    [111th Congress Public Law 203]
    [From the U.S. Government Publishing Office]

    [[Page 1375]]

            DODD-FRANK WALL STREET REFORM AND CONSUMER PROTECTION ACT

    [[Page 124 STAT. 1376]]

    Public Law 111-203
    111th Congress

                                     An Act

      To promote the financial stability of the United States by improving
     accountability and transparency in the financial system, to end ``too
     big to fail'', to protect the American taxpayer by ending bailouts, to
      protect consumers from abusive financial services practices, and for
             other purposes. <<NOTE: July 21, 2010 -  [H.R. 4173]>>

        Be it enacted by the Senate and House of Representatives of the
    United States of America in Congress assembled, <<NOTE: Dodd-Frank Wall
    Street Reform and Consumer Protection Act.>>
    SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

        (a) Short <<NOTE: 12 USC 5301 note.>> Title.--This Act may be cited
    as the ``Dodd-Frank Wall Street Reform and Consumer Protection Act''.

        (b) Table of Contents.--The table of contents for this Act is as
    follows:

    Sec. 1. Short title; table of contents.
    Sec. 2. Definitions.
    Sec. 3. Severability.
    Sec. 4. Effective date.
    Sec. 5. Budgetary effects.
    Sec. 6. Antitrust savings clause.

                          TITLE I--FINANCIAL STABILITY

    Sec. 101. Short title.
    Sec. 102. Definitions.

                Subtitle A--Financial Stability Oversight Council

    Sec. 111. Financial Stability Oversight Council established.
    Sec. 112. Council authority.
    Sec. 113. Authority to require supervision and regulation of certain
               nonbank financial companies.
    Sec. 114. Registration of nonbank financial companies supervised by the
               Board of Governors.
    Sec. 115. Enhanced supervision and prudential standards for nonbank
               financial companies supervised by the Board of Governors and
               certain bank holding companies.
    Sec. 116. Reports.
    Sec. 117. Treatment of certain companies that cease to be bank holding
               companies.
    Sec. 118. Council funding.
    Sec. 119. Resolution of supervisory jurisdictional disputes among member
               agencies.
    Sec. 120. Additional standards applicable to activities or practices for
               financial stability purposes.
    Sec. 121. Mitigation of risks to financial stability.
    Sec. 122. GAO Audit of Council.
    Sec. 123. Study of the effects of size and complexity of financial
               institutions on capital market efficiency and economic
               growth.

                    Subtitle B--Office of Financial Research

    Sec. 151. Definitions.
    Sec. 152. Office of Financial Research established.
    Sec. 153. Purpose and duties of the Office.
    Sec. 154. Organizational structure; responsibilities of primary
               programmatic units.
    Sec. 155. Funding.
    Sec. 156. Transition oversight.

    [[Page 124 STAT. 1377]]

    Subtitle C--Additional Board of Governors Authority for Certain Nonbank
                 Financial Companies and Bank Holding Companies

    Sec. 161. Reports by and examinations of nonbank financial companies by
               the Board of Governors.
    Sec. 162. Enforcement.
    Sec. 163. Acquisitions.
    Sec. 164. Prohibition against management interlocks between certain
               financial companies.
    Sec. 165. Enhanced supervision and prudential standards for nonbank
               financial companies supervised by the Board of Governors and
               certain bank holding companies.
    Sec. 166. Early remediation requirements.
    Sec. 167. Affiliations.
    Sec. 168. Regulations.
    Sec. 169. Avoiding duplication.
    Sec. 170. Safe harbor.
    Sec. 171. Leverage and risk-based capital requirements.
    Sec. 172. Examination and enforcement actions for insurance and orderly
               liquidation purposes.
    Sec. 173. Access to United States financial market by foreign
               institutions.
    Sec. 174. Studies and reports on holding company capital requirements.
    Sec. 175. International policy coordination.
    Sec. 176. Rule of construction.

                     TITLE II--ORDERLY LIQUIDATION AUTHORITY

    Sec. 201. Definitions.
    Sec. 202. Judicial review.
    Sec. 203. Systemic risk determination.
    Sec. 204. Orderly liquidation of covered financial companies.
    Sec. 205. Orderly liquidation of covered brokers and dealers.
    Sec. 206. Mandatory terms and conditions for all orderly liquidation
               actions.
    Sec. 207. Directors not liable for acquiescing in appointment of
               receiver.
    Sec. 208. Dismissal and exclusion of other actions.
    Sec. 209. Rulemaking; non-conflicting law.
    Sec. 210. Powers and duties of the Corporation.
    Sec. 211. Miscellaneous provisions.
    Sec. 212. Prohibition of circumvention and prevention of conflicts of
               interest.
    Sec. 213. Ban on certain activities by senior executives and directors.
    Sec. 214. Prohibition on taxpayer funding.
    Sec. 215. Study on secured creditor haircuts.
    Sec. 216. Study on bankruptcy process for financial and nonbank
               financial institutions
    Sec. 217. Study on international coordination relating to bankruptcy
               process for nonbank financial institutions

     TITLE III--TRANSFER OF POWERS TO THE COMPTROLLER OF THE CURRENCY, THE
                     CORPORATION, AND THE BOARD OF GOVERNORS

    Sec. 300. Short title.
    Sec. 301. Purposes.
    Sec. 302. Definition.

                    Subtitle A--Transfer of Powers and Duties

    Sec. 311. Transfer date.
    Sec. 312. Powers and duties transferred.
    Sec. 313. Abolishment.
    Sec. 314. Amendments to the Revised Statutes.
    Sec. 315. Federal information policy.
    Sec. 316. Savings provisions.
    Sec. 317. References in Federal law to Federal banking agencies.
    Sec. 318. Funding.
    Sec. 319. Contracting and leasing authority.

                       Subtitle B--Transitional Provisions

    Sec. 321. Interim use of funds, personnel, and property of the Office of
               Thrift Supervision.
    Sec. 322. Transfer of employees.
    Sec. 323. Property transferred.
    Sec. 324. Funds transferred.
    Sec. 325. Disposition of affairs.
    Sec. 326. Continuation of services.

    [[Page 124 STAT. 1378]]

    Sec. 327. Implementation plan and reports.

                Subtitle C--Federal Deposit Insurance Corporation

    Sec. 331. Deposit insurance reforms.
    Sec. 332. Elimination of procyclical assessments.
    Sec. 333. Enhanced access to information for deposit insurance purposes.
    Sec. 334. Transition reserve ratio requirements to reflect new
               assessment base.
    Sec. 335. Permanent increase in deposit and share insurance.
    Sec. 336. Management of the Federal Deposit Insurance Corporation.

                            Subtitle D--Other Matters

    Sec. 341. Branching.
    Sec. 342. Office of Minority and Women Inclusion.
    Sec. 343. Insurance of transaction accounts.

                 Subtitle E--Technical and Conforming Amendments

    Sec. 351. Effective date.
    Sec. 352. Balanced Budget and Emergency Deficit Control Act of 1985.
    Sec. 353. Bank Enterprise Act of 1991.
    Sec. 354. Bank Holding Company Act of 1956.
    Sec. 355. Bank Holding Company Act Amendments of 1970.
    Sec. 356. Bank Protection Act of 1968.
    Sec. 357. Bank Service Company Act.
    Sec. 358. Community Reinvestment Act of 1977.
    Sec. 359. Crime Control Act of 1990.
    Sec. 360. Depository Institution Management Interlocks Act.
    Sec. 361. Emergency Homeowners' Relief Act.
    Sec. 362. Federal Credit Union Act.
    Sec. 363. Federal Deposit Insurance Act.
    Sec. 364. Federal Home Loan Bank Act.
    Sec. 365. Federal Housing Enterprises Financial Safety and Soundness Act
               of 1992.
    Sec. 366. Federal Reserve Act.
    Sec. 367. Financial Institutions Reform, Recovery, and Enforcement Act
               of 1989.
    Sec. 368. Flood Disaster Protection Act of 1973.
    Sec. 369. Home Owners' Loan Act.
    Sec. 370. Housing Act of 1948.
    Sec. 371. Housing and Community Development Act of 1992.
    Sec. 372. Housing and Urban-Rural Recovery Act of 1983.
    Sec. 373. National Housing Act.
    Sec. 374. Neighborhood Reinvestment Corporation Act.
    Sec. 375. Public Law 93-100.
    Sec. 376. Securities Exchange Act of 1934.
    Sec. 377. Title 18, United States Code.
    Sec. 378. Title 31, United States Code.

           TITLE IV--REGULATION OF ADVISERS TO HEDGE FUNDS AND OTHERS

    Sec. 401. Short title.
    Sec. 402. Definitions.
    Sec. 403. Elimination of private adviser exemption; limited exemption
               for foreign private advisers; limited intrastate exemption.
    Sec. 404. Collection of systemic risk data; reports; examinations;
               disclosures.
    Sec. 405. Disclosure provision amendment.
    Sec. 406. Clarification of rulemaking authority.
    Sec. 407. Exemption of venture capital fund advisers.
    Sec. 408. Exemption of and record keeping by private equity fund
               advisers.
    Sec. 409. Family offices.
    Sec. 410. State and Federal responsibilities; asset threshold for
               Federal registration of investment advisers.
    Sec. 411. Custody of client assets.
    Sec. 412. Adjusting the accredited investor standard.
    Sec. 413. GAO study and report on accredited investors.
    Sec. 414. GAO study on self-regulatory organization for private funds.
    Sec. 415. Commission study and report on short selling.
    Sec. 416. Transition period.

                               TITLE V--INSURANCE

                    Subtitle A--Office of National Insurance

    Sec. 501. Short title.
    Sec. 502. Federal Insurance Office.

                    Subtitle B--State-Based Insurance Reform

    Sec. 511. Short title.

    [[Page 124 STAT. 1379]]

    Sec. 512. Effective date.

                          PART I--Nonadmitted Insurance

    Sec. 521. Reporting, payment, and allocation of premium taxes.
    Sec. 522. Regulation of nonadmitted insurance by insured's home State.
    Sec. 523. Participation in national producer database.
    Sec. 524. Uniform standards for surplus lines eligibility.
    Sec. 525. Streamlined application for commercial purchasers.
    Sec. 526. GAO study of nonadmitted insurance market.
    Sec. 527. Definitions.

                              PART II--Reinsurance

    Sec. 531. Regulation of credit for reinsurance and reinsurance
               agreements.
    Sec. 532. Regulation of reinsurer solvency.
    Sec. 533. Definitions.

                         PART III--Rule of Construction

    Sec. 541. Rule of construction.
    Sec. 542. Severability.

      TITLE VI--IMPROVEMENTS TO REGULATION OF BANK AND SAVINGS ASSOCIATION
                  HOLDING COMPANIES AND DEPOSITORY INSTITUTIONS

    Sec. 601. Short title.
    Sec. 602. Definition.
    Sec. 603. Moratorium and study on treatment of credit card banks,
               industrial loan companies, and certain other companies under
               the Bank Holding Company Act of 1956.
    Sec. 604. Reports and examinations of holding companies; regulation of
               functionally regulated subsidiaries.
    Sec. 605. Assuring consistent oversight of permissible activities of
               depository institution subsidiaries of holding companies.
    Sec. 606. Requirements for financial holding companies to remain well
               capitalized and well managed.
    Sec. 607. Standards for interstate acquisitions.
    Sec. 608. Enhancing existing restrictions on bank transactions with
               affiliates.
    Sec. 609. Eliminating exceptions for transactions with financial
               subsidiaries.
    Sec. 610. Lending limits applicable to credit exposure on derivative
               transactions, repurchase agreements, reverse repurchase
               agreements, and securities lending and borrowing
               transactions.
    Sec. 611. Consistent treatment of derivative transactions in lending
               limits.
    Sec. 612. Restriction on conversions of troubled banks.
    Sec. 613. De novo branching into States.
    Sec. 614. Lending limits to insiders.
    Sec. 615. Limitations on purchases of assets from insiders.
    Sec. 616. Regulations regarding capital levels.
    Sec. 617. Elimination of elective investment bank holding company
               framework.
    Sec. 618. Securities holding companies.
    Sec. 619. Prohibitions on proprietary trading and certain relationships
               with hedge funds and private equity funds.
    Sec. 620. Study of bank investment activities.
    Sec. 621. Conflicts of interest.
    Sec. 622. Concentration limits on large financial firms.
    Sec. 623. Interstate merger transactions.
    Sec. 624. Qualified thrift lenders.
    Sec. 625. Treatment of dividends by certain mutual holding companies.
    Sec. 626. Intermediate holding companies.
    Sec. 627. Interest-bearing transaction accounts authorized.
    Sec. 628. Credit card bank small business lending.

             TITLE VII--WALL STREET TRANSPARENCY AND ACCOUNTABILITY

    Sec. 701. Short title.

            Subtitle A--Regulation of Over-the-Counter Swaps Markets

                          PART I--Regulatory Authority

    Sec. 711. Definitions.
    Sec. 712. Review of regulatory authority.
    Sec. 713. Portfolio margining conforming changes.
    Sec. 714. Abusive swaps.
    Sec. 715. Authority to prohibit participation in swap activities.

    [[Page 124 STAT. 1380]]

    Sec. 716. Prohibition against Federal Government bailouts of swaps
               entities.
    Sec. 717. New product approval CFTC--SEC process.
    Sec. 718. Determining status of novel derivative products.
    Sec. 719. Studies.
    Sec. 720. Memorandum.

                       PART II--Regulation of Swap Markets

    Sec. 721. Definitions.
    Sec. 722. Jurisdiction.
    Sec. 723. Clearing.
    Sec. 724. Swaps; segregation and bankruptcy treatment.
    Sec. 725. Derivatives clearing organizations.
    Sec. 726. Rulemaking on conflict of interest.
    Sec. 727. Public reporting of swap transaction data.
    Sec. 728. Swap data repositories.
    Sec. 729. Reporting and recordkeeping.
    Sec. 730. Large swap trader reporting.
    Sec. 731. Registration and regulation of swap dealers and major swap
               participants.
    Sec. 732. Conflicts of interest.
    Sec. 733. Swap execution facilities.
    Sec. 734. Derivatives transaction execution facilities and exempt boards
               of trade.
    Sec. 735. Designated contract markets.
    Sec. 736. Margin.
    Sec. 737. Position limits.
    Sec. 738. Foreign boards of trade.
    Sec. 739. Legal certainty for swaps.
    Sec. 740. Multilateral clearing organizations.
    Sec. 741. Enforcement.
    Sec. 742. Retail commodity transactions.
    Sec. 743. Other authority.
    Sec. 744. Restitution remedies.
    Sec. 745. Enhanced compliance by registered entities.
    Sec. 746. Insider trading.
    Sec. 747. Antidisruptive practices authority.
    Sec. 748. Commodity whistleblower incentives and protection.
    Sec. 749. Conforming amendments.
    Sec. 750. Study on oversight of carbon markets.
    Sec. 751. Energy and environmental markets advisory committee.
    Sec. 752. International harmonization.
    Sec. 753. Anti-manipulation authority.
    Sec. 754. Effective date.

              Subtitle B--Regulation of Security-Based Swap Markets

    Sec. 761. Definitions under the Securities Exchange Act of 1934.
    Sec. 762. Repeal of prohibition on regulation of security-based swap
               agreements.
    Sec. 763. Amendments to the Securities Exchange Act of 1934.
    Sec. 764. Registration and regulation of security-based swap dealers and
               major security-based swap participants.
    Sec. 765. Rulemaking on conflict of interest.
    Sec. 766. Reporting and recordkeeping.
    Sec. 767. State gaming and bucket shop laws.
    Sec. 768. Amendments to the Securities Act of 1933; treatment of
               security-based swaps.
    Sec. 769. Definitions under the Investment Company Act of 1940.
    Sec. 770. Definitions under the Investment Advisers Act of 1940.
    Sec. 771. Other authority.
    Sec. 772. Jurisdiction.
    Sec. 773. Civil penalties.
    Sec. 774. Effective date.

            TITLE VIII--PAYMENT, CLEARING, AND SETTLEMENT SUPERVISION

    Sec. 801. Short title.
    Sec. 802. Findings and purposes.
    Sec. 803. Definitions.
    Sec. 804. Designation of systemic importance.
    Sec. 805. Standards for systemically important financial market
               utilities and payment, clearing, or settlement activities.
    Sec. 806. Operations of designated financial market utilities.
    Sec. 807. Examination of and enforcement actions against designated
               financial market utilities.
    Sec. 808. Examination of and enforcement actions against financial
               institutions subject to standards for designated activities.

    [[Page 124 STAT. 1381]]

    Sec. 809. Requests for information, reports, or records.
    Sec. 810. Rulemaking.
    Sec. 811. Other authority.
    Sec. 812. Consultation.
    Sec. 813. Common framework for designated clearing entity risk
               management.
    Sec. 814. Effective date.

      TITLE IX--INVESTOR PROTECTIONS AND IMPROVEMENTS TO THE REGULATION OF
                                   SECURITIES

    Sec. 901. Short title.

                   Subtitle A--Increasing Investor Protection

    Sec. 911. Investor Advisory Committee established.
    Sec. 912. Clarification of authority of the Commission to engage in
               investor testing.
    Sec. 913. Study and rulemaking regarding obligations of brokers,
               dealers, and investment advisers.
    Sec. 914. Study on enhancing investment adviser examinations.
    Sec. 915. Office of the Investor Advocate.
    Sec. 916. Streamlining of filing procedures for self-regulatory
               organizations.
    Sec. 917. Study regarding financial literacy among investors.
    Sec. 918. Study regarding mutual fund advertising.
    Sec. 919. Clarification of Commission authority to require investor
               disclosures before purchase of investment products and
               services.
    Sec. 919A. Study on conflicts of interest.
    Sec. 919B. Study on improved investor access to information on
               investment advisers and broker-dealers.
    Sec. 919C. Study on financial planners and the use of financial
               designations.
    Sec. 919D. Ombudsman.

           Subtitle B--Increasing Regulatory Enforcement and Remedies

    Sec. 921. Authority to restrict mandatory pre-dispute arbitration.
    Sec. 922. Whistleblower protection.
    Sec. 923. Conforming amendments for whistleblower protection.
    Sec. 924. Implementation and transition provisions for whistleblower
               protection.
    Sec. 925. Collateral bars.
    Sec. 926. Disqualifying felons and other ``bad actors'' from Regulation
               D offerings.
    Sec. 927. Equal treatment of self-regulatory organization rules.
    Sec. 928. Clarification that section 205 of the Investment Advisers Act
               of 1940 does not apply to State-registered advisers.
    Sec. 929. Unlawful margin lending.
    Sec. 929A. Protection for employees of subsidiaries and affiliates of
               publicly traded companies.
    Sec. 929B. Fair Fund amendments.
    Sec. 929C. Increasing the borrowing limit on Treasury loans.
    Sec. 929D. Lost and stolen securities.
    Sec. 929E. Nationwide service of subpoenas.
    Sec. 929F. Formerly associated persons.
    Sec. 929G. Streamlined hiring authority for market specialists.
    Sec. 929H. SIPC Reforms.
    Sec. 929I. Protecting confidentiality of materials submitted to the
               Commission.
    Sec. 929J. Expansion of audit information to be produced and exchanged.
    Sec. 929K. Sharing privileged information with other authorities.
    Sec. 929L. Enhanced application of antifraud provisions.
    Sec. 929M. Aiding and abetting authority under the Securities Act and
               the Investment Company Act.
    Sec. 929N. Authority to impose penalties for aiding and abetting
               violations of the Investment Advisers Act.
    Sec. 929O. Aiding and abetting standard of knowledge satisfied by
               recklessness.
    Sec. 929P. Strengthening enforcement by the Commission.
    Sec. 929Q. Revision to recordkeeping rule.
    Sec. 929R. Beneficial ownership and short-swing profit reporting.
    Sec. 929S. Fingerprinting.
    Sec. 929T. Equal treatment of self-regulatory organization rules.
    Sec. 929U. Deadline for completing examinations, inspections and
               enforcement actions.
    Sec. 929V. Security Investor Protection Act amendments.
    Sec. 929W. Notice to missing security holders.
    Sec. 929X. Short sale reforms.
    Sec. 929Y. Study on extraterritorial private rights of action.
    Sec. 929Z. GAO study on securities litigation.

      Subtitle C--Improvements to the Regulation of Credit Rating Agencies

    Sec. 931. Findings.

    [[Page 124 STAT. 1382]]

    Sec. 932. Enhanced regulation, accountability, and transparency of
               nationally recognized statistical rating organizations.
    Sec. 933. State of mind in private actions.
    Sec. 934. Referring tips to law enforcement or regulatory authorities.
    Sec. 935. Consideration of information from sources other than the
               issuer in rating decisions.
    Sec. 936. Qualification standards for credit rating analysts.
    Sec. 937. Timing of regulations.
    Sec. 938. Universal ratings symbols.
    Sec. 939. Removal of statutory references to credit ratings.
    Sec. 939A. Review of reliance on ratings.
    Sec. 939B. Elimination of exemption from fair disclosure rule.
    Sec. 939C. Securities and Exchange Commission study on strengthening
               credit rating agency independence.
    Sec. 939D. Government Accountability Office study on alternative
               business models.
    Sec. 939E. Government Accountability Office study on the creation of an
               independent professional analyst organization.
    Sec. 939F. Study and rulemaking on assigned credit ratings.
    Sec. 939G. Effect of Rule 436(g).
    Sec. 939H. Sense of Congress.

       Subtitle D--Improvements to the Asset-Backed Securitization Process

    Sec. 941. Regulation of credit risk retention.
    Sec. 942. Disclosures and reporting for asset-backed securities.
    Sec. 943. Representations and warranties in asset-backed offerings.
    Sec. 944. Exempted transactions under the Securities Act of 1933.
    Sec. 945. Due diligence analysis and disclosure in asset-backed
               securities issues.
    Sec. 946. Study on the macroeconomic effects of risk retention
               requirements.

              Subtitle E--Accountability and Executive Compensation

    Sec. 951. Shareholder vote on executive compensation disclosures.
    Sec. 952. Compensation committee independence.
    Sec. 953. Executive compensation disclosures.
    Sec. 954. Recovery of erroneously awarded compensation.
    Sec. 955. Disclosure regarding employee and director hedging.
    Sec. 956. Enhanced compensation structure reporting.
    Sec. 957. Voting by brokers.

        Subtitle F--Improvements to the Management of the Securities and
                               Exchange Commission

    Sec. 961. Report and certification of internal supervisory controls.
    Sec. 962. Triennial report on personnel management.
    Sec. 963. Annual financial controls audit.
    Sec. 964. Report on oversight of national securities associations.
    Sec. 965. Compliance examiners.
    Sec. 966. Suggestion program for employees of the Commission.
    Sec. 967. Commission organizational study and reform.
    Sec. 968. Study on SEC revolving door.

                 Subtitle G--Strengthening Corporate Governance

    Sec. 971. Proxy access.
    Sec. 972. Disclosures regarding chairman and CEO structures.

                        Subtitle H--Municipal Securities

    Sec. 975. Regulation of municipal securities and changes to the board of
               the MSRB.
    Sec. 976. Government Accountability Office study of increased disclosure
               to investors.
    Sec. 977. Government Accountability Office study on the municipal
               securities markets.
    Sec. 978. Funding for Governmental Accounting Standards Board.
    Sec. 979. Commission Office of Municipal Securities.

        Subtitle I--Public Company Accounting Oversight Board, Portfolio
                          Margining, and Other Matters

    Sec. 981. Authority to share certain information with foreign
               authorities.
    Sec. 982. Oversight of brokers and dealers.
    Sec. 983. Portfolio margining.
    Sec. 984. Loan or borrowing of securities.
    Sec. 985. Technical corrections to Federal securities laws.
    Sec. 986. Conforming amendments relating to repeal of the Public Utility
               Holding Company Act of 1935.

    [[Page 124 STAT. 1383]]

    Sec. 987. Amendment to definition of material loss and nonmaterial
               losses to the Deposit Insurance Fund for purposes of
               Inspector General reviews.
    Sec. 988. Amendment to definition of material loss and nonmaterial
               losses to the National Credit Union Share Insurance Fund for
               purposes of Inspector General reviews.
    Sec. 989. Government Accountability Office study on proprietary trading.
    Sec. 989A. Senior investor protections.
    Sec. 989B. Designated Federal entity inspectors general independence.
    Sec. 989C. Strengthening Inspector General accountability.
    Sec. 989D. Removal of Inspectors General of designated Federal entities.
    Sec. 989E. Additional oversight of financial regulatory system.
    Sec. 989F. GAO study of person to person lending.
    Sec. 989G. Exemption for nonaccelerated filers.
    Sec. 989H. Corrective responses by heads of certain establishments to
               deficiencies identified by Inspectors General.
    Sec. 989I. GAO study regarding exemption for smaller issuers.
    Sec. 989J. Further promoting the adoption of the NAIC Model Regulations
               that enhance protection of seniors and other consumers.

          Subtitle J--Securities and Exchange Commission Match Funding

    Sec. 991. Securities and Exchange Commission match funding.

                TITLE X--BUREAU OF CONSUMER FINANCIAL PROTECTION

    Sec. 1001. Short title.
    Sec. 1002. Definitions.

               Subtitle A--Bureau of Consumer Financial Protection

    Sec. 1011. Establishment of the Bureau of Consumer Financial Protection.
    Sec. 1012. Executive and administrative powers.
    Sec. 1013. Administration.
    Sec. 1014. Consumer Advisory Board.
    Sec. 1015. Coordination.
    Sec. 1016. Appearances before and reports to Congress.
    Sec. 1017. Funding; penalties and fines.
    Sec. 1018. Effective date.

                    Subtitle B--General Powers of the Bureau

    Sec. 1021. Purpose, objectives, and functions.
    Sec. 1022. Rulemaking authority.
    Sec. 1023. Review of Bureau regulations.
    Sec. 1024. Supervision of nondepository covered persons.
    Sec. 1025. Supervision of very large banks, savings associations, and
               credit unions.
    Sec. 1026. Other banks, savings associations, and credit unions.
    Sec. 1027. Limitations on authorities of the Bureau; preservation of
               authorities.
    Sec. 1028. Authority to restrict mandatory pre-dispute arbitration.
    Sec. 1029. Exclusion for auto dealers.
    Sec. 1029A. Effective date.

                     Subtitle C--Specific Bureau Authorities

    Sec. 1031. Prohibiting unfair, deceptive, or abusive acts or practices.
    Sec. 1032. Disclosures.
    Sec. 1033. Consumer rights to access information.
    Sec. 1034. Response to consumer complaints and inquiries.
    Sec. 1035. Private education loan ombudsman.
    Sec. 1036. Prohibited acts.
    Sec. 1037. Effective date.

                      Subtitle D--Preservation of State Law

    Sec. 1041. Relation to State law.
    Sec. 1042. Preservation of enforcement powers of States.
    Sec. 1043. Preservation of existing contracts.
    Sec. 1044. State law preemption standards for national banks and
               subsidiaries clarified.
    Sec. 1045. Clarification of law applicable to nondepository institution
               subsidiaries.
    Sec. 1046. State law preemption standards for Federal savings
               associations and subsidiaries clarified.
    Sec. 1047. Visitorial standards for national banks and savings
               associations.
    Sec. 1048. Effective date.

                         Subtitle E--Enforcement Powers

    Sec. 1051. Definitions.

    [[Page 124 STAT. 1384]]

    Sec. 1052. Investigations and administrative discovery.
    Sec. 1053. Hearings and adjudication proceedings.
    Sec. 1054. Litigation authority.
    Sec. 1055. Relief available.
    Sec. 1056. Referrals for criminal proceedings.
    Sec. 1057. Employee protection.
    Sec. 1058. Effective date.

    Subtitle F--Transfer of Functions and Personnel; Transitional Provisions

    Sec. 1061. Transfer of consumer financial protection functions.
    Sec. 1062. Designated transfer date.
    Sec. 1063. Savings provisions.
    Sec. 1064. Transfer of certain personnel.
    Sec. 1065. Incidental transfers.
    Sec. 1066. Interim authority of the Secretary.
    Sec. 1067. Transition oversight.

                       Subtitle G--Regulatory Improvements

    Sec. 1071. Small business data collection.
    Sec. 1072. Assistance for economically vulnerable individuals and
               families.
    Sec. 1073. Remittance transfers.
    Sec. 1074. Department of the Treasury study on ending the
               conservatorship of Fannie Mae, Freddie Mac, and reforming the
               housing finance system.
    Sec. 1075. Reasonable fees and rules for payment card transactions.
    Sec. 1076. Reverse mortgage study and regulations.
    Sec. 1077. Report on private education loans and private educational
               lenders.
    Sec. 1078. Study and report on credit scores.
    Sec. 1079. Review, report, and program with respect to exchange
               facilitators.
    Sec. 1079A. Financial fraud provisions.

                        Subtitle H--Conforming Amendments

    Sec. 1081. Amendments to the Inspector General Act.
    Sec. 1082. Amendments to the Privacy Act of 1974.
    Sec. 1083. Amendments to the Alternative Mortgage Transaction Parity Act
               of 1982.
    Sec. 1084. Amendments to the Electronic Fund Transfer Act.
    Sec. 1085. Amendments to the Equal Credit Opportunity Act.
    Sec. 1086. Amendments to the Expedited Funds Availability Act.
    Sec. 1087. Amendments to the Fair Credit Billing Act.
    Sec. 1088. Amendments to the Fair Credit Reporting Act and the Fair and
               Accurate Credit Transactions Act of 2003.
    Sec. 1089. Amendments to the Fair Debt Collection Practices Act.
    Sec. 1090. Amendments to the Federal Deposit Insurance Act.
    Sec. 1091. Amendment to Federal Financial Institutions Examination
               Council Act of 1978.
    Sec. 1092. Amendments to the Federal Trade Commission Act.
    Sec. 1093. Amendments to the Gramm-Leach-Bliley Act.
    Sec. 1094. Amendments to the Home Mortgage Disclosure Act of 1975.
    Sec. 1095. Amendments to the Homeowners Protection Act of 1998.
    Sec. 1096. Amendments to the Home Ownership and Equity Protection Act of
               1994.
    Sec. 1097. Amendments to the Omnibus Appropriations Act, 2009.
    Sec. 1098. Amendments to the Real Estate Settlement Procedures Act of
               1974.
    Sec. 1098A. Amendments to the Interstate Land Sales Full Disclosure Act.
    Sec. 1099. Amendments to the Right to Financial Privacy Act of 1978.
    Sec. 1100. Amendments to the Secure and Fair Enforcement for Mortgage
               Licensing Act of 2008.
    Sec. 1100A. Amendments to the Truth in Lending Act.
    Sec. 1100B. Amendments to the Truth in Savings Act.
    Sec. 1100C. Amendments to the Telemarketing and Consumer Fraud and Abuse
               Prevention Act.
    Sec. 1100D. Amendments to the Paperwork Reduction Act.
    Sec. 1100E. Adjustments for inflation in the Truth in Lending Act.
    Sec. 1100F. Use of consumer reports.
    Sec. 1100G. Small business fairness and regulatory transparency.
    Sec. 1100H. Effective date.

                   TITLE XI--FEDERAL RESERVE SYSTEM PROVISIONS

    Sec. 1101. Federal Reserve Act amendments on emergency lending
               authority.
    Sec. 1102. Reviews of special Federal reserve credit facilities.
    Sec. 1103. Public access to information.
    Sec. 1104. Liquidity event determination.

    [[Page 124 STAT. 1385]]

    Sec. 1105. Emergency financial stabilization.
    Sec. 1106. Additional related amendments.
    Sec. 1107. Federal Reserve Act amendments on Federal reserve bank
               governance.
    Sec. 1108. Federal Reserve Act amendments on supervision and regulation
               policy.
    Sec. 1109. GAO audit of the Federal Reserve facilities; publication of
               Board actions.

        TITLE XII--IMPROVING ACCESS TO MAINSTREAM FINANCIAL INSTITUTIONS

    Sec. 1201. Short title.
    Sec. 1202. Purpose.
    Sec. 1203. Definitions.
    Sec. 1204. Expanded access to mainstream financial institutions.
    Sec. 1205. Low-cost alternatives to payday loans.
    Sec. 1206. Grants to establish loan-loss reserve funds.
    Sec. 1207. Procedural provisions.
    Sec. 1208. Authorization of appropriations.
    Sec. 1209. Regulations.
    Sec. 1210. Evaluation and reports to Congress.

                           TITLE XIII--PAY IT BACK ACT

    Sec. 1301. Short title.
    Sec. 1302. Amendment to reduce TARP authorization.
    Sec. 1303. Report.
    Sec. 1304. Amendments to Housing and Economic Recovery Act of 2008.
    Sec. 1305. Federal Housing Finance Agency report.
    Sec. 1306. Repayment of unobligated ARRA funds.

            TITLE XIV--MORTGAGE REFORM AND ANTI-PREDATORY LENDING ACT

    Sec. 1400. Short title; designation as enumerated consumer law.

           Subtitle A--Residential Mortgage Loan Origination Standards

    Sec. 1401. Definitions.
    Sec. 1402. Residential mortgage loan origination.
    Sec. 1403. Prohibition on steering incentives.
    Sec. 1404. Liability.
    Sec. 1405. Regulations.
    Sec. 1406. Study of shared appreciation mortgages.

                   Subtitle B--Minimum Standards For Mortgages

    Sec. 1411. Ability to repay.
    Sec. 1412. Safe harbor and rebuttable presumption.
    Sec. 1413. Defense to foreclosure.
    Sec. 1414. Additional standards and requirements.
    Sec. 1415. Rule of construction.
    Sec. 1416. Amendments to civil liability provisions.
    Sec. 1417. Lender rights in the context of borrower deception.
    Sec. 1418. Six-month notice required before reset of hybrid adjustable
               rate mortgages.
    Sec. 1419. Required disclosures.
    Sec. 1420. Disclosures required in monthly statements for residential
               mortgage loans.
    Sec. 1421. Report by the GAO.
    Sec. 1422. State attorney general enforcement authority.

                         Subtitle C--High-Cost Mortgages

    Sec. 1431. Definitions relating to high-cost mortgages.
    Sec. 1432. Amendments to existing requirements for certain mortgages.
    Sec. 1433. Additional requirements for certain mortgages.

                    Subtitle D--Office of Housing Counseling

    Sec. 1441. Short title.
    Sec. 1442. Establishment of Office of Housing Counseling.
    Sec. 1443. Counseling procedures.
    Sec. 1444. Grants for housing counseling assistance.
    Sec. 1445. Requirements to use HUD-certified counselors under HUD
               programs.
    Sec. 1446. Study of defaults and foreclosures.
    Sec. 1447. Default and foreclosure database.
    Sec. 1448. Definitions for counseling-related programs.
    Sec. 1449. Accountability and transparency for grant recipients.
    Sec. 1450. Updating and simplification of mortgage information booklet.

    [[Page 124 STAT. 1386]]

    Sec. 1451. Home inspection counseling.
    Sec. 1452. Warnings to homeowners of foreclosure rescue scams.

                         Subtitle E--Mortgage Servicing

    Sec. 1461. Escrow and impound accounts relating to certain consumer
               credit transactions.
    Sec. 1462. Disclosure notice required for consumers who waive escrow
               services.
    Sec. 1463. Real Estate Settlement Procedures Act of 1974 amendments.
    Sec. 1464. Truth in Lending Act amendments.
    Sec. 1465. Escrows included in repayment analysis.

                        Subtitle F--Appraisal Activities

    Sec. 1471. Property appraisal requirements.
    Sec. 1472. Appraisal independence requirements.
    Sec. 1473. Amendments relating to Appraisal Subcommittee of FFIEC,
               Appraiser Independence Monitoring, Approved Appraiser
               Education, Appraisal Management Companies, Appraiser
               Complaint Hotline, Automated Valuation Models, and Broker
               Price Opinions.
    Sec. 1474. Equal Credit Opportunity Act amendment.
    Sec. 1475. Real Estate Settlement Procedures Act of 1974 amendment
               relating to certain appraisal fees.
    Sec. 1476. GAO study on the effectiveness and impact of various
               appraisal methods, valuation models and distributions
               channels, and on the Home Valuation Code of conduct and the
               Appraisal Subcommittee.

                Subtitle G--Mortgage Resolution and Modification

    Sec. 1481. Multifamily mortgage resolution program.
    Sec. 1482. Home Affordable Modification Program guidelines.
    Sec. 1483. Public availability of information of Making Home Affordable
               Program.
    Sec. 1484. Protecting tenants at foreclosure extension and
               clarification.

                      Subtitle H--Miscellaneous Provisions

    Sec. 1491. Sense of Congress regarding the importance of government-
               sponsored enterprises reform to enhance the protection,
               limitation, and regulation of the terms of residential
               mortgage credit.
    Sec. 1492. GAO study report on government efforts to combat mortgage
               foreclosure rescue scams and loan modification fraud.
    Sec. 1493. Reporting of mortgage data by State.
    Sec. 1494. Study of effect of drywall presence on foreclosures.
    Sec. 1495. Definition.
    Sec. 1496. Emergency mortgage relief.
    Sec. 1497. Additional assistance for Neighborhood Stabilization Program.
    Sec. 1498. Legal assistance for foreclosure-related issues.

                       TITLE XV--MISCELLANEOUS PROVISIONS

    Sec. 1501. Restrictions on use of United States funds for foreign
               governments; protection of American taxpayers.
    Sec. 1502. Conflict minerals.
    Sec. 1503. Reporting requirements regarding coal or other mine safety.
    Sec. 1504. Disclosure of payments by resource extraction issuers.
    Sec. 1505. Study by the Comptroller General.
    Sec. 1506. Study on core deposits and brokered deposits.

                        TITLE XVI--SECTION 1256 CONTRACTS

    Sec. 1601. Certain swaps, etc., not treated as section 1256 contracts.

    SEC. 2. <<NOTE: 12 USC 5301.>> DEFINITIONS.

        As used in this Act, the following definitions shall apply, except
    as the context otherwise requires or as otherwise specifically provided
    in this Act:
                (1) Affiliate.--The term ``affiliate'' has the same meaning
            as in section 3 of the Federal Deposit Insurance Act (12 U.S.C.
            1813).
                (2) Appropriate federal banking agency.--On and after the
            transfer date, the term ``appropriate Federal banking agency''
            has the same meaning as in section 3(q) of the Federal Deposit
            Insurance Act (12 U.S.C. 1813(q)), as amended by title III.

    [[Page 124 STAT. 1387]]

                (3) Board of governors.--The term ``Board of Governors''
            means the Board of Governors of the Federal Reserve System.
                (4) Bureau.--The term ``Bureau'' means the Bureau of
            Consumer Financial Protection established under title X.
                (5) Commission.--The term ``Commission'' means the
            Securities and Exchange Commission, except in the context of the
            Commodity Futures Trading Commission.
                (6) Commodity futures terms.--The terms ``futures commission
            merchant'', ``swap'', ``swap dealer'', ``swap execution
            facility'', ``derivatives clearing organization'', ``board of
            trade'', ``commodity trading advisor'', ``commodity pool'', and
            ``commodity pool operator'' have the same meanings as given the
            terms in section 1a of the Commodity Exchange Act (7 U.S.C. 1 et
            seq.).
                (7) Corporation.--The term ``Corporation'' means the Federal
            Deposit Insurance Corporation.
                (8) Council.--The term ``Council'' means the Financial
            Stability Oversight Council established under title I.
                (9) Credit union.--The term ``credit union'' means a Federal
            credit union, State credit union, or State-chartered credit
            union, as those terms are defined in section 101 of the Federal
            Credit Union Act (12 U.S.C. 1752).
                (10) Federal banking agency.--The term--
                        (A) ``Federal banking agency'' means, individually,
                    the Board of Governors, the Office of the Comptroller of
                    the Currency, and the Corporation; and
                        (B) ``Federal banking agencies'' means all of the
                    agencies referred to in subparagraph (A), collectively.
                (11) Functionally regulated subsidiary.--The term
            ``functionally regulated subsidiary'' has the same meaning as in
            section 5(c)(5) of the Bank Holding Company Act of 1956 (12
            U.S.C. 1844(c)(5)).
                (12) Primary financial regulatory agency.--The term
            ``primary financial regulatory agency'' means--
                        (A) the appropriate Federal banking agency, with
                    respect to institutions described in section 3(q) of the
                    Federal Deposit Insurance Act, except to the extent that
                    an institution is or the activities of an institution
                    are otherwise described in subparagraph (B), (C), (D),
                    or (E);
                        (B) the Securities and Exchange Commission, with
                    respect to--
                              (i) any broker or dealer that is registered
                          with the Commission under the Securities Exchange
                          Act of 1934, with respect to the activities of the
                          broker or dealer that require the broker or dealer
                          to be registered under that Act;
                              (ii) any investment company that is registered
                          with the Commission under the Investment Company
                          Act of 1940, with respect to the activities of the
                          investment company that require the investment
                          company to be registered under that Act;
                              (iii) any investment adviser that is
                          registered with the Commission under the
                          Investment Advisers Act of 1940, with respect to
                          the investment advisory activities of such company
                          and activities that are incidental to such
                          advisory activities;

    [[Page 124 STAT. 1388]]

                              (iv) any clearing agency registered with the
                          Commission under the Securities Exchange Act of
                          1934, with respect to the activities of the
                          clearing agency that require the agency to be
                          registered under such Act;
                              (v) any nationally recognized statistical
                          rating organization registered with the Commission
                          under the Securities Exchange Act of 1934;
                              (vi) any transfer agent registered with the
                          Commission under the Securities Exchange Act of
                          1934;
                              (vii) any exchange registered as a national
                          securities exchange with the Commission under the
                          Securities Exchange Act of 1934;
                              (viii) any national securities association
                          registered with the Commission under the
                          Securities Exchange Act of 1934;
                              (ix) any securities information processor
                          registered with the Commission under the
                          Securities Exchange Act of 1934;
                              (x) the Municipal Securities Rulemaking Board
                          established under the Securities Exchange Act of
                          1934;
                              (xi) the Public Company Accounting Oversight
                          Board established under the Sarbanes-Oxley Act of
                          2002 (15 U.S.C. 7211 et seq.);
                              (xii) the Securities Investor Protection
                          Corporation established under the Securities
                          Investor Protection Act of 1970 (15 U.S.C. 78aaa
                          et seq.); and
                              (xiii) any security-based swap execution
                          facility, security-based swap data repository,
                          security-based swap dealer or major security-based
                          swap participant registered with the Commission
                          under the Securities Exchange Act of 1934, with
                          respect to the security-based swap activities of
                          the person that require such person to be
                          registered under such Act;
                        (C) the Commodity Futures Trading Commission, with
                    respect to--
                              (i) any futures commission merchant registered
                          with the Commodity Futures Trading Commission
                          under the Commodity Exchange Act (7 U.S.C. 1 et
                          seq.), with respect to the activities of the
                          futures commission merchant that require the
                          futures commission merchant to be registered under
                          that Act;
                              (ii) any commodity pool operator registered
                          with the Commodity Futures Trading Commission
                          under the Commodity Exchange Act (7 U.S.C. 1 et
                          seq.), with respect to the activities of the
                          commodity pool operator that require the commodity
                          pool operator to be registered under that Act, or
                          a commodity pool, as defined in that Act;
                              (iii) any commodity trading advisor or
                          introducing broker registered with the Commodity
                          Futures Trading Commission under the Commodity
                          Exchange Act (7 U.S.C. 1 et seq.), with respect to
                          the activities of the commodity trading advisor or
                          introducing broker that require the commodity
                          trading adviser or introducing broker to be
                          registered under that Act;

    [[Page 124 STAT. 1389]]

                              (iv) any derivatives clearing organization
                          registered with the Commodity Futures Trading
                          Commission under the Commodity Exchange Act (7
                          U.S.C. 1 et seq.), with respect to the activities
                          of the derivatives clearing organization that
                          require the derivatives clearing organization to
                          be registered under that Act;
                              (v) any board of trade designated as a
                          contract market by the Commodity Futures Trading
                          Commission under the Commodity Exchange Act (7
                          U.S.C. 1 et seq.);
                              (vi) any futures association registered with
                          the Commodity Futures Trading Commission under the
                          Commodity Exchange Act (7 U.S.C. 1 et seq.);
                              (vii) any retail foreign exchange dealer
                          registered with the Commodity Futures Trading
                          Commission under the Commodity Exchange Act (7
                          U.S.C. 1 et seq.), with respect to the activities
                          of the retail foreign exchange dealer that require
                          the retail foreign exchange dealer to be
                          registered under that Act;
                              (viii) any swap execution facility, swap data
                          repository, swap dealer, or major swap participant
                          registered with the Commodity Futures Trading
                          Commission under the Commodity Exchange Act (7
                          U.S.C. 1 et seq.) with respect to the swap
                          activities of the person that require such person
                          to be registered under that Act; and
                              (ix) any registered entity under the Commodity
                          Exchange Act (7 U.S.C. 1 et seq.), with respect to
                          the activities of the registered entity that
                          require the registered entity to be registered
                          under that Act;
                        (D) the State insurance authority of the State in
                    which an insurance company is domiciled, with respect to
                    the insurance activities and activities that are
                    incidental to such insurance activities of an insurance
                    company that is subject to supervision by the State
                    insurance authority under State insurance law; and
                        (E) the Federal Housing Finance Agency, with respect
                    to Federal Home Loan Banks or the Federal Home Loan Bank
                    System, and with respect to the Federal National
                    Mortgage Association or the Federal Home Loan Mortgage
                    Corporation.
                (13) Prudential standards.--The term ``prudential
            standards'' means enhanced supervision and regulatory standards
            developed by the Board of Governors under section 165.
                (14) Secretary.--The term ``Secretary'' means the Secretary
            of the Treasury.
                (15) Securities terms.--The--
                        (A) terms ``broker'', ``dealer'', ``issuer'',
                    ``nationally recognized statistical rating
                    organization'', ``security'', and ``securities laws''
                    have the same meanings as in section 3 of the Securities
                    Exchange Act of 1934 (15 U.S.C. 78c);
                        (B) term ``investment adviser'' has the same meaning
                    as in section 202 of the Investment Advisers Act of 1940
                    (15 U.S.C. 80b-2); and
                        (C) term ``investment company'' has the same meaning
                    as in section 3 of the Investment Company Act of 1940
                    (15 U.S.C. 80a-3).

