[House Report 118-297]
[From the U.S. Government Publishing Office]
118th Congress} { REPT. 118-297
1st Session } HOUSE OF REPRESENTATIVES { Part 1
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CFPB TRANSPARENCY AND ACCOUNTABILITY REFORM ACT
_______
December 4, 2023.--Committed to the Committee of the Whole House on the
State of the Union ordered to be printed
_______
Mr. McHenry, from the Committee on Financial Services, submitted the
following
R E P O R T
together with
MINORITY VIEWS
[To accompany H.R. 2798]
[Including cost estimate of the Congressional Budget Office]
The Committee on Financial Services, to whom was referred
the bill (H.R. 2798) to make reforms to the Bureau of Consumer
Financial Protection, and for other purposes, having considered
the same, reports favorably thereon with an amendment and
recommends that the bill as amended do pass.
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``CFPB Transparency
and Accountability Reform Act''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--COMMISSION OF THE BUREAU OF CONSUMER FINANCIAL PROTECTION ACT
Sec. 101. Short title.
Sec. 102. Making the Bureau an independent agency led by a commission.
Sec. 103. Deeming of name.
Sec. 104. Conforming amendments.
TITLE II--TABS ACT OF 2023
Sec. 201. Short title.
Sec. 202. Bringing the Bureau into the regular appropriations process.
TITLE III--CFPB-IG REFORM ACT OF 2023
Sec. 301. Short title.
Sec. 302. Appointment of Inspector General.
Sec. 303. Requirements for the Inspector General for the Bureau of
Consumer Financial Protection.
Sec. 304. Effective date.
TITLE IV--CFPB DUAL MANDATE AND ECONOMIC ANALYSIS ACT
Sec. 401. Short title.
Sec. 402. Purpose.
Sec. 403. Office of Economic Analysis.
TITLE V--TRANSPARENCY IN CFPB COST-BENEFIT ANALYSIS ACT
Sec. 501. Short title.
Sec. 502. Transparency in cost-benefit analysis.
TITLE VI--MAKING THE CFPB ACCOUNTABLE TO SMALL BUSINESSES ACT OF 2023
Sec. 601. Short title.
Sec. 602. Rulemaking under Dodd-Frank Wall Street Reform and Consumer
Protection Act.
Sec. 603. Initial regulatory flexibility analysis.
Sec. 604. Final regulatory flexibility analysis.
TITLE VII--CFPB WHISTLEBLOWER INCENTIVES AND PROTECTION ACT
Sec. 701. Short title.
Sec. 702. Bureau whistleblower incentives and protection.
Sec. 703. Amendment to the Consumer Financial Civil Penalty Fund.
TITLE I--COMMISSION OF THE BUREAU OF CONSUMER FINANCIAL PROTECTION ACT
SEC. 101. SHORT TITLE.
This Act may be cited as the ``Commission of the Bureau of Consumer
Financial Protection Act''
SEC. 102. MAKING THE BUREAU AN INDEPENDENT AGENCY LED BY A COMMISSION.
The Consumer Financial Protection Act of 2010 (12 U.S.C. 5481 et
seq.) is amended--
(1) in section 1011--
(A) in subsection (a)--
(i) by striking ``in the Federal Reserve
System,''; and
(ii) by striking ``independent bureau'' and
inserting ``independent agency'';
(B) by striking subsections (b), (c), and (d);
(C) by redesignating subsection (e) as subsection
(j);
(D) in subsection (j), as so redesignated, by
striking ``, including in cities in which the Federal
reserve banks, or branches of such banks, are
located,''; and
(E) by inserting after subsection (a) the following
new subsections:
``(b) Authority to Prescribe Regulations.--The commission of the
Bureau may prescribe such regulations and issue such orders in
accordance with this title as the Bureau may determine to be necessary
for carrying out this title and all other laws within the Bureau's
jurisdiction and shall exercise any authorities granted under this
title and all other laws within the Bureau's jurisdiction.
``(c) Composition of the Commission.--
``(1) In general.--The management of the Bureau shall be
vested in a commission, which shall be composed of 5 members
who shall be appointed by the President, by and with the advice
and consent of the Senate, and at least 2 of whom shall have
private sector experience in the provision of consumer
financial products and services.
``(2) Staggering.--The members of the commission shall serve
staggered terms, which initially shall be established by the
President for terms of 1, 2, 3, 4, and 5 years, respectively.
``(3) Terms.--
``(A) In general.--Except with respect to the initial
staggered terms described under paragraph (2), each
member of the commission, including the Chair, shall
serve for a term of 5 years.
``(B) Removal.--The President may remove any member
of the commission for inefficiency, neglect of duty, or
malfeasance in office.
``(C) Vacancies.--Any member of the commission
appointed to fill a vacancy occurring before the
expiration of the term to which that member's
predecessor was appointed (including the Chair) shall
be appointed only for the remainder of the term.
``(D) Continuation of service.--Each member of the
commission may continue to serve after the expiration
of the term of office to which that member was
appointed until a successor has been appointed by the
President and confirmed by the Senate, except that a
member may not continue to serve more than 1 year after
the date on which that member's term would otherwise
expire.
``(E) Other employment prohibited.--No member of the
commission shall engage in any other business,
vocation, or employment.
``(d) Affiliation.--Not more than 3 members of the commission shall
be members of any one political party.
``(e) Chair of the Commission.--
``(1) Initial chair.--The first member and Chair of the
commission shall be the individual serving as Director of the
Bureau of Consumer Financial Protection on the day before the
date of the enactment of this subsection. Such individual shall
serve until the President has appointed all 5 members of the
commission in accordance with subsection (c).
``(2) Subsequent chair.--Of the 5 members appointed in
accordance with subsection (c), the President shall appoint 1
member to serve as the subsequent Chair of the commission.
``(3) Authority.--The Chair shall be the principal executive
officer of the commission, and shall exercise all of the
executive and administrative functions of the commission,
including with respect to--
``(A) the appointment and supervision of personnel
employed under the commission (other than personnel
employed regularly and full time in the immediate
offices of members of the commission other than the
Chair);
``(B) the distribution of business among personnel
appointed and supervised by the Chair and among
administrative units of the commission; and
``(C) the use and expenditure of funds.
``(4) Limitation.--In carrying out any of the Chair's
functions under the provisions of this subsection, the Chair
shall be governed by general policies of the commission and by
such regulatory decisions, findings, and determinations as the
commission may by law be authorized to make.
``(5) Requests or estimates related to appropriations.--
Requests or estimates for regular, supplemental, or deficiency
appropriations on behalf of the commission may not be submitted
by the Chair without the prior approval of the commission.
``(6) Designation.--The Chair shall be known as both the
`Chair of the commission' of the Bureau and the `Chair of the
Bureau'.
``(f) Initial Quorum Established.--For the 6 month period beginning
on the date of enactment of this subsection, the first member and Chair
of the commission described under subsection (e)(1) shall constitute a
quorum for the transaction of business until the President has
appointed all 5 members of the commission in accordance with subsection
(c). Following such appointment of 5 members, the quorum requirements
of subsection (g) shall apply.
``(g) No Impairment by Reason of Vacancies.--No vacancy in the
members of the commission after the establishment of an initial quorum
under subsection (f) shall impair the right of the remaining members of
the commission to exercise all the powers of the commission. Three
members of the commission shall constitute a quorum for the transaction
of business, except that if there are only 3 members serving on the
commission because of vacancies in the commission, 2 members of the
commission shall constitute a quorum for the transaction of business.
If there are only 2 members serving on the commission because of
vacancies in the commission, 2 members shall constitute a quorum for
the 6-month period beginning on the date of the vacancy which caused
the number of commission members to decline to 2.
``(h) Seal.--The Bureau shall have an official seal.
``(i) Compensation.--
``(1) Chair.--The Chair shall receive compensation at the
rate prescribed for level I of the Executive Schedule under
section 5313 of title 5, United States Code.
``(2) Other members of the commission.--The 4 other members
of the commission shall each receive compensation at the rate
prescribed for level II of the Executive Schedule under section
5314 of title 5, United States Code.'';
(2) in section 1012(c)--
(A) in the heading, by striking ``Autonomy of the
Bureau'' and inserting ``Coordination With the Board of
Governors'';
(B) by striking ``(1) Coordination with the board of
governors.--''; and
(C) by striking paragraphs (2), (3), (4), and (5);
and
(3) in section 1014(b), by striking ``Not fewer than 6
members shall be appointed upon the recommendation of the
regional Federal Reserve Bank Presidents, on a rotating
basis.'' and inserting ``Not fewer than half of all members
shall have private sector experience in the provision of
consumer financial products and services.''.
SEC. 103. DEEMING OF NAME.
Any reference in a law, regulation, document, paper, or other record
of the United States to the Director of the Bureau of Consumer
Financial Protection, except in subsection (e)(1) of section 1011 of
the Consumer Financial Protection Act of 2010 (12 U.S.C. 5491), as
added by this Act, shall be deemed a reference to the commission
leading and governing the Bureau of Consumer Financial Protection, as
described under section 1011 of the Consumer Financial Protection Act
of 2010.
SEC. 104. CONFORMING AMENDMENTS.
(a) Consumer Financial Protection Act of 2010.--
(1) In general.--Except as provided under paragraph (2), the
Consumer Financial Protection of 2010 (12 U.S.C. 5481 et seq.)
is amended--
(A) by striking ``Director of the Bureau'' each place
such term appears, other than where such term is used
to refer to a Director other than the Director of the
Bureau of Consumer Financial Protection, and inserting
``Bureau'';
(B) by striking ``Director'' each place such term
appears and inserting ``Bureau'', other than where such
term is used to refer to a Director other than the
Director of the Bureau of Consumer Financial
Protection; and
(C) in section 1002, by striking paragraph (10).
(2) Exceptions.--
(A) In general.--The Consumer Financial Protection
Act of 2010 (12 U.S.C. 5481 et seq.) is amended--
(i) in section 1013(c)(3)--
(I) by striking ``Assistant Director
of the Bureau for'' and inserting
``Head of the Office of''; and
(II) in subparagraph (B), by striking
``Assistant Director'' and inserting
``Head of the Office'';
(ii) in section 1013(g)(2)--
(I) by striking ``Assistant
director'' and inserting ``Head of the
office''; and
(II) by striking ``an assistant
director'' and inserting ``a Head of
the Office of Financial Protection for
Older Americans'';
(iii) in section 1016(a), by striking
``Director of the Bureau'' and inserting
``Chair of the Bureau''; and
(iv) by striking section 1066.
(B) Clerical amendment.--The table of contents for
the Dodd-Frank Wall Street Reform and Consumer
Protection Act is amended by striking the item relating
to section 1066.
(b) Dodd-Frank Wall Street Reform and Consumer Protection Act.--The
Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C.
5301 et seq.) is amended--
(1) in section 111(b)(1)(D), by striking ``Director'' and
inserting ``Chair''; and
(2) in section 1447, by striking ``Director of the Bureau''
each place such term appears and inserting ``Chair of the
Bureau''.
(c) Electronic Fund Transfer Act.--Section 921(a)(4)(C) of the
Electronic Fund Transfer Act (15 U.S.C. 1693o-2(a)(4)(C)), as added by
section 1075(a)(2) of the Consumer Financial Protection Act of 2010, is
amended by striking ``Director of the Bureau of Consumer Financial
Protection'' and inserting ``Chair of the Bureau of Consumer Financial
Protection''.
(d) Expedited Funds Availability Act.--The Expedited Funds
Availability Act (12 U.S.C. 4001 et seq.), as amended by section 1086
of the Consumer Financial Protection Act of 2010, is amended by
striking ``Director of the Bureau'' each place such term appears and
inserting ``Bureau''.
(e) Federal Deposit Insurance Act.--Section 2 of the Federal Deposit
Insurance Act (12 U.S.C. 1812), as amended by section 336(a) of the
Dodd-Frank Wall Street Reform and Consumer Protection Act, is amended
by striking ``Director of the Consumer Financial Protection Bureau''
each place such term appears and inserting ``Chair of the Bureau of
Consumer Financial Protection''.
(f) Federal Financial Institutions Examination Council Act of 1978.--
Section 1004(a)(4) of the Federal Financial Institutions Examination
Council Act of 1978 (12 U.S.C. 3303(a)(4)), as amended by section 1091
of the Consumer Financial Protection Act of 2010, is amended by
striking ``Director of the Consumer Financial Protection Bureau'' and
inserting ``Chair of the Bureau of Consumer Financial Protection''.
(g) Financial Literacy and Education Improvement Act.--Section 513 of
the Financial Literacy and Education Improvement Act (20 U.S.C. 9702),
as amended by section 1013(d)(5) of the Consumer Financial Protection
Act of 2010, is amended by striking ``Director'' each place such term
appears and inserting ``Chair''.
(h) Home Mortgage Disclosure Act of 1975.--Section 307 of the Home
Mortgage Disclosure Act of 1975 (12 U.S.C. 2806 et seq), as amended by
section 1094(6) of the Consumer Financial Protection Act of 2010, is
amended by striking ``Director of the Bureau of Consumer Financial
Protection'' each place such term appears and inserting ``Bureau of
Consumer Financial Protection''.
(i) Interstate Land Sales Full Disclosure Act.--The Interstate Land
Sales Full Disclosure Act (15 U.S.C. 1701 et seq), as amended by
section 1098A of the Consumer Financial Protection Act of 2010, is
amended--
(1) in section 1402--
(A) by striking paragraph (1); and
(B) by redesignating paragraphs (2) through (12) as
paragraphs (1) through (11), respectively;
(2) in section 1403(c)--
(A) by striking ``him'' and inserting ``the Bureau'';
and
(B) by striking ``he'' and inserting ``the Bureau'';
(3) in section 1407--
(A) in subsection (c), by striking ``he'' and
inserting ``the Bureau''; and
(B) in subsection (e), by striking ``Director or
anyone designated by him'' and inserting ``Bureau'';
(4) in section 1411(a)--
(A) by striking ``his findings'' and inserting ``the
findings of the Bureau''; and
(B) by striking ``his recommendation'' and inserting
``the recommendation of the Bureau'';
(5) in section 1415--
(A) in subsection (a), by striking ``he may, in his
discretion,'' and inserting ``the Bureau may, in the
discretion of the Bureau,'';
(B) in subsection (b)--
(i) by striking ``in his discretion'' each
place such term appears and inserting ``in the
discretion of the Bureau'';
(ii) by striking ``he deems'' and inserting
``the Bureau determines''; and
(iii) by striking ``he may deem'' and
inserting ``the Bureau may determine''; and
(C) in subsection (c), by striking ``the Director, or
any officer designated by him,'' and inserting ``the
Bureau'';
(6) in section 1416(a)--
(A) by striking ``Director of the Bureau of Consumer
Financial Protection who may delegate any of his'' and
inserting ``Bureau of Consumer Financial Protection,
which may delegate any'';
(B) by striking ``his administrative'' and inserting
``administrative''; and
(C) by striking ``himself'' and inserting ``the
commission of the Bureau'';
(7) in section 1418a(b)(4), by striking ``Secretary's
determination'' and inserting ``determination of the Bureau'';
and
(8) by striking ``Director'' each place such term appears and
inserting ``Bureau''.
(j) Real Estate Settlement Procedures Act of 1974.--Section 5 of the
Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2604), as
amended by section 1450 of the Dodd-Frank Wall Street Reform and
Consumer Protection Act, is amended--
(1) by striking ``The Director of the Bureau of Consumer
Financial Protection (hereafter in this section referred to as
the `Director')'' and inserting ``The Bureau of Consumer
Financial Protection (hereafter in this section referred to as
the `Bureau')''; and
(2) by striking ``Director'' each place such term appears and
inserting ``Bureau''.
(k) S.A.F.E. Mortgage Licensing Act of 2008.--The S.A.F.E. Mortgage
Licensing Act of 2008 (12 U.S.C. 5101 et seq.), as amended by section
1100 of the Consumer Financial Protection Act of 2010, is amended--
(1) by striking ``Director'' each place such term appears in
headings and text and inserting ``Bureau of Consumer Financial
Protection''; and
(2) in section 1503, by striking paragraph (10).
(l) Title 44, United States Code.--Section 3513(c) of title 44,
United States Code, as amended by section 1100D(b) of the Consumer
Financial Protection Act of 2010, is amended by striking ``Director of
the''.
TITLE II--TABS ACT OF 2023
SEC. 201. SHORT TITLE.
This title may be cited as the ``Taking Account of Bureaucrats'
Spending Act of 2023'' or the ``TABS Act of 2023''.
SEC. 202. BRINGING THE BUREAU INTO THE REGULAR APPROPRIATIONS PROCESS.
(a) In General.--Section 1017 of the Consumer Financial Protection
Act of 2010 (12 U.S.C. 5497) is amended--
(1) in subsection (a)--
(A) by amending the heading of such subsection to
read as follows: ``Budget, Financial Management, and
Audit.--'';
(B) by striking paragraphs (1), (2), and (3);
(C) by redesignating paragraphs (4) and (5) as
paragraphs (1) and (2), respectively; and
(D) by striking subparagraphs (E) and (F) of
paragraph (1), as so redesignated;
(2) by striking subsections (b) and (c);
(3) by redesignating subsections (d) and (e) as subsections
(b) and (c), respectively; and
(4) in subsection (c), as so redesignated--
(A) by striking paragraphs (1), (2), and (3) and
inserting the following:
``(1) Authorization of appropriations.--There is authorized
to be appropriated to the Bureau $650,000,000 for fiscal year
2024 to carry out the authorities of the Bureau.''; and
(B) by redesignating paragraph (4) as paragraph (2).
(b) Transfer of Amounts From Civil Penalty Fund.--On the date that
funds are appropriated pursuant to section 1017(c)(1) of the Consumer
Financial Protection Act of 2010 (as amended by subsection (a)) for
fiscal year 2024, there is transferred an equal amount of funds from
the Consumer Financial Civil Penalty Fund to the general fund of the
Treasury.
TITLE III--CFPB-IG REFORM ACT OF 2023
SEC. 301. SHORT TITLE.
This title may be cited as the ``Bureau of Consumer Financial
Protection-Inspector General Reform Act of 2023'' or the ``CFPB-IG
Reform Act of 2023''.
SEC. 302. APPOINTMENT OF INSPECTOR GENERAL.
Chapter 4 of title 5, United States Code, is amended--
(1) in section 401--
(A) in paragraph (1), by inserting ``the Bureau of
Consumer Financial Protection,'' after ``the Export-
Import Bank of the United States,''; and
(B) in paragraph (3), by inserting ``the Chair of the
Bureau of Consumer Financial Protection;'' after ``the
President of the Export-Import Bank of the United
States;''; and
(2) in section 415--
(A) in subsection (a)(1)(A), by striking ``and the
Bureau of Consumer Financial Protection'';
(B) in subsection (c), by striking ``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.'';
and
(C) in subsection (g)(3), by striking ``and the
Bureau of Consumer Financial Protection''.
SEC. 303. REQUIREMENTS FOR THE INSPECTOR GENERAL FOR THE BUREAU OF
CONSUMER FINANCIAL PROTECTION.
(a) Establishment.--Section 1011 of the Dodd-Frank Wall Street Reform
and Consumer Protection Act (12 U.S.C. 5491), as amended by section
102(1), is further amended by adding at the end the following:
``(k) Inspector General.--There is established the position of the
Inspector General.''.
(b) Hearings.--Section 1016 of such Act is amended by inserting after
subsection (c) the following:
``(d) Additional Requirement for Inspector General.--On a separate
occasion from that described in subsection (a), the Inspector General
of the Bureau shall appear before the Committee on Banking, Housing,
and Urban Affairs of the Senate and the Committee on Financial Services
of the House of Representatives at semiannual hearings regarding the
reports required under subsection (b) and the reports required under
section 405 of title 5, United States Code.''.
(c) Participation in the Council of Inspectors General on Financial
Oversight.--Section 989E(a)(1) of such Act is amended by adding at the
end the following:
``(J) The Bureau of Consumer Financial Protection.''.
(d) Deadline for Appointment.--Not later than 60 days after the date
of the enactment of this Act, the President shall appoint an Inspector
General for the Bureau of Consumer Financial Protection in accordance
with section 403 of title 5, United States Code.
SEC. 304. EFFECTIVE DATE.
(a) In General.--The amendments made by this title shall take effect
on the date on which the first Inspector General of the Bureau of
Consumer Financial Protection is confirmed by the Senate.
(b) Appointment.--The President may appoint, and the Senate may
confirm, an Inspector General of the Bureau of Consumer Financial
Protection before the amendments made by this title take effect.
(c) Transition.--The Inspector General of the Board of Governors of
the Federal Reserve System and the Bureau of Consumer Financial
Protection shall, upon the date on which the first Inspector General of
the Bureau of Consumer Financial Protection is confirmed by the Senate,
become the Inspector General of the Board of Governors of the Federal
Reserve System.
TITLE IV--CFPB DUAL MANDATE AND ECONOMIC ANALYSIS ACT
SEC. 401. SHORT TITLE.
This title may be cited as the ``CFPB Dual Mandate and Economic
Analysis Act''.
SEC. 402. PURPOSE.
Section 1021(a) of the Consumer Financial Protection Act of 2010 (12
U.S.C. 5511(a)) is amended--
(1) by striking ``fair, transparent, and competitive'' and
inserting: ``fair and transparent''; and
(2) by adding at the end the following: ``In addition, the
Bureau shall seek to implement and, where applicable, enforce
Federal consumer financial law consistently for the purpose of
strengthening private sector participation in markets, without
Government interference or subsidies, to increase competition
and enhance consumer choice.''.
SEC. 403. OFFICE OF ECONOMIC ANALYSIS.
(a) In General.--Section 1013 of the Consumer Financial Protection
Act of 2010 (12 U.S.C. 5493) is amended by adding at the end the
following:
``(i) Office of Economic Analysis.--
``(1) Establishment.--The Bureau shall establish an Office of
Economic Analysis.
``(2) Review and assessment of proposed guidance, orders,
rules, and regulations.--The Office of Economic Analysis
shall--
``(A) review all proposed guidance, orders, rules,
and regulations of the Bureau, including carrying out
the determinations and assessments with respect to
notices of proposed rulemaking described under section
1022(b)(7);
``(B) assess the impact of such guidance, orders,
rules, and regulations on consumer choice, price, and
access to credit products; and
``(C) publish a report on such reviews and
assessments in the Federal Register.
``(3) Measuring existing guidance, orders, rules, and
regulations.--The Office of Economic Analysis shall--
``(A) review each guidance, order, rule, and
regulation issued by the Bureau after 1, 2, 5, and 10
years;
``(B) measure each such guidance, order, rule, or
regulation's success in solving the problem that the
guidance, order, rule, or regulation was intended to
solve when issued; and
``(C) publish a report on such review and measurement
in the Federal Register.''.
(b) Consideration of Review and Assessment; Rulemaking
Requirements.--Section 1022(b) of the Consumer Financial Protection Act
of 2010 (12 U.S.C. 5512(b)) is amended by adding at the end the
following:
``(5) Consideration of review and assessment by the office of
economic analysis.--
``(A) In general.--Before issuing any guidance,
order, rule, or regulation, the commissioners of the
Bureau shall consider the review and assessment of such
guidance, order, rule, or regulation carried out by the
Office of Economic Analysis.
``(B) Notice of disagreement.--If any commissioner of
the Bureau disagrees with any part of a review and
assessment described under subparagraph (A) with
respect to any guidance, order, rule, or regulation,
the commissioner shall accompany any such guidance,
order, rule, or regulation with a statement explaining
why the commissioner so disagrees.
``(6) Identification of problems and metrics for judging
success.--
``(A) In general.--The Bureau shall, in each proposed
rulemaking of the Bureau--
``(i) identify the problem that the
particular rule or regulations is seeking to
solve; and
``(ii) specify the metrics by which the
Bureau will measure the success of the rule or
regulation in solving such problem.
``(B) Required metrics.--The metrics specified under
subparagraph (A)(ii) shall include a measurement of
changes to consumer access to, and cost of, consumer
financial products and services.''.
TITLE V--TRANSPARENCY IN CFPB COST-BENEFIT ANALYSIS ACT
SEC. 501. SHORT TITLE.
This title may be cited as the ``Transparency in CFPB Cost-Benefit
Analysis Act''.
SEC. 502. TRANSPARENCY IN COST-BENEFIT ANALYSIS.
Section 1022(b) of the Consumer Financial Protection Act of 2010 (12
U.S.C. 5512(b)), as amended by section 403, is further amended by
adding at the end the following:
``(7) Additional rulemaking requirements.--
``(A) In general.--Each notice of proposed rulemaking
issued by the Bureau shall be published in its entirety
in the Federal Register and shall include--
``(i) a statement of the need for the
proposed regulation;
``(ii) an examination of why the Bureau must
undertake the proposed regulation and why the
private market, State, local, or tribal
authorities cannot adequately address the
problem;
``(iii) an examination by the Office of
Economic Analysis of whether the proposed
regulation is duplicative, inconsistent, or
incompatible with other Federal regulations and
orders;
``(iv) if the proposed regulation is found by
the Office of Economic Analysis to be
duplicative, inconsistent, or incompatible with
other Federal regulations and orders, a
discussion of--
``(I) why the proposed regulation is
justified;
``(II) how the proposed regulation
can coexist with the existing
regulations; and
``(III) how the Bureau plans to
reduce the regulatory burden associated
with the duplicative, inconsistent, or
incompatible proposed regulation;
``(v) a quantitative and qualitative
assessment by the Office of Economic Analysis
of all anticipated direct and indirect costs
and benefits of the proposed regulation,
including--
``(I) compliance costs for all
regulated entities, including small
businesses;
``(II) effects on economic activity,
efficiency, competition, and capital
formation;
``(III) regulatory and administrative
costs of implementation; and
``(IV) costs imposed on State, local,
and tribal entities;
``(vi) an identification of reasonable
alternatives to the regulation, including
modification of an existing regulation;
``(vii) an analysis by the Office of Economic
Analysis of the costs and benefits, both
quantitative and qualitative, of any
alternative identified pursuant to clause (vi);
``(viii) if the Office of Economic Analysis
determines the proposed regulation would
increase costs for small businesses, then the
Bureau shall consult the Office of Advocacy
within the Small Business Administration to
determine ways to minimize the effect of direct
and indirect costs imposed on small businesses
by the proposed regulation;
``(ix) if the Office of Economic Analysis
determines that quantified net benefits of the
proposed action do not outweigh the quantified
net benefits of the alternatives, a
justification of the regulation;
``(x) if quantified benefits identified
pursuant to clause (v) by the Office of
Economic Analysis do not outweigh the
quantified costs of the regulation, a
justification of the regulation;
``(xi) an assessment by the Office of
Economic Analysis of how the burden imposed by
the regulation will be distributed, including
whether consumers or small businesses will be
disproportionately burdened; and
``(xii) when feasible, and using appropriate
statistical techniques, a probability
distribution prepared by the Office of Economic
Analysis of the relevant outcomes of the
proposed regulation.
``(B) Assumptions and studies used.--With respect to
the information required to be included under
subparagraph (A) in a notice of proposed rulemaking,
the Bureau shall include in such notice--
``(i) a discussion of underlying assumptions
used as a basis for such information; and
``(ii) a description of any studies or data
used in preparing such information, and whether
such studies were peer-reviewed.''.
TITLE VI--MAKING THE CFPB ACCOUNTABLE TO SMALL BUSINESSES ACT OF 2023
SEC. 601. SHORT TITLE.
This title may be cited as the ``Making the CFPB Accountable to Small
Businesses Act of 2023''.
SEC. 602. RULEMAKING UNDER DODD-FRANK WALL STREET REFORM AND CONSUMER
PROTECTION ACT.
Section 1022(b)(2)(A) of the Dodd-Frank Wall Street Reform and
Consumer Protection Act (12 U.S.C. 5512(b)(2)(A)) is amended--
(1) in clause (i), by striking ``and'' at the end;
(2) in clause (ii), by striking the semicolon at the end and
inserting ``; and''; and
(3) by adding at the end the following:
``(iii) the impact of proposed rules on small
entities, in accordance with section 609 of
title 5, United States Code;''.
SEC. 603. INITIAL REGULATORY FLEXIBILITY ANALYSIS.
Section 603(d)(1) of title 5, United States Code, is amended--
(1) in subparagraph (B), by striking ``and'' at the end;
(2) in subparagraph (C), by striking the period and inserting
``; and''; and
(3) by adding at the end the following:
``(D) with respect to the Bureau of Consumer Financial
Protection, if the Bureau does not adopt any alternatives
described in paragraphs (1) through (4) of subsection (c), a
detailed justification of the Bureau's determination that the
relative size and resources of small entities should have no
bearing on the rule, supported by factual, policy and legal
reasons.''.
SEC. 604. FINAL REGULATORY FLEXIBILITY ANALYSIS.
Section 604(a) of title 5, United States Code, is amended by amending
the second paragraph (6) to read as follows:
``(7) with respect to the Bureau of Consumer Financial
Protection, a description of the steps the Bureau has taken to
minimize any additional cost of credit for small entities and,
where no significant alternatives for small entities was
adopted, a detailed justification of the Bureau's determination
that the relative size and resources of small entities should
have no bearing on the rule, supported by factual, policy and
legal reasons.''.
TITLE VII--CFPB WHISTLEBLOWER INCENTIVES AND PROTECTION ACT
SEC. 701. SHORT TITLE.
This title may be cited as the ``CFPB Whistleblower Incentives and
Protection Act''.
SEC. 702. BUREAU WHISTLEBLOWER INCENTIVES AND PROTECTION.
(a) In General.--The Consumer Financial Protection Act of 2010 (12
U.S.C. 5481 et seq.) is amended by inserting after section 1017 the
following:
``SEC. 1017A. WHISTLEBLOWER INCENTIVES AND PROTECTION.
``(a) Definitions.--In this section:
``(1) Administrative proceeding or court action.--The term
`administrative proceeding or court action' means any judicial
or administrative action brought by the Bureau that results in
monetary sanctions exceeding $1,000,000.
``(2) Fund.--The term `Fund' means the `Consumer Financial
Civil Penalty Fund' established under section 1017(b)(1).
``(3) Monetary sanctions.--The term `monetary sanctions',
when used with respect to any administrative proceeding or
court action means any monies, including penalties,
disgorgement, restitution, or interest, ordered to be paid or
other amounts of relief obtained under section 1055(a)(2).
``(4) 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 Bureau from any other
source, unless the whistleblower is the original source
of the information;
``(C) is not exclusively derived from an allegation
made in a judicial or administrative hearing, in a
governmental report, hearing, or from the news media,
unless the whistleblower is a source of the
information; and
``(D) is not exclusively derived from an allegation
made in an audit, examination, or investigation.
``(5) Successful enforcement.--The term `successful
enforcement', when used with respect to any administrative
proceeding or court action, includes any settlement of such
action.
``(6) Whistleblower.--The term `whistleblower' means any
individual, or 2 or more individuals acting jointly, who
provides original information relating to a violation of
Federal consumer financial law, consistent with any rule issued
by the Bureau under this section.
``(b) Awards.--
``(1) In general.--In any administrative proceeding or court
action the Bureau, subject to rules prescribed by the Bureau
and subject to subsection (c), shall pay an award or awards to
1 or more whistleblowers who voluntarily provided original
information that led to the successful enforcement of the
administrative proceeding or court action in an aggregate
amount equal to--
``(A) not less than the greater of--
``(i) 10 percent, in total, of monetary
sanctions imposed and collected in the
administrative proceeding or court action; or
``(ii) $50,000; and
``(B) not more than 30 percent, in total, of such
monetary sanctions.
