other agencies and the 
Congress of such compensation and benefits and shall seek to 
maintain comparability regarding compensation and benefits.
  (b) Commodity Futures Trading Commission.--In establishing 
and adjusting schedules of compensation and benefits for 
employees of the Commodity Futures Trading Commission under 
applicable provisions of law, the Commission shall--
          (1) inform the heads of the agencies referred to in 
        subsection (a) and Congress of such compensation and 
        benefits; and
          (2) seek to maintain comparability with those 
        agencies regarding compensation and benefits.

           *       *       *       *       *       *       *

                              ----------                              


HOME OWNERS' LOAN ACT

           *       *       *       *       *       *       *



SEC. 4. SUPERVISION OF SAVINGS ASSOCIATIONS.

  (a) Savings Associations.--
          (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.
          (3) Safe and sound housing credit to be encouraged.--
        The Comptroller and the Corporation shall exercise all 
        powers granted to the Comptroller and the Corporation 
        under this Act so as to encourage savings associations 
        to provide credit for housing safely and soundly.
  (b) Accounting and Disclosure.--
          (1) In general.--The Comptroller shall, by 
        regulation, prescribe uniform accounting and disclosure 
        standards for savings associations, to be used in 
        determining savings associations' compliance with all 
        applicable regulations.
          (2) Specific requirements for accounting standards.--
        Subject to section 5(t), the uniform accounting 
        standards prescribed under paragraph (1) shall--
                  (A) incorporate generally accepted accounting 
                principles to the same degree that such 
                principles are used to determine compliance 
                with regulations prescribed by the Federal 
                banking agencies; and
                  (B) allow for no deviation from full 
                compliance with such standards as are in effect 
                after December 31, 1993.
          (3) Authority to prescribe more stringent accounting 
        standards.--The Comptroller may at any time prescribe 
        accounting standards more stringent than required under 
        paragraph (2) if the Comptroller determines that the 
        more stringent standards are necessary to ensure the 
        safe and sound operation of savings associations.
  (c) Stringency of Standards.--The regulations of the 
Comptroller and the policies of the Comptroller and the 
Corporation governing the safe and sound operation of savings 
associations, including regulations and policies governing 
asset classification and appraisals, shall be no less stringent 
than those established by the Comptroller for national banks.
  (d) Investment of Certain Funds in Accounts of Savings 
Associations.--The savings accounts and share accounts of 
savings associations insured by the Corporation shall be lawful 
investments and may be accepted as security for all public 
funds of the United States, fiduciary and trust funds under the 
authority or control of the United States or any officer 
thereof, and for the funds of all corporations organized under 
the laws of the United States (subject to any regulatory 
authority otherwise applicable), regardless of any limitation 
of law upon the investment of any such funds or upon the 
acceptance of security for the investment or deposit of any of 
such funds.
  (e) Participation by Savings Associations in Lotteries and 
Related Activities.--
          (1) Participation prohibited.--No savings association 
        may--
                  (A) deal in lottery tickets;
                  (B) deal in bets used as a means or 
                substitute for participation in a lottery;
                  (C) announce, advertise, or publicize the 
                existence of any lottery; or
                  (D) announce, advertise, or publicize the 
                existence or identity of any participant or 
                winner, as such, in a lottery.
          (2) Use of facilities prohibited.--No savings 
        association may permit--
                  (A) the use of any part of any of its own 
                offices by any person for any purpose forbidden 
                to the institution under paragraph (1); or
                  (B) direct access by the public from any of 
                its own offices to any premises used by any 
                person for any purpose forbidden to the 
                institution under paragraph (1).
          (3) Definitions.--For purposes of this subsection--
                  (A) Deal in.--The term ``deal in'' includes 
                making, taking, buying, selling, redeeming, or 
                collecting.
                  (B) Lottery.--The term ``lottery'' includes 
                any arrangement, other than a savings promotion 
                raffle, under which--
                          (i) 3 or more persons (hereafter in 
                        this subparagraph referred to as the 
                        ``participants'') advance money or 
                        credit to another in exchange for the 
                        possibility or expectation that 1 or 
                        more but not all of the participants 
                        (hereafter in this paragraph referred 
                        to as the ``winners'') will receive by 
                        reason of those participants' advances 
                        more than the amounts those 
                        participants have advanced; and
                          (ii) the identity of the winners is 
                        determined by any means which 
                        includes--
                                  (I) a random selection;
                                  (II) a game, race, or 
                                contest; or
                                  (III) any record or 
                                tabulation of the result of 1 
                                or more events in which any 
                                participant has no interest 
                                except for the bearing that 
                                event has on the possibility 
                                that the participant may become 
                                a winner.
                  (C) Lottery ticket.--The term ``lottery 
                ticket'' includes any right, privilege, or 
                possibility (and any ticket, receipt, record, 
                or other evidence of any such right, privilege, 
                or possibility) of becoming a winner in a 
                lottery.
                  (D) Savings promotion raffle.--The term 
                ``savings promotion raffle'' means a contest in 
                which the sole consideration required for a 
                chance of winning designated prizes is obtained 
                by the deposit of a specified amount of money 
                in a savings account or other savings program, 
                where each ticket or entry has an equal chance 
                of being drawn, such contest being subject to 
                regulations that may from time to time be 
                promulgated by the appropriate prudential 
                regulator (as defined in section 1002 of the 
                Consumer Financial Protection Act of 2010 (12 
                U.S.C. 5481)).
          (4) Exception for state lotteries.--Paragraphs (1) 
        and (2) shall not apply with respect to any savings 
        association accepting funds from, or performing any 
        lawful services for, any State operating a lottery, or 
        any officer or employee of such a State who is charged 
        with administering the lottery.
          (5) Regulations.--The Comptroller shall prescribe 
        such regulations as may be necessary to provide for 
        enforcement of this subsection and to prevent any 
        evasion of any provision of this subsection.
  (f) Federally Related Mortgage Loan Disclosures.--A savings 
association may not make a federally related mortgage loan to 
an agent, trustee, nominee, or other person acting in a 
fiduciary capacity without requiring that the identity of the 
person receiving the beneficial interest of such loan shall at 
all times be revealed to the savings association. At the 
request of the appropriate Federal banking agency, the savings 
association shall report to the appropriate Federal banking 
agency the identity of such person and the nature and amount of 
the loan.
  (g) Preemption of State Usury Laws.--(1) Notwithstanding any 
State law, a savings association may charge interest on any 
extension of credit at a rate of not more than 1 percent in 
excess of the discount rate on 90-day commercial paper in 
effect at the Federal Reserve bank in the Federal Reserve 
district in which such savings association is located or at the 
rate allowed by the laws of the State in which such savings 
association is located, whichever is greater. A loan that is 
valid when made as to its maximum rate of interest in 
accordance with this subsection shall remain valid with respect 
to such rate regardless of whether the loan is subsequently 
sold, assigned, or otherwise transferred to a third party, and 
may be enforced by such third party notwithstanding any State 
law to the contrary.
  (2) If the rate prescribed in paragraph (1) exceeds the rate 
such savings association would be permitted to charge in the 
absence of this subsection, the receiving or charging a greater 
rate of interest than that prescribed by paragraph (1), when 
knowingly done, shall be deemed a forfeiture of the entire 
interest which the extension of credit carries with it, or 
which has been agreed to be paid thereon. If such greater rate 
of interest has been paid, the person who paid it may recover, 
in a civil action commenced in a court of appropriate 
jurisdiction not later than 2 years after the date of such 
payment, an amount equal to twice the amount of the interest 
paid from the savings association taking or receiving such 
interest.
  (h) Form and Maturity of Securities.--No savings association 
shall--
          (1) issue securities which guarantee a definite 
        maturity except with the specific approval of the 
        appropriate Federal banking agency, or
          (2) issue any securities the form of which has not 
        been approved by the appropriate Federal banking 
        agency.

SEC. 5. FEDERAL SAVINGS ASSOCIATIONS.

  (a) In General.--In order to provide thrift institutions for 
the deposit of funds and for the extension of credit for homes 
and other goods and services, the Comptroller of the Currency 
is authorized, under such regulations as the Comptroller of the 
Currency may prescribe--
          (1) to provide for the organization, incorporation, 
        examination, operation, and regulation of associations 
        to be known as Federal savings associations (including 
        Federal savings banks), and
          (2) to issue charters therefor,
giving primary consideration of the best practices of thrift 
institutions in the United States. The lending and investment 
powers conferred by this section are intended to encourage such 
institutions to provide credit for housing safely and soundly.
  (b) Deposits and Related Powers.--
          (1) Deposit accounts.--
                  (A) Subject to the terms of its charter and 
                regulations of the Comptroller of the Currency, 
                a Federal savings association may--
                          (i) raise funds through such deposit, 
                        share, or other accounts, including 
                        demand deposit accounts (hereafter in 
                        this section referred to as 
                        ``accounts''); and
                          (ii) issue passbooks, certificates, 
                        or other evidence of accounts.
                  (B) A Federal savings association may not 
                permit any overdraft (including an intraday 
                overdraft) on behalf of an affiliate, or incur 
                any such overdraft in such savings 
                association's account at a Federal reserve bank 
                or Federal home loan bank on behalf of an 
                affiliate.
                All savings accounts and demand accounts shall 
                have the same priority upon liquidation. 
                Holders of accounts and obligors of a Federal 
                savings association shall, to such extent as 
                may be provided by its charter or by 
                regulations of the Comptroller of the Currency, 
                be members of the savings association, and 
                shall have such voting rights and such other 
                rights as are thereby provided.
                  (C) A Federal savings association may require 
                not less than 14 days notice prior to payment 
                of savings accounts if the charter of the 
                savings association or the regulations of the 
                Comptroller of the Currency so provide.
                  (D) If a Federal savings association does not 
                pay all withdrawals in full (subject to the 
                right of the association, where applicable, to 
                require notice), the payment of withdrawals 
                from accounts shall be subject to such rules 
                and procedures as may be prescribed by the 
                savings association's charter or by regulation 
                of the Comptroller of the Currency. Except as 
                authorized in writing by the Comptroller of the 
                Currency, any Federal savings association that 
                fails to make full payment of any withdrawal 
                when due shall be deemed to be in an unsafe or 
                unsound condition.
                  (E) Accounts may be subject to check or to 
                withdrawal or transfer on negotiable or 
                transferable or other order or authorization to 
                the Federal savings association, as the 
                Comptroller of the Currency may by regulation 
                provide.
                  (F) A Federal savings association may 
                establish remote service units for the purpose 
                of crediting savings or demand accounts, 
                debiting such accounts, crediting payments on 
                loans, and the disposition of related financial 
                transactions, as provided in regulations 
                prescribed by the Comptroller of the Currency.
          (2) Other liabilities.--To such extent as the 
        Comptroller of the Currency may authorize in writing, a 
        Federal savings association may borrow, may give 
        security, may be surety as defined by the Comptroller 
        of the Currency and may issue such notes, bonds, 
        debentures, or other obligations, or other securities, 
        including capital stock.
          (3) Loans from state housing finance agencies.--
                  (A) In general.--Subject to regulation by the 
                Comptroller of the Currency but without regard 
                to any other provision of this subsection, any 
                Federal savings association that is in 
                compliance with the capital standards in effect 
                under subsection (t) may borrow funds from a 
                State mortgage finance agency of the State in 
                which the head office of such savings 
                association is situated to the same extent as 
                State law authorizes a savings association 
                organized under the laws of such State to 
                borrow from the State mortgage finance agency.
                  (B) Interest rate.--A Federal savings 
                association may not make any loan of funds 
                borrowed under subparagraph (A) at an interest 
                rate which exceeds by more than 1\3/4\ percent 
                per annum the interest rate paid to the State 
                mortgage finance agency on the obligations 
                issued to obtain the funds so borrowed.
          (4) Mutual capital certificates.--In accordance with 
        regulations issued by the Comptroller of the Currency, 
        mutual capital certificates may be issued and sold 
        directly to subscribers or through underwriters. Such 
        certificates may be included in calculating capital for 
        the purpose of subsection (t) to the extent permitted 
        by the Comptroller of the Currency. The issuance of 
        certificates under this paragraph does not constitute a 
        change of control or ownership under this Act or any 
        other law unless there is in fact a change in control 
        or reorganization. Regulations relating to the issuance 
        and sale of mutual capital certificates shall provide 
        that such certificates--
                  (A) are subordinate to all savings accounts, 
                savings certificates, and debt obligations;
                  (B) constitute a claim in liquidation on the 
                general reserves, surplus, and undivided 
                profits of the Federal savings association 
                remaining after the payment in full of all 
                savings accounts, savings certificates, and 
                debt obligations;
                  (C) are entitled to the payment of dividends; 
                and
                  (D) may have a fixed or variable dividend 
                rate.
  (c) Loans and Investments.--To the extent specified in 
regulations of the Comptroller, a Federal savings association 
may invest in, sell, or otherwise deal in the following loans 
and other investments:
          (1) Loans or investments without percentage of assets 
        limitation.--Without limitation as a percentage of 
        assets, the following are permitted:
                  (A) Account loans.--Loans on the security of 
                its savings accounts and loans specifically 
                related to transaction accounts.
                  (B) Residential real property loans.--Loans 
                on the security of liens upon residential real 
                property.
                  (C) United states government securities.--
                Investments in obligations of, or fully 
                guaranteed as to principal and interest by, the 
                United States.
                  (D) Federal home loan bank and federal 
                national mortgage association securities.--
                Investments in the stock or bonds of a Federal 
                home loan bank or in the stock of the Federal 
                National Mortgage Association.
                  (E) Federal home loan mortgage corporation 
                instruments.--Investments in mortgages, 
                obligations, or other securities which are or 
                have been sold by the Federal Home Loan 
                Mortgage Corporation pursuant to section 305 or 
                306 of the Federal Home Loan Mortgage 
                Corporation Act.
                  (F) Other government securities.--Investments 
                in obligations, participations, securities, or 
                other instruments issued by, or fully 
                guaranteed as to principal and interest by, the 
                Federal National Mortgage Association, the 
                Student Loan Marketing Association, the 
                Government National Mortgage Association, or 
                any agency of the United States. A savings 
                association may issue and sell securities which 
                are guaranteed pursuant to section 306(g) of 
                the National Housing Act.
                  (G) Deposits.--Investments in accounts of any 
                insured depository institution, as defined in 
                section 3 of the Federal Deposit Insurance Act.
                  (H) State securities.--Investments in 
                obligations issued by any State or political 
                subdivision thereof (including any agency, 
                corporation, or instrumentality of a State or 
                political subdivision). A Federal savings 
                association may not invest more than 10 percent 
                of its capital in obligations of any one 
                issuer, exclusive of investments in general 
                obligations of any issuer.
                  (I) Purchase of insured loans.--Purchase of 
                loans secured by liens on improved real estate 
                which are insured or guaranteed under the 
                National Housing Act, the Servicemen's 
                Readjustment Act of 1944, or chapter 37 of 
                title 38, United States Code.
                  (J) Home improvement and manufactured home 
                loans.--Loans made to repair, equip, alter, or 
                improve any residential real property, and 
                loans made for manufactured home financing.
                  (K) Insured loans to finance the purchase of 
                fee simple.--Loans insured under section 240 of 
                the National Housing Act.
                  (L) Loans to financial institutions, brokers, 
                and dealers.--Loans to--
                          (i) financial institutions with 
                        respect to which the United States or 
                        an agency or instrumentality thereof 
                        has any function of examination or 
                        supervision, or
                          (ii) any broker or dealer registered 
                        with the Securities and Exchange 
                        Commission,
                which are secured by loans, obligations, or 
                investments in which the Federal savings 
                association has the statutory authority to 
                invest directly.
                  (M) Liquidity investments.--Investments 
                (other than equity investments), identified by 
                the Comptroller, for liquidity purposes, 
                including cash, funds on deposit at a Federal 
                reserve bank or a Federal home loan bank, or 
                bankers' acceptances.
                  (N) Investment in the national housing 
                partnership corporation, partnerships, and 
                joint ventures.--Investments in shares of stock 
                issued by a corporation authorized to be 
                created pursuant to title IX of the Housing and 
                Urban Development Act of 1968, and investments 
                in any partnership, limited partnership, or 
                joint venture formed pursuant to section 907(a) 
                or 907(c) of such Act.
                  (O) Certain hud insured or guaranteed 
                investments.--Loans that are secured by 
                mortgages--
                          (i) insured under title X of the 
                        National Housing Act, or
                          (ii) guaranteed under title IV of the 
                        Housing and Urban Development Act of 
                        1968, under part B of the National 
                        Urban Policy and New Community 
                        Development Act of 1970, or under 
                        section 802 of the Housing and 
                        Community Development Act of 1974.
                  (P) State housing corporation investments.--
                Obligations of and loans to any State housing 
                corporation, if--
                          (i) such obligations or loans are 
                        secured directly, or indirectly through 
                        an agent or fiduciary, by a first lien 
                        on improved real estate which is 
                        insured under the provisions of the 
                        National Housing Act, and
                          (ii) in the event of default, the 
                        holder of the obligations or loans has 
                        the right directly, or indirectly 
                        through an agent or fiduciary, to cause 
                        to be subject to the satisfaction of 
                        such obligations or loans the real 
                        estate described in the first lien or 
                        the insurance proceeds under the 
                        National Housing Act.
                  (Q) Investment companies.--A Federal savings 
                association may invest in, redeem, or hold 
                shares or certificates issued by any open-end 
                management investment company which--
                          (i) is registered with the Securities 
                        and Exchange Commission under the 
                        Investment Company Act of 1940, and
                          (ii) the portfolio of which is 
                        restricted by such management company's 
                        investment policy (changeable only if 
                        authorized by shareholder vote) solely 
                        to investments that a Federal savings 
                        association by law or regulation may, 
                        without limitation as to percentage of 
                        assets, invest in, sell, redeem, hold, 
                        or otherwise deal in.
                  (R) Mortgage-backed securities.--Investments 
                in securities that--
                          (i) are offered and sold pursuant to 
                        section 4(5) of the Securities Act of 
                        1933; or
                          (ii) are mortgage related securities 
                        (as defined in section 3(a)(41) of the 
                        Securities Exchange Act of 1934),
                subject to such regulations as the Comptroller 
                may prescribe, including regulations 
                prescribing minimum size of the issue (at the 
                time of initial distribution) or minimum 
                aggregate sales price, or both.
                  (S) Small business related securities.--
                Investments in small business related 
                securities (as defined in section 3(a)(53) of 
                the Securities Exchange Act of 1934), subject 
                to such regulations as the Comptroller may 
                prescribe, including regulations concerning the 
                minimum size of the issue (at the time of the 
                initial distribution), the minimum aggregate 
                sales price, or both.
                  (T) Credit card loans.--Loans made through 
                credit cards or credit card accounts.
                  (U) Educational loans.--Loans made for the 
                payment of educational expenses.
          (2) Loans or investments limited to a percentage of 
        assets or capital.--The following loans or investments 
        are permitted, but only to the extent specified:
                  (A) Commercial and other loans.--Secured or 
                unsecured loans for commercial, corporate, 
                business, or agricultural purposes. The 
                aggregate amount of loans made under this 
                subparagraph may not exceed 20 percent of the 
                total assets of the Federal savings 
                association, and amounts in excess of 10 
                percent of such total assets may be used under 
                this subparagraph only for small business 
                loans, as that term is defined by the 
                Comptroller.
                  (B) Nonresidential real property loans.--
                          (i) In general.--Loans on the 
                        security of liens upon nonresidential 
                        real property. Except as provided in 
                        clause (ii), the aggregate amount of 
                        such loans shall not exceed 400 percent 
                        of the Federal savings association's 
                        capital, as determined under subsection 
                        (t).
                          (ii) Exception.--The Comptroller may 
                        permit a savings association to exceed 
                        the limitation set forth in clause (i) 
                        if the Comptroller determines that the 
                        increased authority--
                                  (I) poses no significant risk 
                                to the safe and sound operation 
                                of the association, and
                                  (II) is consistent with 
                                prudent operating practices.
                          (iii) Monitoring.--If the Comptroller 
                        permits any increased authority 
                        pursuant to clause (ii), the 
                        Comptroller shall closely monitor the 
                        Federal savings association's condition 
                        and lending activities to ensure that 
                        the savings association carries out all 
                        authority under this paragraph in a 
                        safe and sound manner and complies with 
                        this subparagraph and all relevant laws 
                        and regulations.
                  (C) Investments in personal property.--
                Investments in tangible personal property, 
                including vehicles, manufactured homes, 
                machinery, equipment, or furniture, for rental 
                or sale. Investments under this subparagraph 
                may not exceed 10 percent of the assets of the 
                Federal savings association.
                  (D) Consumer loans and certain securities.--A 
                Federal savings association may make loans for 
                personal, family, or household purposes, 
                including loans reasonably incident to 
                providing such credit, and may invest in, sell, 
                or hold commercial paper and corporate debt 
                securities, as defined and approved by the 
                Comptroller. Loans and other investments under 
                this subparagraph may not exceed 35 percent of 
                the assets of the Federal savings association, 
                except that amounts in excess of 30 percent of 
                the assets may be invested only in loans which 
                are made by the association directly to the 
                original obligor and with respect to which the 
                association does not pay any finder, referral, 
                or other fee, directly or indirectly, to any 
                third party.
          (3) Loans or investments limited to 5 percent of 
        assets.--The following loans or investments are 
        permitted, but not to exceed 5 percent of assets of a 
        Federal savings association for each subparagraph:
                  (A) Community development investments.--
                Investments in real property and obligations 
                secured by liens on real property located 
                within a geographic area or neighborhood 
                receiving concentrated development assistance 
                by a local government under title I of the 
                Housing and Community Development Act of 1974. 
                No investment under this subparagraph in such 
                real property may exceed an aggregate of 2 
                percent of the assets of the Federal savings 
                association.
                  (B) Nonconforming loans.--Loans upon the 
                security of or respecting real property or 
                interests therein used for primarily 
                residential or farm purposes that do not comply 
                with the limitations of this subsection.
                  (C) Construction loans without security.--
                Loans--
                          (i) the principal purpose of which is 
                        to provide financing with respect to 
                        what is or is expected to become 
                        primarily residential real estate; and
                          (ii) with respect to which the 
                        association--
                                  (I) relies substantially on 
                                the borrower's general credit 
                                standing and projected future 
                                income for repayment, without 
                                other security; or
                                  (II) relies on other 
                                assurances for repayment, 
                                including a guarantee or 
                                similar obligation of a third 
                                party.
                The aggregate amount of such investments shall 
                not exceed the greater of the Federal savings 
                association's capital or 5 percent of its 
                assets.
          (4) Other loans and investments.--The following 
        additional loans and other investments to the extent 
        authorized below:
                  (A) Business development credit 
                corporations.--A Federal savings association 
                that is in compliance with the capital 
                standards prescribed under subsection (t) may 
                invest in, lend to, or to commit itself to lend 
                to, any business development credit corporation 
                incorporated in the State in which the home 
                office of the association is located in the 
                same manner and to the same extent as savings 
                associations chartered by such State are 
                authorized. The aggregate amount of such 
                investments, loans, and commitments of any such 
                Federal savings association shall not exceed 
                one-half of 1 percent of the association's 
                total outstanding loans or $250,000, whichever 
                is less.
                  (B) Service corporations.--Investments in the 
                capital stock, obligations, or other securities 
                of any corporation organized under the laws of 
                the State in which the Federal savings 
                association's home office is located, if such 
                corporation's entire capital stock is available 
                for purchase only by savings associations of 
                such State and by Federal associations having 
                their home offices in such State. No Federal 
                savings association may make any investment 
                under this subparagraph if the association's 
                aggregate outstanding investment under this 
                subparagraph would exceed 3 percent of the 
                association's assets. Not less than one-half of 
                the investment permitted under this 
                subparagraph which exceeds 1 percent of the 
                association's assets shall be used primarily 
                for community, inner-city, and community 
                development purposes.
                  (C) Foreign assistance investments.--
                Investments in housing project loans having the 
                benefit of any guaranty under section 221 of 
                the Foreign Assistance Act of 1961 or loans 
                having the benefit of any guarantee under 
                section 224 of such Act, or any commitment or 
                agreement with respect to such loans made 
                pursuant to either of such sections and in the 
                share capital and capital reserve of the Inter-
                American Savings and Loan Bank. This authority 
                extends to the acquisition, holding, and 
                disposition of loans guaranteed under section 
                221 or 222 of such Act. Investments under this 
                subparagraph shall not exceed 1 percent of the 
                Federal savings association's assets.
                  (D) Small business investment companies.--A 
                Federal savings association may invest in 
                stock, obligations, or other securities of any 
                small business investment company formed 
                pursuant to section 301(d) of the Small 
                Business Investment Act of 1958 for the purpose 
                of aiding members of a Federal home loan bank. 
                A Federal savings association may not make any 
                investment under this subparagraph if its 
                aggregate outstanding investment under this 
                subparagraph would exceed 1 percent of the 
                assets of such savings association.
                  (E) Bankers' banks.--A Federal savings 
                association may purchase for its own account 
                shares of stock of a bankers' bank, described 
                in Paragraph Seventh of section 5136 of the 
                Revised Statutes or in section 5169(b) of the 
                Revised Statutes, on the same terms and 
                conditions as a national bank may purchase such 
                shares.
                  (F) New markets venture capital companies.--A 
                Federal savings association may invest in 
                stock, obligations, or other securities of any 
                New Markets Venture Capital company as defined 
                in section 351 of the Small Business Investment 
                Act of 1958, except that a Federal savings 
                association may not make any investment under 
                this subparagraph if its aggregate outstanding 
                investment under this subparagraph would exceed 
                5 percent of the capital and surplus of such 
                savings association.
          (5) Transition rule for savings associations 
        acquiring banks.--
                  (A) In general.--If, under section 5(d)(3) of 
                the Federal Deposit Insurance Act, a savings 
                association acquires all or substantially all 
                of the assets of a bank, the appropriate 
                Federal banking agency may permit the savings 
                association to retain any such asset during the 
                2-year period beginning on the date of the 
                acquisition.
                  (B) Extension.--The appropriate Federal 
                banking agency may extend the 2-year period 
                described in subparagraph (A) for not more than 
                1 year at a time and not more than 2 years in 
                the aggregate, if the appropriate Federal 
                banking agency determines that the extension is 
                consistent with the purposes of this Act.
          (6) Definitions.--For purposes of this subsection, 
        the following definitions shall apply:
                  (A) Residential property.--The terms 
                ``residential real property'' or ``residential 
                real estate'' mean leaseholds, homes (including 
                condominiums and cooperatives, except that in 
                connection with loans on individual cooperative 
                units, such loans shall be adequately secured 
                as defined by the Comptroller) and, 
                combinations of homes or dwelling units and 
                business property, involving only minor or 
                incidental business use, or property to be 
                improved by construction of such structures.
                  (B) Loans.--The term ``loans'' includes 
                obligations and extensions or advances of 
                credit; and any reference to a loan or 
                investment includes an interest in such a loan 
                or investment.
  (d) Regulatory Authority.--
          (1) In general.--
                  (A) Enforcement.--The appropriate Federal 
                banking agency shall have power to enforce this 
                section, section 8 of the Federal Deposit 
                Insurance Act, and regulations prescribed 
                hereunder. In enforcing any provision of this 
                section, regulations prescribed under this 
                section, or any other law or regulation, or in 
                any other action, suit, or proceeding to which 
                the appropriate Federal banking agency is a 
                party or in which the appropriate Federal 
                banking agency is interested, and in the 
                administration of conservatorships and 
                receiverships, the appropriate Federal banking 
                agency may act in the name of the appropriate 
                Federal banking agency and through the 
                attorneys of the appropriate Federal banking 
                agency. Except as otherwise provided, the 
                Comptroller shall be subject to suit (other 
                than suits on claims for money damages) by any 
                Federal savings association or director or 
                officer thereof with respect to any matter 
                under this section or any other applicable law, 
                or regulation thereunder, in the United States 
                district court for the judicial district in 
                which the savings association's home office is 
                located, or in the United States District Court 
                for the District of Columbia, and the 
                Comptroller may be served with process in the 
                manner prescribed by the Federal Rules of Civil 
                Procedure.
                  (B) Ancillary provisions.--(i) In making 
                examinations of savings associations, examiners 
                appointed by the appropriate Federal banking 
                agency shall have power to make such 
                examinations of the affairs of all affiliates 
                of such savings associations as shall be 
                necessary to disclose fully the relations 
                between such savings associations and their 
                affiliates and the effect of such relations 
                upon such savings associations. For purposes of 
                this subsection, the term ``affiliate'' has the 
                same meaning as in section 2(b) of the Banking 
                Act of 1933, except that the term ``member 
                bank'' in section 2(b) shall be deemed to refer 
                to a savings association.
                  (ii) In the course of any examination of any 
                savings association, upon request by the 
                appropriate Federal banking agency, prompt and 
                complete access shall be given to all savings 
                association officers, directors, employees, and 
                agents, and to all relevant books, records, or 
                documents of any type.
                  (iii) Upon request made in the course of 
                supervision or oversight of any savings 
                association, for the purpose of acting on any 
                application or determining the condition of any 
                savings association, including whether 
                operations are being conducted safely, soundly, 
                or in compliance with charters, laws, 
                regulations, directives, written agreements, or 
                conditions imposed in writing in connection 
                with the granting of an application or other 
                request, the appropriate Federal banking agency 
                shall be given prompt and complete access to 
                all savings association officers, directors, 
                employees, and agents, and to all relevant 
                books, records, or documents of any type.
                  (iv) If prompt and complete access upon 
                request is not given as required in this 
                subsection, the appropriate Federal banking 
                agency may apply to the United States district 
                court for the judicial district (or the United 
                States court in any territory) in which the 
                principal office of the institution is located, 
                or in which the person denying such access 
                resides or carries on business, for an order 
                requiring that such information be promptly 
                provided.
                  (v) In connection with examinations of 
                savings associations and affiliates thereof, 
                the appropriate Federal banking agency may--
                          (I) administer oaths and affirmations 
                        and examine and to take and preserve 
                        testimony under oath as to any matter 
                        in respect of the affairs or ownership 
                        of any such savings association or 
                        affiliate, and
                          (II) issue subpoenas and, for the 
                        enforcement thereof, apply to the 
                        United States district court for the 
                        judicial district (or the United States 
                        court in any territory) in which the 
                        principal office of the savings 
                        association or affiliate is located, or 
                        in which the witness resides or carries 
                        on business.
                Such courts shall have jurisdiction and power 
                to order and require compliance with any such 
                subpoena.
                  (vi) In any proceeding under this section, 
                the appropriate Federal banking agency may 
                administer oaths and affirmations, take 
                depositions, and issue subpenas. The 
                Comptroller may prescribe regulations with 
                respect to any such proceedings. The attendance 
                of witnesses and the production of documents 
                provided for in this subsection may be required 
                from any place in any State or in any territory 
                at any designated place where such proceeding 
                is being conducted.
                  (vii) Any party to a proceeding under this 
                section may apply to the United States District 
                Court for the District of Columbia, or the 
                United States district court for the judicial 
                district (or the United States court in any 
                territory) in which such proceeding is being 
                conducted, or where the witness resides or 
                carries on business, for enforcement of any 
                subpoena issued pursuant to this subsection or 
                section 10(c) of the Federal Deposit Insurance 
                Act, and such courts shall have jurisdiction 
                and power to order and require compliance 
                therewith. Witnesses subpoenaed under this 
                section shall be paid the same fees and mileage 
                that are paid witnesses in the district courts 
                of the United States. All expenses of the 
                appropriate Federal banking agency in 
                connection with this section shall be 
                considered as nonadministrative expenses. Any 
                court having jurisdiction of any proceeding 
                instituted under this section by a savings 
                association, or a director or officer thereof, 
                may allow to any such party reasonable expenses 
                and attorneys' fees. Such expenses and fees 
                shall be paid by the savings association.
          (2) Conservatorships and receiverships.--
                  (A) Grounds for appointing conservator or 
                receiver for insured savings association.--The 
                appropriate Federal banking agency may appoint 
                a conservator or receiver for an insured 
                savings association if the appropriate Federal 
                banking agency determines, in the discretion of 
                the appropriate Federal banking agency, that 1 
                or more of the grounds specified in section 
                11(c)(5) of the Federal Deposit Insurance Act 
                exists.
                  (B) Power of appointment; judicial review.--
                The appropriate Federal banking agency shall 
                have exclusive power and jurisdiction to 
                appoint a conservator or receiver for a Federal 
                savings association. If, in the opinion of the 
                appropriate Federal banking agency, a ground 
                for the appointment of a conservator or 
                receiver for a savings association exists, the 
                appropriate Federal banking agency is 
                authorized to appoint ex parte and without 
                notice a conservator or receiver for the 
                savings association. In the event of such 
                appointment, the association may, within 30 
                days thereafter, bring an action in the United 
                States district court for the judicial district 
                in which the home office of such association is 
                located, or in the United States District Court 
                for the District of Columbia, for an order 
                requiring the appropriate Federal banking 
                agency to remove such conservator or receiver, 
                and the court shall upon the merits dismiss 
                such action or direct the appropriate Federal 
                banking agency to remove such conservator or 
                receiver. Upon the commencement of such an 
                action, the court having jurisdiction of any 
                other action or proceeding authorized under 
                this subsection to which the association is a 
                party shall stay such action or proceeding 
                during the pendency of the action for removal 
                of the conservator or receiver.
                  (C) Replacement.--The appropriate Federal 
                banking agency may, without any prior notice, 
                hearing, or other action, replace a conservator 
                with another conservator or with a receiver, 
                but such replacement shall not affect any right 
                which the association may have to obtain 
                judicial review of the original appointment, 
                except that any removal under this subparagraph 
                shall be removal of the conservator or receiver 
                in office at the time of such removal.
                  (D) Court action.--Except as otherwise 
                provided in this subsection, no court may take 
                any action for or toward the removal of any 
                conservator or receiver or, except at the 
                request of the appropriate Federal banking 
                agency, to restrain or affect the exercise of 
                powers or functions of a conservator or 
                receiver.
                  (E) Powers.--
                          (i) In general.--A conservator shall 
                        have all the powers of the members, the 
                        stockholders, the directors, and the 
                        officers of the association and shall 
                        be authorized to operate the 
                        association in its own name or to 
                        conserve its assets in the manner and 
                        to the extent authorized by the 
                        appropriate Federal banking agency.
                          (ii) FDIC as conservator or 
                        receiver.--[Except as provided in 
                        section 21A of the Federal Home Loan 
                        Bank Act, the] The appropriate Federal 
                        banking agency[, at the Director's 
                        discretion,] may appoint the Federal 
                        Deposit Insurance Corporation as 
                        conservator for a savings association. 
                        The appropriate Federal banking agency 
                        shall appoint only the Federal Deposit 
                        Insurance Corporation as receiver for a 
                        savings association for the purpose of 
                        liquidation or winding up the affairs 
                        of such savings association. The 
                        conservator or receiver so appointed 
                        shall, as such, have power to buy at 
                        its own sale. The Federal Deposit 
                        Insurance Corporation, as such 
                        conservator or receiver, shall have all 
                        the powers of a conservator or 
                        receiver, as appropriate, granted under 
                        the Federal Deposit Insurance Act, and 
                        (when not inconsistent therewith) any 
                        other rights, powers, and privileges 
                        possessed by conservators or receivers, 
                        as appropriate, of savings associations 
                        under this Act and any other provisions 
                        of law.
                  (F) Disclosure requirement for those acting 
                on behalf of conservator.--A conservator shall 
                require that any independent contractor, 
                consultant, or counsel employed by the 
                conservator in connection with the 
                conservatorship of a savings association 
                pursuant to this section shall fully disclose 
                to all parties with which such contractor, 
                consultant, or counsel is negotiating, any 
                limitation on the authority of such contractor, 
                consultant, or counsel to make legally binding 
                representations on behalf of the conservator.
          (3) Regulations.--
                  (A) In general.--The Comptroller may 
                prescribe regulations for the reorganization, 
                consolidation, liquidation, and dissolution of 
                savings associations, for the merger of insured 
                savings associations with insured savings 
                associations, for savings associations in 
                conservatorship and receivership, and for the 
                conduct of conservatorships and receiverships. 
                The Comptroller may, by regulation or 
                otherwise, provide for the exercise of 
                functions by members, stockholders, directors, 
                or officers of a savings association during 
                conservatorship and receivership.
                  (B) FDIC as conservator or receiver.--In any 
                case where the Federal Deposit Insurance 
                Corporation is the conservator or receiver, any 
                regulations prescribed by the Comptroller shall 
                be consistent with any regulations prescribed 
                by the Federal Deposit Insurance Corporation 
                pursuant to the Federal Deposit Insurance Act.
          (4) Refusal to comply with demand.--Whenever a 
        conservator or receiver appointed by the appropriate 
        Federal banking agency demands possession of the 
        property, business, and assets of any savings 
        association, or of any part thereof, the refusal by any 
        director, officer, employee, or agent of such 
        association to comply with the demand shall be 
        punishable by a fine of not more than $5,000 or 
        imprisonment for not more than one year, or both.
          (5) Definitions.--As used in this subsection, the 
        term ``savings association'' includes any savings 
        association or former savings association that retains 
        deposits insured by the Corporation, notwithstanding 
        termination of its status as an institution insured by 
        the Corporation.
          (6) Compliance with monetary transaction 
        recordkeeping and report requirements.--
                  (A) Compliance procedures required.--The 
                Comptroller shall prescribe regulations 
                requiring savings associations to establish and 
                maintain procedures reasonably designed to 
                assure and monitor the compliance of such 
                associations with the requirements of 
                subchapter II of chapter 53 of title 31, United 
                States Code.
                  (B) Examinations of savings associations to 
                include review of compliance procedures.--
                          (i) In general.--Each examination of 
                        a savings association by the 
                        appropriate Federal banking agency 
                        shall include a review of the 
                        procedures required to be established 
                        and maintained under subparagraph (A).
                          (ii) Exam report requirement.--The 
                        report of examination shall describe 
                        any problem with the procedures 
                        maintained by the association.
                  (C) Order to comply with requirements.--If 
                the appropriate Federal banking agency 
                determines that a savings association--
                          (i) has failed to establish and 
                        maintain the procedures described in 
                        subparagraph (A); or
                          (ii) has failed to correct any 
                        problem with the procedures maintained 
                        by such association which was 
                        previously reported to the association 
                        by the appropriate Federal banking 
                        agency,
                the appropriate Federal banking agency shall 
                issue an order under section 8 of the Federal 
                Deposit Insurance Act requiring such 
                association to cease and desist from its 
                violation of this paragraph or regulations 
                prescribed under this paragraph.
          (7) Regulation and examination of savings association 
        service companies, subsidiaries, and service 
        providers.--
                  (A) General examination and regulatory 
                authority.--A service company or subsidiary 
                that is owned in whole or in part by a savings 
                association shall be subject to examination and 
                regulation by the appropriate Federal banking 
                agency to the same extent as that savings 
                association.
                  (B) Examination by other banking agencies.--
                The appropriate Federal banking agency may 
                authorize any other Federal banking agency that 
                supervises any other owner of part of the 
                service company or subsidiary to perform an 
                examination described in subparagraph (A).
                  (C) Applicability of section 8 of the federal 
                deposit insurance act.--A service company or 
                subsidiary that is owned in whole or in part by 
                a saving association shall be subject to the 
                provisions of section 8 of the Federal Deposit 
                Insurance Act as if the service company or 
                subsidiary were an insured depository 
                institution. In any such case, the Federal 
                Deposit Insurance Corporation or the 
                Comptroller, as appropriate, shall be deemed to 
                be the appropriate Federal banking agency, 
                pursuant to section 3(q) of the Federal Deposit 
                Insurance Act.
                  (D) Service performed by contract or 
                otherwise.--Notwithstanding subparagraph (A), 
                if a savings association, a subsidiary thereof, 
                or any savings and loan affiliate or entity, as 
                identified by section 8(b)(9) of the Federal 
                Deposit Insurance Act, that is regularly 
                examined or subject to examination by the 
                appropriate Federal banking agency, causes to 
                be performed for itself, by contract or 
                otherwise, any service authorized under this 
                Act or, in the case of a State savings 
                association, any applicable State law, whether 
                on or off its premises--
                          (i) such performance shall be subject 
                        to regulation and examination by the 
                        appropriate Federal banking agency to 
                        the same extent as if such services 
                        were being performed by the savings 
                        association on its own premises; and
                          (ii) the savings association shall 
                        notify the appropriate Federal banking 
                        agency of the existence of the service 
                        relationship not later than 30 days 
                        after the earlier of--
                                  (I) the date on which the 
                                contract is entered into; or
                                  (II) the date on which the 
                                performance of the service is 
                                initiated.
                  (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.
          (8) Definitions.--For purposes of this section--
                  (A) the term ``service company'' means--
                          (i) any corporation--
                                  (I) that is organized to 
                                perform services authorized by 
                                this Act or, in the case of a 
                                corporation owned in part by a 
                                State savings association, 
                                authorized by applicable State 
                                law; and
                                  (II) all of the capital stock 
                                of which is owned by 1 or more 
                                insured savings associations; 
                                and
                          (ii) any limited liability company--
                                  (I) that is organized to 
                                perform services authorized by 
                                this Act or, in the case of a 
                                company, 1 of the members of 
                                which is a State savings 
                                association, authorized by 
                                applicable State law; and
                                  (II) all of the members of 
                                which are 1 or more insured 
                                savings associations;
                  (B) the term ``limited liability company'' 
                means any company, partnership, trust, or 
                similar business entity organized under the law 
                of a State (as defined in section 3 of the 
                Federal Deposit Insurance Act) that provides 
                that a member or manager of such company is not 
                personally liable for a debt, obligation, or 
                liability of the company solely by reason of 
                being, or acting as, a member or manager of 
                such company; and
                  (C) the terms ``State savings association'' 
                and ``subsidiary'' have the same meanings as in 
                section 3 of the Federal Deposit Insurance Act.
  (e) Character and Responsibility.--A charter may be granted 
only--
          (1) to persons of good character and responsibility,
          (2) if in the judgment of the Comptroller a necessity 
        exists for such an institution in the community to be 
        served,
          (3) if there is a reasonable probability of its 
        usefulness and success, and
          (4) if the association can be established without 
        undue injury to properly conducted existing local 
        thrift and home financing institutions.
  (f) Federal Home Loan Bank Membership.--After the end of the 
6-month period beginning on the date of the enactment of the 
Federal Home Loan Bank System Modernization Act of 1999, a 
Federal savings association may become a member of the Federal 
Home Loan Bank System, and shall qualify for such membership in 
the manner provided by the Federal Home Loan Bank Act.
  (h) Discriminatory State and Local Taxation Prohibited.--No 
State, county, municipal, or local taxing authority may impose 
any tax on Federal savings associations or their franchise, 
capital, reserves, surplus, loans, or income greater than that 
imposed by such authority on other similar local mutual or 
cooperative thrift and home financing institutions.
  (i) Conversions.--
          (1) In general.--Any savings association which is, or 
        is eligible to become, a member of a Federal home loan 
        bank may convert into a Federal savings association 
        (and in so doing may change directly from the mutual 
        form to the stock form, or from the stock form to the 
        mutual form). Such conversion shall be subject to such 
        regulations as the Comptroller shall prescribe. 
        Thereafter such Federal savings association shall be 
        entitled to all the benefits of this section and shall 
        be subject to examination and regulation to the same 
        extent as other associations incorporated pursuant to 
        this Act.
          (2) Authority of Comptroller.--(A) No savings 
        association may convert from the mutual to the stock 
        form, or from the stock form to the mutual form, except 
        in accordance with the regulations of the Comptroller.
          (B) Any aggrieved person may obtain review of a final 
        action of the Comptroller which approves or disapproves 
        a plan of conversion pursuant to this subsection only 
        by complying with the provisions of section 10(j) of 
        this Act within the time limit and in the manner 
        therein prescribed, which provisions shall apply in all 
        respects as if such final action were an order the 
        review of which is therein provided for, except that 
        such time limit shall commence upon publication of 
        notice of such final action in the Federal Register or 
        upon the giving of such general notice of such final 
        action as is required by or approved under regulations 
        of the Comptroller, whichever is later.
          (C) Any Federal savings association may change its 
        designation from a Federal savings association to a 
        Federal savings bank, or the reverse.
          (3) Conversion to state association.--(A) Any Federal 
        savings association may convert itself into a savings 
        association or savings bank organized pursuant to the 
        laws of the State in which the principal office of such 
        Federal savings association is located if--
                  (i) the State permits the conversion of any 
                savings association or savings bank of such 
                State into a Federal savings association;
                  (ii) such conversion of a Federal savings 
                association into such a State savings 
                association is determined--
                          (I) upon the vote in favor of such 
                        conversion cast in person or by proxy 
                        at a special meeting of members or 
                        stockholders called to consider such 
                        action, specified by the law of the 
                        State in which the home office of the 
                        Federal savings association is located, 
                        as required by such law for a State-
                        chartered institution to convert itself 
                        into a Federal savings association, but 
                        in no event upon a vote of less than 51 
                        percent of all the votes cast at such 
                        meeting, and
                          (II) upon compliance with other 
                        requirements reciprocally equivalent to 
                        the requirements of such State law for 
                        the conversion of a State-chartered 
                        institution into a Federal savings 
                        association;
                  (iii) notice of the meeting to vote on 
                conversion shall be given as herein provided 
                and no other notice thereof shall be necessary; 
                the notice shall expressly state that such 
                meeting is called to vote thereon, as well as 
                the time and place thereof; and such notice 
                shall be mailed, postage prepaid, at least 30 
                and not more than 60 days prior to the date of 
                the meeting, to the Comptroller and to each 
                member or stockholder of record of the Federal 
                savings association at the member's or 
                stockholder's last address as shown on the 
                books of the Federal savings association;
                  (iv) when a mutual savings association is 
                dissolved after conversion, the members or 
                shareholders of the savings association will 
                share on a mutual basis in the assets of the 
                association in exact proportion to their 
                relative share or account credits;
                  (v) when a stock savings association is 
                dissolved after conversion, the stockholders 
                will share on an equitable basis in the assets 
                of the association; and
                  (vi) such conversion shall be effective upon 
                the date that all the provisions of this Act 
                shall have been fully complied with and upon 
                the issuance of a new charter by the State 
                wherein the savings association is located.
          (B)(i) The act of conversion constitutes consent by 
        the institution to be bound by all the requirements 
        that the Comptroller may impose under this Act.
          (ii) The savings association shall upon conversion 
        and thereafter be authorized to issue securities in any 
        form currently approved at the time of issue by the 
        Comptroller for issuance by similar savings 
        associations in such State.
          (iii) If the insurance of accounts is terminated in 
        connection with such conversion, the notice and other 
        action shall be taken as provided by law and 
        regulations for the termination of insurance of 
        accounts.
          (4) Savings bank activities.--(A) To the extent 
        authorized by the Comptroller, but subject to section 
        18(m)(3) of the Federal Deposit Insurance Act--
                  (i) any Federal savings bank chartered as 
                such prior to October 15, 1982, may continue to 
                make any investment or engage in any activity 
                not otherwise authorized under this section, to 
                the degree it was permitted to do so as a 
                Federal savings bank prior to October 15, 1982; 
                and
                  (ii) any Federal savings bank in existence on 
                the date of the enactment of the Financial 
                Institutions Reform, Recovery, and Enforcement 
                Act of 1989 and formerly organized as a mutual 
                savings bank under State law may continue to 
                make any investment or engage in any activity 
                not otherwise authorized under this section, to 
                the degree it was authorized to do so as a 
                mutual savings bank under State law.
          (B) The authority conferred by this paragraph may be 
        utilized by any Federal savings association that 
        acquires, by merger or consolidation, a Federal savings 
        bank enjoying grandfather rights hereunder.
          (5) Conversion to national or state bank.--
                  (A) In general.--Any Federal savings 
                association chartered and in operation before 
                the date of enactment of the Gramm-Leach-Bliley 
                Act, with branches in operation before such 
                date of enactment in 1 or more States, may 
                convert, at its option, with the approval of 
                the Comptroller for each national bank, and 
                with the approval of the appropriate State bank 
                supervisor and the appropriate Federal banking 
                agency for each State bank, into 1 or more 
                national or State banks, each of which may 
                encompass 1 or more of the branches of the 
                Federal savings association in operation before 
                such date of enactment in 1 or more States 
                subject to subparagraph (B).
                  (B) Conditions of conversion.--The authority 
                in subparagraph (A) shall apply only if each 
                resulting national or State bank--
                          (i) will meet all financial, 
                        management, and capital requirements 
                        applicable to the resulting national or 
                        State bank; and
                          (ii) if more than 1 national or State 
                        bank results from a conversion under 
                        this subparagraph, has received 
                        approval from the Federal Deposit 
                        Insurance Corporation under section 
                        5(a) of the Federal Deposit Insurance 
                        Act.
                  (C) No merger application under fdia 
                required.--No application under section 18(c) 
                of the Federal Deposit Insurance Act shall be 
                required for a conversion under this paragraph.
                  (D) Definitions.--For purposes of this 
                paragraph, the terms ``State bank'' and ``State 
                bank supervisor'' have the same meanings as in 
                section 3 of the Federal Deposit Insurance Act.
          (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.
  (j) Subscription for Shares.--
  (k) Depository of Public Money.--When designated for that 
purpose by the Secretary of the Treasury, a savings association 
the deposits of which are insured by the Corporation shall be a 
depository of public money and may be employed as fiscal agent 
of the Government under such regulations as may be prescribed 
by the Secretary and shall perform all such reasonable duties 
as fiscal agent of the Government as may be required of it. A 
savings association the deposits of which are insured by the 
Corporation may act as agent for any other instrumentality of 
the United States when designated for that purpose by such 
instrumentality, including services in connection with the 
collection of taxes and other obligations owed the United 
States, and the Secretary of the Treasury may deposit public 
money in any such savings association, and shall prescribe such 
regulations as may be necessary to carry out the purposes of 
this subsection.
  (l) Retirement Accounts.--A Federal savings association is 
authorized to act as trustee of any trust created or organized 
in the United States and forming part of a stock bonus, 
pension, or profit-sharing plan which qualifies or qualified 
for specific tax treatment under section 401(d) of the Internal 
Revenue Code of 1986 and to act as trustee or custodian of an 
individual retirement account within the meaning of section 408 
of such Code if the funds of such trust or account are invested 
only in savings accounts or deposits in such Federal savings 
association or in obligations or securities issued by such 
Federal savings association. All funds held in such fiduciary 
capacity by any Federal savings association may be commingled 
for appropriate purposes of investment, but individual records 
shall be kept by the fiduciary for each participant and shall 
show in proper detail all transactions engaged in under this 
paragraph.
  (m) Branching.--
          (1) In general.--
                  (A) No savings association incorporated under 
                the laws of the District of Columbia or 
                organized in the District or doing business in 
                the District shall establish any branch or move 
                its principal office or any branch without the 
                [Director's] appropriate Federal banking 
                agency's prior written approval.
                  (B) No savings association shall establish 
                any branch in the District of Columbia or move 
                its principal office or any branch in the 
                District without the [Director's] appropriate 
                Federal banking agency's prior written 
                approval.
          (2) Definition.--For purposes of this subsection the 
        term ``branch'' means any office, place of business, or 
        facility, other than the principal office as defined by 
        the Comptroller, of a savings association at which 
        accounts are opened or payments are received or 
        withdrawals are made, or any other office, place of 
        business, or facility of a savings association defined 
        by the Comptroller as a branch within the meaning of 
        such sentence.
  (n) Trusts.--
          (1) Permits.--The Comptroller may grant by special 
        permit to a Federal savings association applying 
        therefor the right to act as trustee, executor, 
        administrator, guardian, or in any other fiduciary 
        capacity in which State banks, trust companies, or 
        other corporations which compete with Federal savings 
        associations are permitted to act under the laws of the 
        State in which the Federal savings association is 
        located. Subject to the regulations of the Comptroller, 
        service corporations may invest in State or federally 
        chartered corporations which are located in the State 
        in which the home office of the Federal savings 
        association is located and which are engaged in trust 
        activities.
          (2) Segregation of assets.--A Federal savings 
        association exercising any or all of the powers 
        enumerated in this section shall segregate all assets 
        held in any fiduciary capacity from the general assets 
        of the association and shall keep a separate set of 
        books and records showing in proper detail all 
        transactions engaged in under this subsection. The 
        State banking authority involved may have access to 
        reports of examination made by the Comptroller insofar 
        as such reports relate to the trust department of such 
        association but nothing in this subsection shall be 
        construed as authorizing such State banking authority 
        to examine the books, records, and assets of such 
        associations.
          (3) Prohibitions.--No Federal savings association 
        shall receive in its trust department deposits of 
        current funds subject to check or the deposit of 
        checks, drafts, bills of exchange, or other items for 
        collection or exchange purposes. Funds deposited or 
        held in trust by the association awaiting investment 
        shall be carried in a separate account and shall not be 
        used by the association in the conduct of its business 
        unless it shall first set aside in the trust department 
        United States bonds or other securities approved by the 
        Comptroller.
          (4) Separate lien.--In the event of the failure of a 
        Federal savings association, the owners of the funds 
        held in trust for investment shall have a lien on the 
        bonds or other securities so set apart in addition to 
        their claim against the estate of the association.
          (5) Deposits.--Whenever the laws of a State require 
        corporations acting in a fiduciary capacity to deposit 
        securities with the State authorities for the 
        protection of private or court trusts, Federal savings 
        associations so acting shall be required to make 
        similar deposits. Securities so deposited shall be held 
        for the protection of private or court trusts, as 
        provided by the State law. Federal savings associations 
        in such cases shall not be required to execute the bond 
        usually required of individuals if State corporations 
        under similar circumstances are exempt from this 
        requirement. Federal savings associations shall have 
        power to execute such bond when so required by the laws 
        of the State involved.
          (6) Oaths and affidavits.--In any case in which the 
        laws of a State require that a corporation acting as 
        trustee, executor, administrator, or in any capacity 
        specified in this section, shall take an oath or make 
        an affidavit, the president, vice president, cashier, 
        or trust officer of such association may take the 
        necessary oath or execute the necessary affidavit.
          (7) Certain loans prohibited.--It shall be unlawful 
        for any Federal savings association to lend any 
        officer, director, or employee any funds held in trust 
        under the powers conferred by this section. Any 
        officer, director, or employee making such loan, or to 
        whom such loan is made, may be fined not more than 
        $50,000 or twice the amount of that person's gain from 
        the loan, whichever is greater, or may be imprisoned 
        not more than 5 years, or may be both fined and 
        imprisoned, in the discretion of the court.
          (8) Factors to be considered.--In reviewing 
        applications for permission to exercise the powers 
        enumerated in this section, the Comptroller may 
        consider--
                  (A) the amount of capital of the applying 
                Federal savings association,
                  (B) whether or not such capital is sufficient 
                under the circumstances of the case,
                  (C) the needs of the community to be served, 
                and
                  (D) any other facts and circumstances that 
                seem to it proper.
        The Comptroller may grant or refuse the application 
        accordingly, except that no permit shall be issued to 
        any association having capital less than the capital 
        required by State law of State banks, trust companies, 
        and corporations exercising such powers.
          (9) Surrender of charter.--(A) Any Federal savings 
        association may surrender its right to exercise the 
        powers granted under this subsection, and have returned 
        to it any securities which it may have deposited with 
        the State authorities, by filing with the Comptroller a 
        certified copy of a resolution of its board of 
        directors indicating its intention to surrender its 
        right.
          (B) Upon receipt of such resolution, the Comptroller, 
        if satisfied that such Federal savings association has 
        been relieved in accordance with State law of all 
        duties as trustee, executor, administrator, guardian or 
        other fiduciary, may in the [Director's] Comptroller's 
        discretion, issue to such association a certificate 
        that such association is no longer authorized to 
        exercise the powers granted by this subsection.
          (C) Upon the issuance of such a certificate by the 
        Comptroller, such Federal savings association (i) shall 
        no longer be subject to the provisions of this section 
        or the regulations of the Comptroller made pursuant 
        thereto, (ii) shall be entitled to have returned to it 
        any securities which it may have deposited with State 
        authorities, and (iii) shall not exercise thereafter 
        any of the powers granted by this section without first 
        applying for and obtaining a new permit to exercise 
        such powers pursuant to the provisions of this section.
          (D) The Comptroller may prescribe regulations 
        necessary to enforce compliance with the provisions of 
        this subsection.
          (10) Revocation.--(A) In addition to the authority 
        conferred by other law, if, in the opinion of the 
        Comptroller, a Federal savings association is 
        unlawfully or unsoundly exercising, or has unlawfully 
        or unsoundly exercised, or has failed for a period of 5 
        consecutive years to exercise, the powers granted by 
        this subsection or otherwise fails or has failed to 
        comply with the requirements of this subsection, the 
        Comptroller may issue and serve upon the association a 
        notice of intent to revoke the authority of the 
        association to exercise the powers granted by this 
        subsection. The notice shall contain a statement of the 
        facts constituting the alleged unlawful or unsound 
        exercise of powers, or failure to exercise powers, or 
        failure to comply, and shall fix a time and place at 
        which a hearing will be held to determine whether an 
        order revoking authority to exercise such powers should 
        issue against the association.
          (B) Such hearing shall be conducted in accordance 
        with the provisions of subsection (d)(1)(B), and 
        subject to judicial review as therein provided, and 
        shall be fixed for a date not earlier than 30 days and 
        not later than 60 days after service of such notice 
        unless the Comptroller sets an earlier or later date at 
        the request of any Federal savings association so 
        served.
          (C) Unless the Federal savings association so served 
        shall appear at the hearing by a duly authorized 
        representative, it shall be deemed to have consented to 
        the issuance of the revocation order. In the event of 
        such consent, or if upon the record made at any such 
        hearing, the Comptroller shall find that any allegation 
        specified in the notice of charges has been 
        established, the Comptroller may issue and serve upon 
        the association an order prohibiting it from accepting 
        any new or additional trust accounts and revoking 
        authority to exercise any and all powers granted by 
        this subsection, except that such order shall permit 
        the association to continue to service all previously 
        accepted trust accounts pending their expeditious 
        divestiture or termination.
          (D) A revocation order shall become effective not 
        earlier than the expiration of 30 days after service of 
        such order upon the association so served (except in 
        the case of a revocation order issued upon consent, 
        which shall become effective at the time specified 
        therein), and shall remain effective and enforceable, 
        except to such extent as it is stayed, modified, 
        terminated, or set aside by action of the Comptroller 
        or a reviewing court.
  (o) Conversion of State Savings Banks.--(1) Subject to the 
provisions of this subsection and under regulations of the 
Comptroller, the Comptroller may authorize the conversion of a 
State-chartered savings bank into a Federal savings bank, if 
such conversion is not in contravention of State law, and 
provide for the organization, incorporation, operation, 
examination, and regulation of such institution.
  (2)(A) Any Federal savings bank chartered pursuant to this 
subsection shall continue to be insured by the Deposit 
Insurance Fund.
  (B) The Comptroller shall notify the Corporation of any 
application under this Act for conversion to a Federal charter 
by an institution insured by the Corporation, shall consult 
with the Corporation before disposing of the application, and 
shall notify the Corporation of the determination of the 
Comptroller with respect to such application.
  (C) Notwithstanding any other provision of law, if the 
Corporation determines that conversion into a Federal stock 
savings bank or the chartering of a Federal stock savings bank 
is necessary to prevent the default of a savings bank it 
insures or to reopen a savings bank in default that it insured, 
or if the Corporation determines, with the concurrence of the 
Comptroller, that severe financial conditions exist that 
threaten the stability of a savings bank insured by the 
Corporation and that such a conversion or charter is likely to 
improve the financial condition of such savings bank, the 
Corporation shall provide the Comptroller with a certificate of 
such determination, the reasons therefor in conformance with 
the requirements of this Act, and the bank shall be converted 
or chartered by the Comptroller, pursuant to the regulations 
thereof, from the time the Corporation issues the certificate.
  (D) A bank may be converted under subparagraph (C) only if 
the board of trustees of the bank--
          (i) has specified in writing that the bank is in 
        danger of closing or is closed, or that severe 
        financial conditions exist that threaten the stability 
        of the bank and a conversion is likely to improve the 
        financial condition of the bank; and
          (ii) has requested in writing that the Corporation 
        use the authority of subparagraph (C).
  (E)(i) Before making a determination under subparagraph (D), 
the Corporation shall consult the State bank supervisor of the 
State in which the bank in danger of closing is chartered. The 
State bank supervisor shall be given a reasonable opportunity, 
and in no event less than 48 hours, to object to the use of the 
provisions of subparagraph (D).
  (ii) If the State supervisor objects during such period, the 
Corporation may use the authority of subparagraph (D) only by 
an affirmative vote of three-fourths of the Board of Directors. 
The Board of Directors shall provide the State supervisor, as 
soon as practicable, with a written certification of its 
determination.
  (3) A Federal savings bank chartered under this subsection 
shall have the same authority with respect to investments, 
operations, and activities, and shall be subject to the same 
restrictions, including those applicable to branching and 
discrimination, as would apply to it if it were chartered as a 
Federal savings bank under any other provision of this Act.
  (p) Conversions.--(1) Notwithstanding any other provision of 
law, and consistent with the purposes of this Act, the 
Comptroller may authorize (or in the case of a Federal savings 
association, require) the conversion of any mutual savings 
association or Federal mutual savings bank that is insured by 
the Corporation into a Federal stock savings association or 
Federal stock savings bank, or charter a Federal stock savings 
association or Federal stock savings bank to acquire the assets 
of, or merge with such a mutual institution under the 
regulations of the Comptroller.
  (2) Authorizations under this subsection may be made only--
          (A) if the Comptroller has determined that severe 
        financial conditions exist which threaten the stability 
        of an association and that such authorization is likely 
        to improve the financial condition of the association,
          (B) when the Corporation has contracted to provide 
        assistance to such association under section 13 of the 
        Federal Deposit Insurance Act, or
          (C) to assist an institution in receivership.
  (3) A Federal savings bank chartered under this subsection 
shall have the same authority with respect to investments, 
operations and activities, and shall be subject to the same 
restrictions, including those applicable to branching and 
discrimination, as would apply to it if it were chartered as a 
Federal savings bank under any other provision of this Act, and 
may engage in any investment, activity, or operation that the 
institution it acquired was engaged in if that institution was 
a Federal savings bank, or would have been authorized to engage 
in had that institution converted to a Federal charter.
  (q) Tying Arrangements.--(1) A savings association may not in 
any manner extend credit, lease, or sell property of any kind, 
or furnish any service, or fix or vary the consideration for 
any of the foregoing, on the condition or requirement--
          (A) that the customer shall obtain additional credit, 
        property, or service from such savings association, or 
        from any service corporation or affiliate of such 
        association, other than a loan, discount, deposit, or 
        trust service;
          (B) that the customer provide additional credit, 
        property, or service to such association, or to any 
        service corporation or affiliate of such association, 
        other than those related to and usually provided in 
        connection with a similar loan, discount, deposit, or 
        trust service; and
          (C) that the customer shall not obtain some other 
        credit, property, or service from a competitor of such 
        association, or from a competitor of any service 
        corporation or affiliate of such association, other 
        than a condition or requirement that such association 
        shall reasonably impose in connection with credit 
        transactions to assure the soundness of credit.
  (2)(A) Any person may sue for and have injunctive relief, in 
any court of the United States having jurisdiction over the 
parties, against threatened loss or damage by reason of a 
violation of paragraph (1), under the same conditions and 
principles as injunctive relief against threatened conduct that 
will cause loss or damage is granted by courts of equity and 
under the rules governing such proceedings.
  (B) Upon the execution of proper bond against damages for an 
injunction improvidently granted and a showing that the danger 
of irreparable loss or damage is immediate, a preliminary 
injunction may issue.
  (3) Any person injured by a violation of paragraph (1) may 
bring an action in any district court of the United States in 
which the defendant resides or is found or has an agent, 
without regard to the amount in controversy, or in any other 
court of competent jurisdiction, and shall be entitled to 
recover three times the amount of the damages sustained, and 
the cost of suit, including a reasonable attorney's fee. Any 
such action shall be brought within 4 years from the date of 
the occurrence of the violation.
  (4) Nothing contained in this subsection affects in any 
manner the right of the United States or any other party to 
bring an action under any other law of the United States or of 
any State, including any right which may exist in addition to 
specific statutory authority, challenging the legality of any 
act or practice which may be proscribed by this subsection. No 
regulation or order issued by the Board under this subsection 
shall in any manner constitute a defense to such action.
  (5) For purposes of this subsection, the term ``loan'' 
includes obligations and extensions or advances of credit.
          (6) Exceptions.--The Board may, by regulation or 
        order, permit such exceptions to the prohibitions of 
        this subsection as the Board in consultation with the 
        Comptroller and the Corporation, considers will not be 
        contrary to the purposes of this subsection and which 
        conform to exceptions granted by the Board pursuant to 
        section 106(b) of the Bank Holding Company Act 
        Amendments of 1970.
  (r) Out-of-State Branches.--(1) No Federal savings 
association may establish, retain, or operate a branch outside 
the State in which the Federal savings association has its home 
office, unless the association qualifies as a domestic building 
and loan association under section 7701(a)(19) of the Internal 
Revenue Code of 1986 or meets the asset composition test 
imposed by subparagraph (C) of that section on institutions 
seeking so to qualify, or qualifies as a qualified thrift 
lender, as determined under section 10(m) of this Act. No out-
of-State branch so established shall be retained or operated 
unless the total assets of the Federal savings association 
attributable to all branches of the Federal savings association 
in that State would qualify the branches as a whole, were they 
otherwise eligible, for treatment as a domestic building and 
loan association under section 7701(a)(19) or as a qualified 
thrift lender, as determined under section 10(m) of this Act, 
as applicable.
  (2) The limitations of paragraph (1) shall not apply if--
          (A) the branch results from a transaction authorized 
        under section 13(k) of the Federal Deposit Insurance 
        Act;
          (B) the branch was authorized for the Federal savings 
        association prior to October 15, 1982;
          (C) the law of the State where the branch is located, 
        or is to be located, would permit establishment of the 
        branch if the association was a savings association or 
        savings bank chartered by the State in which its home 
        office is located; or
          (D) the branch was operated lawfully as a branch 
        under State law prior to the association's conversion 
        to a Federal charter.
  (3) The Comptroller of the Currency, for good cause shown, 
may allow Federal savings associations up to 2 years to comply 
with the requirements of this subsection.
  (s) Minimum Capital Requirements.--
          (1) In general.--Consistent with the purposes of 
        section 908 of the International Lending Supervision 
        Act of 1983 and the capital requirements established 
        pursuant to such section by the appropriate Federal 
        banking agencies (as defined in section 903(1) [of such 
        Act), the Comptroller of the Currency shall require] of 
        such Act), the appropriate Federal banking agency shall 
        require all savings associations to achieve and 
        maintain adequate capital by--
                  (A) establishing minimum levels of capital 
                for savings associations; and
                  (B) using such [other methods as the 
                Comptroller of the Currency determines] other 
                methods as the appropriate Federal banking 
                agency determines to be appropriate.
          (2) Minimum capital levels may be [determined by 
        director case-by-case.--] [The Comptroller of the 
        Currency may, consistent] determined by appropriate 
        federal banking agency case-by-case._The appropriate 
        Federal banking agency may, consistent with subsection 
        (t), establish the minimum level of capital for a 
        savings association at such amount or at such ratio of 
        [capital-to-assets as the Comptroller of the Currency 
        determines to be necessary] capital-to-assets as the 
        appropriate Federal banking agency determines to be 
        necessary or appropriate for such association in light 
        of the particular circumstances of the association.
          (3) Unsafe or unsound practice.--In the discretion of 
        the appropriate Federal banking agency, the appropriate 
        Federal banking agency, may treat the failure of any 
        savings association to maintain capital at or above the 
        minimum level required by the Comptroller under this 
        subsection or subsection (t) as an unsafe or unsound 
        practice.
          (4) Directive to increase capital.--
                  (A) Plan may be required.--In addition to any 
                other action authorized by law, including 
                paragraph (3), the appropriate Federal banking 
                agency may issue a directive requiring any 
                savings association which fails to maintain 
                capital at or above the minimum level required 
                by the appropriate Federal banking agency to 
                submit and adhere to a plan for increasing 
                capital which is acceptable to the appropriate 
                Federal banking agency.
                  (B) Enforcement of plan.--Any directive 
                issued and plan approved under subparagraph (A) 
                shall be enforceable under section 8 of the 
                Federal Deposit Insurance Act to the same 
                extent and in the same manner as an outstanding 
                order which was issued under section 8 of the 
                Federal Deposit Insurance Act and has become 
                final.
          (5) Plan taken into account in other proceedings.--
        The appropriate Federal banking agency may--
                  (A) consider a savings association's progress 
                in adhering to any plan required under 
                paragraph (4) whenever such association or any 
                affiliate of such association (including any 
                company which controls such association) seeks 
                the approval of the appropriate Federal banking 
                agency for any proposal which would have the 
                effect of diverting earnings, diminishing 
                capital, or otherwise impeding such 
                association's progress in meeting the minimum 
                level of capital required by the appropriate 
                Federal banking agency; and
                  (B) disapprove any proposal referred to in 
                subparagraph (A) if the appropriate Federal 
                banking agency determines that the proposal 
                would adversely affect the ability of the 
                association to comply with such plan.
  (t) Capital Standards.--
          (1) In general.--
                  (A) Requirement for standards to be 
                prescribed.--The appropriate Federal banking 
                agency shall, by regulation, prescribe and 
                maintain uniformly applicable capital standards 
                for savings associations. Those standards shall 
                include--
                          (i) a leverage limit;
                          (ii) a tangible capital requirement; 
                        and
                          (iii) a risk-based capital 
                        requirement.
                  (B) Compliance.--A savings association is not 
                in compliance with capital standards for 
                purposes of this subsection unless it complies 
                with all capital standards prescribed under 
                this paragraph.
                  (C) Stringency.--The standards prescribed 
                under this paragraph shall be no less stringent 
                than the capital standards applicable to 
                national banks.
          (2) Content of standards.--
                  (A) Leverage limit.--The leverage limit 
                prescribed under paragraph (1) shall require a 
                savings association to maintain core capital in 
                an amount not less than 3 percent of the 
                savings association's total assets.
                  (B) Tangible capital requirement.--The 
                tangible capital requirement prescribed under 
                paragraph (1) shall require a savings 
                association to maintain tangible capital in an 
                amount not less than 1.5 percent of the savings 
                association's total assets.
                  (C) Risk-based capital requirement.--
                Notwithstanding paragraph (1)(C), the risk-
                based capital requirement prescribed under 
                paragraph (1) may deviate from the risk-based 
                capital standards applicable to national banks 
                to reflect interest-rate risk or other risks, 
                but such deviations shall not, in the 
                aggregate, result in materially lower levels of 
                capital being required of savings associations 
                under the risk-based capital requirement than 
                would be required under the risk-based capital 
                standards applicable to national banks.
          (5) Separate capitalization required for certain 
        subsidiaries.--
                  (A) In general.--In determining compliance 
                with capital standards prescribed under 
                paragraph (1), all of a savings association's 
                investments in and extensions of credit to any 
                subsidiary engaged in activities not 
                permissible for a national bank shall be 
                deducted from the savings association's 
                capital.
                  (B) Exception for agency activities.--
                Subparagraph (A) shall not apply with respect 
                to a subsidiary engaged, solely as agent for 
                its customers, in activities not permissible 
                for a national bank unless the appropriate 
                Federal banking agency, in the sole discretion 
                of the appropriate Federal banking agency, 
                determines that, in the interests of safety and 
                soundness, this subparagraph should cease to 
                apply to that subsidiary.
                  (C) Other exceptions.--Subparagraph (A) shall 
                not apply with respect to any of the following:
                          (i) Mortgage banking subsidiaries.--A 
                        savings association's investments in 
                        and extensions of credit to a 
                        subsidiary engaged solely in mortgage-
                        banking activities.
                          (ii) Subsidiary insured depository 
                        institutions.--A savings association's 
                        investments in and extensions of credit 
                        to a subsidiary--
                                  (I) that is itself an insured 
                                depository institution or a 
                                company the sole investment of 
                                which is an insured depository 
                                institution, and
                                  (II) that was acquired by the 
                                parent insured depository 
                                institution prior to May 1, 
                                1989.
                          (iii) Certain federal savings 
                        banks.--Any Federal savings association 
                        existing as a Federal savings 
                        association on the date of enactment of 
                        the Financial Institutions Reform, 
                        Recovery, and Enforcement Act of 1989--
                                  (I) that was chartered prior 
                                to October 15, 1982, as a 
                                savings bank or a cooperative 
                                bank under State law; or
                                  (II) that acquired its 
                                principal assets from an 
                                association that was chartered 
                                prior to October 15, 1982, as a 
                                savings bank or a cooperative 
                                bank under State law.
                  (E) Consolidation of subsidiaries not 
                separately capitalized.--In determining 
                compliance with capital standards prescribed 
                under paragraph (1), the assets and liabilities 
                of each of a savings association's subsidiaries 
                (other than any subsidiary described in 
                subparagraph (C)(ii)) shall be consolidated 
                with the savings association's assets and 
                liabilities, unless all of the savings 
                association's investments in and extensions of 
                credit to the subsidiary are deducted from the 
                savings association's capital pursuant to 
                subparagraph (A).
          (6) Consequences of failing to comply with capital 
        standards.--
                  (A)
                  (B) On or after january 1, 1991.--On or after 
                January 1, 1991, the appropriate Federal 
                banking agency--
                          (i) shall prohibit any asset growth 
                        by any savings association not in 
                        compliance with capital standards, 
                        except as provided in subparagraph (C); 
                        and
                          (ii) shall require any savings 
                        association not in compliance with 
                        capital standards to comply with a 
                        capital directive issued by the 
                        appropriate Federal banking agency 
                        (which may include such restrictions, 
                        including restrictions on the payment 
                        of dividends and on compensation, as 
                        the appropriate Federal banking agency 
                        determines to be appropriate).
                  (C) Limited growth exception.--The 
                appropriate Federal banking agency may permit 
                any savings association that is subject to 
                subparagraph (B) to increase its assets in an 
                amount not exceeding the amount of net interest 
                credited to the savings association's deposit 
                liabilities if--
                          (i) the savings association obtains 
                        the prior approval of the appropriate 
                        Federal banking agency;
                          (ii) any increase in assets is 
                        accompanied by an increase in tangible 
                        capital in an amount not less than 6 
                        percent of the increase in assets (or, 
                        in the discretion of the appropriate 
                        Federal banking agency if the leverage 
                        limit then applicable is less than 6 
                        percent, in an amount equal to the 
                        increase in assets multiplied by the 
                        percentage amount of the leverage 
                        limit);
                          (iii) any increase in assets is 
                        accompanied by an increase in capital 
                        not less in percentage amount than 
                        required under the risk-based capital 
                        standard then applicable;
                          (iv) any increase in assets is 
                        invested in low-risk assets, such as 
                        first mortgage loans secured by 1- to 
                        4-family residences and fully secured 
                        consumer loans; and
                          (v) the savings association's ratio 
                        of core capital to total assets is not 
                        less than the ratio existing on January 
                        1, 1991.
                  (D) Additional restrictions in case of 
                excessive risks or rates.--The appropriate 
                Federal banking agency may restrict the asset 
                growth of any savings association that the 
                appropriate Federal banking agency determines 
                is taking excessive risks or paying excessive 
                rates for deposits.
                  (E) Failure to comply with plan, regulation, 
                or order.--The appropriate Federal banking 
                agency may treat as an unsafe and unsound 
                practice any material failure by a savings 
                association to comply with any plan, 
                regulation, or order under this paragraph.
                  (F) Effect on other regulatory authority.--
                This paragraph does not limit any authority of 
                the appropriate Federal banking agency under 
                this Act or any other provision of law.
          (7) Exemption from certain sanctions.--
                  (A) Application for exemption.--Any savings 
                association not in compliance with the capital 
                standards prescribed under paragraph (1) may 
                apply to the appropriate Federal banking agency 
                for an exemption from any applicable sanction 
                or penalty for noncompliance which the 
                appropriate Federal banking agency may impose 
                under this Act.
                  (B) Effect of grant of exemption.--If the 
                appropriate Federal banking agency approves any 
                savings association's application under 
                subparagraph (A), the only sanction or penalty 
                to be imposed by the appropriate Federal 
                banking agency under this Act for the savings 
                association's failure to comply with the 
                capital standards prescribed under paragraph 
                (1) is the growth limitation contained in 
                paragraph (6)(B) or paragraph (6)(C), whichever 
                is applicable.
                  (C) Standards for approval or disapproval.--
                          (i) Approval.--The appropriate 
                        Federal banking agency may approve an 
                        application for an exemption if the 
                        appropriate Federal banking agency 
                        determines that--
                                  (I) such exemption would pose 
                                no significant risk to the 
                                Deposit Insurance Fund;
                                  (II) the savings 
                                association's management is 
                                competent;
                                  (III) the savings association 
                                is in substantial compliance 
                                with all applicable statutes, 
                                regulations, orders, and 
                                supervisory agreements and 
                                directives; and
                                  (IV) the savings 
                                association's management has 
                                not engaged in insider dealing, 
                                speculative practices, or any 
                                other activities that have 
                                jeopardized the association's 
                                safety and soundness or 
                                contributed to impairing the 
                                association's capital.
                          (ii) Denial or revocation of 
                        approval.--The appropriate Federal 
                        banking agency shall deny any 
                        application submitted under clause (i) 
                        and revoke any prior approval granted 
                        with respect to any such application if 
                        the appropriate Federal banking agency 
                        determines that the association's 
                        failure to meet any capital standards 
                        prescribed under paragraph (1) is 
                        accompanied by--
                                  (I) a pattern of consistent 
                                losses;
                                  (II) substantial dissipation 
                                of assets;
                                  (III) evidence of imprudent 
                                management or business 
                                behavior;
                                  (IV) a material violation of 
                                any Federal law, any law of any 
                                State to which such association 
                                is subject, or any applicable 
                                regulation; or
                                  (V) any other unsafe or 
                                unsound condition or activity, 
                                other than the failure to meet 
                                such capital standards.
                  (D) Submission of plan required.--Any 
                application submitted under subparagraph (A) 
                shall be accompanied by a plan which--
                          (i) meets the requirements of 
                        paragraph (6)(A)(ii); and
                          (ii) is acceptable to the appropriate 
                        Federal banking agency.
                  (E) Failure to comply with plan.--The 
                appropriate Federal banking agency shall treat 
                as an unsafe and unsound practice any material 
                failure by any savings association which has 
                been granted an exemption under this paragraph 
                to comply with the provisions of any plan 
                submitted by such association under 
                subparagraph (D).
                  (F) Exemption not available with respect to 
                unsafe or unsound practices.--This paragraph 
                does not limit any authority of the appropriate 
                Federal banking agency under any other 
                provision of law, including section 8 of the 
                Federal Deposit Insurance Act, to take any 
                appropriate action with respect to any unsafe 
                or unsound practice or condition of any savings 
                association, other than the failure of such 
                savings association to comply with the capital 
                standards prescribed under paragraph (1).
          (8)
          (9) Definitions.--For purposes of this subsection--
                  (A) Core capital.--Unless the Comptroller 
                prescribes a more stringent definition, the 
                term ``core capital'' means core capital as 
                defined by the Comptroller of the Currency for 
                national banks, less any unidentifiable 
                intangible assets.
                  (B) Tangible capital.--The term ``tangible 
                capital'' means core capital minus any 
                intangible assets (as intangible assets are 
                defined by the Comptroller for national banks).
                  (C) Total assets.--The term ``total assets'' 
                means total assets (as total assets are defined 
                by the Comptroller of the Currency for national 
                banks) adjusted in the same manner as total 
                assets would be adjusted in determining 
                compliance with the leverage limit applicable 
                to national banks if the savings association 
                were a national bank.
          (10) Use of comptroller's definitions.--
                  (A) In general.--The standards prescribed 
                under paragraph (1) shall include all relevant 
                substantive definitions established by the 
                Comptroller of the Currency for national banks.
                  (B) Special rule.--If the Comptroller of the 
                Currency has not made effective regulations 
                defining core capital or establishing a risk-
                based capital standard, the appropriate Federal 
                banking agency shall use the definition and 
                standard contained in the Comptroller's most 
                recently published final regulations.
  (u) Limits on Loans to One Borrower.--
          (1) In general.--Section 5200 of the Revised Statutes 
        shall apply to savings associations in the same manner 
        and to the same extent as it applies to national banks.
          (2) Special rules.--
                  (A) Notwithstanding paragraph (1), a savings 
                association may make loans to one borrower 
                under one of the following clauses:
                          (i) For any purpose, not to exceed 
                        $500,000.
                          (ii) To develop domestic residential 
                        housing units, not to exceed the lesser 
                        of $30,000,000 or 30 percent of the 
                        savings association's unimpaired 
                        capital and unimpaired surplus, if--
                                  (I) the savings association 
                                is and continues to be in 
                                compliance with the fully 
                                phased-in capital standards 
                                prescribed under subsection 
                                (t);
                                  (II) the appropriate Federal 
                                banking agency, by order, 
                                permits the savings association 
                                to avail itself of the higher 
                                limit provided by this clause;
                                  (III) loans made under this 
                                clause to all borrowers do not, 
                                in aggregate, exceed 150 
                                percent of the savings 
                                association's unimpaired 
                                capital and unimpaired surplus; 
                                and
                                  (IV) such loans comply with 
                                all applicable loan-to-value 
                                requirements.
                  (B) A savings association's loans to one 
                borrower to finance the sale of real property 
                acquired in satisfaction of debts previously 
                contracted in good faith shall not exceed 50 
                percent of the savings association's unimpaired 
                capital and unimpaired surplus.
          (3) Authority to impose more stringent 
        restrictions.--The appropriate Federal banking agency 
        may impose more stringent restrictions on a savings 
        association's loans to one borrower if the appropriate 
        Federal banking agency determines that such 
        restrictions are necessary to protect the safety and 
        soundness of the savings association.
  (v) Reports of Condition.--
          (1) In general.--Each association shall make reports 
        of conditions to the appropriate Federal banking agency 
        which shall be in a form prescribed by the appropriate 
        Federal banking agency and shall contain--
                  (A) information sufficient to allow the 
                identification of potential interest rate and 
                credit risk;
                  (B) a description of any assistance being 
                received by the association, including the type 
                and monetary value of such assistance;
                  (C) the identity of all subsidiaries and 
                affiliates of the association;
                  (D) the identity, value, type, and sector of 
                investment of all equity investments of the 
                associations and subsidiaries; and
                  (E) other information that the appropriate 
                Federal banking agency may prescribe.
          (2) Public disclosure.--
                  (A) Reports required under paragraph (1) and 
                all information contained therein shall be 
                available to the public upon request, unless 
                the appropriate Federal banking agency 
                determines--
                          (i) that a particular item or 
                        classification of information should 
                        not be made public in order to protect 
                        the safety or soundness of the 
                        institution concerned or institutions 
                        concerned, or the Deposit Insurance 
                        Fund; or
                          (ii) that public disclosure would not 
                        otherwise be in the public interest.
                  (B) Any determination made by the appropriate 
                Federal banking agency under subparagraph (A) 
                not to permit the public disclosure of 
                information shall be made in writing, and if 
                the appropriate Federal banking agency 
                restricts any item of information for savings 
                institutions generally, the appropriate Federal 
                banking agency shall disclose the reason in 
                detail in the Federal Register.
                  (C) The determinations of the appropriate 
                Federal banking agency under subparagraph (A) 
                shall not be subject to judicial review.
          (3) Access by certain parties.--
                  (A) Notwithstanding paragraph (2), the 
                persons described in subparagraph (B) shall not 
                be denied access to any information contained 
                in a report of condition, subject to reasonable 
                requirements of confidentiality. Those 
                requirements shall not prevent such information 
                from being transmitted to the Comptroller 
                General of the United States for analysis.
                  (B) The following persons are described in 
                this subparagraph for purposes of subparagraph 
                (A):
                          (i) the Chairman and ranking minority 
                        member of the Committee on Banking, 
                        Housing, and Urban Affairs of the 
                        Senate and their designees; and
                          (ii) the Chairman and ranking 
                        minority member of the Committee on 
                        Banking, Finance and Urban Affairs of 
                        the House of Representatives and their 
                        designees.
          (4) First tier penalties.--Any savings association 
        which--
                  (A) maintains procedures reasonably adapted 
                to avoid any inadvertent and unintentional 
                error and, as a result of such an error--
                          (i) fails to submit or publish any 
                        report or information required by the 
                        appropriate Federal banking agency 
                        under paragraph (1) or (2), within the 
                        period of time specified by the 
                        appropriate Federal banking agency; or
                          (ii) submits or publishes any false 
                        or misleading report or information; or
                  (B) inadvertently transmits or publishes any 
                report which is minimally late,
        shall be subject to a penalty of not more than $2,000 
        for each day during which such failure continues or 
        such false or misleading information is not corrected. 
        The savings association shall have the burden of 
        proving by a preponderence of the evidence that an 
        error was inadvertent and unintentional and that a 
        report was inadvertently transmitted or published late.
          (5) Second tier penalties.--Any savings association 
        which--
                  (A) fails to submit or publish any report or 
                information required by the appropriate Federal 
                banking agency under paragraph (1) or (2), 
                within the period of time specified by the 
                appropriate Federal banking agency; or
                  (B) submits or publishes any false or 
                misleading report or information,
        in a manner not described in paragraph (4) shall be 
        subject to a penalty of not more than $20,000 for each 
        day during which such failure continues or such false 
        or misleading information is not corrected.
          (6) Third tier penalties.--If any savings association 
        knowingly or with reckless disregard for the accuracy 
        of any information or report described in paragraph (5) 
        submits or publishes any false or misleading report or 
        information, the appropriate Federal banking agency may 
        assess a penalty of not more than [$1,000,000] 
        $1,500,000 or 1 percent of total assets, whichever is 
        less, per day for each day during which such failure 
        continues or such false or misleading information is 
        not corrected.
          (7) Assessment.--Any penalty imposed under paragraph 
        (4), (5), or (6) shall be assessed and collected by the 
        appropriate Federal banking agency in the manner 
        provided in subparagraphs (E), (F), (G), and (I) of 
        section 8(i)(2) of the Federal Deposit Insurance Act 
        (for penalties imposed under such section), and any 
        such assessment (including the determination of the 
        amount of the penalty) shall be subject to the 
        provisions of such subsection.
          (8) Hearing.--Any savings association against which 
        any penalty is assessed under this subsection shall be 
        afforded a hearing if such savings association submits 
        a request for such hearing within 20 days after the 
        issuance of the notice of assessment. Section 8(h) of 
        the Federal Deposit Insurance Act shall apply to any 
        proceeding under this subsection.
  (w) Forfeiture of Franchise for Money Laundering or Cash 
Transaction Reporting Offenses.--
          (1) In general.--
                  (A) Conviction of title 18 offense.--
                          
                          (I) Duty to notify.--If a Federal 
                        savings association has been convicted 
                        of any criminal offense under section 
                        1956 or 1957 of title 18, United States 
                        Code, the Attorney General shall 
                        provide to the Comptroller a written 
                        notification of the conviction and 
                        shall include a certified copy of the 
                        order of conviction from the court 
                        rendering the decision.
                          (II) Notice of termination; 
                        pretermination hearing.--After 
                        receiving written notification from the 
                        Attorney General of such a conviction, 
                        the Comptroller shall issue to the 
                        savings association a notice of the 
                        intention of the Comptroller to 
                        terminate all rights, privileges, and 
                        franchises of the savings association 
                        and schedule a pretermination hearing.
                  (B) Conviction of title 31 offenses.--If a 
                Federal savings association is convicted of any 
                criminal offense under section 5322 or 5324 of 
                title 31, United States Code, after receiving 
                written notification from the Attorney General, 
                the Comptroller may issue to the savings 
                association a notice of the intention of the 
                Comptroller to terminate all rights, 
                privileges, and franchises of the savings 
                association and schedule a pretermination 
                hearing.
                  (C) Judicial review.--Subsection 
                (d)(1)(B)(vii) shall apply to any proceeding 
                under this subsection.
          (2) Factors to be considered.--In determining whether 
        a franchise shall be forfeited under paragraph (1), the 
        Comptroller shall take into account the following 
        factors:
                  (A) The extent to which directors or senior 
                executive officers of the savings association 
                knew of, were involved in, the commission of 
                the money laundering offense of which the 
                association was found guilty.
                  (B) The extent to which the offense occurred 
                despite the existence of policies and 
                procedures within the savings association which 
                were designed to prevent the occurrence of any 
                such offense.
                  (C) The extent to which the savings 
                association has fully cooperated with law 
                enforcement authorities with respect to the 
                investigation of the money laundering offense 
                of which the association was found guilty.
                  (D) The extent to which the savings 
                association has implemented additional internal 
                controls (since the commission of the offense 
                of which the savings association was found 
                guilty) to prevent the occurrence of any other 
                money laundering offense.
                  (E) The extent to which the interest of the 
                local community in having adequate deposit and 
                credit services available would be threatened 
                by the forfeiture of the franchise.
          (3) Successor liability.--This subsection shall not 
        apply to a successor to the interests of, or a person 
        who acquires, a savings association that violated a 
        provision of law described in paragraph (1), if the 
        successor succeeds to the interests of the violator, or 
        the acquisition is made, in good faith and not for 
        purposes of evading this subsection or regulations 
        prescribed under this subsection.
          (4) Definition.--The term ``senior executive 
        officer'' has the same meaning as in regulations 
        prescribed under section 32(f) of the Federal Deposit 
        Insurance Act.
  (x) Home State Citizenship.--In determining whether a Federal 
court has diversity jurisdiction over a case in which a Federal 
savings association is a party, the Federal savings association 
shall be considered to be a citizen only of the State in which 
such savings association has its home office.

SEC. 5A. ELECTION TO OPERATE AS A COVERED SAVINGS ASSOCIATION.

  (a) Definition.--In this section, the term ``covered savings 
association'' means a Federal savings association that makes an 
election approved under subsection (b).
  (b) Election.--
          (1) In general.--Upon issuance of the rules described 
        in subsection (f), a Federal savings association may 
        elect to operate as a covered savings association by 
        submitting a notice to the Comptroller of such 
        election.
          (2) Approval.--A Federal savings association shall be 
        deemed to be approved to operate as a covered savings 
        association on the date that is 60 days after the date 
        on which the Comptroller receives the notice under 
        paragraph (1), unless the Comptroller notifies the 
        Federal savings association otherwise.
  (c) Rights and Duties.--Notwithstanding any other provision 
of law and except as otherwise provided in this section, a 
covered savings association shall--
          (1) have the same rights and privileges as a national 
        bank that has its main office situated in the same 
        location as the home office of the covered savings 
        association; and
          (2) be subject to the same duties, restrictions, 
        penalties, liabilities, conditions, and limitations 
        that would apply to such a national bank.
  (d) Treatment of Covered Savings Associations.--A covered 
savings association shall be treated as a Federal savings 
association for the purposes--
          (1) of governance of the covered savings association, 
        including incorporation, bylaws, boards of directors, 
        shareholders, and distribution of dividends;
          (2) of consolidation, merger, dissolution, conversion 
        (including conversion to a stock bank or to another 
        charter), conservatorship, and receivership; and
          (3) determined by regulation of the Comptroller.
  (e) Existing Branches.--A covered savings association may 
continue to operate any branch or agency the covered savings 
association operated on the date on which an election under 
subsection (b) is approved.
  (f) Rulemaking.--The Comptroller shall issue rules to carry 
out this section--
          (1) that establish streamlined standards and 
        procedures that clearly identify required documentation 
        or timelines for an election under subsection (b);
          (2) that require a Federal savings association that 
        makes an election under subsection (b) to identify 
        specific assets and subsidiaries--
                  (A) that do not conform to the requirements 
                for assets and subsidiaries of a national bank; 
                and
                  (B) that are held by the Federal savings 
                association on the date on which the Federal 
                savings association submits a notice of such 
                election;
          (3) that establish--
                  (A) a transition process for bringing such 
                assets and subsidiaries into conformance with 
                the requirements for a national bank; and
                  (B) procedures for allowing the Federal 
                savings association to provide a justification 
                for grandfathering such assets and subsidiaries 
                after electing to operate as a covered savings 
                association;
          (4) that establish standards and procedures to allow 
        a covered savings association to terminate an election 
        under subsection (b) after an appropriate period of 
        time or to make a subsequent election;
          (5) that clarify requirements for the treatment of 
        covered savings associations, including the provisions 
        of law that apply to covered savings associations; and
          (6) as the Comptroller deems necessary and in the 
        interests of safety and soundness.

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

  (a) In General.--Any determination by a court or by the 
Director or any successor officer or agency regarding the 
relation of State law to a provision of this Act or any 
regulation or order prescribed under this Act shall be made in 
accordance with the laws and legal standards applicable to 
national banks regarding the preemption of State law.
  (b) Principles of Conflict Preemption Applicable.--
Notwithstanding the authorities granted under sections 4 and 5, 
this Act does not occupy the field in any area of State law.
  (c) Visitorial Powers.--The provisions of [sections] section 
5136C(i) of the Revised Statutes of the United States shall 
apply to Federal savings associations, and any subsidiary 
thereof, to the same extent and in the same manner as if such 
savings associations, or subsidiaries thereof, were national 
banks or subsidiaries of national banks, respectively.
  (d) Enforcement Actions.--The ability of the Comptroller of 
the Currency to bring an enforcement action under this Act or 
section 5 of the Federal Trade Commission Act does not preclude 
any private party from enforcing rights granted under Federal 
or State law in the courts.

           *       *       *       *       *       *       *


SEC. 10. REGULATION OF HOLDING COMPANIES.

  (a) Definitions.--
          (1) In general.--As used in this section, unless the 
        context otherwise requires--
                  (A) Savings association.--The term ``savings 
                association'' includes a savings bank or 
                cooperative bank which is deemed by the 
                appropriate Federal banking agency to be a 
                savings association under subsection (l).
                  (B) Uninsured institution.--The term 
                ``uninsured institution'' means any depository 
                institution the deposits of which are not 
                insured by the Federal Deposit Insurance 
                Corporation.
                  (C) Company.--The term ``company'' means any 
                corporation, partnership, trust, joint-stock 
                company, or similar organization, but does not 
                include the Federal Deposit Insurance 
                Corporation, the Resolution Trust Corporation, 
                any Federal home loan bank, or any company the 
                majority of the shares of which is owned by the 
                United States or any State, or by an 
                instrumentality of the United States or any 
                State.
                  (D) Savings and loan holding company.--
                          (i) In general.--Except as provided 
                        in clause (ii), the term ``savings and 
                        loan holding company'' means any 
                        company that directly or indirectly 
                        controls a savings association or that 
                        controls any other company that is a 
                        savings and loan holding company.
                          (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.
                  (E) Multiple savings and loan holding 
                company.--The term ``multiple savings and loan 
                holding company'' means any savings and loan 
                holding company which directly or indirectly 
                controls 2 or more savings associations.
                  (F) Diversified savings and loan holding 
                company.--The term ``diversified savings and 
                loan holding company'' means any savings and 
                loan holding company whose subsidiary savings 
                association and related activities as permitted 
                under paragraph (2) of subsection (c) of this 
                section represented, on either an actual or a 
                pro forma basis, less than 50 percent of its 
                consolidated net worth at the close of its 
                preceding fiscal year and of its consolidated 
                net earnings for such fiscal year, as 
                determined in accordance with regulations 
                issued by the appropriate Federal banking 
                agency.
                  (G) Subsidiary.--The term ``subsidiary'' has 
                the same meaning as in section 3 of the Federal 
                Deposit Insurance Act.
                  (H) Affiliate.--The term ``affiliate'' of a 
                savings association means any person which 
                controls, is controlled by, or is under common 
                control with, such savings association.
                  (I) Bank holding company.--The terms ``bank 
                holding company'' and ``bank'' have the 
                meanings given to such terms in section 2 of 
                the Bank Holding Company Act of 1956.
                  (J) Acquire.--The term ``acquire'' has the 
                meaning given to such term in section 13(f)(8) 
                of the Federal Deposit Insurance Act.
          (2) Control.--For purposes of this section, a person 
        shall be deemed to have control of--
                  (A) a savings association if the person 
                directly or indirectly or acting in concert 
                with one or more other persons, or through one 
                or more subsidiaries, owns, controls, or holds 
                with power to vote, or holds proxies 
                representing, more than 25 percent of the 
                voting shares of such savings association, or 
                controls in any manner the election of a 
                majority of the directors of such association;
                  (B) any other company if the person directly 
                or indirectly or acting in concert with one or 
                more other persons, or through one or more 
                subsidiaries, owns, controls, or holds with 
                power to vote, or holds proxies representing, 
                more than 25 percent of the voting shares or 
                rights of such other company, or controls in 
                any manner the election or appointment of a 
                majority of the directors or trustees of such 
                other company, or is a general partner in or 
                has contributed more than 25 percent of the 
                capital of such other company;
                  (C) a trust if the person is a trustee 
                thereof; or
                  (D) a savings association or any other 
                company if the Board determines, after 
                reasonable notice and opportunity for hearing, 
                that such person directly or indirectly 
                exercises a controlling influence over the 
                management or policies of such association or 
                other company.
          (3) Exclusions.--Notwithstanding any other provision 
        of this subsection, the term ``savings and loan holding 
        company'' does not include--
                  (A) any company by virtue of its ownership or 
                control of voting shares of a savings 
                association or a savings and loan holding 
                company acquired in connection with the 
                underwriting of securities if such shares are 
                held only for such period of time (not 
                exceeding 120 days unless extended by the 
                Board) as will permit the sale thereof on a 
                reasonable basis; and
                  (B) any trust (other than a pension, profit-
                sharing, shareholders', voting, or business 
                trust) which controls a savings association or 
                a savings and loan holding company if such 
                trust by its terms must terminate within 25 
                years or not later than 21 years and 10 months 
                after the death of individuals living on the 
                effective date of the trust, and is (i) in 
                existence on June 26, 1967, or (ii) a 
                testamentary trust created on or after June 26, 
                1967.
          (4) Special rule relating to qualified stock 
        issuance.--No savings and loan holding company shall be 
        deemed to control a savings association solely by 
        reason of the purchase by such savings and loan holding 
        company of shares issued by such savings association, 
        or issued by any savings and loan holding company 
        (other than a bank holding company) which controls such 
        savings association, in connection with a qualified 
        stock issuance if such purchase is approved by the 
        Board under subsection (q)(1)(D), unless the acquiring 
        savings and loan holding company, directly or 
        indirectly, or acting in concert with 1 or more other 
        persons, or through 1 or more subsidiaries, owns, 
        controls, or holds with power to vote, or holds proxies 
        representing, more than 15 percent of the voting shares 
        of such savings association or holding company.
  (b) Registration and Examination.--
          (1) In general.--Within 90 days after becoming a 
        savings and loan holding company, each savings and loan 
        holding company shall register with the Board on forms 
        prescribed by the Board, which shall include such 
        information, under oath or otherwise, with respect to 
        the financial condition, ownership, operations, 
        management, and intercompany relationships of such 
        holding company and its subsidiaries, and related 
        matters, as the Board may deem necessary or appropriate 
        to carry out the purposes of this section. Upon 
        application, the Board may extend the time within which 
        a savings and loan holding company shall register and 
        file the requisite information.
          (2) Reports.--
                  (A) In general.--Each savings and loan 
                holding company and each subsidiary thereof, 
                other than a savings association, shall file 
                with the Board, such reports as may be required 
                by the Board. Such reports shall be made under 
                oath or otherwise, and shall be in such form 
                and for such periods, as the Board may 
                prescribe. Each report shall contain such 
                information concerning the operations of such 
                savings and loan holding company and its 
                subsidiaries as the Board may require.
                  (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).
          (3) Books and records.--Each savings and loan holding 
        company shall maintain such books and records as may be 
        prescribed by the Board.
          (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.
          (5) Agent for service of process.--The Board may 
        require any savings and loan holding company, or 
        persons connected therewith if it is not a corporation, 
        to execute and file a prescribed form of irrevocable 
        appointment of agent for service of process.
          (6) Release from registration.--The Board may at any 
        [time, upon the motion or application of the Board, 
        release] time, upon the motion or application of the 
        Board, release a registered savings and loan holding 
        company from any registration theretofore made by such 
        company, if the Board determines that such company no 
        longer has control of any savings association.
  (c) Holding Company Activities.--
          (1) Prohibited activities.--Except as otherwise 
        provided in this subsection, no savings and loan 
        holding company and no subsidiary which is not a 
        savings association shall--
                  (A) engage in any activity or render any 
                service for or on behalf of a savings 
                association subsidiary for the purpose or with 
                the effect of evading any law or regulation 
                applicable to such savings association;
                  (B) commence any business activity, other 
                than the activities described in paragraph (2); 
                or
                  (C) continue any business activity, other 
                than the activities described in paragraph (2), 
                after the end of the 2-year period beginning on 
                the date on which such company received 
                approval under subsection (e) of this section 
                to become a savings and loan holding company 
                subject to the limitations contained in this 
                subparagraph.
          (2) Exempt activities.--The prohibitions of 
        subparagraphs (B) and (C) of paragraph (1) shall not 
        apply to the following business activities of any 
        savings and loan holding company or any subsidiary (of 
        such company) which is not a savings association:
                  (A) Furnishing or performing management 
                services for a savings association subsidiary 
                of such company.
                  (B) Conducting an insurance agency or escrow 
                business.
                  (C) Holding, managing, or liquidating assets 
                owned or acquired from a savings association 
                subsidiary of such company.
                  (D) Holding or managing properties used or 
                occupied by a savings association subsidiary of 
                such company.
                  (E) Acting as trustee under deed of trust.
                  (F) Any other activity--
                          (i) which the Board, by regulation, 
                        has determined to be permissible for 
                        bank holding companies under section 
                        4(c) of the Bank Holding Company Act of 
                        1956, unless the Board, by regulation, 
                        prohibits or limits any such activity 
                        for savings and loan holding companies; 
                        or
                          (ii) in which multiple savings and 
                        loan holding companies were authorized 
                        (by regulation) to directly engage on 
                        March 5, 1987.
                  (G) In the case of a savings and loan holding 
                company, purchasing, holding, or disposing of 
                stock acquired in connection with a qualified 
                stock issuance if the purchase of such stock by 
                such savings and loan holding company is 
                approved by the Board pursuant to subsection 
                (q)(1)(D).
                  (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))] 
                1841(p))) to conduct under section 4(k) of the 
                Bank Holding Company Act of 1956 (12 U.S.C. 
                1843(k)) 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 of 1956 (12 U.S.C. 1843(l) and (m)) 
                        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.
          (3) Certain limitations on activities not applicable 
        to certain holding companies.--Notwithstanding 
        paragraphs (4) and (6) of this subsection, the 
        limitations contained in subparagraphs (B) and (C) of 
        paragraph (1) shall not apply to any savings and loan 
        holding company (or any subsidiary of such company) 
        which controls--
                  (A) only 1 savings association, if the 
                savings association subsidiary of such company 
                is a qualified thrift lender (as determined 
                under subsection (m)); or
                  (B) more than 1 savings association, if--
                          (i) all, or all but 1, of the savings 
                        association subsidiaries of such 
                        company were initially acquired by the 
                        company or by an individual who would 
                        be deemed to control such company if 
                        such individual were a company--
                                  (I) pursuant to an 
                                acquisition under section 13(c) 
                                or 13(k) of the Federal Deposit 
                                Insurance Act or section 408(m) 
                                of the National Housing Act; or
                                  (II) pursuant to an 
                                acquisition in which assistance 
                                was continued to a savings 
                                association under section 13(i) 
                                of the Federal Deposit 
                                Insurance Act; and
                          (ii) all of the savings association 
                        subsidiaries of such company are 
                        qualified thrift lenders (as determined 
                        under subsection (m)).
          (4) Prior approval of certain new activities 
        required.--
                  (A) In general.--No savings and loan holding 
                company and no subsidiary which is not a 
                savings association shall commence, either de 
                novo or by an acquisition (in whole or in part) 
                of a going concern, any activity described in 
                paragraph (2)(F)(i) of this subsection without 
                the prior approval of the Board.
                  (B) Factors to be considered.--In considering 
                any application under subparagraph (A) by any 
                savings and loan holding company or any 
                subsidiary of any such company which is not a 
                savings association, the Board shall consider--
                          (i) whether the performance of the 
                        activity described in such application 
                        by the company or the subsidiary can 
                        reasonably be expected to produce 
                        benefits to the public (such as greater 
                        convenience, increased competition, or 
                        gains in efficiency) that outweigh 
                        possible adverse effects of such 
                        activity (such as undue concentration 
                        of resources, decreased or unfair 
                        competition, conflicts of interest, or 
                        unsound financial practices);
                          (ii) the managerial resources of the 
                        companies involved; and
                          (iii) the adequacy of the financial 
                        resources, including capital, of the 
                        companies involved.
                  (C) Director may differentiate between new 
                and ongoing activities.--In prescribing any 
                regulation or considering any application under 
                this paragraph, the Board may differentiate 
                between activities commenced de novo and 
                activities commenced by the acquisition, in 
                whole or in part, of a going concern.
                  (D) Approval or disapproval by order.--The 
                approval or disapproval of any application 
                under this paragraph by the Board shall be made 
                in an order issued by the Board containing the 
                reasons for such approval or disapproval.
          (5) Grace period to achieve compliance.--If any 
        savings association referred to in paragraph (3) fails 
        to maintain the status of such association as a 
        qualified thrift lender, the Board may allow, for good 
        cause shown, any company that controls such association 
        (or any subsidiary of such company which is not a 
        savings association) up to 3 years to comply with the 
        limitations contained in paragraph (1)(C).
          (6) Special provisions relating to certain companies 
        affected by 1987 amendments.--
                  (A) Exception to 2-year grace period for 
                achieving compliance.--Notwithstanding 
                paragraph (1)(C), any company which received 
                approval under subsection (e) of this section 
                to acquire control of a savings association 
                between March 5, 1987, and August 10, 1987, 
                shall not continue any business activity other 
                than an activity described in paragraph (2) 
                after August 10, 1987.
                  (B) Exemption for activities lawfully engaged 
                in before march 5, 1987.--Notwithstanding 
                paragraph (1)(C) and subject to subparagraphs 
                (C) and (D), any savings and loan holding 
                company which received approval, before March 
                5, 1987, under subsection (e) of this section 
                to acquire control of a savings association may 
                engage, directly or through any subsidiary 
                (other than a savings association subsidiary of 
                such company), in any activity in which such 
                company or such subsidiary was lawfully engaged 
                on such date.
                  (C) Termination of subparagraph (b) 
                exemption.--The exemption provided under 
                subparagraph (B) for activities engaged in by 
                any savings and loan holding company or a 
                subsidiary of such company (which is not a 
                savings association) which would otherwise be 
                prohibited under paragraph (1)(C) shall 
                terminate with respect to such activities of 
                such company or subsidiary upon the occurrence 
                (after August 10, 1987) of any of the 
                following:
                          (i) The savings and loan holding 
                        company acquires control of a bank or 
                        an additional savings association 
                        (other than a savings association 
                        acquired pursuant to section 13(c) or 
                        13(k) of the Federal Deposit Insurance 
                        Act or section 406(f) or 408(m) of the 
                        National Housing Act).
                          (ii) Any savings association 
                        subsidiary of the savings and loan 
                        holding company fails to qualify as a 
                        domestic building and loan association 
                        under section 7701(a)(19) of the 
                        Internal Revenue Code of 1986.
                          (iii) The savings and loan holding 
                        company engages in any business 
                        activity--
                                  (I) which is not described in 
                                paragraph (2); and
                                  (II) in which it was not 
                                engaged on March 5, 1987.
                          (iv) Any savings association 
                        subsidiary of the savings and loan 
                        holding company increases the number of 
                        locations from which such savings 
                        association conducts business after 
                        March 5, 1987 (other than an increase 
                        which occurs in connection with a 
                        transaction under section 13(c) or (k) 
                        of the Federal Deposit Insurance Act or 
                        section 408(m) of the National Housing 
                        Act.
                          (v) Any savings association 
                        subsidiary of the savings and loan 
                        holding company permits any overdraft 
                        (including an intraday overdraft), or 
                        incurs any such overdraft in its 
                        account at a Federal Reserve bank, on 
                        behalf of an affiliate, unless such 
                        overdraft is the result of an 
                        inadvertent computer or accounting 
                        error that is beyond the control of 
                        both the savings association subsidiary 
                        and the affiliate.
                  (D) Order to terminate subparagraph (b) 
                activity.--Any activity described in 
                subparagraph (B) may also be terminated by the 
                Board, after opportunity for hearing, if the 
                Board determines, having due regard for the 
                purposes of this Act, that such action is 
                necessary to prevent conflicts of interest or 
                unsound practices or is in the public interest.
          (7) Foreign savings and loan holding company.--
        Notwithstanding any other provision of this section, 
        any savings and loan holding company organized under 
        the laws of a foreign country as of June 1, 1984 
        (including any subsidiary thereof which is not a 
        savings association), which controls a single savings 
        association on August 10, 1987, shall not be subject to 
        this subsection with respect to any activities of such 
        holding company which are conducted exclusively in a 
        foreign country.
          (8) Exemption for bank holding companies.--Except for 
        paragraph (1)(A), this subsection shall not apply to 
        any company that is treated as a bank holding company 
        for purposes of section 4 of the Bank Holding Company 
        Act of 1956, or any of its subsidiaries.
          (9) Prevention of new affiliations between s&l 
        holding companies and commercial firms.--
                  (A) In general.--Notwithstanding paragraph 
                (3), no company may directly or indirectly, 
                including through any merger, consolidation, or 
                other type of business combination, acquire 
                control of a savings association after May 4, 
                1999, unless the company is engaged, directly 
                or indirectly (including through a subsidiary 
                other than a savings association), only in 
                activities that are permitted--
                          (i) under paragraph (1)(C) or (2) of 
                        this subsection; or
                          (ii) for financial holding companies 
                        under section 4(k) of the Bank Holding 
                        Company Act of 1956.
                  (B) Prevention of new commercial 
                affiliations.--Notwithstanding paragraph (3), 
                no savings and loan holding company may engage 
                directly or indirectly (including through a 
                subsidiary other than a savings association) in 
                any activity other than as described in clauses 
                (i) and (ii) of subparagraph (A).
                  (C) Preservation of authority of existing 
                unitary s&l holding companies.--Subparagraphs 
                (A) and (B) do not apply with respect to any 
                company that was a savings and loan holding 
                company on May 4, 1999, or that becomes a 
                savings and loan holding company pursuant to an 
                application pending before the Office on or 
                before that date, and that--
                          (i) meets and continues to meet the 
                        requirements of paragraph (3); and
                          (ii) continues to control not fewer 
                        than 1 savings association that it 
                        controlled on May 4, 1999, or that it 
                        acquired pursuant to an application 
                        pending before the Office on or before 
                        that date, or the successor to such 
                        savings association.
                  (D) Corporate reorganizations permitted.--
                This paragraph does not prevent a transaction 
                that--
                          (i) involves solely a company under 
                        common control with a savings and loan 
                        holding company from acquiring, 
                        directly or indirectly, control of the 
                        savings and loan holding company or any 
                        savings association that is already a 
                        subsidiary of the savings and loan 
                        holding company; or
                          (ii) involves solely a merger, 
                        consolidation, or other type of 
                        business combination as a result of 
                        which a company under common control 
                        with the savings and loan holding 
                        company acquires, directly or 
                        indirectly, control of the savings and 
                        loan holding company or any savings 
                        association that is already a 
                        subsidiary of the savings and loan 
                        holding company.
                  (E) Authority to prevent evasions.--The Board 
                may issue interpretations, regulations, or 
                orders that the Board determines necessary to 
                administer and carry out the purpose and 
                prevent evasions of this paragraph, including a 
                determination (in consultation with the 
                appropriate Federal banking agency) that, 
                notwithstanding the form of a transaction, the 
                transaction would in substance result in a 
                company acquiring control of a savings 
                association.
                  (F) Preservation of authority for family 
                trusts.--Subparagraphs (A) and (B) do not apply 
                with respect to any trust that becomes a 
                savings and loan holding company with respect 
                to a savings association, if--
                          (i) not less than 85 percent of the 
                        beneficial ownership interests in the 
                        trust are continuously owned, directly 
                        or indirectly, by or for the benefit of 
                        members of the same family, or their 
                        spouses, who are lineal descendants of 
                        common ancestors who controlled, 
                        directly or indirectly, such savings 
                        association on May 4, 1999, or a 
                        subsequent date, pursuant to an 
                        application pending before the Office 
                        on or before May 4, 1999; and
                          (ii) at the time at which such trust 
                        becomes a savings and loan holding 
                        company, such ancestors or lineal 
                        descendants, or spouses of such 
                        descendants, have directly or 
                        indirectly controlled the savings 
                        association continuously since May 4, 
                        1999, or a subsequent date, pursuant to 
                        an application pending before the 
                        Office on or before May 4, 1999.
  (d) Transactions With Affiliates.--Transactions between any 
subsidiary savings association of a savings and loan holding 
company and any affiliate (of such savings association 
subsidiary) shall be subject to the limitations and 
prohibitions specified in section 11 of this Act.
  (e) Acquisitions.--
          (1) In general.--It shall be unlawful for--
                  (A) any savings and loan holding company 
                directly or indirectly, or through one or more 
                subsidiaries or through one or more 
                transactions--
                          (i) to acquire, except with the prior 
                        written approval of the Board, the 
                        control of a savings association or a 
                        savings and loan holding company, or to 
                        retain the control of such an 
                        association or holding company acquired 
                        or retained in violation of this 
                        section as heretofore or hereafter in 
                        effect;
                          (ii) to acquire, except with the 
                        prior written approval of the Board, by 
                        the process of merger, consolidation, 
                        or purchase of assets, another savings 
                        association or a savings and loan 
                        holding company, or all or 
                        substantially all of the assets of any 
                        such association or holding company;
                          (iii) to acquire, by purchase or 
                        otherwise, or to retain, except with 
                        the prior written approval of the 
                        Board, more than 5 percent of the 
                        voting shares of a savings association 
                        not a subsidiary, or of a savings and 
                        loan holding company not a subsidiary, 
                        or in the case of a multiple savings 
                        and loan holding company (other than a 
                        company described in subsection 
                        (c)(8)), to acquire or retain, and the 
                        Board may not authorize acquisition or 
                        retention of, more than 5 percent of 
                        the voting shares of any company not a 
                        subsidiary which is engaged in any 
                        business activity other than the 
                        activities specified in subsection 
                        (c)(2). This clause shall not apply to 
                        shares of a savings association or of a 
                        savings and loan holding company--
                                  (I) held as a bona fide 
                                fiduciary (whether with or 
                                without the sole discretion to 
                                vote such shares);
                                  (II) held temporarily 
                                pursuant to an underwriting 
                                commitment in the normal course 
                                of an underwriting business;
                                  (III) held in an account 
                                solely for trading purposes;
                                  (IV) over which no control is 
                                held other than control of 
                                voting rights acquired in the 
                                normal course of a proxy 
                                solicitation;
                                  (V) acquired in securing or 
                                collecting a debt previously 
                                contracted in good faith, 
                                during the 2-year period 
                                beginning on the date of such 
                                acquisition or for such 
                                additional time (not exceeding 
                                3 years) as the Board may 
                                permit if the Board determines 
                                that such an extension will not 
                                be detrimental to the public 
                                interest;
                                  (VI) acquired under section 
                                408(m) of the National Housing 
                                Act or section 13(k) of the 
                                Federal Deposit Insurance Act;
                                  (VII) held by any insurance 
                                company, as defined in section 
                                2(a)(17) of the Investment 
                                Company Act of 1940, except as 
                                provided in paragraph (6); or
                                  (VIII) acquired pursuant to a 
                                qualified stock issuance if 
                                such purchase is approved by 
                                the Board under subsection 
                                (q)(1)(D);
                        except that the aggregate amount of 
                        shares held under this clause (other 
                        than under subclauses (I), (II), (III), 
                        (IV), and (VI)) may not exceed 15 
                        percent of all outstanding shares or of 
                        the voting power of a savings 
                        association or savings and loan holding 
                        company; or
                          (iv) to acquire the control of an 
                        uninsured institution, or to retain for 
                        more than one year after February 14, 
                        1968, or from the date on which such 
                        control was acquired, whichever is 
                        later, except that the Board may upon 
                        application by such company extend such 
                        one-year period from year to year, for 
                        an additional period not exceeding 3 
                        years, if the Board finds such 
                        extension is warranted and is not 
                        detrimental to the public interest; and
                  (B) any other company, without the prior 
                written approval of the Board, directly or 
                indirectly, or through one or more subsidiaries 
                or through one or more transactions, to acquire 
                the control of one or more savings 
                associations, except that such approval shall 
                not be required in connection with the control 
                of a savings association, (i) acquired by 
                devise under the terms of a will creating a 
                trust which is excluded from the definition of 
                ``savings and loan holding company'' under 
                subsection (a) of this section, (ii) acquired 
                in connection with a reorganization in which a 
                person or group of persons, having had control 
                of a savings association for more than 3 years, 
                vests control of that association in a newly 
                formed holding company subject to the control 
                of the same person or group of persons, or 
                (iii) acquired by a bank holding company that 
                is registered under, and subject to, the Bank 
                Holding Company Act of 1956, or any company 
                controlled by such bank holding company. The 
                Board shall approve an acquisition of a savings 
                association under this subparagraph unless the 
                Board finds the financial and managerial 
                resources and future prospects of the company 
                and association involved to be such that the 
                acquisition would be detrimental to the 
                association or the insurance risk of the 
                Deposit Insurance Fund, and shall render a 
                decision within 90 days after submission to the 
                Board of the complete record on the 
                application.
        Consideration of the managerial resources of a company 
        or savings association under subparagraph (B) shall 
        include consideration of the competence, experience, 
        and integrity of the officers, directors, and principal 
        shareholders of the company or association.
          (2) Factors to be considered.--The Board shall not 
        approve any acquisition under subparagraph (A)(i) or 
        (A)(ii), or of more than one savings association under 
        subparagraph (B) of paragraph (1) of this subsection, 
        any acquisition of stock in connection with a qualified 
        stock issuance, any acquisition under paragraph (4)(A), 
        or any transaction under section 13(k) of the Federal 
        Deposit Insurance Act, except in accordance with this 
        paragraph. In every case, the Board shall take into 
        consideration the financial and managerial resources 
        and future prospects of the company and association 
        involved, the effect of the acquisition on the 
        association, the insurance risk to the Deposit 
        Insurance Fund, and the convenience and needs of the 
        community to be served, and shall render a decision 
        within 90 days after submission to the Board of the 
        complete record on the application. Consideration of 
        the managerial resources of a company or savings 
        association shall include consideration of the 
        competence, experience, and integrity of the officers, 
        directors, and principal shareholders of the company or 
        association. Before approving any such acquisition, 
        except a transaction under section 13(k) of the Federal 
        Deposit Insurance Act, the Board shall request from the 
        Attorney General and consider any report rendered 
        within 30 days on the competitive factors involved. The 
        Board shall not approve any proposed acquisition--
                  (A) which would result in a monopoly, or 
                which would be in furtherance of any 
                combination or conspiracy to monopolize or to 
                attempt to monopolize the savings and loan 
                business in any part of the United States,
                  (B) the effect of which in any section of the 
                country may be substantially to lessen 
                competition, or tend to create a monopoly, or 
                which in any other manner would be in restraint 
                of trade, unless it finds that the 
                anticompetitive effects of the proposed 
                acquisition are clearly outweighed in the 
                public interest by the probable effect of the 
                acquisition in meeting the convenience and 
                needs of the community to be served,
                  (C) if the company fails to provide adequate 
                assurances to the Board that the company will 
                make available to the Board such information on 
                the operations or activities of the company, 
                and any affiliate of the company, as the Board 
                determines to be appropriate to determine and 
                enforce compliance with this Act,
                  (D) in the case of an application involving a 
                foreign bank, if the foreign bank is not 
                subject to comprehensive supervision or 
                regulation on a consolidated basis by the 
                appropriate authorities in the bank's home 
                country, or
                  (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).
          (3) Interstate Acquisitions.--No acquisition shall be 
        approved by the Board under this subsection which will 
        result in the formation by any company, through one or 
        more subsidiaries or through one or more transactions, 
        of a multiple savings and loan holding company 
        controlling savings associations in more than one 
        State, unless--
                  (A) such company, or a savings association 
                subsidiary of such company, is authorized to 
                acquire control of a savings association 
                subsidiary, or to operate a home or branch 
                office, in the additional State or States 
                pursuant to section 13(k) of the Federal 
                Deposit Insurance Act;
                  (B) such company controls a savings 
                association subsidiary which operated a home or 
                branch office in the additional State or States 
                as of March 5, 1987; or
                  (C) the statutes of the State in which the 
                savings association to be acquired is located 
                permit a savings association chartered by such 
                State to be acquired by a savings association 
                chartered by the State where the acquiring 
                savings association or savings and loan holding 
                company is located or by a holding company that 
                controls such a State chartered savings 
                association, and such statutes specifically 
                authorize such an acquisition by language to 
                that effect and not merely by implication.
          (4) Acquisitions by certain individuals.--
                  (A) In general.--Notwithstanding subsection 
                (h)(2), any director or officer of a savings 
                and loan holding company, or any individual who 
                owns, controls, or holds with power to vote (or 
                holds proxies representing) more than 25 
                percent of the voting shares of such holding 
                company, may acquire control of any savings 
                association not a subsidiary of such savings 
                and loan holding company with the prior written 
                approval of the Board.
                  (B) Treatment of certain holding companies.--
                If any individual referred to in subparagraph 
                (A) controls more than 1 savings and loan 
                holding company or more than 1 savings 
                association, any savings and loan holding 
                company controlled by such individual shall be 
                subject to the activities limitations contained 
                in subsection (c) to the same extent such 
                limitations apply to multiple savings and loan 
                holding companies, unless all or all but 1 of 
                the savings associations (including any 
                institution deemed to be a savings association 
                under subsection (l) of this section) 
                controlled directly or indirectly by such 
                individual was acquired pursuant to an 
                acquisition described in subclause (I) or (II) 
                of subsection (c)(3)(B)(i).
          (5) Acquisitions pursuant to certain security 
        interests.--This subsection and subsection (c)(2) of 
        this section do not apply to any savings and loan 
        holding company which acquired the control of a savings 
        association or of a savings and loan holding company 
        pursuant to a pledge or hypothecation to secure a loan, 
        or in connection with the liquidation of a loan, made 
        in the ordinary course of business. It shall be 
        unlawful for any such company to retain such control 
        for more than one year after February 14, 1968, or from 
        the date on which such control was acquired, whichever 
        is later, except that the Board may upon application by 
        such company extend such one-year period from year to 
        year, for an additional period not exceeding 3 years, 
        if the Board finds such extension is warranted and 
        would not be detrimental to the public interest.
          (6) Shares held by insurance affiliates.--Shares 
        described in clause (iii)(VII) of paragraph (1)(A) 
        shall not be excluded for purposes of clause (iii) of 
        such paragraph if--
                  (A) all shares held under such clause 
                (iii)(VII) by all insurance company affiliates 
                of such savings association or savings and loan 
                holding company in the aggregate exceed 5 
                percent of all outstanding shares or of the 
                voting power of the savings association or 
                savings and loan holding company; or
                  (B) such shares are acquired or retained with 
                a view to acquiring, exercising, or 
                transferring control of the savings association 
                or savings and loan holding company.
          (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 [Board of the Office 
                        of Thrift Supervision] Director of the 
                        Office of Thrift Supervision, or, on 
                        and after the transfer date, as defined 
                        in section 2 of the Dodd-Frank Wall 
                        Street Reform and Consumer Protection 
                        Act (12 U.S.C. 5301), 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.
  (f) Declaration of Dividend.--Every subsidiary savings 
association of a savings and loan holding company shall give 
the Board not less than 30 days' advance notice of the proposed 
declaration by its directors of any dividend on its guaranty, 
permanent, or other nonwithdrawable stock. Such notice period 
shall commence to run from the date of receipt of such notice 
by the Board. Any such dividend declared within such period, or 
without the giving of such notice to the Board, shall be 
invalid and shall confer no rights or benefits upon the holder 
of any such stock.
  (g) Administration and Enforcement.--
          (1) In general.--The Board is authorized to issue 
        such regulations and orders, including regulations and 
        orders relating to capital requirements for savings and 
        loan holding companies, as the Board deems necessary or 
        appropriate to enable the Board to administer and carry 
        out the purposes of this section, and to require 
        compliance therewith and prevent evasions thereof. 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.
          (2) Investigations.--The Board may make such 
        investigations as the Board deems necessary or 
        appropriate to determine whether the provisions of this 
        section, and regulations and orders thereunder, are 
        being and have been complied with by savings and loan 
        holding companies and subsidiaries and affiliates 
        thereof. For the purpose of any investigation under 
        this section, the Board may administer oaths and 
        affirmations, issue subpenas, take evidence, and 
        require the production of any books, papers, 
        correspondence, memorandums, or other records which may 
        be relevant or material to the inquiry. The attendance 
        of witnesses and the production of any such records may 
        be required from any place in any State. The Board may 
        apply to the United States district court for the 
        judicial district (or the United States court in any 
        territory) in which any witness or company subpenaed 
        resides or carries on business, for enforcement of any 
        subpena issued pursuant to this paragraph, and such 
        courts shall have jurisdiction and power to order and 
        require compliance.
          (3) Proceedings.--(A) In any proceeding under 
        subsection (a)(2)(D) or under paragraph (5) of this 
        subsection, the Board may administer oaths and 
        affirmations, take or cause to be taken depositions, 
        and issue subpenas. The Board may make regulations with 
        respect to any such proceedings. The attendance of 
        witnesses and the production of documents provided for 
        in this paragraph may be required from any place in any 
        State or in any territory at any designated place where 
        such proceeding is being conducted. Any party to such 
        proceedings may apply to the United States District 
        Court for the District of Columbia, or the United 
        States district court for the judicial district or the 
        United States court in any territory in which such 
        proceeding is being conducted, or where the witness 
        resides or carries on business, for enforcement of any 
        subpena issued pursuant to this paragraph, and such 
        courts shall have jurisdiction and power to order and 
        require compliance therewith. Witnesses subpenaed under 
        this section shall be paid the same fees and mileage 
        that are paid witnesses in the district courts of the 
        United States.
          (B) Any hearing provided for in subsection (a)(2)(D) 
        or under paragraph (5) of this section shall be held in 
        the Federal judicial district or in the territory in 
        which the principal office of the association or other 
        company is located unless the party afforded the 
        hearing consents to another place, and shall be 
        conducted in accordance with the provisions of chapter 
        5 of title 5, United States Code.
          (4) Injunctions.--Whenever it appears to the Board 
        that any person is engaged or has engaged or is about 
        to engage in any acts or practices which constitute or 
        will constitute a violation of the provisions of this 
        section or of any regulation or order thereunder, the 
        Board may bring an action in the proper United States 
        district court, or the United States court of any 
        territory or other place subject to the jurisdiction of 
        the United States, to enjoin such acts or practices, to 
        enforce compliance with this section or any regulation 
        or order, or to require the divestiture of any 
        acquisition in violation of this section, or for any 
        combination of the foregoing, and such courts shall 
        have jurisdiction of such actions. Upon a proper 
        showing an injunction, decree, restraining order, order 
        of divestiture, or other appropriate order shall be 
        granted without bond.
          (5) Cease and desist orders.--(A) Notwithstanding any 
        other provision of this section, the Board may, 
        whenever the Board has reasonable cause to believe that 
        the continuation by a savings and loan holding company 
        of any activity or of ownership or control of any of 
        its noninsured subsidiaries constitutes a serious risk 
        to the financial safety, soundness, or stability of a 
        savings and loan holding company's subsidiary savings 
        association and is inconsistent with the sound 
        operation of a savings association or with the purposes 
        of this section or section 8 of the Federal Deposit 
        Insurance Act, order the savings and loan holding 
        company or any of its subsidiaries, after due notice 
        and opportunity for hearing, to terminate such 
        activities or to terminate (within 120 days or such 
        longer period as the Board directs in unusual 
        circumstances) its ownership or control of any such 
        noninsured subsidiary either by sale or by distribution 
        of the shares of the subsidiary to the shareholders of 
        the savings and loan holding company. Such distribution 
        shall be pro rata with respect to all of the 
        shareholders of the distributing savings and loan 
        holding company, and the holding company shall not make 
        any charge to its shareholders arising out of such a 
        distribution.
          (B) The Board may in the discretion of the Board 
        apply to the United States district court within the 
        jurisdiction of which the principal office of the 
        company is located, for the enforcement of any 
        effective and outstanding order issued under this 
        section, and such court shall have jurisdiction and 
        power to order and require compliance therewith. Except 
        as provided in subsection (j), no court shall have 
        jurisdiction to affect by injunction or otherwise the 
        issuance or enforcement of any notice or order under 
        this section, or to review, modify, suspend, terminate, 
        or set aside any such notice or order.
  (h) Prohibited Acts.--It shall be unlawful for--
          (1) any savings and loan holding company or 
        subsidiary thereof, or any director, officer, employee, 
        or person owning, controlling, or holding with power to 
        vote, or holding proxies representing, more than 25 
        percent of the voting shares, of such holding company 
        or subsidiary, to hold, solicit, or exercise any 
        proxies in respect of any voting rights in a savings 
        association which is a mutual association;
          (2) any director or officer of a savings and loan 
        holding company, or any individual who owns, controls, 
        or holds with power to vote (or holds proxies 
        representing) more than 25 percent of the voting shares 
        of such holding company, to acquire control of any 
        savings association not a subsidiary of such savings 
        and loan holding company, unless such acquisition is 
        approved by the Board pursuant to subsection (e)(4); or
          (3) any individual, except with the prior approval of 
        the Board, to serve or act as a director, officer, or 
        trustee of, or become a partner in, any savings and 
        loan holding company after having been convicted of any 
        criminal offense involving dishonesty or breach of 
        trust.
  (i) Penalties.--
          (1) Criminal penalty.--(A) Whoever knowingly violates 
        any provision of this section or being a company, 
        violates any regulation or order issued by the Board 
        under this section, shall be imprisoned not more than 1 
        year, fined not more than $100,000 per day for each day 
        during which the violation continues, or both.
          (B) Whoever, with the intent to deceive, defraud, or 
        profit significantly, knowingly violates any provision 
        of this section shall be fined not more than 
        [$1,000,000] $1,500,000 per day for each day during 
        which the violation continues, imprisoned not more than 
        5 years, or both.
          (2) Civil money penalty.--
                  (A) Penalty.--Any company which violates, and 
                any person who participates in a violation of, 
                any provision of this section, or any 
                regulation or order issued pursuant thereto, 
                shall forfeit and pay a civil penalty of not 
                more than $25,000 for each day during which 
                such violation continues.
                  (B) Assessment.--Any penalty imposed under 
                subparagraph (A) may be assessed and collected 
                by the Board in the manner provided in 
                subparagraphs (E), (F), (G), and (I) of section 
                8(i)(2) of the Federal Deposit Insurance Act 
                for penalties imposed (under such section) and 
                any such assessment shall be subject to the 
                provisions of such section.
                  (C) Hearing.--The company or other person 
                against whom any civil penalty is assessed 
                under this paragraph shall be afforded a 
                hearing if such company or person submits a 
                request for such hearing within 20 days after 
                the issuance of the notice of assessment. 
                Section 8(h) of the Federal Deposit Insurance 
                Act shall apply to any proceeding under this 
                paragraph.
                  (D) Disbursement.--All penalties collected 
                under authority of this paragraph shall be 
                deposited into the Treasury.
                  (E) Violate defined.--For purposes of this 
                section, the term ``violate'' includes any 
                action (alone or with another or others) for or 
                toward causing, bringing about, participating 
                in, counseling, or aiding or abetting a 
                violation.
                  (F) Regulations.--The Board shall prescribe 
                regulations establishing such procedures as may 
                be necessary to carry out this paragraph.
          (3) Civil money penalty.--
                  (A) Penalty.--Any company which violates, and 
                any person who participates in a violation of, 
                any provision of this section, or any 
                regulation or order issued pursuant thereto, 
                shall forfeit and pay a civil penalty of not 
                more than $25,000 for each day during which 
                such violation continues.
                  (B) Assessment; etc.--Any penalty imposed 
                under subparagraph (A) may be assessed and 
                collected by the Board in the manner provided 
                in subparagraphs (E), (F), (G), and (I) of 
                section 8(i)(2) of the Federal Deposit 
                Insurance Act for penalties imposed (under such 
                section) and any such assessment shall be 
                subject to the provisions of such section.
                  (C) Hearing.--The company or other person 
                against whom any penalty is assessed under this 
                paragraph shall be afforded an agency hearing 
                if such company or person submits a request for 
                such hearing within 20 days after the issuance 
                of the notice of assessment. Section 8(h) of 
                the Federal Deposit Insurance Act shall apply 
                to any proceeding under this paragraph.
                  (D) Disbursement.--All penalties collected 
                under authority of this paragraph shall be 
                deposited into the Treasury.
                  (E) Violate defined.--For purposes of this 
                section, the term ``violate'' includes any 
                action (alone or with another or others) for or 
                toward causing, bringing about, participating 
                in, counseling, or aiding or abetting a 
                violation.
                  (F) Regulations.--The Board shall prescribe 
                regulations establishing such procedures as may 
                be necessary to carry out this paragraph.
          (4) Notice under this section after separation from 
        service.--The resignation, termination of employment or 
        participation, or separation of an institution-
        affiliated party (within the meaning of section 3(u) of 
        the Federal Deposit Insurance Act) with respect to a 
        savings and loan holding company or subsidiary thereof 
        (including a separation caused by the deregistration of 
        such a company or such a subsidiary) shall not affect 
        the jurisdiction and authority of the Board to issue 
        any notice and proceed under this section against any 
        such party, if such notice is served before the end of 
        the 6-year period beginning on the date such party 
        ceased to be such a party with respect to such holding 
        company or its subsidiary (whether such date occurs 
        before, on, or after the date of the enactment of this 
        paragraph).
  (j) Judicial Review.--Any party aggrieved by an order of the 
Board under this section may obtain a review of such order by 
filing in the court of appeals of the United States for the 
circuit in which the principal office of such party is located, 
or in the United States Court of Appeals for the District of 
Columbia Circuit, within 30 days after the date of service of 
such order, a written petition praying that the order of the 
Board be modified, terminated, or set aside. A copy of the 
petition shall be forthwith transmitted by the clerk of the 
court to the Board, and thereupon the Board shall file in the 
court the record in the proceeding, as provided in section 2112 
of title 28, United States Code. Upon the filing of such 
petition, such court shall have jurisdiction, which upon the 
filing of the record shall be exclusive, to affirm, modify, 
terminate, or set aside, in whole or in part, the order of the 
Board. Review of such proceedings shall be had as provided in 
chapter 7 of title 5, United States Code. The judgment and 
decree of the court shall be final, except that the same shall 
be subject to review by the Supreme Court upon certiorari as 
provided in section 1254 of title 28, United States Code.
  (k) Savings Clause.--Nothing contained in this section, other 
than any transaction approved under subsection (e)(2) of this 
section or section 13 of the Federal Deposit Insurance Act, 
shall be interpreted or construed as approving any act, action, 
or conduct which is or has been or may be in violation of 
existing law, nor shall anything herein contained constitute a 
defense to any action, suit, or proceeding pending or hereafter 
instituted on account of any act, action, or conduct in 
violation of the antitrust laws.
  (l) Treatment of FDIC Insured State Savings Banks and 
Cooperative Banks as Savings Associations.--
          (1) In general.--Notwithstanding any other provision 
        of law, a savings bank (as defined in section 3(g) of 
        the Federal Deposit Insurance Act) and a cooperative 
        bank that is an insured bank (as defined in section 
        3(h) of the Federal Deposit Insurance Act) upon 
        application shall be deemed to be a savings association 
        for the purpose of this section, if the appropriate 
        Federal banking agency determines that such bank is a 
        qualified thrift lender (as determined under subsection 
        (m)).
          (2) Failure to maintain qualified thrift lender 
        status.--If any savings bank which is deemed to be a 
        savings association under paragraph (1) subsequently 
        fails to maintain its status as a qualified thrift 
        lender, as determined by the appropriate Federal 
        banking agency, such bank may not thereafter be a 
        qualified thrift lender for a period of 5 years.
  (m) Qualified Thrift Lender Test.--
          (1) In general.--Except as provided in paragraphs (2) 
        and (7), any savings association is a qualified thrift 
        lender if--
                  (A) the savings association qualifies as a 
                domestic building and loan association, as such 
                term is defined in section 7701(a)(19) of the 
                Internal Revenue Code of 1986; or
                  (B)(i) the savings association's qualified 
                thrift investments equal or exceed 65 percent 
                of the savings association's portfolio assets; 
                and
                  (ii) the savings association's qualified 
                thrift investments continue to equal or exceed 
                65 percent of the savings association's 
                portfolio assets on a monthly average basis in 
                9 out of every 12 months.
          (2) Exceptions granted by director.--Notwithstanding 
        paragraph (1), the appropriate Federal banking agency 
        may grant such temporary and limited exceptions from 
        the minimum actual thrift investment percentage 
        requirement contained in such paragraph as the 
        appropriate Federal banking agency deems necessary if--
                  (A) the appropriate Federal banking agency 
                determines that extraordinary circumstances 
                exist, such as when the effects of high 
                interest rates reduce mortgage demand to such a 
                degree that an insufficient opportunity exists 
                for a savings association to meet such 
                investment requirements; or
                  (B) the appropriate Federal banking agency 
                determines that--
                          (i) the grant of any such exception 
                        will significantly facilitate an 
                        acquisition under section 13(c) or 
                        13(k) of the Federal Deposit Insurance 
                        Act;
                          (ii) the acquired association will 
                        comply with the transition requirements 
                        of paragraph (7)(B), as if the date of 
                        the exemption were the starting date 
                        for the transition period described in 
                        that paragraph; and
                          (iii) the appropriate Federal banking 
                        agency determines that the exemption 
                        will not have an undue adverse effect 
                        on competing savings associations in 
                        the relevant market and will further 
                        the purposes of this subsection.
          (3) Failure to become and remain a qualified thrift 
        lender.--
                  (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).
                  (B) Restrictions applicable to savings 
                associations that are not qualified thrift 
                lenders.--
                          (i) Restrictions effective 
                        immediately.--The following 
                        restrictions shall apply to a savings 
                        association beginning on the date on 
                        which the savings association should 
                        have become or ceases to be a qualified 
                        thrift lender:
                                  (I) Activities.--The savings 
                                association shall not make any 
                                new investment (including an 
                                investment in a subsidiary) or 
                                engage, directly or indirectly, 
                                in any other new activity 
                                unless that investment or 
                                activity would be permissible 
                                for the savings association if 
                                it were a national bank, and is 
                                also permissible for the 
                                savings association as a 
                                savings association.
                                  (II) Branching.--The savings 
                                association shall not establish 
                                any new branch office at any 
                                location at which a national 
                                bank located in the savings 
                                association's home State may 
                                not establish a branch office. 
                                For purposes of this subclause, 
                                a savings association's home 
                                State is the State in which the 
                                savings association's total 
                                deposits were largest on the 
                                date on which the savings 
                                association should have become 
                                or ceased to be a qualified 
                                thrift lender.
                                  (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)).
                          (ii) Additional restrictions 
                        effective after 3 years.--Beginning 3 
                        years after the date on which a savings 
                        association should have become a 
                        qualified thrift lender, or the date on 
                        which the savings association ceases to 
                        be a qualified thrift lender, as 
                        applicable, the savings association 
                        shall not retain any investment 
                        (including an investment in any 
                        subsidiary) or engage, directly or 
                        indirectly, in any activity, unless 
                        that investment or activity--
                                  (I) would be permissible for 
                                the savings association if it 
                                were a national bank; and
                                  (II) is permissible for the 
                                savings association as a 
                                savings association.
                  (C) Holding company regulation.--Any company 
                that controls a savings association that is 
                subject to any provision of subparagraph (B) 
                shall, within one year after the date on which 
                the savings association should have become or 
                ceases to be a qualified thrift lender, 
                register as and be deemed to be a bank holding 
                company subject to all of the provisions of the 
                Bank Holding Company Act of 1956, section 8 of 
                the Federal Deposit Insurance Act, and other 
                statutes applicable to bank holding companies, 
                in the same manner and to the same extent as if 
                the company were a bank holding company and the 
                savings association were a bank, as those terms 
                are defined in the Bank Holding Company Act of 
                1956.
                  (D) Requalification.--A savings association 
                that should have become or ceases to be a 
                qualified thrift lender shall not be subject to 
                subparagraph (B) or (C) if the savings 
                association becomes a qualified thrift lender 
                by meeting the qualified thrift lender 
                requirement in paragraph (1) on a monthly 
                average basis in 9 out of the preceding 12 
                months and remains a qualified thrift lender. 
                If the savings association (or any savings 
                association that acquired all or substantially 
                all of its assets from that savings 
                association) at any time thereafter ceases to 
                be a qualified thrift lender, it shall 
                immediately be subject to all provisions of 
                subparagraphs (B) and (C) as if all the periods 
                described in subparagraphs (B)(ii) and (C) had 
                expired.
                  (E) Exemption for specialized savings 
                associations serving certain military 
                personnel.--Subparagraph (A) shall not apply to 
                a savings association subsidiary of a savings 
                and loan holding company if at least 90 percent 
                of the customers of the savings and loan 
                holding company and its subsidiaries and 
                affiliates are active or former members in the 
                United States military services or the widows, 
                widowers, divorced spouses, or current or 
                former dependents of such members.
                  (F) Exemption for certain federal savings 
                associations.--This paragraph shall not apply 
                to any Federal savings association in existence 
                as a Federal savings association on the date of 
                enactment of the Financial Institutions Reform, 
                Recovery, and Enforcement Act of 1989--
                          (i) that was chartered before October 
                        15, 1982, as a savings bank or a 
                        cooperative bank under State law; or
                          (ii) that acquired its principal 
                        assets from an association that was 
                        chartered before October 15, 1982, as a 
                        savings bank or a cooperative bank 
                        under State law.
                  (G) No circumvention of exit moratorium.--
                Subparagraph (A) of this paragraph shall not be 
                construed as permitting any insured depository 
                institution to engage in any conversion 
                transaction prohibited under section 5(d) of 
                the Federal Deposit Insurance Act.
          (4) Definitions.--For purposes of this subsection, 
        the following definitions shall apply:
                  (A) Actual thrift investment percentage.--The 
                term ``actual thrift investment percentage'' 
                means the percentage determined by dividing--
                          (i) the amount of a savings 
                        association's qualified thrift 
                        investments, by
                          (ii) the amount of the savings 
                        association's portfolio assets.
                  (B) Portfolio assets.--The term ``portfolio 
                assets'' means, with respect to any savings 
                association, the total assets of the savings 
                association, minus the sum of--
                          (i) goodwill and other intangible 
                        assets;
                          (ii) the value of property used by 
                        the savings association to conduct its 
                        business; and
                          (iii) liquid assets of the type 
                        required to be maintained under section 
                        6 of the Home Owners' Loan Act, as in 
                        effect on the day before the date of 
                        the enactment of the Financial 
                        Regulatory Relief and Economic 
                        Efficiency Act of 2000, in an amount 
                        not exceeding the amount equal to 20 
                        percent of the savings association's 
                        total assets.
                  (C) Qualified thrift investments.--
                          (i) In general.--The term ``qualified 
                        thrift investments'' means, with 
                        respect to any savings association, the 
                        assets of the savings association that 
                        are described in clauses (ii) and 
                        (iii).
                          (ii) Assets includible without 
                        limit.--The following assets are 
                        described in this clause for purposes 
                        of clause (i):
                                  (I) The aggregate amount of 
                                loans held by the savings 
                                association that were made to 
                                purchase, refinance, construct, 
                                improve, or repair domestic 
                                residential housing or 
                                manufactured housing.
                                  (II) Home-equity loans.
                                  (III) Securities backed by or 
                                representing an interest in 
                                mortgages on domestic 
                                residential housing or 
                                manufactured housing.
                                  (IV) Existing obligations of 
                                deposit insurance agencies.--
                                Direct or indirect obligations 
                                of the Federal Deposit 
                                Insurance Corporation or the 
                                Federal Savings and Loan 
                                Insurance Corporation issued in 
                                accordance with the terms of 
                                agreements entered into prior 
                                to July 1, 1989, for the 10-
                                year period beginning on the 
                                date of issuance of such 
                                obligations.
                                  (V) New obligations of 
                                deposit insurance agencies.--
                                Obligations of the Federal 
                                Deposit Insurance Corporation, 
                                the Federal Savings and Loan 
                                Insurance Corporation, the 
                                FSLIC Resolution Fund, and the 
                                Resolution Trust Corporation 
                                issued in accordance with the 
                                terms of agreements entered 
                                into on or after July 1, 1989, 
                                for the 5-year period beginning 
                                on the date of issuance of such 
                                obligations.
                                  (VI) Shares of stock issued 
                                by any Federal home loan bank.
                                  (VII) Loans for educational 
                                purposes, loans to small 
                                businesses, and loans made 
                                through credit cards or credit 
                                card accounts.
                          (iii) Assets includible subject to 
                        percentage restriction.--The following 
                        assets are described in this clause for 
                        purposes of clause (i):
                                  (I) 50 percent of the dollar 
                                amount of the residential 
                                mortgage loans originated by 
                                such savings association and 
                                sold within 90 days of 
                                origination.
                                  (II) Investments in the 
                                capital stock or obligations 
                                of, and any other security 
                                issued by, any service 
                                corporation if such service 
                                corporation derives at least 80 
                                percent of its annual gross 
                                revenues from activities 
                                directly related to purchasing, 
                                refinancing, constructing, 
                                improving, or repairing 
                                domestic residential real 
                                estate or manufactured housing.
                                  (III) 200 percent of the 
                                dollar amount of loans and 
                                investments made to acquire, 
                                develop, and construct 1- to 4-
                                family residences the purchase 
                                price of which is or is 
                                guaranteed to be not greater 
                                than 60 percent of the median 
                                value of comparable newly 
                                constructed 1- to 4-family 
                                residences within the local 
                                community in which such real 
                                estate is located, except that 
                                not more than 25 percent of the 
                                amount included under this 
                                subclause may consist of 
                                commercial properties related 
                                to the development if those 
                                properties are directly related 
                                to providing services to 
                                residents of the development.
                                  (IV) 200 percent of the 
                                dollar amount of loans for the 
                                acquisition or improvement of 
                                residential real property, 
                                churches, schools, and nursing 
                                homes located within, and loans 
                                for any other purpose to any 
                                small businesses located within 
                                any area which has been 
                                identified by the appropriate 
                                Federal banking agency, in 
                                connection with any review or 
                                examination of community 
                                reinvestment practices, as a 
                                geographic area or neighborhood 
                                in which the credit needs of 
                                the low- and moderate-income 
                                residents of such area or 
                                neighborhood are not being 
                                adequately met.
                                  (V) Loans for the purchase or 
                                construction of churches, 
                                schools, nursing homes, and 
                                hospitals, other than those 
                                qualifying under clause (IV), 
                                and loans for the improvement 
                                and upkeep of such properties.
                                  (VI) Loans for personal, 
                                family, or household purposes 
                                (other than loans for personal, 
                                family, or household purposes 
                                described in clause (ii)(VII)).
                                  (VII) Shares of stock issued 
                                by the Federal Home Loan 
                                Mortgage Corporation or the 
                                Federal National Mortgage 
                                Association.
                          (iv) Percentage restriction 
                        applicable to certain assets.--The 
                        aggregate amount of the assets 
                        described in clause (iii) which may be 
                        taken into account in determining the 
                        amount of the qualified thrift 
                        investments of any savings association 
                        shall not exceed the amount which is 
                        equal to 20 percent of a savings 
                        association's portfolio assets.
                          (v) The term ``qualified thrift 
                        investments'' excludes--
                                  (I) except for home equity 
                                loans, that portion of any loan 
                                or investment that is used for 
                                any purpose other than those 
                                expressly qualifying under any 
                                subparagraph of clause (ii) or 
                                (iii); or
                                  (II) goodwill or any other 
                                intangible asset.
                  (D) Credit card.--The appropriate Federal 
                banking agency shall issue such regulations as 
                may be necessary to define the term ``credit 
                card''.
                  (E) Small business.--The appropriate Federal 
                banking agency shall issue such regulations as 
                may be necessary to define the term ``small 
                business''.
          (5) Consistent accounting required.--
                  (A) In determining the amount of a savings 
                association's portfolio assets, the assets of 
                any subsidiary of the savings association shall 
                be consolidated with the assets of the savings 
                association if--
                          (i) Assets of the subsidiary are 
                        consolidated with the assets of the 
                        savings association in determining the 
                        savings association's qualified thrift 
                        investments; or
                          (ii) Residential mortgage loans 
                        originated by the subsidiary are 
                        included pursuant to paragraph 
                        (4)(C)(iii)(I) in determining the 
                        savings association's qualified thrift 
                        investments.
                  (B) In determining the amount of a savings 
                association's portfolio assets and qualified 
                thrift investments, consistent accounting 
                principles shall be applied.
          (6) Special rules for puerto rico and virgin islands 
        savings associations.--
                  (A) Puerto rico savings associations.--With 
                respect to any savings association 
                headquartered and operating primarily in Puerto 
                Rico--
                          (i) the term ``qualified thrift 
                        investments'' includes, in addition to 
                        the items specified in paragraph (4)--
                                  (I) the aggregate amount of 
                                loans for personal, family, 
                                educational, or household 
                                purposes made to persons 
                                residing or domiciled in the 
                                Commonwealth of Puerto Rico; 
                                and
                                  (II) the aggregate amount of 
                                loans for the acquisition or 
                                improvement of churches, 
                                schools, or nursing homes, and 
                                of loans to small businesses, 
                                located within the Commonwealth 
                                of Puerto Rico; and
                          (ii) the aggregate amount of loans 
                        related to the purchase, acquisition, 
                        development and construction of 1- to 
                        4-family residential real estate--
                                  (I) which is located within 
                                the Commonwealth of Puerto 
                                Rico; and
                                  (II) the value of which (at 
                                the time of acquisition or upon 
                                completion of the development 
                                and construction) is below the 
                                median value of newly 
                                constructed 1- to 4-family 
                                residences in the Commonwealth 
                                of Puerto Rico, which may be 
                                taken into account in 
                                determining the amount of the 
                                qualified thrift investments 
                                and of such savings association 
                                shall be doubled.
                  (B) Virgin islands savings associations.--
                With respect to any savings association 
                headquartered and operating primarily in the 
                Virgin Islands--
                          (i) the term ``qualified thrift 
                        investments'' includes, in addition to 
                        the items specified in paragraph (4)--
                                  (I) the aggregate amount of 
                                loans for personal, family, 
                                educational, or household 
                                purposes made to persons 
                                residing or domiciled in the 
                                Virgin Islands; and
                                  (II) the aggregate amount of 
                                loans for the acquisition or 
                                improvement of churches, 
                                schools, or nursing homes, and 
                                of loans to small businesses, 
                                located within the Virgin 
                                Islands; and
                          (ii) the aggregate amount of loans 
                        related to the purchase, acquisition, 
                        development and construction of 1- to 
                        4-family residential real estate--
                                  (I) which is located within 
                                the Virgin Islands; and
                                  (II) the value of which (at 
                                the time of acquisition or upon 
                                completion of the development 
                                and construction) is below the 
                                median value of newly 
                                constructed 1- to 4-family 
                                residences in the Virgin 
                                Islands, which may be taken 
                                into account in determining the 
                                amount of the qualified thrift 
                                investments and of such savings 
                                association shall be doubled.
          (7) Transitional rule for certain savings 
        associations.--
                  (A) In general.--If any Federal savings 
                association in existence as a Federal savings 
                association on the date of enactment of the 
                Financial Institutions Reform, Recovery, and 
                Enforcement Act of 1989--
                          (i) that was chartered as a savings 
                        bank or a cooperative bank under State 
                        law before October 15, 1982; or
                          (ii) that acquired its principal 
                        assets from an association that was 
                        chartered before October 15, 1982, as a 
                        savings bank or a cooperative bank 
                        under State law,
                meets the requirements of subparagraph (B), 
                such savings association shall be treated as a 
                qualified thrift lender during the period 
                ending on September 30, 1995.
                  (B) Subparagraph (b) requirements.--A savings 
                association meets the requirements of this 
                subparagraph if, in the determination of the 
                appropriate Federal banking agency--
                          (i) the actual thrift investment 
                        percentage of such association does 
                        not, after the date of enactment of the 
                        Financial Institutions Reform, 
                        Recovery, and Enforcement Act of 1989, 
                        decrease below the actual thrift 
                        investment percentage of such 
                        association on July 15, 1989; and
                          (ii) the amount by which--
                                  (I) the actual thrift 
                                investment percentage of such 
                                association at the end of each 
                                period described in the 
                                following table, exceeds
                                  (II) the actual thrift 
                                investment percentage of such 
                                association on July 15, 1989,
                        is equal to or greater than the 
                        applicable percentage (as determined 
                        under the following table) of the 
                        amount by which 70 percent exceeds the 
                        actual thrift investment percentage of 
                        such association on such date of 
                        enactment:

        For the following                                 The applicable
          period:                                         percentage is:
        July 1, 1991-September 30, 1992.................      25 percent
        October 1, 1992-March 31, 1994..................      50 percent
        April 1, 1994-September 30, 1995................      75 percent
        Thereafter......................................     100 percent

                  (C) For purposes of this paragraph, the 
                actual thrift investment percentage of an 
                association on July 15, 1989, shall be 
                determined by applying the definition of 
                ``actual thrift investment percentage'' that 
                takes effect on July 1, 1991.
  (n) Tying Restrictions.--A savings and loan holding company 
and any of its affiliates shall be subject to section 5(q) and 
regulations prescribed under such section, in connection with 
transactions involving the products or services of such company 
or affiliate and those of an affiliated savings association as 
if such company or affiliate were a savings association.
  (o) Mutual Holding Companies.--
          (1) In general.--A savings association operating in 
        mutual form may reorganize so as to become a holding 
        company by--
                  (A) chartering an interim savings 
                association, the stock of which is to be wholly 
                owned, except as otherwise provided in this 
                section, by the mutual association; and
                  (B) transferring the substantial part of its 
                assets and liabilities, including all of its 
                insured liabilities, to the interim savings 
                association.
          (2) Directors and certain account holders' approval 
        of plan required.--A reorganization is not authorized 
        under this subsection unless--
                  (A) a plan providing for such reorganization 
                has been approved by a majority of the board of 
                directors of the mutual savings association; 
                and
                  (B) in the case of an association in which 
                holders of accounts and obligors exercise 
                voting rights, such plan has been submitted to 
                and approved by a majority of such individuals 
                at a meeting held at the call of the directors 
                in accordance with the procedures prescribed by 
                the association's charter and bylaws.
          (3) Notice to the director; disapproval period.--
                  (A) Notice required.--At least 60 days prior 
                to taking any action described in paragraph 
                (1), a savings association seeking to establish 
                a mutual holding company shall provide written 
                notice to the Board. The notice shall contain 
                such relevant information as the Board shall 
                require by regulation or by specific request in 
                connection with any particular notice.
                  (B) Transaction allowed if not disapproved.--
                Unless the Board within such 60-day notice 
                period disapproves the proposed holding company 
                formation, or extends for another 30 days the 
                period during which such disapproval may be 
                issued, the savings association providing such 
                notice may proceed with the transaction, if the 
                requirements of paragraph (2) have been met.
                  (C) Grounds for disapproval.--The Board may 
                disapprove any proposed holding company 
                formation only if--
                          (i) such disapproval is necessary to 
                        prevent unsafe or unsound practices;
                          (ii) the financial or management 
                        resources of the savings association 
                        involved warrant disapproval;
                          (iii) the savings association fails 
                        to furnish the information required 
                        under subparagraph (A); or
                          (iv) the savings association fails to 
                        comply with the requirement of 
                        paragraph (2).
                  (D) Retention of capital assets.--In 
                connection with the transaction described in 
                paragraph (1), a savings association may, 
                subject to the approval of the Board, retain 
                capital assets at the holding company level to 
                the extent that such capital exceeds the 
                association's capital requirement established 
                by the Board pursuant to subsections (s) and 
                (t) of section 5.
          (4) Ownership.--
                  (A) In general.--Persons having ownership 
                rights in the mutual association pursuant to 
                section 5(b)(1)(B) of this Act or State law 
                shall have the same ownership rights with 
                respect to the mutual holding company.
                  (B) Holders of certain accounts.--Holders of 
                savings, demand or other accounts of--
                          (i) a savings association chartered 
                        as part of a transaction described in 
                        paragraph (1); or
                          (ii) a mutual savings association 
                        acquired pursuant to paragraph (5)(B),
                shall have the same ownership rights with 
                respect to the mutual holding company as 
                persons described in subparagraph (A) of this 
                paragraph.
          (5) Permitted activities.--A mutual holding company 
        may engage only in the following activities:
                  (A) Investing in the stock of a savings 
                association.
                  (B) Acquiring a mutual association through 
                the merger of such association into a savings 
                association subsidiary of such holding company 
                or an interim savings association subsidiary of 
                such holding company.
                  (C) Subject to paragraph (6), merging with or 
                acquiring another holding company, one of whose 
                subsidiaries is a savings association.
                  (D) Investing in a corporation the capital 
                stock of which is available for purchase by a 
                savings association under Federal law or under 
                the law of any State where the subsidiary 
                savings association or associations have their 
                home offices.
                  (E) Engaging in the activities described in 
                subsection (c)(2) or (c)(9)(A)(ii).
          (6) Limitations on certain activities of acquired 
        holding companies.--
                  (A) New activities.--If a mutual holding 
                company acquires or merges with another holding 
                company under paragraph (5)(C), the holding 
                company acquired or the holding company 
                resulting from such merger or acquisition may 
                only invest in assets and engage in activities 
                which are authorized under paragraph (5).
                  (B) Grace period for divesting prohibited 
                assets or discontinuing prohibited 
                activities.--Not later than 2 years following a 
                merger or acquisition described in paragraph 
                (5)(C), the acquired holding company or the 
                holding company resulting from such merger or 
                acquisition shall--
                          (i) dispose of any asset which is an 
                        asset in which a mutual holding company 
                        may not invest under paragraph (5); and
                          (ii) cease any activity which is an 
                        activity in which a mutual holding 
                        company may not engage under paragraph 
                        (5).
          (7) Regulation.--A mutual holding company shall be 
        chartered by the Board and shall be subject to such 
        regulations as the Board may prescribe. Unless the 
        context otherwise requires, a mutual holding company 
        shall be subject to the other requirements of this 
        section regarding regulation of holding companies.
          (8) Capital improvement.--
                  (A) Pledge of stock of savings association 
                subsidiary.--This section shall not prohibit a 
                mutual holding company from pledging all or a 
                portion of the stock of a savings association 
                chartered as part of a transaction described in 
                paragraph (1) to raise capital for such savings 
                association.
                  (B) Issuance of nonvoting shares.--This 
                section shall not prohibit a savings 
                association chartered as part of a transaction 
                described in paragraph (1) from issuing any 
                nonvoting shares or less than 50 percent of the 
                voting shares of such association to any person 
                other than the mutual holding company.
          (9) Insolvency and liquidation.--
                  (A) In general.--Notwithstanding any 
                provision of law, upon--
                          (i) the default of any savings 
                        association--
                                  (I) the stock of which is 
                                owned by any mutual holding 
                                company; and
                                  (II) which was chartered in a 
                                transaction described in 
                                paragraph (1);
                          (ii) the default of a mutual holding 
                        company; or
                          (iii) a foreclosure on a pledge by a 
                        mutual holding company described in 
                        paragraph (8)(A),
                a trustee shall be appointed receiver of such 
                mutual holding company and such trustee shall 
                have the authority to liquidate the assets of, 
                and satisfy the liabilities of, such mutual 
                holding company pursuant to title 11, United 
                States Code.
                  (B) Distribution of net proceeds.--Except as 
                provided in subparagraph (C), the net proceeds 
                of any liquidation of any mutual holding 
                company pursuant to subparagraph (A) shall be 
                transferred to persons who hold ownership 
                interests in such mutual holding company.
                  (C) Recovery by corporation.--If the 
                Corporation incurs a loss as a result of the 
                default of any savings association subsidiary 
                of a mutual holding company which is liquidated 
                pursuant to subparagraph (A), the Corporation 
                shall succeed to the ownership interests of the 
                depositors of such savings association in the 
                mutual holding company, to the extent of the 
                Corporation's loss.
          (10) Definitions.--For purposes of this subsection--
                  (A) Mutual holding company.--The term 
                ``mutual holding company'' means a corporation 
                organized as a holding company under this 
                subsection.
                  (B) Mutual association.--The term ``mutual 
                association'' means a savings association which 
                is operating in mutual form.
                  (C) Default.--The term ``default'' means an 
                adjudication or other official determination of 
                a court of competent jurisdiction or other 
                public authority pursuant to which a 
                conservator, receiver, or other legal custodian 
                is appointed.
          (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.
  (p) Holding Company Activities Constituting Serious Risk to 
Subsidiary Savings Association.--
          (1) Determination and imposition of restrictions.--If 
        the Board or the appropriate Federal banking agency for 
        the savings association determines that there is 
        reasonable cause to believe that the continuation by a 
        savings and loan holding company of any activity 
        constitutes a serious risk to the financial safety, 
        soundness, or stability of a savings and loan holding 
        company's subsidiary savings association, the Board may 
        impose such restrictions as the Board, in consultation 
        with the appropriate Federal banking agency for the 
        savings association determines to be necessary to 
        address such risk. Such restrictions shall be issued in 
        the form of a directive to the holding company and any 
        of its subsidiaries, limiting--
                  (A) the payment of dividends by the savings 
                association;
                  (B) transactions between the savings 
                association, the holding company, and the 
                subsidiaries or affiliates of either; and
                  (C) any activities of the savings association 
                that might create a serious risk that the 
                liabilities of the holding company and its 
                other affiliates may be imposed on the savings 
                association.
        Such directive shall be effective as a cease and desist 
        order that has become final.
          (2) Review of directive.--
                  (A) Administrative review.--After a directive 
                referred to in paragraph (1) is issued, the 
                savings and loan holding company, or any 
                subsidiary of such holding company subject to 
                the directive, may object and present in 
                writing its reasons why the directive should be 
                modified or rescinded. Unless within 10 days 
                after receipt of such response the Board 
                affirms, modifies, or rescinds the directive, 
                such directive shall automatically lapse.
                  (B) Judicial review.--If the Board affirms or 
                modifies a directive pursuant to subparagraph 
                (A), any affected party may immediately 
                thereafter petition the United States district 
                court for the district in which the savings and 
                loan holding company has its main office or in 
                the United States District Court for the 
                District of Columbia to stay, modify, terminate 
                or set aside the directive. Upon a showing of 
                extraordinary cause, the savings and loan 
                holding company, or any subsidiary of such 
                holding company subject to a directive, may 
                petition a United States district court for 
                relief without first pursuing or exhausting the 
                administrative remedies set forth in this 
                paragraph.
  (q) Qualified Stock Issuance by Undercapitalized Savings 
Associations or Holding Companies.--
          (1) In general.--For purposes of this section, any 
        issue of shares of stock shall be treated as a 
        qualified stock issuance if the following conditions 
        are met:
                  (A) The shares of stock are issued by--
                          (i) an undercapitalized savings 
                        association; or
                          (ii) a savings and loan holding 
                        company which is not a bank holding 
                        company but which controls an 
                        undercapitalized savings association 
                        if, at the time of issuance, the 
                        savings and loan holding company is 
                        legally obligated to contribute the net 
                        proceeds from the issuance of such 
                        stock to the capital of an 
                        undercapitalized savings association 
                        subsidiary of such holding company.
                  (B) All shares of stock issued consist of 
                previously unissued stock or treasury shares.
                  (C) All shares of stock issued are purchased 
                by a savings and loan holding company that is 
                registered, as of the date of purchase, with 
                the Board in accordance with the provisions of 
                subsection (b)(1) of this section.
                  (D) Subject to paragraph (2), the Board 
                approved the purchase of the shares of stock by 
                the acquiring savings and loan holding company.
                  (E) The entire consideration for the stock 
                issued is paid in cash by the acquiring savings 
                and loan holding company.
                  (F) At the time of the stock issuance, each 
                savings association subsidiary of the acquiring 
                savings and loan holding company (other than an 
                association acquired in a transaction pursuant 
                to subsection (c) or (k) of section 13 of the 
                Federal Deposit Insurance Act or section 408(m) 
                of the National Housing Act) has capital (after 
                deducting any subordinated debt, intangible 
                assets, and deferred, unamortized gains or 
                losses) of not less than 6\1/2\ percent of the 
                total assets of such savings association.
                  (G) Immediately after the stock issuance, the 
                acquiring savings and loan holding company 
                holds not more than 15 percent of the 
                outstanding voting stock of the issuing 
                undercapitalized savings association or savings 
                and loan holding company.
                  (H) Not more than one of the directors of the 
                issuing association or company is an officer, 
                director, employee, or other representative of 
                the acquiring company or any of its affiliates.
                  (I) Transactions between the savings 
                association or savings and loan holding company 
                that issues the shares pursuant to this section 
                and the acquiring company and any of its 
                affiliates shall be subject to the provisions 
                of section 11.
          (2) Approval of acquisitions.--
                  (A) Additional capital commitments not 
                required.--The Board shall not disapprove any 
                application for the purchase of stock in 
                connection with a qualified stock issuance on 
                the grounds that the acquiring savings and loan 
                holding company has failed to undertake to make 
                subsequent additional capital contributions to 
                maintain the capital of the undercapitalized 
                savings association at or above the minimum 
                level required by the Board or any other 
                Federal agency having jurisdiction.
                  (B) Other conditions.--Notwithstanding 
                subsection (a)(4), the Board may impose such 
                conditions on any approval of an application 
                for the purchase of stock in connection with a 
                qualified stock issuance as the Board 
                determines to be appropriate, including--
                          (i) a requirement that any savings 
                        association subsidiary of the acquiring 
                        savings and loan holding company limit 
                        dividends paid to such holding company 
                        for such period of time as the Board 
                        may require; and
                          (ii) such other conditions as the 
                        Board deems necessary or appropriate to 
                        prevent evasions of this section.
                  (C) Application deemed approved if not 
                disapproved within 90 days.--An application for 
                approval of a purchase of stock in connection 
                with a qualified stock issuance shall be deemed 
                to have been approved by the Board if such 
                application has not been disapproved by the 
                Board before the end of the 90-day period 
                beginning on the date such application has been 
                deemed sufficient under regulations issued by 
                the Board.
          (3) No limitation on class of stock issued.--The 
        shares of stock issued in connection with a qualified 
        stock issuance may be shares of any class.
          (4) Undercapitalized savings association defined.--
        For purposes of this subsection, the term 
        ``undercapitalized savings association'' means any 
        savings association--
                  (A) the assets of which exceed the 
                liabilities of such association; and
                  (B) which does not comply with one or more of 
                the capital standards in effect under section 
                5(t).
  (r) Penalty for Failure To Provide Timely and Accurate 
Reports.--
          (1) First tier.--Any savings and loan holding 
        company, and any subsidiary of such holding company, 
        which--
                  (A) maintains procedures reasonably adapted 
                to avoid any inadvertent and unintentional 
                error and, as a result of such an error--
                          (i) fails to submit or publish any 
                        report or information required under 
                        this section or regulations prescribed 
                        by the Board or appropriate Federal 
                        banking agency, within the period of 
                        time specified by the Board or 
                        appropriate Federal banking agency; or
                          (ii) submits or publishes any false 
                        or misleading report or information; or
                  (B) inadvertently transmits or publishes any 
                report which is minimally late,
        shall be subject to a penalty of not more than $2,000 
        for each day during which such failure continues or 
        such false or misleading information is not corrected. 
        Such holding company or subsidiary shall have the 
        burden of proving by a preponderence of the evidence 
        that an error was inadvertent and unintentional and 
        that a report was inadvertently transmitted or 
        published late.
          (2) Second tier.--Any savings and loan holding 
        company, and any subsidiary of such holding company, 
        which--
                  (A) fails to submit or publish any report or 
                information required under this section or 
                under regulations prescribed by the Board or 
                appropriate Federal banking agency, within the 
                period of time specified by the Board or 
                appropriate Federal banking agency; or
                  (B) submits or publishes any false or 
                misleading report or information,
        in a manner not described in paragraph (1) shall be 
        subject to a penalty of not more than $20,000 for each 
        day during which such failure continues or such false 
        or misleading information is not corrected.
          (3) Third tier.--If any savings and loan holding 
        company or any subsidiary of such a holding company 
        knowingly or with reckless disregard for the accuracy 
        of any information or report described in paragraph (2) 
        submits or publishes any false or misleading report or 
        information, the Board or appropriate Federal banking 
        agency may assess a penalty of not more than 
        [$1,000,000] $1,500,000 or 1 percent of total assets of 
        such company or subsidiary, whichever is less, per day 
        for each day during which such failure continues or 
        such false or misleading information is not corrected.
          (4) Assessment.--Any penalty imposed under paragraph 
        (1), (2), or (3) shall be assessed and collected by the 
        Board or appropriate Federal banking agency in the 
        manner provided in subparagraphs (E), (F), (G), and (I) 
        of section 8(i)(2) of the Federal Deposit Insurance Act 
        (for penalties imposed under such section) and any such 
        assessment (including the determination of the amount 
        of the penalty) shall be subject to the provisions of 
        such subsection.
          (5) Hearing.--Any savings and loan holding company or 
        any subsidiary of such a holding company against which 
        any penalty is assessed under this subsection shall be 
        afforded a hearing if such savings and loan holding 
        company or such subsidiary, as the case may be, submits 
        a request for such hearing within 20 days after the 
        issuance of the notice of assessment. Section 8(h) of 
        the Federal Deposit Insurance Act shall apply to any 
        proceeding under this subsection.
  (s) Mergers, Consolidations, and Other Acquisitions 
Authorized.--
          (1) In general.--Subject to sections 5(d)(3) and 
        18(c) of the Federal Deposit Insurance Act and all 
        other applicable laws, any Federal savings association 
        may acquire or be acquired by any insured depository 
        institution.
          (2) Expedited approval of acquisitions.--
                  (A) In general.--Any application by a savings 
                association to acquire or be acquired by 
                another insured depository institution which is 
                required to be filed with the appropriate 
                Federal banking agency for the savings 
                association under any applicable law or 
                regulation shall be approved or disapproved in 
                writing by the appropriate Federal banking 
                agency for the savings association before the 
                end of the 60-day period beginning on the date 
                such application is filed with the agency.
                  (B) Extension of period.--The period for 
                approval or disapproval referred to in 
                subparagraph (A) may be extended for an 
                additional 30-day period if the appropriate 
                Federal banking agency for the savings 
                association determines that--
                          (i) an applicant has not furnished 
                        all of the information required to be 
                        submitted; or
                          (ii) in the judgment of the 
                        appropriate Federal banking agency for 
                        the savings association, any material 
                        information submitted is substantially 
                        inaccurate or incomplete.
          (3) Acquire defined.--For purposes of this 
        subsection, the term ``acquire'' means to acquire, 
        directly or indirectly, ownership or control through a 
        merger or consolidation or an acquisition of assets or 
        assumption of liabilities, provided that following such 
        merger, consolidation, or acquisition, an acquiring 
        insured depository institution may not own the shares 
        of the acquired insured depository institution.
          (4) Regulations.--
                  (A) Required.--The Comptroller shall 
                prescribe such regulations as may be necessary 
                to carry out paragraph (1).
                  (B) Effective date.--The regulations required 
                under subparagraph (A) shall--
                          (i) be prescribed in final form 
                        before the end of the 90-day period 
                        beginning on the date of the enactment 
                        of this subsection; and
                          (ii) take effect before the end of 
                        the 120-day period beginning on such 
                        date.
          (5) Limitation.--No provision of this section shall 
        be construed to authorize a national bank or any 
        subsidiary thereof to engage in any activity not 
        otherwise authorized under the National Bank Act or any 
        other law governing the powers of a national bank.
  (t) Exemption for Bank Holding Companies.--This section shall 
not apply to a bank holding company that is subject to the Bank 
Holding Company Act of 1956, or any company controlled by such 
bank holding company.
          * * * * * * *

SEC. 13. POWERS OF EXAMINERS.

   For the purposes of this Act, examiners appointed by [the a] 
a Federal banking agency shall--
          (1) be subject to the same requirements, 
        responsibilities, and penalties as are applicable to 
        examiners under the Federal Reserve Act and title LXII 
        of the Revised Statutes; and
          (2) have, in the exercise of functions under this 
        Act, the same powers and privileges as are vested in 
        such examiners by law.
          * * * * * * *
                              ----------                              


                        FEDERAL CREDIT UNION ACT

          * * * * * * *

                     TITLE I--FEDERAL CREDIT UNIONS

          * * * * * * *

                                  fees

  Sec. 105. [(a) In accordance with rules prescribed by the 
Board, each Federal credit union shall pay to the 
Administration an annual operating fee which may be composed of 
one or more charges identified as to the function or functions 
for which assessed.
  [(b) The fee assessed under this section shall be determined 
according to a schedule, or schedules, or other method 
determined by the Board to be appropriate, which gives due 
consideration to the expenses of the Administration in carrying 
out its responsibilities under this Act and to the ability of 
Federal credit unions to pay the fee. The Board shall, among 
other things, determine the periods for which the fee shall be 
assessed and the date or dates for the payment of the fee or 
increments thereof.]
  (a) Payment by Federal Credit Unions to Administration.--Each 
insured credit union shall pay to the Administration an annual 
fee.
  (b) Determinations of Assessment Periods and Payment Dates.--
The Board shall determine the periods for which the fee 
referred to under subsection (a) shall be assessed and the date 
for the payment of such fee or increments thereof.
  (c) If the annual [operating] fee is composed of separate 
charges, no supervision charge shall be payable by a Federal 
credit union, and the Board may waive payment of any or all 
other charges comprising the fee, with respect to the year in 
which its charter is issued, or in which final distribution is 
made in its liquidation or the charter is canceled.
  [(d) All operating fees shall be deposited with the Treasurer 
of the United States for the account of the Administration and 
may be expended by the Board to defray the expenses incurred in 
carrying out the provisions of this Act including the 
examination and supervision of Federal credit unions.
  [(e)(1) Upon request of the Board, the Secretary of the 
Treasury shall invest and reinvest such portions of the annual 
operating fees deposited under subsection (d) as the Board 
determines are not needed for current operations.
  [(2) Such investments may be made only in interest bearing 
securities of the United States with maturities requested by 
the Board bearing interest at rates determined by the Secretary 
of the Treasury, taking into consideration current market 
yields on outstanding marketable obligations of the United 
States of comparable maturities.
  [(3) All income derived from such investments and 
reinvestments shall be deposited to the account of the 
Administration described in subsection (d).]
  (d) Appropriations Requirement.--
          (1) Recovery of costs of annual appropriation The 
        Administration shall collect fees other than those fees 
        referred to under subsection (a) from each insured 
        credit union, as provided under this Act, in an amount 
        stated as a percentage of insured shares of each 
        insured credit union (which percentage shall be the 
        same for all insured credit unions). Such fees shall be 
        designed to recover the costs to the Government of the 
        annual appropriation to the Administration by Congress.
          (2) Offsetting collections.--Fees described under 
        paragraph (1) for any fiscal year--
                  (A) shall be deposited and credited as 
                offsetting collections to the account providing 
                appropriations to the Administration; and
                  (B) except as provided in paragraph (3), 
                shall not be collected for any fiscal year 
                except to the extent provided in advance in 
                appropriation Acts.
          (3) Lapse of appropriation.--If on the first day of a 
        fiscal year an appropriation to the Administration has 
        not been enacted, the Administration shall continue to 
        collect (as offsetting collections) the fees described 
        under paragraph (1) at the rate in effect during the 
        preceding fiscal year, until 60 days after the date 
        such an appropriation is enacted.
          (4) Exception for insurance functions.--This 
        subsection shall not apply to the National Credit Union 
        Share Insurance Fund, including assessments and other 
        fees that are deposited into, and amounts paid from, 
        the National Credit Union Share Insurance Fund.

           *       *       *       *       *       *       *


                        certain powers of board

  Sec. 120. (a) The Board may prescribe rules and regulations 
for the administration of this Act (including, but not by way 
of limitation, the merger, consolidation, and dissolution of 
corporations organized under this Act). Any central credit 
union chartered by the Board shall be subject to such rules, 
regulations, and orders as the Board deems appropriate and, 
except as otherwise specifically provided in such rules, 
regulations, or orders, shall be vested with or subject to the 
same rights, privileges, duties, restrictions, penalties, 
liabilities, conditions, and limitations that would apply to 
all Federal credit unions under this Act.
  (b)(1) The Board may suspend or revoke the charter of any 
Federal credit union, or place the same in involuntary 
liquidation and appoint a liquidating agent therefor, upon its 
finding that the organization is bankrupt or insolvent, or has 
violated any of the provisions of its charter, its bylaws, this 
Act, or any regulations issued thereunder.
  (2) The Board, through such persons as it shall designate, 
may examine any Federal credit union in voluntary liquidation 
and, upon its finding that such voluntary liquidation is not 
being conducted in an orderly or efficient manner or in the 
best interests of its members, may terminate such voluntary 
liquidation and place such organization in involuntary 
liquidation and appoint a liquidating agent therefor.
  (3) Such liquidating agent shall have power and authority, 
subject to the control and supervision of the Board and under 
such rules and regulations as the Board may prescribe, (A) to 
receive and take possession of the books, records, assets, and 
property of every description of the Federal credit union in 
liquidation, to sell, enforce collection of, and liquidate all 
such assets and property, to compound all bad or doubtful 
debts, and to sue in his own name or in the name of the Federal 
credit union in liquidation, and defend such actions as may be 
brought against him as liquidating agent or against the Federal 
credit union; (B) to receive, examine, and pass upon all claims 
against the Federal credit union in liquidation, including 
claims of members on member accounts; (C) to make distribution 
and payment to creditors and members as their interests may 
appear; and (D) to execute such documents and papers and to do 
such other acts and things which he may deem necessary or 
desirable to discharge his duties hereunder.
  (4) Subject to the control and supervision of the Board and 
under such rules and regulations as the Board may prescribe, 
the liquidating agent of a Federal credit union in involuntary 
liquidation shall (A) cause notice to be given to creditors and 
members to present their claims and make legal proof thereof, 
which notice shall be published once a week in each of three 
successive weeks in a newspaper of general circulation in each 
county in which the Federal credit union in liquidation 
maintained an office or branch for the transaction of business 
on the date it ceased unrestricted operations; except that 
whenever the aggregate book value of the assets and property of 
a Federal credit union in involuntary liquidation is less than 
$1,000, unless the Board shall find that its books and records 
do not contain a true and accurate record of its liabilities, 
he shall declare such Federal credit union in liquidation to be 
a ``no publication'' liquidation, and publication of notice to 
creditors and members shall not be required in such case; (B) 
from time to time make a ratable dividend on all such claims as 
may have been proved to his satisfaction or adjudicated in a 
court of competent jurisdiction and, after the assets of such 
organization have been liquidated, make further dividends on 
all claims previously proved or adjudicated, and he may accept 
in lieu of a formal proof of claim on behalf of any creditor or 
member the statement of any amount due to such creditor or 
member as shown on the books and records of the credit union; 
but all claims not filed before payment of the final dividend 
shall be barred and claims rejected or disallowed by the 
liquidating agent shall be likewise barred unless suit be 
instituted thereon within three months after notice of 
rejection or disallowance; and (C) in a ``no publication'' 
liquidation, determine from all sources available to him, and 
within the limits of available funds of the Federal credit 
union, the amounts due to creditors and members, and after 
sixty days shall have elapsed from the date of his appointment 
distribute the funds of the Federal credit union to creditors 
and members ratably and as their interests may appear.
  (5) Upon certification by the liquidating agent in the case 
of an involuntary liquidation, and upon such proof as shall be 
satisfactory to the Board in the case of a voluntary 
liquidation, that distribution has been made and that 
liquidation has been completed, as provided herein, the Board 
shall cancel the charter of such Federal credit union; but the 
corporate existence of the Federal credit union shall continue 
for a period of three years from the date of such cancellation 
of its charter, during which period the liquidating agent, or 
his duly appointed successor, or such persons as the Board 
shall designate, may act on behalf of the Federal credit union 
for the purpose of paying, satisfying, and discharging any 
existing liabilities or obligations, collecting and 
distributing its assets, and doing all other acts required to 
adjust and wind up its business and affairs, and it may sue and 
be sued in its corporate name.
  (c) After the expiration of five years from the date of 
cancellation of the charter of a Federal credit union the Board 
may, in its discretion, destroy any or all books and records of 
such Federal credit union in its possession or under its 
control.
  (d) The Board is authorized and empowered to execute any and 
all functions and perform any and all duties vested in it 
hereby, through such persons as it shall designate or employ; 
and it may delegate to any person or persons, including any 
institution operating under the general supervision of the 
Administration, the performance and discharge of any authority, 
power, or function vested in it by this Act.
  (e) All books and records of Federal credit unions shall be 
kept and reports shall be made in accordance with forms 
approved by the Board.
  (f)(1) The Board is authorized to make investigations and to 
conduct researches and studies of the problems of persons of 
small means in obtaining credit at reasonable rates of 
interest, and of the methods and benefits of cooperative saving 
and lending among such persons. It is further authorized to 
make reports of such investigations and to publish and 
disseminate the same.
  (2)(A) The Board is authorized to conduct directly, or to 
make grants to or contracts with colleges or universities, 
State or local educational agencies, or other appropriate 
public or private nonprofit organizations to conduct, programs 
for the training of persons engaged, or preparing to engage, in 
the operation of credit unions, and in related consumer 
counseling programs, serving the poor. It is authorized to 
establish a program of experimental, developmental, 
demonstration, and pilot projects, either directly or by grants 
to public or private nonprofit organizations, including credit 
unions, or by contracts with such organizations or other 
private organizations, designed to promote more effective 
operation of credit unions, and related consumer counseling 
programs, serving the poor.
  (B) In carrying out its authority under this paragraph, the 
Board shall consult with officials of the Office of Economic 
Opportunity and other appropriate Federal agencies responsible 
for the administration of projects or programs concerned with 
problems of the poor. The development and operation of programs 
and projects under this paragraph shall involve maximum 
feasible participation of residents of the areas and members of 
the groups served by such programs and projects, with community 
action agencies established under the provisions of the 
Economic Opportunity Act of 1964 serving, to the extent 
feasible, as the means through which such participation is 
achieved.
  (C) In order to carry out the purposes of this paragraph, 
there is authorized to be appropriated, as a supplement to any 
funds that may be expended by the Board pursuant to sections 
105 and 106 for such purposes, not to exceed $300,000 for the 
fiscal year ending June 30, 1970, and not to exceed $1,000,000 
for the fiscal year ending June 30, 1971.
  (g) Any officer or employee of the Administration is 
authorized, when designated for the purpose by the Board, to 
administer oaths and affirmations and to take affidavits and 
depositions touching upon any matter within the jurisdiction of 
the Administration.
  (h) The Board is authorized, empowered, and directed to 
require that every person appointed or elected by any Federal 
credit union to any position requiring the receipt, payment, or 
custody of money or other personal property owned by a Federal 
credit union, or in its custody or control as collateral or 
otherwise, give bond in a corporate surety company holding a 
certificate of authority from the Secretary of the Treasury 
under chapter 93 of title 31, United States Code, as an 
acceptable surety on Federal bonds. Any such bond or bonds 
shall be in a form approved by the Board with a view to 
providing surety coverage to the Federal credit union with 
reference to loss by reason of acts of fraud or dishonesty 
including forgery, theft, embezzlement, wrongful abstraction, 
or misapplication on the part of the person, directly or 
through connivance with others, and such other surety coverages 
as the Board may determine to be reasonably appropriate or as 
elsewhere required by this Act. Any such bond or bonds shall be 
in such an amount in relation to the money or other personal 
property involved or in relation to the assets of the Federal 
credit union as the Board may from time to time prescribe by 
regulation for the purpose of requiring reasonable coverage. In 
lieu of individual bonds the Board may approve the use of a 
form of schedule or blanket bond which covers all of the 
officers and employees of a Federal credit union whose duties 
include the receipt, payment, or custody of money or other 
personal property for or on behalf of the Federal credit union. 
The Board may also approve the use of a form of excess coverage 
bond whereby a Federal credit union may obtain an amount of 
coverage in excess of the basic surety coverage.
  (i) In addition to the authority conferred upon them by other 
sections of this Act, the Board is authorized in carrying out 
its functions under this Act--
          (1) to appoint such personnel as may be necessary to 
        enable the Administration to carry out its functions;
          (2) to expend such funds, enter into such contracts 
        with public and private organizations and persons, make 
        such payments in advance or by way of reimbursement, 
        acquire and dispose of, by lease or purchase, real or 
        personal property, without regard to the provisions of 
        any other law applicable to executive or independent 
        agencies of the United States, and perform such other 
        functions or acts as it may deem necessary or 
        appropriate to carry out the provisions of this Act, in 
        accordance with the rules and regulations or policies 
        established by the Board not inconsistent with this 
        Act; and
          (3) to pay stipends, including allowances for travel 
        to and from the place of residence, to any individual 
        to study in a program assisted under this Act upon a 
        determination by the Board that assistance to such 
        individual in such studies will be in furtherance of 
        the purposes of this Act.
  (j) Staff.--
          (1) Appointment and compensation.--The Board shall 
        fix the compensation and number of, and appoint and 
        direct, employees of the Board. Rates of basic pay for 
        employees of the Board may be set and adjusted by the 
        Board without regard to the provisions of chapter 51 or 
        subchapter III of chapter 53 of title 5, United States 
        Code.
          (2) Additional compensation and benefits.--The Board 
        may provide additional compensation and benefits to 
        employees of the Board if the same type of compensation 
        or benefits are then being provided by any other 
        Federal bank regulatory agency or, if not then being 
        provided, could be provided by such an agency under 
        applicable provisions of law, rule, or regulation. In 
        setting and adjusting the total amount of compensation 
        and benefits for employees of the Board, the Board 
        shall seek to maintain comparability with other Federal 
        bank regulatory agencies.
          [(3) Funding.--The salaries and expenses of the Board 
        and employees of the Board shall be paid from fees and 
        assessments (including income earned on insurance 
        deposits) levied on insured credit unions under this 
        Act.]

           *       *       *       *       *       *       *


[SEC. 128. APPORTIONMENT.

  [Notwithstanding any other provision of law, funds received 
by the Board pursuant to any method provided by this Act, and 
interest, dividend, or other income thereon, shall not be 
subject to apportionment for the purpose of chapter 15 of title 
31, United States Code, or under any other authority.]

SEC. 128. NATIONAL CREDIT UNION SHARE INSURANCE FUND EXEMPT FROM 
                    APPORTIONMENT.

  Notwithstanding any other provision of law, amounts received 
pursuant to any assessments or other fees that are deposited 
into the National Credit Union Share Insurance Fund or the 
Temporary Corporate Credit Union Stabilization Fund shall not 
be subject to apportionment for the purposes of chapter 15 of 
title 31, United States Code, or under any other authority.

           *       *       *       *       *       *       *


TITLE II--SHARE INSURANCE

           *       *       *       *       *       *       *



   reports of condition; certified statements; premiums for insurance

  Sec. 202. (a)(1) Each insured credit union shall make reports 
of condition to the Board upon dates which shall be selected by 
them. Such reports of condition shall be in such form and shall 
contain such information as the Board may require. The 
reporting dates selected for reports of condition shall be the 
same for all insured credit unions except that when any of said 
reporting dates is a nonbusiness day for any credit union the 
preceding business day shall be its reporting date. The total 
amount of the member accounts of each insured credit union as 
of each reporting date shall be reported in such reports of 
condition in accordance with regulations prescribed by the 
Board. Each report of condition shall contain a declaration by 
the president, by a vice president, by the treasurer, or by any 
other officer designated by the board of directors of the 
reporting credit union to make such declaration, that the 
report is true and correct to the best of such officer's 
knowledge and belief. Unless such requirement is waived by the 
Board, the correctness of each report of condition shall be 
attested by the signatures of three of the officers of the 
reporting credit union with the declaration that the report has 
been examined by them and to the best of their knowledge and 
belief is true and correct.
  (2) The Board may call for such other reports as it may from 
time to time require.
  (3) The Board may require reports of condition to be 
published in such manner, not inconsistent with any applicable 
law, as it may direct. Any insured credit union which maintains 
procedures reasonably adapted to avoid any inadvertent error 
and, unintentionally and as a result of such an error, fails to 
submit or publish any report required under this subsection or 
section 106, within the period of time specified by the Board, 
or submits or publishes any false or misleading report or 
information, or inadvertently transmits or publishes any report 
which is minimally late, shall be subject to a penalty of not 
more than $2,000 for each day during which such failure 
continues or such false or misleading information is not 
corrected. The insured credit union shall have the burden of 
proving that an error was inadvertent and that a report was 
inadvertently transmitted or published late. Any insured credit 
union which fails to submit or publish any report required 
under this subsection or section 106, within the period of time 
specified by the Board, or submits or publishes any false or 
misleading report or information, in a manner not described in 
the 2nd preceding sentence shall be subject to a penalty of not 
more than $20,000 for each day during which such failure 
continues or such false or misleading information is not 
corrected. Notwithstanding the preceding sentence, if any 
insured credit union knowingly or with reckless disregard for 
the accuracy of any information or report described in such 
sentence submits or publishes any false or misleading report or 
information, the Board may assess a penalty of not more than 
[$1,000,000] $1,500,000 or 1 percent of total assets of such 
credit union, whichever is less, per day for each day during 
which such failure continues or such false or misleading 
information is not corrected. Any penalty imposed under any of 
the 4 preceding sentences shall be assessed and collected by 
the Board in the manner provided in section 206(k)(2) (for 
penalties imposed under such section) and any such assessment 
(including the determination of the amount of the penalty) 
shall be subject to the provisions of such section. Any insured 
credit union against which any penalty is assessed under this 
subsection shall be afforded an agency hearing if such insured 
credit union submits a request for such hearing within 20 days 
after the issuance of the notice of assessment. Section 206(j) 
shall apply to any proceeding under this subsection.
  (4) The Board may accept any report of condition made to any 
commission, board, or authority having supervision of a State-
chartered credit union and may furnish to any such commission, 
board, or authority reports of condition made to the Board.
  (5) Reports required under title I of this Act shall be so 
prepared that they can be used for share insurance purposes. To 
the maximum extent feasible, the Board shall use for insurance 
purposes reports submitted to State regulatory agencies by 
State-chartered credit unions.
          (6) Audit requirement.--
                  (A) In general.--Before the end of the 120-
                day period beginning on the date of the 
                enactment of the Financial Institutions Reform, 
                Recovery, and Enforcement Act of 1989 and 
                notwithstanding any other provision of Federal 
                or State law, the Board shall prescribe, by 
                regulation, audit standards which require an 
                outside, independent audit of any insured 
                credit union by a certified public accountant 
                for any fiscal year (of such credit union)--
                          (i) for which such credit union has 
                        not conducted an annual supervisory 
                        committee audit;
                          (ii) for which such credit union has 
                        not received a complete and 
                        satisfactory supervisory committee 
                        audit; or
                          (iii) during which such credit union 
                        has experienced persistent and serious 
                        recordkeeping deficiencies, as 
                        determined by the Board.
                  (B) Unsafe or unsound practice.--The Board 
                may treat the failure of any insured credit 
                union to obtain an outside, independent audit 
                for any fiscal year for which such audit is 
                required under subparagraph (A) or (D) as an 
                unsafe or unsound practice within the meaning 
                of section 206(b).
                  (C) Accounting principles.--
                          (i) In general.--Accounting 
                        principles applicable to reports or 
                        statements required to be filed with 
                        the Board by each insured credit union 
                        shall be uniform and consistent with 
                        generally accepted accounting 
                        principles.
                          (ii) Board determination.--If the 
                        Board determines that the application 
                        of any generally accepted accounting 
                        principle to any insured credit union 
                        is not appropriate, the Board may 
                        prescribe an accounting principle for 
                        application to the credit union that is 
                        no less stringent than generally 
                        accepted accounting principles.
                          (iii) De minimus exception.--This 
                        subparagraph shall not apply to any 
                        insured credit union, the total assets 
                        of which are less than $10,000,000, 
                        unless prescribed by the Board or an 
                        appropriate State credit union 
                        supervisor.
                  (D) Large credit union audit requirement.--
                          (i) In general.--Each insured credit 
                        union having total assets of 
                        $500,000,000 or more shall have an 
                        annual independent audit of the 
                        financial statements of the credit 
                        union, performed in accordance with 
                        generally accepted auditing standards 
                        by an independent certified public 
                        accountant or public accountant 
                        licensed by the appropriate State or 
                        jurisdiction to perform those services.
                          (ii) Voluntary audits.--If a Federal 
                        credit union that is not required to 
                        conduct an audit under clause (i), and 
                        that has total assets of more than 
                        $10,000,000 conducts such an audit for 
                        any purpose, using an independent 
                        auditor who is compensated for his or 
                        her audit services with respect to that 
                        audit, the audit shall be performed 
                        consistent with the accountancy laws of 
                        the appropriate State or jurisdiction, 
                        including licensing requirements.
          (7) Report to independent auditor.--
                  (A) In general.--Each insured credit union 
                which has engaged the services of an 
                independent auditor to audit such depository 
                institution within the past 2 years shall 
                transmit to such auditor a copy of the most 
                recent report of condition made by such credit 
                union (pursuant to this Act or any other 
                provision of law) and a copy of the most recent 
                report of examination received by such credit 
                union.
                  (B) Additional information.--In addition to 
                the copies of the reports required to be 
                provided to an auditor under subparagraph (A), 
                each insured credit union shall provide such 
                auditor with--
                          (i) a copy of any supervisory 
                        memorandum of understanding with such 
                        credit union and any written agreement 
                        between the Board or a State regulatory 
                        agency and the credit union which is in 
                        effect during the period covered by the 
                        audit; and
                          (ii) a report of any action initiated 
                        or taken by the Board during such 
                        period under subsection (e), (f), (g), 
                        (i), (l), or (q) of section 206, or any 
                        similar action taken by a State 
                        regulatory dagency under State law, or 
                        any other civil money penalty assessed 
                        by the Board under this Act, with 
                        respect to--
                                  (I) the credit union; or
                                  (II) any institution-
                                affiliated party.
          (8) Data sharing with other agencies and persons.--In 
        addition to reports of examination, reports of 
        condition, and other reports required to be regularly 
        provided to the Board (with respect to all insured 
        credit unions, including a credit union for which the 
        Corporation has been appointed conservator or 
        liquidating agent) or an appropriate State commission, 
        board, or authority having supervision of a State-
        chartered credit union, the Board may, in the 
        discretion of the Board, furnish any report of 
        examination or other confidential supervisory 
        information concerning any credit union or other entity 
        examined by the Board under authority of any Federal 
        law, to--
                  (A) any other Federal or State agency or 
                authority with supervisory or regulatory 
                authority over the credit union or other 
                entity;
                  (B) any officer, director, or receiver of 
                such credit union or entity; and
                  (C) any other person that the Board 
                determines to be appropriate.
  (b) Certified Statement.--
          (1) Statement required.--
                  (A) In general.--For each calendar year, in 
                the case of an insured credit union with total 
                assets of not more than $50,000,000, and for 
                each semi-annual period in the case of an 
                insured credit union with total assets of 
                $50,000,000 or more, an insured credit union 
                shall file with the Board, at such time as the 
                Board prescribes, a certified statement showing 
                the total amount of insured shares in the 
                credit union at the close of the relevant 
                period and both the amount of its deposit or 
                adjustment of deposit and the amount of the 
                insurance charge due to the Fund for that 
                period, both as computed under subsection (c).
                  (B) Exception for newly insured credit 
                union.--Subparagraph (A) shall not apply with 
                respect to a credit union that became insured 
                during the reporting period.
          (2) Form.--The certified statements required to be 
        filed with the Board pursuant to this subsection shall 
        be in such form and shall set forth such supporting 
        information as the Board shall require.
          (3) Certification.--The president of the credit union 
        or any officer designated by the board of directors 
        shall certify, with respect to each statement required 
        to be filed with the Board pursuant to this subsection, 
        that to the best of his or her knowledge and belief the 
        statement is true, correct, complete, and in accordance 
        with this title and the regulations issued under this 
        title.
  (c)(1)(A)(i) Each insured credit union shall pay to and 
maintain with the National Credit Union Share Insurance Fund a 
deposit in an amount equaling 1 per centum of the credit 
union's insured shares.
  (ii) The Board may, in its discretion, authorize insured 
credit unions to initially fund such deposit over a period of 
time in excess of one year if necessary to avoid adverse 
effects on the condition of insured credit unions.
                          (iii) Periodic adjustment.--The 
                        amount of each insured credit union's 
                        deposit shall be adjusted as follows, 
                        in accordance with procedures 
                        determined by the Board, to reflect 
                        changes in the credit union's insured 
                        shares:
                                  (I) annually, in the case of 
                                an insured credit union with 
                                total assets of not more than 
                                $50,000,000; and
                                  (II) semi-annually, in the 
                                case of an insured credit union 
                                with total assets of 
                                $50,000,000 or more.
  (B)(i) The deposit shall be returned to an insured credit 
union in the event that its insurance coverage is terminated, 
it converts to insurance coverage from another source, or in 
the event the operations of the fund are transferred from the 
National Credit Union Administration Board.
  (ii) The deposit shall be returned in accordance with 
procedures and valuation methods determined by the Board, but 
in no event shall the deposit be returned any later than one 
year after the final date on which no shares of the credit 
union are insured by the Board.
  (iii) The deposit shall not be returned in the event of 
liquidation on account of bankruptcy or insolvency.
  (iv) The deposit funds may be used by the fund if necessary 
to meet its expenses, in which case the amount so used shall be 
expensed and shall be replenished by insured credit unions in 
accordance with procedures established by the Board.
          (2) Insurance premium charges.--
                  (A) In general.--Each insured credit union 
                shall, at such times as the Board prescribes 
                (but not more than twice in any calendar year), 
                pay to the Fund a premium charge for insurance 
                in an amount stated as a percentage of insured 
                shares (which shall be the same for all insured 
                credit unions).
                  (B) Relation of premium charge to equity 
                ratio of fund.--The Board may assess a premium 
                charge only if--
                          (i) the Fund's equity ratio is less 
                        than 1.3 percent; and
                          (ii) the premium charge does not 
                        exceed the amount necessary to restore 
                        the equity ratio to 1.3 percent.
                  (C) Premium charge required if equity ratio 
                falls below 1.2 percent.--If the Fund's equity 
                ratio is less than 1.2 percent, the Board 
                shall, subject to subparagraph (B), assess a 
                premium charge in such an amount as the Board 
                determines to be necessary to restore the 
                equity ratio to, and maintain that ratio at, 
                1.2 percent.
                  (D) Fund restoration plans.--
                          (i) In general.--Whenever--
                                  (I) the Board projects that 
                                the equity ratio of the Fund 
                                will, within 6 months of such 
                                determination, fall below the 
                                minimum amount specified in 
                                subparagraph (C); or
                                  (II) the equity ratio of the 
                                Fund actually falls below the 
                                minimum amount specified in 
                                subparagraph (C) without any 
                                determination under sub-clause 
                                (I) having been made,
                        the Board shall establish and implement 
                        a restoration plan within 90 days that 
                        meets the requirements of clause (ii) 
                        and such other conditions as the Board 
                        determines to be appropriate.
                          (ii) Requirements of restoration 
                        plan.--A restoration plan meets the 
                        requirements of this clause if the plan 
                        provides that the equity ratio of the 
                        Fund will meet or exceed the minimum 
                        amount specified in subparagraph (C) 
                        before the end of the 8-year period 
                        beginning upon the implementation of 
                        the plan (or such longer period as the 
                        Board may determine to be necessary due 
                        to extraordinary circumstances).
                          (iii) Transparency.--Not more than 30 
                        days after the Board establishes and 
                        implements a restoration plan under 
                        clause (i), the Board shall publish in 
                        the Federal Register a detailed 
                        analysis of the factors considered and 
                        the basis for the actions taken with 
                        regard to the plan.
          (3) Distributions from fund required.--
                  (A) In general.--The Board shall, subject to 
                the requirements of section 217(e), effect a 
                pro rata distribution to insured credit unions 
                after each calendar year if, as of the end of 
                that calendar year--
                          (i) any loans to the Fund from the 
                        Federal Government, and any interest on 
                        those loans, have been repaid;
                          (ii) the Fund's equity ratio exceeds 
                        the normal operating level; and
                          (iii) the Fund's available assets 
                        ratio exceeds 1.0 percent.
                  (B) Amount of distribution.--The Board shall 
                distribute under subparagraph (A) the maximum 
                possible amount that--
                          (i) does not reduce the Fund's equity 
                        ratio below the normal operating level; 
                        and
                          (ii) does not reduce the Fund's 
                        available assets ratio below 1.0 
                        percent.
                  (C) Calculation based on certified 
                statements.--In calculating the Fund's equity 
                ratio and available assets ratio for purposes 
                of this paragraph, the Board shall determine 
                the aggregate amount of the insured shares in 
                all insured credit unions from insured credit 
                unions certified statements under subsection 
                (b) for the final reporting period of the 
                calendar year referred to in subparagraph (A).
          (4) Timeliness and accuracy of data.--In calculating 
        the available assets ratio and equity ratio of the 
        Fund, the Board shall use the most current and accurate 
        data reasonably available.
  (d)
          (1) If, in the judgment of the Board, a loan to the 
        insurance fund, or to the stabilization fund described 
        in section 217 of this title, is required at any time 
        for purposes of this subchapter, the Secretary of the 
        Treasury shall make the loan, but loans under this 
        paragraph shall not exceed in the aggregate 
        $6,000,000,000 outstanding at any one time. Except as 
        otherwise provided in this subsection, section 217, and 
        in subsection (e) of this section, each loan under this 
        paragraph shall be made on such terms as may be fixed 
        by agreement between the Board and the Secretary of the 
        Treasury.
          (2) Penalty for failure to make accurate certified 
        statement or to pay deposit or premium.--
                  (A) First tier.--Any insured credit union 
                which--
                          (i) maintains procedures reasonably 
                        adapted to avoid any inadvertent error 
                        and, unintentionally and as a result of 
                        such an error, fails to submit any 
                        certified statement under subsection 
                        (b)(1) within the period of time 
                        required or submits a false or 
                        misleading certified statement under 
                        such subsection; or
                          (ii) submits the statement at a time 
                        which is minimally after the time 
                        required,
                shall be subject to a penalty of not more than 
                $2,000 for each day during which such failure 
                continues or such false and misleading 
                information is not corrected. The insured 
                credit union shall have the burden of proving 
                that an error was inadvertent or that a 
                statement was inadvertently submitted late.
                  (B) Second tier.--Any insured credit union 
                which--
                          (i) fails to submit any certified 
                        statement under subsection (b)(1) 
                        within the period of time required or 
                        submits a false or misleading certified 
                        statement in a manner not described in 
                        subparagraph (A); or
                          (ii) fails or refuses to pay any 
                        deposit or premium for insurance 
                        required under this title,
                shall be subject to a penalty of not more than 
                $20,000 for each day during which such failure 
                continues, such false and misleading 
                information is not corrected, or such deposit 
                or premium is not paid.
                  (C) Third tier.--Notwithstanding 
                subparagraphs (A) and (B), if any insured 
                credit union knowingly or with reckless 
                disregard for the accuracy of any certified 
                statement under subsection (b)(1) submits a 
                false or misleading certified statement under 
                such subsection, the Board may assess a penalty 
                of not more than $1,000,000 or not more than 1 
                percent of the total assets of the credit 
                union, whichever is less, per day for each day 
                during which the failure continues or the false 
                or misleading information in such statement is 
                not corrected.
                  (D) Assessment procedure.--Any penalty 
                imposed under this paragraph shall be assessed 
                and collected by the Board in the manner 
                provided in section 206(k)(2) (for penalties 
                imposed under such section) and any such 
                assessment (including the determination of the 
                amount of the penalty) shall be subject to the 
                provisions of such section.
                  (E) Hearing.--Any insured credit union 
                against which any penalty is assessed under 
                this paragraph shall be afforded an agency 
                hearing if the credit union submits a request 
                for such hearing within 20 days after the 
                issuance of the notice of the assessment. 
                Section 206(j) shall apply to any proceeding 
                under this subparagraph.
                  (F) Special rule for disputed payments.--No 
                penalty may be assessed for the failure of any 
                insured credit union to pay any deposit or 
                premium for insurance if--
                          (i) the failure is due to a dispute 
                        between the credit union and the Board 
                        over the amount of the deposit or 
                        premium which is due from the credit 
                        union; and
                          (ii) the credit union deposits 
                        security satisfactory to the Board for 
                        payment of the deposit or insurance 
                        premium upon final determination of the 
                        dispute.
  (3) No insured credit union shall pay any dividends on its 
insured shares or distribute any of its assets while it remains 
in default in the payment of its deposit or any premium charge 
for insurance due to the fund. Any director or officer of any 
insured credit union who knowingly participates in the 
declaration or payment of any such dividend or in any such 
distribution shall, upon conviction, be fined not more than 
$1,000 or imprisoned not more than one year, or both. The 
provisions of this paragraph shall not be applicable in any 
case in which the default is due to a dispute between the 
credit union and the Board over the amount of its deposit or 
the premium charge due to the fund if the credit union deposits 
security satisfactory to the Board for payment of its deposit 
or the premium charge upon final determination of the issue.
          (4) Temporary increases authorized.--
                  (A) Recommendations for increase.--During the 
                period beginning on the date of enactment of 
                this paragraph and ending on December 31, 2010, 
                if, upon the written recommendation of the 
                Board (upon a vote of not less than two-thirds 
                of the members of the Board) and the Board of 
                Governors of the Federal Reserve System (upon a 
                vote of not less than two-thirds of the members 
                of such Board), the Secretary of the Treasury 
                (in consultation with the President) determines 
                that additional amounts above the 
                $6,000,000,000 amount specified in paragraph 
                (1) are necessary, such amount shall be 
                increased to the amount so determined to be 
                necessary, not to exceed $30,000,000,000.
                  (B) Report required.--If the borrowing 
                authority of the Board is increased above 
                $6,000,000,000 pursuant to subparagraph (A), 
                the Board shall promptly 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 reasons and need 
                for the additional borrowing authority and its 
                intended uses.
  (e) The Board, in a suit brought at law or in equity in any 
court of competent jurisdiction, shall be entitled to recover 
from any insured credit union the amount of any unpaid deposit 
or premium charge for insurance lawfully payable by the credit 
union to the fund, whether or not such credit union shall have 
made any report of condition under subsection (a) of this 
section or filed any certified statement required under 
subsection (b) of this section and whether or not suit shall 
have been brought to compel the credit union to make any such 
report or to file any such statement. No action or proceeding 
shall be brought for the recovery of any deposit or premium 
charge due to the fund, or for the recovery of any amount paid 
to the fund in excess of the amount due it, unless such action 
or proceeding shall have been brought within five years after 
the right accrued for which the claim is made. Where the 
insured credit union has made or filed with the Board a false 
or fraudulent certified statement with the intent to evade, in 
whole or in part, the payment of its deposit or any premium 
charge, the claim shall not be deemed to have accrued until the 
discovery by the Board of the fact that the certified statement 
is false or fraudulent.
  (f) Should any Federal credit union fail to make any report 
of condition under subsection (a) of this section or to file 
any certified statement required to be filed under subsection 
(b) of this section or to pay its deposit or any premium charge 
for insurance required to be paid under any provision of this 
title, and should the credit union fail to correct such failure 
within thirty days after written notice has been given by the 
Board to an officer of the credit union, citing this subsection 
and stating that the credit union has failed to make any such 
report or file any such statement or pay any such deposit or 
premium charge as required by law, all the rights, privileges, 
and franchises of the credit union granted to it under title I 
of this Act shall be thereby forfeited. Whether or not the 
penalty provided in this subsection has been incurred shall be 
determined and adjudged by any court of the United States of 
competent jurisdiction in a suit brought for that purpose in 
the district or territory in which the principal office of such 
credit union is located, under direction of and by the Board in 
its own name, before the credit union shall be declared 
dissolved. The remedies provided in this subsection and in 
subsections (d) and (e) of this section shall not be construed 
as limiting any other remedies against any insured credit union 
but shall be in addition thereto.
  (g) Each insured credit union shall maintain such records as 
will readily permit verification of the correctness of its 
reports of condition, certified statements, and deposit and 
premium charges for insurance. However, no insured credit union 
shall be required to retain such records for such purpose for a 
period in excess of five years from the date of the making of 
any such report, the filing of any such statement, or the 
payment of any deposit or adjustment thereof or any premium 
charge, except that when there is a dispute between the insured 
credit union and the Board over the amount of any deposit or 
adjustment thereof or any premium charge for insurance the 
credit union shall retain such records until final 
determination of the issue.
  (h) Definitions.--For purposes of this section, the following 
definitions shall apply:
          (1) Available assets ratio.--The term ``available 
        assets ratio'', when applied to the Fund, means the 
        ratio of--
                  (A) the amount determined by subtracting--
                          (i) direct liabilities of the Fund 
                        and contingent liabilities for which no 
                        provision for losses has been made, 
                        from
                          (ii) the sum of cash and the market 
                        value of unencumbered investments 
                        authorized under section 203(c), to
                  (B) the aggregate amount of the insured 
                shares in all insured credit unions.
          (2) Equity ratio.--The term ``equity ratio'', which 
        shall be calculated using the financial statements of 
        the Fund alone, without any consolidation or 
        combination with the financial statements of any other 
        fund or entity, means the ratio of--
                  (A) the amount of Fund capitalization, 
                including insured credit unions' 1 percent 
                capitalization deposits and the retained 
                earnings balance of the Fund (net of direct 
                liabilities of the Fund and contingent 
                liabilities for which no provision for losses 
                has been made); to
                  (B) the aggregate amount of the insured 
                shares in all insured credit unions.
          (3) Insured shares.--The term ``insured shares'', 
        when applied to this section, includes share, share 
        draft, share certificate, and other similar accounts as 
        determined by the Board, but does not include amounts 
        exceeding the insured account limit set forth in 
        section 207(k)(1).
          (4) Normal operating level.--The term ``normal 
        operating level'', when applied to the Fund, means an 
        equity ratio specified by the Board, which shall be not 
        less than 1.2 percent and not more than 1.5 percent.

               national credit union share insurance fund

  Sec. 203. (a) There is hereby created in the Treasury of the 
United States a National Credit Union Share Insurance Fund 
which shall be used by the Board as a revolving fund for 
carrying out the purposes of this title. Money in the fund 
shall be available upon requisition by the Board, without 
fiscal year limitation, for making payments of insurance under 
section 207 of this title, for providing assistance and making 
expenditures under section 208 of this title in connection with 
the liquidation or threatened liquidation of insured credit 
unions, [and for such administrative and other expenses 
incurred in carrying out the purposes of this title] as it may 
determine to be proper.
  (b) All deposit and premium charges for insurance paid 
pursuant to the provisions of section 202 of this title and all 
fees for examinations and all penalties collected by the Board 
under any provision of this title shall be deposited in the 
National Credit Union Share Insurance Fund. The Board shall 
report annually to the Committee on Banking, Housing, and Urban 
Affairs of the Senate and the Committee on Banking, Finance and 
Urban Affairs of the House of Representatives with respect to 
the operating level of the fund. Such report shall also include 
the results of an independent audit of the fund.
  (c) The Board may authorize the Secretary of the Treasury to 
invest and reinvest such portions of the fund as the Board may 
determine are not needed for current operations in any 
interest-bearing securities of the United States or in any 
securities guaranteed as to both principal and interest by the 
United States or in bonds or other obligations which are lawful 
investments for fiduciary, trust, and public funds of the 
United States, and the income therefrom shall constitute a part 
of the fund.
  (d)(1) If, in the judgment of the Board, a loan to the fund 
is required at any time for carrying out the purposes of this 
title, the Secretary of the Treasury shall make the loan, but 
loans under this paragraph shall not exceed in the aggregate 
$100,000,000 outstanding at any one time. Except as otherwise 
provided in this subsection and in subsection (e) of this 
section, each loan under this paragraph shall be made on such 
terms as may be fixed by agreement between the Board and the 
Secretary of the Treasury.
  (2) Interest shall accrue to the Treasury on the amount of 
any outstanding loans made to the fund pursuant to paragraph 
(1) of this subsection on the basis of the average daily amount 
of such outstanding loans determined at the close of each 
fiscal year with respect to such year, and the Board shall pay 
the interest so accruing into the Treasury as miscellaneous 
receipts annually from the fund. The Secretary of the Treasury 
shall determine the applicable interest rate in advance by 
calculating the average yield to maturity (on the basis of 
daily closing market bid quotations during the month of June of 
the preceding fiscal year) on outstanding marketable public 
debt obligations of the United States having a maturity date of 
five or less years from the first day of such month of June and 
by adjusting such yield to the nearest one-eighth of 1 per 
centum.
  (3) For the purpose of making loans under paragraph (1) of 
this subsection, the Secretary of the Treasury is authorized to 
use as a public debt transaction the proceeds of the sale of 
any securities issued under the Second Liberty Bond Act, as 
amended, and the purposes for which securities may be issued 
under the Second Liberty Bond Act, as amended, are hereby 
extended to include such loans. All loans and repayments under 
this section shall be treated as public debt transactions of 
the United States.
  (e) So long as any loans to the fund are outstanding, the 
Board shall from time to time, not less often than annually, 
determine whether the balance in the fund is in excess of the 
amount which, in its judgment, is needed to meet the 
requirements of the fund and shall pay such excess to the 
Secretary of the Treasury, to be credited against the loans to 
the fund.
  (f) In addition to the authority to borrow from the Secretary 
of the Treasury provided in subsection (d), if in the judgment 
of the Board, a loan to the fund is required at any time for 
carrying out the purposes of this title, the fund is authorized 
to borrow from the National Credit Union Administration Central 
Liquidity Facility.
  (g) Fund Transparency.--
          (1) In general.--The Board shall accompany each 
        annual budget submitted pursuant to section 209(b) with 
        a report containing--
                  (A) a detailed analysis of how the expenses 
                of the Administration are assigned between 
                prudential activities and insurance-related 
                activities and the extent to which those 
                expenses are paid from the fees collected 
                pursuant to section 105 or from the Fund; and
                  (B) the Board's supporting rationale for any 
                proposed use of amounts in the Fund contained 
                in such budget, including detailed breakdowns 
                and supporting rationales for any such proposed 
                use related to titles of this Act other than 
                this title.
          (2) Public disclosure.--The Board shall make each 
        report described under paragraph (1) available to the 
        public.