    [[Page 124 STAT. 1390]]

                (16) State.--The term ``State'' means any State,
            commonwealth, territory, or possession of the United States, the
            District of Columbia, the Commonwealth of Puerto Rico, the
            Commonwealth of the Northern Mariana Islands, American Samoa,
            Guam, or the United States Virgin Islands.
                (17) Transfer date.--The term ``transfer date'' means the
            date established under section 311.
                (18) Other incorporated definitions.--
                        (A) Federal deposit insurance act.--The terms
                    ``bank'', ``bank holding company'', ``control'',
                    ``deposit'', ``depository institution'', ``Federal
                    depository institution'', ``Federal savings
                    association'', ``foreign bank'', ``including'',
                    ``insured branch'', ``insured depository institution'',
                    ``national member bank'', ``national nonmember bank'',
                    ``savings association'', ``State bank'', ``State
                    depository institution'', ``State member bank'', ``State
                    nonmember bank'', ``State savings association'', and
                    ``subsidiary'' have the same meanings as in section 3 of
                    the Federal Deposit Insurance Act (12 U.S.C. 1813).
                        (B) Holding companies.--The term--
                              (i) ``bank holding company'' has the same
                          meaning as in section 2 of the Bank Holding
                          Company Act of 1956 (12 U.S.C. 1841);
                              (ii) ``financial holding company'' has the
                          same meaning as in section 2(p) of the Bank
                          Holding Company Act of 1956 (12 U.S.C. 1841(p));
                          and
                              (iii) ``savings and loan holding company'' has
                          the same meaning as in section 10 of the Home
                          Owners' Loan Act (12 U.S.C. 1467a(a)).
    SEC. 3. <<NOTE: 12 USC 5302.>> SEVERABILITY.

        If any provision of this Act, an amendment made by this Act, or the
    application of such provision or amendment to any person or circumstance
    is held to be unconstitutional, the remainder of this Act, the
    amendments made by this Act, and the application of the provisions of
    such to any person or circumstance shall not be affected thereby.
    SEC. 4. <<NOTE: 12 USC 5301 note.>> EFFECTIVE DATE.

        Except as otherwise specifically provided in this Act or the
    amendments made by this Act, this Act and such amendments shall take
    effect 1 day after the date of enactment of this Act.
    SEC. 5. BUDGETARY EFFECTS.

        The budgetary effects of this Act, for the purpose of complying with
    the Statutory Pay-As-You-Go-Act of 2010, shall be determined by
    reference to the latest statement titled ``Budgetary Effects of PAYGO
    Legislation'' for this Act, jointly submitted for printing in the
    Congressional Record by the Chairmen of the House and Senate Budget
    Committees, provided that such statement has been submitted prior to the
    vote on passage in the House acting first on this conference report or
    amendment between the Houses.
    SEC. 6. <<NOTE: 12 USC 5303.>> ANTITRUST SAVINGS CLAUSE.

        Nothing in this Act, or any amendment made by this Act, shall be
    construed to modify, impair, or supersede the operation of any of the
    antitrust laws, unless otherwise <<NOTE: Definition.>> specified. For
    purposes of this section, the term ``antitrust laws'' has the same
    meaning

    [[Page 124 STAT. 1391]]

    as in subsection (a) of the first section of the Clayton Act, except
    that such term includes section 5 of the Federal Trade Commission Act,
    to the extent that such section 5 applies to unfair methods of
    competition.

    TITLE I-- <<NOTE: Financial Stability Act of 2010.>> FINANCIAL STABILITY
    SEC. 101. <<NOTE: 12 USC 5301 note.>> SHORT TITLE.

        This title may be cited as the ``Financial Stability Act of 2010''.
    SEC. 102. <<NOTE: 12 USC 5311.>> DEFINITIONS.

        (a) In General.--For purposes of this title, unless the context
    otherwise requires, the following definitions shall apply:
                (1) Bank holding company.--The term ``bank holding company''
            has the same meaning as in section 2 of the Bank Holding Company
            Act of 1956 (12 U.S.C. 1841). A foreign bank or company that is
            treated as a bank holding company for purposes of the Bank
            Holding Company Act of 1956, pursuant to section 8(a) of the
            International Banking Act of 1978 (12 U.S.C. 3106(a)), shall be
            treated as a bank holding company for purposes of this title.
                (2) Chairperson.--The term ``Chairperson'' means the
            Chairperson of the Council.
                (3) Member agency.--The term ``member agency'' means an
            agency represented by a voting member of the Council.
                (4) Nonbank financial company definitions.--
                        (A) Foreign nonbank financial company.--The term
                    ``foreign nonbank financial company'' means a company
                    (other than a company that is, or is treated in the
                    United States as, a bank holding company) that is--
                              (i) incorporated or organized in a country
                          other than the United States; and
                              (ii) predominantly engaged in, including
                          through a branch in the United States, financial
                          activities, as defined in paragraph (6).
                        (B) U.S. nonbank financial company.--The term ``U.S.
                    nonbank financial company'' means a company (other than
                    a bank holding company, a Farm Credit System institution
                    chartered and subject to the provisions of the Farm
                    Credit Act of 1971 (12 U.S.C. 2001 et seq.), or a
                    national securities exchange (or parent thereof),
                    clearing agency (or parent thereof, unless the parent is
                    a bank holding company), security-based swap execution
                    facility, or security-based swap data repository
                    registered with the Commission, or a board of trade
                    designated as a contract market (or parent thereof), or
                    a derivatives clearing organization (or parent thereof,
                    unless the parent is a bank holding company), swap
                    execution facility or a swap data repository registered
                    with the Commodity Futures Trading Commission), that
                    is--
                              (i) incorporated or organized under the laws
                          of the United States or any State; and
                              (ii) predominantly engaged in financial
                          activities, as defined in paragraph (6).

    [[Page 124 STAT. 1392]]

                        (C) Nonbank financial company.--The term ``nonbank
                    financial company'' means a U.S. nonbank financial
                    company and a foreign nonbank financial company.
                        (D) Nonbank financial company supervised by the
                    board of governors.--The term ``nonbank financial
                    company supervised by the Board of Governors'' means a
                    nonbank financial company that the Council has
                    determined under section 113 shall be supervised by the
                    Board of Governors.
                (5) Office of financial research.--The term ``Office of
            Financial Research'' means the office established under section
            152.
                (6) Predominantly engaged.--A company is ``predominantly
            engaged in financial activities'' if--
                        (A) the annual gross revenues derived by the company
                    and all of its subsidiaries from activities that are
                    financial in nature (as defined in section 4(k) of the
                    Bank Holding Company Act of 1956) and, if applicable,
                    from the ownership or control of one or more insured
                    depository institutions, represents 85 percent or more
                    of the consolidated annual gross revenues of the
                    company; or
                        (B) the consolidated assets of the company and all
                    of its subsidiaries related to activities that are
                    financial in nature (as defined in section 4(k) of the
                    Bank Holding Company Act of 1956) and, if applicable,
                    related to the ownership or control of one or more
                    insured depository institutions, represents 85 percent
                    or more of the consolidated assets of the company.
                (7) Significant institutions.--The terms ``significant
            nonbank financial company'' and ``significant bank holding
            company'' have the meanings given those terms by rule of the
            Board of Governors, but in no instance shall the term
            ``significant nonbank financial company'' include those entities
            that are excluded under paragraph (4)(B).

        (b) Definitional Criteria.--The <<NOTE: Regulations.>> Board of
    Governors shall establish, by regulation, the requirements for
    determining if a company is predominantly engaged in financial
    activities, as defined in subsection (a)(6).

        (c) Foreign Nonbank Financial Companies.--For purposes of the
    application of subtitles A and C (other than section 113(b)) with
    respect to a foreign nonbank financial company, references in this title
    to ``company'' or ``subsidiary'' include only the United States
    activities and subsidiaries of such foreign company, except as otherwise
    provided.

                Subtitle A--Financial Stability Oversight Council

    SEC. 111. <<NOTE: 12 USC 5321.>> FINANCIAL STABILITY OVERSIGHT
                            COUNCIL ESTABLISHED.

        (a) Establishment.--Effective <<NOTE: Effective date.>> 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--

    [[Page 124 STAT. 1393]]

                        (A) the Secretary of the Treasury, who shall serve
                    as Chairperson of the Council;
                        (B) the Chairman of the Board of Governors;
                        (C) the Comptroller of the Currency;
                        (D) the Director of the Bureau;
                        (E) the Chairman of the Commission;
                        (F) the Chairperson of the Corporation;
                        (G) the Chairperson of the Commodity Futures Trading
                    Commission;
                        (H) the Director of the Federal Housing Finance
                    Agency;
                        (I) the Chairman of the National Credit Union
                    Administration Board; and
                        (J) an independent member appointed by the
                    President, by and with the advice and consent of the
                    Senate, having insurance expertise.
                (2) Nonvoting members.--The nonvoting members, who shall
            serve in an advisory capacity as a nonvoting member of the
            Council, shall be--
                        (A) the Director of the Office of Financial
                    Research;
                        (B) the Director of the Federal Insurance Office;
                        (C) a State insurance commissioner, to be designated
                    by a selection process determined by the State insurance
                    commissioners;
                        (D) a State banking supervisor, to be designated by
                    a selection process determined by the State banking
                    supervisors; and
                        (E) a State securities commissioner (or an officer
                    performing like functions), to be designated by a
                    selection process determined by such State securities
                    commissioners.
                (3) Nonvoting member participation.--The nonvoting members
            of the Council shall not be excluded from any of the
            proceedings, meetings, discussions, or deliberations of the
            Council, except that the Chairperson may, upon an affirmative
            vote of the member agencies, exclude the nonvoting members from
            any of the proceedings, meetings, discussions, or deliberations
            of the Council when necessary to safeguard and promote the free
            exchange of confidential supervisory information.

        (c) Terms; Vacancy.--
                (1) Terms.--The independent member of the Council shall
            serve for a term of 6 years, and each nonvoting member described
            in subparagraphs (C), (D), and (E) of subsection (b)(2) shall
            serve for a term of 2 years.
                (2) Vacancy.--Any vacancy on the Council shall be filled in
            the manner in which the original appointment was made.
                (3) Acting officials may serve.--In the event of a vacancy
            in the office of the head of a member agency or department, and
            pending the appointment of a successor, or during the absence or
            disability of the head of a member agency or department, the
            acting head of the member agency or department shall serve as a
            member of the Council in the place of that agency or department
            head.

        (d) Technical and Professional Advisory Committees.--The Council may
    appoint such special advisory, technical, or professional committees as
    may be useful in carrying out the functions of the Council, including an
    advisory committee consisting of State

    [[Page 124 STAT. 1394]]

    regulators, and the members of such committees may be members of the
    Council, or other persons, or both.
        (e) Meetings.--
                (1) Timing.--The Council shall meet at the call of the
            Chairperson or a majority of the members then serving, but not
            less frequently than quarterly.
                (2) Rules for conducting business.--The Council shall adopt
            such rules as may be necessary for the conduct of the business
            of the Council. Such rules shall be rules of agency
            organization, procedure, or practice for purposes of section 553
            of title 5, United States Code.

        (f) Voting.--Unless otherwise specified, the Council shall make all
    decisions that it is authorized or required to make by a majority vote
    of the voting members then serving.
        (g) Nonapplicability of FACA.--
    The <<NOTE: Publication. List.>> Federal Advisory Committee Act (5
    U.S.C. App.) shall not apply to the Council, or to any special advisory,
    technical, or professional committee appointed by the Council, except
    that, if an advisory, technical, or professional committee has one or
    more members who are not employees of or affiliated with the United
    States Government, the Council shall publish a list of the names of the
    members of such committee.

        (h) Assistance From Federal Agencies.--Any department or agency of
    the United States may provide to the Council and any special advisory,
    technical, or professional committee appointed by the Council, such
    services, funds, facilities, staff, and other support services as the
    Council may determine advisable.
        (i) Compensation of Members.--
                (1) Federal employee members.--All members of the Council
            who are officers or employees of the United States shall serve
            without compensation in addition to that received for their
            services as officers or employees of the United States.
                (2) Compensation for non-federal member.--Section 5314 of
            title 5, United States Code, is amended by adding at the end the
            following:
                ``Independent Member of the Financial Stability Oversight
            Council (1).''.

        (j) Detail of Government Employees.--Any employee of the Federal
    Government may be detailed to the Council without reimbursement, and
    such detail shall be without interruption or loss of civil service
    status or privilege. An employee of the Federal Government detailed to
    the Council shall report to and be subject to oversight by the Council
    during the assignment to the Council, and shall be compensated by the
    department or agency from which the employee was detailed.
    SEC. 112. <<NOTE: 12 USC 5322.>> COUNCIL AUTHORITY.

        (a) Purposes and Duties of the Council.--
                (1) In general.--The purposes of the Council are--
                        (A) to identify risks to the financial stability of
                    the United States that could arise from the material
                    financial distress or failure, or ongoing activities, of
                    large, interconnected bank holding companies or nonbank
                    financial companies, or that could arise outside the
                    financial services marketplace;
                        (B) to promote market discipline, by eliminating
                    expectations on the part of shareholders, creditors, and

    [[Page 124 STAT. 1395]]

                    counterparties of such companies that the Government
                    will shield them from losses in the event of failure;
                    and
                        (C) to respond to emerging threats to the stability
                    of the United States financial system.
                (2) Duties.--The Council shall, in accordance with this
            title--
                        (A) collect information from member agencies, other
                    Federal and State financial regulatory agencies, the
                    Federal Insurance Office and, if necessary to assess
                    risks to the United States financial system, direct the
                    Office of Financial Research to collect information from
                    bank holding companies and nonbank financial companies;
                        (B) provide direction to, and request data and
                    analyses from, the Office of Financial Research to
                    support the work of the Council;
                        (C) monitor the financial services marketplace in
                    order to identify potential threats to the financial
                    stability of the United States;
                        (D) to monitor domestic and international financial
                    regulatory proposals and developments, including
                    insurance and accounting issues, and to advise Congress
                    and make recommendations in such areas that will enhance
                    the integrity, efficiency, competitiveness, and
                    stability of the U.S. financial markets;
                        (E) facilitate information sharing and coordination
                    among the member agencies and other Federal and State
                    agencies regarding domestic financial services policy
                    development, rulemaking, examinations, reporting
                    requirements, and enforcement actions;
                        (F) recommend to the member agencies general
                    supervisory priorities and principles reflecting the
                    outcome of discussions among the member agencies;
                        (G) identify gaps in regulation that could pose
                    risks to the financial stability of the United States;
                        (H) require supervision by the Board of Governors
                    for nonbank financial companies that may pose risks to
                    the financial stability of the United States in the
                    event of their material financial distress or failure,
                    or because of their activities pursuant to section 113;
                        (I) make <<NOTE: Recommenda-
                    tions.>> recommendations to the Board of Governors
                    concerning the establishment of heightened prudential
                    standards for risk-based capital, leverage, liquidity,
                    contingent capital, resolution plans and credit exposure
                    reports, concentration limits, enhanced public
                    disclosures, and overall risk management for nonbank
                    financial companies and large, interconnected bank
                    holding companies supervised by the Board of Governors;
                        (J) identify systemically important financial market
                    utilities and payment, clearing, and settlement
                    activities (as that term is defined in title VIII);
                        (K) <<NOTE: Recommenda- tions.>>  make
                    recommendations to primary financial regulatory agencies
                    to apply new or heightened standards and safeguards for
                    financial activities or practices that could create or
                    increase risks of significant liquidity, credit, or
                    other problems spreading among bank holding companies,
                    nonbank financial companies, and United States financial
                    markets;

    [[Page 124 STAT. 1396]]

                        (L) review and, as appropriate, may submit comments
                    to the Commission and any standard-setting body with
                    respect to an existing or proposed accounting principle,
                    standard, or procedure;
                        (M) provide a forum for--
                              (i) discussion and analysis of emerging market
                          developments and financial regulatory issues; and
                              (ii) resolution of jurisdictional disputes
                          among the members of the Council; and
                        (N) <<NOTE: Deadline. Reports.>> annually report to
                    and testify before Congress on--
                              (i) the activities of the Council;
                              (ii) significant financial market and
                          regulatory developments, including insurance and
                          accounting regulations and standards, along with
                          an assessment of those developments on the
                          stability of the financial system;
                              (iii) potential emerging threats to the
                          financial stability of the United States;
                              (iv) all determinations made under section 113
                          or title VIII, and the basis for such
                          determinations;
                              (v) all recommendations made under section 119
                          and the result of such recommendations; and
                              (vi) recommendations--
                                        (I) to enhance the integrity,
                                    efficiency, competitiveness, and
                                    stability of United States financial
                                    markets;
                                        (II) to promote market discipline;
                                    and
                                        (III) to maintain investor
                                    confidence.

        (b) Statements by Voting Members of the Council.--At the time at
    which each report is submitted under subsection (a), each voting member
    of the Council shall--
                (1) if such member believes that the Council, the
            Government, and the private sector are taking all reasonable
            steps to ensure financial stability and to mitigate systemic
            risk that would negatively affect the economy, submit a signed
            statement to Congress stating such belief; or
                (2) if such member does not believe that all reasonable
            steps described under paragraph (1) are being taken, submit a
            signed statement to Congress stating what actions such member
            believes need to be taken in order to ensure that all reasonable
            steps described under paragraph (1) are taken.

        (c) Testimony by the Chairperson.--The Chairperson shall appear
    before the Committee on Financial Services of the House of
    Representatives and the Committee on Banking, Housing, and Urban Affairs
    of the Senate at an annual hearing, after the report is submitted under
    subsection (a)--
                (1) to discuss the efforts, activities, objectives, and
            plans of the Council; and
                (2) to discuss and answer questions concerning such report.

        (d) Authority To Obtain Information.--
                (1) In general.--The Council may receive, and may request
            the submission of, any data or information from the Office of
            Financial Research, member agencies, and the Federal Insurance
            Office, as necessary--
                        (A) to monitor the financial services marketplace to
                    identify potential risks to the financial stability of
                    the United States; or

    [[Page 124 STAT. 1397]]

                        (B) to otherwise carry out any of the provisions of
                    this title.
                (2) Submissions by the office and member agencies.--
            Notwithstanding any other provision of law, the Office of
            Financial Research, any member agency, and the Federal Insurance
            Office, are authorized to submit information to the Council.
                (3) Financial data collection.--
                        (A) In general.--The Council, acting through the
                    Office of Financial Research, may require the submission
                    of periodic and other reports from any nonbank financial
                    company or bank holding company for the purpose of
                    assessing the extent to which a financial activity or
                    financial market in which the nonbank financial company
                    or bank holding company participates, or the nonbank
                    financial company or bank holding company itself, poses
                    a threat to the financial stability of the United
                    States.
                        (B) Mitigation of report burden.--Before requiring
                    the submission of reports from any nonbank financial
                    company or bank holding company that is regulated by a
                    member agency or any primary financial regulatory
                    agency, the Council, acting through the Office of
                    Financial Research, shall coordinate with such agencies
                    and shall, whenever possible, rely on information
                    available from the Office of Financial Research or such
                    agencies.
                        (C) Mitigation in case of foreign financial
                    companies.--Before <<NOTE: Consultation.>> requiring the
                    submission of reports from a company that is a foreign
                    nonbank financial company or foreign-based bank holding
                    company, the Council shall, acting through the Office of
                    Financial Research, to the extent appropriate, consult
                    with the appropriate foreign regulator of such company
                    and, whenever possible, rely on information already
                    being collected by such foreign regulator, with English
                    translation.
                (4) Back-up examination by the board of governors.--If the
            Council is unable to determine whether the financial activities
            of a U.S. nonbank financial company pose a threat to the
            financial stability of the United States, based on information
            or reports obtained under paragraphs (1) and (3), discussions
            with management, and publicly available information, the Council
            may request the Board of Governors, and the Board of Governors
            is authorized, to conduct an examination of the U.S. nonbank
            financial company for the sole purpose of determining whether
            the nonbank financial company should be supervised by the Board
            of Governors for purposes of this title.
                (5) Confidentiality.--
                        (A) In general.--The Council, the Office of
                    Financial Research, and the other member agencies shall
                    maintain the confidentiality of any data, information,
                    and reports submitted under this title.
                        (B) Retention of privilege.--The submission of any
                    nonpublicly available data or information under this
                    subsection and subtitle B shall not constitute a waiver
                    of, or otherwise affect, any privilege arising under
                    Federal or State law (including the rules of any Federal
                    or State court) to which the data or information is
                    otherwise subject.

    [[Page 124 STAT. 1398]]

                        (C) Freedom of information act.--
                    Section <<NOTE: Applicability.>> 552 of title 5, United
                    States Code, including the exceptions thereunder, shall
                    apply to any data or information submitted under this
                    subsection and subtitle B.
    SEC. 113. <<NOTE: 12 USC 5323.>> AUTHORITY TO REQUIRE SUPERVISION
                            AND REGULATION OF CERTAIN NONBANK
                            FINANCIAL COMPANIES.

        (a) U.S. Nonbank Financial Companies Supervised by the Board of
    Governors.--
                (1) Determination.--The Council, on a nondelegable basis and
            by a vote of not fewer than \2/3\ of the voting members then
            serving, including an affirmative vote by the Chairperson, may
            determine that a U.S. nonbank financial company shall be
            supervised by the Board of Governors and shall be subject to
            prudential standards, in accordance with this title, if the
            Council determines that material financial distress at the U.S.
            nonbank financial company, or the nature, scope, size, scale,
            concentration, interconnectedness, or mix of the activities of
            the U.S. nonbank financial company, could pose a threat to the
            financial stability of the United States.
                (2) Considerations.--In making a determination under
            paragraph (1), the Council shall consider--
                        (A) the extent of the leverage of the company;
                        (B) the extent and nature of the off-balance-sheet
                    exposures of the company;
                        (C) the extent and nature of the transactions and
                    relationships of the company with other significant
                    nonbank financial companies and significant bank holding
                    companies;
                        (D) the importance of the company as a source of
                    credit for households, businesses, and State and local
                    governments and as a source of liquidity for the United
                    States financial system;
                        (E) the importance of the company as a source of
                    credit for low-income, minority, or underserved
                    communities, and the impact that the failure of such
                    company would have on the availability of credit in such
                    communities;
                        (F) the extent to which assets are managed rather
                    than owned by the company, and the extent to which
                    ownership of assets under management is diffuse;
                        (G) the nature, scope, size, scale, concentration,
                    interconnectedness, and mix of the activities of the
                    company;
                        (H) the degree to which the company is already
                    regulated by 1 or more primary financial regulatory
                    agencies;
                        (I) the amount and nature of the financial assets of
                    the company;
                        (J) the amount and types of the liabilities of the
                    company, including the degree of reliance on short-term
                    funding; and
                        (K) any other risk-related factors that the Council
                    deems appropriate.

        (b) Foreign Nonbank Financial Companies Supervised by the Board of
    Governors.--
                (1) Determination.--The Council, on a nondelegable basis and
            by a vote of not fewer than \2/3\ of the voting members then
            serving, including an affirmative vote by the Chairperson,

    [[Page 124 STAT. 1399]]

            may determine that a foreign nonbank financial company shall be
            supervised by the Board of Governors and shall be subject to
            prudential standards, in accordance with this title, if the
            Council determines that material financial distress at the
            foreign nonbank financial company, or the nature, scope, size,
            scale, concentration, interconnectedness, or mix of the
            activities of the foreign nonbank financial company, could pose
            a threat to the financial stability of the United States.
                (2) Considerations.--In making a determination under
            paragraph (1), the Council shall consider--
                        (A) the extent of the leverage of the company;
                        (B) the extent and nature of the United States
                    related off-balance-sheet exposures of the company;
                        (C) the extent and nature of the transactions and
                    relationships of the company with other significant
                    nonbank financial companies and significant bank holding
                    companies;
                        (D) the importance of the company as a source of
                    credit for United States households, businesses, and
                    State and local governments and as a source of liquidity
                    for the United States financial system;
                        (E) the importance of the company as a source of
                    credit for low-income, minority, or underserved
                    communities in the United States, and the impact that
                    the failure of such company would have on the
                    availability of credit in such communities;
                        (F) the extent to which assets are managed rather
                    than owned by the company and the extent to which
                    ownership of assets under management is diffuse;
                        (G) the nature, scope, size, scale, concentration,
                    interconnectedness, and mix of the activities of the
                    company;
                        (H) the extent to which the company is subject to
                    prudential standards on a consolidated basis in its home
                    country that are administered and enforced by a
                    comparable foreign supervisory authority;
                        (I) the amount and nature of the United States
                    financial assets of the company;
                        (J) the amount and nature of the liabilities of the
                    company used to fund activities and operations in the
                    United States, including the degree of reliance on
                    short-term funding; and
                        (K) any other risk-related factors that the Council
                    deems appropriate.

        (c) Antievasion.--
                (1) Determinations.--In order to avoid evasion of this
            title, the Council, on its own initiative or at the request of
            the Board of Governors, may determine, on a nondelegable basis
            and by a vote of not fewer than \2/3\ of the voting members then
            serving, including an affirmative vote by the Chairperson,
            that--
                        (A) material financial distress related to, or the
                    nature, scope, size, scale, concentration,
                    interconnectedness, or mix of, the financial activities
                    conducted directly or indirectly by a company
                    incorporated or organized under the laws of the United
                    States or any State or the financial activities in the
                    United States of a company incorporated or organized in
                    a country other than the United States would

    [[Page 124 STAT. 1400]]

                    pose a threat to the financial stability of the United
                    States, based on consideration of the factors in
                    subsection (a)(2) or (b)(2), as applicable;
                        (B) the company is organized or operates in such a
                    manner as to evade the application of this title; and
                        (C) such financial activities of the company shall
                    be supervised by the Board of Governors and subject to
                    prudential standards in accordance with this title,
                    consistent with paragraph (3).
                (2) Report.--Upon making a determination under paragraph
            (1), the Council shall submit a report to the appropriate
            committees of Congress detailing the reasons for making such
            determination.
                (3) Consolidated supervision of only financial activities;
            establishment of an intermediate holding company.--
                        (A) Establishment of an intermediate holding
                    company.--Upon a determination under paragraph (1), the
                    company that is the subject of the determination may
                    establish an intermediate holding company in which the
                    financial activities of such company and its
                    subsidiaries shall be conducted (other than the
                    activities described in section 167(b)(2)) in compliance
                    with any regulations or guidance provided by the Board
                    of Governors. Such intermediate holding company shall be
                    subject to the supervision of the Board of Governors and
                    to prudential standards under this title as if the
                    intermediate holding company were a nonbank financial
                    company supervised by the Board of Governors.
                        (B) Action of the board of governors.--To facilitate
                    the supervision of the financial activities subject to
                    the determination in paragraph (1), the Board of
                    Governors may require a company to establish an
                    intermediate holding company, as provided for in section
                    167, which would be subject to the supervision of the
                    Board of Governors and to prudential standards under
                    this title, as if the intermediate holding company were
                    a nonbank financial company supervised by the Board of
                    Governors.
                (4) Notice and opportunity for hearing and final
            determination; judicial review.--
            <<NOTE: Applicability.>> Subsections (d) through (h) shall apply
            to determinations made by the Council pursuant to paragraph (1)
            in the same manner as such subsections apply to nonbank
            financial companies.
                (5) Covered financial activities.--For purposes of this
            subsection, the term ``financial activities''--
                        (A) <<NOTE: Definition.>> means activities that are
                    financial in nature (as defined in section 4(k) of the
                    Bank Holding Company Act of 1956);
                        (B) includes the ownership or control of one or more
                    insured depository institutions; and
                        (C) does not include internal financial activities
                    conducted for the company or any affiliate thereof,
                    including internal treasury, investment, and employee
                    benefit functions.
                (6) Only financial activities subject to prudential
            supervision.--Nonfinancial activities of the company shall not

    [[Page 124 STAT. 1401]]

            be subject to supervision by the Board of Governors and
            prudential standards of the Board. For purposes of this Act, the
            financial activities that are the subject of the determination
            in paragraph (1) shall be subject to the same requirements as a
            nonbank financial company supervised by the Board of Governors.
            Nothing in this paragraph shall prohibit or limit the authority
            of the Board of Governors to apply prudential standards under
            this title to the financial activities that are subject to the
            determination in paragraph (1).

        (d) Reevaluation and Rescission.--The Council shall--
                (1) <<NOTE: Deadline.>> not less frequently than annually,
            reevaluate each determination made under subsections (a) and (b)
            with respect to such nonbank financial company supervised by the
            Board of Governors; and
                (2) rescind any such determination, if the Council, by a
            vote of not fewer than \2/3\ of the voting members then serving,
            including an affirmative vote by the Chairperson, determines
            that the nonbank financial company no longer meets the standards
            under subsection (a) or (b), as applicable.

        (e) Notice <<NOTE: Deadlines.>> and Opportunity for Hearing and
    Final Determination.--
                (1) In general.--The Council shall provide to a nonbank
            financial company written notice of a proposed determination of
            the Council, including an explanation of the basis of the
            proposed determination of the Council, that a nonbank financial
            company shall be supervised by the Board of Governors and shall
            be subject to prudential standards in accordance with this
            title.
                (2) Hearing.--Not later than 30 days after the date of
            receipt of any notice of a proposed determination under
            paragraph (1), the nonbank financial company may request, in
            writing, an opportunity for a written or oral hearing before the
            Council to contest the proposed determination. Upon receipt of a
            timely request, the Council shall fix a time (not later than 30
            days after the date of receipt of the request) and place at
            which such company may appear, personally or through counsel, to
            submit written materials (or, at the sole discretion of the
            Council, oral testimony and oral argument).
                (3) Final determination.--Not later than 60 days after the
            date of a hearing under paragraph (2), the Council shall notify
            the nonbank financial company of the final determination of the
            Council, which shall contain a statement of the basis for the
            decision of the Council.
                (4) No hearing requested.--If a nonbank financial company
            does not make a timely request for a hearing, the Council shall
            notify the nonbank financial company, in writing, of the final
            determination of the Council under subsection (a) or (b), as
            applicable, not later than 10 days after the date by which the
            company may request a hearing under paragraph (2).

        (f) Emergency <<NOTE: Deadlines.>> Exception.--
                (1) In general.--The <<NOTE: Waiver authority.>> Council may
            waive or modify the requirements of subsection (e) with respect
            to a nonbank financial company, if the Council determines, by a
            vote of not fewer than \2/3\ of the voting members then serving,
            including an affirmative vote by the Chairperson, that such
            waiver or modification is necessary or appropriate to prevent or
            mitigate

    [[Page 124 STAT. 1402]]

            threats posed by the nonbank financial company to the financial
            stability of the United States.
                (2) Notice.--The Council shall provide notice of a waiver or
            modification under this subsection to the nonbank financial
            company concerned as soon as practicable, but not later than 24
            hours after the waiver or modification is granted.
                (3) International coordination.--
            In <<NOTE: Consultation.>> making a determination under
            paragraph (1), the Council shall consult with the appropriate
            home country supervisor, if any, of the foreign nonbank
            financial company that is being considered for such a
            determination.
                (4) Opportunity for hearing.--The Council shall allow a
            nonbank financial company to request, in writing, an opportunity
            for a written or oral hearing before the Council to contest a
            waiver or modification under this subsection, not later than 10
            days after the date of receipt of notice of the waiver or
            modification by the company. Upon receipt of a timely request,
            the Council shall fix a time (not later than 15 days after the
            date of receipt of the request) and place at which the nonbank
            financial company may appear, personally or through counsel, to
            submit written materials (or, at the sole discretion of the
            Council, oral testimony and oral argument).
                (5) Notice of final determination.--Not later than 30 days
            after the date of any hearing under paragraph (4), the Council
            shall notify the subject nonbank financial company of the final
            determination of the Council under this subsection, which shall
            contain a statement of the basis for the decision of the
            Council.

        (g) Consultation.--The Council shall consult with the primary
    financial regulatory agency, if any, for each nonbank financial company
    or subsidiary of a nonbank financial company that is being considered
    for supervision by the Board of Governors under this section before the
    Council makes any final determination with respect to such nonbank
    financial company under subsection (a), (b), or (c).
        (h) Judicial Review.--If <<NOTE: Deadline.>> the Council makes a
    final determination under this section with respect to a nonbank
    financial company, such nonbank financial company may, not later than 30
    days after the date of receipt of the notice of final determination
    under subsection (d)(2), (e)(3), or (f)(5), bring an action in the
    United States district court for the judicial district in which the home
    office of such nonbank financial company is located, or in the United
    States District Court for the District of Columbia, for an order
    requiring that the final determination be rescinded, and the court
    shall, upon review, dismiss such action or direct the final
    determination to be rescinded. Review of such an action shall be limited
    to whether the final determination made under this section was arbitrary
    and capricious.

        (i) International Coordination.--
    In <<NOTE: Consultation.>> exercising its duties under this title with
    respect to foreign nonbank financial companies, foreign-based bank
    holding companies, and cross-border activities and markets, the Council
    shall consult with appropriate foreign regulatory authorities, to the
    extent appropriate.

    [[Page 124 STAT. 1403]]

    SEC. 114. <<NOTE: 12 USC 5324.>> REGISTRATION OF NONBANK FINANCIAL
                            COMPANIES SUPERVISED BY THE BOARD OF
                            GOVERNORS.

        Not <<NOTE: Deadline.>> later than 180 days after the date of a
    final Council determination under section 113 that a nonbank financial
    company is to be supervised by the Board of Governors, such company
    shall register with the Board of Governors, on forms prescribed by the
    Board of Governors, which shall include such information as the Board of
    Governors, in consultation with the Council, may deem necessary or
    appropriate to carry out this title.
    SEC. 115. <<NOTE: 12 USC 5325.>> ENHANCED SUPERVISION AND
                            PRUDENTIAL STANDARDS FOR NONBANK FINANCIAL
                            COMPANIES SUPERVISED BY THE BOARD OF
                            GOVERNORS AND CERTAIN BANK HOLDING
                            COMPANIES.

        (a) In General.--
                (1) Purpose.--In order to prevent or mitigate risks to the
            financial stability of the United States that could arise from
            the material financial distress, failure, or ongoing activities
            of large, interconnected financial institutions, the Council may
            make recommendations to the Board of Governors concerning the
            establishment and refinement of prudential standards and
            reporting and disclosure requirements applicable to nonbank
            financial companies supervised by the Board of Governors and
            large, interconnected bank holding companies, that--
                        (A) are more stringent than those applicable to
                    other nonbank financial companies and bank holding
                    companies that do not present similar risks to the
                    financial stability of the United States; and
                        (B) increase in stringency, based on the
                    considerations identified in subsection (b)(3).
                (2) Recommended application of required standards.--In
            making recommendations under this section, the Council may--
                        (A) differentiate among companies that are subject
                    to heightened standards on an individual basis or by
                    category, taking into consideration their capital
                    structure, riskiness, complexity, financial activities
                    (including the financial activities of their
                    subsidiaries), size, and any other risk-related factors
                    that the Council deems appropriate; or
                        (B) recommend an asset threshold that is higher than
                    $50,000,000,000 for the application of any standard
                    described in subsections (c) through (g).

        (b) Development of Prudential Standards.--
                (1) In general.--The recommendations of the Council under
            subsection (a) may include--
                        (A) risk-based capital requirements;
                        (B) leverage limits;
                        (C) liquidity requirements;
                        (D) resolution plan and credit exposure report
                    requirements;
                        (E) concentration limits;
                        (F) a contingent capital requirement;
                        (G) enhanced public disclosures;
                        (H) short-term debt limits; and
                        (I) overall risk management requirements.

    [[Page 124 STAT. 1404]]

                (2) Prudential standards for foreign financial companies.--
            In making recommendations concerning the standards set forth in
            paragraph (1) that would apply to foreign nonbank financial
            companies supervised by the Board of Governors or foreign-based
            bank holding companies, the Council shall--
                        (A) give due regard to the principle of national
                    treatment and equality of competitive opportunity; and
                        (B) take into account the extent to which the
                    foreign nonbank financial company or foreign-based bank
                    holding company is subject on a consolidated basis to
                    home country standards that are comparable to those
                    applied to financial companies in the United States.
                (3) Considerations.--In making recommendations concerning
            prudential standards under paragraph (1), the Council shall--
                        (A) take into account differences among nonbank
                    financial companies supervised by the Board of Governors
                    and bank holding companies described in subsection (a),
                    based on--
                              (i) the factors described in subsections (a)
                          and (b) of section 113;
                              (ii) whether the company owns an insured
                          depository institution;
                              (iii) nonfinancial activities and affiliations
                          of the company; and
                              (iv) any other factors that the Council
                          determines appropriate;
                        (B) to the extent possible, ensure that small
                    changes in the factors listed in subsections (a) and (b)
                    of section 113 would not result in sharp, discontinuous
                    changes in the prudential standards established under
                    section 165; and
                        (C) adapt its recommendations as appropriate in
                    light of any predominant line of business of such
                    company, including assets under management or other
                    activities for which particular standards may not be
                    appropriate.

        (c) Contingent Capital.--
                (1) Study required.--The Council shall conduct a study of
            the feasibility, benefits, costs, and structure of a contingent
            capital requirement for nonbank financial companies supervised
            by the Board of Governors and bank holding companies described
            in subsection (a), which study shall include--
                        (A) an evaluation of the degree to which such
                    requirement would enhance the safety and soundness of
                    companies subject to the requirement, promote the
                    financial stability of the United States, and reduce
                    risks to United States taxpayers;
                        (B) an evaluation of the characteristics and amounts
                    of contingent capital that should be required;
                        (C) an analysis of potential prudential standards
                    that should be used to determine whether the contingent
                    capital of a company would be converted to equity in
                    times of financial stress;
                        (D) an evaluation of the costs to companies, the
                    effects on the structure and operation of credit and
                    other financial markets, and other economic effects of
                    requiring contingent capital;

    [[Page 124 STAT. 1405]]

                        (E) an evaluation of the effects of such requirement
                    on the international competitiveness of companies
                    subject to the requirement and the prospects for
                    international coordination in establishing such
                    requirement; and
                        (F) recommendations for implementing regulations.
                (2) Report.--The Council shall submit a report to Congress
            regarding the study required by paragraph (1) not later than 2
            years after the date of enactment of this Act.
                (3) Recommendations.--
                        (A) In general.--Subsequent to submitting a report
                    to Congress under paragraph (2), the Council may make
                    recommendations to the Board of Governors to require any
                    nonbank financial company supervised by the Board of
                    Governors and any bank holding company described in
                    subsection (a) to maintain a minimum amount of
                    contingent capital that is convertible to equity in
                    times of financial stress.
                        (B) Factors to consider.--In making recommendations
                    under this subsection, the Council shall consider--
                              (i) an appropriate transition period for
                          implementation of a conversion under this
                          subsection;
                              (ii) the factors described in subsection
                          (b)(3);
                              (iii) capital requirements applicable to a
                          nonbank financial company supervised by the Board
                          of Governors or a bank holding company described
                          in subsection (a), and subsidiaries thereof;
                              (iv) results of the study required by
                          paragraph (1); and
                              (v) any other factor that the Council deems
                          appropriate.

        (d) Resolution Plan and Credit Exposure Reports.--
                (1) Resolution plan.--The Council may make recommendations
            to the Board of Governors concerning the requirement that each
            nonbank financial company supervised by the Board of Governors
            and each bank holding company described in subsection (a) report
            periodically to the Council, the Board of Governors, and the
            Corporation, the plan of such company for rapid and orderly
            resolution in the event of material financial distress or
            failure.
                (2) Credit exposure report.--The Council may make
            recommendations to the Board of Governors concerning the
            advisability of requiring each nonbank financial company
            supervised by the Board of Governors and bank holding company
            described in subsection (a) to report periodically to the
            Council, the Board of Governors, and the Corporation on--
                        (A) the nature and extent to which the company has
                    credit exposure to other significant nonbank financial
                    companies and significant bank holding companies; and
                        (B) the nature and extent to which other such
                    significant nonbank financial companies and significant
                    bank holding companies have credit exposure to that
                    company.

        (e) Concentration Limits.--In order to limit the risks that the
    failure of any individual company could pose to nonbank financial
    companies supervised by the Board of Governors or bank holding companies
    described in subsection (a), the Council may make recommendations to the
    Board of Governors to prescribe standards to limit such risks, as set
    forth in section 165.

    [[Page 124 STAT. 1406]]

        (f) Enhanced Public Disclosures.--The Council may make
    recommendations to the Board of Governors to require periodic public
    disclosures by bank holding companies described in subsection (a) and by
    nonbank financial companies supervised by the Board of Governors, in
    order to support market evaluation of the risk profile, capital
    adequacy, and risk management capabilities thereof.
        (g) Short-term Debt Limits.--The Council may make recommendations to
    the Board of Governors to require short-term debt limits to mitigate the
    risks that an over-accumulation of such debt could pose to bank holding
    companies described in subsection (a), nonbank financial companies
    supervised by the Board of Governors, or the financial system.
    SEC. 116. <<NOTE: 12 USC 5326.>> REPORTS.