``(2) Payment of awards.--Any amount paid under paragraph (1)
shall be paid from the Fund.
``(3) Award maximum.--Notwithstanding any other provision in
this section, the maximum award to any single whistleblower is
limited to $5,000,000.
``(c) Determination of Amount of Award; Denial of Award.--
``(1) Determination of amount of award.--
``(A) Discretion.--The determination of the
percentage amount of an award made under subsection (b)
shall be in the discretion of the Bureau.
``(B) Criteria.--In determining the percentage amount
of an award made under subsection (b), the Bureau shall
take into consideration--
``(i) the significance of the information
provided by the whistleblower to the successful
enforcement of the administrative proceeding or
court action;
``(ii) the degree of assistance provided by
the whistleblower and any legal representative
of the whistleblower in an administrative
proceeding or court action;
``(iii) the programmatic interest of the
Bureau in deterring violations of Federal
consumer financial law (including applicable
rules) by making awards to whistleblowers who
provide information that leads to the
successful enforcement of such laws; and
``(iv) such additional relevant factors as
the Bureau may establish by rule.
``(2) Denial of award.--No award under subsection (b) may be
made--
``(A) to any whistleblower who is, or was at the time
the whistleblower acquired the original information
submitted to the Bureau, a member, officer, or employee
of an entity described in subclauses (I) through (V) of
subsection (h)(1)(C)(i);
``(B) to any whistleblower who is convicted of a
criminal violation related to the administrative
proceeding or court action for which the whistleblower
otherwise could receive an award under this section;
``(C) to any whistleblower who is found to be liable
for the conduct in the administrative proceeding or
court action, or a related action, for which the
whistleblower otherwise could receive an award under
this section;
``(D) to any whistleblower who planned and initiated
the conduct at issue in the administrative proceeding
or court action for which the whistleblower otherwise
could receive an award under this section;
``(E) to any whistleblower who submits information to
the Bureau that is based on the facts underlying the
administrative proceeding or court action previously
submitted by another whistleblower;
``(F) to any whistleblower who knowingly and
willfully makes any false, fictitious, or fraudulent
statement or representation, or who makes or uses any
false writing or document knowing the same to contain
any false, fictitious, or fraudulent statement or
entry; and
``(G) to any whistleblower who fails to submit
information to the Bureau in such form as the Bureau
may, by rule, require.
``(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 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 Bureau may require, directly or
through counsel of the whistleblower.
``(e) No Contract Necessary.--No contract or other agreement with the
Bureau is necessary for any whistleblower to receive an award under
subsection (b), unless otherwise required by the Bureau by rule.
``(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 Bureau. 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 Bureau. The court shall review the
determination made by the Bureau in accordance with section 706 of
title 5, United States Code.
``(g) Reports to Congress.--Not later than October 30 of each year,
the Bureau shall transmit to the Committee on Financial Services of the
House of Representatives and the Committee on Banking, Housing, and
Urban Affairs of the Senate a report on the Bureau's whistleblower
award program under this section, including a description of the number
of awards granted and the types of cases in which awards were granted
during the preceding fiscal year.
``(h) Protection of Whistleblowers.--
``(1) Confidentiality.--
``(A) In general.--Except as provided in
subparagraphs (B) and (C), the Bureau and any officer
or employee of the Bureau, may not disclose any
information, including information provided by a
whistleblower to the Bureau, 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 Bureau 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 552.
``(B) Effect.--Nothing in this paragraph is intended
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.
``(C) Availability to government agencies.--
``(i) In general.--Without the loss of its
status as confidential in the hands of the
Bureau, all information referred to in
subparagraph (A) may, in the discretion of the
Bureau, when determined by the Bureau to be
necessary or appropriate, be made available to-
--
``(I) the Department of Justice;
``(II) an appropriate department or
agency of the Federal Government,
acting within the scope of its
jurisdiction;
``(III) a State attorney general in
connection with any criminal
investigation;
``(IV) an appropriate department or
agency of any State, acting within the
scope of its jurisdiction; and
``(V) a foreign regulatory authority.
``(ii) Maintenance of information.--Each of
the entities, agencies, or persons described in
clause (i) shall maintain information described
in that clause as confidential, in accordance
with the requirements in subparagraph (A).
``(2) Rights retained.--Nothing in this section shall be
deemed to diminish the rights, privileges, or remedies of any
whistleblower under section 1057, any other Federal or State
law, or under any collective bargaining agreement.
``(i) Rulemaking Authority.--The Bureau shall have the authority to
issue such rules as may be necessary or appropriate to implement the
provisions of this section.
``(j) Original Information.--Information submitted to the Bureau by a
whistleblower in accordance with rules implementing this section shall
not lose its status as original information solely because the
whistleblower submitted such information prior to the effective date of
such rules, provided such information was submitted after the date of
enactment of this section.''.
(b) Clerical Amendment.--The table of contents under section 1(b) of
the Dodd-Frank Wall Street Reform and Consumer Protection Act is
amended by inserting after the item relating to section 1017 the
following:
``Sec. 1017A. Whistleblower incentives and protection.''.
SEC. 703. AMENDMENT TO THE CONSUMER FINANCIAL CIVIL PENALTY FUND.
Subsection (b)(2) of section 1017 of the Consumer Financial
Protection Act of 2010 (12 U.S.C. 5497), as redesignated by section
202(3), is further amended by striking ``under the Federal consumer
financial laws.'' and inserting ``under the Federal consumer financial
laws and for awards authorized under section 1017A.''.
Purpose and Summary
Introduced on April 24, 2023, by Representative Andy Barr,
H.R. 2798, the CFPB Transparency and Accountability Reform Act,
would reform the Bureau of Consumer Financial Protection (CFPB)
to make it more transparent and accountable to Congress and the
American people. The bill would change the leadership structure
of the CFPB from a single Director to a bipartisan, five-member
commission. The bill would also bring the CFPB under the
regular appropriations process and create a dedicated Inspector
General for the CFPB to ensure transparency and accountability,
and to prevent waste, fraud, and abuse. The bill would create a
new Office of Economic Analysis and require cost-benefit
analysis for all guidance, orders, rules, or regulations of the
CFPB. The bill would also require all proposed rules to
consider the impact on small businesses. Finally, the bill
would provide awards to whistleblowers who report original
information relating to a violation of consumer financial law
resulting in certain monetary sanctions exceeding $1 million.
H.R. 2798 contains parts of the following individual bills:
H.R. 1410, the Consumer Financial Protection
Commission Act, introduced by Representative Blaine
Luetkemeyer;
H.R. 1382, the Taking Account of Bureaucrats'
Spending (TABS) Act, introduced by Representative Andy Barr;
H.R. 1411, the CFPB-IG Reform Act, introduced by
Representative Blaine Luetkemeyer;
H.R. 2489, the CFPB Dual Mandate and Economic
Analysis Act, introduced by Representative Tom Emmer;
H.R. 1313, the Transparency in CFPB Cost-Benefit
Analysis Act, introduced by Representative Alex Mooney;
H.R. 1749, the Making the CFPB Accountable to
Small Businesses Act, introduced by Representative Scott
Fitzgerald; and
H.R. 2490, the CFPB Whistleblower Incentives and
Protection Act, introduced by Representative Tom Emmer.
Background and Need for Legislation
H.R. 2798 would promote transparency and accountability at
the CFPB. The Dodd-Frank Act established the CFPB as an
independent bureau. Unlike other federal financial agencies,
the CFPB does not have an executive board, does not have an
independent Inspector General, and does not allow for
meaningful oversight of the director. The CFPB is led by a
single director who is appointed by the President and confirmed
by the Senate for a term of five years. The Dodd-Frank Act
stated the President may only remove the director from office
for cause, i.e., ``inefficiency, neglect of duty, or
malfeasance in office.'' In 2020, the Supreme Court held, in
Seila Law LLC v. Consumer Financial Protection Bureau, that the
CFPB's leadership structure is unconstitutional as a violation
of the separation of powers.
Currently, the CFPB operates outside of the annual
Congressional appropriations process. Instead, it receives
funding through direct transfers from the Federal Reserve (Fed)
which also operates outside of the appropriations process. The
Fed does not have nor does it exercise authority over the CFPB
or its budget. The CFPB director is required only to submit a
letter to the Federal Reserve Board each quarter certifying the
amount of funds that are ``reasonably necessary'' for carrying
out the authorities of the Bureau. The Federal Reserve then
transfers the requested amount. The CFPB's funding mechanism
significantly differs than that of other financial markets
regulators, including the Federal Trade Commission, the
Commodity Futures Trading Commission, or the Securities and
Exchange Commission, which receive Congressional
appropriations. It also differs from Federal banking agencies,
which operate based on fees and assessments from regulated
entities. Federal Reserve fee receipts on assessments it levies
on financial institutions are deposited into the general fund
of the U.S. Treasury and are not used to fund the CFPB. This
process affords very little Congressional oversight of the
CFPB's budget or insight into uses of federal taxpayer
resources by the CFPB.
Moreover, the actions of the CFPB are highly and solely
dependent on the persuasion and normative beliefs of the
director, which changes every five years. Under current
leadership, the CFPB has adopted a tactic of ``regulating
without rules.'' Instead of following the law, the CFPB has, in
effect, increasingly ``regulated'' through enforcement actions,
blog posts, speeches, or press releases. Not only does this
method subject the CFPB to legal challenges from covered
industry participants, but it also further entrenches financial
services industry uncertainty and increases costs associated
with the provision of financial products and services when
CFPB's policy priorities dramatically shift under each change
in leadership.
Relatedly, by strengthening the analysis underlying each
proposed regulation, the CFPB can ensure lasting policy
directives and adhere to its statutory purpose of providing
regulatory clarity to financial services markets and
facilitating access and options for consumers. H.R. 2798 will
provide Congress with the necessary tools to ensure that CFPB
is an accountable, appropriately funded, and transparent
agency.
Hearing
Pursuant to clause 3(c)(6) of rule XIII, the following
hearing was used to develop H.R. 2798: The Subcommittee on
Financial Institutions and Monetary Policy of the Committee on
Financial Services held a hearing on March 9, 2023, ``Consumer
Financial Protection Bureau: Ripe for Reform.''
Committee Consideration
The Committee on Financial Services met in open session on
April 26, 2023, and ordered H.R. 2798 to be reported favorably
to the House as amended by a recorded vote of 26 ayes to 23
nays (Record vote no. FC-57), a quorum being present. Before
the question was called to order the bill favorably reported,
the Committee adopted an amendment in the nature of a
substitute offered by Mr. Barr by voice vote.
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the order to report legislation and amendments thereto. H.R.
2798 was ordered reported favorably to the House as amended by
a recorded vote of 26 ayes to 23 nays (Record vote no. FC-57),
a quorum being present.
An amendment offered by Mr. Lynch, no. 4, was not agreed to
by a recorded vote of 21 ayes to 28 nays (Record vote no. FC-
51).
An amendment offered by Ms. Beatty, no. 5, was not agreed
to by a recorded vote of 21 ayes and 28 nays (Record vote no.
FC-52).
An amendment offered by Ms. Waters, no. 6, was not agreed
to by a recorded vote of 21 ayes to 28 nays (Record vote no.
FC-53).
An amendment offered by Mr. Green, no. 7, was not agreed to
by a recorded vote of 21 ayes to 28 nays (Record vote no. FC-
54).
An amendment offered by Mr. Cleaver, no. 8, was not agreed
to by a recorded vote of 21 ayes to 28 nays (Record vote no.
FC-55).
An amendment offered by Ms. Williams, no. 9, was not agreed
to by a recorded vote of 20 ayes to 28 nays (Record vote no.
FC-56).
Committee Oversight Findings
Pursuant to clause 3(c) of rule XIII of the Rules of the
House of Representatives, the findings and recommendations of
the Committee based on oversight activities under clause
2(b)(1) of rule X of the Rules of the House of Representatives,
are incorporated in the descriptive portions of this report.
Performance Goals and Objectives
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the goal of H.R. 2798 is to reform
the CFPB to make it more transparent and accountable to
Congress and the American people.
Congressional Budget Office Estimates
Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
provided by the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974:
New Budget Authority, Entitlement Authority, and Tax Expenditures
Pursuant to clause 3(c)(2) of rule XIII of the Rules of the
House of Representatives, the Committee adopts as its own the
estimate of new budget authority, entitlement authority, or tax
expenditures or revenues contained in the cost estimate
prepared by the Director of the Congressional Budget Office
pursuant to section 402 of the Congressional Budget Act of
1973.
Federal Mandates Statement
Pursuant to section 423 of the Unfunded Mandates Reform
Act, the Committee adopts as its own the estimate of the
Federal mandates prepared by the Director of the Congressional
Budget Office.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Earmark Identification
Pursuant to clause 9 of rule XXI of the Rules of the House
of Representatives, the Committee has carefully reviewed the
provisions of the bill and states that the provisions of the
bill do not contain any congressional earmarks, limited tax
benefits, or limited tariff benefits within the meaning of the
rule.
Duplication of Federal Programs
Pursuant to clause 3(c)(5) of rule XIII of the Rules of the
House of Representatives, the Committee states that no
provision of the bill establishes or reauthorizes a program of
the Federal Government known to be duplicative of another
Federal program, including any program that was included in a
report to Congress pursuant to section 21 of the Public Law
111-139 or the most recent Catalog of Federal Domestic
Assistance.
Section-by-Section Analysis of the Legislation
Section 1. Short title; Table of Contents
TITLE I--COMMISSION OF THE BUREAU OF CONSUMER FINANCIAL PROTECTION ACT
Sec. 101. Short title
Sec. 102. Making the Bureau an independent agency led by a commission
This section would remove the CFPB from the Federal Reserve
System; convert the CFPB from an independent bureau to
independent agency; and eliminate the positions of Director and
Deputy Director. This section would establish a five-member,
bipartisan commission to lead the CFPB appointed by the
President and confirmed by the Senate, with at least two
members of the commission (members) having private sector
experience in the provision of consumer financial products and
services. This section would grant the commission authority to
prescribe regulations to carry out this Title and all other
laws within the Bureau's jurisdiction. This section would
require each member to serve for a term of five years, with an
initial staggering of terms; grant the President removal
authority of any member for inefficiency, neglect of duty, or
malfeasance in office; determine that vacancy appointments will
only fill the remainder of the term; allow for a member to
continue to serve for the earlier of one year after expiration
of the term or when the new member is confirmed by the Senate;
and prohibit other employment by members. This section would
establish the first member as Chair of the commission to be the
person serving as the Director of the Bureau at the time of
enactment; allow the person to serve until all five members
have been confirmed by the Senate; and require the President to
appoint one member to serve as the subsequent Chair of the
commission. This section would make the Chair the principal
executive officer of the commission in charge of all executive
and administrative functions of the commission including the
appointment and supervision of all personnel except for
personnel employed immediately under other members, the
distribution of business, and the use and expenditure of funds;
and establish limitations on the Chair's authority by the
commission, including requiring prior approval of the
commission to request appropriations. This section would
clarify that the Chair of the commission and the Chair of the
Bureau are the same. This section would allow the first member
as Chair of the commission to constitute a quorum for the
transaction of business for the earlier of 6 months following
enactment of this Act or until the President has appointed and
the Senate has confirmed all five members of the commission;
following the full appointment of the commission, three members
would constitute a quorum, with additional requirements in
place in the event of vacancies on the commission. This section
would direct the Bureau to have an official seal. This section
would set compensation levels for the Chair and other members
of the commission.
Sec. 103. Deeming of name
This section would ensure that any reference to the
Director of the Bureau of Consumer Financial Protection shall
be deemed a reference to the commission leading and governing
the Bureau of Consumer Financial Protection.
Sec. 104. Conforming amendments
This section would make conforming amendments in relevant
statute where ``Director'' shall be replaced by ``Chair'' or
``Bureau'' more generally.
TITLE II--TABS ACT OF 2023
Sec. 201. Short title
Sec. 202. Bringing the Bureau into the regular appropriations process
This section would eliminate provisions that fund the CFPB
using transfers from earnings of the Federal Reserve System.
This section would instead authorize the appropriations of
$650,000,000 in unobligated amounts contained in the Consumer
Financial Civil Penalty Fund for fiscal year 2024 to carry out
the authorities of the Bureau.
TITLE III--CFPB-IG REFORM ACT OF 2023
Sec. 301. Short title
Sec. 302. Appointment of Inspector General
This section would establish an Inspector General solely
for the CFPB (CFPB-IG) and separate from the Inspector General
of the Board of Governors of the Federal Reserve System.
Sec. 303. Requirements for the Inspector General for the Bureau of
Consumer Financial Protection
This section would require the CFPB-IG to testify
semiannually in front of the House Financial Services Committee
and Senate Banking Committee. This section would grant the
CFPB-IG participation in the Council of Inspectors General on
Financial Oversight (CIGFO). This section would require the
President to appoint the CFPB-IG within 60 days of the
enactment of this Act.
Sec. 304. Effective date
This section would set the effective date of the amendments
of this Title as the date of confirmation of the first CFPB-IG
by the Senate. This section would not prohibit the President
from appointing, and the Senate from confirming, a CFPB-IG
before the amendments made by this Title take effect. This
section would provide for the separation of the CFPB and
Federal Reserve IG upon the date of Senate confirmation of the
CFPB-IG.
TITLE IV--CFPB DUAL MANDATE AND ECONOMIC ANALYSIS ACT
Sec. 401. Short title
Sec. 402. Purpose
This section would revise the purpose of the CFPB to
include ``strengthening private sector participation in
markets, without government interference or subsidies, to
increase competition and enhance consumer choice.''
Sec. 403. Office of Economic Analysis
This section would require the CFPB to establish an Office
of Economic Analysis to review all proposed and existing
guidance, orders, rules, and regulations. This section would
require the CFPB to identify in each proposed rulemaking the
problem to be solved by the rule or regulation and the metrics
the CFPB will use to measure the success of the rule or
regulation. Those metrics must include a measurement of changes
regarding consumer access to, and the cost of, consumer
financial products and services.
TITLE V--TRANSPARENCY IN CFPB COST-BENEFIT ANALYSIS ACT
Sec. 501. Short title
Sec. 502. Transparency in cost-benefit analysis
This section would require each notice of proposed
rulemaking issued by the CFPB to be published in the Federal
Register and include certain information. Specifically, the
CFPB would be required to publish:
a statement of the need for the proposed
regulation;
an examination of why the CFPB must undertake the
proposed regulation and why the private market, State, local,
or tribal authorities cannot adequately address the problem;
an examination by the Office of Economic Analysis
of whether the proposed regulation is duplicative,
inconsistent, or incompatible with other Federal regulations
and orders;
a quantitative and qualitative assessment by the
Office of Economic Analysis of all anticipated direct and
indirect costs and benefits of the proposed regulation;
an identification of reasonable alternatives to
the regulation, including modification of an existing
regulation and an analysis by the Office of Economic Analysis
of the costs and benefits, both quantitative and qualitative,
of any alternative identified;
The section would require the CFPB to
consult with the Small Business Administration's Office
of Advocacy to determine ways to minimize the effect of
direct and indirect costs imposed on small businesses
by the proposed regulation;
a justification of the regulation, if the Office
of Economic Analysis determines that quantified net benefits of
the proposed action do not outweigh the quantified net benefits
of the alternatives considered;
an assessment by the Office of Economic Analysis
of how the burden imposed by the regulation will be
distributed, including whether consumers or small businesses
will be disproportionately burdened; and
when feasible, and using appropriate statistical
techniques, a probability distribution of the relevant outcomes
of the proposed regulation, prepared by the Office of Economic
Analysis.
This section would also require the CFPB to publish in each
notice of proposed rulemaking a discussion of underlying
assumptions used as a basis for such information; and a
description of any studies or data used in preparing such
information, and whether such studies were peer-reviewed.
TITLE VI--MAKING THE CFPB ACCOUNTABLE TO SMALL BUSINESSES ACT OF 2023
Sec. 601. Short title
Sec. 602. Rulemaking under Dodd-Frank Wall Street Reform and Consumer
Protection Act
This section would require the CFPB, in proposing each
rule, to consider the impact of the rule on small entities, in
accordance with the Small Business Regulatory Enforcement
Fairness Act (SBREFA) requirements.
Sec. 603. Initial regulatory flexibility analysis
This section would require the CFPB to include, in the
initial regulatory flexibility analysis for each proposed rule,
a detailed justification of the CFPB's determination that the
relative size and resources of small entities should have no
bearing on the rule, supported by factual, policy and legal
reasons, should the Bureau not adopt any significant
alternatives required to be discussed in the analysis.
Sec. 604. Final regulatory flexibility analysis
This section would require the CFPB to include in the final
regulatory flexibility analysis, for each final rule, a
description of the steps the CFPB has taken to minimize any
additional cost of credit for small entities and, where no
significant alternatives for small entities was adopted, a
detailed justification of the Bureau's determination that the
relative size and resources of small entities should have no
bearing on the rule, supported by factual, policy and legal
reasons.
TITLE VII--CFPB WHISTLEBLOWER INCENTIVES AND PROTECTION ACT
Sec. 701. Short title
Sec. 702. Bureau whistleblower incentives and protection
This section would require the CFPB to provide awards to
whistleblowers who report original information relating to a
violation of consumer financial law resulting in successful
enforcement and certain monetary sanctions exceeding $1
million. Specifically, the CFPB would be required to award
compensation to whistleblowers (1) not less than the greater of
10% of the collected monetary sanctions, or $50,000; and (2)
not more than 30% of the collected monetary sanctions. The
compensation to any single whistleblower would be capped at $5
million. This section would also set forth requirements
regarding the legal representation of a whistleblower and would
provide for confidentiality regarding the whistleblower's
identity.
Sec. 703. Amendment to the Consumer Financial Civil Penalty Fund
This section would fund the whistleblower awards from the
Consumer Financial Civil Penalty Fund.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, and existing law in which no
change is proposed is shown in roman):
DODD-FRANK WALL STREET REFORM AND CONSUMER PROTECTION ACT
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Dodd-Frank
Wall Street Reform and Consumer Protection Act''.
(b) Table of Contents.--The table of contents for this Act is
as follows:
Sec. 1. Short title; table of contents.
* * * * * * *
TITLE X--BUREAU OF CONSUMER FINANCIAL PROTECTION
Sec. 1001. Short title.
Sec. 1002. Definitions.
Subtitle A--Bureau of Consumer Financial Protection
* * * * * * *
Sec. 1017. Funding; penalties and fines.
Sec. 1017A. Whistleblower incentives and protection.
* * * * * * *
Subtitle F--Transfer of Functions and Personnel; Transitional Provisions
Sec. 1061. Transfer of consumer financial protection functions.
* * * * * * *
[Sec. 1066. Interim authority of the Secretary.]
* * * * * * *
TITLE I--FINANCIAL STABILITY
* * * * * * *
Subtitle A--Financial Stability Oversight Council
SEC. 111. FINANCIAL STABILITY OVERSIGHT COUNCIL ESTABLISHED.
(a) Establishment.--Effective on the date of enactment of
this Act, there is established the Financial Stability
Oversight Council.
(b) Membership.--The Council shall consist of the following
members:
(1) Voting members.--The voting members, who shall
each have 1 vote on the Council shall be--
(A) the Secretary of the Treasury, who shall
serve as Chairperson of the Council;
(B) the Chairman of the Board of Governors;
(C) the Comptroller of the Currency;
(D) the [Director] Chair of the Bureau;
(E) the Chairman of the Commission;
(F) the Chairperson of the Corporation;
(G) the Chairperson of the Commodity Futures
Trading Commission;
(H) the Director of the Federal Housing
Finance Agency;
(I) the Chairman of the National Credit Union
Administration Board; and
(J) an independent member appointed by the
President, by and with the advice and consent
of the Senate, having insurance expertise.
(2) Nonvoting members.--The nonvoting members, who
shall serve in an advisory capacity as a nonvoting
member of the Council, shall be--
(A) the Director of the Office of Financial
Research;
(B) the Director of the Federal Insurance
Office;
(C) a State insurance commissioner, to be
designated by a selection process determined by
the State insurance commissioners;
(D) a State banking supervisor, to be
designated by a selection process determined by
the State banking supervisors; and
(E) a State securities commissioner (or an
officer performing like functions), to be
designated by a selection process determined by
such State securities commissioners.
(3) Nonvoting member participation.--The nonvoting
members of the Council shall not be excluded from any
of the proceedings, meetings, discussions, or
deliberations of the Council, except that the
Chairperson may, upon an affirmative vote of the member
agencies, exclude the nonvoting members from any of the
proceedings, meetings, discussions, or deliberations of
the Council when necessary to safeguard and promote the
free exchange of confidential supervisory information.
(c) Terms; Vacancy.--
(1) Terms.--The independent member of the Council
shall serve for a term of 6 years, and each nonvoting
member described in subparagraphs (C), (D), and (E) of
subsection (b)(2) shall serve for a term of 2 years.
(2) Vacancy.--Any vacancy on the Council shall be
filled in the manner in which the original appointment
was made.
(3) Acting officials may serve.--In the event of a
vacancy in the office of the head of a member agency or
department, and pending the appointment of a successor,
or during the absence or disability of the head of a
member agency or department, the acting head of the
member agency or department shall serve as a member of
the Council in the place of that agency or department
head.
(4) Term of independent member.--Notwithstanding
paragraph (1), if a successor to the independent member
of the Council serving under subsection (b)(1)(J) is
not appointed and confirmed by the end of the term of
service of such member, such member may continue to
serve until the earlier of--
(A) 18 months after the date on which the
term of service ends; or
(B) the date on which a successor to such
member is appointed and confirmed.
(d) Technical and Professional Advisory Committees.--The
Council may appoint such special advisory, technical, or
professional committees as may be useful in carrying out the
functions of the Council, including an advisory committee
consisting of State regulators, and the members of such
committees may be members of the Council, or other persons, or
both.
(e) Meetings.--
(1) Timing.--The Council shall meet at the call of
the Chairperson or a majority of the members then
serving, but not less frequently than quarterly.
(2) Rules for conducting business.--The Council shall
adopt such rules as may be necessary for the conduct of
the business of the Council. Such rules shall be rules
of agency organization, procedure, or practice for
purposes of section 553 of title 5, United States Code.
(f) Voting.--Unless otherwise specified, the Council shall
make all decisions that it is authorized or required to make by
a majority vote of the voting members then serving.
(g) Nonapplicability of Chapter 10 of Title 5, United States
Code.--Chapter 10 of title 5, United States Code, shall not
apply to the Council, or to any special advisory, technical, or
professional committee appointed by the Council, except that,
if an advisory, technical, or professional committee has one or
more members who are not employees of or affiliated with the
United States Government, the Council shall publish a list of
the names of the members of such committee.
(h) Assistance From Federal Agencies.--Any department or
agency of the United States may provide to the Council and any
special advisory, technical, or professional committee
appointed by the Council, such services, funds, facilities,
staff, and other support services as the Council may determine
advisable.
(i) Compensation of Members.--
(1) Federal employee members.--All members of the
Council who are officers or employees of the United
States shall serve without compensation in addition to
that received for their services as officers or
employees of the United States.
(2) Compensation for non-federal member.--Section
5314 of title 5, United States Code, is amended by
adding at the end the following:``Independent Member of
the Financial Stability Oversight Council (1).''.
(j) Detail of Government Employees.--Any employee of the
Federal Government may be detailed to the Council without
reimbursement, and such detail shall be without interruption or
loss of civil service status or privilege. An employee of the
Federal Government detailed to the Council shall report to and
be subject to oversight by the Council during the assignment to
the Council, and shall be compensated by the department or
agency from which the employee was detailed.
* * * * * * *
TITLE IX--INVESTOR PROTECTIONS AND IMPROVEMENTS TO THE REGULATION OF
SECURITIES
SEC. 901. SHORT TITLE.
This title may be cited as the ``Investor Protection and
Securities Reform Act of 2010''.
* * * * * * *
Subtitle I--Public Company Accounting Oversight Board, Portfolio
Margining, and Other Matters
* * * * * * *
SEC. 989E. ADDITIONAL OVERSIGHT OF FINANCIAL REGULATORY SYSTEM.
(a) Council of Inspectors General on Financial Oversight.--
(1) Establishment and membership.--There is
established a Council of Inspectors General on
Financial Oversight (in this section referred to as the
``Council of Inspectors General'') chaired by the
Inspector General of the Department of the Treasury and
composed of the inspectors general of the following:
(A) The Board of Governors of the Federal
Reserve System.
(B) The Commodity Futures Trading Commission.
(C) The Department of Housing and Urban
Development.
(D) The Department of the Treasury.
(E) The Federal Deposit Insurance
Corporation.
(F) The Federal Housing Finance Agency.
(G) The National Credit Union Administration.
(H) The Securities and Exchange Commission.
(I) The Troubled Asset Relief Program (until
the termination of the authority of the Special
Inspector General for such program under
section 121(k) of the Emergency Economic
Stabilization Act of 2008 (12 U.S.C. 5231(k))).
(J) The Bureau of Consumer Financial
Protection.
(2) Duties.--
(A) Meetings.--The Council of Inspectors
General shall meet not less than once each
quarter, or more frequently if the chair
considers it appropriate, to facilitate the
sharing of information among inspectors general
and to discuss the ongoing work of each
inspector general who is a member of the
Council of Inspectors General, with a focus on
concerns that may apply to the broader
financial sector and ways to improve financial
oversight.
(B) Annual report.--Each year the Council of
Inspectors General shall submit to the Council
and to Congress a report including--
(i) for each inspector general who is
a member of the Council of Inspectors
General, a section within the exclusive
editorial control of such inspector
general that highlights the concerns
and recommendations of such inspector
general in such inspector general's
ongoing and completed work, with a
focus on issues that may apply to the
broader financial sector; and
(ii) a summary of the general
observations of the Council of
Inspectors General based on the views
expressed by each inspector general as
required by clause (i), with a focus on
measures that should be taken to
improve financial oversight.
(3) Working groups to evaluate council.--
(A) Convening a working group.--The Council
of Inspectors General may, by majority vote,
convene a Council of Inspectors General Working
Group to evaluate the effectiveness and
internal operations of the Council.
(B) Personnel and resources.--The inspectors
general who are members of the Council of
Inspectors General may detail staff and
resources to a Council of Inspectors General
Working Group established under this paragraph
to enable it to carry out its duties.
(C) Reports.--A Council of Inspectors General
Working Group established under this paragraph
shall submit regular reports to the Council and
to Congress on its evaluations pursuant to this
paragraph.
(b) Response to Report by Council.--The Council shall respond
to the concerns raised in the report of the Council of
Inspectors General under subsection (a)(2)(B) for such year.
* * * * * * *
TITLE X--BUREAU OF CONSUMER FINANCIAL PROTECTION
SEC. 1001. SHORT TITLE.
This title may be cited as the ``Consumer Financial
Protection Act of 2010''.
SEC. 1002. DEFINITIONS.
Except as otherwise provided in this title, for purposes of
this title, the following definitions shall apply:
(1) Affiliate.--The term ``affiliate'' means any
person that controls, is controlled by, or is under
common control with another person.
(2) Bureau.--The term ``Bureau'' means the Bureau of
Consumer Financial Protection.
(3) Business of insurance.--The term ``business of
insurance'' means the writing of insurance or the
reinsuring of risks by an insurer, including all acts
necessary to such writing or reinsuring and the
activities relating to the writing of insurance or the
reinsuring of risks conducted by persons who act as, or
are, officers, directors, agents, or employees of
insurers or who are other persons authorized to act on
behalf of such persons.
(4) Consumer.--The term ``consumer'' means an
individual or an agent, trustee, or representative
acting on behalf of an individual.