           *       *       *       *       *       *       *


              requirements governing insured credit unions

  Sec. 205. (a) Insurance Logo.--
          (1) Insured credit unions.--
                  (A) In general.--Each insured credit union 
                shall display at each place of business 
                maintained by that credit union a sign or signs 
                relating to the insurance of the share accounts 
                of the institution, in accordance with 
                regulations to be prescribed by the Board.
                  (B) Statement to be included.--Each sign 
                required under subparagraph (A) shall include a 
                statement that insured share accounts are 
                backed by the full faith and credit of the 
                United States Government.
          (2) Regulations.--The Board shall prescribe 
        regulations to carry out this subsection, including 
        regulations governing the substance of signs required 
        by paragraph (1) and the manner of display or use of 
        such signs.
          (3) Penalties.--For each day that an insured credit 
        union continues to violate this subsection or any 
        regulation issued under this subsection, it shall be 
        subject to a penalty of not more than $100, which the 
        Board may recover for its use.
  (b)(1) Except as provided in paragraph (2), no insured credit 
union shall, without the prior approval of the Board--
          (A) merge or consolidate with any noninsured credit 
        union or institution;
          (B) assume liability to pay any member accounts in, 
        or similar liabilities of, any noninsured credit union 
        or institution;
          (C) transfer assets to any noninsured credit union or 
        institution in consideration of the assumption of 
        liabilities for any portion of the member accounts in 
        such insured credit union; or
          (D) convert into a noninsured credit union or 
        institution.
          (2) Conversion of insured credit unions to mutual 
        savings banks.--
                  (A) In general.--Notwithstanding paragraph 
                (1), an insured credit union may convert to a 
                mutual savings bank or savings association (if 
                the savings association is in mutual form), as 
                those terms are defined in section 3 of the 
                Federal Deposit Insurance Act, without the 
                prior approval of the Board, subject to the 
                requirements and procedures set forth in the 
                laws and regulations governing mutual savings 
                banks and savings associations.
                  (B) Conversion proposal.--A proposal for a 
                conversion described in subparagraph (A) shall 
                first be approved, and a date set for a vote 
                thereon by the members (either at a meeting to 
                be held on that date or by written ballot to be 
                filed on or before that date), by a majority of 
                the directors of the insured credit union. 
                Approval of the proposal for conversion shall 
                be by the affirmative vote of a majority of the 
                members of the insured credit union who vote on 
                the proposal.
                  (C) Notice of proposal to members.--An 
                insured credit union that proposes to convert 
                to a mutual savings bank or savings association 
                under subparagraph (A) shall submit notice to 
                each of its members who is eligible to vote on 
                the matter of its intent to convert--
                          (i) 90 days before the date of the 
                        member vote on the conversion;
                          (ii) 60 days before the date of the 
                        member vote on the conversion; and
                          (iii) 30 days before the date of the 
                        member vote on the conversion.
                  (D) Notice of proposal to board.--The Board 
                may require an insured credit union that 
                proposes to convert to a mutual savings bank or 
                savings association under subparagraph (A) to 
                submit a notice to the Board of its intent to 
                convert during the 90-day period preceding the 
                date of the completion of the conversion.
                  (E) Inapplicability of act upon conversion.--
                Upon completion of a conversion described in 
                subparagraph (A), the credit union shall no 
                longer be subject to any of the provisions of 
                this Act.
                  (F) Limit on compensation of officials.--
                          (i) In general.--No director or 
                        senior management official of an 
                        insured credit union may receive any 
                        economic benefit in connection with a 
                        conversion of the credit union as 
                        described in subparagraph (A), other 
                        than--
                                  (I) director fees; and
                                  (II) compensation and other 
                                benefits paid to directors or 
                                senior management officials of 
                                the converted institution in 
                                the ordinary course of 
                                business.
                          (ii) Senior management official.--For 
                        purposes of this subparagraph, the term 
                        ``senior management official'' means a 
                        chief executive officer, an assistant 
                        chief executive officer, a chief 
                        financial officer, and any other senior 
                        executive officer (as defined by the 
                        appropriate Federal banking agency 
                        pursuant to section 32 (f) of the 
                        Federal Deposit Insurance Act).
                  (G) Consistent rules.--
                          (i) In general.--Not later than 6 
                        months after the date of enactment of 
                        the Credit Union Membership Access Act, 
                        the Administration shall promulgate 
                        final rules applicable to charter 
                        conversions described in this paragraph 
                        that are consistent with rules 
                        promulgated by other financial 
                        regulators, including the Office of the 
                        Comptroller of the Currency. The rules 
                        required by this clause shall provide 
                        that charter conversion by an insured 
                        credit union shall be subject to 
                        regulation that is no more or less 
                        restrictive than that applicable to 
                        charter conversions by other financial 
                        institutions.
                          (ii) Oversight of member vote.--The 
                        member vote concerning charter 
                        conversion under this paragraph shall 
                        be administered by the Administration, 
                        and shall be verified by the Federal or 
                        State regulatory agency that would have 
                        jurisdiction over the institution after 
                        the conversion. If either the 
                        Administration or that regulatory 
                        agency disapproves of the methods by 
                        which the member vote was taken or 
                        procedures applicable to the member 
                        vote, the member vote shall be taken 
                        again, as directed by the 
                        Administration or the agency.
  (3) Except with the prior written approval of the Board, no 
insured credit union shall merge or consolidate with any other 
insured credit union or, either directly or indirectly, acquire 
the assets of, or assume liability to pay any member accounts 
in, any other insured credit union.
  (c) In granting or withholding approval or consent under 
subsection (b) of this section, the Board shall consider--
          (1) the history, financial condition, and management 
        policies of the credit union;
          (2) the adequacy of the credit union's reserves;
          (3) the economic advisability of the transaction;
          (4) the general character and fitness of the credit 
        union's management;
          (5) the convenience and needs of the members to be 
        served by the credit union; and
          (6) whether the credit union is a cooperative 
        association organized for the purpose of promoting 
        thrift among its members and creating a source of 
        credit for provident or productive purposes.
  (d) Prohibition.--
          (1) In general.--Except with prior written consent of 
        the Board--
                  (A) any person who has been convicted of any 
                criminal offense involving dishonesty or a 
                breach of trust, or has agreed to enter into a 
                pretrial diversion or similar program in 
                connection with a prosecution for such offense, 
                may not--
                          (i) become, or continue as, an 
                        institution-affiliated party with 
                        respect to any insured credit union; or
                          (ii) otherwise participate, directly 
                        or indirectly, in the conduct of the 
                        affairs of any insured credit union; 
                        and
                  (B) any insured credit union may not permit 
                any person referred to in subparagraph (A) to 
                engage in any conduct or continue any 
                relationship prohibited under such 
                subparagraph.
          (2) Minimum 10-year prohibition period for certain 
        offenses.--
                  (A) In general.--If the offense referred to 
                in paragraph (1)(A) in connection with any 
                person referred to in such paragraph is--
                          (i) an offense under--
                                  (I) section 215, 656, 657, 
                                1005, 1006, 1007, 1008, 1014, 
                                1032, 1344, 1517, 1956, or 1957 
                                of title 18, United States 
                                Code; or
                                  (II) section 1341 or 1343 of 
                                such title which affects any 
                                financial institution (as 
                                defined in section 20 of such 
                                title); or
                          (ii) the offense of conspiring to 
                        commit any such offense,
                the Board may not consent to any exception to 
                the application of paragraph (1) to such person 
                during the 10-year period beginning on the date 
                the conviction or the agreement of the person 
                becomes final.
                  (B) Exception by order of sentencing court.--
                          (i) In general.--On motion of the 
                        Board, the court in which the 
                        conviction or the agreement of a person 
                        referred to in subparagraph (A) has 
                        been entered may grant an exception to 
                        the application of paragraph (1) to 
                        such person if granting the exception 
                        is in the interest of justice.
                          (ii) Period for filing.--A motion may 
                        be filed under clause (i) at any time 
                        during the 10-year period described in 
                        subparagraph (A) with regard to the 
                        person on whose behalf such motion is 
                        made.
          (3) Penalty.--Whoever knowingly violates paragraph 
        (1) or (2) shall be fined not more than [$1,000,000] 
        $1,500,000 for each day such prohibition is violated or 
        imprisoned for not more than 5 years, or both.
  (e)(1) The Board shall promulgate rules establishing minimum 
standards with which each insured credit union must comply with 
respect to the installation, maintenance, and operation of 
security devices and procedures, reasonable in cost, to 
discourage robberies, burglaries, and larcenies and to assist 
in the identification and apprehension of persons who commit 
such acts.
  (2) The rules shall establish the time limits within which 
insured credit unions shall comply with the standards and shall 
require the submission of periodic reports with respect to the 
installation, maintenance, and operation of security devices 
and procedures.
  (3) An insured credit union which violates a rule promulgated 
pursuant to this subsection shall be subject to a civil penalty 
which shall not exceed $100 for each day of the violation.
  (f)(1) Every insured credit union is authorized to maintain, 
and make loans with respect to, share draft accounts in 
accordance with rules and regulations prescribed by the Board. 
Except as provided in paragraph (2), an insured credit union 
may pay dividends on share draft accounts and may permit the 
owners of such share draft accounts to make withdrawals by 
negotiable or transferable instruments or other orders for the 
purpose of making transfers to third parties.
  (2) Paragraph (1) shall apply only with respect to share 
draft accounts in which the entire beneficial interest is held 
by one or more individuals or members or by an organization 
which is operated primarily for religious, philanthropic, 
charitable, educational, or other similar purposes and which is 
not operated for profit, and with respect to deposits of public 
funds by an officer, employee, or agent of the United States, 
any State, county, municipality, or political subdivision 
thereof, the District of Columbia, the Commonwealth of Puerto 
Rico, American Samoa, Guam, any territory or possession of the 
United States, or any political subdivision thereof.
  (g)(1) If the applicable rate prescribed in this subsection 
exceeds the rate an insured credit union would be permitted to 
charge in the absence of this subsection, such credit union 
may, notwithstanding any State constitution or statute which is 
hereby preempted for the purposes of this subsection, take, 
receive, reserve, and charge on any loan, interest at a rate of 
not more than 1 per centum in excess of the discount rate on 
ninety-day commercial paper in effect at the Federal Reserve 
bank in the Federal Reserve district where such insured credit 
union is located or at the rate allowed by the laws of the 
State, territory, or district where such credit union is 
located, whichever may be greater. A loan that is valid when 
made as to its maximum rate of interest in accordance with this 
subsection shall remain valid with respect to such rate 
regardless of whether the loan is subsequently sold, assigned, 
or otherwise transferred to a third party, and may be enforced 
by such third party notwithstanding any State law to the 
contrary.
  (2) If the rate prescribed in paragraph (1) exceeds the rate 
such credit union would be permitted to charge in the absence 
of this subsection, and such State fixed rate is thereby 
preempted by the rate described in paragraph (1), the taking, 
receiving, reserving, or charging a greater rate than is 
allowed by paragraph (1), when knowingly done, shall be deemed 
a forfeiture of the entire interest which the loan carries with 
it, or which has been agreed to be paid thereon. If such 
greater rate of interest has been paid, the person who paid it 
may recover, in a civil action commenced in a court of 
appropriate jurisdiction not later than two years after the 
date of such payment, an amount equal to twice the amount of 
interest paid from the credit union taking or receiving such 
interest.
  (h) Notwithstanding any other provision of law, the Board may 
authorize a merger or consolidation of an insured credit union 
which is insolvent or is in danger of insolvency with any other 
insured credit union or may authorize an insured credit union 
to purchase any of the assets of, or assume any of the 
liabilities of, any other insured credit union which is 
insolvent or in danger of insolvency if the Board is satisfied 
that--
          (1) an emergency requiring expeditious action exists 
        with respect to such other insured credit union;
          (2) other alternatives are not reasonably available; 
        and
          (3) the public interest would best be served by 
        approval of such merger, consolidation, purchase, or 
        assumption.
  (i)(1) Notwithstanding any other provision of this Act or of 
State law, the Board may authorize an institution whose 
deposits or accounts are insured by the Federal Deposit 
Insurance Corporation to purchase any of the assets of or 
assume any of the liabilities of an insured credit union which 
is insolvent or in danger of insolvency, except that prior to 
exercising this authority the Board must attempt to effect the 
merger or consolidation of an insured credit union which is 
insolvent or in danger of insolvency with another insured 
credit union, as provided in subsection (h).
  (2) For purposes of the authority contained in paragraph (1), 
insured accounts of the credit union may upon consummation of 
the purchase and assumption be converted to insured deposits or 
other comparable accounts in the acquiring institution, and the 
Board and the National Credit Union Share Insurance Fund shall 
be absolved of any liability to the credit union's members with 
respect to those accounts.
  (j) Privileges Not Affected by Disclosure to Banking Agency 
or Supervisor.--
          (1) In general.--The submission by any person of any 
        information to the Consumer Law Enforcement Agency, the 
        Administration, any State credit union supervisor, or 
        foreign banking authority for any purpose in the course 
        of any supervisory or regulatory process of such Board, 
        supervisor, or authority shall not be construed as 
        waiving, destroying, or otherwise affecting any 
        privilege such person may claim with respect to such 
        information under Federal or State law as to any person 
        or entity other than such Board, supervisor, or 
        authority.
          (2) Rule of construction.--No provision of paragraph 
        (1) may be construed as implying or establishing that--
                  (A) any person waives any privilege 
                applicable to information that is submitted or 
                transferred under any circumstance to which 
                paragraph (1) does not apply; or
                  (B) any person would waive any privilege 
                applicable to any information by submitting the 
                information to the Consumer Law Enforcement 
                Agency, the Administration, any State credit 
                union supervisor, or foreign banking authority, 
                but for this subsection.

termination of insurance; cease-and-desist proceedings; suspension and/
   or removal of directors, officers, and committee members; taking 
                    possession of committee members

  Sec. 206. (a)(1) Any insured credit union other than a 
Federal credit union may, upon not less than ninety days' 
written notice to the Board and upon the affirmative vote of a 
majority of its members within one year prior to the giving of 
such notice, terminate its status as an insured credit union.
  (2) Any insured credit union, other than a Federal credit 
union, which has obtained a new certificate of insurance from a 
corporation authorized and duly licensed to insure member 
accounts may upon not less than ninety days' written notice to 
the Board convert from status as an insured credit union under 
this Act: Provided, That at the time of giving notice to the 
Board the provisions of paragraph (b)(1) of this section are 
not being invoked against the credit union.
  (b)(1) Whenever, in the opinion of the Board, any insured 
credit union is engaging or has engaged in unsafe or unsound 
practices in conducting the business of such credit union, or 
is in an unsafe or unsound condition to continue operations as 
an insured credit union, or is violating or has violated an 
applicable law, rule, regulation, order, or any condition 
imposed in writing by the Board in connection with any action 
on any application, notice, or other request by the credit 
union or institution-affiliated party,, or is violating or has 
violated any written agreement entered into with the Board, the 
Board shall serve upon the credit union a statement with 
respect to such practices or conditions or violations for the 
purpose of securing the correction thereof. In the case of an 
insured State-chartered credit union, the Board shall send a 
copy of such statement to the commission, board, or authority, 
if any, having supervision of such credit union. Unless such 
correction shall be made within one hundred and twenty days 
after service of such statement, or within such shorter period 
of not less than twenty days after such service as the Board 
shall require in any case where it determines that the 
insurance risk with respect to such credit union could be 
unduly jeopardized by further delay in the correction of such 
practices or conditions or violations, or as the commission, 
board, or authority having supervision of such credit union, if 
any, shall require in the case of an insured State-chartered 
credit union, the Board, if it shall determine to proceed 
further, shall give to the credit union not less than thirty 
days' written notice of its intention to terminate the status 
of the credit union as an insured credit union. Such notice 
shall contain a statement of the facts constituting the alleged 
unsafe and unsound practices or conditions or violations and 
shall fix a time and place for a hearing thereon. Such hearing 
shall be fixed for a date not earlier than thirty days nor 
later than sixty days after service of such notice unless an 
earlier or a later date is set by the Board at the request of 
the credit union. Unless the credit union shall appear at the 
hearing by a duly authorized representative, it shall be deemed 
to have consented to the termination of its status as an 
insured credit union. In the event of such consent, or if upon 
the record made at any such hearing the Board shall find that 
any unsafe or unsound practice or condition or violation 
specified in the notice has been established and has not been 
corrected within the time above-prescribed in which to make 
such correction, the Board may issue and serve upon the credit 
union an order terminating its status as an insured credit 
union on a date subsequent to the date of such finding and 
subsequent to the expiration of the time specified in the 
notice.
  (2) Any credit union whose insured status has been terminated 
by order of the Board under this subsection shall have the 
right of judicial review of such order only to the same extent 
as provided for the review of orders under subsection (j) of 
this section.
  (c) In the event of the termination of a credit union's 
status as an insured credit union as provided under subsection 
(a)(2) or (b) of this section, the credit union shall give 
prompt and reasonable notice to all of its members whose 
accounts are insured that it has ceased to be an insured credit 
union. It may include in such notice a statement of the fact 
that member accounts insured on the effective date of such 
termination, to the extent not withdrawn, remain insured for 
one year from the date of such termination, but it shall not 
further represent itself in any manner as an insured credit 
union. In the event of failure to give the notice as herein 
provided to members whose accounts are insured, the Board is 
authorized to give reasonable notice.
  (d)(1) After the termination of the insured status of any 
credit union as provided under subsection (a)(1) or (b) of this 
section, insurance of its member accounts to the extent that 
they were insured on the effective date of such termination, 
less any amounts thereafter withdrawn which reduce the accounts 
below the amount covered by insurance on the effective date of 
such termination, shall continue for a period of one year, but 
no shares issued by the credit union or deposits made after the 
date of such termination shall be insured by the Board. The 
credit union shall continue to pay premiums to the Board during 
such period as in the case of an insured credit union and the 
Board shall have the right to examine such credit union from 
time to time during the period during which such insurance 
continues. Such credit union shall, in all other respects, be 
subject to the duties and obligations of an insured credit 
union for the period of one year from the date of such 
termination. In the event that such credit union shall be 
closed for liquidation within such period of one year, the 
Board shall have the same powers and rights with respect to 
such credit union as in the case of an insured credit union.
  (2) No credit union shall convert from status as an insured 
credit union under this Act as provided under subsection (a)(2) 
of this section until the proposition for such conversion has 
been approved by a majority of all the directors of the credit 
union, and by affirmative vote of a majority of the members of 
the credit union who vote on the proposition in a vote in which 
at least 20 per centum of the total membership of the credit 
union participates. Following approval by the directors, 
written notice of the proposition and of the date set for the 
membership vote shall be delivered in person to each member, or 
mailed to each member at the address for such member appearing 
on the records of the credit union, not more than thirty nor 
less than seven days prior to such date. The membership shall 
be given the opportunity to vote by mail ballot. If the 
proposition is approved by the membership, prompt and 
reasonable notice of insurance conversion shall be given to all 
members.
  (3) In the event of a conversion of a credit union from 
status as an insured credit union under this Act as provided 
under subection (a)(2) of this section, premium charges payable 
under section 202(c) of this Act shall be reduced by an amount 
proportionate to the number of calendar months for which the 
converting credit union will no longer be insured under this 
Act. As long as a converting credit union remains insured under 
this Act, it shall remain subject to all of the provisions of 
chapter II of this Act.
  (e)(1) If, in the opinion of the Board, any insured credit 
union, credit union which has insured accounts, or any 
institution-affiliated party is engaging or has engaged, or the 
Board has reasonable cause to believe that the credit union or 
any institution-affiliated party is about to engage, in an 
unsafe or unsound practice in conducting the business of such 
credit union, or is violating or has violated, or the Board has 
reasonable cause to believe that the credit union or any 
institution-affiliated party is about to violate, a law, rule, 
or regulation, or any condition imposed in writing by the Board 
in connection with the granting of any application or other 
request by the credit union or any written agreement entered 
into with the Board, the Board may issue and serve upon the 
credit union or such party a notice of charges in respect 
thereof. The notice shall contain a statement of the facts 
constituting the alleged violation or violations or the unsafe 
or unsound practice or practices, and shall fix a time and 
place at which a hearing will be held to determine whether an 
order to cease and desist therefrom should issue against the 
credit union or the institution-affiliated party. Such hearing 
shall be fixed for a date not earlier than thirty days nor 
later than sixty days after service of such notice unless an 
earlier or a later date is set by the Board at the request of 
any party so served. Unless the party or parties so served 
shall appear at the hearing by a duly authorized 
representative, they shall be deemed to have consented to the 
issuance of the cease-and-desist order. In the event of such 
consent, or if upon the record made at any such hearing, the 
Board shall find that any violation or unsafe or unsound 
practice specified in the notice of charges has been 
established, the Board may issue and serve upon the credit 
union or the institution-affiliated party an order to cease and 
desist from any such violation or practice. Such order may, by 
provisions which may be mandatory or otherwise, require the 
credit union or its institution-affiliated parties to cease and 
desist from the same, and, further, to take affirmative action 
to correct the conditions resulting from any such violation or 
practice.
  (2) A cease-and-desist order shall become effective at the 
expiration of thirty days after the service of such order upon 
the credit union or other person concerned (except in the case 
of a cease-and-desist order issued upon consent, which shall 
become effective at the time specified therein), and shall 
remain effective and enforceable as provided therein, except to 
such extent as it is stayed, modified, terminated, or set aside 
by action of the Board or a reviewing court.
          (3) Affirmative action to correct conditions 
        resulting from violations or practices.--The authority 
        to issue an order under this subsection and subsection 
        (f) which requires an insured credit union or any 
        institution-affiliated party to take affirmative action 
        to correct any conditions resulting from any violation 
        or practice with respect to which such order is issued 
        includes the authority to require such insured credit 
        union or such party to--
                  (A) make restitution or provide 
                reimbursement, indemnification, or guarantee 
                against loss if--
                          (i) such credit union or such party 
                        was unjustly enriched in connection 
                        with such violation or practice; or
                          (ii) the violation or practice 
                        involved a reckless disregard for the 
                        law or any applicable regulations or 
                        prior order of the Board;
                  (B) restrict the growth of the institution;
                  (C) rescind agreements or contracts;
                  (D) dispose of any loan or asset involved;
                  (E) employ qualified officers or employees 
                (who may be subject to approval by the Board at 
                the direction of such Board); and
                  (F) take such other action as the Board 
                determines to be appropriate.
          (4) Authority to limit activities.--The authority to 
        issue an order under this subsection or subsection (f) 
        includes the authority to place limitations on the 
        activities or functions of an insured credit union or 
        any institution-affiliated party.
  (f)(1) Whenever the Board shall determine that the violation 
or threatened violation or the unsafe or unsound practice or 
practices, specified in the notice of charges served upon the 
credit union or any institution-affiliated party pursuant to 
paragraph (1) of subsection (e) of this section, or the 
continuation thereof, is likely to cause insolvency or 
significant dissipation of assets or earnings of the credit 
union, or is likely to weaken the condition of the credit union 
or otherwise prejudice the interests of its insured members 
prior to the completion of the proceedings conducted pursuant 
to paragraph (1) of subsection (e) of this section, the Board 
may issue a temporary order requiring the credit union or such 
party to cease and desist from any such violation or practice 
and to take affirmative action to prevent such insolvency, 
dissipation, condition, or prejudice pending completion of such 
proceedings. Such order may include any requirement authorized 
under subsection (e)(3). Such order shall become effective upon 
service upon the credit union or institution-affiliated party 
and, unless set aside, limited, or suspended by a court in 
proceedings authorized by paragraph (2) of this subsection, 
shall remain effective and enforceable pending the completion 
of the administrative proceedings pursuant to such notice and 
until such time as the Administration shall dismiss the charges 
specified in such notice, or if a cease-and-desist order is 
issued against the credit union or such party, until the 
effective date of such order.
  (2) Within ten days after the credit union concerned or any 
institution-affiliated party has been served with a temporary 
cease-and-desist order, the credit union or such party may 
apply to the United States district court for the judicial 
district in which the home office of the credit union is 
located, or the United States District Court for the District 
of Columbia, for an injunction setting aside, limiting, or 
suspending the enforcement, operation, or effectiveness of such 
order pending the completion of the administrative proceedings 
pursuant to the notice of charges served upon the credit union 
or such party under paragraph (1) of subsection (e) of this 
section, and such court shall have jurisdiction to issue such 
injunction.
          (3) Incomplete or inaccurate records.--
                  (A) Temporary order.--If a notice of charges 
                served under subsection (e)(1) specifies, on 
                the basis of particular facts and 
                circumstances, that an insured credit union's 
                books and records are so incomplete or 
                inaccurate that the Board is unable, through 
                the normal supervisory process, to determine 
                the financial condition of that insured credit 
                union or the details or purpose of any 
                transaction or transactions that may have a 
                material effect on the financial condition of 
                that insured credit union, the Board may issue 
                a temporary order requiring--
                          (i) the cessation of any activity or 
                        practice which gave rise, whether in 
                        whole or in part, to the incomplete or 
                        inaccurate state of the books or 
                        records; or
                          (ii) affirmative action to restore 
                        such books or records to a complete and 
                        accurate state, until the completion of 
                        the proceedings under subsection 
                        (e)(1).
                  (B) Effective period.--Any temporary order 
                issued under subparagraph (A)--
                          (i) shall become effective upon 
                        service; and
                          (ii) unless set aside, limited, or 
                        suspended by a court in proceedings 
                        under paragraph (2), shall remain in 
                        effect and enforceable until the 
                        earlier of--
                                  (I) the completion of the 
                                proceeding initiated under 
                                subsection (e)(1) in connection 
                                with the notice of charges; or
                                  (II) the date the Board 
                                determines, by examination or 
                                otherwise, that the insured 
                                credit union's books and 
                                records are accurate and 
                                reflect the financial condition 
                                of the credit union.
  (4) In the case of violation or threatened violation of, or 
failure to obey, a temporary cease-and-desist order, the Board 
may apply to the United States district court, or the United 
States court of any territory, within the jurisdiction of which 
the principal office of the credit union is located for an 
injunction to enforce such order, and, if the court shall 
determine that there has been such violation or threatened 
violation or failure to obey, it shall be the duty of the court 
to issue such injunction.
  (g) Removal and Prohibition Authority.--
          (1) Authority to issue order.--Whenever the Board 
        determines that--
                  (A) any any institution-affiliated party has, 
                directly or indirectly--
                          (i) violated--
                                  (I) any law or regulation;
                                  (II) any cease-and-desist 
                                order which has become final;
                                  (III) any condition imposed 
                                in writing by the Board in 
                                connection with any action on 
                                any application, notice, or 
                                request by such credit union or 
                                institution-affiliated party; 
                                or
                                  (IV) any written agreement 
                                between such credit union and 
                                the Board;
                          (ii) engaged or participated in any 
                        unsafe or unsound practice in 
                        connection with any insured credit 
                        union or business institution; or
                          (iii) committed or engaged in any 
                        act, omission, or practice which 
                        constitutes a breach of such party's 
                        fiduciary duty;
                  (B) by reason of the violation, practice, or 
                breach described in any clause of subparagraph 
                (A)--
                          (i) such insured credit union or 
                        business institution has suffered or 
                        will probably suffer financial loss or 
                        other damage;
                          (ii) the interests of the insured 
                        credit union's members have been or 
                        could be prejudiced; or
                          (iii) such party has received 
                        financial gain or other benefit by 
                        reason of such violation, practice or 
                        breach; and
                  (C) such violation, practice, or breach--
                          (i) involves personal dishonesty on 
                        the part of such party; or
                          (ii) demonstrates such party's 
                        unfitness to serve as a director or 
                        officer of, or to otherwise participate 
                        in the conduct of the affairs of, an 
                        insured credit union,
        the Board may serve upon such party a written notice of 
        the Board's intention to remove such party from office 
        or to prohibit any further participation, by such 
        party, in any manner in the conduct of the affairs of 
        any insured credit union.
          (2) Specific violations.--
                  (A) In general.--Whenever the Board 
                determines that--
                          (i) an institution-affiliated party 
                        has committed a violation of any 
                        provision of subchapter II of chapter 
                        53 of title 31, United States Code, 
                        unless such violation was inadvertent 
                        or unintentional;
                          (ii) an officer or director of an 
                        insured credit union has knowledge that 
                        an institution-affiliated party of the 
                        insured credit union has violated any 
                        such provision or any provision of law 
                        referred to in subsection 
                        (i)(1)(A)(ii); or
                          (iii) an officer or director of an 
                        insured credit union has committed any 
                        violation of the Depository Institution 
                        Management Interlocks Act,
                the Board may serve upon such party, officer, 
                or director a written notice of the Board's 
                intention to remove such officer or director 
                from office.
                  (B) Factors to be considered.--In determining 
                whether an officer or director should be 
                removed as a result of the application of 
                subparagraph (A)(ii), the Board shall consider 
                whether the officer or director took 
                appropriate action to stop, or to prevent the 
                recurrence of, a violation described in such 
                subparagraph.
          (3) Suspension order.--
                  (A) Suspension or prohibition authorized.--If 
                the Board serves written notice under paragraph 
                (1) or (2) to any institution-affiliated party 
                of the Board's intention to issue an order 
                under such paragraph, the Board may suspend 
                such party from office or prohibit such party 
                from further participation in any manner in the 
                conduct of the affairs of the institution, if 
                the Board--
                          (i) determines that such action is 
                        necessary for the protection of the 
                        credit union or the interests of the 
                        credit union's members; and
                          (ii) serves such person with written 
                        notice of the suspension order.
                  (B) Effective period.--Any suspension order 
                issued under subparagraph (A)--
                          (i) shall become effective upon 
                        service; and
                          (ii) unless a court issues a stay of 
                        such order under paragraph (6), shall 
                        remain in effect and enforceable 
                        until--
                                  (I) the date the Board 
                                dismisses the charges contained 
                                in the notice served under 
                                paragraph (1) or (2) with 
                                respect to such party; or
                                  (II) the effective date of an 
                                order issued by the Board to 
                                such person under paragraph (1) 
                                or (2).
                  (C) Copy of order.--If the Board issues a 
                suspension order under subparagraph (A) to any 
                institution-affiliated party, the Board shall 
                serve a copy of such order on any insured 
                credit union with which such party is 
                associated at the time such order is issued.
  (4) A notice of intention to remove a director, committee 
member, officer, or other person from office or to prohibit his 
participation in the conduct of the affairs of an insured 
credit union, shall contain a statement of the facts 
constituting grounds therefor, and shall fix a time and place 
at which a hearing will be held thereon. Such hearing shall be 
fixed for a date not earlier than thirty days nor later than 
sixty days after the date of service of such notice, unless an 
earlier or a later date is set by the Board at the request of 
(A) such director, committee member, or officer or other 
person, and for good cause shown, or (B) the Attorney General 
of the United States. Unless such director, committee member, 
officer, or other person shall appear at the hearing in person 
or by a duly authorized representative, he shall be deemed to 
have consented to the issuance of an order of such removal or 
prohibition. In the event of such consent, or if upon the 
record made at any such hearing the Board shall find that any 
of the grounds specified in such notice have been established, 
the Board may issue such orders of suspension or removal from 
office, or prohibition from participation in the conduct of the 
affairs of the credit union, as it may deem appropriate. Any 
such order shall become effective at the expiration of thirty 
days after service upon such credit union and the director, 
committee member, officer, or other person concerned (except in 
the case of an order issued upon consent, which shall become 
effective at the time specified therein). Such order shall 
remain effective and enforceable except to such extent as it is 
stayed, modified, terminated, or set aside by action of the 
Board or a reviewing court.
  (5) Prohibition of certain specific activities.--Any person 
subject to an order issued under this subsection shall not--
          (A) participate in any manner in the conduct of the 
        affairs of any institution or agency specified in 
        paragraph (7)(A);
          (B) solicit, procure, transfer, attempt to transfer, 
        vote, or attempt to vote any proxy, consent, or 
        authorization with respect to any voting rights in any 
        institution described in subparagraph (A);
          (C) violate any voting agreement previously approved 
        by the appropriate Federal banking agency; or
          (D) vote for a director, or serve or act as an 
        institution-affiliated party.
  (6) Within ten days after any director, officer, committee 
member, or other person has been suspended from office and/or 
prohibited from participation in the conduct of the affairs of 
an insured credit union under paragraph (3) of this subsection, 
such director, officer, committee member, or other person may 
apply to the United States district court for the judicial 
district in which the principal office of the credit union is 
located, or the United States District Court for the District 
of Columbia, for a stay of such suspension and/or prohibition 
pending the completion of the administrative proceedings 
pursuant to the notice served upon such director, officer, 
committee member, or other person under paragraph (1) or (2) of 
this subsection, and such court shall have jurisdiction to stay 
such suspension and/or prohibition.
  (7) Industrywide Prohibition.--
          (A) In general.--Except as provided in subparagraph 
        (B), any person who, pursuant to an order issued under 
        this subsection or subsection (i), has been removed or 
        suspended from office in an insured credit union or 
        prohibited from participating in the conduct of the 
        affairs of an insured credit union may not, while such 
        order is in effect, continue or commence to hold any 
        office in, or participate in any manner in the conduct 
        of the affairs of--
                  (i) any insured depository institution;
                  (ii) any institution treated as an insured 
                bank under paragraph (3) or (4) of section 8(b) 
                of the Federal Deposit Insurance Act, or as a 
                savings association under section 8(b)(9) of 
                such Act;
                  (iii) any insured credit union;
                  (iv) any institution chartered under the Farm 
                Credit Act of 1971;
                  (v) any appropriate Federal financial 
                institution regulatory agency; and
                  (vi) the Federal Housing Finance Agency and 
                any Federal home loan bank.
          (B) Exception if agency provides written consent.--
        If, on or after the date an order is issued under this 
        subsection which removes or suspends from office any 
        institution-affiliated party or prohibits such party 
        from participating in the conduct of the affairs of an 
        insured credit union, such party receives the written 
        consent of--
                  (i) the Board; and
                  (ii) the appropriate Federal financial 
                institutions regulatory agency of the 
                institution described in any clause of 
                subparagraph (A) with respect to which such 
                party proposes to become an institution-
                affiliated party,
                subparagraph (A) shall, to the extent of such 
                consent, cease to apply to such party with 
                respect to the institution described in each 
                written consent. If any person receives such a 
                written consent from the Board, the Board shall 
                publicly disclose such consent. If the agency 
                referred to in clause (ii) grants such a 
                written consent, such agency shall report such 
                action to the Board and publicly disclose such 
                consent.
          (C) Violation of paragraph treated as violation of 
        order.--Any violation of subparagraph (A) by any person 
        who is subject to an order described in such 
        subparagraph shall be treated as a violation of the 
        order.
          (D) Appropriate federal financial institutions 
        regulatory agency defined.--For purposes of this 
        paragraph, the term ``appropriate Federal financial 
        institutions regulatory agency'' means--
                  (i) the appropriate Federal banking agency, 
                as provided in section 3(q) of the Federal 
                Deposit Insurance Act;
                  (ii) the Farm Credit Administration, in the 
                case of an institution chartered under the Farm 
                Credit Act of 1971;
                  (iii) the National Credit Union 
                Administration Board, in the case of an insured 
                credit union (as defined in section 101(7) of 
                the Federal Credit Union Act); and
                  (iv) the Secretary of the Treasury, in the 
                case of the Federal Housing Finance Agency and 
                any Federal home loan bank[;].
          (E) Consultation between agencies.--The agencies 
        referred to in clauses (i) and (ii) of subparagraph (B) 
        shall consult with each other before providing any 
        written consent described in subparagraph (B).
          (F) Applicability.--This paragraph shall only apply 
        to a person who is an individual, unless the Board 
        specifically finds that it should apply to a 
        corporation, firm, or other business enterprise.
  (h)(1) The Board may, ex parte without notice, appoint itself 
or another (including, in the case of a State-chartered insured 
credit union, the State official having jurisdiction over the 
credit union) as conservator and immediately take possession 
and control of the business and assets of any insured credit 
union in any case in which--
          (A) the Board determines that such action is 
        necessary to conserve the assets of any insured credit 
        union or to protect the Fund or the interests of the 
        members of such insured credit union;
          (B) an insured credit union, by a resolution of its 
        board of directors, consents to such an action by the 
        Board;
                  (C) the Attorney General notifies the Board 
                in writing that an insured credit union has 
                been found guilty of a criminal offense under 
                section 1956 or 1957 of title 18, United States 
                Code, or section 5322 or 5324 of title 31, 
                United States Code;
          (D) there is a willful violation of a cease-and-
        desist order which has become final;
          (E) there is concealment of books, papers, records, 
        or assets of the credit union or refusal to submit 
        books, papers, records, or affairs of the credit union 
        for inspection to any examiner or to any lawful agent 
        of the Board;
          (F) the credit union is significantly 
        undercapitalized, as defined in section 216, and has no 
        reasonable prospect of becoming adequately capitalized, 
        as defined in section 216; or
          (G) the credit union is critically undercapitalized, 
        as defined in section 216.
  (2)(A) Except as provided in subparagraph (C), in the case of 
a State-chartered insured credit union, the authority conferred 
by paragraph (1) shall not be exercised without the written 
approval of the State official having jurisdiction over the 
State-chartered credit union that the grounds specified for 
such exercise exist.
  (B) If such approval has not been received by the Board 
within 30 days of receipt of notice by the State that the Board 
has determined such grounds exist, and the Board has responded 
in writing to the State's written reasons, if any, for 
withholding approval, then the Board may proceed without State 
approval only by a unanimous vote of the Board.
          (C) In the case of a State-chartered insured credit 
        union, the authority conferred by subparagraphs (F) and 
        (G) of paragraph (1) may not be exercised unless the 
        Board has complied with section 216(l).
  (3) Not later than ten days after the date on which the Board 
takes possession and control of the business and assets of an 
insured credit union pursuant to paragraph (1), such insured 
credit union may apply to the United States district court for 
the judicial district in which the principal office of such 
insured credit union is located or the United States District 
Court for the District of Columbia, for an order requiring the 
Board to show cause why it should not be enjoined from 
continuing such possession and control. Except as provided in 
this paragraph, no court may take any action, except at the 
request of the Board by regulation or order, to restrain or 
affect the exercise of powers or functions of the Board as 
conservator.
  (4) Except as provided in paragraph (3), in the case of a 
Federal credit union, the Board may maintain possession and 
control of the business and assets of such credit union and may 
operate such credit union until such time--
          (A) as the Board shall permit such credit union to 
        continue business subject to such terms and conditions 
        as may be imposed by the Board; or
          (B) as such credit union is liquidated in accordance 
        with the provisions of section 207.
  (5) Except as provided in paragraph (3), in the case of an 
insured State-chartered credit union, the Board may maintain 
possession and control of the business and assets of such 
credit union and may operate such credit union until such 
time--
          (A) as the Board shall permit such credit union to 
        continue business, subject to such terms and conditions 
        as may be imposed by the Board;
          (B) as the Board shall permit the transfer of 
        possession and control of such credit union to any 
        commission, board, or authority which has supervisory 
        authority over such credit union and which is 
        authorized by State law to operate such credit union; 
        or
          (C) as such credit union is liquidated in accordance 
        with the provisions of section 207.
  (6) The Board may appoint such agents as it considers 
necessary in order to assist the Board in carrying out its 
duties as a conservator under this subsection.
  (7) All expenses incurred by the Board in exercising its 
authority under this subsection with respect to any credit 
union shall be paid out of the assets of such credit union.
  (8) The conservator shall have all the powers of the members, 
the directors, the officers, and the committees of the credit 
union and shall be authorized to operate the credit union in 
its own name or to conserve its assets in the manner and to the 
extent authorized by the Board.
  (9) The authority granted by this subsection is in addition 
to all other authority granted to the Board under this Act.
  (i) Suspension, Removal, and Prohibition From Participation 
Orders in the Case of Certain Criminal Offenses.--
          (1) Suspension or prohibition authorized.--
                  (A) In general.--Whenever any institution-
                affiliated party is charged in any information, 
                indictment, or complaint, with the commission 
                of or participation in--
                          (i) a crime involving dishonesty or 
                        breach of trust which is punishable by 
                        imprisonment for a term exceeding one 
                        year under State or Federal law, or
                          (ii) a criminal violation of section 
                        1956, 1957, or 1960 of title 18, United 
                        States Code, or section 5322 or 5324 of 
                        title 31, United States Code,
                the Board may, if continued service or 
                participation by such party may pose a threat 
                to the interests of the credit union's members 
                or may threaten to impair public confidence in 
                any credit union, by written notice served upon 
                such party, suspend such party from office or 
                prohibit such party from further participation 
                in any manner in the conduct of the affairs of 
                any credit union.
                  (B) Provisions applicable to notice.--
                          (i) Copy.--A copy of any notice under 
                        subparagraph (A) shall also be served 
                        upon the credit union of which the 
                        subject of the order is, or most 
                        recently was, an institution-affiliated 
                        party.
                          (ii) Effective period.--A suspension 
                        or prohibition under subparagraph (A) 
                        shall remain in effect until the 
                        information, indictment, or complaint 
                        referred to in such subparagraph is 
                        finally disposed of or until terminated 
                        by the Board.
                  (C) Removal or prohibition.--
                          (i) In general.--If a judgment of 
                        conviction or an agreement to enter a 
                        pretrial diversion or other similar 
                        program is entered against an 
                        institution-affiliated party in 
                        connection with a crime described in 
                        subparagraph (A)(i), at such time as 
                        such judgment is not subject to further 
                        appellate review, the Board may, if 
                        continued service or participation by 
                        such party may pose a threat to the 
                        interests of any credit union's members 
                        or may threaten to impair public 
                        confidence in any credit union, issue 
                        and serve upon such party an order 
                        removing such party from office or 
                        prohibiting such party from further 
                        participation in any manner in the 
                        conduct of the affairs of any credit 
                        union without the prior written consent 
                        of the Board.
                          (ii) Required for certain offenses--
                        In the case of a judgment of conviction 
                        or agreement against an institution-
                        affiliated party in connection with a 
                        violation described in subparagraph 
                        (A)(ii), the Board shall issue and 
                        serve upon such party an order removing 
                        such party from office or prohibiting 
                        such party from further participation 
                        in any manner in the conduct of the 
                        affairs of any credit union without the 
                        prior written consent of the Board.
                  (D) Provisions applicable to order.--
                          (i) Copy.--A copy of any order under 
                        subparagraph (C) shall also be served 
                        upon the credit union of which the 
                        subject of the order is, or most 
                        recently was, an institution-affiliated 
                        party, whereupon such party (if a 
                        director or an officer) shall cease to 
                        be a director or officer of such credit 
                        union.
                          (ii) Effect of acquittal.--A finding 
                        of not guilty or other disposition of 
                        the charge shall not preclude the Board 
                        from instituting proceedings after such 
                        finding or disposition to remove such 
                        party from office or to prohibit 
                        further participation in credit union 
                        affairs, pursuant to paragraph (1), 
                        (2), or (3) of subsection (g) of this 
                        section.
                          (iii) Effective period.--Any notice 
                        of suspension or order of removal 
                        issued under this paragraph shall 
                        remain effective and outstanding until 
                        the completion of any hearing or appeal 
                        authorized under paragraph (3) unless 
                        terminated by the Board.
                  (E) Continuation of authority.--The Board may 
                issue an order under this paragraph with 
                respect to an individual who is an institution-
                affiliated party at a credit union at the time 
                of an offense described in subparagraph (A) 
                without regard to--
                          (i) whether such individual is an 
                        institution-affiliated party at any 
                        credit union at the time the order is 
                        considered or issued by the Board; or
                          (ii) whether the credit union at 
                        which the individual was an 
                        institution-affiliated party at the 
                        time of the offense remains in 
                        existence at the time the order is 
                        considered or issued by the Board.
  (2) If at any time, because of the suspension of one or more 
directors pursuant to this section, there shall be on the board 
of directors of a Federal credit union less than a quorum of 
directors not so suspended, all powers and functions vested in 
or exercisable by such board shall vest in and be exercisable 
by the director or directors on the board not so suspended, 
until such time as there shall be a quorum of the board of 
directors. In the event all of the directors of a Federal 
credit union are suspended pursuant to this section, the Board 
shall appoint persons to serve temporarily as directors in 
their place and stead pending the termination of such 
suspensions, or until such time as those who have been 
suspended cease to be directors of the credit union and their 
respective successors have been elected by the members at an 
annual or special meeting and have taken office. Directors 
appointed temporarily by the Board shall, within thirty days 
following their appointment, call a special meeting for the 
election of new directors, unless during the thirty-day period 
(A) the regular annual meeting is scheduled, or (B) the 
suspensions giving rise to the appointment of temporary 
directors are terminated.
  (3) Within thirty days from service of any notice of 
suspension or order of removal issued pursuant to paragraph (1) 
of this subsection, the institution-affiliated party concerned 
may request in writing an opportunity to appear before the 
Board to show that the continued service to or participation in 
the conduct of the affairs of the credit union by such party 
does not, or is not likely to, pose a threat to the interests 
of the credit union's members or threaten to impair public 
confidence in the credit union. Upon receipt of any such 
request, the Board shall fix a time (not more than thirty days 
after receipt of such request, unless extended at the request 
of such party) and place at which such party may appear, 
personally or through counsel, before the Board or its designee 
to submit written materials (or, at the discretion of the 
Board, oral testimony) and oral argument. Within sixty days of 
such hearing, the Board shall notify such party whether the 
suspension or prohibition from participation in any manner in 
the conduct of the affairs of the credit union will be 
continued, terminated or otherwise modified, or whether the 
order removing such party from office or prohibiting such party 
from further participation in any manner in the conduct of the 
affairs of the credit union will be rescinded or otherwise 
modified. Such notification shall contain a statement of the 
basis for the Board's decision, if adverse to such party. The 
Board is authorized to prescribe such rules as may be necessary 
to effectuate the purposes of this subsection.
  (j)(1) Any hearing provided for in this section (other than 
the hearing provided for in subsection (i)(3) of this section) 
shall be held in the Federal judicial district or in the 
territory in which the principal office of the credit union is 
located, unless the party afforded the hearing consents to 
another place, and shall be conducted in accordance with the 
provisions of chapter 5 of title 5 of the United States Code. 
After such hearing, and within ninety days after the Board has 
notified the parties that the case has been submitted to them 
for final decision, it shall render its decision (which shall 
include findings of fact upon which its decision is predicated) 
and shall issue and serve upon each party to the proceeding an 
order or orders consistent with the provisions of this section. 
Judicial review of any such order shall be exclusively as 
provided in this subsection (j). Unless a petition for review 
is timely filed in a court of appeals of the United States, as 
provided in paragraph (2) of this subsection, and thereafter 
until the record in the proceeding has been filed as so 
provided, the Board may at any time, upon such notice and in 
such manner as it may deem proper, modify, terminate, or set 
aside any such order. Upon such filing of the record, the Board 
may modify, terminate, or set aside any such order with 
permission of the court.
  (2) Any party to any proceeding under paragraph (1) may 
obtain a review of any order served pursuant to paragraph (1) 
of this subsection (other than an order issued with the consent 
of the credit union or the institution-affiliated party 
concerned or an order issued under subsection (i)(1) of this 
section) by filing in the court of appeals of the United States 
for the circuit in which the principal office of the credit 
union is located, or in the United States Court of Appeals for 
the District of Columbia Circuit, within thirty days after the 
date of service of such order, a written petition praying that 
the order of the Board be modified, terminated, or set aside. A 
copy of such petition shall be forthwith transmitted by the 
clerk of the court to the Board, and thereupon the Board shall 
file in the court the record in the proceeding, as provided in 
section 2112 of title 28, United States Code. Upon the filing 
of such petition, such court shall have jurisdiction, which 
upon the filing of the record shall, except as provided in the 
last sentence of said paragraph (1), be exclusive, to affirm, 
modify, terminate, or set aside, in whole or in part, the order 
of the Board. Review of such proceedings shall be had as 
provided in chapter 7 of title 5, United States Code. The 
judgment and decree of the court shall be final, except that 
the same shall be subject to review by the Supreme Court upon 
certiorari, as provided in section 1254 of title 28, United 
States Code.
  (3) The commencement of proceedings for judicial review under 
paragraph (2) of this subsection shall not, unless specifically 
ordered by the court, operate as a stay of any order issued by 
the Board.
  (k)(1) The Board may in its discretion apply to the United 
States district court, or the United States court of any 
territory within the jurisdiction of which the principal office 
of the credit union is located, for the enforcement of any 
effective and outstanding notice or order issued under this 
section or section 216, and such courts shall have jurisdiction 
and power to order and require compliance therewith. However, 
except as otherwise provided in this section or section 216, no 
court shall have jurisdiction to affect by injunction or 
otherwise the issuance or enforcement of any notice or order 
under this section or section 216 or to review, modify, 
suspend, terminate, or set aside any such notice or order.
          (2) Civil money penalty.--
                  (A) First tier.--Any insured credit union 
                which, and any institution-affiliated party 
                who--
                          (i) violates any law or regulation;
                          (ii) violates any final order or 
                        temporary order issued pursuant to 
                        subsection (e), (f), (g), (i), or (q), 
                        or any final order under section 216;
                          (iii) violates any condition imposed 
                        in writing by the Board in connection 
                        with any action on any application, 
                        notice, or other request by the credit 
                        union or institution-affiliated party; 
                        or
                          (iv) violates any written agreement 
                        between such credit union and such 
                        agency,
                shall forfeit and pay a civil penalty of not 
                more than $5,000 for each day during which such 
                violation continues.
                  (B) Second tier.--Notwithstanding 
                subparagraph (A), any insured credit union 
                which, and any institution-affiliated party 
                who--
                          (i)(I) commits any violation 
                        described in any clause of subparagraph 
                        (A);
                          (II) recklessly engages in an unsafe 
                        or unsound practice in conducting the 
                        affairs of such credit union; or
                          (III) breaches any fiduciary duty;
                          (ii) which violation, practice, or 
                        breach--
                                  (I) is part of a pattern of 
                                misconduct;
                                  (II) causes or is likely to 
                                cause more than a minimal loss 
                                to such credit union; or
                                  (III) results in pecuniary 
                                gain or other benefit to such 
                                party,
                shall forfeit and pay a civil penalty of not 
                more than $25,000 for each day during which 
                such violation, practice, or breach continues.
                  (C) Third tier.--Notwithstanding 
                subparagraphs (A) and (B), any insured credit 
                union which, and any institution-affiliated 
                party who--
                          (i) knowingly--
                                  (I) commits any violation 
                                described in any clause of 
                                subparagraph (A);
                                  (II) engages in any unsafe or 
                                unsound practice in conducting 
                                the affairs of such credit 
                                union; or
                                  (III) breaches any fiduciary 
                                duty; and
                          (ii) knowingly or recklessly causes a 
                        substantial loss to such credit union 
                        or a substantial pecuniary gain or 
                        other benefit to such party by reason 
                        of such violation, practice, or breach,
                shall forfeit and pay a civil penalty in an 
                amount not to exceed the applicable maximum 
                amount determined under subparagraph (D) for 
                each day during which such violation, practice, 
                or breach continues.
                  (D) Maximum amounts of penalties for any 
                violation described in subparagraph (c).--The 
                maximum daily amount of any civil penalty which 
                may be assessed pursuant to subparagraph (C) 
                for any violation, practice, or breach 
                described in such subparagraph is--
                          (i) in the case of any person other 
                        than an insured credit union, an amount 
                        to not exceed [$1,000,000] $1,500,000; 
                        and
                          (ii) in the case of any insured 
                        credit union, an amount not to exceed 
                        the lesser of--
                                  (I) [$1,000,000] $1,500,000; 
                                or
                                  (II) 1 percent of the total 
                                assets of such credit union.
                  (E) Assessment.--
                          (i) Written notice.--Any penalty 
                        imposed under subparagraph (A), (B), or 
                        (C) may be assessed and collected by 
                        the Board by written notice.
                          (ii) Finality of assessment.--If, 
                        with respect to any assessment under 
                        clause (i), a hearing is not requested 
                        pursuant to subparagraph (H) within the 
                        period of time allowed under such 
                        subparagraph, the assessment shall 
                        constitute a final and unappealable 
                        order.
                  (F) Authority to modify or remit penalty.--
                The Board may compromise, modify, or remit any 
                penalty which such agency may assess or had 
                already assessed under subparagraph (A), (B), 
                or (C).
                  (G) Mitigating factors.--In determining the 
                amount of any penalty imposed under 
                subparagraph (A), (B), or (C), the Board shall 
                take into account the appropriateness of the 
                penalty with respect to--
                          (i) the size of financial resources 
                        and good faith of the insured credit 
                        union or the person charged;
                          (ii) the gravity of the violation;
                          (iii) the history of previous 
                        violations; and
                          (iv) such other matters as justice 
                        may require.
                  (H) Hearing.--The insured credit union or 
                other person against whom any penalty is 
                assessed under this paragraph shall be afforded 
                an agency hearing if such institution or person 
                submits a request for such hearing within 20 
                days after the issuance of the notice of 
                assessment.
                  (I) Collection.--
                          (i) Referral.--If any insured credit 
                        union or other person fails to pay an 
                        assessment after any penalty assessed 
                        under this paragraph has become final, 
                        the Board shall recover the amount 
                        assessed by action in the appropriate 
                        United States district court.
                          (ii) Appropriateness of penalty not 
                        reviewable.--In any civil action under 
                        clause (i), the validity and 
                        appropriateness of the penalty shall 
                        not be subject to review.
                  (J) Disbursement.--All penalties collected 
                under authority of this paragraph shall be 
                deposited into the Treasury.
                  (K) Violate defined.--For purposes of this 
                section, the term ``violate'' includes any 
                action (alone or with another or others) for or 
                toward causing, bringing about, participating 
                in, counseling, or aiding or abetting a 
                violation.
                  (L) Regulations.--The Board shall prescribe 
                regulations establishing such procedures as may 
                be necessary to carry out this paragraph.
          (3) Notice under this section after separation from 
        service.--The resignation, termination of employment or 
        participation, or separation of a institution-
        affiliated party (including a separation caused by the 
        closing of an insured credit union) shall not affect 
        the jurisdiction and authority of the Board to issue 
        any notice or order and proceed under this section 
        against any such party, if such notice or order is 
        served before the end of the 6-year period beginning on 
        the date such party ceased to be such a party with 
        respect to such credit union (whether such date occurs 
        before, on, or after the date of the enactment of this 
        paragraph).
  (l) Criminal Penalty for Violation of Certain Orders.--
Whoever--
          (1) under this Act, is suspended or removed from, or 
        prohibited from participating in the affairs of any 
        credit union described in section 206(g)(5); and
          (2) knowingly participates, directly or indirectly, 
        in any manner (including by engaging in an activity 
        specifically prohibited in such an order or in 
        subsection (g)(5)) in the conduct of the affairs of 
        such a credit union;
shall be fined not more than [$1,000,000] $1,500,000, 
imprisoned for not more than 5 years, or both.
  (m) As used in this section (1) the terms ``cease-and-desist 
order which has become final'' and ``order which has become 
final'' means a cease-and-desist order, or an order issued by 
the Board with the consent of the credit union or the director, 
officer, committee member, or other person concerned, or with 
respect to which no petition for review of the action of the 
Board has been filed and perfected in a court of appeals as 
specified in paragraph (2) of subsection (j) of this section, 
or with respect to which the action of the court in which said 
petition is so filed is not subject to further review by the 
Supreme Court of the United States in proceedings provided for 
in said paragraph, or an order issued under subsection (i) of 
this section, and (2) the term ``violation'' includes without 
limitation any action (alone or with another or others) for or 
toward causing, bringing about, participating in, counseling, 
or aiding or abetting a violation.
  (n) Any service required or authorized to be made by the 
Board under this section may be made by registered mail or in 
such other manner reasonably calculated to give actual notice 
as the Board may by regulation or otherwise provide. Copies of 
any notice or order served by the Board upon any State-
chartered credit union or any director, officer, or committee 
member thereof or other person participating in the conduct of 
its affairs, pursuant to the provisions of this section, shall 
also be sent to the commission, board, or authority, if any, 
having supervision of such credit union.
  (o) In connection with any proceeding under subsection (e), 
(f)(1), or (g) of this section involving an insured State-
chartered credit union or any institution-affiliated party, the 
Board shall provide the commission, board, or authority, if 
any, having supervision of such credit union, with notice of 
its intent to institute such a proceeding and the grounds 
thereof. Unless within such time as the Board deems appropriate 
in the light of the circumstances of the case (which time must 
be specified in the notice prescribed in the preceding 
sentence) satisfactory corrective action is effectuated by 
action of such commission, board, or authority, the Board may 
proceed as provided in this section. No credit union or other 
party who is the subject of any notice or order issued by the 
Board under this section shall have standing to raise the 
requirements of this subsection as ground for attacking the 
validity of any such notice or order.
  (p) In the course of or in connection with any proceeding 
under this section or in connection with any claim for insured 
deposits or any examination or investigation under section 
204(b), the Board, in conducting the proceeding, examination, 
or investigation or considering the claim for insured 
deposits,, or any designated representative thereof, including 
any person designated to conduct any hearing under this 
section, shall have the power to administer oaths and 
affirmations, to take or cause to be taken depositions, and to 
issue, revoke, quash, or modify subpenas and subpenas duces 
tecum, and the Board is empowered to make rules and regulations 
with respect to any such proceedings, claims, examinations, or 
investigations. The attendance of witnesses and the production 
of documents provided for in this subsection may be required 
from any place in any State or in any territory or other place 
subject to the jurisdiction of the United States at any 
designated place where such proceeding is being conducted. Any 
party to proceedings under this section may apply to the United 
States District Court for the District of Columbia, or the 
United States district court for the judicial district or the 
United States court in any territory in which such proceeding 
is being conducted, or where the witness resides or carries on 
business, for enforcement of any subpena or subpena duces tecum 
issued pursuant to this subsection, and such courts shall have 
jurisdiction and power to order and require compliance 
therewith. Witnesses subpenaed under this section shall be paid 
the same fees and mileage that are paid witnesses in the 
district courts of the United States. Any court having 
jurisdiction of any proceeding instituted under this section by 
an insured credit union or a director, officer, or committee 
member thereof may allow to any such party such reasonable 
expenses and attorneys' fees as it deems just and proper, and 
such expenses and fees shall be paid by the credit union or 
from its assets.
  (q) Compliance With Monetary Transaction Recordkeeping and 
Report Requirements.--
          (1) Compliance procedures required.--The Board shall 
        prescribe regulations requiring insured credit unions 
        to establish and maintain procedures reasonably 
        designed to assure and monitor the compliance of such 
        credit unions with the requirements of subchapter II of 
        chapter 53 of title 31, United States Code.
          (2) Examinations of credit unions to include review 
        of compliance procedures.--
                  (A) In general.--Each examination of an 
                insured credit union by the Board shall include 
                a review of the procedures required to be 
                established and maintained under paragraph (1).
                  (B) Exam report requirement.--The report of 
                examination shall describe any problem with the 
                procedures maintained by the credit union.
          (3) Order to comply with requirements.--If the Board 
        determines that an insured credit union--
                  (A) has failed to establish and maintain the 
                procedures described in paragraph (1); or
                  (B) has failed to correct any problem with 
                the procedures maintained by such credit union 
                which was previously reported to the credit 
                union by the Board,
        the Board shall issue an order in the manner prescribed 
        in subsection (e) or (f) requiring such credit union to 
        cease and desist from its violation of this subsection 
        or regulations prescribed under this subsection.
  (r) Institution-Affiliated Party Defined.--For purposes of 
this Act, the term ``institution-affiliated party'' means--
          (1) any committee member, director, officer, or 
        employee of, or agent for, an insured credit union;
          (2) any consultant, joint venture partner, and any 
        other person as determined by the Board (by regulation 
        or on a case-by-case basis) who participates in the 
        conduct of the affairs of an insured credit union; and
          (3) any independent contractor (including any 
        attorney, appraiser, or accountant) who knowingly or 
        recklessly participates in--
                  (A) any violation of any law or regulation;
                  (B) any breach of fiduciary duty; or
                  (C) any unsafe or unsound practice,
        which caused or is likely to cause more than a minimal 
        financial loss to, or a significant adverse effect on, 
        the insured credit union.
  (s) Public Disclosure of Agency Action.--
          (1) In general.--The Board shall publish and make 
        available to the public on a monthly basis--
                  (A) any written agreement or other written 
                statement for which a violation may be enforced 
                by the Board, unless the Board, in its 
                discretion, determines that publication would 
                be contrary to the public interest;
                  (B) any final order issued with respect to 
                any administrative enforcement proceeding 
                initiated by the Board under this section or 
                any other law; and
                  (C) any modification to or termination of any 
                order or agreement made public pursuant to this 
                paragraph.
          (2) Hearings.--All hearings on the record with 
        respect to any notice of charges issued by the Board 
        shall be open to the public, unless the agency, in its 
        discretion, determines that holding an open hearing 
        would be contrary to the public interest.
          (3) Reports to congress.--A written report shall be 
        made part of a determination not to hold a public 
        hearing pursuant to paragraph (2) or not to publish a 
        document pursuant to paragraph (1)(A). At the end of 
        each calendar quarter, all such reports shall be 
        transmitted to the Congress.
          (4) Transcript of hearing.--A transcript that 
        includes all testimony and other documentary evidence 
        shall be prepared for all hearings commenced pursuant 
        to subsection (k). A transcript of public hearings 
        shall be made available to the public pursuant to 
        section 552 of title 5, United States Code.
          (5) Delay of publication under exceptional 
        circumstances.--If the Board makes a determination in 
        writing that the publication of a final order pursuant 
        to paragraph (1)(B) would seriously threaten the safety 
        and soundness of an insured depository institution, the 
        agency may delay the publication of the document for a 
        reasonable time.
          (6) Documents filed under seal in public enforcement 
        hearings.--The Board may file any document or part of a 
        document under seal in any administrative enforcement 
        hearing commenced by the agency if disclosure of the 
        document would be contrary to the public interest. A 
        written report shall be made part of any determination 
        to withhold any part of a document from the transcript 
        of the hearing required by paragraph (2).
          (7) Retention of documents.--The Board shall keep and 
        maintain a record, for a period of at least 6 years, of 
        all documents described in paragraph (1) and all 
        informal enforcement agreements and other supervisory 
        actions and supporting documents issued with respect to 
        or in connection with any administrative enforcement 
        proceeding initiated by such agency under this section 
        or any other laws.
          (8) Disclosures to congress.--No provision of this 
        subsection may be construed to authorize the 
        withholding, or to prohibit the disclosure, of any 
        information to the Congress or any committee or 
        subcommittee of the Congress.
          (9) Preservation of records.--
                  (A) In general.--The Board may cause any and 
                all records, papers, or documents kept by the 
                Administration or in the possession or custody 
                of the Administration to be--
                          (i) photographed or microphotographed 
                        or otherwise reproduced upon film; or
                          (ii) preserved in any electronic 
                        medium or format which is capable of--
                                  (I) being read or scanned by 
                                computer; and
                                  (II) being reproduced from 
                                such electronic medium or 
                                format by printing or any other 
                                form of reproduction of 
                                electronically stored data.
                  (B) Treatment as original records.--Any 
                photographs, micrographs, or photographic film 
                or copies thereof described in subparagraph 
                (A)(i) or reproduction of electronically stored 
                data described in subparagraph (A)(ii) shall be 
                deemed to be an original record for all 
                purposes, including introduction in evidence in 
                all State and Federal courts or administrative 
                agencies, and shall be admissible to prove any 
                act, transaction, occurrence, or event therein 
                recorded.
                  (C) Authority of the administration.--Any 
                photographs, microphotographs, or photographic 
                film or copies thereof described in 
                subparagraph (A)(i) or reproduction of 
                electronically stored data described in 
                subparagraph (A)(ii) shall be preserved in such 
                manner as the Administration shall prescribe, 
                and the original records, papers, or documents 
                may be destroyed or otherwise disposed of as 
                the Administration may direct.
  (t) Regulation of Certain Forms of Benefits to Institution-
Affiliated Parties.--
          (1) Golden parachutes and indemnification payments.--
        The Board may prohibit or limit, by regulation or 
        order, any golden parachute payment or indemnification 
        payment.
          (2) Factors to be taken into account.--The Board 
        shall prescribe, by regulation, the factors to be 
        considered by the Board in taking any action pursuant 
        to paragraph (1) which may include such factors as the 
        following:
                  (A) Whether there is a reasonable basis to 
                believe that the institution-affiliated party 
                has committed any fraudulent act or omission, 
                breach of trust or fiduciary duty, or insider 
                abuse with regard to the credit union that has 
                had a material affect on the financial 
                condition of the credit union.
                  (B) Whether there is a reasonable basis to 
                believe that the institution-affiliated party 
                is substantially responsible for the insolvency 
                of the credit union, the appointment of a 
                conservator or liquidating agent for the credit 
                union, or the credit union's troubled condition 
                (as defined in regulations prescribed by the 
                Board pursuant to paragraph (4)(A)(ii)(III)).
                  (C) Whether there is a reasonable basis to 
                believe that the institution-affiliated party 
                has materially violated any applicable Federal 
                or State banking law or regulation that has had 
                a material effect on the financial condition of 
                the credit union.
                  (D) Whether there is a reasonable basis to 
                believe that the institution-affiliated party 
                has violated or conspired to violate--
                          (i) section 215, 656, 657, 1005, 
                        1006, 1007, 1014, 1032, or 1344 of 
                        title 18, United States Code; or
                          (ii) section 1341 or 1343 of such 
                        title affecting a financial 
                        institution.
                  (E) Whether the institution-affiliated party 
                was in a position of managerial or fiduciary 
                responsibility.
                  (F) The length of time the party was 
                affiliated with the credit union and the degree 
                to which--
                          (i) the payment reasonably reflects 
                        compensation earned over the period of 
                        employment; and
                          (ii) the compensation involved 
                        represents a reasonable payment for 
                        services rendered.
          (3) Certain payments prohibited.--No credit union may 
        prepay the salary or any liability or legal expense of 
        any institution-affiliated party if such payment is 
        made--
                  (A) in contemplation of the insolvency of 
                such credit union or after the commission of an 
                act of insolvency; and
                  (B) with a view to, or has the result of--
                          (i) preventing the proper application 
                        of the assets of the credit union; or
                          (ii) preferring one creditor over 
                        another.
          (4) Golden parachute payment defined.--For purposes 
        of this subsection--
                  (A) In general.--The term ``golden parachute 
                payment'' means any payment (or any agreement 
                to make any payment) in the nature of 
                compensation by any credit union for the 
                benefit of any institution-affiliated party 
                pursuant to an obligation of such credit union 
                that--
                          (i) is contingent on the termination 
                        of such party's affiliation with the 
                        credit union; and
                          (ii) is received on or after the date 
                        on which--
                                  (I) the credit union is 
                                insolvent;
                                  (II) any conservator or 
                                liquidating agent is appointed 
                                for such credit union;
                                  (III) the Board determines 
                                that the credit union is in a 
                                troubled condition (as defined 
                                in regulations which the Board 
                                shall prescribe);
                                  (IV) the credit union has 
                                been assigned a composite 
                                rating by the Board of 4 or 5 
                                under the Uniform Financial 
                                Institutions Rating System (as 
                                applicable with respect to 
                                credit unions); or
                                  (V) the credit union is 
                                subject to a proceeding 
                                initiated by the Board to 
                                terminate or suspend deposit 
                                insurance for such credit 
                                union.
                  (B) Certain payments in contemplation of an 
                event.--Any payment which would be a golden 
                parachute payment but for the fact that such 
                payment was made before the date referred to in 
                subparagraph (A)(ii) shall be treated as a 
                golden parachute payment if the payment was 
                made in contemplation of the occurrence of an 
                event described in any subclause of such 
                subparagraph.
                  (C) Certain payments not included.--The term 
                ``golden parachute payment'' shall not 
                include--
                          (i) any payment made pursuant to a 
                        retirement plan which is qualified (or 
                        is intended to be qualified) under 
                        section 401 of the Internal Revenue 
                        Code of 1986 or other nondiscriminatory 
                        retirement or severance benefit plan;
                          (ii) any payment made pursuant to a 
                        bona fide deferred compensation plan or 
                        arrangement which the Board determines, 
                        by regulation or order, to be 
                        permissible; or
                          (iii) any payment made by reason of 
                        the death or disability of an 
                        institution-affiliated party.
          (5) Other definitions.--For purposes of this 
        subsection--
                  (A) Indemnification payment.--Subject to 
                paragraph (6), the term ``indemnification 
                payment'' means any payment (or any agreement 
                to make any payment) by any credit union for 
                the benefit of any person who is or was an 
                institution-affiliated party, to pay or 
                reimburse such person for any liability or 
                legal expense with regard to any administrative 
                proceeding or civil action instituted by the 
                Board which results in a final order under 
                which such person--
                          (i) is assessed a civil money 
                        penalty;
                          (ii) is removed or prohibited from 
                        participating in conduct of the affairs 
                        of the credit union; or
                          (iii) is required to take any 
                        affirmative action described in section 
                        206(e)(3) with respect to such credit 
                        union.
                  (B) Liability or legal expense.--The term 
                ``liability or legal expense'' means--
                          (i) any legal or other professional 
                        expense incurred in connection with any 
                        claim, proceeding, or action;
                          (ii) the amount of, and any cost 
                        incurred in connection with, any 
                        settlement of any claim, proceeding, or 
                        action; and
                          (iii) the amount of, and any cost 
                        incurred in connection with, any 
                        judgment or penalty imposed with 
                        respect to any claim, proceeding, or 
                        action.
                  (C) Payment.--The term ``payment'' includes--
                          (i) any direct or indirect transfer 
                        of any funds or any asset; and
                          (ii) any segregation of any funds or 
                        assets for the purpose of making, or 
                        pursuant to an agreement to make, any 
                        payment after the date on which such 
                        funds or assets are segregated, without 
                        regard to whether the obligation to 
                        make such payment is contingent on--
                                  (I) the determination, after 
                                such date, of the liability for 
                                the payment of such amount; or
                                  (II) the liquidation, after 
                                such date, of the amount of 
                                such payment.
          (6) Certain commercial insurance coverage not treated 
        as covered benefit payment.--No provision of this 
        subsection shall be construed as prohibiting any credit 
        union from purchasing any commercial insurance policy 
        or fidelity bond, except that, subject to any 
        requirement described in paragraph (5)(A)(iii), such 
        insurance policy or bond shall not cover any legal or 
        liability expense of the credit union which is 
        described in paragraph (5)(A).
  (u) Foreign Investigations.--
          (1) Requesting assistance from foreign banking 
        authorities.--In conducting any investigation, 
        examination, or enforcement action under this Act, the 
        Board may--
                  (A) request the assistance of any foreign 
                banking authority; and
                  (B) maintain an office outside the United 
                States.
          (2) Providing assistance to foreign banking 
        authorities.--
                  (A) In general.--The Board may, at the 
                request of any foreign banking authority, 
                assist such authority if such authority states 
                that the requesting authority is conducting an 
                investigation to determine whether any person 
                has violated, is violating, or is about to 
                violate any law or regulation relating to 
                banking matters or currency transactions 
                administered or enforced by the requesting 
                authority.
                  (B) Investigation by federal banking 
                agency.--The Board may, in the Board's 
                discretion, investigate and collect information 
                and evidence pertinent to a request for 
                assistance under subparagraph (A). Any such 
                investigation shall comply with the laws of the 
                United States and the policies and procedures 
                of the Board.
                  (C) Factors to consider.--In deciding whether 
                to provide assistance under this paragraph, the 
                Board shall consider--
                          (i) whether the requesting authority 
                        has agreed to provide reciprocal 
                        assistance with respect to banking 
                        matters within the jurisdiction of the 
                        Board or any appropriate Federal 
                        banking agency; and
                          (ii) whether compliance with the 
                        request would prejudice the public 
                        interest of the United States.
                  (D) Treatment of foreign banking authority.--
                For purposes of any Federal law or Board 
                regulation relating to the collection or 
                transfer of information by the Board or any 
                appropriate Federal banking agency, the foreign 
                banking authority shall be treated as another 
                appropriate Federal banking agency.
          (3) Rule of construction.--Paragraphs (1) and (2) 
        shall not be construed to limit the authority of the 
        Board or any other Federal agency to provide or receive 
        assistance or information to or from any foreign 
        authority with respect to any matter.
  (v) Termination of Insurance for Money Laundering or Cash 
Transaction Reporting Offenses.--
          (1) In general.--
                  (A) Conviction of title 18 offenses.--
                          (i) Duty to notify.--If an insured 
                        State credit union has been convicted 
                        of any criminal offense under section 
                        1956 or 1957 of title 18, United States 
                        Code, the Attorney General shall 
                        provide to the Board a written 
                        notification of the conviction and 
                        shall include a certified copy of the 
                        order of conviction from the court 
                        rendering the decision.
                          (ii) Notice of termination.--After 
                        written notification from the Attorney 
                        General to the Board of such a 
                        conviction, the Board shall issue to 
                        such insured credit union a notice of 
                        its intention to terminate the insured 
                        status of the insured credit union and 
                        schedule a hearing on the matter, which 
                        shall be conducted as a termination 
                        hearing pursuant to subsection (b) of 
                        this section, except that no period for 
                        correction shall apply to a notice 
                        issued under this subparagraph.
                  (B) Conviction of title 31 offenses.--If a 
                credit union is convicted of any criminal 
                offense under section 5322 or 5324 of title 31, 
                United States Code, after prior written 
                notification from the Attorney General, the 
                Board may initiate proceedings to terminate the 
                insured status of such credit union in the 
                manner described in subparagraph (A).
                  (C) Notice to state supervisor.--The Board 
                shall simultaneously transmit a copy of any 
                notice under this paragraph to the appropriate 
                State financial institutions supervisor.
          (2) Factors to be considered.--In determining whether 
        to terminate insurance under paragraph (1), the Board 
        shall take into account the following factors:
                  (A) The extent to which directors, committee 
                members, or senior executive officers (as 
                defined by the Board in regulations which the 
                Board shall prescribe) of the credit union knew 
                of, or were involved in, the commission of the 
                money laundering offense of which the credit 
                union was found guilty.
                  (B) The extent to which the offense occurred 
                despite the existence of policies and 
                procedures within the credit union which were 
                designed to prevent the occurrence of any such 
                offense.
                  (C) The extent to which the credit union has 
                fully cooperated with law enforcement 
                authorities with respect to the investigation 
                of the money laundering offense of which the 
                credit union was found guilty.
                  (D) The extent to which the credit union has 
                implemented additional internal controls (since 
                the commission of the offense of which the 
                credit union was found guilty) to prevent the 
                occurrence of any other money laundering 
                offense.
                  (E) The extent to which the interest of the 
                local community in having adequate deposit and 
                credit services available would be threatened 
                by the termination of insurance.
          (3) Notice to state credit union supervisor and 
        public.--When the order to terminate insured status 
        initiated pursuant to this subsection is final, the 
        Board shall--
                  (A) notify the commission, board, or 
                authority (if any) having supervision of the 
                credit union described in paragraph (1) at 
                least 10 days prior to the effective date of 
                the order of the termination of the insured 
                status of such credit union; and
                  (B) publish notice of the termination of the 
                insured status of the credit union.
          (4) Temporary insurance of previously insured 
        deposits.--Upon termination of the insured status of 
        any State credit union pursuant to paragraph (1), the 
        deposits of such credit union shall be treated in 
        accordance with section 206(d)(2).
          (5) Successor liability.--This subsection shall not 
        apply to a successor to the interests of, or a person 
        who acquires, an insured credit union that violated a 
        provision of law described in paragraph (1), if the 
        successor succeeds to the interests of the violator, or 
        the acquisition is made, in good faith and not for 
        purposes of evading this subsection or regulations 
        prescribed under this subsection.
  (w) One-Year Restrictions on Federal Examiners of Insured 
Credit Unions.--
          (1) In general.--In addition to other applicable 
        restrictions set forth in title 18, United States Code, 
        the penalties set forth in paragraph (5) of this 
        subsection shall apply to any person who--
                  (A) was an officer or employee (including any 
                special Government employee) of the 
                Administration;
                  (B) served 2 or more months during the final 
                12 months of his or her employment with the 
                Administration as the senior examiner (or a 
                functionally equivalent position) of an insured 
                credit union with continuing, broad 
                responsibility for the examination (or 
                inspection) of that insured credit union on 
                behalf of the Administration; and
                  (C) within 1 year after the termination date 
                of his or her service or employment with the 
                Administration, knowingly accepts compensation 
                as an employee, officer, director, or 
                consultant from such insured credit union.
          (2) Rule of construction.--For purposes of this 
        subsection, a person shall be deemed to act as a 
        consultant for an insured credit union only if such 
        person directly works on matters for, or on behalf of, 
        such insured credit union.
          (3) Regulations.--
                  (A) In general.--The Board shall prescribe 
                rules or regulations to administer and carry 
                out this subsection, including rules, 
                regulations, or guidelines to define the scope 
                of persons referred to in paragraph (1)(B).
                  (B) Consultation.--In prescribing rules or 
                regulations under this paragraph, the Board 
                shall, to the extent it deems necessary, 
                consult with the Federal banking agencies (as 
                defined in section 3 of the Federal Deposit 
                Insurance Act) on regulations issued by such 
                agencies in carrying out section 10(k) of the 
                Federal Deposit Insurance Act.
          (4) Waiver.--The Board may grant a waiver, on a case 
        by case basis, of the restriction imposed by this 
        subsection to any officer or employee (including any 
        special Government employee) of the Administration if 
        the Chairman certifies in writing that granting the 
        waiver would not affect the integrity of the 
        supervisory program of the Administration.
          (5) Penalties.--
                  (A) In general.--In addition to any other 
                administrative, civil, or criminal remedy or 
                penalty that may otherwise apply, whenever the 
                Board determines that a person subject to 
                paragraph (1) has become associated, in the 
                manner described in paragraph (1)(C), with an 
                insured credit union, the Board shall impose 
                upon such person one or more of the following 
                penalties:
                          (i) Industry-wide prohibition 
                        order.--The Board shall serve a written 
                        notice or order in accordance with and 
                        subject to the provisions of subsection 
                        (g)(4) for written notices or orders 
                        under paragraph (1) or (2) of 
                        subsection (g), upon such person of the 
                        intention of the Board--
                                  (I) to remove such person 
                                from office or to prohibit such 
                                person from further 
                                participation in the conduct of 
                                the affairs of the insured 
                                credit union for a period of up 
                                to 5 years; and
                                  (II) to prohibit any further 
                                participation by such person, 
                                in any manner, in the conduct 
                                of the affairs of any insured 
                                credit union for a period of up 
                                to 5 years.
                          (ii) Civil monetary penalty.--The 
                        Board may, in an administrative 
                        proceeding or civil action in an 
                        appropriate United States district 
                        court, impose on such person a civil 
                        monetary penalty of not more than 
                        $250,000. Any administrative proceeding 
                        under this clause shall be conducted in 
                        accordance with subsection (k). In lieu 
                        of an action by the Board under this 
                        clause, the Attorney General of the 
                        United States may bring a civil action 
                        under this clause in the appropriate 
                        United States district court.
                  (B) Scope of prohibition order.--Any person 
                subject to an order issued under this 
                subparagraph (A)(i) shall be subject to 
                paragraphs (5) and (7) of subsection (g) in the 
                same manner and to the same extent as a person 
                subject to an order issued under subsection 
                (g).

           *       *       *       *       *       *       *


                       administrative provisions

  Sec. 209. (a) In carrying out the purposes of this title, the 
Board may--
          (1) make contracts;
          (2) sue and be sued, complain and defend, in any 
        court of law or equity, State or Federal. All suits of 
        a civil nature at common law or in equity to which the 
        Board shall be a party shall be deemed to arise under 
        the laws of the United States, and the United States 
        district courts shall have original jurisdiction 
        thereof, without regard to the amount in controversy. 
        The Board may, without bond or security, remove any 
        such action, suit, or proceeding from a State court to 
        the United States district court for the district or 
        division embracing the place where the same is pending 
        by following any procedure for removal now or hereafter 
        in effect, except that any such suit to which the Board 
        is a party in its capacity as liquidating agent of a 
        State-chartered credit union and which involves only 
        the rights or obligations of members, creditors, and 
        such State credit union under State law shall not be 
        deemed to arise under the laws of the United States. No 
        attachment or execution shall be issued against the 
        Board or its property before final judgment in any 
        suit, action, or proceeding in any State, county, 
        municipal, or United States court. The Board shall 
        designate an agent upon whom service of process may be 
        made in any State, territory, or jurisdiction in which 
        any insured credit union is located;
          (3) pursue to final disposition by way of compromise 
        or otherwise claims both for and against the United 
        States (other than tort claims, claims involving 
        administrative expenses, and claims in excess of $5,000 
        arising out of contracts for construction, repairs, and 
        the purchase of supplies and materials) which are not 
        in litigation and have not been referred to the 
        Department of Justice;
          (4) to appoint such officers and employees as are not 
        otherwise provided for in this Act, to define their 
        duties, fix their compensation, require bonds of them 
        and fix the penalty thereof, and to dismiss at pleasure 
        such officers or employees. Nothing in this or any 
        other Act shall be construed to prevent the appointment 
        and compensation as an officer or employee of the 
        Administration of any officer or employee of the United 
        States in any board, commission, independent 
        establishment, or executive department thereof;
          (5) employ experts and consultants or organizations 
        thereof, as authorized by section 15 of the 
        Administrative Expenses Act of 1946 (5 U.S.C. 55a);
          (6) prescribe the manner in which its general 
        business may be conducted and the privileges granted to 
        them by law may be exercised and enjoyed;
          (7) exercise all powers specifically granted by the 
        provisions of this title and such incidental powers as 
        shall be necessary to carry out the powers so granted;
          (8) make examinations of and require information and 
        reports from insured credit unions, as provided in this 
        title;
          (9) act as liquidating agent;
          (10) delegate to any officer or employee of the 
        Administration such of its functions as it deems 
        appropriate; and
          (11) prescribe such rules and regulations as it may 
        deem necessary or appropriate to carry out the 
        provisions of this title.
  (b) With respect to the financial operations arising by 
reason of this title, the Board shall--
          (1) on an annual basis and prior to the submission of 
        the detailed business-type budget required under 
        paragraph (2)--
                  (A) make publicly available and cause to be 
                printed in the Federal Register a draft of such 
                detailed business-type budget; and
                  (B) hold a public hearing, with public notice 
                provided of such hearing, wherein the public 
                can submit comments on the draft of such 
                detailed business-type budget;
          [(1)] (2) prepare annually and submit a detailed 
        business-type budget as provided for wholly owned 
        Government corporations by the Government Corporation 
        Control Act, and where such budget shall address any 
        comments submitted by the public pursuant to paragraph 
        (1)(B); and
          [(2)] (3) maintain an integral set of accounts, which 
        shall be audited annually by the General Accounting 
        Office in accordance with principles and procedures 
        applicable to commercial corporate transactions, as 
        provided by section 105 of the Government Corporation 
        Control Act.

           *       *       *       *       *       *       *

                              ----------                              


REVISED STATUTES OF THE UNITED STATES

           *       *       *       *       *       *       *



TITLE LXII--NATIONAL BANKS.

           *       *       *       *       *       *       *


                 CHAPTER ONE--ORGANIZATION AND POWERS.

Sec.
5133. Formation of national banking associations.
     * * * * * * *
5156B. International processes.

           *       *       *       *       *       *       *


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

  (a) Definitions.--For purposes of this section, the following 
definitions shall apply:
          (1) National bank.--The term ``national bank'' 
        includes--
                  (A) any bank organized under the laws of the 
                United States; and
                  (B) any Federal branch established in 
                accordance with the International Banking Act 
                of 1978.
          (2) State consumer financial laws.--The term ``State 
        consumer financial law'' means a State law that does 
        not directly or indirectly discriminate against 
        national banks and that directly and specifically 
        regulates the manner, content, or terms and conditions 
        of any financial transaction (as may be authorized for 
        national banks to engage in), or any account related 
        thereto, with respect to a consumer.
          (3) Other definitions.--The terms ``affiliate'', 
        ``subsidiary'', ``includes'', and ``including'' have 
        the same meanings as in section 3 of the Federal 
        Deposit Insurance Act.
  (b) Preemption Standard.--
          (1) In general.--State consumer financial laws are 
        preempted, only if--
                  (A) application of a State consumer financial 
                law would have a discriminatory effect on 
                national banks, in comparison with the effect 
                of the law on a bank chartered by that State;
                  (B) in accordance with the legal standard for 
                preemption in the decision of the Supreme Court 
                of the United States in Barnett Bank of Marion 
                County, N. A. v. Nelson, Florida Insurance 
                Commissioner, et al., 517 U.S. 25 (1996), the 
                State consumer financial law prevents or 
                significantly interferes with the exercise by 
                the national bank of its powers; and any 
                preemption determination under this 
                subparagraph may be made by a court, or by 
                regulation or order of the Comptroller of the 
                Currency on a case-by-case basis, in accordance 
                with applicable law; or
                  (C) the State consumer financial law is 
                preempted by a provision of Federal law other 
                than this title.
          (2) Savings clause.--This title and section 24 of the 
        Federal Reserve Act (12 U.S.C. 371) do not preempt, 
        annul, or affect the applicability of any State law to 
        any subsidiary or affiliate of a national bank (other 
        than a subsidiary or affiliate that is chartered as a 
        national bank).
          (3) Case-by-case basis.--
                  (A) Definition.--As used in this section the 
                term ``case-by-case basis'' refers to a 
                determination pursuant to this section made by 
                the Comptroller concerning the impact of a 
                particular State consumer financial law on any 
                national bank that is subject to that law, or 
                the law of any other State with substantively 
                equivalent terms.
                  (B) Consultation.--When making a 
                determination on a case-by-case basis that a 
                State consumer financial law of another State 
                has substantively equivalent terms as one that 
                the Comptroller is preempting, the Comptroller 
                shall first consult with the [Bureau of 
                Consumer Financial Protection] Consumer Law 
                Enforcement Agency and shall take the views of 
                the Bureau into account when making the 
                determination.
          (4) Rule of construction.--This title does not occupy 
        the field in any area of State law.
          (5) Standards of review.--
                  (A) Preemption.--A court reviewing any 
                determinations made by the Comptroller 
                regarding preemption of a State law by this 
                title or section 24 of the Federal Reserve Act 
                (12 U.S.C. 371) shall assess the validity of 
                such determinations, depending upon the 
                thoroughness evident in the consideration of 
                the agency, the validity of the reasoning of 
                the agency, the consistency with other valid 
                determinations made by the agency, and other 
                factors which the court finds persuasive and 
                relevant to its decision.
                  (B) Savings clause.--Except as provided in 
                subparagraph (A), nothing in this section shall 
                affect the deference that a court may afford to 
                the Comptroller in making determinations 
                regarding the meaning or interpretation of 
                title LXII of the Revised Statutes of the 
                United States or other Federal laws.
          (6) Comptroller determination not delegable.--Any 
        regulation, order, or determination made by the 
        Comptroller of the Currency under paragraph (1)(B) 
        shall be made by the Comptroller, and shall not be 
        delegable to another officer or employee of the 
        Comptroller of the Currency.
  (c) Substantial Evidence.--No regulation or order of the 
Comptroller of the Currency prescribed under subsection 
(b)(1)(B), shall be interpreted or applied so as to invalidate, 
or otherwise declare inapplicable to a national bank, the 
provision of the State consumer financial law, unless 
substantial evidence, made on the record of the proceeding, 
supports the specific finding regarding the preemption of such 
provision in accordance with the legal standard of the decision 
of the Supreme Court of the United States in Barnett Bank of 
Marion County, N.A. v. Nelson, Florida Insurance Commissioner, 
et al., 517 U.S. 25 (1996).
  (d) Periodic Review of Preemption Determinations.--
          (1) In general.--The Comptroller of the Currency 
        shall periodically conduct a review, through notice and 
        public comment, of each determination that a provision 
        of Federal law preempts a State consumer financial law. 
        The agency shall conduct such review within the 5-year 
        period after prescribing or otherwise issuing such 
        determination, and at least once during each 5-year 
        period thereafter. After conducting the review of, and 
        inspecting the comments made on, the determination, the 
        agency shall publish a notice in the Federal Register 
        announcing the decision to continue or rescind the 
        determination or a proposal to amend the determination. 
        Any such notice of a proposal to amend a determination 
        and the subsequent resolution of such proposal shall 
        comply with the procedures set forth in subsections (a) 
        and (b) of section 5244 of the Revised Statutes of the 
        United States (12 U.S.C. 43 (a), (b)).
          (2) Reports to congress.--At the time of issuing a 
        review conducted under paragraph (1), the Comptroller 
        of the Currency shall submit a report regarding such 
        review to the Committee on Financial Services of the 
        House of Representatives and the Committee on Banking, 
        Housing, and Urban Affairs of the Senate. The report 
        submitted to the respective committees shall address 
        whether the agency intends to continue, rescind, or 
        propose to amend any determination that a provision of 
        Federal law preempts a State consumer financial law, 
        and the reasons therefor.
  (e) Application of State Consumer Financial Law to 
Subsidiaries and Affiliates.--Notwithstanding any provision of 
this title or section 24 of Federal Reserve Act (12 U.S.C. 
371), a State consumer financial law shall apply to a 
subsidiary or affiliate of a national bank (other than a 
subsidiary or affiliate that is chartered as a national bank) 
to the same extent that the State consumer financial law 
applies to any person, corporation, or other entity subject to 
such State law.
  (f) Preservation of Powers Related to Charging Interest.--No 
provision of this title shall be construed as altering or 
otherwise affecting the authority conferred by section 5197 of 
the Revised Statutes of the United States (12 U.S.C. 85) for 
the charging of interest by a national bank at the rate allowed 
by the laws of the State, territory, or district where the bank 
is located, including with respect to the meaning of 
``interest'' under such provision.
  (g) Transparency of OCC Preemption Determinations.--The 
Comptroller of the Currency shall publish and update no less 
frequently than quarterly, a list of preemption determinations 
by the Comptroller of the Currency then in effect that 
identifies the activities and practices covered by each 
determination and the requirements and constraints determined 
to be preempted.
  (h) Clarification of Law Applicable to Nondepository 
Institution Subsidiaries and Affiliates of National Banks.--
          (1) Definitions.--For purposes of this subsection, 
        the terms ``depository institution'', ``subsidiary'', 
        and ``affiliate'' have the same meanings as in section 
        3 of the Federal Deposit Insurance Act.
          (2) Rule of construction.--No provision of this title 
        or section 24 of the Federal Reserve Act (12 U.S.C. 
        371) shall be construed as preempting, annulling, or 
        affecting the applicability of State law to any 
        subsidiary, affiliate, or agent of a national bank 
        (other than a subsidiary, affiliate, or agent that is 
        chartered as a national bank).
  (i) Visitorial [Powers.--]
          [(1) In general.--In accordance] Powers._In 
        accordance with the decision of the Supreme Court of 
        the United States in Cuomo v. Clearing House Assn., L. 
        L. C. (129 S. Ct. 2710 (2009)), no provision of this 
        title which relates to visitorial powers or otherwise 
        limits or restricts the visitorial authority to which 
        any national bank is subject shall be construed as 
        limiting or restricting the authority of any attorney 
        general (or other chief law enforcement officer) of any 
        State to bring an action against a national bank in a 
        court of appropriate jurisdiction to enforce an 
        applicable law and to seek relief as authorized by such 
        law.
  (j) Enforcement Actions.--The ability of the Comptroller of 
the Currency to bring an enforcement action under this title or 
section 5 of the Federal Trade Commission Act does not preclude 
any private party from enforcing rights granted under Federal 
or State law in the courts.

           *       *       *       *       *       *       *


SEC. 5156B. INTERNATIONAL PROCESSES.

  (a) Notice of Process; Consultation.--At least 30 calendar 
days before the Comptroller of the Currency participates in a 
process of setting financial standards as a part of any foreign 
or multinational entity, the Board of Directors shall--
          (1) issue a notice of the process, including the 
        subject matter, scope, and goals of the process, to the 
        Committee on Financial Services of the House of 
        Representatives and the Committee on Banking, Housing, 
        and Urban Affairs of the Senate;
          (2) make such notice available to the public, 
        including on the website of the Office of the 
        Comptroller of the Currency; and
          (3) solicit public comment, and consult with the 
        committees described under paragraph (1), with respect 
        to the subject matter, scope, and goals of the process.
  (b) Public Reports on Process.--After the end of any process 
described under subsection (a), the Board of Directors shall 
issue a public report on the topics that were discussed at the 
process and any new or revised rulemakings or policy changes 
that the Board of Directors believes should be implemented as a 
result of the process.
  (c) Notice of Agreements; Consultation.--At least 90 calendar 
days before the Board of Directors participates in a process of 
setting financial standards as a part of any foreign or 
multinational entity, the Board of Directors shall--
          (1) issue a notice of agreement to the Committee on 
        Financial Services of the House of Representatives and 
        the Committee on Banking, Housing, and Urban Affairs of 
        the Senate;
          (2) make such notice available to the public, 
        including on the website of the Office of the 
        Comptroller of the Currency; and
          (3) consult with the committees described under 
        paragraph (1) with respect to the nature of the 
        agreement and any anticipated effects such agreement 
        will have on the economy.
  (d) Definition.--For purposes of this section, the term 
``process'' shall include any official proceeding or meeting on 
financial regulation of a recognized international organization 
with authority to set financial standards on a global or 
regional level, including the Financial Stability Board, the 
Basel Committee on Banking Supervision (or a similar 
organization), and the International Association of Insurance 
Supervisors (or a similar organization).

           *       *       *       *       *       *       *


CHAPTER THREE--REGULATION OF THE BANKING BUSINESS.

           *       *       *       *       *       *       *


  Sec. 5197. Any association may take, receive, reserve, and 
charge on any loan or discount made, or upon any notes, bills 
of exchange, or other evidences of debt, interest at the rate 
allowed by the laws of the State, Territory, or District where 
the bank is located, or at a rate of 1 per centum in excess of 
the discount rate on ninety-day commercial paper in effect at 
the Federal reserve bank in the Federal reserve district where 
the bank is located, whichever may be the greater, and no more, 
except that where by the laws of any State a different rate is 
limited for banks organized under State laws, the rate so 
limited shall be allowed for associations organized or existing 
in any such State under this title. When no rate is fixed by 
the laws of the State, or Territory, or District, the bank may 
take, receive, reserve, or charge a rate not exceeding 7 per 
centum, or 1 per centum in excess of the discount rate on 
ninety-day commercial paper in effect at the Federal reserve 
bank in the Federal reserve district where the bank is located, 
whichever may be the greater, and such interest may be taken in 
advance, reckoning the days for which the note, bill, or other 
evidence of debt has to run. The maximum amount of interest or 
discount to be charged at a branch of an association located 
outside of the States of the United States and the District of 
Columbia shall be at the rate allowed by the laws of the 
country, territory, dependency, province, dominion, insular 
possession, or other political subdivision where the branch is 
located. And the purchase, discount, or sale of a bona-fide 
bill of exchange, payable at another place than the place of 
such purchase, discount, or sale, at not more than the current 
rate of exchange for sight-drafts in addition to the interest, 
shall not be considered as taking or receiving a greater rate 
of interest. A loan that is valid when made as to its maximum 
rate of interest in accordance with this section shall remain 
valid with respect to such rate regardless of whether the loan 
is subsequently sold, assigned, or otherwise transferred to a 
third party, and may be enforced by such third party 
notwithstanding any State law to the contrary.

           *       *       *       *       *       *       *


SEC. 5213. PENALTY FOR FAILURE TO MAKE REPORTS.

  (a) First Tier.--Any association which--
          (1) maintains procedures reasonably adapted to avoid 
        any inadvertent error and, unintentionally and as a 
        result of such an error--
                  (A) fails to make, obtain, transmit, or 
                publish any report or information required by 
                the Comptroller of the Currency under section 
                5211 of this chapter, within the period of time 
                specified by the Comptroller; or
                  (B) submits or publishes any false or 
                misleading report or information; or
          (2) inadvertently transmits or publishes any report 
        which is minimally late,
shall be subject to a penalty of not more than $2,000 for each 
day during which such failure continues or such false or 
misleading information is not corrected. The association shall 
have the burden of proving that an error was inadvertent and 
that a report was inadvertently transmitted or published late.
  (b) Second Tier.--Any association which--
          (1) fails to make, obtain, transmit, or publish any 
        report or information required by the Comptroller of 
        the Currency under section 5211 of this chapter, within 
        the period of time specified by the Comptroller; or
          (2) submits or publishes any false or misleading 
        report or information,
in a manner not described in subsection (a) shall be subject to 
a penalty of not more than $20,000 for each day during which 
such failure continues or such false or misleading information 
is not corrected.
  (c) Third Tier.--Notwithstanding subsections (a) and (b), if 
any association knowingly or with reckless disregard for the 
accuracy of any information or report described in subsection 
(b) submits or publishes any false or misleading report or 
information, the Comptroller may assess a penalty of not more 
than [$1,000,000] $1,500,000 or 1 percent of total assets of 
the association, whichever is less per day for each day during 
which such failure continues or such false or misleading 
information is not corrected.
  (d) Assessment, etc.--Any penalty imposed under subsection 
(a), (b), or (c) shall be assessed and collected by the 
Comptroller of the Currency in the manner provided in 
subparagraphs (E), (F), (G), and (I) of section 8(i)(2) of the 
Federal Deposit Insurance Act (for penalties imposed under such 
section) and any such assessment (including the determination 
of the amount of the penalty) shall be subject to the 
provisions of such section.
  (e) Hearing.--Any association against which any penalty is 
assessed under this subsection shall be afforded an agency 
hearing if such association submits a request for such hearing 
within 20 days after the issuance of the notice of assessment. 
Section 8(h) of the Federal Deposit Insurance Act shall apply 
to any proceeding under this section.

           *       *       *       *       *       *       *


CHAPTER FOUR--DISSOLUTION AND RECEIVERSHIP.

           *       *       *       *       *       *       *


  Sec. 5239. (a) If the directors of any national banking 
association shall knowingly violate, or knowingly permit any of 
the officers, agents, or servants of the association to violate 
any of the provisions of this Title, all the rights, 
privileges, and franchises of the association shall be thereby 
forfeited. Such violation shall, however, be determined and 
adjudged by a proper circuit, district, or territorial court of 
the United States, in a suit brought for that purpose by the 
Comptroller of the Currency, in his own name, before the 
association shall be declared dissolved. And in cases of such 
violation, every director who participated in or assented to 
the same shall be held liable in his personal and individual 
capacity for all damages which the association, its 
shareholders, or any other person, shall have sustained in 
consequence of such violation.
  (b) Civil Money Penalty.--
          (1) First tier.--Any national banking association 
        which, and any institution-affiliated party (within the 
        meaning of section 3(u) of the Federal Deposit 
        Insurance Act) with respect to such association who, 
        violates any provision of this title or any of the 
        provisions of the first section of the Act of September 
        28, 1962, (76 Stat. 668; 12 U.S.C. 92a), or any 
        regulation issued pursuant thereto, shall forfeit and 
        pay a civil penalty of not more than $5,000 for each 
        day during which such violation continues.
          (2) Second tier.--Notwithstanding paragraph (1), any 
        national banking association which, and any 
        institution-affiliated party within the meaning of 
        section 3(u) of the Federal Deposit Insurance Act) with 
        respect to such association who, commits any violation 
        described in paragraph (1) which--
                  (A)(i) commits any violation described in any 
                paragraph (1);
                  (ii) recklessly engages in an unsafe or 
                unsound practice in conducting the affairs of 
                such association; or
                  (iii) breaches any fiduciary duty;
                  (B) which violation, practice, or breach--
                          (i) is part of a pattern of 
                        misconduct;
                          (ii) causes or is likely to cause 
                        more than a minimal loss to such 
                        association; or
                          (iii) results in pecuniary gain or 
                        other benefit to such party.
        shall forfeit and pay a civil penalty of not more than 
        $25,000 for each day during which such violation, 
        practice, or breach continues.
          (3) Third tier.--Notwithstanding paragraphs (1) and 
        (2), any national banking association which, and any 
        institution-affiliated party (within the meaning of 
        section 3(u) of the Federal Deposit Insurance Act) with 
        respect to such association who--
                  (A) knowingly--
                          (i) commits any violation described 
                        in paragraph (1);
                          (ii) engages in any unsafe or unsound 
                        practice in conducting the affairs of 
                        such association; or
                          (iii) breaches any fiduciary duty; 
                        and
                  (B) knowingly or recklessly causes a 
                substantial loss to such association or a 
                substantial pecuniary gain or other benefit to 
                such party by reason of such violation, 
                practice, or breach,
                shall forfeit and pay a civil penalty in an 
                amount not to exceed the applicable maximum 
                amount determined under paragraph (4) for each 
                day during which such violation, practice, or 
                breach continues.
          (4) Maximum amounts of penalties for any violation 
        described in paragraph (3).--The maximum daily amount 
        of any civil penalty which may be assessed pursuant to 
        paragraph (3) for any violation, practice, or breach 
        described in such paragraph is--
                  (A) in the case of any person other than a 
                national banking association, an amount to not 
                exceed [$1,000,000] $1,500,000; and
                  (B) in the case of a national banking 
                association, an amount not to exceed the lesser 
                of--
                          (i) [$1,000,000] $1,500,000; or
                          (ii) 1 percent of the total assets of 
                        such association.
          (5) Assessment; etc.--Any penalty imposed under 
        paragraph (1), (2), or (3) shall be assessed and 
        collected by the Comptroller of the Currency in the 
        manner provided in subparagraphs (E), (F), (G), and (I) 
        of section 8(i)(2) of the Federal Deposit Insurance Act 
        for penalties imposed (under such section) and any such 
        assessment shall be subject to the provisions of such 
        section.
          (6) Hearing.--The association or other person against 
        whom any penalty is assessed under this subsection 
        shall be afforded an agency hearing if such association 
        or person submits a request for such hearing within 20 
        days after the issuance of the notice of assessment. 
        Section 8(h) of the Federal Deposit Insurance Act shall 
        apply to any proceeding under this subsection.
          (7) Disbursement.--All penalties collected under 
        authority of this subsection shall be deposited into 
        the Treasury.
          (8) Violate defined.--For purposes of this section, 
        the term ``violate'' includes any action (alone or with 
        another or others) for or toward causing, bringing 
        about, participating in, counseling, or aiding or 
        abetting a violation.
          (12) Regulations.--The Comptroller shall prescribe 
        regulations establishing such procedures as may be 
        necessary to carry out this subsection.
  (c) Notice Under This Section After Separation From Service--
The resignation, termination of employment or participation, or 
separation of an institution-affiliated party (within the 
meaning of section 3(u) of the Federal Deposit Insurance Act) 
with respect to such an association (including a separation 
caused by the closing of such an association) shall not affect 
the jurisdiction and authority of the Comptroller of the 
Currency to issue any notice and proceed under this section 
against any such party, if such notice is served before the end 
of the 6-year period beginning on the date such party ceased to 
be such a party with respect to such association (whether such 
date occurs before, on, or after the date of the enactment of 
this subsection).
  (d) Forfeiture of Franchise for Money Laundering or Cash 
Transaction Reporting Offenses.--
          (1) In general.--
                  (A) Conviction of title 18 offenses.--
                          (i) Duty to notify.--If a national 
                        bank, a Federal branch, or Federal 
                        agency has been convicted of any 
                        criminal offense under section 1956 or 
                        1957 of title 18, United States Code, 
                        the Attorney General shall provide to 
                        the Comptroller of the Currency a 
                        written notification of the conviction 
                        and shall include a certified copy of 
                        the order of conviction from the court 
                        rendering the decision.
                          (ii) Notice of termination; 
                        pretermination hearing.--After 
                        receiving written notification from the 
                        Attorney General of such a conviction, 
                        the Comptroller of the Currency shall 
                        issue to the national bank, Federal 
                        branch, or Federal agency a notice of 
                        the Comptroller's intention to 
                        terminate all rights, privileges, and 
                        franchises of the bank, Federal branch, 
                        or Federal agency and schedule a 
                        pretermination hearing.
                  (B) Conviction of title 31 offenses.--If a 
                national bank, a Federal branch, or a Federal 
                agency is convicted of any criminal offense 
                under section 5322 or 5324 of title 31, United 
                States Code, after receiving written 
                notification from the Attorney General, the 
                Comptroller of the Currency may issue to the 
                national bank, Federal branch, or Federal 
                agency a notice of the Comptroller's intention 
                to terminate all rights, privileges, and 
                franchises of the bank, Federal branch, or 
                Federal agency and schedule a pretermination 
                hearing.
                  (C) Judicial review.--Section 8(h) of the 
                Federal Deposit Insurance Act shall apply to 
                any proceeding under this subsection.
          (2) Factors to be considered.--In determining whether 
        a franchise shall be forfeited under paragraph (1), the 
        Comptroller of the Currency shall take into account the 
        following factors:
                  (A) The extent to which directors or senior 
                executive officers of the national bank, 
                Federal branch, or Federal agency knew of, or 
                were involved in, the commission of the money 
                laundering offense of which the bank, Federal 
                branch, or Federal agency was found guilty.
                  (B) The extent to which the offense occurred 
                despite the existence of policies and 
                procedures within the national bank, Federal 
                branch, or Federal agency which were designed 
                to prevent the occurrence of any such offense.
                  (C) The extent to which the national bank, 
                Federal branch, or Federal agency has fully 
                cooperated with law enforcement authorities 
                with respect to the investigation of the money 
                laundering offense of which the bank, Federal 
                branch, or Federal agency was found guilty.
                  (D) The extent to which the national bank, 
                Federal branch, or Federal agency has 
                implemented additional internal controls (since 
                the commission of the offense of which the 
                bank, Federal branch, or Federal agency was 
                found guilty) to prevent the occurrence of any 
                other money laundering offense.
                  (E) The extent to which the interest of the 
                local community in having adequate deposit and 
                credit services available would be threatened 
                by the forfeiture of the franchise.
          (3) Successor liability.--This subsection shall not 
        apply to a successor to the interests of, or a person 
        who acquires, a bank, a Federal branch, or a Federal 
        agency that violated a provision of law described in 
        paragraph (1), if the successor succeeds to the 
        interests of the violator, or the acquisition is made, 
        in good faith and not for purposes of evading this 
        subsection or regulations prescribed under this 
        subsection.
          (4) Definition.--The term ``senior executive 
        officer'' has the same meaning as in regulations 
        prescribed under section 32(f) of the Federal Deposit 
        Insurance Act.
  (d) Authority.--The Comptroller of the Currency may act in 
the Comptroller's own name and through the Comptroller's own 
attorneys in enforcing any provision of this title, regulations 
thereunder, or any other law or regulation, or in any action, 
suit, or proceeding to which the Comptroller of the Currency is 
a party.

           *       *       *       *       *       *       *

  [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, 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).]

SEC. 5240A. COLLECTION OF FEES; APPROPRIATIONS REQUIREMENT.

  (a) In General.--In establishing the amount of an assessment, 
fee, or charge collected from an entity under subsection (b), 
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.
  (b) Appropriations Requirement.--
          (1) Recovery of costs of annual appropriation.--The 
        Comptroller of the Currency shall impose and collect 
        assessments, fees, or other charges that are designed 
        to recover the costs to the Government of the annual 
        appropriation to the Office of the Comptroller of the 
        Currency by Congress.
          (2) Offsetting collections.--Assessments and other 
        fees described under paragraph (1) for any fiscal 
        year--
                  (A) shall be deposited and credited as 
                offsetting collections to the account providing 
                appropriations to the Office of the Comptroller 
                of the Currency; and
                  (B) except as provided in paragraph (3), 
                shall not be collected for any fiscal year 
                except to the extent provided in advance in 
                appropriation Acts.
          (3) Lapse of appropriation.--If on the first day of a 
        fiscal year an appropriation to the Office of the 
        Comptroller of the Currency has not been enacted, the 
        Comptroller of the Currency shall continue to collect 
        (as offsetting collections) the assessments and other 
        fees described under paragraph (1) at the rate in 
        effect during the preceding fiscal year, until 60 days 
        after the date such an appropriation is enacted.

           *       *       *       *       *       *       *

                              ----------                              


BANK HOLDING COMPANY ACT AMENDMENTS OF 1970

           *       *       *       *       *       *       *



TITLE I--BANK HOLDING COMPANIES

           *       *       *       *       *       *       *


  Sec. 106. (a) As used in this section, the terms ``bank'', 
``bank holding company'', ``subsidiary'', and ``Board'' have 
the meaning ascribed to such terms in section 2 of the Bank 
Holding Company Act of 1956. For purposes of this section only, 
the term ``company'', as used in section 2 of the Bank Holding 
Company Act of 1956, means any person, estate, trust, 
partnership, corporation, association, or similar organization, 
but does not include any corporation the majority of the shares 
of which are owned by the United States or by any State. The 
term ``trust service'' means any service customarily performed 
by a bank trust department. For purposes of this section, a 
financial subsidiary of a national bank engaging in activities 
pursuant to section 5136A(a) of the Revised Statutes of the 
United States shall be deemed to be a subsidiary of a bank 
holding company, and not a subsidiary of a bank.
  (b) (1) A bank shall not in any manner extend credit, lease 
or sell property of any kind, or furnish any service, or fix or 
vary the consideration for any of the foregoing, on the 
condition or requirement--
          (A) that the customer shall obtain some additional 
        credit, property, or service from such bank other than 
        a loan, discount, deposit, or trust service;
          (B) that the customer shall obtain some additional 
        credit, property, or service from a bank holding 
        company of such bank, or from any other subsidiary of 
        such bank holding company;
          (C) that the customer provide some additional credit, 
        property, or service to such bank, other than those 
        related to and usually provided in connection with a 
        loan, discount, deposit, or trust service;
          (D) that the customer provide some additional credit, 
        property, or service to a bank holding company of such 
        bank, or to any other subsidiary of such bank holding 
        company; or
          (E) that the customer shall not obtain some other 
        credit, property, or service from a competitor of such 
        bank, a bank holding company of such bank, or any 
        subsidiary of such bank holding company, other than a 
        condition or requirement that such bank shall 
        reasonably impose in a credit transaction to assure the 
        soundness of the credit.
The Board may 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] 
Federal Deposit Insurance Corporation, may by regulation or 
order permit such exceptions to the foregoing prohibition and 
the prohibitions of section 4(f)(9) and 4(h)(2) of the Bank 
Holding Company Act of 1956 as it considers will not be 
contrary to the purposes of this section.
  (2)(A) No bank which maintains a correspondent account in the 
name of another bank shall make an extension of credit to an 
executive officer or director of, or to any person who directly 
or indirectly or acting through or in concert with one or more 
persons owns, controls, or has the power to vote more than 10 
per centum of any class of voting securities of, such other 
bank or to any related interest of such person unless such 
extension of credit is made on substantially the same terms, 
including interest rates and collateral as those prevailing at 
the time for comparable transactions with other persons and 
does not involve more than the normal risk of repayment or 
present other unfavorable features.
  (B) No bank shall open a correspondent account at another 
bank while such bank has outstanding an extension of credit to 
an executive officer or director of, or other person who 
directly or indirectly or acting through or in concert with one 
or more persons owns, controls, or has the power to vote more 
than 10 per centum of any class of voting securities of, the 
bank desiring to open the account or to any related interest of 
such person, unless such extension of credit was made on 
substantially the same terms, including interest rates and 
collateral as those prevailing at the time for comparable 
transactions with other persons and does not involve more than 
the normal risk of repayment or present other unfavorable 
features.
  (C) No bank which maintains a correspondent account at 
another bank shall make an extension of credit to an executive 
officer or director of, or to any person who directly or 
indirectly acting through or in concert with one or more 
persons owns, controls, or has the power to vote more than 10 
per centum of any class of voting securities of, such other 
bank or to any related interest of such person, unless such 
extension of credit is made on substantially the same terms, 
including interest rates and collateral as those prevailing at 
the time for comparable transactions with other persons and 
does not involve more than the normal risk of repayment or 
present other unfavorable features.
  (D) No bank which has outstanding an extension of credit to 
an executive officer or director of, or to any person who 
directly or indirectly or acting through or in concert with one 
or more persons owns, controls, or has the power to vote more 
than 10 per centum of any class of voting securities of, 
another bank or to any related interest of such person shall 
open a correspondent account at such other bank, unless such 
extension of credit was made on substantially the same terms, 
including interest rates and collateral as those prevailing at 
the time for comparable transactions with other persons and 
does not involve more than the normal risk of repayment or 
present other unfavorable features.
  (E) For purposes of this paragraph, the term ``extension of 
credit'' shall have the meaning prescribed by the Board 
pursuant to section 22(h) of the Federal Reserve Act (12 U.S.C. 
375b), and the term ``executive officer'' shall have the same 
meaning given it under section 22(g) of the Federal Reserve 
Act.
  (F) Civil money penalty.--
          (i) First tier.--Any bank which, and any institution-
        affiliated party (within the meaning of section 3(u) of 
        the Federal Deposit Insurance Act) with respect to such 
        bank who, violates any provision of this paragraph 
        shall forfeit and pay a civil penalty of not more than 
        $5,000 for each day during which such violation 
        continues.
          (ii) Second tier.--Notwithstanding clause (i), any 
        bank which, and any institution-affiliated party 
        (within the meaning of section 3(u) of the Federal 
        Deposit Insurance Act) with respect to such bank who--
                  (I)(aa) commits any violation described in 
                clause (i);
                  (bb) recklessly engages in an unsafe or 
                unsound practice in conducting the affairs of 
                such bank; or
                  (cc) breaches any fiduciary duty;
                  (II) which violation, practice, or breach--
                          (aa) is part of a pattern of 
                        misconduct;
                          (bb) causes or is likely to cause 
                        more than a minimal loss to such bank; 
                        or
                          (cc) results in pecuniary gain or 
                        other benefit to such party,
        shall forfeit and pay a civil penalty of not more than 
        $25,000 for each day during which such violation, 
        practice, or breach continues.
          (iii) Third tier.--Notwithstanding clauses (i) and 
        (ii), any bank which, and any institution-affiliated 
        party (within the meaning of section 3(u) of the 
        Federal Deposit Insurance Act) with respect to such 
        bank who--
                  (I) knowingly--
                          (aa) commits any violation described 
                        in clause (i);
                          (bb) engages in any unsafe or unsound 
                        practice in conducting the affairs of 
                        such bank; or
                          (cc) breaches any fiduciary duty; and
                  (II) knowingly or recklessly causes a 
                substantial loss to such bank or a substantial 
                pecuniary gain or other benefit to such party 
                by reason of such violation, practice, or 
                breach,
        shall forfeit and pay a civil penalty in an amount not 
        to exceed the applicable maximum amount determined 
        under clause (iv) for each day during which such 
        violation, practice, or breach continues.
          (iv) Maximum amounts of penalties for any violation 
        described in clause (iii).--The maximum daily amount of 
        any civil penalty which may be assessed pursuant to 
        clause (iii) for any violation, practice, or breach 
        described in such clause is--
                  (I) in the case of any person other than a 
                bank, an amount to not exceed [$1,000,000] 
                $1,500,000; and
                  (II) in the case of a bank, an amount not to 
                exceed the lesser of--
                          (aa) [$1,000,000] $1,500,000; or
                          (bb) 1 percent of the total assets of 
                        such bank.
          (v) Assessment; etc.--Any penalty imposed under 
        clause (i), (ii), or (iii) may be assessed and 
        collected--
                  (I) in the case of a national bank, by the 
                Comptroller of the Currency;
                  (II) in the case of a State member bank, by 
                the Board; and
                  (III) in the case of an insured nonmember 
                State bank, by the Federal Deposit Insurance 
                Corporation,
in the manner provided in subparagraphs (E), (F), (G), and (I) 
of section 8(i)(2) of the Federal Deposit Insurance Act for 
penalties imposed (under such section) and any such assessment 
shall be subject to the provisions of such section.
          (vi) Hearing.--The bank or other person against whom 
        any penalty is assessed under this subparagraph shall 
        be afforded an agency hearing if such bank or person 
        submits a request for such hearing within 20 days after 
        the issuance of the notice of assessment. Section 8(h) 
        of the Federal Deposit Insurance Act shall apply to any 
        proceeding under this subparagraph.
          (vii) Disbursement.--All penalties collected under 
        authority of this subsection shall be deposited into 
        the Treasury.
          (viii) Violate defined.--For purposes of this 
        paragraph, the term ``violate'' includes any action 
        (alone or with another or others) for or toward 
        causing, bringing about, participating in, counseling, 
        or aiding or abetting a violation.
          (ix) Regulations.--The Comptroller of the Currency, 
        the Board, and the Federal Deposit Insurance 
        Corporation shall prescribe regulations establishing 
        such procedures as may be necessary to carry out this 
        subparagraph.
  (G) For the purpose of this paragraph--
          (i) the term ``bank'' includes a mutual savings bank, 
        a savings bank, and a savings association (as those 
        terms are defined in section 3 of the Federal Deposit 
        Insurance Act);
          (ii) the term ``related interests of such persons'' 
        includes any company controlled by such executive 
        officer, director, or person, or any political or 
        campaign committee the funds or services of which will 
        benefit such executive officer, director, or person or 
        which is controlled by such executive officer, 
        director, or person; and
          (iii) the terms ``control of a company'' and 
        ``company'' have the same meaning as under section 
        22(h) of the Federal Reserve Act (12 U.S.C. 375b).
  (H) Notice Under This Section After Separation From 
Service.--The resignation, termination of employment or 
participation, or separation of an institution-affiliated party 
(within the meaning of section 3(u) of the Federal Deposit 
Insurance Act) with respect to such a bank (including a 
separation caused by the closing of such a bank) shall not 
affect the jurisdiction and authority of the appropriate 
Federal banking agency to issue any notice and proceed under 
this section against any such party, if such notice is served 
before the end of the 6-year period beginning on the date such 
party ceased to be such a party with respect to such bank 
(whether such date occurs before, on, or after the date of the 
enactment of this subparagraph).
  (c) The district courts of the United States have 
jurisdiction to prevent and restrain violations of subsection 
(b) of this section and it is the duty of the United States 
attorneys, under the direction of the Attorney General, to 
institute proceedings in equity to prevent and restrain such 
violations. The proceedings may be by way of a petition setting 
forth the case and praying that the violation be enjoined or 
otherwise prohibited. When the parties complained of have been 
duly notified of the petition, the court shall proceed, as soon 
as possible, to the hearing and determination of the case. 
While the petition is pending, and before final decree, the 
court may at any time make such temporary restraining order or 
prohibition as it deems just. Whenever it appears to the court 
that the ends of justice require that other parties be brought 
before it, the court may cause them to be summoned whether or 
not they reside in the district in which the court is held, and 
subpenas to that end may be served in any district by the 
marshal thereof.
  (d) In any action brought by or on behalf of the United 
States under subsection (b), subpenas for witnesses may run 
into any district, but no writ of subpena may issue for 
witnesses living out of the district in which the court is held 
at a greater distance than one hundred miles from the place of 
holding the same without the prior permission of the trial 
court upon proper application and cause shown.
  (e) Any person who is injured in his business or property by 
reason of anything forbidden in subsection (b) may sue therefor 
in any district court of the United States in which the 
defendant resides or is found or has an agent, without regard 
to the amount in controversy, and shall be entitled to recover 
three times the amount of the damages sustained by him, and the 
cost of suit, including a reasonable attorney's fee.
  (f) Any person may sue for and have injunctive relief, in any 
court of the United States having jurisdiction over the 
parties, against threatened loss or damage by reason of a 
violation of subsection (b), under the same conditions and 
principles as injunctive relief against threatened conduct that 
will cause loss or damage is granted by courts of equity and 
under the rules governing such proceedings. Upon the execution 
of proper bond against damages for an injunction improvidently 
granted and a showing that the danger of irreparable loss or 
damage is immediate, a preliminary injunction may issue.
  (g)(1) Subject to paragraph (2), any action to enforce any 
cause of action under this section shall be forever barred 
unless commenced within four years after the cause of action 
accrued.
  (2) Whenever any enforcement action is instituted by or on 
behalf of the United States with respect to any matter which is 
or could be the subject of a private right of action under this 
section, the running of the statute of limitations in respect 
of every private right of action arising under this section and 
based in whole or in part on such matter shall be suspended 
during the pendency of the enforcement action so instituted and 
for one year thereafter: Provided, That whenever the running of 
the statute of limitations in respect of a cause of action 
arising under this section is suspended under this paragraph, 
any action to enforce such cause of action shall be forever 
barred unless commenced either within the period of suspension 
or within the four-year period referred to in paragraph (1).
  (h) Nothing contained in this section shall be construed as 
affecting in any manner the right of the United States or any 
other party to bring an action under any other law of the 
United States or of any State, including any right which may 
exist in addition to specific statutory authority, challenging 
the legality of any act or practice which may be proscribed by 
this section. No regulation or order issued by the Board under 
this section shall in any manner constitute a defense to such 
action.

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TITLE 18, UNITED STATES CODE

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PART I--CRIMES

           *       *       *       *       *       *       *


CHAPTER 11--BRIBERY, GRAFT, AND CONFLICTS OF INTEREST

           *       *       *       *       *       *       *



Sec. 215. Receipt of commissions or gifts for procuring loans

  (a) Whoever--
          (1) corruptly gives, offers, or promises anything of 
        value to any person, with intent to influence or reward 
        an officer, director, employee, agent, or attorney of a 
        financial institution in connection with any business 
        or transaction of such institution; or
          (2) as an officer, director, employee, agent, or 
        attorney of a financial institution, corruptly solicits 
        or demands for the benefit of any person, or corruptly 
        accepts or agrees to accept, anything of value from any 
        person, intending to be influenced or rewarded in 
        connection with any business or transaction of such 
        institution;
shall be fined not more than [$1,000,000] $1,500,000 or three 
times the value of the thing given, offered, promised, 
solicited, demanded, accepted, or agreed to be accepted, 
whichever is greater, or imprisoned not more than 30 years, or 
both, but if the value of the thing given, offered, promised, 
solicited, demanded, accepted, or agreed to be accepted does 
not exceed $1000, shall be fined under this title or imprisoned 
not more than one year, or both.
  (c) This section shall not apply to bona fide salary, wages, 
fees, or other compensation paid, or expenses paid or 
reimbursed, in the usual course of business.
  (d) Federal agencies with responsibility for regulating a 
financial institution shall jointly establish such guidelines 
as are appropriate to assist an officer, director, employee, 
agent, or attorney of a financial institution to comply with 
this section. Such agencies shall make such guidelines 
available to the public.

           *       *       *       *       *       *       *


CHAPTER 31--EMBEZZLEMENT AND THEFT

           *       *       *       *       *       *       *



Sec. 656. Theft, embezzlement, or misapplication by bank officer or 
                    employee

   Whoever, being an officer, director, agent or employee of, 
or connected in any capacity with any Federal Reserve bank, 
member bank, depository institution holding company, national 
bank, insured bank, branch or agency of a foreign bank, or 
organization operating under section 25 or section 25(a) of the 
Federal Reserve Act, or a receiver of a national bank, insured 
bank, branch, agency, or organization or any agent or employee 
of the receiver, or a Federal Reserve Agent, or an agent or 
employee of a Federal Reserve Agent or of the Board of 
Governors of the Federal Reserve System, embezzles, abstracts, 
purloins or willfully misapplies any of the moneys, funds or 
credits of such bank, branch, agency, or organization or 
holding company or any moneys, funds, assets or securities 
intrusted to the custody or care of such bank, branch, agency, 
or organization, or holding company or to the custody or care 
of any such agent, officer, director, employee or receiver, 
shall be fined not more than [$1,000,000] $1,500,000 or 
imprisoned not more than 30 years, or both; but if the amount 
embezzled, abstracted, purloined or misapplied does not exceed 
$1,000, he shall be fined under this title or imprisoned not 
more than one year, or both.
   As used in this section, the term ``national bank'' is 
synonymous with ``national banking association''; ``member 
bank'' means and includes any national bank, state bank, or 
bank and trust company which has become a member of one of the 
Federal Reserve banks; ``insured bank'' includes any bank, 
banking association, trust company, savings bank, or other 
banking institution, the deposits of which are insured by the 
Federal Deposit Insurance Corporation; and the term ``branch or 
agency of a foreign bank'' means a branch or agency described 
in section 20(9) of this title. For purposes of this section, 
the term ``depository institution holding company'' has the 
meaning given such term in section 3 of the Federal Deposit 
Insurance Act.

Sec. 657. Lending, credit and insurance institutions

  Whoever, being an officer, agent or employee of or connected 
in any capacity with the Federal Deposit Insurance Corporation, 
National Credit Union Administration, any Federal home loan 
bank, the Federal Housing Finance Agency, Farm Credit 
Administration, Department of Housing and Urban Development, 
Federal Crop Insurance Corporation, the Secretary of 
Agriculture acting through the Farmers Home Administration or 
successor agency, the Rural Development Administration or 
successor agency, or the Farm Credit System Insurance 
Corporation, a Farm Credit Bank, a bank for cooperatives or any 
lending, mortgage, insurance, credit or savings and loan 
corporation or association authorized or acting under the laws 
of the United States or any institution, other than an insured 
bank (as defined in section 656), the accounts of which are 
insured by the Federal Deposit Insurance Corporation, or by the 
National Credit Union Administration Board or any small 
business investment company, or any community development 
financial institution receiving financial assistance under the 
Riegle Community Development and Regulatory Improvement Act of 
1994, and whoever, being a receiver of any such institution, or 
agent or employee of the receiver, embezzles, abstracts, 
purloins or willfully misapplies any moneys, funds, credits, 
securities or other things of value belonging to such 
institution, or pledged or otherwise intrusted to its care, 
shall be fined not more than [$1,000,000] $1,500,000 or 
imprisoned not more than 30 years, or both; but if the amount 
or value embezzled, abstracted, purloined or misapplied does 
not exceed $1,000, he shall be fined under this title or 
imprisoned not more than one year, or both.

           *       *       *       *       *       *       *


CHAPTER 47--FRAUD AND FALSE STATEMENTS

           *       *       *       *       *       *       *



Sec. 1005. Bank entries, reports and transactions

   Whoever, being an officer, director, agent or employee of 
any Federal Reserve bank, member bank, depository institution 
holding company, national bank, insured bank, branch or agency 
of a foreign bank, or organization operating under section 25 
or section 25(a) of the Federal Reserve Act, without authority 
from the directors of such bank, branch, agency, or 
organization or company, issues or puts in circulation any 
notes of such bank, branch, agency, or organization or company; 
or
   Whoever, without such authority, makes, draws, issues, puts 
forth, or assigns any certificate of deposit, draft, order, 
bill of exchange, acceptance, note, debenture, bond, or other 
obligation, or mortgage, judgment or decree; or
   Whoever makes any false entry in any book, report, or 
statement of such bank, company, branch, agency, or 
organization with intent to injure or defraud such bank, 
company, branch, agency, or organization, or any other company, 
body politic or corporate, or any individual person, or to 
deceive any officer of such bank, company, branch, agency, or 
organization, or the Comptroller of the Currency, or the 
Federal Deposit Insurance Corporation, or any agent or examiner 
appointed to examine the affairs of such bank, company, branch, 
agency, or organization, or the Board of Governors of the 
Federal Reserve System; or
   Whoever with intent to defraud the United States or any 
agency thereof, or any financial institution referred to in 
this section, participates or shares in or receives (directly 
or indirectly) any money, profit, property, or benefits through 
any transaction, loan, commission, contract, or any other act 
of any such financial institution--
   Shall be fined not more than [$1,000,000] $1,500,000 or 
imprisoned not more than 30 years, or both.
   As used in this section, the term ``national bank'' is 
synonymous with ``national banking association''; ``member 
bank'' means and includes any national bank, state bank, or 
bank or trust company, which has become a member of one of the 
Federal Reserve banks; ``insured bank'' includes any state 
bank, banking association, trust company, savings bank, or 
other banking institution, the deposits of which are insured by 
the Federal Deposit Insurance Corporation; and the term 
``branch or agency of a foreign bank'' means a branch or agency 
described in section 20(9) of this title. For purposes of this 
section, the term ``depository institution holding company'' 
has the meaning given such term in section 3(w)(1) of the 
Federal Deposit Insurance Act.

Sec. 1006. Federal credit institution entries, reports and transactions

  Whoever, being an officer, agent or employee of or connected 
in any capacity with the Federal Deposit Insurance Corporation, 
National Credit Union Administration, any Federal home loan 
bank, the Federal Housing Finance Agency, Farm Credit 
Administration, Department of Housing and Urban Development, 
Federal Crop Insurance Corporation, the Secretary of 
Agriculture acting through the Farmers Home Administration or 
successor agency, the Rural Development Administration or 
successor agency, or the Farm Credit System Insurance 
Corporation, a Farm Credit Bank, a bank for cooperatives or any 
lending, mortgage, insurance, credit or savings and loan 
corporation or association authorized or acting under the laws 
of the United States or any institution, other than an insured 
bank (as defined in section 656), the accounts of which are 
insured by the Federal Deposit Insurance Corporation, or by the 
National Credit Union Administration Board or any small 
business investment company, with intent to defraud any such 
institution or any other company, body politic or corporate, or 
any individual, or to deceive any officer, auditor, examiner or 
agent of any such institution or of department or agency of the 
United States, makes any false entry in any book, report or 
statement of or to any such institution, or without being duly 
authorized, draws any order or bill of exchange, makes any 
acceptance, or issues, puts forth or assigns any note, 
debenture, bond or other obligation, or draft, bill of 
exchange, mortgage, judgment, or decree, or, with intent to 
defraud the United States or any agency thereof, or any 
corporation, institution, or association referred to in this 
section, participates or shares in or receives directly or 
indirectly any money, profit, property, or benefits through any 
transaction, loan, commission, contract, or any other act of 
any such corporation, institution, or association, shall be 
fined not more than [$1,000,000] $1,500,000 or imprisoned not 
more than 30 years, or both.

Sec. 1007. Federal Deposit Insurance Corporation transactions

  Whoever, for the purpose of influencing in any way the action 
of the Federal Deposit Insurance Corporation, knowingly makes 
or invites reliance on a false, forged, or counterfeit 
statement, document, or thing shall be fined not more than 
[$1,000,000] $1,500,000 or imprisoned not more than 30 years, 
or both.

           *       *       *       *       *       *       *


Sec. 1014. Loan and credit applications generally; renewals and 
                    discounts; crop insurance

   Whoever knowingly makes any false statement or report, or 
willfully overvalues any land, property or security, for the 
purpose of influencing in any way the action of the Federal 
Housing Administration, the Farm Credit Administration, Federal 
Crop Insurance Corporation or a company the Corporation 
reinsures, the Secretary of Agriculture acting through the 
Farmers Home Administration or successor agency, the Rural 
Development Administration or successor agency, any Farm Credit 
Bank, production credit association, agricultural credit 
association, bank for cooperatives, or any division, officer, 
or employee thereof, or of any regional agricultural credit 
corporation established pursuant to law, or a Federal land 
bank, a Federal land bank association, a Federal Reserve bank, 
a small business investment company, as defined in section 103 
of the Small Business Investment Act of 1958 (15 U.S.C. 662), 
or the Small Business Administration in connection with any 
provision of that Act, a Federal credit union, an insured 
State-chartered credit union, any institution the accounts of 
which are insured by the Federal Deposit Insurance 
Corporation,, any Federal home loan bank, the Federal Housing 
Finance Agency, the Federal Deposit Insurance Corporation, the 
Farm Credit System Insurance Corporation, or the National 
Credit Union Administration Board, a branch or agency of a 
foreign bank (as such terms are defined in paragraphs (1) and 
(3) of section 1(b) of the International Banking Act of 1978), 
an organization operating under section 25 or section 25(a) of 
the Federal Reserve Act, or a mortgage lending business, or any 
person or entity that makes in whole or in part a federally 
related mortgage loan as defined in section 3 of the Real 
Estate Settlement Procedures Act of 1974, upon any application, 
advance, discount, purchase, purchase agreement, repurchase 
agreement, commitment, loan, or insurance agreement or 
application for insurance or a guarantee, or any change or 
extension of any of the same, by renewal, deferment of action 
or otherwise, or the acceptance, release, or substitution of 
security therefor, shall be fined not more than [$1,000,000] 
$1,500,000 or imprisoned not more than 30 years, or both. The 
term ``State-chartered credit union'' includes a credit union 
chartered under the laws of a State of the United States, the 
District of Columbia, or any commonwealth, territory, or 
possession of the United States.

           *       *       *       *       *       *       *


            CHAPTER 63--MAIL FRAUD AND OTHER FRAUD OFFENSES


Sec. 1341. Frauds and swindles

  Whoever, having devised or intending to devise any scheme or 
artifice to defraud, or for obtaining money or property by 
means of false or fraudulent pretenses, representations, or 
promises, or to sell, dispose of, loan, exchange, alter, give 
away, distribute, supply, or furnish or procure for unlawful 
use any counterfeit or spurious coin, obligation, security, or 
other article, or anything represented to be or intimated or 
held out to be such counterfeit or spurious article, for the 
purpose of executing such scheme or artifice or attempting so 
to do, places in any post office or authorized depository for 
mail matter, any matter or thing whatever to be sent or 
delivered by the Postal Service, or deposits or causes to be 
deposited any matter or thing whatever to be sent or delivered 
by any private or commercial interstate carrier, or takes or 
receives therefrom, any such matter or thing, or knowingly 
causes to be delivered by mail or such carrier according to the 
direction thereon, or at the place at which it is directed to 
be delivered by the person to whom it is addressed, any such 
matter or thing, shall be fined under this title or imprisoned 
not more than 20 years, or both. If the violation occurs in 
relation to, or involving any benefit authorized, transported, 
transmitted, transferred, disbursed, or paid in connection 
with, a presidentially declared major disaster or emergency (as 
those terms are defined in section 102 of the Robert T. 
Stafford Disaster Relief and Emergency Assistance Act (42 
U.S.C. 5122)), or affects a financial institution, such person 
shall be fined not more than [$1,000,000] $1,500,000 or 
imprisoned not more than 30 years, or both.

           *       *       *       *       *       *       *


Sec. 1343. Fraud by wire, radio, or television

  Whoever, having devised or intending to devise any scheme or 
artifice to defraud, or for obtaining money or property by 
means of false or fraudulent pretenses, representations, or 
promises, transmits or causes to be transmitted by means of 
wire, radio, or television communication in interstate or 
foreign commerce, any writings, signs, signals, pictures, or 
sounds for the purpose of executing such scheme or artifice, 
shall be fined under this title or imprisoned not more than 20 
years, or both. If the violation occurs in relation to, or 
involving any benefit authorized, transported, transmitted, 
transferred, disbursed, or paid in connection with, a 
presidentially declared major disaster or emergency (as those 
terms are defined in section 102 of the Robert T. Stafford 
Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122)), 
or affects a financial institution, such person shall be fined 
not more than [$1,000,000] $1,500,000 or imprisoned not more 
than 30 years, or both.

Sec. 1344. Bank fraud

   Whoever knowingly executes, or attempts to execute, a scheme 
or artifice--
          (1) to defraud a financial institution; or
          (2) to obtain any of the moneys, funds, credits, 
        assets, securities, or other property owned by, or 
        under the custody or control of, a financial 
        institution, by means of false or fraudulent pretenses, 
        representations, or promises;
shall be fined not more than [$1,000,000] $1,500,000 or 
imprisoned not more than 30 years, or both.

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                              ----------                              


COMMODITY EXCHANGE ACT

           *       *       *       *       *       *       *



SEC. 1A. DEFINITIONS.

   As used in this Act:
          (1) Alternative trading system.--The term 
        ``alternative trading system'' means an organization, 
        association, or group of persons that--
                  (A) is registered as a broker or dealer 
                pursuant to section 15(b) of the Securities 
                Exchange Act of 1934 (except paragraph (11) 
                thereof);
                  (B) performs the functions commonly performed 
                by an exchange (as defined in section 3(a)(1) 
                of the Securities Exchange Act of 1934);
                  (C) does not--
                          (i) set rules governing the conduct 
                        of subscribers other than the conduct 
                        of such subscribers' trading on the 
                        alternative trading system; or
                          (ii) discipline subscribers other 
                        than by exclusion from trading; and
                  (D) is exempt from the definition of the term 
                ``exchange'' under such section 3(a)(1) by rule 
                or regulation of the Securities and Exchange 
                Commission on terms that require compliance 
                with regulations of its trading functions.
          (2) Appropriate federal banking agency.--The term 
        ``appropriate Federal banking agency''--
                  (A) has the meaning given the term in section 
                3 of the Federal Deposit Insurance Act (12 
                U.S.C. 1813);
                  (B) means the Board in the case of a 
                noninsured State bank; and
                  (C) is the Farm Credit Administration for 
                farm credit system institutions.
          (3) Associated person of a security-based swap dealer 
        or major security-based swap participant.--The term 
        ``associated person of a security-based swap dealer or 
        major security-based swap participant'' has the meaning 
        given the term in section 3(a) of the Securities 
        Exchange Act of 1934 (15 U.S.C. 78c(a)).
          (4) Associated person of a swap dealer or major swap 
        participant.--
                  (A) In general.--The term ``associated person 
                of a swap dealer or major swap participant'' 
                means a person who is associated with a swap 
                dealer or major swap participant as a partner, 
                officer, employee, or agent (or any person 
                occupying a similar status or performing 
                similar functions), in any capacity that 
                involves--
                          (i) the solicitation or acceptance of 
                        swaps; or
                          (ii) the supervision of any person or 
                        persons so engaged.
                  (B) Exclusion.--Other than for purposes of 
                section 4s(b)(6), the term ``associated person 
                of a swap dealer or major swap participant'' 
                does not include any person associated with a 
                swap dealer or major swap participant the 
                functions of which are solely clerical or 
                ministerial.
          (5) Board.--The term ``Board'' means the Board of 
        Governors of the Federal Reserve System.
          (6) Board of trade.--The term ``board of trade'' 
        means any organized exchange or other trading facility.
          (7) Cleared swap.--The term ``cleared swap'' means 
        any swap that is, directly or indirectly, submitted to 
        and cleared by a derivatives clearing organization 
        registered with the Commission.
          (8) Commission.--The term ``Commission'' means the 
        Commodity Futures Trading Commission established under 
        section 2(a)(2).
          (9) Commodity.--The term ``commodity'' means wheat, 
        cotton, rice, corn, oats, barley, rye, flaxseed, grain 
        sorghums, mill feeds, butter, eggs, Solanum tuberosum 
        (Irish potatoes), wool, wool tops, fats and oils 
        (including lard, tallow, cottonseed oil, peanut oil, 
        soybean oil, and all other fats and oils), cottonseed 
        meal, cottonseed, peanuts, soybeans, soybean meal, 
        livestock, livestock products, and frozen concentrated 
        orange juice, and all other goods and articles, except 
        onions (as provided by the first section of Public Law 
        85-839 (7 U.S.C. 13-1)) and motion picture box office 
        receipts (or any index, measure, value, or data related 
        to such receipts), and all services, rights, and 
        interests (except motion picture box office receipts, 
        or any index, measure, value or data related to such 
        receipts) in which contracts for future delivery are 
        presently or in the future dealt in.
          (10) Commodity pool.--
                  (A) In general.--The term ``commodity pool'' 
                means any investment trust, syndicate, or 
                similar form of enterprise operated for the 
                purpose of trading in commodity interests, 
                including any--
                          (i) commodity for future delivery, 
                        security futures product, or swap;
                          (ii) agreement, contract, or 
                        transaction described in section 
                        2(c)(2)(C)(i) or section 2(c)(2)(D)(i);
                          (iii) commodity option authorized 
                        under section 4c; or
                          (iv) leverage transaction authorized 
                        under section 19.
                  (B) Further definition.--The Commission, by 
                rule or regulation, may include within, or 
                exclude from, the term ``commodity pool'' any 
                investment trust, syndicate, or similar form of 
                enterprise if the Commission determines that 
                the rule or regulation will effectuate the 
                purposes of this Act.
          (11) Commodity pool operator.--
                  (A) In general.--The term ``commodity pool 
                operator'' means any person--
                          (i) engaged in a business that is of 
                        the nature of a commodity pool, 
                        investment trust, syndicate, or similar 
                        form of enterprise, and who, in 
                        connection therewith, solicits, 
                        accepts, or receives from others, 
                        funds, securities, or property, either 
                        directly or through capital 
                        contributions, the sale of stock or 
                        other forms of securities, or 
                        otherwise, for the purpose of trading 
                        in commodity interests, including any--
                                  (I) commodity for future 
                                delivery, security futures 
                                product, or swap;
                                  (II) agreement, contract, or 
                                transaction described in 
                                section 2(c)(2)(C)(i) or 
                                section 2(c)(2)(D)(i);
                                  (III) commodity option 
                                authorized under section 4c; or
                                  (IV) leverage transaction 
                                authorized under section 19; or
                          (ii) who is registered with the 
                        Commission as a commodity pool 
                        operator.
                  (B) Further definition.--The Commission, by 
                rule or regulation, may include within, or 
                exclude from, the term ``commodity pool 
                operator'' any person engaged in a business 
                that is of the nature of a commodity pool, 
                investment trust, syndicate, or similar form of 
                enterprise if the Commission determines that 
                the rule or regulation will effectuate the 
                purposes of this Act.
          (12) Commodity trading advisor.--
                  (A) In general.--Except as otherwise provided 
                in this paragraph, the term ``commodity trading 
                advisor'' means any person who--
                          (i) for compensation or profit, 
                        engages in the business of advising 
                        others, either directly or through 
                        publications, writings, or electronic 
                        media, as to the value of or the 
                        advisability of trading in--
                                  (I) any contract of sale of a 
                                commodity for future delivery, 
                                security futures product, or 
                                swap;
                                  (II) any agreement, contract, 
                                or transaction described in 
                                section 2(c)(2)(C)(i) or 
                                section 2(c)(2)(D)(i)
                                  (III) any commodity option 
                                authorized under section 4c; or
                                  (IV) any leverage transaction 
                                authorized under section 19;
                          (ii) for compensation or profit, and 
                        as part of a regular business, issues 
                        or promulgates analyses or reports 
                        concerning any of the activities 
                        referred to in clause (i);
                          (iii) is registered with the 
                        Commission as a commodity trading 
                        advisor; or
                          (iv) the Commission, by rule or 
                        regulation, may include if the 
                        Commission determines that the rule or 
                        regulation will effectuate the purposes 
                        of this Act.
                  (B) Exclusions.--Subject to subparagraph (C), 
                the term ``commodity trading advisor'' does not 
                include--
                          (i) any bank or trust company or any 
                        person acting as an employee thereof;
                          (ii) any news reporter, news 
                        columnist, or news editor of the print 
                        or electronic media, or any lawyer, 
                        accountant, or teacher;
                          (iii) any floor broker or futures 
                        commission merchant;
                          (iv) the publisher or producer of any 
                        print or electronic data of general and 
                        regular dissemination, including its 
                        employees;
                          (v) the fiduciary of any defined 
                        benefit plan that is subject to the 
                        Employee Retirement Income Security Act 
                        of 1974 (29 U.S.C. 1001 et seq.);
                          (vi) any contract market or 
                        derivatives transaction execution 
                        facility; and
                          (vii) such other persons not within 
                        the intent of this paragraph as the 
                        Commission may specify by rule, 
                        regulation, or order.
                  (C) Incidental services.--Subparagraph (B) 
                shall apply only if the furnishing of such 
                services by persons referred to in subparagraph 
                (B) is solely incidental to the conduct of 
                their business or profession.
                  (D) Advisors.--The Commission, by rule or 
                regulation, may include within the term 
                ``commodity trading advisor'', any person 
                advising as to the value of commodities or 
                issuing reports or analyses concerning 
                commodities if the Commission determines that 
                the rule or regulation will effectuate the 
                purposes of this paragraph.
          (13) Contract of sale.--The term ``contract of sale'' 
        includes sales, agreements of sale, and agreements to 
        sell.
          (14) Cooperative association of producers.--The term 
        ``cooperative association of producers'' means any 
        cooperative association, corporate, or otherwise, not 
        less than 75 percent in good faith owned or controlled, 
        directly or indirectly, by producers of agricultural 
        products and otherwise complying with the Act of 
        February 18, 1922 (42 Stat. 388, chapter 57; 7 U.S.C. 
        291 and 292), including any organization acting for a 
        group of such associations and owned or controlled by 
        such associations, except that business done for or 
        with the United States, or any agency thereof, shall 
        not be considered either member or nonmember business 
        in determining the compliance of any such association 
        with this Act.
          (15) Derivatives clearing organization.--
                  (A) In general.--The term ``derivatives 
                clearing organization'' means a clearinghouse, 
                clearing association, clearing corporation, or 
                similar entity, facility, system, or 
                organization that, with respect to an 
                agreement, contract, or transaction--
                          (i) enables each party to the 
                        agreement, contract, or transaction to 
                        substitute, through novation or 
                        otherwise, the credit of the 
                        derivatives clearing organization for 
                        the credit of the parties;
                          (ii) arranges or provides, on a 
                        multilateral basis, for the settlement 
                        or netting of obligations resulting 
                        from such agreements, contracts, or 
                        transactions executed by participants 
                        in the derivatives clearing 
                        organization; or
                          (iii) otherwise provides clearing 
                        services or arrangements that mutualize 
                        or transfer among participants in the 
                        derivatives clearing organization the 
                        credit risk arising from such 
                        agreements, contracts, or transactions 
                        executed by the participants.
                  (B) Exclusions.--The term ``derivatives 
                clearing organization'' does not include an 
                entity, facility, system, or organization 
                solely because it arranges or provides for--
                          (i) settlement, netting, or novation 
                        of obligations resulting from 
                        agreements, contracts, or transactions, 
                        on a bilateral basis and without a 
                        central counterparty;
                          (ii) settlement or netting of cash 
                        payments through an interbank payment 
                        system; or
                          (iii) settlement, netting, or 
                        novation of obligations resulting from 
                        a sale of a commodity in a transaction 
                        in the spot market for the commodity.
          (16) Electronic trading facility.--The term 
        ``electronic trading facility'' means a trading 
        facility that--
                  (A) operates by means of an electronic or 
                telecommunications network; and
                  (B) maintains an automated audit trail of 
                bids, offers, and the matching of orders or the 
                execution of transactions on the facility.
          (17) Eligible commercial entity.--The term ``eligible 
        commercial entity'' means, with respect to an 
        agreement, contract or transaction in a commodity--
                  (A) an eligible contract participant 
                described in clause (i), (ii), (v), (vii), 
                (viii), or (ix) of paragraph (18)(A) that, in 
                connection with its business--
                          (i) has a demonstrable ability, 
                        directly or through separate 
                        contractual arrangements, to make or 
                        take delivery of the underlying 
                        commodity;
                          (ii) incurs risks, in addition to 
                        price risk, related to the commodity; 
                        or
                          (iii) is a dealer that regularly 
                        provides risk management or hedging 
                        services to, or engages in market-
                        making activities with, the foregoing 
                        entities involving transactions to 
                        purchase or sell the commodity or 
                        derivative agreements, contracts, or 
                        transactions in the commodity;
                  (B) an eligible contract participant, other 
                than a natural person or an instrumentality, 
                department, or agency of a State or local 
                governmental entity, that--
                          (i) regularly enters into 
                        transactions to purchase or sell the 
                        commodity or derivative agreements, 
                        contracts, or transactions in the 
                        commodity; and
                          (ii) either--
                                  (I) in the case of a 
                                collective investment vehicle 
                                whose participants include 
                                persons other than--
                                          (aa) qualified 
                                        eligible persons, as 
                                        defined in Commission 
                                        rule 4.7(a) (17 CFR 
                                        4.7(a));
                                          (bb) accredited 
                                        investors, as defined 
                                        in Regulation D of the 
                                        Securities and Exchange 
                                        Commission under the 
                                        Securities Act of 1933 
                                        (17 CFR 230.501(a)), 
                                        with total assets of 
                                        $2,000,000; or
                                          (cc) qualified 
                                        purchasers, as defined 
                                        in section 2(a)(51)(A) 
                                        of the Investment 
                                        Company Act of 1940;
                                in each case as in effect on 
                                the date of the enactment of 
                                the Commodity Futures 
                                Modernization Act of 2000, has, 
                                or is one of a group of 
                                vehicles under common control 
                                or management having in the 
                                aggregate, $1,000,000,000 in 
                                total assets; or
                                  (II) in the case of other 
                                persons, has, or is one of a 
                                group of persons under common 
                                control or management having in 
                                the aggregate, $100,000,000 in 
                                total assets; or
                  (C) such other persons as the Commission 
                shall determine appropriate and shall designate 
                by rule, regulation, or order.
          (18) Eligible contract participant.--The term 
        ``eligible contract participant'' means--
                  (A) acting for its own account--
                          (i) a financial institution;
                          (ii) an insurance company that is 
                        regulated by a State, or that is 
                        regulated by a foreign government and 
                        is subject to comparable regulation as 
                        determined by the Commission, including 
                        a regulated subsidiary or affiliate of 
                        such an insurance company;
                          (iii) an investment company subject 
                        to regulation under the Investment 
                        Company Act of 1940 (15 U.S.C. 80a-1 et 
                        seq.) or a foreign person performing a 
                        similar role or function subject as 
                        such to foreign regulation (regardless 
                        of whether each investor in the 
                        investment company or the foreign 
                        person is itself an eligible contract 
                        participant);
                          (iv) a commodity pool that--
                                  (I) has total assets 
                                exceeding $5,000,000; and
                                  (II) is formed and operated 
                                by a person subject to 
                                regulation under this Act or a 
                                foreign person performing a 
                                similar role or function 
                                subject as such to foreign 
                                regulation (regardless of 
                                whether each investor in the 
                                commodity pool or the foreign 
                                person is itself an eligible 
                                contract participant) provided, 
                                however, that for purposes of 
                                section 2(c)(2)(B)(vi) and 
                                section 2(c)(2)(C)(vii), the 
                                term ``eligible contract 
                                participant'' shall not include 
                                a commodity pool in which any 
                                participant is not otherwise an 
                                eligible contract participant;
                          (v) a corporation, partnership, 
                        proprietorship, organization, trust, or 
                        other entity--
                                  (I) that has total assets 
                                exceeding $10,000,000;
                                  (II) the obligations of which 
                                under an agreement, contract, 
                                or transaction are guaranteed 
                                or otherwise supported by a 
                                letter of credit or keepwell, 
                                support, or other agreement by 
                                an entity described in 
                                subclause (I), in clause (i), 
                                (ii), (iii), (iv), or (vii), or 
                                in subparagraph (C); or
                                  (III) that--
                                          (aa) has a net worth 
                                        exceeding $1,000,000; 
                                        and
                                          (bb) enters into an 
                                        agreement, contract, or 
                                        transaction in 
                                        connection with the 
                                        conduct of the entity's 
                                        business or to manage 
                                        the risk associated 
                                        with an asset or 
                                        liability owned or 
                                        incurred or reasonably 
                                        likely to be owned or 
                                        incurred by the entity 
                                        in the conduct of the 
                                        entity's business;
                          (vi) an employee benefit plan subject 
                        to the Employee Retirement Income 
                        Security Act of 1974 (29 U.S.C. 1001 et 
                        seq.), a governmental employee benefit 
                        plan, or a foreign person performing a 
                        similar role or function subject as 
                        such to foreign regulation--
                                  (I) that has total assets 
                                exceeding $5,000,000; or
                                  (II) the investment decisions 
                                of which are made by--
                                          (aa) an investment 
                                        adviser or commodity 
                                        trading advisor subject 
                                        to regulation under the 
                                        Investment Advisers Act 
                                        of 1940 (15 U.S.C. 80b-
                                        1 et seq.) or this Act;
                                          (bb) a foreign person 
                                        performing a similar 
                                        role or function 
                                        subject as such to 
                                        foreign regulation;
                                          (cc) a financial 
                                        institution; or
                                          (dd) an insurance 
                                        company described in 
                                        clause (ii), or a 
                                        regulated subsidiary or 
                                        affiliate of such an 
                                        insurance company;
                          (vii)(I) a governmental entity 
                        (including the United States, a State, 
                        or a foreign government) or political 
                        subdivision of a governmental entity;
                          (II) a multinational or supranational 
                        government entity; or
                          (III) an instrumentality, agency, or 
                        department of an entity described in 
                        subclause (I) or (II);
                        except that such term does not include 
                        an entity, instrumentality, agency, or 
                        department referred to in subclause (I) 
                        or (III) of this clause unless (aa) the 
                        entity, instrumentality, agency, or 
                        department is a person described in 
                        clause (i), (ii), or (iii) of paragraph 
                        (17)(A); (bb) the entity, 
                        instrumentality, agency, or department 
                        owns and invests on a discretionary 
                        basis $50,000,000 or more in 
                        investments; or (cc) the agreement, 
                        contract, or transaction is offered by, 
                        and entered into with, an entity that 
                        is listed in any of subclauses (I) 
                        through (VI) of section 2(c)(2)(B)(ii);
                          (viii)(I) a broker or dealer subject 
                        to regulation under the Securities 
                        Exchange Act of 1934 (15 U.S.C. 78a et 
                        seq.) or a foreign person performing a 
                        similar role or function subject as 
                        such to foreign regulation, except 
                        that, if the broker or dealer or 
                        foreign person is a natural person or 
                        proprietorship, the broker or dealer or 
                        foreign person shall not be considered 
                        to be an eligible contract participant 
                        unless the broker or dealer or foreign 
                        person also meets the requirements of 
                        clause (v) or (xi);
                          (II) an associated person of a 
                        registered broker or dealer concerning 
                        the financial or securities activities 
                        of which the registered person makes 
                        and keeps records under section 15C(b) 
                        or 17(h) of the Securities Exchange Act 
                        of 1934 (15 U.S.C. 78o-5(b), 78q(h));
                          (III) an investment bank holding 
                        company (as defined in section 17(i) of 
                        the Securities Exchange Act of 1934 (15 
                        U.S.C. 78q(i));
                          (ix) a futures commission merchant 
                        subject to regulation under this Act or 
                        a foreign person performing a similar 
                        role or function subject as such to 
                        foreign regulation, except that, if the 
                        futures commission merchant or foreign 
                        person is a natural person or 
                        proprietorship, the futures commission 
                        merchant or foreign person shall not be 
                        considered to be an eligible contract 
                        participant unless the futures 
                        commission merchant or foreign person 
                        also meets the requirements of clause 
                        (v) or (xi);
                          (x) a floor broker or floor trader 
                        subject to regulation under this Act in 
                        connection with any transaction that 
                        takes place on or through the 
                        facilities of a registered entity 
                        (other than an electronic trading 
                        facility with respect to a significant 
                        price discovery contract) or an exempt 
                        board of trade, or any affiliate 
                        thereof, on which such person regularly 
                        trades; or
                          (xi) an individual who has amounts 
                        invested on a discretionary basis, the 
                        aggregate of which is in excess of--
                                  (I) $10,000,000; or
                                  (II) $5,000,000 and who 
                                enters into the agreement, 
                                contract, or transaction in 
                                order to manage the risk 
                                associated with an asset owned 
                                or liability incurred, or 
                                reasonably likely to be owned 
                                or incurred, by the individual;
                  (B)(i) a person described in clause (i), 
                (ii), (iv), (v), (viii), (ix), or (x) of 
                subparagraph (A) or in subparagraph (C), acting 
                as broker or performing an equivalent agency 
                function on behalf of another person described 
                in subparagraph (A) or (C); or
                  (ii) an investment adviser subject to 
                regulation under the Investment Advisers Act of 
                1940, a commodity trading advisor subject to 
                regulation under this Act, a foreign person 
                performing a similar role or function subject 
                as such to foreign regulation, or a person 
                described in clause (i), (ii), (iv), (v), 
                (viii), (ix), or (x) of subparagraph (A) or in 
                subparagraph (C), in any such case acting as 
                investment manager or fiduciary (but excluding 
                a person acting as broker or performing an 
                equivalent agency function) for another person 
                described in subparagraph (A) or (C) and who is 
                authorized by such person to commit such person 
                to the transaction; or
                  (C) any other person that the Commission 
                determines to be eligible in light of the 
                financial or other qualifications of the 
                person.
          (19) Excluded commodity.--The term ``excluded 
        commodity'' means--
                  
                          (i) an interest rate, exchange rate, 
                        currency, security, security index, 
                        credit risk or measure, debt or equity 
                        instrument, index or measure of 
                        inflation, or other macroeconomic index 
                        or measure;
                          (ii) any other rate, differential, 
                        index, or measure of economic or 
                        commercial risk, return, or value that 
                        is--
                                  (I) not based in substantial 
                                part on the value of a narrow 
                                group of commodities not 
                                described in clause (i); or
                                  (II) based solely on one or 
                                more commodities that have no 
                                cash market;
                          (iii) any economic or commercial 
                        index based on prices, rates, values, 
                        or levels that are not within the 
                        control of any party to the relevant 
                        contract, agreement, or transaction; or
                          (iv) an occurrence, extent of an 
                        occurrence, or contingency (other than 
                        a change in the price, rate, value, or 
                        level of a commodity not described in 
                        clause (i)) that is--
                                  (I) beyond the control of the 
                                parties to the relevant 
                                contract, agreement, or 
                                transaction; and
                                  (II) associated with a 
                                financial, commercial, or 
                                economic consequence.
          (20) Exempt commodity.--The term ``exempt commodity'' 
        means a commodity that is not an excluded commodity or 
        an agricultural commodity.
          (21) Financial institution.--The term ``financial 
        institution'' means--
                  (A) a corporation operating under the fifth 
                undesignated paragraph of section 25 of the 
                Federal Reserve Act (12 U.S.C. 603), commonly 
                known as ``an agreement corporation'';
                  (B) a corporation organized under section 25A 
                of the Federal Reserve Act (12 U.S.C. 611 et 
                seq.), commonly known as an ``Edge Act 
                corporation'';
                  (C) an institution that is regulated by the 
                Farm Credit Administration;
                  (D) a Federal credit union or State credit 
                union (as defined in section 101 of the Federal 
                Credit Union Act (12 U.S.C. 1752));
                  (E) a depository institution (as defined in 
                section 3 of the Federal Deposit Insurance Act 
                (12 U.S.C. 1813));
                  (F) a foreign bank or a branch or agency of a 
                foreign bank (each as defined in section 1(b) 
                of the International Banking Act of 1978 (12 
                U.S.C. 3101(b)));
                  (G) any financial holding company (as defined 
                in section 2 of the Bank Holding Company Act of 
                1956);
                  (H) a trust company; or
                  (I) a similarly regulated subsidiary or 
                affiliate of an entity described in any of 
                subparagraphs (A) through (H).
          (22) Floor broker.--
                  (A) In general.--The term ``floor broker'' 
                means any person--
                          (i) who, in or surrounding any pit, 
                        ring, post, or other place provided by 
                        a contract market for the meeting of 
                        persons similarly engaged, shall 
                        purchase or sell for any other person--
                                  (I) any commodity for future 
                                delivery, security futures 
                                product, or swap; or
                                  (II) any commodity option 
                                authorized under section 4c; or
                          (ii) who is registered with the 
                        Commission as a floor broker.
                  (B) Further definition.--The Commission, by 
                rule or regulation, may include within, or 
                exclude from, the term ``floor broker'' any 
                person in or surrounding any pit, ring, post, 
                or other place provided by a contract market 
                for the meeting of persons similarly engaged 
                who trades for any other person if the 
                Commission determines that the rule or 
                regulation will effectuate the purposes of this 
                Act.
          (23) Floor trader.--
                  (A) In general.--The term ``floor trader'' 
                means any person--
                          (i) who, in or surrounding any pit, 
                        ring, post, or other place provided by 
                        a contract market for the meeting of 
                        persons similarly engaged, purchases, 
                        or sells solely for such person's own 
                        account--
                                  (I) any commodity for future 
                                delivery, security futures 
                                product, or swap; or
                                  (II) any commodity option 
                                authorized under section 4c; or
                          (ii) who is registered with the 
                        Commission as a floor trader.
                  (B) Further definition.--The Commission, by 
                rule or regulation, may include within, or 
                exclude from, the term ``floor trader'' any 
                person in or surrounding any pit, ring, post, 
                or other place provided by a contract market 
                for the meeting of persons similarly engaged 
                who trades solely for such person's own account 
                if the Commission determines that the rule or 
                regulation will effectuate the purposes of this 
                Act.
          (24) Foreign exchange forward.--The term ``foreign 
        exchange forward'' means a transaction that solely 
        involves the exchange of 2 different currencies on a 
        specific future date at a fixed rate agreed upon on the 
        inception of the contract covering the exchange.
          (25) Foreign exchange swap.--The term ``foreign 
        exchange swap'' means a transaction that solely 
        involves--
                  (A) an exchange of 2 different currencies on 
                a specific date at a fixed rate that is agreed 
                upon on the inception of the contract covering 
                the exchange; and
                  (B) a reverse exchange of the 2 currencies 
                described in subparagraph (A) at a later date 
                and at a fixed rate that is agreed upon on the 
                inception of the contract covering the 
                exchange.
          (26) Foreign futures authority.--The term ``foreign 
        futures authority'' means any foreign government, or 
        any department, agency, governmental body, or 
        regulatory organization empowered by a foreign 
        government to administer or enforce a law, rule, or 
        regulation as it relates to a futures or options 
        matter, or any department or agency of a political 
        subdivision of a foreign government empowered to 
        administer or enforce a law, rule, or regulation as it 
        relates to a futures or options matter.
          (27) Future delivery.--The term ``future delivery'' 
        does not include any sale of any cash commodity for 
        deferred shipment or delivery.
          (28) Futures commission merchant.--
                  (A) In general.--The term ``futures 
                commission merchant'' means an individual, 
                association, partnership, corporation, or 
                trust--
                          (i) that--
                                  (I) is--
                                          (aa) engaged in 
                                        soliciting or in 
                                        accepting orders for--
                                                  (AA) the 
                                                purchase or 
                                                sale of a 
                                                commodity for 
                                                future 
                                                delivery;
                                                  (BB) a 
                                                security 
                                                futures 
                                                product;
                                                  (CC) a swap;
                                                  (DD) any 
                                                agreement, 
                                                contract, or 
                                                transaction 
                                                described in 
                                                section 
                                                2(c)(2)(C)(i) 
                                                or section 
                                                2(c)(2)(D)(i);
                                                  (EE) any 
                                                commodity 
                                                option 
                                                authorized 
                                                under section 
                                                4c; or
                                                  (FF) any 
                                                leverage 
                                                transaction 
                                                authorized 
                                                under section 
                                                19; or
                                          (bb) acting as a 
                                        counterparty in any 
                                        agreement, contract, or 
                                        transaction described 
                                        in section 
                                        2(c)(2)(C)(i) or 
                                        section 2(c)(2)(D)(i); 
                                        and
                                  (II) in or in connection with 
                                the activities described in 
                                items (aa) or (bb) of subclause 
                                (I), accepts any money, 
                                securities, or property (or 
                                extends credit in lieu thereof) 
                                to margin, guarantee, or secure 
                                any trades or contracts that 
                                result or may result therefrom; 
                                or
                          (ii) that is registered with the 
                        Commission as a futures commission 
                        merchant.
                  (B) Further definition.--The Commission, by 
                rule or regulation, may include within, or 
                exclude from, the term ``futures commission 
                merchant'' any person who engages in soliciting 
                or accepting orders for, or acting as a 
                counterparty in, any agreement, contract, or 
                transaction subject to this Act, and who 
                accepts any money, securities, or property (or 
                extends credit in lieu thereof) to margin, 
                guarantee, or secure any trades or contracts 
                that result or may result therefrom, if the 
                Commission determines that the rule or 
                regulation will effectuate the purposes of this 
                Act.
          (29) Hybrid instrument.--The term ``hybrid 
        instrument'' means a security having one or more 
        payments indexed to the value, level, or rate of, or 
        providing for the delivery of, one or more commodities.
          (30) Interstate commerce.--The term ``interstate 
        commerce'' means commerce--
                  (A) between any State, territory, or 
                possession, or the District of Columbia, and 
                any place outside thereof; or
                  (B) between points within the same State, 
                territory, or possession, or the District of 
                Columbia, but through any place outside 
                thereof, or within any territory or possession, 
                or the District of Columbia.
          (31) Introducing broker.--
                  (A) In general.--The term ``introducing 
                broker'' means any person (except an individual 
                who elects to be and is registered as an 
                associated person of a futures commission 
                merchant)--
                          (i) who--
                                  (I) is engaged in soliciting 
                                or in accepting orders for--
                                          (aa) the purchase or 
                                        sale of any commodity 
                                        for future delivery, 
                                        security futures 
                                        product, or swap;
                                          (bb) any agreement, 
                                        contract, or 
                                        transaction described 
                                        in section 
                                        2(c)(2)(C)(i) or 
                                        section 2(c)(2)(D)(i);
                                          (cc) any commodity 
                                        option authorized under 
                                        section 4c; or
                                          (dd) any leverage 
                                        transaction authorized 
                                        under section 19; and
                                  (II) does not accept any 
                                money, securities, or property 
                                (or extend credit in lieu 
                                thereof) to margin, guarantee, 
                                or secure any trades or 
                                contracts that result or may 
                                result therefrom; or
                          (ii) who is registered with the 
                        Commission as an introducing broker.
                  (B) Further definition.--The Commission, by 
                rule or regulation, may include within, or 
                exclude from, the term ``introducing broker'' 
                any person who engages in soliciting or 
                accepting orders for any agreement, contract, 
                or transaction subject to this Act, and who 
                does not accept any money, securities, or 
                property (or extend credit in lieu thereof) to 
                margin, guarantee, or secure any trades or 
                contracts that result or may result therefrom, 
                if the Commission determines that the rule or 
                regulation will effectuate the purposes of this 
                Act.
          (32) Major security-based swap participant.--The term 
        ``major security-based swap participant'' has the 
        meaning given the term in section 3(a) of the 
        Securities Exchange Act of 1934 (15 U.S.C. 78c(a)).
          (33) Major swap participant.--
                  (A) In general.--The term ``major swap 
                participant'' means any person who is not a 
                swap dealer, and--
                          (i) maintains a substantial position 
                        in swaps for any of the major swap 
                        categories as determined by the 
                        Commission, excluding--
                                  (I) positions held for 
                                hedging or mitigating 
                                commercial risk; and
                                  (II) positions maintained by 
                                any employee benefit plan (or 
                                any contract held by such a 
                                plan) as defined in paragraphs 
                                (3) and (32) of section 3 of 
                                the Employee Retirement Income 
                                Security Act of 1974 (29 U.S.C. 
                                1002) for the primary purpose 
                                of hedging or mitigating any 
                                risk directly associated with 
                                the operation of the plan;
                          (ii) whose outstanding swaps create 
                        substantial counterparty exposure that 
                        could have serious adverse effects on 
                        the financial stability of the United 
                        States banking system or financial 
                        markets; or
                          (iii)(I) is a financial entity that 
                        is highly leveraged relative to the 
                        amount of capital it holds and that is 
                        not subject to capital requirements 
                        established by an appropriate Federal 
                        banking agency; and
                          (II) maintains a substantial position 
                        in outstanding swaps in any major swap 
                        category as determined by the 
                        Commission.
                  (B) Definition of substantial position.--For 
                purposes of subparagraph (A), the Commission 
                shall define by rule or regulation the term 
                ``substantial position'' at the threshold that 
                the Commission determines to be prudent for the 
                effective monitoring, management, and oversight 
                of entities that are systemically important or 
                can significantly impact the financial system 
                of the United States. In setting the definition 
                under this subparagraph, the Commission shall 
                consider the person's relative position in 
                uncleared as opposed to cleared swaps and may 
                take into consideration the value and quality 
                of collateral held against counterparty 
                exposures.
                  (C) Scope of designation.--For purposes of 
                subparagraph (A), a person may be designated as 
                a major swap participant for 1 or more 
                categories of swaps without being classified as 
                a major swap participant for all classes of 
                swaps.
                  (D) Exclusions.--The definition under this 
                paragraph shall not include an entity whose 
                primary business is providing financing, and 
                uses derivatives for the purpose of hedging 
                underlying commercial risks related to interest 
                rate and foreign currency exposures, 90 percent 
                or more of which arise from financing that 
                facilitates the purchase or lease of products, 
                90 percent or more of which are manufactured by 
                the parent company or another subsidiary of the 
                parent company.
          (34) Member of a registered entity; member of a 
        derivatives transaction execution facility.--The term 
        ``member'' means, with respect to a registered entity 
        or derivatives transaction execution facility, an 
        individual, association, partnership, corporation, or 
        trust--
                  (A) owning or holding membership in, or 
                admitted to membership representation on, the 
                registered entity or derivatives transaction 
                execution facility; or
                  (B) having trading privileges on the 
                registered entity or derivatives transaction 
                execution facility.
        A participant in an alternative trading system that is 
        designated as a contract market pursuant to section 5f 
        is deemed a member of the contract market for purposes 
        of transactions in security futures products through 
        the contract market.
          (35) Narrow-based security index.--
                  (A) The term ``narrow-based security index'' 
                means an index--
                          (i) that has 9 or fewer component 
                        securities;
                          (ii) in which a component security 
                        comprises more than 30 percent of the 
                        index's weighting;
                          (iii) in which the five highest 
                        weighted component securities in the 
                        aggregate comprise more than 60 percent 
                        of the index's weighting; or
                          (iv) in which the lowest weighted 
                        component securities comprising, in the 
                        aggregate, 25 percent of the index's 
                        weighting have an aggregate dollar 
                        value of average daily trading volume 
                        of less than $50,000,000 (or in the 
                        case of an index with 15 or more 
                        component securities, $30,000,000), 
                        except that if there are two or more 
                        securities with equal weighting that 
                        could be included in the calculation of 
                        the lowest weighted component 
                        securities comprising, in the 
                        aggregate, 25 percent of the index's 
                        weighting, such securities shall be 
                        ranked from lowest to highest dollar 
                        value of average daily trading volume 
                        and shall be included in the 
                        calculation based on their ranking 
                        starting with the lowest ranked 
                        security.
                  (B) Notwithstanding subparagraph (A), an 
                index is not a narrow-based security index if--
                          (i)(I) it has at least 9 component 
                        securities;
                          (II) no component security comprises 
                        more than 30 percent of the index's 
                        weighting; and
                          (III) each component security is--
                                  (aa) registered pursuant to 
                                section 12 of the Securities 
                                Exchange Act of 1934;
                                  (bb) one of 750 securities 
                                with the largest market 
                                capitalization; and
                                  (cc) one of 675 securities 
                                with the largest dollar value 
                                of average daily trading 
                                volume;
                          (ii) a board of trade was designated 
                        as a contract market by the Commodity 
                        Futures Trading Commission with respect 
                        to a contract of sale for future 
                        delivery on the index, before the date 
                        of the enactment of the Commodity 
                        Futures Modernization Act of 2000;
                          (iii)(I) a contract of sale for 
                        future delivery on the index traded on 
                        a designated contract market or 
                        registered derivatives transaction 
                        execution facility for at least 30 days 
                        as a contract of sale for future 
                        delivery on an index that was not a 
                        narrow-based security index; and
                          (II) it has been a narrow-based 
                        security index for no more than 45 
                        business days over 3 consecutive 
                        calendar months;
                          (iv) a contract of sale for future 
                        delivery on the index is traded on or 
                        subject to the rules of a foreign board 
                        of trade and meets such requirements as 
                        are jointly established by rule or 
                        regulation by the Commission and the 
                        Securities and Exchange Commission;
                          (v) no more than 18 months have 
                        passed since the date of the enactment 
                        of the Commodity Futures Modernization 
                        Act of 2000 and--
                                  (I) it is traded on or 
                                subject to the rules of a 
                                foreign board of trade;
                                  (II) the offer and sale in 
                                the United States of a contract 
                                of sale for future delivery on 
                                the index was authorized before 
                                the date of the enactment of 
                                the Commodity Futures 
                                Modernization Act of 2000; and
                                  (III) the conditions of such 
                                authorization continue to be 
                                met; or
                          (vi) a contract of sale for future 
                        delivery on the index is traded on or 
                        subject to the rules of a board of 
                        trade and meets such requirements as 
                        are jointly established by rule, 
                        regulation, or order by the Commission 
                        and the Securities and Exchange 
                        Commission.
                  (C) Within 1 year after the date of the 
                enactment of the Commodity Futures 
                Modernization Act of 2000, the Commission and 
                the Securities and Exchange Commission jointly 
                shall adopt rules or regulations that set forth 
                the requirements under subparagraph (B)(iv).
                  (D) An index that is a narrow-based security 
                index solely because it was a narrow-based 
                security index for more than 45 business days 
                over 3 consecutive calendar months pursuant to 
                clause (iii) of subparagraph (B) shall not be a 
                narrow-based security index for the 3 following 
                calendar months.
                  (E) For purposes of subparagraphs (A) and 
                (B)--
                          (i) the dollar value of average daily 
                        trading volume and the market 
                        capitalization shall be calculated as 
                        of the preceding 6 full calendar 
                        months; and
                          (ii) the Commission and the 
                        Securities and Exchange Commission 
                        shall, by rule or regulation, jointly 
                        specify the method to be used to 
                        determine market capitalization and 
                        dollar value of average daily trading 
                        volume.
          (36) Option.--The term ``option'' means an agreement, 
        contract, or transaction that is of the character of, 
        or is commonly known to the trade as, an ``option'', 
        ``privilege'', ``indemnity'', ``bid'', ``offer'', 
        ``put'', ``call'', ``advance guaranty'', or ``decline 
        guaranty''.
          (37) Organized exchange.--The term ``organized 
        exchange'' means a trading facility that--
                  (A) permits trading--
                          (i) by or on behalf of a person that 
                        is not an eligible contract 
                        participant; or
                          (ii) by persons other than on a 
                        principal-to-principal basis; or
                  (B) has adopted (directly or through another 
                nongovernmental entity) rules that--
                          (i) govern the conduct of 
                        participants, other than rules that 
                        govern the submission of orders or 
                        execution of transactions on the 
                        trading facility; and
                          (ii) include disciplinary sanctions 
                        other than the exclusion of 
                        participants from trading.
          (38) Person.--The term ``person'' imports the plural 
        or singular, and includes individuals, associations, 
        partnerships, corporations, and trusts.
          (39) Prudential regulator.--The term ``prudential 
        regulator'' means--
                  (A) the Board in the case of a swap dealer, 
                major swap participant, security-based swap 
                dealer, or major security-based swap 
                participant that is--
                          (i) a State-chartered bank that is a 
                        member of the Federal Reserve System;
                          (ii) a State-chartered branch or 
                        agency of a foreign bank;
                          (iii) any foreign bank which does not 
                        operate an insured branch;
                          (iv) any organization operating under 
                        section 25A of the Federal Reserve Act 
                        or having an agreement with the Board 
                        under section 225 of the Federal 
                        Reserve Act;
                          (v) any bank holding company (as 
                        defined in section 2 of the Bank 
                        Holding Company Act of 1965 (12 U.S.C. 
                        1841)), any foreign bank (as defined in 
                        section 1(b)(7) of the International 
                        Banking Act of 1978 (12 U.S.C. 
                        3101(b)(7)) that is treated as a bank 
                        holding company under section 8(a) of 
                        the International Banking Act of 1978 
                        (12 U.S.C. 3106(a)), and any subsidiary 
                        of such a company or foreign bank 
                        (other than a subsidiary that is 
                        described in subparagraph (A) or (B) or 
                        that is required to be registered with 
                        the Commission as a swap dealer or 
                        major swap participant under this Act 
                        or with the Securities and Exchange 
                        Commission as a security-based swap 
                        dealer or major security-based swap 
                        participant);
                          (vi) after the transfer date (as 
                        defined in section 311 of the Dodd-
                        Frank Wall Street Reform and Consumer 
                        Protection Act), any savings and loan 
                        holding company (as defined in section 
                        10 of the Home Owners' Loan Act (12 
                        U.S.C. 1467a)) and any subsidiary of 
                        such company (other than a subsidiary 
                        that is described in subparagraph (A) 
                        or (B) or that is required to be 
                        registered as a swap dealer or major 
                        swap participant with the Commission 
                        under this Act or with the Securities 
                        and Exchange Commission as a security-
                        based swap dealer or major security-
                        based swap participant); or
                          (vii) any organization operating 
                        under section 25A of the Federal 
                        Reserve Act (12U.S.C. 611 et seq.) or 
                        having an agreement with the Board 
                        under section 25 of the Federal Reserve 
                        Act (12 U.S.C. 601 et seq.);
                  (B) the Office of the Comptroller of the 
                Currency in the case of a swap dealer, major 
                swap participant, security-based swap dealer, 
                or major security-based swap participant that 
                is--
                          (i) a national bank;
                          (ii) a federally chartered branch or 
                        agency of a foreign bank; or
                          (iii) any Federal savings 
                        association;
                  (C) the Federal Deposit Insurance Corporation 
                in the case of a swap dealer, major swap 
                participant, security-based swap dealer, or 
                major security-based swap participant that is--
                          (i) a State-chartered bank that is 
                        not a member of the Federal Reserve 
                        System; or
                          (ii) any State savings association;
                  (D) the Farm Credit Administration, in the 
                case of a swap dealer, major swap participant, 
                security-based swap dealer, or major security-
                based swap participant that is an institution 
                chartered under the Farm Credit Act of 1971 (12 
                U.S.C. 2001 et seq.); and
                  (E) the Federal Housing Finance Agency in the 
                case of a swap dealer, major swap participant, 
                security-based swap dealer, or major security-
                based swap participant that is a regulated 
                entity (as such term is defined in section 1303 
                of the Federal Housing Enterprises Financial 
                Safety and Soundness Act of 1992).
          (40) Registered entity.--The term ``registered 
        entity'' means--
                  (A) a board of trade designated as a contract 
                market under section 5;
                  (B) a derivatives clearing organization 
                registered under section 5b;
                  (C) a board of trade designated as a contract 
                market under section 5f;
                  (D) a swap execution facility registered 
                under section 5h;
                  (E) a swap data repository registered under 
                section 21; and
                  (F) with respect to a contract that the 
                Commission determines is a significant price 
                discovery contract, any electronic trading 
                facility on which the contract is executed or 
                traded.
          (41) Security.--The term ``security'' means a 
        security as defined in section 2(a)(1) of the 
        Securities Act of 1933 (15 U.S.C. 77b(a)(1)) or section 
        3(a)(10) of the Securities Exchange Act of 1934 (15 
        U.S.C. 78c(a)(10)).
          (42) Security-based swap.--The term ``security-based 
        swap'' has the meaning given the term in section 3(a) 
        of the Securities Exchange Act of 1934 (15 U.S.C. 
        78c(a)).
          (43) Security-based swap dealer.--The term 
        ``security-based swap dealer'' has the meaning given 
        the term in section 3(a) of the Securities Exchange Act 
        of 1934 (15 U.S.C. 78c(a)).
          (44) Security future.--The term ``security future'' 
        means a contract of sale for future delivery of a 
        single security or of a narrow-based security index, 
        including any interest therein or based on the value 
        thereof, except an exempted security under section 
        3(a)(12) of the Securities Exchange Act of 1934 as in 
        effect on the date of the enactment of the Futures 
        Trading Act of 1982 (other than any municipal security 
        as defined in section 3(a)(29) of the Securities 
        Exchange Act of 1934 as in effect on the date of the 
        enactment of the Futures Trading Act of 1982). The term 
        ``security future'' does not include any agreement, 
        contract, or transaction excluded from this Act under 
        section 2(c), 2(d), 2(f), or 2(g) of this Act (as in 
        effect on the date of the enactment of the Commodity 
        Futures Modernization Act of 2000) or title IV of the 
        Commodity Futures Modernization Act of 2000.
          (45) Security futures product.--The term ``security 
        futures product'' means a security future or any put, 
        call, straddle, option, or privilege on any security 
        future.
          (46) Significant price discovery contract.--The term 
        ``significant price discovery contract'' means an 
        agreement, contract, or transaction subject to section 
        2(h)(5).
          (47) Swap.--
                  (A) In general.--Except as provided in 
                subparagraph (B), the term ``swap'' means any 
                agreement, contract, or transaction--
                          (i) that is a put, call, cap, floor, 
                        collar, or similar option of any kind 
                        that is for the purchase or sale, or 
                        based on the value, of 1 or more 
                        interest or other rates, currencies, 
                        commodities, securities, instruments of 
                        indebtedness, indices, quantitative 
                        measures, or other financial or 
                        economic interests or property of any 
                        kind;
                          (ii) that provides for any purchase, 
                        sale, payment, or delivery (other than 
                        a dividend on an equity security) that 
                        is dependent on the occurrence, 
                        nonoccurrence, or the extent of the 
                        occurrence of an event or contingency 
                        associated with a potential financial, 
                        economic, or commercial consequence;
                          (iii) that provides on an executory 
                        basis for the exchange, on a fixed or 
                        contingent basis, of 1 or more payments 
                        based on the value or level of 1 or 
                        more interest or other rates, 
                        currencies, commodities, securities, 
                        instruments of indebtedness, indices, 
                        quantitative measures, or other 
                        financial or economic interests or 
                        property of any kind, or any interest 
                        therein or based on the value thereof, 
                        and that transfers, as between the 
                        parties to the transaction, in whole or 
                        in part, the financial risk associated 
                        with a future change in any such value 
                        or level without also conveying a 
                        current or future direct or indirect 
                        ownership interest in an asset 
                        (including any enterprise or investment 
                        pool) or liability that incorporates 
                        the financial risk so transferred, 
                        including any agreement, contract, or 
                        transaction commonly known as--
                                  (I) an interest rate swap;
                                  (II) a rate floor;
                                  (III) a rate cap;
                                  (IV) a rate collar;
                                  (V) a cross-currency rate 
                                swap;
                                  (VI) a basis swap;
                                  (VII) a currency swap;
                                  (VIII) a foreign exchange 
                                swap;
                                  (IX) a total return swap;
                                  (X) an equity index swap;
                                  (XI) an equity swap;
                                  (XII) a debt index swap;
                                  (XIII) a debt swap;
                                  (XIV) a credit spread;
                                  (XV) a credit default swap;
                                  (XVI) a credit swap;
                                  (XVII) a weather swap;
                                  (XVIII) an energy swap;
                                  (XIX) a metal swap;
                                  (XX) an agricultural swap;
                                  (XXI) an emissions swap; and
                                  (XXII) a commodity swap;
                          (iv) that is an agreement, contract, 
                        or transaction that is, or in the 
                        future becomes, commonly known to the 
                        trade as a swap;
                          (v) including any security-based swap 
                        agreement which meets the definition of 
                        ``swap agreement'' as defined in 
                        section 206A of the Gramm-Leach-Bliley 
                        Act (15 U.S.C. 78c note) of which a 
                        material term is based on the price, 
                        yield, value, or volatility of any 
                        security or any group or index of 
                        securities, or any interest therein; or
                          (vi) that is any combination or 
                        permutation of, or option on, any 
                        agreement, contract, or transaction 
                        described in any of clauses (i) through 
                        (v).
                  (B) Exclusions.--The term ``swap'' does not 
                include--
                          (i) any contract of sale of a 
                        commodity for future delivery (or 
                        option on such a contract), leverage 
                        contract authorized under section 19, 
                        security futures product, or agreement, 
                        contract, or transaction described in 
                        section 2(c)(2)(C)(i) or section 
                        2(c)(2)(D)(i);
                          (ii) any sale of a nonfinancial 
                        commodity or security for deferred 
                        shipment or delivery, so long as the 
                        transaction is intended to be 
                        physically settled;
                          (iii) any put, call, straddle, 
                        option, or privilege on any security, 
                        certificate of deposit, or group or 
                        index of securities, including any 
                        interest therein or based on the value 
                        thereof, that is subject to--
                                  (I) the Securities Act of 
                                1933 (15 U.S.C. 77a et seq.); 
                                and
                                  (II) the Securities Exchange 
                                Act of 1934 (15 U.S.C. 78a et 
                                seq.);
                          (iv) any put, call, straddle, option, 
                        or privilege relating to a foreign 
                        currency entered into on a national 
                        securities exchange registered pursuant 
                        to section 6(a) of the Securities 
                        Exchange Act of 1934 (15 U.S.C. 
                        78f(a));
                          (v) any agreement, contract, or 
                        transaction providing for the purchase 
                        or sale of 1 or more securities on a 
                        fixed basis that is subject to--
                                  (I) the Securities Act of 
                                1933 (15 U.S.C. 77a et seq.); 
                                and
                                  (II) the Securities Exchange 
                                Act of 1934 (15 U.S.C. 78a et 
                                seq.);
                          (vi) any agreement, contract, or 
                        transaction providing for the purchase 
                        or sale of 1 or more securities on a 
                        contingent basis that is subject to the 
                        Securities Act of 1933 (15 U.S.C. 77a 
                        et seq.) and the Securities Exchange 
                        Act of 1934 (15 U.S.C. 78a et seq.), 
                        unless the agreement, contract, or 
                        transaction predicates the purchase or 
                        sale on the occurrence of a bona fide 
                        contingency that might reasonably be 
                        expected to affect or be affected by 
                        the creditworthiness of a party other 
                        than a party to the agreement, 
                        contract, or transaction;
                          (vii) any note, bond, or evidence of 
                        indebtedness that is a security, as 
                        defined in section 2(a)(1) of the 
                        Securities Act of 1933 (15 U.S.C. 
                        77b(a)(1));
                          (viii) any agreement, contract, or 
                        transaction that is--
                                  (I) based on a security; and
                                  (II) entered into directly or 
                                through an underwriter (as 
                                defined in section 2(a)(11) of 
                                the Securities Act of 1933 (15 
                                U.S.C. 77b(a)(11)) by the 
                                issuer of such security for the 
                                purposes of raising capital, 
                                unless the agreement, contract, 
                                or transaction is entered into 
                                to manage a risk associated 
                                with capital raising;
                          (ix) any agreement, contract, or 
                        transaction a counterparty of which is 
                        a Federal Reserve bank, the Federal 
                        Government, or a Federal agency that is 
                        expressly backed by the full faith and 
                        credit of the United States; and
                          (x) any security-based swap, other 
                        than a security-based swap as described 
                        in subparagraph (D).
                  (C) Rule of construction regarding master 
                agreements.--
                          (i) In general.--Except as provided 
                        in clause (ii), the term ``swap'' 
                        includes a master agreement that 
                        provides for an agreement, contract, or 
                        transaction that is a swap under 
                        subparagraph (A), together with each 
                        supplement to any master agreement, 
                        without regard to whether the master 
                        agreement contains an agreement, 
                        contract, or transaction that is not a 
                        swap pursuant to subparagraph (A).
                          (ii) Exception.--For purposes of 
                        clause (i), the master agreement shall 
                        be considered to be a swap only with 
                        respect to each agreement, contract, or 
                        transaction covered by the master 
                        agreement that is a swap pursuant to 
                        subparagraph (A).
                  (D) Mixed swap.--The term ``security-based 
                swap'' includes any agreement, contract, or 
                transaction that is as described in section 
                3(a)(68)(A) of the Securities Exchange Act of 
                1934 (15 U.S.C. 78c(a)(68)(A)) and also is 
                based on the value of 1 or more interest or 
                other rates, currencies, commodities, 
                instruments of indebtedness, indices, 
                quantitative measures, other financial or 
                economic interest or property of any kind 
                (other than a single security or a narrow-based 
                security index), or the occurrence, non-
                occurrence, or the extent of the occurrence of 
                an event or contingency associated with a 
                potential financial, economic, or commercial 
                consequence (other than an event described in 
                subparagraph (A)(iii)).
                  (E) Treatment of foreign exchange swaps and 
                forwards.--
                          (i) In general.--Foreign exchange 
                        swaps and foreign exchange forwards 
                        shall be considered swaps under this 
                        paragraph unless the Secretary makes a 
                        written determination under section 1b 
                        that either foreign exchange swaps or 
                        foreign exchange forwards or both--
                                  (I) should be not be 
                                regulated as swaps under this 
                                Act; and
                                  (II) are not structured to 
                                evade the Dodd-Frank Wall 
                                Street Reform and Consumer 
                                Protection Act in violation of 
                                any rule promulgated by the 
                                Commission pursuant to section 
                                721(c) of that Act.
                          (ii) Congressional notice; 
                        effectiveness.--The Secretary shall 
                        submit any written determination under 
                        clause (i) to the appropriate 
                        committees of Congress, including the 
                        Committee on Agriculture, Nutrition, 
                        and Forestry of the Senate and the 
                        Committee on Agriculture of the House 
                        of Representatives. Any such written 
                        determination by the Secretary shall 
                        not be effective until it is submitted 
                        to the appropriate committees of 
                        Congress.
                          (iii) Reporting.--Notwithstanding a 
                        written determination by the Secretary 
                        under clause (i), all foreign exchange 
                        swaps and foreign exchange forwards 
                        shall be reported to either a swap data 
                        repository, or, if there is no swap 
                        data repository that would accept such 
                        swaps or forwards, to the Commission 
                        pursuant to section 4r within such time 
                        period as the Commission may by rule or 
                        regulation prescribe.
                          (iv) Business standards.--
                        Notwithstanding a written determination 
                        by the Secretary pursuant to clause 
                        (i), any party to a foreign exchange 
                        swap or forward that is a swap dealer 
                        or major swap participant shall conform 
                        to the business conduct standards 
                        contained in section 4s(h).
                          (v) Secretary.--For purposes of this 
                        subparagraph, the term ``Secretary'' 
                        means the Secretary of the Treasury.
                  (F) Exception for certain foreign exchange 
                swaps and forwards.--
                          (i) Registered entities.--Any foreign 
                        exchange swap and any foreign exchange 
                        forward that is listed and traded on or 
                        subject to the rules of a designated 
                        contract market or a swap execution 
                        facility, or that is cleared by a 
                        derivatives clearing organization, 
                        shall not be exempt from any provision 
                        of this Act or amendments made by the 
                        Wall Street Transparency and 
                        Accountability Act of 2010 prohibiting 
                        fraud or manipulation.
                          (ii) Retail transactions.--Nothing in 
                        subparagraph (E) shall affect, or be 
                        construed to affect, the applicability 
                        of this Act or the jurisdiction of the 
                        Commission with respect to agreements, 
                        contracts, or transactions in foreign 
                        currency pursuant to section 2(c)(2).
                  (G) Treatment of swap transactions between 
                affiliates.--
                          (i) Exemption from swap rules.--
                        Except as provided under clause (ii), 
                        the Commission may not regulate a swap 
                        under this Act if all of the following 
                        apply to such swap:
                                  (I) Affiliation.--One 
                                counterparty, directly or 
                                indirectly, holds a majority 
                                ownership interest in the other 
                                counterparty, or a third party, 
                                directly or indirectly, holds a 
                                majority ownership interest in 
                                both counterparties.
                                  (II) Financial statements.--
                                The affiliated counterparty 
                                that holds the majority 
                                interest in the other 
                                counterparty or the third party 
                                that, directly or indirectly, 
                                holds the majority interests in 
                                both affiliated counterparties, 
                                reports its financial 
                                statements on a consolidated 
                                basis under generally accepted 
                                accounting principles or 
                                International Financial 
                                Reporting Standards, or other 
                                similar standards, and the 
                                financial statements include 
                                the financial results of the 
                                majority-owned affiliated 
                                counterparty or counterparties.
                          (ii) Requirements for exempted 
                        swaps.--With respect to a swap 
                        described under clause (i):
                                  (I) Reporting requirement.--
                                If at least one counterparty is 
                                a swap dealer or major swap 
                                participant, that counterparty 
                                shall report the swap pursuant 
                                to section 4r, within such time 
                                period as the Commission may by 
                                rule or regulation prescribe--
                                          (aa) to a swap data 
                                        repository; or
                                          (bb) if there is no 
                                        swap data repository 
                                        that would accept the 
                                        agreement, contract or 
                                        transaction, to the 
                                        Commission.
                                  (II) Risk management 
                                requirement.--If at least one 
                                counterparty is a swap dealer 
                                or major swap participant, the 
                                swap shall be subject to a 
                                centralized risk management 
                                program pursuant to section 
                                4s(j) that is reasonably 
                                designed to monitor and to 
                                manage the risks associated 
                                with the swap.
                                  (III) Anti-evasion 
                                requirement.--The swap shall 
                                not be structured to evade the 
                                Dodd-Frank Wall Street Reform 
                                and Consumer Protection Act in 
                                violation of any rule 
                                promulgated by the Commission 
                                pursuant to section 721(c) of 
                                such Act.
          (48) Swap data repository.--The term ``swap data 
        repository'' means any person that collects and 
        maintains information or records with respect to 
        transactions or positions in, or the terms and 
        conditions of, swaps entered into by third parties for 
        the purpose of providing a centralized recordkeeping 
        facility for swaps.
          (49) Swap dealer.--
                  (A) In general.--The term ``swap dealer'' 
                means any person who--
                          (i) holds itself out as a dealer in 
                        swaps;
                          (ii) makes a market in swaps;
                          (iii) regularly enters into swaps 
                        with counterparties as an ordinary 
                        course of business for its own account; 
                        or
                          (iv) engages in any activity causing 
                        the person to be commonly known in the 
                        trade as a dealer or market maker in 
                        swaps,
                provided however, in no event shall an insured 
                depository institution be considered to be a 
                swap dealer to the extent it offers to enter 
                into a swap with a customer in connection with 
                originating a loan with that customer.
                  (B) Inclusion.--A person may be designated as 
                a swap dealer for a single type or single class 
                or category of swap or activities and 
                considered not to be a swap dealer for other 
                types, classes, or categories of swaps or 
                activities.
                  (C) Exception.--The term ``swap dealer'' does 
                not include a person that enters into swaps for 
                such person's own account, either individually 
                or in a fiduciary capacity, but not as a part 
                of a regular business.
                  (D) De minimis exception.--The Commission 
                shall exempt from designation as a swap dealer 
                an entity that engages in a de minimis quantity 
                of swap dealing in connection with transactions 
                with or on behalf of its customers. The 
                Commission shall promulgate regulations to 
                establish factors with respect to the making of 
                this determination to exempt.
          (50) Swap execution facility.--The term ``swap 
        execution facility'' means a trading system or platform 
        in which multiple participants have the ability to 
        execute or trade swaps by accepting bids and offers 
        made by multiple participants in the facility or 
        system, through any means of interstate commerce, 
        including any trading facility, that--
                  (A) facilitates the execution of swaps 
                between persons; and
                  (B) is not a designated contract market.
          (51) Trading facility.--
                  (A) In general.--The term ``trading 
                facility'' means a person or group of persons 
                that constitutes, maintains, or provides a 
                physical or electronic facility or system in 
                which multiple participants have the ability to 
                execute or trade agreements, contracts, or 
                transactions--
                          (i) by accepting bids or offers made 
                        by other participants that are open to 
                        multiple partipants in the facility or 
                        system; or
                          (ii) through the interaction of 
                        multiple bids or multiple offers within 
                        a system with a pre-determined non-
                        discretionary automated trade matching 
                        and execution algorithm.
                  (B) Exclusions.--The term ``trading 
                facility'' does not include--
                          (i) a person or group of persons 
                        solely because the person or group of 
                        persons constitutes, maintains, or 
                        provides an electronic facility or 
                        system that enables participants to 
                        negotiate the terms of and enter into 
                        bilateral transactions as a result of 
                        communications exchanged by the parties 
                        and not from interaction of multiple 
                        bids and multiple offers within a 
                        predetermined, nondiscretionary 
                        automated trade matching and execution 
                        algorithm;
                          (ii) a government securities dealer 
                        or government securities broker, to the 
                        extent that the dealer or broker 
                        executes or trades agreements, 
                        contracts, or transactions in 
                        government securities, or assists 
                        persons in communicating about, 
                        negotiating, entering into, executing, 
                        or trading an agreement, contract, or 
                        transaction in government securities 
                        (as the terms ``government securities 
                        dealer'', ``government securities 
                        broker'', and ``government securities'' 
                        are defined in section 3(a) of the 
                        Securities Exchange Act of 1934 (15 
                        U.S.C. 78c(a))); or
                          (iii) facilities on which bids and 
                        offers, and acceptances of bids and 
                        offers effected on the facility, are 
                        not binding.
                Any person, group of persons, dealer, broker, 
                or facility described in clause (i) or (ii) is 
                excluded from the meaning of the term ``trading 
                facility'' for the purposes of this Act without 
                any prior specific approval, certification, or 
                other action by the Commission.
                  (C) Special rule.--A person or group of 
                persons that would not otherwise constitute a 
                trading facility shall not be considered to be 
                a trading facility solely as a result of the 
                submission to a derivatives clearing 
                organization of transactions executed on or 
                through the person or group of persons.

           *       *       *       *       *       *       *


SEC. 2. JURISDICTION OF COMMISSION; LIABILITY OF PRINCIPAL FOR ACT OF 
                    AGENT; COMMODITY FUTURES TRADING COMMISSION; 
                    TRANSACTION IN INTERSTATE COMMERCE.