        (a) In General.--Subject to subsection (b), the Council, acting
    through the Office of Financial Research, may require a bank holding
    company with total consolidated assets of $50,000,000,000 or greater or
    a nonbank financial company supervised by the Board of Governors, and
    any subsidiary thereof, to submit certified reports to keep the Council
    informed as to--
                (1) the financial condition of the company;
                (2) systems for monitoring and controlling financial,
            operating, and other risks;
                (3) transactions with any subsidiary that is a depository
            institution; and
                (4) the extent to which the activities and operations of the
            company and any subsidiary thereof, could, under adverse
            circumstances, have the potential to disrupt financial markets
            or affect the overall financial stability of the United States.

        (b) Use of Existing Reports.--
                (1) In general.--For purposes of compliance with subsection
            (a), the Council, acting through the Office of Financial
            Research, shall, to the fullest extent possible, use--
                        (A) reports that a bank holding company, nonbank
                    financial company supervised by the Board of Governors,
                    or any functionally regulated subsidiary of such company
                    has been required to provide to other Federal or State
                    regulatory agencies or to a relevant foreign supervisory
                    authority;
                        (B) information that is otherwise required to be
                    reported publicly; and
                        (C) externally audited financial statements.
                (2) Availability.--Each bank holding company described in
            subsection (a) and nonbank financial company supervised by the
            Board of Governors, and any subsidiary thereof, shall provide to
            the Council, at the request of the Council, copies of all
            reports referred to in paragraph (1).
                (3) Confidentiality.--The Council shall maintain the
            confidentiality of the reports obtained under subsection (a) and
            paragraph (1)(A) of this subsection.
    SEC. 117. <<NOTE: 12 USC 5327.>> TREATMENT OF CERTAIN COMPANIES
                            THAT CEASE TO BE BANK HOLDING COMPANIES.

        (a) Applicability.--This section shall apply to--
                (1) any entity that--

    [[Page 124 STAT. 1407]]

                        (A) was a bank holding company having total
                    consolidated assets equal to or greater than
                    $50,000,000,000 as of January 1, 2010; and
                        (B) received financial assistance under or
                    participated in the Capital Purchase Program established
                    under the Troubled Asset Relief Program authorized by
                    the Emergency Economic Stabilization Act of 2008; and
                (2) any successor entity (as defined by the Board of
            Governors, in consultation with the Council) to an entity
            described in paragraph (1).

        (b) Treatment.--If an entity described in subsection (a) ceases to
    be a bank holding company at any time after January 1, 2010, then such
    entity shall be treated as a nonbank financial company supervised by the
    Board of Governors, as if the Council had made a determination under
    section 113 with respect to that entity.
        (c) <<NOTE: Deadlines.>> Appeal.--
                (1) Request for hearing.--An entity may request, in writing,
            an opportunity for a written or oral hearing before the Council
            to appeal its treatment as a nonbank financial company
            supervised by the Board of Governors in accordance with this
            section. Upon receipt of the request, the Council shall fix a
            time (not later than 30 days after the date of receipt of the
            request) and place at which such entity may appear, personally
            or through counsel, to submit written materials (or, at the sole
            discretion of the Council, oral testimony and oral argument).
                (2) Decision.--
                        (A) Proposed decision.--A Council decision to grant
                    an appeal under this subsection shall be made by a vote
                    of not fewer than \2/3\ of the voting members then
                    serving, including an affirmative vote by the
                    Chairperson. Not <<NOTE: Reports.>> later than 60 days
                    after the date of a hearing under paragraph (1), the
                    Council shall submit a report to, and may testify
                    before, the Committee on Banking, Housing, and Urban
                    Affairs of the Senate and the Committee on Financial
                    Services of the House of Representatives on the proposed
                    decision of the Council regarding an appeal under
                    paragraph (1), which report shall include a statement of
                    the basis for the proposed decision of the Council.
                        (B) Notice of final decision.--The Council shall
                    notify the subject entity of the final decision of the
                    Council regarding an appeal under paragraph (1), which
                    notice shall contain a statement of the basis for the
                    final decision of the Council, not later than 60 days
                    after the later of--
                              (i) the date of the submission of the report
                          under subparagraph (A); or
                              (ii) if, not later than 1 year after the date
                          of submission of the report under subparagraph
                          (A), the Committee on Banking, Housing, and Urban
                          Affairs of the Senate or the Committee on
                          Financial Services of the House of Representatives
                          holds one or more hearings regarding such report,
                          the date of the last such hearing.
                        (C) Considerations.--In making a decision regarding
                    an appeal under paragraph (1), the Council shall
                    consider whether the company meets the standards under
                    section 113(a) or 113(b), as applicable, and the
                    definition of the

    [[Page 124 STAT. 1408]]

                    term ``nonbank financial company'' under section 102.
                    The decision of the Council shall be final, subject to
                    the review under paragraph (3).
                (3) Review.--If the Council denies an appeal under this
            subsection, the Council shall, not less frequently than
            annually, review and reevaluate the decision.
    SEC. 118. <<NOTE: 12 USC 5328.>> COUNCIL FUNDING.

        Any expenses of the Council shall be treated as expenses of, and
    paid by, the Office of Financial Research.
    SEC. 119. <<NOTE: 12 USC 5329.>> RESOLUTION OF SUPERVISORY
                            JURISDICTIONAL DISPUTES AMONG MEMBER
                            AGENCIES.

        (a) Request for Council Recommendation.--The Council shall seek to
    resolve a dispute among 2 or more member agencies, if--
                (1) a member agency has a dispute with another member agency
            about the respective jurisdiction over a particular bank holding
            company, nonbank financial company, or financial activity or
            product (excluding matters for which another dispute mechanism
            specifically has been provided under title X);
                (2) the Council determines that the disputing agencies
            cannot, after a demonstrated good faith effort, resolve the
            dispute without the intervention of the Council; and
                (3) any of the member agencies involved in the dispute--
                        (A) <<NOTE: Notice.>> provides all other disputants
                    prior notice of the intent to request dispute resolution
                    by the Council; and
                        (B) <<NOTE: Deadline.>> requests in writing, not
                    earlier than 14 days after providing the notice
                    described in subparagraph (A), that the Council seek to
                    resolve the dispute.

        (b) Council Recommendation.--The Council shall seek to resolve each
    dispute described in subsection (a)--
                (1) within a reasonable time after receiving the dispute
            resolution request;
                (2) after consideration of relevant information provided by
            each agency party to the dispute; and
                (3) by agreeing with 1 of the disputants regarding the
            entirety of the matter, or by determining a compromise position.

        (c) Form of Recommendation.--Any Council recommendation under this
    section shall--
                (1) be in writing;
                (2) include an explanation of the reasons therefor; and
                (3) be approved by the affirmative vote of \2/3\ of the
            voting members of the Council then serving.

        (d) Nonbinding Effect.--Any recommendation made by the Council under
    subsection (c) shall not be binding on the Federal agencies that are
    parties to the dispute.
    SEC. 120. <<NOTE: 12 USC 5330.>> ADDITIONAL STANDARDS APPLICABLE
                            TO ACTIVITIES OR PRACTICES FOR FINANCIAL
                            STABILITY PURPOSES.

        (a) In General.--The Council may provide for more stringent
    regulation of a financial activity by issuing recommendations to the
    primary financial regulatory agencies to apply new or heightened
    standards and safeguards, including standards enumerated in section 115,
    for a financial activity or practice conducted by bank holding companies
    or nonbank financial companies under their respective jurisdictions, if
    the Council determines that the

    [[Page 124 STAT. 1409]]

    conduct, scope, nature, size, scale, concentration, or
    interconnectedness of such activity or practice could create or increase
    the risk of significant liquidity, credit, or other problems spreading
    among bank holding companies and nonbank financial companies, financial
    markets of the United States, or low-income, minority, or underserved
    communities.
        (b) Procedure for Recommendations to Regulators.--
                (1) Notice and opportunity for comment.--
            The <<NOTE: Consultation. Public comments.>> Council shall
            consult with the primary financial regulatory agencies and
            provide notice to the public and opportunity for comment for any
            proposed recommendation that the primary financial regulatory
            agencies apply new or heightened standards and safeguards for a
            financial activity or practice.
                (2) Criteria.--The new or heightened standards and
            safeguards for a financial activity or practice recommended
            under paragraph (1)--
                        (A) shall take costs to long-term economic growth
                    into account; and
                        (B) may include prescribing the conduct of the
                    activity or practice in specific ways (such as by
                    limiting its scope, or applying particular capital or
                    risk management requirements to the conduct of the
                    activity) or prohibiting the activity or practice.

        (c) Implementation of Recommended Standards.--
                (1) Role of primary financial regulatory agency.--
                        (A) In general.--Each primary financial regulatory
                    agency may impose, require reports regarding, examine
                    for compliance with, and enforce standards in accordance
                    with this section with respect to those entities for
                    which it is the primary financial regulatory agency.
                        (B) Rule of construction.--The authority under this
                    paragraph is in addition to, and does not limit, any
                    other authority of a primary financial regulatory
                    agency. Compliance by an entity with actions taken by a
                    primary financial regulatory agency under this section
                    shall be enforceable in accordance with the statutes
                    governing the respective jurisdiction of the primary
                    financial regulatory agency over the entity, as if the
                    agency action were taken under those statutes.
                (2) Imposition of standards.--
            The <<NOTE: Deadline.>> primary financial regulatory agency
            shall impose the standards recommended by the Council in
            accordance with subsection (a), or similar standards that the
            Council deems acceptable, or shall explain in writing to the
            Council, not later than 90 days after the date on which the
            Council issues the recommendation, why the agency has determined
            not to follow the recommendation of the Council.

        (d) Report to Congress.--The Council shall report to Congress on--
                (1) any recommendations issued by the Council under this
            section;
                (2) the implementation of, or failure to implement, such
            recommendation on the part of a primary financial regulatory
            agency; and
                (3) in any case in which no primary financial regulatory
            agency exists for the nonbank financial company conducting
            financial activities or practices referred to in subsection (a),

    [[Page 124 STAT. 1410]]

            recommendations for legislation that would prevent such
            activities or practices from threatening the stability of the
            financial system of the United States.

        (e) Effect of Rescission of Identification.--
                (1) Notice.--The Council may recommend to the relevant
            primary financial regulatory agency that a financial activity or
            practice no longer requires any standards or safeguards
            implemented under this section.
                (2) Determination of primary financial regulatory agency to
            continue.--
                        (A) In general.--Upon receipt of a recommendation
                    under paragraph (1), a primary financial regulatory
                    agency that has imposed standards under this section
                    shall determine whether such standards should remain in
                    effect.
                        (B) Appeal process.--
                    Each <<NOTE: Regulations.>> primary financial regulatory
                    agency that has imposed standards under this section
                    shall promulgate regulations to establish a procedure
                    under which entities under its jurisdiction may appeal a
                    determination by such agency under this paragraph that
                    standards imposed under this section should remain in
                    effect.
    SEC. 121. <<NOTE: 12 USC 5331.>> MITIGATION OF RISKS TO FINANCIAL
                            STABILITY.

        (a) Mitigatory Actions.--If the Board of Governors determines that a
    bank holding company with total consolidated assets of $50,000,000,000
    or more, or a nonbank financial company supervised by the Board of
    Governors, poses a grave threat to the financial stability of the United
    States, the Board of Governors, upon an affirmative vote of not fewer
    than \2/3\ of the voting members of the Council then serving, shall--
                (1) limit the ability of the company to merge with, acquire,
            consolidate with, or otherwise become affiliated with another
            company;
                (2) restrict the ability of the company to offer a financial
            product or products;
                (3) require the company to terminate one or more activities;
                (4) impose conditions on the manner in which the company
            conducts 1 or more activities; or
                (5) if the Board of Governors determines that the actions
            described in paragraphs (1) through (4) are inadequate to
            mitigate a threat to the financial stability of the United
            States in its recommendation, require the company to sell or
            otherwise transfer assets or off-balance-sheet items to
            unaffiliated entities.

        (b) Notice <<NOTE: Deadlines.>> and Hearing.--
                (1) In general.--The Board of Governors, in consultation
            with the Council, shall provide to a company described in
            subsection (a) written notice that such company is being
            considered for mitigatory action pursuant to this section,
            including an explanation of the basis for, and description of,
            the proposed mitigatory action.
                (2) Hearing.--Not later than 30 days after the date of
            receipt of notice under paragraph (1), the company may request,
            in writing, an opportunity for a written or oral hearing before
            the Board of Governors to contest the proposed mitigatory
            action. Upon receipt of a timely request, the Board of Governors
            shall fix a time (not later than 30 days after the date of

    [[Page 124 STAT. 1411]]

            receipt of the request) and place at which such company may
            appear, personally or through counsel, to submit written
            materials (or, at the discretion of the Board of Governors, in
            consultation with the Council, oral testimony and oral
            argument).
                (3) Decision.--Not later than 60 days after the date of a
            hearing under paragraph (2), or not later than 60 days after the
            provision of a notice under paragraph (1) if no hearing was
            held, the Board of Governors shall notify the company of the
            final decision of the Board of Governors, including the results
            of the vote of the Council, as described in subsection (a).

        (c) Factors for Consideration.--The Board of Governors and the
    Council shall take into consideration the factors set forth in
    subsection (a) or (b) of section 113, as applicable, in making any
    determination under subsection (a).
        (d) Application to Foreign Financial Companies.--The Board of
    Governors may prescribe regulations regarding the application of this
    section to foreign nonbank financial companies supervised by the Board
    of Governors and foreign-based bank holding companies--
                (1) giving due regard to the principle of national treatment
            and equality of competitive opportunity; and
                (2) taking into account the extent to which the foreign
            nonbank financial company or foreign-based bank holding company
            is subject on a consolidated basis to home country standards
            that are comparable to those applied to financial companies in
            the United States.
    SEC. 122. <<NOTE: 12 USC 5332.>> GAO AUDIT OF COUNCIL.

        (a) Authority To Audit.--The Comptroller General of the United
    States may audit the activities of--
                (1) the Council; and
                (2) any person or entity acting on behalf of or under the
            authority of the Council, to the extent that such activities
            relate to work for the Council by such person or entity.

        (b) Access <<NOTE: Records.>> to Information.--
                (1) In general.--Notwithstanding any other provision of law,
            the Comptroller General shall, upon request and at such
            reasonable time and in such reasonable form as the Comptroller
            General may request, have access to--
                        (A) any records or other information under the
                    control of or used by the Council;
                        (B) any records or other information under the
                    control of a person or entity acting on behalf of or
                    under the authority of the Council, to the extent that
                    such records or other information is relevant to an
                    audit under subsection (a); and
                        (C) the officers, directors, employees, financial
                    advisors, staff, working groups, and agents and
                    representatives of the Council (as related to the
                    activities on behalf of the Council of such agent or
                    representative), at such reasonable times as the
                    Comptroller General may request.
                (2) Copies.--The Comptroller General may make and retain
            copies of such books, accounts, and other records, access to
            which is granted under this section, as the Comptroller General
            considers appropriate.

    [[Page 124 STAT. 1412]]

    SEC. 123. STUDY <<NOTE: 12 USC 5333.>> OF THE EFFECTS OF SIZE AND
                            COMPLEXITY OF FINANCIAL INSTITUTIONS ON
                            CAPITAL MARKET EFFICIENCY AND ECONOMIC
                            GROWTH.

        (a) Study Required.--
                (1) In general.--The Chairperson of the Council shall carry
            out a study of the economic impact of possible financial
            services regulatory limitations intended to reduce systemic
            risk. Such study shall <<NOTE: Cost estimate.>> estimate the
            benefits and costs on the efficiency of capital markets, on the
            financial sector, and on national economic growth, of--
                        (A) explicit or implicit limits on the maximum size
                    of banks, bank holding companies, and other large
                    financial institutions;
                        (B) limits on the organizational complexity and
                    diversification of large financial institutions;
                        (C) requirements for operational separation between
                    business units of large financial institutions in order
                    to expedite resolution in case of failure;
                        (D) limits on risk transfer between business units
                    of large financial institutions;
                        (E) requirements to carry contingent capital or
                    similar mechanisms;
                        (F) limits on commingling of commercial and
                    financial activities by large financial institutions;
                        (G) segregation requirements between traditional
                    financial activities and trading or other high-risk
                    operations in large financial institutions; and
                        (H) other limitations on the activities or structure
                    of large financial institutions that may be useful to
                    limit systemic risk.
                (2) Recommendations.--The study required by this section
            shall include recommendations for the optimal structure of any
            limits considered in subparagraphs (A) through (E), in order to
            maximize their effectiveness and minimize their economic impact.

        (b) Report.--Not later than the end of the 180-day period beginning
    on the date of enactment of this title, and not later than every 5 years
    thereafter, the Chairperson shall issue a report to the Congress
    containing any findings and determinations made in carrying out the
    study required under subsection (a).

                    Subtitle B--Office of Financial Research

    SEC. 151. <<NOTE: 12 USC 5341.>> DEFINITIONS.

        For purposes of this subtitle--
                (1) the terms ``Office'' and ``Director'' mean the Office of
            Financial Research established under this subtitle and the
            Director thereof, respectively;
                (2) the term ``financial company'' has the same meaning as
            in title II, and includes an insured depository institution and
            an insurance company;
                (3) the term ``Data Center'' means the data center
            established under section 154;
                (4) the term ``Research and Analysis Center'' means the
            research and analysis center established under section 154;

    [[Page 124 STAT. 1413]]

                (5) the term ``financial transaction data'' means the
            structure and legal description of a financial contract, with
            sufficient detail to describe the rights and obligations between
            counterparties and make possible an independent valuation;
                (6) the term ``position data''--
                        (A) means data on financial assets or liabilities
                    held on the balance sheet of a financial company, where
                    positions are created or changed by the execution of a
                    financial transaction; and
                        (B) includes information that identifies
                    counterparties, the valuation by the financial company
                    of the position, and information that makes possible an
                    independent valuation of the position;
                (7) the term ``financial contract'' means a legally binding
            agreement between 2 or more counterparties, describing rights
            and obligations relating to the future delivery of items of
            intrinsic or extrinsic value among the counterparties; and
                (8) the term ``financial instrument'' means a financial
            contract in which the terms and conditions are publicly
            available, and the roles of one or more of the counterparties
            are assignable without the consent of any of the other
            counterparties (including common stock of a publicly traded
            company, government bonds, or exchange traded futures and
            options contracts).
    SEC. 152. <<NOTE: 12 USC 5342.>> OFFICE OF FINANCIAL RESEARCH
                            ESTABLISHED.

        (a) Establishment.--There is established within the Department of
    the Treasury the Office of Financial Research.
        (b) Director.--
                (1) In general.--
            The <<NOTE: President. Appointment.>> Office shall be headed by
            a Director, who shall be appointed by the President, by and with
            the advice and consent of the Senate.
                (2) Term of service.--The Director shall serve for a term of
            6 years, except that, in the event that a successor is not
            nominated and confirmed by the end of the term of service of a
            Director, the Director may continue to serve until such time as
            the next Director is appointed and confirmed.
                (3) Executive level.--The Director shall be compensated at
            Level III of the Executive Schedule.
                (4) Prohibition on dual service.--The individual serving in
            the position of Director may not, during such service, also
            serve as the head of any financial regulatory agency.
                (5) Responsibilities, duties, and authority.--The Director
            shall have sole discretion in the manner in which the Director
            fulfills the responsibilities and duties and exercises the
            authorities described in this subtitle.

        (c) Budget.--The Director, in consultation with the Chairperson,
    shall establish the annual budget of the Office.
        (d) Office Personnel.--
                (1) In general.--The Director, in consultation with the
            Chairperson, may fix the number of, and appoint and direct, all
            employees of the Office.
                (2) Compensation.--The Director, in consultation with the
            Chairperson, shall fix, adjust, and administer the pay for all
            employees of the Office, without regard to chapter 51 or
            subchapter III of chapter 53 of title 5, United States Code,
            relating to classification of positions and General Schedule pay
            rates.

    [[Page 124 STAT. 1414]]

                (3) Comparability.--Section 1206(a) of the Financial
            Institutions Reform, Recovery, and Enforcement Act of 1989 (12
            U.S.C. 1833b(a)) is amended--
                        (A) by striking ``Finance Board,'' and inserting
                    ``Finance Board, the Office of Financial Research, and
                    the Bureau of Consumer Financial Protection''; and
                        (B) by striking ``and the Office of Thrift
                    Supervision,''.
                (4) Senior executives.--Section 3132(a)(1)(D) of title 5,
            United States Code, is amended by striking ``and the National
            Credit Union Administration;'' and inserting ``the National
            Credit Union Administration, the Bureau of Consumer Financial
            Protection, and the Office of Financial Research;''.

        (e) Assistance From Federal Agencies.--Any department or agency of
    the United States may provide to the Office and any special advisory,
    technical, or professional committees appointed by the Office, such
    services, funds, facilities, staff, and other support services as the
    Office may determine advisable. Any Federal Government employee may be
    detailed to the Office without reimbursement, and such detail shall be
    without interruption or loss of civil service status or privilege.
        (f) Procurement of Temporary and Intermittent Services.--The
    Director may procure temporary and intermittent services under section
    3109(b) of title 5, United States Code, at rates for individuals which
    do not exceed the daily equivalent of the annual rate of basic pay
    prescribed for Level V of the Executive Schedule under section 5316 of
    such title.
        (g) Post-employment Prohibitions.--
    The <<NOTE: Regulations.>> Secretary, with the concurrence of the
    Director of the Office of Government Ethics, shall issue regulations
    prohibiting the Director and any employee of the Office who has had
    access to the transaction or position data maintained by the Data Center
    or other business confidential information about financial entities
    required to report to the Office from being employed by or providing
    advice or consulting services to a financial company, for a period of 1
    year after last having had access in the course of official duties to
    such transaction or position data or business confidential information,
    regardless of whether that entity is required to report to the Office.
    For employees whose access to business confidential information was
    limited, the regulations may provide, on a case-by-case basis, for a
    shorter period of post-employment prohibition, provided that the shorter
    period does not compromise business confidential information.

        (h) Technical and Professional Advisory Committees.--The Office, in
    consultation with the Chairperson, may appoint such special advisory,
    technical, or professional committees as may be useful in carrying out
    the functions of the Office, and the members of such committees may be
    staff of the Office, or other persons, or both.
        (i) Fellowship Program.--The Office, in consultation with the
    Chairperson, may establish and maintain an academic and professional
    fellowship program, under which qualified academics and professionals
    shall be invited to spend not longer than 2 years at the Office, to
    perform research and to provide advanced training for Office personnel.
        (j) Executive Schedule Compensation.--Section 5314 of title 5,
    United States Code, is amended by adding at the end the following new
    item:
                ``Director of the Office of Financial Research.''.

    [[Page 124 STAT. 1415]]

    SEC. 153. <<NOTE: 12 USC 5343.>> PURPOSE AND DUTIES OF THE OFFICE.

        (a) Purpose and Duties.--The purpose of the Office is to support the
    Council in fulfilling the purposes and duties of the Council, as set
    forth in subtitle A, and to support member agencies, by--
                (1) collecting data on behalf of the Council, and providing
            such data to the Council and member agencies;
                (2) standardizing the types and formats of data reported and
            collected;
                (3) performing applied research and essential long-term
            research;
                (4) developing tools for risk measurement and monitoring;
                (5) performing other related services;
                (6) making the results of the activities of the Office
            available to financial regulatory agencies; and
                (7) assisting such member agencies in determining the types
            and formats of data authorized by this Act to be collected by
            such member agencies.

        (b) Administrative Authority.--The Office may--
                (1) share data and information, including software developed
            by the Office, with the Council, member agencies, and the Bureau
            of Economic Analysis, which shared data, information, and
            software--
                        (A) shall be maintained with at least the same level
                    of security as is used by the Office; and
                        (B) may not be shared with any individual or entity
                    without the permission of the Council;
                (2) sponsor and conduct research projects; and
                (3) assist, on a reimbursable basis, with financial analyses
            undertaken at the request of other Federal agencies that are not
            member agencies.

        (c) Rulemaking Authority.--
                (1) Scope.--The Office, in consultation with the
            Chairperson, shall issue rules, regulations, and orders only to
            the extent necessary to carry out the purposes and duties
            described in paragraphs (1), (2), and (7) of subsection (a).
                (2) Standardization.--Member agencies, in consultation with
            the Office, shall implement regulations promulgated by the
            Office under paragraph (1) to standardize the types and formats
            of data reported and collected on behalf of the Council, as
            described in subsection (a)(2). If <<NOTE: Time period.>> a
            member agency fails to implement such regulations prior to the
            expiration of the 3-year period following the date of
            publication of final regulations, the Office, in consultation
            with the Chairperson, may implement such regulations with
            respect to the financial entities under the jurisdiction of the
            member agency. This paragraph shall not supersede or interfere
            with the independent authority of a member agency under other
            law to collect data, in such format and manner as the member
            agency requires.

        (d) Testimony.--
                (1) In general.--The <<NOTE: Reports.>> Director of the
            Office shall report to and testify before the Committee on
            Banking, Housing, and Urban Affairs of the Senate and the
            Committee on Financial Services of the House of Representatives
            annually on the activities of the Office, including the work of
            the Data Center and the Research and Analysis Center, and the
            assessment of the

    [[Page 124 STAT. 1416]]

            Office of significant financial market developments and
            potential emerging threats to the financial stability of the
            United States.
                (2) No prior review.--No officer or agency of the United
            States shall have any authority to require the Director to
            submit the testimony required under paragraph (1) or other
            congressional testimony to any officer or agency of the United
            States for approval, comment, or review prior to the submission
            of such testimony. Any such testimony to Congress shall include
            a statement that the views expressed therein are those of the
            Director and do not necessarily represent the views of the
            President.

        (e) Additional Reports.--The Director may provide additional reports
    to Congress concerning the financial stability of the United States. The
    Director <<NOTE: Notification.>> shall notify the Council of any such
    additional reports provided to Congress.

        (f) Subpoena.--
                (1) In general.--The Director may require from a financial
            company, by subpoena, the production of the data requested under
            subsection (a)(1) and section 154(b)(1), but only upon a written
            finding by the Director that--
                        (A) such data is required to carry out the functions
                    described under this subtitle; and
                        (B) the Office has coordinated with the relevant
                    primary financial regulatory agency, as required under
                    section 154(b)(1)(B)(ii).
                (2) Format.--Subpoenas under paragraph (1) shall bear the
            signature of the Director, and shall be served by any person or
            class of persons designated by the Director for that purpose.
                (3) Enforcement.--In the case of contumacy or failure to
            obey a subpoena, the subpoena shall be enforceable by order of
            any appropriate district court of the United States. Any failure
            to obey the order of the court may be punished by the court as a
            contempt of court.
    SEC. 154. <<NOTE: 12 USC 5344.>> ORGANIZATIONAL STRUCTURE;
                            RESPONSIBILITIES OF PRIMARY PROGRAMMATIC
                            UNITS.

        (a) In General.--There are established within the Office, to carry
    out the programmatic responsibilities of the Office--
                (1) the Data Center; and
                (2) the Research and Analysis Center.

        (b) Data Center.--
                (1) General duties.--
                        (A) Data collection.--The Data Center, on behalf of
                    the Council, shall collect, validate, and maintain all
                    data necessary to carry out the duties of the Data
                    Center, as described in this subtitle. The data
                    assembled shall be obtained from member agencies,
                    commercial data providers, publicly available data
                    sources, and financial entities under subparagraph (B).
                        (B) Authority.--
                              (i) In general.--The Office may, as determined
                          by the Council or by the Director in consultation
                          with the Council, require the submission of
                          periodic and other reports from any financial
                          company for the purpose of assessing the extent to
                          which a financial

    [[Page 124 STAT. 1417]]

                          activity or financial market in which the
                          financial company participates, or the financial
                          company itself, poses a threat to the financial
                          stability of the United States.
                              (ii) Mitigation of report burden.--Before
                          requiring the submission of a report from any
                          financial company that is regulated by a member
                          agency, any primary financial regulatory agency, a
                          foreign supervisory authority, or the Office shall
                          coordinate with such agencies or authority, and
                          shall, whenever possible, rely on information
                          available from such agencies or authority.
                              (iii) Collection of financial transaction and
                          position data.--The Office shall collect, on a
                          schedule determined by the Director, in
                          consultation with the Council, financial
                          transaction data and position data from financial
                          companies.
                        (C) Rulemaking.--The Office shall promulgate
                    regulations pursuant to subsections (a)(1), (a)(2),
                    (a)(7), and (c)(1) of section 153 regarding the type and
                    scope of the data to be collected by the Data Center
                    under this paragraph.
                (2) Responsibilities.--
                        (A) Publication.--The <<NOTE: Public
                    information.>> Data Center shall prepare and publish, in
                    a manner that is easily accessible to the public--
                              (i) a financial company reference database;
                              (ii) a financial instrument reference
                          database; and
                              (iii) formats and standards for Office data,
                          including standards for reporting financial
                          transaction and position data to the Office.
                        (B) Confidentiality.--The Data Center shall not
                    publish any confidential data under subparagraph (A).
                (3) Information security.--The Director shall ensure that
            data collected and maintained by the Data Center are kept secure
            and protected against unauthorized disclosure.
                (4) Catalog of financial entities and instruments.--The Data
            Center shall maintain a catalog of the financial entities and
            instruments reported to the Office.
                (5) Availability to the council and member agencies.--The
            Data Center shall make data collected and maintained by the Data
            Center available to the Council and member agencies, as
            necessary to support their regulatory responsibilities.
                (6) Other authority.--The <<NOTE: Public
            information.>> Office shall, after consultation with the member
            agencies, provide certain data to financial industry
            participants and to the general public to increase market
            transparency and facilitate research on the financial system, to
            the extent that intellectual property rights are not violated,
            business confidential information is properly protected, and the
            sharing of such information poses no significant threats to the
            financial system of the United States.

        (c) Research and Analysis Center.--
                (1) General duties.--The Research and Analysis Center, on
            behalf of the Council, shall develop and maintain independent
            analytical capabilities and computing resources--
                        (A) to develop and maintain metrics and reporting
                    systems for risks to the financial stability of the
                    United States;

    [[Page 124 STAT. 1418]]

                        (B) to monitor, investigate, and report on changes
                    in systemwide risk levels and patterns to the Council
                    and Congress;
                        (C) to conduct, coordinate, and sponsor research to
                    support and improve regulation of financial entities and
                    markets;
                        (D) to evaluate and report on stress tests or other
                    stability-related evaluations of financial entities
                    overseen by the member agencies;
                        (E) to maintain expertise in such areas as may be
                    necessary to support specific requests for advice and
                    assistance from financial regulators;
                        (F) to investigate disruptions and failures in the
                    financial markets, report findings, and make
                    recommendations to the Council based on those findings;
                        (G) to conduct studies and provide advice on the
                    impact of policies related to systemic risk; and
                        (H) to promote best practices for financial risk
                    management.

        (d) Reporting Responsibilities.--
                (1) Required reports.--Not later than 2 years after the date
            of enactment of this Act, and not later than 120 days after the
            end of each fiscal year thereafter, the Office shall prepare and
            submit a report to Congress.
                (2) Content.--Each report required by this subsection shall
            assess the state of the United States financial system,
            including--
                        (A) an analysis of any threats to the financial
                    stability of the United States;
                        (B) the status of the efforts of the Office in
                    meeting the mission of the Office; and
                        (C) key findings from the research and analysis of
                    the financial system by the Office.
    SEC. <<NOTE: 12 USC 5345.>> 155. FUNDING.

        (a) Financial Research Fund.--
                (1) Fund established.--There is established in the Treasury
            of the United States a separate fund to be known as the
            ``Financial Research Fund''.
                (2) Fund receipts.--All amounts provided to the Office under
            subsection (c), and all assessments that the Office receives
            under subsection (d) shall be deposited into the Financial
            Research Fund.
                (3) Investments authorized.--
                        (A) Amounts in fund may be invested.--The Director
                    may request the Secretary to invest the portion of the
                    Financial Research Fund that is not, in the judgment of
                    the Director, required to meet the needs of the Office.
                        (B) Eligible investments.--Investments shall be made
                    by the Secretary in obligations of the United States or
                    obligations that are guaranteed as to principal and
                    interest by the United States, with maturities suitable
                    to the needs of the Financial Research Fund, as
                    determined by the Director.
                (4) Interest and proceeds credited.--The interest on, and
            the proceeds from the sale or redemption of, any obligations

    [[Page 124 STAT. 1419]]

            held in the Financial Research Fund shall be credited to and
            form a part of the Financial Research Fund.

        (b) Use of Funds.--
                (1) In general.--Funds obtained by, transferred to, or
            credited to the Financial Research Fund shall be immediately
            available to the Office, and shall remain available until
            expended, to pay the expenses of the Office in carrying out the
            duties and responsibilities of the Office.
                (2) Fees, assessments, and other funds not government
            funds.--Funds obtained by, transferred to, or credited to the
            Financial Research Fund shall not be construed to be Government
            funds or appropriated moneys.
                (3) Amounts not subject to apportionment.--Notwithstanding
            any other provision of law, amounts in the Financial Research
            Fund shall not be subject to apportionment for purposes of
            chapter 15 of title 31, United States Code, or under any other
            authority, or for any other purpose.

        (c) Interim Funding.--During <<NOTE: Time period.>> the 2-year
    period following the date of enactment of this Act, the Board of
    Governors shall provide to the Office an amount sufficient to cover the
    expenses of the Office.

        (d) Permanent Self-funding.--Beginning <<NOTE: Effective
    date. Regulations. Assessments.>> 2 years after the date of enactment of
    this Act, the Secretary shall establish, by regulation, and with the
    approval of the Council, an assessment schedule, including the
    assessment base and rates, applicable to bank holding companies with
    total consolidated assets of 50,000,000,000 or greater and nonbank
    financial companies supervised by the Board of Governors, that takes
    into account differences among such companies, based on the
    considerations for establishing the prudential standards under section
    115, to collect assessments equal to the total expenses of the Office.
    SEC. 156. <<NOTE: 12 USC 5346.>> TRANSITION OVERSIGHT.

        (a) Purpose.--The purpose of this section is to ensure that the
    Office--
                (1) has an orderly and organized startup;
                (2) attracts and retains a qualified workforce; and
                (3) establishes comprehensive employee training and benefits
            programs.

        (b) Reporting Requirement.--
                (1) In general.--The Office shall submit an annual report to
            the Committee on Banking, Housing, and Urban Affairs of the
            Senate and the Committee on Financial Services of the House of
            Representatives that includes the plans described in paragraph
            (2).
                (2) Plans.--The plans described in this paragraph are as
            follows:
                        (A) Training and workforce development plan.--The
                    Office shall submit a training and workforce development
                    plan that includes, to the extent practicable--
                              (i) identification of skill and technical
                          expertise needs and actions taken to meet those
                          requirements;
                              (ii) steps taken to foster innovation and
                          creativity;
                              (iii) leadership development and succession
                          planning; and
                              (iv) effective use of technology by employees.

    [[Page 124 STAT. 1420]]

                        (B) Workplace flexibility plan.--The Office shall
                    submit a workforce flexibility plan that includes, to
                    the extent practicable--
                              (i) telework;
                              (ii) flexible work schedules;
                              (iii) phased retirement;
                              (iv) reemployed annuitants;
                              (v) part-time work;
                              (vi) job sharing;
                              (vii) parental leave benefits and childcare
                          assistance;
                              (viii) domestic partner benefits;
                              (ix) other workplace flexibilities; or
                              (x) any combination of the items described in
                          clauses (i) through (ix).
                        (C) Recruitment and retention plan.--The Office
                    shall submit a recruitment and retention plan that
                    includes, to the extent practicable, provisions relating
                    to--
                              (i) the steps necessary to target highly
                          qualified applicant pools with diverse
                          backgrounds;
                              (ii) streamlined employment application
                          processes;
                              (iii) the provision of timely notification of
                          the status of employment applications to
                          applicants; and
                              (iv) the collection of information to measure
                          indicators of hiring effectiveness.

        (c) Expiration.--The reporting requirement under subsection (b)
    shall terminate 5 years after the date of enactment of this Act.
        (d) Rule of Construction.--Nothing in this section may be construed
    to affect--
                (1) a collective bargaining agreement, as that term is
            defined in section 7103(a)(8) of title 5, United States Code,
            that is in effect on the date of enactment of this Act; or
                (2) the rights of employees under chapter 71 of title 5,
            United States Code.

    Subtitle C--Additional Board of Governors Authority for Certain Nonbank
                 Financial Companies and Bank Holding Companies

    SEC. 161. <<NOTE: 12 USC 5361.>> REPORTS BY AND EXAMINATIONS OF
                            NONBANK FINANCIAL COMPANIES BY THE BOARD
                            OF GOVERNORS.

        (a) Reports.--
                (1) In general.--The Board of Governors may require each
            nonbank financial company supervised by the Board of Governors,
            and any subsidiary thereof, to submit reports under oath, to
            keep the Board of Governors informed as to--
                        (A) the financial condition of the company or
                    subsidiary, systems of the company or subsidiary for
                    monitoring and controlling financial, operating, and
                    other risks, and the extent to which the activities and
                    operations of the company or subsidiary pose a threat to
                    the financial stability of the United States; and
                        (B) compliance by the company or subsidiary with the
                    requirements of this title.

    [[Page 124 STAT. 1421]]

                (2) Use of existing reports and information.--In carrying
            out subsection (a), the Board of Governors shall, to the fullest
            extent possible, use--
                        (A) reports and supervisory information that a
                    nonbank financial company or subsidiary thereof has been
                    required to provide to other Federal or State regulatory
                    agencies;
                        (B) information otherwise obtainable from Federal or
                    State regulatory agencies;
                        (C) information that is otherwise required to be
                    reported publicly; and
                        (D) externally audited financial statements of such
                    company or subsidiary.
                (3) Availability.--Upon the request of the Board of
            Governors, a nonbank financial company supervised by the Board
            of Governors, or a subsidiary thereof, shall promptly provide to
            the Board of Governors any information described in paragraph
            (2).

        (b) Examinations.--
                (1) In general.--Subject to paragraph (2), the Board of
            Governors may examine any nonbank financial company supervised
            by the Board of Governors and any subsidiary of such company, to
            inform the Board of Governors of--
                        (A) the nature of the operations and financial
                    condition of the company and such subsidiary;
                        (B) the financial, operational, and other risks of
                    the company or such subsidiary that may pose a threat to
                    the safety and soundness of such company or subsidiary
                    or to the financial stability of the United States;
                        (C) the systems for monitoring and controlling such
                    risks; and
                        (D) compliance by the company or such subsidiary
                    with the requirements of this title.
                (2) Use of examination reports and information.--For
            purposes of this subsection, the Board of Governors shall, to
            the fullest extent possible, rely on reports of examination of
            any subsidiary depository institution or functionally regulated
            subsidiary made by the primary financial regulatory agency for
            that subsidiary, and on information described in subsection
            (a)(2).

        (c) Coordination With Primary Financial Regulatory Agency.--The
    Board of Governors shall--
                (1) <<NOTE: Notice. Consultation.>> provide reasonable
            notice to, and consult with, the primary financial regulatory
            agency for any subsidiary before requiring a report or
            commencing an examination of such subsidiary under this section;
            and
                (2) avoid duplication of examination activities, reporting
            requirements, and requests for information, to the fullest
            extent possible.
    SEC. 162. <<NOTE: 12 USC 5362.>> ENFORCEMENT.

        (a) In General.--Except as provided in subsection (b), a nonbank
    financial company supervised by the Board of Governors and any
    subsidiaries of such company (other than any depository institution
    subsidiary) shall be subject to the provisions of subsections (b)
    through (n) of section 8 of the Federal Deposit Insurance Act (12 U.S.C.
    1818), in the same manner and to the same extent as if the company were
    a bank holding company, as provided

    [[Page 124 STAT. 1422]]

    in section 8(b)(3) of the Federal Deposit Insurance Act (12 U.S.C.
    1818(b)(3)).
        (b) Enforcement Authority for Functionally Regulated Subsidiaries.--
                (1) Referral.--If the Board of Governors determines that a
            condition, practice, or activity of a depository institution
            subsidiary or functionally regulated subsidiary of a nonbank
            financial company supervised by the Board of Governors does not
            comply with the regulations or orders prescribed by the Board of
            Governors under this Act, or otherwise poses a threat to the
            financial stability of the United States, the Board of Governors
            may recommend, in writing, to the primary financial regulatory
            agency for the subsidiary that such agency initiate a
            supervisory action or enforcement proceeding. The recommendation
            shall be accompanied by a written explanation of the concerns
            giving rise to the recommendation.
                (2) Back-up authority of the board of governors.--If, during
            the 60-day period beginning on the date on which the primary
            financial regulatory agency receives a recommendation under
            paragraph (1), the primary financial regulatory agency does not
            take supervisory or enforcement action against a subsidiary that
            is acceptable to the Board of Governors, the Board of Governors
            (upon a vote of its members) may take the recommended
            supervisory or enforcement action, as if the subsidiary were a
            bank holding company subject to supervision by the Board of
            Governors.
    SEC. <<NOTE: 12 USC 5363.>> 163. ACQUISITIONS.

        (a) Acquisitions of Banks; Treatment as a Bank Holding Company.--For
    purposes of section 3 of the Bank Holding Company Act of 1956 (12 U.S.C.
    1842), a nonbank financial company supervised by the Board of Governors
    shall be deemed to be, and shall be treated as, a bank holding company.
        (b) Acquisition of Nonbank Companies.--
                (1) Prior notice for large acquisitions.--Notwithstanding
            section 4(k)(6)(B) of the Bank Holding Company Act of 1956 (12
            U.S.C. 1843(k)(6)(B)), a bank holding company with total
            consolidated assets equal to or greater than $50,000,000,000 or
            a nonbank financial company supervised by the Board of Governors
            shall not acquire direct or indirect ownership or control of any
            voting shares of any company (other than an insured depository
            institution) that is engaged in activities described in section
            4(k) of the Bank Holding Company Act of 1956 having total
            consolidated assets of $10,000,000,000 or more, without
            providing written notice to the Board of Governors in advance of
            the transaction.
                (2) Exemptions.--The prior notice requirement in paragraph
            (1) shall not apply with regard to the acquisition of shares
            that would qualify for the exemptions in section 4(c) or section
            4(k)(4)(E) of the Bank Holding Company Act of 1956 (12 U.S.C.
            1843(c) and (k)(4)(E)).
                (3) Notice procedures.--The <<NOTE: Applicability.>> notice
            procedures set forth in section 4(j)(1) of the Bank Holding
            Company Act of 1956 (12 U.S.C. 1843(j)(1)), without regard to
            section 4(j)(3) of that Act, shall apply to an acquisition of
            any company (other than an insured depository institution) by a
            bank holding company with total consolidated assets equal to or
            greater than

    [[Page 124 STAT. 1423]]

            $50,000,000,000 or a nonbank financial company supervised by the
            Board of Governors, as described in paragraph (1), including any
            such company engaged in activities described in section 4(k) of
            that Act.
                (4) Standards for review.--In addition to the standards
            provided in section 4(j)(2) of the Bank Holding Company Act of
            1956 (12 U.S.C. 1843(j)(2)), the Board of Governors shall
            consider the extent to which the proposed acquisition would
            result in greater or more concentrated risks to global or United
            States financial stability or the United States economy.
                (5) Hart-Scott-Rodino filing requirement.--Solely for
            purposes of section 7A(c)(8) of the Clayton Act (15 U.S.C.
            18a(c)(8)), the transactions subject to the requirements of
            paragraph (1) shall be treated as if Board of Governors approval
            is not required.
    SEC. <<NOTE: 12 USC 5364.>> 164. PROHIBITION AGAINST MANAGEMENT
                            INTERLOCKS BETWEEN CERTAIN FINANCIAL
                            COMPANIES.