(5) Consumer financial product or service.--The term
``consumer financial product or service'' means any
financial product or service that is described in one
or more categories under--
(A) paragraph (15) and is offered or provided
for use by consumers primarily for personal,
family, or household purposes; or
(B) clause (i), (iii), (ix), or (x) of
paragraph (15)(A), and is delivered, offered,
or provided in connection with a consumer
financial product or service referred to in
subparagraph (A).
(6) Covered person.--The term ``covered person''
means--
(A) any person that engages in offering or
providing a consumer financial product or
service; and
(B) any affiliate of a person described in
subparagraph (A) if such affiliate acts as a
service provider to such person.
(7) Credit.--The term ``credit'' means the right
granted by a person to a consumer to defer payment of a
debt, incur debt and defer its payment, or purchase
property or services and defer payment for such
purchase.
(8) Deposit-taking activity.--The term ``deposit-
taking activity'' means--
(A) the acceptance of deposits, maintenance
of deposit accounts, or the provision of
services related to the acceptance of deposits
or the maintenance of deposit accounts;
(B) the acceptance of funds, the provision of
other services related to the acceptance of
funds, or the maintenance of member share
accounts by a credit union; or
(C) the receipt of funds or the equivalent
thereof, as the Bureau may determine by rule or
order, received or held by a covered person (or
an agent for a covered person) for the purpose
of facilitating a payment or transferring funds
or value of funds between a consumer and a
third party.
(9) Designated transfer date.--The term ``designated
transfer date'' means the date established under
section 1062.
[(10) Director.--The term ``Director'' means the
Director of the Bureau.]
(11) Electronic conduit services.--The term
``electronic conduit services''--
(A) means the provision, by a person, of
electronic data transmission, routing,
intermediate or transient storage, or
connections to a telecommunications system or
network; and
(B) does not include a person that provides
electronic conduit services if, when providing
such services, the person--
(i) selects or modifies the content
of the electronic data;
(ii) transmits, routes, stores, or
provides connections for electronic
data, including financial data, in a
manner that such financial data is
differentiated from other types of data
of the same form that such person
transmits, routes, or stores, or with
respect to which, provides connections;
or
(iii) is a payee, payor,
correspondent, or similar party to a
payment transaction with a consumer.
(12) Enumerated consumer laws.--Except as otherwise
specifically provided in section 1029, subtitle G or
subtitle H, the term ``enumerated consumer laws''
means--
(A) the Alternative Mortgage Transaction
Parity Act of 1982 (12 U.S.C. 3801 et seq.);
(B) the Consumer Leasing Act of 1976 (15
U.S.C. 1667 et seq.);
(C) the Electronic Fund Transfer Act (15
U.S.C. 1693 et seq.), except with respect to
section 920 of that Act;
(D) the Equal Credit Opportunity Act (15
U.S.C. 1691 et seq.);
(E) the Fair Credit Billing Act (15 U.S.C.
1666 et seq.);
(F) the Fair Credit Reporting Act (15 U.S.C.
1681 et seq.), except with respect to sections
615(e) and 628 of that Act (15 U.S.C. 1681m(e),
1681w);
(G) the Home Owners Protection Act of 1998
(12 U.S.C. 4901 et seq.);
(H) the Fair Debt Collection Practices Act
(15 U.S.C. 1692 et seq.);
(I) subsections (b) through (f) of section 43
of the Federal Deposit Insurance Act (12 U.S.C.
1831t(c)-(f));
(J) sections 502 through 509 of the Gramm-
Leach-Bliley Act (15 U.S.C. 6802-6809) except
for section 505 as it applies to section
501(b);
(K) the Home Mortgage Disclosure Act of 1975
(12 U.S.C. 2801 et seq.);
(L) the Home Ownership and Equity Protection
Act of 1994 (15 U.S.C. 1601 note);
(M) the Real Estate Settlement Procedures Act
of 1974 (12 U.S.C. 2601 et seq.);
(N) the S.A.F.E. Mortgage Licensing Act of
2008 (12 U.S.C. 5101 et seq.);
(O) the Truth in Lending Act (15 U.S.C. 1601
et seq.);
(P) the Truth in Savings Act (12 U.S.C. 4301
et seq.);
(Q) section 626 of the Omnibus Appropriations
Act, 2009 (Public Law 111-8); and
(R) the Interstate Land Sales Full Disclosure
Act (15 U.S.C. 1701).
(13) Fair lending.--The term ``fair lending'' means
fair, equitable, and nondiscriminatory access to credit
for consumers.
(14) Federal consumer financial law.--The term
``Federal consumer financial law'' means the provisions
of this title, the enumerated consumer laws, the laws
for which authorities are transferred under subtitles F
and H, and any rule or order prescribed by the Bureau
under this title, an enumerated consumer law, or
pursuant to the authorities transferred under subtitles
F and H. The term does not include the Federal Trade
Commission Act.
(15) Financial product or service.--
(A) In general.--The term ``financial product
or service'' means--
(i) extending credit and servicing
loans, including acquiring, purchasing,
selling, brokering, or other extensions
of credit (other than solely extending
commercial credit to a person who
originates consumer credit
transactions);
(ii) extending or brokering leases of
personal or real property that are the
functional equivalent of purchase
finance arrangements, if--
(I) the lease is on a non-
operating basis;
(II) the initial term of the
lease is at least 90 days; and
(III) in the case of a lease
involving real property, at the
inception of the initial lease,
the transaction is intended to
result in ownership of the
leased property to be
transferred to the lessee,
subject to standards prescribed
by the Bureau;
(iii) providing real estate
settlement services, except such
services excluded under subparagraph
(C), or performing appraisals of real
estate or personal property;
(iv) engaging in deposit-taking
activities, transmitting or exchanging
funds, or otherwise acting as a
custodian of funds or any financial
instrument for use by or on behalf of a
consumer;
(v) selling, providing, or issuing
stored value or payment instruments,
except that, in the case of a sale of,
or transaction to reload, stored value,
only if the seller exercises
substantial control over the terms or
conditions of the stored value provided
to the consumer where, for purposes of
this clause--
(I) a seller shall not be
found to exercise substantial
control over the terms or
conditions of the stored value
if the seller is not a party to
the contract with the consumer
for the stored value product,
and another person is
principally responsible for
establishing the terms or
conditions of the stored value;
and
(II) advertising the
nonfinancial goods or services
of the seller on the stored
value card or device is not in
itself an exercise of
substantial control over the
terms or conditions;
(vi) providing check cashing, check
collection, or check guaranty services;
(vii) providing payments or other
financial data processing products or
services to a consumer by any
technological means, including
processing or storing financial or
banking data for any payment
instrument, or through any payments
systems or network used for processing
payments data, including payments made
through an online banking system or
mobile telecommunications network,
except that a person shall not be
deemed to be a covered person with
respect to financial data processing
solely because the person--
(I) is a merchant, retailer,
or seller of any nonfinancial
good or service who engages in
financial data processing by
transmitting or storing
payments data about a consumer
exclusively for purpose of
initiating payments
instructions by the consumer to
pay such person for the
purchase of, or to complete a
commercial transaction for,
such nonfinancial good or
service sold directly by such
person to the consumer; or
(II) provides access to a
host server to a person for
purposes of enabling that
person to establish and
maintain a website;
(viii) providing financial advisory
services (other than services relating
to securities provided by a person
regulated by the Commission or a person
regulated by a State securities
Commission, but only to the extent that
such person acts in a regulated
capacity) to consumers on individual
financial matters or relating to
proprietary financial products or
services (other than by publishing any
bona fide newspaper, news magazine, or
business or financial publication of
general and regular circulation,
including publishing market data, news,
or data analytics or investment
information or recommendations that are
not tailored to the individual needs of
a particular consumer), including--
(I) providing credit
counseling to any consumer; and
(II) providing services to
assist a consumer with debt
management or debt settlement,
modifying the terms of any
extension of credit, or
avoiding foreclosure;
(ix) collecting, analyzing,
maintaining, or providing consumer
report information or other account
information, including information
relating to the credit history of
consumers, used or expected to be used
in connection with any decision
regarding the offering or provision of
a consumer financial product or
service, except to the extent that--
(I) a person--
(aa) collects,
analyzes, or maintains
information that
relates solely to the
transactions between a
consumer and such
person;
(bb) provides the
information described
in item (aa) to an
affiliate of such
person; or
(cc) provides
information that is
used or expected to be
used solely in any
decision regarding the
offering or provision
of a product or service
that is not a consumer
financial product or
service, including a
decision for
employment, government
licensing, or a
residential lease or
tenancy involving a
consumer; and
(II) the information
described in subclause (I)(aa)
is not used by such person or
affiliate in connection with
any decision regarding the
offering or provision of a
consumer financial product or
service to the consumer, other
than credit described in
section 1027(a)(2)(A);
(x) collecting debt related to any
consumer financial product or service;
and
(xi) such other financial product or
service as may be defined by the
Bureau, by regulation, for purposes of
this title, if the Bureau finds that
such financial product or service is--
(I) entered into or conducted
as a subterfuge or with a
purpose to evade any Federal
consumer financial law; or
(II) permissible for a bank
or for a financial holding
company to offer or to provide
under any provision of a
Federal law or regulation
applicable to a bank or a
financial holding company, and
has, or likely will have, a
material impact on consumers.
(B) Rule of construction.--
(i) In general.--For purposes of
subparagraph (A)(xi)(II), and subject
to clause (ii) of this subparagraph,
the following activities provided to a
covered person shall not, for purposes
of this title, be considered incidental
or complementary to a financial
activity permissible for a financial
holding company to engage in under any
provision of a Federal law or
regulation applicable to a financial
holding company:
(I) Providing information
products or services to a
covered person for identity
authentication.
(II) Providing information
products or services for fraud
or identify theft detection,
prevention, or investigation.
(III) Providing document
retrieval or delivery services.
(IV) Providing public records
information retrieval.
(V) Providing information
products or services for anti-
money laundering activities.
(ii) Limitation.--Nothing in clause
(i) may be construed as modifying or
limiting the authority of the Bureau to
exercise any--
(I) examination or
enforcement powers authority
under this title with respect
to a covered person or service
provider engaging in an
activity described in
subparagraph (A)(ix); or
(II) powers authorized by
this title to prescribe rules,
issue orders, or take other
actions under any enumerated
consumer law or law for which
the authorities are transferred
under subtitle F or H.
(C) Exclusions.--The term ``financial product
or service'' does not include--
(i) the business of insurance; or
(ii) electronic conduit services.
(16) Foreign exchange.--The term ``foreign exchange''
means the exchange, for compensation, of currency of
the United States or of a foreign government for
currency of another government.
(17) Insured credit union.--The term ``insured credit
union'' has the same meaning as in section 101 of the
Federal Credit Union Act (12 U.S.C. 1752).
(18) Payment instrument.--The term ``payment
instrument'' means a check, draft, warrant, money
order, traveler's check, electronic instrument, or
other instrument, payment of funds, or monetary value
(other than currency).
(19) Person.--The term ``person'' means an
individual, partnership, company, corporation,
association (incorporated or unincorporated), trust,
estate, cooperative organization, or other entity.
(20) Person regulated by the commodity futures
trading commission.--The term ``person regulated by the
Commodity Futures Trading Commission'' means any person
that is registered, or required by statute or
regulation to be registered, with the Commodity Futures
Trading Commission, but only to the extent that the
activities of such person are subject to the
jurisdiction of the Commodity Futures Trading
Commission under the Commodity Exchange Act.
(21) Person regulated by the commission.--The term
``person regulated by the Commission'' means a person
who is--
(A) a broker or dealer that is required to be
registered under the Securities Exchange Act of
1934;
(B) an investment adviser that is registered
under the Investment Advisers Act of 1940;
(C) an investment company that is required to
be registered under the Investment Company Act
of 1940, and any company that has elected to be
regulated as a business development company
under that Act;
(D) a national securities exchange that is
required to be registered under the Securities
Exchange Act of 1934;
(E) a transfer agent that is required to be
registered under the Securities Exchange Act of
1934;
(F) a clearing corporation that is required
to be registered under the Securities Exchange
Act of 1934;
(G) any self-regulatory organization that is
required to be registered with the Commission;
(H) any nationally recognized statistical
rating organization that is required to be
registered with the Commission;
(I) any securities information processor that
is required to be registered with the
Commission;
(J) any municipal securities dealer that is
required to be registered with the Commission;
(K) any other person that is required to be
registered with the Commission under the
Securities Exchange Act of 1934; and
(L) any employee, agent, or contractor acting
on behalf of, registered with, or providing
services to, any person described in any of
subparagraphs (A) through (K), but only to the
extent that any person described in any of
subparagraphs (A) through (K), or the employee,
agent, or contractor of such person, acts in a
regulated capacity.
(22) Person regulated by a state insurance
regulator.--The term ``person regulated by a State
insurance regulator'' means any person that is engaged
in the business of insurance and subject to regulation
by any State insurance regulator, but only to the
extent that such person acts in such capacity.
(23) Person that performs income tax preparation
activities for consumers.--The term ``person that
performs income tax preparation activities for
consumers'' means--
(A) any tax return preparer (as defined in
section 7701(a)(36) of the Internal Revenue
Code of 1986), regardless of whether
compensated, but only to the extent that the
person acts in such capacity;
(B) any person regulated by the Secretary
under section 330 of title 31, United States
Code, but only to the extent that the person
acts in such capacity; and
(C) any authorized IRS e-file Providers (as
defined for purposes of section 7216 of the
Internal Revenue Code of 1986), but only to the
extent that the person acts in such capacity.
(24) Prudential regulator.--The term ``prudential
regulator'' means--
(A) in the case of an insured depository
institution or depository institution holding
company (as defined in section 3 of the Federal
Deposit Insurance Act), or subsidiary of such
institution or company, the appropriate Federal
banking agency, as that term is defined in
section 3 of the Federal Deposit Insurance Act;
and
(B) in the case of an insured credit union,
the National Credit Union Administration.
(25) Related person.--The term ``related person''--
(A) shall apply only with respect to a
covered person that is not a bank holding
company (as that term is defined in section 2
of the Bank Holding Company Act of 1956),
credit union, or depository institution;
(B) shall be deemed to mean a covered person
for all purposes of any provision of Federal
consumer financial law; and
(C) means--
(i) any director, officer, or
employee charged with managerial
responsibility for, or controlling
shareholder of, or agent for, such
covered person;
(ii) any shareholder, consultant,
joint venture partner, or other person,
as determined by the Bureau (by rule or
on a case-by-case basis) who materially
participates in the conduct of the
affairs of such covered person; and
(iii) any independent contractor
(including any attorney, appraiser, or
accountant) who knowingly or recklessly
participates in any--
(I) violation of any
provision of law or regulation;
or
(II) breach of a fiduciary
duty.
(26) Service provider.--
(A) In general.--The term ``service
provider'' means any person that provides a
material service to a covered person in
connection with the offering or provision by
such covered person of a consumer financial
product or service, including a person that--
(i) participates in designing,
operating, or maintaining the consumer
financial product or service; or
(ii) processes transactions relating
to the consumer financial product or
service (other than unknowingly or
incidentally transmitting or processing
financial data in a manner that such
data is undifferentiated from other
types of data of the same form as the
person transmits or processes).
(B) Exceptions.--The term ``service
provider'' does not include a person solely by
virtue of such person offering or providing to
a covered person--
(i) a support service of a type
provided to businesses generally or a
similar ministerial service; or
(ii) time or space for an
advertisement for a consumer financial
product or service through print,
newspaper, or electronic media.
(C) Rule of construction.--A person that is a
service provider shall be deemed to be a
covered person to the extent that such person
engages in the offering or provision of its own
consumer financial product or service.
(27) State.--The term ``State'' means any State,
territory, or possession of the United States, the
District of Columbia, the Commonwealth of Puerto Rico,
the Commonwealth of the Northern Mariana Islands, Guam,
American Samoa, or the United States Virgin Islands or
any federally recognized Indian tribe, as defined by
the Secretary of the Interior under section 104(a) of
the Federally Recognized Indian Tribe List Act of 1994
(25 U.S.C. 479a-1(a)).
(28) Stored value.--
(A) In general.--The term ``stored value''
means funds or monetary value represented in
any electronic format, whether or not specially
encrypted, and stored or capable of storage on
electronic media in such a way as to be
retrievable and transferred electronically, and
includes a prepaid debit card or product, or
any other similar product, regardless of
whether the amount of the funds or monetary
value may be increased or reloaded.
(B) Exclusion.--Notwithstanding subparagraph
(A), the term ``stored value'' does not include
a special purpose card or certificate, which
shall be defined for purposes of this paragraph
as funds or monetary value represented in any
electronic format, whether or not specially
encrypted, that is--
(i) issued by a merchant, retailer,
or other seller of nonfinancial goods
or services;
(ii) redeemable only for transactions
with the merchant, retailer, or seller
of nonfinancial goods or services or
with an affiliate of such person, which
affiliate itself is a merchant,
retailer, or seller of nonfinancial
goods or services;
(iii) issued in a specified amount
that, except in the case of a card or
product used solely for telephone
services, may not be increased or
reloaded;
(iv) purchased on a prepaid basis in
exchange for payment; and
(v) honored upon presentation to such
merchant, retailer, or seller of
nonfinancial goods or services or an
affiliate of such person, which
affiliate itself is a merchant,
retailer, or seller of nonfinancial
goods or services, only for any
nonfinancial goods or services.
(29) Transmitting or exchanging funds.--The term
``transmitting or exchanging funds'' means receiving
currency, monetary value, or payment instruments from a
consumer for the purpose of exchanging or transmitting
the same by any means, including transmission by wire,
facsimile, electronic transfer, courier, the Internet,
or through bill payment services or through other
businesses that facilitate third-party transfers within
the United States or to or from the United States.
Subtitle A--Bureau of Consumer Financial Protection
SEC. 1011. ESTABLISHMENT OF THE BUREAU OF CONSUMER FINANCIAL
PROTECTION.
(a) Bureau Established.--There is established [in the Federal
Reserve System,] an [independent bureau] independent agency to
be known as the ``Bureau of Consumer Financial Protection'',
which shall regulate the offering and provision of consumer
financial products or services under the Federal consumer
financial laws. The Bureau shall be considered an Executive
agency, as defined in section 105 of title 5, United States
Code. Except as otherwise provided expressly by law, all
Federal laws dealing with public or Federal contracts,
property, works, officers, employees, budgets, or funds,
including the provisions of chapters 5 and 7 of title 5, shall
apply to the exercise of the powers of the Bureau.
[(b) Director and Deputy Director.--
[(1) In general.--There is established the position
of the Director, who shall serve as the head of the
Bureau.
[(2) Appointment.--Subject to paragraph (3), the
Director shall be appointed by the President, by and
with the advice and consent of the Senate.
[(3) Qualification.--The President shall nominate the
Director from among individuals who are citizens of the
United States.
[(4) Compensation.--The Director shall be compensated
at the rate prescribed for level II of the Executive
Schedule under section 5313 of title 5, United States
Code.
[(5) Deputy director.--There is established the
position of Deputy Director, who shall--
[(A) be appointed by the Director; and
[(B) serve as acting Director in the absence
or unavailability of the Director.
[(c) Term.--
[(1) In general.--The Director shall serve for a term
of 5 years.
[(2) Expiration of term.--An individual may serve as
Director after the expiration of the term for which
appointed, until a successor has been appointed and
qualified.
[(3) Removal for cause.--The President may remove the
Director for inefficiency, neglect of duty, or
malfeasance in office.
[(d) Service Restriction.--No Director or Deputy Director may
hold any office, position, or employment in any Federal reserve
bank, Federal home loan bank, covered person, or service
provider during the period of service of such person as
Director or Deputy Director.]
(b) Authority to Prescribe Regulations.--The commission of
the Bureau may prescribe such regulations and issue such orders
in accordance with this title as the Bureau may determine to be
necessary for carrying out this title and all other laws within
the Bureau's jurisdiction and shall exercise any authorities
granted under this title and all other laws within the Bureau's
jurisdiction.
(c) Composition of the Commission.--
(1) In general.--The management of the Bureau shall
be vested in a commission, which shall be composed of 5
members who shall be appointed by the President, by and
with the advice and consent of the Senate, and at least
2 of whom shall have private sector experience in the
provision of consumer financial products and services.
(2) Staggering.--The members of the commission shall
serve staggered terms, which initially shall be
established by the President for terms of 1, 2, 3, 4,
and 5 years, respectively.
(3) Terms.--
(A) In general.--Except with respect to the
initial staggered terms described under
paragraph (2), each member of the commission,
including the Chair, shall serve for a term of
5 years.
(B) Removal.--The President may remove any
member of the commission for inefficiency,
neglect of duty, or malfeasance in office.
(C) Vacancies.--Any member of the commission
appointed to fill a vacancy occurring before
the expiration of the term to which that
member's predecessor was appointed (including
the Chair) shall be appointed only for the
remainder of the term.
(D) Continuation of service.--Each member of
the commission may continue to serve after the
expiration of the term of office to which that
member was appointed until a successor has been
appointed by the President and confirmed by the
Senate, except that a member may not continue
to serve more than 1 year after the date on
which that member's term would otherwise
expire.
(E) Other employment prohibited.--No member
of the commission shall engage in any other
business, vocation, or employment.
(d) Affiliation.--Not more than 3 members of the commission
shall be members of any one political party.
(e) Chair of the Commission.--
(1) Initial chair.--The first member and Chair of the
commission shall be the individual serving as Director
of the Bureau of Consumer Financial Protection on the
day before the date of the enactment of this
subsection. Such individual shall serve until the
President has appointed all 5 members of the commission
in accordance with subsection (c).
(2) Subsequent chair.--Of the 5 members appointed in
accordance with subsection (c), the President shall
appoint 1 member to serve as the subsequent Chair of
the commission.
(3) Authority.--The Chair shall be the principal
executive officer of the commission, and shall exercise
all of the executive and administrative functions of
the commission, including with respect to--
(A) the appointment and supervision of
personnel employed under the commission (other
than personnel employed regularly and full time
in the immediate offices of members of the
commission other than the Chair);
(B) the distribution of business among
personnel appointed and supervised by the Chair
and among administrative units of the
commission; and
(C) the use and expenditure of funds.
(4) Limitation.--In carrying out any of the Chair's
functions under the provisions of this subsection, the
Chair shall be governed by general policies of the
commission and by such regulatory decisions, findings,
and determinations as the commission may by law be
authorized to make.
(5) Requests or estimates related to
appropriations.--Requests or estimates for regular,
supplemental, or deficiency appropriations on behalf of
the commission may not be submitted by the Chair
without the prior approval of the commission.
(6) Designation.--The Chair shall be known as both
the ``Chair of the commission'' of the Bureau and the
``Chair of the Bureau''.
(f) Initial Quorum Established.--For the 6 month period
beginning on the date of enactment of this subsection, the
first member and Chair of the commission described under
subsection (e)(1) shall constitute a quorum for the transaction
of business until the President has appointed all 5 members of
the commission in accordance with subsection (c). Following
such appointment of 5 members, the quorum requirements of
subsection (g) shall apply.
(g) No Impairment by Reason of Vacancies.--No vacancy in the
members of the commission after the establishment of an initial
quorum under subsection (f) shall impair the right of the
remaining members of the commission to exercise all the powers
of the commission. Three members of the commission shall
constitute a quorum for the transaction of business, except
that if there are only 3 members serving on the commission
because of vacancies in the commission, 2 members of the
commission shall constitute a quorum for the transaction of
business. If there are only 2 members serving on the commission
because of vacancies in the commission, 2 members shall
constitute a quorum for the 6-month period beginning on the
date of the vacancy which caused the number of commission
members to decline to 2.
(h) Seal.--The Bureau shall have an official seal.
(i) Compensation.--
(1) Chair.--The Chair shall receive compensation at
the rate prescribed for level I of the Executive
Schedule under section 5313 of title 5, United States
Code.
(2) Other members of the commission.--The 4 other
members of the commission shall each receive
compensation at the rate prescribed for level II of the
Executive Schedule under section 5314 of title 5,
United States Code.
[(e)] (j) Offices.--The principal office of the Bureau shall
be in the District of Columbia. The [Director] Bureau may
establish regional offices of the Bureau[, including in cities
in which the Federal reserve banks, or branches of such banks,
are located,] in order to carry out the responsibilities
assigned to the Bureau under the Federal consumer financial
laws.
(k) Inspector General.--There is established the position of
the Inspector General.
SEC. 1012. EXECUTIVE AND ADMINISTRATIVE POWERS.
(a) Powers of the Bureau.--The Bureau is authorized to
establish the general policies of the Bureau with respect to
all executive and administrative functions, including--
(1) the establishment of rules for conducting the
general business of the Bureau, in a manner not
inconsistent with this title;
(2) to bind the Bureau and enter into contracts;
(3) directing the establishment and maintenance of
divisions or other offices within the Bureau, in order
to carry out the responsibilities under the Federal
consumer financial laws, and to satisfy the
requirements of other applicable law;
(4) to coordinate and oversee the operation of all
administrative, enforcement, and research activities of
the Bureau;
(5) to adopt and use a seal;
(6) to determine the character of and the necessity
for the obligations and expenditures of the Bureau;
(7) the appointment and supervision of personnel
employed by the Bureau;
(8) the distribution of business among personnel
appointed and supervised by the [Director] Bureau and
among administrative units of the Bureau;
(9) the use and expenditure of funds;
(10) implementing the Federal consumer financial laws
through rules, orders, guidance, interpretations,
statements of policy, examinations, and enforcement
actions; and
(11) performing such other functions as may be
authorized or required by law.
(b) Delegation of Authority.--The [Director of the Bureau]
Bureau may delegate to any duly authorized employee,
representative, or agent any power vested in the Bureau by law.
(c) [Autonomy of the Bureau] Coordination With the Board of
Governors.--
[(1) Coordination with the board of governors.--]
Notwithstanding any other provision of law applicable
to the supervision or examination of persons with
respect to Federal consumer financial laws, the Board
of Governors may delegate to the Bureau the authorities
to examine persons subject to the jurisdiction of the
Board of Governors for compliance with the Federal
consumer financial laws.
[(2) Autonomy.--Notwithstanding the authorities
granted to the Board of Governors under the Federal
Reserve Act, the Board of Governors may not--
[(A) intervene in any matter or proceeding
before the Director, including examinations or
enforcement actions, unless otherwise
specifically provided by law;
[(B) appoint, direct, or remove any officer
or employee of the Bureau; or
[(C) merge or consolidate the Bureau, or any
of the functions or responsibilities of the
Bureau, with any division or office of the
Board of Governors or the Federal reserve
banks.
[(3) Rules and orders.--No rule or order of the
Bureau shall be subject to approval or review by the
Board of Governors. The Board of Governors may not
delay or prevent the issuance of any rule or order of
the Bureau.
[(4) Recommendations and testimony.--No officer or
agency of the United States shall have any authority to
require the Director or any other officer of the Bureau
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 Director or such officer, and
do not necessarily reflect the views of the Board of
Governors or the President.
[(5) Clarification of autonomy of the bureau in legal
proceedings.--The Bureau shall not be liable under any
provision of law for any action or inaction of the
Board of Governors, and the Board of Governors shall
not be liable under any provision of law for any action
or inaction of the Bureau.]
SEC. 1013. ADMINISTRATION.
(a) Personnel.--
(1) Appointment.--
(A) In general.--The [Director] Bureau may
fix the number of, and appoint and direct, all
employees of the Bureau, in accordance with the
applicable provisions of title 5, United States
Code.
(B) Employees of the bureau.--The [Director]
Bureau is authorized to employ attorneys,
compliance examiners, compliance supervision
analysts, economists, statisticians, and other
employees as may be deemed necessary to conduct
the business of the Bureau. Unless otherwise
provided expressly by law, any individual
appointed under this section shall be an
employee as defined in section 2105 of title 5,
United States Code, and subject to the
provisions of such title and other laws
generally applicable to the employees of an
Executive agency.
(C) Waiver authority.--
(i) In general.--In making any
appointment under subparagraph (A), the
[Director] Bureau may waive the
requirements of chapter 33 of title 5,
United States Code, and the regulations
implementing such chapter, to the
extent necessary to appoint employees
on terms and conditions that are
consistent with those set forth in
section 11(1) of the Federal Reserve
Act (12 U.S.C. 248(1)), while providing
for--
(I) fair, credible, and
transparent methods of
establishing qualification
requirements for, recruitment
for, and appointments to
positions;
(II) fair and open
competition and equitable
treatment in the consideration
and selection of individuals to
positions;
(III) fair, credible, and
transparent methods of
assigning, reassigning,
detailing, transferring, and
promoting employees.
(ii) Veterans preferences.--In
implementing this subparagraph, the
[Director] Bureau shall comply with the
provisions of section 2302(b)(11),
regarding veterans' preference
requirements, in a manner consistent
with that in which such provisions are
applied under chapter 33 of title 5,
United States Code. The authority under
this subparagraph to waive the
requirements of that chapter 33 shall
expire 5 years after the date of
enactment of this Act.
(2) Compensation.--Notwithstanding any otherwise
applicable provision of title 5, United States Code,
concerning compensation, including the provisions of
chapter 51 and chapter 53, the following provisions
shall apply with respect to employees of the Bureau:
(A) The rates of basic pay for all employees
of the Bureau may be set and adjusted by the
[Director] Bureau.
(B) The [Director] Bureau shall at all times
provide compensation (including benefits) to
each class of employees that, at a minimum, are
comparable to the compensation and benefits
then being provided by the Board of Governors
for the corresponding class of employees.
(C) All such employees shall be compensated
(including benefits) on terms and conditions
that are consistent with the terms and
conditions set forth in section 11(l) of the
Federal Reserve Act (12 U.S.C. 248(l)).
(3) Bureau participation in federal reserve system
retirement plan and federal reserve system thrift
plan.--
(A) Employee election.--Employees appointed
to the Bureau may elect to participate in
either--
(i) both the Federal Reserve System
Retirement Plan and the Federal Reserve
System Thrift Plan, under the same
terms on which such participation is
offered to employees of the Board of
Governors who participate in such plans
and under the terms and conditions
specified under section 1064(i)(1)(C);
or
(ii) the Civil Service Retirement
System under chapter 83 of title 5,
United States Code, or the Federal
Employees Retirement System under
chapter 84 of title 5, United States
Code, if previously covered under one
of those Federal employee retirement
systems.
(B) Election period.--Bureau employees shall
make an election under this paragraph not later
than 1 year after the date of appointment by,
or transfer under subtitle F to, the Bureau.
Participation in, and benefit accruals under,
any other retirement plan established or
maintained by the Federal Government shall end
not later than the date on which participation
in, and benefit accruals under, the Federal
Reserve System Retirement Plan and Federal
Reserve System Thrift Plan begin.
(C) Employer contribution.--The Bureau shall
pay an employer contribution to the Federal
Reserve System Retirement Plan, in the amount
established as an employer contribution under
the Federal Employees Retirement System, as
established under chapter 84 of title 5, United
States Code, for each Bureau employee who
elects to participate in the Federal Reserve
System Retirement Plan. The Bureau shall pay an
employer contribution to the Federal Reserve
System Thrift Plan for each Bureau employee who
elects to participate in such plan, as required
under the terms of such plan.
(D) Controlled group status.--The Bureau is
the same employer as the Federal Reserve System
(as comprised of the Board of Governors and
each of the 12 Federal reserve banks prior to
the date of enactment of this Act) for purposes
of subsections (b), (c), (m), and (o) of
section 414 of the Internal Revenue Code of
1986, (26 U.S.C. 414).