  (a) Jurisdiction of Commission; Commodity Futures Trading 
Commission.--
          (1) Jurisdiction of commission.--
                  (A) In general.--The Commission shall have 
                exclusive jurisdiction, except to the extent 
                otherwise provided in the Wall Street 
                Transparency and Accountability Act of 2010 
                (including an amendment made by that Act) and 
                subparagraphs (C), (D), and (I) of this 
                paragraph and subsections (c) and (f), with 
                respect to accounts, agreements (including any 
                transaction which is of the character of, or is 
                commonly known to the trade as, an ``option'', 
                ``privilege'', ``indemnity'', ``bid'', 
                ``offer'', ``put'', ``call'', ``advance 
                guaranty'', or ``decline guaranty''), and 
                transactions involving swaps or contracts of 
                sale of a commodity for future delivery 
                (including significant price discovery 
                contracts), traded or executed on a contract 
                market designated pursuant to section 5 or a 
                swap execution facility pursuant to section 5h 
                or any other board of trade, exchange, or 
                market, and transactions subject to regulation 
                by the Commission pursuant to section 19 of 
                this Act. Except as hereinabove provided, 
                nothing contained in this section shall (I) 
                supersede or limit the jurisdiction at any time 
                conferred on the Securities and Exchange 
                Commission or other regulatory authorities 
                under the laws of the United States or of any 
                State, or (II) restrict the Securities and 
                Exchange Commission and such other authorities 
                from carrying out their duties and 
                responsibilities in accordance with such laws. 
                Nothing in this section shall supersede or 
                limit the jurisdiction conferred on courts of 
                the United States or any State.
                  (B) Liability of principal for act of 
                agent.--The act, omission, or failure of any 
                official, agent, or other person acting for any 
                individual, association, partnership, 
                corporation, or trust within the scope of his 
                employment or office shall be deemed the act, 
                omission, or failure of such individual, 
                association, partnership, corporation, or 
                trust, as well as of such official, agent, or 
                other person.
  (C) Notwithstanding any other provision of law--
          (i)(I) Except as provided in subclause (II), this Act 
        shall not apply to and the Commission shall have no 
        jurisdiction to designate a board of trade as a 
        contract market for any transaction whereby any party 
        to such transaction acquires any put, call, or other 
        option on one or more securities (as defined in section 
        2(1) of the Securities Act of 1933 or section 3(a)(10) 
        of the Securities Exchange Act of 1934 on the date of 
        enactment of the Futures Trading Act of 1982), 
        including any group or index of such securities, or any 
        interest therein or based on the value thereof.
                  (II) This Act shall apply to and the 
                Commission shall have jurisdiction with respect 
                to accounts, agreements, and transactions 
                involving, and may permit the listing for 
                trading pursuant to section 5c(c) of, a put, 
                call, or other option on 1 or more securities 
                (as defined in section 2(a)(1) of the 
                Securities Act of 1933 or section 3(a)(10) of 
                the Securities Exchange Act of 1934 on the date 
                of enactment of the Futures Trading Act of 
                1982), including any group or index of such 
                securities, or any interest therein or based on 
                the value thereof, that is exempted by the 
                Securities and Exchange Commission pursuant to 
                section 36(a)(1) of the Securities Exchange Act 
                of 1934 with the condition that the Commission 
                exercise concurrent jurisdiction over such put, 
                call, or other option; provided, however, that 
                nothing in this paragraph shall be construed to 
                affect the jurisdiction and authority of the 
                Securities and Exchange Commission over such 
                put, call, or other option.
          (ii) This Act shall apply to and the Commission shall 
        have exclusive jurisdiction with respect to accounts, 
        agreements (including any transaction which is of the 
        character of, or is commonly known to the trade as, an 
        ``option'', ``privilege'', ``indemnity'', ``bid'', 
        ``offer'', ``put'', ``call'', ``advance guaranty'', or 
        ``decline guaranty'') and transactions involving, and 
        may designate a board of trade as a contract market in, 
        or register a derivatives transaction execution 
        facility that trades or executes, contracts of sale (or 
        options on such contracts) for future delivery of a 
        group or index of securities (or any interest therein 
        or based upon the value thereof): Provided, however, 
        That no board of trade shall be designated as a 
        contract market with respect to any such contracts of 
        sale (or options on such contracts) for future 
        delivery, and no derivatives transaction execution 
        facility shall trade or execute such contracts of sale 
        (or options on such contracts) for future delivery, 
        unless the board of trade or the derivatives 
        transaction execution facility, and the applicable 
        contract, meet the following minimum requirements:
                  (I) Settlement of or delivery on such 
                contract (or option on such contract) shall be 
                effected in cash or by means other than the 
                transfer or receipt of any security, except an 
                exempted security under section 3 of the 
                Securities Act of 1933 or section 3(a)(12) of 
                the Securities Exchange Act of 1934 as in 
                effect on the date of enactment of the Futures 
                Trading Act of 1982 (other than any municipal 
                security, as defined in section 3(a)(29) of the 
                Securities Exchange Act of 1934 on the date of 
                enactment of the Futures Trading Act of 1982);
                  (II) Trading in such contract (or option on 
                such contract) shall not be readily susceptible 
                to manipulation of the price of such contract 
                (or option on such contract), nor to causing or 
                being used in the manipulation of the price of 
                any underlying security, option on such 
                security or option on a group or index 
                including such securities; and
                  (III) Such group or index of securities shall 
                not constitute a narrow-based security index.
          (iii) If, in its discretion, the Commission 
        determines that a stock index futures contract, 
        notwithstanding its conformance with the requirements 
        in clause (ii) of this subparagraph, can reasonably be 
        used as a surrogate for trading a security (including a 
        security futures product), it may, by order, require 
        such contract and any option thereon be traded and 
        regulated as security futures products as defined in 
        section 3(a)(56) of the Securities Exchange Act of 1934 
        and section 1a of this Act subject to all rules and 
        regulations applicable to security futures products 
        under this Act and the securities laws as defined in 
        section 3(a)(47) of the Securities Exchange Act of 
        1934.
          (iv) No person shall offer to enter into, enter into, 
        or confirm the execution of any contract of sale (or 
        option on such contract) for future delivery of any 
        security, or interest therein or based on the value 
        thereof, except an exempted security under or section 
        3(a)(12) of the Securities Exchange Act of 1934 as in 
        effect on the date of enactment of the Futures Trading 
        Act of 1982 (other than any municipal security as 
        defined in section 3(a)(29) of the Securities Exchange 
        Act of 1934 on the date of enactment of the Futures 
        Trading Act of 1982), or except as provided in clause 
        (ii) of this subparagraph or subparagraph (D), any 
        group or index of such securities or any interest 
        therein or based on the value thereof.
          (v)(I) Notwithstanding any other provision of this 
        Act, any contract market in a stock index futures 
        contract (or option thereon) other than a security 
        futures product, or any derivatives transaction 
        execution facility on which such contract or option is 
        traded, shall file with the Board of Governors of the 
        Federal Reserve System any rule establishing or 
        changing the levels of margin (initial and maintenance) 
        for such stock index futures contract (or option 
        thereon) other than security futures products.
          (II) The Board may at any time request any contract 
        market or derivatives transaction execution facility to 
        set the margin for any stock index futures contract (or 
        option thereon), other than for any security futures 
        product, at such levels as the Board in its judgment 
        determines are appropriate to preserve the financial 
        integrity of the contract market or derivatives 
        transaction execution facility, or its clearing system, 
        or to prevent systemic risk. If the contract market or 
        derivatives transaction execution facility fails to do 
        so within the time specified by the Board in its 
        request, the Board may direct the contract market or 
        derivatives transaction execution facility to alter or 
        supplement the rules of the contract market or 
        derivatives transaction execution facility as specified 
        in the request.
          (III) Subject to such conditions as the Board may 
        determine, the Board may delegate any or all of its 
        authority, relating to margin for any stock index 
        futures contract (or option thereon), other than 
        security futures products, under this clause to the 
        Commission.
          (IV) It shall be unlawful for any futures commission 
        merchant to, directly or indirectly, extend or maintain 
        credit to or for, or collect margin from any customer 
        on any security futures product unless such activities 
        comply with the regulations prescribed pursuant to 
        section 7(c)(2)(B) of the Securities Exchange Act of 
        1934.
          (V) Nothing in this clause shall supersede or limit 
        the authority granted to the Commission in section 
        8a(9) to direct a contract market or registered 
        derivatives transaction execution facility, on finding 
        an emergency to exist, to raise temporary margin levels 
        on any futures contract, or option on the contract 
        covered by this clause, or on any security futures 
        product.
          (VI) Any action taken by the Board, or by the 
        Commission acting under the delegation of authority 
        under subclause III, under this clause directing a 
        contract market to alter or supplement a contract 
        market rule shall be subject to review only in the 
        Court of Appeals where the party seeking review resides 
        or has its principal place of business, or in the 
        United States Court of Appeals for the District of 
        Columbia Circuit. The review shall be based on the 
        examination of all information before the Board or the 
        Commission, as the case may be, at the time the 
        determination was made. The court reviewing the action 
        of the Board or the Commission shall not enter a stay 
        or order of mandamus unless the court has determined, 
        after notice and a hearing before a panel of the court, 
        that the agency action complained of was arbitrary, 
        capricious, an abuse of discretion, or otherwise not in 
        accordance with law.
  (D)(i) Notwithstanding any other provision of this Act, the 
Securities and Exchange Commission shall have jurisdiction and 
authority over security futures as defined in section 3(a)(55) 
of the Securities Exchange Act of 1934, section 2(a)(16) of the 
Securities Act of 1933, section 2(a)(52) of the Investment 
Company Act of 1940, and section 202(a)(27) of the Investment 
Advisers Act of 1940, options on security futures, and persons 
effecting transactions in security futures and options thereon, 
and this Act shall apply to and the Commission shall have 
jurisdiction with respect to accounts, agreements (including 
any transaction which is of the character of, or is commonly 
known to the trade as, an ``option'', ``privilege'', 
``indemnity'', ``bid'', ``offer'', ``put'', ``call'', ``advance 
guaranty'', or ``decline guaranty''), contracts, and 
transactions involving, and may designate a board of trade as a 
contract market in, or register a derivatives transaction 
execution facility that trades or executes, a security futures 
product as defined in section 1a of this Act: Provided, 
however, That, except as provided in clause (vi) of this 
subparagraph, no board of trade shall be designated as a 
contract market with respect to, or registered as a derivatives 
transaction execution facility for, any such contracts of sale 
for future delivery unless the board of trade and the 
applicable contract meet the following criteria:
          (I) Except as otherwise provided in a rule, 
        regulation, or order issued pursuant to clause (v) of 
        this subparagraph, any security underlying the security 
        future, including each component security of a narrow-
        based security index, is registered pursuant to section 
        12 of the Securities Exchange Act of 1934.
          (II) If the security futures product is not cash 
        settled, the board of trade on which the security 
        futures product is traded has arrangements in place 
        with a clearing agency registered pursuant to section 
        17A of the Securities Exchange Act of 1934 for the 
        payment and delivery of the securities underlying the 
        security futures product.
          (III) Except as otherwise provided in a rule, 
        regulation, or order issued pursuant to clause (v) of 
        this subparagraph, the security future is based upon 
        common stock and such other equity securities as the 
        Commission and the Securities and Exchange Commission 
        jointly determine appropriate.
          (IV) The security futures product is cleared by a 
        clearing agency that has in place provisions for linked 
        and coordinated clearing with other clearing agencies 
        that clear security futures products, which permits the 
        security futures product to be purchased on a 
        designated contract market, registered derivatives 
        transaction execution facility, national securities 
        exchange registered under section 6(a) of the 
        Securities Exchange Act of 1934, or national securities 
        association registered pursuant to section 15A(a) of 
        the Securities Exchange Act of 1934 and offset on 
        another designated contract market, registered 
        derivatives transaction execution facility, national 
        securities exchange registered under section 6(a) of 
        the Securities Exchange Act of 1934, or national 
        securities association registered pursuant to section 
        15A(a) of the Securities Exchange Act of 1934.
          (V) Only futures commission merchants, introducing 
        brokers, commodity trading advisors, commodity pool 
        operators or associated persons subject to suitability 
        rules comparable to those of a national securities 
        association registered pursuant to section 15A(a) of 
        the Securities Exchange Act of 1934 solicit, accept any 
        order for, or otherwise deal in any transaction in or 
        in connection with the security futures product.
          (VI) The security futures product is subject to a 
        prohibition against dual trading in section 4j of this 
        Act and the rules and regulations thereunder or the 
        provisions of section 11(a) of the Securities Exchange 
        Act of 1934 and the rules and regulations thereunder, 
        except to the extent otherwise permitted under the 
        Securities Exchange Act of 1934 and the rules and 
        regulations thereunder.
          (VII) Trading in the security futures product is not 
        readily susceptible to manipulation of the price of 
        such security futures product, nor to causing or being 
        used in the manipulation of the price of any underlying 
        security, option on such security, or option on a group 
        or index including such securities;
          (VIII) The board of trade on which the security 
        futures product is traded has procedures in place for 
        coordinated surveillance among such board of trade, any 
        market on which any security underlying the security 
        futures product is traded, and other markets on which 
        any related security is traded to detect manipulation 
        and insider trading, except that, if the board of trade 
        is an alternative trading system, a national securities 
        association registered pursuant to section 15A(a) of 
        the Securities Exchange Act of 1934 or national 
        securities exchange registered pursuant to section 6(a) 
        of the Securities Exchange Act of 1934 of which such 
        alternative trading system is a member has in place 
        such procedures.
          (IX) The board of trade on which the security futures 
        product is traded has in place audit trails necessary 
        or appropriate to facilitate the coordinated 
        surveillance required in subclause (VIII), except that, 
        if the board of trade is an alternative trading system, 
        a national securities association registered pursuant 
        to section 15A(a) of the Securities Exchange Act of 
        1934 or national securities exchange registered 
        pursuant to section 6(a) of the Securities Exchange Act 
        of 1934 of which such alternative trading system is a 
        member has rules to require such audit trails.
          (X) The board of trade on which the security futures 
        product is traded has in place procedures to coordinate 
        trading halts between such board of trade and markets 
        on which any security underlying the security futures 
        product is traded and other markets on which any 
        related security is traded, except that, if the board 
        of trade is an alternative trading system, a national 
        securities association registered pursuant to section 
        15A(a) of the Securities Exchange Act of 1934 or 
        national securities exchange registered pursuant to 
        section 6(a) of the Securities Exchange Act of 1934 of 
        which such alternative trading system is a member has 
        rules to require such coordinated trading halts.
          (XI) The margin requirements for a security futures 
        product comply with the regulations prescribed pursuant 
        to section 7(c)(2)(B) of the Securities Exchange Act of 
        1934, except that nothing in this subclause shall be 
        construed to prevent a board of trade from requiring 
        higher margin levels for a security futures product 
        when it deems such action to be necessary or 
        appropriate.
  (ii) It shall be unlawful for any person to offer, to enter 
into, to execute, to confirm the execution of, or to conduct 
any office or business anywhere in the United States, its 
territories or possessions, for the purpose of soliciting, or 
accepting any order for, or otherwise dealing in, any 
transaction in, or in connection with, a security futures 
product unless--
          (I) the transaction is conducted on or subject to the 
        rules of a board of trade that--
                  (aa) has been designated by the Commission as 
                a contract market in such security futures 
                product; or
                  (bb) is a registered derivatives transaction 
                execution facility for the security futures 
                product that has provided a certification with 
                respect to the security futures product 
                pursuant to clause (vii);
          (II) the contract is executed or consummated by, 
        through, or with a member of the contract market or 
        registered derivatives transaction execution facility; 
        and
          (III) the security futures product is evidenced by a 
        record in writing which shows the date, the parties to 
        such security futures product and their addresses, the 
        property covered, and its price, and each contract 
        market member or registered derivatives transaction 
        execution facility member shall keep the record for a 
        period of 3 years from the date of the transaction, or 
        for a longer period if the Commission so directs, which 
        record shall at all times be open to the inspection of 
        any duly authorized representative of the Commission.
  (iii)(I) Except as provided in subclause (II) but 
notwithstanding any other provision of this Act, no person 
shall offer to enter into, enter into, or confirm the execution 
of any option on a security future.
  (II) After 3 years after the date of the enactment of the 
Commodity Futures Modernization Act of 2000, the Commission and 
the Securities and Exchange Commission may by order jointly 
determine to permit trading of options on any security future 
authorized to be traded under the provisions of this Act and 
the Securities Exchange Act of 1934.
  (iv)(I) All relevant records of a futures commission merchant 
or introducing broker registered pursuant to section 4f(a)(2), 
floor broker or floor trader exempt from registration pursuant 
to section 4f(a)(3), associated person exempt from registration 
pursuant to section 4k(6), or board of trade designated as a 
contract market in a security futures product pursuant to 
section 5f shall be subject to such reasonable periodic or 
special examinations by representatives of the Commission as 
the Commission deems necessary or appropriate in the public 
interest, for the protection of investors, or otherwise in 
furtherance of the purposes of this Act, and the Commission, 
before conducting any such examination, shall give notice to 
the Securities and Exchange Commission of the proposed 
examination and consult with the Securities and Exchange 
Commission concerning the feasibility and desirability of 
coordinating the examination with examinations conducted by the 
Securities and Exchange Commission in order to avoid 
unnecessary regulatory duplication or undue regulatory burdens 
for the registrant or board of trade.
  (II) The Commission shall notify the Securities and Exchange 
Commission of any examination conducted of any futures 
commission merchant or introducing broker registered pursuant 
to section 4f(a)(2), floor broker or floor trader exempt from 
registration pursuant to section 4f(a)(3), associated person 
exempt from registration pursuant to section 4k(6), or board of 
trade designated as a contract market in a security futures 
product pursuant to section 5f, and, upon request, furnish to 
the Securities and Exchange Commission any examination report 
and data supplied to or prepared by the Commission in 
connection with the examination.
  (III) Before conducting an examination under subclause (I), 
the Commission shall use the reports of examinations, unless 
the information sought is unavailable in the reports, of any 
futures commission merchant or introducing broker registered 
pursuant to section 4f(a)(2), floor broker or floor trader 
exempt from registration pursuant to section 4f(a)(3), 
associated person exempt from registration pursuant to section 
4k(6), or board of trade designated as a contract market in a 
security futures product pursuant to section 5f that is made by 
the Securities and Exchange Commission, a national securities 
association registered pursuant to section 15A(a) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78o-3(a)), or a 
national securities exchange registered pursuant to section 
6(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78f(a)).
  (IV) Any records required under this subsection for a futures 
commission merchant or introducing broker registered pursuant 
to section 4f(a)(2), floor broker or floor trader exempt from 
registration pursuant to section 4f(a)(3), associated person 
exempt from registration pursuant to section 4k(6), or board of 
trade designated as a contract market in a security futures 
product pursuant to section 5f, shall be limited to records 
with respect to accounts, agreements, contracts, and 
transactions involving security futures products.
  (v)(I) The Commission and the Securities and Exchange 
Commission, by rule, regulation, or order, may jointly modify 
the criteria specified in subclause (I) or (III) of clause (i), 
including the trading of security futures based on securities 
other than equity securities, to the extent such modification 
fosters the development of fair and orderly markets in security 
futures products, is necessary or appropriate in the public 
interest, and is consistent with the protection of investors.
  (II) The Commission and the Securities and Exchange 
Commission, by order, may jointly exempt any person from 
compliance with the criterion specified in clause (i)(IV) to 
the extent such exemption fosters the development of fair and 
orderly markets in security futures products, is necessary or 
appropriate in the public interest, and is consistent with the 
protection of investors.
  (vi)(I) Notwithstanding clauses (i) and (vii), until the 
compliance date, a board of trade shall not be required to meet 
the criterion specified in clause (i)(IV).
  (II) The Commission and the Securities and Exchange 
Commission shall jointly publish in the Federal Register a 
notice of the compliance date no later than 165 days before the 
compliance date.
  (III) For purposes of this clause, the term ``compliance 
date'' means the later of--
          (aa) 180 days after the end of the first full 
        calendar month period in which the average aggregate 
        comparable share volume for all security futures 
        products based on single equity securities traded on 
        all designated contract markets and registered 
        derivatives transaction execution facilities equals or 
        exceeds 10 percent of the average aggregate comparable 
        share volume of options on single equity securities 
        traded on all national securities exchanges registered 
        pursuant to section 6(a) of the Securities Exchange Act 
        of 1934 and any national securities associations 
        registered pursuant to section 15A(a) of such Act; or
          (bb) 2 years after the date on which trading in any 
        security futures product commences under this Act.
  (vii) It shall be unlawful for a board of trade to trade or 
execute a security futures product unless the board of trade 
has provided the Commission with a certification that the 
specific security futures product and the board of trade, as 
applicable, meet the criteria specified in subclauses (I) 
through (XI) of clause (i), except as otherwise provided in 
clause (vi).
  (E)(i) To the extent necessary or appropriate in the public 
interest, to promote fair competition, and consistent with 
promotion of market efficiency, innovation, and expansion of 
investment opportunities, the protection of investors, and the 
maintenance of fair and orderly markets, the Commission and the 
Securities and Exchange Commission shall jointly issue such 
rules, regulations, or orders as are necessary and appropriate 
to permit the offer and sale of a security futures product 
traded on or subject to the rules of a foreign board of trade 
to United States persons.
  (ii) The rules, regulations, or orders adopted under clause 
(i) shall take into account, as appropriate, the nature and 
size of the markets that the securities underlying the security 
futures product reflects.
  (F)(i) Nothing in this Act is intended to prohibit a futures 
commission merchant from carrying security futures products 
traded on or subject to the rules of a foreign board of trade 
in the accounts of persons located outside of the United 
States.
  (ii) Nothing in this Act is intended to prohibit any eligible 
contract participant located in the United States from 
purchasing or carrying securities futures products traded on or 
subject to the rules of a foreign board of trade, exchange, or 
market to the same extent such person may be authorized to 
purchase or carry other securities traded on a foreign board of 
trade, exchange, or market so long as any underlying security 
for such security futures products is traded principally on, 
by, or through any exchange or market located outside the 
United States.
                  (G)(i) Nothing in this paragraph shall limit 
                the jurisdiction conferred on the Securities 
                and Exchange Commission by the Wall Street 
                Transparency and Accountability Act of 2010 
                with regard to security-based swap agreements 
                as defined pursuant to section 3(a)(78) of the 
                Securities Exchange Act of 1934, and security-
                based swaps.
                  (ii) In addition to the authority of the 
                Securities and Exchange Commission described in 
                clause (i), nothing in this subparagraph shall 
                limit or affect any statutory authority of the 
                Commission with respect to an agreement, 
                contract, or transaction described in clause 
                (i).
                  (H) Notwithstanding any other provision of 
                law, the Wall Street Transparency and 
                Accountability Act of 2010 shall not apply to, 
                and the Commodity Futures Trading Commission 
                shall have no jurisdiction under such Act (or 
                any amendments to the Commodity Exchange Act 
                made by such Act) with respect to, any security 
                other than a security-based swap.
                  (I)(i) Nothing in this Act shall limit or 
                affect any statutory authority of the Federal 
                Energy Regulatory Commission or a State 
                regulatory authority (as defined in section 
                3(21) of the Federal Power Act (16 U.S.C. 
                796(21)) with respect to an agreement, 
                contract, or transaction that is entered into 
                pursuant to a tariff or rate schedule approved 
                by the Federal Energy Regulatory Commission or 
                a State regulatory authority and is--
                          (I) not executed, traded, or cleared 
                        on a registered entity or trading 
                        facility; or
                          (II) executed, traded, or cleared on 
                        a registered entity or trading facility 
                        owned or operated by a regional 
                        transmission organization or 
                        independent system operator.
                  (ii) In addition to the authority of the 
                Federal Energy Regulatory Commission or a State 
                regulatory authority described in clause (i), 
                nothing in this subparagraph shall limit or 
                affect--
                          (I) any statutory authority of the 
                        Commission with respect to an 
                        agreement, contract, or transaction 
                        described in clause (i); or
                          (II) the jurisdiction of the 
                        Commission under subparagraph (A) with 
                        respect to an agreement, contract, or 
                        transaction that is executed, traded, 
                        or cleared on a registered entity or 
                        trading facility that is not owned or 
                        operated by a regional transmission 
                        organization or independent system 
                        operator (as defined by sections 3(27) 
                        and (28) of the Federal Power Act (16 
                        U.S.C. 796(27), 796(28)).
          (2)(A) There is hereby established, as an independent 
        agency of the United States Government, a Commodity 
        Futures Trading Commission. The Commission shall be 
        composed of five Commissioners who shall be appointed 
        by the President, by and with the advice and consent of 
        the Senate. In nominating persons for appointment, the 
        President shall--
                  (i) select persons who shall each have 
                demonstrated knowledge in futures trading or 
                its regulation, or the production, 
                merchandising, processing or distribution of 
                one or more of the commodities or other goods 
                and articles, services, rights, and interests 
                covered by this Act; and
                  (ii) seek to ensure that the demonstrated 
                knowledge of the Commissioners is balanced with 
                respect to such areas.
        Not more than three of the members of the Commission 
        shall be members of the same political party. Each 
        Commissioner shall hold office for a term of five years 
        and until his successor is appointed and has qualified, 
        except that he shall not so continue to serve beyond 
        the expiration of the next session of Congress 
        subsequent to the expiration of said fixed term of 
        office, and except (i) any Commissioner appointed to 
        fill a vacancy occurring prior to the expiration of the 
        term for which his predecessor was appointed shall be 
        appointed for the remainder of such term, and (ii) the 
        terms of office of the Commissioners first taking 
        office after the enactment of this paragraph shall 
        expire as designated by the President at the time of 
        nomination, one at the end of one year, one at the end 
        of two years, one at the end of three years, one at the 
        end of four years, and one at the end of five years.
          (B) The President shall appoint, by and with the 
        advice and consent of the Senate, a member of the 
        Commission as Chairman, who shall serve as Chairman at 
        the pleasure of the President. An individual may be 
        appointed as Chairman at the same time that person is 
        appointed as a Commissioner. The Chairman shall be the 
        chief administrative officer of the Commission and 
        shall preside at hearings before the Commission. At any 
        time, the President may appoint, by and with the advice 
        and consent of the Senate, a different Chairman, and 
        the Commissioner previously appointed as Chairman may 
        complete that Commissioner's term as a Commissioner.
          (3) A vacancy in the Commission shall not impair the 
        right of the remaining Commissioners to exercise all 
        the powers of the Commission.
          (4) The Commission shall have a General Counsel, who 
        shall be appointed by the Commission and serve at the 
        pleasure of the Commission. The General Counsel shall 
        report directly to the Commission and serve as its 
        legal advisor. The Commission shall appoint such other 
        attorneys as may be necessary, in the opinion of the 
        Commission, to assist the General Counsel, represent 
        the Commission in all disciplinary proceedings pending 
        before it, represent the Commission in courts of law 
        whenever appropriate, assist the Department of Justice 
        in handling litigation concerning the Commission in 
        courts of law, and perform such other legal duties and 
        functions as the Commission may direct.
          (5) The Commission shall have an Executive Director, 
        who shall be appointed by the Commission and serve at 
        the pleasure of the Commission. The Executive Director 
        shall report directly to the Commission and perform 
        such functions and duties as the Commission may 
        prescribe.
          (6)(A) Except as otherwise provided in this paragraph 
        and in paragraphs (4) and (5) of this subsection, the 
        executive and administrative functions of the 
        Commission, including functions of the Commission with 
        respect to the appointment and supervision of personnel 
        employed under the Commission, the distribution of 
        business among such personnel and among administrative 
        units of the Commission, and the use and expenditure of 
        funds, according to budget categories, plans, programs, 
        and priorities established and approved by the 
        Commission, shall be exercised solely by the Chairman.
          (B) In carrying out any of his functions under the 
        provisions of this paragraph, the Chairman shall be 
        governed by general policies, plans, priorities, and 
        budgets approved by the Commission and by such 
        regulatory decisions, findings, and determinations as 
        the Commission may by law be authorized to make.
          (C) The appointment by the Chairman of the heads of 
        major administrative units under the Commission shall 
        be subject to the approval of the Commission.
          (D) Personnel employed regularly and full time in the 
        immediate offices of Commissioners other than the 
        Chairman shall not be affected by the provisions of 
        this paragraph.
          (E) There are hereby reserved to the Commission its 
        functions with respect to revising budget estimates and 
        with respect to determining the distribution of 
        appropriated funds according to major programs and 
        purposes.
          (F) The Chairman may from time to time make such 
        provisions as he shall deem appropriate authorizing the 
        performance by any officer, employee, or administrative 
        unit under his jurisdiction of any functions of the 
        Chairman under this paragraph.
          (7) Appointment and compensation.--
                  (A) In general.--The Commission may appoint 
                and fix the compensation of such officers, 
                attorneys, economists, examiners, and other 
                employees as may be necessary for carrying out 
                the functions of the Commission under this Act.
                  (B) Rates of pay.--Rates of basic pay for all 
                employees of the Commission may be set and 
                adjusted by the Commission without regard to 
                chapter 51 or subchapter III of chapter 53 of 
                title 5, United States Code.
                  (C) Comparability.--
                          (i) In general.--The Commission may 
                        provide additional compensation and 
                        benefits to employees of the Commission 
                        if the same type of compensation or 
                        benefits are provided by any agency 
                        referred to in section 1206(a) of the 
                        Financial Institutions Reform, 
                        Recovery, and Enforcement Act of 1989 
                        (12 U.S.C. 1833b(a)) or could be 
                        provided by such an agency under 
                        applicable provisions of law (including 
                        rules and regulations).
                          (ii) Consultation.--In setting and 
                        adjusting the total amount of 
                        compensation and benefits for 
                        employees, the Commission shall consult 
                        with, and seek to maintain 
                        comparability with, the agencies 
                        referred to in section 1206(a) of the 
                        Financial Institutions Reform, 
                        Recovery, and Enforcement Act of 1989 
                        (12 U.S.C. 1833b(a)).
          (8) No Commissioner or employee of the Commission 
        shall accept employment or compensation from any 
        person, exchange, or clearinghouse subject to 
        regulation by the Commission under this Act during his 
        term of office, nor shall he participate, directly or 
        indirectly, in any registered entity operations or 
        transactions of a character subject to regulation by 
        the Commission.
          (9)(A) The Commission shall, in cooperation with the 
        Secretary of Agriculture, maintain a liaison between 
        the Commission and the Department of Agriculture. The 
        Secretary shall take such steps as may be necessary to 
        enable the Commission to obtain information and utilize 
        such services and facilities of the Department of 
        Agriculture as may be necessary in order to maintain 
        effectively such liaison. In addition, the Secretary 
        shall appoint a liaison officer, who shall be an 
        employee of the Office of the Secretary, for the 
        purpose of maintaining a liaison between the Department 
        of Agriculture and the Commission. The Commission shall 
        furnish such liaison officer appropriate office space 
        within the offices of the Commission and shall allow 
        such liaison officer to attend and observe all 
        deliberations and proceedings of the Commission.
          (B)(i) The Commission shall maintain communications 
        with the Department of the Treasury, the Board of 
        Governors of the Federal Reserve System, and the 
        Securities and Exchange Commission for the purpose of 
        keeping such agencies fully informed of Commission 
        activities that relate to the responsibilities of those 
        agencies, for the purpose of seeking the views of those 
        agencies on such activities, and for considering the 
        relationships between the volume and nature of 
        investment and trading in contracts of sale of a 
        commodity for future delivery and in securities and 
        financial instruments under the jurisdiction of such 
        agencies.
          (ii) When a board of trade applies for designation or 
        registration as a contract market or derivatives 
        transaction execution facility involving transactions 
        for future delivery of any security issued or 
        guaranteed by the United States or any agency thereof, 
        the Commission shall promptly deliver a copy of such 
        application to the Department of the Treasury and the 
        Board of Governors of the Federal Reserve System. The 
        Commission may not designate or register a board of 
        trade as a contract market or derivatives transaction 
        execution facility based on such application until 
        forty-five days after the date the Commission delivers 
        the application to such agencies or until the 
        Commission receives comments from each of such agencies 
        on the application, whichever period is shorter. Any 
        comments received by the Commission from such agencies 
        shall be included as part of the public record of the 
        Commission's designation proceeding. In designating, 
        registering, or refusing, suspending, or revoking the 
        designation or registration of, a board of trade as a 
        contract market or derivatives transaction execution 
        facility involving transactions for future delivery 
        referred to in this clause or in considering any 
        possible action under this Act (including without 
        limitation emergency action under section 8a(9)) with 
        respect to such transactions, the Commission shall take 
        into consideration all comments it receives from the 
        Department of the Treasury and the Board of Governors 
        of the Federal Reserve System and shall consider the 
        effect that any such designation, registration, 
        suspension, revocation, or action may have on the debt 
        financing requirements of the United States Government 
        and the continued efficiency and integrity of the 
        underlying market for government securities.
          (iii) The provisions of this subparagraph shall not 
        create any rights, liabilities, or obligations upon 
        which actions may be brought against the Commission.
          (10)(A) Whenever the Commission submits any budget 
        estimate or request to the President or the Office of 
        Management and Budget, it shall concurrently transmit 
        copies of that estimate or request to the House and 
        Senate Appropriations Committees and the House 
        Committee on Agriculture and the Senate Committee on 
        Agriculture, Nutrition, and Forestry.
          (B) Whenever the Commission transmits any legislative 
        recommendations, or testimony, or comments on 
        legislation to the President or the Office of 
        Management and Budget, it shall concurrently transmit 
        copies thereof to the House Committee on Agriculture 
        and the Senate Committee on Agriculture, Nutrition, and 
        Forestry. No officer or agency of the United States 
        shall have any authority to require the Commission to 
        submit its legislative recommendations, or testimony, 
        or comments on legislation to any officer or agency of 
        the United States for approval, comments, or review, 
        prior to the submission of such recommendations, 
        testimony, or comments to the Congress. In instances in 
        which the Commission voluntarily seeks to obtain the 
        comments or review of any officer or agency of the 
        United States, the Commission shall include a 
        description of such actions in its legislative 
        recommendations, testimony, or comments on legislation 
        which it transmits to the Congress.
          (C) Whenever the Commission issues for official 
        publication any opinion, release, rule, order, 
        interpretation, or other determination on a matter, the 
        Commission shall provide that any dissenting, 
        concurring, or separate opinion by any Commissioner on 
        the matter be published in full along with the 
        Commission opinion, release, rule, order, 
        interpretation, or determination.
  (11) The Commission shall have an official seal, which shall 
be judicially noticed.
  (12) The Commission is authorized to promulgate such rules 
and regulations as it deems necessary to govern the operating 
procedures and conduct of the business of the Commission.
          (13) Public availability of swap transaction data.--
                  (A) Definition of real-time public 
                reporting.--In this paragraph, the term ``real-
                time public reporting'' means to report data 
                relating to a swap transaction, including price 
                and volume, as soon as technologically 
                practicable after the time at which the swap 
                transaction has been executed.
                  (B) Purpose.--The purpose of this section is 
                to authorize the Commission to make swap 
                transaction and pricing data available to the 
                public in such form and at such times as the 
                Commission determines appropriate to enhance 
                price discovery.
                  (C) General rule.--The Commission is 
                authorized and required to provide by rule for 
                the public availability of swap transaction and 
                pricing data as follows:
                          (i) With respect to those swaps that 
                        are subject to the mandatory clearing 
                        requirement described in subsection 
                        (h)(1) (including those swaps that are 
                        excepted from the requirement pursuant 
                        to subsection (h)(7)), the Commission 
                        shall require real-time public 
                        reporting for such transactions.
                          (ii) With respect to those swaps that 
                        are not subject to the mandatory 
                        clearing requirement described in 
                        subsection (h)(1), but are cleared at a 
                        registered derivatives clearing 
                        organization, the Commission shall 
                        require real-time public reporting for 
                        such transactions.
                          (iii) With respect to swaps that are 
                        not cleared at a registered derivatives 
                        clearing organization and which are 
                        reported to a swap data repository or 
                        the Commission under subsection (h)(6), 
                        the Commission shall require real-time 
                        public reporting for such transactions, 
                        in a manner that does not disclose the 
                        business transactions and market 
                        positions of any person.
                          (iv) With respect to swaps that are 
                        determined to be required to be cleared 
                        under subsection (h)(2) but are not 
                        cleared, the Commission shall require 
                        real-time public reporting for such 
                        transactions.
                  (D) Registered entities and public 
                reporting.--The Commission may require 
                registered entities to publicly disseminate the 
                swap transaction and pricing data required to 
                be reported under this paragraph.
                  (E) Rulemaking required.--With respect to the 
                rule providing for the public availability of 
                transaction and pricing data for swaps 
                described in clauses (i) and (ii) of 
                subparagraph (C), the rule promulgated by the 
                Commission shall contain provisions--
                          (i) to ensure such information does 
                        not identify the participants;
                          (ii) to specify the criteria for 
                        determining what constitutes a large 
                        notional swap transaction (block trade) 
                        for particular markets and contracts;
                          (iii) to specify the appropriate time 
                        delay for reporting large notional swap 
                        transactions (block trades) to the 
                        public; and
                          (iv) that take into account whether 
                        the public disclosure will materially 
                        reduce market liquidity.
                  (F) Timeliness of reporting.--Parties to a 
                swap (including agents of the parties to a 
                swap) shall be responsible for reporting swap 
                transaction information to the appropriate 
                registered entity in a timely manner as may be 
                prescribed by the Commission.
                  (G) Reporting of swaps to registered swap 
                data repositories.--Each swap (whether cleared 
                or uncleared) shall be reported to a registered 
                swap data repository.
          (14) Semiannual and annual public reporting of 
        aggregate swap data.--
                  (A) In general.--In accordance with 
                subparagraph (B), the Commission shall issue a 
                written report on a semiannual and annual basis 
                to make available to the public information 
                relating to--
                          (i) the trading and clearing in the 
                        major swap categories; and
                          (ii) the market participants and 
                        developments in new products.
                  (B) Use; consultation.--In preparing a report 
                under subparagraph (A), the Commission shall--
                          (i) use information from swap data 
                        repositories and derivatives clearing 
                        organizations; and
                          (ii) consult with the Office of the 
                        Comptroller of the Currency, the Bank 
                        for International Settlements, and such 
                        other regulatory bodies as may be 
                        necessary.
                  (C) Authority of the commission.--The 
                Commission may, by rule, regulation, or order, 
                delegate the public reporting responsibilities 
                of the Commission under this paragraph in 
                accordance with such terms and conditions as 
                the Commission determines to be appropriate and 
                in the public interest.
          (15) Energy and environmental markets advisory 
        committee.--
                  (A) Establishment.--
                          (i) In general.--An Energy and 
                        Environmental Markets Advisory 
                        Committee is hereby established.
                          (ii) Membership.--The Committee shall 
                        have 9 members.
                          (iii) Activities.--The Committee's 
                        objectives and scope of activities 
                        shall be--
                                  (I) to conduct public 
                                meetings;
                                  (II) to submit reports and 
                                recommendations to the 
                                Commission (including 
                                dissenting or minority views, 
                                if any); and
                                  (III) otherwise to serve as a 
                                vehicle for discussion and 
                                communication on matters of 
                                concern to exchanges, firms, 
                                end users, and regulators 
                                regarding energy and 
                                environmental markets and their 
                                regulation by the Commission.
                  (B) Requirements.--
                          (i) In general.--The Committee shall 
                        hold public meetings at such intervals 
                        as are necessary to carry out the 
                        functions of the Committee, but not 
                        less frequently than 2 times per year.
                          (ii) Members.--Members shall be 
                        appointed to 3-year terms, but may be 
                        removed for cause by vote of the 
                        Commission.
                  (C) Appointment.--The Commission shall 
                appoint members with a wide diversity of 
                opinion and who represent a broad spectrum of 
                interests, including hedgers and consumers.
                  (D) Reimbursement.--Members shall be entitled 
                to per diem and travel expense reimbursement by 
                the Commission.
                  (E) FACA.--The Committee shall not be subject 
                to the Federal Advisory Committee Act (5 U.S.C. 
                App.).
  (b) For the purposes of this Act (but not in any wise 
limiting the foregoing definition of interstate commerce) a 
transaction in respect to any article shall be considered to be 
in interstate commerce if such article is part of that current 
of commerce usual in the commodity trade whereby commodities 
and commodity products and by-products thereof are sent from 
one State with the expectation that they will end their 
transit, after purchase, in another, including, in addition to 
cases within the above general description, all cases where 
purchase or sale is either for shipment to another State, or 
for manufacture within the State and the shipment outside the 
State of the products resulting from such manufacture. Articles 
normally in such current of commerce shall not be considered 
out of such commerce through resort being had to any means or 
device intended to remove transactions in respect thereto from 
the provisions of this Act. For the purpose of this paragraph 
the word ``State'' includes Territory, the District of 
Columbia, possession of the United States, and foreign nation.
  (c) Agreements, Contracts, and Transactions in Foreign 
Currency, Government Securities, and Certain Other 
Commodities.--
          (1) In general.--Except as provided in paragraph (2), 
        nothing in this Act (other than section, 5b, or 
        12(e)(2)(B)) governs or applies to an agreement, 
        contract, or transaction in--
                  (A) foreign currency;
                  (B) government securities;
                  (C) security warrants;
                  (D) security rights;
                  (E) resales of installment loan contracts;
                  (F) repurchase transactions in an excluded 
                commodity; or
                  (G) mortgages or mortgage purchase 
                commitments.
          (2) Commission jurisdiction.--
                  (A) Agreements, contracts, and transactions 
                traded on an organized exchange.--This Act 
                applies to, and the Commission shall have 
                jurisdiction over, an agreement, contract, or 
                transaction described in paragraph (1) that 
                is--
                          (i) a contract of sale of a commodity 
                        for future delivery (or an option on 
                        such a contract), or an option on a 
                        commodity (other than foreign currency 
                        or a security or a group or index of 
                        securities), that is executed or traded 
                        on an organized exchange;
                          (ii) a swap; or
                          (iii) an option on foreign currency 
                        executed or traded on an organized 
                        exchange that is not a national 
                        securities exchange registered pursuant 
                        to section 6(a) of the Securities 
                        Exchange Act of 1934.
                  (B) Agreements, contracts, and transactions 
                in retail foreign currency.--
                          (i) This Act applies to, and the 
                        Commission shall have jurisdiction 
                        over, an agreement, contract, or 
                        transaction in foreign currency that--
                                  (I) is a contract of sale of 
                                a commodity for future delivery 
                                (or an option on such a 
                                contract) or an option (other 
                                than an option executed or 
                                traded on a national securities 
                                exchange registered pursuant to 
                                section 6(a) of the Securities 
                                Exchange Act of 1934 (15 U.S.C. 
                                78f(a))); and
                                  (II) is offered to, or 
                                entered into with, a person 
                                that is not an eligible 
                                contract participant, unless 
                                the counterparty, or the person 
                                offering to be the 
                                counterparty, of the person 
                                is--
                                          (aa) a United States 
                                        financial institution;
                                          (bb)(AA) a broker or 
                                        dealer registered under 
                                        section 15(b) (except 
                                        paragraph (11) thereof) 
                                        or 15C of the 
                                        Securities Exchange Act 
                                        of 1934 (15 U.S.C. 
                                        78o(b), 78o-5); or
                                          (BB) an associated 
                                        person of a broker or 
                                        dealer registered under 
                                        section 15(b) (except 
                                        paragraph (11) thereof) 
                                        or 15C of the 
                                        Securities Exchange Act 
                                        of 1934 (15 U.S.C. 
                                        78o(b), 78o-5) 
                                        concerning the 
                                        financial or securities 
                                        activities of which the 
                                        broker or dealer makes 
                                        and keeps records under 
                                        section 15C(b) or 17(h) 
                                        of the Securities 
                                        Exchange Act of 1934 
                                        (15 U.S.C. 78o-5(b), 
                                        78q(h));
                                          (cc)(AA) a futures 
                                        commission merchant 
                                        that is primarily or 
                                        substantially engaged 
                                        in the business 
                                        activities described in 
                                        section 1a of this Act, 
                                        is registered under 
                                        this Act, is not a 
                                        person described in 
                                        item (bb) of this 
                                        subclause, and 
                                        maintains adjusted net 
                                        capital equal to or in 
                                        excess of the dollar 
                                        amount that applies for 
                                        purposes of clause (ii) 
                                        of this subparagraph; 
                                        or
                                          (BB) an affiliated 
                                        person of a futures 
                                        commission merchant 
                                        that is primarily or 
                                        substantially engaged 
                                        in the business 
                                        activities described in 
                                        section 1a of this Act, 
                                        is registered under 
                                        this Act, and is not a 
                                        person described in 
                                        item (bb) of this 
                                        subclause, if the 
                                        affiliated person 
                                        maintains adjusted net 
                                        capital equal to or in 
                                        excess of the dollar 
                                        amount that applies for 
                                        purposes of clause (ii) 
                                        of this subparagraph 
                                        and is not a person 
                                        described in such item 
                                        (bb), and the futures 
                                        commission merchant 
                                        makes and keeps records 
                                        under section 
                                        4f(c)(2)(B) of this Act 
                                        concerning the futures 
                                        and other financial 
                                        activities of the 
                                        affiliated person;
                                          (dd) a financial 
                                        holding company (as 
                                        defined in section 2 of 
                                        the Bank Holding 
                                        Company Act of 1956); 
                                        or
                                          (ff) a retail foreign 
                                        exchange dealer that 
                                        maintains adjusted net 
                                        capital equal to or in 
                                        excess of the dollar 
                                        amount that applies for 
                                        purposes of clause (ii) 
                                        of this subparagraph 
                                        and is registered in 
                                        such capacity with the 
                                        Commission, subject to 
                                        such terms and 
                                        conditions as the 
                                        Commission shall 
                                        prescribe, and is a 
                                        member of a futures 
                                        association registered 
                                        under section 17.
                          (ii) The dollar amount that applies 
                        for purposes of this clause is--
                                  (I) $10,000,000, beginning 
                                120 days after the date of the 
                                enactment of this clause;
                                  (II) $15,000,000, beginning 
                                240 days after such date of 
                                enactment; and
                                  (III) $20,000,000, beginning 
                                360 days after such date of 
                                enactment.
                          (iii) Notwithstanding items (cc) and 
                        (gg) of clause (i)(II) of this 
                        subparagraph, agreements, contracts, or 
                        transactions described in clause (i) of 
                        this subparagraph, and accounts or 
                        pooled investment vehicles described in 
                        clause (vi), shall be subject to 
                        subsection (a)(1)(B) of this section 
                        and sections 4(b), 4b, 4c(b), 4o, 6(c) 
                        and 6(d) (except to the extent that 
                        sections 6(c) and 6(d) prohibit 
                        manipulation of the market price of any 
                        commodity in interstate commerce, or 
                        for future delivery on or subject to 
                        the rules of any market), 6c, 6d, 8(a), 
                        13(a), and 13(b) if the agreements, 
                        contracts, or transactions are offered, 
                        or entered into, by a person that is 
                        registered as a futures commission 
                        merchant or retail foreign exchange 
                        dealer, or an affiliated person of a 
                        futures commission merchant registered 
                        under this Act that is not also a 
                        person described in any of item (aa), 
                        (bb), (ee), or (ff) of clause (i)(II) 
                        of this subparagraph.
                          (iv)(I) Notwithstanding items (cc) 
                        and (gg) of clause (i)(II), a person, 
                        unless registered in such capacity as 
                        the Commission by rule, regulation, or 
                        order shall determine and a member of a 
                        futures association registered under 
                        section 17, shall not--
                                  (aa) solicit or accept orders 
                                from any person that is not an 
                                eligible contract participant 
                                in connection with agreements, 
                                contracts, or transactions 
                                described in clause (i) entered 
                                into with or to be entered into 
                                with a person who is not 
                                described in item (aa), (bb), 
                                (ee), or (ff) of clause 
                                (i)(II);
                                  (bb) exercise discretionary 
                                trading authority or obtain 
                                written authorization to 
                                exercise discretionary trading 
                                authority over any account for 
                                or on behalf of any person that 
                                is not an eligible contract 
                                participant in connection with 
                                agreements, contracts, or 
                                transactions described in 
                                clause (i) entered into with or 
                                to be entered into with a 
                                person who is not described in 
                                item (aa), (bb), (ee), or (ff) 
                                of clause (i)(II); or
                                  (cc) operate or solicit 
                                funds, securities, or property 
                                for any pooled investment 
                                vehicle that is not an eligible 
                                contract participant in 
                                connection with agreements, 
                                contracts, or transactions 
                                described in clause (i) entered 
                                into with or to be entered into 
                                with a person who is not 
                                described in item (aa), (bb), 
                                (ee), or (ff) of clause 
                                (i)(II).
                          (II) Subclause (I) of this clause 
                        shall not apply to--
                                  (aa) any person described in 
                                any of item (aa), (bb), (ee), 
                                or (ff) of clause (i)(II);
                                  (bb) any such person's 
                                associated persons; or
                                  (cc) any person who would be 
                                exempt from registration if 
                                engaging in the same activities 
                                in connection with transactions 
                                conducted on or subject to the 
                                rules of a contract market or a 
                                derivatives transaction 
                                execution facility.
                          (III) Notwithstanding items (cc) and 
                        (gg) of clause (i)(II), the Commission 
                        may make, promulgate, and enforce such 
                        rules and regulations as, in the 
                        judgment of the Commission, are 
                        reasonably necessary to effectuate any 
                        of the provisions of, or to accomplish 
                        any of the purposes of, this Act in 
                        connection with the activities of 
                        persons subject to subclause (I).
                          (IV) Subclause (III) of this clause 
                        shall not apply to--
                                  (aa) any person described in 
                                any of item (aa) through (ff) 
                                of clause (i)(II);
                                  (bb) any such person's 
                                associated persons; or
                                  (cc) any person who would be 
                                exempt from registration if 
                                engaging in the same activities 
                                in connection with transactions 
                                conducted on or subject to the 
                                rules of a contract market or a 
                                derivatives transaction 
                                execution facility.
                          (v) Notwithstanding items (cc) and 
                        (gg) of clause (i)(II), the Commission 
                        may make, promulgate, and enforce such 
                        rules and regulations as, in the 
                        judgment of the Commission, are 
                        reasonably necessary to effectuate any 
                        of the provisions of, or to accomplish 
                        any of the purposes of, this Act in 
                        connection with agreements, contracts, 
                        or transactions described in clause (i) 
                        which are offered, or entered into, by 
                        a person described in item (cc) or (gg) 
                        of clause (i)(II).
                          (vi) This Act applies to, and the 
                        Commission shall have jurisdiction 
                        over, an account or pooled investment 
                        vehicle that is offered for the purpose 
                        of trading, or that trades, any 
                        agreement, contract, or transaction in 
                        foreign currency described in clause 
                        (i).
                  (C)(i)(I) This subparagraph shall apply to 
                any agreement, contract, or transaction in 
                foreign currency that is--
                                  (aa) offered to, or entered 
                                into with, a person that is not 
                                an eligible contract 
                                participant (except that this 
                                subparagraph shall not apply if 
                                the counterparty, or the person 
                                offering to be the 
                                counterparty, of the person 
                                that is not an eligible 
                                contract participant is a 
                                person described in any of item 
                                (aa), (bb), (ee), or (ff) of 
                                subparagraph (B)(i)(II)); and
                                  (bb) offered, or entered 
                                into, on a leveraged or 
                                margined basis, or financed by 
                                the offeror, the counterparty, 
                                or a person acting in concert 
                                with the offeror or 
                                counterparty on a similar 
                                basis.
                  (II) Subclause (I) of this clause shall not 
                apply to--
                          (aa) a security that is not a 
                        security futures product; or
                          (bb) a contract of sale that--
                                  (AA) results in actual 
                                delivery within 2 days; or
                                  (BB) creates an enforceable 
                                obligation to deliver between a 
                                seller and buyer that have the 
                                ability to deliver and accept 
                                delivery, respectively, in 
                                connection with their line of 
                                business.
                  (ii)(I) Agreements, contracts, or 
                transactions described in clause (i) of this 
                subparagraph, and accounts or pooled investment 
                vehicles described in clause (vii), shall be 
                subject to subsection (a)(1)(B) of this section 
                and sections 4(b), 4b, 4c(b), 4o, 6(c) and 6(d) 
                (except to the extent that sections 6(c) and 
                6(d) prohibit manipulation of the market price 
                of any commodity in interstate commerce, or for 
                future delivery on or subject to the rules of 
                any market), 6c, 6d, 8(a), 13(a), and 13(b).
                  (II) Subclause (I) of this clause shall not 
                apply to--
                          (aa) any person described in any of 
                        item (aa), (bb), (ee), or (ff) of 
                        subparagraph (B)(i)(II); or
                          (bb) any such person's associated 
                        persons.
                  (III) The Commission may make, promulgate, 
                and enforce such rules and regulations as, in 
                the judgment of the Commission, are reasonably 
                necessary to effectuate any of the provisions 
                of or to accomplish any of the purposes of this 
                Act in connection with agreements, contracts, 
                or transactions described in clause (i) of this 
                subparagraph if the agreements, contracts, or 
                transactions are offered, or entered into, by a 
                person that is not described in item (aa) 
                through (ff) of subparagraph (B)(i)(II).
                  (iii)(I) A person, unless registered in such 
                capacity as the Commission by rule, regulation, 
                or order shall determine and a member of a 
                futures association registered under section 
                17, shall not--
                          (aa) solicit or accept orders from 
                        any person that is not an eligible 
                        contract participant in connection with 
                        agreements, contracts, or transactions 
                        described in clause (i) of this 
                        subparagraph entered into with or to be 
                        entered into with a person who is not 
                        described in item (aa), (bb), (ee), or 
                        (ff) of subparagraph (B)(i)(II);
                          (bb) exercise discretionary trading 
                        authority or obtain written 
                        authorization to exercise written 
                        trading authority over any account for 
                        or on behalf of any person that is not 
                        an eligible contract participant in 
                        connection with agreements, contracts, 
                        or transactions described in clause (i) 
                        of this subparagraph entered into with 
                        or to be entered into with a person who 
                        is not described in item (aa), (bb), 
                        (ee), or (ff) of subparagraph 
                        (B)(i)(II); or
                          (cc) operate or solicit funds, 
                        securities, or property for any pooled 
                        investment vehicle that is not an 
                        eligible contract participant in 
                        connection with agreements, contracts, 
                        or transactions described in clause (i) 
                        of this subparagraph entered into with 
                        or to be entered into with a person who 
                        is not described in item (aa), (bb), 
                        (ee), or (ff) of subparagraph 
                        (B)(i)(II).
                  (II) Subclause (I) of this clause shall not 
                apply to--
                          (aa) any person described in item 
                        (aa), (bb), (ee), or (ff) of 
                        subparagraph (B)(i)(II);
                          (bb) any such person's associated 
                        persons; or
                          (cc) any person who would be exempt 
                        from registration if engaging in the 
                        same activities in connection with 
                        transactions conducted on or subject to 
                        the rules of a contract market or a 
                        derivatives transaction execution 
                        facility.
                  (III) The Commission may make, promulgate, 
                and enforce such rules and regulations as, in 
                the judgment of the Commission, are reasonably 
                necessary to effectuate any of the provisions 
                of, or to accomplish any of the purposes of, 
                this Act in connection with the activities of 
                persons subject to subclause (I).
                  (IV) Subclause (III) of this clause shall not 
                apply to--
                          (aa) any person described in item 
                        (aa) through (ff) of subparagraph 
                        (B)(i)(II);
                          (bb) any such person's associated 
                        persons; or
                          (cc) any person who would be exempt 
                        from registration if engaging in the 
                        same activities in connection with 
                        transactions conducted on or subject to 
                        the rules of a contract market or a 
                        derivatives transaction execution 
                        facility.
                  (iv) Sections 4(b) and 4b shall apply to any 
                agreement, contract, or transaction described 
                in clause (i) of this subparagraph as if the 
                agreement, contract, or transaction were a 
                contract of sale of a commodity for future 
                delivery.
                  (v) This subparagraph shall not be construed 
                to limit any jurisdiction that the Commission 
                may otherwise have under any other provision of 
                this Act over an agreement, contract, or 
                transaction that is a contract of sale of a 
                commodity for future delivery.
                  (vi) This subparagraph shall not be construed 
                to limit any jurisdiction that the Commission 
                or the Securities and Exchange Commission may 
                otherwise have under any other provision of 
                this Act with respect to security futures 
                products and persons effecting transactions in 
                security futures products.
                          (vii) This Act applies to, and the 
                        Commission shall have jurisdiction 
                        over, an account or pooled investment 
                        vehicle that is offered for the purpose 
                        of trading, or that trades, any 
                        agreement, contract, or transaction in 
                        foreign currency described in clause 
                        (i).
                  (D) Retail commodity transactions.--
                          (i) Applicability.--Except as 
                        provided in clause (ii), this 
                        subparagraph shall apply to any 
                        agreement, contract, or transaction in 
                        any commodity that is--
                                  (I) entered into with, or 
                                offered to (even if not entered 
                                into with), a person that is 
                                not an eligible contract 
                                participant or eligible 
                                commercial entity; and
                                  (II) entered into, or offered 
                                (even if not entered into), on 
                                a leveraged or margined basis, 
                                or financed by the offeror, the 
                                counterparty, or a person 
                                acting in concert with the 
                                offeror or counterparty on a 
                                similar basis.
                          (ii) Exceptions.--This subparagraph 
                        shall not apply to--
                                  (I) an agreement, contract, 
                                or transaction described in 
                                paragraph (1) or subparagraphs 
                                (A), (B), or (C), including any 
                                agreement, contract, or 
                                transaction specifically 
                                excluded from subparagraph (A), 
                                (B), or (C);
                                  (II) any security;
                                  (III) a contract of sale 
                                that--
                                          (aa) results in 
                                        actual delivery within 
                                        28 days or such other 
                                        longer period as the 
                                        Commission may 
                                        determine by rule or 
                                        regulation based upon 
                                        the typical commercial 
                                        practice in cash or 
                                        spot markets for the 
                                        commodity involved; or
                                          (bb) creates an 
                                        enforceable obligation 
                                        to deliver between a 
                                        seller and a buyer that 
                                        have the ability to 
                                        deliver and accept 
                                        delivery, respectively, 
                                        in connection with the 
                                        line of business of the 
                                        seller and buyer; or
                                  (IV) an agreement, contract, 
                                or transaction that is listed 
                                on a national securities 
                                exchange registered under 
                                section 6(a) of the Securities 
                                Exchange Act of 1934 (15 U.S.C. 
                                78f(a)); or
                                  (V) an identified banking 
                                product, as defined in section 
                                402(b) of the Legal Certainty 
                                for Bank Products Act of 2000 
                                (7 U.S.C.27(b)).
                          (iii) Enforcement.--Sections 4(a), 
                        4(b), and 4b apply to any agreement, 
                        contract, or transaction described in 
                        clause (i), as if the agreement, 
                        contract, or transaction was a contract 
                        of sale of a commodity for future 
                        delivery.
                          (iv) Eligible commercial entity.--For 
                        purposes of this subparagraph, an 
                        agricultural producer, packer, or 
                        handler shall be considered to be an 
                        eligible commercial entity for any 
                        agreement, contract, or transaction for 
                        a commodity in connection with the line 
                        of business of the agricultural 
                        producer, packer, or handler.
                  (E) Prohibition.--
                          (i) Definition of federal regulatory 
                        agency.--In this subparagraph, the term 
                        ``Federal regulatory agency'' means--
                                  (I) the Commission;
                                  (II) the Securities and 
                                Exchange Commission;
                                  (III) an appropriate Federal 
                                banking agency;
                                  (IV) the National Credit 
                                Union Association; and
                                  (V) the Farm Credit 
                                Administration.
                          (ii) Prohibition.--
                                  (I) In general.--Except as 
                                provided in subclause (II), a 
                                person described in 
                                subparagraph (B)(i)(II) for 
                                which there is a Federal 
                                regulatory agency shall not 
                                offer to, or enter into with, a 
                                person that is not an eligible 
                                contract participant, any 
                                agreement, contract, or 
                                transaction in foreign currency 
                                described in subparagraph 
                                (B)(i)(I) except pursuant to a 
                                rule or regulation of a Federal 
                                regulatory agency allowing the 
                                agreement, contract, or 
                                transaction under such terms 
                                and conditions as the Federal 
                                regulatory agency shall 
                                prescribe.
                                  (II) Effective date.--With 
                                regard to persons described in 
                                subparagraph (B)(i)(II) for 
                                which a Federal regulatory 
                                agency has issued a proposed 
                                rule concerning agreements, 
                                contracts, or transactions in 
                                foreign currency described in 
                                subparagraph (B)(i)(I) prior to 
                                the date of enactment of this 
                                subclause, subclause (I) shall 
                                take effect 90 days after the 
                                date of enactment of this 
                                subclause.
                          (iii) Requirements of rules and 
                        regulations.--
                                  (I) In general.--The rules 
                                and regulations described in 
                                clause (ii) shall prescribe 
                                appropriate requirements with 
                                respect to--
                                          (aa) disclosure;
                                          (bb) recordkeeping;
                                          (cc) capital and 
                                        margin;
                                          (dd) reporting;
                                          (ee) business 
                                        conduct;
                                          (ff) documentation; 
                                        and
                                          (gg) such other 
                                        standards or 
                                        requirements as the 
                                        Federal regulatory 
                                        agency shall determine 
                                        to be necessary.
                                  (II) Treatment.--The rules or 
                                regulations described in clause 
                                (ii) shall treat all 
                                agreements, contracts, and 
                                transactions in foreign 
                                currency described in 
                                subparagraph (B)(i)(I), and all 
                                agreements, contracts, and 
                                transactions in foreign 
                                currency that are functionally 
                                or economically similar to 
                                agreements, contracts, or 
                                transactions described in 
                                subparagraph (B)(i)(I), 
                                similarly.
  (d) Swaps.--Nothing in this Act (other than subparagraphs 
(A), (B), (C), (D), (G), and (H) of subsection (a)(1), 
subsections (f) and (g), sections 1a, 2(a)(13), 2(c)(2)(A)(ii), 
2(e), 2(h), 4(c), 4a, 4b, and 4b-1, subsections (a), (b), and 
(g) of section 4c, sections 4d, 4e, 4f, 4g, 4h, 4i, 4j, 4k, 4l, 
4m, 4n, 4o, 4p, 4r, 4s, 4t, 5, 5b, 5c, 5e, and 5h, subsections 
(c) and (d) of section 6, sections 6c, 6d, 8, 8a, and 9, 
subsections (e)(2), (f), and (h) of section 12, subsections (a) 
and (b) of section 13, sections 17, 20, 21, and 22(a)(4), and 
any other provision of this Act that is applicable to 
registered entities or Commission registrants) governs or 
applies to a swap.
  (e) Limitation on Participation.--It shall be unlawful for 
any person, other than an eligible contract participant, to 
enter into a swap unless the swap is entered into on, or 
subject to the rules of, a board of trade designated as a 
contract market under section 5.
  (f) Exclusion for Qualifying Hybrid Instruments.--
          (1) In general.--Nothing in this Act (other than 
        section 12(e)(2)(B)) governs or is applicable to a 
        hybrid instrument that is predominantly a security.
          (2) Predominance.--A hybrid instrument shall be 
        considered to be predominantly a security if--
                  (A) the issuer of the hybrid instrument 
                receives payment in full of the purchase price 
                of the hybrid instrument, substantially 
                contemporaneously with delivery of the hybrid 
                instrument;
                  (B) the purchaser or holder of the hybrid 
                instrument is not required to make any payment 
                to the issuer in addition to the purchase price 
                paid under subparagraph (A), whether as margin, 
                settlement payment, or otherwise, during the 
                life of the hybrid instrument or at maturity;
                  (C) the issuer of the hybrid instrument is 
                not subject by the terms of the instrument to 
                mark-to-market margining requirements; and
                  (D) the hybrid instrument is not marketed as 
                a contract of sale of a commodity for future 
                delivery (or option on such a contract) subject 
                to this Act.
          (3) Mark-to-market margining requirements.--For the 
        purposes of paragraph (2)(C), mark-to-market margining 
        requirements do not include the obligation of an issuer 
        of a secured debt instrument to increase the amount of 
        collateral held in pledge for the benefit of the 
        purchaser of the secured debt instrument to secure the 
        repayment obligations of the issuer under the secured 
        debt instrument.
  (g) Application of Commodity Futures Laws.--
          (1) No provision of this Act shall be construed as 
        implying or creating any presumption that--
                  (A) any agreement, contract, or transaction 
                that is excluded from this Act under section 
                2(c), 2(d), 2(e), 2(f), or 2(g) of this Act or 
                title IV of the Commodity Futures Modernization 
                Act of 2000, or exempted under section 2(h) or 
                4(c) of this Act; or
                  (B) any agreement, contract, or transaction, 
                not otherwise subject to this Act, that is not 
                so excluded or exempted,
        is or would otherwise be subject to this Act.
          (2) No provision of, or amendment made by, the 
        Commodity Futures Modernization Act of 2000 shall be 
        construed as conferring jurisdiction on the Commission 
        with respect to any such agreement, contract, or 
        transaction, except as expressly provided in section 5b 
        of this Act.
  (h) Clearing Requirement.--
          (1) In general.--
                  (A) Standard for clearing.--It shall be 
                unlawful for any person to engage in a swap 
                unless that person submits such swap for 
                clearing to a derivatives clearing organization 
                that is registered under this Act or a 
                derivatives clearing organization that is 
                exempt from registration under this Act if the 
                swap is required to be cleared.
                  (B) Open access.--The rules of a derivatives 
                clearing organization described in subparagraph 
                (A) shall--
                          (i) prescribe that all swaps (but not 
                        contracts of sale of a commodity for 
                        future delivery or options on such 
                        contracts) submitted to the derivatives 
                        clearing organization with the same 
                        terms and conditions are economically 
                        equivalent within the derivatives 
                        clearing organization and may be offset 
                        with each other within the derivatives 
                        clearing organization; and
                          (ii) provide for non-discriminatory 
                        clearing of a swap (but not a contract 
                        of sale of a commodity for future 
                        delivery or option on such contract) 
                        executed bilaterally or on or through 
                        the rules of an unaffiliated designated 
                        contract market or swap execution 
                        facility.
          (2) Commission review.--
                  (A) Commission-initiated review.--
                          (i) The Commission on an ongoing 
                        basis shall review each swap, or any 
                        group, category, type, or class of 
                        swaps to make a determination as to 
                        whether the swap or group, category, 
                        type, or class of swaps should be 
                        required to be cleared.
                          (ii) The Commission shall provide at 
                        least a 30-day public comment period 
                        regarding any determination made under 
                        clause (i).
                  (B) Swap submissions.--
                          (i) A derivatives clearing 
                        organization shall submit to the 
                        Commission each swap, or any group, 
                        category, type, or class of swaps that 
                        it plans to accept for clearing, and 
                        provide notice to its members (in a 
                        manner to be determined by the 
                        Commission) of the submission.
                          (ii) Any swap or group, category, 
                        type, or class of swaps listed for 
                        clearing by a derivative clearing 
                        organization as of the date of 
                        enactment of this subsection shall be 
                        considered submitted to the Commission.
                          (iii) The Commission shall--
                                  (I) make available to the 
                                public submissions received 
                                under clauses (i) and (ii);
                                  (II) review each submission 
                                made under clauses (i) and 
                                (ii), and determine whether the 
                                swap, or group, category, type, 
                                or class of swaps described in 
                                the submission is required to 
                                be cleared; and
                                  (III) provide at least a 30-
                                day public comment period 
                                regarding its determination as 
                                to whether the clearing 
                                requirement under paragraph 
                                (1)(A) shall apply to the 
                                submission.
                  (C) Deadline.--The Commission shall make its 
                determination under subparagraph (B)(iii) not 
                later than 90 days after receiving a submission 
                made under subparagraphs (B)(i) and (B)(ii), 
                unless the submitting derivatives clearing 
                organization agrees to an extension for the 
                time limitation established under this 
                subparagraph.
                  (D) Determination.--
                          (i) In reviewing a submission made 
                        under subparagraph (B), the Commission 
                        shall review whether the submission is 
                        consistent with section 5b(c)(2).
                          (ii) In reviewing a swap, group of 
                        swaps, or class of swaps pursuant to 
                        subparagraph (A) or a submission made 
                        under subparagraph (B), the Commission 
                        shall take into account the following 
                        factors:
                                  (I) The existence of 
                                significant outstanding 
                                notional exposures, trading 
                                liquidity, and adequate pricing 
                                data.
                                  (II) The availability of rule 
                                framework, capacity, 
                                operational expertise and 
                                resources, and credit support 
                                infrastructure to clear the 
                                contract on terms that are 
                                consistent with the material 
                                terms and trading conventions 
                                on which the contract is then 
                                traded.
                                  (III) The effect on the 
                                mitigation of systemic risk, 
                                taking into account the size of 
                                the market for such contract 
                                and the resources of the 
                                derivatives clearing 
                                organization available to clear 
                                the contract.
                                  (IV) The effect on 
                                competition, including 
                                appropriate fees and charges 
                                applied to clearing.
                                  (V) The existence of 
                                reasonable legal certainty in 
                                the event of the insolvency of 
                                the relevant derivatives 
                                clearing organization or 1 or 
                                more of its clearing members 
                                with regard to the treatment of 
                                customer and swap counterparty 
                                positions, funds, and property.
                          (iii) In making a determination under 
                        subparagraph (A) or (B)(iii) that the 
                        clearing requirement shall apply, the 
                        Commission may require such terms and 
                        conditions to the requirement as the 
                        Commission determines to be 
                        appropriate.
                  (E) Rules.--Not later than 1 year after the 
                date of the enactment of this subsection, the 
                Commission shall adopt rules for a derivatives 
                clearing organization's submission for review, 
                pursuant to this paragraph, of a swap, or a 
                group, category, type, or class of swaps, that 
                it seeks to accept for clearing. Nothing in 
                this subparagraph limits the Commission from 
                making a determination under subparagraph 
                (B)(iii) for swaps described in subparagraph 
                (B)(ii).
          (3) Stay of clearing requirement.--
                  (A) In general.--After making a determination 
                pursuant to paragraph (2)(B), the Commission, 
                on application of a counterparty to a swap or 
                on its own initiative, may stay the clearing 
                requirement of paragraph (1) until the 
                Commission completes a review of the terms of 
                the swap (or the group, category, type, or 
                class of swaps) and the clearing arrangement.
                  (B) Deadline.--The Commission shall complete 
                a review undertaken pursuant to subparagraph 
                (A) not later than 90 days after issuance of 
                the stay, unless the derivatives clearing 
                organization that clears the swap, or group, 
                category, type, or class of swaps agrees to an 
                extension of the time limitation established 
                under this subparagraph.
                  (C) Determination.--Upon completion of the 
                review undertaken pursuant to subparagraph (A), 
                the Commission may--
                          (i) determine, unconditionally or 
                        subject to such terms and conditions as 
                        the Commission determines to be 
                        appropriate, that the swap, or group, 
                        category, type, or class of swaps must 
                        be cleared pursuant to this subsection 
                        if it finds that such clearing is 
                        consistent with paragraph (2)(D); or
                          (ii) determine that the clearing 
                        requirement of paragraph (1) shall not 
                        apply to the swap, or group, category, 
                        type, or class of swaps.
                  (D) Rules.--Not later than 1 year after the 
                date of the enactment of the Wall Street 
                Transparency and Accountability Act of 2010, 
                the Commission shall adopt rules for reviewing, 
                pursuant to this paragraph, a derivatives 
                clearing organization's clearing of a swap, or 
                a group, category, type, or class of swaps, 
                that it has accepted for clearing.
          (4) Prevention of evasion.--
                  (A) In general.--The Commission shall 
                prescribe rules under this subsection (and 
                issue interpretations of rules prescribed under 
                this subsection) as determined by the 
                Commission to be necessary to prevent evasions 
                of the mandatory clearing requirements under 
                this Act.
                  (B) Duty of commission to investigate and 
                take certain actions.--To the extent the 
                Commission finds that a particular swap, group, 
                category, type, or class of swaps would 
                otherwise be subject to mandatory clearing but 
                no derivatives clearing organization has listed 
                the swap, group, category, type, or class of 
                swaps for clearing, the Commission shall--
                          (i) investigate the relevant facts 
                        and circumstances;
                          (ii) within 30 days issue a public 
                        report containing the results of the 
                        investigation; and
                          (iii) take such actions as the 
                        Commission determines to be necessary 
                        and in the public interest, which may 
                        include requiring the retaining of 
                        adequate margin or capital by parties 
                        to the swap, group, category, type, or 
                        class of swaps.
                  (C) Effect on authority.--Nothing in this 
                paragraph--
                          (i) authorizes the Commission to 
                        adopt rules requiring a derivatives 
                        clearing organization to list for 
                        clearing a swap, group, category, type, 
                        or class of swaps if the clearing of 
                        the swap, group, category, type, or 
                        class of swaps would threaten the 
                        financial integrity of the derivatives 
                        clearing organization; and
                          (ii) affects the authority of the 
                        Commission to enforce the open access 
                        provisions of paragraph (1)(B) with 
                        respect to a swap, group, category, 
                        type, or class of swaps that is listed 
                        for clearing by a derivatives clearing 
                        organization.
          (5) Reporting transition rules.--Rules adopted by the 
        Commission under this section shall provide for the 
        reporting of data, as follows:
                  (A) Swaps entered into before the date of the 
                enactment of this subsection shall be reported 
                to a registered swap data repository or the 
                Commission no later than 180 days after the 
                effective date of this subsection.
                  (B) Swaps entered into on or after such date 
                of enactment shall be reported to a registered 
                swap data repository or the Commission no later 
                than the later of--
                          (i) 90 days after such effective 
                        date; or
                          (ii) such other time after entering 
                        into the swap as the Commission may 
                        prescribe by rule or regulation.
          (6) Clearing transition rules.--
                  (A) Swaps entered into before the date of the 
                enactment of this subsection are exempt from 
                the clearing requirements of this subsection if 
                reported pursuant to paragraph (5)(A).
                  (B) Swaps entered into before application of 
                the clearing requirement pursuant to this 
                subsection are exempt from the clearing 
                requirements of this subsection if reported 
                pursuant to paragraph (5)(B).
          (7) Exceptions.--
                  (A) In general.--The requirements of 
                paragraph (1)(A) shall not apply to a swap if 1 
                of the counterparties to the swap--
                          (i) is not a financial entity;
                          (ii) is using swaps to hedge or 
                        mitigate commercial risk; and
                          (iii) notifies the Commission, in a 
                        manner set forth by the Commission, how 
                        it generally meets its financial 
                        obligations associated with entering 
                        into non-cleared swaps.
                  (B) Option to clear.--The application of the 
                clearing exception in subparagraph (A) is 
                solely at the discretion of the counterparty to 
                the swap that meets the conditions of clauses 
                (i) through (iii) of subparagraph (A).
                  (C) Financial entity definition.--
                          (i) In general.--For the purposes of 
                        this paragraph, the term ``financial 
                        entity'' means--
                                  (I) a swap dealer;
                                  (II) a security-based swap 
                                dealer;
                                  (III) a major swap 
                                participant;
                                  (IV) a major security-based 
                                swap participant;
                                  (V) a commodity pool;
                                  (VI) a private fund as 
                                defined in section 202(a) of 
                                the Investment Advisers Act of 
                                1940 (15 U.S.C. 80-b-2(a));
                                  (VII) an employee benefit 
                                plan as defined in paragraphs 
                                (3) and (32) of section 3 of 
                                the Employee Retirement Income 
                                Security Act of 1974 (29 U.S.C. 
                                1002);
                                  (VIII) a person predominantly 
                                engaged in activities that are 
                                in the business of banking, or 
                                in activities that are 
                                financial in nature, as defined 
                                in section 4(k) of the Bank 
                                Holding Company Act of 1956.
                          (ii) Exclusion.--The Commission shall 
                        consider whether to exempt small banks, 
                        savings associations, farm credit 
                        system institutions, and credit unions, 
                        including--
                                  (I) depository institutions 
                                with total assets of 
                                $10,000,000,000 or less;
                                  (II) farm credit system 
                                institutions with total assets 
                                of $10,000,000,000 or less; or
                                  (III) credit unions with 
                                total assets of $10,000,000,000 
                                or less.
                          (iii) Limitation.--Such definition 
                        shall not include an entity whose 
                        primary business is providing 
                        financing, and uses derivatives for the 
                        purpose of hedging underlying 
                        commercial risks related to interest 
                        rate and foreign currency exposures, 90 
                        percent or more of which arise from 
                        financing that facilitates the purchase 
                        or lease of products, 90 percent or 
                        more of which are manufactured by the 
                        parent company or another subsidiary of 
                        the parent company.
                  (D) Treatment of affiliates.--
                          (i) In general.--An affiliate of a 
                        person that qualifies for an exception 
                        under subparagraph (A) (including 
                        affiliate entities predominantly 
                        engaged in providing financing for the 
                        purchase of the merchandise or 
                        manufactured goods of the person) may 
                        qualify for the exception only if the 
                        affiliate--
                                  (I) enters into the swap to 
                                hedge or mitigate the 
                                commercial risk of the person 
                                or other affiliate of the 
                                person that is not a financial 
                                entity, and the commercial risk 
                                that the affiliate is hedging 
                                or mitigating has been 
                                transferred to the affiliate;
                                  (II) is directly and wholly-
                                owned by another affiliate 
                                qualified for the exception 
                                under this subparagraph or an 
                                entity that is not a financial 
                                entity;
                                  (III) is not indirectly 
                                majority-owned by a financial 
                                entity;
                                  (IV) is not ultimately owned 
                                by a parent company that is a 
                                financial entity; and
                                  (V) does not provide any 
                                services, financial or 
                                otherwise, to any affiliate 
                                that is a nonbank financial 
                                company supervised by the Board 
                                of Governors (as defined under 
                                section 102 of the Financial 
                                Stability Act of 2010).
                          (ii) Limitation on qualifying 
                        affiliates.--The exception in clause 
                        (i) shall not apply if the affiliate 
                        is--
                                  (I) a swap dealer;
                                  (II) a security-based swap 
                                dealer;
                                  (III) a major swap 
                                participant;
                                  (IV) a major security-based 
                                swap participant;
                                  (V) a commodity pool;
                                  (VI) a bank holding company;
                                  (VII) a private fund, as 
                                defined in section 202(a) of 
                                the Investment Advisers Act of 
                                1940 (15 U.S.C. 80-b-2(a));
                                  (VIII) an employee benefit 
                                plan or government plan, as 
                                defined in paragraphs (3) and 
                                (32) of section 3 of the 
                                Employee Retirement Income 
                                Security Act of 1974 (29 U.S.C. 
                                1002);
                                  (IX) an insured depository 
                                institution;
                                  (X) a farm credit system 
                                institution;
                                  (XI) a credit union;
                                  (XII) a nonbank financial 
                                company supervised by the Board 
                                of Governors (as defined under 
                                section 102 of the Financial 
                                Stability Act of 2010); or
                                  (XIII) an entity engaged in 
                                the business of insurance and 
                                subject to capital requirements 
                                established by an insurance 
                                governmental authority of a 
                                State, a territory of the 
                                United States, the District of 
                                Columbia, a country other than 
                                the United States, or a 
                                political subdivision of a 
                                country other than the United 
                                States that is engaged in the 
                                supervision of insurance 
                                companies under insurance law.
                          (iii) Limitation on affiliates' 
                        affiliates.--Unless the Commission 
                        determines, by order, rule, or 
                        regulation, that it is in the public 
                        interest, the exception in clause (i) 
                        shall not apply with respect to an 
                        affiliate if the affiliate is itself 
                        affiliated with--
                                  (I) a major security-based 
                                swap participant;
                                  (II) a security-based swap 
                                dealer;
                                  (III) a major swap 
                                participant; or
                                  (IV) a swap dealer.
                          (iv) Conditions on transactions.--
                        With respect to an affiliate that 
                        qualifies for the exception in clause 
                        (i)--
                                  (I) the affiliate may not 
                                enter into any swap other than 
                                for the purpose of hedging or 
                                mitigating commercial risk; and
                                  (II) neither the affiliate 
                                nor any person affiliated with 
                                the affiliate that is not a 
                                financial entity may enter into 
                                a swap with or on behalf of any 
                                affiliate that is a financial 
                                entity or otherwise assume, 
                                net, combine, or consolidate 
                                the risk of swaps entered into 
                                by any such financial entity, 
                                except one that is an affiliate 
                                that qualifies for the 
                                exception under clause (i).
                          (v) Transition rule for affiliates.--
                        An affiliate, subsidiary, or a wholly 
                        owned entity of a person that qualifies 
                        for an exception under subparagraph (A) 
                        and is predominantly engaged in 
                        providing financing for the purchase or 
                        lease of merchandise or manufactured 
                        goods of the person shall be exempt 
                        from the margin requirement described 
                        in section 4s(e) and the clearing 
                        requirement described in paragraph (1) 
                        with regard to swaps entered into to 
                        mitigate the risk of the financing 
                        activities for not less than a 2-year 
                        period beginning on the date of 
                        enactment of this clause.
                          (vi) Risk management program.--Any 
                        swap entered into by an affiliate that 
                        qualifies for the exception in clause 
                        (i) shall be subject to a centralized 
                        risk management program of the 
                        affiliate, which is reasonably designed 
                        both to monitor and manage the risks 
                        associated with the swap and to 
                        identify each of the affiliates on 
                        whose behalf a swap was entered into.
                  (E) Election of counterparty.--
                          (i) Swaps required to be cleared.--
                        With respect to any swap that is 
                        subject to the mandatory clearing 
                        requirement under this subsection and 
                        entered into by a swap dealer or a 
                        major swap participant with a 
                        counterparty that is not a swap dealer, 
                        major swap participant, security-based 
                        swap dealer, or major security-based 
                        swap participant, the counterparty 
                        shall have the sole right to select the 
                        derivatives clearing organization at 
                        which the swap will be cleared.
                          (ii) Swaps not required to be 
                        cleared.--With respect to any swap that 
                        is not subject to the mandatory 
                        clearing requirement under this 
                        subsection and entered into by a swap 
                        dealer or a major swap participant with 
                        a counterparty that is not a swap 
                        dealer, major swap participant, 
                        security-based swap dealer, or major 
                        security-based swap participant, the 
                        counterparty--
                                  (I) may elect to require 
                                clearing of the swap; and
                                  (II) shall have the sole 
                                right to select the derivatives 
                                clearing organization at which 
                                the swap will be cleared.
                  (F) Abuse of exception.--The Commission may 
                prescribe such rules or issue interpretations 
                of the rules as the Commission determines to be 
                necessary to prevent abuse of the exceptions 
                described in this paragraph. The Commission may 
                also request information from those persons 
                claiming the clearing exception as necessary to 
                prevent abuse of the exceptions described in 
                this paragraph.
          (8) Trade execution.--
                  (A) In general.--With respect to transactions 
                involving swaps subject to the clearing 
                requirement of paragraph (1), counterparties 
                shall--
                          (i) execute the transaction on a 
                        board of trade designated as a contract 
                        market under section 5; or
                          (ii) execute the transaction on a 
                        swap execution facility registered 
                        under 5h or a swap execution facility 
                        that is exempt from registration under 
                        section 5h(f) of this Act.
                  (B) Exception.--The requirements of clauses 
                (i) and (ii) of subparagraph (A) shall not 
                apply if no board of trade or swap execution 
                facility makes the swap available to trade or 
                for swap transactions subject to the clearing 
                exception under paragraph (7).
  (i) Applicability.--The provisions of this Act relating to 
swaps that were enacted by the Wall Street Transparency and 
Accountability Act of 2010 (including any rule prescribed or 
regulation promulgated under that Act), shall not apply to 
activities outside the United States unless those activities--
          (1) have a direct and significant connection with 
        activities in, or effect on, commerce of the United 
        States; or
          (2) contravene such rules or regulations as the 
        Commission may prescribe or promulgate as are necessary 
        or appropriate to prevent the evasion of any provision 
        of this Act that was enacted by the Wall Street 
        Transparency and Accountability Act of 2010.
  (j) Committee Approval by Board.--Exemptions from the 
requirements of subsection (h)(1) to clear a swap and 
subsection (h)(8) to execute a swap through a board of trade or 
swap execution facility shall be available to a counterparty 
that is an issuer of securities that are registered under 
section 12 of the Securities Exchange Act of 1934 (15 U.S.C. 
78l) or that is required to file reports pursuant to section 
15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78o) 
only if an appropriate committee of the issuer's board or 
governing body has reviewed and approved its decision to enter 
into swaps that are subject to such exemptions.
  (k) International Processes.--
          (1) Notice of process; consultation.--At least 30 
        calendar days before the Commission participates in a 
        process of setting financial standards as a part of any 
        foreign or multinational entity, the Commission shall--
                  (A) issue a notice of the process, including 
                the subject matter, scope, and goals of the 
                process, to--
                          (i) the Committees on Financial 
                        Services and Agriculture of the House 
                        of Representatives; and
                          (ii) the Committees on Banking, 
                        Housing, and Urban Affairs and 
                        Agriculture, Nutrition, and Forestry of 
                        the Senate;
                  (B) make such notice available to the public, 
                including on the website of the Commission; and
                  (C) solicit public comment, and consult with 
                the committees described under subparagraph 
                (A), with respect to the subject matter, scope, 
                and goals of the process.
          (2) Public reports on process.--After the end of any 
        process described under paragraph (1), the Commission 
        shall issue a public report on the topics that were 
        discussed during the process and any new or revised 
        rulemakings or policy changes that the Commission 
        believes should be implemented as a result of the 
        process.
          (3) Notice of agreements; consultation.--At least 90 
        calendar days before the Commission participates in a 
        process of setting financial standards as a part of any 
        foreign or multinational entity, the Commission shall--
                  (A) issue a notice of agreement to--
                          (i) the Committees on Financial 
                        Services and Agriculture of the House 
                        of Representatives; and
                          (ii) the Committees on Banking, 
                        Housing, and Urban Affairs and 
                        Agriculture, Nutrition, and Forestry of 
                        the Senate;
                  (B) make such notice available to the public, 
                including on the website of the Commission; and
                  (C) consult with the committees described 
                under subparagraph (A) with respect to the 
                nature of the agreement and any anticipated 
                effects such agreement will have on the 
                economy.
          (4) Definition.--For purposes of this subsection, the 
        term ``process'' shall include any official proceeding 
        or meeting on financial regulation of a recognized 
        international organization with authority to set 
        financial standards on a global or regional level, 
        including the Financial Stability Board, the Basel 
        Committee on Banking Supervision (or a similar 
        organization), and the International Association of 
        Insurance Supervisors (or a similar organization).

           *       *       *       *       *       *       *


SEC. 15. CONSIDERATION OF COSTS AND BENEFITS AND ANTITRUST LAWS.

  (a) Costs and Benefits.--
          [(1) In general.--Before promulgating a regulation 
        under this Act or issuing an order (except as provided 
        in paragraph (3)), the Commission shall consider the 
        costs and benefits of the action of the Commission.
          [(2) Considerations.--The costs and benefits of the 
        proposed Commission action shall be evaluated in light 
        of--]
          (1) Considerations._Before promulgating a regulation 
        under this chapter or issuing an order (except as 
        provided in paragraph (2)), the Commission shall take 
        into consideration--
                  (A) considerations of protection of market 
                participants and the public;
                  (B) considerations of the efficiency, 
                competitiveness, and financial integrity of 
                [futures] the relevant markets;
                  (C) considerations of price discovery; and
                  (D) considerations of sound risk management 
                practices[; and].
                  [(E) other public interest considerations.]
          [(3)] (2) Applicability.--This subsection does not 
        apply to the following actions of the Commission:
                  (A) An order that initiates, is part of, or 
                is the result of an adjudicatory or 
                investigative process of the Commission.
                  (B) An emergency action.
                  (C) A finding of fact regarding compliance 
                with a requirement of the Commission.
  (b) Antitrust Laws.--The Commission shall take into 
consideration the public interest to be protected by the 
antitrust laws and endeavor to take the least anticompetitive 
means of achieving the objectives of this Act, as well as the 
policies and purposes of this Act, in issuing any order or 
adopting any Commission rule or regulation (including any 
exemption under section 4(c) or 4c(b)), or in requiring or 
approving any bylaw, rule, or regulation of a contract market 
or registered futures association established pursuant to 
section 17 of this Act.

           *       *       *       *       *       *       *

                              ----------                              


       BALANCED BUDGET AND EMERGENCY DEFICIT CONTROL ACT OF 1985


  PART C--EMERGENCY POWERS TO ELIMINATE DEFICITS IN EXCESS OF MAXIMUM 
DEFICIT AMOUNT

           *       *       *       *       *       *       *



SEC. 255. EXEMPT PROGRAMS AND ACTIVITIES.

  (a) Social Security Benefits and Tier I Railroad Retirement 
Benefits.--Benefits payable under the old-age, survivors, and 
disability insurance program established under title II of the 
Social Security Act (42 U.S.C. 401 et seq.), and benefits 
payable under sections 3 and 4 of the Railroad Retirement Act 
of 1937 (45 U.S.C. 231 et seq.), shall be exempt from reduction 
under any order issued under this part.
  (b) Veterans Programs.--The following programs shall be 
exempt from reduction under any order issued under this part:
          All programs administered by the Department of 
        Veterans Affairs.
          Special Benefits for Certain World War II Veterans 
        (28-0401-0-1-701).
  (c) Net Interest.--No reduction of payments for net interest 
(all of major functional category 900) shall be made under any 
order issued under this part.
  (d) Refundable Income Tax Credits.--Payments to individuals 
made pursuant to provisions of the Internal Revenue Code of 
1986 establishing refundable tax credits shall be exempt from 
reduction under any order issued under this part.
  (e) Non-defense Unobligated Balances.--Unobligated balances 
of budget authority carried over from prior fiscal years, 
except balances in the defense category, shall be exempt from 
reduction under any order issued under this part.
  (f) Optional Exemption of Military Personnel.--
          (1) In general.--The President may, with respect to 
        any military personnel account, exempt that account 
        from sequestration or provide for a lower uniform 
        percentage reduction than would otherwise apply.
          (2) Limitation.--The President may not use the 
        authority provided by paragraph (1) unless the 
        President notifies the Congress of the manner in which 
        such authority will be exercised on or before the date 
        specified in section 254(a) for the budget year.
  (g) Other Programs and Activities.--
          (1)(A) The following budget accounts and activities 
        shall be exempt from reduction under any order issued 
        under this part:
                  Activities resulting from private donations, 
                bequests, or voluntary contributions to the 
                Government.
                  Activities financed by voluntary payments to 
                the Government for goods or services to be 
                provided for such payments.
                  Administration of Territories, Northern 
                Mariana Islands Covenant grants (14-0412-0-1-
                808).
                  Advances to the Unemployment Trust Fund and 
                Other Funds (16-0327-0-1-600).
                  Black Lung Disability Trust Fund Refinancing 
                (16-0329-0-1-601).
                  Bonneville Power Administration Fund and 
                borrowing authority established pursuant to 
                section 13 of Public Law 93-454 (1974), as 
                amended (89-4045-0-3-271).
                  Claims, Judgments, and Relief Acts (20-1895-
                0-1-808).
                  Compact of Free Association (14-0415-0-1-
                808).
                  Compensation of the President (11-0209-01-1-
                802).
                  Comptroller of the Currency, Assessment Funds 
                (20-8413-0-8-373).
                  Continuing Fund, Southeastern Power 
                Administration (89-5653-0-2-271).
                  Continuing Fund, Southwestern Power 
                Administration (89-5649-0-2-271).
                  Dual Benefits Payments Account (60-0111-0-1-
                601).
                  Emergency Fund, Western Area Power 
                Administration (89-5069-0-2-271).
                  Exchange Stabilization Fund (20-4444-0-3-
                155).
                  Farm Credit Administration Operating Expenses 
                Fund (78-4131-0-3-351).
                  Farm Credit System Insurance Corporation, 
                Farm Credit Insurance Fund (78-4171-0-3-351).
                  Federal Deposit Insurance Corporation, 
                Deposit Insurance Fund (51-4596-0-4-373).
                  Federal Deposit Insurance Corporation, FSLIC 
                Resolution Fund (51-4065-0-3-373).
                  Federal Deposit Insurance Corporation, 
                Noninterest Bearing Transaction Account 
                Guarantee (51-4458-0-3-373).
                  Federal Deposit Insurance Corporation, Senior 
                Unsecured Debt Guarantee (51-4457-0-3-373).
                  Federal Home Loan Mortgage Corporation 
                (Freddie Mac).
                  Federal Housing Finance Agency, 
                Administrative Expenses (95-5532-0-2-371).
                  Federal National Mortgage Corporation (Fannie 
                Mae).
                  Federal Payment to the District of Columbia 
                Judicial Retirement and Survivors Annuity Fund 
                (20-1713-0-1-752).
                  Federal Payment to the District of Columbia 
                Pension Fund (20-1714-0-1-601).
                  Federal Payments to the Railroad Retirement 
                Accounts (60-0113-0-1-601).
                  Federal Reserve Bank Reimbursement Fund (20-
                1884-0-1-803).
                  Financial Agent Services (20-1802-0-1-803).
                  Foreign Military Sales Trust Fund (11-8242-0-
                7-155).
                  Hazardous Waste Management, Conservation 
                Reserve Program (12-4336-0-3-999).
                  Host Nation Support Fund for Relocation (97-
                8337-0-7-051).
                  Internal Revenue Collections for Puerto Rico 
                (20-5737-0-2-806).
                  Intragovernmental funds, including those from 
                which the outlays are derived primarily from 
                resources paid in from other government 
                accounts, except to the extent such funds are 
                augmented by direct appropriations for the 
                fiscal year during which an order is in effect.
                  Medical Facilities Guarantee and Loan Fund 
                (75-9931-0-3-551).
                  National Credit Union Administration, Central 
                Liquidity Facility (25-4470-0-3-373).
                  National Credit Union Administration, 
                Corporate Credit Union Share Guarantee Program 
                (25-4476-0-3-376).
                  National Credit Union Administration, Credit 
                Union Homeowners Affordability Relief Program 
                (25-4473-0-3-371).
                  National Credit Union Administration, Credit 
                Union Share Insurance Fund (25-4468-0-3-373).
                  National Credit Union Administration, Credit 
                Union System Investment Program (25-4474-0-3-
                376).
                  National Credit Union Administration, 
                Operating fund (25-4056-0-3-373).
                  National Credit Union Administration, Share 
                Insurance Fund Corporate Debt Guarantee Program 
                (25-4469-0-3-376).
                  National Credit Union Administration, U.S. 
                Central Federal Credit Union Capital Program 
                (25-4475-0-3-376).
                   [Office of Thrift Supervision (20-4108-0-3-
                373).]
                  Panama Canal Commission Compensation Fund 
                (16-5155-0-2-602).
                  Payment of Vietnam and USS Pueblo prisoner-
                of-war claims within the Salaries and Expenses, 
                Foreign Claims Settlement account (15-0100-0-1-
                153).
                  Payment to Civil Service Retirement and 
                Disability Fund (24-0200-0-1-805).
                  Payment to Department of Defense Medicare-
                Eligible Retiree Health Care Fund (97-0850-0-1-
                054).
                  Payment to Judiciary Trust Funds (10-0941-0-
                1-752).
                  Payment to Military Retirement Fund (97-0040-
                0-1-054).
                  Payment to the Foreign Service Retirement and 
                Disability Fund (19-0540-0-1-153).
                  Payments to Copyright Owners (03-5175-0-2-
                376).
                  Payments to Health Care Trust Funds (75-0580-
                0-1-571).
                  Payment to Radiation Exposure Compensation 
                Trust Fund (15-0333-0-1-054).
                  Payments to Social Security Trust Funds (28-
                0404-0-1-651).
                  Payments to the United States Territories, 
                Fiscal Assistance (14-0418-0-1-806).
                  Payments to trust funds from excise taxes or 
                other receipts properly creditable to such 
                trust funds.
                  Payments to widows and heirs of deceased 
                Members of Congress (00-0215-0-1-801).
                  Postal Service Fund (18-4020-0-3-372).
                  Radiation Exposure Compensation Trust Fund 
                (15-8116-0-1-054).
                  Reimbursement to Federal Reserve Banks (20-
                0562-0-1-803).
                  Salaries of Article III judges.
                  Soldiers and Airmen's Home, payment of claims 
                (84-8930-0-7-705).
                  Tennessee Valley Authority Fund, except 
                nonpower programs and activities (64-4110-0-3-
                999).
                  Tribal and Indian trust accounts within the 
                Department of the Interior which fund prior 
                legal obligations of the Government or which 
                are established pursuant to Acts of Congress 
                regarding Federal management of tribal real 
                property or other fiduciary responsibilities, 
                including but not limited to Tribal Special 
                Fund (14-5265-0-2-452), Tribal Trust Fund (14-
                8030-0-7-452), White Earth Settlement (14-2204-
                0-1-452), and Indian Water Rights and Habitat 
                Acquisition (14-5505-0-2-303).
                  United Mine Workers of America 1992 Benefit 
                Plan (95-8260-0-7-551).
                  United Mine Workers of America 1993 Benefit 
                Plan (95-8535-0-7-551).
                  United Mine Workers of America Combined 
                Benefit Fund (95-8295-0-7-551).
                  United States Enrichment Corporation Fund 
                (95-4054-0-3-271).
                  Universal Service Fund (27-5183-0-2-376).
                  Vaccine Injury Compensation (75-0320-0-1-
                551).
                  Vaccine Injury Compensation Program Trust 
                Fund (20-8175-0-7-551).
          (B) The following Federal retirement and disability 
        accounts and activities shall be exempt from reduction 
        under any order issued under this part:
                  Black Lung Disability Trust Fund (20-8144-0-
                7-601).
                  Central Intelligence Agency Retirement and 
                Disability System Fund (56-3400-0-1-054).
                  Civil Service Retirement and Disability Fund 
                (24-8135-0-7-602).
                  Comptrollers general retirement system (05-
                0107-0-1-801).
                  Contributions to U.S. Park Police annuity 
                benefits, Other Permanent Appropriations (14-
                9924-0-2-303).
                  Court of Appeals for Veterans Claims 
                Retirement Fund (95-8290-0-7-705).
                  Department of Defense Medicare-Eligible 
                Retiree Health Care Fund (97-5472-0-2-551).
                  District of Columbia Federal Pension Fund 
                (20-5511-0-2-601).
                  District of Columbia Judicial Retirement and 
                Survivors Annuity Fund (20-8212-0-7-602).
                  Energy Employees Occupational Illness 
                Compensation Fund (16-1523-0-1-053).
                  Foreign National Employees Separation Pay 
                (97-8165-0-7-051).
                  Foreign Service National Defined 
                Contributions Retirement Fund (19-5497-0-2-
                602).
                  Foreign Service National Separation Liability 
                Trust Fund (19-8340-0-7-602).
                  Foreign Service Retirement and Disability 
                Fund (19-8186-0-7-602).
                  Government Payment for Annuitants, Employees 
                Health Benefits (24-0206-0-1-551).
                  Government Payment for Annuitants, Employee 
                Life Insurance (24-0500-0-1-602).
                  Judicial Officers' Retirement Fund (10-8122-
                0-7-602).
                  Judicial Survivors' Annuities Fund (10-8110-
                0-7-602).
                  Military Retirement Fund (97-8097-0-7-602).
                  National Railroad Retirement Investment Trust 
                (60-8118-0-7-601).
                  National Oceanic and Atmospheric 
                Administration retirement (13-1450-0-1-306).
                  Pensions for former Presidents (47-0105-0-1-
                802).
                  Postal Service Retiree Health Benefits Fund 
                (24-5391-0-2-551).
                  Public Safety Officer Benefits (15-0403-0-1-
                754).
                  Rail Industry Pension Fund (60-8011-0-7-601).
                  Retired Pay, Coast Guard (70-0602-0-1-403).
                  Retirement Pay and Medical Benefits for 
                Commissioned Officers, Public Health Service 
                (75-0379-0-1-551).
                  September 11th Victim Compensation Fund (15-
                0340-0-1-754).
                  Special Benefits for Disabled Coal Miners 
                (16-0169-0-1-601).
                  Special Benefits, Federal Employees' 
                Compensation Act (16-1521-0-1-600).
                  Special Workers Compensation Expenses (16-
                9971-0-7-601).
                  Tax Court Judges Survivors Annuity Fund (23-
                8115-0-7-602).
                  United States Court of Federal Claims Judges' 
                Retirement Fund (10-8124-0-7-602).
                  United States Secret Service, DC Annuity (70-
                0400-0-1-751).
                  Victims Compensation Fund established under 
                section 410 of the Air Transportation Safety 
                and System Stabilization Act (49 U.S.C. 40101 
                note).
                  United States Victims of State Sponsored 
                Terrorism Fund.
                  Voluntary Separation Incentive Fund (97-8335-
                0-7-051).
                  World Trade Center Health Program Fund (75-
                0946-0-1-551).
          (2) Prior legal obligations of the Government in the 
        following budget accounts and activities shall be 
        exempt from any order issued under this part:
                  Biomass Energy Development (20-0114-0-1-271).
                  Check Forgery Insurance Fund (20-4109-0-3-
                803).
                  Credit liquidating accounts.
                  Credit reestimates.
                  Employees Life Insurance Fund (24-8424-0-8-
                602).
                  Federal Aviation Insurance Revolving Fund 
                (69-4120-0-3-402).
                  Federal Crop Insurance Corporation Fund (12-
                4085-0-3-351).
                  Federal Emergency Management Agency, National 
                Flood Insurance Fund (58-4236-0-3-453).
                  Geothermal resources development fund (89-
                0206-0-1-271).
                  Low-Rent Public Housing--Loans and Other 
                Expenses (86-4098-0-3-604).
                  Maritime Administration, War Risk Insurance 
                Revolving Fund (69-4302-0-3-403).
                  Natural Resource Damage Assessment Fund (14-
                1618-0-1-302).
                  Overseas Private Investment Corporation, 
                Noncredit Account (71-4184-0-3-151).
                  Pension Benefit Guaranty Corporation Fund 
                (16-4204-0-3-601).
                  San Joaquin Restoration Fund (14-5537-0-2-
                301).
                  Servicemembers' Group Life Insurance Fund 
                (36-4009-0-3-701).
                  Terrorism Insurance Program (20-0123-0-1-
                376).
  (h) Low-income Programs.--The following programs shall be 
exempt from reduction under any order issued under this part:
          Academic Competitiveness/Smart Grant Program (91-
        0205-0-1-502).
          Child Care Entitlement to States (75-1550-0-1-609).
          Child Enrollment Contingency Fund (75-5551-0-2-551).
          Child Nutrition Programs (with the exception of 
        special milk programs) (12-3539-0-1-605).
          Children's Health Insurance Fund (75-0515-0-1-551).
          Commodity Supplemental Food Program (12-3507-0-1-
        605).
          Contingency Fund (75-1522-0-1-609).
          Family Support Programs (75-1501-0-1-609).
          Federal Pell Grants under section 401 of title IV of 
        the Higher Education Act.
          Grants to States for Medicaid (75-0512-0-1-551).
          Payments for Foster Care and Permanency (75-1545-0-1-
        609).
          Supplemental Nutrition Assistance Program (12-3505-0-
        1-605).
          Supplemental Security Income Program (28-0406-0-1-
        609).
          Temporary Assistance for Needy Families (75-1552-0-1-
        609).
  (i) Economic Recovery Programs.--The following programs shall 
be exempt from reduction under any order issued under this 
part:
          GSE Preferred Stock Purchase Agreements (20-0125-0-1-
        371).
          Office of Financial Stability (20-0128-0-1-376).
          Special Inspector General for the Troubled Asset 
        Relief Program (20-0133-0-1-376).
  (j) Split Treatment Programs.--Each of the following programs 
shall be exempt from any order under this part to the extent 
that the budgetary resources of such programs are subject to 
obligation limitations in appropriations bills:
  Federal-Aid Highways (69-8083-0-7-401).
  Highway Traffic Safety Grants (69-8020-0-7-401).
  Operations and Research NHTSA and National Driver Register 
(69-8016-0-7-401).
  Motor Carrier Safety Operations and Programs (69-8159-0-7-
401).
  Motor Carrier Safety Grants (69-8158-0-7-401).
  Formula and Bus Grants (69-8350-0-7-401).
  Grants-In-Aid for Airports (69-8106-0-7-402).
  (k) Identification of Programs.--For purposes of subsections 
(b), (g), and (h), each account is identified by the designated 
budget account identification code number set forth in the 
Budget of the United States Government 2010-Appendix, and an 
activity within an account is designated by the name of the 
activity and the identification code number of the account.

           *       *       *       *       *       *       *


SEC. 257. THE BASELINE.

  (a) In General.--For any budget year, the baseline refers to 
a projection of current-year levels of new budget authority, 
outlays, revenues, and the surplus or deficit into the budget 
year and the outyears based on laws enacted through the 
applicable date.
  (b) Direct Spending and Receipts.--For the budget year and 
each outyear, the baseline shall be calculated using the 
following assumptions:
          (1) In general.--Laws providing or creating direct 
        spending and receipts are assumed to operate in the 
        manner specified in those laws for each such year and 
        funding for entitlement authority is assumed to be 
        adequate to make all payments required by those laws.
          (2) Exceptions.--(A)(i) No program established by a 
        law enacted on or before the date of enactment of the 
        Balanced Budget Act of 1997 with estimated current year 
        outlays greater than $50,000,000 shall be assumed to 
        expire in the budget year or the outyears. The scoring 
        of new programs with estimated outlays greater than 
        $50,000,000 a year shall be based on scoring by the 
        Committees on Budget or OMB, as applicable. OMB, CBO, 
        and the Budget Committees shall consult on the scoring 
        of such programs where there are differences between 
        CBO and OMB.
          (ii) On the expiration of the suspension of a 
        provision of law that is suspended under section 171 of 
        Public Law 104-127 and that authorizes a program with 
        estimated fiscal year outlays that are greater than 
        $50,000,000, for purposes of clause (i), the program 
        shall be assumed to continue to operate in the same 
        manner as the program operated immediately before the 
        expiration of the suspension.
          (B) The increase for veterans' compensation for a 
        fiscal year is assumed to be the same as that required 
        by law for veterans' pensions unless otherwise provided 
        by law enacted in that session.
          (C) Excise taxes dedicated to a trust fund, if 
        expiring, are assumed to be extended at current rates.
          (D) If any law expires before the budget year or any 
        outyear, then any program with estimated current year 
        outlays greater than $50,000,000 that operates under 
        that law shall be assumed to continue to operate under 
        that law as in effect immediately before its 
        expiration.
          (E) Budgetary effects of rules subject to section 332 
        of the financial choice act of 2017.--Any rules subject 
        to the congressional approval procedure set forth in 
        section 332 of the Financial CHOICE Act of 2017 
        affecting budget authority, outlays, or receipts shall 
        be assumed to be effective unless it is not approved in 
        accordance with such section.
          (3) Hospital insurance trust fund.--Notwithstanding 
        any other provision of law, the receipts and 
        disbursements of the Hospital Insurance Trust Fund 
        shall be included in all calculations required by this 
        Act.
  (c) Discretionary Appropriations.--For the budget year and 
each outyear, the baseline shall be calculated using the 
following assumptions regarding all amounts other than those 
covered by subsection (b):
          (1) Inflation of current-year appropriations.--
        Budgetary resources other than unobligated balances 
        shall be at the level provided for the budget year in 
        full-year appropriation Acts. If for any account a 
        full-year appropriation has not yet been enacted, 
        budgetary resources other than unobligated balances 
        shall be at the level available in the current year, 
        adjusted sequentially and cumulatively for expiring 
        housing contracts as specified in paragraph (2), for 
        social insurance administrative expenses as specified 
        in paragraph (3), to offset pay absorption and for pay 
        annualization as specified in paragraph (4), for 
        inflation as specified in paragraph (5), and to account 
        for changes required by law in the level of agency 
        payments for personnel benefits other than pay.
          (2) Expiring housing contracts.--New budget authority 
        to renew expiring multiyear subsidized housing 
        contracts shall be adjusted to reflect the difference 
        in the number of such contracts that are scheduled to 
        expire in that fiscal year and the number expiring in 
        the current year, with the per-contract renewal cost 
        equal to the average current-year cost of renewal 
        contracts.
          (3) Social insurance administrative expenses.--
        Budgetary resources for the administrative expenses of 
        the following trust funds shall be adjusted by the 
        percentage change in the beneficiary population from 
        the current year to that fiscal year: the Federal 
        Hospital Insurance Trust Fund, the Supplementary 
        Medical Insurance Trust Fund, the Unemployment Trust 
        Fund, and the railroad retirement account.
          (4) Pay annualization; offset to pay absorption.--
        Current-year new budget authority for Federal employees 
        shall be adjusted to reflect the full 12-month costs 
        (without absorption) of any pay adjustment that 
        occurred in that fiscal year.
          (5) Inflators.--The inflator used in paragraph (1) to 
        adjust budgetary resources relating to personnel shall 
        be the percent by which the average of the Bureau of 
        Labor Statistics Employment Cost Index (wages and 
        salaries, private industry workers) for that fiscal 
        year differs from such index for the current year. The 
        inflator used in paragraph (1) to adjust all other 
        budgetary resources shall be the percent by which the 
        average of the estimated gross domestic product chain-
        type price index for that fiscal year differs from the 
        average of such estimated index for the current year.
          (6) Current-year appropriations.--If, for any 
        account, a continuing appropriation is in effect for 
        less than the entire current year, then the current-
        year amount shall be assumed to equal the amount that 
        would be available if that continuing appropriation 
        covered the entire fiscal year. If law permits the 
        transfer of budget authority among budget accounts in 
        the current year, the current-year level for an account 
        shall reflect transfers accomplished by the submission 
        of, or assumed for the current year in, the President's 
        original budget for the budget year.
  (d) Up-to-Date Concepts.--In deriving the baseline for any 
budget year or outyear, current-year amounts shall be 
calculated using the concepts and definitions that are required 
for that budget year.
  (e) Asset Sales.--Amounts realized from the sale of an asset 
shall not be included in estimates under section 251, 252, or 
253 if that sale would result in a financial cost to the 
Federal Government as determined pursuant to scorekeeping 
guidelines.

           *       *       *       *       *       *       *

                              ----------                              


FEDERAL HOUSING ENTERPRISES FINANCIAL SAFETY AND SOUNDNESS ACT OF 1992

           *       *       *       *       *       *       *



TITLE XIII--GOVERNMENT SPONSORED ENTERPRISES

           *       *       *       *       *       *       *


         Subtitle A--Supervision and Regulation of Enterprises

PART 1--FINANCIAL SAFETY AND SOUNDNESS REGULATOR

           *       *       *       *       *       *       *


SEC. 1312. DIRECTOR.

  (a) Establishment of Position.--There is established the 
position of the Director of the Agency, who shall be the head 
of the Agency.
  (b) Appointment; Term.--
          (1) Appointment.--The Director shall be appointed by 
        the President, by and with the advice and consent of 
        the Senate, from among individuals who are citizens of 
        the United States, have a demonstrated understanding of 
        financial management or oversight, and have a 
        demonstrated understanding of capital markets, 
        including the mortgage securities markets and housing 
        finance.
          (2) Term.--The Director shall be appointed for a term 
        of 5 years, unless removed before the end of such term 
        [for cause] by the President.
          (3) Vacancy.--A vacancy in the position of Director 
        that occurs before the expiration of the term for which 
        a Director was appointed shall be filled in the manner 
        established under paragraph (1), and the Director 
        appointed to fill such vacancy shall be appointed only 
        for the remainder of such term.
          (4) Service after end of term.--An individual may 
        serve as the Director after the expiration of the term 
        for which appointed until a successor has been 
        appointed.
          (5) Transitional provision.--Notwithstanding 
        paragraphs (1) and (2), during the period beginning on 
        the effective date of the Federal Housing Finance 
        Regulatory Reform Act of 2008, and ending on the date 
        on which the Director is appointed and confirmed, the 
        person serving as the Director of the Office of Federal 
        Housing Enterprise Oversight of the Department of 
        Housing and Urban Development on that effective date 
        shall act for all purposes as, and with the full powers 
        of, the Director.
  (c) Deputy Director of the Division of Enterprise 
Regulation.--
          (1) In general.--The Agency shall have a Deputy 
        Director of the Division of Enterprise Regulation, who 
        shall be designated by the Director from among 
        individuals who are citizens of the United States, have 
        a demonstrated understanding of financial management or 
        oversight, and have a demonstrated understanding of 
        mortgage securities markets and housing finance.
          (2) Functions.--The Deputy Director of the Division 
        of Enterprise Regulation shall have such functions, 
        powers, and duties with respect to the oversight of the 
        enterprises as the Director shall prescribe.
  (d) Deputy Director Of The Division Of Federal Home Loan Bank 
Regulation.--
          (1) In general.--The Agency shall have a Deputy 
        Director of the Division of Federal Home Loan Bank 
        Regulation, who shall be designated by the Director 
        from among individuals who are citizens of the United 
        States, have a demonstrated understanding of financial 
        management or oversight, and have a demonstrated 
        understanding of the Federal Home Loan Bank System and 
        housing finance.
          (2) Functions.--The Deputy Director of the Division 
        of Federal Home Loan Bank Regulation shall have such 
        functions, powers, and duties with respect to the 
        oversight of the Federal Home Loan Banks as the 
        Director shall prescribe.
  (e) Deputy Director for Housing Mission and Goals.--
          (1) In general.--The Agency shall have a Deputy 
        Director for Housing Mission and Goals, who shall be 
        designated by the Director from among individuals who 
        are citizens of the United States, and have a 
        demonstrated understanding of the housing markets and 
        housing finance.
          (2) Functions.--The Deputy Director for Housing 
        Mission and Goals shall have such functions, powers, 
        and duties with respect to the oversight of the housing 
        mission and goals of the enterprises, and with respect 
        to oversight of the housing finance and community and 
        economic development mission of the Federal Home Loan 
        Banks, as the Director shall prescribe.
          (3) Considerations.--In exercising such functions, 
        powers, and duties, the Deputy Director for Housing 
        Mission and Goals shall consider the differences 
        between the enterprises and the Federal Home Loan 
        Banks, including those described in section 1313(d).
  (f) Acting Director.--In the event of the death, resignation, 
sickness, or absence of the Director, the President shall 
designate either the Deputy Director of the Division of 
Enterprise Regulation, the Deputy Director of the Division of 
Federal Home Loan Bank Regulation, or the Deputy Director for 
Housing Mission and Goals, to serve as acting Director until 
the return of the Director, or the appointment of a successor 
pursuant to subsection (b).
  (g) Limitations.--The Director and each of the Deputy 
Directors may not--
          (1) have any direct or indirect financial interest in 
        any regulated entity or entity-affiliated party;
          (2) hold any office, position, or employment in any 
        regulated entity or entity-affiliated party; or
          (3) have served as an executive officer or director 
        of any regulated entity or entity-affiliated party at 
        any time during the 3-year period preceding the date of 
        appointment or designation of such individual as 
        Director or Deputy Director, as applicable.

           *       *       *       *       *       *       *

                              ----------                              


HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1992

           *       *       *       *       *       *       *



TITLE XIII--GOVERNMENT SPONSORED ENTERPRISES

           *       *       *       *       *       *       *


         Subtitle A--Supervision and Regulation of Enterprises

PART 1--FINANCIAL SAFETY AND SOUNDNESS REGULATOR

           *       *       *       *       *       *       *


SEC. 1316. FUNDING.

  [(a) Annual Assessments.--The Director shall establish and 
collect from the regulated entities annual assessments in an 
amount not exceeding the amount sufficient to provide for 
reasonable costs (including administrative costs) and expenses 
of the Agency, including--
          [(1) the expenses of any examinations under section 
        1317 of this Act and under section 20 of the Federal 
        Home Loan Bank Act;
          [(2) the expenses of obtaining any reviews and credit 
        assessments under section 1319;
          [(3) such amounts in excess of actual expenses for 
        any given year as deemed necessary by the Director to 
        maintain a working capital fund in accordance with 
        subsection (e); and
          [(4) the windup of the affairs of the Office of 
        Federal Housing Enterprise Oversight and the Federal 
        Housing Finance Board under title III of the Federal 
        Housing Finance Regulatory Reform Act of 2008.]
  (a) Appropriations Requirement.--
          (1) Recovery of costs of annual appropriation.--The 
        Agency shall collect assessments and other fees that 
        are designed to recover the costs to the Government of 
        the annual appropriation to the Agency by Congress.
          (2) Offsetting collections.--Assessments and other 
        fees described under paragraph (1) for any fiscal 
        year--
                  (A) shall be deposited and credited as 
                offsetting collections to the account providing 
                appropriations to the Agency; and
                  (B) except as provided in paragraph (3), 
                shall not be collected for any fiscal year 
                except to the extent provided in advance in 
                appropriation Acts.
          (3) Lapse of appropriation.--If on the first day of a 
        fiscal year a regular appropriation to the Agency has 
        not been enacted, the Agency shall continue to collect 
        (as offsetting collections) the assessments and other 
        fees described under paragraph (1) at the rate in 
        effect during the preceding fiscal year, until 60 days 
        after the date such a regular appropriation is enacted.
  (b) Allocation of Annual Assessment to Enterprises.--
          (1) Amount of payment.--Each enterprise shall pay to 
        the Director a proportion of the annual assessment made 
        pursuant to subsection (a) that bears the same ratio to 
        the total annual assessment that the total assets of 
        each enterprise bears to the total assets of both 
        enterprises.
          (2) Separate treatment of federal home loan bank and 
        enterprise assessments.--Assessments collected from the 
        enterprises shall not exceed the amounts sufficient to 
        provide for the costs and expenses described in 
        subsection (a) relating to the enterprises. Assessments 
        collected from the Federal Home Loan Banks shall not 
        exceed the amounts sufficient to provide for the costs 
        and expenses described in subsection (a) relating to 
        the Federal Home Loan Banks.
          (3) Timing of payment.--The annual assessment shall 
        be payable semiannually for each fiscal year, on 
        October 1 and April 1.
          (4) Definition.--For the purpose of this section, the 
        term ``total assets'' means, with respect to an 
        enterprise, the sum of--
                  (A) on-balance-sheet assets of the 
                enterprise, as determined in accordance with 
                generally accepted accounting principles;
                  (B) the unpaid principal balance of 
                outstanding mortgage-backed securities issued 
                or guaranteed by the enterprise that are not 
                included in subparagraph (A); and
                  (C) other off-balance-sheet obligations as 
                determined by the Director.
  (c) Increased Costs of Regulation.--
          (1) Increase for inadequate capitalization.--The 
        semiannual payments made pursuant to subsection (b) by 
        any regulated entity that is not classified (for 
        purposes of subtitle B) as adequately capitalized may 
        be increased, as necessary, in the discretion of the 
        Director to pay additional estimated costs of 
        regulation of the regulated entity.
          (2) Adjustment for enforcement activities.--The 
        Director may adjust the amounts of any semiannual 
        payments for an assessment under subsection (a) that 
        are to be paid pursuant to subsection (b) by a 
        regulated entity, as necessary in the discretion of the 
        Director, to ensure that the costs of enforcement 
        activities under this Act for a regulated entity are 
        borne only by such regulated entity.
          (3) Additional assessment for deficiencies.--If at 
        any time, as a result of increased costs of regulation 
        of a regulated entity that is not classified (for 
        purposes of subtitle B) as adequately capitalized or as 
        the result of supervisory or enforcement activities 
        under this Act for a regulated entity, the amount 
        available from any semiannual payment made by such 
        regulated entity pursuant to subsection (b) is 
        insufficient to cover the costs of the Agency with 
        respect to such entity, the Director may make and 
        collect from such regulated entity an immediate 
        assessment to cover the amount of such deficiency for 
        the semiannual period. If, at the end of any semiannual 
        period during which such an assessment is made, any 
        amount remains from such assessment, such remaining 
        amount shall be deducted from the assessment for such 
        regulated entity for the following semiannual period.
  (d) Surplus.--Except with respect to amounts collected 
pursuant to subsection (a)(3), if any amount from any annual 
assessment collected from an enterprise remains unobligated at 
the end of the year for which the assessment was collected, 
such amount shall be credited to the assessment to be collected 
from the enterprise for the following year.
  (e) Working Capital Fund.--At the end of each year for which 
an assessment under this section is made, the Director shall 
remit to each regulated entity any amount of assessment 
collected from such regulated entity that is attributable to 
subsection (a)(3) and is in excess of the amount the Director 
deems necessary to maintain a working capital fund.
  [(f) Treatment of Assessments.--
          [(1) Deposit.--Amounts received by the Director from 
        assessments under this section may be deposited by the 
        Director in the manner provided in section 5234 of the 
        Revised Statutes of the United States (12 U.S.C. 192) 
        for monies deposited by the Comptroller of the 
        Currency.
          [(2) Not government funds.--The amounts received by 
        the Director from any assessment under this section 
        shall not be construed to be Government or public funds 
        or appropriated money.
          [(3) No apportionment of funds.--Notwithstanding any 
        other provision of law, the amounts received by the 
        Director from any assessment under this section shall 
        not be subject to apportionment for the purpose of 
        chapter 15 of title 31, United States Code, or under 
        any other authority.
          [(4) Use of funds.--The Director may use any amounts 
        received by the Director from assessments under this 
        section for compensation of the Director and other 
        employees of the Agency and for all other expenses of 
        the Director and the Agency.
          [(5) Availability of oversight fund amounts.--
        Notwithstanding any other provision of law, any amounts 
        remaining in the Federal Housing Enterprises Oversight 
        Fund established under this section (as in effect 
        before the effective date of the Federal Housing 
        Finance Regulatory Reform Act of 2008, and any amounts 
        remaining from assessments on the Federal Home Loan 
        Banks pursuant to section 18(b) of the Federal Home 
        Loan Bank Act (12 U.S.C. 1438(b)), shall, upon such 
        effective date, be treated for purposes of this 
        subsection as amounts received from assessments under 
        this section.
          [(6) Treasury investments.--
                  [(A) Authority.--The Director may request the 
                Secretary of the Treasury to invest such 
                portions of amounts received by the Director 
                from assessments paid under this section that, 
                in the Director's discretion, are not required 
                to meet the current working needs of the 
                Agency.
                  [(B) Government obligations.--Pursuant to a 
                request under subparagraph (A), the Secretary 
                of the Treasury shall invest such amounts in 
                Government obligations guaranteed as to 
                principal and interest by the United States 
                with maturities suitable to the needs of the 
                Agency and bearing interest at a rate 
                determined by the Secretary of the Treasury 
                taking into consideration current market yields 
                on outstanding marketable obligations of the 
                United States of comparable maturity.]
  (g) Budget and Financial Management.--
          (1) Financial operating plans and forecasts.--The 
        Director shall provide to the Director of the Office of 
        Management and Budget copies of the Director's 
        financial operating plans and forecasts, as prepared by 
        the Director in the ordinary course of the Agency's 
        operations, and copies of the quarterly reports of the 
        Agency's financial condition and results of operations, 
        as prepared by the Director in the ordinary course of 
        the Agency's operations.
          (2) Financial statements.--The Agency shall prepare 
        annually a statement of--
                  (A) assets and liabilities and surplus or 
                deficit;
                  (B) income and expenses; and
                  (C) sources and application of funds.
          (3) Financial management systems.--The Agency shall 
        implement and maintain financial management systems 
        that--
                  (A) comply substantially with Federal 
                financial management systems requirements and 
                applicable Federal accounting standards; and
                  (B) use a general ledger system that accounts 
                for activity at the transaction level.
          (4) Assertion of internal controls.--The Director 
        shall provide to the Comptroller General of the United 
        States an assertion as to the effectiveness of the 
        internal controls that apply to financial reporting by 
        the Agency, using the standards established in section 
        3512(c) of title 31, United States Code.
          (5) Rule of construction.--This subsection may not be 
        construed as implying any obligation on the part of the 
        Director to consult with or obtain the consent or 
        approval of the Director of the Office of Management 
        and Budget with respect to any report, plan, forecast, 
        or other information referred to in paragraph (1) or 
        any jurisdiction or oversight over the affairs or 
        operations of the Agency.
  (h) Audit of Agency.--
          (1) In general.--The Comptroller General shall 
        annually audit the financial transactions of the Agency 
        in accordance with the United States generally accepted 
        government auditing standards as may be prescribed by 
        the Comptroller General of the United States. The audit 
        shall be conducted at the place or places where 
        accounts of the Agency are normally kept. The 
        representatives of the Government Accountability Office 
        shall have access to the personnel and to all books, 
        accounts, documents, papers, records (including 
        electronic records), reports, files, and all other 
        papers, automated data, things, or property belonging 
        to or under the control of or used or employed by the 
        Agency pertaining to its financial transactions and 
        necessary to facilitate the audit, and such 
        representatives shall be afforded full facilities for 
        verifying transactions with the balances or securities 
        held by depositories, fiscal agents, and custodians. 
        All such books, accounts, documents, records, reports, 
        files, papers, and property of the Agency shall remain 
        in possession and custody of the Agency. The 
        Comptroller General may obtain and duplicate any such 
        books, accounts, documents, records, working papers, 
        automated data and files, or other information relevant 
        to such audit without cost to the Comptroller General 
        and the Comptroller General's right of access to such 
        information shall be enforceable pursuant to section 
        716(c) of title 31, United States Code.
          (2) Report.--The Comptroller General shall submit to 
        the Congress a report of each annual audit conducted 
        under this subsection. The report to the Congress shall 
        set forth the scope of the audit and shall include the 
        statement of assets and liabilities and surplus or 
        deficit, the statement of income and expenses, the 
        statement of sources and application of funds, and such 
        comments and information as may be deemed necessary to 
        inform Congress of the financial operations and 
        condition of the Agency, together with such 
        recommendations with respect thereto as the Comptroller 
        General may deem advisable. A copy of each report shall 
        be furnished to the President and to the Agency at the 
        time submitted to the Congress.
          (3) Assistance and costs.--For the purpose of 
        conducting an audit under this subsection, the 
        Comptroller General may, in the discretion of the 
        Comptroller General, employ by contract, without regard 
        to section 3709 of the Revised Statutes of the United 
        States (41 U.S.C. 5), professional services of firms 
        and organizations of certified public accountants for 
        temporary periods or for special purposes. Upon the 
        request of the Comptroller General, the Director of the 
        Agency shall transfer to the Government Accountability 
        Office from funds available, the amount requested by 
        the Comptroller General to cover the full costs of any 
        audit and report conducted by the Comptroller General. 
        The Comptroller General shall credit funds transferred 
        to the account established for salaries and expenses of 
        the Government Accountability Office, and such amount 
        shall be available upon receipt and without fiscal year 
        limitation to cover the full costs of the audit and 
        report.

           *       *       *       *       *       *       *

                              ----------                              


SMALL BUSINESS INVESTMENT INCENTIVE ACT OF 1980

           *       *       *       *       *       *       *



TITLE V--CAPITAL FORMATION

           *       *       *       *       *       *       *



         ANNUAL GOVERNMENT-BUSINESS FORUM ON CAPITAL FORMATION

  Sec. 503. (a) Pursuant to the consultation called for in 
section 502,the Securities and Exchange Commission (acting 
through the Office of the Advocate for Small Business Capital 
Formation and in consultation with the Small Business Capital 
Formation Advisory Committee) shall conduct an 
annualGovernment-business forum to review the current status of 
problems and programs relating to small business capital 
formation.
  (b) The Commission shall invite other Federal agencies, such 
as theDepartment of the Treasury, the Board of Governors of the 
FederalReserve System, the Small Business Administration, 
organizations representing State securities commissioners, and 
leading small businessand professional organizations concerned 
with capital formation,to participate in the planning for such 
forums.
  (c) The Commission may request any of the Federal 
departments, agencies, or organizations such as those specified 
in subsection (b), orother groups or individuals, to prepare 
statements and reports to bedelivered at such forums. Such 
departments and agencies shallcooperate in this effort.
  (d) A summary of the proceedings of such forums and any 
findingsor recommendations thereof shall be prepared and 
transmitted to theparticipants, appropriate committees of the 
Congress, and others whomay be interested in the subject 
matter.
  (e) The Commission shall--
          (1) review the findings and recommendations of the 
        forum; and
          (2) each time the forum submits a finding or 
        recommendation to the Commission, promptly issue a 
        public statement--
                  (A) assessing the finding or recommendation 
                of the forum; and
                  (B) disclosing the action, if any, the 
                Commission intends to take with respect to the 
                finding or recommendation.

           *       *       *       *       *       *       *

                              ----------                              


                          TRUTH IN LENDING ACT


Sec. 1. Short title of entire Act

  This Act may be cited as the Consumer Credit Protection Act.

                TITLE I--CONSUMER CREDIT COST DISCLOSURE

                     CHAPTER 1--GENERAL PROVISIONS


Sec. 101. Short title

  This title may be cited as the Truth in Lending Act.

           *       *       *       *       *       *       *


Sec.  103. Definitions and rules of construction

  (a) The definitions and rules of construction set forth in 
this section are applicable for the purposes of this title.
  [(b) Bureau.--The term ``Bureau '' means the Bureau of 
Consumer Financial Protection.
  [(c) The term ``Bureau '' refers to the Bureau of Governors 
of the Federal Reserve System.
  (b) Agency.--The term ``Agency'' means the Consumer Law 
Enforcement Agency.
  (c) Board.--The term ``Board'' means the Board of Governors 
of the Federal Reserve System.
  (d) The term ``organization'' means a corporation, government 
or governmental subdivision or agency, trust, estate, 
partnership, cooperative, or association.
  (e) The term ``person'' means a natural person or an 
organization.
  (f) The term ``credit'' means the right granted by a creditor 
to a debtor to defer payment of debt or to incur debt and defer 
its payment.
  (g) The term ``creditor'' refers only to a person who both 
(1) regularly extends, whether in connection with loans, sales 
of property or services, or otherwise, consumer credit which is 
payable by agreement in more than four installments or for 
which the payment of a finance charge is or may be required, 
and (2) is the person to whom the debt arising from the 
consumer credit transaction is initially payable on the face of 
the evidence of indebtedness or, if there is no such evidence 
of indebtedness, by agreement. Notwithstanding the preceding 
sentence, in the case of an open-end credit plan involving a 
credit card, the card issuer and any person who honors the 
credit card and offers a discount which is a finance charge are 
creditors. For the purpose of the requirements imposed under 
chapter 4 and sections 127(a)(5), 127(a)(6), 127(a)(7), 
127(b)(1), 127(b)(2), 127(b)(3), 127(b)(8), and 127(b)(10) of 
chapter 2 of this title, the term ``creditor'' shall also 
include card issuers whether or not the amount due is payable 
by agreement in more than four installments or the payment of a 
finance charge is or may be required, and the [Bureau] Agency 
shall, by regulation, apply these requirements to such card 
issuers, to the extent appropriate, even though the 
requirements are by their terms applicable only to creditors 
offering open-end credit plans. Any person who originates 2 or 
more mortgages referred to in subsection (aa) in any 12-month 
period or any person who originates 1 or more such mortgages 
through a mortgage broker shall be considered to be a creditor 
for purposes of this title. The term ``creditor'' includes a 
private educational lender (as that term is defined in section 
140) for purposes of this title.
  (h) The term ``credit sale'' refers to any sale in which the 
seller is a creditor. The term includes any contract in the 
form of a bailment or lease if the bailee or lessee contracts 
to pay as compensation for use a sum substantially equivalent 
to or in excess of the aggregate value of the property and 
services involved and it is agreed that the bailee or lessee 
will become, or for no other or a nominal consideration has the 
option to become, the owner of the property upon full 
compliance with his obligations under the contract.
  (i) The adjective ``consumer'', used with reference to a 
credit transaction, characterizes the transaction as one in 
which the party to whom credit is offered or extended is a 
natural person, and the money, property, or services which are 
the subject of the transaction are primarily for personal, 
family, or household purposes.
  (j) The terms ``open end credit plan'' and ``open end 
consumer credit plan'' mean a plan under which the creditor 
reasonably contemplates repeated transactions, which prescribes 
the terms of such transactions, and which provides for a 
finance charge which may be computed from time to time on the 
outstanding unpaid balance. A credit plan or open end consumer 
credit plan which is an open end credit plan or open end 
consumer credit plan within the meaning of the preceding 
sentence is an open end credit plan or open end consumer credit 
plan even if credit information is verified from time to time.
  (k) The term ``adequate notice'', as used in section 133, 
means a printed notice to a cardholder which sets forth the 
pertinent facts clearly and conspicuously so that a person 
against whom it is to operate could reasonably be expected to 
have noticed it and understood its meaning. Such notice may be 
given to a cardholder by printing the notice on any credit 
card, or on each periodic statement of account, issued to the 
cardholder, or by any other means reasonably assuring the 
receipt thereof by the cardholder.
  (l) The term ``credit card'' means any card, plate, coupon 
book or other credit device existing for the purpose of 
obtaining money, property, labor, or services on credit.
  (m) The term ``accepted credit card'' means any credit card 
which the cardholder has requested and received or has signed 
or has used, or authorized another to use, for the purpose of 
obtaining money, property, labor, or services on credit.
  (n) The term ``cardholder'' means any person to whom a credit 
card is issued or any person who has agreed with the card 
issuer to pay obligations arising from the issuance of a credit 
card to another person.
  (o) The term ``card issuer'' means any person who issues a 
credit card, or the agent of such person with respect to such 
card.
  (p) The term ``unauthorized use'', as used in section 133, 
means a use of a credit card by a person other than the 
cardholder who does not have actual, implied, or apparent 
authority for such use and from which the cardholder receives 
no benefit.
  (q) The term ``discount'' as used in section 167 means a 
reduction made from the regular price. The term ``discount'' as 
used in section 167 shall not mean a surcharge.
  (r) The term ``surcharge'' as used in section 103 and section 
167 means any means of increasing the regular price to a 
cardholder which is not imposed upon customers paying by cash, 
check, or similar means.
  (s) The term ``State'' refers to any State, the Commonwealth 
of Puerto Rico, the District of Columbia, and any territory or 
possession of the United States.
  (t) The term ``agricultural purposes'' includes the 
production, harvest, exhibition, marketing, transportation, 
processing, or manufacture of agricultural products by a 
natural person who cultivates, plants, propagates, or nurtures 
those agricultural products, including but not limited to the 
acquisition of farmland, real property with a farm residence, 
and personal property and services used primarily in farming.
  (u) The term ``agricultural products'' includes agricultural, 
horticultural, viticultural, and dairy products, livestock, 
wildlife, poultry, bees, forest products, fish and shellfish, 
and any products thereof, including processed and manufactured 
products, and any and all products raised or produced on farms 
and any processed or manufactured products thereof.
  (v) The term ``material disclosures'' means the disclosure, 
as required by this title, of the annual percentage rate, the 
method of determining the finance charge and the balance upon 
which a finance charge will be imposed, the amount of the 
finance charge, the amount to be financed, the total of 
payments, the number and amount of payments, the due dates or 
periods of payments scheduled to repay the indebtedness, and 
the disclosures required by section 129(a).
  (w) The term ``dwelling'' means a residential structure or 
mobile home which contains one to four family housing units, or 
individual units of condominiums or cooperatives.
  (x) The term ``residential mortgage transaction'' means a 
transaction in which a mortgage, deed of trust, purchase money 
security interest arising under an installment sales contract, 
or equivalent consensual security interest is created or 
retained against the consumer's dwelling to finance the 
acquisition or initial construction of such dwelling.
  (y) As used in this section and section 167, the term 
``regular price'' means the tag or posted price charged for the 
property or service if a single price is tagged or posted, or 
the price charged for the property or service when payment is 
made by use of an open-end credit plan or a credit card if 
either (1) no price is tagged or posted, or (2) two prices are 
tagged or posted, one of which is charged when payment is made 
by use of an open-end credit plan or a credit card and the 
other when payment is made by use of cash, check, or similar 
means. For purposes of this definition, payment by check, 
draft, or other negotiable instrument which may result in the 
debiting of an open-end credit plan or a credit cardholder's 
open-end account shall not be considered payment made by use of 
the plan or the account.
  (z) Any reference to any requirement imposed under this title 
or any provision thereof includes reference to the regulations 
of the [Bureau] Agency under this title or the provision 
thereof in question.
  [(bb)] (aa) High-cost Mortgage.--
          (1) Definition.--
                  (A) In general.--The term ``high-cost 
                mortgage'', and a mortgage referred to in this 
                subsection, means a consumer credit transaction 
                that is secured by the consumer's principal 
                dwelling, other than a reverse mortgage 
                transaction, if--
                          (i) in the case of a credit 
                        transaction secured--
                                  (I) by a first mortgage on 
                                the consumer's principal 
                                dwelling, the annual percentage 
                                rate at consummation of the 
                                transaction will exceed by more 
                                than 6.5 percentage points 
                                [(8.5 percentage points, if the 
                                dwelling is personal property 
                                and the transaction is for less 
                                than $50,000)] (10 percentage 
                                points if the dwelling is 
                                personal property or is a 
                                transaction that does not 
                                include the purchase of real 
                                property on which a dwelling is 
                                to be placed, and the 
                                transaction is for less than 
                                $75,000 (as such amount is 
                                adjusted by the Consumer Law 
                                Enforcement Agency to reflect 
                                the change in the Consumer 
                                Price Index)) the average prime 
                                offer rate, as defined in 
                                section 129C(b)(2)(B), for a 
                                comparable transaction; or
                                  (II) by a subordinate or 
                                junior mortgage on the 
                                consumer's principal dwelling, 
                                the annual percentage rate at 
                                consummation of the transaction 
                                will exceed by more than 8.5 
                                percentage points the average 
                                prime offer rate, as defined in 
                                section 129C(b)(2)(B), for a 
                                comparable transaction;
                          (ii) the total points and fees 
                        payable in connection with the 
                        transaction, other than bona fide third 
                        party charges not retained by the 
                        mortgage originator, creditor, or an 
                        affiliate of the creditor or mortgage 
                        originator, exceed--
                                  (I) in the case of a 
                                transaction for $20,000 or 
                                more, 5 percent of the total 
                                transaction amount; [or]
                                  (II) in the case of a 
                                transaction for less than 
                                $20,000, the lesser of 8 
                                percent of the total 
                                transaction amount or $1,000 
                                (or such other dollar amount as 
                                the [Bureau] Agency shall 
                                prescribe by regulation); or
                                  (III) in the case of a 
                                transaction for less than 
                                $75,000 (as such amount is 
                                adjusted by the Consumer Law 
                                Enforcement Agency to reflect 
                                the change in the Consumer 
                                Price Index) in which the 
                                dwelling is personal property 
                                (or is a consumer credit 
                                transaction that does not 
                                include the purchase of real 
                                property on which a dwelling is 
                                to be placed) the greater of 5 
                                percent of the total 
                                transaction amount or $3,000 
                                (as such amount is adjusted by 
                                the Consumer Law Enforcement 
                                Agency to reflect the change in 
                                the Consumer Price Index); or
                          (iii) the credit transaction 
                        documents permit the creditor to charge 
                        or collect prepayment fees or penalties 
                        more than 36 months after the 
                        transaction closing or such fees or 
                        penalties exceed, in the aggregate, 
                        more than 2 percent of the amount 
                        prepaid.
                  (B) Introductory rates taken into account.--
                For purposes of subparagraph (A)(i), the annual 
                percentage rate of interest shall be determined 
                based on the following interest rate:
                          (i) In the case of a fixed-rate 
                        transaction in which the annual 
                        percentage rate will not vary during 
                        the term of the loan, the interest rate 
                        in effect on the date of consummation 
                        of the transaction.
                          (ii) In the case of a transaction in 
                        which the rate of interest varies 
                        solely in accordance with an index, the 
                        interest rate determined by adding the 
                        index rate in effect on the date of 
                        consummation of the transaction to the 
                        maximum margin permitted at any time 
                        during the loan agreement.
                          (iii) In the case of any other 
                        transaction in which the rate may vary 
                        at any time during the term of the loan 
                        for any reason, the interest charged on 
                        the transaction at the maximum rate 
                        that may be charged during the term of 
                        the loan.
                  (C) Mortgage insurance.--For the purposes of 
                computing the total points and fees under 
                paragraph (4), the total points and fees shall 
                exclude--
                          (i) any premium provided by an agency 
                        of the Federal Government or an agency 
                        of a State;
                          (ii) any amount that is not in excess 
                        of the amount payable under policies in 
                        effect at the time of origination under 
                        section 203(c)(2)(A) of the National 
                        Housing Act (12 U.S.C. 1709(c)(2)(A)), 
                        provided that the premium, charge, or 
                        fee is required to be refundable on a 
                        pro-rated basis and the refund is 
                        automatically issued upon notification 
                        of the satisfaction of the underlying 
                        mortgage loan; and
                          (iii) any premium paid by the 
                        consumer after closing.
  (2)(A) After the 2-year period beginning on the effective 
date of the regulations promulgated under section 155 of the 
Riegle Community Development and Regulatory Improvement Act of 
1994, and no more frequently than biennially after the first 
increase or decrease under this subparagraph, the [Bureau] 
Agency may by regulation increase or decrease the number of 
percentage points specified in paragraph (1)(A), if the 
[Bureau] Agency determines that the increase or decrease is--
          (i) consistent with the consumer protections against 
        abusive lending provided by the amendments made by 
        subtitle B of title I of the Riegle Community 
        Development and Regulatory Improvement Act of 1994; and
          (ii) warranted by the need for credit.
          (B) An increase or decrease under subparagraph (A)--
                  (i) may not result in the number of 
                percentage points referred to in paragraph 
                (1)(A)(i)(I) being less than 6 percentage 
                points or greater than 10 percentage points; 
                and
                  (ii) may not result in the number of 
                percentage points referred to in paragraph 
                (1)(A)(i)(II) being less than 8 percentage 
                points or greater than 12 percentage points.
  (C) In determining whether to increase or decrease the number 
of percentage points referred to in subparagraph (A), the 
[Bureau] Agency shall consult with representatives of 
consumers, including low-income consumers, and lenders.
  (3) The amount specified in paragraph (1)(B)(ii) shall be 
adjusted annually on January 1 by the annual percentage change 
in the Consumer Price Index, as reported on June 1 of the year 
preceding such adjustment.
  (4) For purposes of [paragraph (1)(B)] paragraph (1)(A) and 
section 129C, points and fees shall include--
          (A) all items included in the finance charge, except 
        interest or the time-price differential;
          (B) all compensation paid directly or indirectly by a 
        consumer or creditor to a mortgage originator from any 
        source, including a mortgage originator that is also 
        the creditor in a table-funded transaction;
          (C) each of the charges listed in section 106(e) 
        (except an escrow for future payment of taxes and 
        insurance), unless--
                  (i) the charge is reasonable;
                  (ii) the creditor receives no direct or 
                indirect compensation, except as retained by a 
                creditor or its affiliate as a result of their 
                participation in an affiliated business 
                arrangement (as defined in section 3(7) of the 
                Real Estate Settlement Procedures Act of 1974 
                (12 U.S.C. 2602(7)); and
                  [(iii) the charge is paid to a third party 
                unaffiliated with the creditor; and]
                  (iii) the charge is--
                          (I) a bona fide third-party charge 
                        not retained by the mortgage 
                        originator, creditor, or an affiliate 
                        of the creditor or mortgage originator; 
                        or
                          (II) a charge set forth in section 
                        106(e)(1);
          (D) premiums or other charges payable at or before 
        closing for any credit life, credit disability, credit 
        unemployment, or credit property insurance, or any 
        other [accident,] loss-of-income, life or health 
        insurance, [or any payments] and any payments directly 
        or indirectly for any debt cancellation or suspension 
        agreement or contract, except that insurance premiums 
        or debt cancellation or suspension fees calculated and 
        paid in full on a monthly basis shall not be considered 
        financed by the creditor;
          (E) the maximum prepayment fees and penalties which 
        may be charged or collected under the terms of the 
        credit transaction;
          (F) all prepayment fees or penalties that are 
        incurred by the consumer if the loan refinances a 
        previous loan made or currently held by the same 
        creditor or an affiliate of the creditor; and
          (G) such other charges as the [Bureau] Agency 
        determines to be appropriate.
          (5) Calculation of points and fees for open-end 
        consumer credit plans.--In the case of open-end 
        consumer credit plans, points and fees shall be 
        calculated, for purposes of this section and section 
        129, by adding the total points and fees known at or 
        before closing, including the maximum prepayment 
        penalties which may be charged or collected under the 
        terms of the credit transaction, plus the minimum 
        additional fees the consumer would be required to pay 
        to draw down an amount equal to the total credit line.
  (6) This subsection shall not be construed to limit the rate 
of interest or the finance charge that a person may charge a 
consumer for any extension of credit.
  [(aa)] (bb) The disclosure of an amount or percentage which 
is greater than the amount or percentage required to be 
disclosed under this title does not in itself constitute a 
violation of this title.
  (cc) The term ``reverse mortgage transaction'' means a 
nonrecourse transaction in which a mortgage, deed of trust, or 
equivalent consensual security interest is created against the 
consumer's principal dwelling--
          (1) securing one or more advances; and
          (2) with respect to which the payment of any 
        principal, interest, and shared appreciation or equity 
        is due and payable (other than in the case of default) 
        only after--
                  (A) the transfer of the dwelling;
                  (B) the consumer ceases to occupy the 
                dwelling as a principal dwelling; or
                  (C) the death of the consumer.
  [(cc)] (dd) Definitions Relating to Mortgage Origination and 
Residential Mortgage Loans.--
          (1) Commission.--Unless otherwise specified, the term 
        ``Commission'' means the Federal Trade Commission.
          (2) Mortgage originator.--The term ``mortgage 
        originator''--
                  (A) means any person who, for direct or 
                indirect compensation or gain, or in the 
                expectation of direct or indirect compensation 
                or gain--
                          (i) takes a residential mortgage loan 
                        application;
                          (ii) assists a consumer in obtaining 
                        or applying to obtain a residential 
                        mortgage loan; or
                          (iii) offers or negotiates terms of a 
                        residential mortgage loan;
                  (B) includes any person who represents to the 
                public, through advertising or other means of 
                communicating or providing information 
                (including the use of business cards, 
                stationery, brochures, signs, rate lists, or 
                other promotional items), that such person can 
                or will provide any of the services or perform 
                any of the activities described in subparagraph 
                (A);
                  (C) does not include any person who is (i) 
                not otherwise described in subparagraph (A) or 
                (B) and who performs purely administrative or 
                clerical tasks on behalf of a person who is 
                described in any such subparagraph, or (ii) [an 
                employee of a retailer of manufactured homes 
                who is not described in clause (i) or (iii) of 
                subparagraph (A) and who does not advise a 
                consumer on loan terms (including rates, fees, 
                and other costs)] a retailer of manufactured or 
                modular homes or its employees unless such 
                retailer or its employees receive compensation 
                or gain for engaging in activities described in 
                subparagraph (A) that is in excess of any 
                compensation or gain received in a comparable 
                cash transaction;
                  (D) does not include a person or entity that 
                only performs real estate brokerage activities 
                and is licensed or registered in accordance 
                with applicable State law, unless such person 
                or entity is compensated by a lender, a 
                mortgage broker, or other mortgage originator 
                or by any agent of such lender, mortgage 
                broker, or other mortgage originator;
                  (E) does not include, with respect to a 
                residential mortgage loan, a person, estate, or 
                trust that provides mortgage financing for the 
                sale of 3 properties in any 12-month period to 
                purchasers of such properties, each of which is 
                owned by such person, estate, or trust and 
                serves as security for the loan, provided that 
                such loan--
                          (i) is not made by a person, estate, 
                        or trust that has constructed, or acted 
                        as a contractor for the construction 
                        of, a residence on the property in the 
                        ordinary course of business of such 
                        person, estate, or trust;
                          (ii) is fully amortizing;
                          (iii) is with respect to a sale for 
                        which the seller determines in good 
                        faith and documents that the buyer has 
                        a reasonable ability to repay the loan;
                          (iv) has a fixed rate or an 
                        adjustable rate that is adjustable 
                        after 5 or more years, subject to 
                        reasonable annual and lifetime 
                        limitations on interest rate increases; 
                        and
                          (v) meets any other criteria the 
                        [Bureau] Agency may prescribe;
                  (F) does not include the creditor (except the 
                creditor in a table-funded transaction) under 
                paragraph (1), (2), or (4) of section 129B(c); 
                and
                  (G) does not include a servicer or servicer 
                employees, agents and contractors, including 
                but not limited to those who offer or negotiate 
                terms of a residential mortgage loan for 
                purposes of renegotiating, modifying, replacing 
                and subordinating principal of existing 
                mortgages where borrowers are behind in their 
                payments, in default or have a reasonable 
                likelihood of being in default or falling 
                behind.
          (3) Nationwide mortgage licensing system and 
        registry.--The term ``Nationwide Mortgage Licensing 
        System and Registry'' has the same meaning as in the 
        Secure and Fair Enforcement for Mortgage Licensing Act 
        of 2008.
          (4) Other definitions relating to mortgage 
        originator.--For purposes of this subsection, a person 
        ``assists a consumer in obtaining or applying to obtain 
        a residential mortgage loan'' by, among other things, 
        advising on residential mortgage loan terms (including 
        rates, fees, and other costs), preparing residential 
        mortgage loan packages, or collecting information on 
        behalf of the consumer with regard to a residential 
        mortgage loan.
          (5) Residential mortgage loan.--The term 
        ``residential mortgage loan'' means any consumer credit 
        transaction that is secured by a mortgage, deed of 
        trust, or other equivalent consensual security interest 
        on a dwelling or on residential real property that 
        includes a dwelling, other than a consumer credit 
        transaction under an open end credit plan or, for 
        purposes of sections 129B and 129C and section 128(a) 
        (16), (17), (18), and (19), and sections 128(f) and 
        130(k), and any regulations promulgated thereunder, an 
        extension of credit relating to a plan described in 
        section 101(53D) of title 11, United States Code.
          (6) Secretary.--The term ``Secretary'', when used in 
        connection with any transaction or person involved with 
        a residential mortgage loan, means the Secretary of 
        Housing and Urban Development.
          (7) Servicer.--The term ``servicer'' has the same 
        meaning as in section 6(i)(2) of the Real Estate 
        Settlement Procedures Act of 1974 (12 U.S.C. 
        2605(i)(2)).
  [(dd)] (ee) Bona Fide Discount Points and Prepayment 
Penalties.--For the purposes of determining the amount of 
points and fees for purposes of subsection (aa), either the 
amounts described in paragraph (1) or (2) of the following 
paragraphs, but not both, shall be excluded:
          (1) Up to and including 2 bona fide discount points 
        payable by the consumer in connection with the 
        mortgage, but only if the interest rate from which the 
        mortgage's interest rate will be discounted does not 
        exceed by more than 1 percentage point--
                  (A) the average prime offer rate, as defined 
                in section 129C; or
                  (B) if secured by a personal property loan, 
                the average rate on a loan in connection with 
                which insurance is provided under title I of 
                the National Housing Act (12 U.S.C. 1702 et 
                seq.).
          (2) Unless 2 bona fide discount points have been 
        excluded under paragraph (1), up to and including 1 
        bona fide discount point payable by the consumer in 
        connection with the mortgage, but only if the interest 
        rate from which the mortgage's interest rate will be 
        discounted does not exceed by more than 2 percentage 
        points--
                  (A) the average prime offer rate, as defined 
                in section 129C; or
                  (B) if secured by a personal property loan, 
                the average rate on a loan in connection with 
                which insurance is provided under title I of 
                the National Housing Act (12 U.S.C. 1702 et 
                seq.).
          (3) For purposes of paragraph (1), the term ``bona 
        fide discount points'' means loan discount points which 
        are knowingly paid by the consumer for the purpose of 
        reducing, and which in fact result in a bona fide 
        reduction of, the interest rate or time-price 
        differential applicable to the mortgage.
          (4) Paragraphs (1) and (2) shall not apply to 
        discount points used to purchase an interest rate 
        reduction unless the amount of the interest rate 
        reduction purchased is reasonably consistent with 
        established industry norms and practices for secondary 
        mortgage market transactions.

Sec. 104. Exempted transactions

   This title does not apply to the following:
          (1) Credit transactions involving extensions of 
        credit primarily for business, commercial, or 
        agricultural purposes, or to government or governmental 
        agencies or instrumentalities, or to organizations.
          (2) Transactions in securities or commodities 
        accounts by a broker-dealer registered with the 
        Securities and Exchange Commission.
          (3) Credit transactions, other than those in which a 
        security interest is or will be acquired in real 
        property, or in personal property used or expected to 
        be used as the principal dwelling of the consumer and 
        other than private education loans (as that term is 
        defined in section 140(a)), in which the total amount 
        financed exceeds $50,000.
          (4) Transactions under public utility tariffs, if the 
        [Bureau] Agency determines that a State regulatory body 
        regulates the charges for the public utility services 
        involved, the charges for delayed payment, and any 
        discount allowed for early payment.
          (5) Transactions for which the [Bureau] Agency, by 
        rule, determines that coverage under this title is not 
        necessary to carry out the purposes of this title.
          (7) Loans made, insured, or guaranteed pursuant to a 
        program authorized by title IV of the Higher Education 
        Act of 1965 (20 U.S.C. 1070 et seq.).

Sec. 105. Regulations

  (a) The [Bureau] Agency shall prescribe regulations to carry 
out the purposes of this title. Except with respect to the 
provisions of section 129 that apply to a mortgage referred to 
in section 103(aa), such regulations may contain such 
additional requirements, classifications, differentiations, or 
other provisions, and may provide for such adjustments and 
exceptions for all or any class of transactions, as in the 
judgment of the [Bureau] Agency are necessary or proper to 
effectuate the purposes of this title, to prevent circumvention 
or evasion thereof, or to facilitate compliance therewith.
  (b) The [Bureau] Agency shall publish a single, integrated 
disclosure for mortgage loan transactions (including real 
estate settlement cost statements) which includes the 
disclosure requirements of this title in conjunction with the 
disclosure requirements of the Real Estate Settlement 
Procedures Act of 1974 that, taken together, may apply to a 
transaction that is subject to both or either provisions of 
law. The purpose of such model disclosure shall be to 
facilitate compliance with the disclosure requirements of this 
title and the Real Estate Settlement Procedures Act of 1974, 
and to aid the borrower or lessee in understanding the 
transaction by utilizing readily understandable language to 
simplify the technical nature of the disclosures. In devising 
such forms, the [Bureau] Agency shall consider the use by 
creditors or lessors of data processing or similar automated 
equipment. Nothing in this title may be construed to require a 
creditor or lessor to use any such model form or clause 
prescribed by the [Bureau] Agency under this section. A 
creditor or lessor shall be deemed to be in compliance with the 
disclosure provisions of this title with respect to other than 
numerical disclosures if the creditor or lessor (1) uses any 
appropriate model form or clause as published by the [Bureau] 
Agency, or (2) uses any such model form or clause and changes 
it by (A) deleting any information which is not required by 
this title, or (B) rearranging the format, if in making such 
deletion or rearranging the format, the creditor or lessor does 
not affect the substance, clarity, or meaningful sequence of 
the disclosure.
  (c) Model disclosure forms and clauses shall be adopted by 
the [Bureau] Agency after notice duly given in the Federal 
Register and an opportunity for public comment in accordance 
with section 553 of title 5, United States Code.
  (d) Any regulation of the [Bureau] Agency, or any amendment 
or interpretation thereof, requiring any disclosure which 
differs from the disclosures previously required by this 
chapter, chapter 4, or chapter 5, or by any regulation of the 
[Bureau] Agency promulgated thereunder shall have an effective 
date of that October 1 which follows by at least six months the 
date of promulgation, except that the [Bureau] Agency may at 
its discretion take interim action by regulation, amendment, or 
interpretation to lengthen the period of time permitted for 
creditors or lessors to adjust their forms to accommodate new 
requirements or shorten the length of time for creditors or 
lessors to make such adjustments when it makes a specific 
finding that such action is necessary to comply with the 
findings of a court or to prevent unfair or deceptive 
disclosure practices. Notwithstanding the previous sentence, 
any creditor or lessor may comply with any such newly 
promulgated disclosure requirements prior to the effective date 
of the requirements.
  (f) Exemption Authority.--
          (1) In general.--The [Bureau] Agency may exempt, by 
        regulation, from all or part of this title all or any 
        class of transactions, other than transactions 
        involving any mortgage described in section 103(aa), 
        for which, in the determination of the [Bureau] Agency, 
        coverage under all or part of this title does not 
        provide a meaningful benefit to consumers in the form 
        of useful information or protection.
          (2) Factors for consideration.--In determining which 
        classes of transactions to exempt in whole or in part 
        under paragraph (1), the [Bureau] Agency shall consider 
        the following factors and publish its rationale at the 
        time a proposed exemption is published for comment:
                  (A) The amount of the loan and whether the 
                disclosures, right of rescission, and other 
                provisions provide a benefit to the consumers 
                who are parties to such transactions, as 
                determined by the [Bureau] Agency.
                  (B) The extent to which the requirements of 
                this title complicate, hinder, or make more 
                expensive the credit process for the class of 
                transactions.
                  (C) The status of the borrower, including--
                          (i) any related financial 
                        arrangements of the borrower, as 
                        determined by the [Bureau] Agency;
                          (ii) the financial sophistication of 
                        the borrower relative to the type of 
                        transaction; and
                          (iii) the importance to the borrower 
                        of the credit, related supporting 
                        property, and coverage under this 
                        title, as determined by the [Bureau] 
                        Agency;
                  (D) whether the loan is secured by the 
                principal residence of the consumer; and
                  (E) whether the goal of consumer protection 
                would be undermined by such an exemption.
  (g) Waiver for Certain Borrowers.--
          (1) In general.--The [Bureau] Agency, by regulation, 
        may exempt from the requirements of this title certain 
        credit transactions if--
                  (A) the transaction involves a consumer--
                          (i) with an annual earned income of 
                        more than $200,000; or
                          (ii) having net assets in excess of 
                        $1,000,000 at the time of the 
                        transaction; and
                  (B) a waiver that is handwritten, signed, and 
                dated by the consumer is first obtained from 
                the consumer.
          (2) Adjustments by the board.--The [Bureau] Agency, 
        at its discretion, may adjust the annual earned income 
        and net asset requirements of paragraph (1) for 
        inflation.
                  
                          (i) Authority of the board to 
                        prescribe rules.--Notwithstanding 
                        subsection (a), the Board shall have 
                        authority to prescribe rules under this 
                        title with respect to a person 
                        described in section 1029(a) of the 
                        Consumer Financial Protection Act of 
                        2010. Regulations prescribed under this 
                        subsection may contain such 
                        classifications, differentiations, or 
                        other provisions, as in the judgment of 
                        the Board are necessary or proper to 
                        effectuate the purposes of this title, 
                        to prevent circumvention or evasion 
                        thereof, or to facilitate compliance 
                        therewith.
  (h) Deference.--Notwithstanding any power granted to any 
Federal agency under this title, the deference that a court 
affords to the [Bureau] Agency with respect to a determination 
made by the [Bureau] Agency relating to the meaning or 
interpretation of any provision of this title, other than 
section 129E or 129H, shall be applied as if the [Bureau] 
Agency were the only agency authorized to apply, enforce, 
interpret, or administer the provisions of this title.
  (i) Authority of the board to prescribe rules.--
Notwithstanding subsection (a), the Board shall have authority 
to prescribe rules under this title with respect to a person 
described in section 1029(a) of the Consumer Financial 
Protection Act of 2010. Regulations prescribed under this 
subsection may contain such classifications, differentiations, 
or other provisions, as in the judgment of the Board are 
necessary or proper to effectuate the purposes of this title, 
to prevent circumvention or evasion thereof, or to facilitate 
compliance therewith.

Sec. 106. Determination of finance charge

  (a) Except as otherwise provided in this section, the amount 
of the finance charge in connection with any consumer credit 
transaction shall be determined as the sum of all charges, 
payable directly or indirectly by the person to whom the credit 
is extended, and imposed directly or indirectly by the creditor 
as an incident to the extension of credit. The finance charge 
does not include charges of a type payable in a comparable cash 
transaction. The finance charge shall not include fees and 
amounts imposed by third party closing agents (including 
settlement agents, attorneys, and escrow and title companies) 
if the creditor does not require the imposition of the charges 
or the services provided and does not retain the charges. 
Examples of charges which are included in the finance charge 
include any of the following types of charges which are 
applicable.
          (1) Interest, time price differential, and any amount 
        payable under a point, discount, or other system of 
        additional charges.
          (2) Service or carrying charge.
          (3) Loan fee, finder's fee, or similar charge.
          (4) Fee for an investigation or credit report.
          (5) Premium or other charge for any guarantee or 
        insurance protecting the creditor against the obligor's 
        default or other credit loss.
          (6) Borrower-paid mortgage broker fees, including 
        fees paid directly to the broker or the lender (for 
        delivery to the broker) whether such fees are paid in 
        cash or financed.
  (b) Charges or premiums for credit life, accident, or health 
insurance written in connection with any consumer credit 
transaction shall be included in the finance charge unless:
          (1) the coverage of the debtor by the insurance is 
        not a factor in the approval by the creditor of the 
        extension of credit, and this fact is clearly disclosed 
        in writing to the person applying for or obtaining the 
        extension of credit; and
          (2) in order to obtain the insurance in connection 
        with the extension of credit, the person to whom the 
        credit is extended must give specific affirmative 
        written indication of his desire to do so after written 
        disclosure to him of the cost thereof.
  (c) Charges or premiums for insurance, written in connection 
with any consumer credit transaction, against loss of or damage 
to property or against liability arising out of the ownership 
or use of property, shall be included in the finance charge 
unless a clear and specific statement in writing is furnished 
by the creditor to the person to whom the credit is extended, 
setting forth the cost of the insurance if obtained from or 
through the creditor, and stating that the person to whom the 
credit is extended may choose the person through which the 
insurance is to be obtained.
  (d) If any of the following items is itemized and disclosed 
in accordance with the regulations of the [Bureau] Agency in 
connection with any transaction, then the creditor need not 
include that item in the computation of the finance charge with 
respect to that transaction:
          (1) Fees and charges prescribed by law which actually 
        are or will be paid to public officials for determining 
        the existence of or for perfecting or releasing or 
        satisfying any security related to the credit 
        transaction.
          (2) The premium payable for any insurance in lieu of 
        perfecting any security interest otherwise required by 
        the creditor in connection with the transaction, if the 
        premium does not exceed the fees and charges described 
        in paragraph (1) which would otherwise be payable.
          (3) Any tax levied on security instruments or on 
        documents evidencing indebtedness if the payment of 
        such taxes is a precondition for recording the 
        instrument securing the evidence of indebtedness.
  (e) The following items, when charged in connection with any 
extension of credit secured by an interest in real property, 
shall not be included in the computation of the finance charge 
with respect to that transaction:
          (1) Fees or premiums for title examination, title 
        insurance, or similar purposes.
          (2) Fees for preparation of loan-related documents.
          (3) Escrows for future payments of taxes and 
        insurance.
          (4) Fees for notarizing deeds and other documents.
          (5) Appraisal fees, including fees related to any 
        pest infestation or flood hazard inspections conducted 
        prior to closing.
          (6) Credit reports.
  (f) Tolerances for Accuracy.--In connection with credit 
transactions not under an open end credit plan that are secured 
by real property or a dwelling, the disclosure of the finance 
charge and other disclosures affected by any finance charge--
          (1) shall be treated as being accurate for purposes 
        of this title if the amount disclosed as the finance 
        charge--
                  (A) does not vary from the actual finance 
                charge by more than $100; or
                  (B) is greater than the amount required to be 
                disclosed under this title; and
          (2) shall be treated as being accurate for purposes 
        of section 125 if--
                  (A) except as provided in subparagraph (B), 
                the amount disclosed as the finance charge does 
                not vary from the actual finance charge by more 
                than an amount equal to one-half of one percent 
                of the total amount of credit extended; or
                  (B) in the case of a transaction, other than 
                a mortgage referred to in section 103(aa), 
                which--
                          (i) is a refinancing of the principal 
                        balance then due and any accrued and 
                        unpaid finance charges of a residential 
                        mortgage transaction as defined in 
                        section [103(w)] 103(x), or is any 
                        subsequent refinancing of such a 
                        transaction; and
                          (ii) does not provide any new 
                        consolidation or new advance;
                if the amount disclosed as the finance charge 
                does not vary from the actual finance charge by 
                more than an amount equal to one percent of the 
                total amount of credit extended.

Sec. 107. Determination of annual percentage rate

  (a) The annual percentage rate applicable to any extension of 
consumer credit shall be determined, in accordance with the 
regulations of the [Bureau] Agency,
          (1) in the case of any extension of credit other than 
        under an open end credit plan, as
                  (A) that nominal annual percentage rate which 
                will yield a sum equal to the amount of the 
                finance charge when it is applied to the unpaid 
                balances of the amount financed, calculated 
                according to the actuarial method of allocating 
                payments made on a debt between the amount 
                financed and the amount of the finance charge, 
                pursuant to which a payment is applied first to 
                the accumulated finance charge and the balance 
                is applied to the unpaid amount financed; or
                  (B) the rate determined by any method 
                prescribed by the [Bureau] Agency as a method 
                which materially simplifies computation while 
                retaining reasonable accuracy as compared with 
                the rate determined under subparagraph (A).
          (2) in the case of any extension of credit under an 
        open end credit plan, as the quotient (expressed as a 
        percentage) of the total finance charge for the period 
        to which it relates divided by the amount upon which 
        the finance charge for that period is based, multiplied 
        by the number of such periods in a year.
  (b) Where a creditor imposes the same finance charge for 
balances within a specified range, the annual percentage rate 
shall be computed on the median balance within the range, 
except that if the [Bureau] Agency determines that a rate so 
computed would not be meaningful, or would be materially 
misleading, the annual percentage rate shall be computed on 
such other basis as the [Bureau] Agency may by regulation 
require.
  (c) The disclosure of an annual percentage rate is accurate 
for the purpose of this title if the rate disclosed is within a 
tolerance not greater than one-eighth of 1 per centum more or 
less than the actual rate or rounded to the nearest one-fourth 
of 1 per centum. The [Bureau] Agency may allow a greater 
tolerance to simplify compliance where irregular payments are 
involved.
  (d) The [Bureau] Agency may authorize the use of rate tables 
or charts which may provide for the disclosure of annual 
percentage rates which vary from the rate determined in 
accordance with subsection (a)(1)(A) by not more than such 
tolerances as the [Bureau] Agency may allow. The [Bureau] 
Agency may not allow a tolerance greater than 8 per centum of 
that rate except to simplify compliance where irregular 
payments are involved.
  (e) In the case of creditors determining the annual 
percentage rate in a manner other than as described in 
subsection (d), the [Bureau] Agency may authorize other 
reasonable tolerances.

Sec. 108. Administrative enforcement

  (a) Enforcing Agencies.--Subject to subtitle B of the 
Consumer Financial Protection Act of 2010, compliance with the 
requirements imposed under this title shall be enforced under--
          (1) section 8 of the Federal Deposit Insurance Act, 
        by the appropriate Federal banking agency, as defined 
        in section 3(q) of the Federal Deposit Insurance Act 
        (12 U.S.C. 1813(q)), with respect to--
                  (A) national banks, Federal savings 
                associations, and Federal branches and Federal 
                agencies of foreign banks;
                  (B) member banks of the Federal Reserve 
                System (other than national banks), branches 
                and agencies of foreign banks (other than 
                Federal branches, Federal agencies, and insured 
                State branches of foreign banks), commercial 
                lending companies owned or controlled by 
                foreign banks, and organizations operating 
                under section 25 or 25A of the Federal Reserve 
                Act; and
                  (C) banks and State savings associations 
                insured by the Federal Deposit Insurance 
                Corporation (other than members of the Federal 
                Reserve System), and insured State branches of 
                foreign banks;
          (2) the Federal Credit Union Act, by the Director of 
        the National Credit Union Administration, with respect 
        to any Federal credit union;
          (3) the Federal Aviation Act of 1958, by the 
        Secretary of Transportation, with respect to any air 
        carrier or foreign air carrier subject to that Act;
          (4) the Packers and Stockyards Act, 1921 (except as 
        provided in section 406 of that Act), by the Secretary 
        of Agriculture, with respect to any activities subject 
        to that Act;
          (5) the Farm Credit Act of 1971, by the Farm Credit 
        Administration with respect to any Federal land bank, 
        Federal land bank association, Federal intermediate 
        credit bank, or production credit association; and
          (6) subtitle E of the Consumer Financial Protection 
        Act of 2010, by the [Bureau] Agency, with respect to 
        any person subject to this title.
          (7) sections 21B and 21C of the Securities Exchange 
        Act of 1934, in the case of a broker or dealer, other 
        than a depository institution, by the Securities and 
        Exchange Commission.
  (b) For the purpose of the exercise by any agency referred to 
in subsection (a) of its powers under any Act referred to in 
that subsection, a violation of any requirement imposed under 
this title shall be deemed to be a violation of a requirement 
imposed under that Act. In addition to its powers under any 
provision of law specifically referred to in subsection (a), 
each of the agencies referred to in that subsection may 
exercise, for the purpose of enforcing compliance with any 
requirement imposed under this title, any other authority 
conferred on it by law.
  (c) Overall Enforcement Authority of the Federal Trade 
Commission.--Except to the extent that enforcement of the 
requirements imposed under this title is specifically committed 
to some other Government agency under any of paragraphs (1) 
through (5) of subsection (a), and subject to subtitle B of the 
Consumer Financial Protection Act of 2010, the Federal Trade 
Commission shall be authorized to enforce such requirements. 
For the purpose of the exercise by the Federal Trade Commission 
of its functions and powers under the Federal Trade Commission 
Act, a violation of any requirement imposed under this title 
shall be deemed a violation of a requirement imposed under that 
Act. All of the functions and powers of the Federal Trade 
Commission under the Federal Trade Commission Act are available 
to the Federal Trade Commission to enforce compliance by any 
person with the requirements under this title, irrespective of 
whether that person is engaged in commerce or meets any other 
jurisdictional tests under the Federal Trade Commission Act.
  (d) The authority of the [Bureau] Agency to issue regulations 
under this title does not impair the authority of any other 
agency designated in this section to make rules respecting its 
own procedures in enforcing compliance with requirements 
imposed under this title.
  (e)(1) In carrying out its enforcement activities under this 
section, each agency referred to in subsection (a) or (c), in 
cases where an annual percentage rate or finance charge was 
inaccurately disclosed, shall notify the creditor of such 
disclosure error and is authorized in accordance with the 
provisions of this subsection to require the creditor to make 
an adjustment to the account of the person to whom credit was 
extended, to assure that such person will not be required to 
pay a finance charge in excess of the finance charge actually 
disclosed or the dollar equivalent of the annual percentage 
rate actually disclosed, whichever is lower. For the purposes 
of this subsection, except where such disclosure error resulted 
from a willful violation which was intended to mislead the 
person to whom credit was extended, in determining whether a 
disclosure error has occurred and in calculating any 
adjustment, (A) each agency shall apply (i) with respect to the 
annual percentage rate, a tolerance of one-quarter of 1 percent 
more or less than the actual rate, determined without regard to 
section 107(c) of this title, and (ii) with respect to the 
finance charge, a corresponding numerical tolerance as 
generated by the tolerance provided under this subsection for 
the annual percentage rate; except that (B) with respect to 
transactions consummated after two years following the 
effective date of section 608 of the Truth in Lending 
Simplification and Reform Act, each agency shall apply (i) for 
transactions that have a scheduled amortization of ten years or 
less, with respect to the annual percentage rate, a tolerance 
not to exceed one-quarter of 1 percent more or less than the 
actual rate, determined without regard to section 107(c) of 
this title, but in no event a tolerance of less than the 
tolerances allowed under section 107(c), (ii) for transactions 
that have a scheduled amortization of more than ten years, with 
respect to the annual percentage rate, only such tolerances as 
are allowed under section 107(c) of this title, and (iii) for 
all transactions, with respect to the finance charge, a 
corresponding numerical tolerance as generated by the 
tolerances provided under this subsection for the annual 
percentage rate.
  (2) Each agency shall require such an adjustment when it 
determines that such disclosure error resulted from (A) a clear 
and consistent pattern or practice of violations, (B) gross 
negligence, or (C) a willful violation which was intended to 
mislead the person to whom the credit was extended. 
Notwithstanding the preceding sentence, except where such 
disclosure error resulted from a willful violation which was 
intended to mislead the person to whom credit was extended, an 
agency need not require such an adjustment if it determines 
that such disclosure error--
          (A) resulted from an error involving the disclosure 
        of a fee or charge that would otherwise be excludable 
        in computing the finance charge, including but not 
        limited to violations involving the disclosures 
        described in sections 106(b), (c) and (d) of this 
        title, in which event the agency may require such 
        remedial action as it determines to be equitable, 
        except that for transactions consummated after two 
        years after the effective date of section 608 of the 
        Truth in Lending Simplification and Reform Act, such an 
        adjustment shall be ordered for violations of section 
        106(b);
          (B) involved a disclosed amount which was 10 per 
        centum or less of the amount that should have been 
        disclosed and (i) in cases where the error involved a 
        disclosed finance charge, the annual percentage rate 
        was disclosed correctly, and (ii) in cases where the 
        error involved a disclosed annual percentage rate, the 
        finance charge was disclosed correctly; in which event 
        the agency may require such adjustment as it determines 
        to be equitable;
          (C) involved a total failure to disclose either the 
        annual percentage rate or the finance charge, in which 
        event the agency may require such adjustment as it 
        determines to be equitable; or
          (D) resulted from any other unique circumstance 
        involving clearly technical and nonsubstantive 
        disclosure violations that do not adversely affect 
        information provided to the consumer and that have not 
        misled or otherwise deceived the consumer.
In the case of other such disclosure errors, each agency may 
require such an adjustment.
  (3) Notwithstanding paragraph (2), no adjustment shall be 
ordered--
          (A) if it would have a significantly adverse impact 
        upon the safety or soundness of the creditor, but in 
        any such case, the agency may--
                  (i) require a partial adjustment in an amount 
                which does not have such an impact; or
                  (ii) require the full adjustment, but permit 
                the creditor to make the required adjustment in 
                partial payments over an extended period of 
                time which the agency considers to be 
                reasonable, if (in the case of an agency 
                referred to in paragraph (1), (2), or (3) of 
                subsection (a)), the agency determines that a 
                partial adjustment or making partial payments 
                over an extended period is necessary to avoid 
                causing the creditor to become undercapitalized 
                pursuant to section 38 of the Federal Deposit 
                Insurance Act;
          (B) the amount of the adjustment would be less that 
        $1, except that if more than one year has elapsed since 
        the date of the violation, the agency may require that 
        such amount be paid into the Treasury of the United 
        States, or
          (C) except where such disclosure error resulted from 
        a willful violation which was intended to mislead the 
        person to whom credit was extended, in the case of an 
        open-end credit plan, more than two years after the 
        violation, or in the case of any other extension of 
        credit, as follows:
          (i) with respect to creditors that are subject to 
        examination by the agencies referred to in paragraphs 
        (1) through (3) of section 108(a) of this title, except 
        in connection with violations arising from practices 
        identified in the current examination and only in 
        connection with transactions that are consummated after 
        the date of the immediately preceding examination, 
        except that where practices giving rise to violations 
        identified in earlier examinations have not been 
        corrected, adjustments for those violations shall be 
        required in connection with transactions consummated 
        after the date of the examination in which such 
        practices were first identified;
          (ii) with respect to creditors that are not subject 
        to examination by such agencies, except in connection 
        with transactions that are consummated after May 10, 
        1978; and
          (iii) in no event after the later of (I) the 
        expiration of the life of the credit extension, or (II) 
        two years after the agreement to extend credit was 
        consummated.
  (4)(A) Notwithstanding any other provision of this section, 
an adjustment under this subsection may be required by an 
agency referred to in subsection (a) or (c) only by an order 
issued in accordance with cease and desist procedures provided 
by the provision of law referred to in such subsections.
  (B) In the case of an agency which is not authorized to 
conduct cease and desist proceedings, such an order may be 
issued after an agency hearing on the record conducted at least 
thirty but not more than sixty days after notice of the alleged 
violation is served on the creditor. Such a hearing shall be 
deemed to be a hearing which is subject to the provisions of 
section 8(h) of the Federal Deposit Insurance Act and shall be 
subject to judicial review as provided therein.
  (5) Except as otherwise specifically provided in this 
subsection and notwithstanding any provision of law referred to 
in subsection (a) or (c), no agency referred to in subsection 
(a) or (c) may require a creditor to make dollar adjustments 
for errors in any requirements under this title, except with 
regard to the requirements of section 165.
  (6) A creditor shall not be subject to an order to make an 
adjustment, if within sixty days after discovering a disclosure 
error, whether pursuant to a final written examination report 
or through the creditor's own procedures, the creditor notifies 
the person concerned of the error and adjusts the account so as 
to assure that such person will not be required to pay a 
finance charge in excess of the finance charge actually 
disclosed or the dollar equivalent of the annual percentage 
rate actually disclosed, whichever is lower.
  (7) Notwithstanding the second sentence of subsection (e)(1), 
subsection (e)(3)(C)(i), and subsection (e)(3)(C)(ii), each 
agency referred to in subsection (a) or (c) shall require an 
adjustment for an annual percentage rate disclosure error that 
exceeds a tolerance of one quarter of one percent less than the 
actual rate, determined without regard to section 107(c) of 
this title, with respect to any transaction consummated between 
January 1, 1977, and the effective date of section 608 of the 
Truth in Lending Simplification and Reform Act.

Sec. 109. Views of other agencies

  In the exercise of its functions under this title, the 
[Bureau] Agency may obtain upon request the views of any other 
Federal agency which, in the judgment of the [Bureau] Agency, 
exercises regulatory or supervisory functions with respect to 
any class of creditors subject to this title.

Sec. 111. Effect on other laws

  (a)(1) Except as provided in subsection (e), chapters 1, 2, 
and 3 do not annul, alter, or affect the laws of any State 
relating to the disclosure of information in connection with 
credit transactions, except to the extent that those laws are 
inconsistent with the provisions of this title, and then only 
to the extent of the inconsistency. Upon its own motion or upon 
the request of any creditor, State, or other interested party 
which is submitted in accordance with procedures prescribed in 
regulations of the [Bureau] Agency, the [Bureau] Agency shall 
determine whether any such inconsistency exists. If the 
[Bureau] Agency determines that a State-required disclosure is 
inconsistent, creditors located in that State may not make 
disclosures using the inconsistent term or form, and shall 
incur no liability under the law of that State for failure to 
use such term or form, notwithstanding that such determination 
is subsequently amended, rescinded, or determined by judicial 
or other authority to be invalid for any reason.
  (2) Upon its own motion or upon the request of any creditor, 
State, or other interested party which is submitted in 
accordance with procedures prescribed in regulations of the 
[Bureau] Agency, the [Bureau] Agency shall determine whether 
any disclosure required under the law of any State is 
substantially the same in meaning as a disclosure required 
under this title. If the [Bureau] Agency determines that a 
State-required disclosure is substantially the same in meaning 
as a disclosure required by this title, then creditors located 
in that State may make such disclosure in compliance with such 
State law in lieu of the disclosure required by this title, 
except that the annual percentage rate and finance charge shall 
be disclosed as required by section 122, and such State-
required disclosure may not be made in lieu of the disclosures 
applicable to certain mortgages under section 129.
  (b) Except as provided in section 129, this title does not 
otherwise annul, alter or affect in any manner the meaning, 
scope or applicability of the laws of any State, including, but 
not limited to, laws relating to the types, amounts or rates of 
charges, or any element or elements of charges, permissible 
under such laws in connection with the extension or use of 
credit, nor does this title extend the applicability of those 
laws to any class of persons or transactions to which they 
would not otherwise apply. The provisions of section 129 do not 
annul, alter, or affect the applicability of the laws of any 
State or exempt any person subject to the provisions of section 
129 from complying with the laws of any State, with respect to 
the requirements for mortgages referred to in section 103(aa), 
except to the extent that those State laws are inconsistent 
with any provisions of section 129, and then only to the extent 
of the inconsistency.
  (c) In any action or proceeding in any court involving a 
consumer credit sale, the disclosure of the annual percentage 
rate as required under this title in connection with that sale 
may not be received as evidence that the sale was a loan or any 
type of transaction other than a credit sale.
  (d) Except as specified in sections 125, 130, and 166, this 
title and the regulations issued thereunder do not affect the 
validity or enforceability of any contract or obligation under 
State or Federal law.
  (e) Certain Credit and Charge Card Application and 
Solicitation Disclosure Provisions.--The provisions of 
subsection (c) of section 122 and subsections (c), (d), (e), 
and (f) of section 127 shall supersede any provision of the law 
of any State relating to the disclosure of information in any 
credit or charge card application or solicitation which is 
subject to the requirements of section 127(c) or any renewal 
notice which is subject to the requirements of section 127(d), 
except that any State may employ or establish State laws for 
the purpose of enforcing the requirements of such sections.

Sec. 112. Criminal liability for willful and knowing violation

   Whoever willfully and knowingly
          (1) gives false or inaccurate information or fails to 
        provide information which he is required to disclose 
        under the provisions of this title or any regulation 
        issued thereunder,
          (2) uses any chart or table authorized by the 
        [Bureau] Agency under section 107 in such a manner as 
        to consistently understate the annual percentage rate 
        determined under section 107(a)(1)(A), or
          (3) otherwise fails to comply with any requirement 
        imposed under this title,
shall be fined not more than $5,000 or imprisoned not more than 
one year, or both.

Sec. 113. Effect on governmental agencies

  (a) Any department or agency of the United States which 
administers a credit program in which it extends, insures, or 
guarantees consumer credit and in which it provides instruments 
to a creditor which contain any disclosures required by this 
title shall, prior to the issuance or continued use of such 
instruments, consult with the [Bureau] Agency to assure that 
such instruments comply with this title.
  (b) No civil or criminal penalty provided under this title 
for any violation thereof may be imposed upon the United States 
or any department or agency thereof, or upon any State or 
political subdivision thereof, or any agency of any State or 
political subdivision.
  (c) A creditor participating in a credit program 
administered, insured, or guaranteed by any department or 
agency of the United States shall not be held liable for a 
civil or criminal penalty under this title in any case in which 
the violation results from the use of an instrument required by 
any such department or agency.
  (d) A creditor participating in a credit program 
administered, insured, or guaranteed by any department or 
agency of the United States shall not be held liable for a 
civil or criminal penalty under the laws of any State (other 
than laws determined under section 111 to be inconsistent with 
this title) for any technical procedural failure, such as a 
failure to use a specific form, to make information available 
at a specific place on an instrument, or to use a specific 
typeface, as is required by State law, which is caused by the 
use of an instrument required to be used by such department or 
agency.

Sec. 114. Reports by Bureau and Attorney General

  Each year the [Bureau] Agency shall make a report to the 
Congress concerning the administration of its functions under 
this title, including such recommendations as the [Bureau] 
Agency deems necessary or appropriate. In addition, each report 
of the [Bureau] Agency shall include its assessment of the 
extent to which compliance with the requirements imposed under 
this title is being achieved.

                     CHAPTER 2--CREDIT TRANSACTIONS


Sec. 121. General requirement of disclosure

  (a) Subject to subsection (b), a creditor or lessor shall 
disclose to the person who is obligated on a consumer lease or 
a consumer credit transaction the information required under 
this title. In a transaction involving more than one obligor, a 
creditor or lessor, except in a transaction under section 125, 
need not disclose to more than one of such obligors if the 
obligor given disclosure is a primary obligor.
  (b) If a transaction involves one creditor as defined in 
section [103(f)] 103(g), or one lessor as defined in section 
181(3), such creditor or lessor shall make the disclosures. If 
a transaction involves more than one creditor or lessor, only 
one creditor or lessor shall be required to make the 
disclosures. The [Bureau] Agency shall by regulation specify 
which creditor or lessor shall make the disclosures.
  (c) The [Bureau] Agency may provide by regulation that any 
portion of the information required to be disclosed by this 
title may be given in the form of estimates where the provider 
of such information is not in a position to know exact 
information. In the case of any consumer credit transaction a 
portion of the interest on which is determined on a per diem 
basis and is to be collected upon the consummation of such 
transaction, any disclosure with respect to such portion of 
interest shall be deemed to be accurate for purposes of this 
title if the disclosure is based on information actually known 
to the creditor at the time that the disclosure documents are 
being prepared for the consummation of the transaction.
  (d) The [Bureau] Agency shall determine whether tolerances 
for numerical disclosures other than the annual percentage rate 
are necessary to facilitate compliance with this title, and if 
it determines that such tolerances are necessary to facilitate 
compliance, it shall by regulation permit disclosures within 
such tolerances. The [Bureau] Agency shall exercise its 
authority to permit tolerances for numerical disclosures other 
than the annual percentage rate so that such tolerances are 
narrow enough to prevent such tolerances from resulting in 
misleading disclosures or disclosures that circumvent the 
purposes of this title.

Sec. 122. Form of disclosures; additional information

  (a) Information required by this title shall be disclosed 
clearly and conspicuously, in accordance with regulations of 
the [Bureau] Agency. The terms ``annual percentage rate'' and 
``finance charge'' shall be disclosed more conspicuously than 
other terms, data, or information provided in connection with a 
transaction, except information relating to the identity of the 
creditor. Except as provided in subsection (c), regulations of 
the [Bureau] Agency need not require that disclosures pursuant 
to this title be made in the order set forth in this title and, 
except as otherwise provided, may permit the use of terminology 
different from that employed in this title if it conveys 
substantially the same meaning.
  (b) Any creditor or lessor may supply additional information 
or explanation with any disclosures required under chapters 4 
and 5 and, except as provided in sections 127A(b)(3) and 
128(b)(1), under this chapter.
  (c) Tabular Format Required for Certain Disclosures Under 
Section 127(c).--
          (1) In general.--The information described in 
        paragraphs (1)(A), (3)(B)(i)(I), (4)(A), and 
        (4)(C)(i)(I) of section 127(c) shall be--
                  (A) disclosed in the form and manner which 
                the [Bureau] Agency shall prescribe by 
                regulations; and
                  (B) placed in a conspicuous and prominent 
                location on or with any written application, 
                solicitation, or other document or paper with 
                respect to which such disclosure is required.
          (2) Tabular format.--
                  (A) Form of table to be prescribed.--In the 
                regulations prescribed under paragraph (1)(A) 
                of this subsection, the [Bureau] Agency shall 
                require that the disclosure of such information 
                shall, to the extent the [Bureau] Agency 
                determines to be practicable and appropriate, 
                be in the form of a table which--
                          (i) contains clear and concise 
                        headings for each item of such 
                        information; and
                          (ii) provides a clear and concise 
                        form for stating each item of 
                        information required to be disclosed 
                        under each such heading.
                  (B) Bureau discretion in prescribing order 
                and wording of table.--In prescribing the form 
                of the table under subparagraph (A), the 
                [Bureau] Agency may--
                          (i) list the items required to be 
                        included in the table in a different 
                        order than the order in which such 
                        items are set forth in paragraph (1)(A) 
                        or (4)(A) of section 127(c); and
                          (ii) subject to subparagraph (C), 
                        employ terminology which is different 
                        than the terminology which is employed 
                        in section 127(c) if such terminology 
                        conveys substantially the same meaning.
                  (C) Grace period.--Either the heading or the 
                statement under the heading which relates to 
                the time period referred to in section 
                127(c)(1)(A)(iii) shall contain the term 
                ``grace period''.
  (d) Additional Electronic Disclosures.--
          (1) Posting agreements.--Each creditor shall 
        establish and maintain an Internet site on which the 
        creditor shall post the written agreement between the 
        creditor and the consumer for each credit card account 
        under an open-end consumer credit plan.
          (2) Creditor to provide contracts to the [bureau] 
        agency.--Each creditor shall provide to the [Bureau] 
        Agency, in electronic format, the consumer credit card 
        agreements that it publishes on its Internet site.
          (3) Record repository.--The [Bureau] Agency shall 
        establish and maintain on its publicly available 
        Internet site a central repository of the consumer 
        credit card agreements received from creditors pursuant 
        to this subsection, and such agreements shall be easily 
        accessible and retrievable by the public.
          (4) Exception.--This subsection shall not apply to 
        individually negotiated changes to contractual terms, 
        such as individually modified workouts or 
        renegotiations of amounts owed by a consumer under an 
        open end consumer credit plan.
          (5) Regulations.--The [Bureau] Agency, in 
        consultation with the other Federal banking agencies 
        (as that term is defined in [section 603) and the 
        Bureau, may promulgate] section 603), may promulgate 
        regulations to implement this subsection, including 
        specifying the format for posting the agreements on the 
        Internet sites of creditors and establishing exceptions 
        to paragraphs (1) and (2), in any case in which the 
        administrative burden outweighs the benefit of 
        increased transparency, such as where a credit card 
        plan has a de minimis number of consumer account 
        holders.

Sec. 123. Exemption for State-regulated transactions

  The [Bureau] Agency shall by regulation exempt from the 
requirements of this chapter any class of credit transactions 
within any State if it determines that under the law of that 
State that class of transactions is subject to requirements 
substantially similar to those imposed under this chapter, and 
that there is adequate provision for enforcement.

           *       *       *       *       *       *       *


Sec. 125. Right of rescission as to certain transactions

  (a) Except as otherwise provided in this section, in the case 
of any consumer credit transaction (including opening or 
increasing the credit limit for an open end credit plan) in 
which a security interest, including any such interest arising 
by operation of law, is or will be retained or acquired in any 
property which is used as the principal dwelling of the person 
to whom credit is extended, the obligor shall have the right to 
rescind the transaction until midnight of the third business 
day following the consummation of the transaction or the 
delivery of the information and rescission forms required under 
this section together with a statement containing the material 
disclosures required under this title, whichever is later, by 
notifying the creditor, in accordance with regulations of the 
[Bureau] Agency, of his intention to do so. The creditor shall 
clearly and conspicuously disclose, in accordance with 
regulations of the [Bureau] Agency, to any obligor in a 
transaction subject to this section the rights of the obligor 
under this section. The creditor shall also provide, in 
accordance with regulations of the [Bureau] Agency, appropriate 
forms for the obligor to exercise his right to rescind any 
transaction subject to this section.
  (b) When an obligor exercises his right to rescind under 
subsection (a), he is not liable for any finance or other 
charge, and any security interest given by the obligor, 
including any such interest arising by operation of law, 
becomes void upon such a rescission. Within 20 days after 
receipt of a notice of rescission, the creditor shall return to 
the obligor any money or property given as earnest money, 
downpayment, or otherwise, and shall take any action necessary 
or appropriate to reflect the termination of any security 
interest created under the transaction. If the creditor has 
delivered any property to the obligor, the obligor may retain 
possession of it. Upon the performance of the creditor's 
obligations under this section, the obligor shall tender the 
property to the creditor, except that if return of the property 
in kind would be impracticable or inequitable, the obligor 
shall tender its reasonable value. Tender shall be made at the 
location of the property or at the residence of the obligor, at 
the option of the obligor. If the creditor does not take 
possession of the property within 20 days after tender by the 
obligor, ownership of the property vests in the obligor without 
obligation on his part to pay for it. The procedures prescribed 
by this subsection shall apply except when otherwise ordered by 
a court.
  (c) Notwithstanding any rule of evidence, written 
acknowledgment of receipt of any disclosures required under 
this title by a person to whom information, forms, and a 
statement is required to be given pursuant to this section does 
no more than create a rebuttable presumption of delivery 
thereof.
  (d) The [Bureau] Agency may, if it finds that such action is 
necessary in order to permit homeowners to meet bona fide 
personal financial emergencies, prescribe regulations 
authorizing the modification or waiver of any rights created 
under this section to the extent and under the circumstances 
set forth in those regulations.
  (e) This section does not apply to--
          (1) a residential mortgage transaction as defined in 
        section [103(w)] 103(x);
          (2) a transaction which constitutes a refinancing or 
        consolidation (with no new advances) of the principal 
        balance then due and any accrued and unpaid finance 
        charges of an existing extension of credit by the same 
        creditor secured by an interest in the same property;
          (3) a transaction in which an agency of a State is 
        the creditor; or
          (4) advances under a preexisting open end credit plan 
        if a security interest has already been retained or 
        acquired and such advances are in accordance with a 
        previously established credit limit for such plan.
  (f) An obligor's right of rescission shall expire three years 
after the date of consummation of the transaction or upon the 
sale of the property, whichever occurs first, notwithstanding 
the fact that the information and forms required under this 
section or any other disclosures required under this chapter 
have not been delivered to the obligor, except that if (1) any 
agency empowered to enforce the provisions of this title 
institutes a proceeding to enforce the provisions of this 
section within three years after the date of consummation of 
the transaction, (2) such agency finds a violation of section 
125, and (3) the obligor's right to rescind is based in whole 
or in part on any matter involved in such proceeding, then the 
obligor's right of rescission shall expire three years after 
the date of consummation of the transaction or upon the earlier 
sale of the property, or upon the expiration of one year 
following the conclusion of the proceeding, or any judicial 
review or period for judicial review thereof, whichever is 
later.
  (g) In any action in which it is determined that a creditor 
has violated this section, in addition to rescission the court 
may award relief under section 130 for violations of this title 
not relating to the right to rescind.
  (h) Limitation on Rescission.--An obligor shall have no 
rescission rights arising solely from the form of written 
notice used by the creditor to inform the obligor of the rights 
of the obligor under this section, if the creditor provided the 
obligor the appropriate form of written notice published and 
adopted by the [Bureau] Agency, or a comparable written notice 
of the rights of the obligor, that was properly completed by 
the creditor, and otherwise complied with all other 
requirements of this section regarding notice.
  (i) Rescission Rights in Foreclosure.--
          (1) In general.--Notwithstanding section 139, and 
        subject to the time period provided in subsection (f), 
        in addition to any other right of rescission available 
        under this section for a transaction, after the 
        initiation of any judicial or nonjudicial foreclosure 
        process on the primary dwelling of an obligor securing 
        an extension of credit, the obligor shall have a right 
        to rescind the transaction equivalent to other 
        rescission rights provided by this section, if--
                  (A) a mortgage broker fee is not included in 
                the finance charge in accordance with the laws 
                and regulations in effect at the time the 
                consumer credit transaction was consummated; or
                  (B) the form of notice of rescission for the 
                transaction is not the appropriate form of 
                written notice published and adopted by the 
                [Bureau] Agency or a comparable written notice, 
                and otherwise complied with all the 
                requirements of this section regarding notice.
          (2) Tolerance for disclosures.--Notwithstanding 
        section 106(f), and subject to the time period provided 
        in subsection (f), for the purposes of exercising any 
        rescission rights after the initiation of any judicial 
        or nonjudicial foreclosure process on the principal 
        dwelling of the obligor securing an extension of 
        credit, the disclosure of the finance charge and other 
        disclosures affected by any finance charge shall be 
        treated as being accurate for purposes of this section 
        if the amount disclosed as the finance charge does not 
        vary from the actual finance charge by more than $35 or 
        is greater than the amount required to be disclosed 
        under this title.
          (3) Right of recoupment under state law.--Nothing in 
        this subsection affects a consumer's right of 
        rescission in recoupment under State law.
          (4) Applicability.--This subsection shall apply to 
        all consumer credit transactions in existence or 
        consummated on or after the date of the enactment of 
        the Truth in Lending Act Amendments of 1995.