        A nonbank financial company supervised by the Board of Governors
    shall be treated as a bank holding company for purposes of the
    Depository Institutions Management Interlocks Act (12 U.S.C. 3201 et
    seq.), except that the Board of Governors shall not exercise the
    authority provided in section 7 of that Act (12 U.S.C. 3207) to permit
    service by a management official of a nonbank financial company
    supervised by the Board of Governors as a management official of any
    bank holding company with total consolidated assets equal to or greater
    than $50,000,000,000, or other nonaffiliated nonbank financial company
    supervised by the Board of Governors (other than to provide a temporary
    exemption for interlocks resulting from a merger, acquisition, or
    consolidation).
    SEC. 165. <<NOTE: 12 USC 5365.>> ENHANCED SUPERVISION AND
                            PRUDENTIAL STANDARDS FOR NONBANK FINANCIAL
                            COMPANIES SUPERVISED BY THE BOARD OF
                            GOVERNORS AND CERTAIN BANK HOLDING
                            COMPANIES.

        (a) In General.--
                (1) Purpose.--In order to prevent or mitigate risks to the
            financial stability of the United States that could arise from
            the material financial distress or failure, or ongoing
            activities, of large, interconnected financial institutions, the
            Board of Governors shall, on its own or pursuant to
            recommendations by the Council under section 115, establish
            prudential standards for nonbank financial companies supervised
            by the Board of Governors and bank holding companies with total
            consolidated assets equal to or greater than $50,000,000,000
            that--
                        (A) are more stringent than the standards and
                    requirements applicable to nonbank financial companies
                    and bank holding companies that do not present similar
                    risks to the financial stability of the United States;
                    and
                        (B) increase in stringency, based on the
                    considerations identified in subsection (b)(3).
                (2) Tailored application.--
                        (A) In general.--In prescribing more stringent
                    prudential standards under this section, the Board of
                    Governors may, on its own or pursuant to a
                    recommendation by the Council in accordance with section
                    115, differentiate among companies on an individual
                    basis or by category, taking into consideration their
                    capital structure, riskiness,

    [[Page 124 STAT. 1424]]

                    complexity, financial activities (including the
                    financial activities of their subsidiaries), size, and
                    any other risk-related factors that the Board of
                    Governors deems appropriate.
                        (B) Adjustment of threshold for application of
                    certain standards.--The Board of Governors may, pursuant
                    to a recommendation by the Council in accordance with
                    section 115, establish an asset threshold above
                    $50,000,000,000 for the application of any standard
                    established under subsections (c) through (g).

        (b) Development of Prudential Standards.--
                (1) In general.--
                        (A) Required standards.--The Board of Governors
                    shall establish prudential standards for nonbank
                    financial companies supervised by the Board of Governors
                    and bank holding companies described in subsection (a),
                    that shall include--
                              (i) risk-based capital requirements and
                          leverage limits, unless the Board of Governors, in
                          consultation with the Council, determines that
                          such requirements are not appropriate for a
                          company subject to more stringent prudential
                          standards because of the activities of such
                          company (such as investment company activities or
                          assets under management) or structure, in which
                          case, the Board of Governors shall apply other
                          standards that result in similarly stringent risk
                          controls;
                              (ii) liquidity requirements;
                              (iii) overall risk management requirements;
                              (iv) resolution plan and credit exposure
                          report requirements; and
                              (v) concentration limits.
                        (B) Additional standards authorized.--The Board of
                    Governors may establish additional prudential standards
                    for nonbank financial companies supervised by the Board
                    of Governors and bank holding companies described in
                    subsection (a), that include--
                              (i) a contingent capital requirement;
                              (ii) enhanced public disclosures;
                              (iii) short-term debt limits; and
                              (iv) such other prudential standards as the
                          Board or Governors, on its own or pursuant to a
                          recommendation made by the Council in accordance
                          with section 115, determines are appropriate.
                (2) Standards for foreign financial companies.--In applying
            the standards set forth in paragraph (1) to any foreign nonbank
            financial company supervised by the Board of Governors or
            foreign-based bank holding company, the Board of Governors
            shall--
                        (A) give due regard to the principle of national
                    treatment and equality of competitive opportunity; and
                        (B) take into account the extent to which the
                    foreign financial company is subject on a consolidated
                    basis to home country standards that are comparable to
                    those applied to financial companies in the United
                    States.
                (3) Considerations.--In prescribing prudential standards
            under paragraph (1), the Board of Governors shall--

    [[Page 124 STAT. 1425]]

                        (A) take into account differences among nonbank
                    financial companies supervised by the Board of Governors
                    and bank holding companies described in subsection (a),
                    based on--
                              (i) the factors described in subsections (a)
                          and (b) of section 113;
                              (ii) whether the company owns an insured
                          depository institution;
                              (iii) nonfinancial activities and affiliations
                          of the company; and
                              (iv) any other risk-related factors that the
                          Board of Governors determines appropriate;
                        (B) to the extent possible, ensure that small
                    changes in the factors listed in subsections (a) and (b)
                    of section 113 would not result in sharp, discontinuous
                    changes in the prudential standards established under
                    paragraph (1) of this subsection;
                        (C) take into account any recommendations of the
                    Council under section 115; and
                        (D) adapt the required standards as appropriate in
                    light of any predominant line of business of such
                    company, including assets under management or other
                    activities for which particular standards may not be
                    appropriate.
                (4) Consultation.--Before imposing prudential standards or
            any other requirements pursuant to this section, including
            notices of deficiencies in resolution plans and more stringent
            requirements or divestiture orders resulting from such notices,
            that are likely to have a significant impact on a functionally
            regulated subsidiary or depository institution subsidiary of a
            nonbank financial company supervised by the Board of Governors
            or a bank holding company described in subsection (a), the Board
            of Governors shall consult with each Council member that
            primarily supervises any such subsidiary with respect to any
            such standard or requirement.
                (5) Report.--The Board of Governors shall submit an annual
            report to Congress regarding the implementation of the
            prudential standards required pursuant to paragraph (1),
            including the use of such standards to mitigate risks to the
            financial stability of the United States.

        (c) Contingent Capital.--
                (1) In general.--Subsequent to submission by the Council of
            a report to Congress under section 115(c), the Board of
            Governors may issue regulations that require each nonbank
            financial company supervised by the Board of Governors and bank
            holding companies described in subsection (a) to maintain a
            minimum amount of contingent capital that is convertible to
            equity in times of financial stress.
                (2) Factors to consider.--In issuing regulations under this
            subsection, the Board of Governors shall consider--
                        (A) the results of the study undertaken by the
                    Council, and any recommendations of the Council, under
                    section 115(c);
                        (B) an appropriate transition period for
                    implementation of contingent capital under this
                    subsection;
                        (C) the factors described in subsection (b)(3)(A);
                        (D) capital requirements applicable to the nonbank
                    financial company supervised by the Board of Governors

    [[Page 124 STAT. 1426]]

                    or a bank holding company described in subsection (a),
                    and subsidiaries thereof; and
                        (E) any other factor that the Board of Governors
                    deems appropriate.

        (d) Resolution Plan and Credit Exposure Reports.--
                (1) Resolution plan.--The Board of Governors shall require
            each nonbank financial company supervised by the Board of
            Governors and bank holding companies described in subsection (a)
            to report periodically to the Board of Governors, the Council,
            and the Corporation the plan of such company for rapid and
            orderly resolution in the event of material financial distress
            or failure, which shall include--
                        (A) information regarding the manner and extent to
                    which any insured depository institution affiliated with
                    the company is adequately protected from risks arising
                    from the activities of any nonbank subsidiaries of the
                    company;
                        (B) full descriptions of the ownership structure,
                    assets, liabilities, and contractual obligations of the
                    company;
                        (C) identification of the cross-guarantees tied to
                    different securities, identification of major
                    counterparties, and a process for determining to whom
                    the collateral of the company is pledged; and
                        (D) any other information that the Board of
                    Governors and the Corporation jointly require by rule or
                    order.
                (2) Credit exposure report.--The Board of Governors shall
            require each nonbank financial company supervised by the Board
            of Governors and bank holding companies described in subsection
            (a) to report periodically to the Board of Governors, the
            Council, and the Corporation on--
                        (A) the nature and extent to which the company has
                    credit exposure to other significant nonbank financial
                    companies and significant bank holding companies; and
                        (B) the nature and extent to which other significant
                    nonbank financial companies and significant bank holding
                    companies have credit exposure to that company.
                (3) Review.--The Board of Governors and the Corporation
            shall review the information provided in accordance with this
            subsection by each nonbank financial company supervised by the
            Board of Governors and bank holding company described in
            subsection (a).
                (4) Notice of deficiencies.--If the Board of Governors and
            the Corporation jointly determine, based on their review under
            paragraph (3), that the resolution plan of a nonbank financial
            company supervised by the Board of Governors or a bank holding
            company described in subsection (a) is not credible or would not
            facilitate an orderly resolution of the company under title 11,
            United States Code--
                        (A) the Board of Governors and the Corporation shall
                    notify the company of the deficiencies in the resolution
                    plan; and
                        (B) the company shall resubmit the resolution plan
                    within a timeframe determined by the Board of Governors
                    and the Corporation, with revisions demonstrating that
                    the plan is credible and would result in an orderly
                    resolution under title 11, United States Code, including
                    any

    [[Page 124 STAT. 1427]]

                    proposed changes in business operations and corporate
                    structure to facilitate implementation of the plan.
                (5) Failure to resubmit credible plan.--
                        (A) In general.--If a nonbank financial company
                    supervised by the Board of Governors or a bank holding
                    company described in subsection (a) fails to timely
                    resubmit the resolution plan as required under paragraph
                    (4), with such revisions as are required under
                    subparagraph (B), the Board of Governors and the
                    Corporation may jointly impose more stringent capital,
                    leverage, or liquidity requirements, or restrictions on
                    the growth, activities, or operations of the company, or
                    any subsidiary thereof, until such time as the company
                    resubmits a plan that remedies the deficiencies.
                        (B) Divestiture.--The Board of Governors and the
                    Corporation, in consultation with the Council, may
                    jointly direct a nonbank financial company supervised by
                    the Board of Governors or a bank holding company
                    described in subsection (a), by order, to divest certain
                    assets or operations identified by the Board of
                    Governors and the Corporation, to facilitate an orderly
                    resolution of such company under title 11, United States
                    Code, in the event of the failure of such company, in
                    any case in which--
                              (i) the Board of Governors and the Corporation
                          have jointly imposed more stringent requirements
                          on the company pursuant to subparagraph (A); and
                              (ii) the company has failed, within the 2-year
                          period beginning on the date of the imposition of
                          such requirements under subparagraph (A), to
                          resubmit the resolution plan with such revisions
                          as were required under paragraph (4)(B).
                (6) No limiting effect.--A resolution plan submitted in
            accordance with this subsection shall not be binding on a
            bankruptcy court, a receiver appointed under title II, or any
            other authority that is authorized or required to resolve the
            nonbank financial company supervised by the Board, any bank
            holding company, or any subsidiary or affiliate of the
            foregoing.
                (7) No private right of action.--No private right of action
            may be based on any resolution plan submitted in accordance with
            this subsection.
                (8) Rules.--Not <<NOTE: Deadline.>> later than 18 months
            after the date of enactment of this Act, the Board of Governors
            and the Corporation shall jointly issue final rules implementing
            this subsection.

        (e) Concentration Limits.--
                (1) Standards.--In <<NOTE: Regulations.>> order to limit the
            risks that the failure of any individual company could pose to a
            nonbank financial company supervised by the Board of Governors
            or a bank holding company described in subsection (a), the Board
            of Governors, by regulation, shall prescribe standards that
            limit such risks.
                (2) Limitation on credit exposure.--The regulations
            prescribed by the Board of Governors under paragraph (1) shall
            prohibit each nonbank financial company supervised by the Board
            of Governors and bank holding company described in subsection
            (a) from having credit exposure to any unaffiliated company that
            exceeds 25 percent of the capital stock and surplus (or such
            lower amount as the Board of Governors may

    [[Page 124 STAT. 1428]]

            determine by regulation to be necessary to mitigate risks to the
            financial stability of the United States) of the company.
                (3) Credit exposure.--For <<NOTE: Definition.>> purposes of
            paragraph (2), ``credit exposure'' to a company means--
                        (A) all extensions of credit to the company,
                    including loans, deposits, and lines of credit;
                        (B) all repurchase agreements and reverse repurchase
                    agreements with the company, and all securities
                    borrowing and lending transactions with the company, to
                    the extent that such transactions create credit exposure
                    for the nonbank financial company supervised by the
                    Board of Governors or a bank holding company described
                    in subsection (a);
                        (C) all guarantees, acceptances, or letters of
                    credit (including endorsement or standby letters of
                    credit) issued on behalf of the company;
                        (D) all purchases of or investment in securities
                    issued by the company;
                        (E) counterparty credit exposure to the company in
                    connection with a derivative transaction between the
                    nonbank financial company supervised by the Board of
                    Governors or a bank holding company described in
                    subsection (a) and the company; and
                        (F) any other similar transactions that the Board of
                    Governors, by regulation, determines to be a credit
                    exposure for purposes of this section.
                (4) Attribution rule.--For purposes of this subsection, any
            transaction by a nonbank financial company supervised by the
            Board of Governors or a bank holding company described in
            subsection (a) with any person is a transaction with a company,
            to the extent that the proceeds of the transaction are used for
            the benefit of, or transferred to, that company.
                (5) Rulemaking.--The Board of Governors may issue such
            regulations and orders, including definitions consistent with
            this section, as may be necessary to administer and carry out
            this subsection.
                (6) Exemptions.--This subsection shall not apply to any
            Federal home loan bank. The Board of Governors may, by
            regulation or order, exempt transactions, in whole or in part,
            from the definition of the term ``credit exposure'' for purposes
            of this subsection, if the Board of Governors finds that the
            exemption is in the public interest and is consistent with the
            purpose of this subsection.
                (7) Transition period.--
                        (A) In general.--This <<NOTE: Effective
                    date.>> subsection and any regulations and orders of the
                    Board of Governors under this subsection shall not be
                    effective until 3 years after the date of enactment of
                    this Act.
                        (B) Extension authorized.--The Board of Governors
                    may extend the period specified in subparagraph (A) for
                    not longer than an additional 2 years.

        (f) Enhanced Public Disclosures.--The Board of Governors may
    prescribe, by regulation, periodic public disclosures by nonbank
    financial companies supervised by the Board of Governors and bank
    holding companies described in subsection (a) in order to support market
    evaluation of the risk profile, capital adequacy, and risk management
    capabilities thereof.

    [[Page 124 STAT. 1429]]

        (g) Short-term Debt Limits.--
                (1) In general.--In order to mitigate the risks that an
            over-accumulation of short-term debt could pose to financial
            companies and to the stability of the United States financial
            system, the Board of Governors may, by regulation, prescribe a
            limit on the amount of short-term debt, including off-balance
            sheet exposures, that may be accumulated by any bank holding
            company described in subsection (a) and any nonbank financial
            company supervised by the Board of Governors.
                (2) Basis of limit.--Any limit prescribed under paragraph
            (1) shall be based on the short-term debt of the company
            described in paragraph (1) as a percentage of capital stock and
            surplus of the company or on such other measure as the Board of
            Governors considers appropriate.
                (3) Short-term debt defined.--For purposes of this
            subsection, the term ``short-term debt'' means such liabilities
            with short-dated maturity that the Board of Governors
            identifies, by regulation, except that such term does not
            include insured deposits.
                (4) Rulemaking authority.--In addition to prescribing
            regulations under paragraphs (1) and (3), the Board of Governors
            may prescribe such regulations, including definitions consistent
            with this subsection, and issue such orders, as may be necessary
            to carry out this subsection.
                (5) Authority to issue exemptions and adjustments.--
            Notwithstanding the Bank Holding Company Act of 1956 (12 U.S.C.
            1841 et seq.), the Board of Governors may, if it determines such
            action is necessary to ensure appropriate heightened prudential
            supervision, with respect to a company described in paragraph
            (1) that does not control an insured depository institution,
            issue to such company an exemption from or adjustment to the
            limit prescribed under paragraph (1).

        (h) Risk Committee.--
                (1) Nonbank financial companies supervised by the board of
            governors.--The Board <<NOTE: Establishment. Deadline.>> of
            Governors shall require each nonbank financial company
            supervised by the Board of Governors that is a publicly traded
            company to establish a risk committee, as set forth in paragraph
            (3), not later than 1 year after the date of receipt of a notice
            of final determination under section 113(e)(3) with respect to
            such nonbank financial company supervised by the Board of
            Governors.
                (2) Certain bank holding companies.--
                        (A) Mandatory regulations.--The Board of Governors
                    shall issue regulations requiring each bank holding
                    company that is a publicly traded company and that has
                    total consolidated assets of not less than
                    $10,000,000,000 to establish a risk committee, as set
                    forth in paragraph (3).
                        (B) Permissive regulations.--The Board of Governors
                    may require each bank holding company that is a publicly
                    traded company and that has total consolidated assets of
                    less than $10,000,000,000 to establish a risk committee,
                    as set forth in paragraph (3), as determined necessary
                    or appropriate by the Board of Governors to promote
                    sound risk management practices.
                (3) Risk committee.--A risk committee required by this
            subsection shall--

    [[Page 124 STAT. 1430]]

                        (A) be responsible for the oversight of the
                    enterprise-wide risk management practices of the nonbank
                    financial company supervised by the Board of Governors
                    or bank holding company described in subsection (a), as
                    applicable;
                        (B) include such number of independent directors as
                    the Board of Governors may determine appropriate, based
                    on the nature of operations, size of assets, and other
                    appropriate criteria related to the nonbank financial
                    company supervised by the Board of Governors or a bank
                    holding company described in subsection (a), as
                    applicable; and
                        (C) include at least 1 risk management expert having
                    experience in identifying, assessing, and managing risk
                    exposures of large, complex firms.
                (4) Rulemaking.--The <<NOTE: Deadline. Effective
            date.>> Board of Governors shall issue final rules to carry out
            this subsection, not later than 1 year after the transfer date,
            to take effect not later than 15 months after the transfer date.

        (i) Stress Tests.--
                (1) By the board of governors.--
                        (A) Annual tests required.--The Board of Governors,
                    in coordination with the appropriate primary financial
                    regulatory agencies and the Federal Insurance Office,
                    shall conduct annual analyses in which nonbank financial
                    companies supervised by the Board of Governors and bank
                    holding companies described in subsection (a) are
                    subject to evaluation of whether such companies have the
                    capital, on a total consolidated basis, necessary to
                    absorb losses as a result of adverse economic
                    conditions.
                        (B) Test parameters and consequences.--The Board of
                    Governors--
                              (i) shall provide for at least 3 different
                          sets of conditions under which the evaluation
                          required by this subsection shall be conducted,
                          including baseline, adverse, and severely adverse;
                              (ii) may require the tests described in
                          subparagraph (A) at bank holding companies and
                          nonbank financial companies, in addition to those
                          for which annual tests are required under
                          subparagraph (A);
                              (iii) may develop and apply such other
                          analytic techniques as are necessary to identify,
                          measure, and monitor risks to the financial
                          stability of the United States;
                              (iv) shall require the companies described in
                          subparagraph (A) to update their resolution plans
                          required under subsection (d)(1), as the Board of
                          Governors determines appropriate, based on the
                          results of the analyses; and
                              (v) shall <<NOTE: Publication.>> publish a
                          summary of the results of the tests required under
                          subparagraph (A) or clause (ii) of this
                          subparagraph.
                (2) By the company.--
                        (A) Requirement.--A <<NOTE: Deadlines.>> nonbank
                    financial company supervised by the Board of Governors
                    and a bank holding company described in subsection (a)
                    shall conduct semiannual stress tests. All other
                    financial companies that have total consolidated assets
                    of more than $10,000,000,000 and are regulated by a
                    primary Federal financial regulatory

    [[Page 124 STAT. 1431]]

                    agency shall conduct annual stress tests. The tests
                    required under this subparagraph shall be conducted in
                    accordance with the regulations prescribed under
                    subparagraph (C).
                        (B) Report.--A company required to conduct stress
                    tests under subparagraph (A) shall submit a report to
                    the Board of Governors and to its primary financial
                    regulatory agency at such time, in such form, and
                    containing such information as the primary financial
                    regulatory agency shall require.
                        (C) Regulations.--Each Federal primary financial
                    regulatory agency, in coordination with the Board of
                    Governors and the Federal Insurance Office, shall issue
                    consistent and comparable regulations to implement this
                    paragraph that shall--
                              (i) define the term ``stress test'' for
                          purposes of this paragraph;
                              (ii) establish methodologies for the conduct
                          of stress tests required by this paragraph that
                          shall provide for at least 3 different sets of
                          conditions, including baseline, adverse, and
                          severely adverse;
                              (iii) establish the form and content of the
                          report required by subparagraph (B); and
                              (iv) <<NOTE: Publication.>> require companies
                          subject to this paragraph to publish a summary of
                          the results of the required stress tests.

        (j) Leverage Limitation.--
                (1) Requirement.--The Board of Governors shall require a
            bank holding company with total consolidated assets equal to or
            greater than $50,000,000,000 or a nonbank financial company
            supervised by the Board of Governors to maintain a debt to
            equity ratio of no more than 15 to 1, upon a determination by
            the Council that such company poses a grave threat to the
            financial stability of the United States and that the imposition
            of such requirement is necessary to mitigate the risk that such
            company poses to the financial stability of the United States.
            Nothing in this paragraph shall apply to a Federal home loan
            bank.
                (2) Considerations.--In making a determination under this
            subsection, the Council shall consider the factors described in
            subsections (a) and (b) of section 113 and any other risk-
            related factors that the Council deems appropriate.
                (3) Regulations.--The <<NOTE: Procedures.>> Board of
            Governors shall promulgate regulations to establish procedures
            and timelines for complying with the requirements of this
            subsection.

        (k) Inclusion of Off-balance-sheet Activities in Computing Capital
    Requirements.--
                (1) In general.--In the case of any bank holding company
            described in subsection (a) or nonbank financial company
            supervised by the Board of Governors, the computation of capital
            for purposes of meeting capital requirements shall take into
            account any off-balance-sheet activities of the company.
                (2) Exemptions.--If the Board of Governors determines that
            an exemption from the requirement under paragraph (1) is
            appropriate, the Board of Governors may exempt a company, or any
            transaction or transactions engaged in by such company, from the
            requirements of paragraph (1).

    [[Page 124 STAT. 1432]]

                (3) Off-balance-sheet activities defined.--For purposes of
            this subsection, the term ``off-balance-sheet activities'' means
            an existing liability of a company that is not currently a
            balance sheet liability, but may become one upon the happening
            of some future event, including the following transactions, to
            the extent that they may create a liability:
                        (A) Direct credit substitutes in which a bank
                    substitutes its own credit for a third party, including
                    standby letters of credit.
                        (B) Irrevocable letters of credit that guarantee
                    repayment of commercial paper or tax-exempt securities.
                        (C) Risk participations in bankers' acceptances.
                        (D) Sale and repurchase agreements.
                        (E) Asset sales with recourse against the seller.
                        (F) Interest rate swaps.
                        (G) Credit swaps.
                        (H) Commodities contracts.
                        (I) Forward contracts.
                        (J) Securities contracts.
                        (K) Such other activities or transactions as the
                    Board of Governors may, by rule, define.
    SEC. 166. <<NOTE: 12 USC 5366.>> EARLY REMEDIATION REQUIREMENTS.

        (a) In General.--The <<NOTE: Regulations.>> Board of Governors, in
    consultation with the Council and the Corporation, shall prescribe
    regulations establishing requirements to provide for the early
    remediation of financial distress of a nonbank financial company
    supervised by the Board of Governors or a bank holding company described
    in section 165(a), except that nothing in this subsection authorizes the
    provision of financial assistance from the Federal Government.

        (b) Purpose of the Early Remediation Requirements.--The purpose of
    the early remediation requirements under subsection (a) shall be to
    establish a series of specific remedial actions to be taken by a nonbank
    financial company supervised by the Board of Governors or a bank holding
    company described in section 165(a) that is experiencing increasing
    financial distress, in order to minimize the probability that the
    company will become insolvent and the potential harm of such insolvency
    to the financial stability of the United States.
        (c) Remediation Requirements.--The regulations prescribed by the
    Board of Governors under subsection (a) shall--
                (1) define measures of the financial condition of the
            company, including regulatory capital, liquidity measures, and
            other forward-looking indicators; and
                (2) establish requirements that increase in stringency as
            the financial condition of the company declines, including--
                        (A) requirements in the initial stages of financial
                    decline, including limits on capital distributions,
                    acquisitions, and asset growth; and
                        (B) requirements at later stages of financial
                    decline, including a capital restoration plan and
                    capital-raising requirements, limits on transactions
                    with affiliates, management changes, and asset sales.
    SEC. 167. <<NOTE: 12 USC 5367.>> AFFILIATIONS.

        (a) Affiliations.--Nothing in this subtitle shall be construed to
    require a nonbank financial company supervised by the Board

    [[Page 124 STAT. 1433]]

    of Governors, or a company that controls a nonbank financial company
    supervised by the Board of Governors, to conform the activities thereof
    to the requirements of section 4 of the Bank Holding Company Act of 1956
    (12 U.S.C. 1843).
        (b) Requirement.--
                (1) In general.--
                        (A)
                    Board <<NOTE: Deadline. Notification.>> authority.--If a
                    nonbank financial company supervised by the Board of
                    Governors conducts activities other than those that are
                    determined to be financial in nature or incidental
                    thereto under section 4(k) of the Bank Holding Company
                    Act of 1956, the Board of Governors may require such
                    company to establish and conduct all or a portion of
                    such activities that are determined to be financial in
                    nature or incidental thereto in or through an
                    intermediate holding company established pursuant to
                    regulation of the Board of Governors, not later than 90
                    days (or such longer period as the Board of Governors
                    may deem appropriate) after the date on which the
                    nonbank financial company supervised by the Board of
                    Governors is notified of the determination of the Board
                    of Governors under this section.
                        (B) Necessary actions.--Notwithstanding subparagraph
                    (A), the Board of Governors shall require a nonbank
                    financial company supervised by the Board of Governors
                    to establish an intermediate holding company if the
                    Board of Governors makes a determination that the
                    establishment of such intermediate holding company is
                    necessary to--
                              (i) appropriately supervise activities that
                          are determined to be financial in nature or
                          incidental thereto; or
                              (ii) to ensure that supervision by the Board
                          of Governors does not extend to the commercial
                          activities of such nonbank financial company.
                (2) Internal financial activities.--For purposes of this
            subsection, activities that are determined to be financial in
            nature or incidental thereto under section 4(k) of the Bank
            Holding Company Act of 1956, as described in paragraph (1),
            shall not include internal financial activities, including
            internal treasury, investment, and employee benefit functions.
            With respect to any internal financial activity engaged in for
            the company or an affiliate and a non-affiliate of such company
            during the year prior to the date of enactment of this Act, such
            company (or an affiliate that is not an intermediate holding
            company or subsidiary of an intermediate holding company) may
            continue to engage in such activity, as long as not less than 2/
            3 of the assets or 2/3 of the revenues generated from the
            activity are from or attributable to such company or an
            affiliate, subject to review by the Board of Governors, to
            determine whether engaging in such activity presents undue risk
            to such company or to the financial stability of the United
            States.
                (3) Source of strength.--A company that directly or
            indirectly controls an intermediate holding company established
            under this section shall serve as a source of strength to its
            subsidiary intermediate holding company.
                (4) Parent company reports.--The Board of Governors may,
            from time to time, require reports under oath from a

    [[Page 124 STAT. 1434]]

            company that controls an intermediate holding company, and from
            the appropriate officers or directors of such company, solely
            for purposes of ensuring compliance with the provisions of this
            section, including assessing the ability of the company to serve
            as a source of strength to its subsidiary intermediate holding
            company pursuant to paragraph (3) and enforcing such compliance.
                (5) Limited parent company enforcement.--
                        (A) In general.--In addition to any other authority
                    of the Board of Governors, the Board of Governors may
                    enforce compliance with the provisions of this
                    subsection that are applicable to any company described
                    in paragraph (1) that controls an intermediate holding
                    company under section 8 of the Federal Deposit Insurance
                    Act, and such company shall be subject to such section
                    (solely for such purposes) in the same manner and to the
                    same extent as if such company were a bank holding
                    company.
                        (B) Application of other act.--Any violation of this
                    subsection by any company that controls an intermediate
                    holding company may also be treated as a violation of
                    the Federal Deposit Insurance Act for purposes of
                    subparagraph (A).
                        (C) No effect on other authority.--No provision of
                    this paragraph shall be construed as limiting any
                    authority of the Board of Governors or any other Federal
                    agency under any other provision of law.

        (c) Regulations.--The Board of Governors--
                (1) shall <<NOTE: Criteria.>> promulgate regulations to
            establish the criteria for determining whether to require a
            nonbank financial company supervised by the Board of Governors
            to establish an intermediate holding company under subsection
            (b); and
                (2) may promulgate regulations to establish any restrictions
            or limitations on transactions between an intermediate holding
            company or a nonbank financial company supervised by the Board
            of Governors and its affiliates, as necessary to prevent unsafe
            and unsound practices in connection with transactions between
            such company, or any subsidiary thereof, and its parent company
            or affiliates that are not subsidiaries of such company, except
            that such regulations shall not restrict or limit any
            transaction in connection with the bona fide acquisition or
            lease by an unaffiliated person of assets, goods, or services.
    SEC. 168. <<NOTE: 12 USC 5368.>> REGULATIONS.

        The Board of Governors shall have authority to issue regulations to
    implement subtitles A and C and the amendments made thereunder.
    Except <<NOTE: Deadline.>> as otherwise specified in subtitle A or C,
    not later than 18 months after the effective date of this Act, the Board
    of Governors shall issue final regulations to implement subtitles A and
    C, and the amendments made thereunder.
    SEC. 169. <<NOTE: 12 USC 5369.>> AVOIDING DUPLICATION.

        The Board of Governors shall take any action that the Board of
    Governors deems appropriate to avoid imposing requirements under this
    subtitle that are duplicative of requirements applicable to bank holding
    companies and nonbank financial companies under other provisions of law.

    [[Page 124 STAT. 1435]]

    SEC. 170. <<NOTE: 12 USC 5370.>> SAFE HARBOR.

        (a) Regulations.--The <<NOTE: Criteria.>> Board of Governors shall
    promulgate regulations on behalf of, and in consultation with, the
    Council setting forth the criteria for exempting certain types or
    classes of U.S. nonbank financial companies or foreign nonbank financial
    companies from supervision by the Board of Governors.

        (b) Considerations.--In developing the criteria under subsection
    (a), the Board of Governors shall take into account the factors for
    consideration described in subsections (a) and (b) of section 113 in
    determining whether a U.S. nonbank financial company or foreign nonbank
    financial company shall be supervised by the Board of Governors.
        (c) Rule of Construction.--Nothing in this section shall be
    construed to require supervision by the Board of Governors of a U.S.
    nonbank financial company or foreign nonbank financial company, if such
    company does not meet the criteria for exemption established under
    subsection (a).
        (d) Revisions.--
                (1) In <<NOTE: Review.>> general.--The Board of Governors
            shall, in consultation with the Council, review the regulations
            promulgated under subsection (a), not less frequently than every
            5 years, and based upon the review, the Board of Governors may
            revise such regulations on behalf of, and in consultation with,
            the Council to update as necessary the criteria set forth in
            such regulations.
                (2) Transition period.--No revisions under paragraph (1)
            shall take effect before the end of the 2-year period after the
            date of publication of such revisions in final form.

        (e) Report.--The Chairman of the Board of Governors and the
    Chairperson of the Council shall submit a joint report to the Committee
    on Banking, Housing, and Urban Affairs of the Senate and the Committee
    on Financial Services of the House of Representatives not later than 30
    days after the date of the issuance in final form of regulations under
    subsection (a), or any subsequent revision to such regulations under
    subsection (d), as applicable. Such report shall include, at a minimum,
    the rationale for exemption and empirical evidence to support the
    criteria for exemption.
    SEC. 171. <<NOTE: 12 USC 5371.>> LEVERAGE AND RISK-BASED CAPITAL
                            REQUIREMENTS.

        (a) Definitions.--For purposes of this section, the following
    definitions shall apply:
                (1) Generally applicable leverage capital requirements.--The
            term ``generally applicable leverage capital requirements''
            means--
                        (A) the minimum ratios of tier 1 capital to average
                    total assets, as established by the appropriate Federal
                    banking agencies to apply to insured depository
                    institutions under the prompt corrective action
                    regulations implementing section 38 of the Federal
                    Deposit Insurance Act, regardless of total consolidated
                    asset size or foreign financial exposure; and
                        (B) includes the regulatory capital components in
                    the numerator of that capital requirement, average total
                    assets in the denominator of that capital requirement,
                    and the required ratio of the numerator to the
                    denominator.

    [[Page 124 STAT. 1436]]

                (2) Generally applicable risk-based capital requirements.--
            The term ``generally applicable risk-based capital
            requirements'' means--
                        (A) the risk-based capital requirements, as
                    established by the appropriate Federal banking agencies
                    to apply to insured depository institutions under the
                    prompt corrective action regulations implementing
                    section 38 of the Federal Deposit Insurance Act,
                    regardless of total consolidated asset size or foreign
                    financial exposure; and
                        (B) includes the regulatory capital components in
                    the numerator of those capital requirements, the risk-
                    weighted assets in the denominator of those capital
                    requirements, and the required ratio of the numerator to
                    the denominator.
                (3) Definition of depository institution holding company.--
            The term ``depository institution holding company'' means a bank
            holding company or a savings and loan holding company (as those
            terms are defined in section 3 of the Federal Deposit Insurance
            Act) that is organized in the United States, including any bank
            or savings and loan holding company that is owned or controlled
            by a foreign organization, but does not include the foreign
            organization.

        (b) Minimum Capital Requirements.--
                (1) Minimum leverage capital requirements.--The appropriate
            Federal banking agencies shall establish minimum leverage
            capital requirements on a consolidated basis for insured
            depository institutions, depository institution holding
            companies, and nonbank financial companies supervised by the
            Board of Governors. The minimum leverage capital requirements
            established under this paragraph shall not be less than the
            generally applicable leverage capital requirements, which shall
            serve as a floor for any capital requirements that the agency
            may require, nor quantitatively lower than the generally
            applicable leverage capital requirements that were in effect for
            insured depository institutions as of the date of enactment of
            this Act.
                (2) Minimum risk-based capital requirements.--The
            appropriate Federal banking agencies shall establish minimum
            risk-based capital requirements on a consolidated basis for
            insured depository institutions, depository institution holding
            companies, and nonbank financial companies supervised by the
            Board of Governors. The minimum risk-based capital requirements
            established under this paragraph shall not be less than the
            generally applicable risk-based capital requirements, which
            shall serve as a floor for any capital requirements that the
            agency may require, nor quantitatively lower than the generally
            applicable risk-based capital requirements that were in effect
            for insured depository institutions as of the date of enactment
            of this Act.
                (3) Investments in financial subsidiaries.--For purposes of
            this section, investments in financial subsidiaries that insured
            depository institutions are required to deduct from regulatory
            capital under section 5136A of the Revised Statutes of the
            United States or section 46(a)(2) of the Federal Deposit
            Insurance Act need not be deducted from regulatory capital by
            depository institution holding companies or nonbank financial
            companies supervised by the Board of Governors, unless such
            capital deduction is required by the Board of Governors

    [[Page 124 STAT. 1437]]

            or the primary financial regulatory agency in the case of
            nonbank financial companies supervised by the Board of
            Governors.
                (4) Effective dates and phase-in periods.--
                        (A) Debt or equity instruments on or after may 19,
                    2010.--For debt or equity instruments issued on or after
                    May 19, 2010, by depository institution holding
                    companies or by nonbank financial companies supervised
                    by the Board of Governors, this section shall be deemed
                    to have become effective as of May 19, 2010.
                        (B) Debt or equity instruments issued before may 19,
                    2010.--For debt or equity instruments issued before May
                    19, 2010, by depository institution holding companies or
                    by nonbank financial companies supervised by the Board
                    of Governors, any regulatory capital deductions required
                    under this section shall be phased in incrementally over
                    a period of 3 years, with the phase-in period to begin
                    on January 1, 2013, except as set forth in subparagraph
                    (C).
                        (C) Debt or equity instruments of smaller
                    institutions.--For debt or equity instruments issued
                    before May 19, 2010, by depository institution holding
                    companies with total consolidated assets of less than
                    $15,000,000,000 as of December 31, 2009, and by
                    organizations that were mutual holding companies on May
                    19, 2010, the capital deductions that would be required
                    for other institutions under this section are not
                    required as a result of this section.
                        (D) Depository institution holding companies not
                    previously supervised by the board of governors.--For
                    any depository institution holding company that was not
                    supervised by the Board of Governors as of May 19, 2010,
                    the requirements of this section, except as set forth in
                    subparagraphs (A) and (B), shall be effective 5 years
                    after the date of enactment of this Act
                        (E) Certain bank holding company subsidiaries of
                    foreign banking organizations.--For bank holding company
                    subsidiaries of foreign banking organizations that have
                    relied on Supervision and Regulation Letter SR-01-1
                    issued by the Board of Governors (as in effect on May
                    19, 2010), the requirements of this section, except as
                    set forth in subparagraph (A), shall be effective 5
                    years after the date of enactment of this Act.
                (5) Exceptions.--This section shall not apply to--
                        (A) debt or equity instruments issued to the United
                    States or any agency or instrumentality thereof pursuant
                    to the Emergency Economic Stabilization Act of 2008, and
                    prior to October 4, 2010;
                        (B) any Federal home loan bank; or
                        (C) any small bank holding company that is subject
                    to the Small Bank Holding Company Policy Statement of
                    the Board of Governors, as in effect on May 19, 2010.
                (6) Study and report on small institution access to
            capital.--
                        (A) Study required.--The Comptroller General of the
                    United States, after consultation with the Federal
                    banking

    [[Page 124 STAT. 1438]]

                    agencies, shall conduct a study of access to capital by
                    smaller insured depository institutions.
                        (B) Scope.--For <<NOTE: Definition.>> purposes of
                    this study required by subparagraph (A), the term
                    ``smaller insured depository institution'' means an
                    insured depository institution with total consolidated
                    assets of $5,000,000,000 or less.
                        (C) Report to congress.--Not later than 18 months
                    after the date of enactment of this Act, the Comptroller
                    General of the United States shall submit to the
                    Committee on Banking, Housing, and Urban Affairs of the
                    Senate and the Committee on Financial Services of the
                    House of Representatives a report summarizing the
                    results of the study conducted under subparagraph (A),
                    together with any recommendations for legislative or
                    regulatory action that would enhance the access to
                    capital of smaller insured depository institutions, in a
                    manner that is consistent with safe and sound banking
                    operations.
                (7) Capital requirements to address activities that pose
            risks to the financial system.--
                        (A) In general.--Subject to the recommendations of
                    the Council, in accordance with section 120, the Federal
                    banking agencies shall develop capital requirements
                    applicable to insured depository institutions,
                    depository institution holding companies, and nonbank
                    financial companies supervised by the Board of Governors
                    that address the risks that the activities of such
                    institutions pose, not only to the institution engaging
                    in the activity, but to other public and private
                    stakeholders in the event of adverse performance,
                    disruption, or failure of the institution or the
                    activity.
                        (B) Content.--Such rules shall address, at a
                    minimum, the risks arising from--
                              (i) significant volumes of activity in
                          derivatives, securitized products purchased and
                          sold, financial guarantees purchased and sold,
                          securities borrowing and lending, and repurchase
                          agreements and reverse repurchase agreements;
                              (ii) concentrations in assets for which the
                          values presented in financial reports are based on
                          models rather than historical cost or prices
                          deriving from deep and liquid 2-way markets; and
                              (iii) concentrations in market share for any
                          activity that would substantially disrupt
                          financial markets if the institution is forced to
                          unexpectedly cease the activity.
    SEC. 172. EXAMINATION AND ENFORCEMENT ACTIONS FOR INSURANCE AND
                            ORDERLY LIQUIDATION PURPOSES.

        (a) Examinations for Insurance and Resolution Purposes.--Section
    10(b)(3) of the Federal Deposit Insurance Act (12 U.S.C. 1820(b)(3)) is
    amended--
                (1) by striking ``In addition'' and inserting the following:
                        ``(A) In general.--In addition''; and
                (2) by striking ``whenever the board of directors
            determines'' and all that follows through the period and
            inserting the following: ``or nonbank financial company
            supervised by the Board of Governors or a bank holding company
            described in section

    [[Page 124 STAT. 1439]]

            165(a) of the Financial Stability Act of 2010, whenever the
            Board of Directors determines that a special examination of any
            such depository institution is necessary to determine the
            condition of such depository institution for insurance purposes,
            or of such nonbank financial company supervised by the Board of
            Governors or bank holding company described in section 165(a) of
            the Financial Stability Act of 2010, for the purpose of
            implementing its authority to provide for orderly liquidation of
            any such company under title II of that Act, provided that such
            authority may not be used with respect to any such company that
            is in a generally sound condition.
                        ``(B) Limitation.--
                    Before <<NOTE: Review.>> conducting a special
                    examination of a nonbank financial company supervised by
                    the Board of Governors or a bank holding company
                    described in section 165(a) of the Financial Stability
                    Act of 2010, the Corporation shall review any available
                    and acceptable resolution plan that the company has
                    submitted in accordance with section 165(d) of that Act,
                    consistent with the nonbinding effect of such plan, and
                    available reports of examination, and shall coordinate
                    to the maximum extent practicable with the Board of
                    Governors, in order to minimize duplicative or
                    conflicting examinations.''.

        (b) Enforcement Authority.--Section 8(t) of the Federal Deposit
    Insurance Act (12 U.S.C. 1818(t)) is amended--
                (1) in paragraph (1), by inserting ``, any depository
            institution holding company,'' before ``or any institution-
            affiliated party'';
                (2) in paragraph (2)--
                        (A) by striking ``or'' at the end of subparagraph
                    (B);
                        (B) at the end of subparagraph (C), by striking the
                    period and inserting ``or''; and
                        (C) by inserting at the end the following new
                    subparagraph:
                        ``(D) the conduct or threatened conduct (including
                    any acts or omissions) of the depository institution
                    holding company poses a risk to the Deposit Insurance
                    Fund, provided that such authority may not be used with
                    respect to a depository institution holding company that
                    is in generally sound condition and whose conduct does
                    not pose a foreseeable and material risk of loss to the
                    Deposit Insurance Fund;''; and
                (3) by adding at the end the following:
                ``(6) Powers and duties with respect to depository
            institution holding companies.--For purposes of exercising the
            backup authority provided in this subsection--
                        ``(A) the Corporation shall have the same powers
                    with respect to a depository institution holding company
                    and its affiliates as the appropriate Federal banking
                    agency has with respect to the holding company and its
                    affiliates; and
                        ``(B) the holding company and its affiliates shall
                    have the same duties and obligations with respect to the
                    Corporation as the holding company and its affiliates
                    have with respect to the appropriate Federal banking
                    agency.''.

        (c) Rule <<NOTE: 12 USC 5372.>> of Construction.--Nothing in this
    Act shall be construed to limit or curtail the Corporation's current
    authority to

    [[Page 124 STAT. 1440]]

    examine or bring enforcement actions with respect to any insured
    depository institution or institution-affiliated party.
    SEC. 173. ACCESS TO UNITED STATES FINANCIAL MARKET BY FOREIGN
                            INSTITUTIONS.

        (a) Establishment of Foreign Bank Offices in the United States.--
    Section 7(d)(3) of the International Banking Act of 1978 (12 U.S.C.
    3105(d)(3)) is amended--
                (1) in subparagraph (C), by striking ``and'' at the end;
                (2) in subparagraph (D), by striking the period at the end
            of and inserting ``; and''; and
                (3) by adding at the end the following new subparagraph:
                        ``(E) for a foreign bank that presents a risk to the
                    stability of United States financial system, whether the
                    home country of the foreign bank has adopted, or is
                    making demonstrable progress toward adopting, an
                    appropriate system of financial regulation for the
                    financial system of such home country to mitigate such
                    risk.''.