(4) Labor-management relations.--Chapter 71 of title
5, United States Code, shall apply to the Bureau and
the employees of the Bureau.
(5) Agency ombudsman.--
(A) Establishment required.--Not later than
180 days after the designated transfer date,
the Bureau shall appoint an ombudsman.
(B) Duties of ombudsman.--The ombudsman
appointed in accordance with subparagraph (A)
shall--
(i) act as a liaison between the
Bureau and any affected person with
respect to any problem that such party
may have in dealing with the Bureau,
resulting from the regulatory
activities of the Bureau; and
(ii) assure that safeguards exist to
encourage complainants to come forward
and preserve confidentiality.
(b) Specific Functional Units.--
(1) Research.--The [Director] Bureau shall establish
a unit whose functions shall include researching,
analyzing, and reporting on--
(A) developments in markets for consumer
financial products or services, including
market areas of alternative consumer financial
products or services with high growth rates and
areas of risk to consumers;
(B) access to fair and affordable credit for
traditionally underserved communities;
(C) consumer awareness, understanding, and
use of disclosures and communications regarding
consumer financial products or services;
(D) consumer awareness and understanding of
costs, risks, and benefits of consumer
financial products or services;
(E) consumer behavior with respect to
consumer financial products or services,
including performance on mortgage loans; and
(F) experiences of traditionally underserved
consumers, including un-banked and under-banked
consumers.
(2) Community affairs.--The [Director] Bureau shall
establish a unit whose functions shall include
providing information, guidance, and technical
assistance regarding the offering and provision of
consumer financial products or services to
traditionally underserved consumers and communities.
(3) Collecting and tracking complaints.--
(A) In general.--The [Director] Bureau shall
establish a unit whose functions shall include
establishing a single, toll-free telephone
number, a website, and a database or utilizing
an existing database to facilitate the
centralized collection of, monitoring of, and
response to consumer complaints regarding
consumer financial products or services. The
[Director] Bureau shall coordinate with the
Federal Trade Commission or other Federal
agencies to route complaints to such agencies,
where appropriate.
(B) Routing calls to states.--To the extent
practicable, State agencies may receive
appropriate complaints from the systems
established under subparagraph (A), if--
(i) the State agency system has the
functional capacity to receive calls or
electronic reports routed by the Bureau
systems;
(ii) the State agency has satisfied
any conditions of participation in the
system that the Bureau may establish,
including treatment of personally
identifiable information and sharing of
information on complaint resolution or
related compliance procedures and
resources; and
(iii) participation by the State
agency includes measures necessary to
provide for protection of personally
identifiable information that conform
to the standards for protection of the
confidentiality of personally
identifiable information and for data
integrity and security that apply to
the Federal agencies described in
subparagraph (D).
(C) Reports to the congress.--The [Director]
Bureau shall present an annual report to
Congress not later than March 31 of each year
on the complaints received by the Bureau in the
prior year regarding consumer financial
products and services. Such report shall
include information and analysis about
complaint numbers, complaint types, and, where
applicable, information about resolution of
complaints.
(D) Data sharing required.--To facilitate
preparation of the reports required under
subparagraph (C), supervision and enforcement
activities, and monitoring of the market for
consumer financial products and services, the
Bureau shall share consumer complaint
information with prudential regulators, the
Federal Trade Commission, other Federal
agencies, and State agencies, subject to the
standards applicable to Federal agencies for
protection of the confidentiality of personally
identifiable information and for data security
and integrity. The prudential regulators, the
Federal Trade Commission, and other Federal
agencies shall share data relating to consumer
complaints regarding consumer financial
products and services with the Bureau, subject
to the standards applicable to Federal agencies
for protection of confidentiality of personally
identifiable information and for data security
and integrity.
(c) Office of Fair Lending and Equal Opportunity.--
(1) Establishment.--The [Director] Bureau shall
establish within the Bureau the Office of Fair Lending
and Equal Opportunity.
(2) Functions.--The Office of Fair Lending and Equal
Opportunity shall have such powers and duties as the
[Director] Bureau may delegate to the Office,
including--
(A) providing oversight and enforcement of
Federal laws intended to ensure the fair,
equitable, and nondiscriminatory access to
credit for both individuals and communities
that are enforced by the Bureau, including the
Equal Credit Opportunity Act and the Home
Mortgage Disclosure Act;
(B) coordinating fair lending efforts of the
Bureau with other Federal agencies and State
regulators, as appropriate, to promote
consistent, efficient, and effective
enforcement of Federal fair lending laws;
(C) working with private industry, fair
lending, civil rights, consumer and community
advocates on the promotion of fair lending
compliance and education; and
(D) providing annual reports to Congress on
the efforts of the Bureau to fulfill its fair
lending mandate.
(3) Administration of office.--There is established
the position of [Assistant Director of the Bureau for]
Head of the Office of Fair Lending and Equal
Opportunity, who--
(A) shall be appointed by the [Director]
Bureau; and
(B) shall carry out such duties as the
[Director] Bureau may delegate to such
[Assistant Director] Head of the Office.
(d) Office of Financial Education.--
(1) Establishment.--The [Director] Bureau shall
establish an Office of Financial Education, which shall
be responsible for developing and implementing
initiatives intended to educate and empower consumers
to make better informed financial decisions.
(2) Other duties.--The Office of Financial Education
shall develop and implement a strategy to improve the
financial literacy of consumers that includes
measurable goals and objectives, in consultation with
the Financial Literacy and Education Commission,
consistent with the National Strategy for Financial
Literacy, through activities including providing
opportunities for consumers to access--
(A) financial counseling, including
community-based financial counseling, where
practicable;
(B) information to assist with the evaluation
of credit products and the understanding of
credit histories and scores;
(C) savings, borrowing, and other services
found at mainstream financial institutions;
(D) activities intended to--
(i) prepare the consumer for
educational expenses and the submission
of financial aid applications, and
other major purchases;
(ii) reduce debt; and
(iii) improve the financial situation
of the consumer;
(E) assistance in developing long-term
savings strategies; and
(F) wealth building and financial services
during the preparation process to claim earned
income tax credits and Federal benefits.
(3) Coordination.--The Office of Financial Education
shall coordinate with other units within the Bureau in
carrying out its functions, including--
(A) working with the Community Affairs Office
to implement the strategy to improve financial
literacy of consumers; and
(B) working with the research unit
established by the [Director] Bureau to conduct
research related to consumer financial
education and counseling.
(4) Report.--Not later than 24 months after the
designated transfer date, and annually thereafter, the
[Director] Bureau shall submit a report on its
financial literacy activities and strategy to improve
financial literacy of consumers to--
(A) the Committee on Banking, Housing, and
Urban Affairs of the Senate; and
(B) the Committee on Financial Services of
the House of Representatives.
(5) Membership in financial literacy and education
commission.--Section 513(c)(1) of the Financial
Literacy and Education Improvement Act (20 U.S.C.
9702(c)(1)) is amended--
(A) in subparagraph (B), by striking ``and''
at the end;
(B) by redesignating subparagraph (C) as
subparagraph (D); and
(C) by inserting after subparagraph (B) the
following new subparagraph:
``(C) the [Director of the Bureau] Bureau of
Consumer Financial Protection; and''.
(6) Conforming amendment.--Section 513(d) of the
Financial Literacy and Education Improvement Act (20
U.S.C. 9702(d)) is amended by adding at the end the
following: ``The [Director of the Bureau] Bureau of
Consumer Financial Protection shall serve as the Vice
Chairman.''.
(7) Study and report on financial literacy program.--
(A) In general.--The Comptroller General of
the United States shall conduct a study to
identify--
(i) the feasibility of certification
of persons providing the programs or
performing the activities described in
paragraph (2), including recognizing
outstanding programs, and developing
guidelines and resources for community-
based practitioners, including--
(I) a potential certification
process and standards for
certification;
(II) appropriate certifying
entities;
(III) resources required for
funding such a process; and
(IV) a cost-benefit analysis
of such certification;
(ii) technological resources intended
to collect, analyze, evaluate, or
promote financial literacy and
counseling programs;
(iii) effective methods, tools, and
strategies intended to educate and
empower consumers about personal
finance management; and
(iv) recommendations intended to
encourage the development of programs
that effectively improve financial
education outcomes and empower
consumers to make better informed
financial decisions based on findings.
(B) Report.--Not later than 1 year after the
date of enactment of this Act, the Comptroller
General of the United States shall submit a
report on the results of the study conducted
under this paragraph to the Committee on
Banking, Housing, and Urban Affairs of the
Senate and the Committee on Financial Services
of the House of Representatives.
(e) Office of Service Member Affairs.--
(1) In general.--The [Director] Bureau shall
establish an Office of Service Member Affairs, which
shall be responsible for developing and implementing
initiatives for service members and their families
intended to--
(A) educate and empower service members and
their families to make better informed
decisions regarding consumer financial products
and services;
(B) coordinate with the unit of the Bureau
established under subsection (b)(3), in order
to monitor complaints by service members and
their families and responses to those
complaints by the Bureau or other appropriate
Federal or State agency; and
(C) coordinate efforts among Federal and
State agencies, as appropriate, regarding
consumer protection measures relating to
consumer financial products and services
offered to, or used by, service members and
their families.
(2) Coordination.--
(A) Regional services.--The [Director] Bureau
is authorized to assign employees of the Bureau
as may be deemed necessary to conduct the
business of the Office of Service Member
Affairs, including by establishing and
maintaining the functions of the Office in
regional offices of the Bureau located near
military bases, military treatment facilities,
or other similar military facilities.
(B) Agreements.--The [Director] Bureau is
authorized to enter into memoranda of
understanding and similar agreements with the
Department of Defense, including any branch or
agency as authorized by the department, in
order to carry out the business of the Office
of Service Member Affairs.
(3) Definition.--As used in this subsection, the term
``service member'' means any member of the United
States Armed Forces and any member of the National
Guard or Reserves.
(f) Timing.--The Office of Fair Lending and Equal
Opportunity, the Office of Financial Education, and the Office
of Service Member Affairs shall each be established not later
than 1 year after the designated transfer date.
(g) Office of Financial Protection for Older Americans.--
(1) Establishment.--Before the end of the 180-day
period beginning on the designated transfer date, the
[Director] Bureau shall establish the Office of
Financial Protection for Older Americans, the functions
of which shall include activities designed to
facilitate the financial literacy of individuals who
have attained the age of 62 years or more (in this
subsection, referred to as ``seniors'') on protection
from unfair, deceptive, and abusive practices and on
current and future financial choices, including through
the dissemination of materials to seniors on such
topics.
(2) [Assistant director] Head of the office.--The
Office of Financial Protection for Older Americans (in
this subsection referred to as the ``Office'') shall be
headed by [an assistant director] a Head of the Office
of Financial Protection for Older Americans.
(3) Duties.--The Office shall--
(A) develop goals for programs that provide
seniors financial literacy and counseling,
including programs that--
(i) help seniors recognize warning
signs of unfair, deceptive, or abusive
practices, protect themselves from such
practices;
(ii) provide one-on-one financial
counseling on issues including long-
term savings and later-life economic
security; and
(iii) provide personal consumer
credit advocacy to respond to consumer
problems caused by unfair, deceptive,
or abusive practices;
(B) monitor certifications or designations of
financial advisors who advise seniors and alert
the Commission and State regulators of
certifications or designations that are
identified as unfair, deceptive, or abusive;
(C) not later than 18 months after the date
of the establishment of the Office, submit to
Congress and the Commission any legislative and
regulatory recommendations on the best
practices for--
(i) disseminating information
regarding the legitimacy of
certifications of financial advisers
who advise seniors;
(ii) methods in which a senior can
identify the financial advisor most
appropriate for the senior's needs; and
(iii) methods in which a senior can
verify a financial advisor's
credentials;
(D) conduct research to identify best
practices and effective methods, tools,
technology and strategies to educate and
counsel seniors about personal finance
management with a focus on--
(i) protecting themselves from
unfair, deceptive, and abusive
practices;
(ii) long-term savings; and
(iii) planning for retirement and
long-term care;
(E) coordinate consumer protection efforts of
seniors with other Federal agencies and State
regulators, as appropriate, to promote
consistent, effective, and efficient
enforcement; and
(F) work with community organizations, non-
profit organizations, and other entities that
are involved with educating or assisting
seniors (including the National Education and
Resource Center on Women and Retirement
Planning).
(h) Application of Chapter 10 of Title 5, United States
Code.--Notwithstanding any provision of chapter 10 of title 5,
United States Code, such chapter shall apply to each advisory
committee of the Bureau and each subcommittee of such an
advisory committee.
(i) Office of Economic Analysis.--
(1) Establishment.--The Bureau shall establish an
Office of Economic Analysis.
(2) Review and assessment of proposed guidance,
orders, rules, and regulations.--The Office of Economic
Analysis shall--
(A) review all proposed guidance, orders,
rules, and regulations of the Bureau, including
carrying out the determinations and assessments
with respect to notices of proposed rulemaking
described under section 1022(b)(7);
(B) assess the impact of such guidance,
orders, rules, and regulations on consumer
choice, price, and access to credit products;
and
(C) publish a report on such reviews and
assessments in the Federal Register.
(3) Measuring existing guidance, orders, rules, and
regulations.--The Office of Economic Analysis shall--
(A) review each guidance, order, rule, and
regulation issued by the Bureau after 1, 2, 5,
and 10 years;
(B) measure each such guidance, order, rule,
or regulation's success in solving the problem
that the guidance, order, rule, or regulation
was intended to solve when issued; and
(C) publish a report on such review and
measurement in the Federal Register.
SEC. 1014. CONSUMER ADVISORY BOARD.
(a) Establishment Required.--The [Director] Bureau shall
establish a Consumer Advisory Board to advise and consult with
the Bureau in the exercise of its functions under the Federal
consumer financial laws, and to provide information on emerging
practices in the consumer financial products or services
industry, including regional trends, concerns, and other
relevant information.
(b) Membership.--In appointing the members of the Consumer
Advisory Board, the [Director] Bureau shall seek to assemble
experts in consumer protection, financial services, community
development, fair lending and civil rights, and consumer
financial products or services and representatives of
depository institutions that primarily serve underserved
communities, and representatives of communities that have been
significantly impacted by higher-priced mortgage loans, and
seek representation of the interests of covered persons and
consumers, without regard to party affiliation. [Not fewer than
6 members shall be appointed upon the recommendation of the
regional Federal Reserve Bank Presidents, on a rotating basis.]
Not fewer than half of all members shall have private sector
experience in the provision of consumer financial products and
services.
(c) Meetings.--The Consumer Advisory Board shall meet from
time to time at the call of the [Director] Bureau, but, at a
minimum, shall meet at least twice in each year.
(d) Compensation and Travel Expenses.--Members of the
Consumer Advisory Board who are not full-time employees of the
United States shall--
(1) be entitled to receive compensation at a rate
fixed by the [Director] Bureau while attending meetings
of the Consumer Advisory Board, including travel time;
and
(2) be allowed travel expenses, including
transportation and subsistence, while away from their
homes or regular places of business.
* * * * * * *
SEC. 1016. APPEARANCES BEFORE AND REPORTS TO CONGRESS.
(a) Appearances Before Congress.--The [Director of the
Bureau] Chair of the Bureau shall appear before the Committee
on Banking, Housing, and Urban Affairs of the Senate and the
Committee on Financial Services and the Committee on Energy and
Commerce of the House of Representatives at semi-annual
hearings regarding the reports required under subsection (b).
(b) Reports Required.--The Bureau shall, concurrent with each
semi-annual hearing referred to in subsection (a), prepare and
submit to the President and to the Committee on Banking,
Housing, and Urban Affairs of the Senate and the Committee on
Financial Services and the Committee on Energy and Commerce of
the House of Representatives, a report, beginning with the
session following the designated transfer date. The Bureau may
also submit such report to the Committee on Commerce, Science,
and Transportation of the Senate.
(c) Contents.--The reports required by subsection (b) shall
include--
(1) a discussion of the significant problems faced by
consumers in shopping for or obtaining consumer
financial products or services;
(2) a justification of the budget request of the
previous year;
(3) a list of the significant rules and orders
adopted by the Bureau, as well as other significant
initiatives conducted by the Bureau, during the
preceding year and the plan of the Bureau for rules,
orders, or other initiatives to be undertaken during
the upcoming period;
(4) an analysis of complaints about consumer
financial products or services that the Bureau has
received and collected in its central database on
complaints during the preceding year;
(5) a list, with a brief statement of the issues, of
the public supervisory and enforcement actions to which
the Bureau was a party during the preceding year;
(6) the actions taken regarding rules, orders, and
supervisory actions with respect to covered persons
which are not credit unions or depository institutions;
(7) an assessment of significant actions by State
attorneys general or State regulators relating to
Federal consumer financial law;
(8) an analysis of the efforts of the Bureau to
fulfill the fair lending mission of the Bureau; and
(9) an analysis of the efforts of the Bureau to
increase workforce and contracting diversity consistent
with the procedures established by the Office of
Minority and Women Inclusion.
(d) Additional Requirement for Inspector General.--On a
separate occasion from that described in subsection (a), the
Inspector General of the Bureau shall appear before the
Committee on Banking, Housing, and Urban Affairs of the Senate
and the Committee on Financial Services of the House of
Representatives at semiannual hearings regarding the reports
required under subsection (b) and the reports required under
section 405 of title 5, United States Code.
* * * * * * *
SEC. 1017. FUNDING; PENALTIES AND FINES.
(a) [Transfer of Funds From Board Of Governors.--] Budget,
Financial Management, and Audit._
[(1) In general.--Each year (or quarter of such
year), beginning on the designated transfer date, and
each quarter thereafter, the Board of Governors shall
transfer to the Bureau from the combined earnings of
the Federal Reserve System, the amount determined by
the Director to be reasonably necessary to carry out
the authorities of the Bureau under Federal consumer
financial law, taking into account such other sums made
available to the Bureau from the preceding year (or
quarter of such year).
[(2) Funding cap.--
[(A) In general.--Notwithstanding paragraph
(1), and in accordance with this paragraph, the
amount that shall be transferred to the Bureau
in each fiscal year shall not exceed a fixed
percentage of the total operating expenses of
the Federal Reserve System, as reported in the
Annual Report, 2009, of the Board of Governors,
equal to--
[(i) 10 percent of such expenses in
fiscal year 2011;
[(ii) 11 percent of such expenses in
fiscal year 2012; and
[(iii) 12 percent of such expenses in
fiscal year 2013, and in each year
thereafter.
[(B) Adjustment of amount.--The dollar amount
referred to in subparagraph (A)(iii) shall be
adjusted annually, using the percent increase,
if any, in the employment cost index for total
compensation for State and local government
workers published by the Federal Government, or
the successor index thereto, for the 12-month
period ending on September 30 of the year
preceding the transfer.
[(C) Reviewability.--Notwithstanding any
other provision in this title, the funds
derived from the Federal Reserve System
pursuant to this subsection shall not be
subject to review by the Committees on
Appropriations of the House of Representatives
and the Senate.
[(3) Transition period.--Beginning on the date of
enactment of this Act and until the designated transfer
date, the Board of Governors shall transfer to the
Bureau the amount estimated by the Secretary needed to
carry out the authorities granted to the Bureau under
Federal consumer financial law, from the date of
enactment of this Act until the designated transfer
date.]
[(4)] (1) Budget and financial management.--
(A) Financial operating plans and
forecasts.--The [Director] Bureau shall provide
to the Director of the Office of Management and
Budget copies of the financial operating plans
and forecasts of the [Director] Bureau, as
prepared by the [Director] Bureau in the
ordinary course of the operations of the
Bureau, and copies of the quarterly reports of
the financial condition and results of
operations of the Bureau, as prepared by the
[Director] Bureau in the ordinary course of the
operations of the Bureau.
(B) Financial statements.--The Bureau shall
prepare annually a statement of--
(i) assets and liabilities and
surplus or deficit;
(ii) income and expenses; and
(iii) sources and application of
funds.
(C) Financial management systems.--The Bureau
shall implement and maintain financial
management systems that comply substantially
with Federal financial management systems
requirements and applicable Federal accounting
standards.
(D) Assertion of internal controls.--The
[Director] Bureau 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 Bureau, using the standards
established in section 3512(c) of title 31,
United States Code.
[(E) 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 subparagraph (A) or
any jurisdiction or oversight over the affairs
or operations of the Bureau.
[(F) Financial statements.--The financial
statements of the Bureau shall not be
consolidated with the financial statements of
either the Board of Governors or the Federal
Reserve System.]
[(5)] (2) Audit of the bureau.--
(A) In general.--The Comptroller General
shall annually audit the financial transactions
of the Bureau 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 Bureau 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 Bureau 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 Bureau shall remain in
possession and custody of the Bureau. 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 right of access of the Comptroller General
to such information shall be enforceable
pursuant to section 716(c) of title 31, United
States Code.
(B) 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 Bureau, 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 Bureau at the time
submitted to the Congress.
(C) 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 Bureau] Bureau 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.
[(b) Consumer Financial Protection Fund.--
[(1) Separate fund in federal reserve established.--
There is established in the Federal Reserve a separate
fund, to be known as the ``Bureau of Consumer Financial
Protection Fund'' (referred to in this section as the
``Bureau Fund''). The Bureau Fund shall be maintained
and established at a Federal reserve bank, in
accordance with such requirements as the Board of
Governors may impose.
[(2) Fund receipts.--All amounts transferred to the
Bureau under subsection (a) shall be deposited into the
Bureau Fund.
[(3) Investment authority.--
[(A) Amounts in bureau fund may be
invested.--The Bureau may request the Board of
Governors to direct the investment of the
portion of the Bureau Fund that is not, in the
judgment of the Bureau, required to meet the
current needs of the Bureau.
[(B) Eligible investments.--Investments
authorized by this paragraph shall be made 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 Bureau Fund, as
determined by the Bureau.
[(C) Interest and proceeds credited.--The
interest on, and the proceeds from the sale or
redemption of, any obligations held in the
Bureau Fund shall be credited to the Bureau
Fund.
[(c) Use of Funds.--
[(1) In general.--Funds obtained by, transferred to,
or credited to the Bureau Fund shall be immediately
available to the Bureau and under the control of the
Director, and shall remain available until expended, to
pay the expenses of the Bureau in carrying out its
duties and responsibilities. The compensation of the
Director and other employees of the Bureau and all
other expenses thereof may be paid from, obtained by,
transferred to, or credited to the Bureau Fund under
this section.
[(2) Funds that are not government funds.--Funds
obtained by or transferred to the Bureau Fund shall not
be construed to be Government funds or appropriated
monies.
[(3) Amounts not subject to apportionment.--
Notwithstanding any other provision of law, amounts in
the Bureau Fund and in the Civil Penalty Fund
established under subsection (d) shall not be subject
to apportionment for purposes of chapter 15 of title
31, United States Code, or under any other authority.]
[(d)] (b) Penalties and Fines.--
(1) Establishment of victims relief fund.--There is
established in the Federal Reserve a separate fund, to
be known as the ``Consumer Financial Civil Penalty
Fund'' (referred to in this section as the ``Civil
Penalty Fund''). The Civil Penalty Fund shall be
maintained and established at a Federal reserve bank,
in accordance with such requirements as the Board of
Governors may impose. If the Bureau obtains a civil
penalty against any person in any judicial or
administrative action under Federal consumer financial
laws, the Bureau shall deposit into the Civil Penalty
Fund, the amount of the penalty collected.
(2) Payment to victims.--Amounts in the Civil Penalty
Fund shall be available to the Bureau, without fiscal
year limitation, for payments to the victims of
activities for which civil penalties have been imposed
[under the Federal consumer financial laws.] under the
Federal consumer financial laws and for awards
authorized under section 1017A. To the extent that such
victims cannot be located or such payments are
otherwise not practicable, the Bureau may use such
funds for the purpose of consumer education and
financial literacy programs.
[(e)] (c) Authorization of Appropriations; Annual Report.--
[(1) Determination regarding need for appropriated
funds.--
[(A) In general.--The Director is authorized
to determine that sums available to the Bureau
under this section will not be sufficient to
carry out the authorities of the Bureau under
Federal consumer financial law for the upcoming
year.
[(B) Report required.--When making a
determination under subparagraph (A), the
Director shall prepare a report regarding the
funding of the Bureau, including the assets and
liabilities of the Bureau, and the extent to
which the funding needs of the Bureau are
anticipated to exceed the level of the amount
set forth in subsection (a)(2). The Director
shall submit the report to the President and to
the Committee on Appropriations of the Senate
and the Committee on Appropriations of the
House of Representatives.
[(2) Authorization of appropriations.--If the
Director makes the determination and submits the report
pursuant to paragraph (1), there are hereby authorized
to be appropriated to the Bureau, for the purposes of
carrying out the authorities granted in Federal
consumer financial law, $200,000,000 for each of fiscal
years 2010, 2011, 2012, 2013, and 2014.
[(3) Apportionment.--Notwithstanding any other
provision of law, the amounts in paragraph (2) shall be
subject to apportionment under section 1517 of title
31, United States Code, and restrictions that generally
apply to the use of appropriated funds in title 31,
United States Code, and other laws.]
(1) Authorization of appropriations.--There is
authorized to be appropriated to the Bureau
$650,000,000 for fiscal year 2024 to carry out the
authorities of the Bureau.
[(4)] (2) Annual report.--The [Director] Bureau shall
prepare and submit a report, on an annual basis, to the
Committee on Appropriations of the Senate and the
Committee on Appropriations of the House of
Representatives regarding the financial operating plans
and forecasts of the [Director] Bureau, the financial
condition and results of operations of the Bureau, and
the sources and application of funds of the Bureau,
including any funds appropriated in accordance with
this subsection.
SEC. 1017A. WHISTLEBLOWER INCENTIVES AND PROTECTION.
(a) Definitions.--In this section:
(1) Administrative proceeding or court action.--The
term ``administrative proceeding or court action''
means any judicial or administrative action brought by
the Bureau that results in monetary sanctions exceeding
$1,000,000.
(2) Fund.--The term ``Fund'' means the ``Consumer
Financial Civil Penalty Fund'' established under
section 1017(b)(1).
(3) Monetary sanctions.--The term ``monetary
sanctions'', when used with respect to any
administrative proceeding or court action means any
monies, including penalties, disgorgement, restitution,
or interest, ordered to be paid or other amounts of
relief obtained under section 1055(a)(2).
(4) 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 Bureau from any other
source, unless the whistleblower is the
original source of the information;
(C) is not exclusively derived from an
allegation made in a judicial or administrative
hearing, in a governmental report, hearing, or
from the news media, unless the whistleblower
is a source of the information; and
(D) is not exclusively derived from an
allegation made in an audit, examination, or
investigation.
(5) Successful enforcement.--The term ``successful
enforcement'', when used with respect to any
administrative proceeding or court action, includes any
settlement of such action.
(6) Whistleblower.--The term ``whistleblower'' means
any individual, or 2 or more individuals acting
jointly, who provides original information relating to
a violation of Federal consumer financial law,
consistent with any rule issued by the Bureau under
this section.
(b) Awards.--
(1) In general.--In any administrative proceeding or
court action the Bureau, subject to rules prescribed by
the Bureau and subject to subsection (c), shall pay an
award or awards to 1 or more whistleblowers who
voluntarily provided original information that led to
the successful enforcement of the administrative
proceeding or court action in an aggregate amount equal
to--
(A) not less than the greater of--
(i) 10 percent, in total, of monetary
sanctions imposed and collected in the
administrative proceeding or court
action; or
(ii) $50,000; and
(B) not more than 30 percent, in total, of
such monetary sanctions.
(2) Payment of awards.--Any amount paid under
paragraph (1) shall be paid from the Fund.
(3) Award maximum.--Notwithstanding any other
provision in this section, the maximum award to any
single whistleblower is limited to $5,000,000.
(c) Determination of Amount of Award; Denial of Award.--
(1) Determination of amount of award.--
(A) Discretion.--The determination of the
percentage amount of an award made under
subsection (b) shall be in the discretion of
the Bureau.
(B) Criteria.--In determining the percentage
amount of an award made under subsection (b),
the Bureau shall take into consideration--
(i) the significance of the
information provided by the
whistleblower to the successful
enforcement of the administrative
proceeding or court action;
(ii) the degree of assistance
provided by the whistleblower and any
legal representative of the
whistleblower in an administrative
proceeding or court action;
(iii) the programmatic interest of
the Bureau in deterring violations of
Federal consumer financial law
(including applicable rules) by making
awards to whistleblowers who provide
information that leads to the
successful enforcement of such laws;
and
(iv) such additional relevant factors
as the Bureau may establish by rule.
(2) Denial of award.--No award under subsection (b)
may be made--
(A) to any whistleblower who is, or was at
the time the whistleblower acquired the
original information submitted to the Bureau, a
member, officer, or employee of an entity
described in subclauses (I) through (V) of
subsection (h)(1)(C)(i);
(B) to any whistleblower who is convicted of
a criminal violation related to the
administrative proceeding or court action for
which the whistleblower otherwise could receive
an award under this section;
(C) to any whistleblower who is found to be
liable for the conduct in the administrative
proceeding or court action, or a related
action, for which the whistleblower otherwise
could receive an award under this section;
(D) to any whistleblower who planned and
initiated the conduct at issue in the
administrative proceeding or court action for
which the whistleblower otherwise could receive
an award under this section;
(E) to any whistleblower who submits
information to the Bureau that is based on the
facts underlying the administrative proceeding
or court action previously submitted by another
whistleblower;
(F) to any whistleblower who knowingly and
willfully makes any false, fictitious, or
fraudulent statement or representation, or who
makes or uses any false writing or document
knowing the same to contain any false,
fictitious, or fraudulent statement or entry;
and
(G) to any whistleblower who fails to submit
information to the Bureau in such form as the
Bureau may, by rule, require.
(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 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 Bureau
may require, directly or through counsel of the
whistleblower.
(e) No Contract Necessary.--No contract or other agreement
with the Bureau is necessary for any whistleblower to receive
an award under subsection (b), unless otherwise required by the
Bureau by rule.
(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 Bureau. 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 Bureau. The court shall review the determination
made by the Bureau in accordance with section 706 of title 5,
United States Code.
(g) Reports to Congress.--Not later than October 30 of each
year, the Bureau shall transmit to the Committee on Financial
Services of the House of Representatives and the Committee on
Banking, Housing, and Urban Affairs of the Senate a report on
the Bureau's whistleblower award program under this section,
including a description of the number of awards granted and the
types of cases in which awards were granted during the
preceding fiscal year.
(h) Protection of Whistleblowers.--
(1) Confidentiality.--
(A) In general.--Except as provided in
subparagraphs (B) and (C), the Bureau and any
officer or employee of the Bureau, may not
disclose any information, including information
provided by a whistleblower to the Bureau,
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 Bureau 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 552.
(B) Effect.--Nothing in this paragraph is
intended 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.
(C) Availability to government agencies.--
(i) In general.--Without the loss of
its status as confidential in the hands
of the Bureau, all information referred
to in subparagraph (A) may, in the
discretion of the Bureau, when
determined by the Bureau to be
necessary or appropriate, be made
available to---
(I) the Department of
Justice;
(II) an appropriate
department or agency of the
Federal Government, acting
within the scope of its
jurisdiction;
(III) a State attorney
general in connection with any
criminal investigation;
(IV) an appropriate
department or agency of any
State, acting within the scope
of its jurisdiction; and
(V) a foreign regulatory
authority.
(ii) Maintenance of information.--
Each of the entities, agencies, or
persons described in clause (i) shall
maintain information described in that
clause as confidential, in accordance
with the requirements in subparagraph
(A).