Sec. 127. Open end consumer credit plans

  (a) Before opening any account under an open end consumer 
credit plan, the creditor shall disclose to the person to whom 
credit is to be extended each of the following items, to the 
extent applicable:
          (1) The conditions under which a finance charge may 
        be imposed, including the time period (if any) within 
        which any credit extended may be repaid without 
        incurring a finance charge, except that the creditor 
        may, at his election and without disclosure, impose no 
        such finance charge if payment is received after the 
        termination of such time period. If no such time period 
        is provided, the creditor shall disclose such fact.
          (2) The method of determining the balance upon which 
        a finance charge will be imposed.
          (3) The method of determining the amount of the 
        finance charge, including any minimum or fixed amount 
        imposed as a finance charge.
          (4) Where one or more periodic rates may be used to 
        compute the finance charge, each such rate, the range 
        of balances to which it is applicable, and the 
        corresponding nominal annual percentage rate determined 
        by multiplying the periodic rate by the number of 
        periods in a year.
          (5) Identification of other charges which may be 
        imposed as part of the plan, and their method of 
        computation, in accordance with regulations of the 
        [Bureau] Agency.
          (6) In cases where the credit is or will be secured, 
        a statement that a security interest has been or will 
        be taken in (A) the property purchased as part of the 
        credit transaction, or (B) property not purchased as 
        part of the credit transaction identified by item or 
        type.
          (7) A statement, in a form prescribed by regulations 
        of the [Bureau] Agency of the protection provided by 
        sections 161 and 170 to an obligor and the creditor's 
        responsibilities under sections 162 and 170. With 
        respect to one billing cycle per calendar year, at 
        intervals of not less than six months or more than 
        eighteen months, the creditor shall transmit such 
        statement to each obligor to whom the creditor is 
        required to transmit a statement pursuant to section 
        127(b) for such billing cycle.
          (8) In the case of any account under an open end 
        consumer credit plan which provides for any extension 
        of credit which is secured by the consumer's principal 
        dwelling, any information which--
                  (A) is required to be disclosed under section 
                127A(a); and
                  (B) the [Bureau] Agency determines is not 
                described in any other paragraph of this 
                subsection.
  (b) The creditor of any account under an open end consumer 
credit plan shall transmit to the obligor, for each billing 
cycle at the end of which there is an outstanding balance in 
that account or with respect to which a finance charge is 
imposed, a statement setting forth each of the following items 
to the extent applicable:
          (1) The outstanding balance in the account at the 
        beginning of the statement period.
          (2) The amount and date of each extension of credit 
        during the period, and a brief identification, on or 
        accompanying the statement of each extension of credit 
        in a form prescribed by the [Bureau] Agency sufficient 
        to enable the obligor either to identify the 
        transaction or to relate it to copies of sales vouchers 
        or similar instruments previously furnished, except 
        that a creditor's failure to disclose such information 
        in accordance with this paragraph shall not be deemed a 
        failure to comply with this chapter or this title if 
        (A) the creditor maintains procedures reasonably 
        adapted to procure and provide such information, and 
        (B) the creditor responds to and treats any inquiry for 
        clarification or documentation as a billing error and 
        an erroneously billed amount under section 161. In lieu 
        of complying with the requirements of the previous 
        sentence, in the case of any transaction in which the 
        creditor and seller are the same person, as defined by 
        the [Bureau] Agency, and such person's open end credit 
        plan has fewer than 15,000 accounts, the creditor may 
        elect to provide only the amount and date of each 
        extension of credit during the period and the seller's 
        name and location where the transaction took place if 
        (A) a brief identification of the transaction has been 
        previously furnished, and (B) the creditor responds to 
        and treats any inquiry for clarification or 
        documentation as a billing error and an erroneously 
        billed amount under section 161.
          (3) The total amount credited to the account during 
        the period.
          (4) The amount of any finance charge added to the 
        account during the period, itemized to show the 
        amounts, if any, due to the application of percentage 
        rates and the amount, if any, imposed as a minimum or 
        fixed charge.
          (5) Where one or more periodic rates may be used to 
        compute the finance charge, each such rate, the range 
        of balances to which it is applicable, and, unless the 
        annual percentage rate (determined under section 
        107(a)(2)) is required to be disclosed pursuant to 
        paragraph (6), the corresponding nominal annual 
        percentage rate determined by multiplying the periodic 
        rate by the number of periods in a year.
          (6) Where the total finance charge exceeds 50 cents 
        for a monthly or longer billing cycle, or the pro rata 
        part of 50 cents for a billing cycle shorter than 
        monthly, the total finance charge expressed as an 
        annual percentage rate (determined under section 
        107(a)(2)), except that if the finance charge is the 
        sum of two or more products of a rate times a portion 
        of the balance, the creditor may, in lieu of disclosing 
        a single rate for the total charge, disclose each such 
        rate expressed as an annual percentage rate, and the 
        part of the balance to which it is applicable.
          (7) The balance on which the finance charge was 
        computed and a statement of how the balance was 
        determined. If the balance is determined without first 
        deducting all credits during the period, that fact and 
        the amount of such payments shall also be disclosed.
          (8) The outstanding balance in the account at the end 
        of the period.
          (9) The date by which or the period (if any) within 
        which, payment must be made to avoid additional finance 
        charges, except that the creditor may, at his election 
        and without disclosure, impose no such additional 
        finance charge if payment is received after such date 
        or the termination of such period.
          (10) The address to be used by the creditor for the 
        purpose of receiving billing inquiries from the 
        obligor.
          (11)(A) A written statement in the following form: 
        ``Minimum Payment Warning: Making only the minimum 
        payment will increase the amount of interest you pay 
        and the time it takes to repay your balance.'', or such 
        similar statement as is established by the [Bureau] 
        Agency pursuant to consumer testing.
          (B) Repayment information that would apply to the 
        outstanding balance of the consumer under the credit 
        plan, including--
                  (i) the number of months (rounded to the 
                nearest month) that it would take to pay the 
                entire amount of that balance, if the consumer 
                pays only the required minimum monthly payments 
                and if no further advances are made;
                  (ii) the total cost to the consumer, 
                including interest and principal payments, of 
                paying that balance in full, if the consumer 
                pays only the required minimum monthly payments 
                and if no further advances are made;
                  (iii) the monthly payment amount that would 
                be required for the consumer to eliminate the 
                outstanding balance in 36 months, if no further 
                advances are made, and the total cost to the 
                consumer, including interest and principal 
                payments, of paying that balance in full if the 
                consumer pays the balance over 36 months; and
                  (iv) a toll-free telephone number at which 
                the consumer may receive information about 
                accessing credit counseling and debt management 
                services.
          (C)(i) Subject to clause (ii), in making the 
        disclosures under subparagraph (B), the creditor shall 
        apply the interest rate or rates in effect on the date 
        on which the disclosure is made until the date on which 
        the balance would be paid in full.
          (ii) If the interest rate in effect on the date on 
        which the disclosure is made is a temporary rate that 
        will change under a contractual provision applying an 
        index or formula for subsequent interest rate 
        adjustment, the creditor shall apply the interest rate 
        in effect on the date on which the disclosure is made 
        for as long as that interest rate will apply under that 
        contractual provision, and then apply an interest rate 
        based on the index or formula in effect on the 
        applicable billing date.
          (D) All of the information described in subparagraph 
        (B) shall--
                  (i) be disclosed in the form and manner which 
                the [Bureau] Agency shall prescribe, by 
                regulation, and in a manner that avoids 
                duplication; and
                  (ii) be placed in a conspicuous and prominent 
                location on the billing statement.
          (E) In the regulations prescribed under subparagraph 
        (D), the [Bureau] Agency shall require that the 
        disclosure of such information shall be in the form of 
        a table that--
                  (i) contains clear and concise headings for 
                each item of such information; and
                  (ii) provides a clear and concise form 
                stating each item of information required to be 
                disclosed under each such heading.
          (F) In prescribing the form of the table under 
        subparagraph (E), the [Bureau] Agency shall require 
        that--
                  (i) all of the information in the table, and 
                not just a reference to the table, be placed on 
                the billing statement, as required by this 
                paragraph; and
                  (ii) the items required to be included in the 
                table shall be listed in the order in which 
                such items are set forth in subparagraph (B).
          (G) In prescribing the form of the table under 
        subparagraph (D), the [Bureau] Agency shall employ 
        terminology which is different than the terminology 
        which is employed in subparagraph (B), if such 
        terminology is more easily understood and conveys 
        substantially the same meaning.
          (12) Requirements relating to late payment deadlines 
        and penalties.--
                  (A) Late payment deadline required to be 
                disclosed.--In the case of a credit card 
                account under an open end consumer credit plan 
                under which a late fee or charge may be imposed 
                due to the failure of the obligor to make 
                payment on or before the due date for such 
                payment, the periodic statement required under 
                subsection (b) with respect to the account 
                shall include, in a conspicuous location on the 
                billing statement, the date on which the 
                payment is due or, if different, the date on 
                which a late payment fee will be charged, 
                together with the amount of the fee or charge 
                to be imposed if payment is made after that 
                date.
                  (B) Disclosure of increase in interest rates 
                for late payments.--If 1 or more late payments 
                under an open end consumer credit plan may 
                result in an increase in the annual percentage 
                rate applicable to the account, the statement 
                required under subsection (b) with respect to 
                the account shall include conspicuous notice of 
                such fact, together with the applicable penalty 
                annual percentage rate, in close proximity to 
                the disclosure required under subparagraph (A) 
                of the date on which payment is due under the 
                terms of the account.
                  (C) Payments at local branches.--If the 
                creditor, in the case of a credit card account 
                referred to in subparagraph (A), is a financial 
                institution which maintains branches or offices 
                at which payments on any such account are 
                accepted from the obligor in person, the date 
                on which the obligor makes a payment on the 
                account at such branch or office shall be 
                considered to be the date on which the payment 
                is made for purposes of determining whether a 
                late fee or charge may be imposed due to the 
                failure of the obligor to make payment on or 
                before the due date for such payment.
  (c) Disclosure in Credit and Charge Card Applications and 
Solicitations.--
          (1) Direct mail applications and solicitations.--
                  (A) Information in tabular format.--Any 
                application to open a credit card account for 
                any person under an open end consumer credit 
                plan, or a solicitation to open such an account 
                without requiring an application, that is 
                mailed to consumers shall disclose the 
                following information, subject to subsection 
                (e) and section 122(c):
                          (i) Annual percentage rates.--
                                  (I) Each annual percentage 
                                rate applicable to extensions 
                                of credit under such credit 
                                plan.
                                  (II) Where an extension of 
                                credit is subject to a variable 
                                rate, the fact that the rate is 
                                variable, the annual percentage 
                                rate in effect at the time of 
                                the mailing, and how the rate 
                                is determined.
                                  (III) Where more than one 
                                rate applies, the range of 
                                balances to which each rate 
                                applies.
                          (ii) Annual and other fees.--
                                  (I) Any annual fee, other 
                                periodic fee, or membership fee 
                                imposed for the issuance or 
                                availability of a credit card, 
                                including any account 
                                maintenance fee or other charge 
                                imposed based on activity or 
                                inactivity for the account 
                                during the billing cycle.
                                  (II) Any minimum finance 
                                charge imposed for each period 
                                during which any extension of 
                                credit which is subject to a 
                                finance charge is outstanding.
                                  (III) Any transaction charge 
                                imposed in connection with use 
                                of the card to purchase goods 
                                or services.
                          (iii) Grace period.--
                                  (I) The date by which or the 
                                period within which any credit 
                                extended under such credit plan 
                                for purchases of goods or 
                                services must be repaid to 
                                avoid incurring a finance 
                                charge, and, if no such period 
                                is offered, such fact shall be 
                                clearly stated.
                                  (II) If the length of such 
                                ``grace period'' varies, the 
                                card issuer may disclose the 
                                range of days in the grace 
                                period, the minimum number of 
                                days in the grace period, or 
                                the average number of days in 
                                the grace period, if the 
                                disclosure is identified as 
                                such.
                          (iv) Balance calculation method.--
                                  (I) The name of the balance 
                                calculation method used in 
                                determining the balance on 
                                which the finance charge is 
                                computed if the method used has 
                                been defined by the [Bureau] 
                                Agency, or a detailed 
                                explanation of the balance 
                                calculation method used if the 
                                method has not been so defined.
                                  (II) In prescribing 
                                regulations to carry out this 
                                clause, the [Bureau] Agency 
                                shall define and name not more 
                                than the 5 balance calculation 
                                methods determined by the 
                                [Bureau] Agency to be the most 
                                commonly used methods.
                  (B) Other information.--In addition to the 
                information required to be disclosed under 
                subparagraph (A), each application or 
                solicitation to which such subparagraph applies 
                shall disclose clearly and conspicuously the 
                following information, subject to subsections 
                (e) and (f):
                          (i) Cash advance fee.--Any fee 
                        imposed for an extension of credit in 
                        the form of cash.
                          (ii) Late fee.--Any fee imposed for a 
                        late payment.
                          (iii) Over-the-limit fee.--Any fee 
                        imposed in connection with an extension 
                        of credit in excess of the amount of 
                        credit authorized to be extended with 
                        respect to such account.
          (2) Telephone solicitations.--
                  (A) In general.--In any telephone 
                solicitation to open a credit card account for 
                any person under an open end consumer credit 
                plan, the person making the solicitation shall 
                orally disclose the information described in 
                paragraph (1)(A).
                  (B) Exception.--Subparagraph (A) shall not 
                apply to any telephone solicitation if--
                          (i) the credit card issuer--
                                  (I) does not impose any fee 
                                described in paragraph 
                                (1)(A)(ii)(I); or
                                  (II) does not impose any fee 
                                in connection with telephone 
                                solicitations unless the 
                                consumer signifies acceptance 
                                by using the card;
                          (ii) the card issuer discloses 
                        clearly and conspicuously in writing 
                        the information described in paragraph 
                        (1) within 30 days after the consumer 
                        requests the card, but in no event 
                        later than the date of delivery of the 
                        card; and
                          (iii) the card issuer discloses 
                        clearly and conspicuously that the 
                        consumer is not obligated to accept the 
                        card or account and the consumer will 
                        not be obligated to pay any of the fees 
                        or charges disclosed unless the 
                        consumer elects to accept the card or 
                        account by using the card.
          (3) Applications and solicitations by other means.--
                  (A) In general.--Any application to open a 
                credit card account for any person under an 
                open end consumer credit plan, and any 
                solicitation to open such an account without 
                requiring an application, that is made 
                available to the public or contained in 
                catalogs, magazines, or other publications 
                shall meet the disclosure requirements of 
                subparagraph (B), (C), or (D).
                  (B) Specific information.--An application or 
                solicitation described in subparagraph (A) 
                meets the requirement of this subparagraph if 
                such application or solicitation contains--
                          (i) the information--
                                  (I) described in paragraph 
                                (1)(A) in the form required 
                                under section 122(c) of this 
                                chapter, subject to subsection 
                                (e), and
                                  (II) described in paragraph 
                                (1)(B) in a clear and 
                                conspicuous form, subject to 
                                subsections (e) and (f);
                          (ii) a statement, in a conspicuous 
                        and prominent location on the 
                        application or solicitation, that--
                                  (I) the information is 
                                accurate as of the date the 
                                application or solicitation was 
                                printed;
                                  (II) the information 
                                contained in the application or 
                                solicitation is subject to 
                                change after such date; and
                                  (III) the applicant should 
                                contact the creditor for 
                                information on any change in 
                                the information contained in 
                                the application or solicitation 
                                since it was printed;
                          (iii) a clear and conspicuous 
                        disclosure of the date the application 
                        or solicitation was printed; and
                          (iv) a disclosure, in a conspicuous 
                        and prominent location on the 
                        application or solicitation, of a toll 
                        free telephone number or a mailing 
                        address at which the applicant may 
                        contact the creditor to obtain any 
                        change in the information provided in 
                        the application or solicitation since 
                        it was printed.
                  (C) General information without any specific 
                term.--An application or solicitation described 
                in subparagraph (A) meets the requirement of 
                this subparagraph if such application or 
                solicitation--
                          (i) contains a statement, in a 
                        conspicuous and prominent location on 
                        the application or solicitation, that--
                                  (I) there are costs 
                                associated with the use of 
                                credit cards; and
                                  (II) the applicant may 
                                contact the creditor to request 
                                disclosure of specific 
                                information of such costs by 
                                calling a toll free telephone 
                                number or by writing to an 
                                address, specified in the 
                                application;
                          (ii) contains a disclosure, in a 
                        conspicuous and prominent location on 
                        the application or solicitation, of a 
                        toll free telephone number and a 
                        mailing address at which the applicant 
                        may contact the creditor to obtain such 
                        information; and
                          (iii) does not contain any of the 
                        items described in paragraph (1).
                  (D) Applications or solicitations containing 
                subsection (a) disclosures.--An application or 
                solicitation meets the requirement of this 
                subparagraph if it contains, or is accompanied 
                by--
                          (i) the disclosures required by 
                        paragraphs (1) through (6) of 
                        subsection (a);
                          (ii) the disclosures required by 
                        subparagraphs (A) and (B) of paragraph 
                        (1) of this subsection included clearly 
                        and conspiciously (except that the 
                        provisions of section 122(c) shall not 
                        apply); and
                          (iii) a toll free telephone number or 
                        a mailing address at which the 
                        applicant may contact the creditor to 
                        obtain any change in the information 
                        provided.
                  (E) Prompt response to information 
                requests.--Upon receipt of a request for any of 
                the information referred to in subparagraph 
                (B), (C), or (D), the card issuer or the agent 
                of such issuer shall promptly disclose all of 
                the information described in paragraph (1).
          (4) Charge card applications and solicitations.--
                  (A) In general.--Any application or 
                solicitation to open a charge card account 
                shall disclose clearly and conspicuously the 
                following information in the form required by 
                section 122(c) of this chapter, subject to 
                subsection (e):
                          (i) Any annual fee, other periodic 
                        fee, or membership fee imposed for the 
                        issuance or availability of the charge 
                        card, including any account maintenance 
                        fee or other charge imposed based on 
                        activity or inactivity for the account 
                        during the billing cycle.
                          (ii) Any transaction charge imposed 
                        in connection with use of the card to 
                        purchase goods or services.
                          (iii) A statement that charges 
                        incurred by use of the charge card are 
                        due and payable upon receipt of a 
                        periodic statement rendered for such 
                        charge card account.
                  (B) Other information.--In addition to the 
                information required to be disclosed under 
                subparagraph (A), each written application or 
                solicitation to which such subparagraph applies 
                shall disclose clearly and conspicuously the 
                following information, subject to subsections 
                (e) and (f):
                          (i) Cash advance fee.--Any fee 
                        imposed for an extension of credit in 
                        the form of cash.
                          (ii) Late fee.--Any fee imposed for a 
                        late payment.
                          (iii) Over-the-limit fee.--Any fee 
                        imposed in connection with an extension 
                        of credit in excess of the amount of 
                        credit authorized to be extended with 
                        respect to such account.
                  (C) Applications and solicitations by other 
                means.--Any application to open a charge card 
                account, and any solicitation to open such an 
                account without requiring an application, that 
                is made available to the public or contained in 
                catalogs, magazines, or other publications 
                shall contain--
                          (i) the information--
                                  (I) described in subparagraph 
                                (A) in the form required under 
                                section 122(c) of this chapter, 
                                subject to subsection (e), and
                                  (II) described in 
                                subparagraph (B) in a clear and 
                                conspicuous form, subject to 
                                subsections (e) and (f);
                          (ii) a statement, in a conspicuous 
                        and prominent location on the 
                        application or solicitation, that--
                                  (I) the information is 
                                accurate as of the date the 
                                application or solicitation was 
                                printed;
                                  (II) the information 
                                contained in the application or 
                                solicitation is subject to 
                                change after such date; and
                                  (III) the applicant should 
                                contact the creditor for 
                                information on any change in 
                                the information contained in 
                                the application or solicitation 
                                since it was printed;
                          (iii) a clear and conspicuous 
                        disclosure of the date the application 
                        or solicitation was printed; and
                          (iv) a disclosure, in a conspicuous 
                        and prominent location on the 
                        application or solicitation, of a toll 
                        free telephone number or a mailing 
                        address at which the applicant may 
                        contact the creditor to obtain any 
                        change in the information provided in 
                        the application or solicitation since 
                        it was printed.
                  (D) Issuers of charge cards which provide 
                access to open end consumer credit plans.--If a 
                charge card permits the card holder to receive 
                an extension of credit under an open end 
                consumer credit plan, which is not maintained 
                by the charge card issuer, the charge card 
                issuer may provide the information described in 
                subparagraphs (A) and (B) in the form required 
                by such subparagraphs in lieu of the 
                information required to be provided under 
                paragraph (1), (2), or (3) with respect to any 
                credit extended under such plan, if the charge 
                card issuer discloses clearly and conspicuously 
                to the consumer in the application or 
                solicitation that--
                          (i) the charge card issuer will make 
                        an independent decision as to whether 
                        to issue the card;
                          (ii) the charge card may arrive 
                        before the decision is made with 
                        respect to an extension of credit under 
                        an open end consumer credit plan; and
                          (iii) approval by the charge card 
                        issuer does not constitute approval by 
                        the issuer of the extension of credit.
                The information required to be disclosed under 
                paragraph (1) shall be provided to the charge 
                card holder by the creditor which maintains 
                such open end consumer credit plan before the 
                first extension of credit under such plan.
                  (E) Charge card defined.--For the purposes of 
                this subsection, the term ``charge card'' means 
                a card, plate, or other single credit device 
                that may be used from time to time to obtain 
                credit which is not subject to a finance 
                charge.
          (5) Regulatory authority of the [bureau] agency.--The 
        [Bureau] Agency may, by regulation, require the 
        disclosure of information in addition to that otherwise 
        required by this subsection or subsection (d), and 
        modify any disclosure of information required by this 
        subsection or subsection (d), in any application to 
        open a credit card account for any person under an open 
        end consumer credit plan or any application to open a 
        charge card account for any person, or a solicitation 
        to open any such account without requiring an 
        application, if the [Bureau] Agency determines that 
        such action is necessary to carry out the purposes of, 
        or prevent evasions of, any paragraph of this 
        subsection.
          (6) Additional notice concerning ``introductory 
        rates''.--
                  (A) In general.--Except as provided in 
                subparagraph (B), an application or 
                solicitation to open a credit card account and 
                all promotional materials accompanying such 
                application or solicitation for which a 
                disclosure is required under paragraph (1), and 
                that offers a temporary annual percentage rate 
                of interest, shall--
                          (i) use the term ``introductory'' in 
                        immediate proximity to each listing of 
                        the temporary annual percentage rate 
                        applicable to such account, which term 
                        shall appear clearly and conspicuously;
                          (ii) if the annual percentage rate of 
                        interest that will apply after the end 
                        of the temporary rate period will be a 
                        fixed rate, state in a clear and 
                        conspicuous manner in a prominent 
                        location closely proximate to the first 
                        listing of the temporary annual 
                        percentage rate (other than a listing 
                        of the temporary annual percentage rate 
                        in the tabular format described in 
                        section 122(c)), the time period in 
                        which the introductory period will end 
                        and the annual percentage rate that 
                        will apply after the end of the 
                        introductory period; and
                          (iii) if the annual percentage rate 
                        that will apply after the end of the 
                        temporary rate period will vary in 
                        accordance with an index, state in a 
                        clear and conspicuous manner in a 
                        prominent location closely proximate to 
                        the first listing of the temporary 
                        annual percentage rate (other than a 
                        listing in the tabular format 
                        prescribed by section 122(c)), the time 
                        period in which the introductory period 
                        will end and the rate that will apply 
                        after that, based on an annual 
                        percentage rate that was in effect 
                        within 60 days before the date of 
                        mailing the application or 
                        solicitation.
                  (B) Exception.--Clauses (ii) and (iii) of 
                subparagraph (A) do not apply with respect to 
                any listing of a temporary annual percentage 
                rate on an envelope or other enclosure in which 
                an application or solicitation to open a credit 
                card account is mailed.
                  (C) Conditions for introductory rates.--An 
                application or solicitation to open a credit 
                card account for which a disclosure is required 
                under paragraph (1), and that offers a 
                temporary annual percentage rate of interest 
                shall, if that rate of interest is revocable 
                under any circumstance or upon any event, 
                clearly and conspicuously disclose, in a 
                prominent manner on or with such application or 
                solicitation--
                          (i) a general description of the 
                        circumstances that may result in the 
                        revocation of the temporary annual 
                        percentage rate; and
                          (ii) if the annual percentage rate 
                        that will apply upon the revocation of 
                        the temporary annual percentage rate--
                                  (I) will be a fixed rate, the 
                                annual percentage rate that 
                                will apply upon the revocation 
                                of the temporary annual 
                                percentage rate; or
                                  (II) will vary in accordance 
                                with an index, the rate that 
                                will apply after the temporary 
                                rate, based on an annual 
                                percentage rate that was in 
                                effect within 60 days before 
                                the date of mailing the 
                                application or solicitation.
                  (D) Definitions.--In this paragraph--
                          (i) the terms ``temporary annual 
                        percentage rate of interest'' and 
                        ``temporary annual percentage rate'' 
                        mean any rate of interest applicable to 
                        a credit card account for an 
                        introductory period of less than 1 
                        year, if that rate is less than an 
                        annual percentage rate that was in 
                        effect within 60 days before the date 
                        of mailing the application or 
                        solicitation; and
                          (ii) the term ``introductory period'' 
                        means the maximum time period for which 
                        the temporary annual percentage rate 
                        may be applicable.
                  (E) Relation to other disclosure 
                requirements.--Nothing in this paragraph may be 
                construed to supersede subsection (a) of 
                section 122, or any disclosure required by 
                paragraph (1) or any other provision of this 
                subsection.
          (7) Internet-based solicitations.--
                  (A) In general.--In any solicitation to open 
                a credit card account for any person under an 
                open end consumer credit plan using the 
                Internet or other interactive computer service, 
                the person making the solicitation shall 
                clearly and conspicuously disclose--
                          (i) the information described in 
                        subparagraphs (A) and (B) of paragraph 
                        (1); and
                          (ii) the information described in 
                        paragraph (6).
                  (B) Form of disclosure.--The disclosures 
                required by subparagraph (A) shall be--
                          (i) readily accessible to consumers 
                        in close proximity to the solicitation 
                        to open a credit card account; and
                          (ii) updated regularly to reflect the 
                        current policies, terms, and fee 
                        amounts applicable to the credit card 
                        account.
                  (C) Definitions.--For purposes of this 
                paragraph--
                          (i) the term ``Internet'' means the 
                        international computer network of both 
                        Federal and non-Federal interoperable 
                        packet switched data networks; and
                          (ii) the term ``interactive computer 
                        service'' means any information 
                        service, system, or access software 
                        provider that provides or enables 
                        computer access by multiple users to a 
                        computer server, including specifically 
                        a service or system that provides 
                        access to the Internet and such systems 
                        operated or services offered by 
                        libraries or educational institutions.
          (8) Applications from underage consumers.--
                  (A) Prohibition on issuance.--No credit card 
                may be issued to, or open end consumer credit 
                plan established by or on behalf of, a consumer 
                who has not attained the age of 21, unless the 
                consumer has submitted a written application to 
                the card issuer that meets the requirements of 
                subparagraph (B).
                  (B) Application requirements.--An application 
                to open a credit card account by a consumer who 
                has not attained the age of 21 as of the date 
                of submission of the application shall 
                require--
                          (i) the signature of a cosigner, 
                        including the parent, legal guardian, 
                        spouse, or any other individual who has 
                        attained the age of 21 having a means 
                        to repay debts incurred by the consumer 
                        in connection with the account, 
                        indicating joint liability for debts 
                        incurred by the consumer in connection 
                        with the account before the consumer 
                        has attained the age of 21; or
                          (ii) submission by the consumer of 
                        financial information, including 
                        through an application, indicating an 
                        independent means of repaying any 
                        obligation arising from the proposed 
                        extension of credit in connection with 
                        the account.
                  (C) Safe harbor.--The [Bureau] Agency shall 
                promulgate regulations providing standards 
                that, if met, would satisfy the requirements of 
                subparagraph (B)(ii).
  (d) Disclosure Prior to Renewal.--
          (1) In general.--A card issuer that has changed or 
        amended any term of the account since the last renewal 
        that has not been previously disclosed or that imposes 
        any fee described in subsection (c)(1)(A)(ii)(I) or 
        (c)(4)(A)(i) shall transmit to a consumer at least 30 
        days prior to the scheduled renewal date of the 
        consumer's credit or charge card account a clear and 
        conspicuous disclosure of--
                  (A) the date by which, the month by which, or 
                the billing period at the close of which, the 
                account will expire if not renewed;
                  (B) the information described in subsection 
                (c)(1)(A) or (c)(4)(A) that would apply if the 
                account were renewed, subject to subsection 
                (e); and
                  (C) the method by which the consumer may 
                terminate continued credit availability under 
                the account.
          (2) Short-term renewals.--The [Bureau] Agency may by 
        regulation provide for fewer disclosures than are 
        required by paragraph (1) in the case of an account 
        which is renewable for a period of less than 6 months.
  (e) Other Rules for Disclosures Under Subsections (c) and 
(d).--
          (1) Fees determined on the basis of a percentage.--If 
        the amount of any fee required to be disclosed under 
        subsection (c) or (d) is determined on the basis of a 
        percentage of another amount, the percentage used in 
        making such determination and the identification of the 
        amount against which such percentage is applied shall 
        be disclosed in lieu of the amount of such fee.
          (2) Disclosure only of fees actually imposed.--If a 
        credit or charge card issuer does not impose any fee 
        required to be disclosed under any provision of 
        subsection (c) or (d), such provision shall not apply 
        with respect to such issuer.
  (f) Disclosure of Range of Certain Fees Which Vary by State 
Allowed.--If the amount of any fee required to be disclosed by 
a credit or charge card issuer under paragraph (1)(B), 
(3)(B)(i)(II), (4)(B), or (4)(C)(i)(II) of subsection (c) 
varies from State to State, the card issuer may disclose the 
range of such fees for purposes of subsection (c) in lieu of 
the amount for each applicable State, if such disclosure 
includes a statement that the amount of such fee varies from 
State to State.
  (g) Insurance in Connection With Certain Open End Credit Card 
Plans.--
          (1) Change in insurance carrier.--Whenever a card 
        issuer that offers any guarantee or insurance for 
        repayment of all or part of the outstanding balance of 
        an open end credit card plan proposes to change the 
        person providing that guarantee or insurance, the card 
        issuer shall send each insured consumer written notice 
        of the proposed change not less than 30 days prior to 
        the change, including notice of any increase in the 
        rate or substantial decrease in coverage or service 
        which will result from such change. Such notice may be 
        included on or with the monthly statement provided to 
        the consumer prior to the month in which the proposed 
        change would take effect.
          (2) Notice of new insurance coverage.--In any case in 
        which a proposed change described in paragraph (1) 
        occurs, the insured consumer shall be given the name 
        and address of the new guarantor or insurer and a copy 
        of the policy or group certificate containing the basic 
        terms and conditions, including the premium rate to be 
        charged.
          (3) Right to discontinue guarantee or insurance.--The 
        notices required under paragraphs (1) and (2) shall 
        each include a statement that the consumer has the 
        option to discontinue the insurance or guarantee.
          (4) No preemption of state law.--No provision of this 
        subsection shall be construed as superseding any 
        provision of State law which is applicable to the 
        regulation of insurance.
          (5) Bureau definition of substantial decrease in 
        coverage or service.--The [Bureau] Agency shall define, 
        in regulations, what constitutes a ``substantial 
        decrease in coverage or service'' for purposes of 
        paragraph (1).
  (h) Prohibition on Certain Actions for Failure To Incur 
Finance Charges.--A creditor of an account under an open end 
consumer credit plan may not terminate an account prior to its 
expiration date solely because the consumer has not incurred 
finance charges on the account. Nothing in this subsection 
shall prohibit a creditor from terminating an account for 
inactivity in 3 or more consecutive months.
  (i) Advance Notice of Rate Increase and Other Changes 
Required.--
          (1) Advance notice of increase in interest rate 
        required.--In the case of any credit card account under 
        an open end consumer credit plan, a creditor shall 
        provide a written notice of an increase in an annual 
        percentage rate (except in the case of an increase 
        described in paragraph (1), (2), or (3) of section 
        171(b)) not later than 45 days prior to the effective 
        date of the increase.
          (2) Advance notice of other significant changes 
        required.--In the case of any credit card account under 
        an open end consumer credit plan, a creditor shall 
        provide a written notice of any significant change, as 
        determined by rule of the [Bureau] Agency, in the terms 
        (including an increase in any fee or finance charge, 
        other than as provided in paragraph (1)) of the 
        cardholder agreement between the creditor and the 
        obligor, not later than 45 days prior to the effective 
        date of the change.
          (3) Notice of right to cancel.--Each notice required 
        by paragraph (1) or (2) shall be made in a clear and 
        conspicuous manner, and shall contain a brief statement 
        of the right of the obligor to cancel the account 
        pursuant to rules established by the [Bureau] Agency 
        before the effective date of the subject rate increase 
        or other change.
          (4) Rule of construction.--Closure or cancellation of 
        an account by the obligor shall not constitute a 
        default under an existing cardholder agreement, and 
        shall not trigger an obligation to immediately repay 
        the obligation in full or through a method that is less 
        beneficial to the obligor than one of the methods 
        described in section 171(c)(2), or the imposition of 
        any other penalty or fee.
  (j) Prohibition on Penalties for On-Time Payments.--
          (1) Prohibition on double-cycle billing and penalties 
        for on-time payments.--Except as provided in paragraph 
        (2), a creditor may not impose any finance charge on a 
        credit card account under an open end consumer credit 
        plan as a result of the loss of any time period 
        provided by the creditor within which the obligor may 
        repay any portion of the credit extended without 
        incurring a finance charge, with respect to--
                  (A) any balances for days in billing cycles 
                that precede the most recent billing cycle; or
                  (B) any balances or portions thereof in the 
                current billing cycle that were repaid within 
                such time period.
          (2) Exceptions.--Paragraph (1) does not apply to--
                  (A) any adjustment to a finance charge as a 
                result of the resolution of a dispute; or
                  (B) any adjustment to a finance charge as a 
                result of the return of a payment for 
                insufficient funds.
  (k) Opt-in Required for Over-the-Limit Transactions if Fees 
Are Imposed.--
          (1) In general.--In the case of any credit card 
        account under an open end consumer credit plan under 
        which an over-the-limit fee may be imposed by the 
        creditor for any extension of credit in excess of the 
        amount of credit authorized to be extended under such 
        account, no such fee shall be charged, unless the 
        consumer has expressly elected to permit the creditor, 
        with respect to such account, to complete transactions 
        involving the extension of credit under such account in 
        excess of the amount of credit authorized.
          (2) Disclosure by creditor.--No election by a 
        consumer under paragraph (1) shall take effect unless 
        the consumer, before making such election, received a 
        notice from the creditor of any over-the-limit fee in 
        the form and manner, and at the time, determined by the 
        [Bureau] Agency. If the consumer makes the election 
        referred to in paragraph (1), the creditor shall 
        provide notice to the consumer of the right to revoke 
        the election, in the form prescribed by the [Bureau] 
        Agency, in any periodic statement that includes notice 
        of the imposition of an over-the-limit fee during the 
        period covered by the statement.
          (3) Form of election.--A consumer may make or revoke 
        the election referred to in paragraph (1) orally, 
        electronically, or in writing, pursuant to regulations 
        prescribed by the [Bureau] Agency. The [Bureau] Agency 
        shall prescribe regulations to ensure that the same 
        options are available for both making and revoking such 
        election.
          (4) Time of election.--A consumer may make the 
        election referred to in paragraph (1) at any time, and 
        such election shall be effective until the election is 
        revoked in the manner prescribed under paragraph (3).
          (5) Regulations.--The [Bureau] Agency shall prescribe 
        regulations--
                  (A) governing disclosures under this 
                subsection; and
                  (B) that prevent unfair or deceptive acts or 
                practices in connection with the manipulation 
                of credit limits designed to increase over-the-
                limit fees or other penalty fees.
          (6) Rule of construction.--Nothing in this subsection 
        shall be construed to prohibit a creditor from 
        completing an over-the-limit transaction, provided that 
        a consumer who has not made a valid election under 
        paragraph (1) is not charged an over-the-limit fee for 
        such transaction.
          (7) Restriction on fees charged for an over-the-limit 
        transaction.--With respect to a credit card account 
        under an open end consumer credit plan, an over-the-
        limit fee may be imposed only once during a billing 
        cycle if the credit limit on the account is exceeded, 
        and an over-the-limit fee, with respect to such excess 
        credit, may be imposed only once in each of the 2 
        subsequent billing cycles, unless the consumer has 
        obtained an additional extension of credit in excess of 
        such credit limit during any such subsequent cycle or 
        the consumer reduces the outstanding balance below the 
        credit limit as of the end of such billing cycle.
  (l) Limit on Fees Related to Method of Payment.--With respect 
to a credit card account under an open end consumer credit 
plan, the creditor may not impose a separate fee to allow the 
obligor to repay an extension of credit or finance charge, 
whether such repayment is made by mail, electronic transfer, 
telephone authorization, or other means, unless such payment 
involves an expedited service by a service representative of 
the creditor.
  (m) Use of Term ``Fixed Rate''.--With respect to the terms of 
any credit card account under an open end consumer credit plan, 
the term ``fixed'', when appearing in conjunction with a 
reference to the annual percentage rate or interest rate 
applicable with respect to such account, may only be used to 
refer to an annual percentage rate or interest rate that will 
not change or vary for any reason over the period specified 
clearly and conspicuously in the terms of the account.
  (n) Standards Applicable to Initial Issuance of Subprime or 
``Fee Harvester'' Cards.--
          (1) In general.--If the terms of a credit card 
        account under an open end consumer credit plan require 
        the payment of any fees (other than any late fee, over-
        the-limit fee, or fee for a payment returned for 
        insufficient funds) by the consumer in the first year 
        during which the account is opened in an aggregate 
        amount in excess of 25 percent of the total amount of 
        credit authorized under the account when the account is 
        opened, no payment of any fees (other than any late 
        fee, over-the-limit fee, or fee for a payment returned 
        for insufficient funds) may be made from the credit 
        made available under the terms of the account.
          (2) Rule of construction.--No provision of this 
        subsection may be construed as authorizing any 
        imposition or payment of advance fees otherwise 
        prohibited by any provision of law.
  (o) Due Dates for Credit Card Accounts.--
          (1) In general.--The payment due date for a credit 
        card account under an open end consumer credit plan 
        shall be the same day each month.
          (2) Weekend or holiday due dates.--If the payment due 
        date for a credit card account under an open end 
        consumer credit plan is a day on which the creditor 
        does not receive or accept payments by mail (including 
        weekends and holidays), the creditor may not treat a 
        payment received on the next business day as late for 
        any purpose.
  (p) Parental Approval Required To Increase Credit Lines for 
Accounts for Which Parent Is Jointly Liable.--No increase may 
be made in the amount of credit authorized to be extended under 
a credit card account for which a parent, legal guardian, or 
spouse of the consumer, or any other individual has assumed 
joint liability for debts incurred by the consumer in 
connection with the account before the consumer attains the age 
of 21, unless that parent, guardian, or spouse approves in 
writing, and assumes joint liability for, such increase.
  (r) College Card Agreements.--
          (1) Definitions.--For purposes of this subsection, 
        the following definitions shall apply:
                  (A) College affinity card.--The term 
                ``college affinity card'' means a credit card 
                issued by a credit card issuer under an open 
                end consumer credit plan in conjunction with an 
                agreement between the issuer and an institution 
                of higher education, or an alumni organization 
                or foundation affiliated with or related to 
                such institution, under which such cards are 
                issued to college students who have an affinity 
                with such institution, organization and--
                          (i) the creditor has agreed to donate 
                        a portion of the proceeds of the credit 
                        card to the institution, organization, 
                        or foundation (including a lump sum or 
                        1-time payment of money for access);
                          (ii) the creditor has agreed to offer 
                        discounted terms to the consumer; or
                          (iii) the credit card bears the name, 
                        emblem, mascot, or logo of such 
                        institution, organization, or 
                        foundation, or other words, pictures, 
                        or symbols readily identified with such 
                        institution, organization, or 
                        foundation.
                  (B) College student credit card account.--The 
                term ``college student credit card account'' 
                means a credit card account under an open end 
                consumer credit plan established or maintained 
                for or on behalf of any college student.
                  (C) College student.--The term ``college 
                student'' means an individual who is a full-
                time or a part-time student attending an 
                institution of higher education.
                  (D) Institution of higher education.--The 
                term ``institution of higher education'' has 
                the same meaning as in section 101 and 102 of 
                the Higher Education Act of 1965 (20 U.S.C. 
                1001 and 1002).
          (2) Reports by creditors.--
                  (A) In general.--Each creditor shall submit 
                an annual report to the [Bureau] Agency 
                containing the terms and conditions of all 
                business, marketing, and promotional agreements 
                and college affinity card agreements with an 
                institution of higher education, or an alumni 
                organization or foundation affiliated with or 
                related to such institution, with respect to 
                any college student credit card issued to a 
                college student at such institution.
                  (B) Details of report.--The information 
                required to be reported under subparagraph (A) 
                includes--
                          (i) any memorandum of understanding 
                        between or among a creditor, an 
                        institution of higher education, an 
                        alumni association, or foundation that 
                        directly or indirectly relates to any 
                        aspect of any agreement referred to in 
                        such subparagraph or controls or 
                        directs any obligations or distribution 
                        of benefits between or among any such 
                        entities;
                          (ii) the amount of any payments from 
                        the creditor to the institution, 
                        organization, or foundation during the 
                        period covered by the report, and the 
                        precise terms of any agreement under 
                        which such amounts are determined; and
                          (iii) the number of credit card 
                        accounts covered by any such agreement 
                        that were opened during the period 
                        covered by the report, and the total 
                        number of credit card accounts covered 
                        by the agreement that were outstanding 
                        at the end of such period.
                  (C) Aggregation by institution.--The 
                information required to be reported under 
                subparagraph (A) shall be aggregated with 
                respect to each institution of higher education 
                or alumni organization or foundation affiliated 
                with or related to such institution.
                  (D) Initial report.--The initial report 
                required under subparagraph (A) shall be 
                submitted to the [Bureau] Agency before the end 
                of the 9-month period beginning on the date of 
                enactment of this subsection.
          (3) Reports by [bureau] agency.--The [Bureau] Agency 
        shall submit to the Congress, and make available to the 
        public, an annual report that lists the information 
        concerning credit card agreements submitted to the 
        [Bureau] Agency under paragraph (2) by each institution 
        of higher education, alumni organization, or 
        foundation.

SEC. 127A. DISCLOSURE REQUIREMENTS FOR OPEN END CONSUMER CREDIT PLANS 
                    SECURED BY THE CONSUMER'S PRINCIPAL DWELLING.

  (a) Application Disclosures.--In the case of any open end 
consumer credit plan which provides for any extension of credit 
which is secured by the consumer's principal dwelling, the 
creditor shall make the following disclosures in accordance 
with subsection (b):
          (1) Fixed annual percentage rate.--Each annual 
        percentage rate imposed in connection with extensions 
        of credit under the plan and a statement that such rate 
        does not include costs other than interest.
          (2) Variable percentage rate.--In the case of a plan 
        which provides for variable rates of interest on credit 
        extended under the plan--
                  (A) a description of the manner in which such 
                rate will be computed and a statement that such 
                rate does not include costs other than 
                interest;
                  (B) a description of the manner in which any 
                changes in the annual percentage rate will be 
                made, including--
                          (i) any negative amortization and 
                        interest rate carryover;
                          (ii) the timing of any such changes;
                          (iii) any index or margin to which 
                        such changes in the rate are related; 
                        and
                          (iv) a source of information about 
                        any such index;
                  (C) if an initial annual percentage rate is 
                offered which is not based on an index--
                          (i) a statement of such rate and the 
                        period of time such initial rate will 
                        be in effect; and
                          (ii) a statement that such rate does 
                        not include costs other than interest;
                  (D) a statement that the consumer should ask 
                about the current index value and interest 
                rate;
                  (E) a statement of the maximum amount by 
                which the annual percentage rate may change in 
                any 1-year period or a statement that no such 
                limit exists;
                  (F) a statement of the maximum annual 
                percentage rate that may be imposed at any time 
                under the plan;
                  (G) subject to subsection (b)(3), a table, 
                based on a $10,000 extension of credit, showing 
                how the annual percentage rate and the minimum 
                periodic payment amount under each repayment 
                option of the plan would have been affected 
                during the preceding 15-year period by changes 
                in any index used to compute such rate;
                  (H) a statement of--
                          (i) the maximum annual percentage 
                        rate which may be imposed under each 
                        repayment option of the plan;
                          (ii) the minimum amount of any 
                        periodic payment which may be required, 
                        based on a $10,000 outstanding balance, 
                        under each such option when such 
                        maximum annual percentage rate is in 
                        effect; and
                          (iii) the earliest date by which such 
                        maximum annual interest rate may be 
                        imposed; and
                  (I) a statement that interest rate 
                information will be provided on or with each 
                periodic statement.
          (3) Other fees imposed by the creditor.--An 
        itemization of any fees imposed by the creditor in 
        connection with the availability or use of credit under 
        such plan, including annual fees, application fees, 
        transaction fees, and closing costs (including costs 
        commonly described as ``points''), and the time when 
        such fees are payable.
          (4) Estimates of fees which may be imposed by third 
        parties.--
                  (A) Aggregate amount.--An estimate, based on 
                the creditor's experience with such plans and 
                stated as a single amount or as a reasonable 
                range, of the aggregate amount of additional 
                fees that may be imposed by third parties (such 
                as governmental authorities, appraisers, and 
                attorneys) in connection with opening an 
                account under the plan.
                  (B) Statement of availability.--A statement 
                that the consumer may ask the creditor for a 
                good faith estimate by the creditor of the fees 
                that may be imposed by third parties.
          (5) Statement of risk of loss of dwelling.--A 
        statement that--
                  (A) any extension of credit under the plan is 
                secured by the consumer's dwelling; and
                  (B) in the event of any default, the consumer 
                risks the loss of the dwelling.
          (6) Conditions to which disclosed terms are 
        subject.--
                  (A) Period during which such terms are 
                available.--A clear and conspicuous statement--
                          (i) of the time by which an 
                        application must be submitted to obtain 
                        the terms disclosed; or
                          (ii) if applicable, that the terms 
                        are subject to change.
                  (B) Right of refusal if certain terms 
                change.--A statement that--
                          (i) the consumer may elect not to 
                        enter into an agreement to open an 
                        account under the plan if any term 
                        changes (other than a change 
                        contemplated by a variable feature of 
                        the plan) before any such agreement is 
                        final; and
                          (ii) if the consumer makes an 
                        election described in clause (i), the 
                        consumer is entitled to a refund of all 
                        fees paid in connection with the 
                        application.
                  (C) Retention of information.--A statement 
                that the consumer should make or otherwise 
                retain a copy of information disclosed under 
                this subparagraph.
          (7) Rights of creditor with respect to extensions of 
        credit.--A statement that--
                  (A) under certain conditions, the creditor 
                may terminate any account under the plan and 
                require immediate repayment of any outstanding 
                balance, prohibit any additional extension of 
                credit to the account, or reduce the credit 
                limit applicable to the account; and
                  (B) the consumer may receive, upon request, 
                more specific information about the conditions 
                under which the creditor may take any action 
                described in subparagraph (A).
          (8) Repayment options and minimum periodic 
        payments.--The repayment options under the plan, 
        including--
                  (A) if applicable, any differences in 
                repayment options with regard to--
                          (i) any period during which 
                        additional extensions of credit may be 
                        obtained; and
                          (ii) any period during which 
                        repayment is required to be made and no 
                        additional extensions of credit may be 
                        obtained;
                  (B) the length of any repayment period, 
                including any differences in the length of any 
                repayment period with regard to the periods 
                described in clauses (i) and (ii) of 
                subparagraph (A); and
                  (C) an explanation of how the amount of any 
                minimum monthly or periodic payment will be 
                determined under each such option, including 
                any differences in the determination of any 
                such amount with regard to the periods 
                described in clauses (i) and (ii) of 
                subparagraph (A).
          (9) Example of minimum payments and maximum repayment 
        period.--An example, based on a $10,000 outstanding 
        balance and the interest rate (other than a rate not 
        based on the index under the plan) which is, or was 
        recently, in effect under such plan, showing the 
        minimum monthly or periodic payment, and the time it 
        would take to repay the entire $10,000 if the consumer 
        paid only the minimum periodic payments and obtained no 
        additional extensions of credit.
          (10) Statement concerning balloon payments.--If, 
        under any repayment option of the plan, the payment of 
        not more than the minimum periodic payments required 
        under such option over the length of the repayment 
        period--
                  (A) would not repay any of the principal 
                balance; or
                  (B) would repay less than the outstanding 
                balance by the end of such period,
        as the case may be, a statement of such fact, including 
        an explicit statement that at the end of such repayment 
        period a balloon payment (as defined in section 147(f)) 
        would result which would be required to be paid in full 
        at that time.
          (11) Negative amortization.--If applicable, a 
        statement that--
                  (A) any limitation in the plan on the amount 
                of any increase in the minimum payments may 
                result in negative amortization;
                  (B) negative amortization increases the 
                outstanding principal balance of the account; 
                and
                  (C) negative amortization reduces the 
                consumer's equity in the consumer's dwelling.
          (12) Limitations and minimum amount requirements on 
        extensions of credit.--
                  (A) Number and dollar amount limitations.--
                Any limitation contained in the plan on the 
                number of extensions of credit and the amount 
                of credit which may be obtained during any 
                month or other defined time period.
                  (B) Minimum balance and other transaction 
                amount requirements.--Any requirement which 
                establishes a minimum amount for--
                          (i) the initial extension of credit 
                        to an account under the plan;
                          (ii) any subsequent extension of 
                        credit to an account under the plan; or
                          (iii) any outstanding balance of an 
                        account under the plan.
          (13) Statement regarding tax deductibility.--A 
        statement that--
                  (A) the consumer should consult a tax advisor 
                regarding the deductibility of interest and 
                charges under the plan; and
                  (B) in any case in which the extension of 
                credit exceeds the fair market value (as 
                defined under the Internal Revenue Code of 
                1986) of the dwelling, the interest on the 
                portion of the credit extension that is greater 
                than the fair market value of the dwelling is 
                not tax deductible for Federal income tax 
                purposes.
          (14) Disclosure requirements established by [bureau] 
        agency.--Any other term which the [Bureau] Agency 
        requires, in regulations, to be disclosed.
  (b) Time and Form of Disclosures.--
          (1) Time of disclosure.--
                  (A) In general.--The disclosures required 
                under subsection (a) with respect to any open 
                end consumer credit plan which provides for any 
                extension of credit which is secured by the 
                consumer's principal dwelling and the pamphlet 
                required under subsection (e) shall be provided 
                to any consumer at the time the creditor 
                distributes an application to establish an 
                account under such plan to such consumer.
                  (B) Telephone, publications, and 3d party 
                applications.--In the case of telephone 
                applications, applications contained in 
                magazines or other publications, or 
                applications provided by a third party, the 
                disclosures required under subsection (a) and 
                the pamphlet required under subsection (e) 
                shall be provided by the creditor before the 
                end of the 3-day period beginning on the date 
                the creditor receives a completed application 
                from a consumer.
          (2) Form.--
                  (A) In general.--Except as provided in 
                paragraph (1)(B), the disclosures required 
                under subsection (a) shall be provided on or 
                with any application to establish an account 
                under an open end consumer credit plan which 
                provides for any extension of credit which is 
                secured by the consumer's principal dwelling.
                  (B) Segregation of required disclosures from 
                other information.--The disclosures required 
                under subsection (a) shall be conspicuously 
                segregated from all other terms, data, or 
                additional information provided in connection 
                with the application, either by grouping the 
                disclosures separately on the application form 
                or by providing the disclosures on a separate 
                form, in accordance with regulations of the 
                [Bureau] Agency.
                  (C) Precedence of certain information.--The 
                disclosures required by paragraphs (5), (6), 
                and (7) of subsection (a) shall precede all of 
                the other required disclosures.
                  (D) Special provision relating to variable 
                interest rate information.--Whether or not the 
                disclosures required under subsection (a) are 
                provided on the application form, the variable 
                rate information described in subsection (a)(2) 
                may be provided separately from the other 
                information required to be disclosed.
          (3) Requirement for historical table.--In preparing 
        the table required under subsection (a)(2)(G), the 
        creditor shall consistently select one rate of interest 
        for each year and the manner of selecting the rate from 
        year to year shall be consistent with the plan.
  (c)  3d Party Applications.--In the case of an application to 
open an account under any open end consumer credit plan 
described in subsection (a) which is provided to a consumer by 
any person other than the creditor--
          (1) such person shall provide such consumer with--
                  (A) the disclosures required under subsection 
                (a) with respect to such plan, in accordance 
                with subsection (b); and
                  (B) the pamphlet required under subsection 
                (e); or
          (2) if such person cannot provide specific terms 
        about the plan because specific information about the 
        plan terms is not available, no nonrefundable fee may 
        be imposed in connection with such application before 
        the end of the 3-day period beginning on the date the 
        consumer receives the disclosures required under 
        subsection (a) with respect to the application.
  (d) Principal Dwelling Defined.--For purposes of this section 
and sections 137 and 147, the term ``principal dwelling'' 
includes any second or vacation home of the consumer.
  (e) Pamphlet.--In addition to the disclosures required under 
subsection (a) with respect to an application to open an 
account under any open end consumer credit plan described in 
such subsection, the creditor or other person providing such 
disclosures to the consumer shall provide--
          (1) a pamphlet published by the [Bureau] Agency 
        pursuant to section 4 of the Home Equity Consumer 
        Protection Act of 1988; or
          (2) any pamphlet which provides substantially similar 
        information to the information described in such 
        section, as determined by the [Bureau] Agency.

Sec. 128. Consumer credit not under open end credit plans

  (a) For each consumer credit transaction other than under an 
open end credit plan, the creditor shall disclose each of the 
following items, to the extent applicable:
          (1) The identity of the creditor required to make 
        disclosure.
          (2)(A) The ``amount financed'', using that term, 
        which shall be the amount of credit of which the 
        consumer has actual use. This amount shall be computed 
        as follows, but the computations need not be disclosed 
        and shall not be disclosed with the disclosures 
        conspicuously segregated in accordance with subsection 
        (b)(1):
                  (i) take the principal amount of the loan or 
                the cash price less downpayment and trade-in;
                  (ii) add any charges which are not part of 
                the finance charge or of the principal amount 
                of the loan and which are financed by the 
                consumer, including the cost of any items 
                excluded from the finance charge pursuant to 
                section 106; and
                  (iii) subtract any charges which are part of 
                the finance charge but which will be paid by 
                the consumer before or at the time of the 
                consummation of the transaction, or have been 
                withheld from the proceeds of the credit.
          (B) In conjunction with the disclosure of the amount 
        financed, a creditor shall provide a statement of the 
        consumer's right to obtain, upon a written request, a 
        written itemization of the amount financed. The 
        statement shall include spaces for a ``yes'' and ``no'' 
        indication to be initialed by the consumer to indicate 
        whether the consumer wants a written itemization of the 
        amount financed. Upon receiving an affirmative 
        indication, the creditor shall provide, at the time 
        other disclosures are required to be furnished, a 
        written itemization of the amount financed. For the 
        purposes of this subparagraph, ``itemization of the 
        amount financed'' means a disclosure of the following 
        items, to the extent applicable:
                  (i) the amount that is or will be paid 
                directly to the consumer;
                  (ii) the amount that is or will be credited 
                to the consumer's account to discharge 
                obligations owed to the creditor;
                  (iii) each amount that is or will be paid to 
                third persons by the creditor on the consumer's 
                behalf, together with an identification of or 
                reference to the third person; and
                  (iv) the total amount of any charges 
                described in the preceding subparagraph 
                (A)(iii).
          (3) The ``finance charge'', not itemized, using that 
        term.
          (4) The finance charge expressed as a ``annual 
        percentage rate'', using that term. This shall not be 
        required if the amount financed does not exceed $75 and 
        the finance charge does not exceed $5, or if the amount 
        financed exceeds $75 and the finance charge does not 
        exceed $7.50.
          (5) The sum of the amount financed and the finance 
        charge, which shall be termed the ``total of 
        payments''.
          (6) The number, amount, and due dates or period of 
        payments scheduled to repay the total of payments.
          (7) In a sale of property or services in which the 
        seller is the creditor required to disclose pursuant to 
        section 121(b), the ``total sale price'', using that 
        term, which shall be the total of the cash price of the 
        property or services, additional charges, and the 
        finance charge.
          (8) Descriptive explanations of the terms ``amount 
        financed'', ``finance charge'', ``annual percentage 
        rate'', ``total of payments'', and ``total sale price'' 
        as specified by the [Bureau] Agency. The descriptive 
        explanation of ``total sale price'' shall include 
        reference to the amount of the downpayment.
          (9) Where the credit is secured, a statement that a 
        security interest has been taken in (A) the property 
        which is purchased as part of the credit transaction, 
        or (B) property not purchased as part of the credit 
        transaction identified by item or type.
          (10) Any dollar charge or percentage amount which may 
        be imposed by a creditor solely on account of a late 
        payment, other than a deferral or extension charge.
          (11) A statement indicating whether or not the 
        consumer is entitled to a rebate of any finance charge 
        upon refinancing or prepayment in full pursuant to 
        acceleration or otherwise, if the obligation involves a 
        precomputed finance charge. A statement indicating 
        whether or not a penalty will be imposed in those same 
        circumstances if the obligation involves a finance 
        charge computed from time to time by application of a 
        rate to the unpaid principal balance.
          (12) A statement that the consumer should refer to 
        the appropriate contract document for any information 
        such document provides about nonpayment, default, the 
        right to accelerate the maturity of the debt, and 
        prepayment rebates and penalties.
          (13) In any residential mortgage transaction, a 
        statement indicating whether a subsequent purchaser or 
        assignee of the consumer may assume the debt obligation 
        on its original terms and conditions.
          (14) In the case of any variable interest rate 
        residential mortgage transaction, in disclosures 
        provided at application as prescribed by the [Bureau] 
        Agency for a variable rate transaction secured by the 
        consumer's principal dwelling, at the option of the 
        creditor, a statement that the periodic payments may 
        increase or decrease substantially, and the maximum 
        interest rate and payment for a $10,000 loan originated 
        at a recent interest rate, as determined by the 
        [Bureau] Agency, assuming the maximum periodic 
        increases in rates and payments under the program, or a 
        historical example illustrating the effects of interest 
        rate changes implemented according to the loan program.
          (15) In the case of a consumer credit transaction 
        that is secured by the principal dwelling of the 
        consumer, in which the extension of credit may exceed 
        the fair market value of the dwelling, a clear and 
        conspicuous statement that--
                  (A) the interest on the portion of the credit 
                extension that is greater than the fair market 
                value of the dwelling is not tax deductible for 
                Federal income tax purposes; and
                  (B) the consumer should consult a tax adviser 
                for further information regarding the 
                deductibility of interest and charges.
          (16) In the case of a variable rate residential 
        mortgage loan for which an escrow or impound account 
        will be established for the payment of all applicable 
        taxes, insurance, and assessments--
                  (A) the amount of initial monthly payment due 
                under the loan for the payment of principal and 
                interest, and the amount of such initial 
                monthly payment including the monthly payment 
                deposited in the account for the payment of all 
                applicable taxes, insurance, and assessments; 
                and
                  (B) the amount of the fully indexed monthly 
                payment due under the loan for the payment of 
                principal and interest, and the amount of such 
                fully indexed monthly payment including the 
                monthly payment deposited in the account for 
                the payment of all applicable taxes, insurance, 
                and assessments.
          (17) In the case of a residential mortgage loan, the 
        aggregate amount of settlement charges for all 
        settlement services provided in connection with the 
        loan, the amount of charges that are included in the 
        loan and the amount of such charges the borrower must 
        pay at closing, the approximate amount of the wholesale 
        rate of funds in connection with the loan, and the 
        aggregate amount of other fees or required payments in 
        connection with the loan.
          (18) In the case of a residential mortgage loan, the 
        aggregate amount of fees paid to the mortgage 
        originator in connection with the loan, the amount of 
        such fees paid directly by the consumer, and any 
        additional amount received by the originator from the 
        creditor.
          (19) In the case of a residential mortgage loan, the 
        total amount of interest that the consumer will pay 
        over the life of the loan as a percentage of the 
        principal of the loan. Such amount shall be computed 
        assuming the consumer makes each monthly payment in 
        full and on-time, and does not make any over-payments.
  (b)(1) Except as otherwise provided in this chapter, the 
disclosures required under subsection (a) shall be made before 
the credit is extended. Except for the disclosures required by 
subsection (a)(1) of this section, all disclosures required 
under subsection (a) and any disclosure provided for in 
subsection (b), (c), or (d) of section 106 shall be 
conspicuously segregated from all other terms, data, or 
information provided in connection with a transaction, 
including any computations or itemization.
  (2)(A) Except as provided in subparagraph (G), in the case of 
any extension of credit that is secured by the dwelling of a 
consumer, which is also subject to the Real Estate Settlement 
Procedures Act, good faith estimates of the disclosures 
required under subsection (a) shall be made in accordance with 
regulations of the [Bureau] Agency under section 121(c) and 
shall be delivered or placed in the mail not later than three 
business days after the creditor receives the consumer's 
written application, which shall be at least 7 business days 
before consummation of the transaction.
          (B) In the case of an extension of credit that is 
        secured by the dwelling of a consumer, the disclosures 
        provided under subparagraph (A), shall be in addition 
        to the other disclosures required by subsection (a), 
        and shall--
                  (i) state in conspicuous type size and 
                format, the following: ``You are not required 
                to complete this agreement merely because you 
                have received these disclosures or signed a 
                loan application.''; and
                  (ii) be provided in the form of final 
                disclosures at the time of consummation of the 
                transaction, in the form and manner prescribed 
                by this section.
          (C) In the case of an extension of credit that is 
        secured by the dwelling of a consumer, under which the 
        annual rate of interest is variable, or with respect to 
        which the regular payments may otherwise be variable, 
        in addition to the other disclosures required by 
        subsection (a), the disclosures provided under this 
        subsection shall do the following:
                  (i) Label the payment schedule as follows: 
                ``Payment Schedule: Payments Will Vary Based on 
                Interest Rate Changes''.
                  (ii) State in conspicuous type size and 
                format examples of adjustments to the regular 
                required payment on the extension of credit 
                based on the change in the interest rates 
                specified by the contract for such extension of 
                credit. Among the examples required to be 
                provided under this clause is an example that 
                reflects the maximum payment amount of the 
                regular required payments on the extension of 
                credit, based on the maximum interest rate 
                allowed under the contract, in accordance with 
                the rules of the [Bureau] Agency. Prior to 
                issuing any rules pursuant to this clause, the 
                [Bureau] Agency shall conduct consumer testing 
                to determine the appropriate format for 
                providing the disclosures required under this 
                subparagraph to consumers so that such 
                disclosures can be easily understood, including 
                the fact that the initial regular payments are 
                for a specific time period that will end on a 
                certain date, that payments will adjust 
                afterwards potentially to a higher amount, and 
                that there is no guarantee that the borrower 
                will be able to refinance to a lower amount.
          (D) In any case in which the disclosure statement 
        under subparagraph (A) contains an annual percentage 
        rate of interest that is no longer accurate, as 
        determined under section 107(c), the creditor shall 
        furnish an additional, corrected statement to the 
        borrower, not later than 3 business days before the 
        date of consummation of the transaction.
          (E) The consumer shall receive the disclosures 
        required under this paragraph before paying any fee to 
        the creditor or other person in connection with the 
        consumer's application for an extension of credit that 
        is secured by the dwelling of a consumer. If the 
        disclosures are mailed to the consumer, the consumer is 
        considered to have received them 3 business days after 
        they are mailed. A creditor or other person may impose 
        a fee for obtaining the consumer's credit report before 
        the consumer has received the disclosures under this 
        paragraph, provided the fee is bona fide and reasonable 
        in amount.
          (F) Waiver of timeliness of disclosures.--To expedite 
        consummation of a transaction, if the consumer 
        determines that the extension of credit is needed to 
        meet a bona fide personal financial emergency, the 
        consumer may waive or modify the timing requirements 
        for disclosures under subparagraph (A), provided that--
                  (i) the term ``bona fide personal emergency'' 
                may be further defined in regulations issued by 
                the [Bureau] Agency;
                  (ii) the consumer provides to the creditor a 
                dated, written statement describing the 
                emergency and specifically waiving or modifying 
                those timing requirements, which statement 
                shall bear the signature of all consumers 
                entitled to receive the disclosures required by 
                this paragraph; and
                  (iii) the creditor provides to the consumers 
                at or before the time of such waiver or 
                modification, the final disclosures required by 
                paragraph (1).
          (G)(i) In the case of an extension of credit relating 
        to a plan described in section 101(53D) of title 11, 
        United States Code--
                          (I) the requirements of subparagraphs 
                        (A) through (E) shall not apply; and
                          (II) a good faith estimate of the 
                        disclosures required under subsection 
                        (a) shall be made in accordance with 
                        regulations of the [Bureau] Agency 
                        under section 121(c) before such credit 
                        is extended, or shall be delivered or 
                        placed in the mail not later than 3 
                        business days after the date on which 
                        the creditor receives the written 
                        application of the consumer for such 
                        credit, whichever is earlier.
                  (ii) If a disclosure statement furnished 
                within 3 business days of the written 
                application (as provided under clause (i)(II)) 
                contains an annual percentage rate which is 
                subsequently rendered inaccurate, within the 
                meaning of section 107(c), the creditor shall 
                furnish another disclosure statement at the 
                time of settlement or consummation of the 
                transaction.
  (3) In the case of a credit transaction described in 
paragraph (15) of subsection (a), disclosures required by that 
paragraph shall be made to the consumer at the time of 
application for such extension of credit.
          (4) Repayment analysis required to include escrow 
        payments.--
                  (A) In general.--In the case of any consumer 
                credit transaction secured by a first mortgage 
                or lien on the principal dwelling of the 
                consumer, other than a consumer credit 
                transaction under an open end credit plan or a 
                reverse mortgage, for which an impound, trust, 
                or other type of account has been or will be 
                established in connection with the transaction 
                for the payment of property taxes, hazard and 
                flood (if any) insurance premiums, or other 
                periodic payments or premiums with respect to 
                the property, the information required to be 
                provided under subsection (a) with respect to 
                the number, amount, and due dates or period of 
                payments scheduled to repay the total of 
                payments shall take into account the amount of 
                any monthly payment to such account for each 
                such repayment in accordance with section 
                10(a)(2) of the Real Estate Settlement 
                Procedures Act of 1974.
                  (B) Assessment value.--The amount taken into 
                account under subparagraph (A) for the payment 
                of property taxes, hazard and flood (if any) 
                insurance premiums, or other periodic payments 
                or premiums with respect to the property shall 
                reflect the taxable assessed value of the real 
                property securing the transaction after the 
                consummation of the transaction, including the 
                value of any improvements on the property or to 
                be constructed on the property (whether or not 
                such construction will be financed from the 
                proceeds of the transaction), if known, and the 
                replacement costs of the property for hazard 
                insurance, in the initial year after the 
                transaction.
  (c)(1) If a creditor receives a purchase order by mail or 
telephone without personal solicitation, and the cash price and 
the total sale price and the terms of financing, including the 
annual percentage rate, are set forth in the creditor's catalog 
or other printed material distributed to the public, then the 
disclosures required under subsection (a) may be made at any 
time not later than the date the first payment is due.
  (2) If a creditor receives a request for a loan by mail or 
telephone without personal solicitation and the terms of 
financing, including the annual percentage rate for 
representative amounts of credit, are set forth in the 
creditor's printed material distributed to the public, or in 
the contract of loan or other printed material delivered to the 
obligor, then the disclosures required under subsection (a) may 
be made at any time not later than the date the first payment 
is due.
  (d) If a consumer credit sale is one of a series of consumer 
credit sales transactions made pursuant to an agreement 
providing for the addition of the deferred payment price of 
that sale to an existing outstanding balance, and the person to 
whom the credit is extended has approved in writing both the 
annual percentage rate or rates and the method of computing the 
finance charge or charges, and the creditor retains no security 
interest in any property as to which he has received payments 
aggregating the amount of the sales price including any finance 
charges attributable thereto, then the disclosure required 
under subsection (a) for the particular sale may be made at any 
time not later than the date the first payment for that sale is 
due. For the purposes of this subsection, in the case of items 
purchased on different dates, the first purchased shall be 
deemed first paid for, and in the case of items purchased on 
the same date, the lowest priced shall be deemed first paid 
for.
  (e) Terms and Disclosure with Respect to Private Education 
Loans.--
          (1) Disclosures required in private education loan 
        applications and solicitations.--In any application for 
        a private education loan, or a solicitation for a 
        private education loan without requiring an 
        application, the private educational lender shall 
        disclose to the borrower, clearly and conspicuously--
                  (A) the potential range of rates of interest 
                applicable to the private education loan;
                  (B) whether the rate of interest applicable 
                to the private education loan is fixed or 
                variable;
                  (C) limitations on interest rate adjustments, 
                both in terms of frequency and amount, or the 
                lack thereof, if applicable;
                  (D) requirements for a co-borrower, including 
                any changes in the applicable interest rates 
                without a co-borrower;
                  (E) potential finance charges, late fees, 
                penalties, and adjustments to principal, based 
                on defaults or late payments of the borrower;
                  (F) fees or range of fees applicable to the 
                private education loan;
                  (G) the term of the private education loan;
                  (H) whether interest will accrue while the 
                student to whom the private education loan 
                relates is enrolled at a covered educational 
                institution;
                  (I) payment deferral options;
                  (J) general eligibility criteria for the 
                private education loan;
                  (K) an example of the total cost of the 
                private education loan over the life of the 
                loan--
                          (i) which shall be calculated using 
                        the principal amount and the maximum 
                        rate of interest actually offered by 
                        the private educational lender; and
                          (ii) calculated both with and without 
                        capitalization of interest, if an 
                        option exists for postponing interest 
                        payments;
                  (L) that a covered educational institution 
                may have school-specific education loan 
                benefits and terms not detailed on the 
                disclosure form;
                  (M) that the borrower may qualify for Federal 
                student financial assistance through a program 
                under title IV of the Higher Education Act of 
                1965 (20 U.S.C. 1070 et seq.), in lieu of, or 
                in addition to, a loan from a non-Federal 
                source;
                  (N) the interest rates available with respect 
                to such Federal student financial assistance 
                through a program under title IV of the Higher 
                Education Act of 1965 (20 U.S.C. 1070 et seq.);
                  (O) that, as provided in paragraph (6)--
                          (i) the borrower shall have the right 
                        to accept the terms of the loan and 
                        consummate the transaction at any time 
                        within 30 calendar days (or such longer 
                        period as the private educational 
                        lender may provide) following the date 
                        on which the application for the 
                        private education loan is approved and 
                        the borrower receives the disclosure 
                        documents required under this 
                        subsection for the loan; and
                          (ii) except for changes based on 
                        adjustments to the index used for a 
                        loan, the rates and terms of the loan 
                        may not be changed by the private 
                        educational lender during the period 
                        described in clause (i);
                  (P) that, before a private education loan may 
                be consummated, the borrower must obtain from 
                the relevant institution of higher education 
                the form required under paragraph (3), and 
                complete, sign, and return such form to the 
                private educational lender;
                  (Q) that the consumer may obtain additional 
                information concerning such Federal student 
                financial assistance from their institution of 
                higher education, or at the website of the 
                Department of Education; and
                  (R) such other information as the [Bureau] 
                Agency shall prescribe, by rule, as necessary 
                or appropriate for consumers to make informed 
                borrowing decisions.
          (2) Disclosures at the time of private education loan 
        approval.--Contemporaneously with the approval of a 
        private education loan application, and before the loan 
        transaction is consummated, the private educational 
        lender shall disclose to the borrower, clearly and 
        conspicuously--
                  (A) the applicable rate of interest in effect 
                on the date of approval;
                  (B) whether the rate of interest applicable 
                to the private education loan is fixed or 
                variable;
                  (C) limitations on interest rate adjustments, 
                both in terms of frequency and amount, or the 
                lack thereof, if applicable;
                  (D) the initial approved principal amount;
                  (E) applicable finance charges, late fees, 
                penalties, and adjustments to principal, based 
                on borrower defaults or late payments, 
                including limitations on the discharge of a 
                private education loan in bankruptcy;
                  (F) fees or range of fees applicable to the 
                private education loan;
                  (G) the maximum term under the private 
                education loan program;
                  (H) an estimate of the total amount for 
                repayment, at both the interest rate in effect 
                on the date of approval and at the maximum 
                possible rate of interest offered by the 
                private educational lender and applicable to 
                the borrower, to the extent that such maximum 
                rate may be determined, or if not, a good faith 
                estimate thereof;
                  (I) any principal and interest payments 
                required while the student for whom the private 
                education loan is intended is enrolled at a 
                covered educational institution and unpaid 
                interest that will accrue during such 
                enrollment;
                  (J) payment deferral options applicable to 
                the borrower;
                  (K) whether monthly payments are graduated;
                  (L) that, as provided in paragraph (6)--
                          (i) the borrower shall have the right 
                        to accept the terms of the loan and 
                        consummate the transaction at any time 
                        within 30 calendar days (or such longer 
                        period as the private educational 
                        lender may provide) following the date 
                        on which the application for the 
                        private education loan is approved and 
                        the borrower receives the disclosure 
                        documents required under this 
                        subsection for the loan; and
                          (ii) except for changes based on 
                        adjustments to the index used for a 
                        loan, the rates and terms of the loan 
                        may not be changed by the private 
                        educational lender during the period 
                        described in clause (i);
                  (M) that the borrower --
                          (i) may qualify for Federal financial 
                        assistance through a program under 
                        title IV of the Higher Education Act of 
                        1965 (20 U.S.C. 1070 et seq.), in lieu 
                        of, or in addition to, a loan from a 
                        non-Federal source; and
                          (ii) may obtain additional 
                        information concerning such assistance 
                        from their institution of higher 
                        education or the website of the 
                        Department of Education;
                  (N) the interest rates available with respect 
                to such Federal financial assistance through a 
                program under title IV of the Higher Education 
                Act of 1965 (20 U.S.C. 1070 et seq.);
                  (O) the maximum monthly payment, calculated 
                using the maximum rate of interest actually 
                offered by the private educational lender and 
                applicable to the borrower, to the extent that 
                such maximum rate may be determined, or if not, 
                a good faith estimate thereof; and
                  (P) such other information as the [Bureau] 
                Agency shall prescribe, by rule, as necessary 
                or appropriate for consumers to make informed 
                borrowing decisions.
          (3) Self-certification of information.--
                  (A) In general.--Before a private educational 
                lender may consummate a private education loan 
                with respect to a student attending an 
                institution of higher education, the lender 
                shall obtain from the applicant for the private 
                education loan the form developed by the 
                Secretary of Education under section 155 of the 
                Higher Education Act of 1965, signed by the 
                applicant, in written or electronic form.
                  (B) Rule of construction.--No other provision 
                of this subsection shall be construed to 
                require a private educational lender to perform 
                any additional duty under this paragraph, other 
                than collecting the form required under 
                subparagraph (A).
          (4) Disclosures at the time of private education loan 
        consummation.--Contemporaneously with the consummation 
        of a private education loan, a private educational 
        lender shall make to the borrower each of the 
        disclosures described in--
                  (A) paragraph (2)(A) (adjusted, as necessary, 
                for the rate of interest in effect on the date 
                of consummation, based on the index used for 
                the loan);
                  (B) subparagraphs (B) through (K) and (M) 
                through (P) of paragraph (2); and
                  (C) paragraph (7).
          (5) Format of disclosures.--
                  (A) Model form.--Not later than 2 years after 
                the date of enactment of this subsection, the 
                [Bureau] Agency shall, based on consumer 
                testing, and in consultation with the Secretary 
                of Education, develop and issue model forms 
                that may be used, at the option of the private 
                educational lender, for the provision of 
                disclosures required under this subsection.
                  (B) Format.--Model forms developed under this 
                paragraph shall--
                          (i) be comprehensible to borrowers, 
                        with a clear format and design;
                          (ii) provide for clear and 
                        conspicuous disclosures;
                          (iii) enable borrowers easily to 
                        identify material terms of the loan and 
                        to compare such terms among private 
                        education loans; and
                          (iv) be succinct, and use an easily 
                        readable type font.
                  (C) Safe harbor.--Any private educational 
                lender that elects to provide a model form 
                developed under this subsection that accurately 
                reflects the practices of the private 
                educational lender shall be deemed to be in 
                compliance with the disclosures required under 
                this subsection.
          (6) Effective period of approved rate of interest and 
        loan terms.--
                  (A) In general.--With respect to a private 
                education loan, the borrower shall have the 
                right to accept the terms of the loan and 
                consummate the transaction at any time within 
                30 calendar days (or such longer period as the 
                private educational lender may provide) 
                following the date on which the application for 
                the private education loan is approved and the 
                borrower receives the disclosure documents 
                required under this subsection for the loan, 
                and the rates and terms of the loan may not be 
                changed by the private educational lender 
                during that period.
                  (B) Prohibition on changes.--Except for 
                changes based on adjustments to the index used 
                for a loan, the rates and terms of the loan may 
                not be changed by the private educational 
                lender prior to the earlier of--
                          (i) the date of acceptance of the 
                        terms of the loan and consummation of 
                        the transaction by the borrower, as 
                        described in subparagraph (A); or
                          (ii) the expiration of the period 
                        described in subparagraph (A).
          (7) Right to cancel.--With respect to a private 
        education loan, the borrower may cancel the loan, 
        without penalty to the borrower, at any time within 3 
        business days of the date on which the loan is 
        consummated, and the private educational lender shall 
        disclose such right to the borrower in accordance with 
        paragraph (4).
          (8) Prohibition on disbursement.--No funds may be 
        disbursed with respect to a private education loan 
        until the expiration of the 3-day period described in 
        paragraph (7).
          (9) Bureau regulations.--In issuing regulations under 
        this subsection, the [Bureau] Agency shall prevent, to 
        the extent possible, duplicative disclosure 
        requirements for private educational lenders that are 
        otherwise required to make disclosures under this 
        title, except that in any case in which the disclosure 
        requirements of this subsection differ or conflict with 
        the disclosure requirements of any other provision of 
        this title, the requirements of this subsection shall 
        be controlling.
          (10) Definitions.--For purposes of this subsection, 
        the terms ``covered educational institution'', 
        ``private educational lender'', and ``private education 
        loan'' have the same meanings as in section 140.
          (11) Duties of lenders participating in preferred 
        lender arrangements.--Each private educational lender 
        that has a preferred lender arrangement with a covered 
        educational institution shall annually, by a date 
        determined by the [Bureau] Agency, in consultation with 
        the Secretary of Education, provide to the covered 
        educational institution such information as the 
        [Bureau] Agency determines to include in the model form 
        developed under paragraph (5) for each type of private 
        education loan that the lender plans to offer to 
        students attending the covered educational institution, 
        or to the families of such students, for the next award 
        year (as that term is defined in section 481 of the 
        Higher Education Act of 1965).
  (f) Periodic Statements for Residential Mortgage Loans.--
          (1) In general.--The creditor, assignee, or servicer 
        with respect to any residential mortgage loan shall 
        transmit to the obligor, for each billing cycle, a 
        statement setting forth each of the following items, to 
        the extent applicable, in a conspicuous and prominent 
        manner:
                  (A) The amount of the principal obligation 
                under the mortgage.
                  (B) The current interest rate in effect for 
                the loan.
                  (C) The date on which the interest rate may 
                next reset or adjust.
                  (D) The amount of any prepayment fee to be 
                charged, if any.
                  (E) A description of any late payment fees.
                  (F) A telephone number and electronic mail 
                address that may be used by the obligor to 
                obtain information regarding the mortgage.
                  (G) The names, addresses, telephone numbers, 
                and Internet addresses of counseling agencies 
                or programs reasonably available to the 
                consumer that have been certified or approved 
                and made publicly available by the Secretary of 
                Housing and Urban Development or a State 
                housing finance authority (as defined in 
                section 1301 of the Financial Institutions 
                Reform, Recovery, and Enforcement Act of 1989).
                  (H) Such other information as the [Board] 
                Agency may prescribe in regulations.
          (2) Development and use of standard form.--The 
        [Board] Agency shall develop and prescribe a standard 
        form for the disclosure required under this subsection, 
        taking into account that the statements required may be 
        transmitted in writing or electronically.
          (3) Exception.--Paragraph (1) shall not apply to any 
        fixed rate residential mortgage loan where the 
        creditor, assignee, or servicer provides the obligor 
        with a coupon book that provides the obligor with 
        substantially the same information as required in 
        paragraph (1).

           *       *       *       *       *       *       *


SEC. 129. REQUIREMENTS FOR CERTAIN MORTGAGES.

  (a) Disclosures.--
          (1) Specific disclosures.--In addition to other 
        disclosures required under this title, for each 
        mortgage referred to in section 103(aa), the creditor 
        shall provide the following disclosures in conspicuous 
        type size:
                  (A) ``You are not required to complete this 
                agreement merely because you have received 
                these disclosures or have signed a loan 
                application.''.
                  (B) ``If you obtain this loan, the lender 
                will have a mortgage on your home. You could 
                lose your home, and any money you have put into 
                it, if you do not meet your obligations under 
                the loan.''.
          (2) Annual percentage rate.--In addition to the 
        disclosures required under paragraph (1), the creditor 
        shall disclose--
                  (A) in the case of a credit transaction with 
                a fixed rate of interest, the annual percentage 
                rate and the amount of the regular monthly 
                payment; or
                  (B) in the case of any other credit 
                transaction, the annual percentage rate of the 
                loan, the amount of the regular monthly 
                payment, a statement that the interest rate and 
                monthly payment may increase, and the amount of 
                the maximum monthly payment, based on the 
                maximum interest rate allowed pursuant to 
                section 1204 of the Competitive Equality 
                Banking Act of 1987.
  (b) Time of Disclosures.--
          (1) In general.--The disclosures required by this 
        section shall be given not less than 3 business days 
        prior to consummation of the transaction.
          (2) New disclosures required.--
                  (A) In general.--After providing the 
                disclosures required by this section, a 
                creditor may not change the terms of the 
                extension of credit if such changes make the 
                disclosures inaccurate, unless new disclosures 
                are provided that meet the requirements of this 
                section.
                  (B) Telephone disclosure.--A creditor may 
                provide new disclosures pursuant to 
                subparagraph (A) by telephone, if--
                          (i) the change is initiated by the 
                        consumer; and
                          (ii) at the consummation of the 
                        transaction under which the credit is 
                        extended--
                                  (I) the creditor provides to 
                                the consumer the new 
                                disclosures, in writing; and
                                  (II) the creditor and 
                                consumer certify in writing 
                                that the new disclosures were 
                                provided by telephone, by not 
                                later than 3 days prior to the 
                                date of consummation of the 
                                transaction.
          (3) Modifications.--The [Bureau] Agency may, if it 
        finds that such action is necessary to permit 
        homeowners to meet bona fide personal financial 
        emergencies, prescribe regulations authorizing the 
        modification or waiver of rights created under this 
        subsection, to the extent and under the circumstances 
        set forth in those regulations.
  (c) No Prepayment Penalty.--
          (1) In general.--
                  (A) Limitation on terms.--A mortgage referred 
                to in section 103(aa) may not contain terms 
                under which a consumer must pay a prepayment 
                penalty for paying all or part of the principal 
                before the date on which the principal is due.
                  (B) Construction.--For purposes of this 
                subsection, any method of computing a refund of 
                unearned scheduled interest is a prepayment 
                penalty if it is less favorable to the consumer 
                than the actuarial method (as that term is 
                defined in section 933(d) of the Housing and 
                Community Development Act of 1992).
          (2)
  (d) Limitations After Default.--A mortgage referred to in 
section 103(aa) may not provide for an interest rate applicable 
after default that is higher than the interest rate that 
applies before default. If the date of maturity of a mortgage 
referred to in subsection 103(aa) is accelerated due to default 
and the consumer is entitled to a rebate of interest, that 
rebate shall be computed by any method that is not less 
favorable than the actuarial method (as that term is defined in 
section 933(d) of the Housing and Community Development Act of 
1992).
  (e) No Balloon Payments.--No high-cost mortgage may contain a 
scheduled payment that is more than twice as large as the 
average of earlier scheduled payments. This subsection shall 
not apply when the payment schedule is adjusted to the seasonal 
or irregular income of the consumer.
  (f) No Negative Amortization.--A mortgage referred to in 
section 103(aa) may not include terms under which the 
outstanding principal balance will increase at any time over 
the course of the loan because the regular periodic payments do 
not cover the full amount of interest due.
  (g) No Prepaid Payments.--A mortgage referred to in section 
103(aa) may not include terms under which more than 2 periodic 
payments required under the loan are consolidated and paid in 
advance from the loan proceeds provided to the consumer.
  (h) Prohibition on Extending Credit Without Regard to Payment 
Ability of Consumer.--A creditor shall not engage in a pattern 
or practice of extending credit to consumers under mortgages 
referred to in section 103(aa) based on the consumers' 
collateral without regard to the consumers' repayment ability, 
including the consumers' current and expected income, current 
obligations, and employment.
  (i) Requirements for Payments Under Home Improvement 
Contracts.--A creditor shall not make a payment to a contractor 
under a home improvement contract from amounts extended as 
credit under a mortgage referred to in section 103(aa), other 
than--
          (1) in the form of an instrument that is payable to 
        the consumer or jointly to the consumer and the 
        contractor; or
          (2) at the election of the consumer, by a third party 
        escrow agent in accordance with terms established in a 
        written agreement signed by the consumer, the creditor, 
        and the contractor before the date of payment.
  (j) Recommended Default.--No creditor shall recommend or 
encourage default on an existing loan or other debt prior to 
and in connection with the closing or planned closing of a 
high-cost mortgage that refinances all or any portion of such 
existing loan or debt.
  (k) Late Fees.--
          (1) In general.--No creditor may impose a late 
        payment charge or fee in connection with a high-cost 
        mortgage--
                  (A) in an amount in excess of 4 percent of 
                the amount of the payment past due;
                  (B) unless the loan documents specifically 
                authorize the charge or fee;
                  (C) before the end of the 15-day period 
                beginning on the date the payment is due, or in 
                the case of a loan on which interest on each 
                installment is paid in advance, before the end 
                of the 30-day period beginning on the date the 
                payment is due; or
                  (D) more than once with respect to a single 
                late payment.
          (2) Coordination with subsequent late fees.--If a 
        payment is otherwise a full payment for the applicable 
        period and is paid on its due date or within an 
        applicable grace period, and the only delinquency or 
        insufficiency of payment is attributable to any late 
        fee or delinquency charge assessed on any earlier 
        payment, no late fee or delinquency charge may be 
        imposed on such payment.
          (3) Failure to make installment payment.--If, in the 
        case of a loan agreement the terms of which provide 
        that any payment shall first be applied to any past due 
        principal balance, the consumer fails to make an 
        installment payment and the consumer subsequently 
        resumes making installment payments but has not paid 
        all past due installments, the creditor may impose a 
        separate late payment charge or fee for any principal 
        due (without deduction due to late fees or related 
        fees) until the default is cured.
  (l) Acceleration of Debt.--No high-cost mortgage may contain 
a provision which permits the creditor to accelerate the 
indebtedness, except when repayment of the loan has been 
accelerated by default in payment, or pursuant to a due-on-sale 
provision, or pursuant to a material violation of some other 
provision of the loan document unrelated to payment schedule.
  (m) Restriction on Financing Points and Fees.--No creditor 
may directly or indirectly finance, in connection with any 
high-cost mortgage, any of the following:
          (1) Any prepayment fee or penalty payable by the 
        consumer in a refinancing transaction if the creditor 
        or an affiliate of the creditor is the noteholder of 
        the note being refinanced.
          (2) Any points or fees.
  (n) Consequence of Failure To Comply.--Any mortgage that 
contains a provision prohibited by this section shall be deemed 
a failure to deliver the material disclosures required under 
this title, for the purpose of section 125.
  (o) Definition.--For purposes of this section, the term 
``affiliate'' has the same meaning as in section 2(k) of the 
Bank Holding Company Act of 1956.
  (p) Discretionary Regulatory Authority of Bureau.--
          (1) Exemptions.--The [Bureau] Agency may, by 
        regulation or order, exempt specific mortgage products 
        or categories of mortgages from any or all of the 
        prohibitions specified in subsections (c) through (i), 
        if the [Bureau] Agency finds that the exemption--
                  (A) is in the interest of the borrowing 
                public; and
                  (B) will apply only to products that maintain 
                and strengthen home ownership and equity 
                protection.
          (2) Prohibitions.--The [Bureau] Agency, by regulation 
        or order, shall prohibit acts or practices in 
        connection with--
                  (A) mortgage loans that the [Bureau] Agency 
                finds to be unfair, deceptive, or designed to 
                evade the provisions of this section; and
                  (B) refinancing of mortgage loans that the 
                [Bureau] Agency finds to be associated with 
                abusive lending practices, or that are 
                otherwise not in the interest of the borrower.
  (q) Civil Penalties in Federal Trade Commission Enforcement 
Actions.--For purposes of enforcement by the Federal Trade 
Commission, any violation of a regulation issued by the 
[Bureau] Agency pursuant to subsection [(l)(2)] (p)(2) shall be 
treated as a violation of a rule promulgated under section 18 
of the Federal Trade Commission Act (15 U.S.C. 57a) regarding 
unfair or deceptive acts or practices.
  (r) Prohibitions on Evasions, Structuring of Transactions, 
and Reciprocal Arrangements.--A creditor may not take any 
action in connection with a high-cost mortgage--
          (1) to structure a loan transaction as an open-end 
        credit plan or another form of loan for the purpose and 
        with the intent of evading the provisions of this 
        title; or
          (2) to divide any loan transaction into separate 
        parts for the purpose and with the intent of evading 
        provisions of this title.
  (s) Modification and Deferral Fees Prohibited.--A creditor, 
successor in interest, assignee, or any agent of any of the 
above, may not charge a consumer any fee to modify, renew, 
extend, or amend a high-cost mortgage, or to defer any payment 
due under the terms of such mortgage.
  (t) Payoff Statement.--
          (1) Fees.--
                  (A) In general.--Except as provided in 
                subparagraph (B), no creditor or servicer may 
                charge a fee for informing or transmitting to 
                any person the balance due to pay off the 
                outstanding balance on a high-cost mortgage.
                  (B) Transaction fee.--When payoff information 
                referred to in subparagraph (A) is provided by 
                facsimile transmission or by a courier service, 
                a creditor or servicer may charge a processing 
                fee to cover the cost of such transmission or 
                service in an amount not to exceed an amount 
                that is comparable to fees imposed for similar 
                services provided in connection with consumer 
                credit transactions that are secured by the 
                consumer's principal dwelling and are not high-
                cost mortgages.
                  (C) Fee disclosure.--Prior to charging a 
                transaction fee as provided in subparagraph 
                (B), a creditor or servicer shall disclose that 
                payoff balances are available for free pursuant 
                to subparagraph (A).
                  (D) Multiple requests.--If a creditor or 
                servicer has provided payoff information 
                referred to in subparagraph (A) without charge, 
                other than the transaction fee allowed by 
                subparagraph (B), on 4 occasions during a 
                calendar year, the creditor or servicer may 
                thereafter charge a reasonable fee for 
                providing such information during the remainder 
                of the calendar year.
          (2) Prompt delivery.--Payoff balances shall be 
        provided within 5 business days after receiving a 
        request by a consumer or a person authorized by the 
        consumer to obtain such information.
  (u) Pre-Loan Counseling.--
          (1) In general.--A creditor may not extend credit to 
        a consumer under a high-cost mortgage without first 
        receiving certification from a counselor that is 
        approved by the Secretary of Housing and Urban 
        Development, or at the discretion of the Secretary, a 
        State housing finance authority, that the consumer has 
        received counseling on the advisability of the 
        mortgage. Such counselor shall not be employed by the 
        creditor or an affiliate of the creditor or be 
        affiliated with the creditor.
          (2) Disclosures required prior to counseling.--No 
        counselor may certify that a consumer has received 
        counseling on the advisability of the high-cost 
        mortgage unless the counselor can verify that the 
        consumer has received each statement required (in 
        connection with such loan) by this section or the Real 
        Estate Settlement Procedures Act of 1974 with respect 
        to the transaction.
          (3) Regulations.--The [Board] Agency may prescribe 
        such regulations as the [Board] Agency determines to be 
        appropriate to carry out the requirements of paragraph 
        (1).
  (v) Corrections and Unintentional Violations.--A creditor or 
assignee in a high-cost mortgage who, when acting in good 
faith, fails to comply with any requirement under this section 
will not be deemed to have violated such requirement if the 
creditor or assignee establishes that either--
          (1) within 30 days of the loan closing and prior to 
        the institution of any action, the consumer is notified 
        of or discovers the violation, appropriate restitution 
        is made, and whatever adjustments are necessary are 
        made to the loan to either, at the choice of the 
        consumer--
                  (A) make the loan satisfy the requirements of 
                this chapter; or
                  (B) in the case of a high-cost mortgage, 
                change the terms of the loan in a manner 
                beneficial to the consumer so that the loan 
                will no longer be a high-cost mortgage; or
          (2) within 60 days of the creditor's discovery or 
        receipt of notification of an unintentional violation 
        or bona fide error and prior to the institution of any 
        action, the consumer is notified of the compliance 
        failure, appropriate restitution is made, and whatever 
        adjustments are necessary are made to the loan to 
        either, at the choice of the consumer--
                  (A) make the loan satisfy the requirements of 
                this chapter; or
                  (B) in the case of a high-cost mortgage, 
                change the terms of the loan in a manner 
                beneficial so that the loan will no longer be a 
                high-cost mortgage.

           *       *       *       *       *       *       *


Sec. 129B. Residential mortgage loan origination

  (a) Finding and Purpose.--
          (1) Finding.--The Congress finds that economic 
        stabilization would be enhanced by the protection, 
        limitation, and regulation of the terms of residential 
        mortgage credit and the practices related to such 
        credit, while ensuring that responsible, affordable 
        mortgage credit remains available to consumers.
          (2) Purpose.--It is the purpose of this section and 
        section 129C to assure that consumers are offered and 
        receive residential mortgage loans on terms that 
        reasonably reflect their ability to repay the loans and 
        that are understandable and not unfair, deceptive or 
        abusive.
  (b) Duty of Care.--
          (1) Standard.--Subject to regulations prescribed 
        under this subsection, each mortgage originator shall, 
        in addition to the duties imposed by otherwise 
        applicable provisions of State or Federal law--
                  (A) be qualified and, when required, 
                registered and licensed as a mortgage 
                originator in accordance with applicable State 
                or Federal law, including the Secure and Fair 
                Enforcement for Mortgage Licensing Act of 2008; 
                and
                  (B) include on all loan documents any unique 
                identifier of the mortgage originator provided 
                by the Nationwide Mortgage Licensing System and 
                Registry.
          (2) Compliance procedures required.--The [Board] 
        Agency shall prescribe regulations requiring depository 
        institutions to establish and maintain procedures 
        reasonably designed to assure and monitor the 
        compliance of such depository institutions, the 
        subsidiaries of such institutions, and the employees of 
        such institutions or subsidiaries with the requirements 
        of this section and the registration procedures 
        established under section 1507 of the Secure and Fair 
        Enforcement for Mortgage Licensing Act of 2008.
  (c) Prohibition on Steering Incentives.--
          (1) In general.--For any residential mortgage loan, 
        no mortgage originator shall receive from any person 
        and no person shall pay to a mortgage originator, 
        directly or indirectly, compensation that varies based 
        on the terms of the loan (other than the amount of the 
        principal).
          (2) Restructuring of financing origination fee.--
                  (A) In general.--For any mortgage loan, a 
                mortgage originator may not receive from any 
                person other than the consumer and no person, 
                other than the consumer, who knows or has 
                reason to know that a consumer has directly 
                compensated or will directly compensate a 
                mortgage originator may pay a mortgage 
                originator any origination fee or charge except 
                bona fide third party charges not retained by 
                the creditor, mortgage originator, or an 
                affiliate of the creditor or mortgage 
                originator.
                  (B) Exception.--Notwithstanding subparagraph 
                (A), a mortgage originator may receive from a 
                person other than the consumer an origination 
                fee or charge, and a person other than the 
                consumer may pay a mortgage originator an 
                origination fee or charge, if--
                          (i) the mortgage originator does not 
                        receive any compensation directly from 
                        the consumer; and
                          (ii) the consumer does not make an 
                        upfront payment of discount points, 
                        origination points, or fees, however 
                        denominated (other than bona fide third 
                        party charges not retained by the 
                        mortgage originator, creditor, or an 
                        affiliate of the creditor or 
                        originator), except that the [Board] 
                        Agency may, by rule, waive or provide 
                        exemptions to this clause if the 
                        [Board] Agency determines that such 
                        waiver or exemption is in the interest 
                        of consumers and in the public 
                        interest.
          (3) Regulations.--The [Board] Agency shall prescribe 
        regulations to prohibit--
                  (A) mortgage originators from steering any 
                consumer to a residential mortgage loan that--
                          (i) the consumer lacks a reasonable 
                        ability to repay (in accordance with 
                        regulations prescribed under section 
                        129C(a)); or
                          (ii) has predatory characteristics or 
                        effects (such as equity stripping, 
                        excessive fees, or abusive terms);
                  (B) mortgage originators from steering any 
                consumer from a residential mortgage loan for 
                which the consumer is qualified that is a 
                qualified mortgage (as defined in section 
                129C(b)(2)) to a residential mortgage loan that 
                is not a qualified mortgage;
                  (C) abusive or unfair lending practices that 
                promote disparities among consumers of equal 
                credit worthiness but of different race, 
                ethnicity, gender, or age; and
                  (D) mortgage originators from--
                          (i) mischaracterizing the credit 
                        history of a consumer or the 
                        residential mortgage loans available to 
                        a consumer;
                          (ii) mischaracterizing or suborning 
                        the mischaracterization of the 
                        appraised value of the property 
                        securing the extension of credit; or
                          (iii) if unable to suggest, offer, or 
                        recommend to a consumer a loan that is 
                        not more expensive than a loan for 
                        which the consumer qualifies, 
                        discouraging a consumer from seeking a 
                        residential mortgage loan secured by a 
                        consumer's principal dwelling from 
                        another mortgage originator.
          (4) Rules of construction.--No provision of this 
        subsection shall be construed as--
                  (A) permitting any yield spread premium or 
                other similar compensation that would, for any 
                residential mortgage loan, permit the total 
                amount of direct and indirect compensation from 
                all sources permitted to a mortgage originator 
                to vary based on the terms of the loan (other 
                than the amount of the principal);
                  (B) limiting or affecting the amount of 
                compensation received by a creditor upon the 
                sale of a consummated loan to a subsequent 
                purchaser;
                  (C) restricting a consumer's ability to 
                finance, at the option of the consumer, 
                including through principal or rate, any 
                origination fees or costs permitted under this 
                subsection, or the mortgage originator's right 
                to receive such fees or costs (including 
                compensation) from any person, subject to 
                paragraph (2)(B), so long as such fees or costs 
                do not vary based on the terms of the loan 
                (other than the amount of the principal) or the 
                consumer's decision about whether to finance 
                such fees or costs; or
                  (D) prohibiting incentive payments to a 
                mortgage originator based on the number of 
                residential mortgage loans originated within a 
                specified period of time.
  (d) Liability for Violations.--
          (1) In general.--For purposes of providing a cause of 
        action for any failure by a mortgage originator, other 
        than a creditor, to comply with any requirement imposed 
        under this section and any regulation prescribed under 
        this section, section 130 shall be applied with respect 
        to any such failure by substituting ``mortgage 
        originator'' for ``creditor'' each place such term 
        appears in each such subsection.
          (2) Maximum.--The maximum amount of any liability of 
        a mortgage originator under paragraph (1) to a consumer 
        for any violation of this section shall not exceed the 
        greater of actual damages or an amount equal to 3 times 
        the total amount of direct and indirect compensation or 
        gain accruing to the mortgage originator in connection 
        with the residential mortgage loan involved in the 
        violation, plus the costs to the consumer of the 
        action, including a reasonable attorney's fee.
  (e) Discretionary Regulatory Authority.--
          (1) In general.--The [Board] Agency shall, by 
        regulations, prohibit or condition terms, acts or 
        practices relating to residential mortgage loans that 
        the [Board] Agency finds to be abusive, unfair, 
        deceptive, predatory, necessary or proper to ensure 
        that responsible, affordable mortgage credit remains 
        available to consumers in a manner consistent with the 
        purposes of this section and section 129C, necessary or 
        proper to effectuate the purposes of this section and 
        section 129C, to prevent circumvention or evasion 
        thereof, or to facilitate compliance with such 
        sections, or are not in the interest of the borrower.
          (2) Application.--The regulations prescribed under 
        paragraph (1) shall be applicable to all residential 
        mortgage loans and shall be applied in the same manner 
        as regulations prescribed under section 105.
  (f) Section 129B and any regulations promulgated thereunder 
do not apply to an extension of credit relating to a plan 
described in section 101(53D) of title 11, United States Code.

Sec. 129C. Minimum standards for residential mortgage loans

  (a) Ability To Repay.--
          (1) In general.--In accordance with regulations 
        prescribed by the [Board] Agency, no creditor may make 
        a residential mortgage loan unless the creditor makes a 
        reasonable and good faith determination based on 
        verified and documented information that, at the time 
        the loan is consummated, the consumer has a reasonable 
        ability to repay the loan, according to its terms, and 
        all applicable taxes, insurance (including mortgage 
        guarantee insurance), and assessments.
          (2) Multiple loans.--If the creditor knows, or has 
        reason to know, that 1 or more residential mortgage 
        loans secured by the same dwelling will be made to the 
        same consumer, the creditor shall make a reasonable and 
        good faith determination, based on verified and 
        documented information, that the consumer has a 
        reasonable ability to repay the combined payments of 
        all loans on the same dwelling according to the terms 
        of those loans and all applicable taxes, insurance 
        (including mortgage guarantee insurance), and 
        assessments.
          (3) Basis for determination.--A determination under 
        this subsection of a consumer's ability to repay a 
        residential mortgage loan shall include consideration 
        of the consumer's credit history, current income, 
        expected income the consumer is reasonably assured of 
        receiving, current obligations, debt-to-income ratio or 
        the residual income the consumer will have after paying 
        non-mortgage debt and mortgage-related obligations, 
        employment status, and other financial resources other 
        than the consumer's equity in the dwelling or real 
        property that secures repayment of the loan. A creditor 
        shall determine the ability of the consumer to repay 
        using a payment schedule that fully amortizes the loan 
        over the term of the loan.
          (4) Income verification.--A creditor making a 
        residential mortgage loan shall verify amounts of 
        income or assets that such creditor relies on to 
        determine repayment ability, including expected income 
        or assets, by reviewing the consumer's Internal Revenue 
        Service Form W-2, tax returns, payroll receipts, 
        financial institution records, or other third-party 
        documents that provide reasonably reliable evidence of 
        the consumer's income or assets. In order to safeguard 
        against fraudulent reporting, any consideration of a 
        consumer's income history in making a determination 
        under this subsection shall include the verification of 
        such income by the use of--
                  (A) Internal Revenue Service transcripts of 
                tax returns; or
                  (B) a method that quickly and effectively 
                verifies income documentation by a third party 
                subject to rules prescribed by the [Board] 
                Agency.
          (5) Exemption.--With respect to loans made, 
        guaranteed, or insured by Federal departments or 
        agencies identified in subsection (b)(3)(B)(ii), such 
        departments or agencies may exempt refinancings under a 
        streamlined refinancing from this income verification 
        requirement as long as the following conditions are 
        met:
                  (A) The consumer is not 30 days or more past 
                due on the prior existing residential mortgage 
                loan.
                  (B) The refinancing does not increase the 
                principal balance outstanding on the prior 
                existing residential mortgage loan, except to 
                the extent of fees and charges allowed by the 
                department or agency making, guaranteeing, or 
                insuring the refinancing.
                  (C) Total points and fees (as defined in 
                section [103(aa)(4), other than bona fide third 
                party charges not retained by the mortgage 
                originator, creditor, or an affiliate of the 
                creditor or mortgage originator] 103(aa)(4)) 
                payable in connection with the refinancing do 
                not exceed 3 percent of the total new loan 
                amount.
                  (D) The interest rate on the refinanced loan 
                is lower than the interest rate of the original 
                loan, unless the borrower is refinancing from 
                an adjustable rate to a fixed-rate loan, under 
                guidelines that the department or agency shall 
                establish for loans they make, guarantee, or 
                issue.
                  (E) The refinancing is subject to a payment 
                schedule that will fully amortize the 
                refinancing in accordance with the regulations 
                prescribed by the department or agency making, 
                guaranteeing, or insuring the refinancing.
                  (F) The terms of the refinancing do not 
                result in a balloon payment, as defined in 
                subsection (b)(2)(A)(ii).
                  (G) Both the residential mortgage loan being 
                refinanced and the refinancing satisfy all 
                requirements of the department or agency 
                making, guaranteeing, or insuring the 
                refinancing.
          (6) Nonstandard loans.--
                  (A) Variable rate loans that defer repayment 
                of any principal or interest.--For purposes of 
                determining, under this subsection, a 
                consumer's ability to repay a variable rate 
                residential mortgage loan that allows or 
                requires the consumer to defer the repayment of 
                any principal or interest, the creditor shall 
                use a fully amortizing repayment schedule.
                  (B) Interest-only loans.--For purposes of 
                determining, under this subsection, a 
                consumer's ability to repay a residential 
                mortgage loan that permits or requires the 
                payment of interest only, the creditor shall 
                use the payment amount required to amortize the 
                loan by its final maturity.
                  (C) Calculation for negative amortization.--
                In making any determination under this 
                subsection, a creditor shall also take into 
                consideration any balance increase that may 
                accrue from any negative amortization 
                provision.
                  (D) Calculation process.--For purposes of 
                making any determination under this subsection, 
                a creditor shall calculate the monthly payment 
                amount for principal and interest on any 
                residential mortgage loan by assuming--
                          (i) the loan proceeds are fully 
                        disbursed on the date of the 
                        consummation of the loan;
                          (ii) the loan is to be repaid in 
                        substantially equal monthly amortizing 
                        payments for principal and interest 
                        over the entire term of the loan with 
                        no balloon payment, unless the loan 
                        contract requires more rapid repayment 
                        (including balloon payment), in which 
                        case the calculation shall be made (I) 
                        in accordance with regulations 
                        prescribed by the [Board] Agency, with 
                        respect to any loan which has an annual 
                        percentage rate that does not exceed 
                        the average prime offer rate for a 
                        comparable transaction, as of the date 
                        the interest rate is set, by 1.5 or 
                        more percentage points for a first lien 
                        residential mortgage loan; and by 3.5 
                        or more percentage points for a 
                        subordinate lien residential mortgage 
                        loan; or (II) using the contract's 
                        repayment schedule, with respect to a 
                        loan which has an annual percentage 
                        rate, as of the date the interest rate 
                        is set, that is at least 1.5 percentage 
                        points above the average prime offer 
                        rate for a first lien residential 
                        mortgage loan; and 3.5 percentage 
                        points above the average prime offer 
                        rate for a subordinate lien residential 
                        mortgage loan; and
                          (iii) the interest rate over the 
                        entire term of the loan is a fixed rate 
                        equal to the fully indexed rate at the 
                        time of the loan closing, without 
                        considering the introductory rate.
                  (E) Refinance of hybrid loans with current 
                lender.--In considering any application for 
                refinancing an existing hybrid loan by the 
                creditor into a standard loan to be made by the 
                same creditor in any case in which there would 
                be a reduction in monthly payment and the 
                mortgagor has not been delinquent on any 
                payment on the existing hybrid loan, the 
                creditor may--
                          (i) consider the mortgagor's good 
                        standing on the existing mortgage;
                          (ii) consider if the extension of new 
                        credit would prevent a likely default 
                        should the original mortgage reset and 
                        give such concerns a higher priority as 
                        an acceptable underwriting practice; 
                        and
                          (iii) offer rate discounts and other 
                        favorable terms to such mortgagor that 
                        would be available to new customers 
                        with high credit ratings based on such 
                        underwriting practice.
          (7) Fully-indexed rate defined.--For purposes of this 
        subsection, the term ``fully indexed rate'' means the 
        index rate prevailing on a residential mortgage loan at 
        the time the loan is made plus the margin that will 
        apply after the expiration of any introductory interest 
        rates.
          (8) Reverse mortgages and bridge loans.--This 
        subsection shall not apply with respect to any reverse 
        mortgage or temporary or bridge loan with a term of 12 
        months or less, including to any loan to purchase a new 
        dwelling where the consumer plans to sell a different 
        dwelling within 12 months.
          (9) Seasonal income.--If documented income, including 
        income from a small business, is a repayment source for 
        a residential mortgage loan, a creditor may consider 
        the seasonality and irregularity of such income in the 
        underwriting of and scheduling of payments for such 
        credit.
  (b) Presumption of Ability To Repay.--
          (1) In general.--Any creditor with respect to any 
        residential mortgage loan, and any assignee of such 
        loan subject to liability under this title, may presume 
        that the loan has met the requirements of subsection 
        (a), if the loan is a qualified mortgage.
          (2) Definitions.--For purposes of this subsection, 
        the following definitions shall apply:
                  (A) Qualified mortgage.--The term ``qualified 
                mortgage'' means any residential mortgage 
                loan--
                          (i) for which the regular periodic 
                        payments for the loan may not--
                                  (I) result in an increase of 
                                the principal balance; or
                                  (II) except as provided in 
                                subparagraph (E), allow the 
                                consumer to defer repayment of 
                                principal;
                          (ii) except as provided in 
                        subparagraph (E), the terms of which do 
                        not result in a balloon payment, where 
                        a ``balloon payment'' is a scheduled 
                        payment that is more than twice as 
                        large as the average of earlier 
                        scheduled payments;
                          (iii) for which the income and 
                        financial resources relied upon to 
                        qualify the obligors on the loan are 
                        verified and documented;
                          (iv) in the case of a fixed rate 
                        loan, for which the underwriting 
                        process is based on a payment schedule 
                        that fully amortizes the loan over the 
                        loan term and takes into account all 
                        applicable taxes, insurance, and 
                        assessments;
                          (v) in the case of an adjustable rate 
                        loan, for which the underwriting is 
                        based on the maximum rate permitted 
                        under the loan during the first 5 
                        years, and a payment schedule that 
                        fully amortizes the loan over the loan 
                        term and takes into account all 
                        applicable taxes, insurance, and 
                        assessments;
                          (vi) that complies with any 
                        guidelines or regulations established 
                        by the Board relating to ratios of 
                        total monthly debt to monthly income or 
                        alternative measures of ability to pay 
                        regular expenses after payment of total 
                        monthly debt, taking into account the 
                        income levels of the borrower and such 
                        other factors as the [Board] Agency may 
                        determine relevant and consistent with 
                        the purposes described in paragraph 
                        (3)(B)(i);
                          (vii) for which the total points and 
                        fees (as defined in subparagraph (C)) 
                        payable in connection with the loan do 
                        not exceed 3 percent of the total loan 
                        amount;
                          (viii) for which the term of the loan 
                        does not exceed 30 years, except as 
                        such term may be extended under 
                        paragraph (3), such as in high-cost 
                        areas; and
                          (ix) in the case of a reverse 
                        mortgage (except for the purposes of 
                        subsection (a) of section 129C, to the 
                        extent that such mortgages are exempt 
                        altogether from those requirements), a 
                        reverse mortgage which meets the 
                        standards for a qualified mortgage, as 
                        set by the [Board] Agency in rules that 
                        are consistent with the purposes of 
                        this subsection.
                  (B) Average prime offer rate.--The term 
                ``average prime offer rate'' means the average 
                prime offer rate for a comparable transaction 
                as of the date on which the interest rate for 
                the transaction is set, as published by the 
                [Board.] Agency.
                  (C) Points and fees.--
                          (i) In general.--For purposes of 
                        subparagraph (A), the term ``points and 
                        fees'' means points and fees as defined 
                        by section [103(aa)(4) (other than bona 
                        fide third party charges not retained 
                        by the mortgage originator, creditor, 
                        or an affiliate of the creditor or 
                        mortgage originator)] 103(aa)(4).
                          (ii) Computation.--For purposes of 
                        computing the total points and fees 
                        under this subparagraph, the total 
                        points and fees shall exclude either of 
                        the amounts described in the following 
                        subclauses, but not both:
                                  (I) Up to and including 2 
                                bona fide discount points 
                                payable by the consumer in 
                                connection with the mortgage, 
                                but only if the interest rate 
                                from which the mortgage's 
                                interest rate will be 
                                discounted does not exceed by 
                                more than 1 percentage point 
                                the average prime offer rate.
                                  (II) Unless 2 bona fide 
                                discount points have been 
                                excluded under subclause (I), 
                                up to and including 1 bona fide 
                                discount point payable by the 
                                consumer in connection with the 
                                mortgage, but only if the 
                                interest rate from which the 
                                mortgage's interest rate will 
                                be discounted does not exceed 
                                by more than 2 percentage 
                                points the average prime offer 
                                rate.
                          (iii) Bona fide discount points 
                        defined.--For purposes of clause (ii), 
                        the term ``bona fide discount points'' 
                        means loan discount points which are 
                        knowingly paid by the consumer for the 
                        purpose of reducing, and which in fact 
                        result in a bona fide reduction of, the 
                        interest rate or time-price 
                        differential applicable to the 
                        mortgage.
                          (iv) Interest rate reduction.--
                        Subclauses (I) and (II) of clause (ii) 
                        shall not apply to discount points used 
                        to purchase an interest rate reduction 
                        unless the amount of the interest rate 
                        reduction purchased is reasonably 
                        consistent with established industry 
                        norms and practices for secondary 
                        mortgage market transactions.
                  (D) Smaller loans.--The [Board] Agency shall 
                prescribe rules adjusting the criteria under 
                subparagraph (A)(vii) in order to permit 
                lenders that extend smaller loans to meet the 
                requirements of the presumption of compliance 
                under paragraph (1). In prescribing such rules, 
                the [Board] Agency shall consider the potential 
                impact of such rules on rural areas and other 
                areas where home values are lower.
                  (E) Balloon loans.--The [Board] Agency may, 
                by regulation, provide that the term 
                ``qualified mortgage'' includes a balloon 
                loan--
                          (i) that meets all of the criteria 
                        for a qualified mortgage under 
                        subparagraph (A) (except clauses 
                        (i)(II), (ii), (iv), and (v) of such 
                        subparagraph);
                          (ii) for which the creditor makes a 
                        determination that the consumer is able 
                        to make all scheduled payments, except 
                        the balloon payment, out of income or 
                        assets other than the collateral;
                          (iii) for which the underwriting is 
                        based on a payment schedule that fully 
                        amortizes the loan over a period of not 
                        more than 30 years and takes into 
                        account all applicable taxes, 
                        insurance, and assessments; and
                          (iv) that is extended by a creditor 
                        that--
                                  (I) operates in rural or 
                                underserved areas;
                                  (II) together with all 
                                affiliates, has total annual 
                                residential mortgage loan 
                                originations that do not exceed 
                                a limit set by the [Board] 
                                Agency;
                                  (III) retains the balloon 
                                loans in portfolio; and
                                  (IV) meets any asset size 
                                threshold and any other 
                                criteria as the [Board] Agency 
                                may establish, consistent with 
                                the purposes of this subtitle.
          (3) Regulations.--
                  (A) In general.--The [Board] Agency shall 
                prescribe regulations to carry out the purposes 
                of this subsection.
                  (B) Revision of safe harbor criteria.--
                          (i) In general.--The [Board] Agency 
                        may prescribe regulations that revise, 
                        add to, or subtract from the criteria 
                        that define a qualified mortgage upon a 
                        finding that such regulations are 
                        necessary or proper to ensure that 
                        responsible, affordable mortgage credit 
                        remains available to consumers in a 
                        manner consistent with the purposes of 
                        this section, necessary and appropriate 
                        to effectuate the purposes of this 
                        section and section 129B, to prevent 
                        circumvention or evasion thereof, or to 
                        facilitate compliance with such 
                        sections.
                          (ii) Loan definition.--The following 
                        agencies shall, in consultation with 
                        the [Board] Agency, prescribe rules 
                        defining the types of loans they 
                        insure, guarantee, or administer, as 
                        the case may be, that are qualified 
                        mortgages for purposes of paragraph 
                        (2)(A), and such rules may revise, add 
                        to, or subtract from the criteria used 
                        to define a qualified mortgage under 
                        paragraph (2)(A), upon a finding that 
                        such rules are consistent with the 
                        purposes of this section and section 
                        129B, to prevent circumvention or 
                        evasion thereof, or to facilitate 
                        compliance with such sections:
                                  (I) The Department of Housing 
                                and Urban Development, with 
                                regard to mortgages insured 
                                under the National Housing Act 
                                (12 U.S.C. 1707 et seq.).
                                  (II) The Department of 
                                Veterans Affairs, with regard 
                                to a loan made or guaranteed by 
                                the Secretary of Veterans 
                                Affairs.
                                  (III) The Department of 
                                Agriculture, with regard loans 
                                guaranteed by the Secretary of 
                                Agriculture pursuant to 42 
                                U.S.C. 1472(h).
                                  (IV) The Rural Housing 
                                Service, with regard to loans 
                                insured by the Rural Housing 
                                Service.
  (c) Prohibition on Certain Prepayment Penalties.--
          (1) Prohibited on certain loans.--
                  (A) In general.--A residential mortgage loan 
                that is not a ``qualified mortgage'', as 
                defined under subsection (b)(2), may not 
                contain terms under which a consumer must pay a 
                prepayment penalty for paying all or part of 
                the principal after the loan is consummated.
                  (B) Exclusions.--For purposes of this 
                subsection, a ``qualified mortgage'' may not 
                include a residential mortgage loan that--
                          (i) has an adjustable rate; or
                          (ii) has an annual percentage rate 
                        that exceeds the average prime offer 
                        rate for a comparable transaction, as 
                        of the date the interest rate is set--
                                  (I) by 1.5 or more percentage 
                                points, in the case of a first 
                                lien residential mortgage loan 
                                having [a original] an original 
                                principal obligation amount 
                                that is equal to or less than 
                                the amount of the maximum 
                                limitation on the original 
                                principal obligation of 
                                mortgage in effect for a 
                                residence of the applicable 
                                size, as of the date of such 
                                interest rate set, pursuant to 
                                the 6th sentence of section 
                                305(a)(2) the Federal Home Loan 
                                Mortgage Corporation Act (12 
                                U.S.C. 1454(a)(2));
                                  (II) by 2.5 or more 
                                percentage points, in the case 
                                of a first lien residential 
                                mortgage loan having a original 
                                principal obligation amount 
                                that is more than the amount of 
                                the maximum limitation on the 
                                original principal obligation 
                                of mortgage in effect for a 
                                residence of the applicable 
                                size, as of the date of such 
                                interest rate set, pursuant to 
                                the 6th sentence of section 
                                305(a)(2) the Federal Home Loan 
                                Mortgage Corporation Act (12 
                                U.S.C. 1454(a)(2)); and
                                  (III) by 3.5 or more 
                                percentage points, in the case 
                                of a subordinate lien 
                                residential mortgage loan.
          (2) Publication of average prime offer rate and apr 
        thresholds.--The [Board] Agency--
                  (A) shall publish, and update at least 
                weekly, average prime offer rates;
                  (B) may publish multiple rates based on 
                varying types of mortgage transactions; and
                  (C) shall adjust the thresholds established 
                under subclause (I), (II), and (III) of 
                paragraph (1)(B)(ii) as necessary to reflect 
                significant changes in market conditions and to 
                effectuate the purposes of the Mortgage Reform 
                and Anti-Predatory Lending Act.
          (3) Phased-out penalties on qualified mortgages.--A 
        qualified mortgage (as defined in subsection (b)(2)) 
        may not contain terms under which a consumer must pay a 
        prepayment penalty for paying all or part of the 
        principal after the loan is consummated in excess of 
        the following limitations:
                  (A) During the 1-year period beginning on the 
                date the loan is consummated, the prepayment 
                penalty shall not exceed an amount equal to 3 
                percent of the outstanding balance on the loan.
                  (B) During the 1-year period beginning after 
                the period described in subparagraph (A), the 
                prepayment penalty shall not exceed an amount 
                equal to 2 percent of the outstanding balance 
                on the loan.
                  (C) During the 1-year period beginning after 
                the 1-year period described in subparagraph 
                (B), the prepayment penalty shall not exceed an 
                amount equal to 1 percent of the outstanding 
                balance on the loan.
                  (D) After the end of the 3-year period 
                beginning on the date the loan is consummated, 
                no prepayment penalty may be imposed on a 
                qualified mortgage.
          (4) Option for no prepayment penalty required.--A 
        creditor may not offer a consumer a residential 
        mortgage loan product that has a prepayment penalty for 
        paying all or part of the principal after the loan is 
        consummated as a term of the loan without offering the 
        consumer a residential mortgage loan product that does 
        not have a prepayment penalty as a term of the loan.
  (d) Single Premium Credit Insurance Prohibited.--No creditor 
may finance, directly or indirectly, in connection with any 
residential mortgage loan or with any extension of credit under 
an open end consumer credit plan secured by the principal 
dwelling of the consumer, any credit life, credit disability, 
credit unemployment, or credit property insurance, or any other 
accident, loss-of-income, life, or health insurance, or any 
payments directly or indirectly for any debt cancellation or 
suspension agreement or contract, except that--
          (1) insurance premiums or debt cancellation or 
        suspension fees calculated and paid in full on a 
        monthly basis shall not be considered financed by the 
        creditor; and
          (2) this subsection shall not apply to credit 
        unemployment insurance for which the unemployment 
        insurance premiums are reasonable, the creditor 
        receives no direct or indirect compensation in 
        connection with the unemployment insurance premiums, 
        and the unemployment insurance premiums are paid 
        pursuant to another insurance contract and not paid to 
        an affiliate of the creditor.
  (e) Arbitration.--
          (1) In general.--No residential mortgage loan and no 
        extension of credit under an open end consumer credit 
        plan secured by the principal dwelling of the consumer 
        may include terms which require arbitration or any 
        other nonjudicial procedure as the method for resolving 
        any controversy or settling any claims arising out of 
        the transaction.
          (2) Post-controversy agreements.--Subject to 
        paragraph (3), paragraph (1) shall not be construed as 
        limiting the right of the consumer and the creditor or 
        any assignee to agree to arbitration or any other 
        nonjudicial procedure as the method for resolving any 
        controversy at any time after a dispute or claim under 
        the transaction arises.
          (3) No waiver of statutory cause of action.--No 
        provision of any residential mortgage loan or of any 
        extension of credit under an open end consumer credit 
        plan secured by the principal dwelling of the consumer, 
        and no other agreement between the consumer and the 
        creditor relating to the residential mortgage loan or 
        extension of credit referred to in paragraph (1), shall 
        be applied or interpreted so as to bar a consumer from 
        bringing an action in an appropriate district court of 
        the United States, or any other court of competent 
        jurisdiction, pursuant to section 130 or any other 
        provision of law, for damages or other relief in 
        connection with any alleged violation of this section, 
        any other provision of this title, or any other Federal 
        law.
  (f) Mortgages With Negative Amortization.--No creditor may 
extend credit to a borrower in connection with a consumer 
credit transaction under an open or closed end consumer credit 
plan secured by a dwelling or residential real property that 
includes a dwelling, other than a reverse mortgage, that 
provides or permits a payment plan that may, at any time over 
the term of the extension of credit, result in negative 
amortization unless, before such transaction is consummated--
          (1) the creditor provides the consumer with a 
        statement that--
                  (A) the pending transaction will or may, as 
                the case may be, result in negative 
                amortization;
                  (B) describes negative amortization in such 
                manner as the [Board] Agency shall prescribe;
                  (C) negative amortization increases the 
                outstanding principal balance of the account; 
                and
                  (D) negative amortization reduces the 
                consumer's equity in the dwelling or real 
                property; and
          (2) in the case of a first-time borrower with respect 
        to a residential mortgage loan that is not a qualified 
        mortgage, the first-time borrower provides the creditor 
        with sufficient documentation to demonstrate that the 
        consumer received homeownership counseling from 
        organizations or counselors certified by the Secretary 
        of Housing and Urban Development as competent to 
        provide such counseling.
  (g) Protection Against Loss of Anti-deficiency Protection.--
          (1) Definition.--For purposes of this subsection, the 
        term ``anti-deficiency law'' means the law of any State 
        which provides that, in the event of foreclosure on the 
        residential property of a consumer securing a mortgage, 
        the consumer is not liable, in accordance with the 
        terms and limitations of such State law, for any 
        deficiency between the sale price obtained on such 
        property through foreclosure and the outstanding 
        balance of the mortgage.
          (2) Notice at time of consummation.--In the case of 
        any residential mortgage loan that is, or upon 
        consummation will be, subject to protection under an 
        anti-deficiency law, the creditor or mortgage 
        originator shall provide a written notice to the 
        consumer describing the protection provided by the 
        anti-deficiency law and the significance for the 
        consumer of the loss of such protection before such 
        loan is consummated.
          (3) Notice before refinancing that would cause loss 
        of protection.--In the case of any residential mortgage 
        loan that is subject to protection under an anti-
        deficiency law, if a creditor or mortgage originator 
        provides an application to a consumer, or receives an 
        application from a consumer, for any type of 
        refinancing for such loan that would cause the loan to 
        lose the protection of such anti-deficiency law, the 
        creditor or mortgage originator shall provide a written 
        notice to the consumer describing the protection 
        provided by the anti-deficiency law and the 
        significance for the consumer of the loss of such 
        protection before any agreement for any such 
        refinancing is consummated.
  (h) Policy Regarding Acceptance of Partial Payment.--In the 
case of any residential mortgage loan, a creditor shall 
disclose prior to settlement or, in the case of a person 
becoming a creditor with respect to an existing residential 
mortgage loan, at the time such person becomes a creditor--
          (1) the creditor's policy regarding the acceptance of 
        partial payments; and
          (2) if partial payments are accepted, how such 
        payments will be applied to such mortgage and if such 
        payments will be placed in escrow.
  (i) Timeshare Plans.--This section and any regulations 
promulgated under this section do not apply to an extension of 
credit relating to a plan described in section 101(53D) of 
title 11, United States Code.
  (j) Safe Harbor for Certain Loans Held on Portfolio.--
          (1) Safe harbor for creditors that are depository 
        institutions.--
                  (A) In general.--A creditor that is a 
                depository institution shall not be subject to 
                suit for failure to comply with subsection (a), 
                (c)(1), or (f)(2) of this section or section 
                129H with respect to a residential mortgage 
                loan, and the banking regulators shall treat 
                such loan as a qualified mortgage, if--
                          (i) the creditor has, since the 
                        origination of the loan, held the loan 
                        on the balance sheet of the creditor; 
                        and
                          (ii) all prepayment penalties with 
                        respect to the loan comply with the 
                        limitations described under subsection 
                        (c)(3).
                  (B) Exception for certain transfers.--In the 
                case of a depository institution that transfers 
                a loan originated by that institution to 
                another depository institution by reason of the 
                bankruptcy or failure of the originating 
                depository institution or the purchase of the 
                originating depository institution, the 
                depository institution transferring such loan 
                shall be deemed to have complied with the 
                requirement under subparagraph (A)(i).
          (2) Safe harbor for mortgage originators.--A mortgage 
        originator shall not be subject to suit for a violation 
        of section 129B(c)(3)(B) for steering a consumer to a 
        residential mortgage loan if--
                  (A) the creditor of such loan is a depository 
                institution and has informed the mortgage 
                originator that the creditor intends to hold 
                the loan on the balance sheet of the creditor 
                for the life of the loan; and
                  (B) the mortgage originator informs the 
                consumer that the creditor intends to hold the 
                loan on the balance sheet of the creditor for 
                the life of the loan.
          (3) Definitions.--For purposes of this subsection:
                  (A) Banking regulators.--The term ``banking 
                regulators'' means the Federal banking 
                agencies, the Consumer Law Enforcement Agency, 
                and the National Credit Union Administration.
                  (B) Depository institution.--The term 
                ``depository institution'' has the meaning 
                given that term under section 19(b)(1) of the 
                Federal Reserve Act (12 U.S.C. 505(b)(1)).
                  (C) Federal banking agencies.--The term 
                ``Federal banking agencies'' has the meaning 
                given that term under section 3 of the Federal 
                Deposit Insurance Act.

Sec. 129D. Escrow or impound accounts relating to certain consumer 
                    credit transactions

  (a) In General.--Except as provided in subsection (b), (c), 
(d), or (e), a creditor, in connection with the consummation of 
a consumer credit transaction secured by a first lien on the 
principal dwelling of the consumer, other than a consumer 
credit transaction under an open end credit plan or a reverse 
mortgage, shall establish, before the consummation of such 
transaction, an escrow or impound account for the payment of 
taxes and hazard insurance, and, if applicable, flood 
insurance, mortgage insurance, ground rents, and any other 
required periodic payments or premiums with respect to the 
property or the loan terms, as provided in, and in accordance 
with, this section.
  (b) When Required.--No impound, trust, or other type of 
account for the payment of property taxes, insurance premiums, 
or other purposes relating to the property may be required as a 
condition of a real property sale contract or a loan secured by 
a first deed of trust or mortgage on the principal dwelling of 
the consumer, other than a consumer credit transaction under an 
open end credit plan or a reverse mortgage, except when--
          (1) any such impound, trust, or other type of escrow 
        or impound account for such purposes is required by 
        Federal or State law;
          (2) a loan is made, guaranteed, or insured by a State 
        or Federal governmental lending or insuring agency;
          (3) the transaction is secured by a first mortgage or 
        lien on the consumer's principal dwelling having an 
        original principal obligation amount that--
                  (A) does not exceed the amount of the maximum 
                limitation on the original principal obligation 
                of mortgage in effect for a residence of the 
                applicable size, as of the date such interest 
                rate set, pursuant to the sixth sentence of 
                section 305(a)(2) the Federal Home Loan 
                Mortgage Corporation Act (12 U.S.C. 
                1454(a)(2)), and the annual percentage rate 
                will exceed the average prime offer rate as 
                defined in section 129C by 1.5 or more 
                percentage points; or
                  (B) exceeds the amount of the maximum 
                limitation on the original principal obligation 
                of mortgage in effect for a residence of the 
                applicable size, as of the date such interest 
                rate set, pursuant to the sixth sentence of 
                section 305(a)(2) the Federal Home Loan 
                Mortgage Corporation Act (12 U.S.C. 
                1454(a)(2)), and the annual percentage rate 
                will exceed the average prime offer rate as 
                defined in section 129C by 2.5 or more 
                percentage points; or
          (4) so required pursuant to regulation.
  (c) Exemptions.--The [Board] Consumer Law Enforcement Agency 
may, by regulation, exempt from the requirements of subsection 
(a) a creditor that--
          (1) operates in rural or underserved areas;
          (2) together with all affiliates, has total annual 
        mortgage loan originations that do not exceed a limit 
        set by the [Board] Consumer Law Enforcement Agency;
          (3) retains its mortgage loan originations in 
        portfolio; and
          (4) meets any asset size threshold and any other 
        criteria the [Board] Consumer Law Enforcement Agency 
        may establish, consistent with the purposes of this 
        subtitle.
  (d) Duration of Mandatory Escrow or Impound Account.--An 
escrow or impound account established pursuant to subsection 
(b) shall remain in existence for a minimum period of 5 years, 
beginning with the date of the consummation of the loan, unless 
and until--
          (1) such borrower has sufficient equity in the 
        dwelling securing the consumer credit transaction so as 
        to no longer be required to maintain private mortgage 
        insurance;
          (2) such borrower is delinquent;
          (3) such borrower otherwise has not complied with the 
        legal obligation, as established by rule; or
          (4) the underlying mortgage establishing the account 
        is terminated.
  (e) Limited Exemptions for Loans Secured by Shares in a 
Cooperative or in Which an Association Must Maintain a Master 
Insurance Policy.--Escrow accounts need not be established for 
loans secured by shares in a cooperative. Insurance premiums 
need not be included in escrow accounts for loans secured by 
dwellings or units, where the borrower must join an association 
as a condition of ownership, and that association has an 
obligation to the dwelling or unit owners to maintain a master 
policy insuring the dwellings or units.
  (f) Clarification on Escrow Accounts for Loans Not Meeting 
Statutory Test.--For mortgages not covered by the requirements 
of subsection (b), no provision of this section shall be 
construed as precluding the establishment of an impound, trust, 
or other type of account for the payment of property taxes, 
insurance premiums, or other purposes relating to the 
property--
          (1) on terms mutually agreeable to the parties to the 
        loan;
          (2) at the discretion of the lender or servicer, as 
        provided by the contract between the lender or servicer 
        and the borrower; or
          (3) pursuant to the requirements for the escrowing of 
        flood insurance payments for regulated lending 
        institutions in section 102(d) of the Flood Disaster 
        Protection Act of 1973.
  (g) Administration of Mandatory Escrow or Impound Accounts.--
          (1) In general.--Except as may otherwise be provided 
        for in this title or in regulations prescribed by the 
        [Board] Consumer Law Enforcement Agency, escrow or 
        impound accounts established pursuant to subsection (b) 
        shall be established in a federally insured depository 
        institution or credit union.
          (2) Administration.--Except as provided in this 
        section or regulations prescribed under this section, 
        an escrow or impound account subject to this section 
        shall be administered in accordance with--
                  (A) the Real Estate Settlement Procedures Act 
                of 1974 and regulations prescribed under such 
                Act;
                  (B) the Flood Disaster Protection Act of 1973 
                and regulations prescribed under such Act; and
                  (C) the law of the State, if applicable, 
                where the real property securing the consumer 
                credit transaction is located.
          (3) Applicability of payment of interest.--If 
        prescribed by applicable State or Federal law, each 
        creditor shall pay interest to the consumer on the 
        amount held in any impound, trust, or escrow account 
        that is subject to this section in the manner as 
        prescribed by that applicable State or Federal law.
          (4) Penalty coordination with respa.--Any action or 
        omission on the part of any person which constitutes a 
        violation of the Real Estate Settlement Procedures Act 
        of 1974 or any regulation prescribed under such Act for 
        which the person has paid any fine, civil money 
        penalty, or other damages shall not give rise to any 
        additional fine, civil money penalty, or other damages 
        under this section, unless the action or omission also 
        constitutes a direct violation of this section.
  (h) Disclosures Relating to Mandatory Escrow or Impound 
Account.--In the case of any impound, trust, or escrow account 
that is required under subsection (b), the creditor shall 
disclose by written notice to the consumer at least 3 business 
days before the consummation of the consumer credit transaction 
giving rise to such account or in accordance with timeframes 
established in prescribed regulations the following 
information:
          (1) The fact that an escrow or impound account will 
        be established at consummation of the transaction.
          (2) The amount required at closing to initially fund 
        the escrow or impound account.
          (3) The amount, in the initial year after the 
        consummation of the transaction, of the estimated taxes 
        and hazard insurance, including flood insurance, if 
        applicable, and any other required periodic payments or 
        premiums that reflects, as appropriate, either the 
        taxable assessed value of the real property securing 
        the transaction, including the value of any 
        improvements on the property or to be constructed on 
        the property (whether or not such construction will be 
        financed from the proceeds of the transaction) or the 
        replacement costs of the property.
          (4) The estimated monthly amount payable to be 
        escrowed for taxes, hazard insurance (including flood 
        insurance, if applicable) and any other required 
        periodic payments or premiums.
          (5) The fact that, if the consumer chooses to 
        terminate the account in the future, the consumer will 
        become responsible for the payment of all taxes, hazard 
        insurance, and flood insurance, if applicable, as well 
        as any other required periodic payments or premiums on 
        the property unless a new escrow or impound account is 
        established.
          (6) Such other information as the [Board] Consumer 
        Law Enforcement Agency determines necessary for the 
        protection of the consumer.
  (i) Definitions.--For purposes of this section, the following 
definitions shall apply:
          (1) Flood insurance.--The term ``flood insurance'' 
        means flood insurance coverage provided under the 
        national flood insurance program pursuant to the 
        National Flood Insurance Act of 1968.
          (2) Hazard insurance.--The term ``hazard insurance'' 
        shall have the same meaning as provided for ``hazard 
        insurance'', ``casualty insurance'', ``homeowner's 
        insurance'', or other similar term under the law of the 
        State where the real property securing the consumer 
        credit transaction is located.
  (j) Disclosure Notice Required for Consumers Who Waive Escrow 
Services.--
          (1) In general.--If--
                  (A) an impound, trust, or other type of 
                account for the payment of property taxes, 
                insurance premiums, or other purposes relating 
                to real property securing a consumer credit 
                transaction is not established in connection 
                with the transaction; or
                  (B) a consumer chooses, and provides written 
                notice to the creditor or servicer of such 
                choice, at any time after such an account is 
                established in connection with any such 
                transaction and in accordance with any statute, 
                regulation, or contractual agreement, to close 
                such account,
        the creditor or servicer shall provide a timely and 
        clearly written disclosure to the consumer that advises 
        the consumer of the responsibilities of the consumer 
        and implications for the consumer in the absence of any 
        such account.
          (2) Disclosure requirements.--Any disclosure provided 
        to a consumer under paragraph (1) shall include the 
        following:
                  (A) Information concerning any applicable 
                fees or costs associated with either the non-
                establishment of any such account at the time 
                of the transaction, or any subsequent closure 
                of any such account.
                  (B) A clear and prominent statement that the 
                consumer is responsible for personally and 
                directly paying the non-escrowed items, in 
                addition to paying the mortgage loan payment, 
                in the absence of any such account, and the 
                fact that the costs for taxes, insurance, and 
                related fees can be substantial.
                  (C) A clear explanation of the consequences 
                of any failure to pay non-escrowed items, 
                including the possible requirement for the 
                forced placement of insurance by the creditor 
                or servicer and the potentially higher cost 
                (including any potential commission payments to 
                the servicer) or reduced coverage for the 
                consumer in the event of any such creditor-
                placed insurance.
                  (D) Such other information as the [Board] 
                Consumer Law Enforcement Agency determines 
                necessary for the protection of the consumer.
  (k) Safe Harbor for Loans Held by Smaller Creditors.--
          (1) In general.--A creditor shall not be in violation 
        of subsection (a) with respect to a loan if--
                  (A) the creditor has consolidated assets of 
                $10,000,000,000 or less; and
                  (B) the creditor holds the loan on the 
                balance sheet of the creditor for the 3-year 
                period beginning on the date of the origination 
                of the loan.
          (2) Exception for certain transfers.--In the case of 
        a creditor that transfers a loan to another person by 
        reason of the bankruptcy or failure of the creditor, 
        the purchase of the creditor, or a supervisory act or 
        recommendation from a State or Federal regulator, the 
        creditor shall be deemed to have complied with the 
        requirement under paragraph (1)(B).

Sec. 129E. Appraisal independence requirements

  (a) In General.--It shall be unlawful, in extending credit or 
in providing any services for a consumer credit transaction 
secured by the principal dwelling of the consumer, to engage in 
any act or practice that violates appraisal independence as 
described in or pursuant to regulations prescribed under this 
section.
  (b) Appraisal Independence.--For purposes of subsection (a), 
acts or practices that violate appraisal independence shall 
include--
          (1) any appraisal of a property offered as security 
        for repayment of the consumer credit transaction that 
        is conducted in connection with such transaction in 
        which a person with an interest in the underlying 
        transaction compensates, coerces, extorts, colludes, 
        instructs, induces, bribes, or intimidates a person, 
        appraisal management company, firm, or other entity 
        conducting or involved in an appraisal, or attempts, to 
        compensate, coerce, extort, collude, instruct, induce, 
        bribe, or intimidate such a person, for the purpose of 
        causing the appraised value assigned, under the 
        appraisal, to the property to be based on any factor 
        other than the independent judgment of the appraiser;
          (2) mischaracterizing, or suborning any 
        mischaracterization of, the appraised value of the 
        property securing the extension of the credit;
          (3) seeking to influence an appraiser or otherwise to 
        encourage a targeted value in order to facilitate the 
        making or pricing of the transaction; and
          (4) withholding or threatening to withhold timely 
        payment for an appraisal report or for appraisal 
        services rendered when the appraisal report or services 
        are provided for in accordance with the contract 
        between the parties.
  (c) Exceptions.--The requirements of subsection (b) shall not 
be construed as prohibiting a mortgage lender, mortgage broker, 
mortgage banker, real estate broker, appraisal management 
company, employee of an appraisal management company, consumer, 
or any other person with an interest in a real estate 
transaction from asking an appraiser to undertake 1 or more of 
the following:
          (1) Consider additional, appropriate property 
        information, including the consideration of additional 
        comparable properties to make or support an appraisal.
          (2) Provide further detail, substantiation, or 
        explanation for the appraiser's value conclusion.
          (3) Correct errors in the appraisal report.
  (d) Prohibitions on Conflicts of Interest.--No certified or 
licensed appraiser conducting, and no appraisal management 
company procuring or facilitating, an appraisal in connection 
with a consumer credit transaction secured by the principal 
dwelling of a consumer may have a direct or indirect interest, 
financial or otherwise, in the property or transaction 
involving the appraisal.
  (e) Mandatory Reporting.--Any mortgage lender, mortgage 
broker, mortgage banker, real estate broker, appraisal 
management company, employee of an appraisal management 
company, or any other person involved in a real estate 
transaction involving an appraisal in connection with a 
consumer credit transaction secured by the principal dwelling 
of a consumer who has a reasonable basis to believe an 
appraiser is failing to comply with the Uniform Standards of 
Professional Appraisal Practice, is violating applicable laws, 
or is otherwise engaging in unethical or unprofessional 
conduct, shall refer the matter to the applicable State 
appraiser certifying and licensing agency.
  (f) No Extension of Credit.--In connection with a consumer 
credit transaction secured by a consumer's principal dwelling, 
a creditor who knows, at or before loan consummation, of a 
violation of the appraisal independence standards established 
in subsections (b) or (d) shall not extend credit based on such 
appraisal unless the creditor documents that the creditor has 
acted with reasonable diligence to determine that the appraisal 
does not materially misstate or misrepresent the value of such 
dwelling.
  (g) Rules and Interpretive Guidelines.--
          (1) In general.--Except as provided under paragraph 
        (2), the Board, the Comptroller of the Currency, the 
        Federal Deposit Insurance Corporation, the National 
        Credit Union Administration Board, the Federal Housing 
        Finance Agency, and the [Bureau] Agency may jointly 
        issue rules, interpretive guidelines, and general 
        statements of policy with respect to acts or practices 
        that violate appraisal independence in the provision of 
        mortgage lending services for a consumer credit 
        transaction secured by the principal dwelling of the 
        consumer and mortgage brokerage services for such a 
        transaction, within the meaning of subsections (a), 
        (b), (c), (d), (e), (f), (h), and (i).
          (2) Interim final regulations.--The Board shall, for 
        purposes of this section, prescribe interim final 
        regulations no later than 90 days after the date of 
        enactment of this section defining with specificity 
        acts or practices that violate appraisal independence 
        in the provision of mortgage lending services for a 
        consumer credit transaction secured by the principal 
        dwelling of the consumer or mortgage brokerage services 
        for such a transaction and defining any terms in this 
        section or such regulations. Rules prescribed by the 
        Board under this paragraph shall be deemed to be rules 
        prescribed by the agencies jointly under paragraph (1).
  (h) Appraisal Report Portability.--Consistent with the 
requirements of this section, the Board, the Comptroller of the 
Currency, the Federal Deposit Insurance Corporation, the 
National Credit Union Administration Board, the Federal Housing 
Finance Agency, and the [Bureau] Agency may jointly issue 
regulations that address the issue of appraisal report 
portability, including regulations that ensure the portability 
of the appraisal report between lenders for a consumer credit 
transaction secured by a 1-4 unit single family residence that 
is the principal dwelling of the consumer, or mortgage 
brokerage services for such a transaction.
  (i) Customary and Reasonable Fee.--
          (1) In general.--Lenders and their agents shall 
        compensate fee appraisers at a rate that is customary 
        and reasonable for appraisal services performed in the 
        market area of the property being appraised. Evidence 
        for such fees may be established by objective third-
        party information, such as government agency fee 
        schedules, academic studies, and independent private 
        sector surveys. Fee studies shall exclude assignments 
        ordered by known appraisal management companies.
          (2) Fee appraiser definition.--For purposes of this 
        section, the term ``fee appraiser'' means a person who 
        is not an employee of the mortgage loan originator or 
        appraisal management company engaging the appraiser and 
        is--
                  (A) a State licensed or certified appraiser 
                who receives a fee for performing an appraisal 
                and certifies that the appraisal has been 
                prepared in accordance with the Uniform 
                Standards of Professional Appraisal Practice; 
                or
                  (B) a company not subject to the requirements 
                of section 1124 of the Financial Institutions 
                Reform, Recovery, and Enforcement Act of 1989 
                (12 U.S.C. 3331 et seq.) that utilizes the 
                services of State licensed or certified 
                appraisers and receives a fee for performing 
                appraisals in accordance with the Uniform 
                Standards of Professional Appraisal Practice.
          (3) Exception for complex assignments.--In the case 
        of an appraisal involving a complex assignment, the 
        customary and reasonable fee may reflect the increased 
        time, difficulty, and scope of the work required for 
        such an appraisal and include an amount over and above 
        the customary and reasonable fee for non-complex 
        assignments.
          (4) Rule of construction related to appraisal 
        donations.--For purposes of paragraph (1), if a fee 
        appraiser voluntarily donates appraisal services to an 
        organization described in section 170(c)(2) of the 
        Internal Revenue Code of 1986, such voluntary donation 
        shall be deemed customary and reasonable.
  (j) Sunset.--Effective on the date the interim final 
regulations are promulgated pursuant to subsection (g), the 
Home Valuation Code of Conduct announced by the Federal Housing 
Finance Agency on December 23, 2008, shall have no force or 
effect.
  (k) Penalties.--
          (1) First violation.--In addition to the enforcement 
        provisions referred to in section 130, each person who 
        violates this section shall forfeit and pay a civil 
        penalty of not more than $10,000 for each day any such 
        violation continues.
          (2) Subsequent violations.--In the case of any person 
        on whom a civil penalty has been imposed under 
        paragraph (1), paragraph (1) shall be applied by 
        substituting ``$20,000'' for ``$10,000'' with respect 
        to all subsequent violations.
          (3) Assessment.--The agency referred to in subsection 
        (a) or (c) of section 108 with respect to any person 
        described in paragraph (1) shall assess any penalty 
        under this subsection to which such person is subject.

           *       *       *       *       *       *       *


Sec. 129H. Property appraisal requirements

  (a) In General.--A creditor may not extend credit in the form 
of a higher-risk mortgage to any consumer without first 
obtaining a written appraisal of the property to be mortgaged 
prepared in accordance with the requirements of this section.
  (b) Appraisal Requirements.--
          (1) Physical property visit.--Subject to the rules 
        prescribed under paragraph (4), an appraisal of 
        property to be secured by a higher-risk mortgage does 
        not meet the requirement of this section unless it is 
        performed by a certified or licensed appraiser who 
        conducts a physical property visit of the interior of 
        the mortgaged property.
          (2) Second appraisal under certain circumstances.--
                  (A) In general.--If the purpose of a higher-
                risk mortgage is to finance the purchase or 
                acquisition of the mortgaged property from a 
                person within 180 days of the purchase or 
                acquisition of such property by that person at 
                a price that was lower than the current sale 
                price of the property, the creditor shall 
                obtain a second appraisal from a different 
                certified or licensed appraiser. The second 
                appraisal shall include an analysis of the 
                difference in sale prices, changes in market 
                conditions, and any improvements made to the 
                property between the date of the previous sale 
                and the current sale.
                  (B) No cost to applicant.--The cost of any 
                second appraisal required under subparagraph 
                (A) may not be charged to the applicant.
          (3) Certified or licensed appraiser defined.--For 
        purposes of this section, the term ``certified or 
        licensed appraiser'' means a person who--
                  (A) is, at a minimum, certified or licensed 
                by the State in which the property to be 
                appraised is located; and
                  (B) performs each appraisal in conformity 
                with the Uniform Standards of Professional 
                Appraisal Practice and title XI of the 
                Financial Institutions Reform, Recovery, and 
                Enforcement Act of 1989, and the regulations 
                prescribed under such title, as in effect on 
                the date of the appraisal.
          (4) Regulations.--
                  (A) In general.--The Board, the Comptroller 
                of the Currency, the Federal Deposit Insurance 
                Corporation, the National Credit Union 
                Administration Board, the Federal Housing 
                Finance Agency, and the [Bureau] Agency shall 
                jointly prescribe regulations to implement this 
                section.
                  (B) Exemption.--The agencies listed in 
                subparagraph (A) may jointly exempt, by rule, a 
                class of loans from the requirements of this 
                subsection or subsection (a) if the agencies 
                determine that the exemption is in the public 
                interest and promotes the safety and soundness 
                of creditors.
  (c) Free Copy of Appraisal.--A creditor shall provide 1 copy 
of each appraisal conducted in accordance with this section in 
connection with a higher-risk mortgage to the applicant without 
charge, and at least 3 days prior to the transaction closing 
date.
  (d) Consumer Notification.--At the time of the initial 
mortgage application, the applicant shall be provided with a 
statement by the creditor that any appraisal prepared for the 
mortgage is for the sole use of the creditor, and that the 
applicant may choose to have a separate appraisal conducted at 
the expense of the applicant.
  (e) Violations.--In addition to any other liability to any 
person under this title, a creditor found to have willfully 
failed to obtain an appraisal as required in this section shall 
be liable to the applicant or borrower for the sum of $2,000.
  (f) Higher-risk Mortgage Defined.--For purposes of this 
section, the term ``higher-risk mortgage'' means a residential 
mortgage loan, other than a reverse mortgage loan that is a 
qualified mortgage, as defined in section 129C, secured by a 
principal dwelling--
          (1) that is not a qualified mortgage, as defined in 
        section 129C; and
          (2) with an annual percentage rate that exceeds the 
        average prime offer rate for a comparable transaction, 
        as defined in section 129C, as of the date the interest 
        rate is set--
                  (A) by 1.5 or more percentage points, in the 
                case of a first lien residential mortgage loan 
                having an original principal obligation amount 
                that does not exceed the amount of the maximum 
                limitation on the original principal obligation 
                of mortgage in effect for a residence of the 
                applicable size, as of the date of such 
                interest rate set, pursuant to the sixth 
                sentence of section 305(a)(2) the Federal Home 
                Loan Mortgage Corporation Act (12 U.S.C. 
                1454(a)(2));
                  (B) by 2.5 or more percentage points, in the 
                case of a first lien residential mortgage loan 
                having an original principal obligation amount 
                that exceeds the amount of the maximum 
                limitation on the original principal obligation 
                of mortgage in effect for a residence of the 
                applicable size, as of the date of such 
                interest rate set, pursuant to the sixth 
                sentence of section 305(a)(2) the Federal Home 
                Loan Mortgage Corporation Act (12 U.S.C. 
                1454(a)(2)); and
                  (C) by 3.5 or more percentage points for a 
                subordinate lien residential mortgage loan.

Sec. 130. Civil liability

  (a) Except as otherwise provided in this section, any 
creditor who fails to comply with any requirement imposed under 
this chapter, including any requirement under section 125, 
subsection (f) or (g) of section 131, or chapter 4 or 5 of this 
title with respect to any person is liable to such person in an 
amount equal to the sum of--
          (1) any actual damage sustained by such person as a 
        result of the failure;
          (2)(A)(i) in the case of an individual action twice 
        the amount of any finance charge in connection with the 
        transaction, (ii) in the case of an individual action 
        relating to a consumer lease under chapter 5 of this 
        title, 25 per centum of the total amount of monthly 
        payments under the lease, except that the liability 
        under this subparagraph shall not be less than $200 nor 
        greater than $2,000, (iii) in the case of an individual 
        action relating to an open end consumer credit plan 
        that is not secured by real property or a dwelling, 
        twice the amount of any finance charge in connection 
        with the transaction, with a minimum of $500 and a 
        maximum of $5,000, or such higher amount as may be 
        appropriate in the case of an established pattern or 
        practice of such failures; or (iv) in the case of an 
        individual action relating to a credit transaction not 
        under an open end credit plan that is secured by real 
        property or a dwelling, not less than $400 or greater 
        than $4,000; or
          (B) in the case of a class action, such amount as the 
        court may allow, except that as to each member of the 
        class no minimum recovery shall be applicable, and the 
        total recovery under this subparagraph in any class 
        action or series of class actions arising out of the 
        same failure to comply by the same creditor shall not 
        be more than the lesser of $1,000,000 or 1 per centum 
        of the net worth of the creditor;
          (3) in the case of any successful action to enforce 
        the foregoing liability or in any action in which a 
        person is determined to have a right of rescission 
        under section 125 or 128(e)(7), the costs of the 
        action, together with a reasonable attorney's fee as 
        determined by the court; and
          (4) in the case of a failure to comply with any 
        requirement under section 129, paragraph (1) or (2) of 
        section 129B(c), or section 129C(a), an amount equal to 
        the sum of all finance charges and fees paid by the 
        consumer, unless the creditor demonstrates that the 
        failure to comply is not material.
In determining the amount of award in any class action, the 
court shall consider, among other relevant factors, the amount 
of any actual damages awarded, the frequency and persistence of 
failures of compliance by the creditor, the resources of the 
creditor, the number of persons adversely affected, and the 
extent to which the creditor's failure of compliance was 
intentional. In connection with the disclosures referred to in 
subsections (a) and (b) of section 127, a creditor shall have a 
liability determined under paragraph (2) only for failing to 
comply with the requirements of section 125, 127(a), or any of 
paragraphs (4) through (13) of section 127(b), or for failing 
to comply with disclosure requirements under State law for any 
term or item that the [Bureau] Agency has determined to be 
substantially the same in meaning under section 111(a)(2) as 
any of the terms or items referred to in section 127(a), or any 
of paragraphs (4) through (13) of section 127(b). In connection 
with the disclosures referred to in subsection (c) or (d) of 
section 127, a card issuer shall have a liability under this 
section only to a cardholder who pays a fee described in 
section 127(c)(1)(A)(ii)(I) or section 127(c)(4)(A)(i) or who 
uses the credit card or charge card. In connection with the 
disclosures referred to in section 128, a creditor shall have a 
liability determined under paragraph (2) only for failing to 
comply with the requirements of section 125, of paragraph (2) 
(insofar as it requires a disclosure of the ``amount 
financed''), (3), (4), (5), (6), or (9) of section 128(a), or 
section 128(b)(2)(C)(ii), of subparagraphs (A), (B), (D), (F), 
or (J) of section 128(e)(2) (for purposes of paragraph (2) or 
(4) of section 128(e)), or paragraph (4)(C), (6), (7), or (8) 
of section 128(e), or for failing to comply with disclosure 
requirements under State law for any term which the [Bureau] 
Agency has determined to be substantially the same in meaning 
under section 111(a)(2) as any of the terms referred to in any 
of those paragraphs of section 128(a) or section 
128(b)(2)(C)(ii). With respect to any failure to make 
disclosures required under this chapter or chapter 4 or 5 of 
this title, liability shall be imposed only upon the creditor 
required to make disclosure, except as provided in section 131.
  (b) A creditor or assignee has no liability under this 
section or section 108 or section 112 for any failure to comply 
with any requirement imposed under this chapter or chapter 5, 
if within sixty days after discovering an error, whether 
pursuant to a final written examination report or notice issued 
under section 108(e)(1) or through the creditor's or assignee's 
own procedures, and prior to the institution of an action under 
this section or the receipt of written notice of the error from 
the obligor, the creditor or assignee notifies the person 
concerned of the error and makes whatever adjustments in the 
appropriate account are necessary to assure that the person 
will not be required to pay an amount in excess of the charge 
actually disclosed, or the dollar equivalent of the annual 
percentage rate actually disclosed, whichever is lower.
  (c) A creditor or assignee may not be held liable in any 
action brought under this section or section 125 for a 
violation of this title if the creditor or assignee shows by a 
preponderance of evidence that the violation was not 
intentional and resulted from a bona fide error notwithstanding 
the maintenance of procedures reasonably adapted to avoid any 
such error. Examples of a bona fide error include, but are not 
limited to, clerical, calculation, computer malfunction and 
programing, and printing errors, except that an error of legal 
judgment with respect to a person's obligations under this 
title is not a bona fide error.
  (d) When there are multiple obligors in a consumer credit 
transaction or consumer lease, there shall be no more than one 
recovery of damages under subsection (a)(2) for a violation of 
this title.
  (e) Except as provided in the subsequent sentence, any action 
under this section may be brought in any United States district 
court, or in any other court of competent jurisdiction, within 
one year from the date of the occurrence of the violation or, 
in the case of a violation involving a private education loan 
(as that term is defined in section 140(a)), 1 year from the 
date on which the first regular payment of principal is due 
under the loan. Any action under this section with respect to 
any violation of section 129, 129B, or 129C may be brought in 
any United States district court, or in any other court of 
competent jurisdiction, before the end of the 3-year period 
beginning on the date of the occurrence of the violation. This 
subsection does not bar a person from asserting a violation of 
this title in an action to collect the debt which was brought 
more than one year from the date of the occurrence of the 
violation as a matter of defense by recoupment or set-off in 
such action, except as otherwise provided by State law. An 
action to enforce a violation of section 129, 129B, 129C, 129D, 
129E, 129F, 129G, or 129H of this Act may also be brought by 
the appropriate State attorney general in any appropriate 
United States district court, or any other court of competent 
jurisdiction, not later than 3 years after the date on which 
the violation occurs. The State attorney general shall provide 
prior written notice of any such civil action to the Federal 
agency responsible for enforcement under section 108 and shall 
provide the agency with a copy of the complaint. If prior 
notice is not feasible, the State attorney general shall 
provide notice to such agency immediately upon instituting the 
action. The Federal agency may--
          (1) intervene in the action;
          (2) upon intervening--
                  (A) remove the action to the appropriate 
                United States district court, if it was not 
                originally brought there; and
                  (B) be heard on all matters arising in the 
                action; and
          (3) file a petition for appeal.
  (f) No provision of this section, section 108(b), section 
108(c), section 108(e), or section 112 imposing any liability 
shall apply to any act done or omitted in good faith in 
conformity with any rule, regulation, or interpretation thereof 
by the [Bureau] Agency or in conformity with any interpretation 
or approval by an official or employee of the Federal Reserve 
System duly authorized by the [Bureau] Agency to issue such 
interpretations or approvals under such procedures as the 
[Bureau] Agency may prescribe therefor, notwithstanding that 
after such act or omission has occurred, such rule, regulation, 
interpretation, or approval is amended, rescinded, or 
determined by judicial or other authority to be invalid for any 
reason.
  (g) The multiple failure to disclose to any person any 
information required under this chapter or chapter 4 or 5 of 
this title to be disclosed in connection with a single account 
under an open end consumer credit plan, other single consumer 
credit sale, consumer loan, consumer lease, or other extension 
of consumer credit, shall entitle the person to a single 
recovery under this section but continued failure to disclose 
after a recovery has been granted shall give rise to rights to 
additional recoveries. This subsection does not bar any remedy 
permitted by section 125.
  (h) A person may not take any action to offset any amount for 
which a creditor or assignee is potentially liable to such 
person under subsection (a)(2) against any amount owed by such 
person, unless the amount of the creditor's or assignee's 
liability under this title has been determined by judgment of a 
court of competent jurisdiction in an action of which such 
person was a party. This subsection does not bar a consumer 
then in default on the obligation from asserting a violation of 
this title as an original action, or as a defense or 
counterclaim to an action to collect amounts owed by the 
consumer brought by a person liable under this title.
  (i) Class Action Moratorium.--
          (1) In general.--During the period beginning on the 
        date of the enactment of the Truth in Lending Class 
        Action Relief Act of 1995 and ending on October 1, 
        1995, no court may enter any order certifying any class 
        in any action under this title--
                  (A) which is brought in connection with any 
                credit transaction not under an open end credit 
                plan which is secured by a first lien on real 
                property or a dwelling and constitutes a 
                refinancing or consolidation of an existing 
                extension of credit; and
                  (B) which is based on the alleged failure of 
                a creditor--
                          (i) to include a charge actually 
                        incurred (in connection with the 
                        transaction) in the finance charge 
                        disclosed pursuant to section 128;
                          (ii) to properly make any other 
                        disclosure required under section 128 
                        as a result of the failure described in 
                        clause (i); or
                          (iii) to provide proper notice of 
                        rescission rights under section 125(a) 
                        due to the selection by the creditor of 
                        the incorrect form from among the model 
                        forms prescribed by the [Bureau] Agency 
                        or from among forms based on such model 
                        forms.
          (2) Exceptions for certain alleged violations.--
        Paragraph (1) shall not apply with respect to any 
        action--
                  (A) described in clause (i) or (ii) of 
                paragraph (1)(B), if the amount disclosed as 
                the finance charge results in an annual 
                percentage rate that exceeds the tolerance 
                provided in section 107(c); or
                  (B) described in paragraph (1)(B)(iii), if--
                          (i) no notice relating to rescission 
                        rights under section 125(a) was 
                        provided in any form; or
                          (ii) proper notice was not provided 
                        for any reason other than the reason 
                        described in such paragraph.
  (j) Private Educational Lender.--A private educational lender 
(as that term is defined in section 140(a)) has no liability 
under this section for failure to comply with section 
128(e)(3)).
  (k) Defense to Foreclosure.--
          (1) In general.--Notwithstanding any other provision 
        of law, when a creditor, assignee, or other holder of a 
        residential mortgage loan or anyone acting on behalf of 
        such creditor, assignee, or holder, initiates a 
        judicial or nonjudicial foreclosure of the residential 
        mortgage loan, or any other action to collect the debt 
        in connection with such loan, a consumer may assert a 
        violation by a creditor of paragraph (1) or (2) of 
        section 129B(c), or of section 129C(a), as a matter of 
        defense by recoupment or set off without regard for the 
        time limit on a private action for damages under 
        subsection (e).
          (2) Amount of recoupment or setoff.--
                  (A) In general.--The amount of recoupment or 
                set-off under paragraph (1) shall equal the 
                amount to which the consumer would be entitled 
                under subsection (a) for damages for a valid 
                claim brought in an original action against the 
                creditor, plus the costs to the consumer of the 
                action, including a reasonable attorney's fee.
                  (B) Special rule.--Where such judgment is 
                rendered after the expiration of the applicable 
                time limit on a private action for damages 
                under subsection (e), the amount of recoupment 
                or set-off under paragraph (1) derived from 
                damages under subsection (a)(4) shall not 
                exceed the amount to which the consumer would 
                have been entitled under subsection (a)(4) for 
                damages computed up to the day preceding the 
                expiration of the applicable time limit.
  (l) Exemption From Liability and Rescission in Case of 
Borrower Fraud or Deception.--In addition to any other remedy 
available by law or contract, no creditor or assignee shall be 
liable to an obligor under this section, if such obligor, or 
co-obligor has been convicted of obtaining by actual fraud such 
residential mortgage loan.

Sec. 131. Liability of assignees

  (a) Except as otherwise specifically provided in this title, 
any civil action for a violation of this title or proceeding 
under section 108 which may be brought against a creditor may 
be maintained against any assignee of such creditor only if the 
violation for which such action or proceeding is brought is 
apparent on the face of the disclosure statement, except where 
the assignment was involuntary. For the purpose of this 
section, a violation apparent on the face of the disclosure 
statement includes, but is not limited to (1) a disclosure 
which can be determined to be incomplete or inaccurate from the 
face of the disclosure statement or other documents assigned, 
or (2) a disclosure which does not use the terms required to be 
used by this title.
  (b) Except as provided in section 125(c), in any action or 
proceeding by or against any subsequent assignee of the 
original creditor without knowledge to the contrary by the 
assignee when he acquires the obligation, written 
acknowledgement of receipt by a person to whom a statement is 
required to be given pursuant to this title shall be conclusive 
proof of the delivery thereof and, except as provided in 
subsection (a), of compliance with this chapter. This section 
does not affect the rights of the obligor in any action against 
the original creditor.
  (c) Any consumer who has the right to rescind a transaction 
under section 125 may rescind the transaction as against any 
assignee of the obligation.
  (d) Rights Upon Assignment of Certain Mortgages.--
          (1) In general.--Any person who purchases or is 
        otherwise assigned a mortgage referred to in section 
        103(aa) shall be subject to all claims and defenses 
        with respect to that mortgage that the consumer could 
        assert against the creditor of the mortgage, unless the 
        purchaser or assignee demonstrates, by a preponderance 
        of the evidence, that a reasonable person exercising 
        ordinary due diligence, could not determine, based on 
        the documentation required by this title, the 
        itemization of the amount financed, and other 
        disclosure of disbursements that the mortgage was a 
        mortgage referred to in section 103(aa). The preceding 
        sentence does not affect rights of a consumer under 
        subsection (a), (b), or (c) of this section or any 
        other provision of this title.
          (2) Limitation on damages.--Notwithstanding any other 
        provision of law, relief provided as a result of any 
        action made permissible by paragraph (1) may not 
        exceed--
                  (A) with respect to actions based upon a 
                violation of this title, the amount specified 
                in section 130; and
                  (B) with respect to all other causes of 
                action, the sum of--
                          (i) the amount of all remaining 
                        indebtedness; and
                          (ii) the total amount paid by the 
                        consumer in connection with the 
                        transaction.
          (3) Offset.--The amount of damages that may be 
        awarded under paragraph (2)(B) shall be reduced by the 
        amount of any damages awarded under paragraph (2)(A).
          (4) Notice.--Any person who sells or otherwise 
        assigns a mortgage referred to in section 103(aa) shall 
        include a prominent notice of the potential liability 
        under this subsection as determined by the [Bureau] 
        Agency.
  (e) Liability of Assignee for Consumer Credit Transactions 
Secured by Real Property.--
          (1) In general.--Except as otherwise specifically 
        provided in this title, any civil action against a 
        creditor for a violation of this title, and any 
        proceeding under section 108 against a creditor, with 
        respect to a consumer credit transaction secured by 
        real property may be maintained against any assignee of 
        such creditor only if--
                  (A) the violation for which such action or 
                proceeding is brought is apparent on the face 
                of the disclosure statement provided in 
                connection with such transaction pursuant to 
                this title; and
                  (B) the assignment to the assignee was 
                voluntary.
          (2) Violation apparent on the face of the disclosure 
        described.--For the purpose of this section, a 
        violation is apparent on the face of the disclosure 
        statement if--
                  (A) the disclosure can be determined to be 
                incomplete or inaccurate by a comparison among 
                the disclosure statement, any itemization of 
                the amount financed, the note, or any other 
                disclosure of disbursement; or
                  (B) the disclosure statement does not use the 
                terms or format required to be used by this 
                title.
  (f) Treatment of Servicer.--
          (1) In general.--A servicer of a consumer obligation 
        arising from a consumer credit transaction shall not be 
        treated as an assignee of such obligation for purposes 
        of this section unless the servicer is or was the owner 
        of the obligation.
          (2) Servicer not treated as owner on basis of 
        assignment for administrative convenience.--A servicer 
        of a consumer obligation arising from a consumer credit 
        transaction shall not be treated as the owner of the 
        obligation for purposes of this section on the basis of 
        an assignment of the obligation from the creditor or 
        another assignee to the servicer solely for the 
        administrative convenience of the servicer in servicing 
        the obligation. Upon written request by the obligor, 
        the servicer shall provide the obligor, to the best 
        knowledge of the servicer, with the name, address, and 
        telephone number of the owner of the obligation or the 
        master servicer of the obligation.
          (3) Servicer defined.--For purposes of this 
        subsection, the term ``servicer'' has the same meaning 
        as in section 6(i)(2) of the Real Estate Settlement 
        Procedures Act of 1974.
          (4) Applicability.--This subsection shall apply to 
        all consumer credit transactions in existence or 
        consummated on or after the date of the enactment of 
        the Truth in Lending Act Amendments of 1995.
  (g) Notice of New Creditor.--
          (1) In general.--In addition to other disclosures 
        required by this title, not later than 30 days after 
        the date on which a mortgage loan is sold or otherwise 
        transferred or assigned to a third party, the creditor 
        that is the new owner or assignee of the debt shall 
        notify the borrower in writing of such transfer, 
        including--
                  (A) the identity, address, telephone number 
                of the new creditor;
                  (B) the date of transfer;
                  (C) how to reach an agent or party having 
                authority to act on behalf of the new creditor;
                  (D) the location of the place where transfer 
                of ownership of the debt is recorded; and
                  (E) any other relevant information regarding 
                the new creditor.
          (2) Definition.--As used in this subsection, the term 
        ``mortgage loan'' means any consumer credit transaction 
        that is secured by the principal dwelling of a 
        consumer.

           *       *       *       *       *       *       *


Sec. 136. Dissemination of annual percentage rates

  (a) The [Bureau] Agency shall collect, publish, and 
disseminate to the public, on a demonstration basis in a number 
of standard metropolitan statistical areas to be determined by 
the [Bureau] Agency, the annual percentage rates charged for 
representative types of nonsale credit by creditors in such 
areas. For the purpose of this section, the [Bureau] Agency is 
authorized to require creditors in such areas to furnish 
information necessary for the [Bureau] Agency to collect, 
publish, and disseminate such information.
  (b) Credit Card Price and Availability Information.--
          (1) Collection required.--The [Bureau] Agency shall 
        collect, on a semiannual basis, credit card price and 
        availability information, including the information 
        required to be disclosed under section 127(c) of this 
        chapter, from a broad sample of financial institutions 
        which offer credit card services.
          (2) Sample requirements.--The broad sample of 
        financial institutions required under paragraph (1) 
        shall include--
                  (A) the 25 largest issuers of credit cards; 
                and
                  (B) not less than 125 additional financial 
                institutions selected by the [Bureau] Agency in 
                a manner that ensures--
                          (i) an equitable geographical 
                        distribution within the sample; and
                          (ii) the representation of a wide 
                        spectrum of institutions within the 
                        sample.
          (3) Report of information from sample.--Each 
        financial institution in the broad sample established 
        pursuant to paragraph (2) shall report the information 
        to the [Bureau] Agency in accordance with such 
        regulations or orders as the [Bureau] Agency may 
        prescribe.
          (4) Public availability of collected information, 
        report to congress.--The [Bureau] Agency shall--
                  (A) make the information collected pursuant 
                to this subsection available to the public upon 
                request; and
                  (B) report such information semiannually to 
                Congress.
  (c) The [Bureau] Agency is authorized to enter into contracts 
or other arrangements with appropriate persons, organizations, 
or State agencies to carry out its functions under subsections 
(a) and (b) and to furnish financial assistance in support 
thereof.

SEC. 137. HOME EQUITY PLANS.

  (a) Index Requirement.--In the case of extensions of credit 
under an open end consumer credit plan which are subject to a 
variable rate and are secured by a consumer's principal 
dwelling, the index or other rate of interest to which changes 
in the annual percentage rate are related shall be based on an 
index or rate of interest which is publicly available and is 
not under the control of the creditor.
  (b) Grounds for Acceleration of Outstanding Balance.--A 
creditor may not unilaterally terminate any account under an 
open end consumer credit plan under which extensions of credit 
are secured by a consumer's principal dwelling and require the 
immediate repayment of any outstanding balance at such time, 
except in the case of--
          (1) fraud or material misrepresentation on the part 
        of the consumer in connection with the account;
          (2) failure by the consumer to meet the repayment 
        terms of the agreement for any outstanding balance; or
          (3) any other action or failure to act by the 
        consumer which adversely affects the creditor's 
        security for the account or any right of the creditor 
        in such security.
This subsection does not apply to reverse mortgage 
transactions.
  (c) Change in Terms.--
          (1) In general.--No open end consumer credit plan 
        under which extensions of credit are secured by a 
        consumer's principal dwelling may contain a provision 
        which permits a creditor to change unilaterally any 
        term required to be disclosed under section 127A(a) or 
        any other term, except a change in insignificant terms 
        such as the address of the creditor for billing 
        purposes.
          (2) Certain changes not precluded.--Notwithstanding 
        the provisions of subsection (1), a creditor may make 
        any of the following changes:
                  (A) Change the index and margin applicable to 
                extensions of credit under such plan if the 
                index used by the creditor is no longer 
                available and the substitute index and margin 
                would result in a substantially similar 
                interest rate.
                  (B) Prohibit additional extensions of credit 
                or reduce the credit limit applicable to an 
                account under the plan during any period in 
                which the value of the consumer's principal 
                dwelling which secures any outstanding balance 
                is significantly less than the original 
                appraisal value of the dwelling.
                  (C) Prohibit additional extensions of credit 
                or reduce the credit limit applicable to the 
                account during any period in which the creditor 
                has reason to believe that the consumer will be 
                unable to comply with the repayment 
                requirements of the account due to a material 
                change in the consumer's financial 
                circumstances.
                  (D) Prohibit additional extensions of credit 
                or reduce the credit limit applicable to the 
                account during any period in which the consumer 
                is in default with respect to any material 
                obligation of the consumer under the agreement.
                  (E) Prohibit additional extensions of credit 
                or reduce the credit limit applicable to the 
                account during any period in which--
                          (i) the creditor is precluded by 
                        government action from imposing the 
                        annual percentage rate provided for in 
                        the account agreement; or
                          (ii) any government action is in 
                        effect which adversely affects the 
                        priority of the creditor's security 
                        interest in the account to the extent 
                        that the value of the creditor's 
                        secured interest in the property is 
                        less than 120 percent of the amount of 
                        the credit limit applicable to the 
                        account.
                  (F) Any change that will benefit the 
                consumer.
          (3) Material obligations.--Upon the request of the 
        consumer and at the time an agreement is entered into 
        by a consumer to open an account under an open end 
        consumer credit plan under which extensions of credit 
        are secured by the consumer's principal dwelling, the 
        consumer shall be given a list of the categories of 
        contract obligations which are deemed by the creditor 
        to be material obligations of the consumer under the 
        agreement for purposes of paragraph (2)(D).
          (4) Consumer benefit.--
                  (A) In general.--For purposes of paragraph 
                (2)(F), a change shall be deemed to benefit the 
                consumer if the change is unequivocally 
                beneficial to the borrower and the change is 
                beneficial through the entire term of the 
                agreement.
                  (B) Board categorization.--The [Bureau] 
                Agency may, by regulation, determine categories 
                of changes that benefit the consumer.
  (d) Terms Changed After Application.--If any term or 
condition described in section 127A(a) which is disclosed to a 
consumer in connection with an application to open an account 
under an open end consumer credit plan described in such 
section (other than a variable feature of the plan) changes 
before the account is opened, and if, as a result of such 
change, the consumer elects not to enter into the plan 
agreement, the creditor shall refund all fees paid by the 
consumer in connection with such application.
  (e) Additional Requirements Relating to Refunds and 
Imposition of Nonrefundable Fees.--
          (1) In general.--No nonrefundable fee may be imposed 
        by a creditor or any other person in connection with 
        any application by a consumer to establish an account 
        under any open end consumer credit plan which provides 
        for extensions of credit which are secured by a 
        consumer's principal dwelling before the end of the 3-
        day period beginning on the date such consumer receives 
        the disclosure required under section 127A(a) and the 
        pamphlet required under section 127A(e) with respect to 
        such application.
          (2) Constructive receipt.--For purposes of 
        determining when a nonrefundable fee may be imposed in 
        accordance with this subsection if the disclosures and 
        pamphlet referred to in paragraph (1) are mailed to the 
        consumer, the date of the receipt of the disclosures by 
        such consumer shall be deemed to be 3 business days 
        after the date of mailing by the creditor.

SEC. 138. REVERSE MORTGAGES.

  (a) In General.--In addition to the disclosures required 
under this title, for each reverse mortgage, the creditor 
shall, not less than 3 days prior to consummation of the 
transaction, disclose to the consumer in conspicuous type a 
good faith estimate of the projected total cost of the mortgage 
to the consumer expressed as a table of annual interest rates. 
Each annual interest rate shall be based on a projected total 
future credit extension balance under a projected appreciation 
rate for the dwelling and a term for the mortgage. The 
disclosure shall include--
          (1) statements of the annual interest rates for not 
        less than 3 projected appreciation rates and not less 
        than 3 credit transaction periods, as determined by the 
        [Bureau] Agency, including--
                  (A) a short-term reverse mortgage;
                  (B) a term equaling the actuarial life 
                expectancy of the consumer; and
                  (C) such longer term as the [Bureau] Agency 
                deems appropriate; and
          (2) a statement that the consumer is not obligated to 
        complete the reverse mortgage transaction merely 
        because the consumer has received the disclosure 
        required under this section or has signed an 
        application for the reverse mortgage.
  (b) Projected Total Cost.--In determining the projected total 
cost of the mortgage to be disclosed to the consumer under 
subsection (a), the creditor shall take into account--
          (1) any shared appreciation or equity that the lender 
        will, by contract, be entitled to receive;
          (2) all costs and charges to the consumer, including 
        the costs of any associated annuity that the consumer 
        elects or is required to purchase as part of the 
        reverse mortgage transaction;
          (3) all payments to and for the benefit of the 
        consumer, including, in the case in which an associated 
        annuity is purchased (whether or not required by the 
        lender as a condition of making the reverse mortgage), 
        the annuity payments received by the consumer and 
        financed from the proceeds of the loan, instead of the 
        proceeds used to finance the annuity; and
          (4) any limitation on the liability of the consumer 
        under reverse mortgage transactions (such as 
        nonrecourse limits and equity conservation agreements).

SEC. 139. CERTAIN LIMITATIONS ON LIABILITY.

  (a) Limitations on Liability.--For any closed end consumer 
credit transaction that is secured by real property or a 
dwelling, that is subject to this title, and that is 
consummated before the date of the enactment of the Truth in 
Lending Act Amendments of 1995, a creditor or any assignee of a 
creditor shall have no civil, administrative, or criminal 
liability under this title for, and a consumer shall have no 
extended rescission rights under section 125(f) with respect 
to--
          (1) the creditor's treatment, for disclosure 
        purposes, of--
                  (A) taxes described in section 106(d)(3);
                  (B) fees described in section 106(e)(2) and 
                (5);
                  (C) fees and amounts referred to in the 3rd 
                sentence of section 106(a); or
                  (D) borrower-paid mortgage broker fees 
                referred to in section 106(a)(6);
          (2) the form of written notice used by the creditor 
        to inform the obligor of the rights of the obligor 
        under section 125 if the creditor provided the obligor 
        with a properly dated form of written notice published 
        and adopted by the [Bureau] Agency or a comparable 
        written notice, and otherwise complied with all the 
        requirements of this section regarding notice; or
          (3) any disclosure relating to the finance charge 
        imposed with respect to the transaction if the amount 
        or percentage actually disclosed--
                  (A) may be treated as accurate for purposes 
                of this title if the amount disclosed as the 
                finance charge does not vary from the actual 
                finance charge by more than $200;
                  (B) may, under section 106(f)(2), be treated 
                as accurate for purposes of section 125; or
                  (C) is greater than the amount or percentage 
                required to be disclosed under this title.
  (b) Exceptions.--Subsection (a) shall not apply to--
          (1) any individual action or counterclaim brought 
        under this title which was filed before June 1, 1995;
          (2) any class action brought under this title for 
        which a final order certifying a class was entered 
        before January 1, 1995;
          (3) the named individual plaintiffs in any class 
        action brought under this title which was filed before 
        June 1, 1995; or
          (4) any consumer credit transaction with respect to 
        which a timely notice of rescission was sent to the 
        creditor before June 1, 1995.

Sec. 140. Preventing unfair and deceptive private educational lending 
                    practices and eliminating conflicts of interest

  (a) Definitions.--As used in this section--
          (1) the term ``covered educational institution''--
                  (A) means any educational institution that 
                offers a postsecondary educational degree, 
                certificate, or program of study (including any 
                institution of higher education); and
                  (B) includes an agent, officer, or employee 
                of the educational institution;
          (2) the term ``gift''--
                  (A)(i) means any gratuity, favor, discount, 
                entertainment, hospitality, loan, or other item 
                having more than a de minimis monetary value, 
                including services, transportation, lodging, or 
                meals, whether provided in kind, by purchase of 
                a ticket, payment in advance, or reimbursement 
                after the expense has been incurred; and
                  (ii) includes an item described in clause (i) 
                provided to a family member of an officer, 
                employee, or agent of a covered educational 
                institution, or to any other individual based 
                on that individual's relationship with the 
                officer, employee, or agent, if--
                          (I) the item is provided with the 
                        knowledge and acquiescence of the 
                        officer, employee, or agent; and
                          (II) the officer, employee, or agent 
                        has reason to believe the item was 
                        provided because of the official 
                        position of the officer, employee, or 
                        agent; and
                  (B) does not include--
                          (i) standard informational material 
                        related to a loan, default aversion, 
                        default prevention, or financial 
                        literacy;
                          (ii) food, refreshments, training, or 
                        informational material furnished to an 
                        officer, employee, or agent of a 
                        covered educational institution, as an 
                        integral part of a training session or 
                        through participation in an advisory 
                        council that is designed to improve the 
                        service of the private educational 
                        lender to the covered educational 
                        institution, if such training or 
                        participation contributes to the 
                        professional development of the 
                        officer, employee, or agent of the 
                        covered educational institution;
                          (iii) favorable terms, conditions, 
                        and borrower benefits on a private 
                        education loan provided to a student 
                        employed by the covered educational 
                        institution, if such terms, conditions, 
                        or benefits are not provided because of 
                        the student's employment with the 
                        covered educational institution;
                          (iv) the provision of financial 
                        literacy counseling or services, 
                        including counseling or services 
                        provided in coordination with a covered 
                        educational institution, to the extent 
                        that such counseling or services are 
                        not undertaken to secure--
                                  (I) applications for private 
                                education loans or private 
                                education loan volume;
                                  (II) applications or loan 
                                volume for any loan made, 
                                insured, or guaranteed under 
                                title IV of the Higher 
                                Education Act of 1965 (20 
                                U.S.C. 1070 et seq.); or
                                  (III) the purchase of a 
                                product or service of a 
                                specific private educational 
                                lender;
                          (v) philanthropic contributions to a 
                        covered educational institution from a 
                        private educational lender that are 
                        unrelated to private education loans 
                        and are not made in exchange for any 
                        advantage related to private education 
                        loans; or
                          (vi) State education grants, 
                        scholarships, or financial aid funds 
                        administered by or on behalf of a 
                        State;
          (3) the term ``institution of higher education'' has 
        the same meaning as in section 102 of the Higher 
        Education Act of 1965 (20 U.S.C. 1002);
          (4) the term ``postsecondary educational expenses'' 
        means any of the expenses that are included as part of 
        the cost of attendance of a student, as defined under 
        section 472 of the Higher Education Act of 1965 (20 
        U.S.C. 1087ll);
          (5) the term ``preferred lender arrangement'' has the 
        same meaning as in section 151 of the Higher Education 
        Act of 1965;
          (6) the term ``private educational lender'' means--
                  (A) a financial institution, as defined in 
                section 3 of the Federal Deposit Insurance Act 
                (12 U.S.C. 1813) that solicits, makes, or 
                extends private education loans;
                  (B) a Federal credit union, as defined in 
                section 101 of the Federal Credit Union Act (12 
                U.S.C. 1752) that solicits, makes, or extends 
                private education loans; and
                  (C) any other person engaged in the business 
                of soliciting, making, or extending private 
                education loans;
          (7) the term ``private education loan''--
                  (A) means a loan provided by a private 
                educational lender that--
                          (i) is not made, insured, or 
                        guaranteed under of title IV of the 
                        Higher Education Act of 1965 (20 U.S.C. 
                        1070 et seq.); and
                          (ii) is issued expressly for 
                        postsecondary educational expenses to a 
                        borrower, regardless of whether the 
                        loan is provided through the 
                        educational institution that the 
                        subject student attends or directly to 
                        the borrower from the private 
                        educational lender; and
                  (B) does not include an extension of credit 
                under an open end consumer credit plan, a 
                reverse mortgage transaction, a residential 
                mortgage transaction, or any other loan that is 
                secured by real property or a dwelling; and
          (8) the term ``revenue sharing'' means an arrangement 
        between a covered educational institution and a private 
        educational lender under which--
                  (A) a private educational lender provides or 
                issues private education loans with respect to 
                students attending the covered educational 
                institution;
                  (B) the covered educational institution 
                recommends to students or others the private 
                educational lender or the private education 
                loans of the private educational lender; and
                  (C) the private educational lender pays a fee 
                or provides other material benefits, including 
                profit sharing, to the covered educational 
                institution in connection with the private 
                education loans provided to students attending 
                the covered educational institution or a 
                borrower acting on behalf of a student.
  (b) Prohibition on Certain Gifts and Arrangements.--A private 
educational lender may not, directly or indirectly--
          (1) offer or provide any gift to a covered 
        educational institution in exchange for any advantage 
        or consideration provided to such private educational 
        lender related to its private education loan 
        activities; or
          (2) engage in revenue sharing with a covered 
        educational institution.
  (c) Prohibition on Co-Branding.--A private educational lender 
may not use the name, emblem, mascot, or logo of the covered 
educational institution, or other words, pictures, or symbols 
readily identified with the covered educational institution, in 
the marketing of private education loans in any way that 
implies that the covered educational institution endorses the 
private education loans offered by the private educational 
lender.
  (d) Advisory Board Compensation.--Any person who is employed 
in the financial aid office of a covered educational 
institution, or who otherwise has responsibilities with respect 
to private education loans or other financial aid of the 
institution, and who serves on an advisory board, commission, 
or group established by a private educational lender or group 
of such lenders shall be prohibited from receiving anything of 
value from the private educational lender or group of lenders. 
Nothing in this subsection prohibits the reimbursement of 
reasonable expenses incurred by an employee of a covered 
educational institution as part of their service on an advisory 
board, commission, or group described in this subsection.
  (e) Prohibition on Prepayment or Repayment Fees or Penalty.--
It shall be unlawful for any private educational lender to 
impose a fee or penalty on a borrower for early repayment or 
prepayment of any private education loan.
  (f) Credit Card Protections for College Students.--
          (1) Disclosure required.--An institution of higher 
        education shall publicly disclose any contract or other 
        agreement made with a card issuer or creditor for the 
        purpose of marketing a credit card.
          (2) Inducements prohibited.--No card issuer or 
        creditor may offer to a student at an institution of 
        higher education any tangible item to induce such 
        student to apply for or participate in an open end 
        consumer credit plan offered by such card issuer or 
        creditor, if such offer is made--
                  (A) on the campus of an institution of higher 
                education;
                  (B) near the campus of an institution of 
                higher education, as determined by rule of the 
                [Bureau] Agency; or
                  (C) at an event sponsored by or related to an 
                institution of higher education.
          (3) Sense of the congress.--It is the sense of the 
        Congress that each institution of higher education 
        should consider adopting the following policies 
        relating to credit cards:
                  (A) That any card issuer that markets a 
                credit card on the campus of such institution 
                notify the institution of the location at which 
                such marketing will take place.
                  (B) That the number of locations on the 
                campus of such institution at which the 
                marketing of credit cards takes place be 
                limited.
                  (C) That credit card and debt education and 
                counseling sessions be offered as a regular 
                part of any orientation program for new 
                students of such institution.

Sec. 140A. Procedure for timely settlement of estates of decedent 
                    obligors

  The [Bureau] Agency, [in consultation with the Bureau] in 
consultation with the Federal Trade Commission and each other 
agency referred to in section 108(a), shall prescribe 
regulations to require any creditor, with respect to any credit 
card account under an open end consumer credit plan, to 
establish procedures to ensure that any administrator of an 
estate of any deceased obligor with respect to such account can 
resolve outstanding credit balances in a timely manner.

CHAPTER 3--CREDIT ADVERTISING AND LIMITS ON CREDIT CARD FEES

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Sec. 143. Advertising of open end credit plans

   No advertisement to aid, promote, or assist directly or 
indirectly the extension of consumer credit under an open end 
credit plan may set forth any of the specific terms of that 
plan unless it also clearly and conspicuously sets forth all of 
the following items:
          (1) Any minimum or fixed amount which could be 
        imposed.
          (2) In any case in which periodic rates may be used 
        to compute the finance charge, the periodic rates 
        expressed as annual percentage rates.
          (3) Any other term that the [Bureau] Agency may by 
        regulation require to be disclosed.

Sec. 144. Advertising of credit other than open end plans

  (a) Except as provided in subsection (b), this section 
applies to any advertisement to aid, promote, or assist 
directly or indirectly any consumer credit sale, loan, or other 
extension of credit subject to the provisions of this title, 
other than an open end credit plan.
  (b) The provisions of this section do not apply to 
advertisements of residential real estate except to the extent 
that the [Bureau] Agency may by regulation require.
  (c) If any advertisement to which this section applies states 
the rate of a finance charge, the advertisement shall state the 
rate of that charge expressed as an annual percentage rate.
  (d) If any advertisement to which this section applies states 
the amount of the downpayment, if any, the amount of any 
installment payment, the dollar amount of any finance charge, 
or the number of installments or the period of repayment, then 
the advertisement shall state all of the following items:
          (1) The downpayment, if any.
          (2) The terms of repayment.
          (3) The rate of the finance charge expressed as an 
        annual percentage rate.
  (e) Each advertisement to which this section applies that 
relates to a consumer credit transaction that is secured by the 
principal dwelling of a consumer in which the extension of 
credit may exceed the fair market value of the dwelling, and 
which advertisement is disseminated in paper form to the public 
or through the Internet, as opposed to by radio or television, 
shall clearly and conspicuously state that--
          (1) the interest on the portion of the credit 
        extension that is greater than the fair market value of 
        the dwelling is not tax deductible for Federal income 
        tax purposes; and
          (2) the consumer should consult a tax adviser for 
        further information regarding the deductibility of 
        interest and charges.

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Sec. 146. Use of annual percentage rate in oral disclosures

  In responding orally to any inquiry about the cost of credit, 
a creditor, regardless of the method used to compute finance 
charges, shall state rates only in terms of the annual 
percentage rate, except that in the case of an open end credit 
plan, the periodic rate also may be stated and, in the case of 
an other than open end credit plan where a major component of 
the finance charge consists of interest computed at a simple 
annual rate, the simple annual rate also may be stated. The 
[Bureau] Agency may, by regulation, modify the requirements of 
this section or provide an exception from this section for a 
transaction or class of transactions for which the creditor 
cannot determine in advance the applicable annual percentage 
rate.

SEC. 147. ADVERTISING OF OPEN END CONSUMER CREDIT PLANS SECURED BY THE 
                    CONSUMER'S PRINCIPAL DWELLING.

  (a) In General.--If any advertisement to aid, promote, or 
assist, directly or indirectly, the extension of consumer 
credit through an open end consumer credit plan under which 
extensions of credit are secured by the consumer's principal 
dwelling states, affirmatively or negatively, any of the 
specific terms of the plan, including any periodic payment 
amount required under such plan, such advertisement shall also 
clearly and conspicuously set forth the following information, 
in such form and manner as the [Bureau] Agency may require:
          (1) Loan fees and opening cost estimates.--Any loan 
        fee the amount of which is determined as a percentage 
        of the credit limit applicable to an account under the 
        plan and an estimate of the aggregate amount of other 
        fees for opening the account, based on the creditor's 
        experience with the plan and stated as a single amount 
        or as a reasonable range.
          (2) Periodic rates.--In any case in which periodic 
        rates may be used to compute the finance charge, the 
        periodic rates expressed as an annual percentage rate.
          (3) Highest annual percentage rate.--The highest 
        annual percentage rate which may be imposed under the 
        plan.
          (4) Other information.--Any other information the 
        [Bureau] Agency may by regulation require.
  (b) Tax Deductibility.--
          (1) In general.--If any advertisement described in 
        subsection (a) contains a statement that any interest 
        expense incurred with respect to the plan is or may be 
        tax deductible, the advertisement shall not be 
        misleading with respect to such deductibility.
          (2) Credit in excess of fair market value.--Each 
        advertisement described in subsection (a) that relates 
        to an extension of credit that may exceed the fair 
        market value of the dwelling, and which advertisement 
        is disseminated in paper form to the public or through 
        the Internet, as opposed to by radio or television, 
        shall include a clear and conspicuous statement that--
                  (A) the interest on the portion of the credit 
                extension that is greater than the fair market 
                value of the dwelling is not tax deductible for 
                Federal income tax purposes; and
                  (B) the consumer should consult a tax adviser 
                for further information regarding the 
                deductibility of interest and charges.
  (c) Certain Terms Prohibited.--No advertisement described in 
subsection (a) with respect to any home equity account may 
refer to such loan as ``free money'' or use other terms 
determined by the [Bureau] Agency by regulation to be 
misleading.
  (d) Discounted Initial Rate.--
          (1) In general.--If any advertisement described in 
        subsection (a) includes an initial annual percentage 
        rate that is not determined by the index or formula 
        used to make later interest rate adjustments, the 
        advertisement shall also state with equal prominence 
        the current annual percentage rate that would have been 
        applied using the index or formula if such initial rate 
        had not been offered.
          (2) Quoted rate must be reasonably current.--The 
        annual percentage rate required to be disclosed under 
        the paragraph (1) rate must be current as of a 
        reasonable time given the media involved.
          (3) Period during which initial rate is in effect.--
        Any advertisement to which paragraph (1) applies shall 
        also state the period of time during which the initial 
        annual percentage rate referred to in such paragraph 
        will be in effect.
  (e) Balloon Payment.--If any advertisement described in 
subsection (a) contains a statement regarding the minimum 
monthly payment under the plan, the advertisement shall also 
disclose, if applicable, the fact that the plan includes a 
balloon payment.
  (f) Balloon Payment Defined.--For purposes of this section 
and section 127A, the term ``balloon payment'' means, with 
respect to any open end consumer credit plan under which 
extensions of credit are secured by the consumer's principal 
dwelling, any repayment option under which--
          (1) the account holder is required to repay the 
        entire amount of any outstanding balance as of a 
        specified date or at the end of a specified period of 
        time, as determined in accordance with the terms of the 
        agreement pursuant to which such credit is extended; 
        and
          (2) the aggregate amount of the minimum periodic 
        payments required would not fully amortize such 
        outstanding balance by such date or at the end of such 
        period.

SEC. 148. INTEREST RATE REDUCTION ON OPEN END CONSUMER CREDIT PLANS.

  (a) In General.--If a creditor increases the annual 
percentage rate applicable to a credit card account under an 
open end consumer credit plan, based on factors including the 
credit risk of the obligor, market conditions, or other 
factors, the creditor shall consider changes in such factors in 
subsequently determining whether to reduce the annual 
percentage rate for such obligor.
  (b) Requirements.--With respect to any credit card account 
under an open end consumer credit plan, the creditor shall--
          (1) maintain reasonable methodologies for assessing 
        the factors described in subsection (a);
          (2) not less frequently than once every 6 months, 
        review accounts as to which the annual percentage rate 
        has been increased since January 1, 2009, to assess 
        whether such factors have changed (including whether 
        any risk has declined);
          (3) reduce the annual percentage rate previously 
        increased when a reduction is indicated by the review; 
        and
          (4) in the event of an increase in the annual 
        percentage rate, provide in the written notice required 
        under section 127(i) a statement of the reasons for the 
        increase.
  (c) Rule of Construction.--This section shall not be 
construed to require a reduction in any specific amount.
  (d) Rulemaking.--The [Bureau] Board shall issue final rules 
not later than 9 months after the date of enactment of this 
section to implement the requirements of and evaluate 
compliance with this section, and subsections (a), (b), and (c) 
shall become effective 15 months after that date of enactment.

SEC. 149. REASONABLE PENALTY FEES ON OPEN END CONSUMER CREDIT PLANS.

  (a) In General.--The amount of any penalty fee or charge that 
a card issuer may impose with respect to a credit card account 
under an open end consumer credit plan in connection with any 
omission with respect to, or violation of, the cardholder 
agreement, including any late payment fee, over-the-limit fee, 
or any other penalty fee or charge, shall be reasonable and 
proportional to such omission or violation.
  (b) Rulemaking Required.--The [Bureau] Agency, in 
consultation with the Comptroller of the Currency, the [Bureau 
of Directors of the Federal Deposit Insurance Corporation] 
Board of Directors of the Federal Deposit Insurance 
Corporation, [the Director of the Office of Thrift 
Supervision,] and the [National Credit Union Administration 
Bureau] National Credit Union Administration Board, shall issue 
final rules not later than 9 months after the date of enactment 
of this section, to establish standards for assessing whether 
the amount of any penalty fee or charge described under 
subsection (a) is reasonable and proportional to the omission 
or violation to which the fee or charge relates. Subsection (a) 
shall become effective 15 months after the date of enactment of 
this section.
  (c) Considerations.--In issuing rules required by this 
section, the [Bureau] Agency shall consider--
          (1) the cost incurred by the creditor from such 
        omission or violation;
          (2) the deterrence of such omission or violation by 
        the cardholder;
          (3) the conduct of the cardholder; and
          (4) such other factors as the [Bureau] Agency may 
        deem necessary or appropriate.
  (d) Differentiation Permitted.--In issuing rules required by 
this subsection, the [Bureau] Agency may establish different 
standards for different types of fees and charges, as 
appropriate.
  (e) Safe Harbor Rule Authorized.--The [Bureau] Agency, in 
consultation with the Comptroller of the Currency, the [Bureau 
of Directors of the Federal Deposit Insurance Corporation] 
Board of Directors of the Federal Deposit Insurance 
Corporation, [the Director of the Office of Thrift 
Supervision,] and the [National Credit Union Administration 
Bureau] National Credit Union Administration Board, may issue 
rules to provide an amount for any penalty fee or charge 
described under subsection (a) that is presumed to be 
reasonable and proportional to the omission or violation to 
which the fee or charge relates.

           *       *       *       *       *       *       *


                       CHAPTER 4--CREDIT BILLING


Sec. 161. Correction of billing errors

  (a) If a creditor, within sixty days after having transmitted 
to an obligor a statement of the obligor's account in 
connection with an extension of consumer credit, receives at 
the address disclosed under section 127(b)(10) a written notice 
(other than notice on a payment stub or other payment medium 
supplied by the creditor if the creditor so stipulates with the 
disclosure required under section 127(a)(7)) from the obligor 
in which the obligor--
          (1) sets forth or otherwise enables the creditor to 
        identify the name and account number (if any) of the 
        obligor,
          (2) indicates the obligor's belief that the statement 
        contains a billing error and the amount of such billing 
        error, and
          (3) sets forth the reasons for the obligor's belief 
        (to the extent applicable) that the statement contains 
        a billing error,
the creditor shall, unless the obligor has, after giving such 
written notice and before the expiration of the time limits 
herein specified, agreed that the statement was correct--
          
          (A) not later than thirty days after the receipt of 
        the notice, send a written acknowledgement thereof to 
        the obligor, unless the action required in subparagraph 
        (B) is taken within such thirty-day period, and
          (B) not later than two complete billing cycles of the 
        creditor (in no event later than ninety days) after the 
        receipt of the notice and prior to taking any action to 
        collect the amount, or any part thereof, indicated by 
        the obligor under paragraph (2) either--
                  (i) make appropriate corrections in the 
                account of the obligor, including the crediting 
                of any finance charges on amounts erroneously 
                billed, and transmit to the obligor a 
                notification of such corrections and the 
                creditor's explanation of any change in the 
                amount indicated by the obligor under paragraph 
                (2) and, if any such change is made and the 
                obligor so requests, copies of documentary 
                evidence of the obligor's indebtedness; or
                  (ii) send a written explanation or 
                clarification to the obligor, after having 
                conducted an investigation, setting forth to 
                the extent applicable the reasons why the 
                creditor believes the account of the obligor 
                was correctly shown in the statement and, upon 
                request of the obligor, provide copies of 
                documentary evidence of the obligor's 
                indebtedness. In the case of a billing error 
                where the obligor alleges that the creditor's 
                billing statement reflects goods not delivered 
                to the obligor or his designee in accordance 
                with the agreement made at the time of the 
                transaction, a creditor may not construe such 
                amount to be correctly shown unless he 
                determines that such goods were actually 
                delivered, mailed, or otherwise sent to the 
                obligor and provides the obligor with a 
                statement of such determination.
After complying with the provisions of this subsection with 
respect to an alleged billing error, a creditor has no further 
responsibility under this section if the obligor continues to 
make substantially the same allegation with respect to such 
error.
  (b) For the purpose of this section, a ``billing error'' 
consists of any of the following:
          (1) A reflection on a statement of an extension of 
        credit which was not made to the obligor or, if made, 
        was not in the amount reflected on such statement.
          (2) A reflection on a statement of an extension of 
        credit for which the obligor requests additional 
        clarification including documentary evidence thereof.
          (3) A reflection on a statement of goods or services 
        not accepted by the obligor or his designee or not 
        delivered to the obligor or his designee in accordance 
        with the agreement made at the time of a transaction.
          (4) The creditor's failure to reflect properly on a 
        statement a payment made by the obligor or a credit 
        issued to the obligor.
          (5) A computation error or similar error of an 
        accounting nature of the creditor on a statement.
          (6) Failure to transmit the statement required under 
        section 127(b) of this Act to the last address of the 
        obligor which has been disclosed to the creditor, 
        unless that address was furnished less than twenty days 
        before the end of the billing cycle for which the 
        statement is required.
          (7) Any other error described in regulations of the 
        [Bureau] Agency.
  (c) For the purposes of this section, ``action to collect the 
amount, or any part thereof, indicated by an obligor under 
paragraph (2)'' does not include the sending of statements of 
account, which may include finance charges on amounts in 
dispute, to the obligor following written notice from the 
obligor as specified under subsection (a), if--
          (1) the obligor's account is not restricted or closed 
        because of the failure of the obligor to pay the amount 
        indicated under paragraph (2) of subsection (a), and
          (2) the creditor indicates the payment of such amount 
        is not required pending the creditor's compliance with 
        this section.
Nothing in this section shall be construed to prohibit any 
action by a creditor to collect any amount which has not been 
indicated by the obligor to contain a billing error.
  (d) Pursuant to regulations of the [Bureau] Agency, a 
creditor operating an open end consumer credit plan may not, 
prior to the sending of the written explanation or 
clarification required under paragraph (B)(ii), restrict or 
close an account with respect to which the obligor has 
indicated pursuant to subsection (a) that he believes such 
account to contain a billing error solely because of the 
obligor's failure to pay the amount indicated to be in error. 
Nothing in this subsection shall be deemed to prohibit a 
creditor from applying against the credit limit on the 
obligor's account the amount indicated to be in error.
  (e) Any creditor who fails to comply with the requirements of 
this section or section 162 forfeits any right to collect from 
the obligor the amount indicated by the obligor under paragraph 
(2) of subsection (a) of this section, and any finance charges 
thereon, except that the amount required to be forfeited under 
this subsection may not exceed $50.

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Sec. 164. Prompt and fair crediting of payments

  (a) In General.--Payments received from an obligor under an 
open end consumer credit plan by the creditor shall be posted 
promptly to the obligor's account as specified in regulations 
of the [Bureau] Agency. Such regulations shall prevent a 
finance charge from being imposed on any obligor if the 
creditor has received the obligor's payment in readily 
identifiable form, by 5:00 p.m. on the date on which such 
payment is due, in the amount, manner, and location indicated 
by the creditor to avoid the imposition thereof.
  (b) Application of Payments.--
          (1) In general.--Upon receipt of a payment from a 
        cardholder, the card issuer shall apply amounts in 
        excess of the minimum payment amount first to the card 
        balance bearing the highest rate of interest, and then 
        to each successive balance bearing the next highest 
        rate of interest, until the payment is exhausted.
          (2) Clarification relating to certain deferred 
        interest arrangements.--A creditor shall allocate the 
        entire amount paid by the consumer in excess of the 
        minimum payment amount to a balance on which interest 
        is deferred during the last 2 billing cycles 
        immediately preceding the expiration of the period 
        during which interest is deferred.
  (c) Changes by Card Issuer.--If a card issuer makes a 
material change in the mailing address, office, or procedures 
for handling cardholder payments, and such change causes a 
material delay in the crediting of a cardholder payment made 
during the 60-day period following the date on which such 
change took effect, the card issuer may not impose any late fee 
or finance charge for a late payment on the credit card account 
to which such payment was credited.

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SEC. 172. ADDITIONAL LIMITS ON INTEREST RATE INCREASES.

  (a) Limitation on Increases Within First Year.--Except in the 
case of an increase described in paragraph (1), (2), (3), or 
(4) of section 171(b), no increase in any annual percentage 
rate, fee, or finance charge on any credit card account under 
an open end consumer credit plan shall be effective before the 
end of the 1-year period beginning on the date on which the 
account is opened.
  (b) Promotional Rate Minimum Term.--No increase in any annual 
percentage rate applicable to a credit card account under an 
open end consumer credit plan that is a promotional rate (as 
that term is defined by the [Bureau] Agency) shall be effective 
before the end of the 6-month period beginning on the date on 
which the promotional rate takes effect, subject to such 
reasonable exceptions as the [Bureau] Agency may establish, by 
rule.

Sec. 173. Relation to State laws

  (a) This chapter does not annul, alter, or affect, or exempt 
any person subject to the provisions of this chapter from 
complying with, the laws of any State with respect to credit 
billing practices, except to the extent that those laws are 
inconsistent with any provision of this chapter, and then only 
to the extent of the inconsistency. The [Bureau] Agency is 
authorized to determine whether such inconsistencies exist. The 
[Bureau] Agency may not determine that any State law is 
inconsistent with any provision of this chapter if the [Bureau] 
Agency determines that such law gives greater protection to the 
consumer.
  (b) The [Bureau] Agency shall by regulation exempt from the 
requirements of this chapter any class of credit transactions 
within any State if it determines that under the law of that 
State that class of transactions is subject to requirements 
substantially similar to those imposed under this chapter or 
that such law gives greater protection to the consumer, and 
that there is adequate provision for enforcement.
  (c) Notwithstanding any other provisions of this title, any 
discount offered under section 167(b) of this title shall not 
be considered a finance charge or other charge for credit under 
the usury laws of any State or under the laws of any State 
relating to disclosure of information in connection with credit 
transactions, or relating to the types, amounts or rates of 
charges, or to any element or elements of charges permissible 
under such laws in connection with the extension or use of 
credit.

                       CHAPTER 5--CONSUMER LEASES


Sec. 181. Definitions

   For purposes of this chapter--
          (1) The term ``consumer lease'' means a contract in 
        the form of a lease or bailment for the use of personal 
        property by a natural person for a period of time 
        exceeding four months, and for a total contractual 
        obligation not exceeding $50,000, primarily for 
        personal, family, or household purposes, whether or not 
        the lessee has the option to purchase or otherwise 
        become the owner of the property at the expiration of 
        the lease, except that such term shall not include any 
        credit sale as defined in section [103(g)] 103(h). Such 
        term does not include a lease for agricultural, 
        business, or commercial purposes, or to a government or 
        governmental agency or instrumentality, or to an 
        organization.
          (2) The term ``lessee'' means a natural person who 
        leases or is offered a consumer lease.
          (3) The term ``lessor'' means a person who is 
        regularly engaged in leasing, offering to lease, or 
        arranging to lease under a consumer lease.
          (4) The term ``personal property'' means any property 
        which is not real property under the laws of the State 
        where situated at the time offered or otherwise made 
        available for lease.
          (5) The terms ``security'' and ``security interest'' 
        mean any interest in property which secures payment or 
        performance of an obligation.

Sec. 182. Consumer lease disclosures

   Each lessor shall give a lessee prior to the consummation of 
the lease a dated written statement on which the lessor and 
lessee are identified setting out accurately and in a clear and 
conspicuous manner the following information with respect to 
that lease, as applicable:
          (1) A brief description or identification of the 
        leased property;
          (2) The amount of any payment by the lessee required 
        at the inception of the lease;
          (3) The amount paid or payable by the lessee for 
        official fees, registration, certificate of title, or 
        license fees or taxes;
          (4) The amount of other charges payable by the lessee 
        not included in the periodic payments, a description of 
        the charges and that the lessee shall be liable for the 
        differential, if any, between the anticipated fair 
        market value of the leased property and its appraised 
        actual value at the termination of the lease, if the 
        lessee has such liability;
          (5) A statement of the amount or method of 
        determining the amount of any liabilities the lease 
        imposes upon the lessee at the end of the term and 
        whether or not the lessee has the option to purchase 
        the leased property and at what price and time;
          (6) A statement identifying all express warranties 
        and guarantees made by the manufacturer or lessor with 
        respect to the leased property, and identifying the 
        party responsible for maintaining or servicing the 
        leased property together with a description of the 
        responsibility;
          (7) A brief description of insurance provided or paid 
        for by the lessor or required of the lessee, including 
        the types and amounts of the coverages and costs;
          (8) A description of any security interest held or to 
        be retained by the lessor in connection with the lease 
        and a clear identification of the property to which the 
        security interest relates;
          (9) The number, amount, and due dates or periods of 
        payments under the lease and the total amount of such 
        periodic payments;
          (10) Where the lease provides that the lessee shall 
        be liable for the anticipated fair market value of the 
        property on expiration of the lease, the fair market 
        value of the property at the inception of the lease, 
        the aggregate cost of the lease on expiration, and the 
        differential between them; and
          (11) A statement of the conditions under which the 
        lessee or lessor may terminate the lease prior to the 
        end of the term and the amount or method of determining 
        any penalty or other charge for delinquency, default, 
        late payments, or early termination.
The disclosures required under this section may be made in the 
lease contract to be signed by the lessee. The [Bureau] Agency 
may provide by regulation that any portion of the information 
required to be disclosed under this section may be given in the 
form of estimates where the lessor is not in a position to know 
exact information.

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Sec. 184. Consumer lease advertising

  (a) In General.--If an advertisement for a consumer lease 
includes a statement of the amount of any payment or a 
statement that any or no initial payment is required, the 
advertisement shall clearly and conspicuously state, as 
applicable--
          (1) the transaction advertised is a lease;
          (2) the total amount of any initial payments required 
        on or before consummation of the lease or delivery of 
        the property, whichever is later;
          (3) that a security deposit is required;
          (4) the number, amount, and timing of scheduled 
        payments; and
          (5) with respect to a lease in which the liability of 
        the consumer at the end of the lease term is based on 
        the anticipated residual value of the property, that an 
        extra charge may be imposed at the end of the lease 
        term.
  (b) Advertising Medium Not Liable.--No owner or employee of 
any entity that serves as a medium in which an advertisement 
appears or through which an advertisement is disseminated, 
shall be liable under this section.
  (c) Radio Advertisements.--
          (1) In general.--An advertisement by radio broadcast 
        to aid, promote, or assist, directly or indirectly, any 
        consumer lease shall be deemed to be in compliance with 
        the requirements of subsection (a) if such 
        advertisement clearly and conspicuously--
                  (A) states the information required by 
                paragraphs (1) and (2) of subsection (a);
                  (B) states the number, amounts, due dates or 
                periods of scheduled payments, and the total of 
                such payments under the lease;
                  (C) includes--
                          (i) a referral to--
                                  (I) a toll-free telephone 
                                number established in 
                                accordance with paragraph (2) 
                                that may be used by consumers 
                                to obtain the information 
                                required under subsection (a); 
                                or
                                  (II) a written advertisement 
                                that--
                                          (aa) appears in a 
                                        publication in general 
                                        circulation in the 
                                        community served by the 
                                        radio station on which 
                                        such advertisement is 
                                        broadcast during the 
                                        period beginning 3 days 
                                        before any such 
                                        broadcast and ending 10 
                                        days after such 
                                        broadcast; and
                                          (bb) includes the 
                                        information required to 
                                        be disclosed under 
                                        subsection (a); and
                          (ii) the name and dates of any 
                        publication referred to in clause 
                        (i)(II); and
                  (D) includes any other information which the 
                [Bureau] Agency determines necessary to carry 
                out this chapter.
          (2) Establishment of toll-free number.--
                  (A) In general.--In the case of a radio 
                broadcast advertisement described in paragraph 
                (1) that includes a referral to a toll-free 
                telephone number, the lessor who offers the 
                consumer lease shall--
                          (i) establish such a toll-free 
                        telephone number not later than the 
                        date on which the advertisement 
                        including the referral is broadcast;
                          (ii) maintain such telephone number 
                        for a period of not less than 10 days, 
                        beginning on the date of any such 
                        broadcast; and
                          (iii) provide the information 
                        required under subsection (a) with 
                        respect to the lease to any person who 
                        calls such number.
                  (B) Form of information.--The information 
                required to be provided under subparagraph 
                (A)(iii) shall be provided verbally or, if 
                requested by the consumer, in written form.
          (3) No effect on other law.--Nothing in this 
        subsection shall affect the requirements of Federal law 
        as such requirements apply to advertisement by any 
        medium other than radio broadcast.

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Sec. 186. Relation to State laws

  (a) This chapter does not annul, alter, or affect, or exempt 
any person subject to the provisions of this chapter from 
complying with, the laws of any State with respect to consumer 
leases, except to the extent that those laws are inconsistent 
with any provision of this chapter, and then only to the extent 
of the inconsistency. The [Bureau] Agency is authorized to 
determine whether such inconsistencies exist. The [Bureau] 
Agency may not determine that any State law is inconsistent 
with any provision of this chapter if the [Bureau] Agency 
determines that such law gives greater protection and benefit 
to the consumer.
  (b) The [Bureau] Agency shall by regulation exempt from the 
requirements of this chapter any class of lease transactions 
within any State if it determines that under the law of that 
State that class of transactions is subject to requirements 
substantially similar to those imposed under this chapter or 
that such law gives greater protection and benefit to the 
consumer, and that there is adequate provision for enforcement.

SEC. 187. REGULATIONS.

  (a) Regulations Authorized.--
          (1) In general.--The [Bureau] Agency shall prescribe 
        regulations to update and clarify the requirements and 
        definitions applicable to lease disclosures and 
        contracts, and any other issues specifically related to 
        consumer leasing, to the extent that the [Bureau] 
        Agency determines such action to be necessary--
                  (A) to carry out this chapter;
                  (B) to prevent any circumvention of this 
                chapter; or
                  (C) to facilitate compliance with the 
                requirements of the chapter.
          (2) Classifications, adjustments.--Any regulations 
        prescribed under paragraph (1) may contain 
        classifications and differentiations, and may provide 
        for adjustments and exceptions for any class of 
        transactions, as the [Bureau] Agency considers 
        appropriate.
  (b) Model Disclosure.--
          (1) Publication.--The [Bureau] Agency shall establish 
        and publish model disclosure forms to facilitate 
        compliance with the disclosure requirements of this 
        chapter and to aid the consumer in understanding the 
        transaction to which the subject disclosure form 
        relates.
          (2) Use of automated equipment.--In establishing 
        model forms under this subsection, the [Bureau] Agency 
        shall consider the use by lessors of data processing or 
        similar automated equipment.
          (3) Use optional.--A lessor may utilize a model 
        disclosure form established by the [Bureau] Agency 
        under this subsection for purposes of compliance with 
        this chapter, at the discretion of the lessor.
          (4) Effect of use.--Any lessor who properly uses the 
        material aspects of any model disclosure form 
        established by the [Bureau] Agency under this 
        subsection shall be deemed to be in compliance with the 
        disclosure requirements to which the form relates.

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                              ----------                              


EXPEDITED FUNDS AVAILABILITY ACT

           *       *       *       *       *       *       *



                 TITLE VI--EXPEDITED FUNDS AVAILABILITY

SEC. 601. SHORT TITLE.

  This title may be cited as the ``Expedited Funds Availability 
Act''.

SEC. 602. DEFINITIONS.

   For purposes of this title--
          (1) Account.--The term ``account'' means a demand 
        deposit account or other similar transaction account at 
        a depository institution.
          (2) Board.--The term ``Board'' means the Board of 
        Governors of the Federal Reserve System.
          (3) Business day.--The term ``business day'' means 
        any day other than a Saturday, Sunday, or legal 
        holiday.
          (4) Cash.--The term ``cash'' means United States 
        coins and currency, including Federal Reserve notes.
          (5) Cashier's check.--The term ``cashier's check'' 
        means any check which--
                  (A) is drawn on a depository institution;
                  (B) is signed by an officer or employee of 
                such depository institution; and
                  (C) is a direct obligation of such depository 
                institution.
          (6) Certified check.--The term ``certified check'' 
        means any check with respect to which a depository 
        institution certifies that--
                  (A) the signature on the check is genuine; 
                and
                  (B) such depository institution has set aside 
                funds which--
                          (i) are equal to the amount of the 
                        check; and
                          (ii) will be used only to pay such 
                        check.
          (7) Check.--The term ``check'' means any negotiable 
        demand draft drawn on or payable through an office of a 
        depository institution located in the United States. 
        Such term does not include noncash items.
          (8) Check clearinghouse association.--The term 
        ``check clearinghouse association'' means any 
        arrangement by which participant depository 
        institutions exchange deposited checks on a local 
        basis, including an entire metropolitan area, without 
        using the check processing facilities of the Federal 
        Reserve System.
          (9) Check processing region.--The term ``check 
        processing region'' means the geographical area served 
        by a Federal Reserve bank check processing center or 
        such larger area as the Board may prescribe by 
        regulations.
          (10) Consumer account.--The term ``consumer account'' 
        means any account used primarily for personal, family, 
        or household purposes.
          (11) Depository check.--The term ``depository check'' 
        means any cashier's check, certified check, teller's 
        check, and any other functionally equivalent instrument 
        as determined by the Board.
          (12) Depository institution.--The term ``depository 
        institution'' has the meaning given such term in 
        clauses (i) through (vi) of section 19(b)(1)(A) of the 
        Federal Reserve Act. Such term also includes an office, 
        branch, or agency of a foreign bank located in the 
        United States.
          (13) Local originating depository institution.--The 
        term ``local originating depository institution'' means 
        any originating depository institution which is located 
        in the same check processing region as the receiving 
        depository institution.
          (14) Noncash item.--The term ``noncash item'' means--
                  (A) a check or other demand item to which a 
                passbook, certificate, or other document is 
                attached;
                  (B) a check or other demand item which is 
                accompanied by special instructions, such as a 
                request for special advise of payment or 
                dishonor; or
                  (C) any similar item which is otherwise 
                classified as a noncash item in regulations of 
                the Board.
          (15) Nonlocal originating depository institution.--
        The term ``nonlocal originating depository 
        institution'' means any originating depository 
        institution which is not a local depository 
        institution.
          (16) Proprietary atm.--The term ``proprietary ATM'' 
        means an automated teller machine which is--
                  (A) located--
                          (i) at or adjacent to a branch of the 
                        receiving depository institution; or
                          (ii) in close proximity, as defined 
                        by the Board, to a branch of the 
                        receiving depository institution; or
                  (B) owned by, operated exclusively for, or 
                operated by the receiving depository 
                institution.
          (17) Originating depository institution.--The term 
        ``originating depository institution'' means the branch 
        of a depository institution on which a check is drawn.
          (18) Nonproprietary atm.--The term ``nonproprietary 
        ATM'' means an automated teller machine which is not a 
        proprietary ATM.
          (19) Participant.--The term ``participant'' means a 
        depository institution which--
                  (A) is located in the same geographic area as 
                that served by a check clearinghouse 
                association; and
                  (B) exchanges checks through the check 
                clearinghouse association, either directly or 
                through an intermediary.
          (20) Receiving depository institution.--The term 
        ``receiving depository institution'' means the branch 
        of a depository institution or the proprietary ATM, 
        located in the United States, in which a check is first 
        deposited.
          (21) State.--The term ``State'' means any State, the 
        District of Columbia, the Commonwealth of Puerto Rico, 
        American Samoa, the Commonwealth of the Northern 
        Mariana Islands, or the Virgin Islands.
          (22) Teller's check.--The term ``teller's check'' 
        means any check issued by a depository institution and 
        drawn on another depository institution.
          (23) United states.--The term ``United States'' means 
        the several States, the District of Columbia, the 
        Commonwealth of Puerto Rico, American Samoa, the 
        Commonwealth of the Northern Mariana Islands, and the 
        Virgin Islands.
          (24) Unit of general local government.--The term 
        ``unit of general local government'' means any city, 
        county, town, township, parish, village, or other 
        general purpose political subdivision of a State.
          (25) Wire transfer.--The term ``wire transfer'' has 
        such meaning as the Board shall prescribe by 
        regulations.

SEC. 603. EXPEDITED FUNDS AVAILABILITY SCHEDULES.