        (b) Termination of Foreign Bank Offices in the United States.--
    Section 7(e)(1) of the International Banking Act of 1978 (12 U.S.C.
    3105(e)(1)) is amended--
                (1) in subparagraph (A), by striking ``or'' at the end;
                (2) in subparagraph (B), by striking the period at the end
            of and inserting ``; or''; and
                (3) by inserting after subparagraph (B), the following new
            subparagraph:
                        ``(C) for a foreign bank that presents a risk to the
                    stability of the United States financial system, the
                    home country of the foreign bank has not adopted, or
                    made demonstrable progress toward adopting, an
                    appropriate system of financial regulation to mitigate
                    such risk.''.

        (c) Registration or Succession to a United States Broker or Dealer
    and Termination of Such Registration.--Section 15 of the Securities
    Exchange Act of 1934 (15 U.S.C. 78o) is amended by adding at the end the
    following new subsections:
        ``(k) Registration or Succession to a United States Broker or
    Dealer.--In determining whether to permit a foreign person or an
    affiliate of a foreign person to register as a United States broker or
    dealer, or succeed to the registration of a United States broker or
    dealer, the Commission may consider whether, for a foreign person, or an
    affiliate of a foreign person that presents a risk to the stability of
    the United States financial system, the home country of the foreign
    person has adopted, or made demonstrable progress toward adopting, an
    appropriate system of financial regulation to mitigate such risk.
        ``(l) Termination of a United States Broker or Dealer.--For a
    foreign person or an affiliate of a foreign person that presents such a
    risk to the stability of the United States financial system, the
    Commission may determine to terminate the registration of such foreign
    person or an affiliate of such foreign person as a broker or dealer in
    the United States, if the Commission determines that the home country of
    the foreign person has not adopted, or made demonstrable progress toward
    adopting, an appropriate system of financial regulation to mitigate such
    risk.''.

    [[Page 124 STAT. 1441]]

    SEC. 174. STUDIES AND REPORTS ON HOLDING COMPANY CAPITAL
                            REQUIREMENTS.

        (a) Study of Hybrid Capital Instruments.--The Comptroller General of
    the United States, in consultation with the Board of Governors, the
    Comptroller of the Currency, and the Corporation, shall conduct a study
    of the use of hybrid capital instruments as a component of Tier 1
    capital for banking institutions and bank holding companies. The study
    shall consider--
                (1) the current use of hybrid capital instruments, such as
            trust preferred shares, as a component of Tier 1 capital;
                (2) the differences between the components of capital
            permitted for insured depository institutions and those
            permitted for companies that control insured depository
            institutions;
                (3) the benefits and risks of allowing such instruments to
            be used to comply with Tier 1 capital requirements;
                (4) the economic impact of prohibiting the use of such
            capital instruments for Tier 1;
                (5) a review of the consequences of disqualifying trust
            preferred instruments, and whether it could lead to the failure
            or undercapitalization of existing banking organizations;
                (6) the international competitive implications prohibiting
            hybrid capital instruments for Tier 1;
                (7) the impact on the cost and availability of credit in the
            United States from such a prohibition;
                (8) the availability of capital for financial institutions
            with less than $10,000,000,000 in total assets; and
                (9) any other relevant factors relating to the safety and
            soundness of our financial system and potential economic impact
            of such a prohibition.

        (b) Study of Foreign Bank Intermediate Holding Company Capital
    Requirements.--The Comptroller General of the United States, in
    consultation with the Secretary, the Board of Governors, the Comptroller
    of the Currency, and the Corporation, shall conduct a study of capital
    requirements applicable to United States intermediate holding companies
    of foreign banks that are bank holding companies or savings and loan
    holding companies. The study shall consider--
                (1) current Board of Governors policy regarding the
            treatment of intermediate holding companies;
                (2) the principle of national treatment and equality of
            competitive opportunity for foreign banks operating in the
            United States;
                (3) the extent to which foreign banks are subject on a
            consolidated basis to home country capital standards comparable
            to United States capital standards;
                (4) potential effects on United States banking organizations
            operating abroad of changes to United States policy regarding
            intermediate holding companies;
                (5) the impact on the cost and availability of credit in the
            United States from a change in United States policy regarding
            intermediate holding companies; and
                (6) any other relevant factors relating to the safety and
            soundness of our financial system and potential economic impact
            of such a prohibition.

        (c) Report.--Not later than 18 months after the date of enactment of
    this Act, the Comptroller General of the United States shall submit
    reports to the Committee on Banking, Housing, and

    [[Page 124 STAT. 1442]]

    Urban Affairs of the Senate and the Committee on Financial Services of
    the House of Representatives summarizing the results of the studies
    required under subsection (a). The reports shall include specific
    recommendations for legislative or regulatory action regarding the
    treatment of hybrid capital instruments, including trust preferred
    shares, and shall explain the basis for such recommendations.
    SEC. 175. <<NOTE: Consultation. 12 USC 5373.>> INTERNATIONAL
                            POLICY COORDINATION.

        (a) By the President.--The President, or a designee of the
    President, may coordinate through all available international policy
    channels, similar policies as those found in United States law relating
    to limiting the scope, nature, size, scale, concentration, and
    interconnectedness of financial companies, in order to protect financial
    stability and the global economy.
        (b) By the Council.--The Chairperson of the Council, in consultation
    with the other members of the Council, shall regularly consult with the
    financial regulatory entities and other appropriate organizations of
    foreign governments or international organizations on matters relating
    to systemic risk to the international financial system.
        (c) By the Board of Governors and the Secretary.--The Board of
    Governors and the Secretary shall consult with their foreign
    counterparts and through appropriate multilateral organizations to
    encourage comprehensive and robust prudential supervision and regulation
    for all highly leveraged and interconnected financial companies.
    SEC. 176. <<NOTE: 12 USC 5374.>> RULE OF CONSTRUCTION.

        No regulation or standard imposed under this title may be construed
    in a manner that would lessen the stringency of the requirements of any
    applicable primary financial regulatory agency or any other Federal or
    State agency that are otherwise applicable. This title, and the rules
    and regulations or orders prescribed pursuant to this title, do not
    divest any such agency of any authority derived from any other
    applicable law.

                     TITLE II--ORDERLY LIQUIDATION AUTHORITY

    SEC. 201. <<NOTE: 12 USC 5381.>> DEFINITIONS.

        (a) In General.--In this title, the following definitions shall
    apply:
                (1) Administrative expenses of the receiver.--The term
            ``administrative expenses of the receiver'' includes--
                        (A) the actual, necessary costs and expenses
                    incurred by the Corporation as receiver for a covered
                    financial company in liquidating a covered financial
                    company; and
                        (B) any obligations that the Corporation as receiver
                    for a covered financial company determines are necessary
                    and appropriate to facilitate the smooth and orderly
                    liquidation of the covered financial company.
                (2) Bankruptcy code.--The term ``Bankruptcy Code'' means
            title 11, United States Code.
                (3) Bridge financial company.--The term ``bridge financial
            company'' means a new financial company organized by

    [[Page 124 STAT. 1443]]

            the Corporation in accordance with section 210(h) for the
            purpose of resolving a covered financial company.
                (4) Claim.--The term ``claim'' means any right to payment,
            whether or not such right is reduced to judgment, liquidated,
            unliquidated, fixed, contingent, matured, unmatured, disputed,
            undisputed, legal, equitable, secured, or unsecured.
                (5) Company.--The term ``company'' has the same meaning as
            in section 2(b) of the Bank Holding Company Act of 1956 (12
            U.S.C. 1841(b)), except that such term includes any company
            described in paragraph (11), the majority of the securities of
            which are owned by the United States or any State.
                (6) Court.--The term ``Court'' means the United States
            District Court for the District of Columbia, unless the context
            otherwise requires.
                (7) Covered broker or dealer.--The term ``covered broker or
            dealer'' means a covered financial company that is a broker or
            dealer that--
                        (A) is registered with the Commission under section
                    15(b) of the Securities Exchange Act of 1934 (15 U.S.C.
                    78o(b)); and
                        (B) is a member of SIPC.
                (8) Covered financial company.--The term ``covered financial
            company''--
                        (A) means a financial company for which a
                    determination has been made under section 203(b); and
                        (B) does not include an insured depository
                    institution.
                (9) Covered subsidiary.--The term ``covered subsidiary''
            means a subsidiary of a covered financial company, other than--
                        (A) an insured depository institution;
                        (B) an insurance company; or
                        (C) a covered broker or dealer.
                (10) Definitions relating to covered brokers and dealers.--
            The terms ``customer'', ``customer name securities'', ``customer
            property'', and ``net equity'' in the context of a covered
            broker or dealer, have the same meanings as in section 16 of the
            Securities Investor Protection Act of 1970 (15 U.S.C. 78lll).
                (11) Financial company.--The term ``financial company''
            means any company that--
                        (A) is incorporated or organized under any provision
                    of Federal law or the laws of any State;
                        (B) is--
                              (i) a bank holding company, as defined in
                          section 2(a) of the Bank Holding Company Act of
                          1956 (12 U.S.C. 1841(a));
                              (ii) a nonbank financial company supervised by
                          the Board of Governors;
                              (iii) any company that is predominantly
                          engaged in activities that the Board of Governors
                          has determined are financial in nature or
                          incidental thereto for purposes of section 4(k) of
                          the Bank Holding Company Act of 1956 (12 U.S.C.
                          1843(k)) other than a company described in clause
                          (i) or (ii); or
                              (iv) any subsidiary of any company described
                          in any of clauses (i) through (iii) that is
                          predominantly engaged in activities that the Board
                          of Governors has

    [[Page 124 STAT. 1444]]

                          determined are financial in nature or incidental
                          thereto for purposes of section 4(k) of the Bank
                          Holding Company Act of 1956 (12 U.S.C. 1843(k))
                          (other than a subsidiary that is an insured
                          depository institution or an insurance company);
                          and
                        (C) is not a Farm Credit System institution
                    chartered under and subject to the provisions of the
                    Farm Credit Act of 1971, as amended (12 U.S.C. 2001 et
                    seq.), a governmental entity, or a regulated entity, as
                    defined under section 1303(20) of the Federal Housing
                    Enterprises Financial Safety and Soundness Act of 1992
                    (12 U.S.C. 4502(20)).
                (12) Fund.--The term ``Fund'' means the Orderly Liquidation
            Fund established under section 210(n).
                (13) Insurance company.--The term ``insurance company''
            means any entity that is--
                        (A) engaged in the business of insurance;
                        (B) subject to regulation by a State insurance
                    regulator; and
                        (C) covered by a State law that is designed to
                    specifically deal with the rehabilitation, liquidation,
                    or insolvency of an insurance company.
                (14) Nonbank financial company.--The term ``nonbank
            financial company'' has the same meaning as in section
            102(a)(4)(C).
                (15) Nonbank financial company supervised by the board of
            governors.--The term ``nonbank financial company supervised by
            the Board of Governors'' has the same meaning as in section
            102(a)(4)(D).
                (16) SIPC.--The term ``SIPC'' means the Securities Investor
            Protection Corporation.

        (b) Definitional <<NOTE: Regulations.>> Criteria.--For purpose of
    the definition of the term ``financial company'' under subsection
    (a)(11), no company shall be deemed to be predominantly engaged in
    activities that the Board of Governors has determined are financial in
    nature or incidental thereto for purposes of section 4(k) of the Bank
    Holding Company Act of 1956 (12 U.S.C. 1843(k)), if the consolidated
    revenues of such company from such activities constitute less than 85
    percent of the total consolidated revenues of such company, as the
    Corporation, in consultation with the Secretary, shall establish by
    regulation. In determining whether a company is a financial company
    under this title, the consolidated revenues derived from the ownership
    or control of a depository institution shall be included.
    SEC. 202. <<NOTE: 12 USC 5382.>> JUDICIAL REVIEW.

        (a) Commencement of Orderly Liquidation.--
                (1) Petition to district court.--
                        (A) District court review.--
                              (i) Petition to district court.--
                          Subsequent <<NOTE: Notification.>> to a
                          determination by the Secretary under section 203
                          that a financial company satisfies the criteria in
                          section 203(b), the Secretary shall notify the
                          Corporation and the covered financial
                          company. <<NOTE: Appointment.>> If the board of
                          directors (or body performing similar functions)
                          of the covered financial company acquiesces or
                          consents to the appointment of the Corporation as
                          receiver, the Secretary shall appoint the
                          Corporation as receiver. If

    [[Page 124 STAT. 1445]]

                          the board of directors (or body performing similar
                          functions) of the covered financial company does
                          not acquiesce or consent to the appointment of the
                          Corporation as receiver, the Secretary shall
                          petition the United States District Court for the
                          District of Columbia for an order authorizing the
                          Secretary to appoint the Corporation as receiver.
                              (ii) Form and content of order.--The Secretary
                          shall present all relevant findings and the
                          recommendation made pursuant to section 203(a) to
                          the Court. The petition shall be filed under seal.
                              (iii) Determination.--On a strictly
                          confidential basis, and without any prior public
                          disclosure, the Court, after notice to the covered
                          financial company and a hearing in which the
                          covered financial company may oppose the petition,
                          shall determine whether the determination of the
                          Secretary that the covered financial company is in
                          default or in danger of default and satisfies the
                          definition of a financial company under section
                          201(a)(11) is arbitrary and capricious.
                              (iv) Issuance of order.--If the Court
                          determines that the determination of the Secretary
                          that the covered financial company is in default
                          or in danger of default and satisfies the
                          definition of a financial company under section
                          201(a)(11)--
                                        (I) is not arbitrary and capricious,
                                    the Court shall issue an order
                                    immediately authorizing the Secretary to
                                    appoint the Corporation as receiver of
                                    the covered financial company; or
                                        (II) is arbitrary and capricious,
                                    the Court shall immediately provide to
                                    the Secretary a written statement of
                                    each reason supporting its
                                    determination, and afford the Secretary
                                    an immediate opportunity to amend and
                                    refile the petition under clause (i).
                              (v) Petition granted by operation of law.--If
                          the Court does not make a determination within 24
                          hours of receipt of the petition--
                                        (I) the petition shall be granted by
                                    operation of law;
                                        (II) the Secretary shall appoint the
                                    Corporation as receiver; and
                                        (III) liquidation under this title
                                    shall automatically and without further
                                    notice or action be commenced and the
                                    Corporation may immediately take all
                                    actions authorized under this title.
                        (B) Effect of determination.--The determination of
                    the Court under subparagraph (A) shall be final, and
                    shall be subject to appeal only in accordance with
                    paragraph (2). The decision shall not be subject to any
                    stay or injunction pending appeal.
                    Upon <<NOTE: Records.>> conclusion of its proceedings
                    under subparagraph (A), the Court shall provide
                    immediately for the record a written statement of each
                    reason supporting the decision of the Court, and shall
                    provide copies thereof to the Secretary and the covered
                    financial company.

    [[Page 124 STAT. 1446]]

                        (C) Criminal penalties.--A person who recklessly
                    discloses a determination of the Secretary under section
                    203(b) or a petition of the Secretary under subparagraph
                    (A), or the pendency of court proceedings as provided
                    for under subparagraph (A), shall be fined not more than
                    250,000, or imprisoned for not more than 5 years, or
                    both.
                (2) Appeal of decisions of the district court.--
                        (A) Appeal to court of appeals.--
                              (i) In general.--
                          Subject <<NOTE: Deadline.>> to clause (ii), the
                          United States Court of Appeals for the District of
                          Columbia Circuit shall have jurisdiction of an
                          appeal of a final decision of the Court filed by
                          the Secretary or a covered financial company,
                          through its board of directors, notwithstanding
                          section 210(a)(1)(A)(i), not later than 30 days
                          after the date on which the decision of the Court
                          is rendered or deemed rendered under this
                          subsection.
                              (ii) Condition of jurisdiction.--The Court of
                          Appeals shall have jurisdiction of an appeal by a
                          covered financial company only if the covered
                          financial company did not acquiesce or consent to
                          the appointment of a receiver by the Secretary
                          under paragraph (1)(A).
                              (iii) Expedition.--The Court of Appeals shall
                          consider any appeal under this subparagraph on an
                          expedited basis.
                              (iv) Scope of review.--For an appeal taken
                          under this subparagraph, review shall be limited
                          to whether the determination of the Secretary that
                          a covered financial company is in default or in
                          danger of default and satisfies the definition of
                          a financial company under section 201(a)(11) is
                          arbitrary and capricious.
                        (B) Appeal to the supreme court.--
                              (i) In <<NOTE: Deadline.>> general.--A
                          petition for a writ of certiorari to review a
                          decision of the Court of Appeals under
                          subparagraph (A) may be filed by the Secretary or
                          the covered financial company, through its board
                          of directors, notwithstanding section
                          210(a)(1)(A)(i), with the Supreme Court of the
                          United States, not later than 30 days after the
                          date of the final decision of the Court of
                          Appeals, and the Supreme Court shall have
                          discretionary jurisdiction to review such
                          decision.
                              (ii) Written statement.--
                          In <<NOTE: Records.>> the event of a petition
                          under clause (i), the Court of Appeals shall
                          immediately provide for the record a written
                          statement of each reason for its decision.
                              (iii) Expedition.--The Supreme Court shall
                          consider any petition under this subparagraph on
                          an expedited basis.
                              (iv) Scope of review.--Review by the Supreme
                          Court under this subparagraph shall be limited to
                          whether the determination of the Secretary that
                          the covered financial company is in default or in
                          danger of default and satisfies the definition of
                          a financial company under section 201(a)(11) is
                          arbitrary and capricious.

        (b) Establishment and Transmittal of Rules and Procedures.--

    [[Page 124 STAT. 1447]]

                (1) In general.--Not <<NOTE: Deadline.>> later than 6 months
            after the date of enactment of this Act, the Court shall
            establish such rules and procedures as may be necessary to
            ensure the orderly conduct of proceedings, including rules and
            procedures to ensure that the 24-hour deadline is met and that
            the Secretary shall have an ongoing opportunity to amend and
            refile petitions under subsection (a)(1).
                (2) Publication of rules.--The rules and procedures
            established under paragraph (1), and any modifications of such
            rules and procedures, shall be recorded and shall be transmitted
            to--
                        (A) the Committee on the Judiciary of the Senate;
                        (B) the Committee on Banking, Housing, and Urban
                    Affairs of the Senate;
                        (C) the Committee on the Judiciary of the House of
                    Representatives; and
                        (D) the Committee on Financial Services of the House
                    of Representatives.

        (c) Provisions Applicable to Financial Companies.--
                (1) Bankruptcy code.--Except as provided in this subsection,
            the provisions of the Bankruptcy Code and rules issued
            thereunder or otherwise applicable insolvency law, and not the
            provisions of this title, shall apply to financial companies
            that are not covered financial companies for which the
            Corporation has been appointed as receiver.
                (2) This title.--The provisions of this title shall
            exclusively apply to and govern all matters relating to covered
            financial companies for which the Corporation is appointed as
            receiver, and no provisions of the Bankruptcy Code or the rules
            issued thereunder shall apply in such cases, except as expressly
            provided in this title.

        (d) Time Limit on Receivership Authority.--
                (1) Baseline period.--Any appointment of the Corporation as
            receiver under this section shall terminate at the end of the 3-
            year period beginning on the date on which such appointment is
            made.
                (2) Extension of time limit.--
            The <<NOTE: Certification.>> time limit established in paragraph
            (1) may be extended by the Corporation for up to 1 additional
            year, if the Chairperson of the Corporation determines and
            certifies in writing to the Committee on Banking, Housing, and
            Urban Affairs of the Senate and the Committee on Financial
            Services of the House of Representatives that continuation of
            the receivership is necessary--
                        (A) to--
                              (i) maximize the net present value return from
                          the sale or other disposition of the assets of the
                          covered financial company; or
                              (ii) minimize the amount of loss realized upon
                          the sale or other disposition of the assets of the
                          covered financial company; and
                        (B) to protect the stability of the financial system
                    of the United States.
                (3) Second extension of time limit.--
                        (A) In general.--The time limit under this
                    subsection, as extended under paragraph (2), may be
                    extended for

    [[Page 124 STAT. 1448]]

                    up to 1 additional year, if the Chairperson of the
                    Corporation, with the concurrence of the Secretary,
                    submits the certifications described in paragraph (2).
                        (B) Additional report required.--Not later than 30
                    days after the date of commencement of the extension
                    under subparagraph (A), the Corporation shall submit a
                    report to the Committee on Banking, Housing, and Urban
                    Affairs of the Senate and the Committee on Financial
                    Services of the House of Representatives describing the
                    need for the extension and the specific plan of the
                    Corporation to conclude the receivership before the end
                    of the second extension.
                (4) Ongoing litigation.--The <<NOTE: Deadline. Termination
            date.>> time limit under this subsection, as extended under
            paragraph (3), may be further extended solely for the purpose of
            completing ongoing litigation in which the Corporation as
            receiver is a party, provided that the appointment of the
            Corporation as receiver shall terminate not later than 90 days
            after the date of completion of such litigation, if--
                        (A) the Council determines that the Corporation used
                    its best efforts to conclude the receivership in
                    accordance with its plan before the end of the time
                    limit described in paragraph (3);
                        (B) the Council determines that the completion of
                    longer-term responsibilities in the form of ongoing
                    litigation justifies the need for an extension; and
                        (C) <<NOTE: Reports. Deadline.>> the Corporation
                    submits a report approved by the Council not later than
                    30 days after the date of the determinations by the
                    Council under subparagraphs (A) and (B) to the Committee
                    on Banking, Housing, and Urban Affairs of the Senate and
                    the Committee on Financial Services of the House of
                    Representatives, describing--
                              (i) the ongoing litigation justifying the need
                          for an extension; and
                              (ii) the specific plan of the Corporation to
                          complete the litigation and conclude the
                          receivership.
                (5) Regulations.--The Corporation may issue regulations
            governing the termination of receiverships under this title.
                (6) No liability.--The Corporation and the Deposit Insurance
            Fund shall not be liable for unresolved claims arising from the
            receivership after the termination of the receivership.

        (e) Study of Bankruptcy and Orderly Liquidation Process for
    Financial Companies.--
                (1) Study.--
                        (A) In general.--The Administrative Office of the
                    United States Courts and the Comptroller General of the
                    United States shall each monitor the activities of the
                    Court, and each such Office shall conduct separate
                    studies regarding the bankruptcy and orderly liquidation
                    process for financial companies under the Bankruptcy
                    Code.
                        (B) Issues to be studied.--
                    In <<NOTE: Evaluation.>> conducting the study under
                    subparagraph (A), the Administrative Office of the
                    United States Courts and the Comptroller General of the
                    United States each shall evaluate--
                              (i) the effectiveness of chapter 7 or chapter
                          11 of the Bankruptcy Code in facilitating the
                          orderly liquidation or reorganization of financial
                          companies;

    [[Page 124 STAT. 1449]]

                              (ii) ways to maximize the efficiency and
                          effectiveness of the Court; and
                              (iii) ways to make the orderly liquidation
                          process under the Bankruptcy Code for financial
                          companies more effective.
                (2) Reports.--Not later than 1 year after the date of
            enactment of this Act, in each successive year until the third
            year, and every fifth year after that date of enactment, the
            Administrative Office of the United States Courts and the
            Comptroller General of the United States shall submit to the
            Committee on Banking, Housing, and Urban Affairs and the
            Committee on the Judiciary of the Senate and the Committee on
            Financial Services and the Committee on the Judiciary of the
            House of Representatives separate reports summarizing the
            results of the studies conducted under paragraph (1).

        (f) Study of International Coordination Relating to Bankruptcy
    Process for Financial Companies.--
                (1) Study.--
                        (A) In general.--The Comptroller General of the
                    United States shall conduct a study regarding
                    international coordination relating to the orderly
                    liquidation of financial companies under the Bankruptcy
                    Code.
                        (B) Issues to be studied.--In conducting the study
                    under subparagraph (A), the Comptroller General of the
                    United States shall evaluate, with respect to the
                    bankruptcy process for financial companies--
                              (i) the extent to which international
                          coordination currently exists;
                              (ii) current mechanisms and structures for
                          facilitating international cooperation;
                              (iii) barriers to effective international
                          coordination; and
                              (iv) ways to increase and make more effective
                          international coordination.
                (2) Report.--Not later than 1 year after the date of
            enactment of this Act, the Comptroller General of the United
            States shall submit to the Committee on Banking, Housing, and
            Urban Affairs and the Committee on the Judiciary of the Senate
            and the Committee on Financial Services and the Committee on the
            Judiciary of the House of Representatives and the Secretary a
            report summarizing the results of the study conducted under
            paragraph (1).

        (g) Study of Prompt Corrective Action Implementation by the
    Appropriate Federal Agencies.--
                (1) Study.--The Comptroller General of the United States
            shall conduct a study regarding the implementation of prompt
            corrective action by the appropriate Federal banking agencies.
                (2) Issues to be studied.--
            In <<NOTE: Evaluation.>> conducting the study under paragraph
            (1), the Comptroller General shall evaluate--
                        (A) the effectiveness of implementation of prompt
                    corrective action by the appropriate Federal banking
                    agencies and the resolution of insured depository
                    institutions by the Corporation; and
                        (B) ways to make prompt corrective action a more
                    effective tool to resolve the insured depository
                    institutions at the least possible long-term cost to the
                    Deposit Insurance Fund.

    [[Page 124 STAT. 1450]]

                (3) Report to council.--Not later than 1 year after the date
            of enactment of this Act, the Comptroller General shall submit a
            report to the Council on the results of the study conducted
            under this subsection.
                (4) Council report of action.--Not later than 6 months after
            the date of receipt of the report from the Comptroller General
            under paragraph (3), the Council shall submit a report to the
            Committee on Banking, Housing, and Urban Affairs of the Senate
            and the Committee on Financial Services of the House of
            Representatives on actions taken in response to the report,
            including any recommendations made to the Federal primary
            financial regulatory agencies under section 120.
    SEC. 203. <<NOTE: 12 USC 5383.>> SYSTEMIC RISK DETERMINATION.

        (a) Written Recommendation and Determination.--
                (1) Vote required.--
                        (A) In general.--On their own initiative, or at the
                    request of the Secretary, the Corporation and the Board
                    of Governors shall consider whether to make a written
                    recommendation described in paragraph (2) with respect
                    to whether the Secretary should appoint the Corporation
                    as receiver for a financial company. Such recommendation
                    shall be made upon a vote of not fewer than \2/3\ of the
                    members of the Board of Governors then serving and \2/3\
                    of the members of the board of directors of the
                    Corporation then serving.
                        (B) Cases involving brokers or dealers.--In the case
                    of a broker or dealer, or in which the largest United
                    States subsidiary (as measured by total assets as of the
                    end of the previous calendar quarter) of a financial
                    company is a broker or dealer, the Commission and the
                    Board of Governors, at the request of the Secretary, or
                    on their own initiative, shall consider whether to make
                    the written recommendation described in paragraph (2)
                    with respect to the financial company. Subject to the
                    requirements in paragraph (2), such recommendation shall
                    be made upon a vote of not fewer than \2/3\ of the
                    members of the Board of Governors then serving and \2/3\
                    of the members of the Commission then serving, and in
                    consultation with the Corporation.
                        (C) Cases involving insurance companies.--In the
                    case of an insurance company, or in which the largest
                    United States subsidiary (as measured by total assets as
                    of the end of the previous calendar quarter) of a
                    financial company is an insurance company, the Director
                    of the Federal Insurance Office and the Board of
                    Governors, at the request of the Secretary or on their
                    own initiative, shall consider whether to make the
                    written recommendation described in paragraph (2) with
                    respect to the financial company. Subject to the
                    requirements in paragraph (2), such recommendation shall
                    be made upon a vote of not fewer than \2/3\ of the Board
                    of Governors then serving and the affirmative approval
                    of the Director of the Federal Insurance Office, and in
                    consultation with the Corporation.
                (2) Recommendation required.--Any written recommendation
            pursuant to paragraph (1) shall contain--

    [[Page 124 STAT. 1451]]

                        (A) an evaluation of whether the financial company
                    is in default or in danger of default;
                        (B) a description of the effect that the default of
                    the financial company would have on financial stability
                    in the United States;
                        (C) a description of the effect that the default of
                    the financial company would have on economic conditions
                    or financial stability for low income, minority, or
                    underserved communities;
                        (D) a recommendation regarding the nature and the
                    extent of actions to be taken under this title regarding
                    the financial company;
                        (E) an evaluation of the likelihood of a private
                    sector alternative to prevent the default of the
                    financial company;
                        (F) an evaluation of why a case under the Bankruptcy
                    Code is not appropriate for the financial company;
                        (G) an evaluation of the effects on creditors,
                    counterparties, and shareholders of the financial
                    company and other market participants; and
                        (H) an evaluation of whether the company satisfies
                    the definition of a financial company under section 201.

        (b) Determination by the Secretary.--Notwithstanding any other
    provision of Federal or State law, the Secretary shall take action in
    accordance with section 202(a)(1)(A), if, upon the written
    recommendation under subsection (a), the Secretary (in consultation with
    the President) determines that--
                (1) the financial company is in default or in danger of
            default;
                (2) the failure of the financial company and its resolution
            under otherwise applicable Federal or State law would have
            serious adverse effects on financial stability in the United
            States;
                (3) no viable private sector alternative is available to
            prevent the default of the financial company;
                (4) any effect on the claims or interests of creditors,
            counterparties, and shareholders of the financial company and
            other market participants as a result of actions to be taken
            under this title is appropriate, given the impact that any
            action taken under this title would have on financial stability
            in the United States;
                (5) any action under section 204 would avoid or mitigate
            such adverse effects, taking into consideration the
            effectiveness of the action in mitigating potential adverse
            effects on the financial system, the cost to the general fund of
            the Treasury, and the potential to increase excessive risk
            taking on the part of creditors, counterparties, and
            shareholders in the financial company;
                (6) a Federal regulatory agency has ordered the financial
            company to convert all of its convertible debt instruments that
            are subject to the regulatory order; and
                (7) the company satisfies the definition of a financial
            company under section 201.

        (c) Documentation and Review.--
                (1) In general.--The Secretary shall--
                        (A) document any determination under subsection (b);
                        (B) retain the documentation for review under
                    paragraph (2); and

    [[Page 124 STAT. 1452]]

                        (C) <<NOTE: Notification.>> notify the covered
                    financial company and the Corporation of such
                    determination.
                (2) Report to congress.--Not later than 24 hours after the
            date of appointment of the Corporation as receiver for a covered
            financial company, the Secretary shall provide written notice of
            the recommendations and determinations reached in accordance
            with subsections (a) and (b) to the Majority Leader and the
            Minority Leader of the Senate and the Speaker and the Minority
            Leader of the House of Representatives, the Committee on
            Banking, Housing, and Urban Affairs of the Senate, and the
            Committee on Financial Services of the House of Representatives,
            which shall consist of a summary of the basis for the
            determination, including, to the extent available at the time of
            the determination--
                        (A) the size and financial condition of the covered
                    financial company;
                        (B) the sources of capital and credit support that
                    were available to the covered financial company;
                        (C) the operations of the covered financial company
                    that could have had a significant impact on financial
                    stability, markets, or both;
                        (D) identification of the banks and financial
                    companies which may be able to provide the services
                    offered by the covered financial company;
                        (E) any potential international ramifications of
                    resolution of the covered financial company under other
                    applicable insolvency law;
                        (F) an estimate of the potential effect of the
                    resolution of the covered financial company under other
                    applicable insolvency law on the financial stability of
                    the United States;
                        (G) the potential effect of the appointment of a
                    receiver by the Secretary on consumers;
                        (H) the potential effect of the appointment of a
                    receiver by the Secretary on the financial system,
                    financial markets, and banks and other financial
                    companies; and
                        (I) whether resolution of the covered financial
                    company under other applicable insolvency law would
                    cause banks or other financial companies to experience
                    severe liquidity distress.
                (3) Reports to congress and the public.--
                        (A) In general.--Not later than 60 days after the
                    date of appointment of the Corporation as receiver for a
                    covered financial company, the Corporation shall file a
                    report with the Committee on Banking, Housing, and Urban
                    Affairs of the Senate and the Committee on Financial
                    Services of the House of Representatives--
                              (i) setting forth information on the financial
                          condition of the covered financial company as of
                          the date of the appointment, including a
                          description of its assets and liabilities;
                              (ii) describing the plan of, and actions taken
                          by, the Corporation to wind down the covered
                          financial company;
                              (iii) explaining each instance in which the
                          Corporation waived any applicable requirements of
                          part 366

    [[Page 124 STAT. 1453]]

                          of title 12, Code of Federal Regulations (or any
                          successor thereto) with respect to conflicts of
                          interest by any person in the private sector who
                          was retained to provide services to the
                          Corporation in connection with such receivership;
                              (iv) describing the reasons for the provision
                          of any funding to the receivership out of the
                          Fund;
                              (v) setting forth the expected costs of the
                          orderly liquidation of the covered financial
                          company;
                              (vi) setting forth the identity of any
                          claimant that is treated in a manner different
                          from other similarly situated claimants under
                          subsection (b)(4), (d)(4), or (h)(5)(E), the
                          amount of any additional payment to such claimant
                          under subsection (d)(4), and the reason for any
                          such action; and
                              (vii) <<NOTE: Publication. Web
                          posting.>> which report the Corporation shall
                          publish on an online website maintained by the
                          Corporation, subject to maintaining appropriate
                          confidentiality.
                        (B) Amendments.--The <<NOTE: Deadline.>> Corporation
                    shall, on a timely basis, not less frequently than
                    quarterly, amend or revise and resubmit the reports
                    prepared under this paragraph, as necessary.
                        (C) Congressional testimony.--
                    The <<NOTE: Deadline.>> Corporation and the primary
                    financial regulatory agency, if any, of the financial
                    company for which the Corporation was appointed receiver
                    under this title shall appear before Congress, if
                    requested, not later than 30 days after the date on
                    which the Corporation first files the reports required
                    under subparagraph (A).
                (4) Default or in danger of default.--For purposes of this
            title, a financial company shall be considered to be in default
            or in danger of default if, as determined in accordance with
            subsection (b)--
                        (A) a case has been, or likely will promptly be,
                    commenced with respect to the financial company under
                    the Bankruptcy Code;
                        (B) the financial company has incurred, or is likely
                    to incur, losses that will deplete all or substantially
                    all of its capital, and there is no reasonable prospect
                    for the company to avoid such depletion;
                        (C) the assets of the financial company are, or are
                    likely to be, less than its obligations to creditors and
                    others; or
                        (D) the financial company is, or is likely to be,
                    unable to pay its obligations (other than those subject
                    to a bona fide dispute) in the normal course of
                    business.
                (5) GAO review.--The Comptroller General of the United
            States shall review and report to Congress on any determination
            under subsection (b), that results in the appointment of the
            Corporation as receiver, including--
                        (A) the basis for the determination;
                        (B) the purpose for which any action was taken
                    pursuant thereto;
                        (C) the likely effect of the determination and such
                    action on the incentives and conduct of financial
                    companies and their creditors, counterparties, and
                    shareholders; and

    [[Page 124 STAT. 1454]]

                        (D) the likely disruptive effect of the
                    determination and such action on the reasonable
                    expectations of creditors, counterparties, and
                    shareholders, taking into account the impact any action
                    under this title would have on financial stability in
                    the United States, including whether the rights of such
                    parties will be disrupted.

        (d) Corporation Policies and Procedures.--As soon as is practicable
    after the date of enactment of this Act, the Corporation shall establish
    policies and procedures that are acceptable to the Secretary governing
    the use of funds available to the Corporation to carry out this title,
    including the terms and conditions for the provision and use of funds
    under sections 204(d), 210(h)(2)(G)(iv), and 210(h)(9).
        (e) Treatment of Insurance Companies and Insurance Company
    Subsidiaries.--
                (1) In general.--Notwithstanding subsection (b), if an
            insurance company is a covered financial company or a subsidiary
            or affiliate of a covered financial company, the liquidation or
            rehabilitation of such insurance company, and any subsidiary or
            affiliate of such company that is not excepted under paragraph
            (2), shall be conducted as provided under applicable State law.
                (2) Exception for subsidiaries and affiliates.--The
            requirement of paragraph (1) shall not apply with respect to any
            subsidiary or affiliate of an insurance company that is not
            itself an insurance company.
                (3) Backup <<NOTE: Time period.>> authority.--
            Notwithstanding paragraph (1), with respect to a covered
            financial company described in paragraph (1), if, after the end
            of the 60-day period beginning on the date on which a
            determination is made under section 202(a) with respect to such
            company, the appropriate regulatory agency has not filed the
            appropriate judicial action in the appropriate State court to
            place such company into orderly liquidation under the laws and
            requirements of the State, the Corporation shall have the
            authority to stand in the place of the appropriate regulatory
            agency and file the appropriate judicial action in the
            appropriate State court to place such company into orderly
            liquidation under the laws and requirements of the State.
    SEC. 204. <<NOTE: 12 USC 5384.>> ORDERLY LIQUIDATION OF COVERED
                            FINANCIAL COMPANIES.

        (a) Purpose of Orderly Liquidation Authority.--It is the purpose of
    this title to provide the necessary authority to liquidate failing
    financial companies that pose a significant risk to the financial
    stability of the United States in a manner that mitigates such risk and
    minimizes moral hazard. The authority provided in this title shall be
    exercised in the manner that best fulfills such purpose, so that--
                (1) creditors and shareholders will bear the losses of the
            financial company;
                (2) management responsible for the condition of the
            financial company will not be retained; and
                (3) the Corporation and other appropriate agencies will take
            all steps necessary and appropriate to assure that all parties,
            including management, directors, and third parties, having
            responsibility for the condition of the financial company

    [[Page 124 STAT. 1455]]

            bear losses consistent with their responsibility, including
            actions for damages, restitution, and recoupment of compensation
            and other gains not compatible with such responsibility.

        (b) Corporation as Receiver.--Upon the appointment of the
    Corporation under section 202, the Corporation shall act as the receiver
    for the covered financial company, with all of the rights and
    obligations set forth in this title.
        (c) Consultation.--The Corporation, as receiver--
                (1) shall consult with the primary financial regulatory
            agency or agencies of the covered financial company and its
            covered subsidiaries for purposes of ensuring an orderly
            liquidation of the covered financial company;
                (2) may consult with, or under subsection (a)(1)(B)(v) or
            (a)(1)(L) of section 210, acquire the services of, any outside
            experts, as appropriate to inform and aid the Corporation in the
            orderly liquidation process;
                (3) shall consult with the primary financial regulatory
            agency or agencies of any subsidiaries of the covered financial
            company that are not covered subsidiaries, and coordinate with
            such regulators regarding the treatment of such solvent
            subsidiaries and the separate resolution of any such insolvent
            subsidiaries under other governmental authority, as appropriate;
            and
                (4) shall consult with the Commission and the Securities
            Investor Protection Corporation in the case of any covered
            financial company for which the Corporation has been appointed
            as receiver that is a broker or dealer registered with the
            Commission under section 15(b) of the Securities Exchange Act of
            1934 (15 U.S.C. 78o(b)) and is a member of the Securities
            Investor Protection Corporation, for the purpose of determining
            whether to transfer to a bridge financial company organized by
            the Corporation as receiver, without consent of any customer,
            customer accounts of the covered financial company.

        (d) Funding for Orderly Liquidation.--Upon its appointment as
    receiver for a covered financial company, and thereafter as the
    Corporation may, in its discretion, determine to be necessary or
    appropriate, the Corporation may make available to the receivership,
    subject to the conditions set forth in section 206 and subject to the
    plan described in section 210(n)(9), funds for the orderly liquidation
    of the covered financial company. All funds provided by the Corporation
    under this subsection shall have a priority of claims under subparagraph
    (A) or (B) of section 210(b)(1), as applicable, including funds used
    for--
                (1) making loans to, or purchasing any debt obligation of,
            the covered financial company or any covered subsidiary;
                (2) purchasing or guaranteeing against loss the assets of
            the covered financial company or any covered subsidiary,
            directly or through an entity established by the Corporation for
            such purpose;
                (3) assuming or guaranteeing the obligations of the covered
            financial company or any covered subsidiary to 1 or more third
            parties;
                (4) taking a lien on any or all assets of the covered
            financial company or any covered subsidiary, including a first
            priority lien on all unencumbered assets of the covered
            financial company or any covered subsidiary to secure repayment
            of any transactions conducted under this subsection;

    [[Page 124 STAT. 1456]]

                (5) selling or transferring all, or any part, of such
            acquired assets, liabilities, or obligations of the covered
            financial company or any covered subsidiary; and
                (6) making payments pursuant to subsections (b)(4), (d)(4),
            and (h)(5)(E) of section 210.
    SEC. 205. <<NOTE: 12 USC 5385.>> ORDERLY LIQUIDATION OF COVERED
                            BROKERS AND DEALERS.

        (a) Appointment of SIPC as Trustee.--
                (1) Appointment.--Upon the appointment of the Corporation as
            receiver for any covered broker or dealer, the Corporation shall
            appoint, without any need for court approval, the Securities
            Investor Protection Corporation to act as trustee for the
            liquidation under the Securities Investor Protection Act of 1970
            (15 U.S.C. 78aaa et seq.) of the covered broker or dealer.
                (2) Actions by sipc.--
                        (A) Filing.--Upon appointment of SIPC under
                    paragraph (1), SIPC shall promptly file with any Federal
                    district court of competent jurisdiction specified in
                    section 21 or 27 of the Securities Exchange Act of 1934
                    (15 U.S.C. 78u, 78aa), an application for a protective
                    decree under the Securities Investor Protection Act of
                    1970 (15 U.S.C. 78aaa et seq.) as to the covered broker
                    or dealer. The Federal district court shall accept and
                    approve the filing, including outside of normal business
                    hours, and shall immediately issue the protective decree
                    as to the covered broker or dealer.
                        (B) Administration by sipc.--Following entry of the
                    protective decree, and except as otherwise provided in
                    this section, the determination of claims and the
                    liquidation of assets retained in the receivership of
                    the covered broker or dealer and not transferred to the
                    bridge financial company shall be administered under the
                    Securities Investor Protection Act of 1970 (15 U.S.C.
                    78aaa et seq.) by SIPC, as trustee for the covered
                    broker or dealer.
                        (C) Definition of filing date.--For purposes of the
                    liquidation proceeding, the term ``filing date'' means
                    the date on which the Corporation is appointed as
                    receiver of the covered broker or dealer.
                        (D) Determination of claims.--As trustee for the
                    covered broker or dealer, SIPC shall determine and
                    satisfy, consistent with this title and with the
                    Securities Investor Protection Act of 1970 (15 U.S.C.
                    78aaa et seq.), all claims against the covered broker or
                    dealer arising on or before the filing date.