(2) Rights retained.--Nothing in this section shall
be deemed to diminish the rights, privileges, or
remedies of any whistleblower under section 1057, any
other Federal or State law, or under any collective
bargaining agreement.
(i) Rulemaking Authority.--The Bureau shall have the
authority to issue such rules as may be necessary or
appropriate to implement the provisions of this section.
(j) Original Information.--Information submitted to the
Bureau by a whistleblower in accordance with rules implementing
this section shall not lose its status as original information
solely because the whistleblower submitted such information
prior to the effective date of such rules, provided such
information was submitted after the date of enactment of this
section.
* * * * * * *
Subtitle B--General Powers of the Bureau
SEC. 1021. PURPOSE, OBJECTIVES, AND FUNCTIONS.
(a) Purpose.--The Bureau shall seek to implement and, where
applicable, enforce Federal consumer financial law consistently
for the purpose of ensuring that all consumers have access to
markets for consumer financial products and services and that
markets for consumer financial products and services are [fair,
transparent, and competitive] fair and transparent. In
addition, the Bureau shall seek to implement and, where
applicable, enforce Federal consumer financial law consistently
for the purpose of strengthening private sector participation
in markets, without Government interference or subsidies, to
increase competition and enhance consumer choice.
(b) Objectives.--The Bureau is authorized to exercise its
authorities under Federal consumer financial law for the
purposes of ensuring that, with respect to consumer financial
products and services--
(1) consumers are provided with timely and
understandable information to make responsible
decisions about financial transactions;
(2) consumers are protected from unfair, deceptive,
or abusive acts and practices and from discrimination;
(3) outdated, unnecessary, or unduly burdensome
regulations are regularly identified and addressed in
order to reduce unwarranted regulatory burdens;
(4) Federal consumer financial law is enforced
consistently, without regard to the status of a person
as a depository institution, in order to promote fair
competition; and
(5) markets for consumer financial products and
services operate transparently and efficiently to
facilitate access and innovation.
(c) Functions.--The primary functions of the Bureau are--
(1) conducting financial education programs;
(2) collecting, investigating, and responding to
consumer complaints;
(3) collecting, researching, monitoring, and
publishing information relevant to the functioning of
markets for consumer financial products and services to
identify risks to consumers and the proper functioning
of such markets;
(4) subject to sections 1024 through 1026,
supervising covered persons for compliance with Federal
consumer financial law, and taking appropriate
enforcement action to address violations of Federal
consumer financial law;
(5) issuing rules, orders, and guidance implementing
Federal consumer financial law; and
(6) performing such support activities as may be
necessary or useful to facilitate the other functions
of the Bureau.
SEC. 1022. RULEMAKING AUTHORITY.
(a) In General.--The Bureau is authorized to exercise its
authorities under Federal consumer financial law to administer,
enforce, and otherwise implement the provisions of Federal
consumer financial law.
(b) Rulemaking, Orders, and Guidance.--
(1) General authority.--The [Director] Bureau may
prescribe rules and issue orders and guidance, as may
be necessary or appropriate to enable the Bureau to
administer and carry out the purposes and objectives of
the Federal consumer financial laws, and to prevent
evasions thereof.
(2) Standards for rulemaking.--In prescribing a rule
under the Federal consumer financial laws--
(A) the Bureau shall consider--
(i) the potential benefits and costs
to consumers and covered persons,
including the potential reduction of
access by consumers to consumer
financial products or services
resulting from such rule; [and]
(ii) the impact of proposed rules on
covered persons, as described in
section 1026, and the impact on
consumers in rural areas[;]; and
(iii) the impact of proposed rules on
small entities, in accordance with
section 609 of title 5, United States
Code;
(B) the Bureau shall consult with the
appropriate prudential regulators or other
Federal agencies prior to proposing a rule and
during the comment process regarding
consistency with prudential, market, or
systemic objectives administered by such
agencies; and
(C) if, during the consultation process
described in subparagraph (B), a prudential
regulator provides the Bureau with a written
objection to the proposed rule of the Bureau or
a portion thereof, the Bureau shall include in
the adopting release a description of the
objection and the basis for the Bureau
decision, if any, regarding such objection,
except that nothing in this clause shall be
construed as altering or limiting the
procedures under section 1023 that may apply to
any rule prescribed by the Bureau.
(3) Exemptions.--
(A) In general.--The Bureau, by rule, may
conditionally or unconditionally exempt any
class of covered persons, service providers, or
consumer financial products or services, from
any provision of this title, or from any rule
issued under this title, as the Bureau
determines necessary or appropriate to carry
out the purposes and objectives of this title,
taking into consideration the factors in
subparagraph (B).
(B) Factors.--In issuing an exemption, as
permitted under subparagraph (A), the Bureau
shall, as appropriate, take into
consideration--
(i) the total assets of the class of
covered persons;
(ii) the volume of transactions
involving consumer financial products
or services in which the class of
covered persons engages; and
(iii) existing provisions of law
which are applicable to the consumer
financial product or service and the
extent to which such provisions provide
consumers with adequate protections.
(4) Exclusive rulemaking authority.--
(A) In general.--Notwithstanding any other
provisions of Federal law and except as
provided in section 1061(b)(5), to the extent
that a provision of Federal consumer financial
law authorizes the Bureau and another Federal
agency to issue regulations under that
provision of law for purposes of assuring
compliance with Federal consumer financial law
and any regulations thereunder, the Bureau
shall have the exclusive authority to prescribe
rules subject to those provisions of law.
(B) Deference.--Notwithstanding any power
granted to any Federal agency or to the Council
under this title, and subject to section
1061(b)(5)(E), the deference that a court
affords to the Bureau with respect to a
determination by the Bureau regarding the
meaning or interpretation of any provision of a
Federal consumer financial law shall be applied
as if the Bureau were the only agency
authorized to apply, enforce, interpret, or
administer the provisions of such Federal
consumer financial law.
(5) Consideration of review and assessment by the
office of economic analysis.--
(A) In general.--Before issuing any guidance,
order, rule, or regulation, the commissioners
of the Bureau shall consider the review and
assessment of such guidance, order, rule, or
regulation carried out by the Office of
Economic Analysis.
(B) Notice of disagreement.--If any
commissioner of the Bureau disagrees with any
part of a review and assessment described under
subparagraph (A) with respect to any guidance,
order, rule, or regulation, the commissioner
shall accompany any such guidance, order, rule,
or regulation with a statement explaining why
the commissioner so disagrees.
(6) Identification of problems and metrics for
judging success.--
(A) In general.--The Bureau shall, in each
proposed rulemaking of the Bureau--
(i) identify the problem that the
particular rule or regulations is
seeking to solve; and
(ii) specify the metrics by which the
Bureau will measure the success of the
rule or regulation in solving such
problem.
(B) Required metrics.--The metrics specified
under subparagraph (A)(ii) shall include a
measurement of changes to consumer access to,
and cost of, consumer financial products and
services.
(7) Additional rulemaking requirements.--
(A) In general.--Each notice of proposed
rulemaking issued by the Bureau shall be
published in its entirety in the Federal
Register and shall include--
(i) a statement of the need for the
proposed regulation;
(ii) an examination of why the Bureau
must undertake the proposed regulation
and why the private market, State,
local, or tribal authorities cannot
adequately address the problem;
(iii) an examination by the Office of
Economic Analysis of whether the
proposed regulation is duplicative,
inconsistent, or incompatible with
other Federal regulations and orders;
(iv) if the proposed regulation is
found by the Office of Economic
Analysis to be duplicative,
inconsistent, or incompatible with
other Federal regulations and orders, a
discussion of--
(I) why the proposed
regulation is justified;
(II) how the proposed
regulation can coexist with the
existing regulations; and
(III) how the Bureau plans to
reduce the regulatory burden
associated with the
duplicative, inconsistent, or
incompatible proposed
regulation;
(v) a quantitative and qualitative
assessment by the Office of Economic
Analysis of all anticipated direct and
indirect costs and benefits of the
proposed regulation, including--
(I) compliance costs for all
regulated entities, including
small businesses;
(II) effects on economic
activity, efficiency,
competition, and capital
formation;
(III) regulatory and
administrative costs of
implementation; and
(IV) costs imposed on State,
local, and tribal entities;
(vi) an identification of reasonable
alternatives to the regulation,
including modification of an existing
regulation;
(vii) an analysis by the Office of
Economic Analysis of the costs and
benefits, both quantitative and
qualitative, of any alternative
identified pursuant to clause (vi);
(viii) if the Office of Economic
Analysis determines the proposed
regulation would increase costs for
small businesses, then the Bureau shall
consult the Office of Advocacy within
the Small Business Administration to
determine ways to minimize the effect
of direct and indirect costs imposed on
small businesses by the proposed
regulation;
(ix) if the Office of Economic
Analysis determines that quantified net
benefits of the proposed action do not
outweigh the quantified net benefits of
the alternatives, a justification of
the regulation;
(x) if quantified benefits identified
pursuant to clause (v) by the Office of
Economic Analysis do not outweigh the
quantified costs of the regulation, a
justification of the regulation;
(xi) an assessment by the Office of
Economic Analysis of how the burden
imposed by the regulation will be
distributed, including whether
consumers or small businesses will be
disproportionately burdened; and
(xii) when feasible, and using
appropriate statistical techniques, a
probability distribution prepared by
the Office of Economic Analysis of the
relevant outcomes of the proposed
regulation.
(B) Assumptions and studies used.--With
respect to the information required to be
included under subparagraph (A) in a notice of
proposed rulemaking, the Bureau shall include
in such notice--
(i) a discussion of underlying
assumptions used as a basis for such
information; and
(ii) a description of any studies or
data used in preparing such
information, and whether such studies
were peer-reviewed.
(c) Monitoring.--
(1) In general.--In order to support its rulemaking
and other functions, the Bureau shall monitor for risks
to consumers in the offering or provision of consumer
financial products or services, including developments
in markets for such products or services.
(2) Considerations.--In allocating its resources to
perform the monitoring required by this section, the
Bureau may consider, among other factors--
(A) likely risks and costs to consumers
associated with buying or using a type of
consumer financial product or service;
(B) understanding by consumers of the risks
of a type of consumer financial product or
service;
(C) the legal protections applicable to the
offering or provision of a consumer financial
product or service, including the extent to
which the law is likely to adequately protect
consumers;
(D) rates of growth in the offering or
provision of a consumer financial product or
service;
(E) the extent, if any, to which the risks of
a consumer financial product or service may
disproportionately affect traditionally
underserved consumers; or
(F) the types, number, and other pertinent
characteristics of covered persons that offer
or provide the consumer financial product or
service.
(3) Significant findings.--
(A) In general.--The Bureau shall publish not
fewer than 1 report of significant findings of
its monitoring required by this subsection in
each calendar year, beginning with the first
calendar year that begins at least 1 year after
the designated transfer date.
(B) Confidential information.--The Bureau may
make public such information obtained by the
Bureau under this section as is in the public
interest, through aggregated reports or other
appropriate formats designed to protect
confidential information in accordance with
paragraphs (4), (6), (8), and (9).
(4) Collection of information.--
(A) In general.--In conducting any monitoring
or assessment required by this section, the
Bureau shall have the authority to gather
information from time to time regarding the
organization, business conduct, markets, and
activities of covered persons and service
providers.
(B) Methodology.--In order to gather
information described in subparagraph (A), the
Bureau may--
(i) gather and compile information
from a variety of sources, including
examination reports concerning covered
persons or service providers, consumer
complaints, voluntary surveys and
voluntary interviews of consumers,
surveys and interviews with covered
persons and service providers, and
review of available databases; and
(ii) require covered persons and
service providers participating in
consumer financial services markets to
file with the Bureau, under oath or
otherwise, in such form and within such
reasonable period of time as the Bureau
may prescribe by rule or order, annual
or special reports, or answers in
writing to specific questions,
furnishing information described in
paragraph (4), as necessary for the
Bureau to fulfill the monitoring,
assessment, and reporting
responsibilities imposed by Congress.
(C) Limitation.--The Bureau may not use its
authorities under this paragraph to obtain
records from covered persons and service
providers participating in consumer financial
services markets for purposes of gathering or
analyzing the personally identifiable financial
information of consumers.
(5) Limited information gathering.--In order to
assess whether a nondepository is a covered person, as
defined in section 1002, the Bureau may require such
nondepository to file with the Bureau, under oath or
otherwise, in such form and within such reasonable
period of time as the Bureau may prescribe by rule or
order, annual or special reports, or answers in writing
to specific questions.
(6) Confidentiality rules.--
(A) Rulemaking.--The Bureau shall prescribe
rules regarding the confidential treatment of
information obtained from persons in connection
with the exercise of its authorities under
Federal consumer financial law.
(B) Access by the bureau to reports of other
regulators.--
(i) Examination and financial
condition reports.--Upon providing
reasonable assurances of
confidentiality, the Bureau shall have
access to any report of examination or
financial condition made by a
prudential regulator or other Federal
agency having jurisdiction over a
covered person or service provider, and
to all revisions made to any such
report.
(ii) Provision of other reports to
the bureau.--In addition to the reports
described in clause (i), a prudential
regulator or other Federal agency
having jurisdiction over a covered
person or service provider may, in its
discretion, furnish to the Bureau any
other report or other confidential
supervisory information concerning any
insured depository institution, credit
union, or other entity examined by such
agency under authority of any provision
of Federal law.
(C) Access by other regulators to reports of
the bureau.--
(i) Examination reports.--Upon
providing reasonable assurances of
confidentiality, a prudential
regulator, a State regulator, or any
other Federal agency having
jurisdiction over a covered person or
service provider shall have access to
any report of examination made by the
Bureau with respect to such person, and
to all revisions made to any such
report.
(ii) Provision of other reports to
other regulators.--In addition to the
reports described in clause (i), the
Bureau may, in its discretion, furnish
to a prudential regulator or other
agency having jurisdiction over a
covered person or service provider any
other report or other confidential
supervisory information concerning such
person examined by the Bureau under the
authority of any other provision of
Federal law.
(7) Registration.--
(A) In general.--The Bureau may prescribe
rules regarding registration requirements
applicable to a covered person, other than an
insured depository institution, insured credit
union, or related person.
(B) Registration information.--Subject to
rules prescribed by the Bureau, the Bureau may
publicly disclose registration information to
facilitate the ability of consumers to identify
covered persons that are registered with the
Bureau.
(C) Consultation with state agencies.--In
developing and implementing registration
requirements under this paragraph, the Bureau
shall consult with State agencies regarding
requirements or systems (including coordinated
or combined systems for registration), where
appropriate.
(8) Privacy considerations.--In collecting
information from any person, publicly releasing
information held by the Bureau, or requiring covered
persons to publicly report information, the Bureau
shall take steps to ensure that proprietary, personal,
or confidential consumer information that is protected
from public disclosure under section 552(b) or 552a of
title 5, United States Code, or any other provision of
law, is not made public under this title.
(9) Consumer privacy.--
(A) In general.--The Bureau may not obtain
from a covered person or service provider any
personally identifiable financial information
about a consumer from the financial records of
the covered person or service provider,
except--
(i) if the financial records are
reasonably described in a request by
the Bureau and the consumer provides
written permission for the disclosure
of such information by the covered
person or service provider to the
Bureau; or
(ii) as may be specifically permitted
or required under other applicable
provisions of law and in accordance
with the Right to Financial Privacy Act
of 1978 (12 U.S.C. 3401 et seq.).
(B) Treatment of covered person or service
provider.--With respect to the application of
any provision of the Right to Financial Privacy
Act of 1978, to a disclosure by a covered
person or service provider subject to this
subsection, the covered person or service
provider shall be treated as if it were a
``financial institution'', as defined in
section 1101 of that Act (12 U.S.C. 3401).
(d) Assessment of Significant Rules.--
(1) In general.--The Bureau shall conduct an
assessment of each significant rule or order adopted by
the Bureau under Federal consumer financial law. The
assessment shall address, among other relevant factors,
the effectiveness of the rule or order in meeting the
purposes and objectives of this title and the specific
goals stated by the Bureau. The assessment shall
reflect available evidence and any data that the Bureau
reasonably may collect.
(2) Reports.--The Bureau shall publish a report of
its assessment under this subsection not later than 5
years after the effective date of the subject rule or
order.
(3) Public comment required.--Before publishing a
report of its assessment, the Bureau shall invite
public comment on recommendations for modifying,
expanding, or eliminating the newly adopted significant
rule or order.
* * * * * * *
SEC. 1024. SUPERVISION OF NONDEPOSITORY COVERED PERSONS.
(a) Scope of Coverage.--
(1) Applicability.--Notwithstanding any other
provision of this title, and except as provided in
paragraph (3), this section shall apply to any covered
person who--
(A) offers or provides origination,
brokerage, or servicing of loans secured by
real estate for use by consumers primarily for
personal, family, or household purposes, or
loan modification or foreclosure relief
services in connection with such loans;
(B) is a larger participant of a market for
other consumer financial products or services,
as defined by rule in accordance with paragraph
(2);
(C) the Bureau has reasonable cause to
determine, by order, after notice to the
covered person and a reasonable opportunity for
such covered person to respond, based on
complaints collected through the system under
section 1013(b)(3) or information from other
sources, that such covered person is engaging,
or has engaged, in conduct that poses risks to
consumers with regard to the offering or
provision of consumer financial products or
services;
(D) offers or provides to a consumer any
private education loan, as defined in section
140 of the Truth in Lending Act (15 U.S.C.
1650), notwithstanding section 1027(a)(2)(A)
and subject to section 1027(a)(2)(C); or
(E) offers or provides to a consumer a payday
loan.
(2) Rulemaking to define covered persons subject to
this section.--The Bureau shall consult with the
Federal Trade Commission prior to issuing a rule, in
accordance with paragraph (1)(B), to define covered
persons subject to this section. The Bureau shall issue
its initial rule not later than 1 year after the
designated transfer date.
(3) Rules of construction.--
(A) Certain persons excluded.--This section
shall not apply to persons described in section
1025(a) or 1026(a).
(B) Activity levels.--For purposes of
computing activity levels under paragraph (1)
or rules issued thereunder, activities of
affiliated companies (other than insured
depository institutions or insured credit
unions) shall be aggregated.
(b) Supervision.--
(1) In general.--The Bureau shall require reports and
conduct examinations on a periodic basis of persons
described in subsection (a)(1) for purposes of--
(A) assessing compliance with the
requirements of Federal consumer financial law;
(B) obtaining information about the
activities and compliance systems or procedures
of such person; and
(C) detecting and assessing risks to
consumers and to markets for consumer financial
products and services.
(2) Risk-based supervision program.--The Bureau shall
exercise its authority under paragraph (1) in a manner
designed to ensure that such exercise, with respect to
persons described in subsection (a)(1), is based on the
assessment by the Bureau of the risks posed to
consumers in the relevant product markets and
geographic markets, and taking into consideration, as
applicable--
(A) the asset size of the covered person;
(B) the volume of transactions involving
consumer financial products or services in
which the covered person engages;
(C) the risks to consumers created by the
provision of such consumer financial products
or services;
(D) the extent to which such institutions are
subject to oversight by State authorities for
consumer protection; and
(E) any other factors that the Bureau
determines to be relevant to a class of covered
persons.
(3) Coordination.--To minimize regulatory burden, the
Bureau shall coordinate its supervisory activities with
the supervisory activities conducted by prudential
regulators, the State bank regulatory authorities, and
the State agencies that licence, supervise, or examine
the offering of consumer financial products or
services, including establishing their respective
schedules for examining persons described in subsection
(a)(1) and requirements regarding reports to be
submitted by such persons. The sharing of information
with such regulators, authorities, and agencies shall
not be construed as waiving, destroying, or otherwise
affecting any privilege or confidentiality such person
may claim with respect to such information under
Federal or State law as to any person or entity other
than such Bureau, agency, supervisor, or authority.
(4) Use of existing reports.--The Bureau shall, to
the fullest extent possible, use--
(A) reports pertaining to persons described
in subsection (a)(1) that have been provided or
required to have been provided to a Federal or
State agency; and
(B) information that has been reported
publicly.
(5) Preservation of authority.--Nothing in this title
may be construed as limiting the authority of the
[Director] Bureau to require reports from persons
described in subsection (a)(1), as permitted under
paragraph (1), regarding information owned or under the
control of such person, regardless of whether such
information is maintained, stored, or processed by
another person.
(6) Reports of tax law noncompliance.--The Bureau
shall provide the Commissioner of Internal Revenue with
any report of examination or related information
identifying possible tax law noncompliance.
(7) Registration, recordkeeping and other
requirements for certain persons.--
(A) In general.--The Bureau shall prescribe
rules to facilitate supervision of persons
described in subsection (a)(1) and assessment
and detection of risks to consumers.
(B) Recordkeeping.--The Bureau may require a
person described in subsection (a)(1), to
generate, provide, or retain records for the
purposes of facilitating supervision of such
persons and assessing and detecting risks to
consumers.
(C) Requirements concerning obligations.--The
Bureau may prescribe rules regarding a person
described in subsection (a)(1), to ensure that
such persons are legitimate entities and are
able to perform their obligations to consumers.
Such requirements may include background checks
for principals, officers, directors, or key
personnel and bonding or other appropriate
financial requirements.
(D) Consultation with state agencies.--In
developing and implementing requirements under
this paragraph, the Bureau shall consult with
State agencies regarding requirements or
systems (including coordinated or combined
systems for registration), where appropriate.
(c) Enforcement Authority.--
(1) The bureau to have enforcement authority.--Except
as provided in paragraph (3) and section 1061, with
respect to any person described in subsection (a)(1),
to the extent that Federal law authorizes the Bureau
and another Federal agency to enforce Federal consumer
financial law, the Bureau shall have exclusive
authority to enforce that Federal consumer financial
law.
(2) Referral.--Any Federal agency authorized to
enforce a Federal consumer financial law described in
paragraph (1) may recommend in writing to the Bureau
that the Bureau initiate an enforcement proceeding, as
the Bureau is authorized by that Federal law or by this
title.
(3) Coordination with the federal trade commission.--
(A) In general.--The Bureau and the Federal
Trade Commission shall negotiate an agreement
for coordinating with respect to enforcement
actions by each agency regarding the offering
or provision of consumer financial products or
services by any covered person that is
described in subsection (a)(1), or service
providers thereto. The agreement shall include
procedures for notice to the other agency,
where feasible, prior to initiating a civil
action to enforce any Federal law regarding the
offering or provision of consumer financial
products or services.
(B) Civil actions.--Whenever a civil action
has been filed by, or on behalf of, the Bureau
or the Federal Trade Commission for any
violation of any provision of Federal law
described in subparagraph (A), or any
regulation prescribed under such provision of
law--
(i) the other agency may not, during
the pendency of that action, institute
a civil action under such provision of
law against any defendant named in the
complaint in such pending action for
any violation alleged in the complaint;
and
(ii) the Bureau or the Federal Trade
Commission may intervene as a party in
any such action brought by the other
agency, and, upon intervening--
(I) be heard on all matters
arising in such enforcement
action; and
(II) file petitions for
appeal in such actions.
(C) Agreement terms.--The terms of any
agreement negotiated under subparagraph (A) may
modify or supersede the provisions of
subparagraph (B).
(D) Deadline.--The agencies shall reach the
agreement required under subparagraph (A) not
later than 6 months after the designated
transfer date.
(d) Exclusive Rulemaking and Examination Authority.--
Notwithstanding any other provision of Federal law and except
as provided in section 1061, to the extent that Federal law
authorizes the Bureau and another Federal agency to issue
regulations or guidance, conduct examinations, or require
reports from a person described in subsection (a)(1) under such
law for purposes of assuring compliance with Federal consumer
financial law and any regulations thereunder, the Bureau shall
have the exclusive authority to prescribe rules, issue
guidance, conduct examinations, require reports, or issue
exemptions with regard to a person described in subsection
(a)(1), subject to those provisions of law.
(e) Service Providers.--A service provider to a person
described in subsection (a)(1) shall be subject to the
authority of the Bureau under this section, to the same extent
as if such service provider were engaged in a service
relationship with a bank, and the Bureau were an appropriate
Federal banking agency under section 7(c) of the Bank Service
Company Act (12 U.S.C. 1867(c)). In conducting any examination
or requiring any report from a service provider subject to this
subsection, the Bureau shall coordinate with the appropriate
prudential regulator, as applicable.
(f) Preservation of Farm Credit Administration Authority.--No
provision of this title may be construed as modifying,
limiting, or otherwise affecting the authority of the Farm
Credit Administration.
SEC. 1025. SUPERVISION OF VERY LARGE BANKS, SAVINGS ASSOCIATIONS, AND
CREDIT UNIONS.
(a) Scope of Coverage.--This section shall apply to any
covered person that is--
(1) an insured depository institution with total
assets of more than $10,000,000,000 and any affiliate
thereof; or
(2) an insured credit union with total assets of more
than $10,000,000,000 and any affiliate thereof.
(b) Supervision.--
(1) In general.--The Bureau shall have exclusive
authority to require reports and conduct examinations
on a periodic basis of persons described in subsection
(a) for purposes of--
(A) assessing compliance with the
requirements of Federal consumer financial
laws;
(B) obtaining information about the
activities subject to such laws and the
associated compliance systems or procedures of
such persons; and
(C) detecting and assessing associated risks
to consumers and to markets for consumer
financial products and services.
(2) Coordination.--To minimize regulatory burden, the
Bureau shall coordinate its supervisory activities with
the supervisory activities conducted by prudential
regulators and the State bank regulatory authorities,
including consultation regarding their respective
schedules for examining such persons described in
subsection (a) and requirements regarding reports to be
submitted by such persons.
(3) Use of existing reports.--The Bureau shall, to
the fullest extent possible, use--
(A) reports pertaining to a person described
in subsection (a) that have been provided or
required to have been provided to a Federal or
State agency; and
(B) information that has been reported
publicly.
(4) Preservation of authority.--Nothing in this title
may be construed as limiting the authority of the
[Director] Bureau to require reports from a person
described in subsection (a), as permitted under
paragraph (1), regarding information owned or under the
control of such person, regardless of whether such
information is maintained, stored, or processed by
another person.
(5) Reports of tax law noncompliance.--The Bureau
shall provide the Commissioner of Internal Revenue with
any report of examination or related information
identifying possible tax law noncompliance.
(c) Primary Enforcement Authority.--
(1) The bureau to have primary enforcement
authority.--To the extent that the Bureau and another
Federal agency are authorized to enforce a Federal
consumer financial law, the Bureau shall have primary
authority to enforce that Federal consumer financial
law with respect to any person described in subsection
(a).
(2) Referral.--Any Federal agency, other than the
Federal Trade Commission, that is authorized to enforce
a Federal consumer financial law may recommend, in
writing, to the Bureau that the Bureau initiate an
enforcement proceeding with respect to a person
described in subsection (a), as the Bureau is
authorized to do by that Federal consumer financial
law.
(3) Backup enforcement authority of other federal
agency.--If the Bureau does not, before the end of the
120-day period beginning on the date on which the
Bureau receives a recommendation under paragraph (2),
initiate an enforcement proceeding, the other agency
referred to in paragraph (2) may initiate an
enforcement proceeding, including performing follow up
supervisory and support functions incidental thereto,
to assure compliance with such proceeding.
(d) Service Providers.--A service provider to a person
described in subsection (a) shall be subject to the authority
of the Bureau under this section, to the same extent as if the
Bureau were an appropriate Federal banking agency under section
7(c) of the Bank Service Company Act 12 U.S.C. 1867(c). In
conducting any examination or requiring any report from a
service provider subject to this subsection, the Bureau shall
coordinate with the appropriate prudential regulator.
(e) Simultaneous and Coordinated Supervisory Action.--
(1) Examinations.--A prudential regulator and the
Bureau shall, with respect to each insured depository
institution, insured credit union, or other covered
person described in subsection (a) that is supervised
by the prudential regulator and the Bureau,
respectively--
(A) coordinate the scheduling of examinations
of the insured depository institution, insured
credit union, or other covered person described
in subsection (a);
(B) conduct simultaneous examinations of each
insured depository institution or insured
credit union, unless such institution requests
examinations to be conducted separately;
(C) share each draft report of examination
with the other agency and permit the receiving
agency a reasonable opportunity (which shall
not be less than a period of 30 days after the
date of receipt) to comment on the draft report
before such report is made final; and
(D) prior to issuing a final report of
examination or taking supervisory action, take
into consideration concerns, if any, raised in
the comments made by the other agency.
(2) Coordination with state bank supervisors.--The
Bureau shall pursue arrangements and agreements with
State bank supervisors to coordinate examinations,
consistent with paragraph (1).
(3) Avoidance of conflict in supervision.--
(A) Request.--If the proposed supervisory
determinations of the Bureau and a prudential
regulator (in this section referred to
collectively as the ``agencies'') are
conflicting, an insured depository institution,
insured credit union, or other covered person
described in subsection (a) may request the
agencies to coordinate and present a joint
statement of coordinated supervisory action.
(B) Joint statement.--The agencies shall
provide a joint statement under subparagraph
(A), not later than 30 days after the date of
receipt of the request of the insured
depository institution, credit union, or
covered person described in subsection (a).
(4) Appeals to governing panel.--
(A) In general.--If the agencies do not
resolve the conflict or issue a joint statement
required by subparagraph (B), or if either of
the agencies takes or attempts to take any
supervisory action relating to the request for
the joint statement without the consent of the
other agency, an insured depository
institution, insured credit union, or other
covered person described in subsection (a) may
institute an appeal to a governing panel, as
provided in this subsection, not later than 30
days after the expiration of the period during
which a joint statement is required to be filed
under paragraph (3)(B).
(B) Composition of governing panel.--The
governing panel for an appeal under this
paragraph shall be composed of--
(i) a representative from the Bureau
and a representative of the prudential
regulator, both of whom--
(I) have not participated in
the material supervisory
determinations under appeal;
and
(II) do not directly or
indirectly report to the person
who participated materially in
the supervisory determinations
under appeal; and
(ii) one individual representative,
to be determined on a rotating basis,
from among the Board of Governors, the
Corporation, the National Credit Union
Administration, and the Office of the
Comptroller of the Currency, other than
any agency involved in the subject
dispute.
(C) Conduct of appeal.--In an appeal under
this paragraph--
(i) the insured depository
institution, insured credit union, or
other covered person described in
subsection (a)--
(I) shall include in its
appeal all the facts and legal
arguments pertaining to the
matter; and
(II) may, through counsel,
employees, or representatives,
appear before the governing
panel in person or by
telephone; and
(ii) the governing panel--
(I) may request the insured
depository institution, insured
credit union, or other covered
person described in subsection
(a), the Bureau, or the
prudential regulator to produce
additional information relevant
to the appeal; and
(II) by a majority vote of
its members, shall provide a
final determination, in
writing, not later than 30 days
after the date of filing of an
informationally complete
appeal, or such longer period
as the panel and the insured
depository institution, insured
credit union, or other covered
person described in subsection
(a) may jointly agree.
(D) Public availability of determinations.--A
governing panel shall publish all information
contained in a determination by the governing
panel, with appropriate redactions of
information that would be subject to an
exemption from disclosure under section 552 of
title 5, United States Code.
(E) Prohibition against retaliation.--The
Bureau and the prudential regulators shall
prescribe rules to provide safeguards from
retaliation against the insured depository
institution, insured credit union, or other
covered person described in subsection (a)
instituting an appeal under this paragraph, as
well as their officers and employees.
(F) Limitation.--The process provided in this
paragraph shall not apply to a determination by
a prudential regulator 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 (12 U.S.C.
1831o) or section 212 of the Federal Credit
Union Act (112 U.S.C. 1790a), as applicable.