  (a) Next Business Day Availability For Certain Deposits.--
          (1) Cash deposits; wire transfers.--Except as 
        provided in subsection (e) and in section 604, in any 
        case in which--
                  (A) any cash is deposited in an account at a 
                receiving depository institution staffed by 
                individuals employed by such institution, or
                  (B) funds are received by a depository 
                institution by wire transfer for deposit in an 
                account at such institution,
        such cash or funds shall be available for withdrawal 
        not later than the business day after the business day 
        on which such cash is deposited or such funds are 
        received for deposit.
          (2) Government checks; certain other checks.--Funds 
        deposited in an account at a depository institution by 
        check shall be available for withdrawal not later than 
        the business day after the business day on which such 
        funds are deposited in the case of--
                  (A) a check which--
                          (i) is drawn on the Treasury of the 
                        United States; and
                          (ii) is endorsed only by the person 
                        to whom it was issued.
                  (B) a check which--
                          (i) is drawn by a State;
                          (ii) is deposited in a receiving 
                        depository institution which is located 
                        in such State and is staffed by 
                        individuals employed by such 
                        institution;
                          (iii) is deposited with a special 
                        deposit slip which indicates it is a 
                        check drawn by a State; and
                          (iv) is endorsed only by the person 
                        to whom it was issued;
                  (C) a check which--
                          (i) is drawn by a unit of general 
                        local government;
                          (ii) is deposited in a receiving 
                        depository institution which is located 
                        in the same State as such unit of 
                        general local government and is staffed 
                        by individuals employed by such 
                        institution;
                          (iii) is deposited with a special 
                        deposit slip which indicates it is a 
                        check drawn by a unit of general local 
                        government; and
                          (iv) is endorsed only by the person 
                        to whom it was issued;
                  (D) the first $200 deposited by check or 
                checks on any one business day;
                  (E) a check deposited in a branch of a 
                depository institution and drawn on the same or 
                another branch of the same depository 
                institution if both such branches are located 
                in the same State or the same check processing 
                region;
                  (F) a cashier's check, certified check, 
                teller's check, or depository check which--
                          (i) is deposited in a receiving 
                        depository institution which is staffed 
                        by individuals employed by such 
                        institution;
                          (ii) is deposited with a special 
                        deposit slip which indicates it is a 
                        cashier's check, certified check, 
                        teller's check, or depository check, as 
                        the case may be; and
                          (iii) is endorsed only by the person 
                        to whom it was issued.
  (b) Permanent Schedule.--
          (1) Availability of funds deposited by local 
        checks.--Subject to paragraph (3) of this subsection, 
        subsections (a)(2), (d), and (e) of this section, and 
        section 604, not more than 1 business day shall 
        intervene between the business day on which funds are 
        deposited in an account at a depository institution by 
        a check drawn on a local originating depository 
        institution and the business day on which the funds 
        involved are available for withdrawal.
          (2) Availability of funds deposited by nonlocal 
        checks.--Subject to paragraph (3) of this subsection, 
        subsections (a)(2), (d), and (e) of this section, and 
        section 604, not more than 4 business days shall 
        intervene between the business day on which funds are 
        deposited in an account at a depository institution by 
        a check drawn on a nonlocal originating depository 
        institution and the business day on which such funds 
        are available for withdrawal.
          (3) Time period adjustments for cash withdrawal of 
        certain checks.--
                  (A) In general.--Except as provided in 
                subparagraph (B), funds deposited in an account 
                in a depository institution by check (other 
                than a check described in subsection (a)(2)) 
                shall be available for cash withdrawal not 
                later than the business day after the business 
                day on which such funds otherwise are available 
                under paragraph (1) or (2).
                  (B)  5 p.m. cash availability.--Not more than 
                $400 (or the maximum amount allowable in the 
                case of a withdrawal from an automated teller 
                machine but not more than $400) of funds 
                deposited by one or more checks to which this 
                paragraph applies shall be available for cash 
                withdrawal not later than 5 o'clock post 
                meridian of the business day on which such 
                funds are available under paragraph (1) or (2). 
                If funds deposited by checks described in both 
                paragraph (1) and paragraph (2) become 
                available for cash withdrawal under this 
                paragraph on the same business day, the 
                limitation contained in this subparagraph shall 
                apply to the aggregate amount of such funds.
                  (C)  $200 availability.--Any amount available 
                for withdrawal under this paragraph shall be in 
                addition to the amount available under 
                subsection (a)(2)(D).
          (4) Applicability.--This subsection shall apply with 
        respect to funds deposited by check in an account at a 
        depository institution on or after September 1, 1990, 
        except that the Board may, by regulation, make this 
        subsection or any part of this subsection applicable 
        earlier than September 1, 1990.
  (c) Temporary Schedule.--
          (1) Availability of local checks.--
                  (A) In general.--Subject to subparagraph (B) 
                of this paragraph, subsections (a)(2), (d), and 
                (e) of this section, and section 604, not more 
                than 2 business days shall intervene between 
                the business day on which funds are deposited 
                in an account at a depository institution by a 
                check drawn on a local originating depository 
                institution and the business day on which such 
                funds are available for withdrawal.
                  (B) Time period adjustment for cash 
                withdrawal of certain checks.--
                          (i) In general.--Except as provided 
                        in clause (ii), funds deposited in an 
                        account in a depository institution by 
                        check drawn on a local depository 
                        institution that is not a participant 
                        in the same check clearinghouse 
                        association as the receiving depository 
                        institution (other than a check 
                        described in subsection (a)(2)) shall 
                        be available for cash withdrawal not 
                        later than the business day after the 
                        business day on which such funds 
                        otherwise are available under 
                        subparagraph (A).
                          (ii)  5 p.m. cash availability.--Not 
                        more than $400 (or the maximum amount 
                        allowable in the case of a withdrawal 
                        from an automated teller machine but 
                        not more than $400) of funds deposited 
                        by one or more checks to which this 
                        subparagraph applies shall be available 
                        for cash withdrawal not later than 5 
                        o'clock post meridian of the business 
                        day on which such funds are available 
                        under subparagraph (A).
                  (iii)  $200 availability.--Any amount 
                available for withdrawal under this 
                subparagraph shall be in addition to the amount 
                available under subsection (a)(2)(D).
          (2) Availability of nonlocal checks.--Subject to 
        subsections (a)(2), (d), and (e) of this section and 
        section 604, not more than 6 business days shall 
        intervene between the business day on which funds are 
        deposited in an account at a depository institution by 
        a check drawn on a nonlocal originating depository 
        institution and the business day on which such funds 
        are available for withdrawal.
          (3) Applicability.--This subsection shall apply with 
        respect to funds deposited by check in an account at a 
        depository institution after August 31, 1988, and 
        before September 1, 1990, except as may be otherwise 
        provided under subsection (b)(4).
  (d) Time Period Adjustments.--
          (1) Reduction generally.--Notwithstanding any other 
        provision of law, the Board, jointly with the Director 
        of the [Bureau of Consumer Financial Protection] 
        Consumer Law Enforcement Agency, shall, by regulation, 
        reduce the time periods established under subsections 
        (b), (c), and (e) to as short a time as possible and 
        equal to the period of time achievable under the 
        improved check clearing system for a receiving 
        depository institution to reasonably expect to learn of 
        the nonpayment of most items for each category of 
        checks.
          (2) Extension for certain deposits in noncontiguous 
        states or territories.--Notwithstanding any other 
        provision of law, any time period established under 
        subsection (b), (c), or (e) shall be extended by 1 
        business day in the case of any deposit which is both--
                  (A) deposited in an account at a depository 
                institution which is located in Alaska, Hawaii, 
                Puerto Rico, American Samoa, the Commonwealth 
                of the Northern Mariana Islands, or the Virgin 
                Islands; and
                  (B) deposited by a check drawn on an 
                originating depository institution which is not 
                located in the same State, commonwealth, or 
                territory as the receiving depository 
                institution.
  (e) Deposits at an ATM.--
          (1) Nonproprietary atm.--
                  (A) In general.--Not more than 4 business 
                days shall intervene between the business day a 
                deposit described in subparagraph (B) is made 
                at a nonproprietary automated teller machine 
                (for deposit in an account at a depository 
                institution) and the business day on which 
                funds from such deposit are available for 
                withdrawal.
                  (B) Deposits described in this paragraph.--A 
                deposit is described in this subparagraph if it 
                is--
                          (i) a cash deposit;
                          (ii) a deposit made by a check 
                        described in subsection (a)(2);
                          (iii) a deposit made by a check drawn 
                        on a local originating depository 
                        institution (other than a check 
                        described in subsection (a)(2)); or
                          (iv) a deposit made by a check drawn 
                        on a nonlocal originating depository 
                        institution (other than a check 
                        described in subsection (a)(2)).
          (2) Proprietary atm--temporary and permanent 
        schedules.--The provisions of subsections (a), (b), and 
        (c) shall apply with respect to any funds deposited at 
        a proprietary auto- mated teller machine for deposit in 
        an account at a depository institution.
          (3) Study and report on atm's.--The Board shall, 
        either directly or through the Consumer Advisory 
        Council, establish and maintain a dialogue with 
        depository institutions and their suppliers on the 
        computer software and hardware available for use by 
        automated teller machines, and shall, not later than 
        September 1 of each of the first 3 calendar years 
        beginning after the date of the enactment of this 
        title, report to the Congress regarding such software 
        and hardware and regarding the potential for improving 
        the processing of automated teller machine deposits.
  (f) Check Return; Notice of Nonpayment.--No provision of this 
section shall be construed as requiring that, with respect to 
all checks deposited in a receiving depository institution--
          (1) such checks be physically returned to such 
        depository institution; or
          (2) any notice of nonpayment of any such check be 
        given to such depository institution within the times 
        set forth in subsection (a), (b), (c), or (e) or in the 
        regulations issued under any such subsection.

SEC. 604. SAFEGUARD EXCEPTIONS.

  (a) New Accounts.--Notwithstanding section 603, in the case 
of any account established at a depository institution by a new 
depositor, the following provisions shall apply with respect to 
any deposit in such account during the 30-day period (or such 
shorter period as the Board, jointly with the Director of the 
[Bureau of Consumer Financial Protection] Consumer Law 
Enforcement Agency, may establish) beginning on the date such 
account is established--
          (1) Next business day availability of cash and 
        certain items.--Except as provided in paragraph (3), in 
        the case of--
                  (A) any cash deposited in such account;
                  (B) any funds received by such depository 
                institution by wire transfer for deposit in 
                such account;
                  (C) any funds deposited in such account by 
                cashier's check, certified check, teller's 
                check, depository check, or traveler's check; 
                and
                  (D) any funds deposited by a government check 
                which is described in subparagraph (A), (B), or 
                (C) of section 603(a)(2),
        such cash or funds shall be available for withdrawal on 
        the business day after the business day on which such 
        cash or funds are deposited or, in the case of a wire 
        transfer, on the business day after the business day on 
        which such funds are received for deposit.
          (2) Availability of other items.--In the case of any 
        funds deposited in such account by a check (other than 
        a check described in subparagraph (C) or (D) of 
        paragraph (1)), the availability for withdrawal of such 
        funds shall not be subject to the provisions of section 
        603(b), 603(c), or paragraphs (1) of section 603(e).
          (3) Limitation relating to certain checks in excess 
        of $5,000.--In the case of funds deposited in such 
        account during such period by checks described in 
        subparagraph (C) or (D) of paragraph (1) the aggregate 
        amount of which exceeds $5,000--
                  (A) paragraph (1) shall apply only with 
                respect to the first $5,000 of such aggregate 
                amount; and
                  (B) not more than 8 business days shall 
                intervene between the business day on which any 
                such funds are deposited and the business day 
                on which such excess amount shall be available 
                for withdrawal.
  (b) Large or Redeposited Checks; Repeated Overdrafts.--The 
Board, jointly with the Director of the [Bureau of Consumer 
Financial Protection] Consumer Law Enforcement Agency, may, by 
regulation, establish reasonable exceptions to any time 
limitation established under subsection (a)(2), (b), (c), or 
(e) of section 603 for--
          (1) the amount of deposits by one or more checks that 
        exceeds the amount of $5,000 in any one day;
          (2) checks that have been returned unpaid and 
        redeposited; and
          (3) deposit accounts which have been overdrawn 
        repeatedly.
  (c) Reasonable Cause Exception.--
          (1) In general.--In accordance with regulations which 
        the Board, jointly with the Director of the [Bureau of 
        Consumer Financial Protection] Consumer Law Enforcement 
        Agency, shall prescribe, subsections (a)(2), (b), (c), 
        and (e) of section 603 shall not apply with respect to 
        any check deposited in an account at a depository 
        institution if the receiving depository institution has 
        reasonable cause to believe that the check is 
        uncollectible from the originating depository 
        institution. For purposes of the preceding sentence, 
        reasonable cause to believe requires the existence of 
        facts which would cause a well-grounded belief in the 
        mind of a reasonable person. Such reasons shall be 
        included in the notice required under sub- section (f).
          (2) Basis for determination.--No determination under 
        this subsection may be based on any class of checks or 
        persons.
          (3) Overdraft fees.--If the receiving depository 
        institution determines that a check deposited in an 
        account is a check described in paragraph (1), the 
        receiving depository institution shall not assess any 
        fee for any subsequent overdraft with respect to such 
        account, if--
                  (A) the depositor was not provided with the 
                written notice required under subsection (f) 
                (with respect to such determination) at the 
                time the deposit was made;
                  (B) the overdraft would not have occurred but 
                for the fact that the funds so deposited are 
                not available; and
                  (C) the amount of the check is collected from 
                the originating depository institution.
          (4) Compliance.--Each agency referred to in section 
        610(a) shall monitor compliance with the requirements 
        of this subsection in each regular examination of a 
        depository institution and shall describe in each 
        report to the Congress the extent to which this 
        subsection is being complied with. For the purpose of 
        this paragraph, each depository institution shall 
        retain a record of each notice provided under 
        subsection (f) as a result of the application of this 
        subsection.
  (d) Emergency Conditions.--Subject to such regulations as the 
Board, jointly with the Director of the [Bureau of Consumer 
Financial Protection] Consumer Law Enforcement Agency, may 
prescribe, subsections (a)(2), (b), (c), and (e) of section 603 
shall not apply to funds deposited by check in any receiving 
depository institution in the case of--
          (1) any interruption of communication facilities;
          (2) suspension of payments by another depository 
        institution;
          (3) any war; or
          (4) any emergency condition beyond the control of the 
        receiving depository institution,
if the receiving depository institution exercises such 
diligence as the circumstances require.
  (e) Prevention of Fraud Losses.--
          (1) In general.--The Board, jointly with the Director 
        of the [Bureau of Consumer Financial Protection] 
        Consumer Law Enforcement Agency, may, by regulation or 
        order, suspend the applicability of this title, or any 
        portion thereof, to any classification of checks if the 
        Board, jointly with the Director of the [Bureau of 
        Consumer Financial Protection] Consumer Law Enforcement 
        Agency, determines that--
                  (A) depository institutions are experiencing 
                an unacceptable level of losses due to check-
                related fraud, and
                  (B) suspension of this title, or such portion 
                of this title, with regard to the 
                classification of checks involved in such fraud 
                is necessary to diminish the volume of such 
                fraud.
          (2) Sunset provision.--No regulation prescribed or 
        order issued under paragraph (1) shall remain in effect 
        for more than 45 days (excluding Saturdays, Sundays, 
        legal holidays, or any day either House of Congress is 
        not in session).
          (3) Report to congress.--
                  (A) Notice of each suspension.--Within 10 
                days of prescribing any regulation or issuing 
                any order under paragraph (1), the Board, 
                jointly with the Director of the [Bureau of 
                Consumer Financial Protection] Consumer Law 
                Enforcement Agency, shall transmit a report of 
                such action to the Committee on Banking, 
                Finance and Urban Affairs of the House of 
                Representatives and the Committee on Banking, 
                Housing, and Urban Affairs of the Senate.
                  (B) Contents of report.--Each report under 
                subparagraph (A) shall contain--
                          (i) the specific reason for 
                        prescribing the regulation or issuing 
                        the order;
                          (ii) evidence considered by the 
                        Board, jointly with the Director of the 
                        [Bureau of Consumer Financial 
                        Protection] Consumer Law Enforcement 
                        Agency, in making the determination 
                        under paragraph (1) with respect to 
                        such regulation or order; and
                          (iii) specific examples of the check-
                        related fraud giving rise to such 
                        regulation or order.
  (f) Notice of Exception; Availability Within Reasonable 
Time.--
          (1) In general.--If any exception contained in this 
        section (other than subsection (a)) applies with 
        respect to funds deposited in an account at a 
        depository institution--
                  (A) the depository institution shall provide 
                notice in the manner provided in paragraph (2) 
                of--
                          (i) the time period within which the 
                        funds shall be made available for 
                        withdrawal; and
                          (ii) the reason the exception was 
                        invoked; and
                  (B) except where other time periods are 
                specifically provided in this title, the 
                availability of the funds deposited shall be 
                governed by the policy of the receiving 
                depository institution, but shall not exceed a 
                reasonable period of time as determined by the 
                Board, jointly with the Director of the [Bureau 
                of Consumer Financial Protection] Consumer Law 
                Enforcement Agency.
          (2) Time for notice.--The notice required under 
        paragraph (1)(A) with respect to a deposit to which an 
        exception contained in this section applies shall be 
        made by the time provided in the following 
        subparagraphs:
                  (A) In the case of a deposit made in person 
                by the depositor at the receiving depository 
                institution, the depository institution shall 
                immediately provide such notice in writing to 
                the depositor.
                  (B) In the case of any other deposit (other 
                than a deposit described in subparagraph (C)), 
                the receiving depository institution shall mail 
                the notice to the depositor not later than the 
                close of the next business day following the 
                business day on which the deposit is received.
                  (C) In the case of a deposit to which 
                subsection (d) or (e) applies, notice shall be 
                provided by the depository institution in 
                accordance with regulations of the Board, 
                jointly with the Director of the [Bureau of 
                Consumer Financial Protection] Consumer Law 
                Enforcement Agency.
                  (D) In the case of a deposit to which 
                subsection (b)(1) or (b)(2) applies, the 
                depository institution may, for nonconsumer 
                accounts and other classes of accounts, as 
                defined by the Board, that generally have a 
                large number of such deposits, provide notice 
                at or before the time it first determines that 
                the subsection applies.
                  (E) In the case of a deposit to which 
                subsection (b)(3) applies, the depository 
                institution may, subject to regulations of the 
                Board, provide notice at the beginning of each 
                time period it determines that the subsection 
                applies. In addition to the requirements 
                contained in paragraph (1)(A), the notice shall 
                specify the time period for which the exception 
                will apply.
          (3) Subsequent determinations.--If the facts upon 
        which the determination of the applicability of an 
        exception contained in subsection (b) or (c) to any 
        deposit only become known to the receiving depository 
        institution after the time notice is required under 
        paragraph (2) with respect to such deposit, the 
        depository institution shall mail such notice to the 
        depositor as soon as practicable, but not later than 
        the first business day following the day such facts 
        become known to the depository institution.

SEC. 605. DISCLOSURE OF FUNDS AVAILABILITY POLICIES.

  (a) Notice for New Accounts.--Before an account is opened at 
a depository institution, the depository institution shall 
provide written notice to the potential customer of the 
specific policy of such depository institution with respect to 
when a customer may withdraw funds deposited into the 
customer's account.
  (b) Preprinted Deposit Slips.--All preprinted deposit slips 
that a depository institution furnishes to its customers shall 
contain a summary notice, as prescribed by the Board, jointly 
with the Director of the [Bureau of Consumer Financial 
Protection] Consumer Law Enforcement Agency, in regulations, 
that deposited items may not be available for immediate 
withdrawal.
  (c) Mailing of Notice.--
          (1) First mailing after enactment.--In the first 
        regularly scheduled mailing to customers occurring 
        after the effective date of this section, but not more 
        than 60 days after such effective date, each depository 
        institution shall send a written notice containing the 
        specific policy of such depository institution with 
        respect to when a customer may withdraw funds deposited 
        into such customer's account, unless the depository 
        institution has provided a disclosure which meets the 
        requirements of this section before such effective 
        date.
          (2) Subsequent changes.--A depository institution 
        shall send a written notice to customers at least 30 
        days before implementing any change to the depository 
        institution's policy with respect to when customers may 
        withdraw funds deposited into consumer accounts, except 
        that any change which expedites the availability of 
        such funds shall be disclosed not later than 30 days 
        after implementation.
          (3) Upon request.--Upon the request of any person, a 
        depository institution shall provide or send such 
        person a written notice containing the specific policy 
        of such depository institution with respect to when a 
        customer may withdraw funds deposited into a customer's 
        account.
  (d) Posting of Notice.--
          (1) Specific notice at manned teller stations.--Each 
        depository institution shall post, in a conspicuous 
        place in each location where deposits are accepted by 
        individuals employed by such depository institution, a 
        specific notice which describes the time periods 
        applicable to the availability of funds deposited in a 
        consumer account.
          (2) General notice at automated teller machines.--In 
        the case of any automated teller machine at which any 
        funds are received for deposit in an account at any 
        depository institution, the Board, jointly with the 
        Director of the [Bureau of Consumer Financial 
        Protection] Consumer Law Enforcement Agency, shall 
        prescribe, by regulations, that the owner or operator 
        of such automated teller machine shall post or provide 
        a general notice that funds deposited in such machine 
        may not be immediately available for withdrawal.
  (e) Notice of Interest Payment Policy.--If a depository 
institution described in section 606(b) begins the accrual of 
interest or dividends at a later date than the date described 
in section 606(a) with respect to all funds, including cash, 
deposited in an interest-bearing account at such depository 
institution, any notice required to be provided under 
subsections (a) and (c) shall contain a written description of 
the time at which such depository institution begins to accrue 
interest or dividends on such funds.
  (f) Model Disclosure Forms.--
          (1) Prepared by [board and bureau] board and 
        agency.--The Board, jointly with the Director of the 
        [Bureau of Consumer Financial Protection] Consumer Law 
        Enforcement Agency, shall publish model disclosure 
        forms and clauses for common transactions to facilitate 
        compliance with the disclosure requirements of this 
        section and to aid customers by utilizing readily 
        understandable language.
          (2) Use of forms to achieve compliance.--A depository 
        institution shall be deemed to be in compliance with 
        the requirements of this section if such institution--
                  (A) uses any appropriate model form or clause 
                as published by the Board, jointly with the 
                Director of the Bureau of Consumer Financial 
                Protection[,,]; or
                  (B) uses any such model form or clause and 
                changes such form or clause by--
                          (i) deleting any information which is 
                        not required by this title; or
                          (ii) rearranging the format.
          (3) Voluntary use.--Nothing in this title requires 
        the use of any such model form or clause prescribed by 
        the Board, jointly with the Director of the [Bureau of 
        Consumer Financial Protection] Consumer Law Enforcement 
        Agency, under this subsection.
          (4) Notice and comment.--Model disclosure forms and 
        clauses shall be adopted by the Board, jointly with the 
        Director of the [Bureau of Consumer Financial 
        Protection] Consumer Law Enforcement Agency, only after 
        notice duly given in the Federal Register and an 
        opportunity for public comment in accordance with 
        section 553 of title 5, United States Code.

           *       *       *       *       *       *       *


SEC. 609. REGULATIONS AND REPORTS BY BOARD.

  (a) In General.--After notice and opportunity to submit 
comment in accordance with section 553(c) of title 5, United 
States Code, the Board, jointly with the Director of the 
[Bureau of Consumer Financial Protection] Consumer Law 
Enforcement Agency, shall prescribe regulations--
          (1) to carry out the provisions of this title;
          (2) to prevent the circumvention or evasion of such 
        provisions; and
          (3) to facilitate compliance with such provisions.
  (b) Regulations Relating to Improvement of Check Processing 
System.--In order to improve the check processing system, the 
Board shall consider (among other proposals) requiring, by 
regulation, that--
          (1) depository institutions be charged based upon 
        notification that a check or similar instrument will be 
        presented for payment;
          (2) the Federal Reserve banks and depository 
        institutions provide for check truncation;
          (3) depository institutions be provided incentives to 
        return items promptly to the depository institution of 
        first deposit;
          (4) the Federal Reserve banks and depository 
        institutions take such actions as are necessary to 
        automate the process of returning unpaid checks,
          (5) each depository institution and Federal Reserve 
        bank--
                  (A) place its endorsement, and other 
                notations specified in regulations of the 
                Board, on checks in the positions specified in 
                such regulations; and
                  (B) take such actions as are necessary to--
                          (i) automate the process of reading 
                        endorsements; and
                          (ii) eliminate unnecessary 
                        endorsements;
          (6) within one business day after an originating 
        depository institution is presented a check (for more 
        than such minimum amount as the Board may prescribe)--
                  (A) such originating depository institution 
                determine whether it will pay such check; and
                  (B) if such originating depository 
                institution determines that it will not pay 
                such check, such originating depository 
                institution directly notify the receiving 
                depository institution of such determination;
          (7) regardless of where a check is cleared initially, 
        all returned checks be eligible to be returned through 
        the Federal Reserve System;
          (8) Federal Reserve banks and depository institutions 
        participate in the development and implementation of an 
        electronic clearinghouse process to the extent the 
        Board determines, pursuant to the study under 
        subsection (f), that such a process is feasible; and
          (9) originating depository institutions be permitted 
        to return unpaid checks directly to, and obtain 
        reimbursement for such checks directly from, the 
        receiving depository institution.
  (c) Regulatory Responsibility of Board for Payment System.--
          (1) Responsibility for payment system.--In order to 
        carry out the provisions of this title, the Board of 
        Governors of the Federal Reserve System shall have the 
        responsibility to regulate--
                  (A) any aspect of the payment system, 
                including the receipt, payment, collection, or 
                clearing of checks; and
                  (B) any related function of the payment 
                system with respect to checks.
          (2) Regulations.--The Board shall prescribe such 
        regulations as it may determine to be appropriate to 
        carry out its responsibility under paragraph (1).
  (d) Reports.--
          (1) Implementation progress reports.--
                  (A) Required reports.--The Board shall 
                transmit a report to both Houses of the 
                Congress not later than 18, 30, and 48 months 
                after the date of the enactment of this title.
                  (B) Contents of report.--Each such report 
                shall describe--
                          (i) the actions taken and progress 
                        made by the Board to implement the 
                        schedules established in section 603, 
                        and
                          (ii) the impact of this title on 
                        consumers and depository institutions.
          (2) Evaluation of temporary schedule report.--
                  (A) Report required.--The Board shall 
                transmit a report to both Houses of the 
                Congress not later than 2 years after the date 
                of the enactment of this title regarding the 
                effects the temporary schedule established 
                under section 603(c) have had on depository 
                institutions and the public.
                  (B) Contents of report.--Such report shall 
                also assess the potential impact the 
                implementation of the schedule established in 
                section 603(b) will have on depository 
                institutions and the public, including an 
                estimate of the risks to and losses of 
                depository institutions and the benefits to 
                consumers. Such report shall also contain such 
                recommendations for legislative or 
                administrative action as the Board may 
                determine to be necessary.
          (3) Comptroller general evaluation report.--Not later 
        than 6 months after section 603(b) takes effect, the 
        Comptroller General of the United States shall transmit 
        a report to the Congress evaluating the implementation 
        and administration of this title.
  (e) Consultations.--In prescribing regulations under 
subsections (a) and (b), the Board and the Director of the 
[Bureau of Consumer Financial Protection] Consumer Law 
Enforcement Agency, in the case of subsection (a), and the 
Board, in the case of subsection (b), shall consult with the 
Comptroller of the Currency, the Board of Directors of the 
Federal Deposit Insurance Corporation, and the National Credit 
Union Administration Board.
  (f) Electronic Clearinghouse Study.--
          (1) Study required.--The Board shall study the 
        feasibility of modernizing and accelerating the check 
        payment system through the development of an electronic 
        clearinghouse process utilizing existing 
        telecommunications technology to avoid the necessity of 
        actual presentment of the paper instrument to a payor 
        institution before such institution is charged for the 
        item.
          (2) Consultation; factors to be studied.--In 
        connection with the study required under paragraph (1), 
        the Board shall--
                  (A) consult with appropriate experts in 
                telecommunications technology; and
                  (B) consider all practical and legal 
                impediments to the development of an electronic 
                clearinghouse process.
          (3) Report required.--The Board shall report its 
        conclusions to the Congress within 9 months of the date 
        of the enactment of this title.

SEC. 610. ADMINISTRATIVE ENFORCEMENT.

  (a) Administrative Enforcement.--Compliance with the 
requirements imposed under this title, including regulations 
prescribed by and orders issued by the Board of Governors of 
the Federal Reserve System under this title, shall be enforced 
under--
          (1) section 8 of the Federal Deposit Insurance Act in 
        the case of--
                  (A) national banks, and Federal branches and 
                Federal agencies of foreign banks, by the 
                Office of the Comptroller of the Currency;
                  (B) member banks of the Federal Reserve 
                System (other than national banks), and 
                offices, branches, and agencies of foreign 
                banks located in the United States (other than 
                Federal branches, Federal agencies, and insured 
                State branches of foreign banks), by the Board 
                of Governors of the Federal Reserve System; and
                  (C) banks insured by the Federal Deposit 
                Insurance Corporation (other than members of 
                the Federal Reserve System) and insured State 
                branches of foreign banks, by the Board of 
                Directors of the Federal Deposit Insurance 
                Corporation;
          (2) section 8 of the Federal Deposit Insurance Act, 
        by the [Director of the Office of Thrift Supervision] 
        Comptroller of the Currency and the Board of Directors 
        of the Federal Deposit Insurance Corporation, as 
        appropriate, in the case of savings associations the 
        deposits of which are insured by the Federal Deposit 
        Insurance Corporation; and
          (3) the Federal Credit Union Act, by the National 
        Credit Union Administration Board with respect to any 
        Federal credit union or insured credit union.
The terms used in paragraph (1) that are not defined in this 
title or otherwise defined in section 3(s) of the Federal 
Deposit Insurance Act (12 U.S.C. 1813(s)) shall have the 
meaning given to them in section 1(b) of the International 
Banking Act of 1978 (12 U.S.C. 3101).
  (b) Additional Powers.--
          (1) Violation of this title treated as violation of 
        other acts.--For purposes of the exercise by any agency 
        referred to in subsection (a) of this section of its 
        powers under any Act referred to in that subsection, a 
        violation of any requirement imposed under this title 
        shall be deemed to be a violation of a requirement 
        imposed under that Act.
          (2) Enforcement authority under other acts.--In 
        addition to its powers under any provision of law 
        specifically referred to in subsection (a) of this 
        section, each of the agencies referred to in such 
        subsection may exercise, for purposes of enforcing 
        compliance with any requirement imposed under this 
        title, any other authority conferred on it by law.
  (c) Enforcement by the Board.--
          (1) In general.--Except to the extent that 
        enforcement of the requirements imposed under this 
        title is specifically committed to some other 
        Government agency under subsection (a) of this section, 
        the Board of Governors of the Federal Reserve System 
        shall enforce such requirements.
          (2) Additional remedy.--If the Board determines 
        that--
                  (A) any depository institution which is not a 
                depository institution described in subsection 
                (a), or
                  (B) any other person subject to the authority 
                of the Board under this title, including any 
                person subject to the authority of the Board 
                under section 605(d)(2) or 609(c),
        has failed to comply with any requirement imposed by 
        this title or by the Board under this title, the Board 
        may issue an order prohibiting any depository 
        institution, any Federal Reserve bank, or any other 
        person subject to the authority of the Board from 
        engaging in any activity or transaction which directly 
        or indirectly involves such noncomplying depository 
        institution or person (including any activity or 
        transaction involving the receipt, payment, collection, 
        and clearing of checks and any related function of the 
        payment system with respect to checks).
  (d) Procedural Rules.--The authority of the Board to 
prescribe regulations under this title does not impair the 
authority of any other agency designated in this section to 
make rules regarding its own procedures in enforcing compliance 
with requirements imposed under this title.

           *       *       *       *       *       *       *

                              ----------                              


             REAL ESTATE SETTLEMENT PROCEDURES ACT OF 1974


                              short title

  Section 1. This Act may be cited as the ``Real Estate 
Settlement Procedures Act of 1974''.

           *       *       *       *       *       *       *


                              definitions

  Sec. 3. For purposes of this Act--
          (1) the term ``federally related mortgage loan'' 
        includes any loan (other than temporary financing such 
        as a construction loan) which--
                  (A) is secured by a first or subordinate lien 
                on residential real property (including 
                individual units of condominiums and 
                cooperatives) designed principally for the 
                occupancy of from one to four families, 
                including any such secured loan, the proceeds 
                of which are used to prepay or pay off an 
                existing loan secured by the same property; and
                  (B)(i) is made in whole or in part by any 
                lender the deposits or accounts of which are 
                insured by any agency of the Federal 
                Government, or is made in whole or in part by 
                any lender which is regulated by any agency of 
                the Federal Government; or
                  (ii) is made in whole or in part, or insured, 
                guaranteed, supplemented, or assisted in any 
                way, by the Secretary or any other officer or 
                agency of the Federal Government or under or in 
                connection with a housing or urban development 
                program administered by the Secretary or a 
                housing or related program administered by any 
                other such officer or agency; or
                  (iii) is intended to be sold by the 
                originating lender to the Federal National 
                Mortgage Association, the Government National 
                Mortgage Association, the Federal Home Loan 
                Mortgage Corporation, or a financial 
                institution from which it is to be purchased by 
                the Federal Home Loan Mortgage Corporation; or
                  (iv) is made in whole or in part by any 
                ``creditor'', as defined in section 103(f) of 
                the Consumer Credit Protection Act (15 U.S.C. 
                1602(f)), who makes or invests in residential 
                real estate loans aggregating more than 
                $1,000,000 per year, except that for the 
                purpose of this Act, the term ``creditor'' does 
                not include any agency or instrumentality of 
                any state;
          (2) the term ``thing of value'' includes any payment, 
        advance, funds, loan, service, or other consideration;
          (3) the term ``settlement services'' includes any 
        service provided in connection with a real estate 
        settlement including, but not limited to, the 
        following: title searchers, title examinations, the 
        provision of title certificates, title insurance, 
        services rendered by an attorney, the preparation of 
        documents, property surveys, the rendering of credit 
        reports or appraisals, pest and fungus inspections, 
        services rendered by a real estate agent or broker, the 
        origination of a federally related mortgage loan 
        (including, but not limited to, the taking of loan 
        applications, loan processing, and the underwriting and 
        funding of loans), and the handling of the processing, 
        and closing or settlement;
          (4) the term ``title company'' means any institution 
        which is qualified to issue title insurance, directly 
        or through its agents, and also refers to any duly 
        authorized agent of a title company;
          (5) the term ``person'' includes individuals, 
        corporations, associations, partnerships, and trusts;
          (6) the term ``Secretary'' means the Secretary of 
        Housing and Urban Development;
          (7) the term ``affiliated business arrangement'' 
        means an arrangement in which (A) a person who is in a 
        position to refer business incident to or a part of a 
        real estate settlement service involving a federally 
        related mortgage loan, or an associate of such person, 
        has either an affiliate relationship with or a direct 
        or beneficial ownership interest of more than 1 percent 
        in a provider of settlement services; and (B) either of 
        such persons directly or indirectly refers such 
        business to that provider or affirmately influences the 
        selection of that provider;
          (8) the term ``associate'' means one who has one or 
        more of the following relationships with a person in a 
        position to refer settlement business: (A) a spouse, 
        parent, or child of such person; (B) a corporation or 
        business entity that controls, is controlled by, or is 
        under common control with such person; (C) an employer, 
        officer, director, partner, franchisor, or franchisee 
        of such person; or (D) anyone who has an agreement, 
        arrangement, or understanding, with such person, the 
        purpose or substantial effect of which is to enable the 
        person in a position to refer settlement business to 
        benefit financially from the referals of such business; 
        and
          [(9) the term ``Bureau '' means the Bureau of 
        Consumer Financial Protection.]
          (9) the term ``Agency'' means the Consumer Law 
        Enforcement Agency.

                      uniform settlement statement

  Sec. 4. (a) The [Bureau] Agency shall publish a single, 
integrated disclosure for mortgage loan transactions (including 
real estate settlement cost statements) which includes the 
disclosure requirements of this section and section 5, in 
conjunction with the disclosure requirements of the Truth in 
Lending Act that, taken together, may apply to a transaction 
that is subject to both or either provisions of law. The 
purpose of such model disclosure shall be to facilitate 
compliance with the disclosure requirements of this title and 
the Truth in Lending Act, and to aid the borrower or lessee in 
understanding the transaction by utilizing readily 
understandable language to simplify the technical nature of the 
disclosures. Such forms shall conspicuously and clearly itemize 
all charges imposed upon the borrower and all charges imposed 
upon the seller in connection with the settlement and shall 
indicate whether any title insurance premium included in such 
charges covers or insures the lender's interest in the 
property, the borrower's interest, or both. The [Bureau] Agency 
may, by regulation, permit the deletion from the forms 
prescribed under this section of items which are not, under 
local laws or customs, applicable in any locality, except that 
such regulation shall require that the numerical code 
prescribed by the [Bureau] Agency be retained in forms to be 
used in all localities. Nothing in this section may be 
construed to require that that part of the standard forms which 
relates to the borrower's transaction to be furnished to the 
seller, or to require that that part of the standard forms 
which relates to the seller be furnished to the borrower.
  (b) The forms prescribed under this section shall be 
completed and made available for inspection by the borrower at 
or before settlement by the person conducting the settlement, 
except that (1) the [Bureau] Agency may exempt from the 
requirements of this section settlements occurring in 
localities where the final settlement statement is not 
customarily provided at or before the date of settlement, or 
settlements where such requirements are impractical and (2) the 
borrower may, in accordance with regulations of the [Bureau] 
Agency, waive his right to have the forms made available at 
such time. Upon the request of the borrower to inspect the 
forms prescribed under this section during the business day 
immediately preceding the day of settlement, the person who 
will conduct the settlement shall permit the borrower to 
inspect those items which are known to such person during such 
preceding day.
  (c) The standard form described in subsection (a) may 
include, in the case of an appraisal coordinated by an 
appraisal management company (as such term is defined in 
section 1121(11) of the Financial Institutions Reform, 
Recovery, and Enforcement Act of 1989 (12 U.S.C. 3350(11))), a 
clear disclosure of--
          (1) the fee paid directly to the appraiser by such 
        company; and
          (2) the administration fee charged by such company.

                    home buying information booklets

  Sec. 5. (a) Preparation and Distribution.--The Director of 
the [Bureau of Consumer Financial Protection] Consumer Law 
Enforcement Agency (hereafter in this section referred to as 
the ``Director'') shall prepare, at least once every 5 years, a 
booklet to help consumers applying for federally related 
mortgage loans to understand the nature and costs of real 
estate settlement services. The Director shall prepare the 
booklet in various languages and cultural styles, as the 
Director determines to be appropriate, so that the booklet is 
understandable and accessible to homebuyers of different ethnic 
and cultural backgrounds. The Director shall distribute such 
booklets to all lenders that make federally related mortgage 
loans. The Director shall also distribute to such lenders 
lists, organized by location, of homeownership counselors 
certified under section 106(e) of the Housing and Urban 
Development Act of 1968 (12 U.S.C. 1701x(e)) for use in 
complying with the requirement under subsection (c) of this 
section.
  (b) Contents.--Each booklet shall be in such form and detail 
as the Director shall prescribe and, in addition to such other 
information as the Director may provide, shall include in plain 
and understandable language the following information:
          (1) A description and explanation of the nature and 
        purpose of the costs incident to a real estate 
        settlement or a federally related mortgage loan. The 
        description and explanation shall provide general 
        information about the mortgage process as well as 
        specific information concerning, at a minimum--
                  (A) balloon payments;
                  (B) prepayment penalties;
                  (C) the advantages of prepayment; and
                  (D) the trade-off between closing costs and 
                the interest rate over the life of the loan.
          (2) An explanation and sample of the uniform 
        settlement statement required by section 4.
          (3) A list and explanation of lending practices, 
        including those prohibited by the Truth in Lending Act 
        or other applicable Federal law, and of other unfair 
        practices and unreasonable or unnecessary charges to be 
        avoided by the prospective buyer with respect to a real 
        estate settlement.
          (4) A list and explanation of questions a consumer 
        obtaining a federally related mortgage loan should ask 
        regarding the loan, including whether the consumer will 
        have the ability to repay the loan, whether the 
        consumer sufficiently shopped for the loan, whether the 
        loan terms include prepayment penalties or balloon 
        payments, and whether the loan will benefit the 
        borrower.
          (5) An explanation of the right of rescission as to 
        certain transactions provided by sections 125 and 129 
        of the Truth in Lending Act.
          (6) A brief explanation of the nature of a variable 
        rate mortgage and a reference to the booklet entitled 
        ``Consumer Handbook on Adjustable Rate Mortgages'', 
        published by the Director, or to any suitable 
        substitute of such booklet that the Director may 
        subsequently adopt pursuant to such section.
          (7) A brief explanation of the nature of a home 
        equity line of credit and a reference to the pamphlet 
        required to be provided under section 127A of the Truth 
        in Lending Act.
          (8) Information about homeownership counseling 
        services made available pursuant to section 106(a)(4) 
        of the Housing and Urban Development Act of 1968 (12 
        U.S.C. 1701x(a)(4)), a recommendation that the consumer 
        use such services, and notification that a list of 
        certified providers of homeownership counseling in the 
        area, and their contact information, is available.
          (9) An explanation of the nature and purpose of 
        escrow accounts when used in connection with loans 
        secured by residential real estate and the requirements 
        under section 10 of this Act regarding such accounts.
          (10) An explanation of the choices available to 
        buyers of residential real estate in selecting persons 
        to provide necessary services incidental to a real 
        estate settlement.
          (11) An explanation of a consumer's responsibilities, 
        liabilities, and obligations in a mortgage transaction.
          (12) An explanation of the nature and purpose of real 
        estate appraisals, including the difference between an 
        appraisal and a home inspection.
          (13) Notice that the Office of Housing of the [Bureau 
        of Consumer Financial Protection] Consumer Law 
        Enforcement Agency has made publicly available a 
        brochure regarding loan fraud and a World Wide Web 
        address and toll-free telephone number for obtaining 
        the brochure.
          (14) An explanation of flood insurance and the 
        availability of flood insurance under the National 
        Flood Insurance Program or from a private insurance 
        company, whether or not the real estate is located in 
        an area having special flood hazards, and the following 
        statement: ``Although you may not be required to 
        maintain flood insurance on all structures, you may 
        still wish to do so, and your mortgage lender may still 
        require you to do so to protect the collateral securing 
        the mortgage. If you choose to not maintain flood 
        insurance on a structure, and it floods, you are 
        responsible for all flood losses relating to that 
        structure.''.
The booklet prepared pursuant to this section shall take into 
consideration differences in real estate settlement procedures 
that may exist among the several States and territories of the 
United States and among separate political subdivisions within 
the same State and territory.
  (c) Each lender shall include with the booklet a good faith 
estimate of the amount or range of charges for specific 
settlement services the borrower is likely to incur in 
connection with the settlement as prescribed by the [Bureau] 
Agency. Each lender shall also include with the booklet a 
reasonably complete or updated list of homeownership counselors 
who are certified pursuant to section 106(e) of the Housing and 
Urban Development Act of 1968 (12 U.S.C. 1701x(e)) and located 
in the area of the lender.
  (d) Each lender referred to in subsection (a) shall provide 
the booklet described in such subsection to each person from 
whom it receives or for whom it prepares a written application 
to borrow money to finance the purchase of residential real 
estate. The lender shall provide the booklet in the version 
that is most appropriate for the person receiving it. Such 
booklet shall be provided by delivering it or placing it in the 
mail not later than 3 business days after the lender receives 
the application, but no booklet need be provided if the lender 
denies the application for credit before the end of the 3-day 
period.
  (e) Booklets may be printed and distributed by lenders if 
their form and content are approved by the [Bureau] Agency as 
meeting the requirements of subsection (b) of this section.

   servicing of mortgage loans and administration of escrow accounts

  Sec. 6. (a) Disclosure to Applicant Relating to Assignment, 
Sale, or Transfer of Loan Servicing.--Each person who makes a 
federally related mortgage loan shall disclose to each person 
who applies for the loan, at the time of application for the 
loan, whether the servicing of the loan may be assigned, sold, 
or transferred to any other person at any time while the loan 
is outstanding.
  (b) Notice by Transferor or Loan Servicing at Time of 
Transfer.--
          (1) Notice requirement.--Each servicer of any 
        federally related mortgage loan shall notify the 
        borrower in writing of any assignment, sale, or 
        transfer of the servicing of the loan to any other 
        person.
          (2) Time of notice.--
                  (A) In general.--Except as provided under 
                subparagraphs (B) and (C), the notice required 
                under paragraph (1) shall be made to the 
                borrower not less than 15 days before the 
                effective date of transfer of the servicing of 
                the mortgage loan (with respect to which such 
                notice is made).
                  (B) Exception for certain proceedings.--The 
                notice required under paragraph (1) shall be 
                made to the borrower not more than 30 days 
                after the effective date of assignment, sale, 
                or transfer of the servicing of the mortgage 
                loan (with respect to which such notice is 
                made) in any case in which the assignment, 
                sale, or transfer of the servicing of the 
                mortgage loan is preceded by--
                          (i) termination of the contract for 
                        servicing the loan for cause;
                          (ii) commencement of proceedings for 
                        bankruptcy of the servicer; or
                          (iii) commencement of proceedings by 
                        the Federal Deposit Insurance 
                        Corporation or the Resolution Trust 
                        Corporation for conservatorship or 
                        receivership of the servicer (or an 
                        entity by which the servicer is owned 
                        or controlled).
                  (C) Exception for notice provided at 
                closing.--The provisions of subparagraphs (A) 
                and (B) shall not apply to any assignment, 
                sale, or transfer of the servicing of any 
                mortgage loan if the person who makes the loan 
                provides to the borrower, at settlement (with 
                respect to the property for which the mortgage 
                loan is made), written notice under paragraph 
                (3) of such transfer.
          (3) Contents of notice.--The notice required under 
        paragraph (1) shall include the following information:
                  (A) The effective date of transfer of the 
                servicing described in such paragraph.
                  (B) The name, address, and toll-free or 
                collect call telephone number of the transferee 
                servicer.
                  (C) A toll-free or collect call telephone 
                number for (i) an individual employed by the 
                transferor servicer, or (ii) the department of 
                the transferor servicer, that can be contacted 
                by the borrower to answer inquiries relating to 
                the transfer of servicing.
                  (D) The name and toll-free or collect call 
                telephone number for (i) an individual employed 
                by the transferee servicer, or (ii) the 
                department of the transferee servicer, that can 
                be contacted by the borrower to answer 
                inquiries relating to the transfer of 
                servicing.
                  (E) The date on which the transferor servicer 
                who is servicing the mortgage loan before the 
                assignment, sale, or transfer will cease to 
                accept payments relating to the loan and the 
                date on which the transferee servicer will 
                begin to accept such payments.
                  (F) Any information concerning the effect the 
                transfer may have, if any, on the terms of or 
                the continued availability of mortgage life or 
                disability insurance or any other type of 
                optional insurance and what action, if any, the 
                borrower must take to maintain coverage.
                  (G) A statement that the assignment, sale, or 
                transfer of the servicing of the mortgage loan 
                does not affect any term or condition of the 
                security instruments other than terms directly 
                related to the servicing of such loan.
  (c) Notice by Transferee of Loan Servicing at Time of 
Transfer.--
          (1) Notice requirement.--Each transferee servicer to 
        whom the servicing of any federally related mortgage 
        loan is assigned, sold, or transferred shall notify the 
        borrower of any such assignment, sale, or transfer.
          (2) Time of notice.--
                  (A) In general.--Except as provided in 
                subparagraphs (B) and (C), the notice required 
                under paragraph (1) shall be made to the 
                borrower not more than 15 days after the 
                effective date of transfer of the servicing of 
                the mortgage loan (with respect to which such 
                notice is made).
                  (B) Exception for certain proceedings.--The 
                notice required under paragraph (1) shall be 
                made to the borrower not more than 30 days 
                after the effective date of assignment, sale, 
                or transfer of the servicing of the mortgage 
                loan (with respect to which such notice is 
                made) in any case in which the assignment, 
                sale, or transfer of the servicing of the 
                mortgage loan is preceded by--
                          (i) termination of the contract for 
                        servicing the loan for cause;
                          (ii) commencement of proceedings for 
                        bankruptcy of the servicer; or
                          (iii) commencement of proceedings by 
                        the Federal Deposit Insurance 
                        Corporation or the Resolution Trust 
                        Corporation for conservatorship or 
                        receivership of the servicer (or an 
                        entity by which the servicer is owned 
                        or controlled).
                  (C) Exception for notice provided at 
                closing.--The provisions of subparagraphs (A) 
                and (B) shall not apply to any assignment, 
                sale, or transfer of the servicing of any 
                mortgage loan if the person who makes the loan 
                provides to the borrower, at settlement (with 
                respect to the property for which the mortgage 
                loan is made), written notice under paragraph 
                (3) of such transfer.
          (3) Contents of notice.--Any notice required under 
        paragraph (1) shall include the information described 
        in subsection (b)(3).
  (d) Treatment of Loan Payments During Transfer Period.--
During the 60-day period beginning on the effective date of 
transfer of the servicing of any federally related mortgage 
loan, a late fee may not be imposed on the borrower with 
respect to any payment on such loan and no such payment may be 
treated as late for any other purposes, if the payment is 
received by the transferor servicer (rather than the transferee 
servicer who should properly receive payment) before the due 
date applicable to such payment.
  (e) Duty of Loan Servicer To Respond to Borrower Inquiries.--
          (1) Notice of receipt of inquiry.--
                  (A) In general.--If any servicer of a 
                federally related mortgage loan receives a 
                qualified written request from the borrower (or 
                an agent of the borrower) for information 
                relating to the servicing of such loan, the 
                servicer shall provide a written response 
                acknowledging receipt of the correspondence 
                within 5 days (excluding legal public holidays, 
                Saturdays, and Sundays) unless the action 
                requested is taken within such period.
                  (B) Qualified written request.--For purposes 
                of this subsection, a qualified written request 
                shall be a written correspondence, other than 
                notice on a payment coupon or other payment 
                medium supplied by the servicer, that--
                          (i) includes, or otherwise enables 
                        the servicer to identify, the name and 
                        account of the borrower; and
                          (ii) includes a statement of the 
                        reasons for the belief of the borrower, 
                        to the extent applicable, that the 
                        account is in error or provides 
                        sufficient detail to the servicer 
                        regarding other information sought by 
                        the borrower.
          (2) Action with respect to inquiry.--Not later than 
        30 days (excluding legal public holidays, Saturdays, 
        and Sundays) after the receipt from any borrower of any 
        qualified written request under paragraph (1) and, if 
        applicable, before taking any action with respect to 
        the inquiry of the borrower, the servicer shall--
                  (A) make appropriate corrections in the 
                account of the borrower, including the 
                crediting of any late charges or penalties, and 
                transmit to the borrower a written notification 
                of such correction (which shall include the 
                name and telephone number of a representative 
                of the servicer who can provide assistance to 
                the borrower);
                  (B) after conducting an investigation, 
                provide the borrower with a written explanation 
                or clarification that includes--
                          (i) to the extent applicable, a 
                        statement of the reasons for which the 
                        servicer believes the account of the 
                        borrower is correct as determined by 
                        the servicer; and
                          (ii) the name and telephone number of 
                        an individual employed by, or the 
                        office or department of, the servicer 
                        who can provide assistance to the 
                        borrower; or
                  (C) after conducting an investigation, 
                provide the borrower with a written explanation 
                or clarification that includes--
                          (i) information requested by the 
                        borrower or an explanation of why the 
                        information requested is unavailable or 
                        cannot be obtained by the servicer; and
                          (ii) the name and telephone number of 
                        an individual employed by, or the 
                        office or department of, the servicer 
                        who can provide assistance to the 
                        borrower.
          (3) Protection of credit rating.--During the 60-day 
        period beginning on the date of the servicer's receipt 
        from any borrower of a qualified written request 
        relating to a dispute regarding the borrower's 
        payments, a servicer may not provide information 
        regarding any overdue payment, owed by such borrower 
        and relating to such period or qualified written 
        request, to any consumer reporting agency (as such term 
        is defined under section 603 of the Fair Credit 
        Reporting Act).
          (4) Limited extension of response time.--The 30-day 
        period described in paragraph (2) may be extended for 
        not more than 15 days if, before the end of such 30-day 
        period, the servicer notifies the borrower of the 
        extension and the reasons for the delay in responding.
  (f) Damages and Costs.--Whoever fails to comply with any 
provision of this section shall be liable to the borrower for 
each such failure in the following amounts:
          (1) Individuals.--In the case of any action by an 
        individual, an amount equal to the sum of--
                  (A) any actual damages to the borrower as a 
                result of the failure; and
                  (B) any additional damages, as the court may 
                allow, in the case of a pattern or practice of 
                noncompliance with the requirements of this 
                section, in an amount not to exceed $2,000.
          (2) Class actions.--In the case of a class action, an 
        amount equal to the sum of--
                  (A) any actual damages to each of the 
                borrowers in the class as a result of the 
                failure; and
                  (B) any additional damages, as the court may 
                allow, in the case of a pattern or practice of 
                noncompliance with the requirements of this 
                section, in an amount not greater than $2,000 
                for each member of the class, except that the 
                total amount of damages under this subparagraph 
                in any class action may not exceed the lesser 
                of--
                          (i) $1,000,000; or
                          (ii) 1 percent of the net worth of 
                        the servicer.
          (3) Costs.--In addition to the amounts under 
        paragraph (1) or (2), in the case of any successful 
        action under this section, the costs of the action, 
        together with any attorneys fees incurred in connection 
        with such action as the court may determine to be 
        reasonable under the circumstances.
          (4) Nonliability.--A transferor or transferee 
        servicer shall not be liable under this subsection for 
        any failure to comply with any requirement under this 
        section if, within 60 days after discovering an error 
        (whether pursuant to a final written examination report 
        or the servicer's own procedures) and before the 
        commencement of an action under this subsection and the 
        receipt of written notice of the error from the 
        borrower, the servicer notifies the person concerned of 
        the error and makes whatever adjustments are necessary 
        in the appropriate account to ensure that the person 
        will not be required to pay an amount in excess of any 
        amount that the person otherwise would have paid.
  (g) Administration of Escrow Accounts.--If the terms of any 
federally related mortgage loan require the borrower to make 
payments to the servicer of the loan for deposit into an escrow 
account for the purpose of assuring payment of taxes, insurance 
premiums, and other charges with respect to the property, the 
servicer shall make payments from the escrow account for such 
taxes, insurance premiums, and other charges in a timely manner 
as such payments become due. Any balance in any such account 
that is within the servicer's control at the time the loan is 
paid off shall be promptly returned to the borrower within 20 
business days or credited to a similar account for a new 
mortgage loan to the borrower with the same lender.
  (h) Preemption of Conflicting State Laws.--Notwithstanding 
any provision of any law or regulation of any State, a person 
who makes a federally related mortgage loan or a servicer shall 
be considered to have complied with the provisions of any such 
State law or regulation requiring notice to a borrower at the 
time of application for a loan or transfer of the servicing of 
a loan if such person or servicer complies with the 
requirements under this section regarding timing, content, and 
procedures for notification of the borrower.
  (i) Definitions.--For purposes of this section:
          (1) Effective date of transfer.--The term ``effective 
        date of transfer'' means the date on which the mortgage 
        payment of a borrower is first due to the transferee 
        servicer of a mortgage loan pursuant to the assignment, 
        sale, or transfer of the servicing of the mortgage 
        loan.
          (2) Servicer.--The term ``servicer'' means the person 
        responsible for servicing of a loan (including the 
        person who makes or holds a loan if such person also 
        services the loan). The term does not include--
                  (A) the Federal Deposit Insurance Corporation 
                or the Resolution Trust Corporation, in 
                connection with assets acquired, assigned, 
                sold, or transferred pursuant to section 13(c) 
                of the Federal Deposit Insurance Act or as 
                receiver or conservator of an insured 
                depository institution; and
                  (B) the Government National Mortgage 
                Association, the Federal National Mortgage 
                Association, the Federal Home Loan Mortgage 
                Corporation, the Resolution Trust Corporation, 
                or the Federal Deposit Insurance Corporation, 
                in any case in which the assignment, sale, or 
                transfer of the servicing of the mortgage loan 
                is preceded by--
                          (i) termination of the contract for 
                        servicing the loan for cause;
                          (ii) commencement of proceedings for 
                        bankruptcy of the servicer; or
                          (iii) commencement of proceedings by 
                        the Federal Deposit Insurance 
                        Corporation or the Resolution Trust 
                        Corporation for conservatorship or 
                        receivership of the servicer (or an 
                        entity by which the servicer is owned 
                        or controlled).
          (3) Servicing.--The term ``servicing'' means 
        receiving any scheduled periodic payments from a 
        borrower pursuant to the terms of any loan, including 
        amounts for escrow accounts described in section 10, 
        and making the payments of principal and interest and 
        such other payments with respect to the amounts 
        received from the borrower as may be required pursuant 
        to the terms of the loan.
  (j) Transition.--
          (1) Originator liability.--A person who makes a 
        federally related mortgage loan shall not be liable to 
        a borrower because of a failure of such person to 
        comply with subsection (a) with respect to an 
        application for a loan made by the borrower before the 
        regulations referred to in paragraph (3) take effect.
          (2) Servicer liability.--A servicer of a federally 
        related mortgage loan shall not be liable to a borrower 
        because of a failure of the servicer to perform any 
        duty under subsection (b), (c), (d), or (e) that arises 
        before the regulations referred to in paragraph (3) 
        take effect.
          (3) Regulations and effective date.--The [Bureau] 
        Agency shall establish any requirements necessary to 
        carry out this section. Such regulations shall include 
        the model disclosure statement required under 
        subsection (a)(2).
  (k) Servicer Prohibitions.--
          (1) In general.--A servicer of a federally related 
        mortgage shall not--
                  (A) obtain force-placed hazard insurance 
                unless there is a reasonable basis to believe 
                the borrower has failed to comply with the loan 
                contract's requirements to maintain property 
                insurance;
                  (B) charge fees for responding to valid 
                qualified written requests (as defined in 
                regulations which the [Bureau of Consumer 
                Financial Protection] Consumer Law Enforcement 
                Agency shall prescribe) under this section;
                  (C) fail to take timely action to respond to 
                a borrower's requests to correct errors 
                relating to allocation of payments, final 
                balances for purposes of paying off the loan, 
                or avoiding foreclosure, or other standard 
                servicer's duties;
                  (D) fail to respond within 10 business days 
                to a request from a borrower to provide the 
                identity, address, and other relevant contact 
                information about the owner or assignee of the 
                loan; or
                  (E) fail to comply with any other obligation 
                found by the [Bureau of Consumer Financial 
                Protection] Consumer Law Enforcement Agency, by 
                regulation, to be appropriate to carry out the 
                consumer protection purposes of this Act.
          (2) Force-placed insurance defined.--For purposes of 
        this subsection and subsections (l) and (m), the term 
        ``force-placed insurance'' means hazard insurance 
        coverage obtained by a servicer of a federally related 
        mortgage when the borrower has failed to maintain or 
        renew hazard insurance on such property as required of 
        the borrower under the terms of the mortgage.
  (l) Requirements for Force-placed Insurance.--A servicer of a 
federally related mortgage shall not be construed as having a 
reasonable basis for obtaining force-placed insurance unless 
the requirements of this subsection have been met.
          (1) Written notices to borrower.--A servicer may not 
        impose any charge on any borrower for force-placed 
        insurance with respect to any property securing a 
        federally related mortgage unless--
                  (A) the servicer has sent, by first-class 
                mail, a written notice to the borrower 
                containing--
                          (i) a reminder of the borrower's 
                        obligation to maintain hazard insurance 
                        on the property securing the federally 
                        related mortgage;
                          (ii) a statement that the servicer 
                        does not have evidence of insurance 
                        coverage of such property;
                          (iii) a clear and conspicuous 
                        statement of the procedures by which 
                        the borrower may demonstrate that the 
                        borrower already has insurance 
                        coverage; and
                          (iv) a statement that the servicer 
                        may obtain such coverage at the 
                        borrower's expense if the borrower does 
                        not provide such demonstration of the 
                        borrower's existing coverage in a 
                        timely manner;
                  (B) the servicer has sent, by first-class 
                mail, a second written notice, at least 30 days 
                after the mailing of the notice under 
                subparagraph (A) that contains all the 
                information described in each clause of such 
                subparagraph; and
                  (C) the servicer has not received from the 
                borrower any demonstration of hazard insurance 
                coverage for the property securing the mortgage 
                by the end of the 15-day period beginning on 
                the date the notice under subparagraph (B) was 
                sent by the servicer.
          (2) Sufficiency of demonstration.--A servicer of a 
        federally related mortgage shall accept any reasonable 
        form of written confirmation from a borrower of 
        existing insurance coverage, which shall include the 
        existing insurance policy number along with the 
        identity of, and contact information for, the insurance 
        company or agent, or as otherwise required by the 
        [Bureau of Consumer Financial Protection] Consumer Law 
        Enforcement Agency.
          (3) Termination of force-placed insurance.--Within 15 
        days of the receipt by a servicer of confirmation of a 
        borrower's existing insurance coverage, the servicer 
        shall--
                  (A) terminate the force-placed insurance; and
                  (B) refund to the consumer all force-placed 
                insurance premiums paid by the borrower during 
                any period during which the borrower's 
                insurance coverage and the force-placed 
                insurance coverage were each in effect, and any 
                related fees charged to the consumer's account 
                with respect to the force-placed insurance 
                during such period.
          (4) Clarification with respect to flood disaster 
        protection act.--No provision of this section shall be 
        construed as prohibiting a servicer from providing 
        simultaneous or concurrent notice of a lack of flood 
        insurance pursuant to section 102(e) of the Flood 
        Disaster Protection Act of 1973.
  (m) Limitations on Force-placed Insurance Charges.--All 
charges, apart from charges subject to State regulation as the 
business of insurance, related to force-placed insurance 
imposed on the borrower by or through the servicer shall be 
bona fide and reasonable.
  (n) Small Servicer Exemption.--The Consumer Law Enforcement 
Agency shall, by regulation, provide exemptions to, or 
adjustments for, the provisions of this section for a servicer 
that annually services 20,000 or fewer mortgage loans, in order 
to reduce regulatory burdens while appropriately balancing 
consumer protections.

SEC. 7. EXEMPTED TRANSACTIONS.

  (a) In General.--This Act does not apply to credit 
transactions involving extensions of credit--
          (1) primarily for business, commercial, or 
        agricultural purposes; or
          (2) to government or governmental agencies or 
        instrumentalities.
  (b) Interpretation.--In prescribing regulations under section 
19(a), the [Bureau] Agency shall ensure that, with respect to 
subsection (a) of this section, the exemption for credit 
transactions involving extensions of credit primarily for 
business, commercial, or agricultural purposes, as provided in 
section 7(1) of the Real Estate Settlement Procedures Act of 
1974 shall be the same as the exemption for such credit 
transactions under section 104(1) of the Truth in Lending Act.

            prohibition against kickbacks and unearned fees

  Sec. 8. (a) No person shall give and no person shall accept 
any fee, kickback, or thing of value pursuant to any agreement 
or understanding, oral or otherwise, that business incident to 
or a part of a real estate settlement service involving a 
federally related mortgage loan shall be referred to any 
person.
  (b) No person shall give and no person shall accept any 
portion, split, or percentage of any charge made or received 
for the rendering of a real estate settlement service in 
connection with a transaction involving a federally related 
mortgage loan other than for services actually performed.
  (c) Nothing in this section shall be construed as prohibiting 
(1) the payment of a fee (A) to attorneys at law for services 
actually rendered or (B) by a title company to its duly 
appointed agent for services actually performed in the issuance 
of a policy of title insurance or (C) by a lender to its duly 
appointed agent for services actually performed in the making 
of a loan, (2) the payment to any person of a bona fide salary 
or compensation or other payment for goods or facilities 
actually furnished or for services actually performed, (3) 
payments pursuant to cooperative brokerage and referral 
arrangements or agreements between real estate agents and 
brokers, (4) affiliated business arrangements so long as (A) a 
disclosure is made of the existence of such an arrangement to 
the person being referred and, in connection with such 
referral, such person is provided a written estimate of the 
charge or range of charges generally made by the provider to 
which the person is referred (i) in the case of a face-to-face 
referral or a referral made in writing or by electronic media, 
at or before the time of the referral (and compliance with this 
requirement in such case may be evidenced by a notation in a 
written, electronic, or similar system of records maintained in 
the regular course of business); (ii) in the case of a referral 
made by telephone, within 3 business days after the referral by 
telephone, (and in such case an abbreviated verbal disclosure 
of the existence of the arrangement and the fact that a written 
disclosure will be provided within 3 business days shall be 
made to the person being referred during the telephone 
referral); or (iii) in the case of a referral by a lender 
(including a referral by a lender to an affiliated lender), at 
the time the estimates required under section 5(c) are provided 
(notwithstanding clause (i) or (ii)); and any required written 
receipt of such disclosure (without regard to the manner of the 
disclosure under clause (i), (ii), or (iii)) may be obtained at 
the closing or settlement (except that a person making a face-
to-face referral who provides the written disclosure at or 
before the time of the referral shall attempt to obtain any 
required written receipt of such disclosure at such time and if 
the person being referred chooses not to acknowledge the 
receipt of the disclosure at that time, that fact shall be 
noted in the written, electronic, or similar system of records 
maintained in the regular course of business by the person 
making the referral), (B) such person is not required to use 
any particular provider of settlement services, and (C) the 
only thing of value that is received from the arrangement, 
other than the payments permitted under this subsection, is a 
return on the ownership interest or franchise relationship, or 
(5) such other payments or classes of payments or other 
transfers as are specified in regulations prescribed by the 
Secretary, after consultation with the Attorney General, the 
Secretary of Veterans Affairs, the Federal Home Loan Bank 
Board, the Federal Deposit Insurance Corporation, the Board of 
Governors of the Federal Reserve System, and the Secretary of 
Agriculture. For purposes of the preceding sentence, the 
following shall not be considered a violation of clause (4)(B): 
(i) any arrangement that requires a buyer, borrower, or seller 
to pay for the services of an attorney, credit reporting 
agency, or real estate appraiser chosen by the lender to 
represent the lender's interest in a real estate transaction, 
or (ii) any arrangement where an attorney or law firm 
represents a client in a real estate transaction issues or 
arranges for the issuance of a policy of title insurance in the 
transaction directly as agent or through a separate corporate 
title insurance agency that may be established by that attorney 
or law firm and operated as an adjunct to his or its law 
practice.
  (d)(1) Any person or persons who violate the provisions of 
this section shall be fined not more than $10,000 or imprisoned 
for not more than one year, or both.
  (2) Any person or persons who violate the prohibitions or 
limitations of this section shall be jointly and severally 
liable to the person or persons charged for the settlement 
service involved in the violation in an amount equal to three 
times the amount of any charge paid for such settlement 
service.
  (3) No person or persons shall be liable for a violation of 
the provisions of section 8(c)(4)(A) if such person or persons 
proves by a preponderance of the evidence that such violation 
was not intentional and resulted from a bona fide error 
notwithstanding maintenance of procedures that are reasonably 
adapted to avoid such error.
          (4) The [Bureau] Agency, the Secretary, or the 
        attorney general or the insurance commissioner of any 
        State may bring an action to enjoin violations of this 
        section. Except, to the extent that a person is subject 
        to the jurisdiction of the [Bureau] Agency, the 
        Secretary, or the attorney general or the insurance 
        commissioner of any State, the [Bureau] Agency shall 
        have primary authority to enforce or administer this 
        section, subject to subtitle B of the Consumer 
        Financial Protection Act of 2010.
  (5) In any private action brought pursuant to this 
subsection, the court may award to the prevailing party the 
court costs of the action together with reasonable attorneys 
fees.
  (6) No provision of State law or regulation that imposes more 
stringent limitations on affiliated business arrangements shall 
be construed as being inconsistent with this section.

           *       *       *       *       *       *       *


                            escrow accounts

  Sec. 10. (a) In General.--A lender, in connection with a 
federally related mortgage loan, may not require the borrower 
or prospective borrower--
          (1) to deposit in any escrow account which may be 
        established in connection with such loan for the 
        purpose of assuring payment of taxes, insurance 
        premiums, or other charges with respect to the 
        property, in connection with the settlement, an 
        aggregate sum (for such purpose) in excess of a sum 
        that will be sufficient to pay such taxes, insurance 
        premiums and other charges attributable to the period 
        beginning on the last date on which each such charge 
        would have been paid under the normal lending practice 
        of the lender and local custom, provided that the 
        selection of each such date constitutes prudent lending 
        practice, and ending on the due date of its first full 
        installment payment under the mortgage, plus one-sixth 
        of the estimated total amount of such taxes, insurance 
        premiums and other charges to be paid on dates, as 
        provided above, during the ensuing twelve-month period; 
        or
          (2) to deposit in any such escrow account in any 
        month beginning with the first full installment payment 
        under the mortgage a sum (for the purpose of assuring 
        payment of taxes, insurance premiums and other charges 
        with respect to the property) in excess of the sum of 
        (A) one-twelfth of the total amount of the estimated 
        taxes, insurance premiums and other charges which are 
        reasonably anticipated to be paid on dates during the 
        ensuing twelve months which dates are in accordance 
        with the normal lending practice of the lender and 
        local custom, provided that the selection of each such 
        date constitutes prudent lending practice, plus (B) 
        such amount as is necessary to maintain an additional 
        balance in such escrow account not to exceed one-sixth 
        of the estimated total amount of such taxes, insurance 
        premiums and other charges to be paid on dates, as 
        provided above, during the ensuing twelve-month period: 
        Provided, however, That in the event the lender 
        determines there will be or is a deficiency he shall 
        not be prohibited from requiring additional monthly 
        deposits in such escrow account to avoid or eliminate 
        such deficiency.
  (b) Notification of Shortage in Escrow Account.--If the terms 
of any federally related mortgage loan require the borrower to 
make payments to the servicer (as the term is defined in 
section 6(i)) of the loan for deposit into an escrow account 
for the purpose of assuring payment of taxes, insurance 
premiums, and other charges with respect to the property, the 
servicer shall notify the borrower not less than annually of 
any shortage of funds in the escrow account.
  (c) Escrow Account Statements.--
          (1) Initial statement.--
                  (A) In general.--Any servicer that has 
                established an escrow account in connection 
                with a federally related mortgage loan shall 
                submit to the borrower for which the escrow 
                account has been established a statement 
                clearly itemizing the estimated taxes, 
                insurance premiums, and other charges that are 
                reasonably anticipated to be paid from the 
                escrow account during the first 12 months after 
                the establishment of the account and the 
                anticipated dates of such payments.
                  (B) Time of submission.--The statement 
                required under subparagraph (A) shall be 
                submitted to the borrower at closing with 
                respect to the property for which the mortgage 
                loan is made or not later than the expiration 
                of the 45-day period beginning on the date of 
                the establishment of the escrow account.
                  (C) Initial statement at closing.--Any 
                servicer may submit the statement required 
                under subparagraph (A) to the borrower at 
                closing and may incorporate such statement in 
                the uniform settlement statement required under 
                section 4. The [Bureau] Agency shall issue 
                regulations prescribing any changes necessary 
                to the uniform settlement statement under 
                section 4 that specify how the statement 
                required under subparagraph (A) of this section 
                shall be incorporated in the uniform settlement 
                statement.
          (2) Annual statement.--
                  (A) In general.--Any servicer that has 
                established or continued an escrow account in 
                connection with a federally related mortgage 
                loan shall submit to the borrower for which the 
                escrow account has been established or 
                continued a statement clearly itemizing, for 
                each period described in subparagraph (B) 
                (during which the servicer services the escrow 
                account), the amount of the borrower's current 
                monthly payment, the portion of the monthly 
                payment being placed in the escrow account, the 
                total amount paid into the escrow account 
                during the period, the total amount paid out of 
                the escrow account during the period for taxes, 
                insurance premiums, and other charges (as 
                separately identified), and the balance in the 
                escrow account at the conclusion of the period.
                  (B) Time of submission.--The statement 
                required under subparagraph (A) shall be 
                submitted to the borrower not less than once 
                for each 12-month period, the first such period 
                beginning on the first January 1st that occurs 
                after the date of the enactment of the 
                Cranston-Gonzalez National Affordable Housing 
                Act, and shall be submitted not more than 30 
                days after the conclusion of each such 1-year 
                period.
  (d) Penalties.--
          (1) In general.--In the case of each failure to 
        submit a statement to a borrower as required under 
        subsection (c), the Secretary shall assess to the 
        lender or escrow servicer failing to submit the 
        statement a civil penalty of $50 for each such failure, 
        but the total amount imposed on such lender or escrow 
        servicer for all such failures during any 12-month 
        period referred to in subsection (b) may not exceed 
        $100,000.
          (2) Intentional violations.--If any failure to which 
        paragraph (1) applies is due to intentional disregard 
        of the requirement to submit the statement, then, with 
        respect to such failure--
                  (A) the penalty imposed under paragraph (1) 
                shall be $100; and
                  (B) in the case of any penalty determined 
                under subparagraph (A), the $100,000 limitation 
                under paragraph (1) shall not apply.

           *       *       *       *       *       *       *


                         jurisdiction of courts

  Sec. 16. Any action pursuant to the provisions of section 6, 
8, or 9 may be brought in the United States district court or 
in any other court of competent jurisdiction, for the district 
in which the property involved is located, or where the 
violation is alleged to have occurred, within 3 years in the 
case of a violation of section 6 and 1 year in the case of a 
violation of section 8 or 9 from the date of the occurrence of 
the violation, except that actions brought by the the [Bureau] 
Agency, Secretary, the Attorney General of any State, or the 
insurance commissioner of any State may be brought within 3 
years from the date of the occurrence of the violation.

           *       *       *       *       *       *       *


                         relation to state laws

  Sec. 18. This Act does not annul, alter, or affect, or exempt 
any person subject to the provisions of this Act from complying 
with, the laws of any State with respect to settlement 
practices, except to the extent that those laws are 
inconsistent with any provision of this Act, and then only to 
the extent of the inconsistency. The [Bureau] Agency is 
authorized to determine whether such inconsistencies exist. The 
[Bureau] Agency may not determine that any State law is 
inconsistent with any provision of this Act if the [Bureau] 
Agency determines that such laws gives greater protection to 
the consumer. In making these determinations the [Bureau] 
Agency shall consult with the appropriate Federal agencies.

                        authority of the bureau

  Sec. 19. (a) The [Bureau] Agency is authorized to prescribe 
such rules and regulations, to make such interpretations, and 
to grant such reasonable exemptions for classes of 
transactions, as may be necessary to achieve the purposes of 
this Act.
  (b) No provision of this Act or the laws of any State 
imposing any liability shall apply to any act done or omitted 
in good faith in conformity with any rule, regulation, or 
interpretation thereof by the [Bureau] Agency or the Attorney 
General, notwithstanding that after such act or omission has 
occurred, such rule, regulation, or interpretation is amended, 
rescinded, or determined by judicial or other authority to be 
invalid for any reason.
  (c)(1) The Secretary may investigate any facts, conditions, 
practices, or matters that may be deemed necessary or proper to 
aid in the enforcement of the provisions of this Act, in 
prescribing of rules and regulations thereunder, or in securing 
information to serve as a basis for recommending further 
legislation concerning real estate settlement practices. To aid 
in the investigations, the [Bureau] Agency is authorized to 
hold such hearings, administer such oaths, and require by 
subpena the attendance and testimony of such witnesses and 
production of such documents as the [Bureau] Agency deems 
advisable.
  (2) Any district court of the United States within the 
jurisdiction of which an inquiry is carried on may, in the case 
of contumacy or refusal to obey a subpena of the [Bureau] 
Agency issued under this section, issue an order requiring 
compliance therewith; and any failure to obey such order of the 
court may be punished by such court as a contempt thereof.
  (d) Delay of Effectiveness of Recent Final Regulation 
Relating to Payments to Employees.--
          (1) In general.--The amendment to part 3500 of title 
        24 of the Code of Federal Regulations contained in the 
        final regulation prescribed by the Secretary and 
        published in the Federal Register on June 7, 1996, 
        which will, as of the effective date of such 
        amendment--
                  (A) eliminate the exemption for payments by 
                an employer to employees of such employer for 
                referral activities which is currently codified 
                as section 3500.14(g)(1)(vii) of such title 24; 
                and
                  (B) replace such exemption with a more 
                limited exemption in new clauses (vii), (viii), 
                and (ix) of section 3500.14 of such title 24,
        shall not take effect before July 31, 1997.
          (2) Continuation of prior rule.--The regulation 
        codified as section 3500.14(g)(1)(vii) of title 24 of 
        the Code of Federal Regulations, relating to employer-
        employee payments, as in effect on May 1, 1996, shall 
        remain in effect until the date the amendment referred 
        to in paragraph (1) takes effect in accordance with 
        such paragraph.
          (3) Public notice of effective date.--The Secretary 
        shall provide public notice of the date on which the 
        amendment referred to in paragraph (1) will take effect 
        in accordance with such paragraph not less than 90 days 
        and not more than 180 days before such effective date.

           *       *       *       *       *       *       *

                              ----------                              


FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL ACT OF 1978

           *       *       *       *       *       *       *



TITLE X--FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL

           *       *       *       *       *       *       *



                              definitions

  Sec. 1003. As used in this title--
          [(1) the term ``Federal financial institutions 
        regulatory agencies'' means the Office of the 
        Comptroller of the Currency, the Board of Governors of 
        the Federal Reserve System, the Federal Deposit 
        Insurance Corporation, the Office of Thrift 
        Supervision, and the National Credit Union 
        Administration;]
          (1) the term ``Federal financial institutions 
        regulatory agencies''--
                  (A) means the Office of the Comptroller of 
                the Currency, the Board of Governors of the 
                Federal Reserve System, the Federal Deposit 
                Insurance Corporation, and the National Credit 
                Union Administration; and
                  (B) for purposes of sections 1012, 1013, 
                1014, and 1015, includes the Consumer Law 
                Enforcement Agency;
          (2) the term ``Council'' means the Financial 
        Institutions Examination Council; and
          (3) the term ``financial institution'' means a 
        commercial bank, a savings bank, a trust company, a 
        savings association, a building and loan association, a 
        homestead association, a cooperative bank, or a credit 
        union;

                      establishment of the council

  Sec. 1004. (a) There is established the Financial 
Institutions Examination Council which shall consist of--
          (1) the Comptroller of the Currency,
          (2) the Chairman of the Board of Directors of the 
        Federal Deposit Insurance Corporation,
          (3) a Governor of the Board of Governors of the 
        Federal Reserve System designated by the Chairman of 
        the Board,
          (4) the Director of the [Consumer Financial 
        Protection Bureau] Consumer Law Enforcement Agency,
          (5) the Chairman of the National Credit Union 
        Administration Board, and
          (6) the Chairman of the State Liaison Committee.
  (b) The members of the Council shall select the first 
chairman of the Council. Thereafter the chairmanship shall 
rotate among the members of the Council.
  (c) The term of the Chairman of the Council shall be two 
years.
  (d) The members of the Council may, from time to time, 
designate other officers or employees of their respective 
agencies to carry out their duties on the Council.
  (e) Each member of the Council shall serve without additional 
compensation but shall be entitled to reasonable expenses 
incurred in carrying out his official duties a such a member.

                        expenses of the council

  Sec. 1005. [One-fifth] One-fourth of the costs and expenses 
of the Council, including the salaries of its employees, shall 
be paid by each of the Federal financial institutions 
regulatory agencies. Annual assessments for such share shall be 
levied by the Council based upon its projected budget for the 
year, and additional assessments may be made during the year if 
necessary.

           *       *       *       *       *       *       *


SEC. 1011. ESTABLISHMENT OF APPRAISAL SUBCOMMITTEE.

  There shall be within the Council a subcommittee to be known 
as the ``Appraisal Subcommittee'', which shall consist of the 
designees of the heads of the Federal financial institutions 
regulatory agencies, the [Bureau of Consumer Financial 
Protection] Consumer Law Enforcement Agency, and the Federal 
Housing Finance Agency. Each such designee shall be a person 
who has demonstrated knowledge and competence concerning the 
appraisal profession. At all times at least one member of the 
Appraisal Subcommittee shall have demonstrated knowledge and 
competence through licensure, certification, or professional 
designation within the appraisal profession.

SEC. 1012. TIMELINESS OF EXAMINATION REPORTS.

  (a) In General.--
          (1) Final examination report.--A Federal financial 
        institutions regulatory agency shall provide a final 
        examination report to a financial institution not later 
        than 60 days after the later of--
                  (A) the exit interview for an examination of 
                the institution; or
                  (B) the provision of additional information 
                by the institution relating to the examination.
          (2) Exit interview.--If a financial institution is 
        not subject to a resident examiner program, the exit 
        interview shall occur not later than the end of the 9-
        month period beginning on the commencement of the 
        examination, except that such period may be extended by 
        the Federal financial institutions regulatory agency by 
        providing written notice to the institution and the 
        Independent Examination Review Director describing with 
        particularity the reasons that a longer period is 
        needed to complete the examination.
  (b) Examination Materials.--Upon the request of a financial 
institution, the Federal financial institutions regulatory 
agency shall include with the final report an appendix listing 
all examination or other factual information relied upon by the 
agency in support of a material supervisory determination.

SEC. 1013. EXAMINATION STANDARDS.

  (a) In General.--In the examination of a financial 
institution--
          (1) a commercial loan shall not be placed in non-
        accrual status solely because the collateral for such 
        loan has deteriorated in value;
          (2) a modified or restructured commercial loan shall 
        be removed from non-accrual status if the borrower 
        demonstrates the ability to perform on such loan over a 
        maximum period of 6 months, except that with respect to 
        loans on a quarterly, semiannual, or longer repayment 
        schedule such period shall be a maximum of 3 
        consecutive repayment periods;
          (3) a new appraisal on a performing commercial loan 
        shall not be required unless an advance of new funds is 
        involved; and
          (4) in classifying a commercial loan in which there 
        has been deterioration in collateral value, the amount 
        to be classified shall be the portion of the deficiency 
        relating to the decline in collateral value and 
        repayment capacity of the borrower.
  (b) Well Capitalized Institutions.--The Federal financial 
institutions regulatory agencies may not require a financial 
institution that is well capitalized to raise additional 
capital in lieu of an action prohibited under subsection (a).
  (c) Consistent Loan Classifications.--The Federal financial 
institutions regulatory agencies shall develop and apply 
identical definitions and reporting requirements for non-
accrual loans.

SEC. 1014. OFFICE OF INDEPENDENT EXAMINATION REVIEW.

  (a) Establishment.--There is established in the Council an 
Office of Independent Examination Review (the ``Office'').
  (b) Head of Office.--There is established the position of the 
Independent Examination Review Director (the ``Director''), as 
the head of the Office. The Director shall be appointed by the 
Council and shall be independent from any member agency of the 
Council.
  (c) Staffing.--The Director is authorized to hire staff to 
support the activities of the Office.
  (d) Duties.--The Director shall--
          (1) receive and, at the Director's discretion, 
        investigate complaints from financial institutions, 
        their representatives, or another entity acting on 
        behalf of such institutions, concerning examinations, 
        examination practices, or examination reports;
          (2) hold meetings, at least once every three months 
        and in locations designed to encourage participation 
        from all sections of the United States, with financial 
        institutions, their representatives, or another entity 
        acting on behalf of such institutions, to discuss 
        examination procedures, examination practices, or 
        examination policies;
          (3) review examination procedures of the Federal 
        financial institutions regulatory agencies to ensure 
        that the written examination policies of those agencies 
        are being followed in practice and adhere to the 
        standards for consistency established by the Council;
          (4) conduct a continuing and regular review of 
        examination quality assurance for all examination types 
        conducted by the Federal financial institutions 
        regulatory agencies;
          (5) adjudicate any supervisory appeal initiated under 
        section 1015; and
          (6) report annually to the Committee on Financial 
        Services of the House of Representatives, the Committee 
        on Banking, Housing, and Urban Affairs of the Senate, 
        and the Council, on the reviews carried out pursuant to 
        paragraphs (3) and (4), including compliance with the 
        requirements set forth in section 1012 regarding 
        timeliness of examination reports, and the Council's 
        recommendations for improvements in examination 
        procedures, practices, and policies.
  (e) Confidentiality.--The Director shall keep confidential 
all meetings with, discussions with, and information provided 
by financial institutions.

SEC. 1015. RIGHT TO INDEPENDENT REVIEW OF MATERIAL SUPERVISORY 
                    DETERMINATIONS.

  (a) In General.--A financial institution shall have the right 
to obtain an independent review of a material supervisory 
determination contained in a final report of examination.
  (b) Notice.--
          (1) Timing.--A financial institution seeking review 
        of a material supervisory determination under this 
        section shall file a written notice with the 
        Independent Examination Review Director (the 
        ``Director'') within 60 days after receiving the final 
        report of examination that is the subject of such 
        review.
          (2) Identification of determination.--The written 
        notice shall identify the material supervisory 
        determination that is the subject of the independent 
        examination review, and a statement of the reasons why 
        the institution believes that the determination is 
        incorrect or should otherwise be modified.
          (3) Information to be provided to institution.--Any 
        information relied upon by the agency in the final 
        report that is not in the possession of the financial 
        institution may be requested by the financial 
        institution and shall be delivered promptly by the 
        agency to the financial institution.
  (c) Right to Hearing.--
          (1) In general.--The Director shall determine the 
        merits of the appeal on the record or, at the financial 
        institution's election, shall refer the appeal to an 
        Administrative Law Judge to conduct a confidential 
        hearing pursuant to the procedures set forth under 
        sections 556 and 557 of title 5, United States Code, 
        which hearing shall take place not later than 60 days 
        after the petition for review was received by the 
        Director, and to issue a proposed decision to the 
        Director based upon the record established at such 
        hearing.
          (2) Standard of review.--In rendering a determination 
        or recommendation under this subsection, neither the 
        Administrative Law Judge nor the Director shall defer 
        to the opinions of the examiner or agency, but shall 
        conduct a de novo review to independently determine the 
        appropriateness of the agency's decision based upon the 
        relevant statutes, regulations, and other appropriate 
        guidance, as well as evidence adduced at any hearing.
  (d) Final Decision.--A decision by the Director on an 
independent review under this section shall--
          (1) be made not later than 60 days after the record 
        has been closed; and
          (2) be deemed final agency action and shall bind the 
        agency whose supervisory determination was the subject 
        of the review and the financial institution requesting 
        the review.
  (e) Right to Judicial Review.--A financial institution shall 
have the right to petition for review of final agency action 
under this section by filing a Petition for Review within 60 
days of the Director's decision in the United States Court of 
Appeals for the District of Columbia Circuit or the Circuit in 
which the financial institution is located.
  (f) Report.--The Director shall report annually to the 
Committee on Financial Services of the House of Representatives 
and the Committee on Banking, Housing, and Urban Affairs of the 
Senate on actions taken under this section, including the types 
of issues that the Director has reviewed and the results of 
those reviews. In no case shall such a report contain 
information about individual financial institutions or any 
confidential or privileged information shared by financial 
institutions.
  (g) Retaliation Prohibited.--A Federal financial institutions 
regulatory agency may not--
          (1) retaliate against a financial institution, 
        including service providers, or any institution-
        affiliated party (as defined under section 3 of the 
        Federal Deposit Insurance Act), for exercising 
        appellate rights under this section; or
          (2) delay or deny any agency action that would 
        benefit a financial institution or any institution-
        affiliated party on the basis that an appeal under this 
        section is pending under this section.
  (h) Rule of Construction.--Nothing in this section may be 
construed--
          (1) to affect the right of a Federal financial 
        institutions regulatory agency to take enforcement or 
        other supervisory actions related to a material 
        supervisory determination under review under this 
        section; or
          (2) to prohibit the review under this section of a 
        material supervisory determination with respect to 
        which there is an ongoing enforcement or other 
        supervisory action.

           *       *       *       *       *       *       *

                              ----------                              


RIEGLE COMMUNITY DEVELOPMENT AND REGULATORY IMPROVEMENT ACT OF 1994

           *       *       *       *       *       *       *



         TITLE I--COMMUNITY DEVELOPMENT AND CONSUMER PROTECTION

 Subtitle A--Community Development Banking and Financial Institutions 
Act

           *       *       *       *       *       *       *


SEC. 117. STUDIES AND REPORTS; EXAMINATION AND AUDIT.

  (a) Annual Report by the Fund.--The Fund shall conduct an 
annual evaluation of the activities carried out by the Fund and 
the community development financial institutions and other 
organizations assisted pursuant to this subtitle, and shall 
submit a report of its findings to the President and the 
Congress not later than 120 days after the end of each fiscal 
year of the Fund. The report shall include financial statements 
audited in accordance with subsection (f).
  (b) Optional Studies.--The Fund may conduct such studies as 
the Fund determines necessary to further the purpose of this 
subtitle and to facilitate investment in distressed 
communities. The findings of any studies conducted pursuant to 
this subsection shall be included in the report required by 
subsection (a).
  (c) Native American Lending Study.--
          (1) In general.--The Fund shall conduct a study on 
        lending and investment practices on Indian reservations 
        and other land held in trust by the United States. Such 
        study shall--
                  (A) identify barriers to private financing on 
                such lands; and
                  (B) identify the impact of such barriers on 
                access to capital and credit for Native 
                American populations.
          (2) Report.--Not later than 12 months after the date 
        on which the Administrator is appointed, the Fund shall 
        submit a report to the President and the Congress 
        that--
                  (A) contains the findings of the study 
                conducted under paragraph (1);
                  (B) recommends any necessary statutory and 
                regulatory changes to existing Federal 
                programs; and
                  (C) makes policy recommendations for 
                community development financial institutions, 
                insured depository institutions, secondary 
                market institutions, and other private sector 
                capital institutions to better serve such 
                populations.
  (d) Investment, Governance, and Role of Fund.--Thirty months 
after the appointment and qualification of the Administrator, 
the Comptroller General of the United States shall submit to 
the President and the Congress a study evaluating the 
structure, governance, and performance of the Fund.
  (e) Consultation.--In the conduct of the studies required 
under this section, the Fund shall consult, as appropriate, 
with the Comptroller of the Currency, the Federal Deposit 
Insurance Corporation, the Board of Governors of the Federal 
Reserve System, the Federal Housing Finance Agency, the Farm 
Credit Administration, [the Director of the Office of Thrift 
Supervision,] the National Credit Union Administration Board, 
Indian tribal governments, community reinvestment 
organizations, civil rights organizations, consumer 
organizations, financial organizations, and such 
representatives of agencies or other persons, at the discretion 
of the Fund.
  (f) Examination and Audit.--The financial statements of the 
Fund shall be audited in accordance with section 9105 of title 
31, United States Code, except that audits required by section 
9105(a) of such title shall be performed annually.

           *       *       *       *       *       *       *


TITLE III--PAPERWORK REDUCTION AND REGULATORY IMPROVEMENT

           *       *       *       *       *       *       *


SEC. 309. REGULATORY APPEALS PROCESS, OMBUDSMAN, AND ALTERNATIVE 
                    DISPUTE RESOLUTION.

  (a) In General.--Not later than 180 days after the date of 
enactment of this Act, each appropriate Federal banking agency, 
the Consumer Law Enforcement Agency, and the National Credit 
Union Administration Board shall establish an independent 
intra-agency appellate process. The process shall be available 
to review material supervisory determinations made at insured 
depository institutions or at insured credit unions that the 
agency supervises.
  (b) Review Process.--In establishing the independent 
appellate process under subsection (a), each agency shall 
ensure that--
          (1) any appeal of a material supervisory 
        determination by an insured depository institution or 
        insured credit union is heard and decided 
        expeditiously; and
          (2) appropriate safeguards exist for protecting [the 
        appellant from retaliation by agency examiners] the 
        insured depository institution or insured credit union 
        from retaliation by the agencies referred to in 
        subsection (a).
For purposes of this subsection and subsection (e), retaliation 
includes delaying consideration of, or withholding approval of, 
any request, notice, or application that otherwise would have 
been approved, but for the exercise of the institution's or 
credit union's rights under this section.
  (c) Comment Period.--Not later than 90 days after the date of 
enactment of this Act, each appropriate Federal banking agency 
and the National Credit Union Administration Board shall 
provide public notice and opportunity for comment on proposed 
guidelines for the establishment of an appellate process under 
this section.
  (d) Agency Ombudsman.--
          (1) Establishment required.--Not later than 180 days 
        after the date of enactment of this Act, each Federal 
        banking agency and the National Credit Union 
        Administration Board shall appoint an ombudsman.
          (2) Duties of ombudsman.--The ombudsman appointed in 
        accordance with paragraph (1) for any agency shall--
                  (A) act as a liaison between the agency and 
                any affected person with respect to any problem 
                such party may have in dealing with the agency 
                resulting from the regulatory activities of the 
                agency; and
                  (B) assure that safeguards exist to encourage 
                complainants to come forward and preserve 
                confidentiality.
  (e) Alternative Dispute Resolution Pilot Program.--
          (1) In general.--Not later than 18 months after the 
        date of enactment of this Act, each Federal banking 
        agency and the National Credit Union Administration 
        Board shall develop and implement a pilot program for 
        using alternative means of dispute resolution of issues 
        in controversy (hereafter in this section referred to 
        as the ``alternative dispute resolution program'') that 
        is consistent with the requirements of subchapter IV of 
        chapter 5 of title 5, United States Code, if the 
        parties to the dispute, including the agency, agree to 
        such proceeding.
          (2) Standards.--An alternative dispute resolution 
        pilot program developed under paragraph (1) shall--
                  (A) be fair to all interested parties to a 
                dispute;
                  (B) resolve disputes expeditiously; [and]
                  (C) be less costly than traditional means of 
                dispute resolution, including litigation[.]; 
                and
                  (D) ensure that appropriate safeguards exist 
                for protecting the insured depository 
                institution or insured credit union from 
                retaliation by any agency referred to in 
                subsection (a) for exercising its rights under 
                this subsection.
          (3) Independent evaluation.--Not later than 18 months 
        after the date on which a pilot program is implemented 
        under paragraph (1), the Administrative Conference of 
        the United States shall submit to the Congress a report 
        containing--
                  (A) an evaluation of that pilot program;
                  (B) the extent to which the pilot programs 
                meet the standards established under paragraph 
                (2);
                  (C) the extent to which parties to disputes 
                were offered alternative means of dispute 
                resolution and the frequency with which the 
                parties, including the agencies, accepted or 
                declined to use such means; and
                  (D) any recommendations of the Conference to 
                improve the alternative dispute resolution 
                procedures of the Federal banking agencies and 
                the National Credit Union Administration Board.
          (4) Implementation of program.--At any time after 
        completion of the evaluation under paragraph (3)(A), 
        any Federal banking agency and the National Credit 
        Union Administration Board may implement an alternative 
        dispute resolution program throughout the agency, 
        taking into account the results of that evaluation.
          (5) Coordination with existing agency adr programs.--
                  (A) Evaluation required.--If any Federal 
                banking agency or the National Credit Union 
                Administration maintains an alternative dispute 
                resolution program as of the date of enactment 
                of this Act under any other provision of law, 
                the Administrative Conference of the United 
                States shall include such program in the 
                evaluation conducted under paragraph (3)(A).
                  (B) Multiple adr programs.--No provision of 
                this section shall be construed as precluding 
                any Federal banking agency or the National 
                Credit Union Administration Board from 
                establishing more than 1 alternative means of 
                dispute resolution.
  (f) Definitions.--For purposes of this section, the following 
definitions shall apply:
          (1) Material supervisory determinations.--The term 
        ``material supervisory determinations''--
                  (A) includes determinations relating to--
                          (i) examination ratings;
                          (ii) the adequacy of loan loss 
                        reserve provisions; [and]
                          (iii) loan classifications on loans 
                        that are significant to an institution; 
                        [and]
                          (iv) any issue specifically listed in 
                        an exam report as a matter requiring 
                        attention by the institution's 
                        management or board of directors; and
                          (v) any suspension or removal of an 
                        institution's status as eligible for 
                        expedited processing of applications, 
                        requests, notices, or filings on the 
                        grounds of a supervisory or compliance 
                        concern, regardless of whether that 
                        concern has been cited as a basis for 
                        another material supervisory 
                        determination or matter requiring 
                        attention in an examination report, 
                        provided that the conduct at issue did 
                        not involve violation of any criminal 
                        law; and
                  (B) does not include a determination by a 
                Federal banking agency or the National Credit 
                Union Administration Board to appoint a 
                conservator or receiver for an insured 
                depository institution or a liquidating agent 
                for an insured credit union, as the case may 
                be, or a decision to take action pursuant to 
                section 38 of the Federal Deposit Insurance Act 
                or section 212 of the Federal Credit Union Act, 
                as appropriate.
          (2) Independent appellate process.--The term 
        ``independent appellate process'' means a review by an 
        agency official who does not directly or indirectly 
        report to the agency official who made the material 
        supervisory determination under review.
          (3) Alternative means of dispute resolution.--The 
        term ``alternative means of dispute resolution'' has 
        the meaning given to such term in section 571 of title 
        5, United States Code.
          (4) Issues in controversy.--The term ``issues in 
        controversy'' means--
                  (A) any final agency decision involving any 
                claim against an insured depository institution 
                or insured credit union for which the agency 
                has been appointed conservator or receiver or 
                for which a liquidating agent has been 
                appointed, as the case may be;
                  (B) any final action taken by an agency in 
                the agency's capacity as conservator or 
                receiver for an insured depository institution 
                or by the liquidating agent appointed for an 
                insured credit union; and
                  (C) any other issue for which the appropriate 
                Federal banking agency or the National Credit 
                Union Administration Board determines that 
                alternative means of dispute resolution would 
                be appropriate.
  (g) Effect on Other Authority.--Nothing in this section shall 
affect the authority of an appropriate Federal banking agency 
or the National Credit Union Administration Board to take 
enforcement or supervisory action.

           *       *       *       *       *       *       *

                              ----------                              


                S.A.F.E. MORTGAGE LICENSING ACT OF 2008


DIVISION A--HOUSING FINANCE REFORM

           *       *       *       *       *       *       *


                TITLE V--S.A.F.E. MORTGAGE LICENSING ACT

SEC. 1501. SHORT TITLE.

  This title may be cited as the ``Secure and Fair Enforcement 
for Mortgage Licensing Act of 2008'' or ``S.A.F.E. Mortgage 
Licensing Act of 2008''.

           *       *       *       *       *       *       *


SEC. 1503. DEFINITIONS.

  For purposes of this title, the following definitions shall 
apply:
          [(1) Bureau.--The term ``Bureau '' means the Bureau 
        of Consumer Financial Protection.]
          (1) Agency.--The term ``Agency'' means the Consumer 
        Law Enforcement Agency.
          (2) Federal banking agency.--The term ``Federal 
        banking agency'' means the Board of Governors of the 
        Federal Reserve System, the Office of the Comptroller 
        of the Currency, the National Credit Union 
        Administration, and the Federal Deposit Insurance 
        Corporation.
          (3) Depository institution.--The term ``depository 
        institution'' has the same meaning as in section 3 of 
        the Federal Deposit Insurance Act, and includes any 
        credit union.
          (4) Loan originator.--
                  (A) In general.--The term ``loan 
                originator''--
                          (i) means an individual who--
                                  (I) takes a residential 
                                mortgage loan application; and
                                  (II) offers or negotiates 
                                terms of a residential mortgage 
                                loan for compensation or gain;
                          (ii) does not include any individual 
                        who is not otherwise described in 
                        clause (i) and who performs purely 
                        administrative or clerical tasks on 
                        behalf of a person who is described in 
                        any such clause;
                          (iii) does not include a person or 
                        entity that only performs real estate 
                        brokerage activities and is licensed or 
                        registered in accordance with 
                        applicable State law, unless the person 
                        or entity is compensated by a lender, a 
                        mortgage broker, or other loan 
                        originator or by any agent of such 
                        lender, mortgage broker, or other loan 
                        originator; and
                          (iv) does not include a person or 
                        entity solely involved in extensions of 
                        credit relating to timeshare plans, as 
                        that term is defined in section 
                        101(53D) of title 11, United States 
                        Code.
                  (B) Other definitions relating to loan 
                originator.--For purposes of this subsection, 
                an individual ``assists a consumer in obtaining 
                or applying to obtain a residential mortgage 
                loan'' by, among other things, advising on loan 
                terms (including rates, fees, other costs), 
                preparing loan packages, or collecting 
                information on behalf of the consumer with 
                regard to a residential mortgage loan.
                  (C) Administrative or clerical tasks.--The 
                term ``administrative or clerical tasks'' means 
                the receipt, collection, and distribution of 
                information common for the processing or 
                underwriting of a loan in the mortgage industry 
                and communication with a consumer to obtain 
                information necessary for the processing or 
                underwriting of a residential mortgage loan.
                  (D) Real estate brokerage activity defined.--
                The term ``real estate brokerage activity'' 
                means any activity that involves offering or 
                providing real estate brokerage services to the 
                public, including--
                          (i) acting as a real estate agent or 
                        real estate broker for a buyer, seller, 
                        lessor, or lessee of real property;
                          (ii) bringing together parties 
                        interested in the sale, purchase, 
                        lease, rental, or exchange of real 
                        property;
                          (iii) negotiating, on behalf of any 
                        party, any portion of a contract 
                        relating to the sale, purchase, lease, 
                        rental, or exchange of real property 
                        (other than in connection with 
                        providing financing with respect to any 
                        such transaction);
                          (iv) engaging in any activity for 
                        which a person engaged in the activity 
                        is required to be registered or 
                        licensed as a real estate agent or real 
                        estate broker under any applicable law; 
                        and
                          (v) offering to engage in any 
                        activity, or act in any capacity, 
                        described in clause (i), (ii), (iii), 
                        or (iv).
          (5) Loan processor or underwriter.--
                  (A) In general.--The term ``loan processor or 
                underwriter'' means an individual who performs 
                clerical or support duties at the direction of 
                and subject to the supervision and instruction 
                of--
                          (i) a State-licensed loan originator; 
                        or
                          (ii) a registered loan originator.
                  (B) Clerical or support duties.--For purposes 
                of subparagraph (A), the term ``clerical or 
                support duties'' may include--
                          (i) the receipt, collection, 
                        distribution, and analysis of 
                        information common for the processing 
                        or underwriting of a residential 
                        mortgage loan; and
                          (ii) communicating with a consumer to 
                        obtain the information necessary for 
                        the processing or underwriting of a 
                        loan, to the extent that such 
                        communication does not include offering 
                        or negotiating loan rates or terms, or 
                        counseling consumers about residential 
                        mortgage loan rates or terms.
          (6) Nationwide mortgage licensing system and 
        registry.--The term ``Nationwide Mortgage Licensing 
        System and Registry'' means a mortgage licensing system 
        developed and maintained by the Conference of State 
        Bank Supervisors and the American Association of 
        Residential Mortgage Regulators for the State licensing 
        and registration of State-licensed loan originators and 
        the registration of registered loan originators or any 
        system established by the Director under section 1509.
          (7) Nontraditional mortgage product.--The term 
        ``nontraditional mortgage product'' means any mortgage 
        product other than a 30-year fixed rate mortgage.
          (8) Registered loan originator.--The term 
        ``registered loan originator'' means any individual 
        who--
                  (A) meets the definition of loan originator 
                and is an employee of--
                          (i) a depository institution;
                          (ii) a subsidiary that is--
                                  (I) owned and controlled by a 
                                depository institution; and
                                  (II) regulated by a Federal 
                                banking agency; or
                          (iii) an institution regulated by the 
                        Farm Credit Administration; and
                  (B) is registered with, and maintains a 
                unique identifier through, the Nationwide 
                Mortgage Licensing System and Registry.
          (9) Residential mortgage loan.--The term 
        ``residential mortgage loan'' means any loan primarily 
        for personal, family, or household use that is secured 
        by a mortgage, deed of trust, or other equivalent 
        consensual security interest on a dwelling (as defined 
        in section 103(v) of the Truth in Lending Act) or 
        residential real estate upon which is constructed or 
        intended to be constructed a dwelling (as so defined).
          (10) Director.--The term ``Director'' means the 
        Director of the [Bureau] Agency of Consumer Financial 
        Protection.
          (11) State.--The term ``State'' means any State of 
        the United States, the District of Columbia, any 
        territory of the United States, Puerto Rico, Guam, 
        American Samoa, the Trust Territory of the Pacific 
        Islands, the Virgin Islands, and the Northern Mariana 
        Islands.
          (12) State-licensed loan originator.--The term 
        ``State-licensed loan originator'' means any individual 
        who--
                  (A) is a loan originator;
                  (B) is not an employee of--
                          (i) a depository institution;
                          (ii) a subsidiary that is--
                                  (I) owned and controlled by a 
                                depository institution; and
                                  (II) regulated by a Federal 
                                banking agency; or
                          (iii) an institution regulated by the 
                        Farm Credit Administration; and
                  (C) is licensed by a State or by the Director 
                under section 1508 and registered as a loan 
                originator with, and maintains a unique 
                identifier through, the Nationwide Mortgage 
                Licensing System and Registry.
          (13) Unique identifier.--
                  (A) In general.--The term ``unique 
                identifier'' means a number or other identifier 
                that--
                          (i) permanently identifies a loan 
                        originator;
                          (ii) is assigned by protocols 
                        established by the Nationwide Mortgage 
                        Licensing System and Registry and the 
                        [Bureau] Agency to facilitate 
                        electronic tracking of loan originators 
                        and uniform identification of, and 
                        public access to, the employment 
                        history of and the publicly adjudicated 
                        disciplinary and enforcement actions 
                        against loan originators; and
                          (iii) shall not be used for purposes 
                        other than those set forth under this 
                        title.
                  (B) Responsibility of states.--To the 
                greatest extent possible and to accomplish the 
                purpose of this title, States shall use unique 
                identifiers in lieu of social security numbers.

           *       *       *       *       *       *       *


SEC. 1507. SYSTEM OF REGISTRATION ADMINISTRATION BY FEDERAL AGENCIES.

  (a) Development.--
          (1) In general.--The [Bureau] Agency shall develop 
        and maintain a system for registering employees of a 
        depository institution, employees of a subsidiary that 
        is owned and controlled by a depository institution and 
        regulated by a Federal banking agency, or employees of 
        an institution regulated by the Farm Credit 
        Administration, as registered loan originators with the 
        Nationwide Mortgage Licensing System and Registry. The 
        system shall be implemented before the end of the 1-
        year period beginning on the date of enactment of the 
        Consumer Financial Protection Act of 2010.
          (2) Registration requirements.--In connection with 
        the registration of any loan originator under this 
        subsection, the [Bureau] Agency shall, at a minimum, 
        furnish or cause to be furnished to the Nationwide 
        Mortgage Licensing System and Registry information 
        concerning the identity of the employee, including--
                  (A) fingerprints for submission to the 
                Federal Bureau of Investigation, and any 
                governmental agency or entity authorized to 
                receive such information for a State and 
                national criminal history background check; and
                  (B) personal history and experience, 
                including authorization for the Nationwide 
                Mortgage Licensing System and Registry to 
                obtain information related to any 
                administrative, civil or criminal findings by 
                any governmental jurisdiction.
  (b) Coordination.--
          (1) Unique identifier.--The [Bureau, and the Bureau 
        of Consumer Financial Protection] Consumer Law 
        Enforcement Agency shall coordinate with the Nationwide 
        Mortgage Licensing System and Registry to establish 
        protocols for assigning a unique identifier to each 
        registered loan originator that will facilitate 
        electronic tracking and uniform identification of, and 
        public access to, the employment history of and 
        publicly adjudicated disciplinary and enforcement 
        actions against loan originators.
          (2) Nationwide mortgage licensing system and registry 
        development.--To facilitate the transfer of information 
        required by subsection (a)(2), the Nationwide Mortgage 
        Licensing System and Registry shall coordinate with the 
        [Bureau, and the Bureau of Consumer Financial 
        Protection] Consumer Law Enforcement Agency concerning 
        the development and operation, by such System and 
        Registry, of the registration functionality and data 
        requirements for loan originators.
  (c) Consideration of Factors and Procedures.--In establishing 
the registration procedures under subsection (a) and the 
protocols for assigning a unique identifier to a registered 
loan originator, the [Bureau] Agency shall make such de minimis 
exceptions as may be appropriate to paragraphs (1)(A) and (2) 
of section 1504(a), shall make reasonable efforts to utilize 
existing information to minimize the burden of registering loan 
originators, and shall consider methods for automating the 
process to the greatest extent practicable consistent with the 
purposes of this title.

SEC. 1508. [BUREAU OF CONSUMER FINANCIAL PROTECTION]  CONSUMER LAW 
                    ENFORCEMENT AGENCY BACKUP AUTHORITY TO ESTABLISH 
                    LOAN ORIGINATOR LICENSING SYSTEM.

  (a) Backup Licensing System.--If, by the end of the 1-year 
period, or the 2-year period in the case of a State whose 
legislature meets only biennially, beginning on the date of the 
enactment of this title or at any time thereafter, the Director 
determines that a State does not have in place by law or 
regulation a system for licensing and registering loan 
originators that meets the requirements of sections 1505 and 
1506 and subsection (d) of this section, or does not 
participate in the Nationwide Mortgage Licensing System and 
Registry, the Director shall provide for the establishment and 
maintenance of a system for the licensing and registration by 
the Director of loan originators operating in such State as 
State-licensed loan originators.
  (b) Licensing and Registration Requirements.--The system 
established by the Director under subsection (a) for any State 
shall meet the requirements of sections 1505 and 1506 for 
State-licensed loan originators.
  (c) Unique Identifier.--The Director shall coordinate with 
the Nationwide Mortgage Licensing System and Registry to 
establish protocols for assigning a unique identifier to each 
loan originator licensed by the Director as a State-licensed 
loan originator that will facilitate electronic tracking and 
uniform identification of, and public access to, the employment 
history of and the publicly adjudicated disciplinary and 
enforcement actions against loan originators.
  (d) State Licensing Law Requirements.--For purposes of this 
section, the law in effect in a State meets the requirements of 
this subsection if the Director determines the law satisfies 
the following minimum requirements:
          (1) A State loan originator supervisory authority is 
        maintained to provide effective supervision and 
        enforcement of such law, including the suspension, 
        termination, or nonrenewal of a license for a violation 
        of State or Federal law.
          (2) The State loan originator supervisory authority 
        ensures that all State-licensed loan originators 
        operating in the State are registered with Nationwide 
        Mortgage Licensing System and Registry.
          (3) The State loan originator supervisory authority 
        is required to regularly report violations of such law, 
        as well as enforcement actions and other relevant 
        information, to the Nationwide Mortgage Licensing 
        System and Registry.
          (4) The State loan originator supervisory authority 
        has a process in place for challenging information 
        contained in the Nationwide Mortgage Licensing System 
        and Registry.
          (5) The State loan originator supervisory authority 
        has established a mechanism to assess civil money 
        penalties for individuals acting as mortgage 
        originators in their State without a valid license or 
        registration.
          (6) The State loan originator supervisory authority 
        has established minimum net worth or surety bonding 
        requirements that reflect the dollar amount of loans 
        originated by a residential mortgage loan originator, 
        or has established a recovery fund paid into by the 
        loan originators.
  (e) Temporary Extension of Period.--The Director may extend, 
by not more than 24 months, the 1-year or 2-year period, as the 
case may be, referred to in subsection (a) for the licensing of 
loan originators in any State under a State licensing law that 
meets the requirements of sections 1505 and 1506 and subsection 
(d) if the Director determines that such State is making a good 
faith effort to establish a State licensing law that meets such 
requirements, license mortgage originators under such law, and 
register such originators with the Nationwide Mortgage 
Licensing System and Registry.
  (f) Regulation Authority.--
          (1) In general.--The [Bureau] Agency is authorized to 
        promulgate regulations setting minimum net worth or 
        surety bond requirements for residential mortgage loan 
        originators and minimum requirements for recovery funds 
        paid into by loan originators.
          (2) Considerations.--In issuing regulations under 
        paragraph (1), the [Bureau] Agency shall take into 
        account the need to provide originators adequate 
        incentives to originate affordable and sustainable 
        mortgage loans, as well as the need to ensure a 
        competitive origination market that maximizes consumer 
        access to affordable and sustainable mortgage loans.

           *       *       *       *       *       *       *


SEC. 1510. FEES.

  The [Bureau] Agency, the Farm Credit Administration, and the 
Nationwide Mortgage Licensing System and Registry may charge 
reasonable fees to cover the costs of maintaining and providing 
access to information from the Nationwide Mortgage Licensing 
System and Registry, to the extent that such fees are not 
charged to consumers for access to such system and registry.

           *       *       *       *       *       *       *


SEC. 1513. LIABILITY PROVISIONS.

  The [Bureau] Agency, any State official or agency, or any 
organization serving as the administrator of the Nationwide 
Mortgage Licensing System and Registry or a system established 
by the Director under section 1509, or any officer or employee 
of any such entity, shall not be subject to any civil action or 
proceeding for monetary damages by reason of the good faith 
action or omission of any officer or employee of any such 
entity, while acting within the scope of office or employment, 
relating to the collection, furnishing, or dissemination of 
information concerning persons who [are loan originators or are 
applying for licensing or registration as loan originators] are 
applying for licensing or registration using the Nationwide 
Mortgage Licensing System and Registry.

SEC. 1514. ENFORCEMENT BY THE [BUREAU]  AGENCY.

  (a) Summons Authority.--The Director may--
          (1) examine any books, papers, records, or other data 
        of any loan originator operating in any State which is 
        subject to a licensing system established by the 
        Director under section 1508; and
          (2) summon any loan originator referred to in 
        paragraph (1) or any person having possession, custody, 
        or care of the reports and records relating to such 
        loan originator, to appear before the Director or any 
        delegate of the Director at a time and place named in 
        the summons and to produce such books, papers, records, 
        or other data, and to give testimony, under oath, as 
        may be relevant or material to an investigation of such 
        loan originator for compliance with the requirements of 
        this title.
  (b) Examination Authority.--
          (1) In general.--If the Director establishes a 
        licensing system under section 1508 for any State, the 
        Director shall appoint examiners for the purposes of 
        administering such section.
          (2) Power to examine.--Any examiner appointed under 
        paragraph (1) shall have power, on behalf of the 
        Director, to make any examination of any loan 
        originator operating in any State which is subject to a 
        licensing system established by the Director under 
        section 1508 whenever the Director determines an 
        examination of any loan originator is necessary to 
        determine the compliance by the originator with this 
        title.
          (3) Report of examination.--Each examiner appointed 
        under paragraph (1) shall make a full and detailed 
        report of examination of any loan originator examined 
        to the Director.
          (4) Administration of oaths and affirmations; 
        evidence.--In connection with examinations of loan 
        originators operating in any State which is subject to 
        a licensing system established by the Director under 
        section 1508, or with other types of investigations to 
        determine compliance with applicable law and 
        regulations, the Director and examiners appointed by 
        the Director may administer oaths and affirmations and 
        examine and take and preserve testimony under oath as 
        to any matter in respect to the affairs of any such 
        loan originator.
          (5) Assessments.--The cost of conducting any 
        examination of any loan originator operating in any 
        State which is subject to a licensing system 
        established by the Director under section 1508 shall be 
        assessed by the Director against the loan originator to 
        meet the [Secretary's] Director's expenses in carrying 
        out such examination.
  (c) Cease and Desist Proceeding.--
          (1) Authority of director.--If the Director finds, 
        after notice and opportunity for hearing, that any 
        person is violating, has violated, or is about to 
        violate any provision of this title, or any regulation 
        thereunder, with respect to a State which is subject to 
        a licensing system established by the Director under 
        section 1508, the Director may publish such findings 
        and enter an order requiring such person, and any other 
        person that is, was, or would be a cause of the 
        violation, due to an act or omission the person knew or 
        should have known would contribute to such violation, 
        to cease and desist from committing or causing such 
        violation and any future violation of the same 
        provision, rule, or regulation. Such order may, in 
        addition to requiring a person to cease and desist from 
        committing or causing a violation, require such person 
        to comply, or to take steps to effect compliance, with 
        such provision or regulation, upon such terms and 
        conditions and within such time as the Director may 
        specify in such order. Any such order may, as the 
        Director deems appropriate, require future compliance 
        or steps to effect future compliance, either 
        permanently or for such period of time as the Director 
        may specify, with such provision or regulation with 
        respect to any loan originator.
          (2) Hearing.--The notice instituting proceedings 
        pursuant to paragraph (1) shall fix a hearing date not 
        earlier than 30 days nor later than 60 days after 
        service of the notice unless an earlier or a later date 
        is set by the Director with the consent of any 
        respondent so served.
          (3) Temporary order.--Whenever the Director 
        determines that the alleged violation or threatened 
        violation specified in the notice instituting 
        proceedings pursuant to paragraph (1), or the 
        continuation thereof, is likely to result in 
        significant dissipation or conversion of assets, 
        significant harm to consumers, or substantial harm to 
        the public interest prior to the completion of the 
        proceedings, the Director may enter a temporary order 
        requiring the respondent to cease and desist from the 
        violation or threatened violation and to take such 
        action to prevent the violation or threatened violation 
        and to prevent dissipation or conversion of assets, 
        significant harm to consumers, or substantial harm to 
        the public interest as the Director deems appropriate 
        pending completion of such proceedings. Such an order 
        shall be entered only after notice and opportunity for 
        a hearing, unless the Director determines that notice 
        and hearing prior to entry would be impracticable or 
        contrary to the public interest. A temporary order 
        shall become effective upon service upon the respondent 
        and, unless set aside, limited, or suspended by the 
        Director or a court of competent jurisdiction, shall 
        remain effective and enforceable pending the completion 
        of the proceedings.
          (4) Review of temporary orders.--
                  (A) Review by director.--At any time after 
                the respondent has been served with a temporary 
                cease and desist order pursuant to paragraph 
                (3), the respondent may apply to the Director 
                to have the order set aside, limited, or 
                suspended. If the respondent has been served 
                with a temporary cease and desist order entered 
                without a prior hearing before the Director, 
                the respondent may, within 10 days after the 
                date on which the order was served, request a 
                hearing on such application and the Director 
                shall hold a hearing and render a decision on 
                such application at the earliest possible time.
                  (B) Judicial review.--Within--
                          (i) 10 days after the date the 
                        respondent was served with a temporary 
                        cease and desist order entered with a 
                        prior hearing before the Director; or
                          (ii) 10 days after the Director 
                        renders a decision on an application 
                        and hearing under paragraph (1), with 
                        respect to any temporary cease and 
                        desist order entered without a prior 
                        hearing before the Director,
                the respondent may apply to the United States 
                district court for the district in which the 
                respondent resides or has its principal place 
                of business, or for the District of Columbia, 
                for an order setting aside, limiting, or 
                suspending the effectiveness or enforcement of 
                the order, and the court shall have 
                jurisdiction to enter such an order. A 
                respondent served with a temporary cease and 
                desist order entered without a prior hearing 
                before the Director may not apply to the court 
                except after hearing and decision by the 
                Director on the respondent's application under 
                subparagraph (A).
                  (C) No automatic stay of temporary order.--
                The commencement of proceedings under 
                subparagraph (B) shall not, unless specifically 
                ordered by the court, operate as a stay of the 
                [Secretary's] Director's order.
          (5) Authority of the director to prohibit persons 
        from serving as loan originators.--In any cease and 
        desist proceeding under paragraph (1), the Director may 
        issue an order to prohibit, conditionally or 
        unconditionally, and permanently or for such period of 
        time as the Director shall determine, any person who 
        has violated this title or regulations thereunder, from 
        acting as a loan originator if the conduct of that 
        person demonstrates unfitness to serve as a loan 
        originator.
  (d) Authority of the Director To Assess Money Penalties.--
          (1) In general.--The Director may impose a civil 
        penalty on a loan originator operating in any State 
        which is subject to a licensing system established by 
        the Director under section 1508, if the Director finds, 
        on the record after notice and opportunity for hearing, 
        that such loan originator has violated or failed to 
        comply with any requirement of this title or any 
        regulation prescribed by the Director under this title 
        or order issued under subsection (c).
          (2) Maximum amount of penalty.--The maximum amount of 
        penalty for each act or omission described in paragraph 
        (1) shall be $25,000.

           *       *       *       *       *       *       *


SEC. 1518. EMPLOYMENT TRANSITION OF LOAN ORIGINATORS.

  (a) Temporary Authority to Originate Loans for Loan 
Originators Moving From a Depository Institution to a Non-
depository Institution.--
          (1) In general.--Upon employment by a State-licensed 
        mortgage company, an individual who is a registered 
        loan originator shall be deemed to have temporary 
        authority to act as a loan originator in an application 
        State for the period described in paragraph (2) if the 
        individual--
                  (A) has not had an application for a loan 
                originator license denied, or had such a 
                license revoked or suspended in any 
                governmental jurisdiction;
                  (B) has not been subject to or served with a 
                cease and desist order in any governmental 
                jurisdiction or as described in section 
                1514(c);
                  (C) has not been convicted of a felony that 
                would preclude licensure under the law of the 
                application State;
                  (D) has submitted an application to be a 
                State-licensed loan originator in the 
                application State; and
                  (E) was registered in the Nationwide Mortgage 
                Licensing System and Registry as a loan 
                originator during the 12-month period preceding 
                the date of submission of the information 
                required under section 1505(a).
          (2) Period.--The period described in paragraph (1) 
        shall begin on the date that the individual submits the 
        information required under section 1505(a) and shall 
        end on the earliest of--
                  (A) the date that the individual withdraws 
                the application to be a State-licensed loan 
                originator in the application State;
                  (B) the date that the application State 
                denies, or issues a notice of intent to deny, 
                the application;
                  (C) the date that the application State 
                grants a State license; or
                  (D) the date that is 120 days after the date 
                on which the individual submits the 
                application, if the application is listed on 
                the Nationwide Mortgage Licensing System and 
                Registry as incomplete.
  (b) Temporary Authority to Originate Loans for State-licensed 
Loan Originators Moving Interstate.--
          (1) In general.--A State-licensed loan originator 
        shall be deemed to have temporary authority to act as a 
        loan originator in an application State for the period 
        described in paragraph (2) if the State-licensed loan 
        originator--
                  (A) meets the requirements of subparagraphs 
                (A), (B), (C), and (D) of subsection (a)(1);
                  (B) is employed by a State-licensed mortgage 
                company in the application State; and
                  (C) was licensed in a State that is not the 
                application State during the 30-day period 
                preceding the date of submission of the 
                information required under section 1505(a) in 
                connection with the application submitted to 
                the application State.
          (2) Period.--The period described in paragraph (1) 
        shall begin on the date that the State-licensed loan 
        originator submits the information required under 
        section 1505(a) in connection with the application 
        submitted to the application State and end on the 
        earliest of--
                  (A) the date that the State-licensed loan 
                originator withdraws the application to be a 
                State-licensed loan originator in the 
                application State;
                  (B) the date that the application State 
                denies, or issues a notice of intent to deny, 
                the application;
                  (C) the date that the application State 
                grants a State license; or
                  (D) the date that is 120 days after the date 
                on which the State-licensed loan originator 
                submits the application, if the application is 
                listed on the Nationwide Mortgage Licensing 
                System and Registry as incomplete.
  (c) Applicability.--
          (1) Any person employing an individual who is deemed 
        to have temporary authority to act as a loan originator 
        in an application State pursuant to this section shall 
        be subject to the requirements of this title and to 
        applicable State law to the same extent as if such 
        individual was a State-licensed loan originator 
        licensed by the application State.
          (2) Any individual who is deemed to have temporary 
        authority to act as a loan originator in an application 
        State pursuant to this section and who engages in 
        residential mortgage loan origination activities shall 
        be subject to the requirements of this title and to 
        applicable State law to the same extent as if such 
        individual was a State-licensed loan originator 
        licensed by the application State.
  (d) Definitions.--In this section, the following definitions 
shall apply:
          (1) State-licensed mortgage company.--The term 
        ``State-licensed mortgage company'' means an entity 
        licensed or registered under the law of any State to 
        engage in residential mortgage loan origination and 
        processing activities.
          (2) Application state.--The term ``application 
        State'' means a State in which a registered loan 
        originator or a State-licensed loan originator seeks to 
        be licensed.

           *       *       *       *       *       *       *

                              ----------                              


               HOUSING AND ECONOMIC RECOVERY ACT OF 2008


SEC. 1. SHORT TITLE; TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``Housing and 
Economic Recovery Act of 2008''.
  (b) Table of Content.--The table of contents for this Act is 
as follows:

     * * * * * * *

                   DIVISION A--HOUSING FINANCE REFORM

     * * * * * * *

                TITLE V--S.A.F.E. MORTGAGE LICENSING ACT

     * * * * * * *
Sec. 1518. Employment transition of loan originators.

           *       *       *       *       *       *       *

                              ----------                              


EQUAL CREDIT OPPORTUNITY ACT

           *       *       *       *       *       *       *



                  TITLE VII--EQUAL CREDIT OPPORTUNITY

Sec. 701. Prohibited discrimination; reasons for adverse action

  (a) It shall be unlawful for any creditor to discriminate 
against any applicant, with respect to any aspect of a credit 
transaction--
          (1) on the basis of race, color, religion, national 
        origin, sex or marital status, or age (provided the 
        applicant has the capacity to contract);
          (2) because all or part of the applicant's income 
        derives from any public assistance program; or
          (3) because the applicant has in good faith exercised 
        any right under the Consumer Credit Protection Act.
  (b) It shall not constitute discrimination for purposes of 
this title for a creditor--
          (1) to make an inquiry of marital status if such 
        inquiry is for the purpose of ascertaining the 
        creditor's rights and remedies applicable to the 
        particular extension of credit and not to discriminate 
        in a determination of credit-worthiness;
          (2) to make an inquiry of the applicant's age or of 
        whether the applicant's income derives from any public 
        assistance program if such inquiry is for the purpose 
        of determining the amount and probable continuance of 
        income levels, credit history, or other pertinent 
        element of credit-worthiness as provided in regulations 
        of the Board;
          (3) to use any empirically derived credit system 
        which considers age if such system is demonstrably and 
        statistically sound in accordance with regulations of 
        the [Bureau] Agency, except that in the operation of 
        such system the age of an elderly applicant may not be 
        assigned a negative factor or value; or
          (4) to make an inquiry or to consider the age of an 
        elderly applicant when the age of such applicant is to 
        be used by the creditor in the extension of credit in 
        favor of such applicant[; or].
          [(5) to make an inquiry under section 704B, in 
        accordance with the requirements of that section.]
  (c) It is not a violation of this section for a creditor to 
refuse to extend credit offered pursuant to--
          (1) any credit assistance program expressly 
        authorized by law for an economically disadvantaged 
        class of persons;
          (2) any credit assistance program administered by a 
        nonprofit organization for its members or an 
        economically disadvantaged class of persons; or
          (3) any special purpose credit program offered by a 
        profit-making organization to meet special social needs 
        which meets standards prescribed in regulations by the 
        Board;
if such refusal is required by or made pursuant to such 
program.
  (d)(1) Within thirty days (or such longer reasonable time as 
specified in regulations of the [Bureau] Agency for any class 
of credit transaction) after receipt of a completed application 
for credit, a creditor shall notify the applicant of its action 
on the application.
  (2) Each applicant against whom adverse action is taken shall 
be entitled to a statement of reasons for such action from the 
creditor. A creditor satisfies this obligation by--
          (A) providing statements of reasons in writing as a 
        matter of course to applicants against whom adverse 
        action is taken; or
          (B) giving written notification of adverse action 
        which discloses (i) the applicant's right to a 
        statement of reasons within thirty days after receipt 
        by the creditor of a request made within sixty days 
        after such notification, and (ii) the identity of the 
        person or office from which such statement may be 
        obtained. Such statement may be given orally, if the 
        written notification advises the applicant of his right 
        to have the statement of reasons confirmed in writing 
        on written request.
  (3) A statement of reasons meets the requirements of this 
section only if it contains the specific reasons for the 
adverse action taken.
  (4) Where a creditor has been requested by a third party to 
make a specific extension of credit directly or indirectly to 
an applicant, the notification and statement of reasons 
required by this subsection may be made directly by such 
creditor, or indirectly through the third party, provided in 
either case that the identity of the creditor is disclosed.
  (5) The requirements of paragraphs (2), (3), or (4) may be 
satisfied by verbal statements or notifications in the case of 
any creditor who did not act on more than one hundred and fifty 
applications during the calendar year preceding the calendar 
year in which the adverse action is taken, as determined under 
regulations of the Board.
  (6) For purposes of this subsection, the term ``adverse 
action'' means a denial or revocation of credit, a change in 
the terms of an existing credit arrangement, or a refusal to 
grant credit in substantially the amount or on substantially 
the terms requested. Such term does not include a refusal to 
extend additional credit under an existing credit arrangement 
where the applicant is delinquent or otherwise in default, or 
where such additional credit would exceed a previously 
established credit limit.
  (e) Copies Furnished to Applicants.--
          (1) In general.--Each creditor shall furnish to an 
        applicant a copy of any and all written appraisals and 
        valuations developed in connection with the applicant's 
        application for a loan that is secured or would have 
        been secured by a first lien on a dwelling promptly 
        upon completion, but in no case later than 3 days prior 
        to the closing of the loan, whether the creditor grants 
        or denies the applicant's request for credit or the 
        application is incomplete or withdrawn.
          (2) Waiver.--The applicant may waive the 3 day 
        requirement provided for in paragraph (1), except where 
        otherwise required in law.
          (3) Reimbursement.--The applicant may be required to 
        pay a reasonable fee to reimburse the creditor for the 
        cost of the appraisal, except where otherwise required 
        in law.
          (4) Free copy.--Notwithstanding paragraph (3), the 
        creditor shall provide a copy of each written appraisal 
        or valuation at no additional cost to the applicant.
          (5) Notification to applicants.--At the time of 
        application, the creditor shall notify an applicant in 
        writing of the right to receive a copy of each written 
        appraisal and valuation under this subsection.
          (6) Valuation defined.--For purposes of this 
        subsection, the term ``valuation'' shall include any 
        estimate of the value of a dwelling developed in 
        connection with a creditor's decision to provide 
        credit, including those values developed pursuant to a 
        policy of a government sponsored enterprise or by an 
        automated valuation model, a broker price opinion, or 
        other methodology or mechanism.

Sec. 702. Definitions

  (a) The definitions and rules of construction set forth in 
this section are applicable for the purposes of this title.
  (b) The term ``applicant'' means any person who applies to a 
creditor directly for an extension, renewal, or continuation of 
credit, or applies to a creditor indirectly by use of an 
existing credit plan for an amount exceeding a previously 
established credit limit.
  [(c) The term ``Bureau'' means the Bureau of Consumer 
Financial Protection.]
  (c) The term ``Agency'' means the Consumer Law Enforcement 
Agency.
  (d) The term ``credit'' means the right granted by a creditor 
to a debtor to defer payment of debt or to incur debts and 
defer its payment or to purchase property or services and defer 
payment therefor.
  (e) The term ``creditor'' means any person who regularly 
extends, renews, or continues credit; any person who regularly 
arranges for the extension, renewal, or continuation of credit; 
or any assignee of an original creditor who participates in the 
decision to extend, renew, or continue credit.
  (f) The term ``person'' means a natural person, a 
corporation, government or governmental subdivision or agency, 
trust, estate, partnership, cooperative, or association.
  (g) Any reference to any requirement imposed under this title 
or any provision thereof includes reference to the regulations 
of the [Bureau] Agency under this title or the provision 
thereof in question.

SEC. 703. PROMULGATION OF REGULATIONS BY THE [BUREAU]  AGENCY.

  (a) The [Bureau] Agency shall prescribe regulations to carry 
out the purposes of this title. These regulations may contain 
but are not limited to such classifications, differentiation, 
or other provision, and may provide for such adjustments and 
exceptions for any class of transactions, as in the judgment of 
the [Bureau] Agency are necessary or proper to effectuate the 
purposes of this title, to prevent circumvention or evasion 
thereof, or to facilitate or substantiate compliance therewith.
  (b) Such regulations may exempt from the provisions of this 
title any class of transactions that are not primarily for 
personal, family, or household purposes, or business or 
commercial loans made available by a financial institution, 
except that a particular type within a class of such 
transactions may be exempted if the [Bureau] Agency determines, 
after making an express finding that the application of this 
title or of any provision of this title of such transaction 
would not contribute substantially to effecting the purposes of 
this title.
  (c) An exemption granted pursuant to subsection (b) shall be 
for no longer than five years and shall be extended only if the 
[Bureau] Agency makes a subsequent determination, in the manner 
described by such [paragraph] subsection, that such exemption 
remains appropriate.
  (d) Pursuant to [Bureau] Agency regulations, entities making 
business or commercial loans shall maintain such records or 
other data relating to such loans as may be necessary to 
evidence compliance with this subsection or enforce any action 
pursuant to the authority of this Act. In no event shall such 
records or data be maintained for a period of less than one 
year. The [Bureau] Agency shall promulgate regulations to 
implement this [paragraph] subsection in the manner prescribed 
by chapter 5 of title 5, United States Code.
  (e) The [Bureau] Agency shall provide in regulations that an 
applicant for a business or commercial loan shall be provided a 
written notice of such applicant's right to receive a written 
statement of the reasons for the denial of such loan.
  (f) Board Authority.--Notwithstanding subsection (a), the 
Board shall prescribe regulations to carry out the purposes of 
this title with respect to a person described in section 
1029(a) of the Consumer Financial Protection Act of 2010. These 
regulations may contain but are not limited to such 
classifications, differentiation, or other provision, and may 
provide for such adjustments and exceptions for any class of 
transactions, as in the judgment of the Board are necessary or 
proper to effectuate the purposes of this title, to prevent 
circumvention or evasion thereof, or to facilitate or 
substantiate compliance therewith.
  (g) Deference.--Notwithstanding any power granted to any 
Federal agency under this title, the deference that a court 
affords to a Federal agency with respect to a determination 
made by such agency relating to the meaning or interpretation 
of any provision of this title that is subject to the 
jurisdiction of such agency shall be applied as if that agency 
were the only agency authorized to apply, enforce, interpret, 
or administer the provisions of this title.

Sec. 704. Administrative enforcement

  (a) Subject to subtitle B of the [Consumer Protection 
Financial Protection Act of 2010 with] Consumer Financial 
Protection Act of 2010, compliance with the requirements 
imposed under this title shall be enforced under:
          (1) [section 8] Section 8 of the Federal Deposit 
        Insurance Act, by the appropriate Federal banking 
        agency, as defined in section 3(q) of the Federal 
        Deposit Insurance Act (12 U.S.C. 1813(q)), with respect 
        to--
                  (A) national banks, Federal savings 
                associations, and Federal branches and Federal 
                agencies of foreign banks;
                  (B) member banks of the Federal Reserve 
                System (other than national banks), branches 
                and agencies of foreign banks (other than 
                Federal branches, Federal agencies, and insured 
                State branches of foreign banks), commercial 
                lending companies owned or controlled by 
                foreign banks, and organizations operating 
                under section 25 or 25A of the Federal Reserve 
                Act; and
                  (C) banks and State savings associations 
                insured by the Federal Deposit Insurance 
                Corporation (other than members of the Federal 
                Reserve System), and insured State branches of 
                foreign [banks;] banks.
          (2) The Federal Credit Union Act, by the 
        Administrator of the National Credit Union 
        Administration with respect to any Federal Credit 
        Union.
          (3) The Acts to regulate commerce, by the Secretary 
        of Transportation, with respect to all carriers subject 
        to the jurisdiction of the Surface Transportation 
        Board.
          (4) The Federal Aviation Act of 1958, by the 
        Secretary of Transportation with respect to any air 
        carrier or foreign air carrier subject to that Act.
          (5) The Packers and Stockyards Act, 1921 (except as 
        provided in section 406 of that Act), by the Secretary 
        of Agriculture with respect to any activities subject 
        to that Act.
          (6) The Farm Credit Act of 1971, by the Farm Credit 
        Administration with respect to any Federal land bank, 
        Federal land bank association, Federal intermediate 
        credit bank, and production credit association[;].
          (7) The Securities Exchange Act of 1934, by the 
        Securities and Exchange Commission with respect to 
        brokers and dealers[;].
          (8) The Small Business Investment Act of 1958, by the 
        Small Business Administration, with respect to small 
        business investment companies[; and].
          (9) Subtitle E of the Consumer Financial Protection 
        Act of 2010, by the [Bureau] Agency, with respect to 
        any person subject to this title.
The terms used in paragraph (1) that are not defined in this 
title or otherwise defined in section 3(s) of the Federal 
Deposit Insurance Act (12 U.S.C. 1813(s)) shall have the 
meaning given to them in section 1(b) of the International 
Banking Act of 1978 (12 U.S.C. 3101).
  (b) For the purpose of the exercise by any agency referred to 
in subsection (a) of its powers under any Act referred to in 
that subsection, a violation of any requirement imposed under 
this title shall be deemed to be a violation of a requirement 
imposed under that Act. In addition to its powers under any 
provision of law specifically referred to in subsection (a), 
each of the agencies referred to in that subsection may 
exercise for the purpose of enforcing compliance with any 
requirement imposed under this title, any other authority 
conferred on it by law. The exercise of the authorities of any 
of the agencies referred to in subsection (a) for the purpose 
of enforcing compliance with any requirement imposed under this 
title shall in no way preclude the exercise of such authorities 
for the purpose of enforcing compliance with any other 
provision of law not relating to the prohibition of 
discrimination on the basis of sex or marital status with 
respect to any aspect of a credit transaction.
  (c) Overall Enforcement Authority of Federal Trade 
Commission.--Except to the extent that enforcement of the 
requirements imposed under this title is specifically committed 
to some other Government agency under any of paragraphs (1) 
through (8) of subsection (a), and subject to subtitle B of the 
Consumer Financial Protection Act of 2010, the Federal Trade 
Commission shall be authorized to enforce such requirements. 
For the purpose of the exercise by the Federal Trade Commission 
of its functions and powers under the Federal Trade Commission 
Act (15 U.S.C. 41 et seq.), a violation of any requirement 
imposed under this [subchapter] title shall be deemed a 
violation of a requirement imposed under that Act. All of the 
functions and powers of the Federal Trade Commission under the 
Federal Trade Commission Act are available to the Federal Trade 
Commission to enforce compliance by any person with the 
requirements imposed under this title, irrespective of whether 
that person is engaged in commerce or meets any other 
jurisdictional tests under the Federal Trade Commission Act, 
including the power to enforce any rule prescribed by the 
[Bureau] Agency under this title in the same manner as if the 
violation had been a violation of a Federal Trade Commission 
trade regulation rule.
  (d) The authority of the [Bureau] Agency to issue regulations 
under this title does not impair the authority of any other 
agency designated in this section to make rules respecting its 
own procedures in enforcing compliance with requirements 
imposed under this title.

           *       *       *       *       *       *       *


[SEC. 704B. SMALL BUSINESS LOAN DATA COLLECTION.

  [(a) Purpose.--The purpose of this section is to facilitate 
enforcement of fair lending laws and enable communities, 
governmental entities, and creditors to identify business and 
community development needs and opportunities of women-owned, 
minority-owned, and small businesses.
  [(b) Information Gathering.--Subject to the requirements of 
this section, in the case of any application to a financial 
institution for credit for women-owned, minority-owned, or 
small business, the financial institution shall--
          [(1) inquire whether the business is a women-owned, 
        minority-owned, or small business, without regard to 
        whether such application is received in person, by 
        mail, by telephone, by electronic mail or other form of 
        electronic transmission, or by any other means, and 
        whether or not such application is in response to a 
        solicitation by the financial institution; and
          [(2) maintain a record of the responses to such 
        inquiry, separate from the application and accompanying 
        information.
  [(c) Right To Refuse.--Any applicant for credit may refuse to 
provide any information requested pursuant to subsection (b) in 
connection with any application for credit.
  [(d) No Access by Underwriters.--
          [(1) Limitation.--Where feasible, no loan underwriter 
        or other officer or employee of a financial 
        institution, or any affiliate of a financial 
        institution, involved in making any determination 
        concerning an application for credit shall have access 
        to any information provided by the applicant pursuant 
        to a request under subsection (b) in connection with 
        such application.
          [(2) Limited access.--If a financial institution 
        determines that a loan underwriter or other officer or 
        employee of a financial institution, or any affiliate 
        of a financial institution, involved in making any 
        determination concerning an application for credit 
        should have access to any information provided by the 
        applicant pursuant to a request under subsection (b), 
        the financial institution shall provide notice to the 
        applicant of the access of the underwriter to such 
        information, along with notice that the financial 
        institution may not discriminate on the basis of such 
        information.
  [(e) Form and Manner of Information.--
          [(1) In general.--Each financial institution shall 
        compile and maintain, in accordance with regulations of 
        the Bureau, a record of the information provided by any 
        loan applicant pursuant to a request under subsection 
        (b).
          [(2) Itemization.--Information compiled and 
        maintained under paragraph (1) shall be itemized in 
        order to clearly and conspicuously disclose--
                  [(A) the number of the application and the 
                date on which the application was received;
                  [(B) the type and purpose of the loan or 
                other credit being applied for;
                  [(C) the amount of the credit or credit limit 
                applied for, and the amount of the credit 
                transaction or the credit limit approved for 
                such applicant;
                  [(D) the type of action taken with respect to 
                such application, and the date of such action;
                  [(E) the census tract in which is located the 
                principal place of business of the women-owned, 
                minority-owned, or small business loan 
                applicant;
                  [(F) the gross annual revenue of the business 
                in the last fiscal year of the women-owned, 
                minority-owned, or small business loan 
                applicant preceding the date of the 
                application;
                  [(G) the race, sex, and ethnicity of the 
                principal owners of the business; and
                  [(H) any additional data that the Bureau 
                determines would aid in fulfilling the purposes 
                of this section.
          [(3) No personally identifiable information.--In 
        compiling and maintaining any record of information 
        under this section, a financial institution may not 
        include in such record the name, specific address 
        (other than the census tract required under paragraph 
        (1)(E)), telephone number, electronic mail address, or 
        any other personally identifiable information 
        concerning any individual who is, or is connected with, 
        the women-owned, minority-owned, or small business loan 
        applicant.
          [(4) Discretion to delete or modify publicly 
        available data.--The Bureau may, at its discretion, 
        delete or modify data collected under this section 
        which is or will be available to the public, if the 
        Bureau determines that the deletion or modification of 
        the data would advance a privacy interest.
  [(f) Availability of Information.--
          [(1) Submission to bureau.--The data required to be 
        compiled and maintained under this section by any 
        financial institution shall be submitted annually to 
        the Bureau.
          [(2) Availability of information.--Information 
        compiled and maintained under this section shall be--
                  [(A) retained for not less than 3 years after 
                the date of preparation;
                  [(B) made available to any member of the 
                public, upon request, in the form required 
                under regulations prescribed by the Bureau;
                  [(C) annually made available to the public 
                generally by the Bureau, in such form and in 
                such manner as is determined by the Bureau, by 
                regulation.
          [(3) Compilation of aggregate data.--The Bureau may, 
        at its discretion--
                  [(A) compile and aggregate data collected 
                under this section for its own use; and
                  [(B) make public such compilations of 
                aggregate data.
  [(g) Bureau Action.--
          [(1) In general.--The Bureau shall prescribe such 
        rules and issue such guidance as may be necessary to 
        carry out, enforce, and compile data pursuant to this 
        section.
          [(2) Exceptions.--The Bureau, by rule or order, may 
        adopt exceptions to any requirement of this section and 
        may, conditionally or unconditionally, exempt any 
        financial institution or class of financial 
        institutions from the requirements of this section, as 
        the Bureau deems necessary or appropriate to carry out 
        the purposes of this section.
          [(3) Guidance.--The Bureau shall issue guidance 
        designed to facilitate compliance with the requirements 
        of this section, including assisting financial 
        institutions in working with applicants to determine 
        whether the applicants are women-owned, minority-owned, 
        or small businesses for purposes of this section.
  [(h) Definitions.--For purposes of this section, the 
following definitions shall apply:
          [(1) Financial institution.--The term ``financial 
        institution'' means any partnership, company, 
        corporation, association (incorporated or 
        unincorporated), trust, estate, cooperative 
        organization, or other entity that engages in any 
        financial activity.
          [(2) Small business.--The term ``small business'' has 
        the same meaning as the term ``small business concern'' 
        in section 3 of the Small Business Act (15 U.S.C. 632).
          [(3) Small business loan.--The term ``small business 
        loan'' means a loan made to a small business.
          [(4) Minority.--The term ``minority'' has the same 
        meaning as in section 1204(c)(3) of the Financial 
        Institutions Reform, Recovery, and Enforcement Act of 
        1989.
          [(5) Minority-owned business.--The term ``minority-
        owned business'' means a business--
                  [(A) more than 50 percent of the ownership or 
                control of which is held by 1 or more minority 
                individuals; and
                  [(B) more than 50 percent of the net profit 
                or loss of which accrues to 1 or more minority 
                individuals.
          [(6) Women-owned business.--The term ``women-owned 
        business'' means a business--
                  [(A) more than 50 percent of the ownership or 
                control of which is held by 1 or more women; 
                and
                  [(B) more than 50 percent of the net profit 
                or loss of which accrues to 1 or more women.]

Sec. 705. Relation to State laws

  (a) A request for the signature of both parties to a marriage 
for the purpose of creating a valid lien, passing clear title, 
waiving inchoate rights to property, or assigning earnings, 
shall not constitute discrimination under this title: Provided, 
however, That this provision shall not be construed to permit a 
creditor to take sex or marital status into account in 
connection with the evaluation of creditworthiness of any 
applicant.
  (b) Consideration or application of State property laws 
directly or indirectly affecting creditworthiness shall not 
constitute discrimination for purposes of this title.
  (c) Any provision of State law which prohibits the separate 
extension of consumer credit to each party to a marriage shall 
not apply in any case where each party to a marriage 
voluntarily applies for separate credit from the same creditor: 
Provided, That in any case where such a State law is so 
preempted, each party to the marriage shall be solely 
responsible for the debt so contracted.
  (d) When each party to a marriage separately and voluntarily 
applies for and obtains separate credit accounts with the same 
creditor, those accounts shall not be aggregated or otherwise 
combined for purposes of determining permissible finance 
charges or permissible loan ceilings under the laws of any 
State or of the United States.
  (e) Where the same act or omission constitutes a violation of 
this title and of applicable State law, a person aggrieved by 
such conduct may bring a legal action to recover monetary 
damages either under this title or under such State law, but 
not both. This election of remedies shall not apply to court 
actions in which the relief sought does not include monetary 
damages or to administrative actions.
  (f) This title does not annul, alter, or affect, or exempt 
any person subject to the provisions of this title from 
complying with, the laws of any State with respect to credit 
discrimination, except to the extent that those laws are 
inconsistent with any provision of this title, and then only to 
the extent of the inconsistency. The [Bureau] Agency is 
authorized to determine whether such inconsistencies exist. The 
[Bureau] Agency may not determine that any State law is 
inconsistent with any provision of this title if the [Bureau] 
Agency determines that such law gives greater protection to the 
applicant.
  (g) The [Bureau] Agency shall by regulation exempt from the 
requirements of sections 701 and 702 of this title any class of 
credit transactions within any State if it determines that 
under the law of that State that class of transactions is 
subject to requirements substantially similar to those imposed 
under this title or that such law gives greater protection to 
the applicant, and that there is adequate provision for 
enforcement. Failure to comply with any requirement of such 
State law in any transaction so exempted shall constitute a 
violation of this title for the purposes of section 706.

Sec. 706. Civil liability

  (a) Any creditor who fails to comply with any requirement 
imposed under this title shall be liable to the aggrieved 
applicant for any actual damages sustained by such applicant 
acting either in an individual capacity or as a member of a 
class.
  (b) Any creditor, other than a government or governmental 
subdivision or agency, who fails to comply with any requirement 
imposed under this title shall be liable to the aggrieved 
applicant for punitive damages in an amount not greater than 
$10,000, in addition to any actual damages provided in 
subsection (a), except that in the case of a class action the 
total recovery under this subsection shall not exceed the 
lesser of $500,000 or 1 per centum of the net worth of the 
creditor. In determining the amount of such damages in any 
action, the court shall consider, among other relevant factors, 
the amount of any actual damages awarded, the frequency and 
persistence of failures of compliance by the creditor, the 
resources of the creditor, the number of persons adversely 
affected, and the extent to which the creditor's failure of 
compliance was intentional.
  (c) Upon application by an aggrieved applicant, the 
appropriate United States district court or any other court of 
competent jurisdiction may grant such equitable and declaratory 
relief as is necessary to enforce the requirements imposed 
under this title.
  (d) In the case of any successful action under subsection 
(a), (b), or (c), the costs of the action, together with a 
reasonable attorney's fee as determined by the court, shall be 
added to any damages awarded by the court under such 
subsection.
  (e) No provision of this title imposing liability shall apply 
to any act done or omitted in good faith in conformity with any 
official rule, regulation, or interpretation thereof by the 
[Bureau] Agency or in conformity with any interpretation or 
approval by an official or employee of the [Bureau] Agency of 
Consumer Financial Protection duly authorized by the [Bureau] 
Agency to issue such interpretations or approvals under such 
procedures as the [Bureau] Agency may prescribe therefor, 
notwithstanding that after such act or omission has occurred, 
such rule, regulation, interpretation, or approval is amended, 
rescinded, or determined by judicial or other authority to be 
invalid for any reason.
  (f) Any action under this section may be brought in the 
appropriate United States district court without regard to the 
amount in controversy, or in any other court of competent 
jurisdiction. No such action shall be brought later than 5 
years after the date of the occurrence of the violation, except 
that--
          (1) whenever any agency having responsibility for 
        administrative enforcement under section 704 commences 
        an enforcement proceeding within 5 years after the date 
        of the occurrence of the violation,
          (2) whenever the Attorney General commences a civil 
        action under this section within 5 years after the date 
        of the occurrence of the violation,
then any applicant who has been a victim of the discrimination 
which is the subject of such proceeding or civil action may 
bring an action under this section not later than one year 
after the commencement of that proceeding or action.
  (g) The agencies having responsibility for administrative 
enforcement under section 704, if unable to obtain compliance 
with section 701, are authorized to refer the matter to the 
Attorney General with a recommendation that an appropriate 
civil action be instituted. Each agency referred to in 
paragraphs (1), (2), and (9) of section 704(a) shall refer the 
matter to the Attorney General whenever the agency has reason 
to believe that 1 or more creditors has engaged in a pattern or 
practice of discouraging or denying applications for credit in 
violation of section 701(a). Each such agency may refer the 
matter to the Attorney General whenever the agency has reason 
to believe that 1 or more creditors has violated section 
701(a).
  (h) When a matter is referred to the Attorney General 
pursuant to subsection (g), or whenever he has reason to 
believe that one or more creditors are engaged in a pattern or 
practice in violation of this title, the Attorney General may 
bring a civil action in any appropriate United States district 
court for such relief as may be appropriate, including actual 
and punitive damages and injunctive relief.
  (i) No person aggrieved by a violation of this title and by a 
violation of section 805 of the Civil Rights Act of 1968 shall 
recover under this title and section 812 of the Civil Rights 
Act of 1968, if such violation is based on the same 
transaction.
  (j) Nothing in this title shall be construed to prohibit the 
discovery of a creditor's credit granting standards under 
appropriate discovery procedures in the court or agency in 
which an action or proceeding is brought.
  (k) Notice to HUD of Violations.--Whenever an agency referred 
to in paragraph (1)[, (2), or (3)] or (2) of section 704(a)--
          (1) has reason to believe, as a result of receiving a 
        consumer complaint, conducting a consumer compliance 
        examination, or otherwise, that a violation of this 
        title has occurred;
          (2) has reason to believe that the alleged violation 
        would be a violation of the Fair Housing Act; and
          (3) does not refer the matter to the Attorney General 
        pursuant to subsection (g),
the agency shall notify the Secretary of Housing and Urban 
Development of the violation, and shall notify the applicant 
that the Secretary of Housing and Urban Development has been 
notified of the alleged violation and that remedies for the 
violation may be available under the Fair Housing Act.

Sec. 707. Annual reports to Congress

  Each year, the [Bureau] Agency and the Attorney General 
shall, respectively, make reports to the Congress concerning 
the administration of their functions under this title, 
including such recommendations as the [Bureau] Agency and the 
Attorney General, respectively, deem necessary or appropriate. 
In addition, each report of the [Bureau] Agency shall include 
its assessment of the extent to which compliance with the 
requirements of this title is being achieved, and a summary of 
the enforcement actions taken by each of the agencies assigned 
administrative enforcement responsibilities under section 704.

           *       *       *       *       *       *       *


Sec. 709. Short title

  This title may be cited as the ``Equal Credit Opportunity 
Act''.
                              ----------                              


CONSUMER CREDIT PROTECTION ACT

           *       *       *       *       *       *       *



                  TITLE VII--EQUAL CREDIT OPPORTUNITY

Sec.
701. Prohibited discrimination.
     * * * * * * *
[704B. Small business loan data collection.]

           *       *       *       *       *       *       *

                              ----------                              


                  HOME MORTGAGE DISCLOSURE ACT OF 1975


                  TITLE III--HOME MORTGAGE DISCLOSURE


                              short title

  Sec. 301. This title may be cited as the ``Home Mortgage 
Disclosure Act of 1975''.

                         findings and purposes

  Sec. 302. (a) The Congress finds that some depository 
institutions have sometimes contributed to the decline of 
certain geographic areas by their failure pursuant to their 
chartering responsibilities to provide adequate home financing 
to qualified applicants on reasonable terms and conditions.
  (b) The purpose of this title is to provide the citizens and 
public officials of the United States with sufficient 
information to enable them to determine whether depository 
institutions are filling their obligations to serve the housing 
needs of the communities and neighborhoods in which they are 
located and to assist public officials in their determination 
of the distribution of public sector investments in a manner 
designed to improve the private investment environment.
  (c) Nothing in this title is intended to, nor shall it be 
construed to, encourage unsound lending practices or the 
allocation of credit.

                              definitions

  Sec. 303. For purposes of this title--
          [(1) the term ``Bureau'' means the Bureau of Consumer 
        Financial Protection;]
          (1) the term ``Agency'' means the Consumer Law 
        Enforcement Agency;
          (2) the term ``mortgage loan'' means a loan which is 
        secured by residential real property or a home 
        improvement loan;
          (3) the term ``depository institution''--
                  (A) means--
                          (i) any bank (as defined in section 
                        3(a)(1) of the Federal Deposit 
                        Insurance Act);
                          (ii) any savings association (as 
                        defined in section 3(b)(1) of the 
                        Federal Deposit Insurance Act); and
                          (iii) any credit union,
                        which makes federally related mortgage 
                        loans as determined by the Board; and
                  (B) includes any other lending institution 
                (as defined in paragraph (4)) other than any 
                institution described in subparagraph (A);
          (4) the term ``completed application'' means an 
        application in which the creditor has received the 
        information that is regularly obtained in evaluating 
        applications for the amount and type of credit 
        requested;
          (5) the term ``other lending institutions'' means any 
        person engaged for profit in the business of mortgage 
        lending;
          (6) the term ``Board'' means the Board of Governors 
        of the Federal Reserve System; and
          (7) the term ``Secretary'' means the Secretary of 
        Housing and Urban Development.

              maintenance of records and public disclosure

  Sec. 304. (a)(1) Each depository institution which has a home 
office or branch office located within a primary metropolitan 
statistical area, metropolitan statistical area, or 
consolidated metropolitan statistical area that is not 
comprised of designated primary metropolitan statistical areas, 
as defined by the Department of Commerce shall compile and make 
available, in accordance with regulations of the Board, to the 
public for inspection and copying at the home office, and at 
least one branch office within each primary metropolitan 
statistical area, metropolitan statistical area, or 
consolidated metropolitan statistical area that is not 
comprised of designated primary metropolitan statistical areas 
in which the depository institution has an office the number 
and total dollar amount of mortgage loans which were (A) 
originated (or for which the institution received completed 
applications), or (B) purchased by that institution during each 
fiscal year (beginning with the last full fiscal year of that 
institution which immediately preceded the effective date of 
this title).
  (2) The information required to be maintained and made 
available under paragraph (1) shall also be itemized in order 
to clearly and conspicuously disclose the following:
          (A) The number and dollar amount for each item 
        referred to in paragraph (1), by census tracts for 
        mortgage loans secured by property located within any 
        county with a population of more than 30,000, within 
        that primary metropolitan statistical area, 
        metropolitan statistical area, or consolidated 
        metropolitan statistical area that is not comprised of 
        designated primary metropolitan statistical areas, 
        otherwise, by county, for mortgage loans secured by 
        property located within any other county within that 
        standard metropolitan statistical area.
          (B) The number and dollar amount for each item 
        referred to in paragraph (1) for all such mortgage 
        loans which are secured by property located outside 
        that primary metropolitan statistical area, 
        metropolitan statistical area, or consolidated 
        metropolitan statistical area that is not comprised of 
        designated primary metropolitan statistical areas.
For the purpose of this paragraph, a depository institution 
which maintains offices in more than one primary metropolitan 
statistical area, metropolitan statistical area, or 
consolidated metropolitan statistical area that is not 
comprised of designated primary metropolitan statistical areas 
shall be required to make the information required by this 
paragraph available at any such office only to the extent that 
such information relates to mortgage loans which were 
originated or purchased (or for which completed applications 
were received) by an office of that depository institution 
located in the primary metropolitan statistical area, 
metropolitan statistical area, or consolidated metropolitan 
statistical area that is not comprised of designated primary 
metropolitan statistical areas in which the office making such 
information available is located. For purposes of this 
paragraph, other lending institutions shall be deemed to have a 
home office or branch office within a primary metropolitan 
statistical area, metropolitan statistical area, or 
consolidated metropolitan statistical area that is not 
comprised of designated primary metropolitan statistical areas 
if such institutions have originated or purchased or received 
completed applications for at least 5 mortgage loans in such 
area in the preceding calendar year.
  (b) Any item of information relating to mortgage loans 
required to be maintained under subsection (a) shall be further 
itemized in order to disclose for each such item--
          (1) the number and dollar amount of mortgage loans 
        which are insured under title II of the National 
        Housing Act or under title V of the Housing Act of 1949 
        or which are guaranteed under chapter 37 of title 38, 
        United States Code;
          (2) the number and dollar amount of mortgage loans 
        made to mortgagors who did not, at the time of 
        execution of the mortgage, intend to reside in the 
        property securing the mortgage loan;
          (3) the number and dollar amount of home improvement 
        loans;
          (4) the number and dollar amount of mortgage loans 
        and completed applications involving mortgagors or 
        mortgage applicants grouped according to census tract, 
        income level, racial characteristics, age, and gender;
          (5) the number and dollar amount of mortgage loans 
        grouped according to measurements of--
                  (A) the total points and fees payable at 
                origination in connection with the mortgage as 
                determined by the [Bureau] Agency, taking into 
                account [15 U.S.C. 1602(aa)(4)] section 
                103(aa)(4) of the Truth in Lending Act;
                  (B) the difference between the annual 
                percentage rate associated with the loan and a 
                benchmark rate or rates for all loans;
                  (C) the term in months of any prepayment 
                penalty or other fee or charge payable on 
                repayment of some portion of principal or the 
                entire principal in advance of scheduled 
                payments; and
                  (D) such other information as the [Bureau] 
                Agency may require; and
          (6) the number and dollar amount of mortgage loans 
        and completed applications grouped according to 
        measurements of--
                  (A) the value of the real property pledged or 
                proposed to be pledged as collateral;
                  (B) the actual or proposed term in months of 
                any introductory period after which the rate of 
                interest may change;
                  (C) the presence of contractual terms or 
                proposed contractual terms that would allow the 
                mortgagor or applicant to make payments other 
                than fully amortizing payments during any 
                portion of the loan term;
                  (D) the actual or proposed term in months of 
                the mortgage loan;
                  (E) the channel through which application was 
                made, including retail, broker, and other 
                relevant categories;
                  (F) as the [Bureau] Agency may determine to 
                be appropriate, a unique identifier that 
                identifies the loan originator as set forth in 
                section 1503 of the S.A.F.E. Mortgage Licensing 
                Act of 2008;
                  (G) as the [Bureau] Agency may determine to 
                be appropriate, a universal loan identifier;
                  (H) as the [Bureau] Agency may determine to 
                be appropriate, the parcel number that 
                corresponds to the real property pledged or 
                proposed to be pledged as collateral;
                  (I) the credit score of mortgage applicants 
                and mortgagors, in such form as the [Bureau] 
                Agency may prescribe; and
                  (J) such other information as the [Bureau] 
                Agency may require.
  (c) Any information required to be compiled and made 
available under this section, other than loan application 
register information under subsection (j), shall be maintained 
and made available for a period of five years after the close 
of the first year during which such information is required to 
be maintained and made available.
  (d) Notwithstanding the provisions of subsection (a)(1), data 
required to be disclosed under this section for 1980 and 
thereafter shall be disclosed for each calendar year. Any 
depository institution which is required to make disclosures 
under this section but which has been making disclosures on 
some basis other than a calendar year basis shall make 
available a separate disclosure statement containing data for 
any period prior to calendar year 1980 which is not covered by 
the last full year report prior to the 1980 calendar year 
report.
  (e) Subject to subsection (h), the [Bureau] Agency shall 
prescribe a standard format for the disclosures required under 
this section.
  (f) The Federal Financial Institutions Examination Council, 
in consultation with the Secretary, shall implement a system to 
facilitate access to data required to be disclosed under this 
section. Such system shall include arrangements for a central 
depository of data in each primary metropolitan statistical 
area, metropolitan statistical area, or consolidated 
metropolitan statistical area that is not comprised of 
designated primary metropolitan statistical areas. Disclosure 
statements shall be made available to the public for inspection 
and copying at such central depository of data for all 
depository institutions which are required to disclose 
information under this section (or which are exempted pursuant 
to section 306(b)) and which have a home office or branch 
office within such primary metropolitan statistical area, 
metropolitan statistical area, or consolidated metropolitan 
statistical area that is not comprised of designated primary 
metropolitan statistical areas.
  (g) The requirements of subsections (a) and (b) shall not 
apply with respect to mortgage loans that are--
          (1) made (or for which completed applications are 
        received) by any mortgage banking subsidiary of a bank 
        holding company or savings and loan holding company or 
        by any savings and loan service corporation that 
        originates or purchases mortgage loans; and
          (2) approved (or for which completed applications are 
        received) by the Secretary for insurance under title I 
        or II of the National Housing Act.
  (h) Submission to Agencies.--
          (1) In general.--The data required to be disclosed 
        under subsection (b) shall be submitted to the [Bureau] 
        Agency or to the appropriate agency for the institution 
        reporting under this title, in accordance with rules 
        prescribed by the [Bureau] Agency. Notwithstanding the 
        requirement of subsection (a)(2)(A) for disclosure by 
        census tract, the [Bureau] Agency, in consultation with 
        other appropriate agencies described in paragraph (2) 
        and, after notice and comment, shall develop 
        regulations that--
                  (A) prescribe the format for such 
                disclosures, the method for submission of the 
                data to the appropriate agency, and the 
                procedures for disclosing the information to 
                the public;
                  (B) require the collection of data required 
                to be disclosed under subsection (b) with 
                respect to loans sold by each institution 
                reporting under this title;
                  (C) require disclosure of the class of the 
                purchaser of such loans;
                  (D) permit any reporting institution to 
                submit in writing to the [Bureau] Agency or to 
                the appropriate agency such additional data or 
                explanations as it deems relevant to the 
                decision to originate or purchase mortgage 
                loans; and
                  (E) modify or require modification of 
                itemized information, for the purpose of 
                protecting the privacy interests of the 
                mortgage applicants or mortgagors, that is or 
                will be available to the public.
          (2) Other appropriate agencies.--The appropriate 
        agencies described in this paragraph are--
                  (A) the appropriate Federal banking agencies, 
                as defined in section 3(q) of the Federal 
                Deposit Insurance Act (12 U.S.C. 1813(q)), with 
                respect to the entities that are subject to the 
                jurisdiction of each such agency, respectively;
                  (B) the Federal Deposit Insurance Corporation 
                for banks insured by the Federal Deposit 
                Insurance Corporation (other than members of 
                the Federal Reserve System), mutual savings 
                banks, insured State branches of foreign banks, 
                and any other depository institution described 
                in section 303(2)(A) which is not otherwise 
                referred to in this paragraph;
                  (C) the National Credit Union Administration 
                Board with respect to credit unions; and
                  (D) the Secretary of Housing and Urban 
                Development with respect to other lending 
                institutions not regulated by the agencies 
                referred to in subparagraph (A) or (B).
          (3) Rules for modifications under paragraph (1).--
                  (A) Application.--A modification under 
                paragraph (1)(E) shall apply to information 
                concerning--
                          (i) credit score data described in 
                        subsection (b)(6)(I), in a manner that 
                        is consistent with the purpose 
                        described in paragraph (1)(E); and
                          (ii) age or any other category of 
                        data described in paragraph (5) or (6) 
                        of subsection (b), as the [Bureau] 
                        Agency determines to be necessary to 
                        satisfy the purpose described in 
                        paragraph (1)(E), and in a manner 
                        consistent with that purpose.
                  (B) Standards.--The [Bureau] Agency shall 
                prescribe standards for any modification under 
                paragraph (1)(E) to effectuate the purposes of 
                this title, in light of the privacy interests 
                of mortgage applicants or mortgagors. Where 
                necessary to protect the privacy interests of 
                mortgage applicants or mortgagors, the [Bureau] 
                Agency shall provide for the disclosure of 
                information described in subparagraph (A) in 
                aggregate or other reasonably modified form, in 
                order to effectuate the purposes of this title.
  (i) Exemptions.--
          (1) In general.--With respect to a depository 
        institution, the requirements of subsections (a) and 
        (b) shall not apply--
                  (A) with respect to closed-end mortgage 
                loans, if such depository institution 
                originated less than 100 closed-end mortgage 
                loans in each of the two preceding calendar 
                years; and
                  (B) with respect to open-end lines of credit, 
                if such depository institution originated less 
                than 200 open-end lines of credit in each of 
                the two preceding calendar years.
          [(i)] (2) Exemption from certain disclosure 
        requirements.--The requirements of subsections (b)(4), 
        (b)(5), and (b)(6) shall not apply with respect to any 
        depository institution described in [section 303(2)(A)] 
        section 303(3)(A) which has total assets, as of the 
        most recent full fiscal year of such institution, of 
        $30,000,000 or less.
  (j) Loan Application Register Information.--
          (1) In general.--In addition to the information 
        required to be disclosed under subsections (a) and (b), 
        any depository institution which is required to make 
        disclosures under this section shall make available to 
        the public, upon request, loan application register 
        information (as defined by the [Bureau] Agency by 
        regulation) in the form required under regulations 
        prescribed by the Board.
          (2) Format of disclosure.--
                  (A) Unedited format.--Subject to subparagraph 
                (B), the loan application register information 
                described in paragraph (1) may be disclosed by 
                a depository institution without editing or 
                compilation and in such formats as the [Bureau] 
                Agency may require.
                  (B) Protection of applicant's privacy 
                interest.--The [Bureau] Agency shall require, 
                by regulation, such deletions as the [Bureau] 
                Agency may determine to be appropriate to 
                protect--
                          (i) any privacy interest of any 
                        applicant, including the deletion of 
                        the applicant's name and identification 
                        number, the date of the application, 
                        and the date of any determination by 
                        the institution with respect to such 
                        application; and
                          (ii) a depository institution from 
                        liability under any Federal or State 
                        privacy law.
                  (C) Census tract format encouraged.--It is 
                the sense of the Congress that a depository 
                institution should provide loan register 
                information under this section in a format 
                based on the census tract in which the property 
                is located.
          (3) Change of form not required.--A depository 
        institution meets the disclosure requirement of 
        paragraph (1) if the institution provides the 
        information required under such paragraph in such 
        formats as the [Bureau] Agency may require.
          (4) Reasonable charge for information.--Any 
        depository institution which provides information under 
        this subsection may impose a reasonable fee for any 
        cost incurred in reproducing such information.
          (5) Time of disclosure.--The disclosure of the loan 
        application register information described in paragraph 
        (1) for any year pursuant to a request under paragraph 
        (1) shall be made--
                  (A) in the case of a request made on or 
                before March 1 of the succeeding year, before 
                April 1 of the succeeding year; and
                  (B) in the case of a request made after March 
                1 of the succeeding year, before the end of the 
                30-day period beginning on the date the request 
                is made.
          (6) Retention of information.--Notwithstanding 
        subsection (c), the loan application register 
        information described in paragraph (1) for any year 
        shall be maintained and made available, upon request, 
        for 3 years after the close of the 1st year during 
        which such information is required to be maintained and 
        made available.
          (7) Minimizing compliance costs.--In prescribing 
        regulations under this subsection, the [Bureau] Agency 
        shall make every effort to minimize the costs incurred 
        by a depository institution in complying with this 
        subsection and such regulations.
  (k) Disclosure of Statements by Depository Institutions.--
          (1) In general.--In accordance with procedures 
        established by the [Bureau] Agency pursuant to this 
        section, any depository institution required to make 
        disclosures under this section--
                  (A) shall make a disclosure statement 
                available, upon request, to the public no later 
                than 3 business days after the institution 
                receives the statement from the Federal 
                Financial Institutions Examination Council; and
                  (B) may make such statement available on a 
                floppy disc which may be used with a personal 
                computer or in any other media which is not 
                prohibited under regulations prescribed by the 
                Board.
          (2) Notice that data is subject to correction after 
        final review.--Any disclosure statement provided 
        pursuant to paragraph (1) shall be accompanied by a 
        clear and conspicuous notice that the statement is 
        subject to final review and revision, if necessary.
          (3) Reasonable charge for information.--Any 
        depository institution which provides a disclosure 
        statement pursuant to paragraph (1) may impose a 
        reasonable fee for any cost incurred in providing or 
        reproducing such statement.
  (l) Prompt Disclosures.--
          (1) In general.--Any disclosure of information 
        pursuant to this section or section 310 shall be made 
        as promptly as possible.
          (2) Maximum disclosure period.--
                  (A)  6- and 9-month maximum periods.--Except 
                as provided in subsections (j)(5) and (k)(1) 
                and regulations prescribed by the [Bureau] 
                Agency and subject to subparagraph (B), any 
                information required to be disclosed for any 
                year beginning after December 31, 1992, under--
                          (i) this section shall be made 
                        available to the public before 
                        September 1 of the succeeding year; and
                          (ii) section 310 shall be made 
                        available to the public before December 
                        1 of the succeeding year.
                  (B) Shorter periods encouraged after 1994.--
                With respect to disclosures of information 
                under this section or section 310 for any year 
                beginning after December 31, 1993, every effort 
                shall be made--
                          (i) to make information disclosed 
                        under this section available to the 
                        public before July 1 of the succeeding 
                        year; and
                          (ii) to make information required to 
                        be disclosed under section 310 
                        available to the public before 
                        September 1 of the succeeding year.
          (3) Improved procedure.--The Federal Financial 
        Institutions Examination Council shall make such 
        changes in the system established pursuant to 
        subsection (f) as may be necessary to carry out the 
        requirements of this subsection.
  (m) Opportunity To Reduce Compliance Burden.--
          (1) In general.--
                  (A) Satisfaction of public availability 
                requirements.--A depository institution shall 
                be deemed to have satisfied the public 
                availability requirements of subsection (a) if 
                the institution compiles the information 
                required under that subsection at the home 
                office of the institution and provides notice 
                at the branch locations specified in subsection 
                (a) that such information is available from the 
                home office of the institution upon written 
                request.
                  (B) Provision of information upon request.--
                Not later than 15 days after the receipt of a 
                written request for any information required to 
                be compiled under subsection (a), the home 
                office of the depository institution receiving 
                the request shall provide the information 
                pertinent to the location of the branch in 
                question to the person requesting the 
                information.
          (2) Form of information.--In complying with paragraph 
        (1), a depository institution shall provide the person 
        requesting the information with a copy of the 
        information requested in such formats as the [Bureau] 
        Agency may require.
  (n) Timing of Certain Disclosures.--The data required to be 
disclosed under subsection (b) shall be submitted to the 
[Bureau] Agency or to the appropriate agency for any 
institution reporting under this title, in accordance with 
regulations prescribed by the [Bureau] Agency. Institutions 
shall not be required to report new data under paragraph (5) or 
(6) of subsection (b) before the first January 1 that occurs 
after the end of the 9-month period beginning on the date on 
which regulations are issued by the [Bureau] Agency in final 
form with respect to such disclosures.

                              enforcement

  Sec. 305. (a) The [Bureau] Agency shall prescribe such 
regulations as may be necessary to carry out the purposes of 
this title. These regulations may contain such classifications, 
differentiations, or other provisions, and may provide for such 
adjustments and exceptions for any class of transactions, as in 
the judgment of the [Bureau] Agency are necessary and proper to 
effectuate the purposes of this title, and prevent 
circumvention or evasion thereof, or to facilitate compliance 
therewith.
  (b) Powers of Certain Other Agencies.--
          (1) In general.--Subject to subtitle B of the 
        Consumer Financial Protection Act of 2010, compliance 
        with the requirements of this title shall be enforced--
                  (A) under section 8 of the Federal Deposit 
                Insurance Act, the appropriate Federal banking 
                agency, as defined in section 3(q) of the 
                Federal Deposit Insurance Act (12 U.S.C. 
                1813(q)), with respect to--
                          (i) any national bank or Federal 
                        savings association, and any Federal 
                        branch or Federal agency of a foreign 
                        bank;
                          (ii) any member bank of the Federal 
                        Reserve System (other than a national 
                        bank), branch or agency of a foreign 
                        bank (other than a Federal branch, 
                        Federal agency, and insured State 
                        branch of a foreign bank), commercial 
                        lending company owned or controlled by 
                        a foreign bank, and any organization 
                        operating under section 25 or 25A of 
                        the Federal Reserve Act; and
                          (iii) any bank or State savings 
                        association insured by the Federal 
                        Deposit Insurance Corporation (other 
                        than a member of the Federal Reserve 
                        System), any mutual savings [bank as,] 
                        bank, as defined in section 3(f) of the 
                        Federal Deposit Insurance Act (12 
                        U.S.C. 1813(f)), any insured State 
                        branch of a foreign bank, and any other 
                        depository institution not referred to 
                        in this paragraph or subparagraph (B) 
                        or (C);
                  (B) under subtitle E of the Consumer 
                Financial Protection Act of 2010, by the 
                [Bureau] Agency, with respect to any person 
                subject to this subtitle;
                  (C) under the Federal Credit Union Act, by 
                the Administrator of the National Credit Union 
                Administration with respect to any insured 
                credit union; and
                  (D) with respect to other lending 
                institutions, by the Secretary of Housing and 
                Urban Development.
          (2) Incorporated definitions.--The terms used in 
        paragraph (1) that are not defined in this title or 
        otherwise defined in section 3(s) of the Federal 
        Deposit Insurance Act (12 U.S.C. 1813(s)) shall have 
        the same meanings as in section 1(b) of the 
        International Banking Act of 1978 (12 U.S.C. 3101).
  (c) For the purpose of the exercise by any agency referred to 
in subsection (b) of its powers under any Act referred to in 
that subsection, a violation of any requirement imposed under 
this title shall be deemed to be a violation of a requirement 
imposed under that Act. In addition to its powers under any 
provision of law specifically referred to in subsection (b), 
each of the agencies referred to in that subsection may 
exercise, for the purpose of enforcing compliance with any 
requirement imposed under this title, any other authority 
conferred on it by law.
  (d) Overall Enforcement Authority of the Bureau of Consumer 
Financial Protection.--Subject to subtitle B of the Consumer 
Financial Protection Act of 2010, enforcement of the 
requirements imposed under this title is committed to each of 
the agencies under subsection (b). To facilitate research, 
examinations, and enforcement, all data collected pursuant to 
section 304 shall be available to the entities listed under 
subsection (b). The [Bureau] Agency may exercise its 
authorities under the Consumer Financial Protection Act of 2010 
to exercise principal authority to [examine and] enforce 
compliance by any person with the requirements of this title.

                         relation to state laws

  Sec. 306. (a) This title does not annul, alter, or affect, or 
exempt any State chartered depository institution subject to 
the provisions of this title from complying with the laws of 
any State or subdivision thereof with respect to public 
disclosure and recordkeeping by depositor institutions, except 
to the extent that those laws are inconsistent with any 
provision of this title, and then only to the extent of the 
inconsistency. The [Bureau] Agency is authorized to determine 
whether such inconsistencies exist. The [Bureau] Agency may not 
determine that any such law is inconsistent with any provision 
of this title if the [Bureau] Agency determines that such law 
requires the maintenance of records with greater geographic or 
other detail than is required under this title, or that such 
law otherwise provides greater disclosure than is required 
under this title.
  (b) Exemption Authority.--The [Bureau] Agency may, by 
regulation, exempt from the requirements of this title any 
State-chartered depository institution within any State or 
subdivision thereof, if the agency determines that, under the 
law of such State or subdivision, that institution is subject 
to requirements that are substantially similar to those imposed 
under this title, and that such law contains adequate 
provisions for enforcement. Notwithstanding any other provision 
of this subsection, compliance with the requirements imposed 
under this subsection shall be enforced by the Office of the 
Comptroller of the Currency under section 8 of the Federal 
Deposit Insurance Act, in the case of national banks and 
Federal savings associations, the deposits of which are insured 
by the Federal Deposit Insurance Corporation.

SEC. 307. COMPLIANCE IMPROVEMENT METHODS.

  (a) In General.--
          (1) Consultation required.--The Director of the 
        [Bureau of Consumer Financial Protection] Consumer Law 
        Enforcement Agency, with the assistance of the 
        Secretary, the Director of the [Bureau] Agency of the 
        Census, the Board of Governors of the Federal Reserve 
        System, the Federal Deposit Insurance Corporation, and 
        such other persons as the [Bureau] Agency deems 
        appropriate, shall develop or assist in the improvement 
        of, methods of matching addresses and census tracts to 
        facilitate compliance by depository institutions in as 
        economical a manner as possible with the requirements 
        of this title.
          (2) Authorization of appropriations.--There are 
        authorized to be appropriated, such sums as may be 
        necessary to carry out this subsection.
          (3) Contracting authority.--The Director of the 
        [Bureau of Consumer Financial Protection] Consumer Law 
        Enforcement Agency is authorized to utilize, contract 
        with, act through, or compensate any person or agency 
        in order to carry out this subsection.
  (b) Recommendations to Congress.--The Director of the [Bureau 
of Consumer Financial Protection] Consumer Law Enforcement 
Agency shall recommend to the Committee on Banking, Housing, 
and Urban Affairs of the Senate and the Committee on Financial 
Services of the House of Representatives, such additional 
legislation as the Director of the [Bureau of Consumer 
Financial Protection] Consumer Law Enforcement Agency deems 
appropriate to carry out the purpose of this title.

           *       *       *       *       *       *       *


                             effective date

  Sec. 309. (a) In General.--This title shall take effect on 
the one hundred and eightieth day beginning after the date of 
its enactment. Any institution specified in section 303(2)(A) 
which has total assets as of its last full fiscal year of 
$10,000,000 or less is exempt from the provisions of this 
title. The Board, in consultation with the Secretary, may 
exempt institutions described in section 303(2)(B) that are 
comparable within their respective industries to institutions 
that are exempt under the preceding sentence (as determined 
without regard to the adjustment made by subsection (b)).
  (b) CPI Adjustments.--
          (1) In general.--Subject to paragraph (2), the dollar 
        amount applicable with respect to institutions 
        described in section 303(2)(A) under the 2d sentence of 
        subsection (a) shall be adjusted annually after 
        December 31, 1996, by the annual percentage increase in 
        the Consumer Price Index for Urban Wage Earners and 
        Clerical Workers published by the [Bureau] Agency of 
        Labor Statistics.
          (2)  1-time adjustment for prior inflation.--The 
        first adjustment made under paragraph (1) after the 
        date of the enactment of the Economic Growth and 
        Regulatory Paperwork Reduction Act of 1996 shall be the 
        percentage by which--
                  (A) the Consumer Price Index described in 
                such paragraph for the calendar year 1996, 
                exceeds
                  (B) such Consumer Price Index for the 
                calendar year 1975.
          (3) Rounding.--The dollar amount applicable under 
        paragraph (1) for any calendar year shall be the amount 
        determined in accordance with subparagraphs (A) and (B) 
        of paragraph (2) and rounded to the nearest multiple of 
        $1,000,000.

                     compilation of aggregate data

  Sec. 310. (a) Beginning with data for calendar year 1980, the 
Federal Financial Institutions Examination Council shall 
compile each year, for each primary metropolitan statistical 
area, metropolitan statistical area, or consolidated 
metropolitan statistical area that is not comprised of 
designated primary metropolitan statistical areas, aggregate 
data by census tract for all depository institutions which are 
required to disclose data under section 304 or which are exempt 
pursuant to section 306(b). The Council shall also produce 
tables indicating, for each primary metropolitan statistical 
area, metropolitan statistical area, or consolidated 
metropolitan statistical area that is not comprised of 
designated primary metropolitan statistical areas, aggregate 
lending patterns for various categories of census tracts 
grouped according to location, age of housing stock, income 
level, and racial characteristics.
  (b) The [Bureau] Agency shall provide staff and data 
processing resources to the Council to enable it to carry out 
the provisions of subsection (a).
  (c) The data and tables required pursuant to subsection (a) 
shall be made available to the public by no later than December 
31 of the year following the calendar year on which the data is 
based.

           *       *       *       *       *       *       *

                              ----------                              


          ALTERNATIVE MORTGAGE TRANSACTION PARITY ACT OF 1982


             TITLE VIII--ALTERNATIVE MORTGAGE TRANSACTIONS


                              short title

  Sec. 801. This title may be cited as the ``Alternative 
Mortgage Transaction Parity Act of 1982''.

                         findings and purpose.

  Sec. 802. (a) The Congress hereby finds that--
          (1) increasingly volatile and dynamic changes in 
        interest rates have seriously impaired the ability of 
        housing creditors to provide consumers with fixed-term, 
        fixed-rate credit secured by interests in real 
        property, cooperative housing, manufactured homes, and 
        other dwellings;
          (2) alternative mortgage transactions are essential 
        to the provision of an adequate supply of credit 
        secured by residential property necessary to meet the 
        demand expected during the 1980's; and
          (3) the Comptroller of the Currency, the National 
        Credit Union Administration, and [the Director of the 
        Office of Thrift Supervision] the Consumer Law 
        Enforcement Agency have recognized the importance of 
        alternative mortgage transactions and have adopted 
        regulations authorizing federally chartered depository 
        institutions to engage in alternative mortgage 
        financing.
  (b) It is the purpose of this title to eliminate the 
discriminatory impact that those regulations have upon 
nonfederally chartered housing creditors and provide them with 
parity with federally chartered institutions by authorizing all 
housing creditors to make, purchase, and enforce alternative 
mortgage transactions so long as the transactions are in 
conformity with the regulations issued by the Federal agencies.

           *       *       *       *       *       *       *


                    alternative mortgage authority.

  Sec. 804. (a) In order to prevent discrimination against 
State-chartered depository institutions, and other nonfederally 
chartered housing creditors, with respect to making, 
purchasing, and enforcing alternative mortgage transactions, 
housing creditors may make, purchase, and enforce alternative 
mortgage transactions, except that this section shall apply--
          (1) with respect to banks, only to transactions made 
        on or before the designated transfer date, as 
        determined under section 1062 of the Consumer Financial 
        Protection Act of 2010 in accordance with regulations 
        governing alternative mortgage transactions as issued 
        by the Comptroller of the Currency for national banks, 
        to the extent that such regulations are authorized by 
        rulemaking authority granted to the Comptroller of the 
        Currency with regard to national banks under laws other 
        than this section;
          (2) with respect to credit unions, only to 
        transactions made on or before the designated transfer 
        date, as determined under section 1062 of the Consumer 
        Financial Protection Act of 2010 in accordance with 
        regulations governing alternative mortgage transactions 
        as issued by the National Credit Union Administration 
        Board for Federal credit unions, to the extent that 
        such regulations are authorized by rulemaking authority 
        granted to the National Credit Union Administration 
        with regard to Federal credit unions under laws other 
        than this section;
          (3) with respect to all other housing creditors, 
        including without limitation, savings and loan 
        associations, mutual savings banks, and savings banks, 
        only to transactions made on or before the designated 
        transfer date, as determined under section 1062 of the 
        Consumer Financial Protection Act of 2010, in 
        accordance with regulations governing alternative 
        mortgage transactions as issued by [the Director of the 
        Office of Thrift Supervision] the Comptroller of the 
        Currency for federally charter savings and loan 
        associations, to the extent that such regulations are 
        authorized by rulemaking authority granted to [the 
        Director of the Office of Thrift Supervision] the 
        Comptroller of the Currency with regard to federally 
        chartered savings and loan associations under laws 
        other than this section; and
          (4) with respect to transactions made after the 
        designated transfer date, only in accordance with 
        regulations governing alternative mortgage 
        transactions, as issued by the [Bureau of Consumer 
        Financial Protection] Consumer Law Enforcement Agency 
        for federally chartered housing creditors, in 
        accordance with the rulemaking authority granted to the 
        [Bureau of Consumer Financial Protection] Consumer Law 
        Enforcement Agency with regard to federally chartered 
        housing creditors under provisions of law other than 
        this section.
  (b) For the purpose of determining the applicability of this 
section, an alternative mortgage transaction shall be deemed to 
be made in accordance with the applicable regulation 
notwithstanding the housing creditor's failure to comply with 
the regulations, if--
          (1) the transaction is in substantial compliance with 
        the regulation; and
          (2) within 60 days of discovering any error, the 
        housing credit correct such error, including making 
        appropriate adjustments, if any, to the account.
  (c) Preemption of State Law.--An alternative mortgage 
transaction may be made by a housing creditor in accordance 
with this section, notwithstanding any State constitution, law, 
or regulation that prohibits an alternative mortgage 
transaction. For purposes of this subsection, a State 
constitution, law, or regulation that prohibits an alternative 
mortgage transaction does not include any State constitution, 
law, or regulation that regulates mortgage transactions 
generally, including any restriction on prepayment penalties or 
late charges.
  (d)  [Bureau] Agency Actions.--The [Bureau of Consumer 
Financial Protection] Consumer Law Enforcement Agency shall--
          (1) review the regulations identified by the 
        Comptroller of the Currency and the National Credit 
        Union Administration[,] (as those rules exist on the 
        designated transfer date), as applicable under 
        paragraphs (1) through (3) of subsection (a);
          (2) determine whether such regulations are fair and 
        not deceptive and otherwise meet the objectives of the 
        Consumer Financial Protection Act of 2010; and
          (3) promulgate regulations under subsection (a)(4) 
        after the designated transfer date.
  (e) Designated Transfer Date.--As used in this section, the 
term ``designated transfer date'' means the date determined 
under section 1062 of the Consumer Financial Protection Act of 
2010.

           *       *       *       *       *       *       *

                              ----------                              


                      ELECTRONIC FUND TRANSFER ACT


                  TITLE IX--ELECTRONIC FUND TRANSFERS

Sec. 901. Short title

  This title may be cited as the ``Electronic Fund Transfer 
Act''.

           *       *       *       *       *       *       *


Sec. 903. Definitions

   As used in this title--
          (1) the term ``accepted card or other means of 
        access'' means a card, code, or other means of access 
        to a consumer's account for the purpose of initiating 
        electronic fund transfers when the person to whom such 
        card or other means of access was issued has requested 
        and received or has signed or has used, or authorized 
        another to use, such card or other means of access for 
        the purpose of transferring money between accounts or 
        obtaining money, property, labor, or services;
          (2) the term ``account'' means a demand deposit, 
        savings deposit, or other asset account (other than an 
        occasional or incidental credit balance in an open end 
        credit plan as defined in section [103(i)] 103(j) of 
        this Act), as described in regulations of the [Bureau] 
        Agency, established primarily for personal, family, or 
        household purposes, but such term does not include an 
        account held by a financial institution pursuant to a 
        bona fide trust agreement;
          [(4)] (3) the term ``Board'' means the Board of 
        Governors of the Federal Reserve System;
          [(4) the term ``Bureau '' means the Bureau of 
        Consumer Financial Protection;]
          (4) the term ``Agency'' means the Consumer Law 
        Enforcement Agency;
          (5) the term ``business day'' means any day on which 
        the offices of the consumer's financial institution 
        involved in an electronic fund transfer are open to the 
        public for carrying on substantially all of its 
        business functions;
          (6) the term ``consumer'' means a natural person;
          (7) the term ``electronic fund transfer'' means any 
        transfer of funds, other than a transaction originated 
        by check, draft, or similar paper instrument, which is 
        initiated through an electronic terminal, telephonic 
        instrument, or computer or magnetic tape so as to 
        order, instruct, or authorize a financial institution 
        to debit or credit an account. Such term includes, but 
        is not limited to, point-of-sale transfers, automated 
        teller machine transactions, direct deposits or 
        withdrawals of funds, and transfers initiated by 
        telephone. Such term does not include--
                  (A) any check guarantee or authorization 
                service which does not directly result in a 
                debit or credit to a consumer's account:
                  (B) any transfer of funds, other than those 
                processed by automated clearinghouse, made by a 
                financial institution on behalf of a consumer 
                by means of a service that transfers funds held 
                at either Federal Reserve banks or other 
                depository institutions and which is not 
                designed primarily to transfer funds on behalf 
                of a consumer;
                  (C) any transaction the primary purpose of 
                which is the purchase or sale of securities or 
                commodities through a broker-dealer registered 
                with or regulated by the Securities and 
                Exchange Commission;
                  (D) any automatic transfer from a savings 
                account to a demand deposit account pursuant to 
                an agreement between a consumer and a financial 
                institution for the purpose of covering an 
                overdraft or maintaining an agreed upon minimum 
                balance in the consumer's demand deposit 
                account; or
                  (E) any transfer of funds which is initiated 
                by a telephone conversation between a consumer 
                and an officer or employee of a financial 
                institution which is not pursuant to a 
                prearranged plan and under which periodic or 
                recurring transfers are not contemplated;
        as determined under regulations of the [Bureau] Agency;
          (8) the term ``electronic terminal'' means an 
        electronic device, other than a telephone operated by a 
        consumer, through which a consumer may initiate an 
        electronic fund transfer. Such term includes, but is 
        not limited to, point-of-sale terminals, automated 
        teller machines, and cash dispensing machines;
          (9) the term ``financial institution'' means a State 
        or National bank, a State or Federal savings and loan 
        association, a mutual savings bank, a State or Federal 
        credit union, or any other person who, directly or 
        indirectly, holds an account belonging to a consumer;
          (10) the term ``preauthorized electronic fund 
        transfer'' means an electronic fund transfer authorized 
        in advance to recur at substantially regular intervals;
          (11) the term ``State'' means any State, territory, 
        or possession of the United States, the District of 
        Columbia, the Commonwealth of Puerto Rico, or any 
        political subdivision of any of the foregoing; and
          (12) the term ``unauthorized electronic fund 
        transfer'' means an electronic fund transfer from a 
        consumer's account initiated by a person other than the 
        consumer without actual authority to initiate such 
        transfer and from which the consumer receives no 
        benefit, but the term does not include any electronic 
        fund transfer (A) initiated by a person other than the 
        consumer who was furnished with the card, code, or 
        other means of access to such consumer's account by 
        such consumer, unless the consumer has notified the 
        financial institution involved that transfers by such 
        other person are no longer authorized, (B) initiated 
        with fraudulent intent by the consumer or any person 
        acting in concert with the consumer, or (C) which 
        constitutes an error committed by a financial 
        institution.

Sec. 904. Regulations

  (a) Prescription by the Bureau and the Board.--
          (1) In general.--Except as provided in paragraph (2), 
        the [Bureau] Agency shall prescribe rules to carry out 
        the purposes of this title.
          (2) Authority of the board.--The Board shall have 
        sole authority to prescribe rules--
                  (A) to carry out the purposes of this title 
                with respect to a person described in section 
                1029(a) of the Consumer Financial Protection 
                Act of 2010; and
                  (B) to carry out the purposes of section 920. 
                [In prescribing such regulations, the Board 
                shall:]
          (3) Regulations.--In prescribing regulations under 
        this subsection, the Agency and the Board shall--
                  [(1)] (A) consult with the other agencies 
                referred to in section 917 and take into 
                account, and allow for, the continuing 
                evolution of electronic banking services and 
                the technology utilized in such services,
                  [(2)] (B) prepare an analysis of economic 
                impact which considers the costs and benefits 
                to financial institutions, consumers, and other 
                users of electronic fund transfers, including 
                the extent to which additional documentation, 
                reports, records, or other paper work would be 
                required, and the effects upon competition in 
                the provision of electronic banking services 
                among large and small financial institutions 
                and the availability of such services to 
                different classes of consumers, particularly 
                low income consumers,
                  [(3)] (C) to the extent practicable, the 
                Board shall demonstrate that the consumer 
                protections of the proposed regulations 
                outweigh the compliance costs imposed upon 
                consumers and financial institutions, and
                  [(4)] (D) any proposed regulations and 
                accompanying analyses shall be sent promptly to 
                Congress by the Board.
  (b) The [Bureau] Agency shall issue model clauses for 
optional use by financial institutions to facilitate compliance 
with the disclosure requirements of section 905 and to aid 
consumers in understanding the rights and responsibilities of 
participants in electronic fund transfers by utilizing readily 
understandable language. Such model clauses shall be adopted 
after notice duly given in the Federal Register and opportunity 
for public comment in accordance with section 553 of title 5, 
United States Code. With respect to the disclosures required by 
section 905(a) (3) and (4), the [Bureau] Agency shall take 
account of variations in the services and charges under 
different electronic fund transfer systems and, as appropriate, 
shall issue alternative model clauses for disclosure of these 
differing account terms.
  (c) Regulations prescribed hereunder may contain such 
classifications, differentiations, or other provisions, and may 
provide for such adjustments and exceptions for any class of 
electronic fund transfers or remittance transfers, as in the 
judgment of the [Bureau] Agency are necessary or proper to 
effectuate the purposes of this title, to prevent circumvention 
or evasion thereof, or to facilitate compliance therewith. The 
[Bureau] Agency shall by regulation modify the requirements 
imposed by this title on small financial institutions if the 
[Bureau] Agency determines that such modifications are 
necessary to alleviate any undue compliance burden on small 
financial institutions and such modifications are consistent 
with the purpose and objective of this title.
  (d) Applicability to Service Providers Other Than Certain 
Financial Institutions.--
          (1) In general.--If electronic fund transfer services 
        are made available to consumers by a person other than 
        a financial institution holding a consumer's account, 
        the [Bureau] Agency shall by regulation assure that the 
        disclosures, protections, responsibilities, and 
        remedies created by this title are made applicable to 
        such persons and services.
          (2) State and local government electronic benefit 
        transfer systems.--
                  (A) Definition of electronic benefit transfer 
                system.--In this paragraph, the term 
                ``electronic benefit transfer system''--
                          (i) means a system under which a 
                        government agency distributes needs-
                        tested benefits by establishing 
                        accounts that may be accessed by 
                        recipients electronically, such as 
                        through automated teller machines or 
                        point-of-sale terminals; and
                          (ii) does not include employment-
                        related payments, including salaries 
                        and pension, retirement, or 
                        unemployment benefits established by a 
                        Federal, State, or local government 
                        agency.
                  (B) Exemption generally.--The disclosures, 
                protections, responsibilities, and remedies 
                established under this title, and any 
                regulation prescribed or order issued by the 
                [Bureau] Agency in accordance with this title, 
                shall not apply to any electronic benefit 
                transfer system established under State or 
                local law or administered by a State or local 
                government.
                  (C) Exception for direct deposit into 
                recipient's account.--Subparagraph (B) shall 
                not apply with respect to any electronic funds 
                transfer under an electronic benefit transfer 
                system for a deposit directly into a consumer 
                account held by the recipient of the benefit.
                  (D) Rule of construction.--No provision of 
                this paragraph--
                          (i) affects or alters the protections 
                        otherwise applicable with respect to 
                        benefits established by any other 
                        provision Federal, State, or local law; 
                        or
                          (ii) otherwise supersedes the 
                        application of any State or local law.
          (3) Fee disclosures at automated teller machines.--
                  (A) In general.--The regulations prescribed 
                under paragraph (1) shall require any automated 
                teller machine operator who imposes a fee on 
                any consumer for providing host transfer 
                services to such consumer to provide notice in 
                accordance with subparagraph (B) to the 
                consumer (at the time the service is provided) 
                of--
                          (i) the fact that a fee is imposed by 
                        such operator for providing the 
                        service; and
                          (ii) the amount of any such fee.
                  (B) Notice requirement.--The notice required 
                under clauses (i) and (ii) of subparagraph (A) 
                with respect to any fee described in such 
                subparagraph shall appear on the screen of the 
                automated teller machine, or on a paper notice 
                issued from such machine, after the transaction 
                is initiated and before the consumer is 
                irrevocably committed to completing the 
                transaction.
                  (C) Prohibition on fees not properly 
                disclosed and explicitly assumed by consumer.--
                No fee may be imposed by any automated teller 
                machine operator in connection with any 
                electronic fund transfer initiated by a 
                consumer for which a notice is required under 
                subparagraph (A), unless--
                          (i) the consumer receives such notice 
                        in accordance with subparagraph (B); 
                        and
                          (ii) the consumer elects to continue 
                        in the manner necessary to effect the 
                        transaction after receiving such 
                        notice.
                  (D) Definitions.--For purposes of this 
                paragraph, the following definitions shall 
                apply:
                          (i) Automated teller machine 
                        operator.--The term ``automated teller 
                        machine operator'' means any person 
                        who--
                                  (I) operates an automated 
                                teller machine at which 
                                consumers initiate electronic 
                                fund transfers; and
                                  (II) is not the financial 
                                institution that holds the 
                                account of such consumer from 
                                which the transfer is made.
                          (ii) Electronic fund transfer.--The 
                        term ``electronic fund transfer'' 
                        includes a transaction that involves a 
                        balance inquiry initiated by a consumer 
                        in the same manner as an electronic 
                        fund transfer, whether or not the 
                        consumer initiates a transfer of funds 
                        in the course of the transaction.
                          (iii) Host transfer services.--The 
                        term ``host transfer services'' means 
                        any electronic fund transfer made by an 
                        automated teller machine operator in 
                        connection with a transaction initiated 
                        by a consumer at an automated teller 
                        machine operated by such operator.
  (e) Deference.--No provision of this title may be construed 
as altering, limiting, or otherwise affecting the deference 
that a court affords to--
          (1) the [Bureau] Agency in making determinations 
        regarding the meaning or interpretation of any 
        provision of this title for which the [Bureau] Agency 
        has authority to prescribe regulations; or
          (2) the Board in making determinations regarding the 
        meaning or interpretation of section 920.

Sec. 905. Terms and conditions of transfers

  (a) The terms and conditions of electronic fund transfers 
involving a consumer's account shall be disclosed at the time 
the consumer contracts for an electronic fund transfer service, 
in accordance with regulations of the [Bureau] Agency. Such 
disclosures shall be in readily understandable language and 
shall include, to the extent applicable--
          (1) the consumer's liability for unauthorized 
        electronic fund transfers and, at the financial 
        institution's option, notice of the advisability of 
        prompt reporting of any loss, theft, or unauthorized 
        use of a card, code, or other means of access;
          (2) the telephone number and address of the person or 
        office to be notified in the event the consumer 
        believes than an unauthorized electronic fund transfer 
        has been or may be effected;
          (3) the type and nature of electronic fund transfers 
        which the consumer may initiate, including any 
        limitations on the frequency or dollar amount of such 
        transfers, except that the details of such limitations 
        need not be disclosed if their confidentiality is 
        necessary to maintain the security of an electronic 
        fund transfer system, as determined by the [Bureau] 
        Agency;
          (4) any charges for electronic fund transfers or for 
        the right to make such transfers;
          (5) the consumer's right to stop payment of a 
        preauthorized electronic fund transfer and the 
        procedure to initiate such a stop payment order;
          (6) the consumer's right to receive documentation of 
        electronic fund transfers under section 906;
          (7) a summary, in a form prescribed by regulations of 
        the [Bureau] Agency, of the error resolution provisions 
        of section 908 and the consumer's rights thereunder. 
        The financial institution shall thereafter transmit 
        such summary at least once per calendar year;
          (8) the financial institution's liability to the 
        consumer under section 910;
          (9) under what circumstances the financial 
        institution will in the ordinary course of business 
        disclose information concerning the consumer's account 
        to third persons; and
          (10) a notice to the consumer that a fee may be 
        imposed by--
                  (A) an automated teller machine operator (as 
                defined in section 904(d)(3)(D)(i)) if the 
                consumer initiates a transfer from an automated 
                teller machine that is not operated by the 
                person issuing the card or other means of 
                access; and
                  (B) any national, regional, or local network 
                utilized to effect the transaction.
  (b) A financial institution shall notify a consumer in 
writing at least twenty-one days prior to the effective date of 
any change in any term or condition of the consumer's account 
required to be disclosed under subsection (a) if such change 
would result in greater cost or liability for such consumer or 
decreased access to the consumer's account. A financial 
institution may, however, implement a change in the terms or 
conditions of an account without prior notice when such change 
is immediately necessary to maintain or restore the security of 
an electronic fund transfer system or a consumer's account. 
Subject to subsection (a)(3), the [Bureau] Agency shall require 
subsequent notification if such a change is made permanent.
  (c) For any account of a consumer made accessible to 
electronic fund transfer prior to the effective date of this 
title, the information required to be disclosed to the consumer 
under subsection (a) shall be disclosed not later than the 
earlier of--
          (1) the first periodic statement required by section 
        906(c) after the effective date of this title; or
          (2) thirty days after the effective date of this 
        title.

Sec. 906. Documentation of tranfers; periodic statements

  (a) For each electronic fund transfer initiated by a consumer 
from an electronic terminal, the financial institution holding 
such consumer's account shall, directly or indirectly, at the 
time the transfer is initiated, make available to the consumer 
written documentation of such transfer. The documentation shall 
clearly set forth to the extent applicable--
          (1) the amount involved and date the transfer is 
        initiated;
          (2) the type of transfer;
          (3) the identity of the consumer's account with the 
        financial institution from which or to which funds are 
        transferred;
          (4) the identity of any third party to whom or from 
        whom funds are transferred; and
          (5) the location or identification of the electronic 
        terminal involved.
  (b) For a consumer's account which is scheduled to be 
credited by a preauthorized electronic fund transfer from the 
same payor at least once in each successive sixty-day period, 
except where the payor provides positive notice of the transfer 
to the consumer, the financial institution shall elect to 
provide promptly either positive notice to the consumer when 
the credit is made as scheduled, or negative notice to the 
consumer when the credit is not made as scheduled, in 
accordance with regulations of the [Bureau] Agency. The means 
of notice elected shall be disclosed to the consumer in 
accordance with section 905.
  (c) A financial institution shall provide each consumer with 
a periodic statement for each account of such consumer that may 
be accessed by means of an electronic fund transfer. Except as 
provided in subsections (d) and (e), such statement shall be 
provided at least monthly for each monthly or shorter cycle in 
which an electronic fund transfer affecting the account has 
occurred, or every three months, whichever is more frequent. 
The statement, which may include information regarding 
transactions other than electronic fund transfers, shall 
clearly set forth--
          (1) with regard to each electronic fund transfer 
        during the period, the information described in 
        subsection (a), which may be provided on an 
        accompanying document;
          (2) the amount of any fee or charge assessed by the 
        financial institution during the period for electronic 
        fund transfers or for account maintenance;
          (3) the balances in the consumer's account at the 
        beginning of the period and at the close of the period; 
        and
          (4) the address and telephone number to be used by 
        the financial institution for the purpose of receiving 
        any statement inquiry or notice of account error from 
        the consumer. Such address and telephone number shall 
        be preceded by the caption ``Direct Inquires To:'' or 
        other similar language indicating that the address and 
        number are to be used for such inquiries or notices.
  (d) In the case of a consumer's passbook account which may 
not be accessed by electronic fund transfers other than 
preauthorized electronic fund transfers crediting the account, 
a financial institution may, in lieu of complying with the 
requirements of subsection (c), upon presentation of the 
passbook provide the consumer in writing with the amount and 
date of each such transfer involving the account since the 
passbook was last presented.
  (e) In the case of a consumer's account, other than a 
passbook account, which may not be accessed by electronic fund 
transfers other than preauthorized electronic fund transfers 
crediting the account, the financial institution may provide a 
periodic statement on a quarterly basis which otherwise 
complies with the requirements of subsection (c).
  (f) In any action involving a consumer, any documentation 
required by this section to be given to the consumer which 
indicates that an electronic fund transfer was made to another 
person shall be admissible as evidence of such transfer and 
shall constitute prima facie proof that such transfer was made.

Sec. 907. Preauthorized transfers

  (a) A preauthorized electronic fund transfer from a 
consumer's account may be authorized by the consumer only in 
writing, and a copy of such authorization shall be provided to 
the consumer when made. A consumer may stop payment of a 
preauthorized electronic fund transfer by notifying the 
financial institution orally or in writing at any time up to 
three business days preceding the scheduled date of such 
transfer. The financial institution may require written 
confirmation to be provided to it within fourteen days of an 
oral notification if, when the oral notification is made, the 
consumer is advised of such requirement and the address to 
which such confirmation should be sent.
  (b) In the case of preauthorized transfers from a consumer's 
account to the same person which may vary in amount, the 
financial institution or designated payee shall, prior to each 
transfer, provide reasonable advance notice to the consumer, in 
accordance with regulations of the [Bureau] Agency, of the 
amount to be transferred and the scheduled date of the 
transfer.

Sec. 908. Error resolution

  (a) If a financial institution, within sixty days after 
having transmitted to a consumer documentation pursuant to 
section 906 (a), (c), or (d) or notification pursuant to 
section 906(b), receives oral or written notice in which the 
consumer--
          (1) sets forth or otherwise enables the financial 
        institution to identify the name and account number of 
        the consumer;
          (2) indicates the consumer's belief that the 
        documentation, or, in the case of notification pursuant 
        to section 906(b), the consumer's account, contains an 
        error and the amount of such error; and
          (3) sets forth the reasons for the consumer's belief 
        (where applicable) that an error has occurred,
the financial institution shall investigate the alleged error, 
determine whether an error has occurred, and report or mail the 
results of such investigation and determination to the consumer 
within ten business days. The financial institution may require 
written confirmation to be provided to it within ten business 
days of an oral notification of error if, when the oral 
notification is made, the consumer is advised of such 
requirement and the address to which such confirmation should 
be sent. A financial institution which requires written 
confirmation in accordance with the previous sentence need not 
provisionally recredit a consumer's account in accordance with 
subsection (c), nor shall the financial institution be liable 
under subsection (e) if the written confirmation is not 
received within the ten-day period referred to in the previous 
sentence.
  (b) If the financial institution determines that an error did 
occur, it shall promptly, but in no event more than one 
business day after such determination, correct the error, 
subject to section 909, including the crediting of interest 
where applicable.
  (c) If a financial institution receives notice of an error in 
the manner and within the time period specified in subsection 
(a), it may, in lieu of the requirements of subsections (a) and 
(b), within ten business days after receiving such notice 
provisionally recredit the consumer's account for the amount 
alleged to be in error, subject to section 909, including 
interest where applicable, pending the conclusion of its 
investigation and its determination of whether an error has 
occurred. Such investigation shall be concluded not later than 
forty-five days after receipt of notice of the error. During 
the pendency of the investigation, the consumer shall have full 
use of the funds provisionally recredited.
  (d) If the financial institution determines after its 
investigation pursuant to subsection (a) or (c) that an error 
did not occur, it shall deliver or mail to the consumer an 
explanation of its findings within 3 business days after the 
conclusion of its investigation, and upon request of the 
consumer promptly deliver or mail to the consumer reproductions 
of all documents which the financial institution relied on to 
conclude that such error did not occur. The financial 
institution shall include notice of the right to request 
reproductions with the explanation of its findings.
  (e) If in any action under section 915, the court finds 
that--
          (1) the financial institution did not provisionally 
        recredit a consumer's account within the ten-day period 
        specified in subsection (c), and the financial 
        institution (A) did not make a good faith investigation 
        of the alleged error, or (B) did not have a reasonable 
        basis for believing that the consumer's account was not 
        in error; or
          (2) the financial institution knowingly and willfully 
        concluded that the consumer's account was not in error 
        when such conclusion could not reasonably have been 
        drawn from the evidence available to the financial 
        institution at the time of its investigation,
then the consumer shall be entitled to treble damages 
determined under section 915(a)(1).
  (f) For the purpose of this section, an error consists of--
          (1) an unauthorized electronic fund transfer;
          (2) an incorrect electronic fund transfer from or to 
        the consumer's account;
          (3) the omission from a periodic statement of an 
        electronic fund transfer affecting the consumer's 
        account which should have been included;
          (4) a computational error by the financial 
        institution;
          (5) the consumer's receipt of an incorrect amount of 
        money from an electronic terminal;
          (6) a consumer's request for additional information 
        or clarification concerning an electronic fund transfer 
        or any documentation required by this title; or
          (7) any other error described in regulations of the 
        [Bureau] Agency.