        (b) Powers and Duties of SIPC.--
                (1) In general.--Except as provided in this section, upon
            its appointment as trustee for the liquidation of a covered
            broker or dealer, SIPC shall have all of the powers and duties
            provided by the Securities Investor Protection Act of 1970 (15
            U.S.C. 78aaa et seq.), including, without limitation, all rights
            of action against third parties, and shall conduct such
            liquidation in accordance with the terms of the Securities
            Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.),
            except that SIPC shall have no powers or duties with respect to
            assets and liabilities transferred by the Corporation from the
            covered

    [[Page 124 STAT. 1457]]

            broker or dealer to any bridge financial company established in
            accordance with this title.
                (2) Limitation of powers.--The exercise by SIPC of powers
            and functions as trustee under subsection (a) shall not impair
            or impede the exercise of the powers and duties of the
            Corporation with regard to--
                        (A) any action, except as otherwise provided in this
                    title--
                              (i) to make funds available under section
                          204(d);
                              (ii) to organize, establish, operate, or
                          terminate any bridge financial company;
                              (iii) to transfer assets and liabilities;
                              (iv) to enforce or repudiate contracts; or
                              (v) to take any other action relating to such
                          bridge financial company under section 210; or
                        (B) determining claims under subsection (e).
                (3) Protective decree.--SIPC and the Corporation, in
            consultation with the Commission, shall jointly determine the
            terms of the protective decree to be filed by SIPC with any
            court of competent jurisdiction under section 21 or 27 of the
            Securities Exchange Act of 1934 (15 U.S.C. 78u, 78aa), as
            required by subsection (a).
                (4) Qualified financial contracts.--Notwithstanding any
            provision of the Securities Investor Protection Act of 1970 (15
            U.S.C. 78aaa et seq.) to the contrary (including section
            5(b)(2)(C) of that Act (15 U.S.C. 78eee(b)(2)(C))), the rights
            and obligations of any party to a qualified financial contract
            (as that term is defined in section 210(c)(8)) to which a
            covered broker or dealer for which the Corporation has been
            appointed receiver is a party shall be governed exclusively by
            section 210, including the limitations and restrictions
            contained in section 210(c)(10)(B).

        (c) Limitation on Court Action.--Except as otherwise provided in
    this title, no court may take any action, including any action pursuant
    to the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et
    seq.) or the Bankruptcy Code, to restrain or affect the exercise of
    powers or functions of the Corporation as receiver for a covered broker
    or dealer and any claims against the Corporation as such receiver shall
    be determined in accordance with subsection (e) and such claims shall be
    limited to money damages.
        (d) Actions by Corporation as Receiver.--
                (1) In general.--Notwithstanding any other provision of this
            title, no action taken by the Corporation as receiver with
            respect to a covered broker or dealer shall--
                        (A) adversely affect the rights of a customer to
                    customer property or customer name securities;
                        (B) diminish the amount or timely payment of net
                    equity claims of customers; or
                        (C) otherwise impair the recoveries provided to a
                    customer under the Securities Investor Protection Act of
                    1970 (15 U.S.C. 78aaa et seq.).
                (2) Net proceeds.--The net proceeds from any transfer, sale,
            or disposition of assets of the covered broker or dealer, or
            proceeds thereof by the Corporation as receiver for the covered
            broker or dealer shall be for the benefit of the estate of the
            covered broker or dealer, as provided in this title.

    [[Page 124 STAT. 1458]]

        (e) Claims Against the Corporation as Receiver.--Any claim against
    the Corporation as receiver for a covered broker or dealer for assets
    transferred to a bridge financial company established with respect to
    such covered broker or dealer--
                (1) shall be determined in accordance with section
            210(a)(2); and
                (2) may be reviewed by the appropriate district or
            territorial court of the United States in accordance with
            section 210(a)(5).

        (f) Satisfaction of Customer Claims.--
                (1) Obligations to customers.--Notwithstanding any other
            provision of this title, all obligations of a covered broker or
            dealer or of any bridge financial company established with
            respect to such covered broker or dealer to a customer relating
            to, or net equity claims based upon, customer property or
            customer name securities shall be promptly discharged by SIPC,
            the Corporation, or the bridge financial company, as applicable,
            by the delivery of securities or the making of payments to or
            for the account of such customer, in a manner and in an amount
            at least as beneficial to the customer as would have been the
            case had the actual proceeds realized from the liquidation of
            the covered broker or dealer under this title been distributed
            in a proceeding under the Securities Investor Protection Act of
            1970 (15 U.S.C. 78aaa et seq.) without the appointment of the
            Corporation as receiver and without any transfer of assets or
            liabilities to a bridge financial company, and with a filing
            date as of the date on which the Corporation is appointed as
            receiver.
                (2) Satisfaction of claims by sipc.--SIPC, as trustee for a
            covered broker or dealer, shall satisfy customer claims in the
            manner and amount provided under the Securities Investor
            Protection Act of 1970 (15 U.S.C. 78aaa et seq.), as if the
            appointment of the Corporation as receiver had not occurred, and
            with a filing date as of the date on which the Corporation is
            appointed as receiver. The Corporation shall satisfy customer
            claims, to the extent that a customer would have received more
            securities or cash with respect to the allocation of customer
            property had the covered financial company been subject to a
            proceeding under the Securities Investor Protection Act (15
            U.S.C. 78aaa et seq.) without the appointment of the Corporation
            as receiver, and with a filing date as of the date on which the
            Corporation is appointed as receiver.

        (g) Priorities.--
                (1) Customer property.--As trustee for a covered broker or
            dealer, SIPC shall allocate customer property and deliver
            customer name securities in accordance with section 8(c) of the
            Securities Investor Protection Act of 1970 (15 U.S.C. 78fff-
            2(c)).
                (2) Other claims.--All claims other than those described in
            paragraph (1) (including any unpaid claim by a customer for the
            allowed net equity claim of such customer from customer
            property) shall be paid in accordance with the priorities in
            section 210(b).

        (h) Rulemaking.--The Commission and the Corporation, after
    consultation with SIPC, shall jointly issue rules to implement this
    section.

    [[Page 124 STAT. 1459]]

    SEC. 206. <<NOTE: 12 USC 5386.>> MANDATORY TERMS AND CONDITIONS
                            FOR ALL ORDERLY LIQUIDATION ACTIONS.

        In taking action under this title, the Corporation shall--
                (1) determine that such action is necessary for purposes of
            the financial stability of the United States, and not for the
            purpose of preserving the covered financial company;
                (2) ensure that the shareholders of a covered financial
            company do not receive payment until after all other claims and
            the Fund are fully paid;
                (3) ensure that unsecured creditors bear losses in
            accordance with the priority of claim provisions in section 210;
                (4) ensure that management responsible for the failed
            condition of the covered financial company is removed (if such
            management has not already been removed at the time at which the
            Corporation is appointed receiver);
                (5) ensure that the members of the board of directors (or
            body performing similar functions) responsible for the failed
            condition of the covered financial company are removed, if such
            members have not already been removed at the time the
            Corporation is appointed as receiver; and
                (6) not take an equity interest in or become a shareholder
            of any covered financial company or any covered subsidiary.
    SEC. 207. <<NOTE: 12 USC 5387.>> DIRECTORS NOT LIABLE FOR
                            ACQUIESCING IN APPOINTMENT OF RECEIVER.

        The members of the board of directors (or body performing similar
    functions) of a covered financial company shall not be liable to the
    shareholders or creditors thereof for acquiescing in or consenting in
    good faith to the appointment of the Corporation as receiver for the
    covered financial company under section 203.
    SEC. 208. <<NOTE: Effective dates. 12 USC 5388.>> DISMISSAL AND
                            EXCLUSION OF OTHER ACTIONS.

        (a) In General.--Effective as of the date of the appointment of the
    Corporation as receiver for the covered financial company under section
    202 or the appointment of SIPC as trustee for a covered broker or dealer
    under section 205, as applicable, any case or proceeding commenced with
    respect to the covered financial company under the Bankruptcy Code or
    the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.)
    shall be dismissed, upon notice to the bankruptcy court (with respect to
    a case commenced under the Bankruptcy Code), and upon notice to SIPC
    (with respect to a covered broker or dealer) and no such case or
    proceeding may be commenced with respect to a covered financial company
    at any time while the orderly liquidation is pending.
        (b) Revesting of Assets.--Effective as of the date of appointment of
    the Corporation as receiver, the assets of a covered financial company
    shall, to the extent they have vested in any entity other than the
    covered financial company as a result of any case or proceeding
    commenced with respect to the covered financial company under the
    Bankruptcy Code, the Securities Investor Protection Act of 1970 (15
    U.S.C. 78aaa et seq.), or any similar provision of State liquidation or
    insolvency law applicable to the covered financial company, revest in
    the covered financial company.
        (c) Limitation.--Notwithstanding subsections (a) and (b), any order
    entered or other relief granted by a bankruptcy court prior to the date
    of appointment of the Corporation as receiver shall

    [[Page 124 STAT. 1460]]

    continue with the same validity as if an orderly liquidation had not
    been commenced.
    SEC. 209. <<NOTE: 12 USC 5389.>> RULEMAKING; NON-CONFLICTING LAW.

        The Corporation shall, in consultation with the Council, prescribe
    such rules or regulations as the Corporation considers necessary or
    appropriate to implement this title, including rules and regulations
    with respect to the rights, interests, and priorities of creditors,
    counterparties, security entitlement holders, or other persons with
    respect to any covered financial company or any assets or other property
    of or held by such covered financial company, and address the potential
    for conflicts of interest between or among individual receiverships
    established under this title or under the Federal Deposit Insurance Act.
    To the extent possible, the Corporation shall seek to harmonize
    applicable rules and regulations promulgated under this section with the
    insolvency laws that would otherwise apply to a covered financial
    company.
    SEC. 210. <<NOTE: 12 USC 5390.>> POWERS AND DUTIES OF THE
                            CORPORATION.

        (a) Powers and Authorities.--
                (1) General powers.--
                        (A) Successor to covered financial company.--The
                    Corporation shall, upon appointment as receiver for a
                    covered financial company under this title, succeed to--
                              (i) all rights, titles, powers, and privileges
                          of the covered financial company and its assets,
                          and of any stockholder, member, officer, or
                          director of such company; and
                              (ii) title to the books, records, and assets
                          of any previous receiver or other legal custodian
                          of such covered financial company.
                        (B) Operation of the covered financial company
                    during the period of orderly liquidation.--The
                    Corporation, as receiver for a covered financial
                    company, may--
                              (i) take over the assets of and operate the
                          covered financial company with all of the powers
                          of the members or shareholders, the directors, and
                          the officers of the covered financial company, and
                          conduct all business of the covered financial
                          company;
                              (ii) collect all obligations and money owed to
                          the covered financial company;
                              (iii) perform all functions of the covered
                          financial company, in the name of the covered
                          financial company;
                              (iv) manage the assets and property of the
                          covered financial company, consistent with
                          maximization of the value of the assets in the
                          context of the orderly liquidation; and
                              (v) provide by contract for assistance in
                          fulfilling any function, activity, action, or duty
                          of the Corporation as receiver.
                        (C) Functions of covered financial company officers,
                    directors, and shareholders.--The Corporation may
                    provide for the exercise of any function by any member
                    or stockholder, director, or officer of any covered
                    financial company for which the Corporation has been
                    appointed as receiver under this title.

    [[Page 124 STAT. 1461]]

                        (D) Additional powers as receiver.--The Corporation
                    shall, as receiver for a covered financial company, and
                    subject to all legally enforceable and perfected
                    security interests and all legally enforceable security
                    entitlements in respect of assets held by the covered
                    financial company, liquidate, and wind-up the affairs of
                    a covered financial company, including taking steps to
                    realize upon the assets of the covered financial
                    company, in such manner as the Corporation deems
                    appropriate, including through the sale of assets, the
                    transfer of assets to a bridge financial company
                    established under subsection (h), or the exercise of any
                    other rights or privileges granted to the receiver under
                    this section.
                        (E) Additional powers with respect to failing
                    subsidiaries of a covered financial company.--
                              (i) In general.--In any case in which a
                          receiver is appointed for a covered financial
                          company under section 202, the Corporation may
                          appoint itself as receiver of any covered
                          subsidiary of the covered financial company that
                          is organized under Federal law or the laws of any
                          State, if the Corporation and the Secretary
                          jointly determine that--
                                        (I) the covered subsidiary is in
                                    default or in danger of default;
                                        (II) such action would avoid or
                                    mitigate serious adverse effects on the
                                    financial stability or economic
                                    conditions of the United States; and
                                        (III) such action would facilitate
                                    the orderly liquidation of the covered
                                    financial company.
                              (ii) Treatment as covered financial company.--
                          If the Corporation is appointed as receiver of a
                          covered subsidiary of a covered financial company
                          under clause (i), the covered subsidiary shall
                          thereafter be considered a covered financial
                          company under this title, and the Corporation
                          shall thereafter have all the powers and rights
                          with respect to that covered subsidiary as it has
                          with respect to a covered financial company under
                          this title.
                        (F) Organization of bridge companies.--The
                    Corporation, as receiver for a covered financial
                    company, may organize a bridge financial company under
                    subsection (h).
                        (G) Merger; transfer of assets and liabilities.--
                              (i) In general.--Subject to clauses (ii) and
                          (iii), the Corporation, as receiver for a covered
                          financial company, may--
                                        (I) merge the covered financial
                                    company with another company; or
                                        (II) transfer any asset or liability
                                    of the covered financial company
                                    (including any assets and liabilities
                                    held by the covered financial company
                                    for security entitlement holders, any
                                    customer property, or any assets and
                                    liabilities associated with any trust or
                                    custody business) without obtaining any
                                    approval, assignment, or consent with
                                    respect to such transfer.
                              (ii) Federal agency approval; antitrust
                          review.--With respect to a transaction described
                          in

    [[Page 124 STAT. 1462]]

                          clause (i)(I) that requires approval by a Federal
                          agency--
                                        (I) the transaction may not be
                                    consummated before the 5th calendar day
                                    after the date of approval by the
                                    Federal agency responsible for such
                                    approval;
                                        (II)
                                    if, <<NOTE: Reports. Notification. Deadli
                                    ne.>> in connection with any such
                                    approval, a report on competitive
                                    factors is required, the Federal agency
                                    responsible for such approval shall
                                    promptly notify the Attorney General of
                                    the United States of the proposed
                                    transaction, and the Attorney General
                                    shall provide the required report not
                                    later than 10 days after the date of the
                                    request; and
                                        (III) if <<NOTE: Termination
                                    date.>> notification under section 7A of
                                    the Clayton Act is required with respect
                                    to such transaction, then the required
                                    waiting period shall end on the 15th day
                                    after the date on which the Attorney
                                    General and the Federal Trade Commission
                                    receive such notification, unless the
                                    waiting period is terminated earlier
                                    under subsection (b)(2) of such section
                                    7A, or is extended pursuant to
                                    subsection (e)(2) of such section 7A.
                              (iii) Setoff.--Subject to the other provisions
                          of this title, any transferee of assets from a
                          receiver, including a bridge financial company,
                          shall be subject to such claims or rights as would
                          prevail over the rights of such transferee in such
                          assets under applicable noninsolvency law.
                        (H) Payment of valid obligations.--The Corporation,
                    as receiver for a covered financial company, shall, to
                    the extent that funds are available, pay all valid
                    obligations of the covered financial company that are
                    due and payable at the time of the appointment of the
                    Corporation as receiver, in accordance with the
                    prescriptions and limitations of this title.
                        (I) Applicable noninsolvency law.--Except as may
                    otherwise be provided in this title, the applicable
                    noninsolvency law shall be determined by the
                    noninsolvency choice of law rules otherwise applicable
                    to the claims, rights, titles, persons, or entities at
                    issue.
                        (J) Subpoena authority.--
                              (i) In general.--The Corporation, as receiver
                          for a covered financial company, may, for purposes
                          of carrying out any power, authority, or duty with
                          respect to the covered financial company
                          (including determining any claim against the
                          covered financial company and determining and
                          realizing upon any asset of any person in the
                          course of collecting money due the covered
                          financial company), exercise any power established
                          under section 8(n) of the Federal Deposit
                          Insurance Act, as if the Corporation were the
                          appropriate Federal banking agency for the covered
                          financial company, and the covered financial
                          company were an insured depository institution.
                              (ii) Rule of construction.--This subparagraph
                          may not be construed as limiting any rights that
                          the

    [[Page 124 STAT. 1463]]

                          Corporation, in any capacity, might otherwise have
                          to exercise any powers described in clause (i) or
                          under any other provision of law.
                        (K) Incidental powers.--The Corporation, as receiver
                    for a covered financial company, may exercise all powers
                    and authorities specifically granted to receivers under
                    this title, and such incidental powers as shall be
                    necessary to carry out such powers under this title.
                        (L) Utilization of private sector.--In carrying out
                    its responsibilities in the management and disposition
                    of assets from the covered financial company, the
                    Corporation, as receiver for a covered financial
                    company, may utilize the services of private persons,
                    including real estate and loan portfolio asset
                    management, property management, auction marketing,
                    legal, and brokerage services, if such services are
                    available in the private sector, and the Corporation
                    determines that utilization of such services is
                    practicable, efficient, and cost effective.
                        (M) Shareholders and creditors of covered financial
                    company.--Notwithstanding any other provision of law,
                    the Corporation, as receiver for a covered financial
                    company, shall succeed by operation of law to the
                    rights, titles, powers, and privileges described in
                    subparagraph (A), and shall terminate all rights and
                    claims that the stockholders and creditors of the
                    covered financial company may have against the assets of
                    the covered financial company or the Corporation arising
                    out of their status as stockholders or creditors, except
                    for their right to payment, resolution, or other
                    satisfaction of their claims, as permitted under this
                    section. The Corporation shall ensure that shareholders
                    and unsecured creditors bear losses, consistent with the
                    priority of claims provisions under this section.
                        (N) Coordination with foreign financial
                    authorities.--The Corporation, as receiver for a covered
                    financial company, shall coordinate, to the maximum
                    extent possible, with the appropriate foreign financial
                    authorities regarding the orderly liquidation of any
                    covered financial company that has assets or operations
                    in a country other than the United States.
                        (O) Restriction on transfers.--
                              (i) Selection of accounts for transfer.--If
                          the Corporation establishes one or more bridge
                          financial companies with respect to a covered
                          broker or dealer, the Corporation shall transfer
                          to one of such bridge financial companies, all
                          customer accounts of the covered broker or dealer,
                          and all associated customer name securities and
                          customer property, unless the Corporation, after
                          consulting with the Commission and SIPC,
                          determines that--
                                        (I) the customer accounts, customer
                                    name securities, and customer property
                                    are likely to be promptly transferred to
                                    another broker or dealer that is
                                    registered with the Commission under
                                    section 15(b) of the Securities Exchange
                                    Act of 1934 (15 U.S.C. 73o(b)) and is a
                                    member of SIPC; or
                                        (II) the transfer of the accounts to
                                    a bridge financial company would
                                    materially interfere with

    [[Page 124 STAT. 1464]]

                                    the ability of the Corporation to avoid
                                    or mitigate serious adverse effects on
                                    financial stability or economic
                                    conditions in the United States.
                              (ii) Transfer of property.--SIPC, as trustee
                          for the liquidation of the covered broker or
                          dealer, and the Commission shall provide any and
                          all reasonable assistance necessary to complete
                          such transfers by the Corporation.
                              (iii) Customer consent and court approval not
                          required.--Neither customer consent nor court
                          approval shall be required to transfer any
                          customer accounts or associated customer name
                          securities or customer property to a bridge
                          financial company in accordance with this section.
                              (iv) Notification of sipc and sharing of
                          information.--The Corporation shall identify to
                          SIPC the customer accounts and associated customer
                          name securities and customer property transferred
                          to the bridge financial company. The Corporation
                          and SIPC shall cooperate in the sharing of any
                          information necessary for each entity to discharge
                          its obligations under this title and under the
                          Securities Investor Protection Act of 1970 (15
                          U.S.C. 78aaa et seq.) including by providing
                          access to the books and records of the covered
                          financial company and any bridge financial company
                          established in accordance with this title.
                (2) Determination of claims.--
                        (A) In general.--The <<NOTE: Reports.>> Corporation,
                    as receiver for a covered financial company, shall
                    report on claims, as set forth in section 203(c)(3).
                    Subject to paragraph (4) of this subsection, the
                    Corporation, as receiver for a covered financial
                    company, shall determine claims in accordance with the
                    requirements of this subsection and regulations
                    prescribed under section 209.
                        (B) Notice requirements.--
                    The <<NOTE: Publication. Deadlines.>> Corporation, as
                    receiver for a covered financial company, in any case
                    involving the liquidation or winding up of the affairs
                    of a covered financial company, shall--
                              (i) promptly publish a notice to the creditors
                          of the covered financial company to present their
                          claims, together with proof, to the receiver by a
                          date specified in the notice, which shall be not
                          earlier than 90 days after the date of publication
                          of such notice; and
                              (ii) republish such notice 1 month and 2
                          months, respectively, after the date of
                          publication under clause (i).
                        (C) Mailing required.--The Corporation as receiver
                    shall mail a notice similar to the notice published
                    under clause (i) or (ii) of subparagraph (B), at the
                    time of such publication, to any creditor shown on the
                    books and records of the covered financial company--
                              (i) at the last address of the creditor
                          appearing in such books;
                              (ii) in any claim filed by the claimant; or
                              (iii) upon <<NOTE: Deadline.>> discovery of
                          the name and address of a claimant not appearing
                          on the books and records of the covered financial
                          company, not later than 30

    [[Page 124 STAT. 1465]]

                          days after the date of the discovery of such name
                          and address.
                (3) Procedures for resolution of claims.--
                        (A) <<NOTE: Notification.>> Decision period.--
                              (i) In general.--Prior to the 180th day after
                          the date on which a claim against a covered
                          financial company is filed with the Corporation as
                          receiver, or such later date as may be agreed as
                          provided in clause (ii), the Corporation shall
                          notify the claimant whether it allows or disallows
                          the claim, in accordance with subparagraphs (B),
                          (C), and (D).
                              (ii) Extension <<NOTE: Deadline.>> of time.--
                          By written agreement executed not later than 180
                          days after the date on which a claim against a
                          covered financial company is filed with the
                          Corporation, the period described in clause (i)
                          may be extended by written agreement between the
                          claimant and the Corporation. Failure to notify
                          the claimant of any disallowance within the time
                          period set forth in clause (i), as it may be
                          extended by agreement under this clause, shall be
                          deemed to be a disallowance of such claim, and the
                          claimant may file or continue an action in court,
                          as provided in paragraph (4).
                              (iii) Mailing of notice sufficient.--The
                          requirements of clause (i) shall be deemed to be
                          satisfied if the notice of any decision with
                          respect to any claim is mailed to the last address
                          of the claimant which appears--
                                        (I) on the books, records, or both
                                    of the covered financial company;
                                        (II) in the claim filed by the
                                    claimant; or
                                        (III) in documents submitted in
                                    proof of the claim.
                              (iv) Contents of notice of disallowance.--If
                          the Corporation as receiver disallows any claim
                          filed under clause (i), the notice to the claimant
                          shall contain--
                                        (I) a statement of each reason for
                                    the disallowance; and
                                        (II) the procedures required to file
                                    or continue an action in court, as
                                    provided in paragraph (4).
                        (B) Allowance of proven claim.--The receiver shall
                    allow any claim received by the receiver on or before
                    the date specified in the notice under paragraph
                    (2)(B)(i), which is proved to the satisfaction of the
                    receiver.
                        (C) Disallowance of claims filed after end of filing
                    period.--
                              (i) In general.--Except as provided in clause
                          (ii), claims filed after the date specified in the
                          notice published under paragraph (2)(B)(i) shall
                          be disallowed, and such disallowance shall be
                          final.
                              (ii) Certain exceptions.--Clause (i) shall not
                          apply with respect to any claim filed by a
                          claimant after the date specified in the notice
                          published under paragraph (2)(B)(i), and such
                          claim may be considered by the receiver under
                          subparagraph (B), if--

    [[Page 124 STAT. 1466]]

                                        (I) the claimant did not receive
                                    notice of the appointment of the
                                    receiver in time to file such claim
                                    before such date; and
                                        (II) such claim is filed in time to
                                    permit payment of such claim.
                        (D) Authority to disallow claims.--
                              (i) In general.--The Corporation may disallow
                          any portion of any claim by a creditor or claim of
                          a security, preference, setoff, or priority which
                          is not proved to the satisfaction of the
                          Corporation.
                              (ii) Payments to undersecured creditors.--In
                          the case of a claim against a covered financial
                          company that is secured by any property or other
                          asset of such covered financial company, the
                          receiver--
                                        (I) may treat the portion of such
                                    claim which exceeds an amount equal to
                                    the fair market value of such property
                                    or other asset as an unsecured claim;
                                    and
                                        (II) may not make any payment with
                                    respect to such unsecured portion of the
                                    claim, other than in connection with the
                                    disposition of all claims of unsecured
                                    creditors of the covered financial
                                    company.
                              (iii) Exceptions.--No provision of this
                          paragraph shall apply with respect to--
                                        (I) any extension of credit from any
                                    Federal reserve bank, or the
                                    Corporation, to any covered financial
                                    company; or
                                        (II) subject to clause (ii), any
                                    legally enforceable and perfected
                                    security interest in the assets of the
                                    covered financial company securing any
                                    such extension of credit.
                        (E) Legal effect of filing.--
                              (i) Statute of limitations tolled.--For
                          purposes of any applicable statute of limitations,
                          the filing of a claim with the receiver shall
                          constitute a commencement of an action.
                              (ii) No prejudice to other actions.--Subject
                          to paragraph (8), the filing of a claim with the
                          receiver shall not prejudice any right of the
                          claimant to continue any action which was filed
                          before the date of appointment of the receiver for
                          the covered financial company.
                (4) Judicial determination of claims.--
                        (A) In general.--Subject to subparagraph (B), a
                    claimant may file suit on a claim (or continue an action
                    commenced before the date of appointment of the
                    Corporation as receiver) in the district or territorial
                    court of the United States for the district within which
                    the principal place of business of the covered financial
                    company is located (and such court shall have
                    jurisdiction to hear such claim).
                        (B) Timing.--A claim under subparagraph (A) may be
                    filed before the end of the 60-day period beginning on
                    the earlier of--
                              (i) the end of the period described in
                          paragraph (3)(A)(i) (or, if extended by agreement
                          of the Corporation and the claimant, the period
                          described in paragraph (3)(A)(ii)) with respect to
                          any claim against a

    [[Page 124 STAT. 1467]]

                          covered financial company for which the
                          Corporation is receiver; or
                              (ii) the date of any notice of disallowance of
                          such claim pursuant to paragraph (3)(A)(i).
                        (C) Statute of limitations.--If any claimant fails
                    to file suit on such claim (or to continue an action on
                    such claim commenced before the date of appointment of
                    the Corporation as receiver) prior to the end of the 60-
                    day period described in subparagraph (B), the claim
                    shall be deemed to be disallowed (other than any portion
                    of such claim which was allowed by the receiver) as of
                    the end of such period, such disallowance shall be
                    final, and the claimant shall have no further rights or
                    remedies with respect to such claim.
                (5) Expedited determination of claims.--
                        (A) Procedure required.--The Corporation shall
                    establish a procedure for expedited relief outside of
                    the claims process established under paragraph (3), for
                    any claimant that alleges--
                              (i) having a legally valid and enforceable or
                          perfected security interest in property of a
                          covered financial company or control of any
                          legally valid and enforceable security entitlement
                          in respect of any asset held by the covered
                          financial company for which the Corporation has
                          been appointed receiver; and
                              (ii) that irreparable injury will occur if the
                          claims procedure established under paragraph (3)
                          is followed.
                        (B) Determination period.--Prior to the end of the
                    90-day period beginning on the date on which a claim is
                    filed in accordance with the procedures established
                    pursuant to subparagraph (A), the Corporation shall--
                              (i) determine--
                                        (I) whether to allow or disallow
                                    such claim, or any portion thereof; or
                                        (II) whether such claim should be
                                    determined pursuant to the procedures
                                    established pursuant to paragraph (3);
                              (ii) <<NOTE: Notification.>> notify the
                          claimant of the determination; and
                              (iii) if the claim is disallowed, provide a
                          statement of each reason for the disallowance and
                          the procedure for obtaining a judicial
                          determination.
                        (C) Period for filing or renewing suit.--Any
                    claimant who files a request for expedited relief shall
                    be permitted to file suit (or continue a suit filed
                    before the date of appointment of the Corporation as
                    receiver seeking a determination of the rights of the
                    claimant with respect to such security interest (or such
                    security entitlement) after the earlier of--
                              (i) the end of the 90-day period beginning on
                          the date of the filing of a request for expedited
                          relief; or
                              (ii) the date on which the Corporation denies
                          the claim or a portion thereof.
                        (D) Statute <<NOTE: Time period.>> of limitations.--
                    If an action described in subparagraph (C) is not filed,
                    or the motion to renew a previously filed suit is not
                    made, before the end of the 30-day period beginning on
                    the date on which such action

    [[Page 124 STAT. 1468]]

                    or motion may be filed in accordance with subparagraph
                    (C), the claim shall be deemed to be disallowed as of
                    the end of such period (other than any portion of such
                    claim which was allowed by the receiver), such
                    disallowance shall be final, and the claimant shall have
                    no further rights or remedies with respect to such
                    claim.
                        (E) Legal effect of filing.--
                              (i) Statute of limitations tolled.--For
                          purposes of any applicable statute of limitations,
                          the filing of a claim with the receiver shall
                          constitute a commencement of an action.
                              (ii) No prejudice to other actions.--Subject
                          to paragraph (8), the filing of a claim with the
                          receiver shall not prejudice any right of the
                          claimant to continue any action which was filed
                          before the appointment of the Corporation as
                          receiver for the covered financial company.
                (6) Agreements against interest of the receiver.--No
            agreement that tends to diminish or defeat the interest of the
            Corporation as receiver in any asset acquired by the receiver
            under this section shall be valid against the receiver, unless
            such agreement--
                        (A) is in writing;
                        (B) was executed by an authorized officer or
                    representative of the covered financial company, or
                    confirmed in the ordinary course of business by the
                    covered financial company; and
                        (C) has been, since the time of its execution, an
                    official record of the company or the party claiming
                    under the agreement provides documentation, acceptable
                    to the receiver, of such agreement and its authorized
                    execution or confirmation by the covered financial
                    company.
                (7) Payment of claims.--
                        (A) In general.--Subject to subparagraph (B), the
                    Corporation as receiver may, in its discretion and to
                    the extent that funds are available, pay creditor
                    claims, in such manner and amounts as are authorized
                    under this section, which are--
                              (i) allowed by the receiver;
                              (ii) approved by the receiver pursuant to a
                          final determination pursuant to paragraph (3) or
                          (5), as applicable; or
                              (iii) determined by the final judgment of a
                          court of competent jurisdiction.
                        (B) Limitation.--A creditor shall, in no event,
                    receive less than the amount that the creditor is
                    entitled to receive under paragraphs (2) and (3) of
                    subsection (d), as applicable.
                        (C) Payment of dividends on claims.--The Corporation
                    as receiver may, in its sole discretion, and to the
                    extent otherwise permitted by this section, pay
                    dividends on proven claims at any time, and no liability
                    shall attach to the Corporation as receiver, by reason
                    of any such payment or for failure to pay dividends to a
                    claimant whose claim is not proved at the time of any
                    such payment.
                        (D) Rulemaking by the corporation.--The Corporation
                    may prescribe such rules, including definitions of

    [[Page 124 STAT. 1469]]

                    terms, as the Corporation deems appropriate to establish
                    an interest rate for or to make payments of post-
                    insolvency interest to creditors holding proven claims
                    against the receivership estate of a covered financial
                    company, except that no such interest shall be paid
                    until the Corporation as receiver has satisfied the
                    principal amount of all creditor claims.
                (8) Suspension of legal actions.--
                        (A) In <<NOTE: Time period.>> general.--After the
                    appointment of the Corporation as receiver for a covered
                    financial company, the Corporation may request a stay in
                    any judicial action or proceeding in which such covered
                    financial company is or becomes a party, for a period of
                    not to exceed 90 days.
                        (B) Grant of stay by all courts required.--Upon
                    receipt of a request by the Corporation pursuant to
                    subparagraph (A), the court shall grant such stay as to
                    all parties.
                (9) Additional rights and duties.--
                        (A) Prior final adjudication.--The Corporation shall
                    abide by any final, non-appealable judgment of any court
                    of competent jurisdiction that was rendered before the
                    appointment of the Corporation as receiver.
                        (B) Rights and remedies of receiver.--In the event
                    of any appealable judgment, the Corporation as receiver
                    shall--
                              (i) have all the rights and remedies available
                          to the covered financial company (before the date
                          of appointment of the Corporation as receiver
                          under section 202) and the Corporation, including
                          removal to Federal court and all appellate rights;
                          and
                              (ii) not be required to post any bond in order
                          to pursue such remedies.
                        (C) No attachment or execution.--No attachment or
                    execution may be issued by any court upon assets in the
                    possession of the Corporation as receiver for a covered
                    financial company.
                        (D) Limitation on judicial review.--Except as
                    otherwise provided in this title, no court shall have
                    jurisdiction over--
                              (i) any claim or action for payment from, or
                          any action seeking a determination of rights with
                          respect to, the assets of any covered financial
                          company for which the Corporation has been
                          appointed receiver, including any assets which the
                          Corporation may acquire from itself as such
                          receiver; or
                              (ii) any claim relating to any act or omission
                          of such covered financial company or the
                          Corporation as receiver.
                        (E) Disposition of assets.--In exercising any right,
                    power, privilege, or authority as receiver in connection
                    with any covered financial company for which the
                    Corporation is acting as receiver under this section,
                    the Corporation shall, to the greatest extent
                    practicable, conduct its operations in a manner that--
                              (i) maximizes the net present value return
                          from the sale or disposition of such assets;

    [[Page 124 STAT. 1470]]

                              (ii) minimizes the amount of any loss realized
                          in the resolution of cases;
                              (iii) mitigates the potential for serious
                          adverse effects to the financial system;
                              (iv) ensures timely and adequate competition
                          and fair and consistent treatment of offerors; and
                              (v) prohibits discrimination on the basis of
                          race, sex, or ethnic group in the solicitation and
                          consideration of offers.
                (10) Statute of limitations for actions brought by
            receiver. <<NOTE: Time period.>> --
                        (A) In general.--Notwithstanding any provision of
                    any contract, the applicable statute of limitations with
                    regard to any action brought by the Corporation as
                    receiver for a covered financial company shall be--
                              (i) in the case of any contract claim, the
                          longer of--
                                        (I) the 6-year period beginning on
                                    the date on which the claim accrues; or
                                        (II) the period applicable under
                                    State law; and
                              (ii) in the case of any tort claim, the longer
                          of--
                                        (I) the 3-year period beginning on
                                    the date on which the claim accrues; or
                                        (II) the period applicable under
                                    State law.
                        (B) Date on which a claim accrues.--For purposes of
                    subparagraph (A), the date on which the statute of
                    limitations begins to run on any claim described in
                    subparagraph (A) shall be the later of--
                              (i) the date of the appointment of the
                          Corporation as receiver under this title; or
                              (ii) the date on which the cause of action
                          accrues.
                        (C) Revival of expired state causes of action.--
                              (i) In general.--In the case of any tort claim
                          described in clause (ii) for which the applicable
                          statute of limitations under State law has expired
                          not more than 5 years before the date of
                          appointment of the Corporation as receiver for a
                          covered financial company, the Corporation may
                          bring an action as receiver on such claim without
                          regard to the expiration of the statute of
                          limitations.
                              (ii) Claims described.--A tort claim referred
                          to in clause (i) is a claim arising from fraud,
                          intentional misconduct resulting in unjust
                          enrichment, or intentional misconduct resulting in
                          substantial loss to the covered financial company.
                (11) Avoidable transfers.--
                        (A) Fraudulent transfers.--The Corporation, as
                    receiver for any covered financial company, may avoid a
                    transfer of any interest of the covered financial
                    company in property, or any obligation incurred by the
                    covered financial company, that was made or incurred at
                    or within 2 years before the date on which the
                    Corporation was appointed receiver, if--
                              (i) the covered financial company voluntarily
                          or involuntarily--
                                        (I) made such transfer or incurred
                                    such obligation with actual intent to
                                    hinder, delay, or defraud

    [[Page 124 STAT. 1471]]

                                    any entity to which the covered
                                    financial company was or became, on or
                                    after the date on which such transfer
                                    was made or such obligation was
                                    incurred, indebted; or
                                        (II) received less than a reasonably
                                    equivalent value in exchange for such
                                    transferor obligation; and
                              (ii) the covered financial company voluntarily
                          or involuntarily--
                                        (I) was insolvent on the date that
                                    such transfer was made or such
                                    obligation was incurred, or became
                                    insolvent as a result of such transfer
                                    or obligation;
                                        (II) was engaged in business or a
                                    transaction, or was about to engage in
                                    business or a transaction, for which any
                                    property remaining with the covered
                                    financial company was an unreasonably
                                    small capital;
                                        (III) intended to incur, or believed
                                    that the covered financial company would
                                    incur, debts that would be beyond the
                                    ability of the covered financial company
                                    to pay as such debts matured; or
                                        (IV) made such transfer to or for
                                    the benefit of an insider, or incurred
                                    such obligation to or for the benefit of
                                    an insider, under an employment contract
                                    and not in the ordinary course of
                                    business.
                        (B) Preferential transfers.--The Corporation as
                    receiver for any covered financial company may avoid a
                    transfer of an interest of the covered financial company
                    in property--
                              (i) to or for the benefit of a creditor;
                              (ii) for or on account of an antecedent debt
                          that was owed by the covered financial company
                          before the transfer was made;
                              (iii) that was made while the covered
                          financial company was insolvent;
                              (iv) that was made--
                                        (I) 90 days or less before the date
                                    on which the Corporation was appointed
                                    receiver; or
                                        (II) more than 90 days, but less
                                    than 1 year before the date on which the
                                    Corporation was appointed receiver, if
                                    such creditor at the time of the
                                    transfer was an insider; and
                              (v) that enables the creditor to receive more
                          than the creditor would receive if--
                                        (I) the covered financial company
                                    had been liquidated under chapter 7 of
                                    the Bankruptcy Code;
                                        (II) the transfer had not been made;
                                    and
                                        (III) the creditor received payment
                                    of such debt to the extent provided by
                                    the provisions of chapter 7 of the
                                    Bankruptcy Code.
                        (C) Post-receivership transactions.--The Corporation
                    as receiver for any covered financial company may avoid
                    a transfer of property of the receivership that occurred
                    after the Corporation was appointed receiver that

    [[Page 124 STAT. 1472]]

                    was not authorized under this title by the Corporation
                    as receiver.
                        (D) Right of recovery.--To the extent that a
                    transfer is avoided under subparagraph (A), (B), or (C),
                    the Corporation may recover, for the benefit of the
                    covered financial company, the property transferred or,
                    if a court so orders, the value of such property (at the
                    time of such transfer) from--
                              (i) the initial transferee of such transfer or
                          the person for whose benefit such transfer was
                          made; or
                              (ii) any immediate or mediate transferee of
                          any such initial transferee.
                        (E) Rights of transferee or obligee.--The
                    Corporation may not recover under subparagraph (D)(ii)
                    from--
                              (i) any transferee that takes for value,
                          including in satisfaction of or to secure a
                          present or antecedent debt, in good faith, and
                          without knowledge of the voidability of the
                          transfer avoided; or
                              (ii) any immediate or mediate good faith
                          transferee of such transferee.
                        (F) Defenses.--Subject to the other provisions of
                    this title--
                              (i) a transferee or obligee from which the
                          Corporation seeks to recover a transfer or to
                          avoid an obligation under subparagraph (A), (B),
                          (C), or (D) shall have the same defenses available
                          to a transferee or obligee from which a trustee
                          seeks to recover a transfer or avoid an obligation
                          under sections 547, 548, and 549 of the Bankruptcy
                          Code; and
                              (ii) the authority of the Corporation to
                          recover a transfer or avoid an obligation shall be
                          subject to subsections (b) and (c) of section 546,
                          section 547(c), and section 548(c) of the
                          Bankruptcy Code.
                        (G) Rights under this section.--The rights of the
                    Corporation as receiver under this section shall be
                    superior to any rights of a trustee or any other party
                    (other than a Federal agency) under the Bankruptcy Code.
                        (H) Rules of construction; definitions.--For
                    purposes of--
                              (i) subparagraphs (A) and (B)--
                                        (I) the term ``insider'' has the
                                    same meaning as in section 101(31) of
                                    the Bankruptcy Code;
                                        (II) a transfer is made when such
                                    transfer is so perfected that a bona
                                    fide purchaser from the covered
                                    financial company against whom
                                    applicable law permits such transfer to
                                    be perfected cannot acquire an interest
                                    in the property transferred that is
                                    superior to the interest in such
                                    property of the transferee, but if such
                                    transfer is not so perfected before the
                                    date on which the Corporation is
                                    appointed as receiver for the covered
                                    financial company, such transfer is made
                                    immediately before the date of such
                                    appointment; and
                                        (III) the term ``value'' means
                                    property, or satisfaction or securing of
                                    a present or antecedent debt of the
                                    covered financial company, but does not

    [[Page 124 STAT. 1473]]

                                    include an unperformed promise to
                                    furnish support to the covered financial
                                    company; and
                              (ii) subparagraph (B)--
                                        (I) the covered financial company is
                                    presumed to have been insolvent on and
                                    during the 90-day period immediately
                                    preceding the date of appointment of the
                                    Corporation as receiver; and
                                        (II) the term ``insolvent'' has the
                                    same meaning as in section 101(32) of
                                    the Bankruptcy Code.
                (12) Setoff.--
                        (A) Generally.--Except as otherwise provided in this
                    title, any right of a creditor to offset a mutual debt
                    owed by the creditor to any covered financial company
                    that arose before the Corporation was appointed as
                    receiver for the covered financial company against a
                    claim of such creditor may be asserted if enforceable
                    under applicable noninsolvency law, except to the extent
                    that--
                              (i) the claim of the creditor against the
                          covered financial company is disallowed;
                              (ii) the claim was transferred, by an entity
                          other than the covered financial company, to the
                          creditor--
                                        (I) after the Corporation was
                                    appointed as receiver of the covered
                                    financial company; or
                                        (II)(aa) after the 90-day period
                                    preceding the date on which the
                                    Corporation was appointed as receiver
                                    for the covered financial company; and
                                        (bb) while the covered financial
                                    company was insolvent (except for a
                                    setoff in connection with a qualified
                                    financial contract); or
                              (iii) the debt owed to the covered financial
                          company was incurred by the covered financial
                          company--
                                        (I) after the 90-day period
                                    preceding the date on which the
                                    Corporation was appointed as receiver
                                    for the covered financial company;
                                        (II) while the covered financial
                                    company was insolvent; and
                                        (III) for the purpose of obtaining a
                                    right of setoff against the covered
                                    financial company (except for a setoff
                                    in connection with a qualified financial
                                    contract).
                        (B) Insufficiency.--
                              (i) In general.--Except <<NOTE: Time
                          periods.>> with respect to a setoff in connection
                          with a qualified financial contract, if a creditor
                          offsets a mutual debt owed to the covered
                          financial company against a claim of the covered
                          financial company on or within the 90-day period
                          preceding the date on which the Corporation is
                          appointed as receiver for the covered financial
                          company, the Corporation may recover from the
                          creditor the amount so offset, to the extent that
                          any insufficiency on the date of such setoff is
                          less than the insufficiency on the later of--
                                        (I) the date that is 90 days before
                                    the date on which the Corporation is
                                    appointed as receiver for the covered
                                    financial company; or
                                        (II) the first day on which there is
                                    an insufficiency during the 90-day
                                    period preceding the date

    [[Page 124 STAT. 1474]]

                                    on which the Corporation is appointed as
                                    receiver for the covered financial
                                    company.
                              (ii) Definition of insufficiency.--In this
                          subparagraph, the term ``insufficiency'' means the
                          amount, if any, by which a claim against the
                          covered financial company exceeds a mutual debt
                          owed to the covered financial company by the
                          holder of such claim.
                        (C) Insolvency.--The <<NOTE: Definition.>> term
                    ``insolvent'' has the same meaning as in section 101(32)
                    of the Bankruptcy Code.
                        (D) Presumption <<NOTE: Time period.>> of
                    insolvency.--For purposes of this paragraph, the covered
                    financial company is presumed to have been insolvent on
                    and during the 90-day period preceding the date of
                    appointment of the Corporation as receiver.
                        (E) Limitation.--Nothing in this paragraph (12)
                    shall be the basis for any right of setoff where no such
                    right exists under applicable noninsolvency law.
                        (F) Priority claim.--Except as otherwise provided in
                    this title, the Corporation as receiver for the covered
                    financial company may sell or transfer any assets free
                    and clear of the setoff rights of any party, except that
                    such party shall be entitled to a claim, subordinate to
                    the claims payable under subparagraphs (A), (B), (C),
                    and (D) of subsection (b)(1), but senior to all other
                    unsecured liabilities defined in subsection (b)(1)(E),
                    in an amount equal to the value of such setoff rights.
                (13) Attachment of assets and other injunctive relief.--
            Subject to paragraph (14), any court of competent jurisdiction
            may, at the request of the Corporation as receiver for a covered
            financial company, issue an order in accordance with Rule 65 of
            the Federal Rules of Civil Procedure, including an order placing
            the assets of any person designated by the Corporation under the
            control of the court and appointing a trustee to hold such
            assets.
                (14) Standards.--
                        (A) Showing.--Rule <<NOTE: Applicability.>> 65 of
                    the Federal Rules of Civil Procedure shall apply with
                    respect to any proceeding under paragraph (13), without
                    regard to the requirement that the applicant show that
                    the injury, loss, or damage is irreparable and
                    immediate.
                        (B) State proceeding.--If, in the case of any
                    proceeding in a State court, the court determines that
                    rules of civil procedure available under the laws of the
                    State provide substantially similar protections of the
                    right of the parties to due process as provided under
                    Rule 65 (as modified with respect to such proceeding by
                    subparagraph (A)), the relief sought by the Corporation
                    pursuant to paragraph (14) may be requested under the
                    laws of such State.
                (15) Treatment of claims arising from breach of contracts
            executed by the corporation as receiver.--Notwithstanding any
            other provision of this title, any final and non-appealable
            judgment for monetary damages entered against the Corporation as
            receiver for a covered financial company for the breach of an
            agreement executed or approved by the Corporation after the date
            of its appointment shall be paid as an administrative expense of
            the receiver. Nothing in this paragraph shall be construed to
            limit the power of a receiver

    [[Page 124 STAT. 1475]]

            to exercise any rights under contract or law, including to
            terminate, breach, cancel, or otherwise discontinue such
            agreement.
                (16) Accounting and recordkeeping requirements.--
                        (A) In general.--The Corporation as receiver for a
                    covered financial company shall, consistent with the
                    accounting and reporting practices and procedures
                    established by the Corporation, maintain a full
                    accounting of each receivership or other disposition of
                    any covered financial company.
                        (B) Annual accounting or report.--With respect to
                    each receivership to which the Corporation is appointed,
                    the Corporation shall make an annual accounting or
                    report, as appropriate, available to the Secretary and
                    the Comptroller General of the United States.
                        (C) Availability of reports.--Any <<NOTE: Public
                    information.>> report prepared pursuant to subparagraph
                    (B) and section 203(c)(3) shall be made available to the
                    public by the Corporation.
                        (D) Recordkeeping requirement.--
                              (i) In general.--
                          The <<NOTE: Regulations.>> Corporation shall
                          prescribe such regulations and establish such
                          retention schedules as are necessary to maintain
                          the documents and records of the Corporation
                          generated in exercising the authorities of this
                          title and the records of a covered financial
                          company for which the Corporation is appointed
                          receiver, with due regard for--
                                        (I) the avoidance of duplicative
                                    record retention; and
                                        (II) the expected evidentiary needs
                                    of the Corporation as receiver for a
                                    covered financial company and the public
                                    regarding the records of covered
                                    financial companies.
                              (ii) Retention of records.--Unless otherwise
                          required by applicable Federal law or court order,
                          the Corporation may not, at any time, destroy any
                          records that are subject to clause (i).
                              (iii) Records defined.--As used in this
                          subparagraph, the terms ``records'' and ``records
                          of a covered financial company'' mean any
                          document, book, paper, map, photograph,
                          microfiche, microfilm, computer or electronically-
                          created record generated or maintained by the
                          covered financial company in the course of and
                          necessary to its transaction of business.