(G) Effect on other authority.--Nothing in
this section shall modify or limit the
authority of the Bureau to interpret, or take
enforcement action under, any Federal consumer
financial law, or the authority of a prudential
regulator to interpret or take enforcement
action under any other provision of Federal law
for safety and soundness purposes.
SEC. 1026. OTHER BANKS, SAVINGS ASSOCIATIONS, AND CREDIT UNIONS.
(a) Scope of Coverage.--This section shall apply to any
covered person that is--
(1) an insured depository institution with total
assets of $10,000,000,000 or less; or
(2) an insured credit union with total assets of
$10,000,000,000 or less.
(b) Reports.--The [Director] Bureau may require reports from
a person described in subsection (a), as necessary to support
the role of the Bureau in implementing Federal consumer
financial law, to support its examination activities under
subsection (c), and to assess and detect risks to consumers and
consumer financial markets.
(1) Use of existing reports.--The Bureau shall, to
the fullest extent possible, use--
(A) reports pertaining to a person described
in subsection (a) that have been provided or
required to have been provided to a Federal or
State agency; and
(B) information that has been reported
publicly.
(2) Preservation of authority.--Nothing in this
subsection may be construed as limiting the authority
of the [Director] Bureau from requiring from a person
described in subsection (a), as permitted under
paragraph (1), information owned or under the control
of such person, regardless of whether such information
is maintained, stored, or processed by another person.
(3) Reports of tax law noncompliance.--The Bureau
shall provide the Commissioner of Internal Revenue with
any report of examination or related information
identifying possible tax law noncompliance.
(c) Examinations.--
(1) In general.--The Bureau may, at its discretion,
include examiners on a sampling basis of the
examinations performed by the prudential regulator to
assess compliance with the requirements of Federal
consumer financial law of persons described in
subsection (a).
(2) Agency coordination.--The prudential regulator
shall--
(A) provide all reports, records, and
documentation related to the examination
process for any institution included in the
sample referred to in paragraph (1) to the
Bureau on a timely and continual basis;
(B) involve such Bureau examiner in the
entire examination process for such person; and
(C) consider input of the Bureau concerning
the scope of an examination, conduct of the
examination, the contents of the examination
report, the designation of matters requiring
attention, and examination ratings.
(d) Enforcement.--
(1) In general.--Except for requiring reports under
subsection (b), the prudential regulator is authorized
to enforce the requirements of Federal consumer
financial laws and, with respect to a covered person
described in subsection (a), shall have exclusive
authority (relative to the Bureau) to enforce such
laws.
(2) Coordination with prudential regulator.--
(A) Referral.--When the Bureau has reason to
believe that a person described in subsection
(a) has engaged in a material violation of a
Federal consumer financial law, the Bureau
shall notify the prudential regulator in
writing and recommend appropriate action to
respond.
(B) Response.--Upon receiving a
recommendation under subparagraph (A), the
prudential regulator shall provide a written
response to the Bureau not later than 60 days
thereafter.
(e) Service Providers.--A service provider to a substantial
number of persons described in subsection (a) shall be subject
to the authority of the Bureau under section 1025 to the same
extent as if the Bureau were an appropriate Federal bank agency
under section 7(c) of the Bank Service Company Act (12 U.S.C.
1867(c)). When conducting any examination or requiring any
report from a service provider subject to this subsection, the
Bureau shall coordinate with the appropriate prudential
regulator.
SEC. 1027. LIMITATIONS ON AUTHORITIES OF THE BUREAU; PRESERVATION OF
AUTHORITIES.
(a) Exclusion for Merchants, Retailers, and Other Sellers of
Nonfinancial Goods or Services.--
(1) Sale or brokerage of nonfinancial good or
service.--The Bureau may not exercise any rulemaking,
supervisory, enforcement or other authority under this
title with respect to a person who is a merchant,
retailer, or seller of any nonfinancial good or service
and is engaged in the sale or brokerage of such
nonfinancial good or service, except to the extent that
such person is engaged in offering or providing any
consumer financial product or service, or is otherwise
subject to any enumerated consumer law or any law for
which authorities are transferred under subtitle F or
H.
(2) Offering or provision of certain consumer
financial products or services in connection with the
sale or brokerage of nonfinancial good or service.--
(A) In general.--Except as provided in
subparagraph (B), and subject to subparagraph
(C), the Bureau may not exercise any
rulemaking, supervisory, enforcement, or other
authority under this title with respect to a
merchant, retailer, or seller of nonfinancial
goods or services, but only to the extent that
such person--
(i) extends credit directly to a
consumer, in a case in which the good
or service being provided is not itself
a consumer financial product or service
(other than credit described in this
subparagraph), exclusively for the
purpose of enabling that consumer to
purchase such nonfinancial good or
service directly from the merchant,
retailer, or seller;
(ii) directly, or through an
agreement with another person, collects
debt arising from credit extended as
described in clause (i); or
(iii) sells or conveys debt described
in clause (i) that is delinquent or
otherwise in default.
(B) Applicability.--Subparagraph (A) does not
apply to any credit transaction or collection
of debt, other than as described in
subparagraph (C)(i), arising from a transaction
described in subparagraph (A)--
(i) in which the merchant, retailer,
or seller of nonfinancial goods or
services assigns, sells or otherwise
conveys to another person such debt
owed by the consumer (except for a sale
of debt that is delinquent or otherwise
in default, as described in
subparagraph (A)(iii));
(ii) in which the credit extended
significantly exceeds the market value
of the nonfinancial good or service
provided, or the Bureau otherwise finds
that the sale of the nonfinancial good
or service is done as a subterfuge, so
as to evade or circumvent the
provisions of this title; or
(iii) in which the merchant,
retailer, or seller of nonfinancial
goods or services regularly extends
credit and the credit is subject to a
finance charge.
(C) Limitations.--
(i) In general.--Notwithstanding
subparagraph (B), subparagraph (A)
shall apply with respect to a merchant,
retailer, or seller of nonfinancial
goods or services that is not engaged
significantly in offering or providing
consumer financial products or
services.
(ii) Exception.--Subparagraph (A) and
clause (i) of this subparagraph do not
apply to any merchant, retailer, or
seller of nonfinancial goods or
services--
(I) if such merchant,
retailer, or seller of
nonfinancial goods or services
is engaged in a transaction
described in subparagraph
(B)(i) or (B)(ii); or
(II) to the extent that such
merchant, retailer, or seller
is subject to any enumerated
consumer law or any law for
which authorities are
transferred under subtitle F or
H, but the Bureau may exercise
such authority only with
respect to that law.
(D) Rules.--
(i) Authority of other agencies.--No
provision of this title shall be
construed as modifying, limiting, or
superseding the supervisory or
enforcement authority of the Federal
Trade Commission or any other agency
(other than the Bureau) with respect to
credit extended, or the collection of
debt arising from such extension,
directly by a merchant or retailer to a
consumer exclusively for the purpose of
enabling that consumer to purchase
nonfinancial goods or services directly
from the merchant or retailer.
(ii) Small businesses.--A merchant,
retailer, or seller of nonfinancial
goods or services that would otherwise
be subject to the authority of the
Bureau solely by virtue of the
application of subparagraph (B)(iii)
shall be deemed not to be engaged
significantly in offering or providing
consumer financial products or services
under subparagraph (C)(i), if such
person--
(I) only extends credit for
the sale of nonfinancial goods
or services, as described in
subparagraph (A)(i);
(II) retains such credit on
its own accounts (except to
sell or convey such debt that
is delinquent or otherwise in
default); and
(III) meets the relevant
industry size threshold to be a
small business concern, based
on annual receipts, pursuant to
section 3 of the Small Business
Act (15 U.S.C. 632) and the
implementing rules thereunder.
(iii) Initial year.--A merchant,
retailer, or seller of nonfinancial
goods or services shall be deemed to
meet the relevant industry size
threshold described in clause (ii)(III)
during the first year of operations of
that business concern if, during that
year, the receipts of that business
concern reasonably are expected to meet
that size threshold.
(iv) Other standards for small
business.--With respect to a merchant,
retailer, or seller of nonfinancial
goods or services that is a classified
on a basis other than annual receipts
for the purposes of section 3 of the
Small Business Act (15 U.S.C. 632) and
the implementing rules thereunder, such
merchant, retailer, or seller shall be
deemed to meet the relevant industry
size threshold described in clause
(ii)(III) if such merchant, retailer,
or seller meets the relevant industry
size threshold to be a small business
concern based on the number of
employees, or other such applicable
measure, established under that Act.
(E) Exception from state enforcement.--To the
extent that the Bureau may not exercise
authority under this subsection with respect to
a merchant, retailer, or seller of nonfinancial
goods or services, no action by a State
attorney general or State regulator with
respect to a claim made under this title may be
brought under subsection 1042(a), with respect
to an activity described in any of clauses (i)
through (iii) of subparagraph (A) by such
merchant, retailer, or seller of nonfinancial
goods or services.
(b) Exclusion for Real Estate Brokerage Activities.--
(1) Real estate brokerage activities excluded.--
Without limiting subsection (a), and except as
permitted in paragraph (2), the Bureau may not exercise
any rulemaking, supervisory, enforcement, or other
authority under this title with respect to a person
that is licensed or registered as a real estate broker
or real estate agent, in accordance with State law, to
the extent that such person--
(A) acts as a real estate agent or broker for
a buyer, seller, lessor, or lessee of real
property;
(B) brings together parties interested in the
sale, purchase, lease, rental, or exchange of
real property;
(C) negotiates, 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 the
provision of financing with respect to any such
transaction); or
(D) offers to engage in any activity, or act
in any capacity, described in subparagraph (A),
(B), or (C).
(2) Description of activities.--The Bureau may
exercise rulemaking, supervisory, enforcement, or other
authority under this title with respect to a person
described in paragraph (1) when such person is--
(A) engaged in an activity of offering or
providing any consumer financial product or
service, except that the Bureau may exercise
such authority only with respect to that
activity; or
(B) otherwise subject to any enumerated
consumer law or any law for which authorities
are transferred under subtitle F or H, but the
Bureau may exercise such authority only with
respect to that law.
(c) Exclusion for Manufactured Home Retailers and Modular
Home Retailers.--
(1) In general.--The [Director] Bureau may not
exercise any rulemaking, supervisory, enforcement, or
other authority over a person to the extent that--
(A) such person is not described in paragraph
(2); and
(B) such person--
(i) acts as an agent or broker for a
buyer or seller of a manufactured home
or a modular home;
(ii) facilitates the purchase by a
consumer of a manufactured home or
modular home, by negotiating the
purchase price or terms of the sales
contract (other than providing
financing with respect to such
transaction); or
(iii) offers to engage in any
activity described in clause (i) or
(ii).
(2) Description of activities.--A person is described
in this paragraph to the extent that such person is
engaged in the offering or provision of any consumer
financial product or service or is otherwise subject to
any enumerated consumer law or any law for which
authorities are transferred under subtitle F or H.
(3) Definitions.--For purposes of this subsection,
the following definitions shall apply:
(A) Manufactured home.--The term
``manufactured home'' has the same meaning as
in section 603 of the National Manufactured
Housing Construction and Safety Standards Act
of 1974 (42 U.S.C. 5402).
(B) Modular home.--The term ``modular home''
means a house built in a factory in 2 or more
modules that meet the State or local building
codes where the house will be located, and
where such modules are transported to the
building site, installed on foundations, and
completed.
(d) Exclusion for Accountants and Tax Preparers.--
(1) In general.--Except as permitted in paragraph
(2), the Bureau may not exercise any rulemaking,
supervisory, enforcement, or other authority over--
(A) any person that is a certified public
accountant, permitted to practice as a
certified public accounting firm, or certified
or licensed for such purpose by a State, or any
individual who is employed by or holds an
ownership interest with respect to a person
described in this subparagraph, when such
person is performing or offering to perform--
(i) customary and usual accounting
activities, including the provision of
accounting, tax, advisory, or other
services that are subject to the
regulatory authority of a State board
of accountancy or a Federal authority;
or
(ii) other services that are
incidental to such customary and usual
accounting activities, to the extent
that such incidental services are not
offered or provided--
(I) by the person separate
and apart from such customary
and usual accounting
activities; or
(II) to consumers who are not
receiving such customary and
usual accounting activities; or
(B) any person, other than a person described
in subparagraph (A) that performs income tax
preparation activities for consumers.
(2) Description of activities.--
(A) In general.--Paragraph (1) shall not
apply to any person described in paragraph
(1)(A) or (1)(B) to the extent that such person
is engaged in any activity which is not a
customary and usual accounting activity
described in paragraph (1)(A) or incidental
thereto but which is the offering or provision
of any consumer financial product or service,
except to the extent that a person described in
paragraph (1)(A) is engaged in an activity
which is a customary and usual accounting
activity described in paragraph (1)(A), or
incidental thereto.
(B) Not a customary and usual accounting
activity.--For purposes of this subsection,
extending or brokering credit is not a
customary and usual accounting activity, or
incidental thereto.
(C) Rule of construction.--For purposes of
subparagraphs (A) and (B), a person described
in paragraph (1)(A) shall not be deemed to be
extending credit, if such person is only
extending credit directly to a consumer,
exclusively for the purpose of enabling such
consumer to purchase services described in
clause (i) or (ii) of paragraph (1)(A) directly
from such person, and such credit is--
(i) not subject to a finance charge;
and
(ii) not payable by written agreement
in more than 4 installments.
(D) Other limitations.--Paragraph (1) does
not apply to any person described in paragraph
(1)(A) or (1)(B) that is otherwise subject to
any enumerated consumer law or any law for
which authorities are transferred under
subtitle F or H.
(e) Exclusion for Practice of Law.--
(1) In general.--Except as provided under paragraph
(2), the Bureau may not exercise any supervisory or
enforcement authority with respect to an activity
engaged in by an attorney as part of the practice of
law under the laws of a State in which the attorney is
licensed to practice law.
(2) Rule of construction.--Paragraph (1) shall not be
construed so as to limit the exercise by the Bureau of
any supervisory, enforcement, or other authority
regarding the offering or provision of a consumer
financial product or service described in any
subparagraph of section 1002(5)--
(A) that is not offered or provided as part
of, or incidental to, the practice of law,
occurring exclusively within the scope of the
attorney-client relationship; or
(B) that is otherwise offered or provided by
the attorney in question with respect to any
consumer who is not receiving legal advice or
services from the attorney in connection with
such financial product or service.
(3) Existing authority.--Paragraph (1) shall not be
construed so as to limit the authority of the Bureau
with respect to any attorney, to the extent that such
attorney is otherwise subject to any of the enumerated
consumer laws or the authorities transferred under
subtitle F or H.
(f) Exclusion for Persons Regulated by a State Insurance
Regulator.--
(1) In general.--No provision of this title shall be
construed as altering, amending, or affecting the
authority of any State insurance regulator to adopt
rules, initiate enforcement proceedings, or take any
other action with respect to a person regulated by a
State insurance regulator. Except as provided in
paragraph (2), the Bureau shall have no authority to
exercise any power to enforce this title with respect
to a person regulated by a State insurance regulator.
(2) Description of activities.--Paragraph (1) does
not apply to any person described in such paragraph to
the extent that such person is engaged in the offering
or provision of any consumer financial product or
service or is otherwise subject to any enumerated
consumer law or any law for which authorities are
transferred under subtitle F or H.
(3) State insurance authority under gramm-leach-
bliley.--Notwithstanding paragraph (2), the Bureau
shall not exercise any authorities that are granted a
State insurance authority under section 505(a)(6) of
the Gramm-Leach-Bliley Act with respect to a person
regulated by a State insurance authority.
(g) Exclusion for Employee Benefit and Compensation Plans and
Certain Other Arrangements Under the Internal Revenue Code of
1986.--
(1) Preservation of authority of other agencies.--No
provision of this title shall be construed as altering,
amending, or affecting the authority of the Secretary
of the Treasury, the Secretary of Labor, or the
Commissioner of Internal Revenue to adopt regulations,
initiate enforcement proceedings, or take any actions
with respect to any specified plan or arrangement.
(2) Activities not constituting the offering or
provision of any consumer financial product or
service.--For purposes of this title, a person shall
not be treated as having engaged in the offering or
provision of any consumer financial product or service
solely because such person is--
(A) a specified plan or arrangement;
(B) engaged in the activity of establishing
or maintaining, for the benefit of employees of
such person (or for members of an employee
organization), any specified plan or
arrangement; or
(C) engaged in the activity of establishing
or maintaining a qualified tuition program
under section 529(b)(1) of the Internal Revenue
Code of 1986 offered by a State or other
prepaid tuition program offered by a State.
(3) Limitation on bureau authority.--
(A) In general.--Except as provided under
subparagraphs (B) and (C), the Bureau may not
exercise any rulemaking or enforcement
authority with respect to products or services
that relate to any specified plan or
arrangement.
(B) Bureau action pursuant to agency
request.--
(i) Agency request.--The Secretary
and the Secretary of Labor may jointly
issue a written request to the Bureau
regarding implementation of appropriate
consumer protection standards under
this title with respect to the
provision of services relating to any
specified plan or arrangement.
(ii) Agency response.--In response to
a request by the Bureau, the Secretary
and the Secretary of Labor shall
jointly issue a written response, not
later than 90 days after receipt of
such request, to grant or deny the
request of the Bureau regarding
implementation of appropriate consumer
protection standards under this title
with respect to the provision of
services relating to any specified plan
or arrangement.
(iii) Scope of bureau action.--
Subject to a request or response
pursuant to clause (i) or clause (ii)
by the agencies made under this
subparagraph, the Bureau may exercise
rulemaking authority, and may act to
enforce a rule prescribed pursuant to
such request or response, in accordance
with the provisions of this title. A
request or response made by the
Secretary and the Secretary of Labor
under this subparagraph shall describe
the basis for, and scope of,
appropriate consumer protection
standards to be implemented under this
title with respect to the provision of
services relating to any specified plan
or arrangement.
(C) Description of products or services.--To
the extent that a person engaged in providing
products or services relating to any specified
plan or arrangement is subject to any
enumerated consumer law or any law for which
authorities are transferred under subtitle F or
H, subparagraph (A) shall not apply with
respect to that law.
(4) Specified plan or arrangement.--For purposes of
this subsection, the term ``specified plan or
arrangement'' means any plan, account, or arrangement
described in section 220, 223, 401(a), 403(a), 403(b),
408, 408A, 529, 529A, or 530 of the Internal Revenue
Code of 1986, or any employee benefit or compensation
plan or arrangement, including a plan that is subject
to title I of the Employee Retirement Income Security
Act of 1974, or any prepaid tuition program offered by
a State.
(h) Persons Regulated by a State Securities Commission.--
(1) In general.--No provision of this title shall be
construed as altering, amending, or affecting the
authority of any securities commission (or any agency
or office performing like functions) of any State to
adopt rules, initiate enforcement proceedings, or take
any other action with respect to a person regulated by
any securities commission (or any agency or office
performing like functions) of any State. Except as
permitted in paragraph (2) and subsection (f), the
Bureau shall have no authority to exercise any power to
enforce this title with respect to a person regulated
by any securities commission (or any agency or office
performing like functions) of any State, but only to
the extent that the person acts in such regulated
capacity.
(2) Description of activities.--Paragraph (1) shall
not apply to any person to the extent such person is
engaged in the offering or provision of any consumer
financial product or service, or is otherwise subject
to any enumerated consumer law or any law for which
authorities are transferred under subtitle F or H.
(i) Exclusion for Persons Regulated by the Commission.--
(1) In general.--No provision of this title may be
construed as altering, amending, or affecting the
authority of the Commission to adopt rules, initiate
enforcement proceedings, or take any other action with
respect to a person regulated by the Commission. The
Bureau shall have no authority to exercise any power to
enforce this title with respect to a person regulated
by the Commission.
(2) Consultation and coordination.--Notwithstanding
paragraph (1), the Commission shall consult and
coordinate, where feasible, with the Bureau with
respect to any rule (including any advance notice of
proposed rulemaking) regarding an investment product or
service that is the same type of product as, or that
competes directly with, a consumer financial product or
service that is subject to the jurisdiction of the
Bureau under this title or under any other law. In
carrying out this paragraph, the agencies shall
negotiate an agreement to establish procedures for such
coordination, including procedures for providing
advance notice to the Bureau when the Commission is
initiating a rulemaking.
(j) Exclusion for Persons Regulated by the Commodity Futures
Trading Commission.--
(1) In general.--No provision of this title shall be
construed as altering, amending, or affecting the
authority of the Commodity Futures Trading Commission
to adopt rules, initiate enforcement proceedings, or
take any other action with respect to a person
regulated by the Commodity Futures Trading Commission.
The Bureau shall have no authority to exercise any
power to enforce this title with respect to a person
regulated by the Commodity Futures Trading Commission.
(2) Consultation and coordination.--Notwithstanding
paragraph (1), the Commodity Futures Trading Commission
shall consult and coordinate with the Bureau with
respect to any rule (including any advance notice of
proposed rulemaking) regarding a product or service
that is the same type of product as, or that competes
directly with, a consumer financial product or service
that is subject to the jurisdiction of the Bureau under
this title or under any other law.
(k) Exclusion for Persons Regulated by the Farm Credit
Administration.--
(1) In general.--No provision of this title shall be
construed as altering, amending, or affecting the
authority of the Farm Credit Administration to adopt
rules, initiate enforcement proceedings, or take any
other action with respect to a person regulated by the
Farm Credit Administration. The Bureau shall have no
authority to exercise any power to enforce this title
with respect to a person regulated by the Farm Credit
Administration.
(2) Definition.--For purposes of this subsection, the
term ``person regulated by the Farm Credit
Administration'' means any Farm Credit System
institution that is chartered and subject to the
provisions of the Farm Credit Act of 1971 (12 U.S.C.
2001 et seq.).
(l) Exclusion for Activities Relating to Charitable
Contributions.--
(1) In general.--The [Director] Bureau and the Bureau
may not exercise any rulemaking, supervisory,
enforcement, or other authority, including authority to
order penalties, over any activities related to the
solicitation or making of voluntary contributions to a
tax-exempt organization as recognized by the Internal
Revenue Service, by any agent, volunteer, or
representative of such organizations to the extent the
organization, agent, volunteer, or representative
thereof is soliciting or providing advice, information,
education, or instruction to any donor or potential
donor relating to a contribution to the organization.
(2) Limitation.--The exclusion in paragraph (1) does
not apply to other activities not described in
paragraph (1) that are the offering or provision of any
consumer financial product or service, or are otherwise
subject to any enumerated consumer law or any law for
which authorities are transferred under subtitle F or
H.
(m) Insurance.--The Bureau may not define as a financial
product or service, by regulation or otherwise, engaging in the
business of insurance.
(n) Limited Authority of the Bureau.--Notwithstanding
subsections (a) through (h) and (l), a person subject to or
described in one or more of such provisions--
(1) may be a service provider; and
(2) may be subject to requests from, or requirements
imposed by, the Bureau regarding information in order
to carry out the responsibilities and functions of the
Bureau and in accordance with section 1022, 1052, or
1053.
(o) No Authority To Impose Usury Limit.--No provision of this
title shall be construed as conferring authority on the Bureau
to establish a usury limit applicable to an extension of credit
offered or made by a covered person to a consumer, unless
explicitly authorized by law.
(p) Attorney General.--No provision of this title, including
section 1024(c)(1), shall affect the authorities of the
Attorney General under otherwise applicable provisions of law.
(q) Secretary of the Treasury.--No provision of this title
shall affect the authorities of the Secretary, including with
respect to prescribing rules, initiating enforcement
proceedings, or taking other actions with respect to a person
that performs income tax preparation activities for consumers.
(r) Deposit Insurance and Share Insurance.--Nothing in this
title shall affect the authority of the Corporation under the
Federal Deposit Insurance Act or the National Credit Union
Administration Board under the Federal Credit Union Act as to
matters related to deposit insurance and share insurance,
respectively.
(s) Fair Housing Act.--No provision of this title shall be
construed as affecting any authority arising under the Fair
Housing Act.
* * * * * * *
Subtitle C--Specific Bureau Authorities
* * * * * * *
SEC. 1035. PRIVATE EDUCATION LOAN OMBUDSMAN.
(a) Establishment.--The Secretary, in consultation with the
[Director] Bureau, shall designate a Private Education Loan
Ombudsman (in this section referred to as the ``Ombudsman'')
within the Bureau, to provide timely assistance to borrowers of
private education loans.
(b) Public Information.--The Secretary and the [Director]
Bureau shall disseminate information about the availability and
functions of the Ombudsman to borrowers and potential
borrowers, as well as institutions of higher education,
lenders, guaranty agencies, loan servicers, and other
participants in private education student loan programs.
(c) Functions of Ombudsman.--The Ombudsman designated under
this subsection shall--
(1) in accordance with regulations of the [Director]
Bureau, receive, review, and attempt to resolve
informally complaints from borrowers of loans described
in subsection (a), including, as appropriate, attempts
to resolve such complaints in collaboration with the
Department of Education and with institutions of higher
education, lenders, guaranty agencies, loan servicers,
and other participants in private education loan
programs;
(2) not later than 90 days after the designated
transfer date, establish a memorandum of understanding
with the student loan ombudsman established under
section 141(f) of the Higher Education Act of 1965 (20
U.S.C. 1018(f)), to ensure coordination in providing
assistance to and serving borrowers seeking to resolve
complaints related to their private education or
Federal student loans;
(3) compile and analyze data on borrower complaints
regarding private education loans; and
(4) make appropriate recommendations to the
[Director] Bureau, the Secretary, the Secretary of
Education, the Committee on Banking, Housing, and Urban
Affairs and the Committee on Health, Education, Labor,
and Pensions of the Senate and the Committee on
Financial Services and the Committee on Education and
Labor of the House of Representatives.
(d) Annual Reports.--
(1) In general.--The Ombudsman shall prepare an
annual report that describes the activities, and
evaluates the effectiveness of the Ombudsman during the
preceding year.
(2) Submission.--The report required by paragraph (1)
shall be submitted on the same date annually to the
Secretary, the Secretary of Education, the Committee on
Banking, Housing, and Urban Affairs and the Committee
on Health, Education, Labor, and Pensions of the Senate
and the Committee on Financial Services and the
Committee on Education and Labor of the House of
Representatives.
(e) Definitions.--For purposes of this section, the terms
``private education loan'' and ``institution of higher
education'' have the same meanings as in section 140 of the
Truth in Lending Act (15 U.S.C. 1650).
* * * * * * *
Subtitle F--Transfer of Functions and Personnel; Transitional
Provisions
* * * * * * *
[SEC. 1066. INTERIM AUTHORITY OF THE SECRETARY.
[(a) In General.--The Secretary is authorized to perform the
functions of the Bureau under this subtitle until the Director
of the Bureau is confirmed by the Senate in accordance with
section 1011.
[(b) Interim Administrative Services by the Department of the
Treasury.--The Department of the Treasury may provide
administrative services necessary to support the Bureau before
the designated transfer date.]
* * * * * * *
Subtitle G--Regulatory Improvements
* * * * * * *
SEC. 1079. REVIEW, REPORT, AND PROGRAM WITH RESPECT TO EXCHANGE
FACILITATORS.
(a) Review.--The [Director] Bureau shall review all Federal
laws and regulations relating to the protection of consumers
who use exchange facilitators for transactions primarily for
personal, family, or household purposes.
(b) Report.--Not later than 1 year after the designated
transfer date, the [Director] Bureau shall submit to Congress a
report describing--
(1) recommendations for legislation to ensure the
appropriate protection of consumers who use exchange
facilitators for transactions primarily for personal,
family, or household purposes;
(2) recommendations for updating the regulations of
Federal departments and agencies to ensure the
appropriate protection of such consumers; and
(3) recommendations for regulations to ensure the
appropriate protection of such consumers.
(c) Program.--Not later than 2 years after the date of the
submission of the report under subsection (b), the Bureau
shall, consistent with subtitle B, propose regulations or
otherwise establish a program to protect consumers who use
exchange facilitators.
(d) Exchange Facilitator Defined.--In this section, the term
``exchange facilitator'' means a person that--
(1) facilitates, for a fee, an exchange of like kind
property by entering into an agreement with a taxpayer
by which the exchange facilitator acquires from the
taxpayer the contractual rights to sell the taxpayer's
relinquished property and transfers a replacement
property to the taxpayer as a qualified intermediary
(within the meaning of Treasury Regulations section
1.1031(k)-1(g)(4)) or enters into an agreement with the
taxpayer to take title to a property as an exchange
accommodation titleholder (within the meaning of
Revenue Procedure 2000-37) or enters into an agreement
with a taxpayer to act as a qualified trustee or
qualified escrow holder (within the meaning of Treasury
Regulations section 1.1031(k)-1(g)(3));
(2) maintains an office for the purpose of soliciting
business to perform the services described in paragraph
(1); or
(3) advertises any of the services described in
paragraph (1) or solicits clients in printed
publications, direct mail, television or radio
advertisements, telephone calls, facsimile
transmissions, or other electronic communications
directed to the general public for purposes of
providing any such services.
* * * * * * *
TITLE XIV--MORTGAGE REFORM AND ANTI-PREDATORY LENDING ACT
SEC. 1400. SHORT TITLE; DESIGNATION AS ENUMERATED CONSUMER LAW.
(a) Short Title.--This title may be cited as the ``Mortgage
Reform and Anti-Predatory Lending Act''.
(b) Designation as Enumerated Consumer Law Under the Purview
of the Bureau of Consumer Financial Protection.--Subtitles A,
B, C, and E and sections 1471, 1472, 1475, and 1476, and the
amendments made by such subtitles and sections, shall be
enumerated consumer laws, as defined in section 1002, and come
under the purview of the Bureau of Consumer Financial
Protection for purposes of title X, including the transfer of
functions and personnel under subtitle F of title X and the
savings provisions of such subtitle.
(c) Regulations; Effective Date.--
(1) Regulations.--The regulations required to be
prescribed under this title or the amendments made by
this title shall--
(A) be prescribed in final form before the
end of the 18-month period beginning on the
designated transfer date; and
(B) take effect not later than 12 months
after the date of issuance of the regulations
in final form.
(2) Effective date established by rule.--Except as
provided in paragraph (3), a section, or provision
thereof, of this title shall take effect on the date on
which the final regulations implementing such section,
or provision, take effect.
(3) Effective date.--A section of this title for
which regulations have not been issued on the date that
is 18 months after the designated transfer date shall
take effect on such date.
* * * * * * *
Subtitle D--Office of Housing Counseling
* * * * * * *
SEC. 1447. DEFAULT AND FORECLOSURE DATABASE.
(a) Establishment.--The Secretary of Housing and Urban
Development and the [Director of the Bureau] Chair of the
Bureau, in consultation with the Federal agencies responsible
for regulation of banking and financial institutions involved
in residential mortgage lending and servicing, shall establish
and maintain a database of information on foreclosures and
defaults on mortgage loans for one- to four-unit residential
properties and shall make such information publicly available,
subject to subsection (e).
(b) Census Tract Data.--Information in the database may be
collected, aggregated, and made available on a census tract
basis.
(c) Requirements.--Information collected and made available
through the database shall include--
(1) the number and percentage of such mortgage loans
that are delinquent by more than 30 days;
(2) the number and percentage of such mortgage loans
that are delinquent by more than 90 days;
(3) the number and percentage of such properties that
are real estate-owned;
(4) number and percentage of such mortgage loans that
are in the foreclosure process;
(5) the number and percentage of such mortgage loans
that have an outstanding principal obligation amount
that is greater than the value of the property for
which the loan was made; and
(6) such other information as the Secretary of
Housing and Urban Development and the [Director of the
Bureau] Chair of the Bureau consider appropriate.