Sec. 909. Consumer liability for unauthorized transfers

  (a) A consumer shall be liable for any unauthorized 
electronic fund transfer involving the account of such consumer 
only if the card or other means of access utilized for such 
transfer was an accepted card or other means of access and if 
the issuer of such card, code, or other means of access has 
provided a means whereby the user of such card, code, or other 
meana of access can be identified as the person authorized to 
use it, such as by signature, photograph, or fingerprint or by 
electronic or mechanical confirmation. In no event, however, 
shall a consumer's liability for an unauthorized transfer 
exceed the lesser of--
          (1) $50; or
          (2) the amount of money or value of property or 
        services obtained in such unauthorized electronic fund 
        transfer prior to the time the financial institution is 
        notified of, or otherwise becomes aware of, 
        circumstances which lead to the reasonable belief that 
        an unauthorized electronic fund transfer involving the 
        consumer's account has been or may be effected. Notice 
        under this paragraph is sufficient when such steps have 
        been taken as may be reasonably required in the 
        ordinary course of business to provide the financial 
        institution with the pertinent information, whether or 
        not any particular officer, employee, or agent of the 
        financial institution does in fact receive such 
        information.
Notwithstanding the foregoing, reimbursement need not be made 
to the consumer for losses the financial institution 
establishes would not have occurred but for the failure of the 
consumer to report within sixty days of transmittal of the 
statement (or in extenuating circumstances such as extended 
travel or hospitalization, within a reasonable time under the 
circumstances) any unauthorized electronic fund transfer or 
account error which appears on the periodic statement provided 
to the consumer under section 906. In addition, reimbursement 
need not be made to the consumer for losses which the financial 
institution establishes would not have occurred but for the 
failure of the consumer to report any loss or theft of a card 
or other means of access within two business days after the 
consumer learns of the loss or theft (or in extenuating 
circumstances such as extended travel or hospitalization, 
within a longer period which is reasonable under the 
circumstances), but the consumer's liability under this 
subsection in any such case may not exceed a total of $500, or 
the amount of unauthorized electronic fund transfers which 
occur following the close of two business days (or such longer 
period) after the consumer learns of the loss or theft but 
prior to notice to the financial institution under this 
subsection, whichever is less.
  (b) In any action which involves a consumer's liability for 
an unauthorized electronic fund transfer, the burden of proof 
is upon the financial institution to show that the electronic 
fund transfer was authorized or, if the electronic fund 
transfer was unauthorized, then the burden of proof is upon the 
financial institution to establish that the conditions of 
liability set forth in subsection (a) have been met, and, if 
the transfer was initiated after the effective date of section 
905, that the disclosures required to be made to the consumer 
under section 905(a) (1) and (2) were in fact made in 
accordance with such section.
  (c) In the event of a transaction which involves both an 
unauthorized electronic fund transfer and an extension of 
credit as defined in section [103(e)] 103(f) of this Act 
pursuant to an agreement between the consumer and the financial 
institution to extend such credit to the consumer in the event 
the consumer's account is overdrawn, the limitation on the 
consumer's liability for such transaction shall be determined 
solely in accordance with this section.
  (d) Nothing in this section imposes liability upon a consumer 
for an unauthorized electronic fund transfer in excess of his 
liability for such a transfer under other applicable law or 
under any agreement with the consumer's financial institution.
  (e) Except as provided in this section, a consumer incurs no 
liability from an unauthorized electronic fund transfer.

Sec. 910. Liability of financial institutions

  (a) Subject to subsections (b) and (c), a financial 
institution shall be liable to a consumer for all damages 
proximately caused by--
          (1) the financial institution's failure to make an 
        electronic fund transfer, in accordance with the terms 
        and conditions of an account, in the correct amount or 
        in a timely manner when properly instructed to do so by 
        the consumer, except where--
                  (A) the consumer's account has insufficient 
                funds;
                  (B) the funds are subject to legal process or 
                other encumbrance restricting such transfer;
                  (C) such transfer would exceed an established 
                credit limit;
                  (D) an electronic terminal has insufficient 
                cash to complete the transaction; or
                  (E) as otherwise provided in regulations of 
                the [Bureau] Agency;
          (2) the financial institution's failure to make an 
        electronic fund transfer due to insufficient funds when 
        the financal institution failed to credit, in 
        accordance with the terms and conditions of an account, 
        a deposit of funds to the consumer's account which 
        would have provided sufficient funds to make the 
        transfer, and
          (3) the financial institution's failure to stop 
        payment of a preauthorized transfer from a consumer's 
        account when instructed to do so in accordance with the 
        terms and conditions of the account.
  (b) A financial institution shall not be liable under 
subsection (a)(1) or (2) if the financial institution shows by 
a preponderance of the evidence that its action or failure to 
act resulted from--
          (1) an act of God or other circumstance beyond its 
        control, that it exercised reasonable care to prevent 
        such an occurrence, and that it exercised such 
        diligence as the circumstances required; or
          (2) a technical malfunction which was known to the 
        consumer at the time he attempted to initiate an 
        electronic fund transfer or, in the case of a 
        preauthorized transfer, at the time such transfer 
        should have occurred.
  (c) In the case of a failure described in subsection (a) 
which was not intentional and which resulted from a bona fide 
error, notwithstanding the maintenance of procedures reasonably 
adapted to avoid any such error, the financial institution 
shall be liable for actual damages proved.
  (d) Exception for Damaged Notices.--If the notice required to 
be posted pursuant to section 904(d)(3)(B)(i) by an automated 
teller machine operator has been posted by such operator in 
compliance with such section and the notice is subsequently 
removed, damaged, or altered by any person other than the 
operator of the automated teller machine, the operator shall 
have no liability under this section for failure to comply with 
section 904(d)(3)(B)(i).

Sec. 911. Issuance of cards or other means of access

  (a) No person may issue to a consumer any card, code, or 
other means of access to such consumer's account for the 
purpose of initiating an electronic fund transfer other than--
          (1) in response to a request or application therefor; 
        or
          (2) as a renewal of, or in substitution for, an 
        accepted card, code, or other means of access, whether 
        issued by the initial issuer or a successor.
  (b) Notwithstanding the provisions of subsection (a), a 
person may distribute to a consumer on an unsolicited basis a 
card, code, or other means of access for use in initiating an 
electronic fund transfer from such consumer's account, if--
          (1) such card, code, or other means of access is not 
        validated;
          (2) such distribution is accompanied by a complete 
        disclosure, in accordance with section 905, of the 
        consumer's rights and liabilities which will apply if 
        such card, code, or other means of access is validated;
          (3) such distribution is accompanied by a clear 
        explanation, in accordance with regulations of the 
        [Bureau] Agency, that such card, code, or other means 
        of access is not validated and how the consumer may 
        dispose of such code, card, or other means of access if 
        validation is not desired; and
          (4) such card, code, or other means of access is 
        validated only in response to a request or application 
        from the consumer, upon verification of the consumer's 
        identity.
  (c) For the purpose of subsection (b), a card, code, or other 
means of access is validated when it may be used to initiate an 
electronic fund transfer.

           *       *       *       *       *       *       *


SEC. 915. GENERAL-USE PREPAID CARDS, GIFT CERTIFICATES, AND STORE GIFT 
                    CARDS.

  (a) Definitions.--In this section, the following definitions 
shall apply:
          (1) Dormancy fee; inactivity charge or fee.--The 
        terms ``dormancy fee'' and ``inactivity charge or fee'' 
        mean a fee, charge, or penalty for non-use or 
        inactivity of a gift certificate, store gift card, or 
        general-use prepaid card.
          (2) General use prepaid card, gift certificate, and 
        store gift card.--
                  (A) General-use prepaid card.--The term 
                ``general-use prepaid card'' means a card or 
                other payment code or device issued by any 
                person that is--
                          (i) redeemable at multiple, 
                        unaffiliated merchants or service 
                        providers, or automated teller 
                        machines;
                          (ii) issued in a requested amount, 
                        whether or not that amount may, at the 
                        option of the issuer, be increased in 
                        value or reloaded if requested by the 
                        holder;
                          (iii) purchased or loaded on a 
                        prepaid basis; and
                          (iv) honored, upon presentation, by 
                        merchants for goods or services, or at 
                        automated teller machines.
                  (B) Gift certificate.--The term ``gift 
                certificate'' means an electronic promise that 
                is--
                          (i) redeemable at a single merchant 
                        or an affiliated group of merchants 
                        that share the same name, mark, or 
                        logo;
                          (ii) issued in a specified amount 
                        that may not be increased or reloaded;
                          (iii) purchased on a prepaid basis in 
                        exchange for payment; and
                          (iv) honored upon presentation by 
                        such single merchant or affiliated 
                        group of merchants for goods or 
                        services.
                  (C) Store gift card.--The term ``store gift 
                card'' means an electronic promise, plastic 
                card, or other payment code or device that is--
                          (i) redeemable at a single merchant 
                        or an affiliated group of merchants 
                        that share the same name, mark, or 
                        logo;
                          (ii) issued in a specified amount, 
                        whether or not that amount may be 
                        increased in value or reloaded at the 
                        request of the holder;
                          (iii) purchased on a prepaid basis in 
                        exchange for payment; and
                          (iv) honored upon presentation by 
                        such single merchant or affiliated 
                        group of merchants for goods or 
                        services.
                  (D) Exclusions.--The terms ``general-use 
                prepaid card'', ``gift certificate'', and 
                ``store gift card'' do not include an 
                electronic promise, plastic card, or payment 
                code or device that is--
                          (i) used solely for telephone 
                        services;
                          (ii) reloadable and not marketed or 
                        labeled as a gift card or gift 
                        certificate;
                          (iii) a loyalty, award, or 
                        promotional gift card, as defined by 
                        the [Bureau] Agency;
                          (iv) not marketed to the general 
                        public;
                          (v) issued in paper form only 
                        (including for tickets and events); or
                          (vi) redeemable solely for admission 
                        to events or venues at a particular 
                        location or group of affiliated 
                        locations, which may also include 
                        services or goods obtainable--
                                  (I) at the event or venue 
                                after admission; or
                                  (II) in conjunction with 
                                admission to such events or 
                                venues, at specific locations 
                                affiliated with and in 
                                geographic proximity to the 
                                event or venue.
          (3) Service fee.--
                  (A) In general.--The term ``service fee'' 
                means a periodic fee, charge, or penalty for 
                holding or use of a gift certificate, store 
                gift card, or general-use prepaid card.
                  (B) Exclusion.--With respect to a general-use 
                prepaid card, the term ``service fee'' does not 
                include a one-time initial issuance fee.
  (b) Prohibition on Imposition of Fees or Charges.--
          (1) In general.--Except as provided under paragraphs 
        (2) through (4), it shall be unlawful for any person to 
        impose a dormancy fee, an inactivity charge or fee, or 
        a service fee with respect to a gift certificate, store 
        gift card, or general-use prepaid card.
          (2) Exceptions.--A dormancy fee, inactivity charge or 
        fee, or service fee may be charged with respect to a 
        gift certificate, store gift card, or general-use 
        prepaid card, if--
                  (A) there has been no activity with respect 
                to the certificate or card in the 12-month 
                period ending on the date on which the charge 
                or fee is imposed;
                  (B) the disclosure requirements of paragraph 
                (3) have been met;
                  (C) not more than one fee may be charged in 
                any given month; and
                  (D) any additional requirements that the 
                [Bureau] Agency may establish through 
                rulemaking under subsection (d) have been met.
          (3) Disclosure requirements.--The disclosure 
        requirements of this paragraph are met if--
                  (A) the gift certificate, store gift card, or 
                general-use prepaid card clearly and 
                conspicuously states--
                          (i) that a dormancy fee, inactivity 
                        charge or fee, or service fee may be 
                        charged;
                          (ii) the amount of such fee or 
                        charge;
                          (iii) how often such fee or charge 
                        may be assessed; and
                          (iv) that such fee or charge may be 
                        assessed for inactivity; and
                  (B) the issuer or vendor of such certificate 
                or card informs the purchaser of such charge or 
                fee before such certificate or card is 
                purchased, regardless of whether the 
                certificate or card is purchased in person, 
                over the Internet, or by telephone.
          (4) Exclusion.--The prohibition under paragraph (1) 
        shall not apply to any gift certificate--
                  (A) that is distributed pursuant to an award, 
                loyalty, or promotional program, as defined by 
                the [Bureau] Agency; and
                  (B) with respect to which, there is no money 
                or other value exchanged.
  (c) Prohibition on Sale of Gift Cards With Expiration 
Dates.--
          (1) In general.--Except as provided under paragraph 
        (2), it shall be unlawful for any person to sell or 
        issue a gift certificate, store gift card, or general-
        use prepaid card that is subject to an expiration date.
          (2) Exceptions.--A gift certificate, store gift card, 
        or general-use prepaid card may contain an expiration 
        date if--
                  (A) the expiration date is not earlier than 5 
                years after the date on which the gift 
                certificate was issued, or the date on which 
                card funds were last loaded to a store gift 
                card or general-use prepaid card; and
                  (B) the terms of expiration are clearly and 
                conspicuously stated.
  (d) Additional Rulemaking.--
          (1) In general.--The [Bureau] Agency shall--
                  (A) prescribe regulations to carry out this 
                section, in addition to any other rules or 
                regulations required by this title, including 
                such additional requirements as appropriate 
                relating to the amount of dormancy fees, 
                inactivity charges or fees, or service fees 
                that may be assessed and the amount of 
                remaining value of a gift certificate, store 
                gift card, or general-use prepaid card below 
                which such charges or fees may be assessed; and
                  (B) shall determine the extent to which the 
                individual definitions and provisions of the 
                Electronic Fund Transfer Act or Regulation E 
                should apply to general-use prepaid cards, gift 
                certificates, and store gift cards.
          (2) Consultation.--In prescribing regulations under 
        this subsection, the [Bureau] Agency shall consult with 
        the Federal Trade Commission.
          (3) Timing; effective date.--The regulations required 
        by this subsection shall be issued in final form not 
        later than 9 months after the date of enactment of the 
        Credit CARD Act of 2009.

Sec. 916. Civil liability

  (a) Except as otherwise provided by this section and section 
910, any person who fails to comply with any provision of this 
title with respect to any consumer, except for an error 
resolved in accordance with section 908, is liable to such 
consumer in an amount equal to the sum of--
          (1) any actual damage sustained by such consumer as a 
        result of such failure;
          (2)(A) in the case of an individual action, an amount 
        not less than $100 nor greater than $1,000; or
          (B) in the case of a class action, such amount as the 
        court may allow, except that (i) as to each member of 
        the class no minimum recovery shall be applicable, and 
        (ii) the total recovery under this subparagraph in any 
        class action or series of class actions arising out of 
        the same failure to comply by the same person shall not 
        be more than the lesser of $500,000 or 1 per centum of 
        the net worth of the defendant; and
          (3) in the case of any successful action to enforce 
        the foregoing liability, the costs of the action, 
        together with a reasonable attorney's fee as determined 
        by the court.
  (b) In determining the amount of liability in any action 
under subsection (a), the court shall consider, among other 
relevant factors--
          (1) in any individual action under subsection 
        (a)(2)(A), the frequency and persistence of 
        noncompliance, the nature of such noncompliance, and 
        the extent to which the noncompliance was intentional; 
        or
          (2) in any class action under subsection (a)(2)(B), 
        the frequency and persistence of noncompliance, the 
        nature of such noncompliance, the resources of the 
        defendant, the number of persons adversely affected, 
        and the extent to which the noncompliance was 
        intentional.
  (c) Except as provided in section 910, a person may not be 
held liable in any action brought under this section for a 
violation of this title if the person shows by a preponderance 
of evidence that the violation was not intentional and resulted 
from a bona fide error notwithstanding the maintenance of 
procedures reasonably adapted to avoid any such error.
  (d) No provision of this section or section 916 imposing any 
liability shall apply to--
          (1) any act done or omitted in good faith in 
        conformity with any rule, regulation, or interpretation 
        thereof by the [Bureau] Agency or the Board or in 
        conformity with any interpretation or approval by an 
        official or employee of the [Bureau of Consumer 
        Financial Protection] Consumer Law Enforcement Agency 
        or the Federal Reserve System duly authorized by the 
        [Bureau] Agency or the Board to issue such 
        interpretations or approvals under such procedures as 
        the [Bureau] Agency or the Board may prescribe 
        therefor; or
          (2) any failure to make disclosure in proper form if 
        a financial institution utilized an appropriate model 
        clause issued by the [Bureau] Agency or the Board,
notwithstanding that after such act, omission, or failure has 
occurred, such rule, regulation, approval, or model clause is 
amended, rescinded, or determined by judicial or other 
authority to be invalid for any reason.
  (e) A person has no liability under this section for any 
failure to comply with any requirement under this title if, 
prior to the institution of an action under this section, the 
person notifies the consumer concerned of the failure, complies 
with the requirements of this title, and makes an appropriate 
adjustment to the consumer's account and pays actual damages 
or, where applicable, damages in accordance with section 910.
  (f) On a finding by the court that an unsuccessful action 
under this section was brought in bad faith or for purposes of 
harassment, the court shall award to the defendant attorney's 
fees reasonable in relation to the work expended and costs.
  (g) Without regard to the amount in controversy, any action 
under this section may be brought in any United States district 
court, or in any other court of competent jurisdiction, within 
one year from the date of the occurrence of the violation.

Sec. 917. Criminal liability

  (a) Whoever knowingly and willfully--
          (1) gives false or inaccurate information or fails to 
        provide information which he is required to disclose by 
        this title or any regulation issued thereunder; or
          (2) otherwise fails to comply with any provision of 
        this title;
shall be fined not more than $5,000 or imprisoned not more than 
one year, or both.
  (b) Whoever--
          (1) knowingly, in a transaction affecting interstate 
        or foreign commerce, uses or attempts or conspires to 
        use any counterfeit, fictitious, altered, forged, lost, 
        stolen, or fraudulently obtained debit instrument to 
        obtain money, goods, services, or anything else of 
        value which within any one-year period has a value 
        aggregating $1,000 or more; or
          (2) with unlawful or fraudulent intent, transports or 
        attempts or conspires to transport in interstate or 
        foreign commerce a counterfeit, fictitious, altered, 
        forged, lost, stolen, or fraudulently obtained debit 
        instrument knowing the same to be counterfeit, 
        fictitious, altered, forged, lost, stolen, or 
        fraudulently obtained; or
          (3) with unlawful or fraudulent intent, uses any 
        instrumentality of interstate or foreign commerce to 
        sell or transport a counterfeit, fictitious, altered, 
        forged, lost, stolen, or fraudulently obtained debit 
        instrument knowing the same to be counterfeit, 
        fictitious, altered, forged, lost, stolen, or 
        fraudulently obtained; or
          (4) knowingly receives, conceals, uses, or 
        transports, money, goods, services, or anything else of 
        value (except tickets for interstate or foreign 
        transportation) which (A) within any one-year period 
        has a value aggregating $1,000 or more, (B) has moved 
        in or is part of, or which constitutes interstate or 
        foreign commerce, and (C) has been obtained with a 
        counterfeit, fictitious, altered, forged, lost, stolen, 
        or fraudulently obtained debit instrument; or
          (5) knowingly receives, conceals, uses, sells, or 
        transports in interstate or foreign commerce one or 
        more tickets for interstate or foreign transportation, 
        which (A) within any one-year period have a value 
        aggregating $500 or more, and (B) have been purchased 
        or obtained with one or more counterfeit, fictitious, 
        altered, forged, lost, stolen, or fraudulently obtained 
        debit instrument; or
          (6) in a transaction affecting interstate or foreign 
        commerce, furnishes money, property, services, or 
        anything else of value, which within any one-year 
        period has a value aggregating $1,000 or more, through 
        the use of any counterfeit, fictitious, altered, 
        forged, lost, stolen, or fraudulently obtained debit 
        instrument knowingly the same to be counterfeit, 
        fictitious, altered, forged, lost, stolen, or 
        fraudulently obtained--
shall be fined not more than $10,000 or imprisoned not more 
than ten years, or both.
  (c) As used in this section, the term ``debit instrument'' 
means a card, code, or other device, other than a check, draft, 
or similar paper instrument, by the use of which a person may 
initiate an electronic fund transfer.

Sec. 918. Administrative enforcement

  (a) Subject to subtitle B of the Consumer Financial 
Protection Act of 2010, compliance with the requirements 
imposed under this title shall be enforced under--
          (1) section 8 of the Federal Deposit Insurance Act, 
        by the appropriate Federal banking agency, as defined 
        in section 3(q) of the Federal Deposit Insurance Act 
        (12 U.S.C. 1813(q)), with respect to--
                  (A) national banks, Federal savings 
                associations, and Federal branches and Federal 
                agencies of foreign banks;
                  (B) member banks of the Federal Reserve 
                System (other than national banks), branches 
                and agencies of foreign banks (other than 
                Federal branches, Federal agencies, and insured 
                State branches of foreign banks), commercial 
                lending companies owned or controlled by 
                foreign banks, and organizations operating 
                under section 25 or 25A of the Federal Reserve 
                Act; and
                  (C) banks and State savings associations 
                insured by the Federal Deposit Insurance 
                Corporation (other than members of the Federal 
                Reserve System), and insured State branches of 
                foreign banks;
          (2) the Federal Credit Union Act, by the 
        Administrator of the National Credit Union 
        Administration with respect to any Federal credit 
        union;
          (3) the Federal Aviation Act of 1958, by the 
        Secretary of Transportation, with respect to any air 
        carrier or foreign air carrier subject to that Act;
          (4) the Securities Exchange Act of 1934, by the 
        Securities and Exchange Commission, with respect to any 
        broker or dealer subject to that [Act and] Act; and
          (5) subtitle E of the Consumer Financial Protection 
        Act of 2010, by the [Bureau] Agency, with respect to 
        any person subject to this title, except that the 
        [Bureau] Agency shall not have authority to enforce the 
        requirements of section 920 or any regulations 
        prescribed by the Board under section 920.
The terms used in paragraph (1) that are not defined in this 
title or otherwise defined in section 3(s) of the Federal 
Deposit Insurance Act (12 U.S.C. 1813(s)) shall have the 
meaning given to them in section 1(b) of the International 
Banking Act of 1978 (12 U.S.C. 3101).
  (b) For the purpose of the exercise by any agency referred to 
in any of paragraphs (1) through (4) of subsection (a) of its 
powers under any Act referred to in that subsection, a 
violation of any requirement imposed under this title shall be 
deemed to be a violation of a requirement imposed under that 
Act. In addition to its powers under any provision of law 
specifically referred to in any of paragraphs (1) through (4) 
of subsection (a), each of the agencies referred to in that 
subsection may exercise, for the purpose of enforcing 
compliance with any requirement imposed under this title, any 
other authority conferred on it by law.
  (c) Overall Enforcement Authority of the Federal Trade 
Commission.--Except to the extent that enforcement of the 
requirements imposed under this title is specifically committed 
to some other Government agency under any of paragraphs (1) 
through (4) of subsection (a), and subject to subtitle B of the 
Consumer Financial Protection Act of 2010, the Federal Trade 
Commission shall be authorized to enforce such requirements. 
For the purpose of the exercise by the Federal Trade Commission 
of its functions and powers under the Federal Trade Commission 
Act, a violation of any requirement imposed under this title 
shall be deemed a violation of a requirement imposed under that 
Act. All of the functions and powers of the Federal Trade 
Commission under the Federal Trade Commission Act are available 
to the Federal Trade Commission to enforce compliance by any 
person subject to the jurisdiction of the Federal Trade 
Commission with the requirements imposed under this title, 
irrespective of whether that person is engaged in commerce or 
meets any other jurisdictional tests under the Federal Trade 
Commission Act.

Sec. 919. Reports to Congress

  (a) Not later than twelve months after the effective date of 
this title and at one-year intervals thereafter, the [Bureau] 
Agency shall make reports to the Congress concerning the 
administration of its functions under this title, including 
such recommendations as the [Bureau] Agency deems necessary and 
appropriate. In addition, each report of the [Bureau] Agency 
shall include its assessment of the extent to which compliance 
with this title is being achieved, and a summary of the 
enforcement actions taken under section 917 of this title. In 
such report, the [Bureau] Agency shall particularly address the 
effects of this title on the costs and benefits to financial 
institutions and consumers, on competition, on the introduction 
of new technology, on the operations of financial institutions, 
and on the adequacy of consumer protection.
  (b) In the exercise of its functions under this title, the 
[Bureau] Agency may obtain upon request the views of any other 
Federal agency which, in the judgment of the [Bureau] Agency, 
exercises regulatory or supervisory functions with respect to 
any class of persons subject to this title.

SEC. 920. REMITTANCE TRANSFERS.

  (a) Disclosures Required for Remittance Transfers.--
          (1) In general.--Each remittance transfer provider 
        shall make disclosures as required under this section 
        and in accordance with rules prescribed by the Board. 
        Disclosures required under this section shall be in 
        addition to any other disclosures applicable under this 
        title.
          (2) Disclosures.--Subject to rules prescribed by the 
        Board, a remittance transfer provider shall provide, in 
        writing and in a form that the sender may keep, to each 
        sender requesting a remittance transfer, as applicable 
        to the transaction--
                  (A) at the time at which the sender requests 
                a remittance transfer to be initiated, and 
                prior to the sender making any payment in 
                connection with the remittance transfer, a 
                disclosure describing--
                          (i) the amount of currency that will 
                        be received by the designated 
                        recipient, using the values of the 
                        currency into which the funds will be 
                        exchanged;
                          (ii) the amount of transfer and any 
                        other fees charged by the remittance 
                        transfer provider for the remittance 
                        transfer; and
                          (iii) any exchange rate to be used by 
                        the remittance transfer provider for 
                        the remittance transfer, to the nearest 
                        1/100th of a point; and
                  (B) at the time at which the sender makes 
                payment in connection with the remittance 
                transfer--
                          (i) a receipt showing--
                                  (I) the information described 
                                in subparagraph (A);
                                  (II) the promised date of 
                                delivery to the designated 
                                recipient; and
                                  (III) the name and either the 
                                telephone number or the address 
                                of the designated recipient, if 
                                either the telephone number or 
                                the address of the designated 
                                recipient is provided by the 
                                sender; and
                          (ii) a statement containing--
                                  (I) information about the 
                                rights of the sender under this 
                                section regarding the 
                                resolution of errors; and
                                  (II) appropriate contact 
                                information for--
                                          (aa) the remittance 
                                        transfer provider; and
                                          (bb) the State agency 
                                        that regulates the 
                                        remittance transfer 
                                        provider and the Board, 
                                        including the toll-free 
                                        telephone number 
                                        established under 
                                        section 1013 of the 
                                        Consumer Financial 
                                        Protection Act of 2010.
          (3) Requirements relating to disclosures.--With 
        respect to each disclosure required to be provided 
        under paragraph (2) a remittance transfer provider 
        shall--
                  (A) provide an initial notice and receipt, as 
                required by subparagraphs (A) and (B) of 
                paragraph (2), and an error resolution 
                statement, as required by subsection (d), that 
                clearly and conspicuously describe the 
                information required to be disclosed therein; 
                and
                  (B) with respect to any transaction that a 
                sender conducts electronically, comply with the 
                Electronic Signatures in Global and National 
                Commerce Act (15 U.S.C. 7001 et seq.).
          (4) Exception for disclosures of amount received.--
                  (A) In general.--Subject to the rules 
                prescribed by the Board, and except as provided 
                under subparagraph (B), the disclosures 
                required regarding the amount of currency that 
                will be received by the designated recipient 
                shall be deemed to be accurate, so long as the 
                disclosures provide a reasonably accurate 
                estimate of the foreign currency to be 
                received. This paragraph shall apply only to a 
                remittance transfer provider who is an insured 
                depository institution, as defined in section 3 
                of the Federal Deposit Insurance Act (12 U.S.C. 
                1813), or an insured credit union, as defined 
                in section 101 of the Federal Credit Union Act 
                (12 U.S.C. 1752), and if--
                          (i) a remittance transfer is 
                        conducted through a demand deposit, 
                        savings deposit, or other asset account 
                        that the sender holds with such 
                        remittance transfer provider; and
                          (ii) at the time at which the sender 
                        requests the transaction, the 
                        remittance transfer provider is unable 
                        to know, for reasons beyond its 
                        control, the amount of currency that 
                        will be made available to the 
                        designated recipient.
                  (B) Deadline.--The application of 
                subparagraph (A) shall terminate 5 years after 
                the date of enactment of the Consumer Financial 
                Protection Act of 2010, unless the Board 
                determines that termination of such provision 
                would negatively affect the ability of 
                remittance transfer providers described in 
                subparagraph (A) to send remittances to 
                locations in foreign countries, in which case, 
                the Board may, by rule, extend the application 
                of subparagraph (A) to not longer than 10 years 
                after the date of enactment of the Consumer 
                Financial Protection Act of 2010.
          (5) Exemption authority.--The Board may, by rule, 
        permit a remittance transfer provider to satisfy the 
        requirements of--
                  (A) paragraph (2)(A) orally, if the 
                transaction is conducted entirely by telephone;
                  (B) paragraph (2)(B), in the case of a 
                transaction conducted entirely by telephone, by 
                mailing the disclosures required under such 
                subparagraph to the sender, not later than 1 
                business day after the date on which the 
                transaction is conducted, or by including such 
                documents in the next periodic statement, if 
                the telephone transaction is conducted through 
                a demand deposit, savings deposit, or other 
                asset account that the sender holds with the 
                remittance transfer provider;
                  (C) subparagraphs (A) and (B) of paragraph 
                (2) together in one written disclosure, but 
                only to the extent that the information 
                provided in accordance with paragraph (3)(A) is 
                accurate at the time at which payment is made 
                in connection with the subject remittance 
                transfer; and
                  (D) paragraph (2)(A), without compliance with 
                section 101(c) of the Electronic Signatures in 
                Global Commerce Act, if a sender initiates the 
                transaction electronically and the information 
                is displayed electronically in a manner that 
                the sender can keep.
          (6) Storefront and internet notices.--
                  (A) In general.--
                          (i) Prominent posting.--Subject to 
                        subparagraph (B), the Board may 
                        prescribe rules to require a remittance 
                        transfer provider to prominently post, 
                        and timely update, a notice describing 
                        a model remittance transfer for one or 
                        more amounts, as the Board may 
                        determine, which notice shall show the 
                        amount of currency that will be 
                        received by the designated recipient, 
                        using the values of the currency into 
                        which the funds will be exchanged.
                          (ii) Onsite displays.--The Board may 
                        require the notice prescribed under 
                        this subparagraph to be displayed in 
                        every physical storefront location 
                        owned or controlled by the remittance 
                        transfer provider.
                          (iii) Internet notices.--Subject to 
                        paragraph (3), the Board shall 
                        prescribe rules to require a remittance 
                        transfer provider that provides 
                        remittance transfers via the Internet 
                        to provide a notice, comparable to a 
                        storefront notice described in this 
                        subparagraph, located on the home page 
                        or landing page (with respect to such 
                        remittance transfer services) owned or 
                        controlled by the remittance transfer 
                        provider.
                          (iv) Rulemaking authority.--In 
                        prescribing rules under this 
                        subparagraph, the Board may impose 
                        standards or requirements regarding the 
                        provision of the storefront and 
                        Internet notices required under this 
                        subparagraph and the provision of the 
                        disclosures required under paragraphs 
                        (2) and (3).
                  (B) Study and analysis.--Prior to proposing 
                rules under subparagraph (A), the Board shall 
                undertake appropriate studies and analyses, 
                which shall be consistent with section 
                904(a)(2), and may include an advanced notice 
                of proposed rulemaking, to determine whether a 
                storefront notice or Internet notice 
                facilitates the ability of a consumer--
                          (i) to compare prices for remittance 
                        transfers; and
                          (ii) to understand the types and 
                        amounts of any fees or costs imposed on 
                        remittance transfers.
  (b) Foreign Language Disclosures.--The disclosures required 
under this section shall be made in English and in each of the 
foreign languages principally used by the remittance transfer 
provider, or any of its agents, to advertise, solicit, or 
market, either orally or in writing, at that office.
  (c) Regulations Regarding Transfers to Certain Nations.--If 
the Board determines that a recipient nation does not legally 
allow, or the method by which transactions are made in the 
recipient country do not allow, a remittance transfer provider 
to know the amount of currency that will be received by the 
designated recipient, the Board may prescribe rules (not later 
than 18 months after the date of enactment of the Consumer 
Financial Protection Act of 2010) addressing the issue, which 
rules shall include standards for a remittance transfer 
provider to provide--
          (1) a receipt that is consistent with subsections (a) 
        and (b); and
          (2) a reasonably accurate estimate of the foreign 
        currency to be received, based on the rate provided to 
        the sender by the remittance transfer provider at the 
        time at which the transaction was initiated by the 
        sender.
  (d) Remittance Transfer Errors.--
          (1) Error resolution.--
                  (A) In general.--If a remittance transfer 
                provider receives oral or written notice from 
                the sender within 180 days of the promised date 
                of delivery that an error occurred with respect 
                to a remittance transfer, including the amount 
                of currency designated in subsection (a)(3)(A) 
                that was to be sent to the designated recipient 
                of the remittance transfer, using the values of 
                the currency into which the funds should have 
                been exchanged, but was not made available to 
                the designated recipient in the foreign 
                country, the remittance transfer provider shall 
                resolve the error pursuant to this subsection 
                and investigate the reason for the error.
                  (B) Remedies.--Not later than 90 days after 
                the date of receipt of a notice from the sender 
                pursuant to subparagraph (A), the remittance 
                transfer provider shall, as applicable to the 
                error and as designated by the sender--
                          (i) refund to the sender the total 
                        amount of funds tendered by the sender 
                        in connection with the remittance 
                        transfer which was not properly 
                        transmitted;
                          (ii) make available to the designated 
                        recipient, without additional cost to 
                        the designated recipient or to the 
                        sender, the amount appropriate to 
                        resolve the error;
                          (iii) provide such other remedy, as 
                        determined appropriate by rule of the 
                        Board for the protection of senders; or
                          (iv) provide written notice to the 
                        sender that there was no error with an 
                        explanation responding to the specific 
                        complaint of the sender.
          (2) Rules.--The Board shall establish, by rule issued 
        not later than 18 months after the date of enactment of 
        the Consumer Financial Protection Act of 2010, clear 
        and appropriate standards for remittance transfer 
        providers with respect to error resolution relating to 
        remittance transfers, to protect senders from such 
        errors. Standards prescribed under this paragraph shall 
        include appropriate standards regarding record keeping, 
        as required, including documentation--
                  (A) of the complaint of the sender;
                  (B) that the sender provides the remittance 
                transfer provider with respect to the alleged 
                error; and
                  (C) of the findings of the remittance 
                transfer provider regarding the investigation 
                of the alleged error that the sender brought to 
                their attention.
          (3) Cancellation and refund policy rules.--Not later 
        than 18 months after the date of enactment of the 
        Consumer Financial Protection Act of 2010, the Board 
        shall issue final rules regarding appropriate 
        remittance transfer cancellation and refund policies 
        for consumers.
  (e) Applicability of This Title.--
          (1) In general.--A remittance transfer that is not an 
        electronic fund transfer, as defined in section 903, 
        shall not be subject to any of the provisions of 
        sections 905 through 913. A remittance transfer that is 
        an electronic fund transfer, as defined in section 903, 
        shall be subject to all provisions of this title, 
        except for section 908, that are otherwise applicable 
        to electronic fund transfers under this title.
          (2) Rule of construction.--Nothing in this section 
        shall be construed--
                  (A) to affect the application to any 
                transaction, to any remittance provider, or to 
                any other person of any of the provisions of 
                subchapter II of chapter 53 of title 31, United 
                States Code, section 21 of the Federal Deposit 
                Insurance Act (12 U.S.C. 1829b), or chapter 2 
                of title I of Public Law 91-508 (12 U.S.C. 
                1951-1959), or any regulations promulgated 
                thereunder; or
                  (B) to cause any fund transfer that would not 
                otherwise be treated as such under paragraph 
                (1) to be treated as an electronic fund 
                transfer, or as otherwise subject to this 
                title, for the purposes of any of the 
                provisions referred to in subparagraph (A) or 
                any regulations promulgated thereunder.
  (f) Acts of Agents.--
          (1) In general.--A remittance transfer provider shall 
        be liable for any violation of this section by any 
        agent, authorized delegate, or person affiliated with 
        such provider, when such agent, authorized delegate, or 
        affiliate acts for that remittance transfer provider.
          (2) Obligations of remittance transfer providers.--
        The Board shall prescribe rules to implement 
        appropriate standards or conditions of, liability of a 
        remittance transfer provider, including a provider who 
        acts through an agent or authorized delegate. An agency 
        charged with enforcing the requirements of this 
        section, or rules prescribed by the Board under this 
        section, may consider, in any action or other 
        proceeding against a remittance transfer provider, the 
        extent to which the provider had established and 
        maintained policies or procedures for compliance, 
        including policies, procedures, or other appropriate 
        oversight measures designed to assure compliance by an 
        agent or authorized delegate acting for such provider.
  (g) Definitions.--As used in this section--
          (1) the term ``designated recipient'' means any 
        person located in a foreign country and identified by 
        the sender as the authorized recipient of a remittance 
        transfer to be made by a remittance transfer provider, 
        except that a designated recipient shall not be deemed 
        to be a consumer for purposes of this Act;
          (2) the term ``remittance transfer''--
                  (A) means the electronic (as defined in 
                section 106(2) of the Electronic Signatures in 
                Global and National Commerce Act (15 U.S.C. 
                7006(2))) transfer of funds requested by a 
                sender located in any State to a designated 
                recipient that is initiated by a remittance 
                transfer provider, whether or not the sender 
                holds an account with the remittance transfer 
                provider or whether or not the remittance 
                transfer is also an electronic fund transfer, 
                as defined in section 903; and
                  (B) does not include a transfer described in 
                subparagraph (A) in an amount that is equal to 
                or lesser than the amount of a small-value 
                transaction determined, by rule, to be excluded 
                from the requirements under section 906(a);
          (3) the term ``remittance transfer provider'' means 
        any person or financial institution that provides 
        remittance transfers for a consumer in the normal 
        course of its business, whether or not the consumer 
        holds an account with such person or financial 
        institution; and
          (4) the term ``sender'' means a consumer who requests 
        a remittance provider to send a remittance transfer for 
        the consumer to a designated recipient.

SEC. 921. REASONABLE FEES AND RULES FOR PAYMENT CARD TRANSACTIONS.

  (a) Reasonable Interchange Transaction Fees for Electronic 
Debit Transactions.--
          (1) Regulatory authority over interchange transaction 
        fees.--The Board may prescribe regulations, pursuant to 
        section 553 of title 5, United States Code, regarding 
        any interchange transaction fee that an issuer may 
        receive or charge with respect to an electronic debit 
        transaction, to implement this subsection (including 
        related definitions), and to prevent circumvention or 
        evasion of this subsection.
          (2) Reasonable interchange transaction fees.--The 
        amount of any interchange transaction fee that an 
        issuer may receive or charge with respect to an 
        electronic debit transaction shall be reasonable and 
        proportional to the cost incurred by the issuer with 
        respect to the transaction.
          (3) Rulemaking required.--
                  (A) In general.--The Board shall prescribe 
                regulations in final form not later than 9 
                months after the date of enactment of the 
                Consumer Financial Protection Act of 2010, to 
                establish standards for assessing whether the 
                amount of any interchange transaction fee 
                described in paragraph (2) is reasonable and 
                proportional to the cost incurred by the issuer 
                with respect to the transaction.
                  (B) Information collection.--The Board may 
                require any issuer (or agent of an issuer) or 
                payment card network to provide the Board with 
                such information as may be necessary to carry 
                out the provisions of this subsection and the 
                Board, in issuing rules under subparagraph (A) 
                and on at least a bi-annual basis thereafter, 
                shall disclose such aggregate or summary 
                information concerning the costs incurred, and 
                interchange transaction fees charged or 
                received, by issuers or payment card networks 
                in connection with the authorization, clearance 
                or settlement of electronic debit transactions 
                as the Board considers appropriate and in the 
                public interest.
          (4) Considerations; consultation.--In prescribing 
        regulations under paragraph (3)(A), the Board shall--
                  (A) consider the functional similarity 
                between--
                          (i) electronic debit transactions; 
                        and
                          (ii) checking transactions that are 
                        required within the Federal Reserve 
                        bank system to clear at par;
                  (B) distinguish between--
                          (i) the incremental cost incurred by 
                        an issuer for the role of the issuer in 
                        the authorization, clearance, or 
                        settlement of a particular electronic 
                        debit transaction, which cost shall be 
                        considered under paragraph (2); and
                          (ii) other costs incurred by an 
                        issuer which are not specific to a 
                        particular electronic debit 
                        transaction, which costs shall not be 
                        considered under paragraph (2); and
                  (C) consult, as appropriate, with the 
                Comptroller of the Currency, the Board of 
                Directors of the Federal Deposit Insurance 
                Corporation, the Director of the Office of 
                Thrift Supervision, the National Credit Union 
                Administration Board, the Administrator of the 
                Small Business Administration, and the Director 
                of the [Bureau] Agency of Consumer Financial 
                Protection.
          (5) Adjustments to interchange transaction fees for 
        fraud prevention costs.--
                  (A) Adjustments.--The Board may allow for an 
                adjustment to the fee amount received or 
                charged by an issuer under paragraph (2), if--
                          (i) such adjustment is reasonably 
                        necessary to make allowance for costs 
                        incurred by the issuer in preventing 
                        fraud in relation to electronic debit 
                        transactions involving that issuer; and
                          (ii) the issuer complies with the 
                        fraud-related standards established by 
                        the Board under subparagraph (B), which 
                        standards shall--
                                  (I) be designed to ensure 
                                that any fraud-related 
                                adjustment of the issuer is 
                                limited to the amount described 
                                in clause (i) and takes into 
                                account any fraud-related 
                                reimbursements (including 
                                amounts from charge-backs) 
                                received from consumers, 
                                merchants, or payment card 
                                networks in relation to 
                                electronic debit transactions 
                                involving the issuer; and
                                  (II) require issuers to take 
                                effective steps to reduce the 
                                occurrence of, and costs from, 
                                fraud in relation to electronic 
                                debit transactions, including 
                                through the development and 
                                implementation of cost-
                                effective fraud prevention 
                                technology.
                  (B) Rulemaking required.--
                          (i) In general.--The Board shall 
                        prescribe regulations in final form not 
                        later than 9 months after the date of 
                        enactment of the Consumer Financial 
                        Protection Act of 2010, to establish 
                        standards for making adjustments under 
                        this paragraph.
                          (ii) Factors for consideration.--In 
                        issuing the standards and prescribing 
                        regulations under this paragraph, the 
                        Board shall consider--
                                  (I) the nature, type, and 
                                occurrence of fraud in 
                                electronic debit transactions;
                                  (II) the extent to which the 
                                occurrence of fraud depends on 
                                whether authorization in an 
                                electronic debit transaction is 
                                based on signature, PIN, or 
                                other means;
                                  (III) the available and 
                                economical means by which fraud 
                                on electronic debit 
                                transactions may be reduced;
                                  (IV) the fraud prevention and 
                                data security costs expended by 
                                each party involved in 
                                electronic debit transactions 
                                (including consumers, persons 
                                who accept debit cards as a 
                                form of payment, financial 
                                institutions, retailers and 
                                payment card networks);
                                  (V) the costs of fraudulent 
                                transactions absorbed by each 
                                party involved in such 
                                transactions (including 
                                consumers, persons who accept 
                                debit cards as a form of 
                                payment, financial 
                                institutions, retailers and 
                                payment card networks);
                                  (VI) the extent to which 
                                interchange transaction fees 
                                have in the past reduced or 
                                increased incentives for 
                                parties involved in electronic 
                                debit transactions to reduce 
                                fraud on such transactions; and
                                  (VII) such other factors as 
                                the Board considers 
                                appropriate.
          (6) Exemption for small issuers.--
                  (A) In general.--This subsection shall not 
                apply to any issuer that, together with its 
                affiliates, has assets of less than 
                $10,000,000,000, and the Board shall exempt 
                such issuers from regulations prescribed under 
                paragraph (3)(A).
                  (B) Definition.--For purposes of this 
                paragraph, the term ``issuer'' shall be limited 
                to the person holding the asset account that is 
                debited through an electronic debit 
                transaction.
          (7) Exemption for government-administered payment 
        programs and reloadable prepaid cards.--
                  (A) In general.--This subsection shall not 
                apply to an interchange transaction fee charged 
                or received with respect to an electronic debit 
                transaction in which a person uses--
                          (i) a debit card or general-use 
                        prepaid card that has been provided to 
                        a person pursuant to a Federal, State 
                        or local government-administered 
                        payment program, in which the person 
                        may only use the debit card or general-
                        use prepaid card to transfer or debit 
                        funds, monetary value, or other assets 
                        that have been provided pursuant to 
                        such program; or
                          (ii) a plastic card, payment code, or 
                        device that is--
                                  (I) linked to funds, monetary 
                                value, or assets which are 
                                purchased or loaded on a 
                                prepaid basis;
                                  (II) not issued or approved 
                                for use to access or debit any 
                                account held by or for the 
                                benefit of the card holder 
                                (other than a subaccount or 
                                other method of recording or 
                                tracking funds purchased or 
                                loaded on the card on a prepaid 
                                basis);
                                  (III) redeemable at multiple, 
                                unaffiliated merchants or 
                                service providers, or automated 
                                teller machines;
                                  (IV) used to transfer or 
                                debit funds, monetary value, or 
                                other assets; and
                                  (V) reloadable and not 
                                marketed or labeled as a gift 
                                card or gift certificate.
                  (B) Exception.--Notwithstanding subparagraph 
                (A), after the end of the 1-year period 
                beginning on the effective date provided in 
                paragraph (9), this subsection shall apply to 
                an interchange transaction fee charged or 
                received with respect to an electronic debit 
                transaction described in subparagraph (A)(i) in 
                which a person uses a general-use prepaid card, 
                or an electronic debit transaction described in 
                subparagraph (A)(ii), if any of the following 
                fees may be charged to a person with respect to 
                the card:
                          (i) A fee for an overdraft, including 
                        a shortage of funds or a transaction 
                        processed for an amount exceeding the 
                        account balance.
                          (ii) A fee imposed by the issuer for 
                        the first withdrawal per month from an 
                        automated teller machine that is part 
                        of the issuer's designated automated 
                        teller machine network.
                  (C) Definition.--For purposes of subparagraph 
                (B), the term ``designated automated teller 
                machine network'' means either--
                          (i) all automated teller machines 
                        identified in the name of the issuer; 
                        or
                          (ii) any network of automated teller 
                        machines identified by the issuer that 
                        provides reasonable and convenient 
                        access to the issuer's customers.
                  (D) Reporting.--Beginning 12 months after the 
                date of enactment of the Consumer Financial 
                Protection Act of 2010, the Board shall 
                annually provide a report to the Congress 
                regarding --
                          (i) the prevalence of the use of 
                        general-use prepaid cards in Federal, 
                        State or local government-administered 
                        payment programs; and
                          (ii) the interchange transaction fees 
                        and cardholder fees charged with 
                        respect to the use of such general-use 
                        prepaid cards.
          (8) Regulatory authority over network fees.--
                  (A) In general.--The Board may prescribe 
                regulations, pursuant to section 553 of title 
                5, United States Code, regarding any network 
                fee.
                  (B) Limitation.--The authority under 
                subparagraph (A) to prescribe regulations shall 
                be limited to regulations to ensure that--
                          (i) a network fee is not used to 
                        directly or indirectly compensate an 
                        issuer with respect to an electronic 
                        debit transaction; and
                          (ii) a network fee is not used to 
                        circumvent or evade the restrictions of 
                        this subsection and regulations 
                        prescribed under such subsection.
                  (C) Rulemaking required.--The Board shall 
                prescribe regulations in final form before the 
                end of the 9-month period beginning on the date 
                of the enactment of the Consumer Financial 
                Protection Act of 2010, to carry out the 
                authorities provided under subparagraph (A).
          (9) Effective date.--This subsection shall take 
        effect at the end of the 12-month period beginning on 
        the date of the enactment of the Consumer Financial 
        Protection Act of 2010.
  (b) Limitation on Payment Card Network Restrictions.--
          (1) Prohibitions against exclusivity arrangements.--
                  (A) No exclusive network.--The Board shall, 
                before the end of the 1-year period beginning 
                on the date of the enactment of the Consumer 
                Financial Protection Act of 2010, prescribe 
                regulations providing that an issuer or payment 
                card network shall not directly or through any 
                agent, processor, or licensed member of a 
                payment card network, by contract, requirement, 
                condition, penalty, or otherwise, restrict the 
                number of payment card networks on which an 
                electronic debit transaction may be processed 
                to--
                          (i) 1 such network; or
                          (ii) 2 or more such networks which 
                        are owned, controlled, or otherwise 
                        operated by --
                                  (I) affiliated persons; or
                                  (II) networks affiliated with 
                                such issuer.
                  (B) No routing restrictions.--The Board 
                shall, before the end of the 1-year period 
                beginning on the date of the enactment of the 
                Consumer Financial Protection Act of 2010, 
                prescribe regulations providing that an issuer 
                or payment card network shall not, directly or 
                through any agent, processor, or licensed 
                member of the network, by contract, 
                requirement, condition, penalty, or otherwise, 
                inhibit the ability of any person who accepts 
                debit cards for payments to direct the routing 
                of electronic debit transactions for processing 
                over any payment card network that may process 
                such transactions.
          (2) Limitation on restrictions on offering discounts 
        for use of a form of payment.--
                  (A) In general.--A payment card network shall 
                not, directly or through any agent, processor, 
                or licensed member of the network, by contract, 
                requirement, condition, penalty, or otherwise, 
                inhibit the ability of any person to provide a 
                discount or in-kind incentive for payment by 
                the use of cash, checks, debit cards, or credit 
                cards to the extent that--
                          (i) in the case of a discount or in-
                        kind incentive for payment by the use 
                        of debit cards, the discount or in-kind 
                        incentive does not differentiate on the 
                        basis of the issuer or the payment card 
                        network;
                          (ii) in the case of a discount or in-
                        kind incentive for payment by the use 
                        of credit cards, the discount or in-
                        kind incentive does not differentiate 
                        on the basis of the issuer or the 
                        payment card network; and
                          (iii) to the extent required by 
                        Federal law and applicable State law, 
                        such discount or in-kind incentive is 
                        offered to all prospective buyers and 
                        disclosed clearly and conspicuously.
                  (B) Lawful discounts.--For purposes of this 
                paragraph, the network may not penalize any 
                person for the providing of a discount that is 
                in compliance with Federal law and applicable 
                State law.
          (3) Limitation on restrictions on setting transaction 
        minimums or maximums.--
                  (A) In general.--A payment card network shall 
                not, directly or through any agent, processor, 
                or licensed member of the network, by contract, 
                requirement, condition, penalty, or otherwise, 
                inhibit the ability--
                          (i) of any person to set a minimum 
                        dollar value for the acceptance by that 
                        person of credit cards, to the extent 
                        that --
                                  (I) such minimum dollar value 
                                does not differentiate between 
                                issuers or between payment card 
                                networks; and
                                  (II) such minimum dollar 
                                value does not exceed $10.00; 
                                or
                          (ii) of any Federal agency or 
                        institution of higher education to set 
                        a maximum dollar value for the 
                        acceptance by that Federal agency or 
                        institution of higher education of 
                        credit cards, to the extent that such 
                        maximum dollar value does not 
                        differentiate between issuers or 
                        between payment card networks.
                  (B) Increase in minimum dollar amount.--The 
                Board may, by regulation prescribed pursuant to 
                section 553 of title 5, United States Code, 
                increase the amount of the dollar value listed 
                in subparagraph (A)(i)(II).
          (4) Rule of construction:.--No provision of this 
        subsection shall be construed to authorize any person--
                  (A) to discriminate between debit cards 
                within a payment card network on the basis of 
                the issuer that issued the debit card; or
                  (B) to discriminate between credit cards 
                within a payment card network on the basis of 
                the issuer that issued the credit card.
  (c) Definitions.--For purposes of this section, the following 
definitions shall apply:
          (1) Affiliate.--The term ``affiliate'' means any 
        company that controls, is controlled by, or is under 
        common control with another company.
          (2) Debit card.--The term ``debit card''--
                  (A) means any card, or other payment code or 
                device, issued or approved for use through a 
                payment card network to debit an asset account 
                (regardless of the purpose for which the 
                account is established), whether authorization 
                is based on signature, PIN, or other means;
                  (B) includes a general-use prepaid card, as 
                that term is defined in section 915(a)(2)(A); 
                and
                  (C) does not include paper checks.
          (3) Credit card.--The term ``credit card'' has the 
        same meaning as in section 103 of the Truth in Lending 
        Act.
          (4) Discount.--The term ``discount''--
                  (A) means a reduction made from the price 
                that customers are informed is the regular 
                price; and
                  (B) does not include any means of increasing 
                the price that customers are informed is the 
                regular price.
          (5) Electronic debit transaction.--The term 
        ``electronic debit transaction'' means a transaction in 
        which a person uses a debit card.
          (6) Federal agency.--The term ``Federal agency'' 
        means--
                  (A) an agency (as defined in section 101 of 
                title 31, United States Code); and
                  (B) a Government corporation (as defined in 
                section 103 of title 5, United States Code).
          (7) Institution of higher education.--The term 
        ``institution of higher education'' has the same 
        meaning as in 101 and 102 of the Higher Education Act 
        of 1965 (20 U.S.C. 1001, 1002).
          (8) Interchange transaction fee.--The term 
        ``interchange transaction fee'' means any fee 
        established, charged or received by a payment card 
        network for the purpose of compensating an issuer for 
        its involvement in an electronic debit transaction.
          (9) Issuer.--The term ``issuer'' means any person who 
        issues a debit card, or credit card, or the agent of 
        such person with respect to such card.
          (10) Network fee.--The term ``network fee'' means any 
        fee charged and received by a payment card network with 
        respect to an electronic debit transaction, other than 
        an interchange transaction fee.
          (11) Payment card network.--The term ``payment card 
        network'' means an entity that directly, or through 
        licensed members, processors, or agents, provides the 
        proprietary services, infrastructure, and software that 
        route information and data to conduct debit card or 
        credit card transaction authorization, clearance, and 
        settlement, and that a person uses in order to accept 
        as a form of payment a brand of debit card, credit card 
        or other device that may be used to carry out debit or 
        credit transactions.
  (d) Enforcement.--
          (1) In general.--Compliance with the requirements 
        imposed under this section shall be enforced under 
        section 918.
          (2) Exception.--Sections 916 and 917 shall not apply 
        with respect to this section or the requirements 
        imposed pursuant to this section.

Sec. [922.]  921. Relation to State laws

  This title does not annul, alter, or affect the laws of any 
State relating to electronic fund transfers, except to the 
extent that those laws are inconsistent with the provisions of 
this title, and then only to the extent of the inconsistency. A 
State law is not inconsistent with this title if the protection 
such law affords any consumer is greater than the protection 
afforded by this title. The [Bureau] Agency shall, upon its own 
motion or upon the request of any financial institution, State, 
or other interested party, submitted in accordance with 
procedures prescribed in regulations of the [Bureau] Agency, 
determine whether a State requirement is inconsistent or 
affords greater protection. If the [Bureau] Agency determines 
that a State requirement is inconsistent, financial 
institutions shall incur no liability under the law of the 
State for a good faith failure to comply with that law, 
notwithstanding that such determination is subsequently 
amended, rescinded, or determined by judicial or other 
authority to be invalid for any reason. This title does not 
extend the applicability of any such law to any class of 
persons or transactions to which it would not otherwise apply.

Sec. 922. Exemption for State regulation

  The [Bureau] Agency shall by regulation exempt from the 
requirements of this title any class of electronic fund 
transfers within any State if the [Bureau] Agency determines 
that under the law of that State that class of electronic fund 
transfers is subject to requirements substantially similar to 
those imposed by this title, and that there is adequate 
provision for enforcement.

Sec. [922.]  923. Effective date

  This title takes effect upon the expiration of eighteen 
months from the date of its enactment, except that sections 909 
and 911 take effect upon the expiration of ninety days after 
the date of enactment.
                              ----------                              


FAIR AND ACCURATE CREDIT TRANSACTIONS ACT OF 2003

           *       *       *       *       *       *       *



         TITLE V--FINANCIAL LITERACY AND EDUCATION IMPROVEMENT

SEC. 511. SHORT TITLE.

  This title may be cited as the ``Financial Literacy and 
Education Improvement Act''.

           *       *       *       *       *       *       *


SEC. 513. ESTABLISHMENT OF FINANCIAL LITERACY AND EDUCATION COMMISSION.

  (a) In General.--There is established a commission to be 
known as the ``Financial Literacy and Education Commission''.
  (b) Purpose.--The Commission shall serve to improve the 
financial literacy and education of persons in the United 
States through development of a national strategy to promote 
financial literacy and education.
  (c) Membership.--
          (1) Composition.--The Commission shall be composed 
        of--
                  (A) the Secretary of the Treasury;
                  (B) the respective head of each of the 
                Federal banking agencies (as defined in section 
                3 of the Federal Deposit Insurance Act), the 
                National Credit Union Administration, the 
                Securities and Exchange Commission, each of the 
                Departments of Education, Agriculture, Defense, 
                Health and Human Services, Housing and Urban 
                Development, Labor, and Veterans Affairs, the 
                Federal Trade Commission, the General Services 
                Administration, the Small Business 
                Administration, the Social Security 
                Administration, the Commodity Futures Trading 
                Commission, and the Office of Personnel 
                Management;
                  (C) the Director of the [Bureau] Agency of 
                Consumer Financial Protection; and
                  (D) at the discretion of the President, not 
                more than 5 individuals appointed by the 
                President from among the administrative heads 
                of any other Federal agencies, departments, or 
                other Federal Government entities, whom the 
                President determines to be engaged in a serious 
                effort to improve financial literacy and 
                education.
          (2) Alternates.--Each member of the Commission may 
        designate an alternate if the member is unable to 
        attend a meeting of the Commission. Such alternate 
        shall be an individual who exercises significant 
        decisionmaking authority.
  (d) Chairperson.--The Secretary of the Treasury shall serve 
as the Chairperson. The Director of the [Bureau] Agency of 
Consumer Financial Protection shall serve as the Vice Chairman.
  (e) Meetings.--The Commission shall hold, at the call of the 
Chairperson, at least 1 meeting every 4 months. All such 
meetings shall be open to the public. The Commission may hold, 
at the call of the Chairperson, such other meetings as the 
Chairperson sees fit to carry out this title.
  (f) Quorum.--A majority of the members of the Commission 
shall constitute a quorum, but a lesser number of members may 
hold hearings.
  (g) Initial Meeting.--The Commission shall hold its first 
meeting not later than 60 days after the date of enactment of 
this Act.

           *       *       *       *       *       *       *

                              ----------                              


FAIR CREDIT REPORTING ACT

           *       *       *       *       *       *       *



TITLE VI--CONSUMER CREDIT REPORTING

           *       *       *       *       *       *       *


Sec. 603. Definitions and rules of construction

  (a) Definitions and rules of construction set forth in this 
section are applicable for the purposes of this title.
  (b) The term ``person'' means any individual, partnership, 
corporation, trust, estate, cooperative, association, 
government or governmental subdivision or agency, or other 
entity.
  (c) The term ``consumer'' means an individual.
  (d) Consumer Report.--
          (1) In general.--The term ``consumer report'' means 
        any written, oral, or other communication of any 
        information by a consumer reporting agency bearing on a 
        consumer's credit worthiness, credit standing, credit 
        capacity, character, general reputation, personal 
        characteristics, or mode of living which is used or 
        expected to be used or collected in whole or in part 
        for the purpose of serving as a factor in establishing 
        the consumer's eligibility for--
                  (A) credit or insurance to be used primarily 
                for personal, family, or household purposes;
                  (B) employment purposes; or
                  (C) any other purpose authorized under 
                section 604.
          (2) Exclusions.--Except as provided in paragraph (3), 
        the term ``consumer report'' does not include--
                  (A) subject to section 624, any--
                          (i) report containing information 
                        solely as to transactions or 
                        experiences between the consumer and 
                        the person making the report;
                          (ii) communication of that 
                        information among persons related by 
                        common ownership or affiliated by 
                        corporate control; or
                          (iii) communication of other 
                        information among persons related by 
                        common ownership or affiliated by 
                        corporate control, if it is clearly and 
                        conspicuously disclosed to the consumer 
                        that the information may be 
                        communicated among such persons and the 
                        consumer is given the opportunity, 
                        before the time that the information is 
                        initially communicated, to direct that 
                        such information not be communicated 
                        among such persons;
                  (B) any authorization or approval of a 
                specific extension of credit directly or 
                indirectly by the issuer of a credit card or 
                similar device;
                  (C) any report in which a person who has been 
                requested by a third party to make a specific 
                extension of credit directly or indirectly to a 
                consumer conveys his or her decision with 
                respect to such request, if the third party 
                advises the consumer of the name and address of 
                the person to whom the request was made, and 
                such person makes the disclosures to the 
                consumer required under section 615; or
                  (D) a communication described in subsection 
                (o) or [(x)] (y).
          (3) Restriction on sharing of medical information.--
        Except for information or any communication of 
        information disclosed as provided in section 604(g)(3), 
        the exclusions in paragraph (2) shall not apply with 
        respect to information disclosed to any person related 
        by common ownership or affiliated by corporate control, 
        if the information is--
                  (A) medical information;
                  (B) an individualized list or description 
                based on the payment transactions of the 
                consumer for medical products or services; or
                  (C) an aggregate list of identified consumers 
                based on payment transactions for medical 
                products or services.
  (e) The term ``investigative consumer report'' means a 
consumer report or portion thereof in which information on a 
consumer's character, general reputation, personal 
characteristics, or mode of living is obtained through personal 
interviews with neighbors, friends, or associates of the 
consumer reported on or with others with whom he is acquainted 
or who may have knowledge concerning any such items of 
information. However, such information shall not include 
specific factual information on a consumer's credit record 
obtained directly from a creditor of the consumer or from a 
consumer reporting agency when such information was obtained 
directly from a creditor of the consumer or from the consumer.
  (f) The term ``consumer reporting agency'' means any person 
which, for monetary fees, dues, or on a cooperative nonprofit 
basis, regularly engages in whole or in part in the practice of 
assembling or evaluating consumer credit information or other 
information on consumers for the purpose of furnishing consumer 
reports to third parties, and which uses any means or facility 
of interstate commerce for the purpose of preparing or 
furnishing consumer reports.
  (g) The term ``file'', when used in connection with 
information on any consumer, means all of the information on 
that consumer recorded and retained by a consumer reporting 
agency regardless of how the information is stored.
  (h) The term ``employment purposes'' when used in connection 
with a consumer report means a report used for the purpose of 
evaluating a consumer for employment, promotion, reassignment 
or retention as an employee.
  (i) Medical Information.--The term ``medical information''--
          (1) means information or data, whether oral or 
        recorded, in any form or medium, created by or derived 
        from a health care provider or the consumer, that 
        relates to--
                  (A) the past, present, or future physical, 
                mental, or behavioral health or condition of an 
                individual;
                  (B) the provision of health care to an 
                individual; or
                  (C) the payment for the provision of health 
                care to an individual.
          (2) does not include the age or gender of a consumer, 
        demographic information about the consumer, including a 
        consumer's residence address or e-mail address, or any 
        other information about a consumer that does not relate 
        to the physical, mental, or behavioral health or 
        condition of a consumer, including the existence or 
        value of any insurance policy.
  (j) Definitions Relating to Child Support Obligations.--
          (1) Overdue support.--The term ``overdue support'' 
        has the meaning given to such term in section 466(e) of 
        the Social Security Act.
          (2) State or local child support enforcement 
        agency.--The term ``State or local child support 
        enforcement agency'' means a State or local agency 
        which administers a State or local program for 
        establishing and enforcing child support obligations.
  (k) Adverse Action.--
          (1) Actions included.--The term ``adverse action''--
                  (A) has the same meaning as in section 
                701(d)(6) of the Equal Credit Opportunity Act; 
                and
                  (B) means--
                          (i) a denial or cancellation of, an 
                        increase in any charge for, or a 
                        reduction or other adverse or 
                        unfavorable change in the terms of 
                        coverage or amount of, any insurance, 
                        existing or applied for, in connection 
                        with the underwriting of insurance;
                          (ii) a denial of employment or any 
                        other decision for employment purposes 
                        that adversely affects any current or 
                        prospective employee;
                          (iii) a denial or cancellation of, an 
                        increase in any charge for, or any 
                        other adverse or unfavorable change in 
                        the terms of, any license or benefit 
                        described in section 604(a)(3)(D); and
                          (iv) an action taken or determination 
                        that is--
                                  (I) made in connection with 
                                an application that was made 
                                by, or a transaction that was 
                                initiated by, any consumer, or 
                                in connection with a review of 
                                an account under section 
                                604(a)(3)(F)(ii); and
                                  (II) adverse to the interests 
                                of the consumer.
          (2) Applicable findings, decisions, commentary, and 
        orders.--For purposes of any determination of whether 
        an action is an adverse action under paragraph (1)(A), 
        all appropriate final findings, decisions, commentary, 
        and orders issued under section 701(d)(6) of the Equal 
        Credit Opportunity Act by the [Bureau] Agency or any 
        court shall apply.
  (l) Firm Offer of Credit or Insurance.--The term ``firm offer 
of credit or insurance'' means any offer of credit or insurance 
to a consumer that will be honored if the consumer is 
determined, based on information in a consumer report on the 
consumer, to meet the specific criteria used to select the 
consumer for the offer, except that the offer may be further 
conditioned on one or more of the following:
          (1) The consumer being determined, based on 
        information in the consumer's application for the 
        credit or insurance, to meet specific criteria bearing 
        on credit worthiness or insurability, as applicable, 
        that are established--
                  (A) before selection of the consumer for the 
                offer; and
                  (B) for the purpose of determining whether to 
                extend credit or insurance pursuant to the 
                offer.
          (2) Verification--
                  (A) that the consumer continues to meet the 
                specific criteria used to select the consumer 
                for the offer, by using information in a 
                consumer report on the consumer, information in 
                the consumer's application for the credit or 
                insurance, or other information bearing on the 
                credit worthiness or insurability of the 
                consumer; or
                  (B) of the information in the consumer's 
                application for the credit or insurance, to 
                determine that the consumer meets the specific 
                criteria bearing on credit worthiness or 
                insurability.
          (3) The consumer furnishing any collateral that is a 
        requirement for the extension of the credit or 
        insurance that was--
                  (A) established before selection of the 
                consumer for the offer of credit or insurance; 
                and
                  (B) disclosed to the consumer in the offer of 
                credit or insurance.
  (m) Credit or Insurance Transaction That Is Not Initiated by 
the Consumer.--The term ``credit or insurance transaction that 
is not initiated by the consumer'' does not include the use of 
a consumer report by a person with which the consumer has an 
account or insurance policy, for purposes of--
          (1) reviewing the account or insurance policy; or
          (2) collecting the account.
  (n) State.--The term ``State'' means any State, the 
Commonwealth of Puerto Rico, the District of Columbia, and any 
territory or possession of the United States.
  (o) Excluded Communications.--A communication is described in 
this subsection if it is a communication--
          (1) that, but for subsection (d)(2)(D), would be an 
        investigative consumer report;
          (2) that is made to a prospective employer for the 
        purpose of--
                  (A) procuring an employee for the employer; 
                or
                  (B) procuring an opportunity for a natural 
                person to work for the employer;
          (3) that is made by a person who regularly performs 
        such procurement;
          (4) that is not used by any person for any purpose 
        other than a purpose described in subparagraph (A) or 
        (B) of paragraph (2); and
          (5) with respect to which--
                  (A) the consumer who is the subject of the 
                communication--
                          (i) consents orally or in writing to 
                        the nature and scope of the 
                        communication, before the collection of 
                        any information for the purpose of 
                        making the communication;
                          (ii) consents orally or in writing to 
                        the making of the communication to a 
                        prospective employer, before the making 
                        of the communication; and
                          (iii) in the case of consent under 
                        clause (i) or (ii) given orally, is 
                        provided written confirmation of that 
                        consent by the person making the 
                        communication, not later than 3 
                        business days after the receipt of the 
                        consent by that person;
                  (B) the person who makes the communication 
                does not, for the purpose of making the 
                communication, make any inquiry that if made by 
                a prospective employer of the consumer who is 
                the subject of the communication would violate 
                any applicable Federal or State equal 
                employment opportunity law or regulation; and
                  (C) the person who makes the communication--
                          (i) discloses in writing to the 
                        consumer who is the subject of the 
                        communication, not later than 5 
                        business days after receiving any 
                        request from the consumer for such 
                        disclosure, the nature and substance of 
                        all information in the consumer's file 
                        at the time of the request, except that 
                        the sources of any information that is 
                        acquired solely for use in making the 
                        communication and is actually used for 
                        no other purpose, need not be disclosed 
                        other than under appropriate discovery 
                        procedures in any court of competent 
                        jurisdiction in which an action is 
                        brought; and
                          (ii) notifies the consumer who is the 
                        subject of the communication, in 
                        writing, of the consumer's right to 
                        request the information described in 
                        clause (i).
  (p) Consumer Reporting Agency That Compiles and Maintains 
Files on Consumers on a Nationwide Basis.--The term ``consumer 
reporting agency that compiles and maintains files on consumers 
on a nationwide basis'' means a consumer reporting agency that 
regularly engages in the practice of assembling or evaluating, 
and maintaining, for the purpose of furnishing consumer reports 
to third parties bearing on a consumer's credit worthiness, 
credit standing, or credit capacity, each of the following 
regarding consumers residing nationwide:
          (1) Public record information.
          (2) Credit account information from persons who 
        furnish that information regularly and in the ordinary 
        course of business.
  (q) Definitions Relating to Fraud Alerts.--
          (1) Active duty military consumer.--The term ``active 
        duty military consumer'' means a consumer in military 
        service who--
                  (A) is on active duty (as defined in section 
                101(d)(1) of title 10, United States Code) or 
                is a reservist performing duty under a call or 
                order to active duty under a provision of law 
                referred to in section 101(a)(13) of title 10, 
                United States Code; and
                  (B) is assigned to service away from the 
                usual duty station of the consumer.
          (2) Fraud alert; active duty alert.--The terms 
        ``fraud alert'' and ``active duty alert'' mean a 
        statement in the file of a consumer that--
                  (A) notifies all prospective users of a 
                consumer report relating to the consumer that 
                the consumer may be a victim of fraud, 
                including identity theft, or is an active duty 
                military consumer, as applicable; and
                  (B) is presented in a manner that facilitates 
                a clear and conspicuous view of the statement 
                described in subparagraph (A) by any person 
                requesting such consumer report.
          (3) Identity theft.--The term ``identity theft'' 
        means a fraud committed using the identifying 
        information of another person, subject to such further 
        definition as the [Bureau] Agency may prescribe, by 
        regulation.
          (4) Identity theft report.--The term ``identity theft 
        report'' has the meaning given that term by rule of the 
        [Bureau] Agency, and means, at a minimum, a report--
                  (A) that alleges an identity theft;
                  (B) that is a copy of an official, valid 
                report filed by a consumer with an appropriate 
                Federal, State, or local law enforcement 
                agency, including the United States Postal 
                Inspection Service, or such other government 
                agency deemed appropriate by the [Bureau] 
                Agency; and
                  (C) the filing of which subjects the person 
                filing the report to criminal penalties 
                relating to the filing of false information if, 
                in fact, the information in the report is 
                false.
          (5) New credit plan.--The term ``new credit plan'' 
        means a new account under an open end credit plan (as 
        defined in section [103(i)] 103(j) of the Truth in 
        Lending Act) or a new credit transaction not under an 
        open end credit plan.
  (r) Credit and Debit Related Terms--
          (1) Card issuer.--The term ``card issuer'' means--
                  (A) a credit card issuer, in the case of a 
                credit card; and
                  (B) a debit card issuer, in the case of a 
                debit card.
          (2) Credit card.--The term ``credit card'' has the 
        same meaning as in section 103 of the Truth in Lending 
        Act.
          (3) Debit card.--The term ``debit card'' means any 
        card issued by a financial institution to a consumer 
        for use in initiating an electronic fund transfer from 
        the account of the consumer at such financial 
        institution, for the purpose of transferring money 
        between accounts or obtaining money, property, labor, 
        or services.
          (4) Account and electronic fund transfer.--The terms 
        ``account'' and ``electronic fund transfer'' have the 
        same meanings as in section 903 of the Electronic Fund 
        Transfer Act.
          (5) Credit and creditor.--The terms ``credit'' and 
        ``creditor'' have the same meanings as in section 702 
        of the Equal Credit Opportunity Act.
  (s) Federal Banking Agency.--The term ``Federal banking 
agency'' has the same meaning as in section 3 of the Federal 
Deposit Insurance Act.
  (t) Financial Institution.--The term ``financial 
institution'' means a State or National bank, a State or 
Federal savings and loan association, a mutual savings bank, a 
State or Federal credit union, or any other person that, 
directly or indirectly, holds a transaction account (as defined 
in section 19(b) of the Federal Reserve Act) belonging to a 
consumer.
  (u) Reseller.--The term ``reseller'' means a consumer 
reporting agency that--
          (1) assembles and merges information contained in the 
        database of another consumer reporting agency or 
        multiple consumer reporting agencies concerning any 
        consumer for purposes of furnishing such information to 
        any third party, to the extent of such activities; and
          (2) does not maintain a database of the assembled or 
        merged information from which new consumer reports are 
        produced.
  (v) Commission.--The term ``Commission'' means the [Bureau] 
Federal Trade Commission.
  [(w) The term ``Bureau'' means the Bureau of Consumer 
Financial Protection.]
  (w) Agency.--The term ``Agency'' means the Consumer Law 
Enforcement Agency.
  (x) Nationwide Specialty Consumer Reporting Agency.--The term 
``nationwide specialty consumer reporting agency'' means a 
consumer reporting agency that compiles and maintains files on 
consumers on a nationwide basis relating to--
          (1) medical records or payments;
          (2) residential or tenant history;
          (3) check writing history;
          (4) employment history; or
          (5) insurance claims.
  (y) Exclusion of Certain Communications for Employee 
Investigations.--
          (1) Communications described in this subsection.--A 
        communication is described in this subsection if--
                  (A) but for subsection (d)(2)(D), the 
                communication would be a consumer report;
                  (B) the communication is made to an employer 
                in connection with an investigation of--
                          (i) suspected misconduct relating to 
                        employment; or
                          (ii) compliance with Federal, State, 
                        or local laws and regulations, the 
                        rules of a self-regulatory 
                        organization, or any preexisting 
                        written policies of the employer;
                  (C) the communication is not made for the 
                purpose of investigating a consumer's credit 
                worthiness, credit standing, or credit 
                capacity; and
                  (D) the communication is not provided to any 
                person except--
                          (i) to the employer or an agent of 
                        the employer;
                          (ii) to any Federal or State officer, 
                        agency, or department, or any officer, 
                        agency, or department of a unit of 
                        general local government;
                          (iii) to any self-regulatory 
                        organization with regulatory authority 
                        over the activities of the employer or 
                        employee;
                          (iv) as otherwise required by law; or
                          (v) pursuant to section 608.
          (2) Subsequent disclosure.--After taking any adverse 
        action based in whole or in part on a communication 
        described in paragraph (1), the employer shall disclose 
        to the consumer a summary containing the nature and 
        substance of the communication upon which the adverse 
        action is based, except that the sources of information 
        acquired solely for use in preparing what would be but 
        for subsection (d)(2)(D) an investigative consumer 
        report need not be disclosed.
          (3) Self-regulatory organization defined.--For 
        purposes of this subsection, the term ``self-regulatory 
        organization'' includes any self-regulatory 
        organization (as defined in section 3(a)(26) of the 
        Securities Exchange Act of 1934), any entity 
        established under title I of the Sarbanes-Oxley Act of 
        2002, any board of trade designated by the Commodity 
        Futures Trading Commission, and any futures association 
        registered with such Commission.

Sec. 604. Permissible purposes of reports

  (a) In General.--Subject to subsection (c), any consumer 
reporting agency may furnish a consumer report under the 
following circumstances and no other:
          (1) In response to the order of a court having 
        jurisdiction to issue such an order, or a subpoena 
        issued in connection with proceedings before a Federal 
        grand jury.
          (2) In accordance with the written instructions of 
        the consumer to whom it relates.
          (3) To a person which it has reason to believe--
                  (A) intends to use the information in 
                connection with a credit transaction involving 
                the consumer on whom the information is to be 
                furnished and involving the extension of credit 
                to, or review or collection of an account of, 
                the consumer; or
                  (B) intends to use the information for 
                employment purposes; or
                  (C) intends to use the information in 
                connection with the underwriting of insurance 
                involving the consumer; or
                  (D) intends to use the information in 
                connection with a determination of the 
                consumer's eligibility for a license or other 
                benefit granted by a governmental 
                instrumentality required by law to consider an 
                applicant's financial responsibility or status; 
                or
                  (E) intends to use the information, as a 
                potential investor or servicer, or current 
                insurer, in connection with a valuation of, or 
                an assessment of the credit or prepayment risks 
                associated with, an existing credit obligation; 
                or
                  (F) otherwise has a legitimate business need 
                for the information--
                          (i) in connection with a business 
                        transaction that is initiated by the 
                        consumer; or
                          (ii) to review an account to 
                        determine whether the consumer 
                        continues to meet the terms of the 
                        account.
                  (G) executive departments and agencies in 
                connection with the issuance of government-
                sponsored individually-billed travel charge 
                cards.
          (4) In response to a request by the head of a State 
        or local child support enforcement agency (or a State 
        or local government official authorized by the head of 
        such an agency), if the person making the request 
        certifies to the consumer reporting agency that--
                  (A) the consumer report is needed for the 
                purpose of establishing an individual's 
                capacity to make child support payments, 
                determining the appropriate level of such 
                payments, or enforcing a child support order, 
                award, agreement, or judgment;
                  (B) the parentage of the consumer for the 
                child to which the obligation relates has been 
                established or acknowledged by the consumer in 
                accordance with State laws under which the 
                obligation arises (if required by those laws); 
                and
                  (C) the consumer report will be kept 
                confidential, will be used solely for a purpose 
                described in subparagraph (A), and will not be 
                used in connection with any other civil, 
                administrative, or criminal proceeding, or for 
                any other purpose.
          (5) To an agency administering a State plan under 
        section 454 of the Social Security Act (42 U.S.C. 654) 
        for use to set an initial or modified child support 
        award.
          (6) To the Federal Deposit Insurance Corporation or 
        the National Credit Union Administration as part of its 
        preparation for its appointment or as part of its 
        exercise of powers, as conservator, receiver, or 
        liquidating agent for an insured depository institution 
        or insured credit union under the Federal Deposit 
        Insurance Act or the Federal Credit Union Act, or other 
        applicable Federal or State law, or in connection with 
        the resolution or liquidation of a failed or failing 
        insured depository institution or insured credit union, 
        as applicable.
  (b) Conditions for Furnishing and Using Consumer Reports for 
Employment Purposes.--
          (1) Certification from user.--A consumer reporting 
        agency may furnish a consumer report for employment 
        purposes only if--
                  (A) the person who obtains such report from 
                the agency certifies to the agency that--
                          (i) the person has complied with 
                        paragraph (2) with respect to the 
                        consumer report, and the person will 
                        comply with paragraph (3) with respect 
                        to the consumer report if paragraph (3) 
                        becomes applicable; and
                          (ii) information from the consumer 
                        report will not be used in violation of 
                        any applicable Federal or State equal 
                        employment opportunity law or 
                        regulation; and
                  (B) the consumer reporting agency provides 
                with the report, or has previously provided, a 
                summary of the consumer's rights under this 
                title, as prescribed by the [Bureau] Agency 
                under [section 609(c)(3)] section 609(c).
          (2) Disclosure to consumer.--
                  (A) In general.--Except as provided in 
                subparagraph (B), a person may not procure a 
                consumer report, or cause a consumer report to 
                be procured, for employment purposes with 
                respect to any consumer, unless--
                          (i) a clear and conspicuous 
                        disclosure has been made in writing to 
                        the consumer at any time before the 
                        report is procured or caused to be 
                        procured, in a document that consists 
                        solely of the disclosure, that a 
                        consumer report may be obtained for 
                        employment purposes; and
                          (ii) the consumer has authorized in 
                        writing (which authorization may be 
                        made on the document referred to in 
                        clause (i)) the procurement of the 
                        report by that person.
                  (B) Application by mail, telephone, computer, 
                or other similar means.--If a consumer 
                described in subparagraph (C) applies for 
                employment by mail, telephone, computer, or 
                other similar means, at any time before a 
                consumer report is procured or caused to be 
                procured in connection with that application--
                          (i) the person who procures the 
                        consumer report on the consumer for 
                        employment purposes shall provide to 
                        the consumer, by oral, written, or 
                        electronic means, notice that a 
                        consumer report may be obtained for 
                        employment purposes, and a summary of 
                        the consumer's rights under [section 
                        615(a)(3)] section 615(a)(4); and
                          (ii) the consumer shall have 
                        consented, orally, in writing, or 
                        electronically to the procurement of 
                        the report by that person.
                  (C) Scope.--Subparagraph (B) shall apply to a 
                person procuring a consumer report on a 
                consumer in connection with the consumer's 
                application for employment only if--
                          (i) the consumer is applying for a 
                        position over which the Secretary of 
                        Transportation has the power to 
                        establish qualifications and maximum 
                        hours of service pursuant to the 
                        provisions of section 31502 of title 
                        49, or a position subject to safety 
                        regulation by a State transportation 
                        agency; and
                          (ii) as of the time at which the 
                        person procures the report or causes 
                        the report to be procured the only 
                        interaction between the consumer and 
                        the person in connection with that 
                        employment application has been by 
                        mail, telephone, computer, or other 
                        similar means.
          (3) Conditions on use for adverse actions.--
                  (A) In general.--Except as provided in 
                subparagraph (B), in using a consumer report 
                for employment purposes, before taking any 
                adverse action based in whole or in part on the 
                report, the person intending to take such 
                adverse action shall provide to the consumer to 
                whom the report relates--
                          (i) a copy of the report; and
                          (ii) a description in writing of the 
                        rights of the consumer under this 
                        title, as prescribed by the [Bureau] 
                        Agency under [section 609(c)(3)] 
                        section 609(c).
                  (B) Application by mail, telephone, computer, 
                or other similar means.--
                          (i) If a consumer described in 
                        subparagraph (C) applies for employment 
                        by mail, telephone, computer, or other 
                        similar means, and if a person who has 
                        procured a consumer report on the 
                        consumer for employment purposes takes 
                        adverse action on the employment 
                        application based in whole or in part 
                        on the report, then the person must 
                        provide to the consumer to whom the 
                        report relates, in lieu of the notices 
                        required under subparagraph (A) of this 
                        section and under section 615(a), 
                        within 3 business days of taking such 
                        action, an oral, written or electronic 
                        notification--
                                  (I) that adverse action has 
                                been taken based in whole or in 
                                part on a consumer report 
                                received from a consumer 
                                reporting agency;
                                  (II) of the name, address and 
                                telephone number of the 
                                consumer reporting agency that 
                                furnished the consumer report 
                                (including a toll-free 
                                telephone number established by 
                                the agency if the agency 
                                compiles and maintains files on 
                                consumers on a nationwide 
                                basis);
                                  (III) that the consumer 
                                reporting agency did not make 
                                the decision to take the 
                                adverse action and is unable to 
                                provide to the consumer the 
                                specific reasons why the 
                                adverse action was taken; and
                                  (IV) that the consumer may, 
                                upon providing proper 
                                identification, request a free 
                                copy of a report and may 
                                dispute with the consumer 
                                reporting agency the accuracy 
                                or completeness of any 
                                information in a report.
                          (ii) If, under [clause (B)(i)(IV)] 
                        clause (i)(IV), the consumer requests a 
                        copy of a consumer report from the 
                        person who procured the report, then, 
                        within 3 business days of receiving the 
                        consumer's request, together with 
                        proper identification, the person must 
                        send or provide to the consumer a copy 
                        of a report and a copy of the 
                        consumer's rights as prescribed by the 
                        [Bureau] Agency under [section 
                        609(c)(3)] section 609(c).
                  (C) Scope.--Subparagraph (B) shall apply to a 
                person procuring a consumer report on a 
                consumer in connection with the consumer's 
                application for employment only if--
                          (i) the consumer is applying for a 
                        position over which the Secretary of 
                        Transportation has the power to 
                        establish qualifications and maximum 
                        hours of service pursuant to the 
                        provisions of section 31502 of title 
                        49, or a position subject to safety 
                        regulation by a State transportation 
                        agency; and
                          (ii) as of the time at which the 
                        person procures the report or causes 
                        the report to be procured the only 
                        interaction between the consumer and 
                        the person in connection with that 
                        employment application has been by 
                        mail, telephone, computer, or other 
                        similar means.
          (4) Exception for national security investigations.--
                  (A) In general.--In the case of an agency or 
                department of the United States Government 
                which seeks to obtain and use a consumer report 
                for employment purposes, paragraph (3) shall 
                not apply to any adverse action by such agency 
                or department which is based in part on such 
                consumer report, if the head of such agency or 
                department makes a written finding that--
                          (i) the consumer report is relevant 
                        to a national security investigation of 
                        such agency or department;
                          (ii) the investigation is within the 
                        jurisdiction of such agency or 
                        department; and
                          (iii) there is reason to believe that 
                        compliance with paragraph (3) will--
                                  (I) endanger the life or 
                                physical safety of any person;
                                  (II) result in flight from 
                                prosecution;
                                  (III) result in the 
                                destruction of, or tampering 
                                with, evidence relevant to the 
                                investigation;
                                  (IV) result in the 
                                intimidation of a potential 
                                witness relevant to the 
                                investigation;
                                  (V) result in the compromise 
                                of classified information; or
                                  (VI) otherwise seriously 
                                jeopardize or unduly delay the 
                                investigation or another 
                                official proceeding.
                  (B) Notification of consumer upon conclusion 
                of investigation.--Upon the conclusion of a 
                national security investigation described in 
                subparagraph (A), or upon the determination 
                that the exception under subparagraph (A) is no 
                longer required for the reasons set forth in 
                such subparagraph, the official exercising the 
                authority in such subparagraph shall provide to 
                the consumer who is the subject of the consumer 
                report with regard to which such finding was 
                made--
                          (i) a copy of such consumer report 
                        with any classified information 
                        redacted as necessary;
                          (ii) notice of any adverse action 
                        which is based, in part, on the 
                        consumer report; and
                          (iii) the identification with 
                        reasonable specificity of the nature of 
                        the investigation for which the 
                        consumer report was sought.
                  (C) Delegation by head of agency or 
                department.--For purposes of subparagraphs (A) 
                and (B), the head of any agency or department 
                of the United States Government may delegate 
                his or her authorities under this paragraph to 
                an official of such agency or department who 
                has personnel security responsibilities and is 
                a member of the Senior Executive Service or 
                equivalent civilian or military rank.
                  (D) Definitions.--For purposes of this 
                paragraph, the following definitions shall 
                apply:
                          (i) Classified information.--The term 
                        ``classified information'' means 
                        information that is protected from 
                        unauthorized disclosure under Executive 
                        Order No. 12958 or successor orders.
                          (ii) National security 
                        investigation.--The term ``national 
                        security investigation'' means any 
                        official inquiry by an agency or 
                        department of the United States 
                        Government to determine the eligibility 
                        of a consumer to receive access or 
                        continued access to classified 
                        information or to determine whether 
                        classified information has been lost or 
                        compromised.
  (c) Furnishing Reports in Connection With Credit or Insurance 
Transactions That Are Not Initiated by the Consumer.--
          (1) In general.--A consumer reporting agency may 
        furnish a consumer report relating to any consumer 
        pursuant to subparagraph (A) or (C) of subsection 
        (a)(3) in connection with any credit or insurance 
        transaction that is not initiated by the consumer only 
        if--
                  (A) the consumer authorizes the agency to 
                provide such report to such person; or
                  (B)(i) the transaction consists of a firm 
                offer of credit or insurance;
                  (ii) the consumer reporting agency has 
                complied with subsection (e);
                  (iii) there is not in effect an election by 
                the consumer, made in accordance with 
                subsection (e), to have the consumer's name and 
                address excluded from lists of names provided 
                by the agency pursuant to this paragraph; and
                  (iv) the consumer report does not contain a 
                date of birth that shows that the consumer has 
                not attained the age of 21, or, if the date of 
                birth on the consumer report shows that the 
                consumer has not attained the age of 21, such 
                consumer consents to the consumer reporting 
                agency to such furnishing.
          (2) Limits on information received under paragraph 
        (1)(b).--A person may receive pursuant to paragraph 
        (1)(B) only--
                  (A) the name and address of a consumer;
                  (B) an identifier that is not unique to the 
                consumer and that is used by the person solely 
                for the purpose of verifying the identity of 
                the consumer; and
                  (C) other information pertaining to a 
                consumer that does not identify the 
                relationship or experience of the consumer with 
                respect to a particular creditor or other 
                entity.
          (3) Information regarding inquiries.--Except as 
        provided in section 609(a)(5), a consumer reporting 
        agency shall not furnish to any person a record of 
        inquiries in connection with a credit or insurance 
        transaction that is not initiated by a consumer.
  (d) Reserved.--
  (e) Election of Consumer To Be Excluded From Lists.--
          (1) In general.--A consumer may elect to have the 
        consumer's name and address excluded from any list 
        provided by a consumer reporting agency under 
        subsection (c)(1)(B) in connection with a credit or 
        insurance transaction that is not initiated by the 
        consumer by notifying the agency in accordance with 
        paragraph (2) that the consumer does not consent to any 
        use of a consumer report relating to the consumer in 
        connection with any credit or insurance transaction 
        that is not initiated by the consumer.
          (2) Manner of notification.--A consumer shall notify 
        a consumer reporting agency under paragraph (1)--
                  (A) through the notification system 
                maintained by the agency under paragraph (5); 
                or
                  (B) by submitting to the agency a signed 
                notice of election form issued by the agency 
                for purposes of this subparagraph.
          (3) Response of agency after notification through 
        system.--Upon receipt of notification of the election 
        of a consumer under paragraph (1) through the 
        notification system maintained by the agency under 
        paragraph (5), a consumer reporting agency shall--
                  (A) inform the consumer that the election is 
                effective only for the 5-year period following 
                the election if the consumer does not submit to 
                the agency a signed notice of election form 
                issued by the agency for purposes of paragraph 
                (2)(B); and
                  (B) provide to the consumer a notice of 
                election form, if requested by the consumer, 
                not later than 5 business days after receipt of 
                the notification of the election through the 
                system established under paragraph (5), in the 
                case of a request made at the time the consumer 
                provides notification through the system.
          (4) Effectiveness of election.--An election of a 
        consumer under paragraph (1)--
                  (A) shall be effective with respect to a 
                consumer reporting agency beginning 5 business 
                days after the date on which the consumer 
                notifies the agency in accordance with 
                paragraph (2);
                  (B) shall be effective with respect to a 
                consumer reporting agency--
                          (i) subject to subparagraph (C), 
                        during the 5-year period beginning 5 
                        business days after the date on which 
                        the consumer notifies the agency of the 
                        election, in the case of an election 
                        for which a consumer notifies the 
                        agency only in accordance with 
                        paragraph (2)(A); or
                          (ii) until the consumer notifies the 
                        agency under subparagraph (C), in the 
                        case of an election for which a 
                        consumer notifies the agency in 
                        accordance with paragraph (2)(B);
                  (C) shall not be effective after the date on 
                which the consumer notifies the agency, through 
                the notification system established by the 
                agency under paragraph (5), that the election 
                is no longer effective; and
                  (D) shall be effective with respect to each 
                affiliate of the agency.
          (5) Notification system.--
                  (A) In general.--Each consumer reporting 
                agency that, under subsection (c)(1)(B), 
                furnishes a consumer report in connection with 
                a credit or insurance transaction that is not 
                initiated by a consumer shall--
                          (i) establish and maintain a 
                        notification system, including a toll-
                        free telephone number, which permits 
                        any consumer whose consumer report is 
                        maintained by the agency to notify the 
                        agency, with appropriate 
                        identification, of the consumer's 
                        election to have the consumer's name 
                        and address excluded from any such list 
                        of names and addresses provided by the 
                        agency for such a transaction; and
                          (ii) publish by not later than 365 
                        days after the date of enactment of the 
                        Consumer Credit Reporting Reform Act of 
                        1996, and not less than annually 
                        thereafter, in a publication of general 
                        circulation in the area served by the 
                        agency--
                                  (I) a notification that 
                                information in consumer files 
                                maintained by the agency may be 
                                used in connection with such 
                                transactions; and
                                  (II) the address and toll-
                                free telephone number for 
                                consumers to use to notify the 
                                agency of the consumer's 
                                election under clause (i).
                  (B) Establishment and maintenance as 
                compliance.--Establishment and maintenance of a 
                notification system (including a toll-free 
                telephone number) and publication by a consumer 
                reporting agency on the agency's own behalf and 
                on behalf of any of its affiliates in 
                accordance with this paragraph is deemed to be 
                compliance with this paragraph by each of those 
                affiliates.
          (6) Notification system by agencies that operate 
        nationwide.--Each consumer reporting agency that 
        compiles and maintains files on consumers on a 
        nationwide basis shall establish and maintain a 
        notification system for purposes of paragraph (5) 
        jointly with other such consumer reporting agencies.
  (f) Certain Use or Obtaining of Information Prohibited.--A 
person shall not use or obtain a consumer report for any 
purpose unless--
          (1) the consumer report is obtained for a purpose for 
        which the consumer report is authorized to be furnished 
        under this section; and
          (2) the purpose is certified in accordance with 
        section 607 by a prospective user of the report through 
        a general or specific certification.
  (g) Protection of Medical Information.--
          (1) Limitation on consumer reporting agencies.--A 
        consumer reporting agency shall not furnish for 
        employment purposes, or in connection with a credit or 
        insurance transaction, a consumer report that contains 
        medical information (other than medical contact 
        information treated in the manner required under 
        section 605(a)(6)) about a consumer, unless--
                  (A) if furnished in connection with an 
                insurance transaction, the consumer 
                affirmatively consents to the furnishing of the 
                report;
                  (B) if furnished for employment purposes or 
                in connection with a credit transaction--
                          (i) the information to be furnished 
                        is relevant to process or effect the 
                        employment or credit transaction; and
                          (ii) the consumer provides specific 
                        written consent for the furnishing of 
                        the report that describes in clear and 
                        conspicuous language the use for which 
                        the information will be furnished; or
                  (C) the information to be furnished pertains 
                solely to transactions, accounts, or balances 
                relating to debts arising from the receipt of 
                medical services, products, or devises, where 
                such information, other than account status or 
                amounts, is restricted or reported using codes 
                that do not identify, or do not provide 
                information sufficient to infer, the specific 
                provider or the nature of such services, 
                products, or devices, as provided in section 
                605(a)(6).
          (2) Limitation on creditors.--Except as permitted 
        pursuant to paragraph (3)(C) or regulations prescribed 
        under paragraph (5)(A), a creditor shall not obtain or 
        use medical information (other than medical information 
        treated in the manner required under section 605(a)(6)) 
        pertaining to a consumer in connection with any 
        determination of the consumer's eligibility, or 
        continued eligibility, for credit.
          (3) Actions authorized by federal law, insurance 
        activities and regulatory determinations.--Section 
        603(d)(3) shall not be construed so as to treat 
        information or any communication of information as a 
        consumer report if the information or communication is 
        disclosed--
                  (A) in connection with the business of 
                insurance or annuities, including the 
                activities described in section 18B of the 
                model Privacy of Consumer Financial and Health 
                Information Regulation issued by the National 
                Association of Insurance Commissioners (as in 
                effect on January 1, 2003);
                  (B) for any purpose permitted without 
                authorization under the Standards for 
                Individually Identifiable Health Information 
                promulgated by the Department of Health and 
                Human Services pursuant to the Health Insurance 
                Portability and Accountability Act of 1996, or 
                referred to under section 1179 of such Act, or 
                described in section 502(e) of Public Law 106-
                102; or
                  (C) as otherwise determined to be necessary 
                and appropriate, by regulation or order, by the 
                [Bureau] Agency or the applicable State 
                insurance authority (with respect to any person 
                engaged in providing insurance or annuities).
          (4) Limitation on redisclosure of medical 
        information.--Any person that receives medical 
        information pursuant to paragraph (1) or (3) shall not 
        disclose such information to any other person, except 
        as necessary to carry out the purpose for which the 
        information was initially disclosed, or as otherwise 
        permitted by statute, regulation, or order.
          (5) Regulations and effective date for [paragraph 
        (2).--]
                  [(A) Regulations required.--The Bureau] 
                paragraph (2)._The Agency may, after notice and 
                opportunity for comment, prescribe regulations 
                that permit transactions under paragraph (2) 
                that are determined to be necessary and 
                appropriate to protect legitimate operational, 
                transactional, risk, consumer, and other needs 
                (and which shall include permitting actions 
                necessary for administrative verification 
                purposes), consistent with the intent of 
                paragraph (2) to restrict the use of medical 
                information for inappropriate purposes.
          (6) Coordination with other laws.--No provision of 
        this subsection shall be construed as altering, 
        affecting, or superseding the applicability of any 
        other provision of Federal law relating to medical 
        confidentiality.

Sec. 605. Requirements relating to information contained in consumer 
                    reports

  (a) Information Excluded From Consumer Reports.--Except as 
authorized under subsection (b), no consumer reporting agency 
may make any consumer report containing any of the following 
items of information:
  (1) Cases under title 11 of the United States Code or under 
the Bankruptcy Act that, from the date of entry of the order 
for relief or the date of adjudication, as the case may be, 
antedate the report by more than 10 years.
  (2) Civil suits, civil judgments, and records of arrest that, 
from date of entry, antedate the report by more than seven 
years or until the governing statute of limitations has 
expired, whichever is the longer period.
  (3) Paid tax liens which, from date of payment, antedate the 
report by more than seven years.
  (4) Accounts placed for collection or charged to profit and 
loss which antedate the report by more than seven years.
  (5) Any other adverse item of information, other than records 
of convictions of crimes which antedates the report by more 
than seven years.
          (6) The name, address, and telephone number of any 
        medical information furnisher that has notified the 
        agency of its status, unless--
                  (A) such name, address, and telephone number 
                are restricted or reported using codes that do 
                not identify, or provide information sufficient 
                to infer, the specific provider or the nature 
                of such services, products, or devices to a 
                person other than the consumer; or
                  (B) the report is being provided to an 
                insurance company for a purpose relating to 
                engaging in the business of insurance other 
                than property and casualty insurance.
  (b) The provisions of paragraphs (1) through (5) of 
subsection (a) are not applicable in the case of any consumer 
credit report to be used in connection with--
          (1) a credit transaction involving, or which may 
        reasonably be expected to involve, a principal amount 
        of $150,000 or more;
          (2) the underwriting of life insurance involving, or 
        which may reasonably be expected to involve, a face 
        amount of $150,000 or more; or
          (3) the employment of any individual at an annual 
        salary which equals, or which may reasonably be 
        expected to equal $75,000, or more.
  (c) Running of Reporting Period.--
          (1) In general.--The 7-year period referred to in 
        paragraphs (4) and (6) of subsection (a) shall begin, 
        with respect to any delinquent account that is placed 
        for collection (internally or by referral to a third 
        party, whichever is earlier), charged to profit and 
        loss, or subjected to any similar action, upon the 
        expiration of the 180-day period beginning on the date 
        of the commencement of the delinquency which 
        immediately preceded the collection activity, charge to 
        profit and loss, or similar action.
          (2) Effective date.--Paragraph (1) shall apply only 
        to items of information added to the file of a consumer 
        on or after the date that is 455 days after the date of 
        enactment of the Consumer Credit Reporting Reform Act 
        of 1996.
  (d) Information Required To Be Disclosed.--
          (1) Title 11 information.--Any consumer reporting 
        agency that furnishes a consumer report that contains 
        information regarding any case involving the consumer 
        that arises under title 11, United States Code, shall 
        include in the report an identification of the chapter 
        of such title 11 under which such case arises if 
        provided by the source of the information. If any case 
        arising or filed under title 11, United States Code, is 
        withdrawn by the consumer before a final judgment, the 
        consumer reporting agency shall include in the report 
        that such case or filing was withdrawn upon receipt of 
        documentation certifying such withdrawal.
          (2) Key factor in credit score information.--Any 
        consumer reporting agency that furnishes a consumer 
        report that contains any credit score or any other risk 
        score or predictor on any consumer shall include in the 
        report a clear and conspicuous statement that a key 
        factor (as defined in section 609(f)(2)(B)) that 
        adversely affected such score or predictor was the 
        number of enquiries, if such a predictor was in fact a 
        key factor that adversely affected such score. This 
        paragraph shall not apply to a check services company, 
        acting as such, which issues authorizations for the 
        purpose of approving or processing negotiable 
        instruments, electronic fund transfers, or similar 
        methods of payments, but only to the extent that such 
        company is engaged in such activities.
  (e) Indication of Closure of Account by Consumer.--If a 
consumer reporting agency is notified pursuant to section 
623(a)(4) that a credit account of a consumer was voluntarily 
closed by the consumer, the agency shall indicate that fact in 
any consumer report that includes information related to the 
account.
  (f) Indication of Dispute by Consumer.--If a consumer 
reporting agency is notified pursuant to section 623(a)(3) that 
information regarding a consumer [who] which was furnished to 
the agency is disputed by the consumer, the agency shall 
indicate that fact in each consumer report that includes the 
disputed information.
  (g) Truncation of Credit Card and Debit Card Numbers.--
          (1) In general.--Except as otherwise provided in this 
        subsection, no person that accepts credit cards or 
        debit cards for the transaction of business shall print 
        more than the last 5 digits of the card number or the 
        expiration date upon any receipt provided to the 
        cardholder at the point of the sale or transaction.
          (2) Limitation.--This subsection shall apply only to 
        receipts that are electronically printed, and shall not 
        apply to transactions in which the sole means of 
        recording a credit card or debit card account number is 
        by handwriting or by an imprint or copy of the card.
          (3) Effective date.--This subsection shall become 
        effective--
                  (A) 3 years after the date of enactment of 
                this subsection, with respect to any cash 
                register or other machine or device that 
                electronically prints receipts for credit card 
                or debit card transactions that is in use 
                before January 1, 2005; and
                  (B) 1 year after the date of enactment of 
                this subsection, with respect to any cash 
                register or other machine or device that 
                electronically prints receipts for credit card 
                or debit card transactions that is first put 
                into use on or after January 1, 2005.
  (h) Notice of Discrepancy in Address.--
          (1) In general.--If a person has requested a consumer 
        report relating to a consumer from a consumer reporting 
        agency described in section 603(p), the request 
        includes an address for the consumer that substantially 
        differs from the addresses in the file of the consumer, 
        and the agency provides a consumer report in response 
        to the request, the consumer reporting agency shall 
        notify the requester of the existence of the 
        discrepancy.
          (2) Regulations.--
                  (A) Regulations required.--The [Bureau] 
                Agency [shall,,] shall, in consultation with 
                the Federal banking agencies, the National 
                Credit Union Administration, and the Federal 
                Trade [Commission,,] Commission, prescribe 
                regulations providing guidance regarding 
                reasonable policies and procedures that a user 
                of a consumer report should employ when such 
                user has received a notice of discrepancy under 
                paragraph (1).
                  (B) Policies and procedures to be included.--
                The regulations prescribed under subparagraph 
                (A) shall describe reasonable policies and 
                procedures for use by a user of a consumer 
                report--
                          (i) to form a reasonable belief that 
                        the user knows the identity of the 
                        person to whom the consumer report 
                        pertains; and
                          (ii) if the user establishes a 
                        continuing relationship with the 
                        consumer, and the user regularly and in 
                        the ordinary course of business 
                        furnishes information to the consumer 
                        reporting agency from which the notice 
                        of discrepancy pertaining to the 
                        consumer was obtained, to reconcile the 
                        address of the consumer with the 
                        consumer reporting agency by furnishing 
                        such address to such consumer reporting 
                        agency as part of information regularly 
                        furnished by the user for the period in 
                        which the relationship is established.

Sec. 605A. Identity theft prevention; fraud alerts and active duty 
                    alerts

  (a) One-Call Fraud Alerts.--
          (1) Initial alerts.--Upon the direct request of a 
        consumer, or an individual acting on behalf of or as a 
        personal representative of a consumer, who asserts in 
        good faith a suspicion that the consumer has been or is 
        about to become a victim of fraud or related crime, 
        including identity theft, a consumer reporting agency 
        described in section 603(p) that maintains a file on 
        the consumer and has received appropriate proof of the 
        identity of the requester shall--
                  (A) include a fraud alert in the file of that 
                consumer, and also provide that alert along 
                with any credit score generated in using that 
                file, for a period of not less than 90 days, 
                beginning on the date of such request, unless 
                the consumer or such representative requests 
                that such fraud alert be removed before the end 
                of such period, and the agency has received 
                appropriate proof of the identity of the 
                requester for such purpose; and
                  (B) refer the information regarding the fraud 
                alert under this paragraph to each of the other 
                consumer reporting agencies described in 
                section 603(p), in accordance with procedures 
                developed under section 621(f).
          (2) Access to free reports.--In any case in which a 
        consumer reporting agency includes a fraud alert in the 
        file of a consumer pursuant to this subsection, the 
        consumer reporting agency shall--
                  (A) disclose to the consumer that the 
                consumer may request a free copy of the file of 
                the consumer pursuant to section 612(d); and
                  (B) provide to the consumer all disclosures 
                required to be made under section 609, without 
                charge to the consumer, not later than 3 
                business days after any request described in 
                subparagraph (A).
  (b) Extended Alerts.--
          (1) In general.--Upon the direct request of a 
        consumer, or an individual acting on behalf of or as a 
        personal representative of a consumer, who submits an 
        identity theft report to a consumer reporting agency 
        described in section 603(p) that maintains a file on 
        the consumer, if the agency has received appropriate 
        proof of the identity of the requester, the agency 
        shall--
                  (A) include a fraud alert in the file of that 
                consumer, and also provide that alert along 
                with any credit score generated in using that 
                file, during the 7-year period beginning on the 
                date of such request, unless the consumer or 
                such representative requests that such fraud 
                alert be removed before the end of such period 
                and the agency has received appropriate proof 
                of the identity of the requester for such 
                purpose;
                  (B) during the 5-year period beginning on the 
                date of such request, exclude the consumer from 
                any list of consumers prepared by the consumer 
                reporting agency and provided to any third 
                party to offer credit or insurance to the 
                consumer as part of a transaction that was not 
                initiated by the consumer, unless the consumer 
                or such representative requests that such 
                exclusion be rescinded before the end of such 
                period; and
                  (C) refer the information regarding the 
                extended fraud alert under this paragraph to 
                each of the other consumer reporting agencies 
                described in section 603(p), in accordance with 
                procedures developed under section 621(f).
          (2) Access to free reports.--In any case in which a 
        consumer reporting agency includes a fraud alert in the 
        file of a consumer pursuant to this subsection, the 
        consumer reporting agency shall--
                  (A) disclose to the consumer that the 
                consumer may request 2 free copies of the file 
                of the consumer pursuant to section 612(d) 
                during the 12-month period beginning on the 
                date on which the fraud alert was included in 
                the file; and
                  (B) provide to the consumer all disclosures 
                required to be made under section 609, without 
                charge to the consumer, not later than 3 
                business days after any request described in 
                subparagraph (A).
  (c) Active Duty Alerts.--Upon the direct request of an active 
duty military consumer, or an individual acting on behalf of or 
as a personal representative of an active duty military 
consumer, a consumer reporting agency described in section 
603(p) that maintains a file on the active duty military 
consumer and has received appropriate proof of the identity of 
the requester shall--
          (1) include an active duty alert in the file of that 
        active duty military consumer, and also provide that 
        alert along with any credit score generated in using 
        that file, during a period of not less than 12 months, 
        or such longer period as the [Bureau] Agency shall 
        determine, by regulation, beginning on the date of the 
        request, unless the active duty military consumer or 
        such representative requests that such fraud alert be 
        removed before the end of such period, and the agency 
        has received appropriate proof of the identity of the 
        requester for such purpose;
          (2) during the 2-year period beginning on the date of 
        such request, exclude the active duty military consumer 
        from any list of consumers prepared by the consumer 
        reporting agency and provided to any third party to 
        offer credit or insurance to the consumer as part of a 
        transaction that was not initiated by the consumer, 
        unless the consumer requests that such exclusion be 
        rescinded before the end of such period; and
          (3) refer the information regarding the active duty 
        alert to each of the other consumer reporting agencies 
        described in section 603(p), in accordance with 
        procedures developed under section 621(f).
  (d) Procedures.--Each consumer reporting agency described in 
section 603(p) shall establish policies and procedures to 
comply with this section, including procedures that inform 
consumers of the availability of initial, extended, and active 
duty alerts and procedures that allow consumers and active duty 
military consumers to request initial, extended, or active duty 
alerts (as applicable) in a simple and easy manner, including 
by telephone.
  (e) Referrals of Alerts.--Each consumer reporting agency 
described in section 603(p) that receives a referral of a fraud 
alert or active duty alert from another consumer reporting 
agency pursuant to this section shall, as though the agency 
received the request from the consumer directly, follow the 
procedures required under--
          (1) paragraphs (1)(A) and (2) of subsection (a), in 
        the case of a referral under subsection (a)(1)(B);
          (2) paragraphs (1)(A), (1)(B), and (2) of subsection 
        (b), in the case of a referral under subsection 
        (b)(1)(C); and
          (3) paragraphs (1) and (2) of subsection (c), in the 
        case of a referral under subsection (c)(3).
  (f) Duty of Reseller To Reconvey Alert.--A reseller shall 
include in its report any fraud alert or active duty alert 
placed in the file of a consumer pursuant to this section by 
another consumer reporting agency.
  (g) Duty of Other Consumer Reporting Agencies To Provide 
Contact Information.--If a consumer contacts any consumer 
reporting agency that is not described in section 603(p) to 
communicate a suspicion that the consumer has been or is about 
to become a victim of fraud or related crime, including 
identity theft, the agency shall provide information to the 
consumer on how to contact the [Bureau] Agency and the consumer 
reporting agencies described in section 603(p) to obtain more 
detailed information and request alerts under this section.
  (h) Limitations on Use of Information for Credit 
Extensions.--
          (1) Requirements for initial and active duty 
        alerts.--
                  (A) Notification.--Each initial fraud alert 
                and active duty alert under this section shall 
                include information that notifies all 
                prospective users of a consumer report on the 
                consumer to which the alert relates that the 
                consumer does not authorize the establishment 
                of any new credit plan or extension of credit, 
                other than under an open-end credit plan (as 
                defined in section [103(i)] 103(j)), in the 
                name of the consumer, or issuance of an 
                additional card on an existing credit account 
                requested by a consumer, or any increase in 
                credit limit on an existing credit account 
                requested by a consumer, except in accordance 
                with subparagraph (B).
                  (B) Limitation on users.--
                          (i) In general.--No prospective user 
                        of a consumer report that includes an 
                        initial fraud alert or an active duty 
                        alert in accordance with this section 
                        may establish a new credit plan or 
                        extension of credit, other than under 
                        an open-end credit plan (as defined in 
                        section 103(i)), in the name of the 
                        consumer, or issue an additional card 
                        on an existing credit account requested 
                        by a consumer, or grant any increase in 
                        credit limit on an existing credit 
                        account requested by a consumer, unless 
                        the user utilizes reasonable policies 
                        and procedures to form a reasonable 
                        belief that the user knows the identity 
                        of the person making the request.
                          (ii) Verification.--If a consumer 
                        requesting the alert has specified a 
                        telephone number to be used for 
                        identity verification purposes, before 
                        authorizing any new credit plan or 
                        extension described in clause (i) in 
                        the name of such consumer, a user of 
                        such consumer report shall contact the 
                        consumer using that telephone number or 
                        take reasonable steps to verify the 
                        consumer's identity and confirm that 
                        the application for a new credit plan 
                        is not the result of identity theft.
          (2) Requirements for extended alerts.--
                  (A) Notification.--Each extended alert under 
                this section shall include information that 
                provides all prospective users of a consumer 
                report relating to a consumer with--
                          (i) notification that the consumer 
                        does not authorize the establishment of 
                        any new credit plan or extension of 
                        credit described in clause (i), other 
                        than under an open-end credit plan (as 
                        defined in section 103(i)), in the name 
                        of the consumer, or issuance of an 
                        additional card on an existing credit 
                        account requested by a consumer, or any 
                        increase in credit limit on an existing 
                        credit account requested by a consumer, 
                        except in accordance with subparagraph 
                        (B); and
                          (ii) a telephone number or other 
                        reasonable contact method designated by 
                        the consumer.
                  (B) Limitation on users.--No prospective user 
                of a consumer report or of a credit score 
                generated using the information in the file of 
                a consumer that includes an extended fraud 
                alert in accordance with this section may 
                establish a new credit plan or extension of 
                credit, other than under an open-end credit 
                plan (as defined in section 103(i)), in the 
                name of the consumer, or issue an additional 
                card on an existing credit account requested by 
                a consumer, or any increase in credit limit on 
                an existing credit account requested by a 
                consumer, unless the user contacts the consumer 
                in person or using the contact method described 
                in subparagraph (A)(ii) to confirm that the 
                application for a new credit plan or increase 
                in credit limit, or request for an additional 
                card is not the result of identity theft.

Sec. 605B. Block of information resulting from identity theft

  (a) Block.--Except as otherwise provided in this section, a 
consumer reporting agency shall block the reporting of any 
information in the file of a consumer that the consumer 
identifies as information that resulted from an alleged 
identity theft, not later than 4 business days after the date 
of receipt by such agency of--
          (1) appropriate proof of the identity of the 
        consumer;
          (2) a copy of an identity theft report;
          (3) the identification of such information by the 
        consumer; and
          (4) a statement by the consumer that the information 
        is not information relating to any transaction by the 
        consumer.
  (b) Notification.--A consumer reporting agency shall promptly 
notify the furnisher of information identified by the consumer 
under subsection (a)--
          (1) that the information may be a result of identity 
        theft;
          (2) that an identity theft report has been filed;
          (3) that a block has been requested under this 
        section; and
          (4) of the effective dates of the block.
  (c) Authority To Decline or Rescind.--
          (1) In general.--A consumer reporting agency may 
        decline to block, or may rescind any block, of 
        information relating to a consumer under this section, 
        if the consumer reporting agency reasonably determines 
        that--
                  (A) the information was blocked in error or a 
                block was requested by the consumer in error;
                  (B) the information was blocked, or a block 
                was requested by the consumer, on the basis of 
                a material misrepresentation of fact by the 
                consumer relevant to the request to block; or
                  (C) the consumer obtained possession of 
                goods, services, or money as a result of the 
                blocked transaction or transactions.
          (2) Notification to consumer.--If a block of 
        information is declined or rescinded under this 
        subsection, the affected consumer shall be notified 
        promptly, in the same manner as consumers are notified 
        of the reinsertion of information under section 
        611(a)(5)(B).
          (3) Significance of block.--For purposes of this 
        subsection, if a consumer reporting agency rescinds a 
        block, the presence of information in the file of a 
        consumer prior to the blocking of such information is 
        not evidence of whether the consumer knew or should 
        have known that the consumer obtained possession of any 
        goods, services, or money as a result of the block.
  (d) Exception for Resellers.--
          (1) No reseller file.--This section shall not apply 
        to a consumer reporting agency, if the consumer 
        reporting agency--
                  (A) is a reseller;
                  (B) is not, at the time of the request of the 
                consumer under subsection (a), otherwise 
                furnishing or reselling a consumer report 
                concerning the information identified by the 
                consumer; and
                  (C) informs the consumer, by any means, that 
                the consumer may report the identity theft to 
                the [Bureau] Agency to obtain consumer 
                information regarding identity theft.
          (2) Reseller with file.--The sole obligation of the 
        consumer reporting agency under this section, with 
        regard to any request of a consumer under this section, 
        shall be to block the consumer report maintained by the 
        consumer reporting agency from any subsequent use, if--
                  (A) the consumer, in accordance with the 
                provisions of subsection (a), identifies, to a 
                consumer reporting agency, information in the 
                file of the consumer that resulted from 
                identity theft; and
                  (B) the consumer reporting agency is a 
                reseller of the identified information.
          (3) Notice.--In carrying out its obligation under 
        paragraph (2), the reseller shall promptly provide a 
        notice to the consumer of the decision to block the 
        file. Such notice shall contain the name, address, and 
        telephone number of each consumer reporting agency from 
        which the consumer information was obtained for resale.
  (e) Exception for Verification Companies.--The provisions of 
this section do not apply to a check services company, acting 
as such, which issues authorizations for the purpose of 
approving or processing negotiable instruments, electronic fund 
transfers, or similar methods of payments, except that, 
beginning 4 business days after receipt of information 
described in paragraphs (1) through (3) of subsection (a), a 
check services company shall not report to a national consumer 
reporting agency described in section 603(p), any information 
identified in the subject identity theft report as resulting 
from identity theft.
  (f) Access to Blocked Information by Law Enforcement 
Agencies.--No provision of this section shall be construed as 
requiring a consumer reporting agency to prevent a Federal, 
State, or local law enforcement agency from accessing blocked 
information in a consumer file to which the agency could 
otherwise obtain access under this title.

           *       *       *       *       *       *       *


Sec. 607. Compliance procedures

  (a) Every consumer reporting agency shall maintain reasonable 
procedures designed to avoid violations of section 605 and to 
limit the furnishing of consumer reports to the purposes listed 
under section 604. These procedures shall require that 
prospective users of the information identify themselves, 
certify the purposes for which the information is sought, and 
certify that the information will be used for no other purpose. 
Every consumer reporting agency shall make a reasonable effort 
to verify the identity of a new prospective user and the uses 
certified by such prospective user prior to furnishing such 
user a consumer report. No consumer reporting agency may 
furnish a consumer report to any person if it has reasonable 
grounds for believing that the consumer report will not be used 
for a purpose listed in section 604.
  (b) Whenever a consumer reporting agency prepares a consumer 
report it shall follow reasonable procedures to assure maximum 
possible accuracy of the information concerning the individual 
about whom the report relates.
  (c) Disclosure of Consumer Reports by Users Allowed.--A 
consumer reporting agency may not prohibit a user of a consumer 
report furnished by the agency on a consumer from disclosing 
the contents of the report to the consumer, if adverse action 
against the consumer has been taken by the user based in whole 
or in part on the report.
  (d) Notice to Users and Furnishers of Information.--
          (1) Notice requirement.--A consumer reporting agency 
        shall provide to any person--
                  (A) who regularly and in the ordinary course 
                of business furnishes information to the agency 
                with respect to any consumer; or
                  (B) to whom a consumer report is provided by 
                the agency;
        a notice of such person's responsibilities under this 
        title.
          (2) Content of notice.--The [Bureau] Agency shall 
        prescribe the content of notices under paragraph (1), 
        and a consumer reporting agency shall be in compliance 
        with this subsection if it provides a notice under 
        paragraph (1) that is substantially similar to the 
        [Bureau] Agency prescription under this paragraph.
  (e) Procurement of Consumer Report for Resale.--
          (1) Disclosure.--A person may not procure a consumer 
        report for purposes of reselling the report (or any 
        information in the report) unless the person discloses 
        to the consumer reporting agency that originally 
        furnishes the report--
                  (A) the identity of the end-user of the 
                report (or information); and
                  (B) each permissible purpose under section 
                604 for which the report is furnished to the 
                end-user of the report (or information).
          (2) Responsibilities of procurers for resale.--A 
        person who procures a consumer report for purposes of 
        reselling the report (or any information in the report) 
        shall--
                  (A) establish and comply with reasonable 
                procedures designed to ensure that the report 
                (or information) is resold by the person only 
                for a purpose for which the report may be 
                furnished under section 604, including by 
                requiring that each person to which the report 
                (or information) is resold and that resells or 
                provides the report (or information) to any 
                other person--
                          (i) identifies each end user of the 
                        resold report (or information);
                          (ii) certifies each purpose for which 
                        the report (or information) will be 
                        used; and
                          (iii) certifies that the report (or 
                        information) will be used for no other 
                        purpose; and
                  (B) before reselling the report, make 
                reasonable efforts to verify the 
                identifications and certifications made under 
                subparagraph (A).
          (3) Resale of consumer report to a federal agency or 
        department.--Notwithstanding paragraph (1) or (2), a 
        person who procures a consumer report for purposes of 
        reselling the report (or any information in the report) 
        shall not disclose the identity of the end-user of the 
        report under paragraph (1) or (2) if--
                  (A) the end user is an agency or department 
                of the United States Government which procures 
                the report from the person for purposes of 
                determining the eligibility of the consumer 
                concerned to receive access or continued access 
                to classified information (as defined in 
                [section 604(b)(4)(E)(i)] section 
                604(b)(4)(D)(i)); and
                  (B) the agency or department certifies in 
                writing to the person reselling the report that 
                nondisclosure is necessary to protect 
                classified information or the safety of persons 
                employed by or contracting with, or undergoing 
                investigation for work or contracting with the 
                agency or department.

           *       *       *       *       *       *       *


Sec. 609. Disclosures to consumers

  (a) Every consumer reporting agency shall, upon request, and 
subject to section 610(a)(1), clearly and accurately disclose 
to the consumer:
          (1) All information in the consumer's file at the 
        time of the request, except that--
                  (A) if the consumer to whom the file relates 
                requests that the first 5 digits of the social 
                security number (or similar identification 
                number) of the consumer not be included in the 
                disclosure and the consumer reporting agency 
                has received appropriate proof of the identity 
                of the requester, the consumer reporting agency 
                shall so truncate such number in such 
                disclosure; and
                  (B) nothing in this paragraph shall be 
                construed to require a consumer reporting 
                agency to disclose to a consumer any 
                information concerning credit scores or any 
                other risk scores or predictors relating to the 
                consumer.
          (2) The sources of the information; except that the 
        sources of information acquired solely for use in 
        preparing an investigative consumer report and actually 
        used for no other purpose need not be disclosed: 
        Provided, That in the event an action is brought under 
        this title, such sources shall be available to the 
        plaintiff under appropriate discovery procedures in the 
        court in which the action is brought.
          (3)(A) Identification of each person (including each 
        end-user identified under section 607(e)(1)) that 
        procured a consumer report--
                  (i) for employment purposes, during the 2-
                year period preceding the date on which the 
                request is made; or
                  (ii) for any other purpose, during the 1-year 
                period preceding the date on which the request 
                is made.
          (B) An identification of a person under subparagraph 
        (A) shall include--
                  (i) the name of the person or, if applicable, 
                the trade name (written in full) under which 
                such person conducts business; and
                  (ii) upon request of the consumer, the 
                address and telephone number of the person.
          (C) Subparagraph (A) does not apply if--
                  (i) the end user is an agency or department 
                of the United States Government that procures 
                the report from the person for purposes of 
                determining the eligibility of the consumer to 
                whom the report relates to receive access or 
                continued access to classified information (as 
                defined in [section 604(b)(4)(E)(i)] section 
                604(b)(4)(D)(i)); and
                  (ii) the head of the agency or department 
                makes a written finding as prescribed under 
                section 604(b)(4)(A).
          (4) The dates, original payees, and amounts of any 
        checks upon which is based any adverse characterization 
        of the consumer, included in the file at the time of 
        the disclosure.
          (5) A record of all inquiries received by the agency 
        during the 1-year period preceding the request that 
        identified the consumer in connection with a credit or 
        insurance transaction that was not initiated by the 
        consumer.
          (6) If the consumer requests the credit file and not 
        the credit score, a statement that the consumer may 
        request and obtain a credit score.
  (b) The requirements of subsection (a) respecting the 
disclosure of sources of information and the recipients of 
consumer reports do not apply to information received or 
consumer reports furnished prior to the effective date of this 
title except to the extent that the matter involved is 
contained in the files of the consumer reporting agency on that 
date.
  (c) Summary of Rights To Obtain and Dispute Information in 
Consumer Reports and To Obtain Credit Scores.--
          (1)  [Commission] Bureau summary of rights 
        required.--
                  (A) In general.--[The Commission] The Bureau 
                shall prepare a model summary of the rights of 
                consumers under this title.
                  (B) Content of summary.--The summary of 
                rights prepared under subparagraph (A) shall 
                include a description of--
                          (i) the right of a consumer to obtain 
                        a copy of a consumer report under 
                        subsection (a) from each consumer 
                        reporting agency;
                          (ii) the frequency and circumstances 
                        under which a consumer is entitled to 
                        receive a consumer report without 
                        charge under section 612;
                          (iii) the right of a consumer to 
                        dispute information in the file of the 
                        consumer under section 611;
                          (iv) the right of a consumer to 
                        obtain a credit score from a consumer 
                        reporting agency, and a description of 
                        how to obtain a credit score;
                          (v) the method by which a consumer 
                        can contact, and obtain a consumer 
                        report from, a consumer reporting 
                        agency without charge, as provided in 
                        the regulations of the [Bureau] Agency 
                        prescribed under section 211(c) of the 
                        Fair and Accurate Credit Transactions 
                        Act of 2003; and
                          (vi) the method by which a consumer 
                        can contact, and obtain a consumer 
                        report from, a consumer reporting 
                        agency described in section [603(w)] 
                        603(x), as provided in the regulations 
                        of the [Bureau] Agency prescribed under 
                        section 612(a)(1)(C).
                  (C) Availability of summary of rights.--[The 
                Commission] The Bureau shall--
                          (i) actively publicize the 
                        availability of the summary of rights 
                        prepared under this paragraph;
                          (ii) conspicuously post on its 
                        Internet website the availability of 
                        such summary of rights; and
                          (iii) promptly make such summary of 
                        rights available to consumers, on 
                        request.
          (2) Summary of rights required to be included with 
        agency disclosures.--A consumer reporting agency shall 
        provide to a consumer, with each written disclosure by 
        the agency to the consumer under this section--
                  (A) the summary of rights prepared by the 
                [Bureau] Agency under paragraph (1);
                  (B) in the case of a consumer reporting 
                agency described in section 603(p), a toll-free 
                telephone number established by the agency, at 
                which personnel are accessible to consumers 
                during normal business hours;
                  (C) a list of all Federal agencies 
                responsible for enforcing any provision of this 
                title, and the address and any appropriate 
                phone number of each such agency, in a form 
                that will assist the consumer in selecting the 
                appropriate agency;
                  (D) a statement that the consumer may have 
                additional rights under State law, and that the 
                consumer may wish to contact a State or local 
                consumer protection agency or a State attorney 
                general (or the equivalent thereof) to learn of 
                those rights; and
                  (E) a statement that a consumer reporting 
                agency is not required to remove accurate 
                derogatory information from the file of a 
                consumer, unless the information is outdated 
                under section 605 or cannot be verified.
  (d) Summary of Rights of Identity Theft Victims.--
          (1) In general.--[The Commission] The Bureau, in 
        consultation with the Federal banking agencies and the 
        National Credit Union Administration, shall prepare a 
        model summary of the rights of consumers under this 
        title with respect to the procedures for remedying the 
        effects of fraud or identity theft involving credit, an 
        electronic fund transfer, or an account or transaction 
        at or with a financial institution or other creditor.
          (2) Summary of rights and contact information.--
        Beginning 60 days after the date on which the model 
        summary of rights is prescribed in final form by the 
        [Bureau] Agency pursuant to paragraph (1), if any 
        consumer contacts a consumer reporting agency and 
        expresses a belief that the consumer is a victim of 
        fraud or identity theft involving credit, an electronic 
        fund transfer, or an account or transaction at or with 
        a financial institution or other creditor, the consumer 
        reporting agency shall, in addition to any other action 
        that the agency may take, provide the consumer with a 
        summary of rights that contains all of the information 
        required by the [Bureau] Agency under paragraph (1), 
        and information on how to contact the [Bureau] Agency 
        to obtain more detailed information.
  (e) Information Available to Victims.--
          (1) In general.--For the purpose of documenting 
        fraudulent transactions resulting from identity theft, 
        not later than 30 days after the date of receipt of a 
        request from a victim in accordance with paragraph (3), 
        and subject to verification of the identity of the 
        victim and the claim of identity theft in accordance 
        with paragraph (2), a business entity that has provided 
        credit to, provided for consideration products, goods, 
        or services to, accepted payment from, or otherwise 
        entered into a commercial transaction for consideration 
        with, a person who has allegedly made unauthorized use 
        of the means of identification of the victim, shall 
        provide a copy of application and business transaction 
        records in the control of the business entity, whether 
        maintained by the business entity or by another person 
        on behalf of the business entity, evidencing any 
        transaction alleged to be a result of identity theft 
        to--
                  (A) the victim;
                  (B) any Federal, State, or local government 
                law enforcement agency or officer specified by 
                the victim in such a request; or
                  (C) any law enforcement agency investigating 
                the identity theft and authorized by the victim 
                to take receipt of records provided under this 
                subsection.
          (2) Verification of identity and claim.--Before a 
        business entity provides any information under 
        paragraph (1), unless the business entity, at its 
        discretion, otherwise has a high degree of confidence 
        that it knows the identity of the victim making a 
        request under paragraph (1), the victim shall provide 
        to the business entity--
                  (A) as proof of positive identification of 
                the victim, at the election of the business 
                entity--
                          (i) the presentation of a government-
                        issued identification card;
                          (ii) personally identifying 
                        information of the same type as was 
                        provided to the business entity by the 
                        unauthorized person; or
                          (iii) personally identifying 
                        information that the business entity 
                        typically requests from new applicants 
                        or for new transactions, at the time of 
                        the victim's request for information, 
                        including any documentation described 
                        in clauses (i) and (ii); and
                  (B) as proof of a claim of identity theft, at 
                the election of the business entity--
                          (i) a copy of a police report 
                        evidencing the claim of the victim of 
                        identity theft; and
                          (ii) a properly completed--
                                  (I) copy of a standardized 
                                affidavit of identity theft 
                                developed and made available by 
                                the [Bureau] Agency; or
                                  (II) [an] affidavit of fact 
                                that is acceptable to the 
                                business entity for that 
                                purpose.
          (3) Procedures.--The request of a victim under 
        paragraph (1) shall--
                  (A) be in writing;
                  (B) be mailed to an address specified by the 
                business entity, if any; and
                  (C) if asked by the business entity, include 
                relevant information about any transaction 
                alleged to be a result of identity theft to 
                facilitate compliance with this section 
                including--
                          (i) if known by the victim (or if 
                        readily obtainable by the victim), the 
                        date of the application or transaction; 
                        and
                          (ii) if known by the victim (or if 
                        readily obtainable by the victim), any 
                        other identifying information such as 
                        an account or transaction number.
          (4) No charge to victim.--Information required to be 
        provided under paragraph (1) shall be so provided 
        without charge.
          (5) Authority to decline to provide information.--A 
        business entity may decline to provide information 
        under paragraph (1) if, in the exercise of good faith, 
        the business entity determines that--
                  (A) this subsection does not require 
                disclosure of the information;
                  (B) after reviewing the information provided 
                pursuant to paragraph (2), the business entity 
                does not have a high degree of confidence in 
                knowing the true identity of the individual 
                requesting the information;
                  (C) the request for the information is based 
                on a misrepresentation of fact by the 
                individual requesting the information relevant 
                to the request for information; or
                  (D) the information requested is Internet 
                navigational data or similar information about 
                a person's visit to a website or online 
                service.
          (6) Limitation on liability.--Except as provided in 
        section 621, sections 616 and 617 do not apply to any 
        violation of this subsection.
          (7) Limitation on civil liability.--No business 
        entity may be held civilly liable under any provision 
        of Federal, State, or other law for disclosure, made in 
        good faith pursuant to this subsection.
          (8) No new recordkeeping obligation.--Nothing in this 
        subsection creates an obligation on the part of a 
        business entity to obtain, retain, or maintain 
        information or records that are not otherwise required 
        to be obtained, retained, or maintained in the ordinary 
        course of its business or under other applicable law.
          (9) Rule of construction.--
                  (A) In general.--No provision of subtitle A 
                of title V of Public Law 106-102, prohibiting 
                the disclosure of financial information by a 
                business entity to third parties shall be used 
                to deny disclosure of information to the victim 
                under this subsection.
                  (B) Limitation.--Except as provided in 
                subparagraph (A), nothing in this subsection 
                permits a business entity to disclose 
                information, including information to law 
                enforcement under subparagraphs (B) and (C) of 
                paragraph (1), that the business entity is 
                otherwise prohibited from disclosing under any 
                other applicable provision of Federal or State 
                law.
          (10) Affirmative defense.--In any civil action 
        brought to enforce this subsection, it is an 
        affirmative defense (which the defendant must establish 
        by a preponderance of the evidence) for a business 
        entity to file an affidavit or answer stating that--
                  (A) the business entity has made a reasonably 
                diligent search of its available business 
                records; and
                  (B) the records requested under this 
                subsection do not exist or are not reasonably 
                available.
          (11) Definition of victim.--For purposes of this 
        subsection, the term ``victim'' means a consumer whose 
        means of identification or financial information has 
        been used or transferred (or has been alleged to have 
        been used or transferred) without the authority of that 
        consumer, with the intent to commit, or to aid or abet, 
        an identity theft or a similar crime.
          (12) Effective date.--This subsection shall become 
        effective 180 days after the date of enactment of this 
        subsection.
          (13) Effectiveness study.--Not later than 18 months 
        after the date of enactment of this subsection, the 
        Comptroller General of the United States shall submit a 
        report to Congress assessing the effectiveness of this 
        provision.
  (f) Disclosure of Credit Scores.--
          (1) In general.--Upon the request of a consumer for a 
        credit score, a consumer reporting agency shall supply 
        to the consumer a statement indicating that the 
        information and credit scoring model may be different 
        than the credit score that may be used by the lender, 
        and a notice which shall include--
                  (A) the current credit score of the consumer 
                or the most recent credit score of the consumer 
                that was previously calculated by the credit 
                reporting agency for a purpose related to the 
                extension of credit;
                  (B) the range of possible credit scores under 
                the model used;
                  (C) all of the key factors that adversely 
                affected the credit score of the consumer in 
                the model used, the total number of which shall 
                not exceed 4, subject to paragraph (9);
                  (D) the date on which the credit score was 
                created; and
                  (E) the name of the person or entity that 
                provided the credit score or credit file upon 
                which the credit score was created.
          (2) Definitions.--For purposes of this subsection, 
        the following definitions shall apply:
                  (A) Credit score.--The term ``credit 
                score''--
                          (i) means a numerical value or a 
                        categorization derived from a 
                        statistical tool or modeling system 
                        used by a person who makes or arranges 
                        a loan to predict the likelihood of 
                        certain credit behaviors, including 
                        default (and the numerical value or the 
                        categorization derived from such 
                        analysis may also be referred to as a 
                        ``risk predictor'' or ``risk score''); 
                        and
                          (ii) does not include--
                                  (I) any mortgage score or 
                                rating of an automated 
                                underwriting system that 
                                considers one or more factors 
                                in addition to credit 
                                information, including the loan 
                                to value ratio, the amount of 
                                down payment, or the financial 
                                assets of a consumer; or
                                  (II) any other elements of 
                                the underwriting process or 
                                underwriting decision.
                  (B) Key factors.--The term ``key factors'' 
                means all relevant elements or reasons 
                adversely affecting the credit score for the 
                particular individual, listed in the order of 
                their importance based on their effect on the 
                credit score.
          (3) Timeframe and manner of disclosure.--The 
        information required by this subsection shall be 
        provided in the same timeframe and manner as the 
        information described in subsection (a).
          (4) Applicability to certain uses.--This subsection 
        shall not be construed so as to compel a consumer 
        reporting agency to develop or disclose a score if the 
        agency does not--
                  (A) distribute scores that are used in 
                connection with residential real property 
                loans; or
                  (B) develop scores that assist credit 
                providers in understanding the general credit 
                behavior of a consumer and predicting the 
                future credit behavior of the consumer.
          (5) Applicability to credit scores developed by 
        another person.--
                  (A) In general.--This subsection shall not be 
                construed to require a consumer reporting 
                agency that distributes credit scores developed 
                by another person or entity to provide a 
                further explanation of them, or to process a 
                dispute arising pursuant to section 611, except 
                that the consumer reporting agency shall 
                provide the consumer with the name and address 
                and website for contacting the person or entity 
                who developed the score or developed the 
                methodology of the score.
                  (B) Exception.--This paragraph shall not 
                apply to a consumer reporting agency that 
                develops or modifies scores that are developed 
                by another person or entity.
          (6) Maintenance of credit scores not required.--This 
        subsection shall not be construed to require a consumer 
        reporting agency to maintain credit scores in its 
        files.
          (7) Compliance in certain cases.--In complying with 
        this subsection, a consumer reporting agency shall--
                  (A) supply the consumer with a credit score 
                that is derived from a credit scoring model 
                that is widely distributed to users by that 
                consumer reporting agency in connection with 
                residential real property loans or with a 
                credit score that assists the consumer in 
                understanding the credit scoring assessment of 
                the credit behavior of the consumer and 
                predictions about the future credit behavior of 
                the consumer; and
                  (B) a statement indicating that the 
                information and credit scoring model may be 
                different than that used by the lender.
          (8) Fair and reasonable fee.--A consumer reporting 
        agency may charge a fair and reasonable fee, as 
        determined by the [Bureau] Agency, for providing the 
        information required under this subsection.
          (9) Use of enquiries as a key factor.--If a key 
        factor that adversely affects the credit score of a 
        consumer consists of the number of enquiries made with 
        respect to a consumer report, that factor shall be 
        included in the disclosure pursuant to paragraph (1)(C) 
        without regard to the numerical limitation in such 
        paragraph.
  (g) Disclosure of Credit Scores by Certain Mortgage 
Lenders.--
          (1) In general.--Any person who makes or arranges 
        loans and who uses a consumer credit score, as defined 
        in subsection (f), in connection with an application 
        initiated or sought by a consumer for a closed end loan 
        or the establishment of an open end loan for a consumer 
        purpose that is secured by 1 to 4 units of residential 
        real property (hereafter in this subsection referred to 
        as the ``lender'') shall provide the following to the 
        consumer as soon as reasonably practicable:
                  (A) Information required under subsection 
                (f).--
                          (i) In general.--A copy of the 
                        information identified in subsection 
                        (f) that was obtained from a consumer 
                        reporting agency or was developed and 
                        used by the user of the information.
                          (ii) Notice under subparagraph (d).--
                        In addition to the information provided 
                        to it by a third party that provided 
                        the credit score or scores, a lender is 
                        only required to provide the notice 
                        contained in subparagraph (D).
                  (B) Disclosures in case of automated 
                underwriting system.--
                          (i) In general.--If a person that is 
                        subject to this subsection uses an 
                        automated underwriting system to 
                        underwrite a loan, that person may 
                        satisfy the obligation to provide a 
                        credit score by disclosing a credit 
                        score and associated key factors 
                        supplied by a consumer reporting 
                        agency.
                          (ii) Numerical credit score.--
                        However, if a numerical credit score is 
                        generated by an automated underwriting 
                        system used by an enterprise, and that 
                        score is disclosed to the person, the 
                        score shall be disclosed to the 
                        consumer consistent with subparagraph 
                        (C).
                          (iii) Enterprise defined.--For 
                        purposes of this subparagraph, the term 
                        ``enterprise'' has the same meaning as 
                        in paragraph (6) of section 1303 of the 
                        Federal Housing Enterprises Financial 
                        Safety and Soundness Act of 1992.
                  (C) Disclosures of credit scores not obtained 
                from a consumer reporting agency.--A person 
                that is subject to the provisions of this 
                subsection and that uses a credit score, other 
                than a credit score provided by a consumer 
                reporting agency, may satisfy the obligation to 
                provide a credit score by disclosing a credit 
                score and associated key factors supplied by a 
                consumer reporting agency.
                  (D) Notice to home loan applicants.--A copy 
                of the following notice, which shall include 
                the name, address, and telephone number of each 
                consumer reporting agency providing a credit 
                score that was used:

                  ``notice to the home loan applicant

  ``In connection with your application for a home loan, the 
lender must disclose to you the score that a consumer reporting 
agency distributed to users and the lender used in connection 
with your home loan, and the key factors affecting your credit 
scores.
   ``The credit score is a computer generated summary 
calculated at the time of the request and based on information 
that a consumer reporting agency or lender has on file. The 
scores are based on data about your credit history and payment 
patterns. Credit scores are important because they are used to 
assist the lender in determining whether you will obtain a 
loan. They may also be used to determine what interest rate you 
may be offered on the mortgage. Credit scores can change over 
time, depending on your conduct, how your credit history and 
payment patterns change, and how credit scoring technologies 
change.
   ``Because the score is based on information in your credit 
history, it is very important that you review the credit-
related information that is being furnished to make sure it is 
accurate. Credit records may vary from one company to another.
   ``If you have questions about your credit score or the 
credit information that is furnished to you, contact the 
consumer reporting agency at the address and telephone number 
provided with this notice, or contact the lender, if the lender 
developed or generated the credit score. The consumer reporting 
agency plays no part in the decision to take any action on the 
loan application and is unable to provide you with specific 
reasons for the decision on a loan application.
   ``If you have questions concerning the terms of the loan, 
contact the lender.''.
                  (E) Actions not required under this 
                subsection.--This subsection shall not require 
                any person to--
                          (i) explain the information provided 
                        pursuant to subsection (f);
                          (ii) disclose any information other 
                        than a credit score or key factors, as 
                        defined in subsection (f);
                          (iii) disclose any credit score or 
                        related information obtained by the 
                        user after a loan has closed;
                          (iv) provide more than 1 disclosure 
                        per loan transaction; or
                          (v) provide the disclosure required 
                        by this subsection when another person 
                        has made the disclosure to the consumer 
                        for that loan transaction.
                  (F) No obligation for content.--
                          (i) In general.--The obligation of 
                        any person pursuant to this subsection 
                        shall be limited solely to providing a 
                        copy of the information that was 
                        received from the consumer reporting 
                        agency.
                          (ii) Limit on liability.--No person 
                        has liability under this subsection for 
                        the content of that information or for 
                        the omission of any information within 
                        the report provided by the consumer 
                        reporting agency.
                  (G) Person defined as excluding enterprise.--
                As used in this subsection, the term ``person'' 
                does not include an enterprise (as defined in 
                paragraph (6) of section 1303 of the Federal 
                Housing Enterprises Financial Safety and 
                Soundness Act of 1992).
          (2) Prohibition on disclosure clauses null and 
        void.--
                  (A) In general.--Any provision in a contract 
                that prohibits the disclosure of a credit score 
                by a person who makes or arranges loans or a 
                consumer reporting agency is void.
                  (B) No liability for disclosure under this 
                subsection.--A lender shall not have liability 
                under any contractual provision for disclosure 
                of a credit score pursuant to this subsection.

Sec. 610. Conditions and form of disclosure to consumers

  (a) In General.--
          (1) Proper identification.--A consumer reporting 
        agency shall require, as a condition of making the 
        disclosures required under section 609, that the 
        consumer furnish proper identification.
          (2) Disclosure in writing.--Except as provided in 
        subsection (b), the disclosures required to be made 
        under section 609 shall be provided under that section 
        in writing.
  (b) Other Forms of Disclosure.--
          (1) In general.--If authorized by a consumer, a 
        consumer reporting agency may make the disclosures 
        required under section 609--
                  (A) other than in writing; and
                  (B) in such form as may be--
                          (i) specified by the consumer in 
                        accordance with paragraph (2); and
                          (ii) available from the agency.
          (2) Form.--A consumer may specify pursuant to 
        paragraph (1) that disclosures under section 609 shall 
        be made--
                  (A) in person, upon the appearance of the 
                consumer at the place of business of the 
                consumer reporting agency where disclosures are 
                regularly provided, during normal business 
                hours, and on reasonable notice;
                  (B) by telephone, if the consumer has made a 
                written request for disclosure by telephone;
                  (C) by electronic means, if available from 
                the agency; or
                  (D) by any other reasonable means that is 
                available from the agency.
  (c) Any consumer reporting agency shall provide trained 
personnel to explain to the consumer any information furnished 
to him pursuant to section 609.
  (d) The consumer shall be permitted to be accompanied by one 
other person of his choosing, who shall furnish reasonable 
identification. A consumer reporting agency may require the 
consumer to furnish a written statement granting permission to 
the consumer reporting agency to discuss the consumer's file in 
such person's presence.
  (e) Except as provided in sections 616 and 617, no consumer 
may bring any action or proceeding in the nature of defamation, 
invasion of privacy, or negligence with respect to the 
reporting of information against any consumer reporting agency, 
any user of information, or any person who furnishes 
information to a consumer reporting agency, based on 
information disclosed pursuant to section 609, 610, or 615, or 
based on information disclosed by a user of a consumer report 
to or for a consumer against whom the user has taken adverse 
action, based in whole or in part on the report, except as to 
false information furnished with malice or willful intent to 
injure such consumer.

Sec. 611. Procedure in case of disputed 
                    accuracy

  (a) Reinvestigations of Disputed Information.--
          (1) Reinvestigation required.--
                  (A) In general.--Subject to subsection (f), 
                if the completeness or accuracy of any item of 
                information contained in a consumer's file at a 
                consumer reporting agency is disputed by the 
                consumer and the consumer notifies the agency 
                directly, or indirectly through a reseller, of 
                such dispute, the agency shall, free of charge, 
                conduct a reasonable reinvestigation to 
                determine whether the disputed information is 
                inaccurate and record the current status of the 
                disputed information, or delete the item from 
                the file in accordance with paragraph (5), 
                before the end of the 30-day period beginning 
                on the date on which the agency receives the 
                notice of the dispute from the consumer or 
                reseller.
                  (B) Extension of period to reinvestigate.--
                Except as provided in subparagraph (C), the 30-
                day period described in subparagraph (A) may be 
                extended for not more than 15 additional days 
                if the consumer reporting agency receives 
                information from the consumer during that 30-
                day period that is relevant to the 
                reinvestigation.
                  (C) Limitations on extension of period to 
                reinvestigate.--Subparagraph (B) shall not 
                apply to any reinvestigation in which, during 
                the 30-day period described in subparagraph 
                (A), the information that is the subject of the 
                reinvestigation is found to be inaccurate or 
                incomplete or the consumer reporting agency 
                determines that the information cannot be 
                verified.
          (2) Prompt notice of dispute to furnisher of 
        information.--
                  (A) In general.--Before the expiration of the 
                5-business-day period beginning on the date on 
                which a consumer reporting agency receives 
                notice of a dispute from any consumer or a 
                reseller in accordance with paragraph (1), the 
                agency shall provide notification of the 
                dispute to any person who provided any item of 
                information in dispute, at the address and in 
                the manner established with the person. The 
                notice shall include all relevant information 
                regarding the dispute that the agency has 
                received from the consumer or reseller.
                  (B) Provision of other information.--The 
                consumer reporting agency shall promptly 
                provide to the person who provided the 
                information in dispute all relevant information 
                regarding the dispute that is received by the 
                agency from the consumer or the reseller after 
                the period referred to in subparagraph (A) and 
                before the end of the period referred to in 
                paragraph (1)(A).
          (3) Determination that dispute is frivolous or 
        irrelevant.--
                  (A) In general.--Notwithstanding paragraph 
                (1), a consumer reporting agency may terminate 
                a reinvestigation of information disputed by a 
                consumer under that paragraph if the agency 
                reasonably determines that the dispute by the 
                consumer is frivolous or irrelevant, including 
                by reason of a failure by a consumer to provide 
                sufficient information to investigate the 
                disputed information.
                  (B) Notice of determination.--Upon making any 
                determination in accordance with subparagraph 
                (A) that a dispute is frivolous or irrelevant, 
                a consumer reporting agency shall notify the 
                consumer of such determination not later than 5 
                business days after making such determination, 
                by mail or, if authorized by the consumer for 
                that purpose, by any other means available to 
                the agency.
                  (C) Contents of notice.--A notice under 
                subparagraph (B) shall include--
                          (i) the reasons for the determination 
                        under subparagraph (A); and
                          (ii) identification of any 
                        information required to investigate the 
                        disputed information, which may consist 
                        of a standardized form describing the 
                        general nature of such information.
          (4) Consideration of consumer information.--In 
        conducting any reinvestigation under paragraph (1) with 
        respect to disputed information in the file of any 
        consumer, the consumer reporting agency shall review 
        and consider all relevant information submitted by the 
        consumer in the period described in paragraph (1)(A) 
        with respect to such disputed information.
          (5) Treatment of inaccurate or unverifiable 
        information.--
                  (A) In general.--If, after any 
                reinvestigation under paragraph (1) of any 
                information disputed by a consumer, an item of 
                the information is found to be inaccurate or 
                incomplete or cannot be verified, the consumer 
                reporting agency shall--
                          (i) promptly delete that item of 
                        information from the file of the 
                        consumer, or modify that item of 
                        information, as appropriate, based on 
                        the results of the reinvestigation; and
                          (ii) promptly notify the furnisher of 
                        that information that the information 
                        has been modified or deleted from the 
                        file of the consumer.
                  (B) Requirements relating to reinsertion of 
                previously deleted material.--
                          (i) Certification of accuracy of 
                        information.--If any information is 
                        deleted from a consumer's file pursuant 
                        to subparagraph (A), the information 
                        may not be reinserted in the file by 
                        the consumer reporting agency unless 
                        the person who furnishes the 
                        information certifies that the 
                        information is complete and accurate.
                          (ii) Notice to consumer.--If any 
                        information that has been deleted from 
                        a consumer's file pursuant to 
                        subparagraph (A) is reinserted in the 
                        file, the consumer reporting agency 
                        shall notify the consumer of the 
                        reinsertion in writing not later than 5 
                        business days after the reinsertion or, 
                        if authorized by the consumer for that 
                        purpose, by any other means available 
                        to the agency.
                          (iii) Additional information.--As 
                        part of, or in addition to, the notice 
                        under clause (ii), a consumer reporting 
                        agency shall provide to a consumer in 
                        writing not later than 5 business days 
                        after the date of the reinsertion--
                                  (I) a statement that the 
                                disputed information has been 
                                reinserted;
                                  (II) the business name and 
                                address of any furnisher of 
                                information contacted and the 
                                telephone number of such 
                                furnisher, if reasonably 
                                available, or of any furnisher 
                                of information that contacted 
                                the consumer reporting agency, 
                                in connection with the 
                                reinsertion of such 
                                information; and
                                  (III) a notice that the 
                                consumer has the right to add a 
                                statement to the consumer's 
                                file disputing the accuracy or 
                                completeness of the disputed 
                                information.
                  (C) Procedures to prevent reappearance.--A 
                consumer reporting agency shall maintain 
                reasonable procedures designed to prevent the 
                reappearance in a consumer's file, and in 
                consumer reports on the consumer, of 
                information that is deleted pursuant to this 
                paragraph (other than information that is 
                reinserted in accordance with subparagraph 
                (B)(i)).
                  (D) Automated reinvestigation system.--Any 
                consumer reporting agency that compiles and 
                maintains files on consumers on a nationwide 
                basis shall implement an automated system 
                through which furnishers of information to that 
                consumer reporting agency may report the 
                results of a reinvestigation that finds 
                incomplete or inaccurate information in a 
                consumer's file to other such consumer 
                reporting agencies.
          (6) Notice of results of reinvestigation.--
                  (A) In general.--A consumer reporting agency 
                shall provide written notice to a consumer of 
                the results of a reinvestigation under this 
                subsection not later than 5 business days after 
                the completion of the reinvestigation, by mail 
                or, if authorized by the consumer for that 
                purpose, by other means available to the 
                agency.
                  (B) Contents.--As part of, or in addition to, 
                the notice under subparagraph (A), a consumer 
                reporting agency shall provide to a consumer in 
                writing before the expiration of the 5-day 
                period referred to in subparagraph (A)--
                          (i) a statement that the 
                        reinvestigation is completed;
                          (ii) a consumer report that is based 
                        upon the consumer's file as that file 
                        is revised as a result of the 
                        reinvestigation;
                          (iii) a notice that, if requested by 
                        the consumer, a description of the 
                        procedure used to determine the 
                        accuracy and completeness of the 
                        information shall be provided to the 
                        consumer by the agency, including the 
                        business name and address of any 
                        furnisher of information contacted in 
                        connection with such information and 
                        the telephone number of such furnisher, 
                        if reasonably available;
                          (iv) a notice that the consumer has 
                        the right to add a statement to the 
                        consumer's file disputing the accuracy 
                        or completeness of the information; and
                          (v) a notice that the consumer has 
                        the right to request under subsection 
                        (d) that the consumer reporting agency 
                        furnish notifications under that 
                        subsection.
          (7) Description of reinvestigation procedure.--A 
        consumer reporting agency shall provide to a consumer a 
        description referred to in paragraph (6)(B)(iii) by not 
        later than 15 days after receiving a request from the 
        consumer for that description.
          (8) Expedited dispute resolution.--If a dispute 
        regarding an item of information in a consumer's file 
        at a consumer reporting agency is resolved in 
        accordance with paragraph (5)(A) by the deletion of the 
        disputed information by not later than 3 business days 
        after the date on which the agency receives notice of 
        the dispute from the consumer in accordance with 
        paragraph (1)(A), then the agency shall not be required 
        to comply with paragraphs (2), (6), and (7) with 
        respect to that dispute if the agency--
                  (A) provides prompt notice of the deletion to 
                the consumer by telephone;
                  (B) includes in that notice, or in a written 
                notice that accompanies a confirmation and 
                consumer report provided in accordance with 
                subparagraph (C), a statement of the consumer's 
                right to request under subsection (d) that the 
                agency furnish notifications under that 
                subsection; and
                  (C) provides written confirmation of the 
                deletion and a copy of a consumer report on the 
                consumer that is based on the consumer's file 
                after the deletion, not later than 5 business 
                days after making the deletion.
  (b) If the reinvestigation does not resolve the dispute, the 
consumer may file a brief statement setting forth the nature of 
the dispute. The consumer reporting agency may limit such 
statements to not more than one hundred words if it provides 
the consumer with assistance in writing a clear summary of the 
dispute.
  (c) Whenever a statement of a dispute is filed, unless there 
is reasonable grounds to believe that it is frivolous or 
irrevelant, the consumer reporting agency shall, in any 
subsequent consumer report containing the information in 
question, clearly note that it is disputed by the consumer and 
provide either the consumer's statement or a clear and accurate 
codification or summary thereof.
  (d) Following any deletion of information which is found to 
be inaccurate or whose accuracy can no longer be verified or 
any notation as to disputed information, the consumer reporting 
agency shall, at the request of the consumer, furnish 
notification that the item has been deleted or the statement, 
codification or summary pursuant to subsection (b) or (c) to 
any person specifically designated by the consumer who has 
within two years prior thereto received a consumer report for 
employment purposes, or within six months prior thereto 
received a consumer report for any other purpose, which 
contained the deleted or disputed information.
  (e) Treatment of Complaints and Report to Congress.--
          (1) In general.--[The Commission] The Agency shall--
                  (A) compile all complaints that it receives 
                that a file of a consumer that is maintained by 
                a consumer reporting agency described in 
                section 603(p) contains incomplete or 
                inaccurate information, with respect to which, 
                the consumer appears to have disputed the 
                completeness or accuracy with the consumer 
                reporting agency or otherwise utilized the 
                procedures provided by subsection (a); and
                  (B) transmit each such complaint to each 
                consumer reporting agency involved.
          (2) Exclusion.--Complaints received or obtained by 
        the [Bureau] Agency pursuant to its investigative 
        authority under the Consumer Financial Protection Act 
        of 2010 shall not be subject to paragraph (1).
          (3) Agency responsibilities.--Each consumer reporting 
        agency described in section 603(p) that receives a 
        complaint transmitted by the [Bureau] Agency pursuant 
        to paragraph (1) shall--
                  (A) review each such complaint to determine 
                whether all legal obligations imposed on the 
                consumer reporting agency under this title 
                (including any obligation imposed by an 
                applicable court or administrative order) have 
                been met with respect to the subject matter of 
                the complaint;
                  (B) provide reports on a regular basis to the 
                [Bureau] Agency regarding the determinations of 
                and actions taken by the consumer reporting 
                agency, if any, in connection with its review 
                of such complaints; and
                  (C) maintain, for a reasonable time period, 
                records regarding the disposition of each such 
                complaint that is sufficient to demonstrate 
                compliance with this subsection.
          (4) Rulemaking authority.--The [Bureau] Agency may 
        prescribe regulations, as appropriate to implement this 
        subsection.
          (5) Annual report.--The [Bureau] Agency shall submit 
        to the Committee on Banking, Housing, and Urban Affairs 
        of the Senate and the Committee on Financial Services 
        of the House of Representatives an annual report 
        regarding information gathered by the [Bureau] Agency 
        under this subsection.
  (f) Reinvestigation Requirement Applicable to Resellers.--
          (1) Exemption from general reinvestigation 
        requirement.--Except as provided in paragraph (2), a 
        reseller shall be exempt from the requirements of this 
        section.
          (2) Action required upon receiving notice of a 
        dispute.--If a reseller receives a notice from a 
        consumer of a dispute concerning the completeness or 
        accuracy of any item of information contained in a 
        consumer report on such consumer produced by the 
        reseller, the reseller shall, within 5 business days of 
        receiving the notice, and free of charge--
                  (A) determine whether the item of information 
                is incomplete or inaccurate as a result of an 
                act or omission of the reseller; and
                  (B) if--
                          (i) the reseller determines that the 
                        item of information is incomplete or 
                        inaccurate as a result of an act or 
                        omission of the reseller, not later 
                        than 20 days after receiving the 
                        notice, correct the information in the 
                        consumer report or delete it; or
                          (ii) if the reseller determines that 
                        the item of information is not 
                        incomplete or inaccurate as a result of 
                        an act or omission of the reseller, 
                        convey the notice of the dispute, 
                        together with all relevant information 
                        provided by the consumer, to each 
                        consumer reporting agency that provided 
                        the reseller with the information that 
                        is the subject of the dispute, using an 
                        address or a notification mechanism 
                        specified by the consumer reporting 
                        agency for such notices.
          (3) Responsibility of consumer reporting agency to 
        notify consumer through reseller.--Upon the completion 
        of a reinvestigation under this section of a dispute 
        concerning the completeness or accuracy of any 
        information in the file of a consumer by a consumer 
        reporting agency that received notice of the dispute 
        from a reseller under paragraph (2)--
                  (A) the notice by the consumer reporting 
                agency under paragraph (6), (7), or (8) of 
                subsection (a) shall be provided to the 
                reseller in lieu of the consumer; and
                  (B) the reseller shall immediately reconvey 
                such notice to the consumer, including any 
                notice of a deletion by telephone in the manner 
                required under paragraph (8)(A).
          (4) Reseller reinvestigations.--No provision of this 
        subsection shall be construed as prohibiting a reseller 
        from conducting a reinvestigation of a consumer dispute 
        directly.

SEC. 612. CHARGES FOR CERTAIN DISCLOSURES.

  (a) Free Annual Disclosure.--
          (1) Nationwide consumer reporting agencies.--
                  (A) In general.--All consumer reporting 
                agencies described in subsections (p) and [(w)] 
                (x) of section 603 shall make all disclosures 
                pursuant to section 609 once during any 12-
                month period upon request of the consumer and 
                without charge to the consumer.
                  (B) Centralized source.--Subparagraph (A) 
                shall apply with respect to a consumer 
                reporting agency described in section 603(p) 
                only if the request from the consumer is made 
                using the centralized source established for 
                such purpose in accordance with section 211(c) 
                of the Fair and Accurate Credit Transactions 
                Act of 2003.
                  (C) Nationwide specialty consumer reporting 
                agency.--
                          (i) In general.--[The Commission] The 
                        Bureau shall prescribe regulations 
                        applicable to each consumer reporting 
                        agency described in section [603(w)] 
                        603(x) to require the establishment of 
                        a streamlined process for consumers to 
                        request consumer reports under 
                        subparagraph (A), which shall include, 
                        at a minimum, the establishment by each 
                        such agency of a toll-free telephone 
                        number for such requests.
                          (ii) Considerations.--In prescribing 
                        regulations under clause (i), the 
                        [Bureau] Agency shall consider--
                                  (I) the significant demands 
                                that may be placed on consumer 
                                reporting agencies in providing 
                                such consumer reports;
                                  (II) appropriate means to 
                                ensure that consumer reporting 
                                agencies can satisfactorily 
                                meet those demands, including 
                                the efficacy of a system of 
                                staggering the availability to 
                                consumers of such consumer 
                                reports; and
                                  (III) the ease by which 
                                consumers should be able to 
                                contact consumer reporting 
                                agencies with respect to access 
                                to such consumer reports.
                          (iii) Date of issuance.--[The 
                        Commission] The Bureau shall issue the 
                        regulations required by this 
                        subparagraph in final form not later 
                        than 6 months after the date of 
                        enactment of the Fair and Accurate 
                        Credit Transactions Act of 2003.
                          (iv) Consideration of ability to 
                        comply.--The regulations of the 
                        [Bureau] Agency under this subparagraph 
                        shall establish an effective date by 
                        which each nationwide specialty 
                        consumer reporting agency (as defined 
                        in section [603(w)] 603(x)) shall be 
                        required to comply with subsection (a), 
                        which effective date--
                                  (I) shall be established 
                                after consideration of the 
                                ability of each nationwide 
                                specialty consumer reporting 
                                agency to comply with 
                                subsection (a); and
                                  (II) shall be not later than 
                                6 months after the date on 
                                which such regulations are 
                                issued in final form (or such 
                                additional period not to exceed 
                                3 months, as the [Bureau] 
                                Agency determines appropriate).
          (2) Timing.--A consumer reporting agency shall 
        provide a consumer report under paragraph (1) not later 
        than 15 days after the date on which the request is 
        received under paragraph (1).
          (3) Reinvestigations.--Notwithstanding the time 
        periods specified in section 611(a)(1), a 
        reinvestigation under that section by a consumer 
        reporting agency upon a request of a consumer that is 
        made after receiving a consumer report under this 
        subsection shall be completed not later than 45 days 
        after the date on which the request is received.
          (4) Exception for first 12 months of operation.--This 
        subsection shall not apply to a consumer reporting 
        agency that has not been furnishing consumer reports to 
        third parties on a continuing basis during the 12-month 
        period preceding a request under paragraph (1), with 
        respect to consumers residing nationwide.
  (b) Free Disclosure After Adverse Notice to Consumer.--Each 
consumer reporting agency that maintains a file on a consumer 
shall make all disclosures pursuant to section 609 without 
charge to the consumer if, not later than 60 days after receipt 
by such consumer of a notification pursuant to section 615, or 
of a notification from a debt collection agency affiliated with 
that consumer reporting agency stating that the consumer's 
credit rating may be or has been adversely affected, the 
consumer makes a request under section 609.
  (c) Free Disclosure Under Certain Other Circumstances.--Upon 
the request of the consumer, a consumer reporting agency shall 
make all disclosures pursuant to section 609 once during any 
12-month period without charge to that consumer if the consumer 
certifies in writing that the consumer--
          (1) is unemployed and intends to apply for employment 
        in the 60-day period beginning on the date on which the 
        certification is made;
          (2) is a recipient of public welfare assistance; or
          (3) has reason to believe that the file on the 
        consumer at the agency contains inaccurate information 
        due to fraud.
  (d) Free Disclosures in Connection With Fraud Alerts.--Upon 
the request of a consumer, a consumer reporting agency 
described in section 603(p) shall make all disclosures pursuant 
to section 609 without charge to the consumer, as provided in 
subsections (a)(2) and (b)(2) of section 605A, as applicable.
  (e) Other Charges Prohibited.--A consumer reporting agency 
shall not impose any charge on a consumer for providing any 
notification required by this title or making any disclosure 
required by this title, except as authorized by subsection (f).
  (f) Reasonable Charges Allowed for Certain Disclosures.--
          (1) In general.--In the case of a request from a 
        consumer other than a request that is covered by any of 
        subsections (a) through (d), a consumer reporting 
        agency may impose a reasonable charge on a consumer--
                  (A) for making a disclosure to the consumer 
                pursuant to section 609, which charge--
                          (i) shall not exceed $8; and
                          (ii) shall be indicated to the 
                        consumer before making the disclosure; 
                        and
                  (B) for furnishing, pursuant to section 
                611(d), following a reinvestigation under 
                section 611(a), a statement, codification, or 
                summary to a person designated by the consumer 
                under that section after the 30-day period 
                beginning on the date of notification of the 
                consumer under paragraph (6) or (8) of section 
                611(a) with respect to the reinvestigation, 
                which charge--
                          (i) shall not exceed the charge that 
                        the agency would impose on each 
                        designated recipient for a consumer 
                        report; and
                          (ii) shall be indicated to the 
                        consumer before furnishing such 
                        information.
          (2) Modification of amount.--The [Bureau] Agency 
        shall increase the amount referred to in paragraph 
        (1)(A)(i) on January 1 of each year, based 
        proportionally on changes in the Consumer Price Index, 
        with fractional changes rounded to the nearest fifty 
        cents.
  (g) Prevention of Deceptive Marketing of Credit Reports.--
          (1) In general.--Subject to rulemaking pursuant to 
        section 205(b) of the Credit CARD Act of 2009, any 
        advertisement for a free credit report in any medium 
        shall prominently disclose in such advertisement that 
        free credit reports are available under Federal law at: 
        ``AnnualCreditReport.com'' (or such other source as may 
        be authorized under Federal law).
          (2) Television and radio advertisement.--In the case 
        of an advertisement broadcast by television, the 
        disclosures required under paragraph (1) shall be 
        included in the audio and visual part of such 
        advertisement. In the case of an advertisement 
        broadcast by [televison] television or radio, the 
        disclosure required under paragraph (1) shall consist 
        only of the following: ``This is not the free credit 
        report provided for by Federal law''.

           *       *       *       *       *       *       *


Sec. 615. Requirements on users of consumer reports

  (a) Duties of Users Taking Adverse Actions on the Basis of 
Information Contained in Consumer Reports.--If any person takes 
any adverse action with respect to any consumer that is based 
in whole or in part on any information contained in a consumer 
report, the person shall--
          (1) provide oral, written, or electronic notice of 
        the adverse action to the consumer;
          (2) provide to the consumer written or electronic 
        disclosure--
                  (A) of a numerical credit score as defined in 
                section 609(f)(2)(A) used by such person in 
                taking any adverse action based in whole or in 
                part on any information in a consumer report; 
                and
                  (B) of the information set forth in 
                subparagraphs (B) through (E) of section 
                609(f)(1);
          (3) provide to the consumer orally, in writing, or 
        electronically--
                  (A) the name, address, and telephone number 
                of the consumer reporting agency (including a 
                toll-free telephone number established by the 
                agency if the agency compiles and maintains 
                files on consumers on a nationwide basis) that 
                furnished the report to the person; and
                  (B) a statement that the consumer reporting 
                agency did not make the decision to take the 
                adverse action and is unable to provide the 
                consumer the specific reasons why the adverse 
                action was taken; and
          (4) provide to the consumer an oral, written, or 
        electronic notice of the consumer's right--
                  (A) to obtain, under section 612, a free copy 
                of a consumer report on the consumer from the 
                consumer reporting agency referred to in 
                paragraph (3), which notice shall include an 
                indication of the 60-day period under that 
                section for obtaining such a copy; and
                  (B) to dispute, under section 611, with a 
                consumer reporting agency the accuracy or 
                completeness of any information in a consumer 
                report furnished by the agency.
  (b) Adverse Action Based on Information Obtained From Third 
Parties Other Than Consumer Reporting Agencies.--
          (1) In general.--Whenever credit for personal, 
        family, or household purposes involving a consumer is 
        denied or the charge for such credit is increased 
        either wholly or partly because of information obtained 
        from a person other than a consumer reporting agency 
        bearing upon the consumer's credit worthiness, credit 
        standing, credit capacity, character, general 
        reputation, personal characteristics, or mode of 
        living, the user of such information shall, within a 
        reasonable period of time, upon the consumer's written 
        request for the reasons for such adverse action 
        received within sixty days after learning of such 
        adverse action, disclose the nature of the information 
        to the consumer. The user of such information shall 
        clearly and accurately disclose to the consumer his 
        right to make such written request at the time such 
        adverse action is communicated to the consumer.
          (2) Duties of person taking certain actions based on 
        information provided by affiliate.--
                  (A) Duties, generally.--If a person takes an 
                action described in subparagraph (B) with 
                respect to a consumer, based in whole or in 
                part on information described in subparagraph 
                (C), the person shall--
                          (i) notify the consumer of the 
                        action, including a statement that the 
                        consumer may obtain the information in 
                        accordance with clause (ii); and
                          (ii) upon a written request from the 
                        consumer received within 60 days after 
                        transmittal of the notice required by 
                        clause (i), disclose to the consumer 
                        the nature of the information upon 
                        which the action is based by not later 
                        than 30 days after receipt of the 
                        request.
                  (B) Action described.--An action referred to 
                in subparagraph (A) is an adverse action 
                described in section 603(k)(1)(A), taken in 
                connection with a transaction initiated by the 
                consumer, or any adverse action described in 
                clause (i) or (ii) of section 603(k)(1)(B).
                  (C) Information described.--Information 
                referred to in subparagraph (A)--
                          (i) except as provided in clause 
                        (ii), is information that--
                                  (I) is furnished to the 
                                person taking the action by a 
                                person related by common 
                                ownership or affiliated by 
                                common corporate control to the 
                                person taking the action; and
                                  (II) bears on the credit 
                                worthiness, credit standing, 
                                credit capacity, character, 
                                general reputation, personal 
                                characteristics, or mode of 
                                living of the consumer; and
                          (ii) does not include--
                                  (I) information solely as to 
                                transactions or experiences 
                                between the consumer and the 
                                person furnishing the 
                                information; or
                                  (II) information in a 
                                consumer report.
  (c) No person shall be held liable for any violation of this 
section if he shows by a preponderance of the evidence that at 
the time of the alleged violation he maintained reasonable 
procedures to assure compliance with the provisions of this 
section.
  (d) Duties of Users Making Written Credit or Insurance 
Solicitations on the Basis of Information Contained in Consumer 
Files.--
          (1) In general.--Any person who uses a consumer 
        report on any consumer in connection with any credit or 
        insurance transaction that is not initiated by the 
        consumer, that is provided to that person under section 
        604(c)(1)(B), shall provide with each written 
        solicitation made to the consumer regarding the 
        transaction a clear and conspicuous statement that--
                  (A) information contained in the consumer's 
                consumer report was used in connection with the 
                transaction;
                  (B) the consumer received the offer of credit 
                or insurance because the consumer satisfied the 
                criteria for credit worthiness or insurability 
                under which the consumer was selected for the 
                offer;
                  (C) if applicable, the credit or insurance 
                may not be extended if, after the consumer 
                responds to the offer, the consumer does not 
                meet the criteria used to select the consumer 
                for the offer or any applicable criteria 
                bearing on credit worthiness or insurability or 
                does not furnish any required collateral;
                  (D) the consumer has a right to prohibit 
                information contained in the consumer's file 
                with any consumer reporting agency from being 
                used in connection with any credit or insurance 
                transaction that is not initiated by the 
                consumer; and
                  (E) the consumer may exercise the right 
                referred to in subparagraph (D) by notifying a 
                notification system established under section 
                604(e).
          (2) Disclosure of address and telephone number; 
        format.--A statement under paragraph (1) shall--
                  (A) include the address and toll-free 
                telephone number of the appropriate 
                notification system established under section 
                604(e); and
                  (B) be presented in such format and in such 
                type size and manner as to be simple and easy 
                to understand, as established by the [Bureau] 
                Agency, by rule, in consultation with the 
                Federal Trade Commission, the Federal banking 
                agencies, and the National Credit Union 
                Administration.
          (3) Maintaining criteria on file.--A person who makes 
        an offer of credit or insurance to a consumer under a 
        credit or insurance transaction described in paragraph 
        (1) shall maintain on file the criteria used to select 
        the consumer to receive the offer, all criteria bearing 
        on credit worthiness or insurability, as applicable, 
        that are the basis for determining whether or not to 
        extend credit or insurance pursuant to the offer, and 
        any requirement for the furnishing of collateral as a 
        condition of the extension of credit or insurance, 
        until the expiration of the 3-year period beginning on 
        the date on which the offer is made to the consumer.
          (4) Authority of federal agencies regarding unfair or 
        deceptive acts or practices not affected.--This section 
        is not intended to affect the authority of any Federal 
        or State agency to enforce a prohibition against unfair 
        or deceptive acts or practices, including the making of 
        false or misleading statements in connection with a 
        credit or insurance transaction that is not initiated 
        by the consumer.
  (e) Red Flag Guidelines and Regulations Required.--
          (1) Guidelines.--The Federal banking agencies, the 
        National Credit Union Administration, the Federal Trade 
        Commission, the Commodity Futures Trading Commission, 
        and the Securities and Exchange Commission shall 
        jointly, with respect to the entities that are subject 
        to their respective enforcement authority under section 
        621--
                  (A) establish and maintain guidelines for use 
                by each financial institution and each creditor 
                regarding identity theft with respect to 
                account holders at, or customers of, such 
                entities, and update such guidelines as often 
                as necessary;
                  (B) prescribe regulations requiring each 
                financial institution and each creditor to 
                establish reasonable policies and procedures 
                for implementing the guidelines established 
                pursuant to subparagraph (A), to identify 
                possible risks to account holders or customers 
                or to the safety and soundness of the 
                institution or customers; and
                  (C) prescribe regulations applicable to card 
                issuers to ensure that, if a card issuer 
                receives notification of a change of address 
                for an existing account, and within a short 
                period of time (during at least the first 30 
                days after such notification is received) 
                receives a request for an additional or 
                replacement card for the same account, the card 
                issuer may not issue the additional or 
                replacement card, unless the card issuer, in 
                accordance with reasonable policies and 
                procedures--
                          (i) notifies the cardholder of the 
                        request at the former address of the 
                        cardholder and provides to the 
                        cardholder a means of promptly 
                        reporting incorrect address changes;
                          (ii) notifies the cardholder of the 
                        request by such other means of 
                        communication as the cardholder and the 
                        card issuer previously agreed to; or
                          (iii) uses other means of assessing 
                        the validity of the change of address, 
                        in accordance with reasonable policies 
                        and procedures established by the card 
                        issuer in accordance with the 
                        regulations prescribed under 
                        subparagraph (B).
          (2) Criteria.--
                  (A) In general.--In developing the guidelines 
                required by paragraph (1)(A), the agencies 
                described in paragraph (1) shall identify 
                patterns, practices, and specific forms of 
                activity that indicate the possible existence 
                of identity theft.
                  (B) Inactive accounts.--In developing the 
                guidelines required by paragraph (1)(A), the 
                agencies described in paragraph (1) shall 
                consider including reasonable guidelines 
                providing that when a transaction occurs with 
                respect to a credit or deposit account that has 
                been inactive for more than 2 years, the 
                creditor or financial institution shall follow 
                reasonable policies and procedures that provide 
                for notice to be given to a consumer in a 
                manner reasonably designed to reduce the 
                likelihood of identity theft with respect to 
                such account.
          (3) Consistency with verification requirements.--
        Guidelines established pursuant to paragraph (1) shall 
        not be inconsistent with the policies and procedures 
        required under section 5318(l) of title 31, United 
        States Code.
          (4) Definitions.--As used in this subsection, the 
        term ``creditor''--
                  (A) means a creditor, as defined in section 
                702 of the Equal Credit Opportunity Act (15 
                U.S.C. 1691a), that regularly and in the 
                ordinary course of business--
                          (i) obtains or uses consumer reports, 
                        directly or indirectly, in connection 
                        with a credit transaction;
                          (ii) furnishes information to 
                        consumer reporting agencies, as 
                        described in section 623, in connection 
                        with a credit transaction; or
                          (iii) advances funds to or on behalf 
                        of a person, based on an obligation of 
                        the person to repay the funds or 
                        repayable from specific property 
                        pledged by or on behalf of the person;
                  (B) does not include a creditor described in 
                subparagraph (A)(iii) that advances funds on 
                behalf of a person for expenses incidental to a 
                service provided by the creditor to that 
                person; and
                  (C) includes any other type of creditor, as 
                defined in that section 702, as the agency 
                described in paragraph (1) having authority 
                over that creditor may determine appropriate by 
                rule promulgated by that agency, based on a 
                determination that such creditor offers or 
                maintains accounts that are subject to a 
                reasonably foreseeable risk of identity theft.
  (f) Prohibition on Sale or Transfer of Debt Caused by 
Identity Theft.--
          (1) In general.--No person shall sell, transfer for 
        consideration, or place for collection a debt that such 
        person has been notified under section 605B has 
        resulted from identity theft.
          (2) Applicability.--The prohibitions of this 
        subsection shall apply to all persons collecting a debt 
        described in paragraph (1) after the date of a 
        notification under paragraph (1).
          (3) Rule of construction.--Nothing in this subsection 
        shall be construed to prohibit--
                  (A) the repurchase of a debt in any case in 
                which the assignee of the debt requires such 
                repurchase because the debt has resulted from 
                identity theft;
                  (B) the securitization of a debt or the 
                pledging of a portfolio of debt as collateral 
                in connection with a borrowing; or
                  (C) the transfer of debt as a result of a 
                merger, acquisition, purchase and assumption 
                transaction, or transfer of substantially all 
                of the assets of an entity.
  (g) Debt Collector Communications Concerning Identity 
Theft.--If a person acting as a debt collector (as that term is 
defined in title VIII) on behalf of a third party that is a 
creditor or other user of a consumer report is notified that 
any information relating to a debt that the person is 
attempting to collect may be fraudulent or may be the result of 
identity theft, that person shall--
          (1) notify the third party that the information may 
        be fraudulent or may be the result of identity theft; 
        and
          (2) upon request of the consumer to whom the debt 
        purportedly relates, provide to the consumer all 
        information to which the consumer would otherwise be 
        entitled if the consumer were not a victim of identity 
        theft, but wished to dispute the debt under provisions 
        of law applicable to that person.
  (h) Duties of Users in Certain Credit Transactions.--
          (1) In general.--Subject to rules prescribed as 
        provided in paragraph (6), if any person uses a 
        consumer report in connection with an application for, 
        or a grant, extension, or other provision of, credit on 
        material terms that are materially less favorable than 
        the most favorable terms available to a substantial 
        proportion of consumers from or through that person, 
        based in whole or in part on a consumer report, the 
        person shall provide an oral, written, or electronic 
        notice to the consumer in the form and manner required 
        by regulations prescribed in accordance with this 
        subsection.
          (2) Timing.--The notice required under paragraph (1) 
        may be provided at the time of an application for, or a 
        grant, extension, or other provision of, credit or the 
        time of communication of an approval of an application 
        for, or grant, extension, or other provision of, 
        credit, except as provided in the regulations 
        prescribed under paragraph (6).
          (3) Exceptions.--No notice shall be required from a 
        person under this subsection if--
                  (A) the consumer applied for specific 
                material terms and was granted those terms, 
                unless those terms were initially specified by 
                the person after the transaction was initiated 
                by the consumer and after the person obtained a 
                consumer report; or
                  (B) the person has provided or will provide a 
                notice to the consumer under subsection (a) in 
                connection with the transaction.
          (4) Other notice not sufficient.--A person that is 
        required to provide a notice under subsection (a) 
        cannot meet that requirement by providing a notice 
        under this subsection.
          (5) Content and delivery of notice.--A notice under 
        this subsection shall, at a minimum--
                  (A) include a statement informing the 
                consumer that the terms offered to the consumer 
                are set based on information from a consumer 
                report;
                  (B) identify the consumer reporting agency 
                furnishing the report;
                  (C) include a statement informing the 
                consumer that the consumer may obtain a copy of 
                a consumer report from that consumer reporting 
                agency without charge;
                  (D) include the contact information specified 
                by that consumer reporting agency for obtaining 
                such consumer reports (including a toll-free 
                telephone number established by the agency in 
                the case of a consumer reporting agency 
                described in section 603(p)); and
                  (E) include a statement informing the 
                consumer of--
                          (i) a numerical credit score as 
                        defined in section 609(f)(2)(A), used 
                        by such person in making the credit 
                        decision described in paragraph (1) 
                        based in whole or in part on any 
                        information in a consumer report; and
                          (ii) the information set forth in 
                        subparagraphs (B) through (E) of 
                        section 609(f)(1).
          (6) Rulemaking.--
                  (A) Rules required.--The [Bureau] Agency 
                shall prescribe rules to carry out this 
                subsection.
                  (B) Content.--Rules required by subparagraph 
                (A) shall address, but are not limited to--
                          (i) the form, content, time, and 
                        manner of delivery of any notice under 
                        this subsection;
                          (ii) clarification of the meaning of 
                        terms used in this subsection, 
                        including what credit terms are 
                        material, and when credit terms are 
                        materially less favorable;
                          (iii) exceptions to the notice 
                        requirement under this subsection for 
                        classes of persons or transactions 
                        regarding which the agencies determine 
                        that notice would not significantly 
                        benefit consumers;
                          (iv) a model notice that may be used 
                        to comply with this subsection; and
                          (v) the timing of the notice required 
                        under paragraph (1), including the 
                        circumstances under which the notice 
                        must be provided after the terms 
                        offered to the consumer were set based 
                        on information from a consumer report.
          (7) Compliance.--A person shall not be liable for 
        failure to perform the duties required by this section 
        if, at the time of the failure, the person maintained 
        reasonable policies and procedures to comply with this 
        section.
          (8) Enforcement.--
                  (A) No civil actions.--Sections 616 and 617 
                shall not apply to any failure by any person to 
                comply with this section.
                  (B) Administrative enforcement.--This section 
                shall be enforced exclusively under section 621 
                by the Federal agencies and officials 
                identified in that section.

           *       *       *       *       *       *       *


Sec. 621. Administrative enforcement

  (a) Enforcement by Federal Trade Commission.--
          (1) In general.--The Federal Trade Commission shall 
        be authorized to enforce compliance with the 
        requirements imposed by this title under the Federal 
        Trade Commission Act (15 U.S.C. 41 et seq.), with 
        respect to consumer reporting agencies and all other 
        persons subject thereto, except to the extent that 
        enforcement of the requirements imposed under this 
        title is specifically committed to some other 
        Government agency under any of subparagraphs (A) 
        through (G) of subsection (b)(1), and subject to 
        subtitle B of the Consumer Financial Protection Act of 
        2010[, subsection (b)]. For the purpose of the exercise 
        by the Federal Trade Commission of its functions and 
        powers under the Federal Trade Commission Act, a 
        violation of any requirement or prohibition imposed 
        under this title shall constitute an unfair or 
        deceptive act or practice in commerce, in violation of 
        section 5(a) of the Federal Trade Commission Act (15 
        U.S.C. 45(a)), and shall be subject to enforcement by 
        the Federal Trade Commission under section 5(b) of that 
        Act with respect to any consumer reporting agency or 
        person that is subject to enforcement by the Federal 
        Trade Commission pursuant to this subsection, 
        irrespective of whether that person is engaged in 
        commerce or meets any other jurisdictional tests under 
        the Federal Trade Commission Act. The Federal Trade 
        Commission shall have such procedural, investigative, 
        and enforcement powers, including the power to issue 
        procedural rules in enforcing compliance with the 
        requirements imposed under this title and to require 
        the filing of reports, the production of documents, and 
        the appearance of witnesses, as though the applicable 
        terms and conditions of the Federal Trade Commission 
        Act were part of this title. Any person violating any 
        of the provisions of this title shall be subject to the 
        penalties and entitled to the privileges and immunities 
        provided in the Federal Trade Commission Act as though 
        the applicable terms and provisions of such Act are 
        part of this title.
          (2) Penalties.--
                  (A) Knowing violations.--Except as otherwise 
                provided by subtitle B of the Consumer 
                Financial Protection Act of 2010, in the event 
                of a knowing violation, which constitutes a 
                pattern or practice of violations of this 
                title, the Federal Trade Commission may 
                commence a civil action to recover a civil 
                penalty in a district court of the United 
                States against any person that violates this 
                title. In such action, such person shall be 
                liable for a civil penalty of not more than 
                $2,500 per violation.
                  (B) Determining penalty amount.--In 
                determining the amount of a civil penalty under 
                subparagraph (A), the court shall take into 
                account the degree of culpability, any history 
                of such prior conduct, ability to pay, effect 
                on ability to continue to do business, and such 
                other matters as justice may require.
                  (C) Limitation.--Notwithstanding paragraph 
                (2), a court may not impose any civil penalty 
                on a person for a violation of section 
                623(a)(1), unless the person has been enjoined 
                from committing the violation, or ordered not 
                to commit the violation, in an action or 
                proceeding brought by or on behalf of the 
                Federal Trade Commission, and has violated the 
                injunction or order, and the court may not 
                impose any civil penalty for any violation 
                occurring before the date of the violation of 
                the injunction or order.
  (b) Enforcement by Other Agencies.--
          (1) In general.--Subject to subtitle B of the 
        Consumer Financial Protection Act of 2010, compliance 
        with the requirements imposed under this title with 
        respect to consumer reporting agencies, persons who use 
        consumer reports from such agencies, persons who 
        furnish information to such agencies, and users of 
        information that are subject to section 615(d) shall be 
        enforced under--
                  (A) section 8 of the Federal Deposit 
                Insurance Act (12 U.S.C. 1818), by the 
                appropriate Federal banking agency, as defined 
                in section 3(q) of the Federal Deposit 
                Insurance Act (12 U.S.C. 1813(q)), with respect 
                to--
                          (i) any national bank or State 
                        savings association, and any Federal 
                        branch or Federal agency of a foreign 
                        bank;
                          (ii) any member bank of the Federal 
                        Reserve System (other than a national 
                        bank), a branch or agency of a foreign 
                        bank (other than a Federal branch, 
                        Federal agency, or insured State branch 
                        of a foreign bank), a commercial 
                        lending company owned or controlled by 
                        a foreign bank, and any organization 
                        operating under section 25 or 25A of 
                        the Federal Reserve Act; and
                          (iii) any bank or Federal savings 
                        association insured by the Federal 
                        Deposit Insurance Corporation (other 
                        than a member of the Federal Reserve 
                        System) and any insured State branch of 
                        a foreign bank;
                  (B) the Federal Credit Union Act (12 U.S.C. 
                1751 et seq.), by the Administrator of the 
                National Credit Union Administration with 
                respect to any Federal credit union;
                  (C) subtitle IV of title 49, United States 
                Code, by the Secretary of Transportation, with 
                respect to all carriers subject to the 
                jurisdiction of the Surface Transportation 
                Board;
                  (D) the Federal Aviation Act of 1958 (49 
                U.S.C. App. 1301 et seq.), by the Secretary of 
                Transportation, with respect to any air carrier 
                or foreign air carrier subject to that Act;
                  (E) the Packers and Stockyards Act, 1921 (7 
                U.S.C. 181 et seq.) (except as provided in 
                section 406 of that Act), by the Secretary of 
                Agriculture, with respect to any activities 
                subject to that Act;
                  (F) the Commodity Exchange Act, with respect 
                to a person subject to the jurisdiction of the 
                Commodity Futures Trading Commission;
                  (G) the Federal securities laws, and any 
                other laws that are subject to the jurisdiction 
                of the Securities and Exchange Commission, with 
                respect to a person that is subject to the 
                jurisdiction of the Securities and Exchange 
                Commission; and
                  (H) subtitle E of the Consumer Financial 
                Protection Act of 2010, by the [Bureau] Agency, 
                with respect to any person subject to this 
                title.
          (2) Incorporated definitions.--The terms used in 
        paragraph (1) that are not defined in this title or 
        otherwise defined in section 3(s) of the Federal 
        Deposit Insurance Act (12 U.S.C. 1813(s)) have the same 
        meanings as in section 1(b) of the International 
        Banking Act of 1978 (12 U.S.C. 3101).
  (c) State Action for Violations.--
          (1) Authority of states.--In addition to such other 
        remedies as are provided under State law, if the chief 
        law enforcement officer of a State, or an official or 
        agency designated by a State, has reason to believe 
        that any person has violated or is violating this 
        title, the State--
                  (A) may bring an action to enjoin such 
                violation in any appropriate United States 
                district court or in any other court of 
                competent jurisdiction;
                  (B) subject to paragraph (5), may bring an 
                action on behalf of the residents of the State 
                to recover--
                          (i) damages for which the person is 
                        liable to such residents under sections 
                        616 and 617 as a result of the 
                        violation;
                          (ii) in the case of a violation 
                        described in any of paragraphs (1) 
                        through (3) of section 623(c), damages 
                        for which the person would, but for 
                        section 623(c), be liable to such 
                        residents as a result of the violation; 
                        or
                          (iii) damages of not more than $1,000 
                        for each willful or negligent 
                        violation; and
                  (C) in the case of any successful action 
                under subparagraph (A) or (B), shall be awarded 
                the costs of the action and reasonable attorney 
                fees as determined by the court.
          (2) Rights of federal regulators.--The State shall 
        serve prior written notice of any action under 
        paragraph (1) upon the [Bureau] Agency and the Federal 
        Trade Commission or the appropriate Federal regulator 
        determined under subsection (b) and provide the 
        [Bureau] Agency and the Federal Trade Commission or 
        appropriate Federal regulator with a copy of its 
        complaint, except in any case in which such prior 
        notice is not feasible, in which case the State shall 
        serve such notice immediately upon instituting such 
        action. The [Bureau] Agency and the Federal Trade 
        Commission or appropriate Federal regulator shall have 
        the right--
                  (A) to intervene in the action;
                  (B) upon so intervening, to be heard on all 
                matters arising therein;
                  (C) to remove the action to the appropriate 
                United States district court; and
                  (D) to file petitions for appeal.
          (3) Investigatory powers.--For purposes of bringing 
        any action under this subsection, nothing in this 
        subsection shall prevent the chief law enforcement 
        officer, or an official or agency designated by a 
        State, from exercising the powers conferred on the 
        chief law enforcement officer or such official by the 
        laws of such State to conduct investigations or to 
        administer oaths or affirmations or to compel the 
        attendance of witnesses or the production of 
        documentary and other evidence.
          (4) Limitation on state action while federal action 
        pending.--If the [Bureau] Agency, the Federal Trade 
        Commission, or the appropriate Federal regulator has 
        instituted a civil action or an administrative action 
        under section 8 of the Federal Deposit Insurance Act 
        for a violation of this title, no State may, during the 
        pendency of such action, bring an action under this 
        section against any defendant named in the complaint of 
        the [Bureau] Agency, the Federal Trade Commission, or 
        the appropriate Federal regulator for any violation of 
        this title that is alleged in that complaint.
          (5) Limitations on state actions for certain 
        violations.--
                  (A) Violation of injunction required.--A 
                State may not bring an action against a person 
                under paragraph (1)(B) for a violation 
                described in any of paragraphs (1) through (3) 
                of section 623(c), unless--
                          (i) the person has been enjoined from 
                        committing the violation, in an action 
                        brought by the State under paragraph 
                        (1)(A); and
                          (ii) the person has violated the 
                        injunction.
                  (B) Limitation on damages recoverable.--In an 
                action against a person under paragraph (1)(B) 
                for a violation described in any of paragraphs 
                (1) through (3) of section 623(c), a State may 
                not recover any damages incurred before the 
                date of the violation of an injunction on which 
                the action is based.
  (d) For the purpose of the exercise by any agency referred to 
in subsection (b) of its powers under any Act referred to in 
that subsection, a violation of any requirement imposed under 
this title shall be deemed to be a violation of a requirement 
imposed under that Act. In addition to its powers under any 
provision of law specifically referred to in subsection (b), 
each of the agencies referred to in that subsection may 
exercise, for the purpose of enforcing compliance with any 
requirement imposed under this title any other authority 
conferred on it by law.
  (e) Regulatory Authority.--
          (1) In general.--The [Bureau] Agency shall prescribe 
        such regulations as are necessary to carry out the 
        purposes of this title, except with respect to sections 
        615(e) and 628. The [Bureau] Agency may prescribe 
        regulations as may be necessary or appropriate to 
        administer and carry out the purposes and objectives of 
        this title, and to prevent evasions thereof or to 
        facilitate compliance therewith. Except as provided in 
        section 1029(a) of the Consumer Financial Protection 
        Act of 2010, the regulations prescribed by the [Bureau] 
        Agency under this title shall apply to any person that 
        is subject to this title, notwithstanding the 
        enforcement authorities granted to other agencies under 
        this section.
          (2) Deference.--Notwithstanding any power granted to 
        any Federal agency under this title, the deference that 
        a court affords to a Federal agency with respect to a 
        determination made by such agency relating to the 
        meaning or interpretation of any provision of this 
        title that is subject to the jurisdiction of such 
        agency shall be applied as if that agency were the only 
        agency authorized to apply, enforce, interpret, or 
        administer the provisions of this title. The 
        regulations prescribed by the [Bureau] Agency under 
        this title shall apply to any person that is subject to 
        this title, notwithstanding the enforcement authorities 
        granted to other agencies under this section.
  (f) Coordination of Consumer Complaint Investigations.--
          (1) In general.--Each consumer reporting agency 
        described in section 603(p) shall develop and maintain 
        procedures for the referral to each other such agency 
        of any consumer complaint received by the agency 
        alleging identity theft, or requesting a fraud alert 
        under section 605A or a block under section 605B.
          (2) Model form and procedure for reporting identity 
        theft.--[The Commission] The Agency, in consultation 
        with the Federal Trade Commission, the Federal banking 
        agencies, and the National Credit Union Administration, 
        shall develop a model form and model procedures to be 
        used by consumers who are victims of identity theft for 
        contacting and informing creditors and consumer 
        reporting agencies of the fraud.
          (3) Annual summary reports.--Each consumer reporting 
        agency described in section 603(p) shall submit an 
        annual summary report to the [Bureau] Agency on 
        consumer complaints received by the agency on identity 
        theft or fraud alerts.
  (g) Bureau Regulation of Coding of Trade Names.--If the 
[Bureau] Agency determines that a person described in paragraph 
(9) of section 623(a) has not met the requirements of such 
paragraph, the [Bureau] Agency shall take action to ensure the 
person's compliance with such paragraph, which may include 
issuing model guidance or prescribing reasonable policies and 
procedures, as necessary to ensure that such person complies 
with such paragraph.

           *       *       *       *       *       *       *


SEC. 623. RESPONSIBILITIES OF FURNISHERS OF INFORMATION TO CONSUMER 
                    REPORTING AGENCIES.

  (a) Duty of Furnishers of Information To Provide Accurate 
Information.--
          (1) Prohibition.--
                  (A) Reporting information with actual 
                knowledge of errors.--A person shall not 
                furnish any information relating to a consumer 
                to any consumer reporting agency if the person 
                knows or has reasonable cause to believe that 
                the information is inaccurate.
                  (B) Reporting information after notice and 
                confirmation of errors.--A person shall not 
                furnish information relating to a consumer to 
                any consumer reporting agency if--
                          (i) the person has been notified by 
                        the consumer, at the address specified 
                        by the person for such notices, that 
                        specific information is inaccurate; and
                          (ii) the information is, in fact, 
                        inaccurate.
                  (C) No address requirement.--A person who 
                clearly and conspicuously specifies to the 
                consumer an address for notices referred to in 
                subparagraph (B) shall not be subject to 
                subparagraph (A); however, nothing in 
                subparagraph (B) shall require a person to 
                specify such an address.
                  (D) Definition.--For purposes of subparagraph 
                (A), the term ``reasonable cause to believe 
                that the information is inaccurate'' means 
                having specific knowledge, other than solely 
                allegations by the consumer, that would cause a 
                reasonable person to have substantial doubts 
                about the accuracy of the information.
          (2) Duty to correct and update information.--A person 
        who--
                  (A) regularly and in the ordinary course of 
                business furnishes information to one or more 
                consumer reporting agencies about the person's 
                transactions or experiences with any consumer; 
                and
                  (B) has furnished to a consumer reporting 
                agency information that the person determines 
                is not complete or accurate,
        shall promptly notify the consumer reporting agency of 
        that determination and provide to the agency any 
        corrections to that information, or any additional 
        information, that is necessary to make the information 
        provided by the person to the agency complete and 
        accurate, and shall not thereafter furnish to the 
        agency any of the information that remains not complete 
        or accurate.
          (3) Duty to provide notice of dispute.--If the 
        completeness or accuracy of any information furnished 
        by any person to any consumer reporting agency is 
        disputed to such person by a consumer, the person may 
        not furnish the information to any consumer reporting 
        agency without notice that such information is disputed 
        by the consumer.
          (4) Duty to provide notice of closed accounts.--A 
        person who regularly and in the ordinary course of 
        business furnishes information to a consumer reporting 
        agency regarding a consumer who has a credit account 
        with that person shall notify the agency of the 
        voluntary closure of the account by the consumer, in 
        information regularly furnished for the period in which 
        the account is closed.
          (5) Duty to provide notice of delinquency [of 
        accounts.--][(A) In general.--A person] Of accounts._
                  (A) In general._A person who furnishes 
                information to a consumer reporting agency 
                regarding a delinquent account being placed for 
                collection, charged to profit or loss, or 
                subjected to any similar action shall, not 
                later than 90 days after furnishing the 
                information, notify the agency of the date of 
                delinquency on the account, which shall be the 
                month and year of the commencement of the 
                delinquency on the account that immediately 
                preceded the action.
                  (B) Rule of construction.--For purposes of 
                this paragraph only, and provided that the 
                consumer does not dispute the information, a 
                person that furnishes information on a 
                delinquent account that is placed for 
                collection, charged for profit or loss, or 
                subjected to any similar action, complies with 
                this paragraph, if--
                          (i) the person reports the same date 
                        of delinquency as that provided by the 
                        creditor to which the account was owed 
                        at the time at which the commencement 
                        of the delinquency occurred, if the 
                        creditor previously reported that date 
                        of delinquency to a consumer reporting 
                        agency;
                          (ii) the creditor did not previously 
                        report the date of delinquency to a 
                        consumer reporting agency, and the 
                        person establishes and follows 
                        reasonable procedures to obtain the 
                        date of delinquency from the creditor 
                        or another reliable source and reports 
                        that date to a consumer reporting 
                        agency as the date of delinquency; or
                          (iii) the creditor did not previously 
                        report the date of delinquency to a 
                        consumer reporting agency and the date 
                        of delinquency cannot be reasonably 
                        obtained as provided in clause (ii), 
                        the person establishes and follows 
                        reasonable procedures to ensure the 
                        date reported as the date of 
                        delinquency precedes the date on which 
                        the account is placed for collection, 
                        charged to profit or loss, or subjected 
                        to any similar action, and reports such 
                        date to the credit reporting agency.
          (6) Duties of furnishers upon notice of identity 
        theft-related information.--
                  (A) Reasonable procedures.--A person that 
                furnishes information to any consumer reporting 
                agency shall have in place reasonable 
                procedures to respond to any notification that 
                it receives from a consumer reporting agency 
                under section 605B relating to information 
                resulting from identity theft, to prevent that 
                person from refurnishing such blocked 
                information.
                  (B) Information alleged to result from 
                identity theft.--If a consumer submits an 
                identity theft report to a person who furnishes 
                information to a consumer reporting agency at 
                the address specified by that person for 
                receiving such reports stating that information 
                maintained by such person that purports to 
                relate to the consumer resulted from identity 
                theft, the person may not furnish such 
                information that purports to relate to the 
                consumer to any consumer reporting agency, 
                unless the person subsequently knows or is 
                informed by the consumer that the information 
                is correct.
          (7) Negative information.--
                  (A) Notice to consumer required.--
                          (i) In general.--If any financial 
                        institution that extends credit and 
                        regularly and in the ordinary course of 
                        business furnishes information to a 
                        consumer reporting agency described in 
                        section 603(p) furnishes negative 
                        information to such an agency regarding 
                        credit extended to a customer, the 
                        financial institution shall provide a 
                        notice of such furnishing of negative 
                        information, in writing, to the 
                        customer.
                          (ii) Notice effective for subsequent 
                        submissions.--After providing such 
                        notice, the financial institution may 
                        submit additional negative information 
                        to a consumer reporting agency 
                        described in section 603(p) with 
                        respect to the same transaction, 
                        extension of credit, account, or 
                        customer without providing additional 
                        notice to the customer.
                  (B) Time of notice.--
                          (i) In general.--The notice required 
                        under subparagraph (A) shall be 
                        provided to the customer prior to, or 
                        no later than 30 days after, furnishing 
                        the negative information to a consumer 
                        reporting agency described in section 
                        603(p).
                          (ii) Coordination with new account 
                        disclosures.--If the notice is provided 
                        to the customer prior to furnishing the 
                        negative information to a consumer 
                        reporting agency, the notice may not be 
                        included in the initial disclosures 
                        provided under section 127(a) of the 
                        Truth in Lending Act.
                  (C) Coordination with other disclosures.--The 
                notice required under subparagraph (A)--
                          (i) may be included on or with any 
                        notice of default, any billing 
                        statement, or any other materials 
                        provided to the customer; and
                          (ii) must be clear and conspicuous.
                  (D) Model disclosure.--
                          (i) Duty of bureau.--The [Bureau] 
                        Agency shall prescribe a brief model 
                        disclosure that a financial institution 
                        may use to comply with subparagraph 
                        (A), which shall not exceed 30 words.
                          (ii) Use of model not required.--No 
                        provision of this paragraph may be 
                        construed to require a financial 
                        institution to use any such model form 
                        prescribed by the [Bureau] Agency.
                          (iii) Compliance using model.--A 
                        financial institution shall be deemed 
                        to be in compliance with subparagraph 
                        (A) if the financial institution uses 
                        any model form prescribed by the 
                        [Bureau] Agency under this 
                        subparagraph, or the financial 
                        institution uses any such model form 
                        and rearranges its format.
                  (E) Use of notice without submitting negative 
                information.--No provision of this paragraph 
                shall be construed as requiring a financial 
                institution that has provided a customer with a 
                notice described in subparagraph (A) to furnish 
                negative information about the customer to a 
                consumer reporting agency.
                  (F) Safe harbor.--A financial institution 
                shall not be liable for failure to perform the 
                duties required by this paragraph if, at the 
                time of the failure, the financial institution 
                maintained reasonable policies and procedures 
                to comply with this paragraph or the financial 
                institution reasonably believed that the 
                institution is prohibited, by law, from 
                contacting the consumer.
                  (G) Definitions.--For purposes of this 
                paragraph, the following definitions shall 
                apply:
                          (i) Negative information.--The term 
                        ``negative information'' means 
                        information concerning a customer's 
                        delinquencies, late payments, 
                        insolvency, or any form of default.
                          (ii) Customer; financial 
                        institution.--The terms ``customer''and 
                        ``financial institution'' have the same 
                        meanings as in section 509 Public Law 
                        106-102.
          (8) Ability of consumer to dispute information 
        directly with furnisher.--
                  (A) In general.--The [Bureau] Agency shall, 
                in consultation with the Federal Trade 
                Commission, the Federal banking agencies, and 
                the National Credit Union Administration, 
                prescribe regulations that shall identify the 
                circumstances under which a furnisher shall be 
                required to reinvestigate a dispute concerning 
                the accuracy of information contained in a 
                consumer report on the consumer, based on a 
                direct request of a consumer.
                  (B) Considerations.--In prescribing 
                regulations under subparagraph (A), the 
                agencies shall weigh--
                          (i) the benefits to consumers with 
                        the costs on furnishers and the credit 
                        reporting system;
                          (ii) the impact on the overall 
                        accuracy and integrity of consumer 
                        reports of any such requirements;
                          (iii) whether direct contact by the 
                        consumer with the furnisher would 
                        likely result in the most expeditious 
                        resolution of any such dispute; and
                          (iv) the potential impact on the 
                        credit reporting process if credit 
                        repair organizations, as defined in 
                        section 403(3), including entities that 
                        would be a credit repair organization, 
                        but for section 403(3)(B)(i), are able 
                        to circumvent the prohibition in 
                        subparagraph (G).
                  (C) Applicability.--Subparagraphs (D) through 
                (G) shall apply in any circumstance identified 
                under the regulations promulgated under 
                subparagraph (A).
                  (D) Submitting a notice of dispute.--A 
                consumer who seeks to dispute the accuracy of 
                information shall provide a dispute notice 
                directly to such person at the address 
                specified by the person for such notices that--
                          (i) identifies the specific 
                        information that is being disputed;
                          (ii) explains the basis for the 
                        dispute; and
                          (iii) includes all supporting 
                        documentation required by the furnisher 
                        to substantiate the basis of the 
                        dispute.
                  (E) Duty of person after receiving notice of 
                dispute.--After receiving a notice of dispute 
                from a consumer pursuant to subparagraph (D), 
                the person that provided the information in 
                dispute to a consumer reporting agency shall--
                          (i) conduct an investigation with 
                        respect to the disputed information;
                          (ii) review all relevant information 
                        provided by the consumer with the 
                        notice;
                          (iii) complete such person's 
                        investigation of the dispute and report 
                        the results of the investigation to the 
                        consumer before the expiration of the 
                        period under section 611(a)(1) within 
                        which a consumer reporting agency would 
                        be required to complete its action if 
                        the consumer had elected to dispute the 
                        information under that section; and
                          (iv) if the investigation finds that 
                        the information reported was 
                        inaccurate, promptly notify each 
                        consumer reporting agency to which the 
                        person furnished the inaccurate 
                        information of that determination and 
                        provide to the agency any correction to 
                        that information that is necessary to 
                        make the information provided by the 
                        person accurate.
                  (F) Frivolous or irrelevant dispute.--
                          (i) In general.--This paragraph shall 
                        not apply if the person receiving a 
                        notice of a dispute from a consumer 
                        reasonably determines that the dispute 
                        is frivolous or irrelevant, including--
                                  (I) by reason of the failure 
                                of a consumer to provide 
                                sufficient information to 
                                investigate the disputed 
                                information; or
                                  (II) the submission by a 
                                consumer of a dispute that is 
                                substantially the same as a 
                                dispute previously submitted by 
                                or for the consumer, either 
                                directly to the person or 
                                through a consumer reporting 
                                agency under subsection (b), 
                                with respect to which the 
                                person has already performed 
                                the person's duties under this 
                                paragraph or subsection (b), as 
                                applicable.
                          (ii) Notice of determination.--Upon 
                        making any determination under clause 
                        (i) that a dispute is frivolous or 
                        irrelevant, the person shall notify the 
                        consumer of such determination not 
                        later than 5 business days after making 
                        such determination, by mail or, if 
                        authorized by the consumer for that 
                        purpose, by any other means available 
                        to the person.
                          (iii) Contents of notice.--A notice 
                        under clause (ii) shall include--
                                  (I) the reasons for the 
                                determination under clause (i); 
                                and
                                  (II) identification of any 
                                information required to 
                                investigate the disputed 
                                information, which may consist 
                                of a standardized form 
                                describing the general nature 
                                of such information.
                  (G) Exclusion of credit repair 
                organizations.--This paragraph shall not apply 
                if the notice of the dispute is submitted by, 
                is prepared on behalf of the consumer by, or is 
                submitted on a form supplied to the consumer 
                by, a credit repair organization, as defined in 
                section 403(3), or an entity that would be a 
                credit repair organization, but for section 
                403(3)(B)(i).
          (9) Duty to provide notice of status as medical 
        information furnisher.--A person whose primary business 
        is providing medical services, products, or devices, or 
        the person's agent or assignee, who furnishes 
        information to a consumer reporting agency on a 
        consumer shall be considered a medical information 
        furnisher for purposes of this title, and shall notify 
        the agency of such status.
  (b) Duties of Furnishers of Information Upon Notice of 
Dispute.--
          (1) In general.--After receiving notice pursuant to 
        section 611(a)(2) of a dispute with regard to the 
        completeness or accuracy of any information provided by 
        a person to a consumer reporting agency, the person 
        shall--
                  (A) conduct an investigation with respect to 
                the disputed information;
                  (B) review all relevant information provided 
                by the consumer reporting agency pursuant to 
                section 611(a)(2);
                  (C) report the results of the investigation 
                to the consumer reporting agency;
                  (D) if the investigation finds that the 
                information is incomplete or inaccurate, report 
                those results to all other consumer reporting 
                agencies to which the person furnished the 
                information and that compile and maintain files 
                on consumers on a nationwide basis; and
                  (E) if an item of information disputed by a 
                consumer is found to be inaccurate or 
                incomplete or cannot be verified after any 
                reinvestigation under paragraph (1), for 
                purposes of reporting to a consumer reporting 
                agency only, as appropriate, based on the 
                results of the reinvestigation promptly--
                          (i) modify that item of information;
                          (ii) delete that item of information; 
                        or
                          (iii) permanently block the reporting 
                        of that item of information.
          (2) Deadline.--A person shall complete all 
        investigations, reviews, and reports required under 
        paragraph (1) regarding information provided by the 
        person to a consumer reporting agency, before the 
        expiration of the period under section 611(a)(1) within 
        which the consumer reporting agency is required to 
        complete actions required by that section regarding 
        that information.
  (c) Limitation on Liability.--Except as provided in section 
621(c)(1)(B), sections 616 and 617 do not apply to any 
violation of--
          (1) subsection (a) of this section, including any 
        regulations issued thereunder;
          (2) subsection (e) of this section, except that 
        nothing in this paragraph shall limit, expand, or 
        otherwise affect liability under section 616 or 617, as 
        applicable, for violations of subsection (b) of this 
        section; or
          (3) subsection (e) of section 615.
  (d) Limitation on Enforcement.--The provisions of law 
described in paragraphs (1) through (3) of subsection (c) 
(other than with respect to the exception described in 
paragraph (2) of subsection (c)) shall be enforced exclusively 
as provided under section 621 by the Federal agencies and 
officials and the State officials identified in section 621.
  (e) Accuracy Guidelines and Regulations Required.--
          (1) Guidelines.--The [Bureau] Agency shall, with 
        respect to persons or entities that are subject to the 
        enforcement authority of the [Bureau] Agency under 
        section 621--
                  (A) establish and maintain guidelines for use 
                by each person that furnishes information to a 
                consumer reporting agency regarding the 
                accuracy and integrity of the information 
                relating to consumers that such entities 
                furnish to consumer reporting agencies, and 
                update such guidelines as often as necessary; 
                and
                  (B) prescribe regulations requiring each 
                person that furnishes information to a consumer 
                reporting agency to establish reasonable 
                policies and procedures for implementing the 
                guidelines established pursuant to subparagraph 
                (A).
          (2) Criteria.--In developing the guidelines required 
        by paragraph (1)(A), the [Bureau] Agency shall--
                  (A) identify patterns, practices, and 
                specific forms of activity that can compromise 
                the accuracy and integrity of information 
                furnished to consumer reporting agencies;
                  (B) review the methods (including 
                technological means) used to furnish 
                information relating to consumers to consumer 
                reporting agencies;
                  (C) determine whether persons that furnish 
                information to consumer reporting agencies 
                maintain and enforce policies to ensure the 
                accuracy and integrity of information furnished 
                to consumer reporting agencies; and
                  (D) examine the policies and processes that 
                persons that furnish information to consumer 
                reporting agencies employ to conduct 
                reinvestigations and correct inaccurate 
                information relating to consumers that has been 
                furnished to consumer reporting agencies.