        (b) Priority of Expenses and Unsecured Claims.--
                (1) In general.--Unsecured claims against a covered
            financial company, or the Corporation as receiver for such
            covered financial company under this section, that are proven to
            the satisfaction of the receiver shall have priority in the
            following order:
                        (A) Administrative expenses of the receiver.
                        (B) Any amounts owed to the United States, unless
                    the United States agrees or consents otherwise.
                        (C) <<NOTE: Deadline.>> Wages, salaries, or
                    commissions, including vacation, severance, and sick
                    leave pay earned by an individual (other than an
                    individual described in subparagraph (G)), but only to
                    the extent of 11,725 for each individual (as indexed for
                    inflation, by regulation of the Corporation)

    [[Page 124 STAT. 1476]]

                    earned not later than 180 days before the date of
                    appointment of the Corporation as receiver.
                        (D) <<NOTE: Deadline.>> Contributions owed to
                    employee benefit plans arising from services rendered
                    not later than 180 days before the date of appointment
                    of the Corporation as receiver, to the extent of the
                    number of employees covered by each such plan,
                    multiplied by 11,725 (as indexed for inflation, by
                    regulation of the Corporation), less the aggregate
                    amount paid to such employees under subparagraph (C),
                    plus the aggregate amount paid by the receivership on
                    behalf of such employees to any other employee benefit
                    plan.
                        (E) Any other general or senior liability of the
                    covered financial company (which is not a liability
                    described under subparagraph (F), (G), or (H)).
                        (F) Any obligation subordinated to general creditors
                    (which is not an obligation described under subparagraph
                    (G) or (H)).
                        (G) Any wages, salaries, or commissions, including
                    vacation, severance, and sick leave pay earned, owed to
                    senior executives and directors of the covered financial
                    company.
                        (H) Any obligation to shareholders, members, general
                    partners, limited partners, or other persons, with
                    interests in the equity of the covered financial company
                    arising as a result of their status as shareholders,
                    members, general partners, limited partners, or other
                    persons with interests in the equity of the covered
                    financial company.
                (2) Post-receivership financing priority.--In the event that
            the Corporation, as receiver for a covered financial company, is
            unable to obtain unsecured credit for the covered financial
            company from commercial sources, the Corporation as receiver may
            obtain credit or incur debt on the part of the covered financial
            company, which shall have priority over any or all
            administrative expenses of the receiver under paragraph (1)(A).
                (3) Claims of the united states.--Unsecured claims of the
            United States shall, at a minimum, have a higher priority than
            liabilities of the covered financial company that count as
            regulatory capital.
                (4) Creditors similarly situated.--All claimants of a
            covered financial company that are similarly situated under
            paragraph (1) shall be treated in a similar manner, except that
            the Corporation may take any action (including making payments,
            subject to subsection (o)(1)(D)(i)) that does not comply with
            this subsection, if--
                        (A) the Corporation determines that such action is
                    necessary--
                              (i) to maximize the value of the assets of the
                          covered financial company;
                              (ii) to initiate and continue operations
                          essential to implementation of the receivership or
                          any bridge financial company;
                              (iii) to maximize the present value return
                          from the sale or other disposition of the assets
                          of the covered financial company; or

    [[Page 124 STAT. 1477]]

                              (iv) to minimize the amount of any loss
                          realized upon the sale or other disposition of the
                          assets of the covered financial company; and
                        (B) all claimants that are similarly situated under
                    paragraph (1) receive not less than the amount provided
                    in paragraphs (2) and (3) of subsection (d).
                (5) Secured claims unaffected.--This section shall not
            affect secured claims or security entitlements in respect of
            assets or property held by the covered financial company, except
            to the extent that the security is insufficient to satisfy the
            claim, and then only with regard to the difference between the
            claim and the amount realized from the security.
                (6) Priority of expenses and unsecured claims in the orderly
            liquidation of sipc member.--Where the Corporation is appointed
            as receiver for a covered broker or dealer, unsecured claims
            against such covered broker or dealer, or the Corporation as
            receiver for such covered broker or dealer under this section,
            that are proven to the satisfaction of the receiver under
            section 205(e), shall have the priority prescribed in paragraph
            (1), except that--
                        (A) SIPC shall be entitled to recover administrative
                    expenses incurred in performing its responsibilities
                    under section 205 on an equal basis with the
                    Corporation, in accordance with paragraph (1)(A);
                        (B) the Corporation shall be entitled to recover any
                    amounts paid to customers or to SIPC pursuant to section
                    205(f), in accordance with paragraph (1)(B);
                        (C) SIPC shall be entitled to recover any amounts
                    paid out of the SIPC Fund to meet its obligations under
                    section 205 and under the Securities Investor Protection
                    Act of 1970 (15 U.S.C. 78aaa et seq.), which claim shall
                    be subordinate to the claims payable under subparagraphs
                    (A) and (B) of paragraph (1), but senior to all other
                    claims; and
                        (D) the Corporation may, after paying any proven
                    claims to customers under section 205 and the Securities
                    Investor Protection Act of 1970 (15 U.S.C. 78aaa et
                    seq.), and as provided above, pay dividends on other
                    proven claims, in its discretion, and to the extent that
                    funds are available, in accordance with the priorities
                    set forth in paragraph (1).

        (c) Provisions Relating to Contracts Entered Into Before Appointment
    of Receiver.--
                (1) Authority to repudiate contracts.--In addition to any
            other rights that a receiver may have, the Corporation as
            receiver for any covered financial company may disaffirm or
            repudiate any contract or lease--
                        (A) to which the covered financial company is a
                    party;
                        (B) the performance of which the Corporation as
                    receiver, in the discretion of the Corporation,
                    determines to be burdensome; and
                        (C) the disaffirmance or repudiation of which the
                    Corporation as receiver determines, in the discretion of
                    the Corporation, will promote the orderly administration
                    of the affairs of the covered financial company.
                (2) Timing of repudiation.--The Corporation, as receiver for
            any covered financial company, shall determine whether

    [[Page 124 STAT. 1478]]

            or not to exercise the rights of repudiation under this section
            within a reasonable period of time.
                (3) Claims for damages for repudiation.--
                        (A) In general.--Except as provided in paragraphs
                    (4), (5), and (6) and in subparagraphs (C), (D), and (E)
                    of this paragraph, the liability of the Corporation as
                    receiver for a covered financial company for the
                    disaffirmance or repudiation of any contract pursuant to
                    paragraph (1) shall be--
                              (i) limited to actual direct compensatory
                          damages; and
                              (ii) determined as of--
                                        (I) the date of the appointment of
                                    the Corporation as receiver; or
                                        (II) in the case of any contract or
                                    agreement referred to in paragraph (8),
                                    the date of the disaffirmance or
                                    repudiation of such contract or
                                    agreement.
                        (B) No liability for other damages.--For purposes of
                    subparagraph (A), the term ``actual direct compensatory
                    damages'' does not include--
                              (i) punitive or exemplary damages;
                              (ii) damages for lost profits or opportunity;
                          or
                              (iii) damages for pain and suffering.
                        (C) Measure of damages for repudiation of qualified
                    financial contracts.--In the case of any qualified
                    financial contract or agreement to which paragraph (8)
                    applies, compensatory damages shall be--
                              (i) deemed to include normal and reasonable
                          costs of cover or other reasonable measures of
                          damages utilized in the industries for such
                          contract and agreement claims; and
                              (ii) paid in accordance with this paragraph
                          and subsection (d), except as otherwise
                          specifically provided in this subsection.
                        (D) Measure of damages for repudiation or
                    disaffirmance of debt obligation.--In the case of any
                    debt for borrowed money or evidenced by a security,
                    actual direct compensatory damages shall be no less than
                    the amount lent plus accrued interest plus any accreted
                    original issue discount as of the date the Corporation
                    was appointed receiver of the covered financial company
                    and, to the extent that an allowed secured claim is
                    secured by property the value of which is greater than
                    the amount of such claim and any accrued interest
                    through the date of repudiation or disaffirmance, such
                    accrued interest pursuant to paragraph (1).
                        (E) Measure of damages for repudiation or
                    disaffirmance of contingent obligation.--In the case of
                    any contingent obligation of a covered financial company
                    consisting of any obligation under a guarantee, letter
                    of credit, loan commitment, or similar credit
                    obligation, the Corporation may, by rule or regulation,
                    prescribe that actual direct compensatory damages shall
                    be no less than the estimated value of the claim as of
                    the date the Corporation was appointed receiver of the
                    covered financial company, as such value is measured
                    based on the likelihood

    [[Page 124 STAT. 1479]]

                    that such contingent claim would become fixed and the
                    probable magnitude thereof.
                (4) Leases under which the covered financial company is the
            lessee.--
                        (A) In general.--If the Corporation as receiver
                    disaffirms or repudiates a lease under which the covered
                    financial company is the lessee, the receiver shall not
                    be liable for any damages (other than damages determined
                    pursuant to subparagraph (B)) for the disaffirmance or
                    repudiation of such lease.
                        (B) Payments of rent.--Notwithstanding subparagraph
                    (A), the lessor under a lease to which subparagraph (A)
                    would otherwise apply shall--
                              (i) be entitled to the contractual rent
                          accruing before the later of the date on which--
                                        (I) the notice of disaffirmance or
                                    repudiation is mailed; or
                                        (II) the disaffirmance or
                                    repudiation becomes effective, unless
                                    the lessor is in default or breach of
                                    the terms of the lease;
                              (ii) have no claim for damages under any
                          acceleration clause or other penalty provision in
                          the lease; and
                              (iii) have a claim for any unpaid rent,
                          subject to all appropriate offsets and defenses,
                          due as of the date of the appointment which shall
                          be paid in accordance with this paragraph and
                          subsection (d).
                (5) Leases under which the covered financial company is the
            lessor.--
                        (A) In general.--If the Corporation as receiver for
                    a covered financial company repudiates an unexpired
                    written lease of real property of the covered financial
                    company under which the covered financial company is the
                    lessor and the lessee is not, as of the date of such
                    repudiation, in default, the lessee under such lease may
                    either--
                              (i) treat the lease as terminated by such
                          repudiation; or
                              (ii) remain in possession of the leasehold
                          interest for the balance of the term of the lease,
                          unless the lessee defaults under the terms of the
                          lease after the date of such repudiation.
                        (B) Provisions applicable to lessee remaining in
                    possession.--If any lessee under a lease described in
                    subparagraph (A) remains in possession of a leasehold
                    interest pursuant to clause (ii) of subparagraph (A)--
                              (i) the lessee--
                                        (I) shall continue to pay the
                                    contractual rent pursuant to the terms
                                    of the lease after the date of the
                                    repudiation of such lease; and
                                        (II) may offset against any rent
                                    payment which accrues after the date of
                                    the repudiation of the lease, any
                                    damages which accrue after such date due
                                    to the nonperformance of any obligation
                                    of the covered financial company under
                                    the lease after such date; and
                              (ii) the Corporation as receiver shall not be
                          liable to the lessee for any damages arising after
                          such date

    [[Page 124 STAT. 1480]]

                          as a result of the repudiation, other than the
                          amount of any offset allowed under clause (i)(II).
                (6) Contracts for the sale of real property.--
                        (A) In general.--If the receiver repudiates any
                    contract (which meets the requirements of subsection
                    (a)(6)) for the sale of real property, and the purchaser
                    of such real property under such contract is in
                    possession and is not, as of the date of such
                    repudiation, in default, such purchaser may either--
                              (i) treat the contract as terminated by such
                          repudiation; or
                              (ii) remain in possession of such real
                          property.
                        (B) Provisions applicable to purchaser remaining in
                    possession.--If any purchaser of real property under any
                    contract described in subparagraph (A) remains in
                    possession of such property pursuant to clause (ii) of
                    subparagraph (A)--
                              (i) the purchaser--
                                        (I) shall continue to make all
                                    payments due under the contract after
                                    the date of the repudiation of the
                                    contract; and
                                        (II) may offset against any such
                                    payments any damages which accrue after
                                    such date due to the nonperformance
                                    (after such date) of any obligation of
                                    the covered financial company under the
                                    contract; and
                              (ii) the Corporation as receiver shall--
                                        (I) not be liable to the purchaser
                                    for any damages arising after such date
                                    as a result of the repudiation, other
                                    than the amount of any offset allowed
                                    under clause (i)(II);
                                        (II) deliver title to the purchaser
                                    in accordance with the provisions of the
                                    contract; and
                                        (III) have no obligation under the
                                    contract other than the performance
                                    required under subclause (II).
                        (C) Assignment and sale allowed.--
                              (i) In general.--No provision of this
                          paragraph shall be construed as limiting the right
                          of the Corporation as receiver to assign the
                          contract described in subparagraph (A) and sell
                          the property, subject to the contract and the
                          provisions of this paragraph.
                              (ii) No liability after assignment and sale.--
                          If an assignment and sale described in clause (i)
                          is consummated, the Corporation as receiver shall
                          have no further liability under the contract
                          described in subparagraph (A) or with respect to
                          the real property which was the subject of such
                          contract.
                (7) Provisions applicable to service contracts.--
                        (A) Services performed before appointment.--In the
                    case of any contract for services between any person and
                    any covered financial company for which the Corporation
                    has been appointed receiver, any claim of such person
                    for services performed before the date of appointment
                    shall be--
                              (i) a claim to be paid in accordance with
                          subsections (a), (b), and (d); and

    [[Page 124 STAT. 1481]]

                              (ii) deemed to have arisen as of the date on
                          which the receiver was appointed.
                        (B) Services performed after appointment and prior
                    to repudiation.--If, in the case of any contract for
                    services described in subparagraph (A), the Corporation
                    as receiver accepts performance by the other person
                    before making any determination to exercise the right of
                    repudiation of such contract under this section--
                              (i) the other party shall be paid under the
                          terms of the contract for the services performed;
                          and
                              (ii) the amount of such payment shall be
                          treated as an administrative expense of the
                          receivership.
                        (C) Acceptance of performance no bar to subsequent
                    repudiation.--The acceptance by the Corporation as
                    receiver for services referred to in subparagraph (B) in
                    connection with a contract described in subparagraph (B)
                    shall not affect the right of the Corporation as
                    receiver to repudiate such contract under this section
                    at any time after such performance.
                (8) Certain qualified financial contracts.--
                        (A) Rights of parties to contracts.--Subject to
                    subsection (a)(8) and paragraphs (9) and (10) of this
                    subsection, and notwithstanding any other provision of
                    this section, any other provision of Federal law, or the
                    law of any State, no person shall be stayed or
                    prohibited from exercising--
                              (i) any right that such person has to cause
                          the termination, liquidation, or acceleration of
                          any qualified financial contract with a covered
                          financial company which arises upon the date of
                          appointment of the Corporation as receiver for
                          such covered financial company or at any time
                          after such appointment;
                              (ii) any right under any security agreement or
                          arrangement or other credit enhancement related to
                          one or more qualified financial contracts
                          described in clause (i); or
                              (iii) any right to offset or net out any
                          termination value, payment amount, or other
                          transfer obligation arising under or in connection
                          with 1 or more contracts or agreements described
                          in clause (i), including any master agreement for
                          such contracts or agreements.
                        (B) Applicability of other provisions.--Subsection
                    (a)(8) shall apply in the case of any judicial action or
                    proceeding brought against the Corporation as receiver
                    referred to in subparagraph (A), or the subject covered
                    financial company, by any party to a contract or
                    agreement described in subparagraph (A)(i) with such
                    covered financial company.
                        (C) Certain transfers not avoidable.--
                              (i) In general.--Notwithstanding subsection
                          (a)(11), (a)(12), or (c)(12), section 5242 of the
                          Revised Statutes of the United States, or any
                          other provision of Federal or State law relating
                          to the avoidance of preferential or fraudulent
                          transfers, the Corporation, whether acting as the
                          Corporation or as receiver for a covered financial
                          company, may not avoid any transfer of money or
                          other property in connection with

    [[Page 124 STAT. 1482]]

                          any qualified financial contract with a covered
                          financial company.
                              (ii) Exception for certain transfers.--Clause
                          (i) shall not apply to any transfer of money or
                          other property in connection with any qualified
                          financial contract with a covered financial
                          company if the transferee had actual intent to
                          hinder, delay, or defraud such company, the
                          creditors of such company, or the Corporation as
                          receiver appointed for such company.
                        (D) Certain contracts and agreements defined.--For
                    purposes of this subsection, the following definitions
                    shall apply:
                              (i) Qualified financial contract.--The term
                          ``qualified financial contract'' means any
                          securities contract, commodity contract, forward
                          contract, repurchase agreement, swap agreement,
                          and any similar agreement that the Corporation
                          determines by regulation, resolution, or order to
                          be a qualified financial contract for purposes of
                          this paragraph.
                              (ii) Securities contract.--The term
                          ``securities contract''--
                                        (I) means a contract for the
                                    purchase, sale, or loan of a security, a
                                    certificate of deposit, a mortgage loan,
                                    any interest in a mortgage loan, a group
                                    or index of securities, certificates of
                                    deposit, or mortgage loans or interests
                                    therein (including any interest therein
                                    or based on the value thereof), or any
                                    option on any of the foregoing,
                                    including any option to purchase or sell
                                    any such security, certificate of
                                    deposit, mortgage loan, interest, group
                                    or index, or option, and including any
                                    repurchase or reverse repurchase
                                    transaction on any such security,
                                    certificate of deposit, mortgage loan,
                                    interest, group or index, or option
                                    (whether or not such repurchase or
                                    reverse repurchase transaction is a
                                    ``repurchase agreement'', as defined in
                                    clause (v));
                                        (II) does not include any purchase,
                                    sale, or repurchase obligation under a
                                    participation in a commercial mortgage
                                    loan unless the Corporation determines
                                    by regulation, resolution, or order to
                                    include any such agreement within the
                                    meaning of such term;
                                        (III) means any option entered into
                                    on a national securities exchange
                                    relating to foreign currencies;
                                        (IV) means the guarantee (including
                                    by novation) by or to any securities
                                    clearing agency of any settlement of
                                    cash, securities, certificates of
                                    deposit, mortgage loans or interests
                                    therein, group or index of securities,
                                    certificates of deposit or mortgage
                                    loans or interests therein (including
                                    any interest therein or based on the
                                    value thereof) or an option on any of
                                    the foregoing, including any option to
                                    purchase or sell any such security,
                                    certificate of deposit, mortgage loan,
                                    interest, group or index, or option
                                    (whether or not such

    [[Page 124 STAT. 1483]]

                                    settlement is in connection with any
                                    agreement or transaction referred to in
                                    subclauses (I) through (XII) (other than
                                    subclause (II)));
                                        (V) means any margin loan;
                                        (VI) means any extension of credit
                                    for the clearance or settlement of
                                    securities transactions;
                                        (VII) means any loan transaction
                                    coupled with a securities collar
                                    transaction, any prepaid securities
                                    forward transaction, or any total return
                                    swap transaction coupled with a
                                    securities sale transaction;
                                        (VIII) means any other agreement or
                                    transaction that is similar to any
                                    agreement or transaction referred to in
                                    this clause;
                                        (IX) means any combination of the
                                    agreements or transactions referred to
                                    in this clause;
                                        (X) means any option to enter into
                                    any agreement or transaction referred to
                                    in this clause;
                                        (XI) means a master agreement that
                                    provides for an agreement or transaction
                                    referred to in any of subclauses (I)
                                    through (X), other than subclause (II),
                                    together with all supplements to any
                                    such master agreement, without regard to
                                    whether the master agreement provides
                                    for an agreement or transaction that is
                                    not a securities contract under this
                                    clause, except that the master agreement
                                    shall be considered to be a securities
                                    contract under this clause only with
                                    respect to each agreement or transaction
                                    under the master agreement that is
                                    referred to in any of subclauses (I)
                                    through (X), other than subclause (II);
                                    and
                                        (XII) means any security agreement
                                    or arrangement or other credit
                                    enhancement related to any agreement or
                                    transaction referred to in this clause,
                                    including any guarantee or reimbursement
                                    obligation in connection with any
                                    agreement or transaction referred to in
                                    this clause.
                              (iii) Commodity contract.--The term
                          ``commodity contract'' means--
                                        (I) with respect to a futures
                                    commission merchant, a contract for the
                                    purchase or sale of a commodity for
                                    future delivery on, or subject to the
                                    rules of, a contract market or board of
                                    trade;
                                        (II) with respect to a foreign
                                    futures commission merchant, a foreign
                                    future;
                                        (III) with respect to a leverage
                                    transaction merchant, a leverage
                                    transaction;
                                        (IV) with respect to a clearing
                                    organization, a contract for the
                                    purchase or sale of a commodity for
                                    future delivery on, or subject to the
                                    rules of, a contract market or board of
                                    trade that is cleared by such clearing
                                    organization, or commodity option traded
                                    on, or subject to the rules of, a
                                    contract market or board of trade that
                                    is cleared by such clearing
                                    organization;
                                        (V) with respect to a commodity
                                    options dealer, a commodity option;

    [[Page 124 STAT. 1484]]

                                        (VI) any other agreement or
                                    transaction that is similar to any
                                    agreement or transaction referred to in
                                    this clause;
                                        (VII) any combination of the
                                    agreements or transactions referred to
                                    in this clause;
                                        (VIII) any option to enter into any
                                    agreement or transaction referred to in
                                    this clause;
                                        (IX) a master agreement that
                                    provides for an agreement or transaction
                                    referred to in any of subclauses (I)
                                    through (VIII), together with all
                                    supplements to any such master
                                    agreement, without regard to whether the
                                    master agreement provides for an
                                    agreement or transaction that is not a
                                    commodity contract under this clause,
                                    except that the master agreement shall
                                    be considered to be a commodity contract
                                    under this clause only with respect to
                                    each agreement or transaction under the
                                    master agreement that is referred to in
                                    any of subclauses (I) through (VIII); or
                                        (X) any security agreement or
                                    arrangement or other credit enhancement
                                    related to any agreement or transaction
                                    referred to in this clause, including
                                    any guarantee or reimbursement
                                    obligation in connection with any
                                    agreement or transaction referred to in
                                    this clause.
                              (iv) Forward contract.--The term ``forward
                          contract'' means--
                                        (I) a contract (other than a
                                    commodity contract) for the purchase,
                                    sale, or transfer of a commodity or any
                                    similar good, article, service, right,
                                    or interest which is presently or in the
                                    future becomes the subject of dealing in
                                    the forward contract trade, or product
                                    or byproduct thereof, with a maturity
                                    date that is more than 2 days after the
                                    date on which the contract is entered
                                    into, including a repurchase or reverse
                                    repurchase transaction (whether or not
                                    such repurchase or reverse repurchase
                                    transaction is a ``repurchase
                                    agreement'', as defined in clause (v)),
                                    consignment, lease, swap, hedge
                                    transaction, deposit, loan, option,
                                    allocated transaction, unallocated
                                    transaction, or any other similar
                                    agreement;
                                        (II) any combination of agreements
                                    or transactions referred to in
                                    subclauses (I) and (III);
                                        (III) any option to enter into any
                                    agreement or transaction referred to in
                                    subclause (I) or (II);
                                        (IV) a master agreement that
                                    provides for an agreement or transaction
                                    referred to in subclause (I), (II), or
                                    (III), together with all supplements to
                                    any such master agreement, without
                                    regard to whether the master agreement
                                    provides for an agreement or transaction
                                    that is not a forward contract under
                                    this clause, except that the master
                                    agreement shall be considered to be a
                                    forward contract under this clause only
                                    with respect to each agreement or
                                    transaction under the master

    [[Page 124 STAT. 1485]]

                                    agreement that is referred to in
                                    subclause (I), (II), or (III); or
                                        (V) any security agreement or
                                    arrangement or other credit enhancement
                                    related to any agreement or transaction
                                    referred to in subclause (I), (II),
                                    (III), or (IV), including any guarantee
                                    or reimbursement obligation in
                                    connection with any agreement or
                                    transaction referred to in any such
                                    subclause.
                              (v) Repurchase agreement.--The term
                          ``repurchase agreement'' (which definition also
                          applies to a reverse repurchase agreement)--
                                        (I) means an agreement, including
                                    related terms, which provides for the
                                    transfer of one or more certificates of
                                    deposit, mortgage related securities (as
                                    such term is defined in section 3 of the
                                    Securities Exchange Act of 1934),
                                    mortgage loans, interests in mortgage-
                                    related securities or mortgage loans,
                                    eligible bankers' acceptances, qualified
                                    foreign government securities (which,
                                    for purposes of this clause, means a
                                    security that is a direct obligation of,
                                    or that is fully guaranteed by, the
                                    central government of a member of the
                                    Organization for Economic Cooperation
                                    and Development, as determined by
                                    regulation or order adopted by the Board
                                    of Governors), or securities that are
                                    direct obligations of, or that are fully
                                    guaranteed by, the United States or any
                                    agency of the United States against the
                                    transfer of funds by the transferee of
                                    such certificates of deposit, eligible
                                    bankers' acceptances, securities,
                                    mortgage loans, or interests with a
                                    simultaneous agreement by such
                                    transferee to transfer to the transferor
                                    thereof certificates of deposit,
                                    eligible bankers' acceptances,
                                    securities, mortgage loans, or interests
                                    as described above, at a date certain
                                    not later than 1 year after such
                                    transfers or on demand, against the
                                    transfer of funds, or any other similar
                                    agreement;
                                        (II) does not include any repurchase
                                    obligation under a participation in a
                                    commercial mortgage loan, unless the
                                    Corporation determines, by regulation,
                                    resolution, or order to include any such
                                    participation within the meaning of such
                                    term;
                                        (III) means any combination of
                                    agreements or transactions referred to
                                    in subclauses (I) and (IV);
                                        (IV) means any option to enter into
                                    any agreement or transaction referred to
                                    in subclause (I) or (III);
                                        (V) means a master agreement that
                                    provides for an agreement or transaction
                                    referred to in subclause (I), (III), or
                                    (IV), together with all supplements to
                                    any such master agreement, without
                                    regard to whether the master agreement
                                    provides for an agreement or transaction
                                    that is not a repurchase agreement under
                                    this clause, except

    [[Page 124 STAT. 1486]]

                                    that the master agreement shall be
                                    considered to be a repurchase agreement
                                    under this subclause only with respect
                                    to each agreement or transaction under
                                    the master agreement that is referred to
                                    in subclause (I), (III), or (IV); and
                                        (VI) means any security agreement or
                                    arrangement or other credit enhancement
                                    related to any agreement or transaction
                                    referred to in subclause (I), (III),
                                    (IV), or (V), including any guarantee or
                                    reimbursement obligation in connection
                                    with any agreement or transaction
                                    referred to in any such subclause.
                              (vi) Swap agreement.--The term ``swap
                          agreement'' means--
                                        (I) any agreement, including the
                                    terms and conditions incorporated by
                                    reference in any such agreement, which
                                    is an interest rate swap, option,
                                    future, or forward agreement, including
                                    a rate floor, rate cap, rate collar,
                                    cross-currency rate swap, and basis
                                    swap; a spot, same day-tomorrow,
                                    tomorrow-next, forward, or other foreign
                                    exchange, precious metals, or other
                                    commodity agreement; a currency swap,
                                    option, future, or forward agreement; an
                                    equity index or equity swap, option,
                                    future, or forward agreement; a debt
                                    index or debt swap, option, future, or
                                    forward agreement; a total return,
                                    credit spread or credit swap, option,
                                    future, or forward agreement; a
                                    commodity index or commodity swap,
                                    option, future, or forward agreement;
                                    weather swap, option, future, or forward
                                    agreement; an emissions swap, option,
                                    future, or forward agreement; or an
                                    inflation swap, option, future, or
                                    forward agreement;
                                        (II) any agreement or transaction
                                    that is similar to any other agreement
                                    or transaction referred to in this
                                    clause and that is of a type that has
                                    been, is presently, or in the future
                                    becomes, the subject of recurrent
                                    dealings in the swap or other
                                    derivatives markets (including terms and
                                    conditions incorporated by reference in
                                    such agreement) and that is a forward,
                                    swap, future, option, or spot
                                    transaction on one or more rates,
                                    currencies, commodities, equity
                                    securities or other equity instruments,
                                    debt securities or other debt
                                    instruments, quantitative measures
                                    associated with an occurrence, extent of
                                    an occurrence, or contingency associated
                                    with a financial, commercial, or
                                    economic consequence, or economic or
                                    financial indices or measures of
                                    economic or financial risk or value;
                                        (III) any combination of agreements
                                    or transactions referred to in this
                                    clause;
                                        (IV) any option to enter into any
                                    agreement or transaction referred to in
                                    this clause;
                                        (V) a master agreement that provides
                                    for an agreement or transaction referred
                                    to in subclause (I), (II), (III), or
                                    (IV), together with all supplements

    [[Page 124 STAT. 1487]]

                                    to any such master agreement, without
                                    regard to whether the master agreement
                                    contains an agreement or transaction
                                    that is not a swap agreement under this
                                    clause, except that the master agreement
                                    shall be considered to be a swap
                                    agreement under this clause only with
                                    respect to each agreement or transaction
                                    under the master agreement that is
                                    referred to in subclause (I), (II),
                                    (III), or (IV); and
                                        (VI) any security agreement or
                                    arrangement or other credit enhancement
                                    related to any agreement or transaction
                                    referred to in any of subclauses (I)
                                    through (V), including any guarantee or
                                    reimbursement obligation in connection
                                    with any agreement or transaction
                                    referred to in any such clause.
                              (vii) Definitions relating to default.--When
                          used in this paragraph and paragraphs (9) and
                          (10)--
                                        (I) the term ``default'' means, with
                                    respect to a covered financial company,
                                    any adjudication or other official
                                    decision by any court of competent
                                    jurisdiction, or other public authority
                                    pursuant to which the Corporation has
                                    been appointed receiver; and
                                        (II) the term ``in danger of
                                    default'' means a covered financial
                                    company with respect to which the
                                    Corporation or appropriate State
                                    authority has determined that--
                                                (aa) in the opinion of the
                                            Corporation or such authority--
                                                    (AA) the covered
                                                financial company is not
                                                likely to be able to pay its
                                                obligations in the normal
                                                course of business; and
                                                    (BB) there is no
                                                reasonable prospect that the
                                                covered financial company
                                                will be able to pay such
                                                obligations without Federal
                                                assistance; or
                                                (bb) in the opinion of the
                                            Corporation or such authority--
                                                    (AA) the covered
                                                financial company has
                                                incurred or is likely to
                                                incur losses that will
                                                deplete all or substantially
                                                all of its capital; and
                                                    (BB) there is no
                                                reasonable prospect that the
                                                capital will be replenished
                                                without Federal assistance.
                              (viii) Treatment of master agreement as one
                          agreement.--Any master agreement for any contract
                          or agreement described in any of clauses (i)
                          through (vi) (or any master agreement for such
                          master agreement or agreements), together with all
                          supplements to such master agreement, shall be
                          treated as a single agreement and a single
                          qualified financial contact. If a master agreement
                          contains provisions relating to agreements or
                          transactions that are not themselves qualified
                          financial contracts, the master agreement

    [[Page 124 STAT. 1488]]

                          shall be deemed to be a qualified financial
                          contract only with respect to those transactions
                          that are themselves qualified financial contracts.
                              (ix) Transfer.--The term ``transfer'' means
                          every mode, direct or indirect, absolute or
                          conditional, voluntary or involuntary, of
                          disposing of or parting with property or with an
                          interest in property, including retention of title
                          as a security interest and foreclosure of the
                          equity of redemption of the covered financial
                          company.
                              (x) Person.--The term ``person'' includes any
                          governmental entity in addition to any entity
                          included in the definition of such term in section
                          1, title 1, United States Code.
                        (E) Clarification.--No provision of law shall be
                    construed as limiting the right or power of the
                    Corporation, or authorizing any court or agency to limit
                    or delay, in any manner, the right or power of the
                    Corporation to transfer any qualified financial contract
                    or to disaffirm or repudiate any such contract in
                    accordance with this subsection.
                        (F) Walkaway clauses not effective.--
                              (i) In general.--Notwithstanding the
                          provisions of subparagraph (A) of this paragraph
                          and sections 403 and 404 of the Federal Deposit
                          Insurance Corporation Improvement Act of 1991, no
                          walkaway clause shall be enforceable in a
                          qualified financial contract of a covered
                          financial company in default.
                              (ii) Limited suspension of certain
                          obligations.--In <<NOTE: Time period.>> the case
                          of a qualified financial contract referred to in
                          clause (i), any payment or delivery obligations
                          otherwise due from a party pursuant to the
                          qualified financial contract shall be suspended
                          from the time at which the Corporation is
                          appointed as receiver until the earlier of--
                                        (I) the time at which such party
                                    receives notice that such contract has
                                    been transferred pursuant to paragraph
                                    (10)(A); or
                                        (II) 5:00 p.m. (eastern time) on the
                                    business day following the date of the
                                    appointment of the Corporation as
                                    receiver.
                              (iii) Walkaway clause defined.--For purposes
                          of this subparagraph, the term ``walkaway clause''
                          means any provision in a qualified financial
                          contract that suspends, conditions, or
                          extinguishes a payment obligation of a party, in
                          whole or in part, or does not create a payment
                          obligation of a party that would otherwise exist,
                          solely because of the status of such party as a
                          nondefaulting party in connection with the
                          insolvency of a covered financial company that is
                          a party to the contract or the appointment of or
                          the exercise of rights or powers by the
                          Corporation as receiver for such covered financial
                          company, and not as a result of the exercise by a
                          party of any right to offset, setoff, or net
                          obligations that exist under the contract, any
                          other contract between those parties, or
                          applicable law.