(d) Rule of Construction.--Nothing in this section shall be
construed to encourage discriminatory or unsound allocation of
credit or lending policies or practices.
(e) Privacy and Confidentiality.--In establishing and
maintaining the database described in subsection (a), the
Secretary of Housing and Urban Development and the [Director of
the Bureau] Chair of the Bureau shall--
(1) be subject to the standards applicable to Federal
agencies for the protection of the confidentiality of
personally identifiable information and for data
security and integrity;
(2) implement the necessary measures to conform to
the standards for data integrity and security described
in paragraph (1); and
(3) collect and make available information under this
section, in accordance with paragraphs (5) and (6) of
section 1022(c) and the rules prescribed under such
paragraphs, in order to protect privacy and
confidentiality.
* * * * * * *
----------
ELECTRONIC FUND TRANSFER ACT
Sec. 901. Short title
This title may be cited as the ``Electronic Fund Transfer
Act''.
* * * * * * *
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 of Consumer Financial
Protection] Chair of the Bureau 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.
* * * * * * *
----------
EXPEDITED FUNDS AVAILABILITY ACT
SEC. 601. SHORT TITLE.
This title may be cited as the ``Expedited Funds Availability
Act''.
* * * * * * *
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] Bureau of Consumer Financial Protection,
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, Guam, 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] Bureau of Consumer Financial Protection, 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] Bureau of
Consumer Financial Protection, 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]
Bureau of Consumer Financial Protection, 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] Bureau of
Consumer Financial Protection, 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] Bureau of Consumer Financial
Protection, 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] Bureau of Consumer
Financial Protection, 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]
Bureau of Consumer Financial Protection, 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] Bureau of Consumer
Financial Protection, 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] Bureau of Consumer Financial
Protection.
(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]
Bureau of Consumer Financial Protection.
(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] Bureau of Consumer Financial
Protection, 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] Bureau of Consumer Financial
Protection, 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.--The Board, jointly
with the [Director of the Bureau] Bureau of Consumer
Financial Protection, 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] 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]
Bureau of Consumer Financial Protection, 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] Bureau of Consumer Financial
Protection, 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] Bureau of Consumer Financial Protection, 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] Bureau of Consumer Financial Protection, 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.
* * * * * * *
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FEDERAL DEPOSIT INSURANCE ACT
* * * * * * *
SEC. 2. MANAGEMENT.
(a) Board of Directors.--
(1) In general.--The management of the Corporation
shall be vested in a Board of Directors consisting of 5
members--
(A) 1 of whom shall be the Comptroller of the
Currency;
(B) 1 of whom shall be the [Director of the
Consumer Financial Protection Bureau] Chair of
the Bureau of Consumer Financial Protection;
and
(C) 3 of whom 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, 1 of whom shall
have State bank supervisory experience.
(2) Political affiliation.--After February 28, 1993,
not more than 3 of the members of the Board of
Directors may be members of the same political party.
(b) Chairperson and Vice Chairperson.--
(1) Chairperson.--1 of the appointed members shall be
designated by the President, by and with the advice and
consent of the Senate, to serve as Chairperson of the
Board of Directors for a term of 5 years.
(2) Vice chairperson.--1 of the appointed members
shall be designated by the President, by and with the
advice and consent of the Senate, to serve as Vice
Chairperson of the Board of Directors.
(3) Acting chairperson.--In the event of a vacancy in
the position of Chairperson of the Board of Directors
or during the absence or disability of the Chairperson,
the Vice Chairperson shall act as Chairperson.
(c) Terms.--
(1) Appointed members.--Each appointed member shall
be appointed for a term of 6 years.
(2) Interim appointments.--Any member appointed to
fill a vacancy occurring before the expiration of the
term for which such member's predecessor was appointed
shall be appointed only for the remainder of such term.
(3) Continuation of service.--The Chairperson, Vice
Chairperson, and each appointed member may continue to
serve after the expiration of the term of office to
which such member was appointed until a successor has
been appointed and qualified.
(d) Vacancy.--
(1) In general.--Any vacancy on the Board of
Directors shall be filled in the manner in which the
original appointment was made.
(2) Acting officials may serve.--In the event of a
vacancy in the office of the Comptroller of the
Currency or the office of [Director of the Consumer
Financial Protection Bureau] Chair of the Bureau of
Consumer Financial Protection and pending the
appointment of a successor, or during the absence or
disability of the Comptroller of the Currency or the
[Director of the Consumer Financial Protection Bureau]
Chair of the Bureau of Consumer Financial Protection,
the acting Comptroller of the Currency or the acting
[Director of the Consumer Financial Protection Bureau]
Chair of the Bureau of Consumer Financial Protection,
as the case may be, shall be a member of the Board of
Directors in the place of the Comptroller or Director.
(e) Ineligibility for Other Offices.--
(1) Postservice restriction.--
(A) In general.--No member of the Board of
Directors may hold any office, position, or
employment in any insured depository
institution or any depository institution
holding company during--
(i) the time such member is in
office; and
(ii) the 2-year period beginning on
the date such member ceases to serve on
the Board of Directors.
(B) Exception for members who serve full
term.--The limitation contained in subparagraph
(A)(ii) shall not apply to any member who has
ceased to serve on the Board of Directors after
serving the full term for which such member was
appointed.
(2) Restriction during service.--No member of the
Board of Directors may--
(A) be an officer or director of any insured
depository institution, depository institution
holding company, Federal Reserve bank, or
Federal home loan bank; or
(B) hold stock in any insured depository
institution or depository institution holding
company.
(3) Certification.--Upon taking office, each member
of the Board of Directors shall certify under oath that
such member has complied with this subsection and such
certification shall be filed with the secretary of the
Board of Directors.
(f) Status of Employees.--
(1) In general.--A director, member, officer, or
employee of the Corporation has no liability under the
Securities Act of 1933 with respect to any claim
arising out of or resulting from any act or omission by
such person within the scope of such person's
employment in connection with any transaction involving
the disposition of assets (or any interests in any
assets or any obligations backed by any assets) by the
Corporation. This subsection shall not be construed to
limit personal liability for criminal acts or
omissions, willful or malicious misconduct, acts or
omissions for private gain, or any other acts or
omissions outside the scope of such person's
employment.
(2) Definition.--For purposes of this subsection, the
term ``employee of the Corporation'' includes any
employee of the Office of the Comptroller of the
Currency or of the Consumer Financial Protection Bureau
who serves as a deputy or assistant to a member of the
Board of Directors of the Corporation in connection
with activities of the Corporation.
(3) Effect on other law.--This subsection does not
affect--
(A) any other immunities and protections that
may be available to such person under
applicable law with respect to such
transactions, or
(B) any other right or remedy against the
Corporation, against the United States under
applicable law, or against any person other
than a person described in paragraph (1)
participating in such transactions.
This subsection shall not be construed to limit or
alter in any way the immunities that are available
under applicable law for Federal officials and
employees not described in this subsection.
* * * * * * *
----------
FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL ACT OF 1978
* * * * * * *
TITLE X--FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL
* * * * * * *
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] Chair of the Bureau of Consumer
Financial Protection,
(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.
* * * * * * *
----------
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] Chair of the Bureau 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] Chair of the Bureau 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.
* * * * * * *
----------
HOME MORTGAGE DISCLOSURE ACT OF 1975
TITLE III--HOME MORTGAGE DISCLOSURE
* * * * * * *
SEC. 307. COMPLIANCE IMPROVEMENT METHODS.
(a) In General.--
(1) Consultation required.--The [Director of the
Bureau of Consumer Financial Protection] Bureau of
Consumer Financial Protection, with the assistance of
the Secretary, the Director of the Bureau of the
Census, the Board of Governors of the Federal Reserve
System, the Federal Deposit Insurance Corporation, and
such other persons as the Bureau 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] Bureau of
Consumer Financial Protection 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] Bureau of Consumer Financial
Protection 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] Bureau of Consumer Financial
Protection deems appropriate to carry out the purpose of this
title.
* * * * * * *
----------
INTERSTATE LAND SALES FULL DISCLOSURE ACT
* * * * * * *
TITLE XIV--INTERSTATE LAND SALES
short title
Sec. 1401. This title may be cited as the ``Interstate Land
Sales Full Disclosure Act.''
definitions
Sec. 1402. For the purposes of this title, the term--
[(1) ``Director'' means the Director of the Bureau of
Consumer Financial Protection;]
[(2)] (1) ``person'' means an individual, or an
unincorporated organization, partnership, association,
corporation, trust, or estate;
[(3)] (2) ``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)] (3) ``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)] (4) ``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)] (5) ``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)] (6) ``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)] (7) ``interstate commerce'' means trade or
commerce among the several states or between any
foreign country and any state;
[(9)] (8) ``State'' includes the several States, the
District of Columbia, the Commonwealth of Puerto Rico,
and the territories and possessions of the United
States;
[(10)] (9) ``purchaser'' means an actual or
prospective purchaser or lessee of any lot in a
subdivision;
[(11)] (10) ``offer'' includes any inducement,
solicitation, or attempt to encourage a person to
acquire a lot in a subdivision; and
[(12)] (11) ``Bureau'' means the Bureau of Consumer
Financial Protection.
exemptions
Sec. 1403. (a) Unless the method of disposition is adopted
for the purpose of evasion of this title, the provisions of
this title shall not apply to--
(1) the sale or lease of lots in a subdivision
containing less than twenty-five lots;
(2) the sale or lease of any improved land on which
there is a residential, commercial, condominium, or
industrial building, or the sale or lease of land under
a contract obligating the seller or lessor to erect
such a building thereon within a period of two years;
(3) the sale of evidences of indebtedness secured by
a mortgage or deed of trust on real estate;
(4) the sale of securities issued by a real estate
investment trust;
(5) the sale or lease of real estate by any
government or government agency;
(6) the sale or lease of cemetery lots;
(7) the sale or lease of lots to any person who
acquires such lots for the purpose of engaging in the
business of constructing residential, commercial, or
industrial buildings or for the purpose of resale or
lease of such lots to persons engaged in such business;
or
(8) the sale or lease of real estate which is zoned
by the appropriate governmental authority for
industrial or commercial development or which is
restricted to such use by a declaration of covenants,
conditions, and restrictions which has been recorded in
the official records of the city or county in which
such real estate is located, when--
(A) local authorities have approved access
from such real estate to a public street or
highway;
(B) the purchaser or lessee of such real
estate is a duly organized corporation,
partnership, trust, or business entity engaged
in commercial or industrial business;
(C) the purchaser or lessee of such real
estate is represented in the transaction of
sale or lease by a representative of its own
selection;
(D) the purchaser or lessee of such real
estate affirms in writing to the seller or
lessor that it either (i) is purchasing or
leasing such real estate substantially for its
own use, or (ii) has a binding commitment to
sell, lease, or sublease such real estate to an
entity which meets the requirements of
subparagraph (B), is engaged in commercial or
industrial business, and is not affiliated with
the seller, lessor, or agent thereof; and
(E) a policy of title insurance or a title
opinion is issued in connection with the
transaction showing that title to the real
estate purchased or leased is vested in the
seller or lessor, subject only to such
exceptions as may be approved in writing by
such purchaser or the lessee prior to
recordation of the instrument of conveyance or
execution of the lease, but (i) nothing herein
shall be construed as requiring the recordation
of a lease, and (ii) any purchaser or lessee
may waive, in writing in a separate document,
the requirement of this subparagraph that a
policy of title insurance or title opinion be
issued in connection with the transaction.
(b) Unless the method of disposition is adopted for the
purpose of evasion of this title, the provisions requiring
registration and disclosure (as specified in section 1404(a)(1)
and sections 1405 through 1408) shall not apply to--
(1) the sale or lease of lots in a subdivision
containing fewer than one hundred lots which are not
exempt under subsection (a);
(2) the sale or lease of lots in a subdivision if,
within the twelve-month period commencing on the date
of the first sale or lease of a lot in such subdivision
after the effective date of this subsection or on such
other date within that twelve-month period as the
[Director] Bureau may prescribe, not more than twelve
lots are sold or leased, and the sale or lease of the
first twelve lots in such subdivision in any subsequent
twelve-month period, if not more than twelve lots have
been sold or leased in any preceding twelve-month
period after the effective date of this subsection;
(3) the sale or lease of lots in a subdivision if
each noncontiguous part of such subdivision contains
not more than twenty lots, and if the purchaser or
lessee (or spouse thereof) has made a personal, on-the-
lot inspection of the lot purchased or leased, prior to
signing of the contract or agreement to purchase or
lease;
(4) the sale or lease of lots in a subdivision in
which each of the lots is at least twenty acres
(inclusive of easements for ingress and egress or
public utilities);
(5) the sale or lease of a lot which is located
within a municipality or county where a unit of local
government specifies minimum standards for the
development of subdivision lots taking place within its
boundaries, when--
(A)(i) the subdivision meets all local codes
and standards, and (ii) each lot is either
zoned for single family residences or, in the
absence of a zoning ordinance, is limited
exclusively to single family residences;
(B)(i) the lot is situated on a paved street
or highway which has been built to standards
applicable to streets and highways maintained
by the unit of local government in which the
subdivision is located and is acceptable to
such unit, or, where such street or highway is
not complete, a bond or other surety acceptable
to the municipality or county in the full
amount of the cost of completing such street or
highway has been posted to assure completion to
such standards, and (ii) the unit of local
government or a homeowners association has
accepted or is obligated to accept the
responsibility of maintaining such street or
highway, except that, in any case in which a
homeowners association has accepted or is
obligated to accept such responsibility, a good
faith written estimate of the cost of carrying
out such responsibility over the first ten
years of ownership or lease is provided to the
purchaser or lessee prior to the signing of the
contract or agreement to purchase or lease;
(C) at the time of closing, potable water,
sanitary sewage disposal, and electricity have
been extended to the lot or the unit of local
government is obligated to install such
facilities within one hundred and eighty days,
and, for subdivisions which do not have a
central water or sewage disposal system, rather
than installation of water or sewer facilities,
there must be assurances that an adequate
potable water supply is available year-round
and that the lot is approved for the
installation of a septic tank;
(D) the contract of sale requires delivery of
a warranty deed (or, where such deed is not
commonly used in the jurisdiction where the lot
is located, a deed or grant which warrants that
the grantor has not conveyed the lot to another
person and that the lot is free from
encumbrances made by the grantor or any other
person claiming by, through, or under him) to
the purchaser within one hundred and eighty
days after the signing of the sales contract;
(E) at the time of closing, a title insurance
binder or a title opinion reflecting the
condition of the title shall be in existence
and issued or presented to the purchaser or
lessee showing that, subject only to such
exceptions as may be approved in writing by the
purchaser or lessee at the time of closing,
marketable title to the lot is vested in the
seller or lessor;
(F) the purchaser or lessee (or spouse
thereof) has made a personal, on-the-lot
inspection of the lot purchased or leased,
prior to signing of the contract or agreement
to purchase or lease; and
(G) there are no offers, by direct mail or
telephone solicitation, of gifts, trips,
dinners, or other such promotional techniques
to induce prospective purchasers or lessees to
visit the subdivision or to purchase or lease a
lot;
(6) the sale or lease of a lot, if a mobile home is
to be erected or placed thereon as a residence, where
the lot is sold as a homesite by one party and the home
by another, under contracts that obligate such sellers
to perform, contingent upon the other seller carrying
out its obligations so that a completed mobile home
will be erected or placed on the completed homesite
within a period of two years, and provide for all funds
received by the sellers to be deposited in escrow
accounts (controlled by parties independent of the
sellers) until the transactions are completed, and
further provide that such funds shall be released to
the buyer on demand without prejudice if the land with
the mobile home erected or placed thereon is not
conveyed within such two-year period. Such homesite
must conform to all local codes and standards for
mobile home subdivisions, if any, must provide potable
water, sanitary sewage disposal, electricity, access by
roads, the purchaser must receive marketable title to
the lot, and where common facilities are to be
provided, they must be completed or fully funded;
(7)(A) the sale or lease of real estate by a
developer who is engaged in a sales operation which is
intrastate in nature. For purposes of this exemption, a
lot may be sold only if--
(i) the lot is free and clear of all liens,
encumberances, and adverse claims;
(ii) the purchaser or lessee (or spouse
thereof) has made a personal on-the-lot
inspection of the lot to be purchased or
leased;
(iii) each purchase or lease agreement
contains--
(I) a clear and specific statement
describing a good faith estimate of the
year of completion of, and the party
responsible for, providing and
maintaining the roads, water
facilities, sewer facilities and any
existing or promised amenities; and
(II) a nonwaivable provision
specifying that the contract or
agreement may be revoked at the option
of the purchaser or lessee until
midnight of the seventh day following
the signing of such contract or
agreement or until such later time as
may be required pursuant to applicable
State laws; and
(iv) the purchaser or lessee has, prior to
the time the contract or lease is entered into,
acknowledged in writing the receipt of a
written statement by the developer containing
good faith estimates of the cost of providing
electric, water, sewage, gas, and telephone
service to such a lot.
(B) As used in subparagraph (A)(i) of this paragraph,
the terms ``liens'', ``encumbrances'', and ``adverse
claims'' do not include United States land patents and
similar Federal grants or reservations, property
reservations which land developers commonly convey or
dedicate to local bodies or public utilities for the
purpose of bringing public services to the land being
developed, taxes and assessments imposed by a State, by
any other public body having authority to assess and
tax property, or by a property owners' association,
which, under applicable State or local law, constitute
liens on the property before they are due and payable
or beneficial property restrictions which would be
enforceable by other lot owners or lessees in the
subdivision, if--
(i) the developer, prior to the time the
contract of sale or lease is entered into, has
furnished each purchaser or lessee with a
statement setting forth in descriptive and
concise terms all such liens, reservations,
taxes, assessments and restrictions which are
applicable to the lot to be purchased or
leased; and
(ii) receipt of such statement has been
acknowledged in writing by the purchaser or
lessee.
(C) For the purpose of this paragraph, a sales
operation is ``intrastate in nature'' if the developer
is subject to the laws of the State in which the land
is located, and each lot in the subdivision, other than
those which are exempt under section 1403(a), (b)(6),
or (b)(8), is sold or leased to residents of the State
in which the land is located;
(8) the sale or lease of a lot in a subdivision
containing fewer than three hundred lots if--
(A) the principal residence of the purchaser
or lessee is within the same standard
metropolitan statistical area, as defined by
the Office of Management and Budget, as the lot
purchased or leased;
(B) the lot is free and clear of liens (such
as mortgages, deeds of trust, tax liens,
mechanics liens, or judgments) at the time of
the signing of the contract or agreement and
until a deed is delivered to the purchaser or
the lease expires. As used in this
subparagraph, the term ``liens'' does not
include (i) United States land patents and
similar Federal grants or reservations, (ii)
property reservations which lands developers
commonly convey or dedicate to local bodies or
public utilities for the purpose of bringing
public services to the land being developed,
(iii) taxes and assessments imposed by a State,
by any other public body having authority to
assess and tax property, or by a property
owners' association, which, under applicable
State or local law, constitute liens on the
property before they are due and payable or
beneficial property restrictions which would be
enforceable by other lot owners or lessees in
the subdivision, or (iv) other interests
described in regulations prescribed by the
[Director] Bureau;
(C) the purchaser or lessee (or spouse
thereof) has made a personal on-the-lot
inspection of the lot to be purchased or
leased;
(D) each purchase or lease agreement contains
(i) a clear and specific statement describing a
good faith estimate of the year of completion
of and the party responsible for providing and
maintaining the roads, water facilities sewer
facilities and any existing or promised
amenities; and (ii) a non waivable provision
specifying that the contract or agreement may
be revoked at the option of the purchaser or
lessee until midnight of the seventh day
following the signing of such contract or
agreement or until such later time as may be
required pursuant to applicable State laws;
(E) the purchaser or lessee has, prior to the
time the contract or lease is entered into,
acknowledged in writing receipt of a written
statement by the developer setting forth (i) in
descriptive and concise terms all liens,
reservations, taxes, assessments, beneficial
property restrictions which would be
enforceable by other lot owners or lessees in
the subdivision, and adverse claims which are
applicable to the lot to be purchased or
leased, and (ii) good faith estimates of the
cost of providing electric, water, sewer, gas,
and telephone service to such lot;
(F) the developer executes and supplies to
the purchaser a written instrument designating
a person within the State of residence of the
purchaser as his agent for service of process
and acknowledging that the developer submits to
the legal jurisdiction of the State in which
the purchaser or lessee resides; and
(G) the developer executes a written
affirmation to the effect that he has complied
with the provisions of this paragraph, such
affirmation to be given on a form provided by
the [Director] Bureau, which shall include the
following: the name and address of the
developer; the name and address of the
purchaser or lessee; a legal description of the
lot; and affirmation that the provisions of
this paragraph have been complied with; a
statement that the developer submits to the
jurisdiction of this title with regard to the
sale of lease; and the signature of the
developer; or
(9) the sale or lease of a condominium unit that is
not exempt under subsection (a).
(c) The [Director] Bureau may from time to time, pursuant to
rules and regulations issued by [him] the Bureau, exempt from
any of the provisions of this title any subdivision or any lots
in a subdivision, if [he] the Bureau finds that the enforcement
of this title with respect to such subdivision or lots is not
necessary in the public interest and for the protection of
purchasers by reason of the small amount involved or the
limited character of the public offering.
(d) For purposes of subsection (b), the term ``condominium
unit'' means a unit of residential or commercial property to be
designated for separate ownership pursuant to a condominium
plan or declaration provided that upon conveyance--
(1) the owner of such unit will have sole ownership
of the unit and an undivided interest in the common
elements appurtenant to the unit; and
(2) the unit will be an improved lot.
* * * * * * *
registration of subdivisions
Sec. 1405. (a) A subdivision may be registered by filing with
the [Director] Bureau a statement of record, meeting the
requirements of this title and such rules and regulations as
may be prescribed by the [Director] Bureau in furtherance of
the provisions of this title. A statement of record shall be
deemed effective only as to the lots specified therein.
(b) At the time of filing a statement of record, or any
amendment thereto, the developer shall pay to the [Director]
Bureau a fee, not in excess of $1,000, in accordance with a
schedule to be fixed by the regulations of the [Director]
Bureau, which fees may be used by the [Director] Bureau to
cover all or part of the cost of rendering services under this
title, and such expenses as are paid from such fees shall be
considered non-administrative.
(c) The filing with the [Director] Bureau of a statement of
record, or of an amendment thereto, shall be deemed to have
taken place upon the receipt thereof, accompanied by payment of
the fee required by subsection (b).
(d) The information contained in or filed with any statement
of record shall be made available to the public under such
regulations as the [Director] Bureau may prescribe and copies
thereof shall be furnished to every applicant at such
reasonable charge as the [Director] Bureau may prescribe.
information required in statement of record
Sec. 1406. The statement of record shall contain the
information and be accompanied by the documents specified
hereinafter in this section--
(1) the name and address of each person having an
interest in the lots in the subdivision to be covered
by the statement of record and the extent of such
interest;
(2) a legal description of, and a statement of the
total area included in, the subdivision and a statement
of the topography thereof, together with a map showing
the division proposed and the dimensions of the lots to
be covered by the statement of record and their
relation to existing streets and roads;
(3) a statement of the condition of the title to the
land comprising the subdivision, including all
encumbrances and deed restrictions and convenants
applicable thereto;
(4) a statement of the general terms and conditions,
including the range of selling prices or rents at which
it is proposed to dispose of the lots in the
subdivision;
(5) a statement of the present condition of access to
the subdivision, the existence of any unusual
conditions relating to noise or safety which affect the
subdivision and are known to the developer, the
availability of sewage disposal facilities and other
public utilities (including water, electricity, gas and
telephone facilities) in the subdivision, the proximity
in miles to the subdivision to nearby municipalities,
and the nature of any improvements to be installed by
the developer and his estimated schedule for
completion;
(6) in the case of any subdivision or portion thereof
against which there exists a blanket encumbrance, a
statement of the consequences for an individual
purchaser of a failure, by the person or persons bound,
to fulfill obligations under the instrument or
instruments creating such encumbrance and the steps, if
any, taken to protect the purchaser in such
eventuality;
(7)(A) copy of its articles of incorporation, with
all amendments thereto, if the developer is a
corporation; (B) copies of all instruments by which the
trust is created or declared, if the developer is a
trust; (C) copies of its articles of partnership or
association and all other papers pertaining to its
organization, if the developer is a partnership,
unincorporated association, joint stock company, or any
other form of organization; and (D) if the purported
holder of legal title is a person other than developer,
copies of the above documents for such person;
(8) copies of the deed or other instrument
establishing title to the subdivision in the developer
or other person and copies of any instrument creating a
lien or encumbrance upon the title of developer or
other person or copies of the opinion or opinions of
counsel in respect to the title to the subdivision in
the developer or other person or copies of the title
insurance policy guaranteeing such title;
(9) copies of all forms of conveyance to be used in
selling or leasing lots to purchasers;
(10) copies of instruments creating easements or
other restrictions;
(11) such certified and uncertified financial
statements of the developer as the [Director] Bureau
may require; and
(12) such other information and such other documents
and certifications as the [Director] Bureau may require
as being reasonably necessary or appropriate for the
protection of purchasers.
taking effect of statements of record and amendments thereto
Sec. 1407. (a) Except as hereinafter provided, the effective
date of a statement of record, or any amendment thereto, shall
be the thirtieth day after the filing thereof or such earlier
date as the [Director] Bureau may determine, having due regard
to the public interest and the protection of purchaser. If any
amendment to any such statement is filed prior to the effective
date of the statement, the statement shall be deemed to have
been filed when such amendment was filed; except that such an
amendment filed with the consent of the Secertary, or filed
pursuant to an order of the [Director] Bureau, shall be treated
as being filed as of the date of the filing of the statement of
record. When a developer records additional lands to be offered
for disposition, he may consolidate the subsequent statement of
record with any earlier recording offering subdivided land for
disposition under the same promotional plan. At the time of
consolidation the developer shall include in the consolidated
statement of record any material changes in the information
contained in the earlier statement.
(b) If it appears to the [Director] Bureau that a statement
of record, or any amendment thereto, is on its face incomplete
or inaccurate in any material respect, the [Director] Bureau
shall so advise the developer within a reasonable time after
the filing of the statement or the amendment, but prior to the
date the statement or amendment would otherwise be effective.
Such notification shall serve to suspend the effective date of
the statement or the amendment until thirty days after the
developer files such additional information as the [Director]
Bureau shall require. Any developer, upon receipt of such
notice, may request a hearing, and such hearing shall be held
within twenty days of receipt of such request by the [Director]
Bureau.
(c) If, at any time subsequent to the effective date of a
statement or record, a change shall occur affecting any
material fact required to be contained in the statement, the
developer shall promptly file an amendment thereto. Upon
receipt of any such amendment, the [Director] Bureau may, if
[he] the Bureau determines such action to be necessary or
appropriate in the public interest or for the protection of
purchasers, suspend the statement of record until the amendment
becomes effective.
(d) If it appears to the [Director] Bureau at any time that a
statement of record, which is in effect, includes any untrue
statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading, the [Director] Bureau may,
after notice, and after opportunity for hearing (at a time
fixed by the [Director] Bureau) within fifteen days after such
notice, issue an order suspending the statement of record. When
such statement has been amended in accordance with such order,
the [Director] Bureau shall so declare and thereupon the order
shall cease to be effective.
(e) The [Director] Bureau is hereby empowered to make an
examination in any case to determine whether an order should
issue under subsection (d). In making such examination, the
[Director or anyone designated by him] Bureau shall have access
to and may demand the production of any books and papers of,
and many administer oaths and affirmations to and examine, the
developer, any agents, or any other person, in respect of any
matter relevant to the examination. If the developer or any
agents shall fail to cooperate, or shall obstruct or refuse to
permit the making of an examination, such conduct shall be
proper ground for the issuance of an order suspending the
statement of record.
(f) Any notice required under this section shall be sent to
or served on the developer or his authorized agent.
information required in property report
Sec. 1408. (a) A property report relating to the lots in a
subdivision shall contain such of the information contained in
the statement of record, and any amendments thereto, as the
[Director] Bureau may deem necessary, but need not include the
documents referred to in paragraphs (7) to (11), inclusive, of
section 1406. A property report shall also contain such other
information as the [Director] Bureau may by rules or
regulations require as being necessary or appropriate in the
public interest or for the protection of purchasers.
(b) The property report shall not be used for any promotional
purposes before the statement of record becomes effective and
then only if it is used in its entirety. No person may
advertise or represent that the [Director] Bureau approves or
recommends the subdivision or the sale or lease of lots
therein. No portion of the property report shall be
underscored, italicized, or printed in larger, or bolder type
than the balance of the statement unless the [Director] Bureau
requires or permits it.
certification of substantially equivalent state law
Sec. 1409. (a)(1) A State shall be certified if the
[Director] Bureau determines--
(A) that, when taken as a whole, the laws and
regulations of the State applicable to the sale or
lease of lots not exempt under section 1403 require the
seller or lessor of such lots to disclose information
which is at least substantially equivalent to the
information required to be disclosed by section 1408;
and
(B) that the State's administration of such laws and
regulations provides, to the maximum extent
practicable, that such information is accurate.
(2) In the case of any State which is not certified under
paragraph (1), such State shall be certified if the [Director]
Bureau determines--
(A) that when taken as a whole, the laws and
regulations of the State applicable to the sale or
lease of lots not exempt under section 1403 provide
sufficient protection for purchasers and lessees with
respect to the matters for which information is
required to be disclosed by section 1408 but which is
not required to be disclosed by such State's laws and
regulations; and
(B) that the State's administration of such laws and
regulations provides, to the maximum extent
practicable, that (i) information required to be
disclosed by such laws and regulations is accurate, and
(ii) sufficient protection for purchasers and lessees
is made available with respect to the matters for which
information is not required to be disclosed.
(3) Any State requesting certification must agree to accept a
property report covering land located in another certified
State but offered for sale or lease in the State requesting
certification if the property report has been approved by the
other certified State. Such property report shall be the only
property report required by the State with respect to the sale
or lease of such land.
(b) After the [Director] Bureau has certified a State under
subsection (a), the [Director] Bureau shall accept for filing
under sections 1405 through 1408 (and declare effective as the
Federal statement of record and property report which shall be
used in all States in which the lots are offered for sale or
lease) disclosure materials found acceptable, and any related
documentation required, by State authorities in connection with
the sale or lease of lots located within the State. The
[Director] Bureau may accept for such filing, and declare
effective as the Federal statement of record and property
report, such materials and documentation found acceptable by
the State in connection with the sale or lease of lots located
outside that State. Nothing in this subsection shall preclude
the [Director] Bureau from exercising the authority conferred
by subsections (d) and (e) of section 1407.
(c) If a State fails to meet the standards for certification
pursuant to subsection (a), the [Director] Bureau shall notify
the State in writing of the changes in State law, regulation,
or administration that are needed in order to obtain
certification.
(d) The [Director] Bureau shall periodically review the laws
and regulations, and the administration thereof, of States
certified under subsection (a), and may withdraw such
certification upon a determination that such laws, regulations,
and the administration thereof, taken as a whole, no longer
meet the requirements of subsection (a).
(e) Nothing in this title may be construed to prevent or
limit the authority of any State or local government to enact
and enforce with regard to the sale of land any law, ordinance,
or code not in conflict with this title. In administering this
title, the [Director] Bureau shall cooperate with State
authorities charged with the responsibility of regulating the
sale or lease of lots which are subject to this title.