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                              ----------                              


FAIR DEBT COLLECTION PRACTICES ACT

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TITLE VIII--DEBT COLLECTION PRACTICES

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Sec. 803. Definitions

   As used in this title--
          [(1) The term ``Bureau'' means the Bureau of Consumer 
        Financial Protection.]
          (1) The term ``Agency'' means the Consumer Law 
        Enforcement Agency.
          (2) The term ``communication'' means the conveying of 
        information regarding a debt directly or indirectly to 
        any person through any medium.
          (3) The term ``consumer'' means any natural person 
        obligated or allegedly obligated to pay any debt.
          (4) The term ``creditor'' means any person who offers 
        or extends credit creating a debt or to whom a debt is 
        owed, but such term does not include any person to the 
        extent that he receives an assignment or transfer of a 
        debt in default solely for the purpose of facilitating 
        collection of such debt for another.
          (5) The term ``debt'' means any obligation or alleged 
        obligation of a consumer to pay money arising out of a 
        transaction in which the money, property, insurance, or 
        services which are the subject of the transaction are 
        primarily for personal, family, or household purposes, 
        whether or not such obligation has been reduced to 
        judgment.
          (6) The term ``debt collector'' means any person who 
        uses any instrumentality of interstate commerce or the 
        mails in any business the principal purpose of which is 
        the collection of any debts, or who regularly collects 
        or attempts to collect, directly or indirectly, debts 
        owed or due or asserted to be owed or due another. 
        Notwithstanding the exclusion provided by clause (F) of 
        the last sentence of this paragraph, the term includes 
        any creditor who, in the process of collecting his own 
        debts, uses any name other than his own which would 
        indicate that a third person is collecting or 
        attempting to collect such debts. For the purpose of 
        section 808(6), such term also includes any person who 
        uses any instrumentality of interstate commerce or the 
        mails in any business the principal purpose of which is 
        the enforcement of security interests. The term does 
        not include--
                  (A) any officer or employee of a creditor 
                while, in the name of the creditor, collecting 
                debts for such creditor;
                  (B) any person while acting as a debt 
                collector for another person, both of whom are 
                related by common ownership or affiliated by 
                corporate control, if the person acting as a 
                debt collector does so only for persons to whom 
                it is so related or affilated and if the 
                principal business of such person is not the 
                collection of debts;
                  (C) any officer or employee of the United 
                States or any State to the extent that 
                collecting or attempting to collect any debt is 
                in the performance of his official duties;
                  (D) any person while serving or attempting to 
                serve legal process on any other person in 
                connection with the judicial enforcement of any 
                debt;
                  (E) any nonprofit organization which, at the 
                request of consumers, performs bona fide 
                consumer credit counseling and assists 
                consumers in the liquidation of their debts by 
                receiving payments from such consumers and 
                distributing such amounts to creditors;
                  (F) any person collecting or attempting to 
                collect any debt owed or due or asserted to be 
                owed or due another to the extent such activity 
                (i) is incidental to a bona fide fiduciary 
                obligation or a bona fide escrow arrangement; 
                (ii) concerns a debt which was originated by 
                such person; (iii) concerns a debt which was 
                not in default at the time it was obtained by 
                such person; or (iv) concerns a debt obtained 
                by such person as a secured party in a 
                commercial credit transaction involving the 
                creditor.
          (7) The term ``location information'' means a 
        consumer's place of abode and his telephone number at 
        such place, or his place of employment.
          (8) The term ``State'' means any State, territory, or 
        possession of the United States, the District of 
        Columbia, the Commonwealth of Puerto Rico, or any 
        political subdivision of any of the foregoing.

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Sec. 813. Civil liability

  (a) Except as otherwise provided by this section, any debt 
collector who fails to comply with any provision of this title 
with respect to any person is liable to such person in an 
amount equal to the sum of--
          (1) any actual damage sustained by such person as a 
        result of such failure;
          (2)(A) in the case of any action by an individual, 
        such additional damages as the court may allow, but not 
        exceeding $1,000; or
          (B) in the case of a class action, (i) such amount 
        for each named plaintiff as could be recovered under 
        subparagraph (A), and (ii) such amount as the court may 
        allow for all other class members, without regard to a 
        minimum individual recovery, not to exceed the lesser 
        of $500,000 or 1 per centum of the net worth of the 
        debt collector; and
          (3) in the case of any successful action to enforce 
        the foregoing liability, the costs of the action, 
        together with a reasonable attorney's fee as determined 
        by the court. On a finding by the court that an action 
        under this section was brought in bad faith and for the 
        purpose of harassment, the court may award to the 
        defendant attorney's fees reasonable in relation to the 
        work expended and costs.
  (b) In determining the amount of liability in any action 
under subsection (a), the court shall consider, among other 
relevant factors--
          (1) in any individual action under subsection 
        (a)(2)(A), the frequency and persistence of 
        noncompliance by the debt collector, the nature of such 
        noncompliance, and the extent to which such 
        noncompliance was intentional; or
          (2) in any class action under subsection (a)(2)(B), 
        the frequency and persistence of noncompliance by the 
        debt collector, the nature of such noncompliance, the 
        resources of the debt collector, the number of persons 
        adversely affected, and the extent to which the debt 
        collector's noncompliance was intentional.
  (c) A debt collector may not be held liable in any action 
brought under this title if the debt collector shows by a 
preponderance of evidence that the violation was not 
intentional and resulted from a bona fide error notwithstanding 
the maintenance of procedures reasonably adapted to avoid any 
such error.
  (d) An action to enforce any liability created by this title 
may be brought in any appropriate United States district court 
without regard to the amount in controversy, or in any other 
court of competent jurisdiction, within one year from the date 
on which the violation occurs.
  (e) No provision of this section imposing any liability shall 
apply to any act done or omitted in good faith in conformity 
with any advisory opinion of the [Bureau] Agency, 
notwithstanding that after such act or omission has occurred, 
such opinion is amended, rescinded, or determined by judicial 
or other authority to be invalid for any reason.

Sec. 814. Administrative enforcement

  (a) Federal Trade Commission.--The Federal Trade Commission 
shall be authorized to enforce compliance with this title, 
except to the extent that enforcement of the requirements 
imposed under this title is specifically committed to another 
Government agency under any of paragraphs (1) through (5) of 
subsection (b), subject to subtitle B of the Consumer Financial 
Protection Act of 2010. For purpose of the exercise by the 
Federal Trade Commission of its functions and powers under the 
Federal Trade Commission Act (15 U.S.C. 41 et seq.), a 
violation of this title shall be deemed an unfair or deceptive 
act or practice in violation of that Act. All of the functions 
and powers of the Federal Trade Commission under the Federal 
Trade Commission Act are available to the Federal Trade 
Commission to enforce compliance by any person with this title, 
irrespective of whether that person is engaged in commerce or 
meets any other jurisdictional tests under the Federal Trade 
Commission Act, including the power to enforce the provisions 
of this title, in the same manner as if the violation had been 
a violation of a Federal Trade Commission trade regulation 
rule.
  (b) Subject to subtitle B of the Consumer Financial 
Protection Act of 2010, compliance with any requirements 
imposed under this title shall be enforced under--
          (1) section 8 of the Federal Deposit Insurance Act, 
        by the appropriate Federal banking agency, as defined 
        in section 3(q) of the Federal Deposit Insurance Act 
        (12 U.S.C. 1813(q)), with respect to--
                  (A) national banks, Federal savings 
                associations, and Federal branches and Federal 
                agencies of foreign banks;
                  (B) member banks of the Federal Reserve 
                System (other than national banks), branches 
                and agencies of foreign banks (other than 
                Federal branches, Federal agencies, and insured 
                State branches of foreign banks), commercial 
                lending companies owned or controlled by 
                foreign banks, and organizations operating 
                under section 25 or 25A of the Federal Reserve 
                Act; and
                  (C) banks and State savings associations 
                insured by the Federal Deposit Insurance 
                Corporation (other than members of the Federal 
                Reserve System), and insured State branches of 
                foreign banks;
          (2) the Federal Credit Union Act, by the 
        Administrator of the National Credit Union 
        Administration with respect to any Federal credit 
        union;
          (3) the Acts to regulate commerce, by the Secretary 
        of Transportation, with respect to all carriers subject 
        to the jurisdiction of the Surface Transportation 
        Board;
          (4) the Federal Aviation Act of 1958, by the 
        Secretary of Transportation with respect to any air 
        carrier or any foreign air carrier subject to that Act;
          (5) the Packers and Stockyards Act, 1921 (except as 
        provided in section 406 of that Act), by the Secretary 
        of Agriculture with respect to any activities subject 
        to that Act; and
          (6) subtitle E of the Consumer Financial Protection 
        Act of 2010, by the [Bureau] Agency, with respect to 
        any person subject to this title.
The terms used in paragraph (1) that are not defined in this 
title or otherwise defined in section 3(s) of the Federal 
Deposit Insurance Act (12 U.S.C. 1813(s)) shall have the 
meaning given to them in section 1(b) of the International 
Banking Act of 1978 (12 U.S.C. 3101).
  (c) For the purpose of the exercise by any agency referred to 
in subsection (b) of its powers under any Act referred to in 
that subsection, a violation of any requirement imposed under 
this title shall be deemed to be a violation of a requirement 
imposed under that Act. In addition to its powers under any 
provision of law specifically referred to in subsection (b), 
each of the agencies referred to in that subsection may 
exercise, for the purpose of enforcing compliance with any 
requirement imposed under this title any other authority 
conferred on it by law, except as provided in subsection (d).
  (d) Except as provided in section 1029(a) of the Consumer 
Financial Protection Act of 2010, the [Bureau] Agency may 
prescribe rules with respect to the collection of debts by debt 
collectors, as defined in this title.

Sec. 815. Reports to Congress by the [Bureau] Agency

  (a) Not later than one year after the effective date of this 
title and at one-year intervals thereafter, the [Bureau] Agency 
shall make reports to the Congress concerning the 
administration of its functions under this title, including 
such recommendations as the [Bureau] Agency deems necessary or 
appropriate. In addition, each report of the [Bureau] Agency 
shall include its assessment of the extent to which compliance 
with this title is being achieved and a summary of the 
enforcement actions taken by the [Bureau] Agency under section 
814 of this title.
  (b) In the exercise of its functions under this title, the 
[Bureau] Agency may obtain upon request the views of any other 
Federal agency which exercises enforcement functions under 
section 814 of this title.

           *       *       *       *       *       *       *


Sec. 817. Exemption for State regulation

  The [Bureau] Agency shall by regulation exempt from the 
requirements of this title any class of debt collection 
practices within any State if the [Bureau] Agency determines 
that under the law of that State that class of debt collection 
practices is subject to requirements substantially similar to 
those imposed by this title, and that there is adequate 
provision for enforcement.

           *       *       *       *       *       *       *

                              ----------                              


FINANCIAL LITERACY AND EDUCATION IMPROVEMENT ACT

           *       *       *       *       *       *       *



TITLE V--FINANCIAL LITERACY AND EDUCATION IMPROVEMENT

           *       *       *       *       *       *       *


SEC. 513. ESTABLISHMENT OF FINANCIAL LITERACY AND EDUCATION COMMISSION.

  (a) In General.--There is established a commission to be 
known as the ``Financial Literacy and Education Commission''.
  (b) Purpose.--The Commission shall serve to improve the 
financial literacy and education of persons in the United 
States through development of a national strategy to promote 
financial literacy and education.
  (c) Membership.--
          (1) Composition.--The Commission shall be composed 
        of--
                  (A) the Secretary of the Treasury;
                  (B) the respective head of each of the 
                Federal banking agencies (as defined in section 
                3 of the Federal Deposit Insurance Act), the 
                National Credit Union Administration, the 
                Securities and Exchange Commission, each of the 
                Departments of Education, Agriculture, Defense, 
                Health and Human Services, Housing and Urban 
                Development, Labor, and Veterans Affairs, the 
                Federal Trade Commission, the General Services 
                Administration, the Small Business 
                Administration, the Social Security 
                Administration, the Commodity Futures Trading 
                Commission, and the Office of Personnel 
                Management;
                  (C) the Director of the [Bureau of Consumer 
                Financial Protection] Consumer Law Enforcement 
                Agency; and
                  (D) at the discretion of the President, not 
                more than 5 individuals appointed by the 
                President from among the administrative heads 
                of any other Federal agencies, departments, or 
                other Federal Government entities, whom the 
                President determines to be engaged in a serious 
                effort to improve financial literacy and 
                education.
          (2) Alternates.--Each member of the Commission may 
        designate an alternate if the member is unable to 
        attend a meeting of the Commission. Such alternate 
        shall be an individual who exercises significant 
        decisionmaking authority.
  (d) Chairperson.--The Secretary of the Treasury shall serve 
as the Chairperson. The Director of the [Bureau of Consumer 
Financial Protection] Consumer Law Enforcement Agency shall 
serve as the Vice Chairman.
  (e) Meetings.--The Commission shall hold, at the call of the 
Chairperson, at least 1 meeting every 4 months. All such 
meetings shall be open to the public. The Commission may hold, 
at the call of the Chairperson, such other meetings as the 
Chairperson sees fit to carry out this title.
  (f) Quorum.--A majority of the members of the Commission 
shall constitute a quorum, but a lesser number of members may 
hold hearings.
  (g) Initial Meeting.--The Commission shall hold its first 
meeting not later than 60 days after the date of enactment of 
this Act.

           *       *       *       *       *       *       *

                              ----------                              


GRAMM-LEACH-BLILEY ACT

           *       *       *       *       *       *       *



 TITLE I--FACILITATING AFFILIATION AMONG BANKS, SECURITIES FIRMS, AND 
INSURANCE COMPANIES

           *       *       *       *       *       *       *


Subtitle D--Preservation of FTC Authority

           *       *       *       *       *       *       *


SEC. 132. INTERAGENCY DATA SHARING.

  (a) In General.--To the extent not prohibited by other law, 
the Comptroller of the Currency, [the Director of the Office of 
Thrift Supervision,] the Federal Deposit Insurance Corporation, 
and the Board of Governors of the Federal Reserve System shall 
make available to the Attorney General and the Federal Trade 
Commission any data in the possession of any such banking 
agency that the antitrust agency deems necessary for antitrust 
review of any transaction requiring notice to any such 
antitrust agency or the approval of such agency under section 3 
or 4 of the Bank Holding Company Act of 1956, section 18(c) of 
the Federal Deposit Insurance Act, the National Bank 
Consolidation and Merger Act, section 10 of the Home Owners' 
Loan Act, or the antitrust laws.
  (b) Confidentiality Requirements.--
          (1) In general.--Any information or material obtained 
        by any agency pursuant to subsection (a) shall be 
        treated as confidential.
          (2) Procedures for disclosure.--If any information or 
        material obtained by any agency pursuant to subsection 
        (a) is proposed to be disclosed to a third party, 
        written notice of such disclosure shall first be 
        provided to the agency from which such information or 
        material was obtained and an opportunity shall be given 
        to such agency to oppose or limit the proposed 
        disclosure.
          (3) Other privileges not waived by disclosure under 
        this section.--The provision by any Federal agency of 
        any information or material pursuant to subsection (a) 
        to another agency shall not constitute a waiver, or 
        otherwise affect, any privilege any agency or person 
        may claim with respect to such information under 
        Federal or State law.
          (4) Exception.--No provision of this section shall be 
        construed as preventing or limiting access to any 
        information by any duly authorized committee of the 
        Congress or the Comptroller General of the United 
        States.
  (c) Banking Agency Information Sharing.--The provisions of 
subsection (b) shall apply to--
          (1) any information or material obtained by any 
        Federal banking agency (as defined in section 3(z) of 
        the Federal Deposit Insurance Act) from any other 
        Federal banking agency; and
          (2) any report of examination or other confidential 
        supervisory information obtained by any State agency or 
        authority, or any other person, from a Federal banking 
        agency.

           *       *       *       *       *       *       *


TITLE II--FUNCTIONAL REGULATION

           *       *       *       *       *       *       *


Subtitle A--Brokers and Dealers

           *       *       *       *       *       *       *


SEC. 206. DEFINITION OF IDENTIFIED BANKING PRODUCT.

  (a) Definition of Identified Banking Product.--[Except as 
provided in subsection (e), for] For purposes of paragraphs (4) 
and (5) of section 3(a) of the Securities Exchange Act of 1934 
(15 U.S.C. 78c(a) (4), (5)), the term ``identified banking 
product'' means--
          (1) a deposit account, savings account, certificate 
        of deposit, or other deposit instrument issued by a 
        bank;
          (2) a banker's acceptance;
          (3) a letter of credit issued or loan made by a bank;
          (4) a debit account at a bank arising from a credit 
        card or similar arrangement;
          (5) a participation in a loan which the bank or an 
        affiliate of the bank (other than a broker or dealer) 
        funds, participates in, or owns that is sold--
                  (A) to qualified investors; or
                  (B) to other persons that--
                          (i) have the opportunity to review 
                        and assess any material information, 
                        including information regarding the 
                        borrower's creditworthiness; and
                          (ii) based on such factors as 
                        financial sophistication, net worth, 
                        and knowledge and experience in 
                        financial matters, have the capability 
                        to evaluate the information available, 
                        as determined under generally 
                        applicable banking standards or 
                        guidelines; or
          (6) any swap agreement, including credit and equity 
        swaps, except that an equity swap that is sold directly 
        to any person other than a qualified investor (as 
        defined in section 3(a)(54) of the Securities Act of 
        1934) shall not be treated as an identified banking 
        product.
  (b) Definition of Swap Agreement.--For purposes of subsection 
(a)(6), the term ``swap agreement'' means any individually 
negotiated contract, agreement, 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, but does not 
include any other identified banking product, as defined in 
paragraphs (1) through (5) of subsection (a).
  (c) Classification Limited.--Classification of a particular 
product as an identified banking product pursuant to this 
section shall not be construed as finding or implying that such 
product is or is not a security for any purpose under the 
securities laws, or is or is not an account, agreement, 
contract, or transaction for any purpose under the Commodity 
Exchange Act.
  (d) Incorporated Definitions.--For purposes of this section, 
the terms ``bank'' and ``qualified investor'' have the same 
meanings as given in section 3(a) of the Securities Exchange 
Act of 1934, as amended by this Act.

           *       *       *       *       *       *       *


                            TITLE V--PRIVACY

        Subtitle A--Disclosure of Nonpublic Personal Information

SEC. 501. PROTECTION OF NONPUBLIC PERSONAL INFORMATION.

  (a) Privacy Obligation Policy.--It is the policy of the 
Congress that each financial institution has an affirmative and 
continuing obligation to respect the privacy of its customers 
and to protect the security and confidentiality of those 
customers' nonpublic personal information.
  (b) Financial Institutions Safeguards.--In furtherance of the 
policy in subsection (a), each agency or authority described in 
section 505(a), other than the [Bureau of Consumer Financial 
Protection] Consumer Law Enforcement Agency, shall establish 
appropriate standards for the financial institutions subject to 
their jurisdiction relating to administrative, technical, and 
physical safeguards--
          (1) to insure the security and confidentiality of 
        customer records and information;
          (2) to protect against any anticipated threats or 
        hazards to the security or integrity of such records; 
        and
          (3) to protect against unauthorized access to or use 
        of such records or information which could result in 
        substantial harm or inconvenience to any customer.

SEC. 502. OBLIGATIONS WITH RESPECT TO DISCLOSURES OF PERSONAL 
                    INFORMATION.

  (a) Notice Requirements.--Except as otherwise provided in 
this subtitle, a financial institution may not, directly or 
through any affiliate, disclose to a nonaffiliated third party 
any nonpublic personal information, unless such financial 
institution provides or has provided to the consumer a notice 
that complies with section 503.
  (b) Opt Out.--
          (1) In general.--A financial institution may not 
        disclose nonpublic personal information to a 
        nonaffiliated third party unless--
                  (A) such financial institution clearly and 
                conspicuously discloses to the consumer, in 
                writing or in electronic form or other form 
                permitted by the regulations prescribed under 
                section 504, that such information may be 
                disclosed to such third party;
                  (B) the consumer is given the opportunity, 
                before the time that such information is 
                initially disclosed, to direct that such 
                information not be disclosed to such third 
                party; and
                  (C) the consumer is given an explanation of 
                how the consumer can exercise that 
                nondisclosure option.
          (2) Exception.--This subsection shall not prevent a 
        financial institution from providing nonpublic personal 
        information to a nonaffiliated third party to perform 
        services for or functions on behalf of the financial 
        institution, including marketing of the financial 
        institution's own products or services, or financial 
        products or services offered pursuant to joint 
        agreements between two or more financial institutions 
        that comply with the requirements imposed by the 
        regulations prescribed under section 504, if the 
        financial institution fully discloses the providing of 
        such information and enters into a contractual 
        agreement with the third party that requires the third 
        party to maintain the confidentiality of such 
        information.
  (c) Limits on Reuse of Information.--Except as otherwise 
provided in this subtitle, a nonaffiliated third party that 
receives from a financial institution nonpublic personal 
information under this section shall not, directly or through 
an affiliate of such receiving third party, disclose such 
information to any other person that is a nonaffiliated third 
party of both the financial institution and such receiving 
third party, unless such disclosure would be lawful if made 
directly to such other person by the financial institution.
  (d) Limitations on the Sharing of Account Number Information 
for Marketing Purposes.--A financial institution shall not 
disclose, other than to a consumer reporting agency, an account 
number or similar form of access number or access code for a 
credit card account, deposit account, or transaction account of 
a consumer to any nonaffiliated third party for use in 
telemarketing, direct mail marketing, or other marketing 
through electronic mail to the consumer.
  (e) General Exceptions.--Subsections (a) and (b) shall not 
prohibit the disclosure of nonpublic personal information--
          (1) as necessary to effect, administer, or enforce a 
        transaction requested or authorized by the consumer, or 
        in connection with--
                  (A) servicing or processing a financial 
                product or service requested or authorized by 
                the consumer;
                  (B) maintaining or servicing the consumer's 
                account with the financial institution, or with 
                another entity as part of a private label 
                credit card program or other extension of 
                credit on behalf of such entity; or
                  (C) a proposed or actual securitization, 
                secondary market sale (including sales of 
                servicing rights), or similar transaction 
                related to a transaction of the consumer;
          (2) with the consent or at the direction of the 
        consumer;
          (3)(A) to protect the confidentiality or security of 
        the financial institution's records pertaining to the 
        consumer, the service or product, or the transaction 
        therein; (B) to protect against or prevent actual or 
        potential fraud, unauthorized transactions, claims, or 
        other liability; (C) for required institutional risk 
        control, or for resolving customer disputes or 
        inquiries; (D) to persons holding a legal or beneficial 
        interest relating to the consumer; or (E) to persons 
        acting in a fiduciary or representative capacity on 
        behalf of the consumer;
          (4) to provide information to insurance rate advisory 
        organizations, guaranty funds or agencies, applicable 
        rating agencies of the financial institution, persons 
        assessing the institution's compliance with industry 
        standards, and the institution's attorneys, 
        accountants, and auditors;
          (5) to the extent specifically permitted or required 
        under other provisions of law and in accordance with 
        the Right to Financial Privacy Act of 1978, to law 
        enforcement agencies (including the [Bureau of Consumer 
        Financial Protection] Consumer Law Enforcement Agency 
        [a Federal], a Federal functional regulator, the 
        Secretary of the Treasury with respect to subchapter II 
        of chapter 53 of title 31, United States Code, and 
        chapter 2 of title I of Public Law 91-508 (12 U.S.C. 
        1951-1959), a State insurance authority, or the Federal 
        Trade Commission), self-regulatory organizations, or 
        for an investigation on a matter related to public 
        safety;
          (6)(A) to a consumer reporting agency in accordance 
        with the Fair Credit Reporting Act, or (B) from a 
        consumer report reported by a consumer reporting 
        agency;
          (7) in connection with a proposed or actual sale, 
        merger, transfer, or exchange of all or a portion of a 
        business or operating unit if the disclosure of 
        nonpublic personal information concerns solely 
        consumers of such business or unit; or
          (8) to comply with Federal, State, or local laws, 
        rules, and other applicable legal requirements; to 
        comply with a properly authorized civil, criminal, or 
        regulatory investigation or subpoena or summons by 
        Federal, State, or local authorities; or to respond to 
        judicial process or government regulatory authorities 
        having jurisdiction over the financial institution for 
        examination, compliance, or other purposes as 
        authorized by law.

           *       *       *       *       *       *       *


SEC. 504. RULEMAKING.

  (a) Regulatory Authority.--
          (1) Rulemaking.--
                  (A) In general.--Except as provided in 
                subparagraph (C), the [Bureau of Consumer 
                Financial Protection] Consumer Law Enforcement 
                Agency and the Securities and Exchange 
                Commission shall have authority to prescribe 
                such regulations as may be necessary to carry 
                out the purposes of this subtitle with respect 
                to financial institutions and other persons 
                subject to their respective jurisdiction under 
                section 505 (and notwithstanding subtitle B of 
                the Consumer Financial Protection Act of 2010), 
                except that the [Bureau of Consumer Financial 
                Protection] Consumer Law Enforcement Agency 
                shall not have authority to prescribe 
                regulations with respect to the standards under 
                section 501.
                  (B) CFTC.--The Commodity Futures Trading 
                Commission shall have authority to prescribe 
                such regulations as may be necessary to carry 
                out the purposes of this subtitle with respect 
                to financial institutions and other persons 
                subject to the jurisdiction of the Commodity 
                Futures Trading Commission under section 5g of 
                the Commodity Exchange Act.
                  (C) Federal trade commission authority.--
                Notwithstanding the authority of the [Bureau of 
                Consumer Financial Protection] Consumer Law 
                Enforcement Agency under subparagraph (A), the 
                Federal Trade Commission shall have authority 
                to prescribe such regulations as may be 
                necessary to carry out the purposes of this 
                subtitle with respect to any financial 
                institution that is a person described in 
                section 1029(a) of the Consumer Financial 
                Protection Act of 2010.
                  (D) Rule of construction.--Nothing in this 
                paragraph shall be construed to alter, affect, 
                or otherwise limit the authority of a State 
                insurance authority to adopt regulations to 
                carry out this subtitle.
          (2) Coordination, consistency, and comparability.--
        Each of the agencies authorized under paragraph (1) to 
        prescribe regulations shall consult and coordinate with 
        the other such agencies [and, as appropriate, and with] 
        and, as appropriate, with representatives of State 
        insurance authorities designated by the National 
        Association of Insurance Commissioners, for the purpose 
        of assuring, to the extent possible, that the 
        regulations prescribed by each such agency are 
        consistent and comparable with the regulations 
        prescribed by the other such agencies.
          (3) Procedures and deadline.--Such regulations shall 
        be prescribed in accordance with applicable 
        requirements of title 5, United States Code.
  (b) Authority To Grant Exceptions.--The regulations 
prescribed under subsection (a) may include such additional 
exceptions to subsections (a) through (d) of section 502 as are 
deemed consistent with the purposes of this subtitle.

SEC. 505. ENFORCEMENT.

  (a) In General.--Subject to subtitle B of the Consumer 
Financial Protection Act of 2010, this subtitle and the 
regulations prescribed thereunder shall be enforced by the 
[Bureau of Consumer Financial Protection] Consumer Law 
Enforcement Agency, the Federal functional regulators, the 
State insurance authorities, and the Federal Trade Commission 
with respect to financial institutions and other persons 
subject to their jurisdiction under applicable law, as follows:
          (1) Under section 8 of the Federal Deposit Insurance 
        Act, by the appropriate Federal banking agency, as 
        defined in section 3(q) of the Federal Deposit 
        Insurance Act, in the case of--
                  (A) national banks, Federal branches and 
                Federal agencies of foreign banks, and any 
                subsidiaries of such entities (except brokers, 
                dealers, persons providing insurance, 
                investment companies, and investment advisers);
                  (B) member banks of the Federal Reserve 
                System (other than national banks), branches 
                and agencies of foreign banks (other than 
                Federal branches, Federal agencies, and insured 
                State branches of foreign banks), commercial 
                lending companies owned or controlled by 
                foreign banks, organizations operating under 
                section 25 or 25A of the Federal Reserve Act, 
                and bank holding companies and their nonbank 
                subsidiaries or affiliates (except brokers, 
                dealers, persons providing insurance, 
                investment companies, and investment advisers);
                  (C) banks insured by the Federal Deposit 
                Insurance Corporation (other than members of 
                the Federal Reserve System), insured State 
                branches of foreign banks, and any subsidiaries 
                of such entities (except brokers, dealers, 
                persons providing insurance, investment 
                companies, and investment advisers); and
                  (D) savings associations the deposits of 
                which are insured by the Federal Deposit 
                Insurance Corporation, and any subsidiaries of 
                such savings associations (except brokers, 
                dealers, persons providing insurance, 
                investment companies, and investment advisers).
          (2) Under the Federal Credit Union Act, by the Board 
        of the National Credit Union Administration with 
        respect to any federally insured credit union, and any 
        subsidiaries of such an entity.
          (3) Under the Securities Exchange Act of 1934, by the 
        Securities and Exchange Commission with respect to any 
        broker or dealer.
          (4) Under the Investment Company Act of 1940, by the 
        Securities and Exchange Commission with respect to 
        investment companies.
          (5) Under the Investment Advisers Act of 1940, by the 
        Securities and Exchange Commission with respect to 
        investment advisers registered with the Commission 
        under such Act.
          (6) Under State insurance law, in the case of any 
        person engaged in providing insurance, by the 
        applicable State insurance authority of the State in 
        which the person is domiciled, subject to section 104 
        of this Act.
          (7) Under the Federal Trade Commission Act, by the 
        Federal Trade Commission for any other financial 
        institution or other person that is not subject to the 
        jurisdiction of any agency or authority under 
        paragraphs (1) through (6) of this subsection.
          (8) Under subtitle E of the Consumer Financial 
        Protection Act of 2010, by the [Bureau of Consumer 
        Financial Protection] Consumer Law Enforcement Agency, 
        in the case of any financial institution and other 
        covered person or service provider that is subject to 
        the jurisdiction of the [Bureau] Agency and any person 
        subject to this subtitle, but not with respect to the 
        standards under section 501.
  (b) Enforcement of Section 501.--
          (1) In general.--Except as provided in paragraph (2), 
        the agencies and authorities described in subsection 
        (a), other than the [Bureau of Consumer Financial 
        Protection] Consumer Law Enforcement Agency, shall 
        implement the standards prescribed under section 501(b) 
        in the same manner, to the extent practicable, as 
        standards prescribed pursuant to section 39(a) of the 
        Federal Deposit Insurance Act are implemented pursuant 
        to such section.
          (2) Exception.--The agencies and authorities 
        described in paragraphs (3), (4), (5), (6), and (7) of 
        subsection (a) shall implement the standards prescribed 
        under section 501(b) by rule with respect to the 
        financial institutions and other persons subject to 
        their respective jurisdictions under subsection (a).
  (c) Absence of State Action.--If a State insurance authority 
fails to adopt regulations to carry out this subtitle, such 
State shall not be eligible to override, pursuant to section 
47(g)(2)(B)(iii) of the Federal Deposit Insurance Act, the 
insurance customer protection regulations prescribed by a 
Federal banking agency under section 47(a) of such Act.
  (d) Definitions.--The terms used in subsection (a)(1) that 
are not defined in this subtitle or otherwise defined in 
section 3(s) of the Federal Deposit Insurance Act shall have 
the same meaning as given in section 1(b) of the International 
Banking Act of 1978.

           *       *       *       *       *       *       *


SEC. 507. RELATION TO STATE LAWS.

  (a) In General.--This subtitle and the amendments made by 
this subtitle shall not be construed as superseding, altering, 
or affecting any statute, regulation, order, or interpretation 
in effect in any State, except to the extent that such statute, 
regulation, order, or interpretation is inconsistent with the 
provisions of this subtitle, and then only to the extent of the 
inconsistency.
  (b) Greater Protection Under State Law.--For purposes of this 
section, a State statute, regulation, order, or interpretation 
is not inconsistent with the provisions of this subtitle if the 
protection such statute, regulation, order, or interpretation 
affords any person is greater than the protection provided 
under this subtitle and the amendments made by this subtitle, 
as determined by the [Bureau of Consumer Financial Protection] 
Consumer Law Enforcement Agency, after consultation with the 
agency or authority with jurisdiction under section 505(a) of 
either the person that initiated the complaint or that is the 
subject of the complaint, on its own motion or upon the 
petition of any interested party.

           *       *       *       *       *       *       *


SEC. 509. DEFINITIONS.

   As used in this subtitle:
          (1) Federal banking agency.--The term ``Federal 
        banking agency'' has the same meaning as given in 
        section 3 of the Federal Deposit Insurance Act.
          (2) Federal functional regulator.--The term ``Federal 
        functional regulator'' means--
                  (A) the Board of Governors of the Federal 
                Reserve System;
                  (B) the Office of the Comptroller of the 
                Currency;
                  (C) the Board of Directors of the Federal 
                Deposit Insurance Corporation;
                  [(D) the Director of the Office of Thrift 
                Supervision;]
                  [(E)] (D) the National Credit Union 
                Administration Board; and
                  [(F)] (E) the Securities and Exchange 
                Commission.
          (3) Financial institution.--
                  (A) In general.--The term ``financial 
                institution'' means any institution the 
                business of which is engaging in financial 
                activities as described in section 4(k) of the 
                Bank Holding Company Act of 1956.
                  (B) Persons subject to cftc regulation.--
                Notwithstanding subparagraph (A), the term 
                ``financial institution'' does not include any 
                person or entity with respect to any financial 
                activity that is subject to the jurisdiction of 
                the Commodity Futures Trading Commission under 
                the Commodity Exchange Act.
                  (C) Farm credit institutions.--
                Notwithstanding subparagraph (A), the term 
                ``financial institution'' does not include the 
                Federal Agricultural Mortgage Corporation or 
                any entity chartered and operating under the 
                Farm Credit Act of 1971.
                  (D) Other secondary market institutions.--
                Notwithstanding subparagraph (A), the term 
                ``financial institution'' does not include 
                institutions chartered by Congress specifically 
                to engage in transactions described in section 
                502(e)(1)(C), as long as such institutions do 
                not sell or transfer nonpublic personal 
                information to a nonaffiliated third party.
          (4) Nonpublic personal information.--
                  (A) The term ``nonpublic personal 
                information'' means personally identifiable 
                financial information--
                          (i) provided by a consumer to a 
                        financial institution;
                          (ii) resulting from any transaction 
                        with the consumer or any service 
                        performed for the consumer; or
                          (iii) otherwise obtained by the 
                        financial institution.
                  (B) Such term does not include publicly 
                available information, as such term is defined 
                by the regulations prescribed under section 
                504.
                  (C) Notwithstanding subparagraph (B), such 
                term--
                          (i) shall include any list, 
                        description, or other grouping of 
                        consumers (and publicly available 
                        information pertaining to them) that is 
                        derived using any nonpublic personal 
                        information other than publicly 
                        available information; but
                          (ii) shall not include any list, 
                        description, or other grouping of 
                        consumers (and publicly available 
                        information pertaining to them) that is 
                        derived without using any nonpublic 
                        personal information.
          (5) Nonaffiliated third party.--The term 
        ``nonaffiliated third party'' means any entity that is 
        not an affiliate of, or related by common ownership or 
        affiliated by corporate control with, the financial 
        institution, but does not include a joint employee of 
        such institution.
          (6) Affiliate.--The term ``affiliate'' means any 
        company that controls, is controlled by, or is under 
        common control with another company.
          (7) Necessary to effect, administer, or enforce.--The 
        term ``as necessary to effect, administer, or enforce 
        the transaction'' means--
                  (A) the disclosure is required, or is a 
                usual, appropriate, or acceptable method, to 
                carry out the transaction or the product or 
                service business of which the transaction is a 
                part, and record or service or maintain the 
                consumer's account in the ordinary course of 
                providing the financial service or financial 
                product, or to administer or service benefits 
                or claims relating to the transaction or the 
                product or service business of which it is a 
                part, and includes--
                          (i) providing the consumer or the 
                        consumer's agent or broker with a 
                        confirmation, statement, or other 
                        record of the transaction, or 
                        information on the status or value of 
                        the financial service or financial 
                        product; and
                          (ii) the accrual or recognition of 
                        incentives or bonuses associated with 
                        the transaction that are provided by 
                        the financial institution or any other 
                        party;
                  (B) the disclosure is required, or is one of 
                the lawful or appropriate methods, to enforce 
                the rights of the financial institution or of 
                other persons engaged in carrying out the 
                financial transaction, or providing the product 
                or service;
                  (C) the disclosure is required, or is a 
                usual, appropriate, or acceptable method, for 
                insurance underwriting at the consumer's 
                request or for reinsurance purposes, or for any 
                of the following purposes as they relate to a 
                consumer's insurance: Account administration, 
                reporting, investigating, or preventing fraud 
                or material misrepresentation, processing 
                premium payments, processing insurance claims, 
                administering insurance benefits (including 
                utilization review activities), participating 
                in research projects, or as otherwise required 
                or specifically permitted by Federal or State 
                law; or
                  (D) the disclosure is required, or is a 
                usual, appropriate or acceptable method, in 
                connection with--
                          (i) the authorization, settlement, 
                        billing, processing, clearing, 
                        transferring, reconciling, or 
                        collection of amounts charged, debited, 
                        or otherwise paid using a debit, credit 
                        or other payment card, check, or 
                        account number, or by other payment 
                        means;
                          (ii) the transfer of receivables, 
                        accounts or interests therein; or
                          (iii) the audit of debit, credit or 
                        other payment information.
          (8) State insurance authority.--The term ``State 
        insurance authority'' means, in the case of any person 
        engaged in providing insurance, the State insurance 
        authority of the State in which the person is 
        domiciled.
          (9) Consumer.--The term ``consumer'' means an 
        individual who obtains, from a financial institution, 
        financial products or services which are to be used 
        primarily for personal, family, or household purposes, 
        and also means the legal representative of such an 
        individual.
          (10) Joint agreement.--The term ``joint agreement'' 
        means a formal written contract pursuant to which two 
        or more financial institutions jointly offer, endorse, 
        or sponsor a financial product or service, and as may 
        be further defined in the regulations prescribed under 
        section 504.
          (11) Customer relationship.--The term ``time of 
        establishing a customer relationship'' shall be defined 
        by the regulations prescribed under section 504, and 
        shall, in the case of a financial institution engaged 
        in extending credit directly to consumers to finance 
        purchases of goods or services, mean the time of 
        establishing the credit relationship with the consumer.

           *       *       *       *       *       *       *


Subtitle B--Fraudulent Access to Financial Information

           *       *       *       *       *       *       *


SEC. 522. ADMINISTRATIVE ENFORCEMENT.

  (a) Enforcement by Federal Trade Commission.--Except as 
provided in subsection (b), compliance with this subtitle shall 
be enforced by the Federal Trade Commission in the same manner 
and with the same power and authority as the Commission has 
under the Fair Debt Collection Practices Act to enforce 
compliance with such Act.
  (b) Enforcement by Other Agencies in Certain Cases.--
          (1) In general.--Compliance with this subtitle shall 
        be enforced under--
                  (A) section 8 of the Federal Deposit 
                Insurance Act, in the case of--
                          (i) national banks, and Federal 
                        branches and Federal agencies of 
                        foreign banks, by the Office of the 
                        Comptroller of the Currency;
                          (ii) member banks of the Federal 
                        Reserve System (other than national 
                        banks), branches and agencies of 
                        foreign banks (other than Federal 
                        branches, Federal agencies, and insured 
                        State branches of foreign banks), 
                        commercial lending companies owned or 
                        controlled by foreign banks, and 
                        organizations operating under section 
                        25 or 25A of the Federal Reserve Act, 
                        by the Board;
                          (iii) banks insured by the Federal 
                        Deposit Insurance Corporation (other 
                        than members of the Federal Reserve 
                        System and national nonmember banks) 
                        and insured State branches of foreign 
                        banks, by the Board of Directors of the 
                        Federal Deposit Insurance Corporation; 
                        and
                          (iv) savings associations the 
                        deposits of which are insured by the 
                        Federal Deposit Insurance Corporation, 
                        by the [Director of the Office of 
                        Thrift Supervision] Comptroller of the 
                        Currency and the Board of Directors of 
                        the Federal Deposit Insurance 
                        Corporation, as appropriate; and
                  (B) the Federal Credit Union Act, by the 
                Administrator of the National Credit Union 
                Administration with respect to any Federal 
                credit union.
          (2) Violations of this subtitle treated as violations 
        of other laws.--For the purpose of the exercise by any 
        agency referred to in paragraph (1) of its powers under 
        any Act referred to in that paragraph, a violation of 
        this subtitle shall be deemed to be a violation of a 
        requirement imposed under that Act. In addition to its 
        powers under any provision of law specifically referred 
        to in paragraph (1), each of the agencies referred to 
        in that paragraph may exercise, for the purpose of 
        enforcing compliance with this subtitle, any other 
        authority conferred on such agency by law.

           *       *       *       *       *       *       *

                              ----------                              


HOMEOWNERS PROTECTION ACT OF 1998

           *       *       *       *       *       *       *



SEC. 10. ENFORCEMENT.

  (a) In General.--Subject to subtitle B of the Consumer 
Financial Protection Act of 2010, compliance with the 
requirements imposed under this Act shall be enforced under--
          (1) section 8 of the Federal Deposit Insurance Act, 
        by the appropriate Federal banking agency (as defined 
        in section 3(q) of that Act), with respect to--
                  (A) insured depository institutions (as 
                defined in section 3(c)(2) of that Act);
                  (B) depository institutions described in 
                clause (i), (ii), or (iii) of section 
                19(b)(1)(A) of the Federal Reserve Act which 
                are not insured depository institutions (as 
                defined in section 3(c)(2) of the Federal 
                Deposit Insurance Act); and
                  (C) depository institutions described in 
                clause (v) or (vi) of section 19(b)(1)(A) of 
                the Federal Reserve Act which are not insured 
                depository institutions (as defined in section 
                3(c)(2) of the Federal Deposit Insurance Act);
          (2) the Federal Credit Union Act, by the National 
        Credit Union Administration Board in the case of 
        depository institutions described in clause (iv) of 
        section 19(b)(1)(A) of the Federal Reserve Act;
          (3) part C of title V of the Farm Credit Act of 1971 
        (12 U.S.C. 2261 et seq.), by the Farm Credit 
        Administration in the case of an institution that is a 
        member of the Farm Credit System; and
          (4) subtitle E of the Consumer Financial Protection 
        Act of 2010, by the [Bureau of Consumer Financial 
        Protection] Consumer Law Enforcement Agency, with 
        respect to any person subject to this Act.
  (b) Additional Enforcement Powers.--
          (1) Violation of this act treated as violation of 
        other acts.--For purposes of the exercise by any agency 
        referred to in subsection (a) of such agency's powers 
        under any Act referred to in such subsection, a 
        violation of a requirement imposed under this Act shall 
        be deemed to be a violation of a requirement imposed 
        under that Act.
          (2) Enforcement authority under other acts.--In 
        addition to the powers of any agency referred to in 
        subsection (a) under any provision of law specifically 
        referred to in such subsection, each such agency may 
        exercise, for purposes of enforcing compliance with any 
        requirement imposed under this Act, any other authority 
        conferred on such agency by law.
  (c) Enforcement and Reimbursement.--In carrying out its 
enforcement activities under this section, each agency referred 
toin subsection (a) shall--
          (1) notify the mortgagee or servicer of any failure 
        of the mortgagee or servicer to comply with 1 or more 
        provisions of this Act;
          (2) with respect to each such failure to comply, 
        require the mortgagee or servicer, as applicable, to 
        correct the account of the mortgagor to reflect the 
        date on which the mortgage insurance should have been 
        canceled or terminated under this Act; and
          (3) require the mortgagee or servicer, as applicable, 
        to reimburse the mortgagor in an amount equal to the 
        total unearned premiums paid by the mortgagor after the 
        date on which the obligation to pay those premiums 
        ceased under this Act.

           *       *       *       *       *       *       *

                              ----------                              


HOME OWNERSHIP AND EQUITY PROTECTION ACT OF 1994

           *       *       *       *       *       *       *



TITLE I--COMMUNITY DEVELOPMENT AND CONSUMER PROTECTION

           *       *       *       *       *       *       *


Subtitle B--Home Ownership and Equity Protection

           *       *       *       *       *       *       *


SEC. 158. HEARINGS ON HOME EQUITY LENDING.

  (a) Hearings.--Not less than once during the 3-year period 
beginning on the date of enactment of this Act, and regularly 
thereafter, the [Bureau] Consumer Law Enforcement Agency, in 
consultation with the Advisory Board to the Bureau, shall 
conduct a public hearing to examine the home equity loan market 
and the adequacy of existing regulatory and legislative 
provisions and the provisions of this subtitle in protecting 
the interests of consumers, and low-income consumers in 
particular.
  (b) Participation.--In conducting hearings required by 
subsection (a), the Bureau shall solicit participation from 
consumers, representatives of consumers, lenders, and other 
interested parties.

           *       *       *       *       *       *       *

                              ----------                              


INTERSTATE LAND SALES FULL DISCLOSURE ACT

           *       *       *       *       *       *       *



TITLE XIV--INTERSTATE LAND SALES

           *       *       *       *       *       *       *



                              definitions

  Sec. 1402. For the purposes of this title, the term--
          (1) ``Director'' means the Director of the [Bureau of 
        Consumer Financial Protection] Agency;
          (2) ``person'' means an individual, or an 
        unincorporated organization, partnership, association, 
        corporation, trust, or estate;
          (3) ``subdivision'' means any land which is located 
        in any State or in a foreign country and is divided or 
        is proposed to be divided into lots, whether contiguous 
        or not, for the purpose of sale or lease as part of a 
        common promotional plan;
          (4) ``common promotional plan'' means a plan, 
        undertaken by a single developer or a group of 
        developers acting in concert, to offer lots for sale or 
        lease; where such land is offered for sale by such a 
        developer or group of developers acting in concert, and 
        such land is contiguous or is known, designated, or 
        advertised as a common unit or by a common name, such 
        land shall be presumed, without regard to the number of 
        lots covered by each individual offering, as being 
        offered for sale or lease as part of a common 
        promotional plan;
          (5) ``developer'' means any person who, directly or 
        indirectly, sells or leases, or offers to sell or 
        lease, or advertises for sale or lease any lots in a 
        subdivision;
          (6) ``agent'' means any person who represents, or 
        acts for or on behalf of, a developer in selling or 
        leasing, or offering to sell or lease, any lot or lots 
        in a subdivision; but shall not include an attorney at 
        law whose representation or another person consists 
        solely of rendering legal services;
          (7) ``blanket encumbrance'' means a trust deed, 
        mortgage, judgment, or any other lien or encumbrance, 
        including an option or contract to sell or a trust 
        agreement, affecting a subdivision or affecting more 
        than one lot offered within a subdivision, except that 
        such term shall not include any lien or other 
        encumbrance arising as the result of the imposition of 
        any tax assessment by any public authority;
          (8) ``interstate commerce'' means trade or commerce 
        among the several states or between any foreign country 
        and any state;
          (9) ``State'' includes the several States, the 
        District of Columbia, the Commonwealth of Puerto Rico, 
        and the territories and possessions of the United 
        States;
          (10) ``purchaser'' means an actual or prospective 
        purchaser or lessee of any lot in a subdivision;
          (11) ``offer'' includes any inducement, solicitation, 
        or attempt to encourage a person to acquire a lot in a 
        subdivision; and
          [(12) ``Bureau'' means the Bureau of Consumer 
        Financial Protection.]
          (12) ``Agency'' means the Consumer Law Enforcement 
        Agency.

           *       *       *       *       *       *       *


                         court review of orders

  Sec. 1411. (a) Any person, aggrieved by an order or 
determination of the Director issued after a hearing, may 
obtain a review of such order or determination in the court of 
appeals of the United States, within any circuit wherein such 
person resides or has his principal place of business, or in 
the United States Court of Appeals for the District of 
Columbia, by filing in such court, within sixty days after the 
entry of such order or determination, a written petition 
praying that the order or determination of the Director be 
modified or be set aside in whole or in part. A copy of such 
petition shall be forthwith transmitted by the clerk of the 
court to the Director, and thereupon the Director shall file in 
the court the record upon which the order or determination 
complained of was entered, as provided in section 2112 of title 
28, United States Code. No objection to an order or 
determination of the Director shall be considered by the court 
unless such objection shall have been urged before the 
Director. The finding of the Director as to the facts, if 
supported by substantial evidence, shall be conclusive. If 
either party shall apply to the court for leave to adduce 
additional evidence, and shall show to the satisfaction of the 
court that such additional evidence is material and that there 
were reasonable grounds for failure to adduce such evidence in 
the hearing before the Director, the court may order such 
additional evidence to be taken before the Director and to be 
adduced upon a hearing in such manner and upon such terms and 
conditions as to the court may seem proper. The Director may 
modify his findings as to the facts by reason of the additional 
evidence so taken, and shall file such modified or new 
findings, which, if supported by substantial evidence, shall be 
conclusive, and his recommendation, if any, for the 
modification or setting aside of the original order. Upon the 
filing of such petition, the jurisdiction of the court shall be 
exclusive and its judgment and decree, affirming, modifying, or 
setting aside, in whole or in part, any order of the Director, 
shall be final, subject to review by the Supreme Court of the 
United States upon certiorari or certification as provided in 
section 1254 of title 28, United States Code.
  (b) The commencement of proceedings under subsection (a) 
shall not, unless specifically ordered by the court, operate as 
a stay of the [Secretary's] Director's order.

           *       *       *       *       *       *       *


                             administration

  Sec. 1416. (a) The authority and responsibility for 
administering this title shall be in the Director of the 
[Bureau] Agency of Consumer Financial Protection who may 
delegate any of his functions, duties, and powers to employees 
of the [Bureau] Agency of Consumer Financial Protection or to 
boards of such employees including functions, duties, and 
powers with respect to investigating, hearing, determining, 
ordering, or otherwise acting as to any work, business, or 
matter under this title. The persons to whom such delegations 
are made with respect to hearing functions, duties, and powers 
shall be appointed and shall serve in the [Bureau] Agency in 
compliance with sections 3105, 3344, 5372, and 7521 of title 5 
of the United States Code. The Director shall by rule 
prescribed such rights of appeal from the decisions of his 
administrative law judges to other administrative law judges or 
to other officers in the [Bureau] Agency, to boards of officers 
or to himself, as shall be apropriate and in accordance with 
law.
  (b) All hearings shall be public and appropriate records 
thereof shall be kept, and any order issued after such hearing 
shall be based on the record made in such hearing which shall 
be conducted in accordance with provisions of subchapter II of 
chapter 5, and chapter 7, of title 5, United States Code.
  (c) The Director shall conduct all actions with respect to 
rulemaking or adjudication under this title in accordance with 
the provisions of chapter 5 of title 5, United States Code. 
Notice shall be given of any adverse action or final 
disposition and such notice and the entry of any order shall be 
accompanied by a written statement of supporting facts and 
legal authority.

           *       *       *       *       *       *       *


                         civil money penalties

  Sec. 1418a. (a) In General.--
          (1) Authority.--Whenever any person knowingly and 
        materially violates any of the provisions of this title 
        or any rule, regulation, or order issued under this 
        title, the Director may impose a civil money penalty on 
        such person in accordance with the provisions of this 
        section. The penalty shall be in addition to any other 
        available civil remedy or any available criminal 
        penalty, and may be imposed whether or not the Director 
        imposes other administrative sanctions.
          (2) Amount of penalty.--The amount of the penalty, as 
        determined by the Director, may not exceed $1,000 for 
        each violation, except that the maximum penalty for all 
        violations by a particular person during any 1-year 
        period shall not exceed $1,000,000. Each violation of 
        this title, or any rule, regulation, or order issued 
        under this title, shall constitute a separate violation 
        with respect to each sale or lease or offer to sell or 
        lease. In the case of a continuing violation, as 
        determined by the Director, each day shall constitute a 
        separate violation.
  (b) Agency Procedures.--
          (1) Establishment.--The Director shall establish 
        standards and procedures governing the imposition of 
        civil money penalties under subsection (a). The 
        standards and procedures--
                  (A) shall provide for the imposition of a 
                penalty only after a person has been given an 
                opportunity for a hearing on the record; and
                  (B) may provide for review by the Director of 
                any determination or order, or interlocutory 
                ruling, arising from a hearing.
          (2) Final orders.--If no hearing is requested within 
        15 days of receipt of the notice of opportunity for 
        hearing, the imposition of the penalty shall constitute 
        a final and unappealable determination. If the Director 
        reviews the determination or order, the Director may 
        affirm, modify, or reverse that determination or order. 
        If the Director does not review the determination or 
        order within 90 days of the issuance of the 
        determination or order, the determination or order 
        shall be final.
          (3) Factors in determining amount of penalty.--In 
        determining the amount of a penalty under subsection 
        (a), consideration shall be given to such factors as 
        the gravity of the offense, any history of prior 
        offenses (including offenses occurring before enactment 
        of this section), ability to pay the penalty, injury to 
        the public, benefits received, deterrence of future 
        violations, and such other factors as the Director may 
        determine in regulations to be appropriate.
          (4) Reviewability of imposition of penalty.--The 
        [Secretary's] Director's determination or order 
        imposing a penalty under subsection (a) shall not be 
        subject to review, except as provided in subsection 
        (c).
  (c) Judicial Review of Agency Determination.--
          (1) In General.--After exhausting all administrative 
        remedies established by the Director under subsection 
        (b)(1), a person aggrieved by a final order of the 
        Director assessing a penalty under this section may 
        seek judicial review pursuant to section 1411.
          (2) Order to pay penalty.--Notwithstanding any other 
        provision of law, in any such review, the court shall 
        have the power to order payment of the penalty imposed 
        by the Director.
  (d) Action to Collect Penalty.--If any person fails to comply 
with the determination or order of the Director imposing a 
civil money penalty under subsection (a), after the 
determination or order is no longer subject to review as 
provided by subsections (b) and (c), the Director may request 
the Attorney General of the United States to bring an action in 
any appropriate United States district court to obtain a 
monetary judgment against the person and such other relief as 
may be available. The monetary judgment may, in the discretion 
of the court, include any attorneys fees and other expenses 
incurred by the United States in connection with the action. In 
an action under this subsection, the validity and 
appropriateness of the [Secretary's] Director's determination 
or order imposing the penalty shall not be subject to review.
  (e) Settlement by Director.--The Director may compromise, 
modify, or remit any civil money penalty which may be, or has 
been, imposed under this section.
  (f) Definition of Knowingly.--The term ``knowingly'' means 
having actual knowledge of or acting with deliberate ignorance 
of or reckless disregard for the prohibitions under this 
section.
  (g) Regulations.--The Director shall issue such regulations 
as the Director deems appropriate to implement this section.
  (h) Use of Penalties for Administration.--Civil money 
penalties collected under this section shall be paid to the 
Director and, upon approval in an appropriation Act, may be 
used by the Director to cover all or part of the cost of 
rendering services under this title.

           *       *       *       *       *       *       *

                              ----------                              


RIGHT TO FINANCIAL PRIVACY ACT OF 1978

           *       *       *       *       *       *       *



TITLE XI--RIGHT TO FINANCIAL PRIVACY

           *       *       *       *       *       *       *



                              definitions

  Sec. 1101. For the purpose of this title, the term--
          (1) ``financial institution'', except as provided in 
        section 1114, means any office of a bank, savings bank, 
        card issuer as defined in section 103 of the Consumers 
        Credit Protection Act (15 U.S.C. 1602(n)), industrial 
        loan company, trust company, savings association, 
        building and loan, or homestead association (including 
        cooperative banks), credit union, or consumer finance 
        institution, located in any State or territory of the 
        United States, the District of Columbia, Puerto Rico, 
        Guam, American Samoa, or the Virgin Islands;
          (2) ``financial record'' means an original of, a copy 
        of, or information known to have been derived from, any 
        record held by a financial institution pertaining to a 
        customer's relationship with the financial institution;
          (3) ``Government authority'' means any agency or 
        department of the United States, or any officer, 
        employee, or agent thereof;
          (4) ``person'' means an individual or a partnership 
        of five or fewer individuals;
          (5) ``customer'' means any person or authorized 
        representative of that person who utilized or is 
        utilizing any service of a financial institution, or 
        for whom a financial institution is acting or has acted 
        as a fiduciary, in relation to an account maintained in 
        the person's name;
          (6) ``holding company'' means--
                  (A) any bank holding company (as defined in 
                section 2 of the Bank Holding Company Act of 
                1956); and
                  (B) any company described in section 4(f)(1) 
                of the Bank Holding Company Act of 1956;
          (7) ``supervisory agency'' means with respect to any 
        particular financial institution, holding company, or 
        any subsidiary of a financial institution or holding 
        company, any of the following which has statutory 
        authority to examine the financial condition, business 
        operations, or records or transactions of that 
        institution, holding company, or subsidiary--
                  (A) the Federal Deposit Insurance 
                Corporation;
                  [(B) the Bureau of Consumer Financial 
                Protection;]
                  (B) the Consumer Law Enforcement Agency;
                  (C) the National Credit Union Administration;
                  (D) the Board of Governors of the Federal 
                Reserve System;
                  (E) the Comptroller of the Currency;
                  (F) the Securities and Exchange Commission;
                  (G) the Commodity Futures Trading Commission;
                  (H) the Secretary of the Treasury, with 
                respect to the Bank Secrecy Act and the 
                Currency and Foreign Transactions Reporting Act 
                (Public Law 91-508, title I and II); or
                  (I) any State banking or securities 
                department or agency; and
          (8) ``law enforcement inquiry'' means a lawful 
        investigation or official proceeding inquiring into a 
        violation of, or failure to comply with, any criminal 
        or civil statute or any regulation, rule, or order 
        issued pursuant thereto.

           *       *       *       *       *       *       *


                           use of information

  Sec. 1112. (a) Financial records originally obtained pursuant 
to this title shall not be transferred to another agency or 
department unless the transferring agency or department 
certifies in writing that there is reason to believe that the 
records are relevant to a legitimate law enforcement inquiry, 
or intelligence or counterintelligence activity, investigation 
or analysis related to international terrorism within the 
jurisdiction of the receiving agency or department.
  (b) When financial records subject to this title are 
tranferred pursuant to subsection (a), the transferring agency 
or department shall, within fourteen days, send to the customer 
a copy of the certification made pursuant to subsection (a) and 
the following notice, which shall state the nature of the law 
enforcement inquiry with reasonable specificity: ``Copies of, 
or information contained in, your financial records lawfully in 
possession of have been furnished to pursuant to the Right of 
Financial Privacy Act of 1978 for the following purpose:. If 
you believe that this transfer has not been made to further a 
legitimate law enforcement inquiry, you may have legal rights 
under the Financial Privacy Act of 1978 or the Privacy Act of 
1974.''
  (c) Notwithstanding subsection (b), notice to the customer 
may be delayed if the transferring agency or department has 
obtained a court order delaying notice pursuant to section 1109 
(a) and (b) and that order is still in effect, of if the 
receiving agency or department obtains a court order 
authorizing a delay in notice pursuant to section 1109 (a) and 
(b). Upon the expiration of any such period of delay, the 
transferring agency or department shall serve to the customer 
the notice specified in subsection (b) above and the agency or 
department that obtained the court order authorizing a delay in 
notice pursuant to section 1109 (a) and (b) shall serve to the 
customer the notice specified in section 1109 (b).
  (d) Nothing in this title prohibits any supervisory agency 
from exchanging examination reports or other information with 
another supervisory agency. Nothing in this title prohibits the 
transfer of a customer's financial records needed by counsel 
for a Government authority to defend an action brought by the 
customer. Nothing in this title shall authorize the withholding 
of information by any officer or employee of a supervisory 
agency from a duly authorized committee or subcommittee of the 
Congress.
  (e) Notwithstanding section 1101(6) or any other provision of 
law, the exchange of financial records, examination reports or 
other information with respect to a financial institution, 
holding company, or a subsidiary of a depository institution or 
holding company, among and between the five member supervisory 
agencies of the Federal Financial Institutions Examination 
Council, the Securities and Exchange Commission, the Federal 
Trade Commission, the Commodity Futures Trading Commission, and 
the [Bureau of Consumer Financial Protection] Consumer Law 
Enforcement Agency is permitted.
  (f) Transfer to Attorney General.--
          (1) In general.--Nothing in this title shall apply 
        when financial records obtained by an agency or 
        department of the United States are disclosed or 
        transferred to the Attorney General or the Secretary of 
        the Treasury upon the certification by a supervisory 
        level official of the transferring agency or department 
        that--
                  (A) there is reason to believe that the 
                records may be relevant to a violation of 
                Federal criminal law; and
                  (B) the records were obtained in the exercise 
                of the agency's or department's supervisory or 
                regulatory functions.
          (2) Limitation on use.--Records so transferred shall 
        be used only for criminal investigative or prosecutive 
        purposes, for civil actions under section 951 of the 
        Financial Institutions Reform, Recovery, and 
        Enforcement Act of 1989, or for forfeiture under 
        sections 981 or 982 of title 18, United States Code, by 
        the Department of Justice and only for criminal 
        investigative purposes relating to money laundering and 
        other financial crimes by the Department of the 
        Treasury and shall, upon completion of the 
        investigation or prosecution (including any appeal), be 
        returned only to the transferring agency or department. 
        No agency or department so transferring such records 
        shall be deemed to have waived any privilege applicable 
        to those records under law.

                               exceptions

  Sec. 1113. (a) Nothing in this title prohibits the disclosure 
of any financial records or information which is not identified 
with or identifiable as being derived from the financial 
records of a particular customer.
  (b) This chapter shall not apply to the examination by or 
disclosure to any supervisory agency of financial records or 
information in the exercise of its supervisory, regulatory, or 
monetary functions, including conservatorship or receivership 
functions, with respect to any financial institution, holding 
company, subsidiary of a financial institution or holding 
company, institution-affiliated party (within the meaning of 
section 3(u) of the Federal Deposit Insurance Act) with respect 
to a financial institution, holding company, or subsidiary, or 
other person participating in the conduct of the affairs 
thereof.
  (c) Nothing in this title prohibits the disclosure of 
financial records in accordance with procedures authorized by 
the Internal Revenue Code.
  (d) Nothing in this title shall authorize the withholding of 
financial records or information required to be reported in 
accordance with any Federal statute or rule promulgated 
thereunder.
  (e) Nothing in this title shall apply when financial records 
are sought by a Government authority under the Federal Rules of 
Civil or Criminal Procedure or comparable rules of other courts 
in connection with litigation to which the Government authority 
and the customer are parties.
  (f) Nothing in this title shall apply when financial records 
are sought by a Government authority pursuant to an 
administrative subpena issued by an administrative law judge in 
an adjudicatory proceeding subject to section 554 of title 5, 
United States Code, and to which the Government authority and 
the customer are parties.
  (g) The notice requirements of this title and sections 1110 
and 1112 shall not apply when a Government authority by a means 
described in section 1102 and for a legitimate law enforcement 
inquiry is seeking only the name, address, account number, and 
type of account of any customer or ascertainable group of 
customers associated (1) with a financial transaction or class 
of financial transactions, or (2) with a foreign country or 
subdivision thereof in the case of a Government authority 
exercising financial controls over foreign accounts in the 
United States under section 5(b) of the Trading with the Enemy 
Act (50 U.S.C. App. 5(b)); the International Emergency Economic 
Powers Act (title II, Public Law 95-223); or section 5 of the 
United Nations Participation Act (22 U.S.C. 287(c)).
  (h)(1) Nothing in this title (except sections 1103, 1117 and 
1118) shall apply when financial records are sought by a 
Government authority--
          (A) in connection with a lawful proceeding, 
        investigation, examination, or inspection directed at a 
        financial institution (whether or not such proceeding, 
        investigation, examination, or inspection is also 
        directed at a customer) or at a legal entity which is 
        not a customer; or
          (B) in connection with the authority's consideration 
        or administration of assistance to the customer in the 
        form of a Government loan, loan guaranty, or loan 
        insurance program.
  (2) When financial records are sought pursuant to this 
subsection, the Government authority shall submit to the 
financial institution the certificate required by section 
1103(b). For access pursuant to paragraph (1)(B), no further 
certification shall be required for subsequent access by the 
certifying Government authority during the term of the loan, 
loan guaranty, or loan insurance agreement.
  (3) After the effective date of this title, whenever a 
customer applies for participation in a Government loan, loan 
guaranty, or loan insurance program, the Government authority 
administering such program shall give the customer written 
notice of the authority's access rights under this subsection. 
No further notification shall be required for subsequent access 
by that authority during the term of the loan, loan guaranty, 
or loan insurance agreement.
  (4) Financial records obtained pursuant to this subsection 
may be used only for the purpose for which they were originally 
obtained, and may be transferred to another agency or 
department only when the transfer is to facilitate a lawful 
proceeding, investigation, examination, or inspection directed 
at a financial institution (whether or not such proceeding, 
investigation, examination, or inspection is also directed at a 
customer), or at a legal entity which is not a customer, except 
that--
          (A) nothing in this paragraph prohibits the use or 
        transfer of a customer's financial records needed by 
        counsel representing a Government authority in a civil 
        action arising from a Government loan, loan guaranty, 
        or loan insurance agreement; and
          (B) nothing in this paragraph prohibits a Government 
        authority providing assistance to a customer in the 
        form of a loan, loan guaranty, or loan insurance 
        agreement from using or transferring financial records 
        necessary to process, service or foreclose a loan, or 
        to collect on an indebtedness to the Government 
        resulting from a customer's default.
  (5) Notification that financial records obtained pursuant to 
this subsection may relate to a potential civil, criminal, or 
regulatory violation by a customer may be given to an agency or 
department with jurisdiction over the violation, and such 
agency or department may than seek access to the records 
pursuant to the provisions of this title.
  (6) Each financial institution shall keep a notation of each 
disclosure made pursuant to paragraph (1)(B) of this 
subsection, including the date of such disclosure and the 
Government authority to which it was made. The customer shall 
be entitled to inspect this information.
  (i) Nothing in this title (except sections 1115 and 1120) 
shall apply to any subpena or court order issued in connection 
with proceedings before a grand jury, except that a court shall 
have authority to order a financial institution, on which a 
grand jury subpena for customer records has been served, not to 
notify the customer of the existence of the subpena or 
information that has been furnished to the grand jury, under 
the circumstances and for the period specified and pursuant to 
the procedures established in section 1109 of the Right to 
Financial Privacy Act of 1978 (12 U.S.C. 3409).
  (j) This title shall not apply when financial records are 
sought by the General Accounting Office pursuant to an 
authorized proceeding, investigation, examination or audit 
directed at a government authority.
  (k) Disclosure Necessary for Proper Administration of 
Programs of Certain Government Authorities.--(1) Nothing in 
this title shall apply to the disclosure by the financial 
institution of the name and address of any customer to the 
Department of the Treasury, the Social Security Administration, 
or the Railroad Retirement Board, where the disclosure of such 
information is necessary to, and such information is used 
solely for the purpose of, the proper administration of section 
1441 of the Internal Revenue Code of 1954, title II of the 
Social Security Act, or the Railroad Retirement Act of 1974.
          (2) Nothing in this title shall apply to the 
        disclosure by the financial institution of information 
        contained in the financial records of any customer to 
        any Government authority that certifies, disburses, or 
        collects payments, where the disclosure of such 
        information is necessary to, and such information is 
        used solely for the purpose of--
                  (A) verification of the identity of any 
                person or proper routing and delivery of funds 
                in connection with the issuance of a Federal 
                payment or collection of funds by a Government 
                authority; or
                  (B) the investigation or recovery of an 
                improper Federal payment or collection of funds 
                or an improperly negotiated Treasury check.
          (3) Notwithstanding any other provision of law, a 
        request authorized by paragraph (1) or (2) (and the 
        information contained therein) may be used by the 
        financial institution or its agents solely for the 
        purpose of providing information contained in the 
        financial records of the customer to the Government 
        authority requesting the information, and the financial 
        institution and its agents shall be barred from 
        redisclosure of such information. Any Government 
        authority receiving information pursuant to paragraph 
        (1) or (2) may not disclose or use the information, 
        except for the purposes set forth in such paragraph.
  (l) Crimes Against Financial Institutions by Insiders.--
Nothing in this title shall apply when any financial 
institution or supervisory agency provides any financial record 
of any officer, director, employee, or controlling shareholder 
(within the meaning of subparagraph (A) or (B) of section 
2(a)(2) of the Bank Holding Company Act of 1956 or subparagraph 
(A) or (B) of section 408(a)(2) of the National Housing Act) of 
such institution, or of any major borrower from such 
institution who there is reason to believe may be acting in 
concert with any such officer, director, employee, or 
controlling shareholder, to the Attorney General of the United 
States, to a State law enforcement agency, or, in the case of a 
possible violation of subchapter II of chapter 53 of title 31, 
United States Code, to the Secretary of the Treasury if there 
is reason to believe that such record is relevant to a possible 
violation by such person of--
          (1) any law relating to crimes against financial 
        institutions or supervisory agencies by directors, 
        officers, employees, or controlling shareholders of, or 
        by borrowers from, financial institutions; or
          (2) any provision of subchapter II of chapter 53 of 
        title 31, United States Code or of section 1956 or 1957 
        of title 18, United States Code.
No supervisory agency which transfers any such record under 
this subsection shall be deemed to have waived any privilege 
applicable to that record under law.
  (m) This title shall not apply to the examination by or 
disclosure to employees or agents of the Board of Governors of 
the Federal Reserve System or any Federal Reserve Bank of 
financial records or information in the exercise of the Federal 
Reserve System's authority to extend credit to the financial 
institutions or others.
  (n) This title shall not apply to the examination by or 
disclosure to the Resolution Trust Corporation or its employees 
or agents of financial records or information in the exercise 
of its conservatorship, receivership, or liquidation functions 
with respect to a financial institution.
  (o) This title shall not apply to the examination by or 
disclosure to the Federal Housing Finance Agency or any of the 
Federal home loan banks of financial records or information in 
the exercise of the Federal Housing Finance Agency's authority 
to extend credit (either directly or through a Federal home 
loan bank) to financial institutions or others.
  (p)(1) Nothing in this title shall apply to the disclosure by 
the financial institution of the name and address of any 
customer to the Department of Veterans Affairs where the 
disclosure of such information is necessary to, and such 
information is used solely for the purposes of, the proper 
administration of benefits programs under laws administered by 
the Secretary.
  (2) Notwithstanding any other provision of law, any request 
authorized by paragraph (1) (and the information contained 
therein) may be used by the financial institution or its agents 
solely for the purpose of providing the customer's name and 
address to the Department of Veterans Affairs and shall be 
barred from redisclosure by the financial institution or its 
agents.
  (q) Nothing in this title shall apply to the disclosure of 
any financial record or information to a Government authority 
in conjunction with a Federal contractor-issued travel charge 
card issued for official Government travel.
  [(r) Disclosure to the Bureau of Consumer Financial 
Protection.--Nothing in this title shall apply to the 
examination by or disclosure to the Bureau of Consumer 
Financial Protection of financial records or information in the 
exercise of its authority with respect to a financial 
institution.]

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TELEMARKETING AND CONSUMER FRAUD AND ABUSE PREVENTION ACT

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SEC. 3. TELEMARKETING RULES.

  (a) In General.--
          (1) The Commission shall prescribe rules prohibiting 
        deceptive telemarketing acts or practices and other 
        abusive telemarketing acts or practices.
          (2) The Commission shall include in such rules 
        respecting deceptive telemarketing acts or practices a 
        definition of deceptive telemarketing acts or practices 
        which shall include fraudulent charitable 
        solicitations, and which may include acts or practices 
        of entities or individuals that assist or facilitate 
        deceptive telemarketing, including credit card 
        laundering.
          (3) The Commission shall include in such rules 
        respecting other abusive telemarketing acts or 
        practices--
                  (A) a requirement that telemarketers may not 
                undertake a pattern of unsolicited telephone 
                calls which the reasonable consumer would 
                consider coercive or abusive of such consumer's 
                right to privacy,
                  (B) restrictions on the hours of the day and 
                night when unsolicited telephone calls can be 
                made to consumers,
                  (C) a requirement that any person engaged in 
                telemarketing for the sale of goods or services 
                shall promptly and clearly disclose to the 
                person receiving the call that the purpose of 
                the call is to sell goods or services and make 
                such other disclosures as the Commission deems 
                appropriate, including the nature and price of 
                the goods and services; and
                  (D) a requirement that any person engaged in 
                telemarketing for the solicitation of 
                charitable contributions, donations, or gifts 
                of money or any other thing of value, shall 
                promptly and clearly disclose to the person 
                receiving the call that the purpose of the call 
                is to solicit charitable contributions, 
                donations, or gifts, and make such other 
                disclosures as the Commission considers 
                appropriate, including the name and mailing 
                address of the charitable organization on 
                behalf of which the solicitation is made.
        In prescribing the rules described in this paragraph, 
        the Commission shall also consider recordkeeping 
        requirements.
  (b) Rulemaking Authority.--The Commission shall have 
authority to prescribe rules under subsection (a), in 
accordance with section 553 of title 5, United States Code. In 
prescribing a rule under this section that relates to the 
provision of a consumer financial product or service that is 
subject to the Consumer Financial Protection Act of 2010, 
including any enumerated consumer law thereunder, the 
Commission shall consult with the [Bureau of Consumer Financial 
Protection] Consumer Law Enforcement Agency regarding the 
consistency of a proposed rule with standards, purposes, or 
objectives administered by the [Bureau of Consumer Financial 
Protection] Consumer Law Enforcement Agency, provided, however, 
nothing in this section shall conflict with or supersede 
section 6 of the Federal Trade Commission Act (15 U.S.C. 46).
  (c) Violations.--Any violation of any rule prescribed under 
[subsection (a)--]
          [(1) shall] subsection (a) shall be treated as a 
        violation of a rule under section 18 of the Federal 
        Trade Commission Act regarding unfair or deceptive acts 
        or practices[; and].
          [(2) that is committed by a person subject to the 
        Consumer Financial Protection Act of 2010 shall be 
        treated as a violation of a rule under section 1031 of 
        that Act regarding unfair, deceptive, or abusive acts 
        or practices.]
  (d) Securities and Exchange Commission Rules.--
          (1) Promulgation.--
                  (A) In general.--Except as provided in 
                subparagraph (B), not later than 6 months after 
                the effective date of rules promulgated by the 
                Federal Trade Commission under subsection (a), 
                the Securities and Exchange Commission shall 
                promulgate, or require any national securities 
                exchange or registered securities association 
                to promulgate, rules substantially similar to 
                such rules to prohibit deceptive and other 
                abusive telemarketing acts or practices by 
                persons described in paragraph (2).
                  (B) Exception.--The Securities and Exchange 
                Commission is not required to promulgate a rule 
                under subparagraph (A) if it determines that--
                          (i) Federal securities laws or rules 
                        adopted by the Securities and Exchange 
                        Commission thereunder provide 
                        protection from deceptive and other 
                        abusive telemarketing by persons 
                        described in paragraph (2) 
                        substantially similar to that provided 
                        by rules promulgated by the Federal 
                        Trade Commission under subsection (a); 
                        or
                          (ii) such a rule promulgated by the 
                        Securities and Exchange Commission is 
                        not necessary or appropriate in the 
                        public interest, or for the protection 
                        of investors, or would be inconsistent 
                        with the maintenance of fair and 
                        orderly markets.
                If the Securities and Exchange Commission 
                determines that an exception described in 
                clause (i) or (ii) applies, the Securities and 
                Exchange Commission shall publish in the 
                Federal Register its determination with the 
                reasons for it.
          (2) Application.--
                  (A) In general.--The rules promulgated by the 
                Securities and Exchange Commission under 
                paragraph (1)(A) shall apply to a broker, 
                dealer, transfer agent, municipal securities 
                dealer, municipal securities broker, government 
                securities broker, government securities 
                dealer, investment adviser or investment 
                company, or any individual asso- ciated with a 
                broker, dealer, transfer agent, municipal 
                securities dealer, municipal securities broker, 
                government securities broker, government 
                securities dealer, investment adviser or 
                investment company. The rules promulgated by 
                the Federal Trade Commission under subsection 
                (a) shall not apply to persons described in the 
                preceding sentence.
                  (B) Definitions.--For purposes of 
                subparagraph (A)--
                          (i) the terms ``broker'', ``dealer'', 
                        ``transfer agent'', ``municipal 
                        securities dealer'', ``municipal 
                        securities broker'', ``government 
                        securities broker'', and ``government 
                        securities dealer'' have the meanings 
                        given such terms by paragraphs (4), 
                        (5), (25), (30), (31), (43), and (44) 
                        of section 3(a) of the Securities and 
                        Exchange Act of 1934 (15 U.S.C. 
                        78c(a)(4), (5), (25), (30), (31), (43), 
                        and (44));
                          (ii) the term ``investment adviser'' 
                        has the meaning given such term by 
                        section 202(a)(11) of the Investment 
                        Advisers Act of 1940 (15 U.S.C. 80b-
                        2(a)(11)); and
                          (iii) the term ``investment company'' 
                        has the meaning given such term by 
                        section 3(a) of the Investment Company 
                        Act of 1940 (15 U.S.C. 80a-3(a)).
  (e) Commodity Futures Trading Commission Rules.--
          (1) Application.--The rules promulgated by the 
        Federal Trade Commission under subsection (a) shall not 
        apply to persons described in subsection (f)(1) of 
        section 6 of the Commodity Exchange Act (7 U.S.C. 8, 9, 
        15, 13b, 9a).
          (2) Promulgation.--Section 6 of the Commodity 
        Exchange Act (7 U.S.C. 8, 9, 15, 13b, 9a) is amended by 
        adding at the end the following new subsection:
  ``(f)(1) Except as provided in paragraph (2), not later than 
six months after the effective date of rules promulgated by the 
Federal Trade Commission under section 3(a) of the 
Telemarketing and Consumer Fraud and Abuse Prevention Act, the 
Commission shall promulgate, or require each registered futures 
association to promulgate, rules substantially similar to such 
rules to prohibit deceptive and other abusive telemarketing 
acts or practices by any person registered or exempt from 
registration under this Act in connection with such person's 
business as a futures commission merchant, introducing broker, 
commodity trading advisor, commodity pool operator, leverage 
transaction merchant, floor broker, or floor trader, or a 
person associated with any such person.
  ``(2) The Commission is not required to promulgate rules 
under paragraph (1) if it determines that--
          ``(A) rules adopted by the Commission under this Act 
        provide protection from deceptive and abusive 
        telemarketing by persons described under paragraph (1) 
        substantially similar to that provided by rules 
        promulgated by the Federal Trade Commission under 
        section 3(a) of the Telemarketing and Consumer Fraud 
        and Abuse Prevention Act; or
          ``(B) such a rule promulgated by the Commission is 
        not necessary or appropriate in the public interest, or 
        for the pro- tection of customers in the futures and 
        options markets, or would be inconsistent with the 
        maintenance of fair and orderly markets.
If the Commission determines that an exception described in 
subparagraph (A) or (B) applies, the Commission shall publish 
in the Federal Register its determination with the reasons for 
it.''.

SEC. 4. ACTIONS BY STATES.

  (a) In General.--Whenever an attorney general of any State 
has reason to believe that the interests of the residents of 
that State have been or are being threatened or adversely 
affected because any person has engaged or is engaging in a 
pattern or practice of telemarketing which violates any rule of 
the Commission under section 3, the State, as parens patriae, 
may bring a civil action on behalf of its residents in an 
appropriate district court of the United States to enjoin such 
telemarketing, to enforce compliance with such rule of the 
Commission, to obtain damages, restitution, or other 
compensation on behalf of residents of such State, or to obtain 
such further and other relief as the court may deem 
appropriate.
  (b) Notice.--The State shall serve prior written notice of 
any civil action under subsection (a) or (f)(2) upon the 
Commission and provide the Commission with a copy of its 
complaint, except that if it is not feasible for the State to 
provide such prior notice, the State shall serve such notice 
immediately upon instituting such action. Upon receiving a 
notice respecting a civil action, the Commission shall have the 
right (1) to intervene in such action, (2) upon so intervening, 
to be heard on all matters arising therein, and (3) to file 
petitions for appeal.
  (c) Construction.--For purposes of bringing any civil action 
under subsection (a), nothing in this Act shall prevent an 
attorney general from exercising the powers conferred on the 
attorney general by the laws of such State to conduct 
investigations or to administer oaths or affirmations or to 
compel the attendance of witnesses or the production of 
documentary and other evidence.
  (d) Actions by the Commission.--Whenever a civil action has 
been instituted by or on behalf of the Commission or the 
[Bureau of Consumer Financial Protection] Consumer Law 
Enforcement Agency for violation of any rule prescribed under 
section 3, no State may, during the pendency of such action 
instituted by or on behalf of the Commission or the [Bureau of 
Consumer Financial Protection] Consumer Law Enforcement Agency, 
institute a civil action under subsection (a) or (f)(2) against 
any defendant named in the complaint in such action for 
violation of any rule as alleged in such complaint.
  (e) Venue; Service of Process.--Any civil action brought 
under subsection (a) in a district court of the United States 
may be brought in the district in which the defendant is found, 
is an inhabitant, or transacts business or wherever venue is 
proper under section 1391 of title 28, United States Code. 
Process in such an action may be served in any district in 
which the defendant is an inhabitant or in which the defendant 
may be found.
  (f) Actions by Other State Officials.--
          (1) Nothing contained in this section shall prohibit 
        an authorized State official from proceeding in State 
        court on the basis of an alleged violation of any civil 
        or criminal statute of such State.
          (2) In addition to actions brought by an attorney 
        general of a State under subsection (a), such an action 
        may be brought by officers of such State who are 
        authorized by the State to bring actions in such State 
        on behalf of its residents.

SEC. 5. ACTIONS BY PRIVATE PERSONS.

  (a) In General.--Any person adversely affected by any pattern 
or practice of telemarketing which violates any rule of the 
Commission under section 3, or an authorized person acting on 
such person's behalf, may, within 3 years after discovery of 
the violation, bring a civil action in an appropriate district 
court of the United States against a person who has engaged or 
is engaging in such pattern or practice of telemarketing if the 
amount in controversy exceeds the sum or value of $50,000 in 
actual damages for each person adversely affected by such 
telemarketing. Such an action may be brought to enjoin such 
telemarketing, to enforce compliance with any rule of the 
Commission under section 3, to obtain damages, or to obtain 
such further and other relief as the court may deem 
appropriate.
  (b) Notice.--The plaintiff shall serve prior written notice 
of the action upon the Commission and provide the Commission 
with a copy of its complaint, except in any case where such 
prior notice is not feasible, in which case the person shall 
serve such notice immediately upon instituting such action. The 
Commission shall have the right (A) to intervene in the action, 
(B) upon so intervening, to be heard on all matters arising 
therein, and (C) to file petitions for appeal.
  (c) Action by the Commission.--Whenever a civil action has 
been instituted by or on behalf of the Commission or the 
[Bureau of Consumer Financial Protection] Consumer Law 
Enforcement Agency for violation of any rule prescribed under 
section 3, no person may, during the pendency of such action 
instituted by or on behalf of the Commission or the [Bureau of 
Consumer Financial Protection] Consumer Law Enforcement Agency, 
institute a civil action against any defendant named in the 
complaint in such action for violation of any rule as alleged 
in such complaint.
  (d) Cost and Fees.--The court, in issuing any final order in 
any action brought under subsection (a), may award costs of 
suit and reasonable fees for attorneys and expert witnesses to 
the prevailing party.
  (e) Construction.--Nothing in this section shall restrict any 
right which any person may have under any statute or common 
law.
  (f) Venue; Service of Process.--Any civil action brought 
under subsection (a) in a district court of the United States 
may be brought in the district in which the defendant is found, 
is an inhabitant, or transacts business or wherever venue is 
proper under section 1391 of title 28, United States Code. 
Process in such an action may be served in any district in 
which the defendant is an inhabitant or in which the defendant 
may be found.

SEC. 6. ADMINISTRATION AND APPLICABILITY OF ACT.

  (a) In General.--Except as otherwise provided in sections 
3(d), 3(e), 4, and 5, this Act shall be enforced by the 
Commission under the Federal Trade Commission Act (15 U.S.C. 41 
et seq.). Consequently, no activity which is outside the 
jurisdiction of that Act shall be affected by this Act.
  (b) Actions by the Commission.--The Commission shall prevent 
any person from violating a rule of the Commission under 
section 3 in the same manner, by the same means, and with the 
same jurisdiction, powers, and duties as though all applicable 
terms and provisions of the Federal Trade Commission Act (15 
U.S.C. 41 et seq.) were incorporated into and made a part of 
this Act. Any person who violates such rule shall be subject to 
the penalties and entitled to the privileges and immunities 
provided in the Federal Trade Commission Act in the same 
manner, by the same means, and with the same jurisdiction, 
power, and duties as though all applicable terms and provisions 
of the Federal Trade Commission Act were incorporated into and 
made a part of this Act.
  (c) Effect on Other Laws.--Nothing contained in this Act 
shall be construed to limit the authority of the Commission 
under any other provision of law.
  (d) Enforcement by [Bureau of Consumer Financial Protection] 
Consumer Law Enforcement Agency.--Except as otherwise provided 
in sections 3(d), 3(e), 4, and 5, and subject to subtitle B of 
the Consumer Financial Protection Act of 2010, this Act shall 
be enforced by the [Bureau of Consumer Financial Protection] 
Consumer Law Enforcement Agency under subtitle E of the 
Consumer Financial Protection Act of 2010, with respect to the 
offering or provision of a consumer financial product or 
service subject to that Act.

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TITLE 5, UNITED STATES CODE

           *       *       *       *       *       *       *



PART I--THE AGENCIES GENERALLY

           *       *       *       *       *       *       *


CHAPTER 5--ADMINISTRATIVE PROCEDURE

           *       *       *       *       *       *       *



SUBCHAPTER II--ADMINISTRATIVE PROCEDURE

           *       *       *       *       *       *       *



Sec. 552a. Records maintained on individuals

  (a) Definitions.--For purposes of this section--
          (1) the term ``agency'' means agency as defined in 
        section 552(e) of this title;
          (2) the term ``individual'' means a citizen of the 
        United States or an alien lawfully admitted for 
        permanent residence;
          (3) the term ``maintain'' includes maintain, collect, 
        use, or disseminate;
          (4) the term ``record'' means any item, collection, 
        or grouping of information about an individual that is 
        maintained by an agency, including, but not limited to, 
        his education, financial transactions, medical history, 
        and criminal or employment history and that contains 
        his name, or the identifying number, symbol, or other 
        identifying particular assigned to the individual, such 
        as a finger or voice print or a photograph;
          (5) the term ``system of records'' means a group of 
        any records under the control of any agency from which 
        information is retrieved by the name of the individual 
        or by some identifying number, symbol, or other 
        identifying particular assigned to the individual;
          (6) the term ``statistical record'' means a record in 
        a system of records maintained for statistical research 
        or reporting purposes only and not used in whole or in 
        part in making any determination about an identifiable 
        individual, except as provided by section 8 of title 
        13;
          (7) the term ``routine use'' means, with respect to 
        the disclosure of a record, the use of such record for 
        a purpose which is compatible with the purpose for 
        which it was collected;
          (8) the term ``matching program''--
                  (A) means any computerized comparison of--
                          (i) two or more automated systems of 
                        records or a system of records with 
                        non-Federal records for the purpose 
                        of--
                                  (I) establishing or verifying 
                                the eligibility of, or 
                                continuing compliance with 
                                statutory and regulatory 
                                requirements by, applicants 
                                for, recipients or 
                                beneficiaries of, participants 
                                in, or providers of services 
                                with respect to, cash or in-
                                kind assistance or payments 
                                under Federal benefit programs, 
                                or
                                  (II) recouping payments or 
                                delinquent debts under such 
                                Federal benefit programs, or
                          (ii) two or more automated Federal 
                        personnel or payroll systems of records 
                        or a system of Federal personnel or 
                        payroll records with non-Federal 
                        records,
                  (B) but does not include--
                          (i) matches performed to produce 
                        aggregate statistical data without any 
                        personal identifiers;
                          (ii) matches performed to support any 
                        research or statistical project, the 
                        specific data of which may not be used 
                        to make decisions concerning the 
                        rights, benefits, or privileges of 
                        specific individuals;
                          (iii) matches performed, by an agency 
                        (or component thereof) which performs 
                        as its principal function any activity 
                        pertaining to the enforcement of 
                        criminal laws, subsequent to the 
                        initiation of a specific criminal or 
                        civil law enforcement investigation of 
                        a named person or persons for the 
                        purpose of gathering evidence against 
                        such person or persons;
                          (iv) matches of tax information (I) 
                        pursuant to section 6103(d) of the 
                        Internal Revenue Code of 1986, (II) for 
                        purposes of tax administration as 
                        defined in section 6103(b)(4) of such 
                        Code, (III) for the purpose of 
                        intercepting a tax refund due an 
                        individual under authority granted by 
                        section 404(e), 464, or 1137 of the 
                        Social Security Act; or (IV) for the 
                        purpose of intercepting a tax refund 
                        due an individual under any other tax 
                        refund intercept program authorized by 
                        statute which has been determined by 
                        the Director of the Office of 
                        Management and Budget to contain 
                        verification, notice, and hearing 
                        requirements that are substantially 
                        similar to the procedures in section 
                        1137 of the Social Security Act;
                          (v) matches--
                                  (I) using records 
                                predominantly relating to 
                                Federal personnel, that are 
                                performed for routine 
                                administrative purposes 
                                (subject to guidance provided 
                                by the Director of the Office 
                                of Management and Budget 
                                pursuant to subsection (v)); or
                                  (II) conducted by an agency 
                                using only records from systems 
                                of records maintained by that 
                                agency;
                        if the purpose of the match is not to 
                        take any adverse financial, personnel, 
                        disciplinary, or other adverse action 
                        against Federal personnel;
                          (vi) matches performed for foreign 
                        counterintelligence purposes or to 
                        produce background checks for security 
                        clearances of Federal personnel or 
                        Federal contractor personnel;
                          (vii) matches performed incident to a 
                        levy described in section 6103(k)(8) of 
                        the Internal Revenue Code of 1986;
                          (viii) matches performed pursuant to 
                        section 202(x)(3) or 1611(e)(1) of the 
                        Social Security Act (42 U.S.C. 
                        402(x)(3), 1382(e)(1));
                          (ix) matches performed by the 
                        Secretary of Health and Human Services 
                        or the Inspector General of the 
                        Department of Health and Human Services 
                        with respect to potential fraud, waste, 
                        and abuse, including matches of a 
                        system of records with non-Federal 
                        records; or
                          (x) matches performed pursuant to 
                        section 3(d)(4) of the Achieving a 
                        Better Life Experience Act of 2014;
          (9) the term ``recipient agency'' means any agency, 
        or contractor thereof, receiving records contained in a 
        system of records from a source agency for use in a 
        matching program;
          (10) the term ``non-Federal agency'' means any State 
        or local government, or agency thereof, which receives 
        records contained in a system of records from a source 
        agency for use in a matching program;
          (11) the term ``source agency'' means any agency 
        which discloses records contained in a system of 
        records to be used in a matching program, or any State 
        or local government, or agency thereof, which discloses 
        records to be used in a matching program;
          (12) the term ``Federal benefit program'' means any 
        program administered or funded by the Federal 
        Government, or by any agent or State on behalf of the 
        Federal Government, providing cash or in-kind 
        assistance in the form of payments, grants, loans, or 
        loan guarantees to individuals; and
          (13) the term ``Federal personnel'' means officers 
        and employees of the Government of the United States, 
        members of the uniformed services (including members of 
        the Reserve Components), individuals entitled to 
        receive immediate or deferred retirement benefits under 
        any retirement program of the Government of the United 
        States (including survivor benefits).
  (b) Conditions of Disclosure.--No agency shall disclose any 
record which is contained in a system of records by any means 
of communication to any person, or to another agency, except 
pursuant to a written request by, or with the prior written 
consent of, the individual to whom the record pertains, unless 
disclosure of the record would be--
          (1) to those officers and employees of the agency 
        which maintains the record who have a need for the 
        record in the performance of their duties;
          (2) required under section 552 of this title;
          (3) for a routine use as defined in subsection (a)(7) 
        of this section and described under subsection 
        (e)(4)(D) of this section;
          (4) to the Bureau of the Census for purposes of 
        planning or carrying out a census or survey or related 
        activity pursuant to the provisions of title 13;
          (5) to a recipient who has provided the agency with 
        advance adequate written assurance that the record will 
        be used solely as a statistical research or reporting 
        record, and the record is to be transferred in a form 
        that is not individually identifiable;
          (6) to the National Archives and Records 
        Administration as a record which has sufficient 
        historical or other value to warrant its continued 
        preservation by the United States Government, or for 
        evaluation by the Archivist of the United States or the 
        designee of the Archivist to determine whether the 
        record has such value;
          (7) to another agency or to an instrumentality of any 
        governmental jurisdiction within or under the control 
        of the United States for a civil or criminal law 
        enforcement activity if the activity is authorized by 
        law, and if the head of the agency or instrumentality 
        has made a written request to the agency which 
        maintains the record specifying the particular portion 
        desired and the law enforcement activity for which the 
        record is sought;
          (8) to a person pursuant to a showing of compelling 
        circumstances affecting the health or safety of an 
        individual if upon such disclosure notification is 
        transmitted to the last known address of such 
        individual;
          (9) to either House of Congress, or, to the extent of 
        matter within its jurisdiction, any committee or 
        subcommittee thereof, any joint committee of Congress 
        or subcommittee of any such joint committee;
          (10) to the Comptroller General, or any of his 
        authorized representatives, in the course of the 
        performance of the duties of the Government 
        Accountability Office;
          (11) pursuant to the order of a court of competent 
        jurisdiction; or
          (12) to a consumer reporting agency in accordance 
        with section 3711(e) of title 31.
  (c) Accounting of Certain Disclosures.--Each agency, with 
respect to each system of records under its control, shall--
          (1) except for disclosures made under subsections 
        (b)(1) or (b)(2) of this section, keep an accurate 
        accounting of--
                  (A) the date, nature, and purpose of each 
                disclosure of a record to any person or to 
                another agency made under subsection (b) of 
                this section; and
                  (B) the name and address of the person or 
                agency to whom the disclosure is made;
          (2) retain the accounting made under paragraph (1) of 
        this subsection for at least five years or the life of 
        the record, whichever is longer, after the disclosure 
        for which the accounting is made;
          (3) except for disclosures made under subsection 
        (b)(7) of this section, make the accounting made under 
        paragraph (1) of this subsection available to the 
        individual named in the record at his request; and
          (4) inform any person or other agency about any 
        correction or notation of dispute made by the agency in 
        accordance with subsection (d) of this section of any 
        record that has been disclosed to the person or agency 
        if an accounting of the disclosure was made.
  (d) Access to Records.--Each agency that maintains a system 
of records shall--
          (1) upon request by any individual to gain access to 
        his record or to any information pertaining to him 
        which is contained in the system, permit him and upon 
        his request, a person of his own choosing to accompany 
        him, to review the record and have a copy made of all 
        or any portion thereof in a form comprehensible to him, 
        except that the agency may require the individual to 
        furnish a written statement authorizing discussion of 
        that individual's record in the accompanying person's 
        presence;
          (2) permit the individual to request amendment of a 
        record pertaining to him and--
                  (A) not later than 10 days (excluding 
                Saturdays, Sundays, and legal public holidays) 
                after the date of receipt of such request, 
                acknowledge in writing such receipt; and
                  (B) promptly, either--
                          (i) make any correction of any 
                        portion thereof which the individual 
                        believes is not accurate, relevant, 
                        timely, or complete; or
                          (ii) inform the individual of its 
                        refusal to amend the record in 
                        accordance with his request, the reason 
                        for the refusal, the procedures 
                        established by the agency for the 
                        individual to request a review of that 
                        refusal by the head of the agency or an 
                        officer designated by the head of the 
                        agency, and the name and business 
                        address of that official;
          (3) permit the individual who disagrees with the 
        refusal of the agency to amend his record to request a 
        review of such refusal, and not later than 30 days 
        (excluding Saturdays, Sundays, and legal public 
        holidays) from the date on which the individual 
        requests such review, complete such review and make a 
        final determination unless, for good cause shown, the 
        head of the agency extends such 30-day period; and if, 
        after his review, the reviewing official also refuses 
        to amend the record in accordance with the request, 
        permit the individual to file with the agency a concise 
        statement setting forth the reasons for his 
        disagreement with the refusal of the agency, and notify 
        the individual of the provisions for judicial review of 
        the reviewing official's determination under subsection 
        (g)(1)(A) of this section;
          (4) in any disclosure, containing information about 
        which the individual has filed a statement of 
        disagreement, occurring after the filing of the 
        statement under paragraph (3) of this subsection, 
        clearly note any portion of the record which is 
        disputed and provide copies of the statement and, if 
        the agency deems it appropriate, copies of a concise 
        statement of the reasons of the agency for not making 
        the amendments requested, to persons or other agencies 
        to whom the disputed record has been disclosed; and
          (5) nothing in this section shall allow an individual 
        access to any information compiled in reasonable 
        anticipation of a civil action or proceeding.
  (e) Agency Requirements.--Each agency that maintains a system 
of records shall--
          (1) maintain in its records only such information 
        about an individual as is relevant and necessary to 
        accomplish a purpose of the agency required to be 
        accomplished by statute or by executive order of the 
        President;
          (2) collect information to the greatest extent 
        practicable directly from the subject individual when 
        the information may result in adverse determinations 
        about an individual's rights, benefits, and privileges 
        under Federal programs;
          (3) inform each individual whom it asks to supply 
        information, on the form which it uses to collect the 
        information or on a separate form that can be retained 
        by the individual--
                  (A) the authority (whether granted by 
                statute, or by executive order of the 
                President) which authorizes the solicitation of 
                the information and whether disclosure of such 
                information is mandatory or voluntary;
                  (B) the principal purpose or purposes for 
                which the information is intended to be used;
                  (C) the routine uses which may be made of the 
                information, as published pursuant to paragraph 
                (4)(D) of this subsection; and
                  (D) the effects on him, if any, of not 
                providing all or any part of the requested 
                information;
          (4) subject to the provisions of paragraph (11) of 
        this subsection, publish in the Federal Register upon 
        establishment or revision a notice of the existence and 
        character of the system of records, which notice shall 
        include--
                  (A) the name and location of the system;
                  (B) the categories of individuals on whom 
                records are maintained in the system;
                  (C) the categories of records maintained in 
                the system;
                  (D) each routine use of the records contained 
                in the system, including the categories of 
                users and the purpose of such use;
                  (E) the policies and practices of the agency 
                regarding storage, retrievability, access 
                controls, retention, and disposal of the 
                records;
                  (F) the title and business address of the 
                agency official who is responsible for the 
                system of records;
                  (G) the agency procedures whereby an 
                individual can be notified at his request if 
                the system of records contains a record 
                pertaining to him;
                  (H) the agency procedures whereby an 
                individual can be notified at his request how 
                he can gain access to any record pertaining to 
                him contained in the system of records, and how 
                he can contest its content; and
                  (I) the categories of sources of records in 
                the system;
          (5) maintain all records which are used by the agency 
        in making any determination about any individual with 
        such accuracy, relevance, timeliness, and completeness 
        as is reasonably necessary to assure fairness to the 
        individual in the determination;
          (6) prior to disseminating any record about an 
        individual to any person other than an agency, unless 
        the dissemination is made pursuant to subsection (b)(2) 
        of this section, make reasonable efforts to assure that 
        such records are accurate, complete, timely, and 
        relevant for agency purposes;
          (7) maintain no record describing how any individual 
        exercises rights guaranteed by the First Amendment 
        unless expressly authorized by statute or by the 
        individual about whom the record is maintained or 
        unless pertinent to and within the scope of an 
        authorized law enforcement activity;
          (8) make reasonable efforts to serve notice on an 
        individual when any record on such individual is made 
        available to any person under compulsory legal process 
        when such process becomes a matter of public record;
          (9) establish rules of conduct for persons involved 
        in the design, development, operation, or maintenance 
        of any system of records, or in maintaining any record, 
        and instruct each such person with respect to such 
        rules and the requirements of this section, including 
        any other rules and procedures adopted pursuant to this 
        section and the penalties for noncompliance;
          (10) establish appropriate administrative, technical, 
        and physical safeguards to insure the security and 
        confidentiality of records and to protect against any 
        anticipated threats or hazards to their security or 
        integrity which could result in substantial harm, 
        embarrassment, inconvenience, or unfairness to any 
        individual on whom information is maintained;
          (11) at least 30 days prior to publication of 
        information under paragraph (4)(D) of this subsection, 
        publish in the Federal Register notice of any new use 
        or intended use of the information in the system, and 
        provide an opportunity for interested persons to submit 
        written data, views, or arguments to the agency; and
          (12) if such agency is a recipient agency or a source 
        agency in a matching program with a non-Federal agency, 
        with respect to any establishment or revision of a 
        matching program, at least 30 days prior to conducting 
        such program, publish in the Federal Register notice of 
        such establishment or revision.
  (f) Agency Rules.--In order to carry out the provisions of 
this section, each agency that maintains a system of records 
shall promulgate rules, in accordance with the requirements 
(including general notice) of section 553 of this title, which 
shall--
          (1) establish procedures whereby an individual can be 
        notified in response to his request if any system of 
        records named by the individual contains a record 
        pertaining to him;
          (2) define reasonable times, places, and requirements 
        for identifying an individual who requests his record 
        or information pertaining to him before the agency 
        shall make the record or information available to the 
        individual;
          (3) establish procedures for the disclosure to an 
        individual upon his request of his record or 
        information pertaining to him, including special 
        procedure, if deemed necessary, for the disclosure to 
        an individual of medical records, including 
        psychological records, pertaining to him;
          (4) establish procedures for reviewing a request from 
        an individual concerning the amendment of any record or 
        information pertaining to the individual, for making a 
        determination on the request, for an appeal within the 
        agency of an initial adverse agency determination, and 
        for whatever additional means may be necessary for each 
        individual to be able to exercise fully his rights 
        under this section; and
          (5) establish fees to be charged, if any, to any 
        individual for making copies of his record, excluding 
        the cost of any search for and review of the record.
The Office of the Federal Register shall biennially compile and 
publish the rules promulgated under this subsection and agency 
notices published under subsection (e)(4) of this section in a 
form available to the public at low cost.
  (g)(1) Civil Remedies.--Whenever any agency
          (A) makes a determination under subsection (d)(3) of 
        this section not to amend an individual's record in 
        accordance with his request, or fails to make such 
        review in conformity with that subsection;
          (B) refuses to comply with an individual request 
        under subsection (d)(1) of this section;
          (C) fails to maintain any record concerning any 
        individual with such accuracy, relevance, timeliness, 
        and completeness as is necessary to assure fairness in 
        any determination relating to the qualifications, 
        character, rights, or opportunities of, or benefits to 
        the individual that may be made on the basis of such 
        record, and consequently a determination is made which 
        is adverse to the individual; or
          (D) fails to comply with any other provision of this 
        section, or any rule promulgated thereunder, in such a 
        way as to have an adverse effect on an individual,
the individual may bring a civil action against the agency, and 
the district courts of the United States shall have 
jurisdiction in the matters under the provisions of this 
subsection.
  (2)(A) In any suit brought under the provisions of subsection 
(g)(1)(A) of this section, the court may order the agency to 
amend the individual's record in accordance with his request or 
in such other way as the court may direct. In such a case the 
court shall determine the matter de novo.
  (B) The court may assess against the United States reasonable 
attorney fees and other litigation costs reasonably incurred in 
any case under this paragraph in which the complainant has 
substantially prevailed.
  (3)(A) In any suit brought under the provisions of subsection 
(g)(1)(B) of this section, the court may enjoin the agency from 
withholding the records and order the production to the 
complainant of any agency records improperly withheld from him. 
In such a case the court shall determine the matter de novo, 
and may examine the contents of any agency records in camera to 
determine whether the records or any portion thereof may be 
withheld under any of the exemptions set forth in subsection 
(k) of this section, and the burden is on the agency to sustain 
its action.
  (B) The court may assess against the United States reasonable 
attorney fees and other litigation costs reasonably incurred in 
any case under this paragraph in which the complainant has 
substantially prevailed.
  (4) In any suit brought under the provisions of subsection 
(g)(1)(C) or (D) of this section in which the court determines 
that the agency acted in a manner which was intentional or 
willful, the United States shall be liable to the individual in 
an amount equal to the sum of--
          (A) actual damages sustained by the individual as a 
        result of the refusal or failure, but in no case shall 
        a person entitled to recovery receive less than the sum 
        of $1,000; and
          (B) the costs of the action together with reasonable 
        attorney fees as determined by the court.
  (5) An action to enforce any liability created under this 
section may be brought in the district court of the United 
States in the district in which the complainant resides, or has 
his principal place of business, or in which the agency records 
are situated, or in the District of Columbia, without regard to 
the amount in controversy, within two years from the date on 
which the cause of action arises, except that where an agency 
has materially and willfully misrepresented any information 
required under this section to be disclosed to an individual 
and the information so misrepresented is material to 
establishment of the liability of the agency to the individual 
under this section, the action may be brought at any time 
within two years after discovery by the individual of the 
misrepresentation. Nothing in this section shall be construed 
to authorize any civil action by reason of any injury sustained 
as the result of a disclosure of a record prior to September 
27, 1975.
  (h) Rights of Legal Guardians.--For the purposes of this 
section, the parent of any minor, or the legal guardian of any 
individual who has been declared to be incompetent due to 
physical or mental incapacity or age by a court of competent 
jurisdiction, may act on behalf of the individual.
  (i)(1) Criminal Penalties.--Any officer or employee of an 
agency, who by virtue of his employment or official position, 
has possession of, or access to, agency records which contain 
individually identifiable information the disclosure of which 
is prohibited by this section or by rules or regulations 
established thereunder, and who knowing that disclosure of the 
specific material is so prohibited, willfully discloses the 
material in any manner to any person or agency not entitled to 
receive it, shall be guilty of a misdemeanor and fined not more 
than $5,000.
  (2) Any officer or employee of any agency who willfully 
maintains a system of records without meeting the notice 
requirements of subsection (e)(4) of this section shall be 
guilty of a misdemeanor and fined not more than $5,000.
  (3) Any person who knowingly and willfully requests or 
obtains any record concerning an individual from an agency 
under false pretenses shall be guilty of a misdemeanor and 
fined not more than $5,000.
  (j) General Exemptions.--The head of any agency may 
promulgate rules, in accordance with the requirements 
(including general notice) of sections 553(b)(1), (2), and (3), 
(c), and (e) of this title, to exempt any system of records 
within the agency from any part of this section except 
subsections (b), (c)(1) and (2), (e)(4)(A) through (F), (e)(6), 
(7), (9), (10), and (11), and (i) if the system of records is--
          (1) maintained by the Central Intelligence Agency; or
          (2) maintained by an agency or component thereof 
        which performs as its principal function any activity 
        pertaining to the enforcement of criminal laws, 
        including police efforts to prevent, control, or reduce 
        crime or to apprehend criminals, and the activities of 
        prosecutors, courts, correctional, probation, pardon, 
        or parole authorities, and which consists of (A) 
        information compiled for the purpose of identifying 
        individual criminal offenders and alleged offenders and 
        consisting only of identifying data and notations of 
        arrests, the nature and disposition of criminal 
        charges, sentencing, confinement, release, and parole 
        and probation status; (B) information compiled for the 
        purpose of a criminal investigation, including reports 
        of informants and investigators, and associated with an 
        identifiable individual; or (C) reports identifiable to 
        an individual compiled at any stage of the process of 
        enforcement of the criminal laws from arrest or 
        indictment through release from supervision.
At the time rules are adopted under this subsection, the agency 
shall include in the statement required under section 553(c) of 
this title, the reasons why the system of records is to be 
exempted from a provision of this section.
  (k) Specific Exemptions.--The head of any agency may 
promulgate rules, in accordance with the requirements 
(including general notice) of sections 553(b)(1), (2), and (3), 
(c), and (e) of this title, to exempt any system of records 
within the agency from subsections (c)(3), (d), (e)(1), 
(e)(4)(G), (H), and (I) and (f) of this section if the system 
of records is--
          (1) subject to the provisions of section 552(b)(1) of 
        this title;
          (2) investigatory material compiled for law 
        enforcement purposes, other than material within the 
        scope of subsection (j)(2) of this section: Provided, 
        however, That if any individual is denied any right, 
        privilege, or benefit that he would otherwise be 
        entitled by Federal law, or for which he would 
        otherwise be eligible, as a result of the maintenance 
        of such material, such material shall be provided to 
        such individual, except to the extent that the 
        disclosure of such material would reveal the identity 
        of a source who furnished information to the Government 
        under an express promise that the identity of the 
        source would be held in confidence, or, prior to the 
        effective date of this section, under an implied 
        promise that the identity of the source would be held 
        in confidence;
          (3) maintained in connection with providing 
        protective services to the President of the United 
        States or other individuals pursuant to section 3056 of 
        title 18;
          (4) required by statute to be maintained and used 
        solely as statistical records;
          (5) investigatory material compiled solely for the 
        purpose of determining suitability, eligibility, or 
        qualifications for Federal civilian employment, 
        military service, Federal contracts, or access to 
        classified information, but only to the extent that the 
        disclosure of such material would reveal the identity 
        of a source who furnished information to the Government 
        under an express promise that the identity of the 
        source would be held in confidence, or, prior to the 
        effective date of this section, under an implied 
        promise that the identity of the source would be held 
        in confidence;
          (6) testing or examination material used solely to 
        determine individual qualifications for appointment or 
        promotion in the Federal service the disclosure of 
        which would compromise the objectivity or fairness of 
        the testing or examination process; or
          (7) evaluation material used to determine potential 
        for promotion in the armed services, but only to the 
        extent that the disclosure of such material would 
        reveal the identity of a source who furnished 
        information to the Government under an express promise 
        that the identity of the source would be held in 
        confidence, or, prior to the effective date of this 
        section, under an implied promise that the identity of 
        the source would be held in confidence.
At the time rules are adopted under this subsection, the agency 
shall include in the statement required under section 553(c) of 
this title, the reasons why the system of records is to be 
exempted from a provision of this section.
  (l)(1) Archival Records.--Each agency record which is 
accepted by the Archivist of the United States for storage, 
processing, and servicing in accordance with section 3103 of 
title 44 shall, for the purposes of this section, be considered 
to be maintained by the agency which deposited the record and 
shall be subject to the provisions of this section. The 
Archivist of the United States shall not disclose the record 
except to the agency which maintains the record, or under rules 
established by that agency which are not inconsistent with the 
provisions of this section.
  (2) Each agency record pertaining to an identifiable 
individual which was transferred to the National Archives of 
the United States as a record which has sufficient historical 
or other value to warrant its continued preservation by the 
United States Government, prior to the effective date of this 
section, shall, for the purposes of this section, be considered 
to be maintained by the National Archives and shall not be 
subject to the provisions of this section, except that a 
statement generally describing such records (modeled after the 
requirements relating to records subject to subsections 
(e)(4)(A) through (G) of this section) shall be published in 
the Federal Register.
  (3) Each agency record pertaining to an identifiable 
individual which is transferred to the National Archives of the 
United States as a record which has sufficient historical or 
other value to warrant its continued preservation by the United 
States Government, on or after the effective date of this 
section, shall, for the purposes of this section, be considered 
to be maintained by the National Archives and shall be exempt 
from the requirements of this section except subsections 
(e)(4)(A) through (G) and (e)(9) of this section.
  (m)(1) Government Contractors.--When an agency provides by a 
contract for the operation by or on behalf of the agency of a 
system of records to accomplish an agency function, the agency 
shall, consistent with its authority, cause the requirements of 
this section to be applied to such system. For purposes of 
subsection (i) of this section any such contractor and any 
employee of such contractor, if such contract is agreed to on 
or after the effective date of this section, shall be 
considered to be an employee of an agency.
  (2) A consumer reporting agency to which a record is 
disclosed under section 3711(e) of title 31 shall not be 
considered a contractor for the purposes of this section.
  (n) Mailing Lists.--An individual's name and address may not 
be sold or rented by an agency unless such action is 
specifically authorized by law. This provision shall not be 
construed to require the withholding of names and addresses 
otherwise permitted to be made public.
  (o) Matching Agreements.--(1) No record which is contained in 
a system of records may be disclosed to a recipient agency or 
non-Federal agency for use in a computer matching program 
except pursuant to a written agreement between the source 
agency and the recipient agency or non-Federal agency 
specifying--
          (A) the purpose and legal authority for conducting 
        the program;
          (B) the justification for the program and the 
        anticipated results, including a specific estimate of 
        any savings;
          (C) a description of the records that will be 
        matched, including each data element that will be used, 
        the approximate number of records that will be matched, 
        and the projected starting and completion dates of the 
        matching program;
          (D) procedures for providing individualized notice at 
        the time of application, and notice periodically 
        thereafter as directed by the Data Integrity Board of 
        such agency (subject to guidance provided by the 
        Director of the Office of Management and Budget 
        pursuant to subsection (v)), to--
                  (i) applicants for and recipients of 
                financial assistance or payments under Federal 
                benefit programs, and
                  (ii) applicants for and holders of positions 
                as Federal personnel,
        that any information provided by such applicants, 
        recipients, holders, and individuals may be subject to 
        verification through matching programs;
          (E) procedures for verifying information produced in 
        such matching program as required by subsection (p);
          (F) procedures for the retention and timely 
        destruction of identifiable records created by a 
        recipient agency or non-Federal agency in such matching 
        program;
          (G) procedures for ensuring the administrative, 
        technical, and physical security of the records matched 
        and the results of such programs;
          (H) prohibitions on duplication and redisclosure of 
        records provided by the source agency within or outside 
        the recipient agency or the non-Federal agency, except 
        where required by law or essential to the conduct of 
        the matching program;
          (I) procedures governing the use by a recipient 
        agency or non-Federal agency of records provided in a 
        matching program by a source agency, including 
        procedures governing return of the records to the 
        source agency or destruction of records used in such 
        program;
          (J) information on assessments that have been made on 
        the accuracy of the records that will be used in such 
        matching program; and
          (K) that the Comptroller General may have access to 
        all records of a recipient agency or a non-Federal 
        agency that the Comptroller General deems necessary in 
        order to monitor or verify compliance with the 
        agreement.
  (2)(A) A copy of each agreement entered into pursuant to 
paragraph (1) shall--
          (i) be transmitted to the Committee on Governmental 
        Affairs of the Senate and the Committee on Government 
        Operations of the House of Representatives; and
          (ii) be available upon request to the public.
  (B) No such agreement shall be effective until 30 days after 
the date on which such a copy is transmitted pursuant to 
subparagraph (A)(i).
  (C) Such an agreement shall remain in effect only for such 
period, not to exceed 18 months, as the Data Integrity Board of 
the agency determines is appropriate in light of the purposes, 
and length of time necessary for the conduct, of the matching 
program.
  (D) Within 3 months prior to the expiration of such an 
agreement pursuant to subparagraph (C), the Data Integrity 
Board of the agency may, without additional review, renew the 
matching agreement for a current, ongoing matching program for 
not more than one additional year if--
          (i) such program will be conducted without any 
        change; and
          (ii) each party to the agreement certifies to the 
        Board in writing that the program has been conducted in 
        compliance with the agreement.
  (p) Verification and Opportunity to Contest Findings.--(1) In 
order to protect any individual whose records are used in a 
matching program, no recipient agency, non-Federal agency, or 
source agency may suspend, terminate, reduce, or make a final 
denial of any financial assistance or payment under a Federal 
benefit program to such individual, or take other adverse 
action against such individual, as a result of information 
produced by such matching program, until--
          (A)(i) the agency has independently verified the 
        information; or
          (ii) the Data Integrity Board of the agency, or in 
        the case of a non-Federal agency the Data Integrity 
        Board of the source agency, determines in accordance 
        with guidance issued by the Director of the Office of 
        Management and Budget that--
                  (I) the information is limited to 
                identification and amount of benefits paid by 
                the source agency under a Federal benefit 
                program; and
                  (II) there is a high degree of confidence 
                that the information provided to the recipient 
                agency is accurate;
          (B) the individual receives a notice from the agency 
        containing a statement of its findings and informing 
        the individual of the opportunity to contest such 
        findings; and
          (C)(i) the expiration of any time period established 
        for the program by statute or regulation for the 
        individual to respond to that notice; or
          (ii) in the case of a program for which no such 
        period is established, the end of the 30-day period 
        beginning on the date on which notice under 
        subparagraph (B) is mailed or otherwise provided to the 
        individual.
  (2) Independent verification referred to in paragraph (1) 
requires investigation and confirmation of specific information 
relating to an individual that is used as a basis for an 
adverse action against the individual, including where 
applicable investigation and confirmation of--
          (A) the amount of any asset or income involved;
          (B) whether such individual actually has or had 
        access to such asset or income for such individual's 
        own use; and
          (C) the period or periods when the individual 
        actually had such asset or income.
  (3) Notwithstanding paragraph (1), an agency may take any 
appropriate action otherwise prohibited by such paragraph if 
the agency determines that the public health or public safety 
may be adversely affected or significantly threatened during 
any notice period required by such paragraph.
  (q) Sanctions.--(1) Notwithstanding any other provision of 
law, no source agency may disclose any record which is 
contained in a system of records to a recipient agency or non-
Federal agency for a matching program if such source agency has 
reason to believe that the requirements of subsection (p), or 
any matching agreement entered into pursuant to subsection (o), 
or both, are not being met by such recipient agency.
  (2) No source agency may renew a matching agreement unless--
          (A) the recipient agency or non-Federal agency has 
        certified that it has complied with the provisions of 
        that agreement; and
          (B) the source agency has no reason to believe that 
        the certification is inaccurate.
  (r) Report on New Systems and Matching Programs.--Each agency 
that proposes to establish or make a significant change in a 
system of records or a matching program shall provide adequate 
advance notice of any such proposal (in duplicate) to the 
Committee on Government Operations of the House of 
Representatives, the Committee on Governmental Affairs of the 
Senate, and the Office of Management and Budget in order to 
permit an evaluation of the probable or potential effect of 
such proposal on the privacy or other rights of individuals.
  (s) Biennial Report.--The President shall biennially submit 
to the Speaker of the House of Representatives and the 
President pro tempore of the Senate a report--
          (1) describing the actions of the Director of the 
        Office of Management and Budget pursuant to section 6 
        of the Privacy Act of 1974 during the preceding 2 
        years;
          (2) describing the exercise of individual rights of 
        access and amendment under this section during such 
        years;
          (3) identifying changes in or additions to systems of 
        records;
          (4) containing such other information concerning 
        administration of this section as may be necessary or 
        useful to the Congress in reviewing the effectiveness 
        of this section in carrying out the purposes of the 
        Privacy Act of 1974.
  (t)(1) Effect of Other Laws.--No agency shall rely on any 
exemption contained in section 552 of this title to withhold 
from an individual any record which is otherwise accessible to 
such individual under the provisions of this section.
  (2) No agency shall rely on any exemption in this section to 
withhold from an individual any record which is otherwise 
accessible to such individual under the provisions of section 
552 of this title.
  (u) Data Integrity Boards.--(1) Every agency conducting or 
participating in a matching program shall establish a Data 
Integrity Board to oversee and coordinate among the various 
components of such agency the agency's implementation of this 
section.
  (2) Each Data Integrity Board shall consist of senior 
officials designated by the head of the agency, and shall 
include any senior official designated by the head of the 
agency as responsible for implementation of this section, and 
the inspector general of the agency, if any. The inspector 
general shall not serve as chairman of the Data Integrity 
Board.
  (3) Each Data Integrity Board--
          (A) shall review, approve, and maintain all written 
        agreements for receipt or disclosure of agency records 
        for matching programs to ensure compliance with 
        subsection (o), and all relevant statutes, regulations, 
        and guidelines;
          (B) shall review all matching programs in which the 
        agency has participated during the year, either as a 
        source agency or recipient agency, determine compliance 
        with applicable laws, regulations, guidelines, and 
        agency agreements, and assess the costs and benefits of 
        such programs;
          (C) shall review all recurring matching programs in 
        which the agency has participated during the year, 
        either as a source agency or recipient agency, for 
        continued justification for such disclosures;
          (D) shall compile an annual report, which shall be 
        submitted to the head of the agency and the Office of 
        Management and Budget and made available to the public 
        on request, describing the matching activities of the 
        agency, including--
                  (i) matching programs in which the agency has 
                participated as a source agency or recipient 
                agency;
                  (ii) matching agreements proposed under 
                subsection (o) that were disapproved by the 
                Board;
                  (iii) any changes in membership or structure 
                of the Board in the preceding year;
                  (iv) the reasons for any waiver of the 
                requirement in paragraph (4) of this section 
                for completion and submission of a cost-benefit 
                analysis prior to the approval of a matching 
                program;
                  (v) any violations of matching agreements 
                that have been alleged or identified and any 
                corrective action taken; and
                  (vi) any other information required by the 
                Director of the Office of Management and Budget 
                to be included in such report;
          (E) shall serve as a clearinghouse for receiving and 
        providing information on the accuracy, completeness, 
        and reliability of records used in matching programs;
          (F) shall provide interpretation and guidance to 
        agency components and personnel on the requirements of 
        this section for matching programs;
          (G) shall review agency recordkeeping and disposal 
        policies and practices for matching programs to assure 
        compliance with this section; and
          (H) may review and report on any agency matching 
        activities that are not matching programs.
  (4)(A) Except as provided in subparagraphs (B) and (C), a 
Data Integrity Board shall not approve any written agreement 
for a matching program unless the agency has completed and 
submitted to such Board a cost-benefit analysis of the proposed 
program and such analysis demonstrates that the program is 
likely to be cost effective.
  (B) The Board may waive the requirements of subparagraph (A) 
of this paragraph if it determines in writing, in accordance 
with guidelines prescribed by the Director of the Office of 
Management and Budget, that a cost-benefit analysis is not 
required.
  (C) A cost-benefit analysis shall not be required under 
subparagraph (A) prior to the initial approval of a written 
agreement for a matching program that is specifically required 
by statute. Any subsequent written agreement for such a program 
shall not be approved by the Data Integrity Board unless the 
agency has submitted a cost-benefit analysis of the program as 
conducted under the preceding approval of such agreement.
  (5)(A) If a matching agreement is disapproved by a Data 
Integrity Board, any party to such agreement may appeal the 
disapproval to the Director of the Office of Management and 
Budget. Timely notice of the filing of such an appeal shall be 
provided by the Director of the Office of Management and Budget 
to the Committee on Governmental Affairs of the Senate and the 
Committee on Government Operations of the House of 
Representatives.
  (B) The Director of the Office of Management and Budget may 
approve a matching agreement notwithstanding the disapproval of 
a Data Integrity Board if the Director determines that--
          (i) the matching program will be consistent with all 
        applicable legal, regulatory, and policy requirements;
          (ii) there is adequate evidence that the matching 
        agreement will be cost-effective; and
          (iii) the matching program is in the public interest.
  (C) The decision of the Director to approve a matching 
agreement shall not take effect until 30 days after it is 
reported to committees described in subparagraph (A).
  (D) If the Data Integrity Board and the Director of the 
Office of Management and Budget disapprove a matching program 
proposed by the inspector general of an agency, the inspector 
general may report the disapproval to the head of the agency 
and to the Congress.
  (6) In the reports required by paragraph (3)(D), agency 
matching activities that are not matching programs may be 
reported on an aggregate basis, if and to the extent necessary 
to protect ongoing law enforcement or counterintelligence 
investigations.
  (v) Office of Management and Budget Responsibilities.--The 
Director of the Office of Management and Budget shall--
          (1) develop and, after notice and opportunity for 
        public comment, prescribe guidelines and regulations 
        for the use of agencies in implementing the provisions 
        of this section; and
          (2) provide continuing assistance to and oversight of 
        the implementation of this section by agencies.
  (w) Applicability to [Bureau of Consumer Financial 
Protection] Consumer Law Enforcement Agency._Except as provided 
in the Consumer Financial Protection Act of 2010, this section 
shall apply with respect to the [Bureau of Consumer Financial 
Protection] Consumer Law Enforcement Agency.

           *       *       *       *       *       *       *


CHAPTER 6--THE ANALYSIS OF REGULATORY FUNCTIONS

           *       *       *       *       *       *       *



Sec. 609. Procedures for gathering comments

  (a) When any rule is promulgated which will have a 
significant economic impact on a substantial number of small 
entities, the head of the agency promulgating the rule or the 
official of the agency with statutory responsibility for the 
promulgation of the rule shall assure that small entities have 
been given an opportunity to participate in the rulemaking for 
the rule through the reasonable use of techniques such as--
          (1) the inclusion in an advanced notice of proposed 
        rulemaking, if issued, of a statement that the proposed 
        rule may have a significant economic effect on a 
        substantial number of small entities;
          (2) the publication of general notice of proposed 
        rulemaking in publications likely to be obtained by 
        small entities;
          (3) the direct notification of interested small 
        entities;
          (4) the conduct of open conferences or public 
        hearings concerning the rule for small entities 
        including soliciting and receiving comments over 
        computer networks; and
          (5) the adoption or modification of agency procedural 
        rules to reduce the cost or complexity of participation 
        in the rulemaking by small entities.
  (b) Prior to publication of an initial regulatory flexibility 
analysis which a covered agency is required to conduct by this 
chapter--
          (1) a covered agency shall notify the Chief Counsel 
        for Advocacy of the Small Business Administration and 
        provide the Chief Counsel with information on the 
        potential impacts of the proposed rule on small 
        entities and the type of small entities that might be 
        affected;
          (2) not later than 15 days after the date of receipt 
        of the materials described in paragraph (1), the Chief 
        Counsel shall identify individuals representative of 
        affected small entities for the purpose of obtaining 
        advice and recommendations from those individuals about 
        the potential impacts of the proposed rule;
          (3) the agency shall convene a review panel for such 
        rule consisting wholly of full time Federal employees 
        of the office within the agency responsible for 
        carrying out the proposed rule, the Office of 
        Information and Regulatory Affairs within the Office of 
        Management and Budget, and the Chief Counsel;
          (4) the panel shall review any material the agency 
        has prepared in connection with this chapter, including 
        any draft proposed rule, collect advice and 
        recommendations of each individual small entity 
        representative identified by the agency after 
        consultation with the Chief Counsel, on issues related 
        to subsections 603(b), paragraphs (3), (4) and (5) and 
        603(c);
          (5) not later than 60 days after the date a covered 
        agency convenes a review panel pursuant to paragraph 
        (3), the review panel shall report on the comments of 
        the small entity representatives and its findings as to 
        issues related to subsections 603(b), paragraphs (3), 
        (4) and (5) and 603(c), provided that such report shall 
        be made public as part of the rulemaking record; and
          (6) where appropriate, the agency shall modify the 
        proposed rule, the initial regulatory flexibility 
        analysis or the decision on whether an initial 
        regulatory flexibility analysis is required.
  (c) An agency may in its discretion apply subsection (b) to 
rules that the agency intends to certify under subsection 
605(b), but the agency believes may have a greater than de 
minimis impact on a substantial number of small entities.
  (d) For purposes of this section, the term ``covered agency'' 
means--
          (1) the Environmental Protection Agency;
          (2) the [Consumer Financial Protection Bureau of the 
        Federal Reserve System] Consumer Law Enforcement 
        Agency; and
          (3) the Occupational Safety and Health Administration 
        of the Department of Labor.
  (e) The Chief Counsel for Advocacy, in consultation with the 
individuals identified in subsection (b)(2), and with the 
Administrator of the Office of Information and Regulatory 
Affairs within the Office of Management and Budget, may waive 
the requirements of subsections (b)(3), (b)(4), and (b)(5) by 
including in the rulemaking record a written finding, with 
reasons therefor, that those requirements would not advance the 
effective participation of small entities in the rulemaking 
process. For purposes of this subsection, the factors to be 
considered in making such a finding are as follows:
          (1) In developing a proposed rule, the extent to 
        which the covered agency consulted with individuals 
        representative of affected small entities with respect 
        to the potential impacts of the rule and took such 
        concerns into consideration.
          (2) Special circumstances requiring prompt issuance 
        of the rule.
          (3) Whether the requirements of subsection (b) would 
        provide the individuals identified in subsection (b)(2) 
        with a competitive advantage relative to other small 
        entities.

           *       *       *       *       *       *       *


PART III--EMPLOYEES

           *       *       *       *       *       *       *


SUBPART B--EMPLOYMENT AND RETENTION

           *       *       *       *       *       *       *


CHAPTER 31--AUTHORITY FOR EMPLOYMENT

           *       *       *       *       *       *       *



SUBCHAPTER II--THE SENIOR EXECUTIVE SERVICE

           *       *       *       *       *       *       *



Sec. 3132. Definitions and exclusions

  (a) For the purpose of this subchapter--
          (1) ``agency'' means an Executive agency, except a 
        Government corporation and the Government 
        Accountability Office, but does not include--
                  (A) any agency or unit thereof excluded from 
                coverage by the President under subsection (c) 
                of this section; or
                  (B) the Federal Bureau of Investigation, the 
                Drug Enforcement Administration, the Central 
                Intelligence Agency, the Office of the Director 
                of National Intelligence, the Defense 
                Intelligence Agency, the National Geospatial-
                Intelligence Agency, the National Security 
                Agency, Department of Defense intelligence 
                activities the civilian employees of which are 
                subject to section 1590 of title 10, and, as 
                determined by the President, an Executive 
                agency, or unit thereof, whose principal 
                function is the conduct of foreign intelligence 
                or counterintelligence activities;
                  (C) the Federal Election Commission or the 
                Election Assistance Commission;
                  (D) the Office of the Comptroller of the 
                Currency, [the Office of Thrift Supervision,, 
                the Resolution Trust Corporation,] the Farm 
                Credit Administration, the Federal Housing 
                Finance Agency, the Office of the Independent 
                Insurance Advocate of the Department of the 
                Treasury, the National Credit Union 
                Administration, the Bureau of Consumer 
                Financial Protection, and the Office of 
                Financial Research;
                  (E) the Securities and Exchange Commission; 
                or
                  (F) the Commodity Futures Trading Commission;
          (2) ``Senior Executive Service position'' means any 
        position in an agency which is classified above GS-15 
        pursuant to section 5108 or in level IV or V of the 
        Executive Schedule, or an equivalent position, which is 
        not required to be filled by an appointment by the 
        President by and with the advice and consent of the 
        Senate, and in which an employee--
                  (A) directs the work of an organizational 
                unit;
                  (B) is held accountable for the success of 
                one or more specific programs or projects;
                  (C) monitors progress toward organizational 
                goals and periodically evaluates and makes 
                appropriate adjustments to such goals;
                  (D) supervises the work of employees other 
                than personal assistants; or
                  (E) otherwise exercises important policy-
                making, policy-determining, or other executive 
                functions;
        but does not include--
                  (i) any position in the Foreign Service of 
                the United States;
                  (ii) an administrative law judge position 
                under section 3105 of this title;
                  (iii) any position established as a qualified 
                position in the excepted service by the 
                Secretary of Homeland Security under section 
                226 of the Homeland Security Act of 2002; or
                  (iv) any position established as a qualified 
                position in the excepted service by the 
                Secretary of Defense under section 1599f of 
                title 10;
          (3) ``senior executive'' means a member of the Senior 
        Executive Service;
          (4) ``career appointee'' means an individual in a 
        Senior Executive Service position whose appointment to 
        the position or previous appointment to another Senior 
        Executive Service position was based on approval by the 
        Office of Personnel Management of the executive 
        qualifications of such individual;
          (5) ``limited term appointee'' means an individual 
        appointed under a nonrenewable appointment for a term 
        of 3 years or less to a Senior Executive Service 
        position the duties of which will expire at the end of 
        such term;
          (6) ``limited emergency appointee'' means an 
        individual appointed under a nonrenewable appointment, 
        not to exceed 18 months, to a Senior Executive Service 
        position established to meet a bona fide, 
        unanticipated, urgent need;
          (7) ``noncareer appointee'' means an individual in a 
        Senior Executive Service position who is not a career 
        appointee, a limited term appointee, or a limited 
        emergency appointee;
          (8) ``career reserved position'' means a position 
        which is required to be filled by a career appointee 
        and which is designated under subsection (b) of this 
        section; and
          (9) ``general position'' means any position, other 
        than a career reserved position, which may be filled by 
        either a career appointee, noncareer appointee, limited 
        emergency appointee, or limited term appointee.
  (b)(1) For the purpose of paragraph (8) of subsection (a) of 
this section, the Office shall prescribe the criteria and 
regulations governing the designation of career reserved 
positions. The criteria and regulations shall provide that a 
position shall be designated as a career reserved position only 
if the filling of the position by a career appointee is 
necessary to ensure impartiality, or the public's confidence in 
the impartiality, of the Government. The head of each agency 
shall be responsible for designating career reserved positions 
in such agency in accordance with such criteria and 
regulations.
  (2) The Office shall periodically review general positions to 
determine whether the positions should be designated as career 
reserved. If the Office determines that any such position 
should be so designated, it shall order the agency to make the 
designation.
  (3) Notwithstanding the provisions of any other law, any 
position to be designated as a Senior Executive Service 
position (except a position in the Executive Office of the 
President) which--
          (A) is under the Executive Schedule, or for which the 
        rate of basic pay is determined by reference to the 
        Executive Schedule, and
          (B) on the day before the date of the enactment of 
        the Civil Service Reform Act of 1978 was specifically 
        required under section 2102 of this title or otherwise 
        required by law to be in the competitive service,
shall be designated as a career reserved position if the 
position entails direct responsibility to the public for the 
management or operation of particular government programs or 
functions.
  (4) Not later than March 1 of each year, the head of each 
agency shall publish in the Federal Register a list of 
positions in the agency which were career reserved positions 
during the preceding calendar year.
  (c) An agency may file an application with the Office setting 
forth reasons why it, or a unit thereof, should be excluded 
from the coverage of this subchapter. The Office shall--
          (1) review the application and stated reasons,
          (2) undertake a review to determine whether the 
        agency or unit should be excluded from the coverage of 
        this subchapter, and
          (3) upon completion of its review, recommend to the 
        President whether the agency or unit should be excluded 
        from the coverage of this subchapter.
If the Office recommends that an agency or unit thereof be 
excluded from the coverage of this subchapter, the President 
may, on written determination, make the exclusion for the 
period determined by the President to be appropriate.
  (d) Any agency or unit which is excluded from coverage under 
subsection (c) of this section shall make a sustained effort to 
bring its personnel system into conformity with the Senior 
Executive Service to the extent practicable.
  (e) The Office may at any time recommend to the President 
that any exclusion previously granted to an agency or unit 
thereof under subsection (c) of this section be revoked. Upon 
recommendation of the Office, the President may revoke, by 
written determination, any exclusion made under subsection (c) 
of this section.
  (f) If--
          (1) any agency is excluded under subsection (c) of 
        this section, or
          (2) any exclusion is revoked under subsection (e) of 
        this section,
the Office shall, within 30 days after the action, transmit to 
the Congress written notice of the exclusion or revocation.

           *       *       *       *       *       *       *


SUBPART D--PAY AND ALLOWANCES

           *       *       *       *       *       *       *


CHAPTER 53--PAY RATES AND SYSTEMS

           *       *       *       *       *       *       *



SUBCHAPTER II--EXECUTIVE SCHEDULE PAY RATES

           *       *       *       *       *       *       *



Sec. 5314. Positions at level III

  Level III of the Executive Schedule applies to the following 
positions, for which the annual rate of basic pay shall be the 
rate determined with respect to such level under chapter 11 of 
title 2, as adjusted by section 5318 of this title:
          Solicitor General of the United States.
          Under Secretary of Commerce, Under Secretary of 
        Commerce for Economic Affairs, Under Secretary of 
        Commerce for Export Administration, and Under Secretary 
        of Commerce for Travel and Tourism.
          Under Secretaries of State (6).
          Under Secretaries of the Treasury (3).
          Administrator of General Services.
          Administrator of the Small Business Administration.
          Deputy Administrator, Agency for International 
        Development.
          Chairman of the Merit Systems Protection Board.
          Chairman, Federal Communications Commission.
          Chairman, Board of Directors, Federal Deposit 
        Insurance Corporation.
          Chairman, Federal Energy Regulatory Commission.
          Chairman, Federal Trade Commission.
          Chairman, Surface Transportation Board.
          Chairman, National Labor Relations Board.
          Chairman, Securities and Exchange Commission.
          Chairman, National Mediation Board.
          Chairman, Railroad Retirement Board.
          Chairman, Federal Maritime Commission.
          Comptroller of the Currency.
          Commissioner of Internal Revenue.
          Under Secretary of Defense for Policy.
          Under Secretary of Defense (Comptroller).
          Under Secretary of Defense for Personnel and 
        Readiness.
          Under Secretary of Defense for Intelligence.
          Under Secretary of the Air Force.
          Under Secretary of the Army.
          Under Secretary of the Navy.
          Deputy Administrator of the National Aeronautics and 
        Space Administration.
          Deputy Director of the Central Intelligence Agency.
          Director of the Office of Emergency Planning.
          Director of the Peace Corps.
          Deputy Director, National Science Foundation.
          President of the Export-Import Bank of Washington.
          Members, Nuclear Regulatory Commission.
          Members, Defense Nuclear Facilities Safety Board.
          Director of the Federal Bureau of Investigation, 
        Department of Justice.
          Administrator of the National Highway Traffic Safety 
        Administration.
          Administrator of the Federal Motor Carrier Safety 
        Administration.
          Administrator, Federal Railroad Administration.
          Chairman, National Transportation Safety Board.
          Chairman of the National Endowment for the Arts the 
        incumbent of which also serves as Chairman of the 
        National Council on the Arts.
          Chairman of the National Endowment for the 
        Humanities.
          Director of the Federal Mediation and Conciliation 
        Service.
          President, Overseas Private Investment Corporation.
          Chairman, Postal Regulatory Commission.
          Chairman, Occupational Safety and Health Review 
        Commission.
          Governor of the Farm Credit Administration.
          Chairman, Equal Employment Opportunity Commission.
          Chairman, Consumer Product Safety Commission.
          Under Secretaries of Energy (3).
          Chairman, Commodity Futures Trading Commission.
          Deputy United States Trade Representatives (3).
          Chief Agricultural Negotiator, Office of the United 
        States Trade Representative.
          Chief Innovation and Intellectual Property 
        Negotiator, Office of the United States Trade 
        Representative.
          Chairman, United States International Trade 
        Commission.
          Under Secretary of Commerce for Oceans and 
        Atmosphere, the incumbent of which also serves as 
        Administrator of the National Oceanic and Atmospheric 
        Administration.
          Under Secretary of Commerce for Standards and 
        Technology, who also serves as Director of the National 
        Institute of Standards and Technology.
          Associate Attorney General.
          Chairman, Federal Mine Safety and Health Review 
        Commission.
          Chairman, National Credit Union Administration Board.
          Deputy Director of the Office of Personnel 
        Management.
          Under Secretary of Agriculture for Farm and Foreign 
        Agricultural Services.
          Under Secretary of Agriculture for Food, Nutrition, 
        and Consumer Services.
          Under Secretary of Agriculture for Natural Resources 
        and Environment.
          Under Secretary of Agriculture for Research, 
        Education, and Economics.
          Under Secretary of Agriculture for Food Safety.
          Under Secretary of Agriculture for Marketing and 
        Regulatory Programs.
          Director, Institute for Scientific and Technological 
        Cooperation.
          Under Secretary of Agriculture for Rural Development.
          Administrator, Maritime Administration.
          Executive Director Property Review Board.
          Deputy Administrator of the Environmental Protection 
        Agency.
          Archivist of the United States.
          Executive Director, Federal Retirement Thrift 
        Investment Board.
          Principal Deputy Under Secretary of Defense for 
        Acquisition, Technology, and Logistics.
          Director, Trade and Development Agency.
          Under Secretary for Health, Department of Veterans 
        Affairs.
          Under Secretary for Benefits, Department of Veterans 
        Affairs.
          Under Secretary for Memorial Affairs, Department of 
        Veterans Affairs.
          Under Secretaries, Department of Homeland Security.
          Director of the Bureau of Citizenship and Immigration 
        Services.
          Director of the Office of Government Ethics.
          Administrator for Federal Procurement Policy.
          Administrator, Office of Information and Regulatory 
        Affairs, Office of Management and Budget.
          [Director of the Office of Thrift Supervision.]
          Chairperson of the Federal Housing Finance Board.
          Executive Secretary, National Space Council.
          Controller, Office of Federal Financial Management, 
        Office of Management and Budget.
          Administrator, Office of the Assistant Secretary for 
        Research and Technology of the Department of 
        Transportation.
          Deputy Director for Demand Reduction, Office of 
        National Drug Control Policy.
          Deputy Director for Supply Reduction, Office of 
        National Drug Control Policy.
          Deputy Director for State and Local Affairs, Office 
        of National Drug Control Policy.
          Under Secretary of Commerce for Intellectual Property 
        and Director of the United States Patent and Trademark 
        Office.
          Register of Copyrights.
          Commissioner of U.S. Customs and Border Protection, 
        Department of Homeland Security
          Under Secretary of Education
          Administrator of the Centers for Medicare & Medicaid 
        Services.
          Administrator of the Office of Electronic Government.
          Administrator, Pipeline and Hazardous Materials 
        Safety Administration.
          Director, Pension Benefit Guaranty Corporation.
          Deputy Administrators, Federal Emergency Management 
        Agency.
          Chief Executive Officer, International Clean Energy 
        Foundation.
          Independent Member of the Financial Stability 
        Oversight Council (1).
          Director of the Office of Financial Research.
          Independent Insurance Advocate, Department of the 
        Treasury.

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                              ----------                              


TITLE 10, UNITED STATES CODE

           *       *       *       *       *       *       *



SUBTITLE A--GENERAL MILITARY LAW

           *       *       *       *       *       *       *


PART II--PERSONNEL

           *       *       *       *       *       *       *


CHAPTER 49--MISCELLANEOUS PROHIBITIONS AND PENALTIES

           *       *       *       *       *       *       *



Sec. 987. Terms of consumer credit extended to members and dependents: 
                    limitations

  (a) Interest.--A creditor who extends consumer credit to a 
covered member of the armed forces or a dependent of such a 
member shall not require the member or dependent to pay 
interest with respect to the extension of such credit, except 
as--
          (1) agreed to under the terms of the credit agreement 
        or promissory note;
          (2) authorized by applicable State or Federal law; 
        and
          (3) not specifically prohibited by this section.
  (b) Annual Percentage Rate.--A creditor described in 
subsection (a) may not impose an annual percentage rate of 
interest greater than 36 percent with respect to the consumer 
credit extended to a covered member or a dependent of a covered 
member.
  (c) Mandatory Loan Disclosures.--
          (1) Information required.--With respect to any 
        extension of consumer credit (including any consumer 
        credit originated or extended through the internet) to 
        a covered member or a dependent of a covered member, a 
        creditor shall provide to the member or dependent the 
        following information orally and in writing before the 
        issuance of the credit:
                  (A) A statement of the annual percentage rate 
                of interest applicable to the extension of 
                credit.
                  (B) Any disclosures required under the Truth 
                in Lending Act (15 U.S.C. 1601 et seq.).
                  (C) A clear description of the payment 
                obligations of the member or dependent, as 
                applicable.
          (2) Terms.--Such disclosures shall be presented in 
        accordance with terms prescribed by the regulations 
        issued by the Board of Governors of the Federal Reserve 
        System to implement the Truth in Lending Act (15 U.S.C. 
        1601 et seq.).
  (d) Preemption.--
          (1) Inconsistent laws.--Except as provided in 
        subsection (f)(2), this section preempts any State or 
        Federal law, rule, or regulation, including any State 
        usury law, to the extent that such law, rule, or 
        regulation is inconsistent with this section, except 
        that this section shall not preempt any such law, rule, 
        or regulation that provides protection to a covered 
        member or a dependent of such a member in addition to 
        the protection provided by this section.
          (2) Different treatment under State law of members 
        and dependents prohibited.--States shall not--
                  (A) authorize creditors to charge covered 
                members and their dependents annual percentage 
                rates of interest for any consumer credit or 
                loans higher than the legal limit for residents 
                of the State; or
                  (B) permit violation or waiver of any State 
                consumer lending protections covering consumer 
                credit for the benefit of residents of the 
                State on the basis of nonresident or military 
                status of a covered member or dependent of such 
                a member, regardless of the member's or 
                dependent's domicile or permanent home of 
                record.
  (e) Limitations.--It shall be unlawful for any creditor to 
extend consumer credit to a covered member or a dependent of 
such a member with respect to which--
          (1) the creditor rolls over, renews, repays, 
        refinances, or consolidates any consumer credit 
        extended to the borrower by the same creditor with the 
        proceeds of other credit extended to the same covered 
        member or a dependent;
          (2) the borrower is required to waive the borrower's 
        right to legal recourse under any otherwise applicable 
        provision of State or Federal law, including any 
        provision of the Servicemembers Civil Relief Act (50 
        U.S.C. 3901 et seq.);
          (3) the creditor requires the borrower to submit to 
        arbitration or imposes onerous legal notice provisions 
        in the case of a dispute;
          (4) the creditor demands unreasonable notice from the 
        borrower as a condition for legal action;
          (5) the creditor uses a check or other method of 
        access to a deposit, savings, or other financial 
        account maintained by the borrower, or the title of a 
        vehicle as security for the obligation;
          (6) the creditor requires as a condition for the 
        extension of credit that the borrower establish an 
        allotment to repay an obligation; or
          (7) the borrower is prohibited from prepaying the 
        loan or is charged a penalty or fee for prepaying all 
        or part of the loan.
  (f) Penalties and Remedies.--
          (1) Misdemeanor.--A creditor who knowingly violates 
        this section shall be fined as provided in title 18, or 
        imprisoned for not more than one year, or both.
          (2) Preservation of other remedies.--The remedies and 
        rights provided under this section are in addition to 
        and do not preclude any remedy otherwise available 
        under law to the person claiming relief under this 
        section, including any award for consequential and 
        punitive damages.
          (3) Contract void.--Any credit agreement, promissory 
        note, or other contract prohibited under this section 
        is void from the inception of such contract.
          (4) Arbitration.--Notwithstanding section 2 of title 
        9, or any other Federal or State law, rule, or 
        regulation, no agreement to arbitrate any dispute 
        involving the extension of consumer credit shall be 
        enforceable against any covered member or dependent of 
        such a member, or any person who was a covered member 
        or dependent of that member when the agreement was 
        made.
          (5) Civil liability.--
                  (A) In general.--A person who violates this 
                section with respect to any person is civilly 
                liable to such person for--
                          (i) any actual damage sustained as a 
                        result, but not less than $500 for each 
                        violation;
                          (ii) appropriate punitive damages;
                          (iii) appropriate equitable or 
                        declaratory relief; and
                          (iv) any other relief provided by 
                        law.
                  (B) Costs of the action.--In any successful 
                action to enforce the civil liability described 
                in subparagraph (A), the person who violated 
                this section is also liable for the costs of 
                the action, together with reasonable attorney 
                fees as determined by the court.
                  (C) Effect of finding of bad faith and 
                harassment.--In any successful action by a 
                defendant under this section, if the court 
                finds the action was brought in bad faith and 
                for the purpose of harassment, the plaintiff is 
                liable for the attorney fees of the defendant 
                as determined by the court to be reasonable in 
                relation to the work expended and costs 
                incurred.
                  (D) Defenses.--A person may not be held 
                liable for civil liability under this paragraph 
                if the person shows by a preponderance of 
                evidence that the violation was not intentional 
                and resulted from a bona fide error 
                notwithstanding the maintenance of procedures 
                reasonably adapted to avoid any such error. 
                Examples of a bona fide error include clerical, 
                calculation, computer malfunction and 
                programming, and printing errors, except that 
                an error of legal judgment with respect to a 
                person's obligations under this section is not 
                a bona fide error.
                  (E) Jurisdiction, venue, and statute of 
                limitations.--An action for civil liability 
                under this paragraph may be brought in any 
                appropriate United States district court, 
                without regard to the amount in controversy, or 
                in any other court of competent jurisdiction, 
                not later than the earlier of--
                          (i) two years after the date of 
                        discovery by the plaintiff of the 
                        violation that is the basis for such 
                        liability; or
                          (ii) five years after the date on 
                        which the violation that is the basis 
                        for such liability occurs.
          (6) Administrative enforcement.--The provisions of 
        this section (other than paragraph (1) of this 
        subsection) shall be enforced by the agencies specified 
        in section 108 of the Truth in Lending Act (15 U.S.C. 
        1607) in the manner set forth in that section or under 
        any other applicable authorities available to such 
        agencies by law.
  (g) Servicemembers Civil Relief Act Protections Unaffected.--
Nothing in this section may be construed to limit or otherwise 
affect the applicability of section 207 of the Servicemembers 
Civil Relief Act (50 U.S.C. 3937).
  (h) Regulations.--(1) The Secretary of Defense shall 
prescribe regulations to carry out this section.
  (2) Such regulations shall establish the following:
          (A) Disclosures required of any creditor that extends 
        consumer credit to a covered member or dependent of 
        such a member.
          (B) The method for calculating the applicable annual 
        percentage rate of interest on such obligations, in 
        accordance with the limit established under this 
        section.
          (C) A maximum allowable amount of all fees, and the 
        types of fees, associated with any such extension of 
        credit, to be expressed and disclosed to the borrower 
        as a total amount and as a percentage of the principal 
        amount of the obligation, at the time at which the 
        transaction is entered into.
          (D) Definitions of ``creditor'' under paragraph (5) 
        and ``consumer credit'' under paragraph (6) of 
        subsection (i), consistent with the provisions of this 
        section.
          (E) Such other criteria or limitations as the 
        Secretary of Defense determines appropriate, consistent 
        with the provisions of this section.
  (3) In prescribing regulations under this subsection, and not 
less often than once every two years thereafter, the Secretary 
of Defense shall consult with the following:
          (A) The Federal Trade Commission.
          (B) The Board of Governors of the Federal Reserve 
        System.
          (C) The Office of the Comptroller of the Currency.
          (D) The Federal Deposit Insurance Corporation.
          (E) The [Bureau of Consumer Financial Protection] 
        Consumer Law Enforcement Agency.
          (F) The National Credit Union Administration.
          (G) The Treasury Department.
  (i) Definitions.--In this section:
          (1) Covered member.--The term ``covered member'' 
        means a member of the armed forces who is--
                  (A) on active duty under a call or order that 
                does not specify a period of 30 days or less; 
                or
                  (B) on active Guard and Reserve Duty.
          (2) Dependent.--The term ``dependent'', with respect 
        to a covered member, means a person described in 
        subparagraph (A), (D), (E), or (I) of section 1072(2) 
        of this title.
          (3) Interest.--The term ``interest'' includes all 
        cost elements associated with the extension of credit, 
        including fees, service charges, renewal charges, 
        credit insurance premiums, any ancillary product sold 
        with any extension of credit to a servicemember or the 
        servicemember's dependent, as applicable, and any other 
        charge or premium with respect to the extension of 
        consumer credit.
          (4) Annual percentage rate.--The term ``annual 
        percentage rate'' has the same meaning as in section 
        107 of the Truth and Lending Act (15 U.S.C. 1606), as 
        implemented by regulations of the Board of Governors of 
        the Federal Reserve System. For purposes of this 
        section, such term includes all fees and charges, 
        including charges and fees for single premium credit 
        insurance and other ancillary products sold in 
        connection with the credit transaction, and such fees 
        and charges shall be included in the calculation of the 
        annual percentage rate.
          (5) Creditor.--The term ``creditor'' means a person--
                  (A) who--
                          (i) is engaged in the business of 
                        extending consumer credit; and
                          (ii) meets such additional criteria 
                        as are specified for such purpose in 
                        regulations prescribed under this 
                        section; or
                  (B) who is an assignee of a person described 
                in subparagraph (A) with respect to any 
                consumer credit extended.
          (6) Consumer credit.--The term ``consumer credit'' 
        has the meaning provided for such term in regulations 
        prescribed under this section, except that such term 
        does not include (A) a residential mortgage, or (B) a 
        loan procured in the course of purchasing a car or 
        other personal property, when that loan is offered for 
        the express purpose of financing the purchase and is 
        secured by the car or personal property procured.

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CARL LEVIN AND HOWARD P. BUCK MCKEON NATIONAL DEFENSE AUTHORIZATION ACT 
FOR FISCAL YEAR 2015

           *       *       *       *       *       *       *



DIVISION A--DEPARTMENT OF DEFENSE AUTHORIZATIONS

           *       *       *       *       *       *       *


TITLE V--MILITARY PERSONNEL POLICY

           *       *       *       *       *       *       *


Subtitle E--Member Education, Training, and Transition

           *       *       *       *       *       *       *


SEC. 557. ENHANCEMENT OF INFORMATION PROVIDED TO MEMBERS OF THE ARMED 
                    FORCES AND VETERANS REGARDING USE OF POST-9/11 
                    EDUCATIONAL ASSISTANCE AND FEDERAL FINANCIAL AID 
                    THROUGH TRANSITION ASSISTANCE PROGRAM.

  (a) Additional Information Required.--
          (1) In general.--Not later than one year after the 
        date of the enactment of this Act, the Secretary of 
        Defense shall enhance the higher education component of 
        the Transition Assistance Program (TAP) of the 
        Department of Defense by providing additional 
        information that is more complete and accurate than the 
        information provided as of the day before the date of 
        the enactment of this Act to individuals who apply for 
        educational assistance under chapter 30 or 33 of title 
        38, United States Code, to pursue a program of 
        education at an institution of higher learning.
          (2) Elements.--The additional information required by 
        paragraph (1) shall include the following:
                  (A) Information provided by the Secretary of 
                Education that is publically available and 
                addresses--
                          (i) to the extent practicable, 
                        differences between types of 
                        institutions of higher learning in such 
                        matters as tuition and fees, admission 
                        requirements, accreditation, 
                        transferability of credits, credit for 
                        qualifying military training, time 
                        required to complete a degree, and 
                        retention and job placement rates; and
                          (ii) how Federal educational 
                        assistance provided under title IV of 
                        the Higher Education Act of 1965 (20 
                        U.S.C. 1070 et seq.) may be used in 
                        conjunction with educational assistance 
                        provided under chapters 30 and 33 of 
                        title 38, United States Code.
                  (B) Information about the Postsecondary 
                Education Complaint System of the Department of 
                Defense, the Department of Veterans Affairs, 
                the Department of Education, and the [Consumer 
                Financial Protection Bureau] Consumer Law 
                Enforcement Agency.
                  (C) Information about the GI Bill Comparison 
                Tool of the Department of Veterans Affairs.
                  (D) Information about each of the Principles 
                of Excellence established by the Secretary of 
                Defense, the Secretary of Veterans Affairs, and 
                the Secretary of Education pursuant to 
                Executive Order 13607 of April 27, 2012 (77 
                Fed. Reg. 25861), including how to recognize 
                whether an institution of higher learning may 
                be violating any of such principles.
                  (E) Information to enable individuals 
                described in paragraph (1) to develop a post-
                secondary education plan appropriate and 
                compatible with their educational goals.
                  (F) Such other information as the Secretary 
                of Education considers appropriate.
          (3) Consultation.--In carrying out this subsection, 
        the Secretary of Defense shall consult with the 
        Secretary of Veterans Affairs, the Secretary of 
        Education, and the Director of the [Consumer Financial 
        Protection Bureau] Consumer Law Enforcement Agency.
  (b) Availability of Higher Education Component Online.--Not 
later than one year after the date of the enactment of this 
Act, the Secretary of Defense shall ensure that the higher 
education component of the Transition Assistance Program is 
available to members of the Armed Forces on an Internet website 
of the Department of Defense so that members have an option to 
complete such component electronically and remotely.
  (c) Definitions.--In this section:
          (1) The term ``institution of higher learning'' has 
        the meaning given such term in section 3452 of title 
        38, United States Code.
          (2) The term ``types of institutions of higher 
        learning'' means the following:
                  (A) An educational institution described in 
                section 101(a) of the Higher Education Act of 
                1965 (20 U.S.C. 1001(a)).
                  (B) An educational institution described in 
                subsection (b) or (c) of section 102 of such 
                Act (20 U.S.C. 1002).

           *       *       *       *       *       *       *

                              ----------                              


TRUTH IN SAVINGS ACT

           *       *       *       *       *       *       *



TITLE II--REGULATORY IMPROVEMENT

           *       *       *       *       *       *       *


Subtitle C--Bank Enterprise Act

           *       *       *       *       *       *       *


SEC. 233. ASSESSMENT CREDITS FOR QUALIFYING ACTIVITIES RELATING TO 
                    DISTRESSED COMMUNITIES.

  (a) Determination of Credits for Increases in Community 
Enterprise Activities.--
          (1) In general.--The Community Enterprise Assessment 
        Credit Board established under subsection (d) shall 
        issue guidelines for insured depository institutions 
        eligible under this subsection for any community 
        enterprise assessment credit with respect to any 
        semiannual period. Such guidelines shall--
                  (A) designate the eligibility requirements 
                for any institution meeting applicable capital 
                standards to receive an assessment credit under 
                section 7(b)(7) of the Federal Deposit 
                Insurance Act; and
                  (B) determine the community enterprise 
                assessment credit available to any eligible 
                institution under paragraph (3).
          (2) Qualifying activities.--An insured depository 
        institution may apply for for any community enterprise 
        assessment credit for any semiannual period for--
                  (A) the amount, during such period, of new 
                originations of qualified loans and other 
                assistance provided for low- and moderate-
                income persons in distressed communities, or 
                enterprises integrally involved with such 
                neighborhoods, which the Board determines are 
                qualified to be taken into account for purposes 
                of this subsection;
                  (B) the amount, during such period, of 
                deposits accepted from persons domiciled in the 
                distressed community, at any office of the 
                institution (including any branch) located in 
                any qualified distressed community, and new 
                originations of any loans and other financial 
                assistance made within that community, except 
                that in no case shall the credit for deposits 
                at any institution or branch exceed the credit 
                for loans and other financial assistance by the 
                bank or branch in the distressed community; and
                  (C) any increase during the period in the 
                amount of new equity investments in community 
                development financial institutions.
          (3) Amount of assessment credit.--The amount of any 
        community enterprise assessment credit available under 
        section 7(b)(7) of the Federal Deposit Insurance Act 
        for any insured depository institution, or a qualified 
        portion thereof, shall be the amount which is equal to 
        5 percent, in the case of an institution which does not 
        meet the community development organization 
        requirements under section 234, and 15 percent, in the 
        case of an institution, or a qualified portion thereof, 
        which meets such requirements (or any percentage 
        designated under paragraph (5)) of--
                  (A) for the first full semiannual period in 
                which community enterprise assessment credits 
                are available, the sum of--
                          (i) the amounts of assets described 
                        in paragraph (2)(A); and
                          (ii) the amounts of deposits, loans, 
                        and other financial assistance 
                        described in paragraph (2)(B); and
                  (B) for any subsequent semiannual period, the 
                sum of--
                          (i) any increase during such period 
                        in the amount of assets described in 
                        paragraph (2)(A) that has been deemed 
                        eligible for credit by the Board; and
                          (ii) any increase during such period 
                        in the amounts of deposits, loans, and 
                        other financial assistance described in 
                        paragraph (2)(B) that has been deemed 
                        eligible for credit by the Board.
          (4) Determination of qualified loans and other 
        financial assistance.--Except as provided in paragraph 
        (6), the types of loans and other assistance which the 
        Board may determine to be qualified to be taken into 
        account under paragraph (2)(A) for purposes of the 
        community enterprise assessment credit, may include the 
        following:
                  (A) Loans insured or guaranteed by the 
                Secretary of Housing and Urban Development, the 
                Secretary of the Department of Veterans 
                Affairs, the Administrator of the Small 
                Business Administration, and the Secretary of 
                Agriculture.
                  (B) Loans or financing provided in connection 
                with activities assisted by the Administrator 
                of the Small Business Administration or any 
                small business investment company and 
                investments in small business investment 
                companies.
                  (C) Loans or financing provided in connection 
                with any neighborhood housing service program 
                assisted under the Neighborhood Reinvestment 
                Corporation Act.
                  (D) Loans or financing provided in connection 
                with any activities assisted under the 
                community development block grant program under 
                title I of the Housing and Community 
                Development Act of 1974.
                  (E) Loans or financing provided in connection 
                with activities assisted under title II of the 
                Cranston-Gonzalez National Affordable Housing 
                Act.
                  (F) Loans or financing provided in connection 
                with a homeownership program assisted under 
                title III of the United States Housing Act of 
                1937 or subtitle B or C of title IV of the 
                Cranston-Gonzalez National Affordable Housing 
                Act.
                  (G) Financial assistance provided through 
                community development corporations.
                  (H) Federal and State programs providing 
                interest rate assistance for homeowners.
                  (I) Extensions of credit to nonprofit 
                developers or purchasers of low-income housing 
                and small business developments.
                  (J) In the case of members of any Federal 
                home loan bank, participation in the community 
                investment fund program established by the 
                Federal home loan banks.
                  (K) Conventional mortgages targeted to low- 
                or moderate-income persons.
                  (L) Loans made for the purpose of developing 
                or supporting--
                          (i) commercial facilities that 
                        enhance revitalization, community 
                        stability, or job creation and 
                        retention efforts;
                          (ii) business creation and expansion 
                        efforts that--
                                  (I) create or retain jobs for 
                                low-income people;
                                  (II) enhance the availability 
                                of products and services to 
                                low-income people; or
                                  (III) create or retain 
                                businesses owned by low-income 
                                people or residents of a 
                                targeted area;
                          (iii) community facilities that 
                        provide benefits to low-income people 
                        or enhance community stability;
                          (iv) home ownership opportunities 
                        that are affordable to low-income 
                        households;
                          (v) rental housing that is 
                        principally affordable to low-income 
                        households; and
                          (vi) other activities deemed 
                        appropriate by the Board.
                  (M) The provision of technical assistance to 
                residents of qualified distressed communities 
                in managing their personal finances through 
                consumer education programs either sponsored or 
                offered by insured depository institutions.
                  (N) The provision of technical assistance and 
                consulting services to newly formed small 
                businesses located in qualified distressed 
                communities.
                  (O) The provision of technical assistance to, 
                or servicing the loans of low- or moderate-
                income homeowners and homeowners located in 
                qualified distressed communities.
          (5) Adjustment of percentage.--The Board may increase 
        or decrease the percentage referred to in paragraph 
        (3)(A) for determining the amount of any community 
        enterprise assessment credit pursuant to such 
        paragraph, except that the percentage established for 
        insured depository institutions which meet the 
        community development organization requirements under 
        section 234 shall not be less than 3 times the amount 
        of the percentage applicable for insured depository 
        institutions which do not meet such requirements.
          (6) Certain investments not eligible to be taken into 
        account.--Loans, financial assistance, and equity 
        investments made by any insured depository institution 
        that are not the result of originations by the 
        institution shall not be taken into account for 
        purposes of determining the amount of any credit 
        pursuant to this subsection.
          (7) Quantitative analysis of technical assistance.--
        The Board may establish guidelines for analyzing the 
        technical assistance described in subparagraphs (M), 
        (N), and (O) of paragraph (4) for the purpose of 
        quantifying the results of such assistance in 
        determining the amount of any community assessment 
        credit under this subsection.
  (b) Qualified Distressed Community Defined.--
          (1) In general.--For purposes of this section, the 
        term ``qualified distressed community'' means any 
        neighborhood or community which--
                  (A) meets the minimum area requirements under 
                paragraph (3) and the eligibility requirements 
                of paragraph (4); and
                  (B) is designated as a distressed community 
                by any insured depository institution in 
                accordance with paragraph (2) and such 
                designation is not disapproved under such 
                paragraph.
          (2) Designation requirements.--
                  (A) Notice of designation.--
                          (i) Notice to agency.--Upon 
                        designating an area as a qualified 
                        distressed community, an insured 
                        depository institution shall notify the 
                        appropriate Federal banking agency of 
                        the designation.
                          (ii) Public notice.--Upon the 
                        effective date of any designation of an 
                        area as a qualified distressed 
                        community, an insured depository 
                        institution shall publish a notice of 
                        such designation in major newspapers 
                        and other community publications which 
                        serve such area.
                  (B) Agency duties relating to designations.--
                          (i) Providing information.--At the 
                        request of any insured depository 
                        institution, the appropriate Federal 
                        banking agency shall provide to the 
                        institution appropriate information to 
                        assist the institution to identify and 
                        designate a qualified distressed 
                        community.
                          (ii) Period for disapproval.--Any 
                        notice received by the appropriate 
                        Federal banking agency from any insured 
                        depository institution under 
                        subparagraph (A)(i) shall take effect 
                        at the end of the 90-day period 
                        beginning on the date such notice is 
                        received unless written notice of the 
                        approval or disapproval of the 
                        application by the agency is provided 
                        to the institution before the end of 
                        such period.
          (3) Minimum area requirements.--For purposes of this 
        subsection, an area meets the requirements of this 
        paragraph if--
                  (A) the area is within the jurisdiction of 1 
                unit of general local government;
                  (B) the boundary of the area is contiguous; 
                and
                  (C) the area--
                          (i) has a population, as determined 
                        by the most recent census data 
                        available, of not less than--
                                  (I) 4,000, if any portion of 
                                such area is located within a 
                                metropolitan statistical area 
                                (as designated by the Director 
                                of the Office of Management and 
                                Budget) with a population of 
                                50,000 or more; or
                                  (II) 1,000, in any other 
                                case; or
                          (ii) is entirely within an Indian 
                        reservation (as determined by the 
                        Secretary of the Interior).
          (4) Eligibility requirements.--For purposes of this 
        subsection, an area meets the requirements of this 
        paragraph if the following criteria are met:
                  (A) At least 30 percent of the residents 
                residing in the area have incomes which are 
                less than the national poverty level.
                  (B) The unemployment rate for the area is 
                1\1/2\ times greater than the national average 
                (as determined by the [Bureau] Agency of Labor 
                Statistics' most recent figures).
                  (C) Such additional eligibility requirements 
                as the Board may, in its discretion, deem 
                necessary to carry out the provisions of this 
                subtitle.
  (c)
  (d) Community Enterprise Assessment Credit Board.--
          (1) Establishment.--There is hereby established the 
        ``Community Enterprise Assessment Credit Board''.
          (2) Number and appointment.--The Board shall be 
        composed of 5 members as follows:
                  (A) The Secretary of the Treasury or a 
                designee of the Secretary.
                  (B) The Secretary of Housing and Urban 
                Development or a designee of the Secretary.
                  (C) The Chairperson of the Federal Deposit 
                Insurance Corporation or a designee of the 
                Chairperson.
                  (D) 2 individuals appointed by the President 
                from among individuals who represent community 
                organizations.
          (3) Terms.--
                  (A) Appointed members.--Each appointed member 
                shall be appointed for a term of 5 years.
                  (B) Interim appointment.--Any member 
                appointed to fill a vacancy occurring before 
                the expiration of the term to which such 
                member's predecessor was appointed shall be 
                appointed only for the remainder of such term.
                  (C) Continuation of service.--Each appointed 
                member may continue to serve after the 
                expiration of the period to which such member 
                was appointed until a successor has been 
                appointed.
          (4) Chairperson.--The Secretary of the Treasury shall 
        serve as the Chairperson of the Board.
          (5) No pay.--No members of the Commission may receive 
        any pay for service on the Board.
          (6) Travel expenses.--Each member shall receive 
        travel expenses, including per diem in lieu of 
        subsistence, in accordance with sections 5702 and 5703 
        of title 5, United States Code.
          (7) Meetings.--The Board shall meet at the call of 
        the Chairperson or a majority of the Board's members.
  (e) Duties of the Board.--
          (1) Procedure for determining community enterprise 
        assessment credits.--The Board shall establish 
        procedures for accepting and considering applications 
        by insured depository institutions under subsection 
        (a)(1) for community enterprise assessment credits and 
        making determinations with respect to such 
        applications.
          (2) Notice to fdic.--The Board shall notify the 
        applicant and the Federal Deposit Insurance Corporation 
        of any determination of the Board with respect to any 
        application referred to in paragraph (1) in sufficient 
        time for the Corporation to include the amount of such 
        credit in the computation of the semiannual assessment 
        to which such credit is applicable.
  (f) Availability of Funds.--The provisions of this section 
shall not take effect until appropriations are specifically 
provided in advance. There are hereby authorized to be 
appropriated such sums as may be necessary to carry out the 
provisions of this section.
  (g) Prohibition on Double Funding for Same Activities.--No 
community development financial institution may receive a 
community enterprise assessment credit if such institution, 
either directly or through a community partnership--
          (1) has received assistance within the preceding 12-
        month period, or has an application for assistance 
        pending, under section 105 of the Community Development 
        Banking and Financial Institutions Act of 1994; or
          (2) has ever received assistance, under section 108 
        of the Community Development Banking and Financial 
        Institutions Act of 1994, for the same activity during 
        the same semiannual period for which the institution 
        seeks a community enterprise assessment credit under 
        this section.
  (h) Priority of Awards.--
          (1) Qualifying loans and services.--
                  (A) In general.--If the amount of funds 
                appropriated for purposes of carrying out this 
                section for any fiscal year are insufficient to 
                award the amount of assessment credits for 
                which insured depository institutions have 
                applied and are eligible under this section, 
                the Board shall, in awarding community 
                enterprise assessment credits for qualifying 
                activities under subparagraphs (A) and (B) of 
                subsection (a)(2) for any semiannual period for 
                which such appropriation is available, 
                determine which institutions shall receive an 
                award.
                  (B) Priority for support of efforts of 
                cdfi.--The Board shall give priority to 
                institutions that have supported the efforts of 
                community development financial institutions in 
                the qualified distressed community.
                  (C) Other factors.--The Board may also 
                consider the following factors:
                          (i) Degree of difficulty.--The degree 
                        of difficulty in carrying out the 
                        activities that form the basis for the 
                        institution's application.
                          (ii) Community impact.--The extent to 
                        which the activities that form the 
                        basis for the institution's application 
                        have benefited the qualified distressed 
                        community.
                          (iii) Innovation.--The degree to 
                        which the activities that form the 
                        basis for the institution's application 
                        have incorporated innovative methods 
                        for meeting community needs.
                          (iv) Leverage.--The leverage ratio 
                        between the dollar amount of the 
                        activities that form the basis for the 
                        institution's application and the 
                        amount of the assessment credit 
                        calculated in accordance with this 
                        section for such activities.
                          (v) Size.--The amount of total assets 
                        of the institution.
                          (vi) New entry.--Whether the 
                        institution had provided financial 
                        services in the designated distressed 
                        community before such semiannual 
                        period.
                          (vii) Need for subsidy.--The degree 
                        to which the qualified activity which 
                        forms the basis for the application 
                        needs enhancement through an assessment 
                        credit.
                          (viii) Extent of distress in 
                        community.--The degree of poverty and 
                        unemployment in the designated 
                        distressed community, the proportion of 
                        the total population of the community 
                        which are low-income families and 
                        unrelated individuals, and the extent 
                        of other adverse economic conditions in 
                        such community.
          (2) Qualifying investments.--If the amount of funds 
        appropriated for purposes of carrying out this section 
        for any fiscal year are insufficient to award the 
        amount of assessment credits for which insured 
        depository institutions have applied and are eligible 
        under this section, the Board shall, in awarding 
        community enterprise assessment credits for qualifying 
        activities under subsection (a)(2)(C) for any 
        semiannual period for which such appropriation is 
        available, determine which institutions shall receive 
        an award based on the leverage ratio between the dollar 
        amount of the activities that form the basis for the 
        institution's application and the amount of the 
        assessment credit calculated in accordance with this 
        section for such
        activities.
  (i) Determination of Amount of Assessment Credit.--
Notwithstanding any other provision of this section, the 
determination of the amount of any community enterprise 
assessment credit under subsection (a)(3) for any insured 
depository institution for any semiannual period shall be made 
solely at the discretion of the Board. No insured depository 
institution shall be awarded community enterprise assessment 
credits for any semiannual period in excess of an amount 
determined by the Board.
  (j) Definitions.--For purposes of this section--
          (1) Appropriate federal banking agency.--The term 
        ``appropriate Federal banking agency'' has the meaning 
        given to such term in section 3(q) of the Federal 
        Deposit Insurance Act.
          (2) Board.--The term ``Board'' means the Community 
        Enterprise Assessment Credit Board established under 
        the amendment made by subsection (d).
          (3) Insured depository institution.--The term 
        ``insured depository institution'' has the meaning 
        given to such term in section 3(c)(2) of the Federal 
        Deposit Insurance Act.
          (4) Community development financial institution.--The 
        term ``community development financial institution'' 
        has the same meaning as in section 103(5) of the 
        Community Development Banking and Financial 
        Institutions Act of 1994.
          (5) Affiliate.--The term ``affiliate'' has the same 
        meaning as in section 2 of the Bank Holding Company Act 
        of 1956.

           *       *       *       *       *       *       *


Subtitle F--Truth in Savings

           *       *       *       *       *       *       *


SEC. 263. DISCLOSURE OF INTEREST RATES AND TERMS OF ACCOUNTS.

  (a) In General.--Except as provided in subsections (b) and 
(c), each advertisement, announcement, or solicitation 
initiated by any depository institution or deposit broker 
relating to any demand or interest-bearing account offered by 
an insured depository institution which includes any reference 
to a specific rate of interest payable on amounts deposited in 
such account, or to a specific yield or rate of earnings on 
amounts so deposited, shall state the following information, to 
the extent applicable, in a clear and conspicuous manner:
          (1) The annual percentage yield.
          (2) The period during which such annual percentage 
        yield is in effect.
          (3) All minimum account balance and time requirements 
        which must be met in order to earn the advertised yield 
        (and, in the case of accounts for which more than 1 
        yield is stated, each annual percentage yield and the 
        account minimum balance requirement associated with 
        each such yield shall be in close proximity and have 
        equal prominence).
          (4) The minimum amount of the initial deposit which 
        is required to open the account in order to obtain the 
        yield advertised, if such minimum amount is greater 
        than the minimum balance necessary to earn the 
        advertised yield.
          (5) A statement that regular fees or other conditions 
        could reduce the yield.
          (6) A statement that an interest penalty is required 
        for early withdrawal.
  (b) Broadcast and Electronic Media and Outdoor Advertising 
Exception.--The [Bureau] Agency may, by regulation, exempt 
advertisements, announcements, or solicitations made by any 
broadcast or electronic medium or outdoor advertising display 
not on the premises of the depository institution from any 
disclosure requirements described in paragraph (4) or (5) of 
subsection (a) if the [Bureau] Agency finds that any such 
disclosure would be unnecessarily burdensome.
  (c) Disclosure Required for On-Premises Displays.--
          The disclosure requirements contained in this section 
        shall not apply to any sign (including a rate board) 
        disclosing a rate or rates of interest which is 
        displayed on the premises of the depository institution 
        if such sign contains--
          (1) the accompanying annual percentage yield; and
          (2) a statement that the consumer should request 
        further information from an employee of the depository 
        institution concerning the fees and terms applicable to 
        the advertised account.
  (d) Misleading Descriptions of Free or No-Cost Accounts 
Prohibited.--No advertisement, announcement, or solicitation 
made by any depository institution or deposit broker may refer 
to or describe an account as a free or no-cost account (or 
words of similar meaning) if--
          (1) in order to avoid fees or service charges for any 
        period--
                  (A) a minimum balance must be maintained in 
                the account during such period; or
                  (B) the number of transactions during such 
                period may not exceed a maximum number; or
          (2) any regular service or transaction fee is 
        imposed.
  (e) Misleading or Inaccurate Advertisements, Etc., 
Prohibited.--No depository institution or deposit broker shall 
make any advertisement, announcement, or solicitation relating 
to a deposit account that is inaccurate or misleading or that 
misrepresents its deposit contracts.

SEC. 264. ACCOUNT SCHEDULE.

  (a) In General.--Each depository institution shall maintain a 
schedule of fees, charges, interest rates, and terms and 
conditions applicable to each class of accounts offered by the 
depository institution, in accordance with the requirements of 
this section and regulations which the [Bureau] Agency shall 
prescribe. The [Bureau] Agency shall specify, in regulations, 
which fees, charges, penalties, terms, conditions, and account 
restrictions must be included in a schedule required under this 
subsection. A depository institution need not include in such 
schedule any information not specified in such regulation.
  (b) Information on Fees and Charges.--The schedule required 
under subsection (a) with respect to any account shall contain 
the following information:
          (1) A description of all fees, periodic service 
        charges, and penalties which may be charged or assessed 
        against the account (or against the account holder in 
        connection with such account), the amount of any such 
        fees, charge, or penalty (or the method by which such 
        amount will be calculated), and the conditions under 
        which any such amount will be assessed.
          (2) All minimum balance requirements that affect 
        fees, charges, and penalties, including a clear 
        description of how each such minimum balance is 
        calculated.
          (3) Any minimum amount required with respect to the 
        initial deposit in order to open the account.
  (c) Information on Interest Rates.--The schedule required 
under subsection (a) with respect to any account shall include 
the following information:
          (1) Any annual percentage yield.
          (2) The period during which any such annual 
        percentage yield will be in effect.
          (3) Any annual rate of simple interest.
          (4) The frequency with which interest will be 
        compounded and credited.
          (5) A clear description of the method used to 
        determine the balance on which interest is paid.
          (6) The information described in paragraphs (1) 
        through (4) with respect to any period after the end of 
        the period referred to in paragraph (2) (or the method 
        for computing any information described in any such 
        paragraph), if applicable.
          (7) Any minimum balance which must be maintained to 
        earn the rates and obtain the yields disclosed pursuant 
        to this subsection and a clear description of how any 
        such minimum balance is calculated.
          (8) A clear description of any minimum time 
        requirement which must be met in order to obtain the 
        yields disclosed pursuant to this subsection and any 
        information described in paragraph (1), (2), (3), or 
        (4) that will apply if any time requirement is not met.
          (9) A statement, if applicable, that any interest 
        which has accrued but has not been credited to an 
        account at the time of a withdrawal from the account 
        will not be paid by the depository institution or 
        credited to the account by reason of such withdrawal.
          (10) Any provision or requirement relating to 
        nonpayment of interest, including any charge or penalty 
        for early withdrawal, and the conditions under which 
        any such charge or penalty may be assessed.
  (d) Other Information.--The schedule required under 
subsection (a) shall include such other disclosures as the 
[Bureau] Agency may determine to be necessary to allow 
consumers to understand and compare accounts, including 
frequency of interest rate adjustments, account restrictions, 
and renewal policies for time accounts.
  (e) Style and Format.--Schedules required under subsection 
(a) shall be written in clear and plain language and be 
presented in a format designed to allow consumers to readily 
understand the terms of the accounts offered.

SEC. 265. DISCLOSURE REQUIREMENTS FOR CERTAIN ACCOUNTS.

   The [Bureau] Agency shall require, in regulations which the 
[Bureau] Agency shall prescribe, such modification in the 
disclosure requirements under this subtitle relating to annual 
percentage yield as may be necessary to carry out the purposes 
of this subtitle in the case of--
          (1) accounts with respect to which determination of 
        annual percentage yield is based on an annual rate of 
        interest that is guaranteed for a period of less than 1 
        year;
          (2) variable rate accounts;
          (3) accounts which, pursuant to law, do not guarantee 
        payment of a stated rate;
          (4) multiple rate accounts; and
          (5) accounts with respect to which determination of 
        annual percentage yield is based on an annual rate of 
        interest that is guaranteed for a stated term.

SEC. 266. DISTRIBUTION OF SCHEDULES.

  (a) In General.--A schedule required under section 264 for an 
appropriate account shall be--
          (1) made available to any person upon request;
          (2) provided to any potential customer before an 
        account is opened or a service is rendered; and
          (3) provided to the depositor, in the case of any 
        time deposit which has a maturity of more than 30 days 
        is renewable at maturity without notice from the 
        depositor, at least 30 days before the date of 
        maturity.
  (b) Distribution in Case of Certain Initial Deposits.--If--
          (1) a depositor is not physically present at an 
        office of a depository institution at the time an 
        initial deposit is accepted with respect to an account 
        established by or for such person; and
          (2) the schedule required under section 264(a) has 
        not been furnished previously to such depositor,
the depository institution shall mail the schedule to the 
depositor at the address shown on the records of the depository 
institution for such account no later than 10 days after the 
date of the initial deposit.
  (c) Distribution of Notice of Certain Changes.--If--
          (1) any change is made in any term or condition which 
        is required to be disclosed in the schedule required 
        under section 264(a) with respect to any account; and
          (2) the change may reduce the yield or adversely 
        affect any holder of the account,
all account holders who may be affected by such change shall be 
notified and provided with a description of the change by mail 
at least 30 days before the change takes effect.
  (d) Distribution in Case of Accounts Established by More Than 
1 Individual or by a Group.--If an account is established by 
more than 1 individual or for a person other than an 
individual, any distribution described in this section with 
respect to such account meets the requirements of this section 
if the distribution is made to 1 of the individuals who 
established the account or 1 individual representative of the 
person on whose behalf such account was established.
  (e) Notice to Account Holders as of the Effective Date of 
Regulations.--For any account for which the depository 
institution delivers an account statement on a quarterly or 
more frequent basis, the depository institution shall include 
on or with the first regularly scheduled mailing sent after the 
end of the 6-month period beginning on the date of publication 
of regulations issued by the [Bureau] Agency in final form, a 
statement that the account holder has the right to request an 
account schedule containing the terms, charges, and interest 
rates of the account, and that the account holder may wish to 
request such an account schedule.

           *       *       *       *       *       *       *


SEC. 269. REGULATIONS.

  (a) In General.--
          (1) Regulations required.--Before the end of the 9-
        month period beginning on the date of the enactment of 
        this subtitle, the [Bureau] Agency, after consultation 
        with each agency referred to in section 270(a) and 
        public notice and opportunity for comment, shall 
        prescribe regulations to carry out the purpose and 
        provisions of this subtitle.
          (2) Effective date of regulations.--The regulations 
        prescribed under paragraph (1) shall take effect not 
        later than 9 months after publication in final form.
          (3) Contents of regulations.--The regulations 
        prescribed under paragraph (1) may contain such 
        classifications, differentiations, or other provisions, 
        and may provide for such adjustments and exceptions for 
        any class of accounts as, in the judgment of the 
        [Bureau] Agency, are necessary or proper to carry out 
        the purposes of this subtitle, to prevent circumvention 
        or evasion of the requirements of this subtitle, or to 
        facilitate compliance with the requirements of this 
        subtitle.
          (4) Date of applicability.--The provisions of this 
        subtitle shall not apply with respect to any depository 
        institution before the effective date of regulations 
        prescribed by the [Bureau] Agency under this subsection 
        (or by the National Credit Union [Administration 
        Bureau] Administration Board under section 12(b), in 
        the case of any depository institution described in 
        clause (iv) of section 19(b)(1)(A) of the Federal 
        Reserve Act).
  (b) Model Forms and Clauses.--
          (1) In general.--The [Bureau] Agency shall publish 
        model forms and clauses for common disclosures to 
        facilitate compliance with this subtitle. In devising 
        such forms, the [Bureau] Agency shall consider the use 
        by depository institutions of data processing or 
        similar automated machines.
          (2) Use of forms and clauses deemed in compliance.--
        Nothing in this subtitle may be construed to require a 
        depository institution to use any such model form or 
        clause prescribed by the [Bureau] Agency under this 
        subsection. A depository institution shall be deemed to 
        be in compliance with the disclosure provisions of this 
        subtitle if the depository institution--
                  (A) uses any appropriate model form or clause 
                as published by the [Bureau] Agency; or
                  (B) uses any such model form or clause and 
                changes it by--
                          (i) deleting any information which is 
                        not required by this subtitle; or
                          (ii) rearranging the format,
                if in making such deletion or rearranging the 
                format, the depository institution does not 
                affect the substance, clarity, or meaningful 
                sequence of the disclosure.
          (3) Public notice and opportunity for comment.--Model 
        disclosure forms and clauses shall be adopted by the 
        [Bureau] Agency after duly given notice in the Federal 
        Register and an opportunity for public comment in 
        accordance with section 553 of title 5, United States 
        Code.

SEC. 270. ADMINISTRATIVE ENFORCEMENT.

  (a) In General.--Subject to subtitle B of the Consumer 
Financial Protection Act of 2010, compliance with the 
requirements imposed under this subtitle shall be enforced 
under--
          (1) section 8 of the Federal Deposit Insurance Act by 
        the appropriate Federal banking agency (as defined in 
        section 3(q) of that Act), with respect to--
                  (A) insured depository institutions (as 
                defined in section 3(c)(2) of that Act);
                  (B) depository institutions described in 
                clause (i), (ii), or (iii) of section 
                19(b)(1)(A) of the Federal Reserve Act which 
                are not insured depository institutions (as 
                defined in section 3(c)(2) of the Federal 
                Deposit Insurance Act); and
                  (C) depository institutions described in 
                clause (v) or (vi) of section 19(b)(1)(A) of 
                the Federal Reserve Act which are not insured 
                depository institutions (as defined in section 
                3(c)(2) of the Federal Deposit Insurance Act);
          (2) the Federal Credit Union Act, by the National 
        Credit Union [Administration Bureau] Administration 
        Board in the case of depository institutions described 
        in clause (iv) of section 19(b)(1)(A) of the Federal 
        Reserve Act; and
          (3) subtitle E of the Consumer Financial Protection 
        Act of 2010, by the [Bureau] Agency, with respect to 
        any person subject to this subtitle.
  (b) Additional Enforcement Powers.--
          (1) Violation of this subtitle treated as violation 
        of other acts.--For purposes of the exercise by any 
        agency referred to in subsection (a) of such agency's 
        powers under any Act referred to in such subsection, a 
        violation of a requirement imposed under this subtitle 
        shall be deemed to be a violation of a requirement 
        imposed under that Act.
          (2) Enforcement authority under other acts.--In 
        addition to the powers of any agency referred to in 
        subsection (a) under any provision of law specifically 
        referred to in such subsection, each such agency may 
        exercise, for purposes of enforcing compliance with any 
        requirement imposed under this subtitle, any other 
        authority conferred on such agency by law.
  (c) Regulations by Agencies Other Than the [Bureau] Agency.--
The authority of the [Bureau] Agency to issue regulations under 
this subtitle does not impair the authority of any other agency 
referred to in subsection (a) to make rules regarding its own 
procedures in enforcing compliance with the requirements 
imposed under this subtitle.

SEC. 272. CREDIT UNIONS.

  (a) In General.--No regulation prescribed by the [Bureau] 
Agency under this subtitle shall apply directly with respect to 
any depository institution described in clause (iv) of section 
19(b)(1)(A) of the Federal Reserve Act.
  (b) Regulations Prescribed by the NCUA.--Within 90 days of 
the effective date of any regulation prescribed by the [Bureau] 
Agency under this subtitle, the National Credit Union 
Administration Board shall prescribe a regulation substantially 
similar to the regulation prescribed by the [Bureau] Agency 
taking into account the unique nature of credit unions and the 
limitations under which they may pay dividends on member 
accounts.

SEC. 273. EFFECT ON STATE LAW.

  The provisions of this subtitle do not supersede any 
provisions of the law of any State relating to the disclosure 
of yields payable or terms for accounts to the extent such 
State law requires the disclosure of such yields or terms for 
accounts, except to the extent that those laws are inconsistent 
with the provisions of this subtitle, and then only to the 
extent of the inconsistency. The [Bureau] Agency may determine 
whether such inconsistencies exist.

SEC. 274. DEFINITIONS.

   For the purposes of this subtitle--
          (1) Account.--The term ``account'' means any account 
        intended for use by and generally used by consumers 
        primarily for personal, family, or household purposes 
        that is offered by a depository institution into which 
        a consumer deposits funds, including demand accounts, 
        time accounts, negotiable order of withdrawal accounts, 
        and share draft accounts.
          (2) Annual percentage yield.--The term ``annual 
        percentage yield'' means the total amount of interest 
        that would be received on a $100 deposit, based on the 
        annual rate of simple interest and the frequency of 
        compounding for a 365-day period, expressed as a 
        percentage calculated by a method which shall be 
        prescribed by the [Bureau] Agency in regulations.
          (3) Annual rate of simple interest.--The term 
        ``annual rate of simple interest''--
                  (A) means the annualized rate of interest 
                paid with respect to each compounding period, 
                expressed as a percentage; and
                  (B) may be referred to as the ``annual 
                percentage rate''.
          [(4) Bureau.--The term ``Bureau '' means the Bureau 
        of Consumer Financial Protection.]
          (4) Agency.--The term ``Agency'' means the Consumer 
        Law Enforcement Agency.
          (5) Deposit broker.--The term ``deposit broker''--
                  (A) has the meaning given to such term in 
                section 29(f)(1) of the Federal Deposit 
                Insurance Act; and
                  (B) includes any person who solicits any 
                amount from any other person for deposit in an 
                insured depository institution.
          (6) Depository institution.--The term ``depository 
        institution'' has the meaning given such term in 
        clauses (i) through (vi) of section 19(b)(1)(A) of the 
        Federal Reserve Act, but does not include any 
        nonautomated credit union that was not required to 
        comply with the requirements of this title as of the 
        date of enactment of the Economic Growth and Regulatory 
        Paperwork Reduction Act of 1996, pursuant to the 
        determination of the National Credit Union 
        Administration [Bureau] Board.
          (7) Interest.--The term ``interest'' includes 
        dividends paid with respect to share draft accounts 
        which are accounts within the meaning of paragraph (3).
          (8) Multiple rate account.--The term ``multiple rate 
        account'' means any account that has 2 or more annual 
        rates of simple interest which take effect at the same 
        time or in succeeding periods and which are known at 
        the time of disclosure.

           *       *       *       *       *       *       *

                              ----------                              


INSPECTOR GENERAL ACT OF 1978

           *       *       *       *       *       *       *



   requirements for federal entities and designated federal entities

  Sec. 8G. (a) Notwithstanding section 12 of this Act, as used 
in this section--
          (1) the term ``Federal entity'' means any Government 
        corporation (within the meaning of section 103(1) of 
        title 5, United States Code), any Government controlled 
        corporation (within the meaning of section 103(2) of 
        such title), or any other entity in the Executive 
        branch of the Government, or any independent regulatory 
        agency, but does not include--
                  (A) an establishment (as defined under 
                section 12(2) of this Act) or part of an 
                establishment;
                  (B) a designated Federal entity (as defined 
                under paragraph (2) of this subsection) or part 
                of a designated Federal entity;
                  (C) the Executive Office of the President;
                  (D) the Central Intelligence Agency;
                  (E) the General Accounting Office; or
                  (F) any entity in the judicial or legislative 
                branches of the Government, including the 
                Administrative Office of the United States 
                Courts and the Architect of the Capitol and any 
                activities under the direction of the Architect 
                of the Capitol;
          (2) the term ``designated Federal entity'' means 
        Amtrak, the Appalachian Regional Commission, the Board 
        of Governors of the Federal Reserve System [and the 
        Bureau of Consumer Financial Protection], the Board for 
        International Broadcasting, the Committee for Purchase 
        From People Who Are Blind or Severely Disabled, the 
        Commodity Futures Trading Commission, the Consumer 
        Product Safety Commission, the Corporation for Public 
        Broadcasting, the Defense Intelligence Agency, the 
        Equal Employment Opportunity Commission, the Farm 
        Credit Administration, the Federal Communications 
        Commission, the Federal Deposit Insurance Corporation, 
        the Federal Election Commission, the Election 
        Assistance Commission, the Federal Housing Finance 
        Board, the Federal Labor Relations Authority, the 
        Federal Maritime Commission, the Federal Trade 
        Commission, the Legal Services Corporation, the 
        National Archives and Records Administration, the 
        National Credit Union Administration, the National 
        Endowment for the Arts, the National Endowment for the 
        Humanities, the National Geospatial-Intelligence 
        Agency, the National Labor Relations Board, the 
        National Science Foundation, the Panama Canal 
        Commission, the Peace Corps, the Pension Benefit 
        Guaranty Corporation, the Securities and Exchange 
        Commission, the Smithsonian Institution, the United 
        States International Trade Commission, the Postal 
        Regulatory Commission, and the United States Postal 
        Service;
          (3) the term ``head of the Federal entity'' means any 
        person or persons designated by statute as the head of 
        a Federal entity, and if no such designation exists, 
        the chief policymaking officer or board of a Federal 
        entity as identified in the list published pursuant to 
        subsection (h)(1) of this section;
          (4) the term ``head of the designated Federal 
        entity'' means the board or commission of the 
        designated Federal entity, or in the event the 
        designated Federal entity does not have a board or 
        commission, any person or persons designated by statute 
        as the head of a designated Federal entity and if no 
        such designation exists, the chief policymaking officer 
        or board of a designated Federal entity as identified 
        in the list published pursuant to subsection (h)(1) of 
        this section, except that--
                  (A) with respect to the National Science 
                Foundation, such term means the National 
                Science Board;
                  (B) with respect to the United States Postal 
                Service, such term means the Governors (within 
                the meaning of section 102(3) of title 39, 
                United States Code);
                  (C) with respect to the Federal Labor 
                Relations Authority, such term means the 
                members of the Authority (described under 
                section 7104 of title 5, United States Code);
                  (D) with respect to the Committee for 
                Purchase From People Who Are Blind or Severely 
                Disabled, such term means the Chairman of the 
                Committee for Purchase From People Who Are 
                Blind or Severely Disabled;
                  (E) with respect to the National Archives and 
                Records Administration, such term means the 
                Archivist of the United States;
                  (F) with respect to the National Credit Union 
                Administration, such term means the National 
                Credit Union Administration Board (described 
                under section 102 of the Federal Credit Union 
                Act (12 U.S.C. 1752a);
                  (G) with respect to the National Endowment of 
                the Arts, such term means the National Council 
                on the Arts;
                  (H) with respect to the National Endowment 
                for the Humanities, such term means the 
                National Council on the Humanities; and
                  (I) with respect to the Peace Corps, such 
                term means the Director of the Peace Corps;
          (5) the term ``Office of Inspector General'' means an 
        Office of Inspector General of a designated Federal 
        entity; and
          (6) the term ``Inspector General'' means an Inspector 
        General of a designated Federal entity.
  (b) No later than 180 days after the date of the enactment of 
this section, there shall be established and maintained in each 
designated Federal entity an Office of Inspector General. The 
head of the designated Federal entity shall transfer to such 
office the offices, units, or other components, and the 
functions, powers, or duties thereof, that such head determines 
are properly related to the functions of the Office of 
Inspector General and would, if so transferred, further the 
purposes of this section. There shall not be transferred to 
such office any program operating responsibilities.
  (c) Except as provided under subsection (f) of this section, 
the Inspector General shall be appointed by the head of the 
designated Federal entity in accordance with the applicable 
laws and regulations governing appointments within the 
designated Federal entity. Each Inspector General shall be 
appointed without regard to political affiliation and solely on 
the basis of integrity and demonstrated ability in accounting, 
auditing, financial analysis, law, management analysis, public 
administration, or investigations. [For purposes of 
implementing this section, the Chairman of the Board of 
Governors of the Federal Reserve System shall appoint the 
Inspector General of the Board of Governors of the Federal 
Reserve System and the Bureau of Consumer Financial Protection. 
The Inspector General of the Board of Governors of the Federal 
Reserve System and the Bureau of Consumer Financial Protection 
shall have all of the authorities and responsibilities provided 
by this Act with respect to the Bureau of Consumer Financial 
Protection, as if the Bureau were part of the Board of 
Governors of the Federal Reserve System.]
  (d)(1) Each Inspector General shall report to and be under 
the general supervision of the head of the designated Federal 
entity, but shall not report to, or be subject to supervision 
by, any other officer or employee of such designated Federal 
entity. Except as provided in paragraph (2), the head of the 
designated Federal entity shall not prevent or prohibit the 
Inspector General from initiating, carrying out, or completing 
any audit or investigation, or from issuing any subpoena during 
the course of any audit or investigation.
  (2)(A) The Secretary of Defense, in consultation with the 
Director of National Intelligence, may prohibit the inspector 
general of an element of the intelligence community specified 
in subparagraph (D) from initiating, carrying out, or 
completing any audit or investigation, or from accessing 
information available to an element of the intelligence 
community specified in subparagraph (D),, or from accessing 
information available to an element of the intelligence 
community specified in subparagraph (D), if the Secretary 
determines that the prohibition is necessary to protect vital 
national security interests of the United States.
  (B) If the Secretary exercises the authority under 
subparagraph (A), the Secretary shall submit to the committees 
of Congress specified in subparagraph (E) an appropriately 
classified statement of the reasons for the exercise of such 
authority not later than 7 days after the exercise of such 
authority.
  (C) At the same time the Secretary submits under subparagraph 
(B) a statement on the exercise of the authority in 
subparagraph (A) to the committees of Congress specified in 
subparagraph (E), the Secretary shall notify the inspector 
general of such element of the submittal of such statement and, 
to the extent consistent with the protection of intelligence 
sources and methods, provide such inspector general with a copy 
of such statement. Such inspector general may submit to such 
committees of Congress any comments on a notice or statement 
received by the inspector general under this subparagraph that 
the inspector general considers appropriate.
  (D) The elements of the intelligence community specified in 
this subparagraph are as follows:
          (i) The Defense Intelligence Agency.
          (ii) The National Geospatial-Intelligence Agency.
          (iii) The National Reconnaissance Office.
          (iv) The National Security Agency.
  (E) The committees of Congress specified in this subparagraph 
are--
          (i) the Committee on Armed Services and the Select 
        Committee on Intelligence of the Senate; and
          (ii) the Committee on Armed Services and the 
        Permanent Select Committee on Intelligence of the House 
        of Representatives.
  (e)(1) In the case of a designated Federal entity for which a 
board, chairman of a committee, or commission is the head of 
the designated Federal entity, a removal under this subsection 
may only be made upon the written concurrence of a \2/3\ 
majority of the board, committee, or commission.''.
  (2) If an Inspector General is removed from office or is 
transferred to another position or location within a designated 
Federal entity, the head of the designated Federal entity shall 
communicate in writing the reasons for any such removal or 
transfer to both Houses of Congress, not later than 30 days 
before the removal or transfer. Nothing in this subsection 
shall prohibit a personnel action otherwise authorized by law, 
other than transfer or removal.
  (f)(1) For purposes of carrying out subsection (c) with 
respect to the United States Postal Service, the appointment 
provisions of section 202(e) of title 39, United States Code, 
shall be applied.
  (2) In carrying out the duties and responsibilities specified 
in this Act, the Inspector General of the United States Postal 
Service (hereinafter in this subsection referred to as the 
``Inspector General'') shall have oversight responsibility for 
all activities of the Postal Inspection Service, including any 
internal investigation performed by the Postal Inspection 
Service. The Chief Postal Inspector shall promptly report the 
significant activities being carried out by the Postal 
Inspection Service to such Inspector General.
  (3)(A)(i) Notwithstanding subsection (d), the Inspector 
General shall be under the authority, direction, and control of 
the Governors with respect to audits or investigations, or the 
issuance of subpoenas, which require access to sensitive 
information concerning--
          (I) ongoing civil or criminal investigations or 
        proceedings;
          (II) undercover operations;
          (III) the identity of confidential sources, including 
        protected witnesses;
          (IV) intelligence or counterintelligence matters; or
          (V) other matters the disclosure of which would 
        constitute a serious threat to national security.
  (ii) With respect to the information described under clause 
(i), the Governors may prohibit the Inspector General from 
carrying out or completing any audit or investigation, or from 
issuing any subpoena, after such Inspector General has decided 
to initiate, carry out, or complete such audit or investigation 
or to issue such subpoena, if the Governors determine that such 
prohibition is necessary to prevent the disclosure of any 
information described under clause (i) or to prevent the 
significant impairment to the national interests of the United 
States.
  (iii) If the Governors exercise any power under clause (i) or 
(ii), the Governors shall notify the Inspector General in 
writing stating the reasons for such exercise. Within 30 days 
after receipt of any such notice, the Inspector General shall 
transmit a copy of such notice to the Committee on Governmental 
Affairs of the Senate and the Committee on Government Reform 
and Oversight of the House of Representatives, and to other 
appropriate committees or subcommittees of the Congress.
  (B) In carrying out the duties and responsibilities specified 
in this Act, the Inspector General--
          (i) may initiate, conduct and supervise such audits 
        and investigations in the United States Postal Service 
        as the Inspector General considers appropriate; and
          (ii) shall give particular regard to the activities 
        of the Postal Inspection Service with a view toward 
        avoiding duplication and insuring effective 
        coordination and cooperation.
  (C) Any report required to be transmitted by the Governors to 
the appropriate committees or subcommittees of the Congress 
under section 5(d) shall also be transmitted, within the seven-
day period specified under such section, to the Committee on 
Governmental Affairs of the Senate and the Committee on 
Government Reform and Oversight of the House of 
Representatives.
  (4) Nothing in this Act shall restrict, eliminate, or 
otherwise adversely affect any of the rights, privileges, or 
benefits of either employees of the United States Postal 
Service, or labor organizations representing employees of the 
United States Postal Service, under chapter 12 of title 39, 
United States Code, the National Labor Relations Act, any 
handbook or manual affecting employee labor relations with the 
United States Postal Service, or any collective bargaining 
agreement.
  (5) As used in this subsection, the term ``Governors'' has 
the meaning given such term by section 102(3) of title 39, 
United States Code.
          (6) There are authorized to be appropriated, out of 
        the Postal Service Fund, such sums as may be necessary 
        for the Office of Inspector General of the United 
        States Postal Service.
  (g)(1) Sections 4, 5, 6 (other than subsections (a)(7) and 
(a)(8) thereof), and 7 of this Act shall apply to each 
Inspector General and Office of Inspector General of a 
designated Federal entity and such sections shall be applied to 
each designated Federal entity and head of the designated 
Federal entity (as defined under subsection (a)) by 
substituting--
          (A) ``designated Federal entity'' for 
        ``establishment''; and
          (B) ``head of the designated Federal entity'' for 
        ``head of the establishment''.
  (2) In addition to the other authorities specified in this 
Act, an Inspector General is authorized to select, appoint, and 
employ such officers and employees as may be necessary for 
carrying out the functions, powers, and duties of the Office of 
Inspector General and to obtain the temporary or intermittent 
services of experts or consultants or an organization thereof, 
subject to the applicable laws and regulations that govern such 
selections, appointments, and employment, and the obtaining of 
such services, within the designated Federal entity.
  (3) Notwithstanding the last sentence of subsection (d) of 
this section, the provisions of subsection (a) of section 8D 
(other than the provisions of subparagraphs (A), (B), (C), and 
(E) of subsection (a)(1)) shall apply to the Inspector General 
of the Board of Governors of the Federal Reserve System [and 
the Bureau of Consumer Financial Protection] and the Chairman 
of the Board of Governors of the Federal Reserve System in the 
same manner as such provisions apply to the Inspector General 
of the Department of the Treasury and the Secretary of the 
Treasury, respectively.
          (4) Each Inspector General shall--
  (A) in accordance with applicable laws and regulations 
governing appointments within the designated Federal entity, 
appoint a Counsel to the Inspector General who shall report to 
the Inspector General;
  (B) obtain the services of a counsel appointed by and 
directly reporting to another Inspector General on a 
reimbursable basis; or
  (C) obtain the services of appropriate staff of the Council 
of the Inspectors General on Integrity and Efficiency on a 
reimbursable basis.
  (h)(1) No later than April 30, 1989, and annually thereafter, 
the Director of the Office of Management and Budget, after 
consultation with the Comptroller General of the United States, 
shall publish in the Federal Register a list of the Federal 
entities and designated Federal entities and if the designated 
Federal entity is not a board or commission, include the head 
of each such entity (as defined under subsection (a) of this 
section).
  (2) Beginning on October 31, 1989, and on October 31 of each 
succeeding calendar year, the head of each Federal entity (as 
defined under subsection (a) of this section) shall prepare and 
transmit to the Director of the Office of Management and Budget 
and to each House of the Congress a report which--
          (A) states whether there has been established in the 
        Federal entity an office that meets the requirements of 
        this section;
          (B) specifies the actions taken by the Federal entity 
        otherwise to ensure that audits are conducted of its 
        programs and operations in accordance with the 
        standards for audit of governmental organizations, 
        programs, activities, and functions issued by the 
        Comptroller General of the United States, and includes 
        a list of each audit report completed by a Federal or 
        non-Federal auditor during the reporting period and a 
        summary of any particularly significant findings; and
          (C) summarizes any matters relating to the personnel, 
        programs, and operations of the Federal entity referred 
        to prosecutive authorities, including a summary 
        description of any preliminary investigation conducted 
        by or at the request of the Federal entity concerning 
        these matters, and the prosecutions and convictions 
        which have resulted.

           *       *       *       *       *       *       *


                              definitions

  Sec. 12. As used in this Act--
          (1) the term ``head of the establishment'' means the 
        Secretary of Agriculture, Commerce, Defense, Education, 
        Energy, Health and Human Services, Housing and Urban 
        Development, the Interior, Labor, State, 
        Transportation, Homeland Security, or the Treasury; the 
        Attorney General; the Administrator of the Agency for 
        International Development, Environmental Protection, 
        General Services, National Aeronautics and Space, or 
        Small Business, or Veterans' Affairs; the Director of 
        the Federal Emergency Management Agency, or the Office 
        of Personnel Management; the Chairman of the Nuclear 
        Regulatory Commission or the Railroad Retirement Board; 
        the Chairperson of the Thrift Depositor Protection 
        Oversight Board; the Chief Executive Officer of the 
        Corporation for National and Community Service; the 
        Administrator of the Community Development Financial 
        Institutions Fund; the chief executive officer of the 
        Resolution Trust Corporation; the Chairperson of the 
        Federal Deposit Insurance Corporation; the Commissioner 
        of Social Security, Social Security Administration; the 
        Director of the Federal Housing Finance Agency; the 
        Board of Directors of the Tennessee Valley Authority; 
        the President of the Export-Import Bank; the Consumer 
        Law Enforcement Agency; the Federal Cochairpersons of 
        the Commissions established under section 15301 of 
        title 40, United States Code; the Director of the 
        National Security Agency;or the Director of the 
        National Reconnaissance Office; as the case may be;
          (2) the term ``establishment'' means the Department 
        of Agriculture, Commerce, Defense, Education, Energy, 
        Health and Human Services, Housing and Urban 
        Development, the Interior, Justice, Labor, State, 
        Transportation, Homeland Security, or the Treasury; the 
        Agency for International Development, the Community 
        Development Financial Institutions Fund, the 
        Environmental Protection Agency, the Federal Emergency 
        Management Agency, the General Services Administration, 
        the National Aeronautics and Space Administration, the 
        Nuclear Regulatory Commission, the Office of Personnel 
        Management, the Railroad Retirement Board, the 
        Resolution Trust Corporation, the Federal Deposit 
        Insurance Corporation, the Small Business 
        Administration, the Corporation for National and 
        Community Service, or the Veterans' Administration, the 
        Social Security Administration, the Federal Housing 
        Finance Agency, the Tennessee Valley Authority, the 
        Export-Import Bank, the Consumer Law Enforcement 
        Agency, the Commissions established under section 15301 
        of title 40, United States Code, the National Security 
        Agency,or the National Reconnaissance Office, as the 
        case may be;
          (3) the term ``Inspector General'' means the 
        Inspector General of an establishment;
          (4) the term ``Office'' means the Office of Inspector 
        General of an establishment; and
          (5) the term ``Federal agency'' means an agency as 
        defined in section 552(f) of title 5 (including an 
        establishment as defined in paragraph (2)), United 
        States Code, but shall not be construed to include the 
        General Accounting Office.

           *       *       *       *       *       *       *

                              ----------                              


OMNIBUS APPROPRIATIONS ACT, 2009

           *       *       *       *       *       *       *



 DIVISION D--FINANCIAL SERVICES AND GENERAL GOVERNMENT APPROPRIATIONS 
ACT, 2009

           *       *       *       *       *       *       *



TITLE VI--GENERAL PROVISIONS--THIS ACT

           *       *       *       *       *       *       *


  [Sec. 626. (a)(1) The Bureau of Consumer Financial Protection 
shall have authority to prescribe rules with respect to 
mortgage loans in accordance with section 553 of title 5, 
United States Code. Such rulemaking shall relate to unfair or 
deceptive acts or practices regarding mortgage loans, which may 
include unfair or deceptive acts or practices involving loan 
modification and foreclosure rescue services. Any violation of 
a rule prescribed under this paragraph shall be treated as a 
violation of a rule prohibiting unfair, deceptive, or abusive 
acts or practices under the Consumer Financial Protection Act 
of 2010 and a violation of a rule under section 18 of the 
Federal Trade Commission Act (15 U.S.C. 57a) regarding unfair 
or deceptive acts or practices.
  [(2) The Bureau of Consumer Financial Protection shall 
enforce the rules issued under paragraph (1) in the same 
manner, by the same means, and with the same jurisdiction, 
powers, and duties, as though all applicable terms and 
provisions of the Consumer Financial Protection Act of 2010 
were incorporated into and made part of this subsection.
  [(3) Subject to subtitle B of the Consumer Financial 
Protection Act of 2010, the Federal Trade Commission shall 
enforce the rules issued under paragraph (1), in the same 
manner, by the same means, and with the same jurisdiction, as 
though all applicable terms and provisions of the Federal Trade 
Commission Act were incorporated into and made part of this 
section.
  [(b)
          [(1) Except as provided in paragraph (6), in any case 
        in which the attorney general of a State has reason to 
        believe that an interest of the residents of the State 
        has been or is threatened or adversely affected by the 
        engagement of any person subject to a rule prescribed 
        under subsection (a) in practices that violate such 
        rule, the State, as parens patriae, may bring a civil 
        action on behalf of its residents in an appropriate 
        district court of the United States or other court of 
        competent jurisdiction--
                  [(A) to enjoin that practice;
                  [(B) to enforce compliance with the rule;
                  [(C) to obtain damages, restitution, or other 
                compensation on behalf of the residents of the 
                State; or
                  [(D) to obtain penalties and relief provided 
                under the Consumer Financial Protection Act of 
                2010, the Federal Trade Commission Act, and 
                such other relief as the court deems 
                appropriate.
  [(2) The State shall serve written notice to the Bureau of 
Consumer Financial Protection or the Commission, as appropriate 
of any civil action under paragraph (1) at least 60 days prior 
to initiating such civil action. The notice shall include a 
copy of the complaint to be filed to initiate such civil 
action, except that if it is not feasible for the State to 
provide such prior notice, the State shall provide notice 
immediately upon instituting such civil action.
  [(3) Upon receiving the notice required by paragraph (2) and 
subject to subtitle B of the Consumer Financial Protection Act 
of 2010 the Bureau of Consumer Financial Protection or the 
Commission, as appropriate may intervene in such civil action 
and upon intervening--
          [(A) be heard on all matters arising in such civil 
        action;
          [(B) remove the action to the appropriate United 
        States district court; and
          [(C) file petitions for appeal of a decision in such 
        civil action.
  [(4) Nothing in this subsection shall prevent the attorney 
general of a State from exercising the powers conferred on the 
attorney general by the laws of such State to conduct 
investigations or to administer oaths or affirmations or to 
compel the attendance of witnesses or the production of 
documentary and other evidence. Nothing in this section shall 
prohibit the attorney general of a State, or other authorized 
State officer, from proceeding in State or Federal court on the 
basis of an alleged violation of any civil or criminal statute 
of that State.
  [(5) In a civil action brought under paragraph (1)--
          [(A) the venue shall be a judicial district in which 
        the defendant is found, is an inhabitant, or transacts 
        business or wherever venue is proper under section 1391 
        of title 28, United States Code; and
          [(B) process may be served without regard to the 
        territorial limits of the district or of the State in 
        which the civil action is instituted.
  [(6) Whenever a civil action or an administrative action has 
been instituted by or on behalf of the Bureau of Consumer 
Financial Protection or the Commission for violation of any 
provision of law or rule described in paragraph (1), no State 
may, during the pendency of such action instituted by or on 
behalf of the Bureau of Consumer Financial Protection or the 
Commission, institute a civil action under that paragraph 
against any defendant named in the complaint in such action for 
violation of any law or rule as alleged in such complaint.
  [(7) If the attorney general of a State prevails in any civil 
action under paragraph (1), the State can recover reasonable 
costs and attorney fees from the lender or related party.]

           *       *       *       *       *       *       *

                              ----------                              


FEDERAL TRADE COMMISSION ACT

           *       *       *       *       *       *       *


  Sec. 4. The words defined in this section shall have the 
following meaning when found in this Act, to wit:
    ``Commerce'' means commerce among the several States or 
with foreign nations, or in any Territory of the United States 
or in the District of Columbia, or between any such Territory 
and another, or between any such Territory and any State or 
foreign nation, or between the District of Columbia and any 
State or Territory or foreign nation.
    ``Corporation'' shall be deemed to include any company, 
trust, so-called Massachusetts trust, or association, 
incorporated or unincorporated, which is organized to carry on 
business for its own profit or that of its members, and has 
shares of capital or capital stock or certificates of interest, 
and any company, trust, so-called Massachusetts trust, or 
association, incorporated or unincorporated, without shares of 
capital or capital stock or certificates of interest, except 
partnerships, which is organized to carry on business for its 
own profit or that of its members.
    ``Documentary evidence'' includes all documents, papers, 
correspondence, books of account, and financial and corporate 
records.
    ``Acts to regulate commerce'' means the Act entitled ``An 
Act to regulate commerce,'' approved February 14, 1887, and all 
Acts amendatory thereof and supplementary thereto and the 
Communications Act of 1934 and all Acts amendatory thereof and 
supplementary thereto.
   ``Antitrust Acts'' means the Act entitled ``An Act to 
protect trade and commerce against unlawful restraints and 
monopolies,'' approved July 2, 1890; also sections 73 to 76, 
inclusive, of an Act entitled ``An Act to reduce taxation, to 
provide revenue for the Government, and for other purposes,'' 
approved August 27, 1894; also the Act entitled ``An Act to 
amend sections 73 and 76 of the Act of August 27, 1894, 
entitled `An Act to reduce taxation, to provide revenue for the 
Government, and for other purposes,''' approved February 12, 
1913; and also the Act entitled ``An Act to supplement existing 
laws against unlawful restraints and monopolies, and for other 
purposes,'' approved October 15, 1914.
            ``Banks'' means the types of banks and other 
        financial institutions referred to in [section 
        18(f)(2)] section 18(f).
    ``Foreign law enforcement agency'' means--
          (1) any agency or judicial authority of a foreign 
        government, including a foreign state, a political 
        subdivision of a foreign state, or a multinational 
        organization constituted by and comprised of foreign 
        states, that is vested with law enforcement or 
        investigative authority in civil, criminal, or 
        administrative matters; and
          (2) any multinational organization, to the extent 
        that it is acting on behalf of an entity described in 
        paragraph (1).
  Sec. 5. (a)(1) Unfair methods of competition in or affecting 
commerce, and unfair or deceptive acts or practices in or 
affecting commerce, are hereby declared unlawful.
  (2) The Commission is hereby empowered and directed to 
prevent persons, partnerships, or corporations, except banks, 
savings and loan institutions described in [section 18(f)(3)] 
section 18(f), Federal credit unions described in [section 
18(f)(4)] section 18(f), common carriers subject to the Acts to 
regulate commerce, air carriers and foreign air carriers 
subject to the Federal Aviation Act of 1958, and persons, 
partnerships, or corporations insofar as they are subject to 
the Packers and Stockyards Act, 1921, as amended, except as 
provided in section 406(b) of said Act, from using unfair 
methods of competition in or affecting commerce and unfair or 
deceptive acts or practices in or affecting commerce.
  (3) This subsection shall not apply to unfair methods of 
competition involving commerce with foreign nations (other than 
import commerce) unless--
          (A) such methods of competition have a direct, 
        substantial, and reasonably foreseeable effect--
                  (i) on commerce which is not commerce with 
                foreign nations, or on import commerce with 
                foreign nations; or
                  (ii) on export commerce with foreign nations, 
                of a person engaged in such commerce in the 
                United States; and
          (B) such effect gives rise to a claim under the 
        provisions of this subsection, other than this 
        paragraph.
If this subsection applies to such methods of competition only 
because of the operation of subparagraph (A)(ii), this 
subsection shall apply to such conduct only for injury to 
export business in the United States.
          (4)(A) For purposes of subsection (a), the term 
        ``unfair or deceptive acts or practices'' includes such 
        acts or practices involving foreign commerce that--
                  (i) cause or are likely to cause reasonably 
                foreseeable injury within the United States; or
                  (ii) involve material conduct occurring 
                within the United States.
          (B) All remedies available to the Commission with 
        respect to unfair and deceptive acts or practices shall 
        be available for acts and practices described in this 
        paragraph, including restitution to domestic or foreign 
        victims.
  (b) Whenever the Commission shall have reason to believe that 
any such person, partnership, or corporation has been or is 
using any unfair method of competition or unfair or deceptive 
act or practice in or affecting commerce, and if it shall 
appear to the Commission that a proceeding by it in respect 
thereof would be to the interest of the public, it shall issue 
and serve upon such person, partnership, or corporation a 
complaint stating its charges in that respect and containing a 
notice of a hearing upon a day and at a place therein fixed at 
least thirty days after the service of said complaint. The 
person, partnership, or corporation so complained of shall have 
the right to appear at the place and time so fixed and show 
cause why an order should not be entered by the Commission 
requiring such person, partnership, or corporation to cease and 
desist from the violation of the law so charged in said 
complaint. Any person, partnership, or corporation may make 
application, and upon good cause shown may be allowed by the 
Commission to intervene and appear in said proceeding by 
counsel or in person. The testimony in any such proceeding 
shall be reduced to writing and filed in the office of the 
Commission. If upon such hearing the Commission shall be of the 
opinion that the method of competition or the act or practice 
in question is prohibited by this Act, it shall make a report 
in writing in which it shall state its findings as to the facts 
and shall issue and cause to be served on such person, 
partnership, or corporation an order requiring such person, 
partnership, or corporation to cease and desist from using such 
method of competition or such act or practice. Until the 
expiration of the time allowed for filing a petition for 
review, if no such petition has been duly filed within such 
time, or, if a petition for review has been filed within such 
time then until the record in the proceeding has been filed in 
a court of appeals of the United States, as hereinafter 
provided, the Commission may at any time, upon such notice and 
in such manner as it shall deem proper, modify or set aside, in 
whole or in part, any report or any order made or issued by it 
under this section. After the expiration of the time allowed 
for filing a petition for review, if no such petition has been 
duly filed within such time, the Commission may at any time, 
after notice and opportunity for hearing, reopen and alter, 
modify, or set aside, in whole or in part, any report or order 
made or issued by it under this section, whenever in the 
opinion of the Commission conditions of fact or of law have so 
changed as to require such action or if the public interest 
shall so require, except that (1) the said person, partnership, 
or corporation may, within sixty days after service upon him or 
it of said report or order entered after such a reopening, 
obtain a review thereof in the appropriate circuit court of 
appeals of the United States, in the manner provided in 
subsection (c) of this section; and (2) in the case of an 
order, the Commission shall reopen any such order to consider 
whether such order (including any affirmative relief provision 
contained in such order) should be altered, modified, or set 
aside, in whole or in part, if the person, partnership, or 
corporation involved files a request with the Commission which 
makes a satisfactory showing that changed conditions of law or 
fact require such order to be altered, modified, or set aside, 
in whole or in part. The Commission shall determine whether to 
alter, modify, or set aside any order of the Commission in 
response to a request made by a person, partnership, or 
corporation under paragraph (2) not later than 120 days after 
the date of the filing of such request.
  (c) Any person, partnership, or corporation required by an 
order of the Commission to cease and desist from using any 
method of competition or act or practice may obtain a review of 
such order in the circuit court of appeals of the United 
States, within any circuit where the method of competition or 
the act or practice in question was used or where such person, 
partnership, or corporation resides or carries on business, by 
filing in the court, within sixty days from the date of the 
service of such order, a written petition praying that the 
order of the Commission be set aside. A copy of such petition 
shall be forthwith transmitted by the clerk of the court to the 
Commission, and thereupon the Commission shall file in the 
court the record in the proceeding, as provided in section 2112 
of title 28, United States Code. Upon such filing of the 
petition the court shall have jurisdiction of the proceeding 
and of the question determined therein concurrently with the 
Commission until the filing of the record and shall have power 
to make and enter a decree affirming, modifying, or setting 
aside the order of the Commission, and enforcing the same to 
the extent that such order is affirmed and to issue such writs 
as are ancillary to its jurisdiction or are necessary in its 
judgment to prevent injury to the public or to competitors 
pendente lite. The findings of the Commission as to the facts, 
if supported by evidence, shall be conclusive. To the extent 
that the order of the Commission is affirmed, the court shall 
thereupon issue its own order commanding obedience to the terms 
of such order of the Commission. If either party shall apply to 
the court for leave to adduce additional evidence, and shall 
show to the satisfaction of the court that such additional 
evidence is material and that there were reasonable grounds for 
the failure to adduce such evidence in the proceeding before 
the Commission, the court may order such additional evidence to 
be taken before the Commission and to be adduced upon the 
hearing in such manner and upon such terms and conditions as to 
the court may seem proper. The Commission may modify its 
findings as to the facts, or make new findings, by reason of 
the additional evidence so taken, and it shall file such 
modified or new findings, which if supported by evidence, shall 
be conclusive, and its recommendation, if any, for the 
modification or setting aside of its original order, with the 
return of such additional evidence. The judgment and decree of 
the court shall be final, except that the same shall be subject 
to review by the Supreme Court upon certiorari, as provided in 
section 240 of the Judicial Code.
  (d) Upon the filing of the record with it the jurisdiction of 
the court of appeals of the United States to affirm, enforce, 
modify, or set aside orders of the Commission shall be 
exclusive.
  (e) No order of the Commission or judgment of court to 
enforce the same shall in anywise relieve or absolve any 
person, partnership, or corporation from any liability under 
the Antitrust Acts.
  (f) Complaints, orders, and other processes of the Commission 
under this section may be served by anyone duly authorized by 
the Commission, either (a) by delivering a copy thereof to the 
person to be served, or to a member of the partnership to be 
served, or the president, secretary, or other executive officer 
or a director of the corporation to be served; or (b) by 
leaving a copy thereof at the residence or the principal office 
or place of business of such person, partnership, or 
corporation; or (c) by mailing a copy thereof by registered 
mail or by certified mail addressed to such person, 
partnership, or corporation at his or its residence or 
principal office or place of business. The verified return by 
the person so serving said complaint, order, or other process 
setting forth the manner of said service shall be proof of the 
same, and the return post office receipt for said complaint, 
order, or other process mailed by registered mail or certified 
mail as aforesaid shall be proof of the service of the same.
  (g) An order of the Commission to cease and desist shall 
become final--
          (1) Upon the expiration of the time allowed for 
        filing a petition for review, if no such petition has 
        been duly filed within such time; but the Commission 
        may thereafter modify or set aside its order to the 
        extent provided in the last sentence of subsection (b).
          (2) Except as to any order provision subject to 
        paragraph (4), upon the sixtieth day after such order 
        is served, if a petition for review has been duly 
        filed; except that any such order may be stayed, in 
        whole or in part and subject to such conditions as may 
        be appropriate, by--
                  (A) the Commission;
                  (B) an appropriate court of appeals of the 
                United States, if (i) a petition for review of 
                such order is pending in such court, and (ii) 
                an application for such a stay was previously 
                submitted to the Commission and the Commission, 
                within the 30-day period beginning on the date 
                the application was received by the Commission, 
                either denied the application or did not grant 
                or deny the application; or
                  (C) the Supreme Court, if an applicable 
                petition for certiorari is pending.
          (3) For purposes of subsection (m)(1)(B) and of 
        section 19(a)(2), if a petition for review of the order 
        of the Commission has been filed--
                  (A) upon the expiration of the time allowed 
                for filing a petition for certiorari, if the 
                order of the Commission has been affirmed or 
                the petition for review has been dismissed by 
                the court of appeals and no petition for 
                certiorari has been duly filed;
                  (B) upon the denial of a petition for 
                certiorari, if the order of the Commission has 
                been affirmed or the petition for review has 
                been dismissed by the court of appeals; or
                  (C) upon the expiration of 30 days from the 
                date of issuance of a mandate of the Supreme 
                Court directing that the order of the 
                Commission be affirmed or the petition for 
                review be dismissed.
          (4) In the case of an order provision requiring a 
        person, partnership, or corporation to divest itself of 
        stock, other share capital, or assets, if a petition 
        for review of such order of the Commission has been 
        filed--
                  (A) upon the expiration of the time allowed 
                for filing a petition for certiorari, if the 
                order of the Commission has been affirmed or 
                the petition for review has been dismissed by 
                the court of appeals and no petition for 
                certiorari has been duly filed;
                  (B) upon the denial of a petition for 
                certiorari, if the order of the Commission has 
                been affirmed or the petition for review has 
                been dismissed by the court of appeals; or
                  (C) upon the expiration of 30 days from the 
                date of issuance of a mandate of the Supreme 
                Court directing that the order of the 
                Commission be affirmed or the petition for 
                review be dismissed.
  (h) If the Supreme Court directs that the order of the 
Commission be modified or set aside, the order of the 
Commission rendered in accordance with the mandate of the 
Supreme Court shall become final upon the expiration of thirty 
days from the time it was rendered, unless within such thirty 
days either party has instituted proceedings to have such order 
corrected to accord with the mandate, in which event the order 
of the Commission shall become final when so corrected.
  (i) If the order of the Commission is modified or set aside 
by the circuit court of appeals, and if (1) the time allowed 
for filing a petition for certiorari has expired and no such 
petition has been duly filed, or (2) the petition for 
certiorari has been denied, or (3) the decision of the court 
has been affirmed by the Supreme Court, then the order of the 
Commission rendered in accordance with the mandate of the 
circuit court of appeals shall become final on the expiration 
of thirty days from the time such order of the Commission was 
rendered, unless within such thirty days either party has 
instituted proceedings to have such order corrected so that it 
will accord with the mandate, in which event the order of the 
Commission shall become final when so corrected.
  (j) If the Supreme Court orders a rehearing; or if the case 
is remanded by the circuit court of appeals to the Commission 
for a rehearing, and if (1) the time allowed for filing a 
petition for certiorari has expired, and no such petition has 
been duly filed, or (2) the petition for certiorari has been 
denied, or (3) the decision of the court has been affirmed by 
the Supreme Court, then the order of the Commission rendered 
upon such rehearing shall become final in the same manner as 
though no prior order of the Commission had been rendered.
  (k) As used in this section the term ``mandate'', in case a 
mandate has been recalled prior to the expiration of thirty 
days from the date of issuance thereof, means the final 
mandate.
  (l) Any person, partnership, or corporation who violates an 
order of the Commission after it has become final, and while 
such order is in effect, shall forfeit and pay to the United 
States a civil penalty of not more than $10,000 for each 
violation, which shall accrue to the United States and may be 
recovered in a civil action brought by the Attorney General of 
the United States. Each separate violation of such an order 
shall be a separate offense, except that in the case of a 
violation through continuing failure to obey or neglect to obey 
a final order of the Commission, each day of continuance of 
such failure or neglect shall be deemed a separate offense. In 
such actions, the United States district courts are empowered 
to grant mandatory injunctions and such other and further 
equitable relief as they deem appropriate in the enforcement of 
such final orders of the Commission.
  (m)(1)(A) The Commission may commence a civil action to 
recover a civil penalty in a district court of the United 
States against any person, partnership, or corporation which 
violates any rule under this Act respecting unfair or deceptive 
acts or practices (other than an interpretive rule or a rule 
violation of which the Commission has provided is not an unfair 
or deceptive act or practice in violation of subsection (a)(1)) 
with actual knowledge or knowledge fairly implied on the basis 
of objective circumstances that such act is unfair or deceptive 
and is prohibited by such rule. In such action, such person, 
partnership, or corporation shall be liable for a civil penalty 
of not more than $10,000 for each violation.
  (B) If the Commission determines in a proceeding under 
subsection (b) that any act or practice is unfair or deceptive, 
and issues a final cease and desist order, other than a consent 
order, with respect to such act or practice, then the 
Commission may commence a civil action to obtain a civil 
penalty in a district court of the United States against any 
person, partnership, or corporation which engages in such act 
or practice--
          (1) after such cease and desist order becomes final 
        (whether or not such person, partnership, or 
        corporation was subject to such cease and desist 
        order), and
          (2) with actual knowledge that such act or practice 
        is unfair or deceptive and is unlawful under subsection 
        (a)(1) of this section.
                In such action, such person, partnership, or 
                corporation shall be liable for a civil penalty 
                of not more than $10,000 for each violation.
  (C)(1) In the case of a violation through continuing failure 
to comply with a rule or with section 5(a)(1), each day of 
continuance of such failure shall be treated as a separate 
violation, for purposes of subparagraphs (A) and (B). In 
determining the amount of such a civil penalty, the court shall 
take into account the degree of culpability, any history of 
prior such conduct, ability to pay, effect on ability to 
continue to do business, and such other matters as justice may 
require.
  (2) If the cease and desist order establishing that the act 
or practice is unfair or deceptive was not issued against the 
defendant in a civil penalty action under paragraph (1)(B) the 
issues of fact in such action against such defendant shall be 
tried de novo. Upon request of any party to such an action 
against such defendant, the court shall also review the 
determination of law made by the Commission in the proceeding 
under subsection (b) that the act or practice which was the 
subject of such proceeding constituted an unfair or deceptive 
act or practice in violation of subsection (a).
  (3) The Commission may compromise or settle any action for a 
civil penalty if such compromise or settlement is accompanied 
by a public statement of its reasons and is approved by the 
court.
  (n) The Commission shall have no authority under this section 
or section 18 to declare unlawful an act or practice on the 
grounds that such act or practice is unfair unless the act or 
practice causes or is likely to cause substantial injury to 
consumers which is not reasonably avoidable by consumers 
themselves and not outweighed by countervailing benefits to 
consumers or to competition. In determining whether an act or 
practice is unfair, the Commission may consider established 
public policies as evidence to be considered with all other 
evidence. Such public policy considerations may not serve as a 
primary basis for such determination.
  Sec. 6. That the commission shall also have power--
  (a) To gather and compile information concerning, and to 
investigate from time to time the organization, business, 
conduct, practices, and management of any person, partnership, 
or corporation engaged in or whose business affects commerce, 
excepting banks, savings and loan institutions described in 
[section 18(f)(3)] section 18(f), Federal credit unions 
described in [section 18(f)(4)] section 18(f), and common 
carriers subject to the Act to regulate commerce, and its 
relation to other persons, partnerships, and corporations.
  (b) To require, by general or special orders, persons, 
partnerships, and corporations engaged in or whose business 
affects commerce, excepting banks, savings and loan 
institutions described in [section 18(f)(3)] section 18(f), 
Federal credit unions described in [section 18(f)(4)] section 
18(f), and common carriers subject to the Act to regulate 
commerce, or any class of them, or any of them, respectively, 
to file with the commission in such form as the commission may 
prescribe annual or special, or both annual and special, 
reports or answers in writing to specific questions, furnishing 
to the commission such information as it may require as to the 
organization, business, conduct, practices, management, and 
relation to other corporations, partnerships, and individuals 
of the respective persons, partnerships, and corporations 
filing such reports or answers in writing. Such reports and 
answers shall be made under oath, or otherwise, as the 
commission may prescribe, and shall be filed with the 
commission within such reasonable period as the commission may 
prescribe, unless additional time be granted in any case by the 
commission.
  (c) Whenever a final decree has been entered against any 
defendant corporation in any suit brought by the United States 
to prevent and restrain any violation of the antitrust Acts, to 
make investigation, upon its own initiative, of the manner in 
which the decree has been or is being carried out, and upon the 
application of the Attorney General it shall be its duty to 
make such investigation. It shall transmit to the Attorney 
General a report embodying its findings and recommendations as 
a result of any such investigation, and the report shall be 
made public in the discretion of the commission.
  (d) Upon the direction of the President or either House of 
Congress to investigate and report the facts relating to any 
alleged violations of the antitrust Acts by any corporation.
  (e) Upon the application of the Attorney General to 
investigate and make recommendations for the readjustment of 
the business of any corporation alleged to be violating the 
antitrust Acts in order that the corporation may thereafter 
maintain its organization, management, and conduct of business 
in accordance with law.
  (f) To make public from time to time such portions of the 
information obtained by it hereunder as are in the public 
interest; and to make annual and special reports to the 
Congress and to submit therewith recommendations for additional 
legislation; and to provide for the publication of its reports 
and decisions in such form and manner as may be best adapted 
for public information and use: Provided, That the Commission 
shall not have any authority to make public any trade secret or 
any commercial or financial information which is obtained from 
any person and which is privileged or confidential, except that 
the Commission may disclose such information (1) to officers 
and employees of appropriate Federal law enforcement agencies 
or to any officer or employee of any State law enforcement 
agency upon the prior certification of an officer of any such 
Federal or State law enforcement agency that such information 
will be maintained in confidence and will be used only for 
official law enforcement purposes, and (2) to any officer or 
employee of any foreign law enforcement agency under the same 
circumstances that making material available to foreign law 
enforcement agencies is permitted under section 21(b).
  (g) From time to time to classify corporations and (except as 
provided in section 18(a)(2) of this Act) to make rules and 
regulations for the purpose of carrying out the provisions of 
this Act.
  (h) To investigate, from time to time, trade conditions in 
and with foreign countries where associations, combinations, or 
practices of manufacturers, merchants, or traders, or other 
conditions, may affect the foreign trade of the United States, 
and to report to Congress thereon, with such recommendations as 
it deems advisable.
  (i) With respect to the International Antitrust Enforcement 
Assistance Act of 1994, to conduct investigations of possible 
violations of foreign antitrust laws (as defined in section 12 
of such Act).
  (j) Investigative Assistance for Foreign Law Enforcement 
Agencies.--
          (1) In general.--Upon a written request from a 
        foreign law enforcement agency to provide assistance in 
        accordance with this subsection, if the requesting 
        agency states that it is investigating, or engaging in 
        enforcement proceedings against, possible violations of 
        laws prohibiting fraudulent or deceptive commercial 
        practices, or other practices substantially similar to 
        practices prohibited by any provision of the laws 
        administered by the Commission, other than Federal 
        antitrust laws (as defined in section 12(5) of the 
        International Antitrust Enforcement Assistance Act of 
        1994 (15 U.S.C. 6211(5))), to provide the assistance 
        described in paragraph (2) without requiring that the 
        conduct identified in the request constitute a 
        violation of the laws of the United States.
          (2) Type of assistance.--In providing assistance to a 
        foreign law enforcement agency under this subsection, 
        the Commission may--
                  (A) conduct such investigation as the 
                Commission deems necessary to collect 
                information and evidence pertinent to the 
                request for assistance, using all investigative 
                powers authorized by this Act; and
                  (B) when the request is from an agency acting 
                to investigate or pursue the enforcement of 
                civil laws, or when the Attorney General refers 
                a request to the Commission from an agency 
                acting to investigate or pursue the enforcement 
                of criminal laws, seek and accept appointment 
                by a United States district court of Commission 
                attorneys to provide assistance to foreign and 
                international tribunals and to litigants before 
                such tribunals on behalf of a foreign law 
                enforcement agency pursuant to section 1782 of 
                title 28, United States Code.
          (3) Criteria for determination.--In deciding whether 
        to provide such assistance, the Commission shall 
        consider all relevant factors, including--
                  (A) whether the requesting agency has agreed 
                to provide or will provide reciprocal 
                assistance to the Commission;
                  (B) whether compliance with the request would 
                prejudice the public interest of the United 
                States; and
                  (C) whether the requesting agency's 
                investigation or enforcement proceeding 
                concerns acts or practices that cause or are 
                likely to cause injury to a significant number 
                of persons.
          (4) International agreements.--If a foreign law 
        enforcement agency has set forth a legal basis for 
        requiring execution of an international agreement as a 
        condition for reciprocal assistance, or as a condition 
        for provision of materials or information to the 
        Commission, the Commission, with prior approval and 
        ongoing oversight of the Secretary of State, and with 
        final approval of the agreement by the Secretary of 
        State, may negotiate and conclude an international 
        agreement, in the name of either the United States or 
        the Commission, for the purpose of obtaining such 
        assistance, materials, or information. The Commission 
        may undertake in such an international agreement to--
                  (A) provide assistance using the powers set 
                forth in this subsection;
                  (B) disclose materials and information in 
                accordance with subsection (f) and section 
                21(b); and
                  (C) engage in further cooperation, and 
                protect materials and information received from 
                disclosure, as authorized by this Act.
          (5) Additional authority.--The authority provided by 
        this subsection is in addition to, and not in lieu of, 
        any other authority vested in the Commission or any 
        other officer of the United States.
          (6) Limitation.--The authority granted by this 
        subsection shall not authorize the Commission to take 
        any action or exercise any power with respect to a 
        bank, a savings and loan institution described in 
        [section 18(f)(3) (15 U.S.C. 57a(f)(3)), a Federal 
        credit union described in section 18(f)(4) (15 U.S.C. 
        57a(f)(4))] section 18(f), a Federal credit union 
        described in section 18(f), or a common carrier subject 
        to the Act to regulate commerce, except in accordance 
        with the undesignated proviso following the last 
        designated subsection of section 6 (15 U.S.C. 46).
          (7) Assistance to certain countries.--The Commission 
        may not provide investigative assistance under this 
        subsection to a foreign law enforcement agency from a 
        foreign state that the Secretary of State has 
        determined, in accordance with section 6(j) of the 
        Export Administration Act of 1979 (50 U.S.C. App. 
        2405(j)), has repeatedly provided support for acts of 
        international terrorism, unless and until such 
        determination is rescinded pursuant to section 6(j)(4) 
        of that Act (50 U.S.C. App. 2405(j)(4)).
  (k) Referral of Evidence for Criminal Proceedings.--
          (1) In general.--Whenever the Commission obtains 
        evidence that any person, partnership, or corporation, 
        either domestic or foreign, has engaged in conduct that 
        may constitute a violation of Federal criminal law, to 
        transmit such evidence to the Attorney General, who may 
        institute criminal proceedings under appropriate 
        statutes. Nothing in this paragraph affects any other 
        authority of the Commission to disclose information.
          (2) International information.--The Commission shall 
        endeavor to ensure, with respect to memoranda of 
        understanding and international agreements it may 
        conclude, that material it has obtained from foreign 
        law enforcement agencies acting to investigate or 
        pursue the enforcement of foreign criminal laws may be 
        used for the purpose of investigation, prosecution, or 
        prevention of violations of United States criminal 
        laws.
  (l) Expenditures for Cooperative Arrangements.--To expend 
appropriated funds for--
          (1) operating expenses and other costs of bilateral 
        and multilateral cooperative law enforcement groups 
        conducting activities of interest to the Commission and 
        in which the Commission participates; and
          (2) expenses for consultations and meetings hosted by 
        the Commission with foreign government agency 
        officials, members of their delegations, appropriate 
        representatives and staff to exchange views concerning 
        developments relating to the Commission's mission, 
        development and implementation of cooperation 
        agreements, and provision of technical assistance for 
        the development of foreign consumer protection or 
        competition regimes, such expenses to include necessary 
        administrative and logistic expenses and the expenses 
        of Commission staff and foreign invitees in attendance 
        at such consultations and meetings including--
                  (A) such incidental expenses as meals taken 
                in the course of such attendance;
                  (B) any travel and transportation to or from 
                such meetings; and
                  (C) any other related lodging or subsistence.
 Provided, That the exception of ``banks, savings and loan 
institutions described in [section 18(f)(3)] section 18(f), 
Federal credit unions described in [section 18(f)(4)] section 
18(f), and common carriers subject to the Act to regulate 
commerce'' from the Commission's powers defined in subsections 
(a), (b), and (j) of this section, shall not be construed to 
limit the Commission's authority to gather and compile 
information to investigate, or to require reports or answers 
from, any person, partnership, or corporation to the extent 
that such action is necessary to the investigation of any 
person, partnership, or corporation, group of persons, 
partnerships, or corporations, or industry which is not 
engaged, or is engaged only incidentally in banking, in 
business as a savings and loan institution, in business as a 
Federal credit union, or in business as a common carrier 
subject to the Act to regulate commerce.
          
                  
  The Commission shall establish a plan designed to 
substantially reduce burdens imposed upon small businesses as a 
result of requirements established by the Commission under 
clause (b) relating to the filing of quarterly financial 
reports. Such plan shall (1) be established after consultation 
with small businesses and persons who use the information 
contained in such quarterly financial reports; (2) provide for 
a reduction of the number of small businesses required to file 
such quarterly financial reports; and (3) make revisions in the 
forms used for such quarterly financial reports for the purpose 
of reducing the complexity of such forms. The Commission, not 
later than December 31, 1980, shall submit such plan to the 
Committee on Commerce, Science, and Transportation of the 
Senate and to the Committee on Energy and Commerce of the House 
of Representatives. Such plan shall take effect not later than 
October 31, 1981.
  No officer or employee of the Commission or any Commissioner 
may publish or disclose information to the public, or to any 
Federal agency, whereby any line-of-business data furnished by 
a particular establishment or individual can be identified. No 
one other than designated sworn officers and employees of the 
Commission may examine the line-of-business reports from 
individual firms, and information provided in the line-of-
business program administered by the Commission shall be used 
only for statistical purposes. Information for carrying out 
specific law enforcement responsibilities of the Commission 
shall be obtained under practices and procedures in effect on 
the date of the enactment of the Federal Trade Commission 
Improvements Act of 1980, or as changed by law.
  Nothing in this section (other than the provisions of clause 
(c) and clause (d)) shall apply to the business of insurance, 
except that the Commission shall have authority to conduct 
studies and prepare reports relating to the business of 
insurance. The Commission may exercise such authority only upon 
receiving a request which is agreed to by a majority of the 
members of the Committee on Commerce, Science, and 
Transportation of the Senate or the Committee on Energy and 
Commerce of the House of Representatives. The authority to 
conduct any such study shall expire at the end of the Congress 
during which the request for such study was made.

           *       *       *       *       *       *       *

  Sec. 18. (a)(1) Except as provided in subsection (h), the 
Commission may prescribe--
          (A) interpretive rules and general statements of 
        policy with respect to unfair or deceptive acts or 
        practices in or affecting commerce (within the meaning 
        of section 5(a)(1) of this Act), and
          (B) rules which define with specificity acts or 
        practices which are unfair or deceptive acts or 
        practices in or affecting commerce (within the meaning 
        of such section 5(a)(1)), except that the Commission 
        shall not develop or promulgate any trade rule or 
        regulation with regard to the regulation of the 
        development and utilization of the standards and 
        certification activities pursuant to this section. 
        Rules under this subparagraph may include requirements 
        prescribed for the purpose of preventing such acts or 
        practices.
  (2) The Commission shall have no authority under this Act, 
other than its authority under this section, to prescribe any 
rule with respect to unfair or deceptive acts or practices in 
or affecting commerce (within the meaning of section 5(a)(1)). 
The preceding sentence shall not affect any authority of the 
Commission to prescribe rules (including interpretive rules), 
and general statements of policy, with respect to unfair 
methods of competition in or affecting commerce.
  (b)(1) When prescribing a rule under subsection (a)(1)(B) of 
this section, the Commission shall proceed in accordance with 
section 553 of title 5, United States Code (without regard to 
any reference in such section to sections 556 and 557 of such 
title), and shall also (A) publish a notice of proposed 
rulemaking stating with particularity the text of the rule, 
including any alternatives, which the Commission proposes to 
promulgate, and the reason for the proposed rule; (B) allow 
interested persons to submit written data, views, and 
arguments, and make all such submissions publicly available; 
(C) provide an opportunity for an informal hearing in 
accordance with subsection (c); and (D) promulgate, if 
appropriate, a final rule based on the matter in the rule-
making record (as defined in subsection (e)(1)(B)), together 
with a statement of basis and purpose.
  (2)(A) Prior to the publication of any notice of proposed 
rulemaking pursuant to paragraph (1)(A), the Commission shall 
publish an advance notice of proposed rulemaking in the Federal 
Register. Such advance notice shall--
          (i) contain a brief description of the area of 
        inquiry under consideration, the objectives which the 
        Commission seeks to achieve, and possible regulatory 
        alternatives under consideration by the Commission; and
          (ii) invite the response of interested parties with 
        respect to such proposed rulemaking, including any 
        suggestions or alternative methods for achieving such 
        objectives.
  (B) The Commission shall submit such advance notice of 
proposed rulemaking to the Committee on Commerce, Science, and 
Transportation of the Senate and to the Committee on Energy and 
Commerce of the House of Representatives. The Commission may 
use such additional mechanisms as the Commission considers 
useful to obtain suggestions regarding the content of the area 
of inquiry before the publication of a general notice of 
proposed rulemaking under paragraph (1)(A).
  (C) The Commission shall, 30 days before the publication of a 
notice of proposed rulemaking pursuant to paragraph (1)(A), 
submit such notice to the Committee on Commerce, Science, and 
Transportation of the Senate and to the Committee on Energy and 
Commerce of the House of Representatives.
  (3) The Commission shall issue a notice of proposed 
rulemaking pursuant to paragraph (1)(A) only where it has 
reason to believe that the unfair or deceptive acts or 
practices which are the subject of the proposed rulemaking are 
prevalent. The Commission shall make a determination that 
unfair or deceptive acts or practices are prevalent under this 
paragraph only if--
          (A) it has issued cease and desist orders regarding 
        such acts or practices, or
          (B) any other information available to the Commission 
        indicates a widespread pattern of unfair or deceptive 
        acts or practices.
  (c) The Commission shall conduct any informal hearings 
required by subsection (b)(1)(c) of this section in accordance 
with the following procedure:
  (1)(A) The Commission shall provide for the conduct of 
proceedings under this subsection by hearing officers who shall 
perform their functions in accordance with the requirements of 
this subsection.
  (B) The officer who presides over the rulemaking proceedings 
shall be responsible to a chief presiding officer who shall not 
be responsible to any other officer or employee of the 
Commission. The officer who presides over the rulemaking 
proceeding shall make a recommended decision based upon the 
findings and conclusions of such officer as to all relevant and 
material evidence, except that such recommended decision may be 
made by another officer if the officer who presided over the 
proceeding is no longer available to the Commission.
  (C) Except as required for the disposition of ex parte 
matters as authorized by law, no presiding officer shall 
consult any person or party with respect to any fact in issue 
unless such officer gives notice and opportunity for all 
parties to participate.
  (2) Subject to paragraph (3) of this subsection, an 
interested person is entitled--
          (A) to present his position orally or by documentary 
        submissions (or both), and
          (B) if the Commission determines that there are 
        disputed issues of material fact it is necessary to 
        resolve, to present such rebuttal submissions and to 
        conduct (or have conducted under paragraph (3)(B)) such 
        cross-examination of persons as the Commission 
        determines (i) to be appropriate, and (ii) to be 
        required for a full and true disclosure with respect to 
        such issues.
  (3) The Commission may prescribe such rules and make such 
rulings concerning proceedings in such hearings as may tend to 
avoid unnecessary costs or delay. Such rules or rulings may 
include (A) imposition of reasonable time limits on each 
interested person's oral presentations, and (B) requirements 
that any cross-examination to which a person may be entitled 
under paragraph (2) be conducted by the Commission on behalf of 
that person in such manner as the Commission determines (i) to 
be appropriate, and (ii) to be required for a full and true 
disclosure with respect to disputed issues of material fact.
  (4)(A) Except as provided in subparagraph (B), if a group of 
persons each of whom under paragraphs (2) and (3) would be 
entitled to conduct (or have conducted) cross-examination and 
who are determined by the Commission to have the same or 
similar interests in the proceeding cannot agree upon a single 
representative of such interests for purposes of cross-
examination, the Commission may make rules and rulings (i) 
limiting the representation of such interest, for such 
purposes, and (ii) governing the manner in which such cross-
examination shall be limited.
  (B) When any person who is a member of a group with respect 
to which the Commission has made a determination under 
subparagraph (A) is unable to agree upon group representation 
with the other members of the group, then such person shall not 
be denied under the authority of subparagraph (A) the 
opportunity to conduct (or have conducted) cross-examination as 
to issues affecting his particular interests if (i) he 
satisfies the Commission that he has made a reasonable and good 
faith effort to reach agreement upon group representation with 
the other members of the group and (ii) the Commission 
determines that there are substantial and relevant issues which 
are not adequately presented by the group representative.
  (5) A verbatim transcript shall be taken of any oral 
presentation, and cross-examination, in an informal hearing to 
which this subsection applies. Such transcript shall be 
available to the public.
  (d)(1) The Commission's statement of basis and purpose to 
accompany a rule promulgated under subsection (a)(1)(B) shall 
include (A) a statement as to the prevalence of the acts or 
practices treated by the rule; (B) a statement as to the manner 
and context in which such acts or practices are unfair or 
deceptive; and (C) a statement as to the economic effect of the 
rule, taking into account the effect on small business and 
consumers.
  (2)(A) The term ``Commission'' as used in this subsection and 
subsections (b) and (c) includes any person authorized to act 
in behalf of the Commission in any part of the rulemaking 
proceeding.
  (B) A substantive amendment to, or repeal of, a rule 
promulgated under subsection (a)(1)(B) shall be prescribed, and 
subject to judicial review, in the same manner as a rule 
prescribed under such subsection. An exemption under subsection 
(g) shall not be treated as an amendment or repeal of a rule.
  (3) When any rule under subsection (a)(1)(B) takes effect a 
subsequent violation thereof shall constitute an unfair or 
deceptive act or practice in violation of section 5(a)(1) of 
this Act, unless the Commission otherwise expressly provides in 
such rule.
  (e)(1)(A) Not later than 60 days after a rule is promulgated 
under subsection (a)(1)(B) by the Commission, any interested 
person (including a consumer or consumer organization) may file 
a petition, in the United States Court of Appeals for the 
District of Columbia circuit or for the circuit in which such 
person resides or has his principal place of business, for 
judicial review of such rule. Copies of the petition shall be 
forthwith transmitted by the clerk of the court to the 
Commission or other officer designated by it for that purpose. 
The provisions of section 2112 of title 28, United States Code, 
shall apply to the filing of the rulemaking record of 
proceedings on which the Commission based its rule and to the 
transfer of proceedings in the courts of appeals.
  (B) For purposes of this section, the term ``rulemaking 
record'' means the rule, its statement of basis and purpose, 
the transcript required by subsection (c)(5), any written 
submissions, and any other information which the Commission 
considers relevant to such rule.
  (2) If the petitioner or the Commission applies to the court 
for leave to make additional oral submissions or written 
presentations and shows to the satisfaction of the court that 
such submissions and presentations would be material and that 
there were reasonable grounds for the submissions and failure 
to make such submissions and presentations in the proceeding 
before the Commission, the court may order the Commission to 
provide additional opportunity to make such submissions and 
presentations. The Commission may modify or set aside its rule 
or make a new rule by reason of the additional submissions and 
presentations and shall file such modified or new rule, and the 
rule's statement of basis of purpose, with the return of such 
submissions and presentations. The court shall thereafter 
review such new or modified rule.
  (3) Upon the filing of the petition under paragraph (1) of 
this subsection, the court shall have jurisdiction to review 
the rule in accordance with chapter 7 of title 5, United States 
Code, and to grant appropriate relief, including interim 
relief, as provided in such chapter. The court shall hold 
unlawful and set aside the rule on any ground specified in 
subparagraphs (A), (B), (C), or (D) of section 706(2) of title 
5, United States Code (taking due account of the rule of 
prejudicial error), or if--
          (A) the court finds that the Commission's action is 
        not supported by substantial evidence in the rulemaking 
        record (as defined in paragraph (1)(B) of this 
        subsection) taken as a whole, or
          (B) the court finds that--
                  (i) a Commission determination under 
                subsection (c) that the petitioner is not 
                entitled to conduct cross-examination or make 
                rebuttal submissions, or
                  (ii) a Commission rule or ruling under 
                subsection (c) limiting the petitioner's cross-
                examination or rebuttal submissions,
        has precluded disclosure of disputed material facts 
        which was necessary for fair determination by the 
        Commission of the rulemaking proceeding taken as a 
        whole.
The term ``evidence,'' as used in this paragraph, means any 
matter in the rulemaking record.
  (4) The judgment of the court affirming or setting aside, in 
whole or in part, any such rule shall be final, subject to 
review by the Supreme Court of the United States upon 
certiorari or certification, as provided in section 1254 of 
title 28, United States Code.
  (5)(A) Remedies under the preceding paragraphs of this 
subsection are in addition to and not in lieu of any other 
remedies provided by law.
  (B) The United States Courts of Appeals shall have exclusive 
jurisdiction of any action to obtain judicial review (other 
than in an enforcement proceeding) of a rule prescribed under 
subsection (a)(1)(B), if any district court of the United 
States would have had jurisdiction of such action but for this 
subparagraph. Any such action shall be brought in the United 
States Court of Appeals for the District of Columbia circuit, 
or for any circuit which includes a judicial district in which 
the action could have been brought but for this subparagraph.
  (C) A determination, rule, or ruling of the Commission 
described in paragraph (3)(B) (i) or (ii) may be reviewed only 
in a proceeding under this subsection and only in accordance 
with paragraph (3)(B). Section 706(2)(E) of title 5, United 
States Code, shall not apply to any rule promulgated under 
subsection (a)(1)(B). The contents and adequacy of any 
statement required by subsection (b)(1)(D) shall not be subject 
to judicial review in any respect.
  [(f) Definitions of Banks, Savings and Loan Institutions, and 
Federal Credit Unions.--
          [(1)
          [(2) Definition.--For purposes of this Act, the term 
        ``bank'' means--
                  [(A) national banks and Federal branches and 
                Federal agencies of foreign banks;
                  [(B) member banks of the Federal Reserve 
                System (other than national banks), branches 
                and agencies of foreign banks (other than 
                Federal branches, Federal agencies, and insured 
                State branches of foreign banks), commercial 
                lending companies owned or controlled by 
                foreign banks, and organizations operating 
                under section 25 or 25A of the Federal Reserve 
                Act; and
                  [(C) banks insured by the Federal Deposit 
                Insurance Corporation (other than banks 
                referred to in subparagraph (A) or (B)) and 
                insured State branches of foreign banks.
  [(3) For purposes of this Act, the term ``savings and loan 
institution'' has the same meaning as in section 3 of the 
Federal Deposit Insurance Act.
  [(4) For purposes of this Act, the term ``Federal credit 
union'' has the same meaning as in sections 120 and 206 of the 
Federal Credit Union Act (12 U.S.C. 1766 and 1786).
        The terms used in this paragraph that are not defined 
        in the Federal Trade Commission Act or otherwise 
        defined in section 3(s) of the Federal Deposit 
        Insurance Act (12 U.S.C. 1813(s)) shall have the 
        meaning given to them in section 1(b) of the 
        International Banking Act of 1978 (12 U.S.C. 3101).]
  (f) Unfair or Deceptive Acts or Practices by Depository 
Institutions.--
          (1) In general.-- In order to prevent unfair or 
        deceptive acts or practices in or affecting commerce 
        (including acts or practices which are unfair or 
        deceptive to consumers) by depository institutions, 
        each Federal banking regulator shall prescribe 
        regulations to carry out the purposes of this section, 
        including regulations defining with specificity such 
        unfair or deceptive acts or practices, and containing 
        requirements prescribed for the purpose of preventing 
        such acts or practices.
          (2) Promulgating substantially similar regulations.--
        Whenever the Commission prescribes a rule under 
        subsection (a)(1)(B), then within 60 days after such 
        rule takes effect each Federal banking regulator shall 
        promulgate substantially similar regulations 
        prohibiting acts or practices of depository 
        institutions which are substantially similar to those 
        prohibited by rules of the Commission and which impose 
        substantially similar requirements, unless--
                  (A) the Federal banking regulator finds that 
                such acts or practices of depository 
                institutions are not unfair or deceptive; or
                  (B) the Board of Governors of the Federal 
                Reserve System finds that implementation of 
                similar regulations with respect to depository 
                institutions would seriously conflict with 
                essential monetary and payments systems 
                policies of such Board, and publishes any such 
                finding, and the reasons therefor, in the 
                Federal Register.
          (3) Enforcement.--
                  (A) In general.--Compliance with regulations 
                prescribed under this subsection shall be 
                enforced--
                          (i) under section 8 of the Federal 
                        Deposit Insurance Act, with respect to 
                        a depository institution other than a 
                        Federal credit union; and
                          (ii) under sections 120 and 206 of 
                        the Federal Credit Union Act, with 
                        respect to a Federal credit union.
                  (B) Deeming of violation.--For the purpose of 
                the exercise by a Federal banking regulator of 
                the regulator's powers under any Act referred 
                to in subparagraph (A), a violation of any 
                regulation prescribed under this subsection 
                shall be deemed to be a violation of a 
                requirement imposed under that Act.
                  (C) Enforcement through any existing 
                authority.--In addition to its powers under any 
                provision of law specifically referred to in 
                subparagraph (A), each Federal banking 
                regulator may exercise, for the purpose of 
                enforcing compliance with any regulation 
                prescribed under this subsection, any other 
                authority conferred on the regulator by law.
          (4) Rule of construction.--The authority of the Board 
        of Governors of the Federal Reserve System to issue 
        regulations under this subsection does not impair the 
        authority of any other Federal banking regulator to 
        make rules respecting the regulator's own procedures in 
        enforcing compliance with regulations prescribed under 
        this subsection.
          (5) Report to congress.--Each Federal banking 
        regulator exercising authority under this subsection 
        shall transmit to the Congress each year a detailed 
        report on its activities under this subsection during 
        the preceding calendar year.
          (6) Definitions.--For purposes of this Act:
                  (A) Bank.--The term ``bank'' means--
                          (i) national banks and Federal 
                        branches and Federal agencies of 
                        foreign banks;
                          (ii) member banks of the Federal 
                        Reserve System (other than national 
                        banks), branches and agencies of 
                        foreign banks (other than Federal 
                        branches, Federal agencies, and insured 
                        State branches of foreign banks), 
                        commercial lending companies owned or 
                        controlled by foreign banks, and 
                        organizations operating under section 
                        25 or 25A of the Federal Reserve Act; 
                        and
                          (iii) banks insured by the Federal 
                        Deposit Insurance Corporation (other 
                        than banks referred to in clause (i) or 
                        (ii) and insured State branches of 
                        foreign banks.
                  (B) Depository institution.--The term 
                ``depository institution'' means a bank, a 
                savings and loan institution, or a Federal 
                credit union.
                  (C) Federal banking regulator.--The term 
                ``Federal banking regulator''--
                          (i) has the meaning given the term 
                        ``appropriate Federal banking agency'' 
                        under section 3 of the Federal Deposit 
                        Insurance Act; and
                          (ii) means the National Credit Union 
                        Administration, in the case of a 
                        Federal credit union.
                  (D) Federal credit union.--The term ``Federal 
                credit union'' has the same meaning as in 
                section 101 of the Federal Credit Union Act.
                  (E) Savings and loan institution.--The term 
                ``savings and loan institution'' has the same 
                meaning as in section 3 of the Federal Deposit 
                Insurance Act.
                  (F) Other terms.--The terms used in this 
                paragraph that are not defined in this Act or 
                otherwise defined in section 3(s) of the 
                Federal Deposit Insurance Act shall have the 
                meaning given to them in section 1(b) of the 
                International Banking Act of 1978.
  (g)(1) Any person to whom a rule under subsection (a)(1)(B) 
of this section applies may petition the Commission for an 
exemption from such rule.
  (2) If, on its own motion or on the basis of a petition under 
paragraph (1), the Commission finds that the application of a 
rule prescribed under subsection (a)(1)(B) to any person or 
class or persons is not necessary to prevent the unfair or 
deceptive act or practice to which the rule relates, the 
Commission may exempt such person or class from all or part of 
such rule. Section 553 of title 5, United States Code, shall 
apply to action under this paragraph.
  (3) Neither the pendency of a proceeding under this 
subsection respecting an exemption from a rule, nor the 
pendency of judicial proceedings to review the Commission's 
action or failure to act under this subsection, shall stay the 
applicability of such rule under subsection (a)(1)(B).
  (h) The Commission shall not have any authority to promulgate 
any rule in the children's advertising proceeding pending on 
the date of the enactment of the Federal Trade Commission 
Improvements Act of 1980 or in any substantially similar 
proceeding on the basis of a determination by the Commission 
that such advertising constitutes an unfair act or practice in 
or affecting commerce.
  (i)(1) For purposes of this subsection, the term ``outside 
party'' means any person other than (A) a Commissioner; (B) an 
officer or employee of the Commission; or (C) any person who 
has entered into a contract or any other agreement or 
arrangement with the Commission to provide any goods or 
services (including consulting services) to the Commission.
  (2) Not later than 60 days after the date of the enactment of 
the Federal Trade Commission Improvements Act of 1980, the 
Commission shall publish a proposed rule, and not later than 
180 days after such date of enactment the Commission shall 
promulgate a final rule, which shall authorize the Commission 
or any Commissioner to meet with any outside party concerning 
any rulemaking proceeding of the Commission. Such rule shall 
provide that--
          (A) notice of any such meeting shall be included in 
        any weekly calendar prepared by the Commission; and
          (B) a verbatim record or a summary of any such 
        meeting, or of any communication relating to any such 
        meeting, shall be kept, made available to the public, 
        and included in the rulemaking record.
  (j) Not later than 60 days after the date of the enactment of 
the Federal Trade Commission Improvements Act of 1980, the 
Commission shall publish a proposed rule, and not later than 
180 days after such date of enactment the Commission shall 
promulgate a final rule, which shall prohibit any officer, 
employee, or agent of the Commission with any investigative 
responsibility or other responsibility relating to any 
rulemaking proceeding within any operating bureau of the 
Commission, from communicating or causing to be communicated to 
any Commissioner or to the personal staff of any Commissioner 
any fact which is relevant to the merits of such proceeding and 
which is not on the rulemaking record of such proceeding, 
unless such communication is made available to the public and 
is included in the rulemaking record. The provisions of this 
subsection shall not apply to any communication to the extent 
such communication is required for the disposition of ex parte 
matters as authorized by law.

           *       *       *       *       *       *       *

  Sec. 21. (a) For purposes of this section:
          (1) The term ``material'' means documentary material, 
        tangible things, written reports or answers to 
        questions, and transcripts of oral testimony.
          (2) The term ``Federal agency'' has the meaning given 
        it in section 552(e) of title 5, United States Code.
  (b)(1) With respect to any document, tangible thing, or 
transcript of oral testimony received by the Commission 
pursuant to compulsory process in an investigation, a purpose 
of which is to determine whether any person may have violated 
any provision of the laws administered by the Commission, the 
procedures established in paragraph (2) through paragraph (7) 
shall apply.
  (2)(A) The Commission shall designate a duly authorized agent 
to serve as custodian of documentary material, tangible things, 
or written reports or answers to questions, and transcripts of 
oral testimony, and such additional duly authorized agents as 
the Commission shall determine from time to time to be 
necessary to serve as deputies to the custodian.
  (B) Any person upon whom any demand for the production of 
documentary material has been duly served shall make such 
material available for inspection and copying or reproduction 
to the custodian designated in such demand at the principal 
place of business of such person (or at such other place as 
such custodian and such person thereafter may agree and 
prescribe in writing or as the court may direct pursuant to 
section 20(h)) on the return date specified in such demand (or 
on such later date as such custodian may prescribe in writing). 
Such person may upon written agreement between such person and 
the custodian substitute copies for originals of all or any 
part of such material.
  (3)(A) The custodian to whom any documentary material, 
tangible things, written reports or answers to questions, and 
transcripts of oral testimony are delivered shall take physical 
possession of such material, reports or answers, and 
transcripts, and shall be responsible for the use made of such 
material, reports or answers, and transcripts, and for the 
return of material, pursuant to the requirements of this 
section.
  (B) The custodian may prepare such copies of the documentary 
material, written reports or answers to questions, and 
transcripts of oral testimony, and may make tangible things 
available, as may be required for official use by any duly 
authorized officer or employee of the Commission under 
regulations which shall be promulgated by the Commission. 
Notwithstanding subparagraph (C), such material, things, and 
transcripts may be used by any such officer or employee in 
connection with the taking of oral testimony under this 
section.
  (C) Except as otherwise provided in this section, while in 
the possession of the custodian, no documentary material, 
tangible things, reports or answers to questions, and 
transcripts of oral testimony shall be available for 
examination by any individual other than a duly authorized 
officer or employee of the Commission without the consent of 
the person who produced the material, things, or transcripts. 
Nothing in this section is intended to prevent disclosure to 
either House of the Congress or to any committee or 
subcommittee of the Congress, except that the Commission 
immediately shall notify the owner or provider of any such 
information of a request for information designated as 
confidential by the owner or provider.
  (D) While in the possession of the custodian and under such 
reasonable terms and conditions as the Commission shall 
prescribe--
          (i) documentary material, tangible things, or written 
        reports shall be available for examination by the 
        person who produced the material, or by any duly 
        authorized representative of such person; and
          (ii) answers to questions in writing and transcripts 
        of oral testimony shall be available for examination by 
        the person who produced the testimony or by his 
        attorney.
  (4) Whenever the Commission has instituted a proceeding 
against a person, partnership, or corporation, the custodian 
may deliver to any officer or employee of the Commission 
documentary material, tangible things, written reports or 
answers to questions, and transcripts of oral testimony for 
official use in connection with such proceeding. Upon the 
completion of the proceeding, the officer or employee shall 
return to the custodian any such material so delivered which 
has not been received into the record of the proceeding.
  (5) If any documentary material, tangible things, written 
reports or answers to questions, and transcripts of oral 
testimony have been produced in the course of any investigation 
by any person pursuant to compulsory process and--
          (A) any proceeding arising out of the investigation 
        has been completed; or
          (B) no proceeding in which the material may be used 
        has been commenced within a reasonable time after 
        completion of the examination and analysis of all such 
        material and other information assembled in the course 
        of the investigation;
then the custodian shall, upon written request of the person 
who produced the material, return to the person any such 
material which has not been received into the record of any 
such proceeding (other than copies of such material made by the 
custodian pursuant to paragraph (3)(B)).
  (6) The custodian of any documentary material, written 
reports or answers to questions, and transcripts of oral 
testimony may deliver to any officers or employees of 
appropriate Federal law enforcement agencies, in response to a 
written request, copies of such material for use in connection 
with an investigation or proceeding under the jurisdiction of 
any such agency. The custodian of any tangible things may make 
such things available for inspection to such persons on the 
same basis. Such materials shall not be made available to any 
such agency until the custodian receives certification of any 
officer of such agency that such information will be maintained 
in confidence and will be used only for official law 
enforcement purposes. Such documentary material, results of 
inspections of tangible things, written reports or answers to 
questions, and transcripts of oral testimony may be used by any 
officer or employee of such agency only in such manner and 
subject to such conditions as apply to the Commission under 
this section. The custodian may make such materials available 
to any State law enforcement agency upon the prior 
certification of any officer of such agency that such 
information will be maintained in confidence and will be used 
only for official law enforcement purposes. The custodian may 
make such material available to any foreign law enforcement 
agency upon the prior certification of an appropriate official 
of any such foreign law enforcement agency, either by a prior 
agreement or memorandum of understanding with the Commission or 
by other written certification, that such material will be 
maintained in confidence and will be used only for official law 
enforcement purposes, if--
          (A) the foreign law enforcement agency has set forth 
        a bona fide legal basis for its authority to maintain 
        the material in confidence;
          (B) the materials are to be used for purposes of 
        investigating, or engaging in enforcement proceedings 
        related to, possible violations of--
                  (i) foreign laws prohibiting fraudulent or 
                deceptive commercial practices, or other 
                practices substantially similar to practices 
                prohibited by any law administered by the 
                Commission;
                  (ii) a law administered by the Commission, if 
                disclosure of the material would further a 
                Commission investigation or enforcement 
                proceeding; or
                  (iii) with the approval of the Attorney 
                General, other foreign criminal laws, if such 
                foreign criminal laws are offenses defined in 
                or covered by a criminal mutual legal 
                assistance treaty in force between the 
                government of the United States and the foreign 
                law enforcement agency's government;
          (C) the appropriate Federal banking agency (as 
        defined in section 3(q) of the Federal Deposit 
        Insurance Act (12 U.S.C. 1813(q)) or, in the case of a 
        Federal credit union, the National Credit Union 
        Administration, has given its prior approval if the 
        materials to be provided under subparagraph (B) are 
        requested by the foreign law enforcement agency for the 
        purpose of investigating, or engaging in enforcement 
        proceedings based on, possible violations of law by a 
        bank, a savings and loan institution described in 
        [section 18(f)(3) of the Federal Trade Commission Act 
        (15 U.S.C. 57a(f)(3)), or a Federal credit union 
        described in section 18(f)(4) of the Federal Trade 
        Commission Act (15 U.S.C. 57a(f)(4))] 18(f), or a 
        Federal credit union described in section 18(f); and
          (D) the foreign law enforcement agency is not from a 
        foreign state that the Secretary of State has 
        determined, in accordance with section 6(j) of the 
        Export Administration Act of 1979 (50 U.S.C. App. 
        2405(j)), has repeatedly provided support for acts of 
        international terrorism, unless and until such 
        determination is rescinded pursuant to section 6(j)(4) 
        of that Act (50 U.S.C. App. 2405(j)(4)).
Nothing in the preceding sentence authorizes the disclosure of 
material obtained in connection with the administration of the 
Federal antitrust laws or foreign antitrust laws (as defined in 
paragraphs (5) and (7), respectively, of section 12 of the 
International Antitrust Enforcement Assistance Act of 1994 (15 
U.S.C. 6211)) to any officer or employee of a foreign law 
enforcement agency.
  (7) In the event of the death, disability, or separation from 
service in the Commission of the custodian of any documentary 
material, tangible things, written reports or answers to 
questions, and transcripts of oral testimony produced under any 
demand issued under this Act, or the official relief of the 
custodian from responsibility for the custody and control of 
such material, the Commission promptly shall--
          (A) designate under paragraph (2)(A) another duly 
        authorized agent to serve as custodian of such 
        material; and
          (B) transmit in writing to the person who produced 
        the material or testimony notice as to the identity and 
        address of the successor so designated.
Any successor designated under paragraph (2)(A) as a result of 
the requirements of this paragraph shall have (with regard to 
the material involved) all duties and responsibilities imposed 
by this section upon his predecessor in office with regard to 
such material, except that he shall not be held responsible for 
any default or dereliction which occurred before his 
designation.
  (c)(1) All information reported to or otherwise obtained by 
the Commission which is not subject to the requirements of 
subsection (b) shall be considered confidential when so marked 
by the person supplying the information and shall not be 
disclosed, except in accordance with the procedures established 
in paragraph (2) and paragraph (3).
  (2) If the Commission determines that a document marked 
confidential by the person supplying it may be disclosed 
because it is not a trade secret or commercial or financial 
information which is obtained from any person and which is 
privileged or confidential, within the meaning of section 6(f), 
then the Commission shall notify such person in writing that 
the Commission intends to disclose the document at a date not 
less than 10 days after the date of receipt of notification.
  (3) Any person receiving such notification may, if he 
believes disclosure of the document would cause disclosure of a 
trade secret, or commercial or financial information which is 
obtained from any person and which is privileged or 
confidential, within the meaning of section 6(f), before the 
date set for release of the document, bring an action in the 
district court of the United States for the district within 
which the documents are located or in the United States 
District Court for the District of Columbia to restrain 
disclosure of the document. Any person receiving such 
notification may file with the appropriate district court or 
court of appeals of the United States, as appropriate, an 
application for a stay of disclosure. The documents shall not 
be disclosed until the court has ruled on the application for a 
stay.
  (d)(1) The provisions of subsection (c) shall not be 
construed to prohibit--
          (A) the disclosure of information to either House of 
        the Congress or to any committee or subcommittee of the 
        Congress, except that the Commission immediately shall 
        notify the owner or provider of any such information of 
        a request for information designated as confidential by 
        the owner or provider;
          (B) the disclosure of the results of any 
        investigation or study carried out or prepared by the 
        Commission, except that no information shall be 
        identified nor shall information be disclosed in such a 
        manner as to disclose a trade secret of any person 
        supplying the trade secret, or to disclose any 
        commercial or financial information which is obtained 
        from any person and which is privileged or 
        confidential;
          (C) the disclosure of relevant and material 
        information in Commission adjudicative proceedings or 
        in judicial proceedings to which the Commission is a 
        party; or
          (D) the disclosure to a Federal agency of 
        disaggregated information obtained in accordance with 
        section 3512 of title 44, United States Code, except 
        that the recipient agency shall use such disaggregated 
        information for economic, statistical, or policymaking 
        purposes only, and shall not disclose such information 
        in an individually identifiable form.
  (2) Any disclosure of relevant and material information in 
Commission adjudicative proceedings or in judicial proceedings 
to which the Commission is a party shall be governed by the 
rules of the Commission for adjudicative proceedings or by 
court rules or orders, except that the rules of the Commission 
shall not be amended in a manner inconsistent with the purposes 
of this section.
  (e) Nothing in this section shall supersede any statutory 
provision which expressly prohibits or limits particular 
disclosures by the Commission, or which authorizes disclosures 
to any other Federal agency.
  (f) Exemption From Public Disclosure.--
          (1) In general.--Any material which is received by 
        the Commission in any investigation, a purpose of which 
        is to determine whether any person may have violated 
        any provision of the laws administered by the 
        Commission, and which is provided pursuant to any 
        compulsory process under this Act or which is provided 
        voluntarily in place of such compulsory process shall 
        not be required to be disclosed under section 552 of 
        title 5, United States Code, or any other provision of 
        law, except as provided in paragraph (2)(B) of this 
        section.
          (2) Material obtained from a foreign source.--
                  (A) In general.--Except as provided in 
                subparagraph (B) of this paragraph, the 
                Commission shall not be required to disclose 
                under section 552 of title 5, United States 
                Code, or any other provision of law--
                          (i) any material obtained from a 
                        foreign law enforcement agency or other 
                        foreign government agency, if the 
                        foreign law enforcement agency or other 
                        foreign government agency has requested 
                        confidential treatment, or has 
                        precluded such disclosure under other 
                        use limitations, as a condition of 
                        providing the material;
                          (ii) any material reflecting a 
                        consumer complaint obtained from any 
                        other foreign source, if that foreign 
                        source supplying the material has 
                        requested confidential treatment as a 
                        condition of providing the material; or
                          (iii) any material reflecting a 
                        consumer complaint submitted to a 
                        Commission reporting mechanism 
                        sponsored in part by foreign law 
                        enforcement agencies or other foreign 
                        government agencies.
                  (B) Savings provision.--Nothing in this 
                subsection shall authorize the Commission to 
                withhold information from the Congress or 
                prevent the Commission from complying with an 
                order of a court of the United States in an 
                action commenced by the United States or the 
                Commission.

           *       *       *       *       *       *       *

                              ----------                              


                           PUBLIC LAW 93-495


   AN ACT To increase deposit insurance from $20,000 to $40,000, to 
    provide full insurance for public unit deposits of $100,000 per 
    account, to establish a National Commission on Electronic Fund 
                   Transfers, and for other purposes.

TITLE I--AMENDMENTS TO AND EXTENSIONS OF PROVISIONS OF LAW RELATING TO 
FEDERAL REGULATION OF DEPOSITORY INSTITUTIONS

           *       *       *       *       *       *       *



             independence of financial regulatory agencies

  Sec. 111. No officer or agency of the United States shall 
have any authority to require the Securities and Exchange 
Commission, the Board of Governors of the Federal Reserve 
System, the Federal Deposit Insurance Corporation, the 
Comptroller of the Currency, [the Director of the Office of 
Thrift Supervision,] the Director of the Federal Housing 
Finance Agency, the Independent Insurance Advocate of the 
Department of the Treasury, or the National Credit Union 
Administration to submit legislative recommendations, or 
testimony, or comments on legislation, to any officer or agency 
of the United States for approval, comments, or review, prior 
to the submission of such recommendations, testimony, or 
comments to the Congress if such recommendations, testimony, or 
comments to the Congress include a statement indicating that 
the views expressed therein are those of the agency or official 
submitting them and do not necessarily represent the views of 
the President.

           *       *       *       *       *       *       *

                              ----------                              


BRETTON WOODS AGREEMENTS ACT

           *       *       *       *       *       *       *



SEC. 68. RESTRICTIONS ON USE OF UNITED STATES FUNDS FOR FOREIGN 
                    GOVERNMENTS; PROTECTION OF AMERICAN TAXPAYERS.

  (a) In General.--The Secretary of the Treasury shall instruct 
the United States Executive Director at the International 
Monetary Fund--
          (1) to evaluate, prior to consideration by the Board 
        of Executive Directors of the [Fund,] Fund, any 
        proposal submitted to the Board for the Fund to make a 
        loan to a country if--
                  (A) the amount of the public debt of the 
                country exceeds the gross domestic product of 
                the country as of the most recent year for 
                which such information is available; and
                  (B) the country is not eligible for 
                assistance from the International Development 
                Association.
          (2) Opposition to loans unlikely to be repaid in 
        full.--If any such evaluation indicates that the 
        proposed loan is not likely to be repaid in full, the 
        Secretary of the Treasury shall instruct the United 
        States Executive Director at the Fund to use the voice 
        and vote of the United States to oppose the proposal.
  (b) Reports to Congress.--Within 30 days after the Board of 
Executive Directors of the Fund approves a proposal described 
in subsection (a), and annually thereafter by June 30, for the 
duration of any program approved under such proposals, the 
Secretary of the Treasury shall report in writing to the 
Committee on Financial Services of the House of Representatives 
and the Committee on Foreign Relations and the Committee on 
Banking, Housing, and Urban Affairs of the Senate assessing the 
likelihood that loans made pursuant to such proposals will be 
repaid in full, including--
          (1) the borrowing country's current debt status, 
        including, to the extent possible, its maturity 
        structure, whether it has fixed or floating rates, 
        whether it is indexed, and by whom it is held;
          (2) the borrowing country's external and internal 
        vulnerabilities that could potentially affect its 
        ability to repay; and
          (3) the borrowing country's debt management strategy.

           *       *       *       *       *       *       *

                              ----------                              


CAN-SPAM ACT OF 2003

           *       *       *       *       *       *       *



SEC. 7. ENFORCEMENT GENERALLY.

  (a) Violation Is Unfair or Deceptive Act or Practice.--Except 
as provided in subsection (b), this Act shall be enforced by 
the Commission as if the violation of this Act were an unfair 
or deceptive act or practice proscribed under section 
18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C. 
57a(a)(1)(B)).
  (b) Enforcement by Certain Other Agencies.--Compliance with 
this Act shall be enforced--
          (1) under section 8 of the Federal Deposit Insurance 
        Act (12 U.S.C. 1818), in the case of--
                  (A) national banks, and Federal branches and 
                Federal agencies of foreign banks, by the 
                Office of the Comptroller of the Currency;
                  (B) member banks of the Federal Reserve 
                System (other than national banks), branches 
                and agencies of foreign banks (other than 
                Federal branches, Federal agencies, and insured 
                State branches of foreign banks), commercial 
                lending companies owned or controlled by 
                foreign banks, organizations operating under 
                section 25 or 25A of the Federal Reserve Act 
                (12 U.S.C. 601 and 611), and bank holding 
                companies, by the Board;
                  (C) banks insured by the Federal Deposit 
                Insurance Corporation (other than members of 
                the Federal Reserve System) and insured State 
                branches of foreign banks, by the Board of 
                Directors of the Federal Deposit Insurance 
                Corporation; and
                  (D) savings associations the deposits of 
                which are insured by the Federal Deposit 
                Insurance Corporation, by the [Director of the 
                Office of Thrift Supervision] Comptroller of 
                the Currency or the Board of Directors of 
                Federal Deposit Insurance Corporation, as 
                applicable,;
          (2) under the Federal Credit Union Act (12 U.S.C. 
        1751 et seq.) by the Board of the National Credit Union 
        Administration with respect to any Federally insured 
        credit union;
          (3) under the Securities Exchange Act of 1934 (15 
        U.S.C. 78a et seq.) by the Securities and Exchange 
        Commission with respect to any broker or dealer;
          (4) under the Investment Company Act of 1940 (15 
        U.S.C. 80a-1 et seq.) by the Securities and Exchange 
        Commission with respect to investment companies;
          (5) under the Investment Advisers Act of 1940 (15 
        U.S.C. 80b-1 et seq.) by the Securities and Exchange 
        Commission with respect to investment advisers 
        registered under that Act;
          (6) under State insurance law in the case of any 
        person engaged in providing insurance, by the 
        applicable State insurance authority of the State in 
        which the person is domiciled, subject to section 104 
        of the Gramm-Bliley-Leach Act (15 U.S.C. 6701), except 
        that in any State in which the State insurance 
        authority elects not to exercise this power, the 
        enforcement authority pursuant to this Act shall be 
        exercised by the Commission in accordance with 
        subsection (a);
          (7) under part A of subtitle VII of title 49, United 
        States Code, by the Secretary of Transportation with 
        respect to any air carrier or foreign air carrier 
        subject to that part;
          (8) under the Packers and Stockyards Act, 1921 (7 
        U.S.C. 181 et seq.) (except as provided in section 406 
        of that Act (7 U.S.C. 226, 227)), by the Secretary of 
        Agriculture with respect to any activities subject to 
        that Act;
          (9) under the Farm Credit Act of 1971 (12 U.S.C. 2001 
        et seq.) by the Farm Credit Administration with respect 
        to any Federal land bank, Federal land bank 
        association, Federal intermediate credit bank, or 
        production credit association; and
          (10) under the Communications Act of 1934 (47 U.S.C. 
        151 et seq.) by the Federal Communications Commission 
        with respect to any person subject to the provisions of 
        that Act.
  (c) Exercise of Certain Powers.--For the purpose of the 
exercise by any agency referred to in subsection (b) of its 
powers under any Act referred to in that subsection, a 
violation of this Act is deemed to be a violation of a Federal 
Trade Commission trade regulation rule. In addition to its 
powers under any provision of law specifically referred to in 
subsection (b), each of the agencies referred to in that 
subsection may exercise, for the purpose of enforcing 
compliance with any requirement imposed under this Act, any 
other authority conferred on it by law.
  (d) Actions by the Commission.--The Commission shall prevent 
any person from violating this Act in the same manner, by the 
same means, and with the same jurisdiction, powers, and duties 
as though all applicable terms and provisions of the Federal 
Trade Commission Act (15 U.S.C. 41 et seq.) were incorporated 
into and made a part of this Act. Any entity that violates any 
provision of that subtitle is subject to the penalties and 
entitled to the privileges and immunities provided in the 
Federal Trade Commission Act in the same manner, by the same 
means, and with the same jurisdiction, power, and duties as 
though all applicable terms and provisions of the Federal Trade 
Commission Act were incorporated into and made a part of that 
subtitle.
  (e) Availability of Cease-and-Desist Orders and Injunctive 
Relief Without Showing of Knowledge.--Notwithstanding any other 
provision of this Act, in any proceeding or action pursuant to 
subsection (a), (b), (c), or (d) of this section to enforce 
compliance, through an order to cease and desist or an 
injunction, with section 5(a)(1)(C), section 5(a)(2), clause 
(ii), (iii), or (iv) of section 5(a)(4)(A), section 5(b)(1)(A), 
or section 5(b)(3), neither the Commission nor the Federal 
Communications Commission shall be required to allege or prove 
the state of mind required by such section or subparagraph.
  (f) Enforcement by States.--
          (1) Civil action.--In any case in which the attorney 
        general of a State, or an official or agency of a 
        State, has reason to believe that an interest of the 
        residents of that State has been or is threatened or 
        adversely affected by any person who violates paragraph 
        (1) or (2) of section 5(a), who violates section 5(d), 
        or who engages in a pattern or practice that violates 
        paragraph (3), (4), or (5) of section 5(a), of this 
        Act, the attorney general, official, or agency of the 
        State, as parens patriae, may bring a civil action on 
        behalf of the residents of the State in a district 
        court of the United States of appropriate 
        jurisdiction--
                  (A) to enjoin further violation of section 5 
                of this Act by the defendant; or
                  (B) to obtain damages on behalf of residents 
                of the State, in an amount equal to the greater 
                of--
                          (i) the actual monetary loss suffered 
                        by such residents; or
                          (ii) the amount determined under 
                        paragraph (3).
          (2) Availability of injunctive relief without showing 
        of knowledge.--Notwithstanding any other provision of 
        this Act, in a civil action under paragraph (1)(A) of 
        this subsection, the attorney general, official, or 
        agency of the State shall not be required to allege or 
        prove the state of mind required by section 5(a)(1)(C), 
        section 5(a)(2), clause (ii), (iii), or (iv) of section 
        5(a)(4)(A), section 5(b)(1)(A), or section 5(b)(3).
          (3) Statutory damages.--
                  (A) In general.--For purposes of paragraph 
                (1)(B)(ii), the amount determined under this 
                paragraph is the amount calculated by 
                multiplying the number of violations (with each 
                separately addressed unlawful message received 
                by or addressed to such residents treated as a 
                separate violation) by up to $250.
                  (B) Limitation.--For any violation of section 
                5 (other than section 5(a)(1)), the amount 
                determined under subparagraph (A) may not 
                exceed $2,000,000.
                  (C) Aggravated damages.--The court may 
                increase a damage award to an amount equal to 
                not more than three times the amount otherwise 
                available under this paragraph if--
                          (i) the court determines that the 
                        defendant committed the violation 
                        willfully and knowingly; or
                          (ii) the defendant's unlawful 
                        activity included one or more of the 
                        aggravating violations set forth in 
                        section 5(b).
                  (D) Reduction of damages.--In assessing 
                damages under subparagraph (A), the court may 
                consider whether--
                          (i) the defendant has established and 
                        implemented, with due care, 
                        commercially reasonable practices and 
                        procedures designed to effectively 
                        prevent such violations; or
                          (ii) the violation occurred despite 
                        commercially reasonable efforts to 
                        maintain compliance the practices and 
                        procedures to which reference is made 
                        in clause (i).
          (4) Attorney fees.--In the case of any successful 
        action under paragraph (1), the court, in its 
        discretion, may award the costs of the action and 
        reasonable attorney fees to the State.
          (5) Rights of federal regulators.--The State shall 
        serve prior written notice of any action under 
        paragraph (1) upon the Federal Trade Commission or the 
        appropriate Federal regulator determined under 
        subsection (b) and provide the Commission or 
        appropriate Federal regulator with a copy of its 
        complaint, except in any case in which such prior 
        notice is not feasible, in which case the State shall 
        serve such notice immediately upon instituting such 
        action. The Federal Trade Commission or appropriate 
        Federal regulator shall have the right--
                  (A) to intervene in the action;
                  (B) upon so intervening, to be heard on all 
                matters arising therein;
                  (C) to remove the action to the appropriate 
                United States district court; and
                  (D) to file petitions for appeal.
          (6) Construction.--For purposes of bringing any civil 
        action under paragraph (1), nothing in this Act shall 
        be construed to prevent an attorney general of a State 
        from exercising the powers conferred on the attorney 
        general by the laws of that State to--
                  (A) conduct investigations;
                  (B) administer oaths or affirmations; or
                  (C) compel the attendance of witnesses or the 
                production of documentary and other evidence.
          (7) Venue; service of process.--
                  (A) Venue.--Any action brought under 
                paragraph (1) may be brought in the district 
                court of the United States that meets 
                applicable requirements relating to venue under 
                section 1391 of title 28, United States Code.
                  (B) Service of process.--In an action brought 
                under paragraph (1), process may be served in 
                any district in which the defendant--
                          (i) is an inhabitant; or
                          (ii) maintains a physical place of 
                        business.
          (8) Limitation on state action while federal action 
        is pending.--If the Commission, or other appropriate 
        Federal agency under subsection (b), has instituted a 
        civil action or an administrative action for violation 
        of this Act, no State attorney general, or official or 
        agency of a State, may bring an action under this 
        subsection during the pendency of that action against 
        any defendant named in the complaint of the Commission 
        or the other agency for any violation of this Act 
        alleged in the complaint.
          (9) Requisite scienter for certain civil actions.--
        Except as provided in section 5(a)(1)(C), section 
        5(a)(2), clause (ii), (iii), or (iv) of section 
        5(a)(4)(A), section 5(b)(1)(A), or section 5(b)(3), in 
        a civil action brought by a State attorney general, or 
        an official or agency of a State, to recover monetary 
        damages for a violation of this Act, the court shall 
        not grant the relief sought unless the attorney 
        general, official, or agency establishes that the 
        defendant acted with actual knowledge, or knowledge 
        fairly implied on the basis of objective circumstances, 
        of the act or omission that constitutes the violation.
  (g) Action by Provider of Internet Access Service.--
          (1) Action authorized.--A provider of Internet access 
        service adversely affected by a violation of section 
        5(a)(1), 5(b), or 5(d), or a pattern or practice that 
        violates paragraph (2), (3), (4), or (5) of section 
        5(a), may bring a civil action in any district court of 
        the United States with jurisdiction over the 
        defendant--
                  (A) to enjoin further violation by the 
                defendant; or
                  (B) to recover damages in an amount equal to 
                the greater of--
                          (i) actual monetary loss incurred by 
                        the provider of Internet access service 
                        as a result of such violation; or
                          (ii) the amount determined under 
                        paragraph (3).
          (2) Special definition of ``procure''.--In any action 
        brought under paragraph (1), this Act shall be applied 
        as if the definition of the term ``procure'' in section 
        3(12) contained, after ``behalf'' the words ``with 
        actual knowledge, or by consciously avoiding knowing, 
        whether such person is engaging, or will engage, in a 
        pattern or practice that violates this Act''.
          (3) Statutory damages.--
                  (A) In general.--For purposes of paragraph 
                (1)(B)(ii), the amount determined under this 
                paragraph is the amount calculated by 
                multiplying the number of violations (with each 
                separately addressed unlawful message that is 
                transmitted or attempted to be transmitted over 
                the facilities of the provider of Internet 
                access service, or that is transmitted or 
                attempted to be transmitted to an electronic 
                mail address obtained from the provider of 
                Internet access service in violation of section 
                5(b)(1)(A)(i), treated as a separate violation) 
                by--
                          (i) up to $100, in the case of a 
                        violation of section 5(a)(1); or
                          (ii) up to $25, in the case of any 
                        other violation of section 5.
                  (B) Limitation.--For any violation of section 
                5 (other than section 5(a)(1)), the amount 
                determined under subparagraph (A) may not 
                exceed $1,000,000.
                  (C) Aggravated damages.--The court may 
                increase a damage award to an amount equal to 
                not more than three times the amount otherwise 
                available under this paragraph if--
                          (i) the court determines that the 
                        defendant committed the violation 
                        willfully and knowingly; or
                          (ii) the defendant's unlawful 
                        activity included one or more of the 
                        aggravated violations set forth in 
                        section 5(b).
                  (D) Reduction of damages.--In assessing 
                damages under subparagraph (A), the court may 
                consider whether--
                          (i) the defendant has established and 
                        implemented, with due care, 
                        commercially reasonable practices and 
                        procedures designed to effectively 
                        prevent such violations; or
                          (ii) the violation occurred despite 
                        commercially reasonable efforts to 
                        maintain compliance with the practices 
                        and procedures to which reference is 
                        made in clause (i).
          (4) Attorney fees.--In any action brought pursuant to 
        paragraph (1), the court may, in its discretion, 
        require an undertaking for the payment of the costs of 
        such action, and assess reasonable costs, including 
        reasonable attorneys' fees, against any party.

           *       *       *       *       *       *       *

                              ----------                              


            CHILDREN'S ONLINE PRIVACY PROTECTION ACT OF 1998


DIVISION C--OTHER MATTERS

           *       *       *       *       *       *       *



TITLE XIII--CHILDREN'S ONLINE PRIVACY PROTECTION

           *       *       *       *       *       *       *



SEC. 1306. ADMINISTRATION AND APPLICABILITY OF ACT.

  (a) In General.--Except as otherwise provided, this title 
shall be enforced by the Commission under the Federal Trade 
Commission Act (15 U.S.C. 41 et seq.).
  (b) Provisions.--Compliance with the requirements imposed 
under this title shall be enforced under--
          (1) section 8 of the Federal Deposit Insurance Act 
        (12 U.S.C. 1818), in the case of--
                  (A) national banks, and Federal branches and 
                Federal agencies of foreign banks, by the 
                Office of the Comptroller of the Currency;
                  (B) member banks of the Federal Reserve 
                System (other than national banks), branches 
                and agencies of foreign banks (other than 
                Federal branches, Federal agencies, and insured 
                State branches of foreign banks), commercial 
                lending companies owned or controlled by 
                foreign banks, and organizations operating 
                under section 25 or 25(a) of the Federal 
                Reserve Act (12 U.S.C. 601 et seq. and 611 et 
                seq.), by the Board; and
                  (C) banks insured by the Federal Deposit 
                Insurance Corporation (other than members of 
                the Federal Reserve System) and insured State 
                branches of foreign banks, by the Board of 
                Directors of the Federal Deposit Insurance 
                Corporation;
          (2) section 8 of the Federal Deposit Insurance Act 
        (12 U.S.C. 1818), by the [Director of the Office of 
        Thrift Supervision] Comptroller of the Currency and the 
        Board of Directors of Federal Deposit Insurance 
        Corporation, as applicable,, in the case of a savings 
        association the deposits of which are insured by the 
        Federal Deposit Insurance Corporation;
          (3) the Federal Credit Union Act (12 U.S.C. 1751 et 
        seq.) by the National Credit Union Administration Board 
        with respect to any Federal credit union;
          (4) part A of subtitle VII of title 49, United States 
        Code, by the Secretary of Transportation with respect 
        to any air carrier or foreign air carrier subject to 
        that part;
          (5) the Packers and Stockyards Act, 1921 (7 U.S.C. 
        181 et seq.) (except as provided in section 406 of that 
        Act (7 U.S.C. 226, 227)), by the Secretary of 
        Agriculture with respect to any activities subject to 
        that Act; and
          (6) the Farm Credit Act of 1971 (12 U.S.C. 2001 et 
        seq.) by the Farm Credit Administration with respect to 
        any Federal land bank, Federal land bank association, 
        Federal intermediate credit bank, or production credit 
        association.
  (c) Exercise of Certain Powers.--For the purpose of the 
exercise by any agency referred to in subsection (a) of its 
powers under any Act referred to in that subsection, a 
violation of any requirement imposed under this title shall be 
deemed to be a violation of a requirement imposed under that 
Act. In addition to its powers under any provision of law 
specifically referred to in subsection (a), each of the 
agencies referred to in that subsection may exercise, for the 
purpose of enforcing compliance with any requirement imposed 
under this title, any other authority conferred on it by law.
  (d) Actions by the Commission.--The Commission shall prevent 
any person from violating a rule of the Commission under 
section 1303 in the same manner, by the same means, and with 
the same jurisdiction, powers, and duties as though all 
applicable terms and provisions of the Federal Trade Commission 
Act (15 U.S.C. 41 et seq.) were incorporated into and made a 
part of this title. Any entity that violates such rule shall be 
subject to the penalties and entitled to the privileges and 
immunities provided in the Federal Trade Commission Act in the 
same manner, by the same means, and with the same jurisdiction, 
power, and duties as though all applicable terms and provisions 
of the Federal Trade Commission Act were incorporated into and 
made a part of this title.
  (e) Effect on Other Laws.--Nothing contained in the Act shall 
be construed to limit the authority of the Commission under any 
other provisions of law.

           *       *       *       *       *       *       *

                              ----------                              


                   COMMUNITY REINVESTMENT ACT OF 1977


TITLE VIII--COMMUNITY REINVESTMENT

           *       *       *       *       *       *       *


  Sec. 803. For the purposes of this title--
          (1) the term ``appropriate Federal financial 
        supervisory agency'' means--
                  (A) the Comptroller of the Currency with 
                respect to national banks and Federal savings 
                associations (the deposits of which are insured 
                by the Federal Deposit Insurance Corporation);
                  (B) the Board of Governors of the Federal 
                Reserve System with respect to State chartered 
                banks which are members of the Federal Reserve 
                System, bank holding companies, and savings and 
                loan holding companies;
                  (C) the Federal Deposit Insurance Corporation 
                with respect to State chartered banks and 
                savings banks which are not members of the 
                Federal Reserve System and the deposits of 
                which are insured by the Corporation, and State 
                savings associations (the deposits of which are 
                insured by the Federal Deposit Insurance 
                Corporation)[.];
          (2) the term ``regulated financial institution'' 
        means an insured depository institution (as defined in 
        section 3 of the Federal Deposit Insurance Act); and
          (3) the term ``application for a deposit facility'' 
        means an application to the appropriate Federal 
        financial supervisory agency otherwise required under 
        Federal law or regulations thereunder for--
                  (A) a charter for a national bank or Federal 
                savings and loan association;
                  (B) deposit insurance in connection with a 
                newly chartered State bank, savings bank, 
                savings and loan association or similar 
                institution;
                  (C) the establishment of a domestic branch or 
                other facility with the ability to accept 
                deposits of a regulated financial institution;
                  (D) the relocation of the home office or a 
                branch office of a regulated financial 
                institution;
                  (E) the merger or consolidation with, or the 
                acquisition of the assets, or the assumption of 
                the liabilities of a regulated financial 
                institution requiring approval under section 
                18(c) of the Federal Deposit Insurance Act or 
                under regulations issued under the authority of 
                title IV of the National Housing Act; or
                  (F) the acquisition of shares in, or the 
                assets of, a regulated financial institution 
                requiring approval under section 3 of the Bank 
                Holding Company Act of 1956 or section 408 (e) 
                of the National Housing Act.
          (4) A financial institution whose business 
        predominately consists of serving the needs of military 
        personnel who are not located within a defined 
        geographic area may define its ``entire community'' to 
        include its entire deposit customer base without regard 
        to geographic proximity.

           *       *       *       *       *       *       *

  Sec. 806. Regulations to carry out the purposes of this title 
shall be published by each appropriate Federal financial 
supervisory agency, 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,,] companies, 
and shall take effect no later than 390 days after the date of 
enactment of this title.

           *       *       *       *       *       *       *

                              ----------                              


CREDIT REPAIR ORGANIZATIONS ACT

           *       *       *       *       *       *       *



TITLE IV--CREDIT REPAIR ORGANIZATIONS

           *       *       *       *       *       *       *


SEC. 403. DEFINITIONS.

   For purposes of this title, the following definitions apply:
          (1) Consumer.--The term ``consumer'' means an 
        individual.
          (2) Consumer credit transaction.--The term ``consumer 
        credit transaction'' means any transaction in which 
        credit is offered or extended to an individual for 
        personal, family, or household purposes.
          (3) Credit repair organization.--The term ``credit 
        repair organization''--
                  (A) means any person who uses any 
                instrumentality of interstate commerce or the 
                mails to sell, provide, or perform (or 
                represent that such person can or will sell, 
                provide, or perform) any service, in return for 
                the payment of money or other valuable 
                consideration, for the express or implied 
                purpose of--
                          (i) improving any consumer's credit 
                        record, credit history, or credit 
                        rating; or
                          (ii) providing advice or assistance 
                        to any consumer with regard to any 
                        activity or service described in clause 
                        (i); and
                  (B) does not include--
                          (i) any nonprofit organization which 
                        is exempt from taxation under section 
                        501(c)(3) of the Internal Revenue Code 
                        of 1986;
                          (ii) any creditor (as defined in 
                        section 103 of the Truth in Lending 
                        Act), with respect to any consumer, to 
                        the extent the creditor is assisting 
                        the consumer to restructure any debt 
                        owed by the consumer to the creditor; 
                        or
                          (iii) any depository institution (as 
                        that term is defined in section 3 of 
                        the Federal Deposit Insurance Act) or 
                        any Federal or State credit union (as 
                        those terms are defined in section 101 
                        of the Federal Credit Union Act), or 
                        any affiliate or subsidiary of such a 
                        depository institution or credit union.
          (4) Credit.--The term ``credit'' has the meaning 
        given to such term in section [103(e)] 103(f) of this 
        Act.

           *       *       *       *       *       *       *

                              ----------                              


DEPOSITORY INSTITUTION MANAGEMENT INTERLOCKS ACT

           *       *       *       *       *       *       *



TITLE II--INTERLOCKING DIRECTORS

           *       *       *       *       *       *       *


  Sec. 205. The prohibitions contained in sections 203 and 204 
shall not apply in the case of any one or more of the following 
or subsidiary thereof:
          (1) A depository institution or depository holding 
        company which has been placed formally in liquidation, 
        or which is in the hands of a receiver, conservator, or 
        other official exercising a similar function.
          (2) A corporation operating under section 25 or 25(a) 
        of the Federal Reserve Act.
          (3) a credit union being served by a management 
        official of another credit union.
          (4) A depository institution or depository holding 
        company which does not do business within any State of 
        the United States, the District of Columbia, any 
        territory of the United States, Puerto Rico, Guam, 
        American Samoa, or the Virgin Islands except as in 
        incident to its activities outside the United States.
          (5) A State-chartered savings and loan guaranty 
        corporation.
          (6) A Federal Home Loan Bank or any other bank 
        organized specifically to serve depository 
        institutions.
          (7) A depository institution or a depository holding 
        company which--
                  (A) is closed or is in danger of closing, as 
                determined by the appropriate Federal 
                depository institutions regulatory agency in 
                accordance with regulations prescribed by such 
                agency; and
                  (B) is acquired by another depository 
                institution or depository holding company,
        during the 5-year period beginning on the date of the 
        acquisition of the depository institution or depository 
        holding company described in subparagraph (A).
          (8)(A) A diversified savings and loan holding company 
        (as defined in section 408(a)(1)(F) of the National 
        Housing Act) with respect to the service of a director 
        of such company who is also a director of any 
        nonaffiliated depository institution or depository 
        holding company (including a savings and loan holding 
        company) if--
                  (i) notice of the proposed dual service is 
                given by such diversified savings and loan 
                holding company to--
                          (I) the appropriate Federal 
                        depository institutions regulatory 
                        agency for such company; and
                          (II) the appropriate Federal 
                        depository institutions regulatory 
                        agency for the nonaffiliated depository 
                        institution or depository holding 
                        company of which such person is also a 
                        director,
                not less than 60 days before such dual service 
                is proposed to begin; and
                  (ii) the proposed dual service is not 
                disapproved by any such appropriate Federal 
                depository institutions regulatory agency 
                before the end of such 60-day period.
          (B) Any appropriate Federal depository institutions 
        regulatory agency may disapprove, under subparagraph 
        (A)(ii), a notice of proposed dual service by any 
        individual if such agency finds that--
                  (i) the dual service cannot be structured or 
                limited so as to preclude the dual service's 
                resulting in a monopoly or substantial 
                lessening of competition in financial services 
                in any part of the United States;
                  (ii) the dual service would lead to 
                substantial conflicts of interest or unsafe or 
                unsound practices; or
                  (iii) the diversified savings and loan 
                holding company has neglected, failed, or 
                refused to furnish all the information required 
                by such agency.
          (C) Any appropriate Federal depository institutions 
        regulatory agency may, at any time after the end of the 
        60-day period referred to in subparagraph (A), require 
        that any dual service by any individual which was not 
        disapproved by such agency during such period be 
        terminated if a change in circumstances occurs with 
        respect to any depository institution or depository 
        holding company of which such individual is a director 
        that would have provided a basis for disapproval of the 
        dual service during such period.
          (9) Any savings association (as defined in section 
        10(a)(1)(A) of the Home Owners' Loan Act or any savings 
        and loan holding company (as defined in section 
        10(a)(1)(D) of such Act) which has issued stock in 
        connection with a qualified stock issuance pursuant to 
        section 10(q) of such Act, except that this paragraph 
        shall apply only with respect to service as a single 
        management official of such savings association or 
        holding company, or any subsidiary of such savings 
        association or holding company, by a single management 
        official of the savings and loan holding company which 
        purchased the stock issued in connection with such 
        qualified stock issuance, and shall apply only when the 
        [Director of the Office of Thrift Supervision] 
        appropriate Federal banking agency has determined that 
        such service is consistent with the purposes of this 
        Act and the Home Owners' Loan Act.

           *       *       *       *       *       *       *

                              ----------                              


SECTION 2227 OF THE ECONOMIC GROWTH AND REGULATORY PAPERWORK REDUCTION 
                              ACT OF 1996


SEC. 2227. CREDIT AVAILABILITY ASSESSMENT.

  (a) Study.--
          (1) In general.--Not later than 12 months after 
        September 30, 1996, and once every 60 months 
        thereafter, the Board, in consultation with [the 
        Director of the Office of Thrift Supervision,] the 
        Comptroller of the Currency, the Board of Directors of 
        the Corporation, the Administrator of the National 
        Credit Union Administration, the Administrator of the 
        Small Business Administration, and the Secretary of 
        Commerce, shall conduct a study and submit a report to 
        the Congress detailing the extent of small business 
        lending by all creditors.
          (2) Contents of Study.--The study required under 
        paragraph (1) shall identify, to the extent 
        practicable, those factors which provide policymakers 
        with insights into the small business credit market, 
        including--
                  (A) the demand for small business credit, 
                including consideration of the impact of 
                economic cycles on the levels of such demand;
                  (B) the availability of credit to small 
                businesses;
                  (C) the range of credit options available to 
                small businesses, such as those available from 
                insured depository institutions and other 
                providers of credit;
                  (D) the types of credit products used to 
                finance small business operations, including 
                the use of traditional loans, leases, lines of 
                credit, home equity loans, credit cards, and 
                other sources of financing;
                  (E) the credit needs of small businesses, 
                including, if appropriate, the extent to which 
                such needs differ, based upon product type, 
                size of business, cash flow requirements, 
                characteristics of ownership or investors, or 
                other aspects of such business;
                  (F) the types of risks to creditors in 
                providing credit to small businesses; and
                  (G) such other factors as the Board deems 
                appropriate.
  (b) Use Of Existing Data.--The studies required by this 
section shall not increase the regulatory or paperwork burden 
on regulated financial institutions, other sources of small 
business credit, or small businesses.
                              ----------                              


FEDERAL FIRE PREVENTION AND CONTROL ACT OF 1974

           *       *       *       *       *       *       *



SEC. 31. FIRE SAFETY SYSTEMS IN FEDERALLY ASSISTED BUILDINGS.

  (a) Definitions.--For purposes of this section, the following 
definitions apply:
          (1) The term ``affordable cost'' means the cost to a 
        Federal agency of leasing office space in a building 
        that is protected by an automatic sprinkler system or 
        equivalent level of safety, which cost is no more than 
        10 percent greater than the cost of leasing available 
        comparable office space in a building that is not so 
        protected.
          (2) The term ``automatic sprinkler system'' means an 
        electronically supervised, integrated system of piping 
        to which sprinklers are attached in a systematic 
        pattern, and which, when activated by heat from a 
        fire--
                  (A) will protect human lives by discharging 
                water over the fire area, in accordance with 
                the National Fire Protection Association 
                Standard 13, 13D, or 13R, whichever is 
                appropriate for the type of building and 
                occupancy being protected, or any successor 
                standard thereto; and
                  (B) includes an alarm signaling system with 
                appropriate warning signals (to the extent such 
                alarm systems and warning signals are required 
                by Federal, State, or local laws or 
                regulations) installed in accordance with the 
                National Fire Protection Association Standard 
                72, or any successor standard thereto.
          (3) The term ``equivalent level of safety'' means an 
        alternative design or system (which may include 
        automatic sprinkler systems), based upon fire 
        protection engineering analysis, which achieves a level 
        of safety equal to or greater than that provided by 
        automatic sprinkler systems.
          (4) The term ``Federal employee office building'' 
        means any office building in the United States, whether 
        owned or leased by the Federal Government, that is 
        regularly occupied by more than 25 full-time Federal 
        employees in the course of their employment.
          (5) The term ``housing assistance''--
                  (A) means assistance provided by the Federal 
                Government to be used in connection with the 
                provision of housing, that is provided in the 
                form of a grant, contract, loan, loan 
                guarantee, cooperative agreement, interest 
                subsidy, insurance, or direct appropriation; 
                and
                  (B) does not include assistance provided by 
                the Secretary of Veterans Affairs; the Federal 
                Emergency Management Agency; the Secretary of 
                Housing and Urban Development under the single 
                family mortgage insurance programs under the 
                National Housing Act or the homeownership 
                assistance program under section 235 of such 
                Act; the National Homeownership Trust; [the 
                Federal Deposit Insurance Corporation under the 
                affordable housing program under section 40 of 
                the Federal Deposit Insurance Act; or the 
                Resolution Trust Corporation under the 
                affordable housing program under section 21A(c) 
                of the Federal Home Loan Bank Act.] or the 
                Federal Deposit Insurance Corporation under the 
                affordable housing program under section 40 of 
                the Federal Deposit Insurance Act.
          (6) The term ``hazardous areas'' means those areas in 
        a building referred to as hazardous areas in National 
        Fire Protection Association Standard 101, known as the 
        Life Safety Code, or any successor standard thereto.
          (7) The term ``multifamily property'' means--
                  (A) in the case of housing for Federal 
                employees or their dependents, a residential 
                building consisting of more than 2 residential 
                units that are under one roof; and
                  (B) in any other case, a residential building 
                consisting of more than 4 residential units 
                that are under one roof.
          (8) The term ``prefire plan'' means specific plans 
        for fire fighting activities at a property or location.
          (9) The term ``rebuilding'' means the repairing or 
        reconstructing of portions of a multifamily property 
        where the cost of the alterations is 70 percent or more 
        of the replacement cost of the completed multifamily 
        property, not including the value of the land on which 
        the multifamily property is located.
          (10) The term ``renovated'' means the repairing or 
        reconstructing of 50 percent or more of the current 
        value of a Federal employee office building, not 
        including the value of the land on which the Federal 
        employee office building is located.
          (11) The term ``smoke detectors'' means single or 
        multiple station, self-contained alarm devices designed 
        to respond to the presence of visible or invisible 
        particles of combustion, installed in accordance with 
        the National Fire Protection Association Standard 74 or 
        any successor standard thereto.
          (12) The term ``United States'' means the States 
        collectively.
  (b) Federal Employee Office Buildings.--(1)(A) No Federal 
funds may be used for the construction or purchase of a Federal 
employee office building of 6 or more stories unless during the 
period of occupancy by Federal employees the building is 
protected by an automatic sprinkler system or equivalent level 
of safety. No Federal funds may be used for the construction or 
purchase of any other Federal employee office building unless 
during the period of occupancy by Federal employees the 
hazardous areas of the building are protected by automatic 
sprinkler systems or an equivalent level of safety.
  (B)(i) Except as provided in clause (ii), no Federal funds 
may be used for the lease of a Federal employee office building 
of 6 or more stories, where at least some portion of the 
federally leased space is on the sixth floor or above and at 
least 35,000 square feet of space is federally occupied, unless 
during the period of occupancy by Federal employees the entire 
Federal employee office building is protected by an automatic 
sprinkler system or equivalent level of safety. No Federal 
funds may be used for the lease of any other Federal employee 
office building unless during the period of occupancy by 
Federal employees the hazardous areas of the entire Federal 
employee office building are protected by automatic sprinkler 
systems or an equivalent level of safety.
  (ii) The first sentence of clause (i) shall not apply to the 
lease of a building the construction of which is completed 
before the date of enactment of this section if the leasing 
agency certifies that no suitable building with automatic 
sprinkler systems or an equivalent level of safety is available 
at an affordable cost.
  (2) Paragraph (1) shall not apply to--
          (A) a Federal employee office building that was owned 
        by the Federal Government before the date of enactment 
        of this section;
          (B) space leased in a Federal employee office 
        building if the space was leased by the Federal 
        Government before such date of enactment;
          (C) space leased on a temporary basis for not longer 
        than 6 months;
          (D) a Federal employee office building that becomes a 
        Federal employee office building pursuant to a 
        commitment to move Federal employees into the building 
        that is made prior to such date of enactment; or
          (E) a Federal employee office building that is owned 
        or managed by the Resolution Trust Corporation.
Nothing in this subsection shall require the installation of an 
automatic sprinkler system or equivalent level of safety by 
reason of the leasing, after such date of enactment, of space 
below the sixth floor in a Federal employee office building.
  (3) No Federal funds may be used for the renovation of a 
Federal employee office building of 6 or more stories that is 
owned by the Federal Government unless after that renovation 
the Federal employee office building is protected by an 
automatic sprinkler system or equivalent level of safety. No 
Federal funds may be used for the renovation of any other 
Federal employee office building that is owned by the Federal 
Government unless after that renovation the hazardous areas of 
the Federal employee office building are protected by automatic 
sprinkler systems or an equivalent level of safety.
  (4) No Federal funds may be used for entering into or 
renewing a lease of a Federal employee office building of 6 or 
more stories that is renovated after the date of enactment of 
this section, where at least some portion of the federally 
leased space is on the sixth floor or above and at least 35,000 
square feet of space is federally occupied, unless after that 
renovation the Federal employee office building is protected by 
an automatic sprinkler system or equivalent level of safety. No 
Federal funds may be used for entering into or renewing a lease 
of any other Federal employee office building that is renovated 
after such date of enactment of this section, unless after that 
renovation the hazardous areas of the Federal employee office 
building are protected by automatic sprinkler systems or an 
equivalent level of safety.
  (c) Housing.--(1)(A) Except as otherwise provided in this 
paragraph, no Federal funds may be used for the construction, 
purchase, lease, or operation by the Federal Government of 
housing in the United States for Federal employees or their 
dependents unless--
          (i) in the case of a multifamily property acquired or 
        rebuilt by the Federal Government after the date of 
        enactment of this section, the housing is protected, 
        before occupancy by Federal employees or their 
        dependents, by an automatic sprinkler system (or 
        equivalent level of safety) and hard-wired smoke 
        detectors; and
          (ii) in the case of any other housing, the housing, 
        before--
                  (I) occupancy by the first Federal employees 
                (or their dependents) who do not occupy such 
                housing as of such date of enactment; or
                  (II) the expiration of 3 years after such 
                date of enactment,
        whichever occurs first, is protected by hard-wired 
        smoke detectors.
  (B) Nothing in this paragraph shall be construed to supersede 
any guidelines or requirements applicable to housing for 
Federal employees that call for a higher level of fire safety 
protection than is required under this paragraph.
  (C) Housing covered by this paragraph that does not have an 
adequate and reliable electrical system shall not be subject to 
the requirement under subparagraph (A) for protection by hard-
wired smoke detectors, but shall be protected by battery 
operated smoke detectors.
  (D) If funding has been programmed or designated for the 
demolition of housing covered by this paragraph, such housing 
shall not be subject to the fire protection requirements of 
subparagraph (A), but shall be protected by battery operated 
smoke detectors.
  (2)(A)(i) Housing assistance may not be used in connection 
with any newly constructed multifamily property, unless after 
the new construction the multifamily property is protected by 
an automatic sprinkler system and hard-wired smoke detectors.
  (ii) For purposes of clause (i), the term ``newly constructed 
multifamily property'' means a multifamily property of 4 or 
more stories above ground level--
          (I) that is newly constructed after the date of 
        enactment of this section; and
          (II) for which (a) housing assistance is used for 
        such new construction, or (b) a binding commitment is 
        made, before commencement of such construction, to 
        provide housing assistance for the newly constructed 
        property.
  (iii) Clause (i) shall not apply to any multifamily property 
for which, before such date of enactment, a binding commitment 
is made to provide housing assistance for the new construction 
of the property or for the newly constructed property.
  (B)(i) Except as provided in clause (ii), housing assistance 
may not be used in connection with any rebuilt multifamily 
property, unless after the rebuilding the multifamily property 
complies with the chapter on existing apartment buildings of 
National Fire Protection Association Standard 101 (known as the 
Life Safety Code) or any successor standard to that standard, 
as in effect at the earlier of (I) the time of any approval by 
the Department of Housing and Urban Development of the specific 
plan or budget for rebuilding, or (II) the time that a binding 
commitment is made to provide housing assistance for the 
rebuilt property.
  (ii) If any rebuilt multifamily property is subject to, and 
in compliance with, any provision of a State or local fire 
safety standard or code that prevents compliance with a 
specific provision of National Fire Protection Association 
Standard 101 or any successor standard to that standard, the 
requirement under clause (i) shall not apply with respect to 
such specific provision.
  (iii) For purposes of this subparagraph, the term ``rebuilt 
multifamily property'' means a multifamily property of 4 or 
more stories above ground level--
          (I) that is rebuilt after the last day of the second 
        fiscal year that ends after the date of enactment of 
        this section; and
          (II) for which (a) housing assistance is used for 
        such rebuilding, or (b) a binding commitment is made, 
        before commencement of such rebuilding, to provide 
        housing assistance for the rebuilt property.
  (C) After the expiration of the 180-day period beginning on 
the date of enactment of this section, housing assistance may 
not be used in connection with any other dwelling unit, unless 
the unit is protected by a hard-wired or battery-operated smoke 
detector. For purposes of this subparagraph, housing assistance 
shall be considered to be used in connection with a particular 
dwelling unit only if such assistance is provided (i) for the 
particular unit, in the case of assistance provided on a unit-
by-unit basis, or (ii) for the multifamily property in which 
the unit is located, in the case of assistance provided on a 
structure-by-structure basis.
  (d) Regulations.--The Administrator of General Services, in 
cooperation with the United States Fire Administration, the 
National Institute of Standards and Technology, and the 
Department of Defense, within 2 years after the date of 
enactment of this section, shall promulgate regulations to 
further define the term ``equivalent level of safety'', and 
shall, to the extent practicable, base those regulations on 
nationally recognized codes.
  (e) State and Local Authority Not Limited.--Nothing in this 
section shall be construed to limit the power of any State or 
political subdivision thereof to implement or enforce any law, 
rule, regulation, or standard that establishes requirements 
concerning fire prevention and control. Nothing in this section 
shall be construed to reduce fire resistance requirements which 
otherwise would have been required.
  (f) Prefire Plan.--The head of any Federal agency that owns, 
leases, or operates a building or housing unit with Federal 
funds shall invite the local agency or voluntary organization 
having responsibility for fire protection in the jurisdiction 
where the building or housing unit is located to prepare, and 
biennially review, a prefire plan for the building or housing 
unit.
  (g) Reports to Congress.--(1) Within 3 years after the date 
of enactment of this section, and every 3 years thereafter, the 
Administrator of General Services shall transmit to Congress a 
report on the level of fire safety in Federal employee office 
buildings subject to fire safety requirements under this 
section. Such report shall contain a description of such 
buildings for each Federal agency.
  (2) Within 10 years after the date of enactment of this 
section, each Federal agency providing housing to Federal 
employees or housing assistance shall submit a report to 
Congress on the progress of that agency in implementing 
subsection (c) and on plans for continuing such implementation.
  (3)(A) The National Institute of Standards and Technology 
shall conduct a study and submit a report to Congress on the 
use, in combination, of fire detection systems, fire 
suppression systems, and compartmentation. Such study shall--
          (i) quantify performance and reliability for fire 
        detection systems, fire suppression systems, and 
        compartmentation, including a field assessment of 
        performance and determination of conditions under which 
        a reduction or elimination of 1 or more of those 
        systems would result in an unacceptable risk of fire 
        loss; and
          (ii) include a comparative analysis and 
        compartmentation using fire resistive materials and 
        compartmentation using noncombustible materials.
  (B) The National Institute of Standards and Technology shall 
obtain funding from non-Federal sources in an amount equal to 
25 percent of the cost of the study required by subparagraph 
(A). Funding for the National Institute of Standards and 
Technology for carrying out such study shall be derived from 
amounts otherwise authorized to be appropriated, for the 
Building and Fire Research Center at the National Institute of 
Standards and Technology, not to exceed $750,000. The study 
shall commence until receipt of all matching funds from non-
Federal sources. The scope and extent of the study shall be 
determined by the level of project funding. The Institute shall 
submit a report to Congress on the study within 30 months after 
the date of enactment of this section.
  (h) Relation to Other Requirements.--In the implementation of 
this section, the process for meeting space needs in urban 
areas shall continue to give first consideration to a 
centralized community business area and adjacent areas of 
similar character to the extent of any Federal requirement 
therefor.

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FEDERAL HOME LOAN BANK ACT

           *       *       *       *       *       *       *



SEC. 10. ADVANCES TO MEMBERS.

  (a) In General.--
          (1) All advances.--Each Federal Home Loan Bank is 
        authorized to make secured advances to its members upon 
        collateral sufficient, in the judgment of the Bank, to 
        fully secure advances obtained from the Bank under this 
        section or section 11(g) of this Act.
          (2) Purposes of advances.--A long-term advance may 
        only be made for the purposes of--
                  (A) providing funds to any member for 
                residential housing finance; and
                  (B) providing funds to any community 
                financial institution for small businesses, 
                small farms, small agri-businesses, and 
                community development activities.
          (3) Collateral.--A Bank, at the time of origination 
        or renewal of a loan or advance, shall obtain and 
        maintain a security interest in collateral eligible 
        pursuant to one or more of the following categories:
                  (A) Fully disbursed, whole first mortgages on 
                improved residential property (not more than 90 
                days delinquent), or securities representing a 
                whole interest in such mortgages.
                  (B) Securities issued, insured, or guaranteed 
                by the United States Government or any agency 
                thereof (including without limitation, 
                mortgage-backed securities issued or guaranteed 
                by the Federal Home Loan Mortgage Corporation, 
                the Federal National Mortgage Corporation, and 
                the Government National Mortgage Association).
                  (C) Cash or deposits of a Federal Home Loan 
                Bank.
                  (D) Other real estate related collateral 
                acceptable to the Bank if such collateral has a 
                readily ascertainable value and the Bank can 
                perfect its interest in the collateral.
                  (E) Secured loans for small business, 
                agriculture, or community development 
                activities or securities representing a whole 
                interest in such secured loans, in the case of 
                any community financial institution.
          (4) Additional bank authority.--Subparagraphs (A) 
        through (E) of paragraph (3) shall not affect the 
        ability of any Federal Home Loan Bank to take such 
        steps as it deems necessary to protect its security 
        position with respect to outstanding advances, 
        including requiring deposits of additional collateral 
        security, whether or not such additional security would 
        be eligible to originate an advance. If an advance 
        existing on the date of enactment of the Financial 
        Institutions Reform, Recovery, and Enforcement Act of 
        1989 matures and the member does not have sufficient 
        eligible collateral to fully secure a renewal of such 
        advance, a Bank may renew such advance secured by such 
        collateral as the Bank determines is appropriate. A 
        member that has an advance secured by such insufficient 
        eligible collateral must reduce its level of 
        outstanding advances promptly and prudently in 
        accordance with a schedule determined by the Federal 
        home loan bank.
          (5) Review of certain collateral standards.--The 
        Director may review the collateral standards applicable 
        to each Federal home loan bank for the classes of 
        collateral described in subparagraphs (D) and (E) of 
        paragraph (3), and may, if necessary for safety and 
        soundness purposes, require an increase in the 
        collateral standards for any or all of those classes of 
        collateral.
          (6) Definitions.--For purposes of this subsection, 
        the terms ``small business'', ``agriculture'', ``small 
        farm'', ``small agri-business'', and ``community 
        development activities'' shall have the meanings given 
        those terms by regulation of the Director.
  (b) For the purposes of this section, each Federal Home Loan 
Bank shall have power to make, or to cause or require to be 
made, such appraisals and other investigations as it may deem 
necessary. No home mortgage otherwise eligible to be accepted 
as collateral security for an advance by a Federal Home Loan 
Bank shall be accepted if any director, officer, employee, 
attorney, or agent of the Federal Home Loan Bank or of the 
borrowing institution is personally liable theron, unless the 
Director has specifically approved such acceptance.
  (c) Such advances shall be made upon the note or obligation 
of the member secured as provided in this section, bearing such 
rate of interest as the Federal home loan bank may approve or 
determine, and the Federal Home Loan Bank shall have a lien 
upon and shall hold the stock of such member as further 
collateral security for all indebtedness of the member to the 
Federal Home Loan Bank.
  (d) The institution applying for an advance shall enter into 
a primary and unconditional obligation to pay off all advances, 
together with interest and any unpaid costs and expenses in 
connection therewith according to the terms under which they 
were made, in such form as shall meet the requirements of the 
bank. The bank shall reserve the right to require at any time, 
when deemed necessary for its protection, deposits of 
additional collateral security or substitutions of security by 
the borrowing institution, and each borrowing institution shall 
assign additional or substituted security when and as so 
required. Any Federal Home Loan Bank shall have power to sell 
to any other Federal Home Loan Bank, with or without recourse, 
any advance made under the provisions of this Act, or to allow 
to such bank a participation therein, and any other Federal 
Home Loan Bank shall have power to purchase such advance or to 
accept a participation therein, together with an appropriate 
assignment of security therefor.
  (e) Priority of Certain Secured Interests.--Notwithstanding 
any other provision of law, any security interest granted to a 
Federal Home Loan Bank by any member of any Federal Home Loan 
Bank or any affiliate of any such member shall be entitled to 
priority over the claims and rights of any party (including any 
receiver, conservator, trustee, or similar party having rights 
of a lien creditor) other than claims and rights that--
          (1) would be entitled to priority under otherwise 
        applicable law; and
          (2) are held by actual bona fide purchasers for value 
        or by actual secured parties that are secured by actual 
        perfected security interests.
  (g) Community Support Requirements.--
          (1) In general.--Before the end of the 2-year period 
        beginning on the date of enactment of the Financial 
        Institutions Reform, Recovery, and Enforcement Act of 
        1989, the Director shall adopt regulations establishing 
        standards of community investment or service for 
        members of Banks to maintain continued access to long-
        term advances.
          (2) Factors to be included.--The regulations 
        promulgated pursuant to paragraph (1) shall take into 
        account factors such as a member's performance under 
        the Community Reinvestment Act of 1977 and the member's 
        record of lending to first-time homebuyers.
  (h) Special Liquidity Advances.--
          (1) In general.--Subject to paragraph (2), the 
        Federal Home Loan Banks may, upon the request of the 
        [Director of the Office of Thrift Supervision] 
        Comptroller of the Currency or the Board of Directors 
        of the Federal Deposit Insurance Corporation, as 
        applicable, make short-term liquidity advances to a 
        savings association that--
                  (A) is solvent but presents a supervisory 
                concern because of such association's poor 
                financial condition; and
                  (B) has reasonable and demonstrable prospects 
                of returning to a satisfactory financial 
                condition.
          (2) Interest on and security for special liquidity 
        advances.--Any loan by a Federal Home Loan Bank 
        pursuant to paragraph (1) shall be subject to all 
        applicable collateral requirements, including the 
        requirements of section 10(a) of this Act, and shall be 
        at an interest rate no less favorable than those made 
        available for similar short-term liquidity advances to 
        savings associations that do not present such 
        supervisory concern.
  (i) Community Investment Program.--
          (1) In general.--Each Bank shall establish a program 
        to provide funding for members to undertake community-
        oriented mortgage lending. Each Bank shall designate a 
        community investment officer to implement community 
        lending and affordable housing advance programs of the 
        Banks under this subsection and subsection (j) and 
        provide technical assistance and outreach to promote 
        such programs. Advances under this program shall be 
        priced at the cost of consolidated Federal Home Loan 
        Bank obligations of comparable maturities, taking into 
        account reasonable administrative costs.
          (2) Community-oriented mortgage lending.--For 
        purposes of this subsection, the term ``community-
        oriented mortgage lending'' means providing loans--
                  (A) to finance home purchases by families 
                whose income does not exceed 115 percent of the 
                median income for the area,
                  (B) to finance purchase or rehabilitation of 
                housing for occupancy by families whose income 
                does not exceed 115 percent of median income 
                for the area,
                  (C) to finance commercial and economic 
                development activities that benefit low- and 
                moderate-income families or activities that are 
                located in low- and moderate-income 
                neighborhoods, and
                  (D) to finance projects that further a 
                combination of the purposes described in 
                subparagraphs (A) through (C).
  (j) Affordable Housing Program.--
          (1) In general.--Pursuant to regulations promulgated 
        by the Director, each Bank shall establish an 
        Affordable Housing Program to subsidize the interest 
        rate on advances to members engaged in lending for long 
        term, low- and moderate-income, owner-occupied and 
        affordable rental housing at subsidized interest rates.
          (2) Standards.--The Board's regulations shall permit 
        Bank members to use subsidized advances received from 
        the Banks to--
                  (A) finance homeownership by families with 
                incomes at or below 80 percent of the median 
                income for the area;
                  (B) finance the purchase, construction, or 
                rehabilitation of rental housing, at least 20 
                percent of the units of which will be occupied 
                by and affordable for very low-income 
                households for the remaining useful life of 
                such housing or the mortgage term; or
                  (C) during the 2-year period beginning on the 
                date of enactment of this subparagraph, use 
                such percentage as the Director may by 
                regulation establish of any subsidized advances 
                set aside to finance homeownership under 
                subparagraph (A) to refinance loans that are 
                secured by a first mortgage on a primary 
                residence of any family having an income at or 
                below 80 percent of the median income for the 
                area.
          (3) Priorities for making advances.--In using 
        advances authorized under paragraph (1), each Bank 
        member shall give priority to qualified projects such 
        as the following:
                  (A) purchase of homes by families whose 
                income is 80 percent or less of the median 
                income for the area,
                  (B) purchase or rehabilitation of housing 
                owned or held by the United States Government 
                or any agency or instrumentality of the United 
                States; and
                  (C) purchase or rehabilitation of housing 
                sponsored by any nonprofit organization, any 
                State or political subdivision of any State, 
                any local housing authority or State housing 
                finance agency.
          (4) Report.--Each member receiving advances under 
        this program shall report annually to the Bank making 
        such advances concerning the member's use of advances 
        received under this program.
          (5) Contribution to program.--Each Bank shall 
        annually contribute the percentage of its annual net 
        earnings prescribed in the following subparagraphs to 
        support subsidized advances through the Affordable 
        Housing Program:
                  (A) In 1990, 1991, 1992, and 1993, 5 percent 
                of the preceding year's net income, or such 
                prorated sums as may be required to assure that 
                the aggregate contribution of all the Banks 
                shall not be less than $50,000,000 for each 
                such year.
                  (B) In 1994, 6 percent of the preceding 
                year's net income, or such prorated sum as may 
                be required to assure that the aggregate 
                contribution of the Banks shall not be less 
                than $75,000,000 for such year.
                  (C) In 1995, and subsequent years, 10 percent 
                of the preceding year's net income, or such 
                prorated sums as may be required to assure that 
                the aggregate contribution of the Banks shall 
                not be less than $100,000,000 for each such 
                year.
          (6) Grounds for Suspending Contributions.--
                  (A) In general.--If a Bank finds that the 
                payments required under this paragraph are 
                contributing to the financial instability of 
                such Bank, it may apply to the Director for a 
                temporary suspension of such payments.
                  (B) Financial instability.--In determining 
                the financial instability of a Bank, the 
                Director shall consider such factors as (i) 
                whether the Bank's earnings are severely 
                depressed, (ii) whether there has been a 
                substantial decline in membership capital, and 
                (iii) whether there has been a substantial 
                reduction in advances outstanding.
                  (C) Review.--The Director shall review the 
                application and any supporting financial data 
                and issue a written decision approving or 
                disapproving such application. The Board's 
                decision shall be accompanied by specific 
                findings and reasons for its action.
                  (D) Monitoring suspension.--If the Director 
                grants a suspension, it shall specify the 
                period of time such suspension shall remain in 
                effect and shall continue to monitor the Bank's 
                financial condition during such suspension.
                  (E) Limitations on grounds for suspension.--
                The Director shall not suspend payments to the 
                Affordable Housing Program if the Bank's 
                reduction in earnings is a result of (i) a 
                change in the terms for advances to members 
                which is not justified by market conditions, 
                (ii) inordinate operating and administrative 
                expenses, or (iii) mismanagement.
                  (F) The Director shall notify the Committee 
                on Banking, Finance and Urban Affairs of the 
                House of Representatives and the Committee on 
                Banking, Housing, and Urban Affairs of the 
                Senate not less than 60 days before such 
                suspension takes effect. Such suspension shall 
                become effective unless a joint resolution is 
                enacted disapproving such suspension.
          (7) Failure to use amounts for affordable housing.--
        If any Bank fails to utilize or commit the full amount 
        provided in this subsection in any year, 90 percent of 
        the amount that has not been utilized or committed in 
        that year shall be deposited by the Bank in an 
        Affordable Housing Reserve Fund administered by the 
        Director. The 10 percent of the unutilized and 
        uncommitted amount retained by a Bank should be fully 
        utilized or committed by that Bank during the following 
        year and any remaining portion must be deposited in the 
        Affordable Housing Reserve Fund. Under regulations 
        established by the Director, funds from the Affordable 
        Housing Reserve Fund may be made available to any Bank 
        to meet additional affordable housing needs in such 
        Bank's district pursuant to this section.
          (8) Net earnings.--The net earnings of any Federal 
        Home Loan Bank shall be determined for purposes of this 
        paragraph--
                  (A) after reduction for any payment required 
                under section 21 or 21B of this Act; and
                  (B) before declaring any dividend under 
                section 16.
          (9) Regulations.--The Director shall promulgate 
        regulations to implement this subsection. Such 
        regulations shall, at a minimum--
                  (A) specify activities eligible to receive 
                subsidized advances from the Banks under this 
                program;
                  (B) specify priorities for the use of such 
                advances;
                  (C) ensure that advances made under this 
                program will be used only to assist projects 
                for which adequate long-term monitoring is 
                available to guarantee that affordability 
                standards and other requirements of this 
                subsection are satisfied;
                  (D) ensure that a preponderance of assistance 
                provided under this subsection is ultimately 
                received by low- and moderate-income 
                households;
                  (E) ensure that subsidies provided by Banks 
                to member institutions under this program are 
                passed on to the ultimate borrower;
                  (F) establish uniform standards for 
                subsidized advances under this program and 
                subsidized lending by member institutions 
                supported by such advances, including maximum 
                subsidy and risk limitations for different 
                categories of loans made under this subsection; 
                and
                  (G) coordinate activities under this 
                subsection with other Federal or federally-
                subsidized affordable housing activities to the 
                maximum extent possible.
          (10) Other programs.--No provision of this subsection 
        or subsection (i) shall preclude any Bank from 
        establishing additional community investment cash 
        advance programs or contributing additional sums to the 
        Affordable Housing Reserve Fund.
          (11) Advisory council.--Each Bank shall appoint an 
        Advisory Council of 7 to 15 persons drawn from 
        community and nonprofit organizations actively involved 
        in providing or promoting low- and moderate-income 
        housing in its district. The Advisory Council shall 
        meet with representatives of the board of directors of 
        the Bank quarterly to advise the Bank on low- and 
        moderate-income housing programs and needs in the 
        district and on the utilization of the advances for 
        these purposes. Each Advisory Council established under 
        this paragraph shall submit to the Director at least 
        annually its analysis of the low-income housing 
        activity of the Bank by which it is appointed.
          (12) Reports to congress.--
                  (A) The Director shall monitor and report 
                annually to the Congress and the Advisory 
                Council for each Bank the support of low-income 
                housing and community development by the Banks 
                and the utilization of advances for these 
                purposes.
                  (B) The analyses submitted by the Advisory 
                Councils to the Director under paragraph (11) 
                shall be included as part of the report 
                required by this paragraph.
                  (C) Reports.--The Director shall annually 
                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 collateral pledged to 
                the Banks, including an analysis of collateral 
                by type and by Bank district.
                  (D) Submission to congress.--The Director 
                shall submit the reports under subparagraphs 
                (A) and (C) 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 180 
                days after the date of enactment of the Federal 
                Housing Finance Regulatory Reform Act of 2008.
          (13) Definitions.--For purposes of this subsection--
                  (A) Low- or moderate-income household.--The 
                term ``low- or moderate-income household'' 
                means any household which has an income of 80 
                percent or less of the area median.
                  (B) Very low-income household.--The term 
                ``very low-income household'' means any 
                household that has an income of 50 percent or 
                less of the area median.
                  (C) Low- or moderate-income neighborhood.--
                The term ``low- or moderate-income 
                neighborhood'' means any neighborhood in which 
                51 percent or more of the households are low- 
                or moderate-income households.
                  (D) Affordable for very-low income 
                households.--For purposes of paragraph (2)(B) 
                the term ``affordable for very-low income 
                households'' means that rents charged to 
                tenants for units made available for occupancy 
                by low-income families shall not exceed 30 
                percent of the adjusted income of a family 
                whose income equals 50 percent of the income 
                for the area (as determined by the Secretary of 
                Housing and Urban Development) with adjustment 
                for family size.
  (k) Public Use Database.--
          (1) Data.--Each Federal Home Loan Bank shall provide 
        to the Director, in a form determined by the Director, 
        census tract level data relating to mortgages 
        purchased, if any, including--
                  (A) data consistent with that reported under 
                section 1323 of the Federal Housing Enterprises 
                Financial Safety and Soundness Act of 1992;
                  (B) data elements required to be reported 
                under the Home Mortgage Disclosure Act of 1975; 
                and
                  (C) any other data elements that the Director 
                considers appropriate.
          (2) Public use database.--
                  (A) In general.--The Director shall make 
                available to the public, in a form that is 
                useful to the public (including forms 
                accessible electronically), and to the extent 
                practicable, the data provided to the Director 
                under paragraph (1).
                  (B) Proprietary information.--Not 
                withstanding subparagraph (A), the Director may 
                not provide public access to, or disclose to 
                the public, any information required to be 
                submitted under this subsection that the 
                Director determines is proprietary or that 
                would provide personally identifiable 
                information and that is not otherwise publicly 
                accessible through other forms, unless the 
                Director determines that it is in the public 
                interest to provide such information.

           *       *       *       *       *       *       *


SEC. 22. MEMBER FINANCIAL INFORMATION.

  (a) In General.--In order to enable the Federal Home Loan 
Banks to carry out the provisions of this Act, the Secretary of 
the Treasury, the [Comptroller of the Currency, the Chairman of 
the Director of Governors of the Federal Reserve System, the 
Chairperson of the Federal Deposit Insurance Corporation, the 
Chairperson of the National Credit Union Administration, and 
the Director of the Office of Thrift Supervision] Comptroller 
of the Currency, the Chairman of the Board of Governors of the 
Federal Reserve System, the Chairperson of the Federal Deposit 
Insurance Corporation, and the Chairman of the National Credit 
Union Administration, upon request by any Federal Home Loan 
Bank--
          (1) shall make available in confidence to any Federal 
        Home Loan Bank, such reports, records, or other 
        information as may be available, relating to the 
        condition of any member of any Federal Home Loan Bank 
        or any institution with respect to which any such Bank 
        has had or contemplates having transactions under this 
        Act; and
          (2) may perform through their examiners or other 
        employees or agents, for the confidential use of the 
        Federal Home Loan Bank, examinations of institutions 
        for which such agency is the appropriate Federal 
        banking regulatory agency.
In addition, the [Comptroller of the Currency, the Chairman of 
the Director of Governors of the Federal Reserve System, the 
Chairperson of the National Credit Union Administration, and 
the Director of the Office of Thrift Supervision] Comptroller 
of the Currency, the Chairman of the Board of Governors of the 
Federal Reserve System, and the Chairman of the National Credit 
Union Administration shall make available to the Director or 
any Federal Home Loan Bank the financial reports filed by 
members of any Bank to enable the Director or a Bank to compile 
and publish cost of funds indices or other financial or 
statistical reports.
  (b) Consent by Members.--Every member of a Federal Home Loan 
Bank shall, as a condition precedent thereto, be deemed--
          (1) to consent to such examinations as the Bank or 
        the Director may require for the purposes of this Act;
          (2) to agree that reports of examinations by local, 
        State, or Federal agencies or institutions may be 
        furnished by such authorities to the Bank or the 
        Director upon request; and
          (3) to agree to give the Bank or the Federal agency, 
        upon request, such information as they may need to 
        compile and publish cost of funds indices and to 
        publish other reports or statistical summaries 
        pertaining to the activities of Bank members.

           *       *       *       *       *       *       *

                              ----------                              


             HELPING FAMILIES SAVE THEIR HOMES ACT OF 2009


DIVISION A--PREVENTING MORTGAGE FORECLOSURES

           *       *       *       *       *       *       *


TITLE I--PREVENTION OF MORTGAGE FORECLOSURES

           *       *       *       *       *       *       *


SEC. 104. MORTGAGE MODIFICATION DATA COLLECTING AND REPORTING.

  (a) Reporting Requirements.--Not later than 120 days after 
the date of the enactment of this Act, and quarterly 
thereafter, the Comptroller of the Currency [and the Director 
of the Office of Thrift Supervision, shall jointly] shall 
submit a report to the Committee on Banking, Housing, and Urban 
Affairs of the Senate, the Committee on Financial Services of 
the House of Representatives on the volume of mortgage 
modifications reported to the Office of the Comptroller of the 
Currency [and the Office of Thrift Supervision], under the 
mortgage metrics program of [each such] such Office, during the 
previous quarter, including the following:
          (1) A copy of the data collection instrument 
        currently used by the Office of the Comptroller of the 
        Currency and the Office of Thrift Supervision to 
        collect data on loan modifications.
          (2) The total number of mortgage modifications in 
        each State with that result in each of the following:
                  (A) Additions of delinquent payments and fees 
                to loan balances.
                  (B) Interest rate reductions and freezes.
                  (C) Term extensions.
                  (D) Reductions of principal.
                  (E) Deferrals of principal.
                  (F) Combinations of modifications described 
                in subparagraph (A), (B), (C), (D), or (E).
          (3) The total number of mortgage modifications in 
        each State for which the total monthly principal and 
        interest payment resulted in the following:
                  (A) An increase.
                  (B) Remained the same.
                  (C) Decreased less than 10 percent.
                  (D) Decreased between 10 percent and 20 
                percent.
                  (E) Decreased 20 percent or more.
          (4) The total number of loans in each State that have 
        been modified and then entered into default, where the 
        loan modification resulted in--
                  (A) higher monthly payments by the homeowner;
                  (B) equivalent monthly payments by the 
                homeowner;
                  (C) lower monthly payments by the homeowner 
                of up to 10 percent;
                  (D) lower monthly payments by the homeowner 
                of between 10 percent to 20 percent; or
                  (E) lower monthly payments by the homeowner 
                of more than 20 percent.
  (b) Data Collection.--
          (1) Required.--
                  (A) In General.--Not later than 60 days after 
                the date of the enactment of this Act, the 
                Comptroller of the Currency [and the Director 
                of the Office of Thrift Supervision,] shall 
                issue mortgage modification data collection and 
                reporting requirements to institutions covered 
                under the reporting requirement of the mortgage 
                metrics program of the Comptroller [or the 
                Director]. Not later than 60 days after the 
                date of the enactment of the Dodd-Frank Wall 
                Street Reform and Consumer Protection Act, the 
                Comptroller of the Currency [and the Director 
                of the Office of Thrift Supervision] shall 
                update such requirements to reflect amendments 
                made to this section by such Act.
                  (B) Inclusiveness of collections.--The 
                requirements under subparagraph (A) shall 
                provide for the collection of all mortgage 
                modification data needed by the Comptroller of 
                the Currency [and the Director of the Office of 
                Thrift Supervision] to fulfill the reporting 
                requirements under subsection (a).
          (2) Report.--The Comptroller of the Currency shall 
        report all requirements established under paragraph (1) 
        to each committee receiving the report required under 
        subsection (a).

           *       *       *       *       *       *       *

                              ----------                              


                          HOUSING ACT OF 1948


          TITLE V--ADMINISTRATIVE AND MISCELLANEOUS PROVISIONS


administrative provisions

           *       *       *       *       *       *       *


  Sec. 502. In carrying out their respective functions, powers, 
and duties--
  (a) The Secretary of Housing and Urban Development may 
appoint such officers and employees as he may find necessary, 
which appointments shall be subject to the civil service laws 
and chapter 51 and subchapter III of chapter 53 of title 5, 
United States Code. The Secretary may make such expenditures as 
may be necessary to carry out his functions, powers, and 
duties, and there are hereby authorized to be appropriated to 
the Secretary, out of any moneys in the Treasury not otherwise 
appropriated, such sums as may be necessary to carry out such 
functions, powers, and duties and for administrative expenses 
in connection therewith. The Secretary, without in any way 
relieving himself from final responsibility, may delegate any 
of his functions and powers to such officers, agents, or 
employees as he may designate, may authorize such successive 
redelegations of such functions and powers, as he may deem 
desirable, and may make such rules and regulations as may be 
necessary to carry out his functions, powers, and duties.
  (b) The Secretary of Housing and Urban Development may sue 
and be sued only with respect to its functions under the United 
States Housing Act of 1937, as amended, and title II of Public 
Law 671, Seventy-sixth Congress, approved June 28, 1940, as 
amended. Funds made available for carrying out the functions, 
powers, and duties of the Secretary of Housing and Urban 
Development (including appropriations therefor, which are 
hereby authorized) shall be available in such amounts as may 
from year to year be authorized by the Congress, for the 
administrative expenses of the Secretary of Housing and Urban 
Development. Notwithstanding any other provisions of law except 
provisions of law hereafter enacted expressly in limitation 
hereof, the Secretary of Housing and Urban Development, or any 
State, or local public agency administering a low-rent housing 
project assisted pursuant to the United States Housing Act of 
1937 or title II of Public Law 671, Seventy-sixth Congress, 
approved June 28, 1940, shall continue to have the right to 
maintain an action or proceeding to recover possession of any 
housing accommodations operated by it where such action is 
authorized by the statute or regulations under which such 
housing accommodations are administered, and, in determining 
net income for the purposes of tenant eligibility with respect 
to low-rent housing projects assisted pursuant to said Acts, 
the Secretary of Housing and Urban Development is authorized, 
where it finds such action equitable and in the public 
interest, to exclude amounts or portions thereof paid by the 
United States Government for disability or death occurring in 
connection with military service.
  (c) The Secretary of Housing and Urban Development, the 
Comptroller of the Currency, and the Federal Deposit Insurance 
Corporation, respectively, may, in addition to and not in 
derogation of any powers and authorities conferred elsewhere in 
this Act--
          (1) with the consent of the agency or organization 
        concerned, accept and utilize equipment, facilities, or 
        the services of employees of any Federal, State, or 
        local public agency or instrumentality, educational 
        institution, or nonprofit agency or organization and, 
        in connection with the utilization of such services, 
        may make payments for transportation while away from 
        their homes or regular places of business and per diem 
        in lieu of subsistence en route and at place of such 
        service, in accordance with the provisions of section 
        5703 of title 5, United States Code;
          (2) utilize, contract with, and act through, without 
        regard to section 3709 of the Revised Statutes, any 
        Federal, State, or local public agency or 
        instrumentality, educational institution or nonprofit 
        agency or organization with the consent of the agency 
        or organization concerned, and any funds available to 
        said officers for carrying out their respective 
        functions, powers, and duties shall be available to 
        reimburse or pay any such agency or organization; and, 
        whenever in the judgment of any such officer necessary, 
        he may make advance, progress, or other payments with 
        respect to such contracts without regard to the 
        provisions of subsections (a) and (b) of section 3324 
        of title 31, United States Code; and
          (3) make expenditures for all necessary expenses, 
        including preparation, mounting, shipping, and 
        installation of exhibits; purchase and exchange of 
        technical apparatus; and such other expenses as may, 
        from time to time, be found necessary in carrying out 
        their respective functions, powers, and duties: 
        Provided, That funds made available for administrative 
        expenses in carrying out the functions, powers, and 
        duties imposed upon the Secretary of Housing and Urban 
        Development and the [Federal Home Loan Bank Agency] 
        Federal Housing Finance Agency, respectively, by or 
        pursuant to law may at their option be consolidated 
        into single administrative expense fund accounts of 
        such officer or agency for expenditure by them, 
        respectively, in accordance with the provisions hereof.
  (d) The Secretary of Housing and Urban Development may 
utilize funds made available to him for salaries and expenses 
for payment in advance for dues or fees for library memberships 
in organizations (or for membership of the individual 
librarians in organizations which will not accept library 
membership) whose publications are available to members only, 
or to members at a price lower than to the general public, and 
for payment in advance for publications available only upon 
that basis or available at a reduced price on prepublication 
order.
                              ----------                              


HOUSING AND URBAN DEVELOPMENT ACT OF 1968

           *       *       *       *       *       *       *



TITLE I--LOWER INCOME HOUSING

           *       *       *       *       *       *       *



 technical assistance, counseling to tenants and homeowners, and loans 
            to sponsors of low- and moderate-income housing

  Sec. 106. (a)(1) The Secretary is authorized to provide, or 
contract with public or private organizations to provide, 
information, advice, and technical assistance, including but 
not limited to--
                  
          (i) the assembly, correlation, publication, and 
        dissemination of information with respect to the 
        construction, rehabilitation, and operation of low- and 
        moderate-income housing;
          (ii) the provision of advice and technical assistance 
        to public bodies or to nonprofit or cooperative 
        organizations with respect to the construction, 
        rehabilitation, and operation of low- and moderate-
        income housing, including assistance with respect to 
        self-help and mutual self-help programs;
          (iii) counseling and advice to tenants and homeowners 
        with respect to property maintenance, financial 
        management, and such other matters as may be 
        appropriate to assist them in improving their housing 
        conditions and in meeting the responsibilities of 
        tenancy or homeownership; and
          (iv) the provision of technical assistance to 
        communities, particularly smaller communities, to 
        assist such communities in planning, developing, and 
        administering Community Development Programs pursuant 
        to title I of the Housing and Community Development Act 
        of 1974.
  (2) The Secretary (A) shall provide the services described in 
clause (iii) of paragraph (1) for homeowners assisted under 
section 235 of the National Housing Act; (B) shall, in 
consultation with the Secretary of Agriculture, provide such 
services for borrowers who are first-time homebuyers with 
guaranteed loans under section 502(h) of the Housing Act of 
1949; and (C) may provide such services for other owners of 
single family dwelling units insured under title II of the 
National Housing Act or guaranteed or insured under chapter 37 
of title 38, United States Code. For purposes of this paragraph 
and clause (iii) of paragraph (1), the Secretary may provide 
the services described in such clause directly or may enter 
into contracts with, make grants to, and provide other types of 
assistance to private or public organizations with special 
competence and knowledge in counseling low- and moderate-income 
families to provide such services.
  (3) There is authorized to be appropriated for the purposes 
of this subsection, without fiscal year limitation, such sums 
as may be necessary, except that for such purposes there are 
authorized to be appropriated $6,025,000 for fiscal year 1993 
and $6,278,050 for fiscal year 1994. Of the amounts 
appropriated for each of fiscal years 1993 and 1994, up to 
$500,000 shall be available for use for counseling and other 
activities in connection with the demonstration program under 
section 152 of the Housing and Community Development Act of 
1992. Any amounts so appropriated shall remain available until 
expended.
  (4) Homeownership and Rental Counseling Assistance.--
          (A) In general.--The Secretary shall make financial 
        assistance available under this paragraph to HUD-
        approved housing counseling agencies and State housing 
        finance agencies.
          (B) Qualified entities.--The Secretary shall 
        establish standards and guidelines for eligibility of 
        organizations (including governmental and nonprofit 
        organizations) to receive assistance under this 
        paragraph, in accordance with subparagraph (D).
          (C) Distribution.--Assistance made available under 
        this paragraph shall be distributed in a manner that 
        encourages efficient and successful counseling programs 
        and that ensures adequate distribution of amounts for 
        rural areas having traditionally low levels of access 
        to such counseling services, including areas with 
        insufficient access to the Internet. In distributing 
        such assistance, the Secretary may give priority 
        consideration to entities serving areas with the 
        highest home foreclosure rates.
          (D) Limitation on distribution of assistance.--
                  (i) In general.--None of the amounts made 
                available under this paragraph shall be 
                distributed to--
                          (I) any organization which has been 
                        convicted for a violation under Federal 
                        law relating to an election for Federal 
                        office; or
                          (II) any organization which employs 
                        applicable individuals.
                  (ii) Definition of applicable individuals.--
                In this subparagraph, the term ``applicable 
                individual'' means an individual who--
                          (I) is--
                                  (aa) employed by the 
                                organization in a permanent or 
                                temporary capacity;
                                  (bb) contracted or retained 
                                by the organization; or
                                  (cc) acting on behalf of, or 
                                with the express or apparent 
                                authority of, the organization; 
                                and
                          (II) has been convicted for a 
                        violation under Federal law relating to 
                        an election for Federal office.
          (E) Grantmaking process.--In making assistance 
        available under this paragraph, the Secretary shall 
        consider appropriate ways of streamlining and improving 
        the processes for grant application, review, approval, 
        and award.
          (F) Authorization of appropriations.--There are 
        authorized to be appropriated $45,000,000 for each of 
        fiscal years 2009 through 2012 for--
                  (i) the operations of the Office of Housing 
                Counseling of the Department of Housing and 
                Urban Development;
                  (ii) the responsibilities of the Director of 
                Housing Counseling under paragraphs (2) through 
                (5) of subsection (g); and
                  (iii) assistance pursuant to this paragraph 
                for entities providing homeownership and rental 
                counseling.
  (b)(1) The Secretary is authorized to make loans to nonprofit 
organizations or public housing agencies for the necessary 
expenses, prior to construction, in planning, and obtaining 
financing for, the rehabilitation or construction of housing 
for low- or moderate-income families under section 235 of the 
National Housing Act or any other federally assisted program. 
Such loans shall be made without interest and shall not exceed 
80 per centum of the reasonable costs expected to be incurred 
in planning, and in obtaining financing for, such housing prior 
to the availability of financing, including, but not limited 
to, preliminary surveys and analyses of market needs, 
preliminary site engineering and architectural fees, site 
acquisition, application, and mortgage commitment fees, and 
construction loan fees and discounts. The Secretary shall 
require repayment of loans made under this subsection, under 
such terms and conditions as he may require, upon completion of 
the project or sooner, and may cancel any part or all of a loan 
if he determines that it cannot be recovered from the proceeds 
of any permanent loan made to finance the rehabilitation or 
construction of the housing.
  (2) The Secretary shall determine prior to the making of any 
loan that the nonprofit organization or public housing agency 
meets such requirements with respect to financial 
responsibility and stability as he may prescribe.
  (3) There are authorized to be appropriated for the purposes 
of this subsection not to exceed $7,500,000, for the fiscal 
year ending June 30, 1969, and not to exceed $10,000,000 for 
the fiscal year ending June 30, 1970. Any amounts so 
appropriated shall remain available until expended, and any 
amounts authorized for any fiscal year under this paragraph but 
not appropriated may be appropriated for any succeeding fiscal 
year.
  (4) All funds appropriated for the purposes of this 
subsection shall be deposited in a fund which shall be known as 
the Low and Moderate Income Sponsor Fund, and which shall be 
available without fiscal year limitation and be administered by 
the Secretary as a revolving fund for carrying out the purposes 
of this subsection. Sums received in repayment of loans made 
under this subsection shall be deposited in such fund.
  (c) Grants for Homeownership Counseling Organizations.--
          (1) In general.--The Secretary of Housing and Urban 
        Development may make grants--
                  (A) to nonprofit organizations experienced in 
                the provision of homeownership counseling to 
                enable the organizations to provide 
                homeownership counseling to eligible 
                homeowners; and
                  (B) to assist in the establishment of 
                nonprofit homeownership counseling 
                organizations.
          (2) Program requirements.--
                  (A) Applications for grants under this 
                subsection shall be submitted in the form, and 
                in accordance with the procedures, that the 
                Secretary requires.
                  (B) The homeownership counseling 
                organizations receiving assistance under this 
                subsection shall use the assistance only to 
                provide homeownership counseling to eligible 
                homeowners.
                  (C) The homeownership counseling provided by 
                homeownership counseling organizations 
                receiving assistance under this subsection 
                shall include counseling with respect to--
                          (i) financial management;
                          (ii) available community resources, 
                        including public assistance programs, 
                        mortgage assistance programs, home 
                        repair assistance programs, utility 
                        assistance programs, food programs, and 
                        social services; and
                          (iii) employment training and 
                        placement.
          (3) Availability of homeownership counseling.--The 
        Secretary shall take any action that is necessary--
                  (A) to ensure the availability throughout the 
                United States of homeownership counseling from 
                homeownership counseling organizations 
                receiving assistance under this subsection, 
                with priority to areas that--
                          (i) are experiencing high rates of 
                        home foreclosure and any other 
                        indicators of homeowner distress 
                        determined by the Secretary to be 
                        appropriate;
                          (ii) are not already adequately 
                        served by homeownership counseling 
                        organizations; and
                          (iii) have a high incidence of 
                        mortgages involving principal 
                        obligations (including such initial 
                        service charges, appraisal, inspection, 
                        and other fees as the Secretary shall 
                        approve) in excess of 97 percent of the 
                        appraised value of the properties that 
                        are insured pursuant to section 203 of 
                        the National Housing Act; and
                  (B) to inform the public of the availability 
                of the homeownership counseling.
          (4) Eligibility for counseling.--A homeowner shall be 
        eligible for homeownership counseling under this 
        subsection if--
                  (A) the home loan is secured by property that 
                is the principal residence (as defined by the 
                Secretary) of the homeowner;
                  (B) the home loan is not assisted under title 
                V of the Housing Act of 1949; and
                  (C) the homeowner is, or is expected to be, 
                unable to make payments, correct a home loan 
                delinquency within a reasonable time, or resume 
                full home loan payments due to a reduction in 
                the income of the homeowner because of--
                          (i) an involuntary loss of, or 
                        reduction in, the employment of the 
                        homeowner, the self-employment of the 
                        homeowner, or income from the pursuit 
                        of the occupation of the homeowner;
                          (ii) any similar loss or reduction 
                        experienced by any person who 
                        contributes to the income of the 
                        homeowner;
                          (iii) a significant reduction in the 
                        income of the household due to divorce 
                        or death; or
                          (iv) a significant increase in basic 
                        expenses of the homeowner or an 
                        immediate family member of the 
                        homeowner (including the spouse, child, 
                        or parent for whom the homeowner 
                        provides substantial care or financial 
                        assistance) due to--
                                  (I) an unexpected or 
                                significant increase in medical 
                                expenses;
                                  (II) a divorce;
                                  (III) unexpected and 
                                significant damage to the 
                                property, the repair of which 
                                will not be covered by private 
                                or public insurance; or
                                  (IV) a large property-tax 
                                increase; or
                  (D) the Secretary of Housing and Urban 
                Development determines that the annual income 
                of the homeowner is no greater than the annual 
                income established by the Secretary as being of 
                low- or moderate-income.
          (5) Notification of availability of homeownership 
        counseling.--
                  (A) Notification of availability of 
                homeownership counseling.--
                          (i) Requirement.--Except as provided 
                        in subparagraph (C), the creditor of a 
                        loan (or proposed creditor) shall 
                        provide notice under clause (ii) to (I) 
                        any eligible homeowner who fails to pay 
                        any amount by the date the amount is 
                        due under a home loan, and (II) any 
                        applicant for a mortgage described in 
                        paragraph (4).
                          (ii) Content.--Notification under 
                        this subparagraph shall--
                                  (I) notify the homeowner or 
                                mortgage applicant of the 
                                availability of any 
                                homeownership counseling 
                                offered by the creditor (or 
                                proposed creditor);
                                  (II) if provided to an 
                                eligible mortgage applicant, 
                                state that completion of a 
                                counseling program is required 
                                for insurance pursuant to 
                                section 203 of the National 
                                Housing Act;
                                  (III) notify the homeowner or 
                                mortgage applicant of the 
                                availability of homeownership 
                                counseling provided by 
                                nonprofit organizations 
                                approved by the Secretary and 
                                experienced in the provision of 
                                homeownership counseling, or 
                                provide the toll-free telephone 
                                number described in 
                                subparagraph (D)(i);
                                  (IV) notify the homeowner by 
                                a statement or notice, written 
                                in plain English by the 
                                Secretary of Housing and Urban 
                                Development, in consultation 
                                with the Secretary of Defense 
                                and the Secretary of the 
                                Treasury, explaining the 
                                mortgage and foreclosure rights 
                                of servicemembers, and the 
                                dependents of such 
                                servicemembers, under the 
                                Servicemembers Civil Relief Act 
                                (50 U.S.C. App. 501 et seq.), 
                                including the toll-free 
                                military one source number to 
                                call if servicemembers, or the 
                                dependents of such 
                                servicemembers, require further 
                                assistance; and
                                  (V) notify the housing or 
                                mortgage applicant of the 
                                availability of mortgage 
                                software systems provided 
                                pursuant to subsection (g)(3).
                  (B) Deadline for notification.--The 
                notification required in subparagraph (A) shall 
                be made--
                          (i) in a manner approved by the 
                        Secretary; and
                          (ii) before the expiration of the 45-
                        day period beginning on the date on 
                        which the failure referred to in such 
                        subparagraph occurs.
                  (C) Notification.--Notification under 
                subparagraph (A) shall not be required with 
                respect to any loan for which the eligible 
                homeowner pays the amount overdue before the 
                expiration of the 45-day period under 
                subparagraph (B)(ii).
                  (D) Administration and compliance.--The 
                Secretary shall, to the extent of amounts 
                approved in appropriation Acts, enter into an 
                agreement with an appropriate private entity 
                under which the entity will--
                          (i) operate a toll-free telephone 
                        number through which any eligible 
                        homeowner can obtain a list of 
                        nonprofit organizations, which shall be 
                        updated annually, that--
                                  (I) are approved by the 
                                Secretary and experienced in 
                                the provision of homeownership 
                                counseling; and
                                  (II) serve the area in which 
                                the residential property of the 
                                homeowner is located;
                          (ii) monitor the compliance of 
                        creditors with the requirements of 
                        subparagraphs (A) and (B); and
                          (iii) report to the Secretary not 
                        less than annually regarding the extent 
                        of compliance of creditors with the 
                        requirements of subparagraphs (A) and 
                        (B).
                  (E) Report.--The Secretary shall submit a 
                report to the Congress not less than annually 
                regarding the extent of compliance of creditors 
                with the requirements of subparagraphs (A) and 
                (B) and the effectiveness of the entity 
                monitoring such compliance. The Secretary shall 
                also include in the report any recommendations 
                for legislative action to increase the 
                authority of the Secretary to penalize 
                creditors who do not comply with such 
                requirements.
          (6) Definitions.--For purposes of this subsection:
                  (A) The term ``creditor'' means a person or 
                entity that is servicing a home loan on behalf 
                of itself or another person or entity.
                  (B) The term ``eligible homeowner'' means a 
                homeowner eligible for counseling under 
                paragraph (4).
                  (C) The term ``home loan'' means a loan 
                secured by a mortgage or lien on residential 
                property.
                  (D) The term ``homeowner'' means a person who 
                is obligated under a home loan.
                  (E) The term ``residential property'' means a 
                1-family residence, including a 1-family unit 
                in a condominium project, a membership interest 
                and occupancy agreement in a cooperative 
                housing project, and a manufactured home and 
                the lot on which the home is situated.
          (7) Regulations.--The Secretary shall issue any 
        regulations that are necessary to carry out this 
        subsection.
          (8) Authorization of appropriations.--There are 
        authorized to be appropriated to carry out this section 
        $7,000,000 for fiscal year 1993 and $7,294,000 for 
        fiscal year 1994, of which amounts $1,000,000 shall be 
        available in each such fiscal year to carry out 
        paragraph (5)(D). Any amount appropriated under this 
        subsection shall remain available until expended.
  (d) Prepurchase and Foreclosure-Prevention Counseling 
Demonstration.--
          (1) Purposes.--The purpose of this subsection is--
                  (A) to reduce defaults and foreclosures on 
                mortgage loans insured under the Federal 
                Housing Administration single family mortgage 
                insurance program;
                  (B) to encourage responsible and prudent use 
                of such federally insured home mortgages;
                  (C) to assist homeowners with such federally 
                insured mortgages to retain the homes they have 
                purchased pursuant to such mortgages; and
                  (D) to encourage the availability and 
                expansion of housing opportunities in 
                connection with such federally insured home 
                mortgages.
          (2) Authority.--The Secretary of Housing and Urban 
        Development shall carry out a program to demonstrate 
        the effectiveness of providing coordinated prepurchase 
        counseling and foreclosure-prevention counseling to 
        first-time homebuyers and homeowners in avoiding 
        defaults and foreclosures on mortgages insured under 
        the Federal Housing Administration single family home 
        mortgage insurance program.
          (3) Grants.--Under the demonstration program under 
        this subsection, the Secretary shall make grants to 
        qualified nonprofit organizations under paragraph (4) 
        to enable the organizations to provide prepurchase 
        counseling services to eligible homebuyers and 
        foreclosure-prevention counseling services to eligible 
        homeowners, in counseling target areas.
          (4) Qualified nonprofit organizations.--The Secretary 
        shall select nonprofit organizations to receive 
        assistance under the demonstration program under this 
        subsection based on the experience and ability of the 
        organizations in providing homeownership counseling and 
        their ability to provide community-based prepurchase 
        and foreclosure-prevention counseling under paragraphs 
        (5) and (6) in a counseling target area. To be eligible 
        for selection under this paragraph, a nonprofit 
        organization shall submit an application containing a 
        proposal for providing counseling services in the form 
        and manner required by the Secretary.
          (5) Prepurchase counseling.--
                  (A) Mandatory participation.--Under the 
                demonstration program, the Secretary shall 
                require any eligible homebuyer who intends to 
                purchase a home located in a counseling target 
                area and who has applied for (as determined by 
                the Secretary) a qualified mortgage (as such 
                term is defined in paragraph (9)) on such home 
                that involves a downpayment of less than 10 
                percent of the principal obligation of the 
                mortgage, to receive counseling prior to 
                signing of a contract to purchase the home. The 
                counseling shall include counseling with 
                respect to--
                          (i) financial management and the 
                        responsibilities involved in 
                        homeownership;
                          (ii) fair housing laws and 
                        requirements;
                          (iii) the maximum mortgage amount 
                        that the homebuyer can afford; and
                          (iv) options, programs, and actions 
                        available to the homebuyer in the event 
                        of actual or potential delinquency or 
                        default.
                  (B) Eligibility for counseling.--A homebuyer 
                shall be eligible for prepurchase counseling 
                under this paragraph if--
                          (i) the homebuyer has applied for a 
                        qualified mortgage;
                          (ii) the homebuyer is a first-time 
                        homebuyer; and
                          (iii) the home to be purchased under 
                        the qualified mortgage is located in a 
                        counseling target area.
          (6) Foreclosure-prevention counseling.--
                  (A) Availability.--Under the demonstration 
                program, the Secretary shall make counseling 
                available for eligible homeowners who are 60 or 
                more days delinquent with respect to a payment 
                under a qualified mortgage on a home located 
                within a counseling target area. The counseling 
                shall include counseling with respect to 
                options, programs, and actions available to the 
                homeowner for resolving the delinquency or 
                default.
                  (B) Notification of delinquency.--Under the 
                demonstration program, the Secretary shall 
                require the creditor of any eligible homeowner 
                who is delinquent (as described in subparagraph 
                (A)) to send written notice by registered or 
                certified mail within 5 days (excluding 
                Saturdays, Sundays, and legal public holidays) 
                after the occurrence of such delinquency--
                          (i) notifying the homeowner of the 
                        delinquency and the name, address, and 
                        phone number of the counseling 
                        organization for the counseling target 
                        area; and
                          (ii) notifying any counseling 
                        organization for the counseling target 
                        area of the delinquency and the name, 
                        address, and phone number of the 
                        delinquent homeowner.
                  (C) Coordination with emergency homeownership 
                counseling program.--The Secretary may 
                coordinate the provision of assistance under 
                subsection (c) with the demonstration program 
                under this subsection.
                  (D) Eligibility for counseling.--A homeowner 
                shall be eligible for foreclosure-prevention 
                counseling under this paragraph if--
                          (i) the home owned by the homeowner 
                        is subject to a qualified mortgage; and
                          (ii) such home is located in a 
                        counseling target area.
          (7) Scope of demonstration program.--
                  (A) Designation of counseling target areas.--
                The Secretary shall designate 3 counseling 
                target areas (as provided in subparagraph (B)), 
                which shall be located in not less than 2 
                separate metropolitan areas. The Secretary 
                shall provide for counseling under the 
                demonstration program under this subsection 
                with respect to only such counseling target 
                areas.
                  (B) Counseling target areas.--Each counseling 
                target area shall consist of a group of 
                contiguous census tracts--
                          (i) the population of which is 
                        greater than 50,000;
                          (ii) which together constitute an 
                        identifiable neighborhood, area, 
                        borough, district, or region within a 
                        metropolitan area (except that this 
                        clause may not be construed to exclude 
                        a group of census tracts containing 
                        areas not wholly contained within a 
                        single town, city, or other political 
                        subdivision of a State);
                          (iii) in which the average age of 
                        existing housing is greater than 20 
                        years; and
                          (iv) for which (I) the percentage of 
                        qualified mortgages on homes within the 
                        area that are foreclosed exceeds 5 
                        percent for the calendar year preceding 
                        the year in which the area is selected 
                        as a counseling target area, or (II) 
                        the number of qualified mortgages 
                        originated on homes in such area in the 
                        calendar year preceding the calendar 
                        year in which the area is selected as a 
                        counseling target area exceeds 20 
                        percent of the total number of 
                        mortgages originated on residences in 
                        the area during such year.
                  (C) Mortgage characteristics.--In designating 
                counseling target areas under subparagraph (A), 
                the Secretary shall designate at least 1 such 
                area that meets the requirements of 
                subparagraph (B)(iv)(I) and at least 1 such 
                area that meets the requirements of 
                subparagraph (B)(iv)(II).
                  (D) Expansion of target areas.--The Secretary 
                may expand any counseling target area during 
                the term of the demonstration program, if the 
                Secretary determines that counseling can be 
                adequately provided within such expanded area 
                and the purposes of this subsection will be 
                furthered by such expansion. Any such expansion 
                shall include only groups of census tracts that 
                are contiguous to the counseling target area 
                expanded and such census tract groups shall not 
                be subject to the provisions of subparagraph 
                (B).
                  (E) Designation of control areas.--For 
                purposes of determining the effectiveness of 
                counseling under the demonstration program, the 
                Secretary shall designate 3 control areas, each 
                of which shall correspond to 1 of the 
                counseling target areas designated under 
                subparagraph (A). Each control area shall be 
                located in the metropolitan area in which the 
                corresponding counseling target area is 
                located, shall meet the requirements of 
                subparagraph (B), and shall be similar to such 
                area with respect to size, age of housing 
                stock, median income, and racial makeup of the 
                population. Each control area shall also comply 
                with the requirements of subclause (I) or (II) 
                of subparagraph (B)(iv), according to the 
                subclause with which the corresponding 
                counseling target area complies.
          (8) Evaluation.--Each organization providing 
        counseling under the demonstration program under this 
        subsection shall maintain records with respect to each 
        eligible homebuyer and eligible homeowner counseled and 
        shall provide information with respect to such 
        counseling as the Secretary or the Comptroller General 
        may require.
          (9) Definitions.--For purposes of this subsection:
                  (A) The term ``control area'' means an area 
                designated by the Secretary under paragraph 
                (7)(E).
                  (B) The term ``counseling target area'' means 
                an area designated by the Secretary under 
                paragraph (7)(A).
                  (C) The term ``creditor'' means a person or 
                entity that is servicing a loan secured by a 
                qualified mortgage on behalf of itself or 
                another person or entity.
                  (D) The term ``displaced homemaker'' means an 
                individual who--
                          (i) is an adult;
                          (ii) has not worked full-time, full-
                        year in the labor force for a number of 
                        years, but has during such years, 
                        worked primarily without remuneration 
                        to care for the home and family; and
                          (iii) is unemployed or underemployed 
                        and is experiencing difficulty in 
                        obtaining or upgrading employment.
                  (E) The term ``downpayment'' means the amount 
                of purchase price of home required to be paid 
                at or before the time of purchase.
                  (F) The term ``eligible homebuyer'' means a 
                homebuyer that meets the requirements under 
                paragraph (5)(B).
                  (G) The term ``eligible homeowner'' means a 
                homeowner that meets the requirements under 
                paragraph (6)(D).
                  (H) The term ``first-time homebuyer'' means 
                an individual who--
                          (i) (and whose spouse) has had no 
                        ownership in a principal residence 
                        during the 3-year period ending on the 
                        date of purchase of the home pursuant 
                        to which counseling is provided under 
                        this subsection;
                          (ii) is a displaced homemaker who, 
                        except for owning a residence with his 
                        or her spouse or residing in a 
                        residence owned by the spouse, meets 
                        the requirements of clause (i); or
                          (iii) is a single parent who, except 
                        for owning a residence with his or her 
                        spouse or residing in a residence owned 
                        by the spouse while married, meets the 
                        requirements of clause (i).
                  (I) The term ``home'' includes any dwelling 
                or dwelling unit eligible for a qualified 
                mortgage, and includes a unit in a condominium 
                project, a membership interest and occupancy 
                agreement in a cooperative housing project, and 
                a manufactured home and the lot on which the 
                home is situated.
                  (J) The term ``metropolitan area'' means a 
                standard metropolitan statistical area as 
                designated by the Director of the Office of 
                Management and Budget.
                  (K) The term ``qualified mortgage'' means a 
                mortgage on a 1- to 4-family home that is 
                insured under title II of the National Housing 
                Act.
                  (L) The term ``Secretary'' means the 
                Secretary of Housing and Urban Development.
                  (M) The term ``single parent'' means an 
                individual who--
                          (i) is unmarried or legally separated 
                        from a spouse; and
                          (ii)(I) has 1 or more minor children 
                        for whom the individual has custody or 
                        joint custody; or
                          (II) is pregnant.
          (10) Regulations.--The Secretary may issue any 
        regulations necessary to carry out this subsection.
          (11) Authorization of appropriations.--There are 
        authorized to be appropriated to carry out this 
        subsection $365,000 for fiscal year 1993 and $380,330 
        for fiscal year 1994.
          (12) Termination.--The demonstration program under 
        this subsection shall terminate at the end of fiscal 
        year 1994.
  (e) Certification.--
          (1) Requirement for assistance.--An organization may 
        not receive assistance for counseling activities under 
        subsection (a)(1)(iii), (a)(2), (a)(4), (c), or (d) of 
        this section, or under section 101(e), unless the 
        organization, or the individuals through which the 
        organization provides such counseling, has been 
        certified by the Secretary under this subsection as 
        competent to provide such counseling.
          (2) Standards and examination.--The Secretary shall, 
        by regulation, establish standards and procedures for 
        testing and certifying counselors and for certifying 
        organizations. Such standards and procedures shall 
        require, for certification of an organization, that 
        each individual through which the organization provides 
        counseling shall demonstrate, and, for certification of 
        an individual, that the individual shall demonstrate, 
        by written examination (as provided under subsection 
        (f)(4)), competence to provide counseling in each of 
        the following areas:
                  (A) Financial management.
                  (B) Property maintenance.
                  (C) Responsibilities of homeownership and 
                tenancy.
                  (D) Fair housing laws and requirements.
                  (E) Housing affordability.
                  (F) Avoidance of, and responses to, rental 
                and mortgage delinquency and avoidance of 
                eviction and mortgage default.
          (3) Requirement under hud programs.--Any 
        homeownership counseling or rental housing counseling 
        (as such terms are defined in subsection (g)(1)) 
        required under, or provided in connection with, any 
        program administered by the Department of Housing and 
        Urban Development shall be provided only by 
        organizations or counselors certified by the Secretary 
        under this subsection as competent to provide such 
        counseling.
          (4) Outreach.--The Secretary shall take such actions 
        as the Secretary considers appropriate to ensure that 
        individuals and organizations providing homeownership 
        or rental housing counseling are aware of the 
        certification requirements and standards of this 
        subsection and of the training and certification 
        programs under subsection (f).
          (5) Encouragement.--The Secretary shall encourage 
        organizations engaged in providing homeownership and 
        rental counseling that do not receive assistance under 
        this section to employ organizations and individuals to 
        provide such counseling who are certified under this 
        subsection or meet the certification standards 
        established under this subsection.
  (f) Homeownership and Rental Counselor Training and 
Certification Programs.--
          (1) Establishment.--To the extent amounts are 
        provided in appropriations Acts under paragraph (7), 
        the Secretary shall contract with an appropriate entity 
        (which may be a nonprofit organization) to carry out a 
        program under this subsection to train individuals to 
        provide homeownership and rental counseling and to 
        administer the examination under subsection (e)(2) and 
        certify individuals under such subsection.
          (2) Eligibility and selection.--
                  (A) Eligibility.--To be eligible to provide 
                the training and certification program under 
                this subsection, an entity shall have 
                demonstrated experience in training 
                homeownership and rental counselors.
                  (B) Selection.--The Secretary shall provide 
                for entities meeting the requirements of 
                subparagraph (A) to submit applications to 
                provide the training and certification program 
                under this subsection. The Secretary shall 
                select an application based on the ability of 
                the entity to--
                          (i) establish the program as soon as 
                        possible on a national basis, but not 
                        later than the date under paragraph 
                        (6);
                          (ii) minimize the costs involved in 
                        establishing the program; and
                          (iii) effectively and efficiently 
                        carry out the program.
          (3) Training.--The Secretary shall require that 
        training of counselors under the program under this 
        subsection be designed and coordinated to prepare 
        individuals for successful completion of the 
        examination for certification under subsection (e)(2). 
        The Secretary, in consultation with the entity selected 
        under paragraph (2)(B), shall establish the curriculum 
        and standards for training counselors under the 
        program.
          (4) Certification.--The entity selected under 
        paragraph (2)(B) shall administer the examination under 
        subsection (e)(2) and, on behalf of the Secretary, 
        certify individuals successfully completing the 
        examination. The Secretary, in consultation with such 
        entity, shall establish the content and format of the 
        examination.
          (5) Fees.--Subject to the approval of the Secretary, 
        the entity selected under paragraph (2)(B) may 
        establish and impose reasonable fees for participation 
        in the training provided under the program and for 
        examination and certification under subsection (e)(2), 
        in an amount sufficient to cover any costs of such 
        activities not covered with amounts provided under 
        paragraph (7).
          (6) Timing.--The entity selected under paragraph 
        (2)(B) to carry out the training and certification 
        program shall establish the program as soon as possible 
        after such selection, and shall make training and 
        certification available under the program on a national 
        basis not later than the expiration of the 1-year 
        period beginning upon such selection.
          (7) Authorization of appropriations.--There are 
        authorized to be appropriated to carry out this 
        subsection $2,000,000 for fiscal year 1993 and 
        $2,084,000 for 1994.
  (g) Procedures and Activities.--
          (1) Counseling procedures.--
                  (A) In general.--The Secretary shall 
                establish, coordinate, and monitor the 
                administration by the Department of Housing and 
                Urban Development of the counseling procedures 
                for homeownership counseling and rental housing 
                counseling provided in connection with any 
                program of the Department, including all 
                requirements, standards, and performance 
                measures that relate to homeownership and 
                rental housing counseling.
                  (B) Homeownership counseling.--For purposes 
                of this subsection and as used in the 
                provisions referred to in this subparagraph, 
                the term ``homeownership counseling'' means 
                counseling related to homeownership and 
                residential mortgage loans. Such term includes 
                counseling related to homeownership and 
                residential mortgage loans that is provided 
                pursuant to--
                          (i) section 105(a)(20) of the Housing 
                        and Community Development Act of 1974 
                        (42 U.S.C. 5305(a)(20));
                          (ii) in the United States Housing Act 
                        of 1937--
                                  (I) section 9(e) (42 U.S.C. 
                                1437g(e));
                                  (II) section 8(y)(1)(D) (42 
                                U.S.C. 1437f(y)(1)(D));
                                  (III) section 18(a)(4)(D) (42 
                                U.S.C. 1437p(a)(4)(D));
                                  (IV) section 23(c)(4) (42 
                                U.S.C. 1437u(c)(4));
                                  (V) section 32(e)(4) (42 
                                U.S.C. 1437z-4(e)(4));
                                  (VI) section 33(d)(2)(B) (42 
                                U.S.C. 1437z-5(d)(2)(B));
                                  (VII) sections 302(b)(6) and 
                                303(b)(7) (42 U.S.C. 1437aaa-
                                1(b)(6), 1437aaa-2(b)(7)); and
                                  (VIII) section 304(c)(4) (42 
                                U.S.C. 1437aaa-3(c)(4));
                          (iii) section 302(a)(4) of the 
                        American Homeownership and Economic 
                        Opportunity Act of 2000 (42 U.S.C. 
                        1437f note);
                          (iv) sections 233(b)(2) and 258(b) of 
                        the Cranston-Gonzalez National 
                        Affordable Housing Act (42 U.S.C. 
                        12773(b)(2), 12808(b));
                          (v) this section and section 101(e) 
                        of the Housing and Urban Development 
                        Act of 1968 (12 U.S.C. 1701x, 
                        1701w(e));
                          (vi) section 220(d)(2)(G) of the Low-
                        Income Housing Preservation and 
                        Resident Homeownership Act of 1990 (12 
                        U.S.C. 4110(d)(2)(G));
                          (vii) sections 422(b)(6), 423(b)(7), 
                        424(c)(4), 442(b)(6), and 443(b)(6) of 
                        the Cranston-Gonzalez National 
                        Affordable Housing Act (42 U.S.C. 
                        12872(b)(6), 12873(b)(7), 12874(c)(4), 
                        12892(b)(6), and 12893(b)(6));
                          (viii) section 491(b)(1)(F)(iii) of 
                        the McKinney-Vento Homeless Assistance 
                        Act (42 U.S.C. 11408(b)(1)(F)(iii));
                          (ix) sections 202(3) and 810(b)(2)(A) 
                        of the Native American Housing and 
                        Self-Determination Act of 1996 (25 
                        U.S.C. 4132(3), 4229(b)(2)(A));
                          (x) in the National Housing Act--
                                  (I) in section 203 (12 U.S.C. 
                                1709), the penultimate 
                                undesignated paragraph of 
                                paragraph (2) of subsection 
                                (b), subsection (c)(2)(A), and 
                                subsection (r)(4);
                                  (II) subsections (a) and 
                                (c)(3) of section 237 (12 
                                U.S.C. 1715z-2); and
                                  (III) subsections (d)(2)(B) 
                                and (m)(1) of section 255 (12 
                                U.S.C. 1715z-20);
                          (xi) section 502(h)(4)(B) of the 
                        Housing Act of 1949 (42 U.S.C. 
                        1472(h)(4)(B));
                          (xii) section 508 of the Housing and 
                        Urban Development Act of 1970 (12 
                        U.S.C. 1701z-7); and
                          (xiii) section 106 of the Energy 
                        Policy Act of 1992 (42 U.S.C. 12712 
                        note).
                  (C) Rental housing counseling.--For purposes 
                of this subsection, the term ``rental housing 
                counseling'' means counseling related to rental 
                of residential property, which may include 
                counseling regarding future homeownership 
                opportunities and providing referrals for 
                renters and prospective renters to entities 
                providing counseling and shall include 
                counseling related to such topics that is 
                provided pursuant to--
                          (i) section 105(a)(20) of the Housing 
                        and Community Development Act of 1974 
                        (42 U.S.C. 5305(a)(20));
                          (ii) in the United States Housing Act 
                        of 1937--
                                  (I) section 9(e) (42 U.S.C. 
                                1437g(e));
                                  (II) section 18(a)(4)(D) (42 
                                U.S.C. 1437p(a)(4)(D));
                                  (III) section 23(c)(4) (42 
                                U.S.C. 1437u(c)(4));
                                  (IV) section 32(e)(4) (42 
                                U.S.C. 1437z-4(e)(4));
                                  (V) section 33(d)(2)(B) (42 
                                U.S.C. 1437z-5(d)(2)(B)); and
                                  (VI) section 302(b)(6) (42 
                                U.S.C. 1437aaa-1(b)(6));
                          (iii) section 233(b)(2) of the 
                        Cranston-Gonzalez National Affordable 
                        Housing Act (42 U.S.C. 12773(b)(2));
                          (iv) section 106 of the Housing and 
                        Urban Development Act of 1968 (12 
                        U.S.C. 1701x);
                          (v) section 422(b)(6) of the 
                        Cranston-Gonzalez National Affordable 
                        Housing Act (42 U.S.C. 12872(b)(6));
                          (vi) section 491(b)(1)(F)(iii) of the 
                        McKinney-Vento Homeless Assistance Act 
                        (42 U.S.C. 11408(b)(1)(F)(iii));
                          (vii) sections 202(3) and 
                        810(b)(2)(A) of the Native American 
                        Housing and Self-Determination Act of 
                        1996 (25 U.S.C. 4132(3), 
                        4229(b)(2)(A)); and
                          (viii) the rental assistance program 
                        under section 8 of the United States 
                        Housing Act of 1937 (42 U.S.C. 1437f).
          (2) Standards for materials.--The Secretary, in 
        consultation with the advisory committee established 
        under subsection (g)(4) of the Department of Housing 
        and Urban Development Act, shall establish standards 
        for materials and forms to be used, as appropriate, by 
        organizations providing homeownership counseling 
        services, including any recipients of assistance 
        pursuant to subsection (a)(4).
          (3) Mortgage software systems.--
                  (A) Certification.--The Secretary shall 
                provide for the certification of various 
                computer software programs for consumers to use 
                in evaluating different residential mortgage 
                loan proposals. The Secretary shall require, 
                for such certification, that the mortgage 
                software systems take into account--
                          (i) the consumer's financial 
                        situation and the cost of maintaining a 
                        home, including insurance, taxes, and 
                        utilities;
                          (ii) the amount of time the consumer 
                        expects to remain in the home or 
                        expected time to maturity of the loan; 
                        and
                          (iii) such other factors as the 
                        Secretary considers appropriate to 
                        assist the consumer in evaluating 
                        whether to pay points, to lock in an 
                        interest rate, to select an adjustable 
                        or fixed rate loan, to select a 
                        conventional or government-insured or 
                        guaranteed loan and to make other 
                        choices during the loan application 
                        process.
                If the Secretary determines that available 
                existing software is inadequate to assist 
                consumers during the residential mortgage loan 
                application process, the Secretary shall 
                arrange for the development by private sector 
                software companies of new mortgage software 
                systems that meet the Secretary's 
                specifications.
                  (B) Use and initial availability.--Such 
                certified computer software programs shall be 
                used to supplement, not replace, housing 
                counseling. The Secretary shall provide that 
                such programs are initially used only in 
                connection with the assistance of housing 
                counselors certified pursuant to subsection 
                (e).
                  (C) Availability.--After a period of initial 
                availability under subparagraph (B) as the 
                Secretary considers appropriate, the Secretary 
                shall take reasonable steps to make mortgage 
                software systems certified pursuant to this 
                paragraph widely available through the Internet 
                and at public locations, including public 
                libraries, senior-citizen centers, public 
                housing sites, offices of public housing 
                agencies that administer rental housing 
                assistance vouchers, and housing counseling 
                centers.
                  (D) Budget compliance.--This paragraph shall 
                be effective only to the extent that amounts to 
                carry out this paragraph are made available in 
                advance in appropriations Acts.
          (4) National public service multimedia campaigns to 
        promote housing counseling.--
                  (A) In general.--The Director of Housing 
                Counseling shall develop, implement, and 
                conduct national public service multimedia 
                campaigns designed to make persons facing 
                mortgage foreclosure, persons considering a 
                subprime mortgage loan to purchase a home, 
                elderly persons, persons who face language 
                barriers, low-income persons, minorities, and 
                other potentially vulnerable consumers aware 
                that it is advisable, before seeking or 
                maintaining a residential mortgage loan, to 
                obtain homeownership counseling from an 
                unbiased and reliable sources and that such 
                homeownership counseling is available, 
                including through programs sponsored by the 
                Secretary of Housing and Urban Development.
                  (B) Contact information.--Each segment of the 
                multimedia campaign under subparagraph (A) 
                shall publicize the toll-free telephone number 
                and website of the Department of Housing and 
                Urban Development through which persons seeking 
                housing counseling can locate a housing 
                counseling agency in their State that is 
                certified by the Secretary of Housing and Urban 
                Development and can provide advice on buying a 
                home, renting, defaults, foreclosures, credit 
                issues, and reverse mortgages.
                  (C) Authorization of appropriations.--There 
                are authorized to be appropriated to the 
                Secretary, not to exceed $3,000,000 for fiscal 
                years 2009, 2010, and 2011, for the 
                development, implementation, and conduct of 
                national public service multimedia campaigns 
                under this paragraph.
                  (D) Foreclosure rescue education programs.--
                          (i) In general.--Ten percent of any 
                        funds appropriated pursuant to the 
                        authorization under subparagraph (C) 
                        shall be used by the Director of 
                        Housing Counseling to conduct an 
                        education program in areas that have a 
                        high density of foreclosure. Such 
                        program shall involve direct mailings 
                        to persons living in such areas 
                        describing--
                                  (I) tips on avoiding 
                                foreclosure rescue scams;
                                  (II) tips on avoiding 
                                predatory lending mortgage 
                                agreements;
                                  (III) tips on avoiding for-
                                profit foreclosure counseling 
                                services; and
                                  (IV) local counseling 
                                resources that are approved by 
                                the Department of Housing and 
                                Urban Development.
                          (ii) Program emphasis.--In conducting 
                        the education program described under 
                        clause (i), the Director of Housing 
                        Counseling shall also place an emphasis 
                        on serving communities that have a high 
                        percentage of retirement communities or 
                        a high percentage of low-income 
                        minority communities.
                          (iii) Terms defined.--For purposes of 
                        this subparagraph:
                                  (I) High density of 
                                foreclosures.--An area has a 
                                ``high density of 
                                foreclosures'' if such area is 
                                one of the metropolitan 
                                statistical areas (as that term 
                                is defined by the Director of 
                                the Office of Management and 
                                Budget) with the highest home 
                                foreclosure rates.
                                  (II) High percentage of 
                                retirement communities.--An 
                                area has a ``high percentage of 
                                retirement communities'' if 
                                such area is one of the 
                                metropolitan statistical areas 
                                (as that term is defined by the 
                                Director of the Office of 
                                Management and Budget) with the 
                                highest percentage of residents 
                                aged 65 or older.
                                  (III) High percentage of low-
                                income minority communities.--
                                An area has a ``high percentage 
                                of low-income minority 
                                communities'' if such area 
                                contains a higher-than-normal 
                                percentage of residents who are 
                                both minorities and low-income, 
                                as defined by the Director of 
                                Housing Counseling.
          (5) Education programs.--The Secretary shall provide 
        advice and technical assistance to States, units of 
        general local government, and nonprofit organizations 
        regarding the establishment and operation of, including 
        assistance with the development of content and 
        materials for, educational programs to inform and 
        educate consumers, particularly those most vulnerable 
        with respect to residential mortgage loans (such as 
        elderly persons, persons facing language barriers, low-
        income persons, minorities, and other potentially 
        vulnerable consumers), regarding home mortgages, 
        mortgage refinancing, home equity loans, home repair 
        loans, and where appropriate by region, any 
        requirements and costs associated with obtaining flood 
        or other disaster-specific insurance coverage.
  (h) Definitions.--For purposes of this section:
          (1) Nonprofit organization.--The term ``nonprofit 
        organization'' has the meaning given such term in 
        section 104(5) of the Cranston-Gonzalez National 
        Affordable Housing Act (42 U.S.C. 12704(5)), except 
        that subparagraph (D) of such section shall not apply 
        for purposes of this section.
          (2) State.--The term ``State'' means each of the 
        several States, the Commonwealth of Puerto Rico, the 
        District of Columbia, the Commonwealth of the Northern 
        Mariana Islands, Guam, the Virgin Islands, American 
        Samoa, the Trust Territories of the Pacific, or any 
        other possession of the United States.
          (3) Unit of general local government.--The term 
        ``unit of general local government'' means any city, 
        county, parish, town, township, borough, village, or 
        other general purpose political subdivision of a State.
          (4) HUD-approved counseling agency.--The term ``HUD-
        approved counseling agency'' means a private or public 
        nonprofit organization that is--
                  (A) exempt from taxation under section 501(c) 
                of the Internal Revenue Code of 1986; and
                  (B) certified by the Secretary to provide 
                housing counseling services.
          (5) State housing finance agency.--The term ``State 
        housing finance agency'' means any public body, agency, 
        or instrumentality specifically created under State 
        statute that is [authorised] authorized to finance 
        activities designed to provide housing and related 
        facilities throughout an entire State through land 
        acquisition, construction, or rehabilitation.
  (i) Accountability for Recipients of Covered Assistance.--
          (1) Tracking of funds.--The Secretary shall--
                  (A) develop and maintain a system to ensure 
                that any organization or entity that receives 
                any covered assistance uses all amounts of 
                covered assistance in accordance with this 
                section, the regulations issued under this 
                section, and any requirements or conditions 
                under which such amounts were provided; and
                  (B) require any organization or entity, as a 
                condition of receipt of any covered assistance, 
                to agree to comply with such requirements 
                regarding covered assistance as the Secretary 
                shall establish, which shall include--
                          (i) appropriate periodic financial 
                        and grant activity reporting, record 
                        retention, and audit requirements for 
                        the duration of the covered assistance 
                        to the organization or entity to ensure 
                        compliance with the limitations and 
                        requirements of this section, the 
                        regulations under this section, and any 
                        requirements or conditions under which 
                        such amounts were provided; and
                          (ii) any other requirements that the 
                        Secretary determines are necessary to 
                        ensure appropriate administration and 
                        compliance.
          (2) Misuse of funds.--If any organization or entity 
        that receives any covered assistance is determined by 
        the Secretary to have used any covered assistance in a 
        manner that is materially in violation of this section, 
        the regulations issued under this section, or any 
        requirements or conditions under which such assistance 
        was provided--
                  (A) the Secretary shall require that, within 
                12 months after the determination of such 
                misuse, the organization or entity shall 
                reimburse the Secretary for such misused 
                amounts and return to the Secretary any such 
                amounts that remain unused or uncommitted for 
                use; and
                  (B) such organization or entity shall be 
                ineligible, at any time after such 
                determination, to apply for or receive any 
                further covered assistance.
        The remedies under this paragraph are in addition to 
        any other remedies that may be available under law.
          (3) Covered assistance.--For purposes of this 
        subsection, the term ``covered assistance'' means any 
        grant or other financial assistance provided under this 
        section.

           *       *       *       *       *       *       *

                              ----------                              


INTERNATIONAL BANKING ACT OF 1978

           *       *       *       *       *       *       *



SEC. 15. COOPERATION WITH FOREIGN SUPERVISORS.

  (a) Disclosure of Supervisory Information to Foreign 
Supervisors.--Notwithstanding any other provision of law, the 
Board, Comptroller of the Currency, and Federal Deposit 
Insurance Corporation[, and Director of the Office of Thrift 
Supervision] may disclose information obtained in the course of 
exercising supervisory or examination authority to any foreign 
bank regulatory or supervisory authority if the Board, 
[Comptroller, Corporation, or Director] Comptroller of the 
Currency, or Corporation determines that such disclosure is 
appropriate and will not prejudice the interests of the United 
States.
  (b) Requirement of Confidentiality.--Before making any 
disclosure of any information to a foreign authority, the 
Board, Comptroller of the Currency, and Federal Deposit 
Insurance Corporation[, and Director of the Office of Thrift 
Supervision] shall obtain, to the extent necessary, the 
agreement of such foreign authority to maintain the 
confidentiality of such information to the extent possible 
under applicable law.
  (c) Confidential Information Received From Foreign 
Supervisors.--
          (1) In general.--Except as provided in paragraph (3), 
        a Federal banking agency may not be compelled to 
        disclose information received from a foreign regulatory 
        or supervisory authority if--
                  (A) the Federal banking agency determines 
                that the foreign regulatory or supervisory 
                authority has, in good faith, determined and 
                represented in writing to such Federal banking 
                agency that public disclosure of the 
                information would violate the laws applicable 
                to that foreign regulatory or supervisory 
                authority; and
                  (B) the relevant Federal banking agency 
                obtained such information pursuant to--
                          (i) such procedures as the Federal 
                        banking agency may establish for use in 
                        connection with the administration and 
                        enforcement of Federal banking laws; or
                          (ii) a memorandum of understanding or 
                        other similar arrangement between the 
                        Federal banking agency and the foreign 
                        regulatory or supervisory authority.
          (2) Treatment under title 5, united states code.--For 
        purposes of section 552 of title 5, United States Code, 
        this subsection shall be treated as a statute described 
        in subsection (b)(3)(B) of such section.
          (3) Savings provision.--No provision of this section 
        shall be construed as--
                  (A) authorizing any Federal banking agency to 
                withhold any information from any duly 
                authorized committee of the House of 
                Representatives or the Senate; or
                  (B) preventing any Federal banking agency 
                from complying with an order of a court of the 
                United States in an action commenced by the 
                United States or such agency.
          (4) Federal banking agency defined.--For purposes of 
        this subsection, the term ``Federal banking agency'' 
        means the Board, the Comptroller of the Currency, and 
        the Federal Deposit Insurance Corporation[, and the 
        Director of the Office of Thrift Supervision].

           *       *       *       *       *       *       *

                              ----------                              


INTERNATIONAL LENDING SUPERVISION ACT OF 1983

           *       *       *       *       *       *       *



TITLE IX--INTERNATIONAL LENDING SUPERVISION

           *       *       *       *       *       *       *



[EQUAL REPRESENTATION FOR THE FEDERAL DEPOSIT INSURANCE CORPORATION AND 
  THE OFFICE OF THRIFT SUPERVISION] EQUAL REPRESENTATION FOR FEDERAL 
                     DEPOSIT INSURANCE CORPORATION

  Sec. 912.
  [(a) In General.--] As one of the 4 Federal bank regulatory 
and supervisory agencies, and as the insurer of the United 
States banks involved in international lending, the Federal 
Deposit Insurance Corporation shall be given equal 
representation with the Board of Governors of the Federal 
Reserve System and the Office of the Comptroller of the 
Currency on the Committee on Banking Regulations and 
Supervisory Practices of the Group of Ten Countries and 
Switzerland.
  [(b) As one of the 4 Federal bank regulatory and supervisory 
agencies, the Office of Thrift Supervision shall be given equal 
representation with the Board of Governors of the Federal 
Reserve System, the Office of the Comptroller of the Currency, 
and the Federal Deposit Insurance Corporation on the Committee 
on Banking Regulations and Supervisory Practices of the Group 
of Ten Countries and Switzerland.]

           *       *       *       *       *       *       *

                              ----------                              


SECTION 403 OF THE LEGAL CERTAINTY FOR BANK PRODUCTS ACT OF 2000

           *       *       *       *       *       *       *



SEC. 403. EXCLUSION OF IDENTIFIED BANKING PRODUCT.

  (a) Exclusion.--Except as provided in subsection (b) or (c)--
          (1) the Commodity Exchange Act (7 U.S.C. 1 et seq.) 
        shall not apply to, and the Commodity Futures Trading 
        Commission shall not exercise regulatory authority 
        under the Commodity Exchange Act (7 U.S.C. 1 et seq.) 
        with respect to, an identified banking product; and
          (2) the definitions of ``security-based swap'' in 
        section 3(a)(68) of the Securities Exchange Act of 1934 
        and ``security-based swap agreement'' in section 
        1a(47)(A)(v) of the Commodity Exchange Act and section 
        3(a)(78) of the Securities Exchange Act of 1934 do not 
        include any identified bank product.
  (b) Exception.--An appropriate Federal banking agency may 
except an identified banking product of a bank under its 
regulatory jurisdiction from the exclusion in subsection (a) if 
the agency determines, in consultation with the Commodity 
Futures Trading Commission and the Securities and Exchange 
Commission, that the product--
          (1) would meet the definition of a ``swap'' under 
        section 1a(47) of the Commodity Exchange Act (7 U.S.C. 
        1a) or a ``security-based swap'' under [that section] 
        section 3(a)(68) of the Securities Exchange Act of 
        1934; and
          (2) has become known to the trade as a swap or 
        security-based swap, or otherwise has been structured 
        as an identified banking product for the purpose of 
        evading the provisions of the Commodity Exchange Act (7 
        U.S.C. 1 et seq.), the Securities Act of 1933 (15 
        U.S.C. 77a et seq.), or the Securities Exchange Act of 
        1934 (15 U.S.C. 78a et seq.).
  (c) Exception.--The exclusions in subsection (a) shall not 
apply to an identified bank product that--
          (1) is a product of a bank that is not under the 
        regulatory jurisdiction of an appropriate Federal 
        banking agency;
          (2) meets the definition of swap in section 1a(47) of 
        the Commodity Exchange Act or security-based swap in 
        section 3(a)(68) of the Securities Exchange Act of 
        1934; and
          (3) has become known to the trade as a swap or 
        security-based swap, or otherwise has been structured 
        as an identified banking product for the purpose of 
        evading the provisions of the Commodity Exchange Act (7 
        U.S.C. 1 et seq.), the Securities Act of 1933 (15 
        U.S.C. 77a et seq.), or the Securities Exchange Act of 
        1934 (15 U.S.C. 78a et seq.).
        
        

                             MINORITY VIEWS

    H.R. 10, the ``Financial CHOICE Act'' (herein called the 
``Wrong Choice Act''), will eliminate several of the most 
important aspects of the Dodd-Frank Wall Street Reform and 
Consumer Protection Act of 2010 (``Wall Street Reform'').
    Wall Street Reform effectively addressed failures in the 
fragmented Federal regulatory scheme that contributed to the 
worst financial crisis in our country since the Great 
Depression, which resulted in a loss of about 8 million jobs 
and reduced the overall wealth of American families by 28.5 
percent. Because the law restored responsibility and 
accountability to our country's financial system, it boosted 
confidence among American consumers and helped to stabilize our 
economy.
    Despite the reform law's successes, Congressional 
Republicans and President Trump are eager to, in the words of 
the President, do ``a big number'' on Wall Street Reform. The 
Wrong Choice Act is that ``big number'' to help out large 
financial institutions on Wall Street at the expense of 
consumers, investors, and small businesses located on Main 
Street. If H.R. 10 becomes law, shoddy financial actors will be 
free once again to employ unfair, abusive, and deceptive acts 
and practices that harm vulnerable consumers and engage in 
excessive risk-taking activities that jeopardize our economy.
     Fortunately, Democratic Members do not suffer from the 
same economic amnesia as their Republican colleagues. 
Democratic Members still remember the causes that triggered, 
and the devastating effects of, the 2008 financial crisis and 
the incalculable stories of human suffering that the 
unemployment rate skyrocketed to 10 percent; that many young 
people were unable to secure jobs; and that at least 11million 
people lost their homes through foreclosures.
    Despite Republican Members' attempts to use ``alternative 
facts'' to confuse the American public about the benefits of 
Wall Street Reform, the numbers tell the true story. Since 
enactment of the law, our economy has had a record 85 
consecutive months of private-sector job growth, creating more 
than 16 million jobs. The labor market continues to improve 
with the unemployment rate now at 4.5 percent and wages on the 
rise. Business lending by banks has increased by 75 percent, 
and the banking industry set an all-time record for profits of 
$171.3 billion in 2016. Community banks' loan growth has been 
even faster than at bigger banks, which have supported more 
residential, commercial, industrial, and small business loans.
    In the face of this evidence that Wall Street Reform is 
working for consumers, investors, businesses, and the economy, 
Republican Members are hastily pushing the Wrong Choice Act to 
advance Trump's agenda. The Committee, under Chairman 
Hensarling's leadership, only intended to hold a single hearing 
to review his nearly 600-page bill, before rushing to schedule 
a markup of it. In contrast, the Committee, Democrats convened 
41 hearings relating to regulatory reform matters before Wall 
Street Reform was considered.
    Democratic Members could not let this brazen Republican 
attempt to jam a bad bill through Congress go unchallenged. 
Accordingly, Democratic Members exercised their right to compel 
a second hearing, known as a ``Minority Day hearing,'' to 
ensure the American public had an opportunity to hear from 
those who are not carrying Trump's water. At this hearing, 11 
experts and community advocates, along with Senator Elizabeth 
Warren, testified for several hours about the dangers of the 
bill. Notably absent from this hearing was Chairman Hensarling 
and virtually all of the Republican Members who largely 
boycotted it, willfully choosing to ignore the many concerns 
raised by these witnesses, and countless letters of opposition 
from Americans across the country.
    Democrats have named the bill the Wrong Choice Act for 
several reasons. First, it effectively guts the Consumer 
Financial Protection Bureau (``Consumer Bureau''). It does this 
by ending the Consumer Bureau's authority to protect consumers 
from the unfair, deceptive, or abusive acts or practices of 
shoddy financial actors, which to date, has helped 29 million 
consumers receive nearly $12 billion in relief. It eliminates 
the Consumer Bureau's supervisory and enforcement authority to 
oversee the largest financial firms, thereby thwarting the 
Consumer Bureau's ability to provide redress to those harmed by 
Wells Fargo's fake account scandal. It changes the Consumer 
Bureau's independent funding mechanism and instead subjects it 
to the broken Congressional appropriations process that 
Republicans have recklessly abused for partisan purposes. It 
obscures the public's access to the Consumer Bureau's 
nationwide consumer complaint database, even though 97 percent 
of complaints submitted to companies have received timely 
responses. It allows the President to fire the head of the 
Consumer Bureau without reason. The effect of these provisions 
is clear. Republican Members want to undermine the Consumer 
Bureau's ability to serve as a strong, independent consumer 
``cop on the beat.''
    Second, the Wrong Choice Act re-creates the problem of 
regulatory arbitrage by repealing Wall Street Reform 
safeguards. It creates ``off-ramps'' for mega-banks to avoid 
enhanced capital, liquidity, and risk management standards, in 
exchange for an insufficient leverage requirement of 10 
percent, which would encourage large banks to take the same 
kinds of risks that crashed the economy in 2008. In addition, 
the Wrong Choice Act repeals the ``Volcker Rule,'' which stops 
banks from gambling with taxpayer money. Even President Trump's 
Treasury Secretary, Steven Mnuchin, supports the Volcker Rule.
    Third, the Wrong Choice Act repeals the emergency, back-up 
authority of our financial regulators to ensure that very 
large, complex, and interconnected companies can fail without 
triggering a global economic financial crisis. This authority, 
known as the Orderly Liquidation Authority (``OLA''), is 
replaced in the Wrong Choice Act with superficial changes to 
the Bankruptcy Code that fail to address the shortcomings 
exposed by Lehman Brothers' chaotic collapse.
    Fourth, the Wrong Choice Act makes it harder for our 
regulators to identify and oversee new risks to our financial 
system, including risks posed by non-bank entities. 
Specifically, it repeals the ability of the Financial Stability 
Oversight Council (``FSOC'') to designate non-bank financial 
firms, like AIG, as systemically important financial 
institutions (``SIFIs'') for enhanced supervision and 
regulation. The Wrong Choice Act also abolishes the Office of 
Financial Research (``OFR''), which collects data and provides 
valuable research and analysis to help the FSOC identify and 
combat activities that could risk our country's economic 
stability.
    Fifth, as discussed above with the Wrong Choice Act's 
changes to the funding mechanism of the Consumer Bureau, it 
hamstrings all of our Federal financial services regulators by 
imprudently subjecting them to the politicized, annual 
Congressional appropriations process. It also requires each of 
these agencies to conduct time-consuming, onerous analysis of 
their rules, guidance, and statements in an effort to slow or 
outright block the issuance of any new protections for 
consumers, investors, and vulnerable populations. The Wrong 
Choice Act also provides a two year window for Trump-appointed 
regulators to rollback guardrails before creating a heightened 
litigation standard that makes it easier for industry to block 
any future effort by regulators to restore or strengthen 
existing consumer and investor protections.
    Sixth, the Wrong Choice Act puts millions of American jobs 
at risk by curtailing the Federal Reserve's discretion to 
consider a wide range of dynamic economic data to determine 
interest rates and makes monetary policy decisions vulnerable 
to short-term political pressure. The bill would also establish 
a partisan Commission with twice as many Republicans as 
Democrats which would open the door to eliminating the full 
employment aspect of the Fed's mandate, and curtailing the 
Federal Reserve's ability to support the economy.
    Seventh, the Wrong Choice Act hurts investors by silencing 
shareholders and repealing their fundamental rights as owners 
of the company, encouraging corporate executives to engage in 
excessive risk-taking for big bonuses, and letting Wall Street 
fraudsters of the hook. For example, the Wrong Choice Act makes 
it harder for the Securities and Exchange Commission (``SEC'') 
to initiate enforcement actions and eliminates its authority to 
ban officers and directors from the industry.
    Eighth, the Wrong Choice Act hurts seniors and workers 
saving for retirement by repealing the requirement that 
financial advisers act in the best interests of their clients. 
This change bolsters the Trump Administration's efforts to 
rollback the Department of Labor's fiduciary rule, to the 
benefit of unscrupulous financial advisers but to the detriment 
of senior savers.
    Finally, the Wrong Choice Act undermines the bipartisan 
compromises Republican and Democratic Members achieved in bills 
and laws from the past three congressional terms, thereby 
removing important investor protections and creating potential 
loopholes in securities laws.
    The Wrong Choice Act is the vehicle to enable President 
Trump to repeal Wall Street Reform, and it must be defeated at 
all costs.

                                   Maxine Waters.
                                   Nydia M. Velazquez.
                                   Denny Heck.
                                   Keith Ellison.
                                   Ruben J. Kihuen.
                                   Brad Sherman.
                                   Al Green.
                                   Carolyn B. Maloney.
                                   Michael E. Capuano.
                                   Daniel T. Kildee.
                                   Gregory W. Meeks.
                                   Charlie Crist.
                                   Gwen Moore.
                                   Bill Foster.
                                   Emanuel Cleaver.
                                   James A. Himes.
                                   Juan Vargas.
                                   Stephen F. Lynch.
                                   Vicente Gonzalez.
                                   Joyce Beatty.
                                   Wm. Lacy Clay.
                                   Ed Permutter.

                             MINORITY VIEWS

    In addition to concurring with the Minority Views, we 
strongly oppose provisions in H.R. 10, the ``Financial CHOICE 
Act'' (herein called the ``Wrong Choice Act''), that roll back 
the rules governing the credit rating agencies.
    During the years leading up to the financial crisis, the 
credit rating agencies were responsible for providing investors 
with assessments of the risks of their securities, but failed 
miserably in this task. Specifically, the three main credit 
rating agencies--Moody's Investors Service, Standard & Poor's 
Financial Services, and Fitch Ratings--failed to properly 
assess the credit risk in mortgage securities when they 
assigned high grades to toxic securities that rapidly 
collapsed.
    In the aftermath of the financial crisis, the Dodd-Frank 
Wall Street Reform and Consumer Protection Act of 2010 imposed 
heightened accountability measures on credit rating agencies. 
Regrettably, the Wrong Choice Act removes these provisions.
    Additionally, the Wrong Choice Act repeals the authority of 
the Securities and Exchange Commission under the Wall Street 
Reform law to remedy the conflict of interests that still 
remain in the credit rating agencies' business model. 
Currently, the agencies are still allowed to be paid and 
selected by the issuer of the debt instrument being analyzed 
for the grade it receives. As long as this structure is 
permissible, the credit rating agencies have an incentive to 
cater to issuers' demands.
    For these additional reasons, we strongly oppose H.R. 10.

                                   Stephen F. Lynch.
                                   Maxine Waters.