* * * * * * *
court review of orders
Sec. 1411. (a) Any person, aggrieved by an order or
determination of the [Director] Bureau 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]
Bureau 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] Bureau, and thereupon the
[Director] Bureau 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] Bureau
shall be considered by the court unless such objection shall
have been urged before the [Director] Bureau. The finding of
the [Director] Bureau 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] Bureau, the court may order such
additional evidence to be taken before the [Director] Bureau
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] Bureau may modify [his findings] the findings of the
Bureau 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] the recommendation of the Bureau, 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] Bureau, 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 order.
* * * * * * *
contrary stipulation void
Sec. 1413. Any condition, stipulation, or provision binding
any person acquiring any lot in a subdivision to waive
compliance with any provision of this title of the rules and
regulations of the [Director] Bureau shall be void.
* * * * * * *
investigations, injunctions, and prosecution of offenses
Sec. 1415. (a) Whenever it shall appear to the [Director]
Bureau that any person is engaged or about to engage in any
acts or practices which constitute or will constitute a
violation of the provisions of this title, or of any rule or
regulation prescribed pursuant thereto, [he may, in his
discretion,] the Bureau may, in the discretion of the Bureau,
bring an action in any district court of the United States, or
the United States District Court for the District of Columbia
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 [Director] Bureau may transmit such
evidence as may be available concerning such acts or practices
to the Attorney General who may, in his discretion, institute
the appropriate criminal proceedings under this title.
(b) The [Director] Bureau may, [in his discretion] in the
discretion of the Bureau, make such investigations as [he
deems] the Bureau determines necessary to determine whether any
person has violated or is about to violate any provision of
this title or any rule or regulation prescribed pursuant
thereto, and may require or permit any person to file with him
a statement in writing, under oath or otherwise as the
[Director] Bureau shall determine, as to all the facts and
circumstances concerning the matter to be investigated. The
[Director] Bureau is authorized, [in his discretion] in the
discretion of the Bureau, to publish information concerning any
such violations, and to investigate any facts, conditions,
practices, or matters which [he may deem] the Bureau may
determine necessary or proper to aid in the enforcement of the
provisions of this title, in the prescribing of rules and
regulations thereunder or in securing information to service as
a basis for recommending further legislation concerning the
matters to which this title relates.
(c) For the purpose of any such investigation, or any other
proceeding under this title, [the Director, or any officer
designated by him,] the Bureau is empowered to administer oaths
and affirmations, subpena witnesses, compel their attendance,
take evidence, and require the production of any books, papers,
correspondence, memorandums, or other records which the
[Director] Bureau 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.
(d) In case of contumacy by, or refusal to obey a subpena
issued to, any person, the [Director] Bureau 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, memorandums, and other records
and documents. And such court may issue an order requiring such
person to appear before the [Director] Bureau or any officer
designated by the [Director] Bureau, 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.
administration
Sec. 1416. (a) The authority and responsibility for
administering this title shall be in the [Director of the
Bureau of Consumer Financial Protection who may delegate any of
his] Bureau of Consumer Financial Protection, which may
delegate any functions, duties, and powers to employees of the
Bureau 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 in compliance with sections 3105,
3344, 5372, and 7521 of title 5 of the United States Code. The
[Director] Bureau shall by rule prescribed such rights of
appeal from the decisions of [his administrative]
administrative law judges to other administrative law judges or
to other officers in the Bureau, to boards of officers or to
[himself] the commission of the Bureau, 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] Bureau 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.
unlawful representations
Sec. 1417. The fact that a statement of record with respect
to a subdivision has been filed or is in effect shall not be
deemed a finding by the [Director] Bureau that the statement of
record is true and accurate on its face, or be held to mean the
[Director] Bureau has in any way passed upon the merits of, or
given approval to, such subdivision. It shall be unlawful to
make, or cause to be made, to any prospective purchaser any
representation contrary to the foregoing.
* * * * * * *
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] Bureau 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] Bureau imposes other
administrative sanctions.
(2) Amount of penalty.--The amount of the penalty, as
determined by the [Director] Bureau, 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] Bureau, each
day shall constitute a separate violation.
(b) Agency Procedures.--
(1) Establishment.--The [Director] Bureau 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]
Bureau 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] Bureau reviews the determination or order,
the [Director] Bureau may affirm, modify, or reverse
that determination or order. If the [Director] Bureau
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]
Bureau may determine in regulations to be appropriate.
(4) Reviewability of imposition of penalty.--The
[Secretary's determination] determination of the Bureau
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] Bureau under
subsection (b)(1), a person aggrieved by a final order
of the [Director] Bureau 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] Bureau.
(d) Action to Collect Penalty.--If any person fails to comply
with the determination or order of the [Director] Bureau
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] Bureau 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 determination or order
imposing the penalty shall not be subject to review.
(e) Settlement by Director.--The [Director] Bureau 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] Bureau shall issue such
regulations as the [Director] Bureau 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] Bureau and, upon approval in an appropriation Act,
may be used by the [Director] Bureau to cover all or part of
the cost of rendering services under this title.
Sec. 1419. The [Director] Bureau 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 him
elsewhere in this title. For the purpose of his rules and
regulations, the [Director] Bureau may classify persons and
matters within his jurisdiction and prescribe different
requirements for different classes of persons or matters.
jurisdiction of offenses and suits
Sec. 1420. The district courts of the United States, the
United States courts of any territory, and the United States
District Court for the District of Columbia shall have
jurisdiction of offenses and violations under this title and
under the this title and under the rules and regulations
prescribed by the [Director] Bureau pursuant thereto, and
concurrent with State courts, of all suits in equity and
actions at law brought to enforce any liability or duty created
by this title. Any such suit or action may be brought to
enforce any liability or duty created by this title. Any such
suit or action may be brought in the district where the
defendant is found or is an inhabitant or transacts business,
or in the district where the offer or sale took place, if the
defendant participated therein, and process in such cases may
be served in any other district of which the defendant is an
inhabitant or wherever the defendant may be found. Judgments
and decrees so rendered shall be subject to review as provided
in sections 1254 and 1291 of title 28, United State Code. No
case arising under this title and brought in any State court of
competent jurisdiction shall be removed to any court of the
United States, except where the United States or any officer or
employee of the United States in his official capacity is a
party. No costs shall be assessed for or against the [Director]
Bureau in any proceeding under this title brought by or against
him in the Supreme Court or such other courts.
* * * * * * *
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REAL ESTATE SETTLEMENT PROCEDURES ACT OF 1974
* * * * * * *
home buying information booklets
Sec. 5. (a) Preparation and Distribution.--[The Director of
the Bureau of Consumer Financial Protection (hereafter in this
section referred to as the ``Director'')] The Bureau of
Consumer Financial Protection (hereafter in this section
referred to as the ``Bureau'') 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] Bureau
shall prepare the booklet in various languages and cultural
styles, as the [Director] Bureau determines to be appropriate,
so that the booklet is understandable and accessible to
homebuyers of different ethnic and cultural backgrounds. The
[Director] Bureau shall distribute such booklets to all lenders
that make federally related mortgage loans. The [Director]
Bureau 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] Bureau shall prescribe and, in addition to
such other information as the [Director] Bureau 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] Bureau, or to any suitable
substitute of such booklet that the [Director] Bureau
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 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.
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 as meeting
the requirements of subsection (b) of this section.
* * * * * * *
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S.A.F.E. MORTGAGE LICENSING ACT OF 2008
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.
(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] Bureau of Consumer
Financial Protection 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 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] Bureau of Consumer Financial
Protection 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 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. 1508. BUREAU OF CONSUMER FINANCIAL PROTECTION 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] Bureau of Consumer Financial Protection 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] Bureau
of Consumer Financial Protection shall provide for the
establishment and maintenance of a system for the licensing and
registration by the [Director] Bureau of Consumer Financial
Protection of loan originators operating in such State as
State-licensed loan originators.
(b) Licensing and Registration Requirements.--The system
established by the [Director] Bureau of Consumer Financial
Protection 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] Bureau of Consumer
Financial Protection 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] Bureau of Consumer Financial
Protection 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] Bureau of Consumer Financial
Protection 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] Bureau of
Consumer Financial Protection 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] Bureau of Consumer Financial Protection
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 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 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. 1509. BACKUP AUTHORITY TO ESTABLISH A NATIONWIDE MORTGAGE
LICENSING AND REGISTRY SYSTEM.
If at any time the [Director] Bureau of Consumer Financial
Protection determines that the Nationwide Mortgage Licensing
System and Registry is failing to meet the requirements and
purposes of this title for a comprehensive licensing,
supervisory, and tracking system for loan originators, the
[Director] Bureau of Consumer Financial Protection shall
establish and maintain such a system to carry out the purposes
of this title and the effective registration and regulation of
loan originators.
* * * * * * *
SEC. 1512. CONFIDENTIALITY OF INFORMATION.
(a) System Confidentiality.--Except as otherwise provided in
this section, any requirement under Federal or State law
regarding the privacy or confidentiality of any information or
material provided to the Nationwide Mortgage Licensing System
and Registry or a system established by the [Director] Bureau
of Consumer Financial Protection under section 1509, and any
privilege arising under Federal or State law (including the
rules of any Federal or State court) with respect to such
information or material, shall continue to apply to such
information or material after the information or material has
been disclosed to the system. Such information and material may
be shared with all State and Federal regulatory officials with
mortgage or financial services industry oversight authority
without the loss of privilege or the loss of confidentiality
protections provided by Federal and State laws.
(b) Nonapplicability of Certain Requirements.--Information or
material that is subject to a privilege or confidentiality
under subsection (a) shall not be subject to--
(1) disclosure under any Federal or State law
governing the disclosure to the public of information
held by an officer or an agency of the Federal
Government or the respective State; or
(2) subpoena or discovery, or admission into
evidence, in any private civil action or administrative
process, unless with respect to any privilege held by
the Nationwide Mortgage Licensing System and Registry
or the [Director] Bureau of Consumer Financial
Protection with respect to such information or
material, the person to whom such information or
material pertains waives, in whole or in part, in the
discretion of such person, that privilege.
(c) Coordination With Other Law.--Any State law, including
any State open record law, relating to the disclosure of
confidential supervisory information or any information or
material described in subsection (a) that is inconsistent with
subsection (a) shall be superseded by the requirements of such
provision to the extent State law provides less confidentiality
or a weaker privilege.
(d) Public Access to Information.--This section shall not
apply with respect to the information or material relating to
the employment history of, and publicly adjudicated
disciplinary and enforcement actions against, loan originators
that is included in Nationwide Mortgage Licensing System and
Registry for access by the public.
SEC. 1513. LIABILITY PROVISIONS.
The Bureau, 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] Bureau of Consumer Financial Protection 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--
(1) have applied, are applying, or are licensed or
registered through the Nationwide Mortgage Licensing
System and Registry; and
(2) work in an industry with respect to which persons
were licensed or registered through the Nationwide
Mortgage Licensing System and Registry on the date of
enactment of the Economic Growth, Regulatory Relief,
and Consumer Protection Act.
SEC. 1514. ENFORCEMENT BY THE BUREAU.
(a) Summons Authority.--The [Director] Bureau of Consumer
Financial Protection 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] Bureau of Consumer Financial Protection
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] Bureau
of Consumer Financial Protection or any delegate of the
[Director] Bureau of Consumer Financial Protection 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] Bureau of Consumer
Financial Protection establishes a licensing system
under section 1508 for any State, the [Director] Bureau
of Consumer Financial Protection 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] Bureau of Consumer Financial Protection, to
make any examination of any loan originator operating
in any State which is subject to a licensing system
established by the [Director] Bureau of Consumer
Financial Protection under section 1508 whenever the
[Director] Bureau of Consumer Financial Protection
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] Bureau of Consumer Financial
Protection.
(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] Bureau
of Consumer Financial Protection under section 1508, or
with other types of investigations to determine
compliance with applicable law and regulations, the
[Director] Bureau of Consumer Financial Protection and
examiners appointed by the [Director] Bureau of
Consumer Financial Protection 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] Bureau of Consumer
Financial Protection under section 1508 shall be
assessed by the [Director] Bureau of Consumer Financial
Protection against the loan originator to meet the
Secretary's expenses in carrying out such examination.
(c) Cease and Desist Proceeding.--
(1) Authority of [director] bureau of consumer
financial protection.--If the [Director] Bureau of
Consumer Financial Protection 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] Bureau of Consumer
Financial Protection under section 1508, the [Director]
Bureau of Consumer Financial Protection 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]
Bureau of Consumer Financial Protection may specify in
such order. Any such order may, as the [Director]
Bureau of Consumer Financial Protection deems
appropriate, require future compliance or steps to
effect future compliance, either permanently or for
such period of time as the [Director] Bureau of
Consumer Financial Protection 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] Bureau of Consumer Financial
Protection with the consent of any respondent so
served.
(3) Temporary order.--Whenever the [Director] Bureau
of Consumer Financial Protection 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] Bureau of Consumer
Financial Protection 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] Bureau of
Consumer Financial Protection deems appropriate pending
completion of such proceedings. Such an order shall be
entered only after notice and opportunity for a
hearing, unless the [Director] Bureau of Consumer
Financial Protection 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]
Bureau of Consumer Financial Protection 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] bureau of consumer
financial protection.--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]
Bureau of Consumer Financial Protection 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] Bureau of
Consumer Financial Protection, the respondent
may, within 10 days after the date on which the
order was served, request a hearing on such
application and the [Director] Bureau of
Consumer Financial Protection 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]
Bureau of Consumer Financial
Protection; or
(ii) 10 days after the [Director]
Bureau of Consumer Financial Protection
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] Bureau of
Consumer Financial Protection,
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] Bureau of Consumer
Financial Protection may not apply to the court
except after hearing and decision by the
[Director] Bureau of Consumer Financial
Protection 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 order.
(5) Authority of the [director] bureau of consumer
financial protection to prohibit persons from serving
as loan originators.--In any cease and desist
proceeding under paragraph (1), the [Director] Bureau
of Consumer Financial Protection may issue an order to
prohibit, conditionally or unconditionally, and
permanently or for such period of time as the
[Director] Bureau of Consumer Financial Protection
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] Bureau of Consumer Financial
Protection To Assess Money Penalties.--
(1) In general.--The [Director] Bureau of Consumer
Financial Protection may impose a civil penalty on a
loan originator operating in any State which is subject
to a licensing system established by the [Director]
Bureau of Consumer Financial Protection under section
1508, if the [Director] Bureau of Consumer Financial
Protection 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] Bureau of Consumer Financial Protection
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. 1516. REPORTS AND RECOMMENDATIONS TO CONGRESS.
(a) Annual Reports.--Not later than 1 year after the date of
enactment of this title, and annually thereafter, the
[Director] Bureau of Consumer Financial Protection shall submit
a report to Congress on the effectiveness of the provisions of
this title, including legislative recommendations, if any, for
strengthening consumer protections, enhancing examination
standards, streamlining communication between all stakeholders
involved in residential mortgage loan origination and
processing, and establishing performance based bonding
requirements for mortgage originators or institutions that
employ such brokers.
(b) Legislative Recommendations.--Not later than 6 months
after the date of enactment of this title, the [Director]
Bureau of Consumer Financial Protection shall make
recommendations to Congress on legislative reforms to the Real
Estate Settlement Procedures Act of 1974, that the [Director]
Bureau of Consumer Financial Protection deems appropriate to
promote more transparent disclosures, allowing consumers to
better shop and compare mortgage loan terms and settlement
costs.
SEC. 1517. STUDY AND REPORTS ON DEFAULTS AND FORECLOSURES.
(a) Study Required.--The [Director] Bureau of Consumer
Financial Protection shall conduct an extensive study of the
root causes of default and foreclosure of home loans, using as
much empirical data as is available.
(b) Preliminary Report to Congress.--Not later than 6 months
after the date of enactment of this title, the [Director]
Bureau of Consumer Financial Protection shall submit to
Congress a preliminary report regarding the study required by
this section.
(c) Final Report to Congress.--Not later than 12 months after
the date of enactment of this title, the [Director] Bureau of
Consumer Financial Protection shall submit to Congress a final
report regarding the results of the study required by this
section, which shall include any recommended legislation
relating to the study, and recommendations for best practices
and for a process to provide targeted assistance to populations
with the highest risk of potential default or foreclosure.
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TITLE 44, UNITED STATES CODE
* * * * * * *
CHAPTER 35--COORDINATION OF FEDERAL INFORMATION POLICY
SUBCHAPTER I--FEDERAL INFORMATION POLICY
* * * * * * *
Sec. 3513. Director review of agency activities; reporting; agency
response
(a) In consultation with the Administrator of General
Services, the Archivist of the United States, the Director of
the National Institute of Standards and Technology, and the
Director of the Office of Personnel Management, the Director
shall periodically review selected agency information resources
management activities to ascertain the efficiency and
effectiveness of such activities to improve agency performance
and the accomplishment of agency missions.
(b) Each agency having an activity reviewed under subsection
(a) shall, within 60 days after receipt of a report on the
review, provide a written plan to the Director describing steps
(including milestones) to--
(1) be taken to address information resources
management problems identified in the report; and
(2) improve agency performance and the accomplishment
of agency missions.
(c) Comparable Treatment.--Notwithstanding any other
provision of law, the Director shall treat or review a rule or
order prescribed or proposed by the [Director of the] Bureau of
Consumer Financial Protection on the same terms and conditions
as apply to any rule or order prescribed or proposed by the
Board of Governors of the Federal Reserve System.
* * * * * * *
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TITLE 5, UNITED STATES CODE
* * * * * * *
PART I--THE AGENCIES GENERALLY
* * * * * * *
CHAPTER 4--INSPECTORS GENERAL
Sec. 401. Definitions
In this chapter:
(1) Establishment.--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, the Treasury,
or Veterans Affairs; the Agency for International
Development, the Community Development Financial
Institutions Fund, the Environmental Protection Agency,
the Federal Communications Commission, 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 Federal Deposit Insurance Corporation, the
Small Business Administration, the Corporation for
National and Community Service, the Social Security
Administration, the Federal Housing Finance Agency, the
Tennessee Valley Authority, the Export-Import Bank of
the United States, the Bureau of Consumer Financial
Protection, the Commissions established under section
15301 of title 40, the National Security Agency, or the
National Reconnaissance Office, as the case may be.
(2) Federal agency.--The term ``Federal agency''
means an agency as defined in section 552(f) of this
title (including an establishment as defined in
paragraph (1)), but shall not be construed to include
the Government Accountability Office.
(3) Head of the establishment.--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, the
Treasury, or Veterans Affairs; the Attorney General;
the Administrator of the Agency for International
Development, Environmental Protection, General
Services, National Aeronautics and Space, Small
Business, or the Federal Emergency Management Agency;
the Director of the Office of Personnel Management; the
Chairman of the Nuclear Regulatory Commission, the
Federal Communications Commission, or the Railroad
Retirement Board; the Chief Executive Officer of the
Corporation for National and Community Service; the
Administrator of the Community Development Financial
Institutions Fund; 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 of the United
States; the Chair of the Bureau of Consumer Financial
Protection; the Federal Cochairpersons of the
Commissions established under section 15301 of title
40; the Director of the National Security Agency; or
the Director of the National Reconnaissance Office; as
the case may be.
(4) Inspector general.--The term ``Inspector
General'' means the Inspector General of an
establishment.
(5) Office.--The term ``Office'' means the Office of
Inspector General of an establishment.
* * * * * * *
Sec. 415. Requirements for Federal entities and designated Federal
entities
(a) Definitions.--Notwithstanding section 401 of this title,
in this section:
(1) Designated federal entity.--
(A) In general.--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 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 Denali Commission, the Equal Employment
Opportunity Commission, the Farm Credit
Administration, the Federal Election
Commission, the Election Assistance Commission,
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 Peace Corps, the Pension
Benefit Guaranty Corporation, the Securities
and Exchange Commission, the Smithsonian
Institution, the United States International
Development Finance Corporation, the United
States International Trade Commission, the
Postal Regulatory Commission, and the United
States Postal Service.
(B) Amtrak.--Effective at the beginning of
the first fiscal year after a fiscal year for
which Amtrak receives no Federal subsidy,
subparagraph (A) is amended by striking
``Amtrak,''.
(2) Federal entity.--The term ``Federal entity''
means any Government corporation (within the meaning of
section 103(1) of this title), any Government
controlled corporation (within the meaning of section
103(2) of this 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 401 of this title) or part of an
establishment;
(B) a designated Federal entity (as defined
under paragraph (1) of this subsection) or part
of a designated Federal entity;
(C) the Executive Office of the President;
(D) the Central Intelligence Agency;
(E) the Government Accountability 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.
(3) Head of the designated federal entity.--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);
(C) with respect to the Federal Labor
Relations Authority, such term means the
members of the Authority (described under
section 7104 of this title);
(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;
(I) with respect to the Peace Corps, such
term means the Director of the Peace Corps; and
(J) with respect to the United States
International Development Finance Corporation,
such term means the Board of Directors of the
United States International Development Finance
Corporation.
(4) Head of the federal entity.--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.
(5) Inspector general.--The term ``Inspector
General'' means an Inspector General of a designated
Federal entity.
(6) Office of inspector general.--The term ``Office
of Inspector General'' means an Office of Inspector
General of a designated Federal entity.
(b) Office of Inspector General in Each Designated Federal
Entity.--Not later than 180 days after October 18, 1988, 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) Appointment of Inspector General.--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) Supervision.--
(1) In general.--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) Exception relating to intelligence community.--
(A) In general.--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), if the Secretary determines
that the prohibition is necessary to protect
vital national security interests of the United
States.
(B) Statement of reasons for exercise of
authority.--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) Notification to inspector general.--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) Elements of the intelligence community.--
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) Committees of congress.--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) Removal.--
(1) Board, chairman of committee, or commission is
head of designated federal entity.--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) Inspector general removed or transferred.--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) United States Postal Service.--
(1) Appointment.--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 shall be applied.
(2) Oversight responsibility of inspector general for
activities of postal inspection service.--In carrying
out the duties and responsibilities specified in this
chapter, 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) Audits and investigations.--
(A) Authority, direction, and control of
governors.--
(i) Access to sensitive
information.--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) Authority to prohibit inspector
general from carrying out or completing
audit or investigation.--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
significant impairment to the national
interests of the United States.
(iii) Notification of reasons for
exercise of power.--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 Homeland Security and
Governmental Affairs of the Senate and
the Committee on Oversight and Reform
of the House of Representatives, and to
other appropriate committees or
subcommittees of the Congress.
(B) Initiating, conducting, and supervising
audits and investigations.--In carrying out the
duties and responsibilities specified in this
chapter, 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 ensuring effective
coordination and cooperation.
(C) Reporting serious problems, abuses, or
deficiencies.--Any report required to be
transmitted by the Governors to the appropriate
committees or subcommittees of the Congress
under section 405(e) of this title shall also
be transmitted, within the 7-day period
specified under such section, to the Committee
on Homeland Security and Governmental Affairs
of the Senate and the Committee on Oversight
and Reform of the House of Representatives.
(4) Limitation.--Nothing in this chapter 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,
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) Definition of governors.--In this subsection, the
term ``Governors'' has the meaning given the term by
section 102(3) of title 39.
(6) Authorization of appropriations.--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) Special Application.--
(1) Sections 404, 405, 406, and 407.--Sections 404,
405, 406 (other than paragraphs (7) and (8) of section
406(a)), and 407 of this title 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) Personnel.--In addition to the other authorities
specified in this chapter, 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 of experts or consultants, 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) Application of section 412(a).--Notwithstanding
the last sentence of subsection (d)(1) of this section,
the provisions of subsection (a) of section 412 of this
title (other than the provisions of subparagraphs (A),
(B), (C), and (E) of subsection (a)(1) of section 412
of this title) 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) Counsel.--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) Annual Listing and Report.--
(1) Listing.--Each year, 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)).
(2) Report.--On October 31 of each year, the head of
each Federal entity (as defined under subsection (a))
shall prepare and transmit to the Director of the
Office of Management and Budget and to each House of
the Congress a report that--
(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.
* * * * * * *
CHAPTER 6--THE ANALYSIS OF REGULATORY FUNCTIONS
* * * * * * *
Sec. 603. Initial regulatory flexibility analysis
(a) Whenever an agency is required by section 553 of this
title, or any other law, to publish general notice of proposed
rulemaking for any proposed rule, or publishes a notice of
proposed rulemaking for an interpretative rule involving the
internal revenue laws of the United States, the agency shall
prepare and make available for public comment an initial
regulatory flexibility analysis. Such analysis shall describe
the impact of the proposed rule on small entities. The initial
regulatory flexibility analysis or a summary shall be published
in the Federal Register at the time of the publication of
general notice of proposed rulemaking for the rule. The agency
shall transmit a copy of the initial regulatory flexibility
analysis to the Chief Counsel for Advocacy of the Small
Business Administration. In the case of an interpretative rule
involving the internal revenue laws of the United States, this
chapter applies to interpretative rules published in the
Federal Register for codification in the Code of Federal
Regulations, but only to the extent that such interpretative
rules impose on small entities a collection of information
requirement.
(b) Each initial regulatory flexibility analysis required
under this section shall contain--
(1) a description of the reasons why action by the
agency is being considered;
(2) a succinct statement of the objectives of, and
legal basis for, the proposed rule;
(3) a description of and, where feasible, an estimate
of the number of small entities to which the proposed
rule will apply;
(4) a description of the projected reporting,
recordkeeping and other compliance requirements of the
proposed rule, including an estimate of the classes of
small entities which will be subject to the requirement
and the type of professional skills necessary for
preparation of the report or record;
(5) an identification, to the extent practicable, of
all relevant Federal rules which may duplicate, overlap
or conflict with the proposed rule.
(c) Each initial regulatory flexibility analysis shall also
contain a description of any significant alternatives to the
proposed rule which accomplish the stated objectives of
applicable statutes and which minimize any significant economic
impact of the proposed rule on small entities. Consistent with
the stated objectives of applicable statutes, the analysis
shall discuss significant alternatives such as--
(1) the establishment of differing compliance or
reporting requirements or timetables that take into
account the resources available to small entities;
(2) the clarification, consolidation, or
simplification of compliance and reporting requirements
under the rule for such small entities;
(3) the use of performance rather than design
standards; and
(4) an exemption from coverage of the rule, or any
part thereof, for such small entities.
(d)(1) For a covered agency, as defined in section 609(d)(2),
each initial regulatory flexibility analysis shall include a
description of--
(A) any projected increase in the cost of credit for
small entities;
(B) any significant alternatives to the proposed rule
which accomplish the stated objectives of applicable
statutes and which minimize any increase in the cost of
credit for small entities; [and]
(C) advice and recommendations of representatives of
small entities relating to issues described in
subparagraphs (A) and (B) and subsection (b)[.]; and
(D) with respect to the Bureau of Consumer Financial
Protection, if the Bureau does not adopt any
alternatives described in paragraphs (1) through (4) of
subsection (c), a detailed justification of the
Bureau's determination that the relative size and
resources of small entities should have no bearing on
the rule, supported by factual, policy and legal
reasons.
(2) A covered agency, as defined in section 609(d)(2), shall,
for purposes of complying with paragraph (1)(C)--
(A) identify representatives of small entities in
consultation with the Chief Counsel for Advocacy of the
Small Business Administration; and
(B) collect advice and recommendations from the
representatives identified under subparagraph (A)
relating to issues described in subparagraphs (A) and
(B) of paragraph (1) and subsection (b).
Sec. 604. Final regulatory flexibility analysis
(a) When an agency promulgates a final rule under section 553
of this title, after being required by that section or any
other law to publish a general notice of proposed rulemaking,
or promulgates a final interpretative rule involving the
internal revenue laws of the United States as described in
section 603(a), the agency shall prepare a final regulatory
flexibility analysis. Each final regulatory flexibility
analysis shall contain--
(1) a statement of the need for, and objectives of,
the rule;
(2) a statement of the significant issues raised by
the public comments in response to the initial
regulatory flexibility analysis, a statement of the
assessment of the agency of such issues, and a
statement of any changes made in the proposed rule as a
result of such comments;
(3) the response of the agency to any comments filed
by the Chief Counsel for Advocacy of the Small Business
Administration in response to the proposed rule, and a
detailed statement of any change made to the proposed
rule in the final rule as a result of the comments;
(4) a description of and an estimate of the number of
small entities to which the rule will apply or an
explanation of why no such estimate is available;
(5) a description of the projected reporting,
recordkeeping and other compliance requirements of the
rule, including an estimate of the classes of small
entities which will be subject to the requirement and
the type of professional skills necessary for
preparation of the report or record;
(6) a description of the steps the agency has taken
to minimize the significant economic impact on small
entities consistent with the stated objectives of
applicable statutes, including a statement of the
factual, policy, and legal reasons for selecting the
alternative adopted in the final rule and why each one
of the other significant alternatives to the rule
considered by the agency which affect the impact on
small entities was rejected; and
[(6) for a covered agency, as defined in section
609(d)(2), a description of the steps the agency has
taken to minimize any additional cost of credit for
small entities.]
(7) with respect to the Bureau of Consumer Financial
Protection, a description of the steps the Bureau has
taken to minimize any additional cost of credit for
small entities and, where no significant alternatives
for small entities was adopted, a detailed
justification of the Bureau's determination that the
relative size and resources of small entities should
have no bearing on the rule, supported by factual,
policy and legal reasons.
(b) The agency shall make copies of the final regulatory
flexibility analysis available to members of the public and
shall publish in the Federal Register such analysis or a
summary thereof.
* * * * * * *
MINORITY VIEWS
This bill contains several measures that, taken together,
strip the CFPB of the authority and independence that Congress
granted it to effectively carry out its mission to protect
consumers. Specifically, Titles I and II would change CFPB's
independent funding, which is capped by statute, so that it
becomes subject to the annual appropriations process, as well
as the agency's single-director leadership structure to a
bipartisan commission. These measures would dial back the
impact of key decisions that Congress made in 2010, when it
passed Dodd-Frank and created the CFPB, to insulate the agency
from partisan and special interests, ensure it can operate
nimbly and in an accountable manner, and has the resources
needed to protect consumers in the financial marketplace.
Congress purposefully designed the CFPB's independent funding
mechanism and structure, including its leadership by a single
Director, who is appointed by the President and approved by the
Senate to be an effective watchdog for consumers. CFPB is not
the only federal agency with a similar funding mechanism and
leadership structure: the Office of the Comptroller of the
Currency (OCC) is also led by a single Comptroller with its
funding mechanism independent of the annual appropriations
process. CFPB also demonstrates budget and funding
accountability in several ways, including having the CFPB
Director testify semiannually before the Committee, notifying
Congress when it requests a transfer of funds from the Federal
Reserve, and complying with financial audits by GAO, OIG as
well as a private sector, independent audit.
In addition, Titles IV through VI would impose additional
or duplicative requirements on the CFPB. Those measures would
water down CFPB's existing authority to promulgate rules that
protect consumers, slow down the CFPB's work, and make it
easier for financial companies to challenge the consumer
protections CFPB is authorized to enforce in the court system,
among other things. Furthermore, those measures completely
ignore the existing requirements CFPB must already meet,
including conducting cost-benefit analyses during the rule-
making process, as well as high standards the agency has to
meet, including convening small business review panels and
being subject to a provision allowing the Financial Stability
Oversight Council (FSOC) to review and overturn its
regulations.
For these reasons, the minority opposes H.R. 2798.
Sincerely,
Maxine Waters,
Ranking Member.
Nydia M. Velazquez,
David Scott,
Juan Vargas,
Stephen F. Lynch,
Brittany Pettersen,
Ayanna Pressley,
Members of Congress.
[all]