    [[Page 124 STAT. 1489]]

                        (G) Certain obligations to clearing organizations.--
                    In the event that the Corporation has been appointed as
                    receiver for a covered financial company which is a
                    party to any qualified financial contract cleared by or
                    subject to the rules of a clearing organization (as
                    defined in paragraph (9)(D)), the receiver shall use its
                    best efforts to meet all margin, collateral, and
                    settlement obligations of the covered financial company
                    that arise under qualified financial contracts (other
                    than any margin, collateral, or settlement obligation
                    that is not enforceable against the receiver under
                    paragraph (8)(F)(i) or paragraph (10)(B)), as required
                    by the rules of the clearing organization when due.
                    Notwithstanding any other provision of this title, if
                    the receiver fails to satisfy any such margin,
                    collateral, or settlement obligations under the rules of
                    the clearing organization, the clearing organization
                    shall have the immediate right to exercise, and shall
                    not be stayed from exercising, all of its rights and
                    remedies under its rules and applicable law with respect
                    to any qualified financial contract of the covered
                    financial company, including, without limitation, the
                    right to liquidate all positions and collateral of such
                    covered financial company under the company's qualified
                    financial contracts, and suspend or cease to act for
                    such covered financial company, all in accordance with
                    the rules of the clearing organization.
                        (H) Recordkeeping.--
                              (i) Joint rulemaking.--The Federal primary
                          financial regulatory agencies shall jointly
                          prescribe regulations requiring that financial
                          companies maintain such records with respect to
                          qualified financial contracts (including market
                          valuations) that the Federal primary financial
                          regulatory agencies determine to be necessary or
                          appropriate in order to assist the Corporation as
                          receiver for a covered financial company in being
                          able to exercise its rights and fulfill its
                          obligations under this paragraph or paragraph (9)
                          or (10).
                              (ii) Time frame.--The Federal primary
                          financial regulatory agencies shall prescribe
                          joint final or interim final regulations not later
                          than 24 months after the date of enactment of this
                          Act.
                              (iii) Back-up rulemaking authority.--If the
                          Federal primary financial regulatory agencies do
                          not prescribe joint final or interim final
                          regulations within the time frame in clause (ii),
                          the Chairperson of the Council shall prescribe, in
                          consultation with the Corporation, the regulations
                          required by clause (i).
                              (iv) Categorization and tiering.--The joint
                          regulations prescribed under clause (i) shall, as
                          appropriate, differentiate among financial
                          companies by taking into consideration their size,
                          risk, complexity, leverage, frequency and dollar
                          amount of qualified financial contracts,
                          interconnectedness to the financial system, and
                          any other factors deemed appropriate.
                (9) Transfer of qualified financial contracts.--
                        (A) In general.--In making any transfer of assets or
                    liabilities of a covered financial company in default,

    [[Page 124 STAT. 1490]]

                    which includes any qualified financial contract, the
                    Corporation as receiver for such covered financial
                    company shall either--
                              (i) transfer to one financial institution,
                          other than a financial institution for which a
                          conservator, receiver, trustee in bankruptcy, or
                          other legal custodian has been appointed or which
                          is otherwise the subject of a bankruptcy or
                          insolvency proceeding--
                                        (I) all qualified financial
                                    contracts between any person or any
                                    affiliate of such person and the covered
                                    financial company in default;
                                        (II) all claims of such person or
                                    any affiliate of such person against
                                    such covered financial company under any
                                    such contract (other than any claim
                                    which, under the terms of any such
                                    contract, is subordinated to the claims
                                    of general unsecured creditors of such
                                    company);
                                        (III) all claims of such covered
                                    financial company against such person or
                                    any affiliate of such person under any
                                    such contract; and
                                        (IV) all property securing or any
                                    other credit enhancement for any
                                    contract described in subclause (I) or
                                    any claim described in subclause (II) or
                                    (III) under any such contract; or
                              (ii) transfer none of the qualified financial
                          contracts, claims, property or other credit
                          enhancement referred to in clause (i) (with
                          respect to such person and any affiliate of such
                          person).
                        (B) Transfer to foreign bank, financial institution,
                    or branch or agency thereof.--In transferring any
                    qualified financial contracts and related claims and
                    property under subparagraph (A)(i), the Corporation as
                    receiver for the covered financial company shall not
                    make such transfer to a foreign bank, financial
                    institution organized under the laws of a foreign
                    country, or a branch or agency of a foreign bank or
                    financial institution unless, under the law applicable
                    to such bank, financial institution, branch or agency,
                    to the qualified financial contracts, and to any netting
                    contract, any security agreement or arrangement or other
                    credit enhancement related to one or more qualified
                    financial contracts, the contractual rights of the
                    parties to such qualified financial contracts, netting
                    contracts, security agreements or arrangements, or other
                    credit enhancements are enforceable substantially to the
                    same extent as permitted under this section.
                        (C) Transfer of contracts subject to the rules of a
                    clearing organization.--In the event that the
                    Corporation as receiver for a financial institution
                    transfers any qualified financial contract and related
                    claims, property, or credit enhancement pursuant to
                    subparagraph (A)(i) and such contract is cleared by or
                    subject to the rules of a clearing organization, the
                    clearing organization shall not be required to accept
                    the transferee as a member by virtue of the transfer.
                        (D) Definitions.--For purposes of this paragraph--

    [[Page 124 STAT. 1491]]

                              (i) the term ``financial institution'' means a
                          broker or dealer, a depository institution, a
                          futures commission merchant, a bridge financial
                          company, or any other institution determined by
                          the Corporation, by regulation, to be a financial
                          institution; and
                              (ii) the term ``clearing organization'' has
                          the same meaning as in section 402 of the Federal
                          Deposit Insurance Corporation Improvement Act of
                          1991.
                (10) Notification of transfer.--
                        (A) In general.--
                              (i) Notice.--The Corporation shall provide
                          notice in accordance with clause (ii), if--
                                        (I) the Corporation as receiver for
                                    a covered financial company in default
                                    or in danger of default transfers any
                                    assets or liabilities of the covered
                                    financial company; and
                                        (II) the transfer includes any
                                    qualified financial contract.
                              (ii) Timing.--The Corporation as receiver for
                          a covered financial company shall notify any
                          person who is a party to any contract described in
                          clause (i) of such transfer not later than 5:00
                          p.m. (eastern time) on the business day following
                          the date of the appointment of the Corporation as
                          receiver.
                        (B) Certain rights not enforceable.--
                              (i) Receivership.--A <<NOTE: Time
                          period.>> person who is a party to a qualified
                          financial contract with a covered financial
                          company may not exercise any right that such
                          person has to terminate, liquidate, or net such
                          contract under paragraph (8)(A) solely by reason
                          of or incidental to the appointment under this
                          section of the Corporation as receiver for the
                          covered financial company (or the insolvency or
                          financial condition of the covered financial
                          company for which the Corporation has been
                          appointed as receiver)--
                                        (I) until 5:00 p.m. (eastern time)
                                    on the business day following the date
                                    of the appointment; or
                                        (II) after the person has received
                                    notice that the contract has been
                                    transferred pursuant to paragraph
                                    (9)(A).
                              (ii) Notice.--For purposes of this paragraph,
                          the Corporation as receiver for a covered
                          financial company shall be deemed to have notified
                          a person who is a party to a qualified financial
                          contract with such covered financial company, if
                          the Corporation has taken steps reasonably
                          calculated to provide notice to such person by the
                          time specified in subparagraph (A).
                        (C) Treatment of bridge financial company.--For
                    purposes of paragraph (9), a bridge financial company
                    shall not be considered to be a financial institution
                    for which a conservator, receiver, trustee in
                    bankruptcy, or other legal custodian has been appointed,
                    or which is otherwise the subject of a bankruptcy or
                    insolvency proceeding.
                        (D) Business day defined.--For purposes of this
                    paragraph, the term ``business day'' means any day other
                    than any Saturday, Sunday, or any day on which either
                    the

    [[Page 124 STAT. 1492]]

                    New York Stock Exchange or the Federal Reserve Bank of
                    New York is closed.
                (11) Disaffirmance or repudiation of qualified financial
            contracts.--In exercising the rights of disaffirmance or
            repudiation of the Corporation as receiver with respect to any
            qualified financial contract to which a covered financial
            company is a party, the Corporation shall either--
                        (A) disaffirm or repudiate all qualified financial
                    contracts between--
                              (i) any person or any affiliate of such
                          person; and
                              (ii) the covered financial company in default;
                          or
                        (B) disaffirm or repudiate none of the qualified
                    financial contracts referred to in subparagraph (A)
                    (with respect to such person or any affiliate of such
                    person).
                (12) Certain security and customer interests not
            avoidable.--No provision of this subsection shall be construed
            as permitting the avoidance of any--
                        (A) legally enforceable or perfected security
                    interest in any of the assets of any covered financial
                    company, except in accordance with subsection (a)(11);
                    or
                        (B) legally enforceable interest in customer
                    property, security entitlements in respect of assets or
                    property held by the covered financial company for any
                    security entitlement holder.
                (13) Authority to enforce contracts.--
                        (A) In general.--The Corporation, as receiver for a
                    covered financial company, may enforce any contract,
                    other than a liability insurance contract of a director
                    or officer, a financial institution bond entered into by
                    the covered financial company, notwithstanding any
                    provision of the contract providing for termination,
                    default, acceleration, or exercise of rights upon, or
                    solely by reason of, insolvency, the appointment of or
                    the exercise of rights or powers by the Corporation as
                    receiver, the filing of the petition pursuant to section
                    202(a)(1), or the issuance of the recommendations or
                    determination, or any actions or events occurring in
                    connection therewith or as a result thereof, pursuant to
                    section 203.
                        (B) Certain rights not affected.--No provision of
                    this paragraph may be construed as impairing or
                    affecting any right of the Corporation as receiver to
                    enforce or recover under a liability insurance contract
                    of a director or officer or financial institution bond
                    under other applicable law.
                        (C) Consent requirement and ipso facto clauses.--
                              (i) In general.--Except <<NOTE: Time
                          period.>> as otherwise provided by this section,
                          no person may exercise any right or power to
                          terminate, accelerate, or declare a default under
                          any contract to which the covered financial
                          company is a party (and no provision in any such
                          contract providing for such default, termination,
                          or acceleration shall be enforceable), or to
                          obtain possession of or exercise control over any
                          property of the covered financial company or
                          affect any contractual rights of the covered
                          financial company, without the consent of the

    [[Page 124 STAT. 1493]]

                          Corporation as receiver for the covered financial
                          company during the 90 day period beginning from
                          the appointment of the Corporation as receiver.
                              (ii) Exceptions.--No provision of this
                          subparagraph shall apply to a director or officer
                          liability insurance contract or a financial
                          institution bond, to the rights of parties to
                          certain qualified financial contracts pursuant to
                          paragraph (8), or to the rights of parties to
                          netting contracts pursuant to subtitle A of title
                          IV of the Federal Deposit Insurance Corporation
                          Improvement Act of 1991 (12 U.S.C. 4401 et seq.),
                          or shall be construed as permitting the
                          Corporation as receiver to fail to comply with
                          otherwise enforceable provisions of such contract.
                        (D) Contracts to extend credit.--Notwithstanding any
                    other provision in this title, if the Corporation as
                    receiver enforces any contract to extend credit to the
                    covered financial company or bridge financial company,
                    any valid and enforceable obligation to repay such debt
                    shall be paid by the Corporation as receiver, as an
                    administrative expense of the receivership.
                (14) Exception for federal reserve banks and corporation
            security interest.--No provision of this subsection shall apply
            with respect to--
                        (A) any extension of credit from any Federal reserve
                    bank or the Corporation to any covered financial
                    company; or
                        (B) any security interest in the assets of the
                    covered financial company securing any such extension of
                    credit.
                (15) Savings clause.--The meanings of terms used in this
            subsection are applicable for purposes of this subsection only,
            and shall not be construed or applied so as to challenge or
            affect the characterization, definition, or treatment of any
            similar terms under any other statute, regulation, or rule,
            including the Gramm-Leach-Bliley Act, the Legal Certainty for
            Bank Products Act of 2000, the securities laws (as that term is
            defined in section 3(a)(47) of the Securities Exchange Act of
            1934), and the Commodity Exchange Act.
                (16) Enforcement of contracts guaranteed by the covered
            financial company.--
                        (A) In general.--The Corporation, as receiver for a
                    covered financial company or as receiver for a
                    subsidiary of a covered financial company (including an
                    insured depository institution) shall have the power to
                    enforce contracts of subsidiaries or affiliates of the
                    covered financial company, the obligations under which
                    are guaranteed or otherwise supported by or linked to
                    the covered financial company, notwithstanding any
                    contractual right to cause the termination, liquidation,
                    or acceleration of such contracts based solely on the
                    insolvency, financial condition, or receivership of the
                    covered financial company, if--
                              (i) such guaranty or other support and all
                          related assets and liabilities are transferred to
                          and assumed by a bridge financial company or a
                          third party (other than a third party for which a
                          conservator, receiver, trustee in bankruptcy, or
                          other legal custodian has been appointed, or which
                          is otherwise the subject of

    [[Page 124 STAT. 1494]]

                          a bankruptcy or insolvency proceeding) within the
                          same period of time as the Corporation is entitled
                          to transfer the qualified financial contracts of
                          such covered financial company; or
                              (ii) the Corporation, as receiver, otherwise
                          provides adequate protection with respect to such
                          obligations.
                        (B) Rule of construction.--For purposes of this
                    paragraph, a bridge financial company shall not be
                    considered to be a third party for which a conservator,
                    receiver, trustee in bankruptcy, or other legal
                    custodian has been appointed, or which is otherwise the
                    subject of a bankruptcy or insolvency proceeding.

        (d) Valuation of Claims in Default.--
                (1) In general.--Notwithstanding any other provision of
            Federal law or the law of any State, and regardless of the
            method utilized by the Corporation for a covered financial
            company, including transactions authorized under subsection (h),
            this subsection shall govern the rights of the creditors of any
            such covered financial company.
                (2) Maximum liability.--The maximum liability of the
            Corporation, acting as receiver for a covered financial company
            or in any other capacity, to any person having a claim against
            the Corporation as receiver or the covered financial company for
            which the Corporation is appointed shall equal the amount that
            such claimant would have received if--
                        (A) the Corporation had not been appointed receiver
                    with respect to the covered financial company; and
                        (B) the covered financial company had been
                    liquidated under chapter 7 of the Bankruptcy Code, or
                    any similar provision of State insolvency law applicable
                    to the covered financial company.
                (3) Special provision for orderly liquidation by sipc.--The
            maximum liability of the Corporation, acting as receiver or in
            its corporate capacity for any covered broker or dealer to any
            customer of such covered broker or dealer, with respect to
            customer property of such customer, shall be--
                        (A) equal to the amount that such customer would
                    have received with respect to such customer property in
                    a case initiated by SIPC under the Securities Investor
                    Protection Act of 1970 (15 U.S.C. 78aaa et seq.); and
                        (B) determined <<NOTE: Determination.>> as of the
                    close of business on the date on which the Corporation
                    is appointed as receiver.
                (4) Additional payments authorized.--
                        (A) In general.--Subject to subsection (o)(1)(D)(i),
                    the Corporation, with the approval of the Secretary, may
                    make additional payments or credit additional amounts to
                    or with respect to or for the account of any claimant or
                    category of claimants of the covered financial company,
                    if the Corporation determines that such payments or
                    credits are necessary or appropriate to minimize losses
                    to the Corporation as receiver from the orderly
                    liquidation of the covered financial company under this
                    section.
                        (B) Limitations.--
                              (i) Prohibition.--The Corporation shall not
                          make any payments or credit amounts to any
                          claimant or category of claimants that would
                          result in any claimant receiving more than the
                          face value amount of any

    [[Page 124 STAT. 1495]]

                          claim that is proven to the satisfaction of the
                          Corporation.
                              (ii) No obligation.--Notwithstanding any other
                          provision of Federal or State law, or the
                          Constitution of any State, the Corporation shall
                          not be obligated, as a result of having made any
                          payment under subparagraph (A) or credited any
                          amount described in subparagraph (A) to or with
                          respect to, or for the account, of any claimant or
                          category of claimants, to make payments to any
                          other claimant or category of claimants.
                        (C) Manner of payment.--The Corporation may make
                    payments or credit amounts under subparagraph (A)
                    directly to the claimants or may make such payments or
                    credit such amounts to a company other than a covered
                    financial company or a bridge financial company
                    established with respect thereto in order to induce such
                    other company to accept liability for such claims.

        (e) Limitation on Court Action.--Except as provided in this title,
    no court may take any action to restrain or affect the exercise of
    powers or functions of the receiver hereunder, and any remedy against
    the Corporation or receiver shall be limited to money damages determined
    in accordance with this title.
        (f) Liability of Directors and Officers.--
                (1) In general.--A director or officer of a covered
            financial company may be held personally liable for monetary
            damages in any civil action described in paragraph (2) by, on
            behalf of, or at the request or direction of the Corporation,
            which action is prosecuted wholly or partially for the benefit
            of the Corporation--
                        (A) acting as receiver for such covered financial
                    company;
                        (B) acting based upon a suit, claim, or cause of
                    action purchased from, assigned by, or otherwise
                    conveyed by the Corporation as receiver; or
                        (C) acting based upon a suit, claim, or cause of
                    action purchased from, assigned by, or otherwise
                    conveyed in whole or in part by a covered financial
                    company or its affiliate in connection with assistance
                    provided under this title.
                (2) Actions covered.--Paragraph (1) shall apply with respect
            to actions for gross negligence, including any similar conduct
            or conduct that demonstrates a greater disregard of a duty of
            care (than gross negligence) including intentional tortious
            conduct, as such terms are defined and determined under
            applicable State law.
                (3) Savings clause.--Nothing in this subsection shall impair
            or affect any right of the Corporation under other applicable
            law.

        (g) Damages.--In any proceeding related to any claim against a
    director, officer, employee, agent, attorney, accountant, or appraiser
    of a covered financial company, or any other party employed by or
    providing services to a covered financial company, recoverable damages
    determined to result from the improvident or otherwise improper use or
    investment of any assets of the covered financial company shall include
    principal losses and appropriate interest.

    [[Page 124 STAT. 1496]]

        (h) Bridge Financial Companies.--
                (1) Organization.--
                        (A) Purpose.--The Corporation, as receiver for one
                    or more covered financial companies or in anticipation
                    of being appointed receiver for one or more covered
                    financial companies, may organize one or more bridge
                    financial companies in accordance with this subsection.
                        (B) Authorities.--Upon the creation of a bridge
                    financial company under subparagraph (A) with respect to
                    a covered financial company, such bridge financial
                    company may--
                              (i) assume such liabilities (including
                          liabilities associated with any trust or custody
                          business, but excluding any liabilities that count
                          as regulatory capital) of such covered financial
                          company as the Corporation may, in its discretion,
                          determine to be appropriate;
                              (ii) purchase such assets (including assets
                          associated with any trust or custody business) of
                          such covered financial company as the Corporation
                          may, in its discretion, determine to be
                          appropriate; and
                              (iii) perform any other temporary function
                          which the Corporation may, in its discretion,
                          prescribe in accordance with this section.
                (2) Charter and establishment.--
                        (A) Establishment.--Except as provided in
                    subparagraph (H), where the covered financial company is
                    a covered broker or dealer, the Corporation, as receiver
                    for a covered financial company, may grant a Federal
                    charter to and approve articles of association for one
                    or more bridge financial company or companies, with
                    respect to such covered financial company which shall,
                    by operation of law and immediately upon issuance of its
                    charter and approval of its articles of association, be
                    established and operate in accordance with, and subject
                    to, such charter, articles, and this section.
                        (B) Management.--Upon its establishment, a bridge
                    financial company shall be under the management of a
                    board of directors appointed by the Corporation.
                        (C) Articles of association.--The articles of
                    association and organization certificate of a bridge
                    financial company shall have such terms as the
                    Corporation may provide, and shall be executed by such
                    representatives as the Corporation may designate.
                        (D) Terms of charter; rights and privileges.--
                    Subject to and in accordance with the provisions of this
                    subsection, the Corporation shall--
                              (i) establish the terms of the charter of a
                          bridge financial company and the rights, powers,
                          authorities, and privileges of a bridge financial
                          company granted by the charter or as an incident
                          thereto; and
                              (ii) provide for, and establish the terms and
                          conditions governing, the management (including
                          the bylaws and the number of directors of the
                          board of directors) and operations of the bridge
                          financial company.
                        (E) Transfer of rights and privileges of covered
                    financial company.--

    [[Page 124 STAT. 1497]]

                              (i) In general.--Notwithstanding any other
                          provision of Federal or State law, the Corporation
                          may provide for a bridge financial company to
                          succeed to and assume any rights, powers,
                          authorities, or privileges of the covered
                          financial company with respect to which the bridge
                          financial company was established and, upon such
                          determination by the Corporation, the bridge
                          financial company shall immediately and by
                          operation of law succeed to and assume such
                          rights, powers, authorities, and privileges.
                              (ii) Effective without approval.--Any
                          succession to or assumption by a bridge financial
                          company of rights, powers, authorities, or
                          privileges of a covered financial company under
                          clause (i) or otherwise shall be effective without
                          any further approval under Federal or State law,
                          assignment, or consent with respect thereto.
                        (F) Corporate governance and election and
                    designation of body of law.--To the extent permitted by
                    the Corporation and consistent with this section and any
                    rules, regulations, or directives issued by the
                    Corporation under this section, a bridge financial
                    company may elect to follow the corporate governance
                    practices and procedures that are applicable to a
                    corporation incorporated under the general corporation
                    law of the State of Delaware, or the State of
                    incorporation or organization of the covered financial
                    company with respect to which the bridge financial
                    company was established, as such law may be amended from
                    time to time.
                        (G) Capital.--
                              (i) Capital not required.--Notwithstanding any
                          other provision of Federal or State law, a bridge
                          financial company may, if permitted by the
                          Corporation, operate without any capital or
                          surplus, or with such capital or surplus as the
                          Corporation may in its discretion determine to be
                          appropriate.
                              (ii) No contribution by the corporation
                          required.--The Corporation is not required to pay
                          capital into a bridge financial company or to
                          issue any capital stock on behalf of a bridge
                          financial company established under this
                          subsection.
                              (iii) Authority.--If the Corporation
                          determines that such action is advisable, the
                          Corporation may cause capital stock or other
                          securities of a bridge financial company
                          established with respect to a covered financial
                          company to be issued and offered for sale in such
                          amounts and on such terms and conditions as the
                          Corporation may, in its discretion, determine.
                              (iv) Operating funds in lieu of capital and
                          implementation plan.--Upon the organization of a
                          bridge financial company, and thereafter as the
                          Corporation may, in its discretion, determine to
                          be necessary or advisable, the Corporation may
                          make available to the bridge financial company,
                          subject to the plan described in subsection
                          (n)(9), funds for the operation of the bridge
                          financial company in lieu of capital.
                        (H) Bridge brokers or dealers.--

    [[Page 124 STAT. 1498]]

                              (i) In general.--The Corporation, as receiver
                          for a covered broker or dealer, may approve
                          articles of association for one or more bridge
                          financial companies with respect to such covered
                          broker or dealer, which bridge financial company
                          or companies shall, by operation of law and
                          immediately upon approval of its articles of
                          association--
                                        (I) be established and deemed
                                    registered with the Commission under the
                                    Securities Exchange Act of 1934 and a
                                    member of SIPC;
                                        (II) operate in accordance with such
                                    articles and this section; and
                                        (III) succeed to any and all
                                    registrations and memberships of the
                                    covered financial company with or in any
                                    self-regulatory organizations.
                              (ii) Other requirements.--Except as provided
                          in clause (i), and notwithstanding any other
                          provision of this section, the bridge financial
                          company shall be subject to the Federal securities
                          laws and all requirements with respect to being a
                          member of a self-regulatory organization, unless
                          exempted from any such requirements by the
                          Commission, as is necessary or appropriate in the
                          public interest or for the protection of
                          investors.
                              (iii) Treatment of customers.--Except as
                          otherwise provided by this title, any customer of
                          the covered broker or dealer whose account is
                          transferred to a bridge financial company shall
                          have all the rights, privileges, and protections
                          under section 205(f) and under the Securities
                          Investor Protection Act of 1970 (15 U.S.C. 78aaa
                          et seq.), that such customer would have had if the
                          account were not transferred from the covered
                          financial company under this subparagraph.
                              (iv) Operation of bridge brokers or dealers.--
                          Notwithstanding any other provision of this title,
                          the Corporation shall not operate any bridge
                          financial company created by the Corporation under
                          this title with respect to a covered broker or
                          dealer in such a manner as to adversely affect the
                          ability of customers to promptly access their
                          customer property in accordance with applicable
                          law.
                (3) Interests in and assets and obligations of covered
            financial company.--Notwithstanding paragraph (1) or (2) or any
            other provision of law--
                        (A) a bridge financial company shall assume,
                    acquire, or succeed to the assets or liabilities of a
                    covered financial company (including the assets or
                    liabilities associated with any trust or custody
                    business) only to the extent that such assets or
                    liabilities are transferred by the Corporation to the
                    bridge financial company in accordance with, and subject
                    to the restrictions set forth in, paragraph (1)(B); and
                        (B) a bridge financial company shall not assume,
                    acquire, or succeed to any obligation that a covered
                    financial company for which the Corporation has been
                    appointed receiver may have to any shareholder, member,
                    general

    [[Page 124 STAT. 1499]]

                    partner, limited partner, or other person with an
                    interest in the equity of the covered financial company
                    that arises as a result of the status of that person
                    having an equity claim in the covered financial company.
                (4) Bridge financial company treated as being in default for
            certain purposes.--A bridge financial company shall be treated
            as a covered financial company in default at such times and for
            such purposes as the Corporation may, in its discretion,
            determine.
                (5) Transfer of assets and liabilities.--
                        (A) Authority of corporation.--The Corporation, as
                    receiver for a covered financial company, may transfer
                    any assets and liabilities of a covered financial
                    company (including any assets or liabilities associated
                    with any trust or custody business) to one or more
                    bridge financial companies, in accordance with and
                    subject to the restrictions of paragraph (1).
                        (B) Subsequent transfers.--At any time after the
                    establishment of a bridge financial company with respect
                    to a covered financial company, the Corporation, as
                    receiver, may transfer any assets and liabilities of
                    such covered financial company as the Corporation may,
                    in its discretion, determine to be appropriate in
                    accordance with and subject to the restrictions of
                    paragraph (1).
                        (C) Treatment of trust or custody business.--For
                    purposes of this paragraph, the trust or custody
                    business, including fiduciary appointments, held by any
                    covered financial company is included among its assets
                    and liabilities.
                        (D) Effective without approval.--The transfer of any
                    assets or liabilities, including those associated with
                    any trust or custody business of a covered financial
                    company, to a bridge financial company shall be
                    effective without any further approval under Federal or
                    State law, assignment, or consent with respect thereto.
                        (E) Equitable treatment of similarly situated
                    creditors.--The Corporation shall treat all creditors of
                    a covered financial company that are similarly situated
                    under subsection (b)(1), in a similar manner in
                    exercising the authority of the Corporation under this
                    subsection to transfer any assets or liabilities of the
                    covered financial company to one or more bridge
                    financial companies established with respect to such
                    covered financial company, except that the Corporation
                    may take any action (including making payments, subject
                    to subsection (o)(1)(D)(i)) that does not comply with
                    this subparagraph, if--
                              (i) the Corporation determines that such
                          action is necessary--
                                        (I) to maximize the value of the
                                    assets of the covered financial company;
                                        (II) to maximize the present value
                                    return from the sale or other
                                    disposition of the assets of the covered
                                    financial company; or
                                        (III) to minimize the amount of any
                                    loss realized upon the sale or other
                                    disposition of the assets of the covered
                                    financial company; and

    [[Page 124 STAT. 1500]]

                              (ii) all creditors that are similarly situated
                          under subsection (b)(1) receive not less than the
                          amount provided under paragraphs (2) and (3) of
                          subsection (d).
                        (F) Limitation on transfer of liabilities.--
                    Notwithstanding any other provision of law, the
                    aggregate amount of liabilities of a covered financial
                    company that are transferred to, or assumed by, a bridge
                    financial company from a covered financial company may
                    not exceed the aggregate amount of the assets of the
                    covered financial company that are transferred to, or
                    purchased by, the bridge financial company from the
                    covered financial company.
                (6) Stay of judicial action.--Any judicial action to which a
            bridge financial company becomes a party by virtue of its
            acquisition of any assets or assumption of any liabilities of a
            covered financial company shall be stayed from further
            proceedings for a period of not longer than 45 days (or such
            longer period as may be agreed to upon the consent of all
            parties) at the request of the bridge financial company.
                (7) Agreements against interest of the bridge financial
            company.--No agreement that tends to diminish or defeat the
            interest of the bridge financial company in any asset of a
            covered financial company acquired by the bridge financial
            company shall be valid against the bridge financial company,
            unless such agreement--
                        (A) is in writing;
                        (B) was executed by an authorized officer or
                    representative of the covered financial company or
                    confirmed in the ordinary course of business by the
                    covered financial company; and
                        (C) has been on the official record of the company,
                    since the time of its execution, or with which, the
                    party claiming under the agreement provides
                    documentation of such agreement and its authorized
                    execution or confirmation by the covered financial
                    company that is acceptable to the receiver.
                (8) No federal status.--
                        (A) Agency status.--A bridge financial company is
                    not an agency, establishment, or instrumentality of the
                    United States.
                        (B) Employee status.--Representatives for purposes
                    of paragraph (1)(B), directors, officers, employees, or
                    agents of a bridge financial company are not, solely by
                    virtue of service in any such capacity, officers or
                    employees of the United States. Any employee of the
                    Corporation or of any Federal instrumentality who serves
                    at the request of the Corporation as a representative
                    for purposes of paragraph (1)(B), director, officer,
                    employee, or agent of a bridge financial company shall
                    not--
                              (i) solely by virtue of service in any such
                          capacity lose any existing status as an officer or
                          employee of the United States for purposes of
                          title 5, United States Code, or any other
                          provision of law; or
                              (ii) receive any salary or benefits for
                          service in any such capacity with respect to a
                          bridge financial company in addition to such
                          salary or benefits as are obtained through
                          employment with the Corporation or such Federal
                          instrumentality.

    [[Page 124 STAT. 1501]]

                (9) Funding authorized.--The Corporation may, subject to the
            plan described in subsection (n)(9), provide funding to
            facilitate any transaction described in subparagraph (A), (B),
            (C), or (D) of paragraph (13) with respect to any bridge
            financial company, or facilitate the acquisition by a bridge
            financial company of any assets, or the assumption of any
            liabilities, of a covered financial company for which the
            Corporation has been appointed receiver.
                (10) Exempt tax status.--Notwithstanding any other provision
            of Federal or State law, a bridge financial company, its
            franchise, property, and income shall be exempt from all
            taxation now or hereafter imposed by the United States, by any
            territory, dependency, or possession thereof, or by any State,
            county, municipality, or local taxing authority.
                (11) Federal agency approval; antitrust review.--If a
            transaction involving the merger or sale of a bridge financial
            company requires approval by a Federal agency, the transaction
            may not be consummated before the 5th calendar day after the
            date of approval by the Federal agency responsible for such
            approval with respect thereto.
            If, <<NOTE: Notification. Reports. Deadline.>> in connection
            with any such approval a report on competitive factors from the
            Attorney General is required, the Federal agency responsible for
            such approval shall promptly notify the Attorney General of the
            proposed transaction and the Attorney General shall provide the
            required report within 10 days of the request.
            If <<NOTE: Termination date.>>  a notification is required under
            section 7A of the Clayton Act with respect to such transaction,
            the required waiting period shall end on the 15th day after the
            date on which the Attorney General and the Federal Trade
            Commission receive such notification, unless the waiting period
            is terminated earlier under section 7A(b)(2) of the Clayton Act,
            or extended under section 7A(e)(2) of that Act.
                (12) Duration of bridge <<NOTE: Termination
            date.>> financial company.--Subject to paragraphs (13) and (14),
            the status of a bridge financial company as such shall terminate
            at the end of the 2-year period following the date on which it
            was granted a charter. The Corporation may, in its discretion,
            extend the status of the bridge financial company as such for no
            more than 3 additional 1-year periods.
                (13) Termination of bridge financial company status.--The
            status of any bridge financial company as such shall terminate
            upon the earliest of--
                        (A) the date of the merger or consolidation of the
                    bridge financial company with a company that is not a
                    bridge financial company;
                        (B) at the election of the Corporation, the sale of
                    a majority of the capital stock of the bridge financial
                    company to a company other than the Corporation and
                    other than another bridge financial company;
                        (C) the sale of 80 percent, or more, of the capital
                    stock of the bridge financial company to a person other
                    than the Corporation and other than another bridge
                    financial company;
                        (D) at the election of the Corporation, either the
                    assumption of all or substantially all of the
                    liabilities of the bridge financial company by a company
                    that is not a bridge financial company, or the
                    acquisition of all or

    [[Page 124 STAT. 1502]]

                    substantially all of the assets of the bridge financial
                    company by a company that is not a bridge financial
                    company, or other entity as permitted under applicable
                    law; and
                        (E) the expiration of the period provided in
                    paragraph (12), or the earlier dissolution of the bridge
                    financial company, as provided in paragraph (15).
                (14) Effect of termination events.--
                        (A) Merger or consolidation.--A
                    merger <<NOTE: Delaware.>> or consolidation, described
                    in paragraph (13)(A) shall be conducted in accordance
                    with, and shall have the effect provided in, the
                    provisions of applicable law. For the purpose of
                    effecting such a merger or consolidation, the bridge
                    financial company shall be treated as a corporation
                    organized under the laws of the State of Delaware
                    (unless the law of another State has been selected by
                    the bridge financial company in accordance with
                    paragraph (2)(F)), and the Corporation shall be treated
                    as the sole shareholder thereof, notwithstanding any
                    other provision of State or Federal law.
                        (B) Charter conversion.--Following the sale of a
                    majority of the capital stock of the bridge financial
                    company, as provided in paragraph (13)(B), the
                    Corporation may amend the charter of the bridge
                    financial company to reflect the termination of the
                    status of the bridge financial company as such,
                    whereupon the company shall have all of the rights,
                    powers, and privileges under its constituent documents
                    and applicable Federal or State law. In connection
                    therewith, the Corporation may take such steps as may be
                    necessary or convenient to reincorporate the bridge
                    financial company under the laws of a State and,
                    notwithstanding any provisions of Federal or State law,
                    such State-chartered corporation shall be deemed to
                    succeed by operation of law to such rights, titles,
                    powers, and interests of the bridge financial company as
                    the Corporation may provide, with the same effect as if
                    the bridge financial company had merged with the State-
                    chartered corporation under provisions of the corporate
                    laws of such State.
                        (C) Sale of stock.--Following the sale of 80 percent
                    or more of the capital stock of a bridge financial
                    company, as provided in paragraph (13)(C), the company
                    shall have all of the rights, powers, and privileges
                    under its constituent documents and applicable Federal
                    or State law. In connection therewith, the Corporation
                    may take such steps as may be necessary or convenient to
                    reincorporate the bridge financial company under the
                    laws of a State and, notwithstanding any provisions of
                    Federal or State law, the State-chartered corporation
                    shall be deemed to succeed by operation of law to such
                    rights, titles, powers and interests of the bridge
                    financial company as the Corporation may provide, with
                    the same effect as if the bridge financial company had
                    merged with the State-chartered corporation under
                    provisions of the corporate laws of such State.
                        (D) Assumption of liabilities and sale of assets.--
                    Following the assumption of all or substantially all of
                    the liabilities of the bridge financial company, or the
                    sale of

    [[Page 124 STAT. 1503]]

                    all or substantially all of the assets of the bridge
                    financial company, as provided in paragraph (13)(D), at
                    the election of the Corporation, the bridge financial
                    company may retain its status as such for the period
                    provided in paragraph (12) or may be dissolved at the
                    election of the Corporation.
                        (E) Amendments to charter.--Following the
                    consummation of a transaction described in subparagraph
                    (A), (B), (C), or (D) of paragraph (13), the charter of
                    the resulting company shall be amended to reflect the
                    termination of bridge financial company status, if
                    appropriate.
                (15) Dissolution of bridge financial company.--
                        (A) In general.--Notwithstanding any other provision
                    of Federal or State law, if the status of a bridge
                    financial company as such has not previously been
                    terminated by the occurrence of an event specified in
                    subparagraph (A), (B), (C), or (D) of paragraph (13)--
                              (i) the Corporation may, in its discretion,
                          dissolve the bridge financial company in
                          accordance with this paragraph at any time; and
                              (ii) the <<NOTE: Time period.>> Corporation
                          shall promptly commence dissolution proceedings in
                          accordance with this paragraph upon the expiration
                          of the 2-year period following the date on which
                          the bridge financial company was chartered, or any
                          extension thereof, as provided in paragraph (12).
                        (B) Procedures.--The Corporation shall remain the
                    receiver for a bridge financial company for the purpose
                    of dissolving the bridge financial company. The
                    Corporation as receiver for a bridge financial company
                    shall wind up the affairs of the bridge financial
                    company in conformity with the provisions of law
                    relating to the liquidation of covered financial
                    companies under this title. With respect to any such
                    bridge financial company, the Corporation as receiver
                    shall have all the rights, powers, and privileges and
                    shall perform the duties related to the exercise of such
                    rights, powers, or privileges granted by law to the
                    Corporation as receiver for a covered financial company
                    under this title and, notwithstanding any other
                    provision of law, in the exercise of such rights,
                    powers, and privileges, the Corporation shall not be
                    subject to the direction or supervision of any State
                    agency or other Federal agency.
                (16) Authority to obtain credit.--
                        (A) In general.--A bridge financial company may
                    obtain unsecured credit and issue unsecured debt.
                        (B) Inability to obtain credit.--If a bridge
                    financial company is unable to obtain unsecured credit
                    or issue unsecured debt, the Corporation may authorize
                    the obtaining of credit or the issuance of debt by the
                    bridge financial company--
                              (i) with priority over any or all of the
                          obligations of the bridge financial company;
                              (ii) secured by a lien on property of the
                          bridge financial company that is not otherwise
                          subject to a lien; or
                              (iii) secured by a junior lien on property of
                          the bridge financial company that is subject to a
                          lien.
                        (C) Limitations.--

    [[Page 124 STAT. 1504]]

                              (i) In general.--The Corporation, after notice
                          and a hearing, may authorize the obtaining of
                          credit or the issuance of debt by a bridge
                          financial company that is secured by a senior or
                          equal lien on property of the bridge financial
                          company that is subject to a lien, only if--
                                        (I) the bridge financial company is
                                    unable to otherwise obtain such credit
                                    or issue such debt; and
                                        (II) there is adequate protection of
                                    the interest of the holder of the lien
                                    on the property with respect to which
                                    such senior or equal lien is proposed to
                                    be granted.
                              (ii) Hearing.--The hearing required pursuant
                          to this subparagraph shall be before a court of
                          the United States, which shall have jurisdiction
                          to conduct such hearing and to authorize a bridge
                          financial company to obtain secured credit under
                          clause (i).
                        (D) Burden of proof.--In any hearing under this
                    paragraph, the Corporation has the burden of proof on
                    the issue of adequate protection.
                        (E) Qualified financial contracts.--No credit or
                    debt obtained or issued by a bridge financial company
                    may contain terms that impair the rights of a
                    counterparty to a qualified financial contract upon a
                    default by the bridge financial company, other than the
                    priority of such counterparty's unsecured claim (after
                    the exercise of rights) relative to the priority of the
                    bridge financial company's obligations in respect of
                    such credit or debt, unless such counterparty consents
                    in writing to any such impairment.
                (17) Effect on debts and liens.--The reversal or
            modification on appeal of an authorization under this subsection
            to obtain credit or issue debt, or of a grant under this section
            of a priority or a lien, does not affect the validity of any
            debt so issued, or any priority or lien so granted, to an entity
            that extended such credit in good faith, whether or not such
            entity knew of the pendency of the appeal, unless such
            authorization and the issuance of such debt, or the granting of
            such priority or lien, were stayed pending appeal.

        (i) Sharing Records.--If the Corporation has been appointed as
    receiver for a covered financial company, other Federal regulators shall
    make all records relating to the covered financial company available to
    the Corporation, which may be used by the Corporation in any manner that
    the Corporation determines to be appropriate.
        (j) Expedited Procedures for Certain Claims.--
                (1) Time for filing notice of appeal.--
            The <<NOTE: Deadlines.>> notice of appeal of any order, whether
            interlocutory or final, entered in any case brought by the
            Corporation against a director, officer, employee, agent,
            attorney, accountant, or appraiser of the covered financial
            company, or any other person employed by or providing services
            to a covered financial company, shall be filed not later than 30
            days after the date of entry of the order. The hearing of the
            appeal shall be held not later than 120 days after the date of
            the notice of appeal. The appeal shall be decided not later than
            180 days after the date of the notice of appeal.

    [[Page 124 STAT. 1505]]

                (2) Scheduling.--The <<NOTE: Courts.>> court shall expedite
            the consideration of any case brought by the Corporation against
            a director, officer, employee, agent, attorney, accountant, or
            appraiser of a covered financial company or any other person
            employed by or providing services to a covered financial
            company. As far as practicable, the court shall give such case
            priority on its docket.
                (3) Judicial discretion.--The court may modify the schedule
            and limitations stated in paragraphs (1) and (2) in a particular
            case, based on a specific finding that the ends of justice that
            would be served by making such a modification would outweigh the
            best interest of the public in having the case resolved
            expeditiously.

        (k) Foreign Investigations.--The Corporation, as receiver for any
    covered financial company, and for purposes of carrying out any power,
    authority, or duty with respect to a covered financial company--
                (1) may request the assistance of any foreign financial
            authority and provide assistance to any foreign financial
            authority in accordance with section 8(v) of the Federal Deposit
            Insurance Act, as if the covered financial company were an
            insured depository institution, the Corporation were the
            appropriate Federal banking agency for the company, and any
            foreign financial authority were the foreign banking authority;
            and
                (2) may maintain an office to coordinate foreign
            investigations or investigations on behalf of foreign financial
            authorities.

        (l) Prohibition on Entering Secrecy Agreements and Protective
    Orders.--The Corporation may not enter into any agreement or approve any
    protective order which prohibits the Corporation from disclosing the
    terms of any settlement of an administrative or other action for damages
    or restitution brought by the Corporation in its capacity as receiver
    for a covered financial company.
        (m) Liquidation of Certain Covered Financial Companies or Bridge
    Financial Companies.--
                (1) In <<NOTE: Applicability.>> general.--Except as
            specifically provided in this section, and notwithstanding any
            other provision of law, the Corporation, in connection with the
            liquidation of any covered financial company or bridge financial
            company with respect to which the Corporation has been appointed
            as receiver, shall--
                        (A) in the case of any covered financial company or
                    bridge financial company that is a stockbroker, but is
                    not a member of the Securities Investor Protection
                    Corporation, apply the provisions of subchapter III of
                    chapter 7 of the Bankruptcy Code, in respect of the
                    distribution to any customer of all customer name
                    security and customer property and member property, as
                    if such covered financial company or bridge financial
                    company were a debtor for purposes of such subchapter;
                    or
                        (B) in the case of any covered financial company or
                    bridge financial company that is a commodity broker,
                    apply the provisions of subchapter IV of chapter 7 the
                    Bankruptcy Code, in respect of the distribution to any
                    customer of all customer property and member property,
                    as if such covered financial company or bridge financial
                    company were a debtor for purposes of such subchapter.
                (2) Definitions.--For purposes of this subsection--

    [[Page 124 STAT. 1506]]

                        (A) the terms ``customer'', ``customer name
                    security'', and ``customer property and member
                    property'' have the same meanings as in sections 741 and
                    761 of title 11, United States Code; and
                        (B) the terms ``commodity broker'' and
                    ``stockbroker'' have the same meanings as in section 101
                    of the Bankruptcy Code.

        (n) Orderly Liquidation Fund.--
                (1) Establishment.--There is established in the Treasury of
            the United States a separate fund to be known as the ``Orderly
            Liquidation Fund'', which shall be available to the Corporation
            to carry out the authorities contained in this title, for the
            cost of actions authorized by this title, including the orderly
            liquidation of covered financial companies, payment of
            administrative expenses, the payment of principal and interest
            by the Corporation on obligations issued under paragraph (5),
            and the exercise of the authorities of the Corporation under
            this title.
                (2) Proceeds.--Amounts received by the Corporation,
            including assessments received under subsection (o), proceeds of
            obligations issued under paragraph (5), interest and other
            earnings from investments, and repayments to the Corporation by
            covered financial companies, shall be deposited into the Fund.
                (3) Management.--The Corporation shall manage the Fund in
            accordance with this subsection and the policies and procedures
            established under section 203(d).
                (4) Investments.--At the request of the Corporation, the
            Secretary may invest such portion of amounts held in the Fund
            that are not, in the judgment of the Corporation, required to
            meet the current needs of the Corporation, in obligations of the
            United States having suitable maturities, as determined by the
            Corporation. The interest on and the proceeds from the sale or
            redemption of such obligations shall be credited to the Fund.
                (5) Authority to issue obligations.--
                        (A) Corporation authorized to issue obligations.--
                    Upon appointment by the Secretary of the Corporation as
                    receiver for a covered financial company, the
                    Corporation is authorized to issue obligations to the
                    Secretary.
                        (B) Secretary authorized to purchase obligations.--
                    The Secretary may, under such terms and conditions as
                    the Secretary may require, purchase or agree to purchase
                    any obligations issued under subparagraph (A), and for
                    such purpose, the Secretary is authorized to use as a
                    public debt transaction the proceeds of the sale of any
                    securities issued under chapter 31 of title 31, United
                    States Code, and the purposes for which securities may
                    be issued under chapter 31 of title 31, United States
                    Code, are extended to include such purchases.
                        (C) Interest rate.--Each purchase of obligations by
                    the Secretary under this paragraph shall be upon such
                    terms and conditions as to yield a return at a rate
                    determined by the Secretary, taking into consideration
                    the current average yield on outstanding marketable
                    obligations of the United States of comparable maturity,
                    plus an

    [[Page 124 STAT. 1507]]

                    interest rate surcharge to be determined by the
                    Secretary, which shall be greater than the difference
                    between--
                              (i) the current average rate on an index of
                          corporate obligations of comparable maturity; and
                              (ii) the current average rate on outstanding
                          marketable obligations of the United States of
                          comparable maturity.
                        (D) Secretary authorized to sell obligations.--The
                    Secretary may <<NOTE: Determination.>> sell, upon such
                    terms and conditions as the Secretary shall determine,
                    any of the obligations acquired under this paragraph.
                        (E) Public debt transactions.--All purchases and
                    sales by the Secretary of such obligations under this
                    paragraph shall be treated as public debt transactions
                    of the United States, and the proceeds from the sale of
                    any obligations acquired by the Secretary under this
                    paragraph shall be deposited into the Treasury of the
                    United States as miscellaneous receipts.
                (6) Maximum obligation limitation.--The Corporation may not,
            in connection with the orderly liquidation of a covered
            financial company, issue or incur any obligation, if, after
            issuing or incurring the obligation, the aggregate amount of
            such obligations outstanding under this subsection for each
            covered financial company would exceed--
                        (A) an amount that is equal to 10 percent of the
                    total consolidated assets of the covered financial
                    company, based on the most recent financial statement
                    available, during the 30-day period immediately
                    following the date of appointment of the Corporation as
                    receiver (or a shorter time period if the Corporation
                    has calculated the amount described under subparagraph
                    (B)); and
                        (B) the amount that is equal to 90 percent of the
                    fair value of the total consolidated assets of each
                    covered financial company that are available for
                    repayment, after the time period described in
                    subparagraph (A).
                (7) Rulemaking.--The Corporation and the Secretary shall
            jointly, in consultation with the Council, prescribe regulations
            governing the calculation of the maximum obligation limitation
            defined in this paragraph.
                (8) Rule of construction.--
                        (A) In general.--Nothing in this section shall be
                    construed to affect the authority of the Corporation
                    under subsection (a) or (b) of section 14 or section
                    15(c)(5) of the Federal Deposit Insurance Act (12 U.S.C.
                    1824, 1825(c)(5)), the management of the Deposit
                    Insurance Fund by the Corporation, or the resolution of
                    insured depository institutions, provided that--
                              (i) the authorities of the Corporation
                          contained in this title shall not be used to
                          assist the Deposit Insurance Fund or to assist any
                          financial company under applicable law other than
                          this Act;
                              (ii) the authorities of the Corporation
                          relating to the Deposit Insurance Fund, or any
                          other responsibilities of the Corporation under
                          applicable law other than this title, shall not be
                          used to assist a covered financial company
                          pursuant to this title; and

    [[Page 124 STAT. 1508]]

                              (iii) the Deposit Insurance Fund may not be
                          used in any manner to otherwise circumvent the
                          purposes of this title.
                        (B) Valuation.--For purposes of determining the
                    amount of obligations under this subsection--
                              (i) the Corporation shall include as an
                          obligation any contingent liability of the
                          Corporation pursuant to this title; and
                              (ii) the Corporation shall value any
                          contingent liability at its expected cost to the
                          Corporation.
                (9) Orderly liquidation and repayment plans.--
                        (A) Orderly liquidation plan.--Amounts in the Fund
                    shall be available to the Corporation with regard to a
                    covered financial company for which the Corporation is
                    appointed receiver after the Corporation has developed
                    an orderly liquidation plan that is acceptable to the
                    Secretary with regard to such covered financial company,
                    including the provision and use of funds, including
                    taking any actions specified under section 204(d) and
                    subsection (h)(2)(G)(iv) and (h)(9) of this section, and
                    payments to third parties. The orderly liquidation plan
                    shall take into account actions to avoid or mitigate
                    potential adverse effects on low income, minority, or
                    underserved communities affected by the failure of the
                    covered financial company, and shall provide for
                    coordination with the primary financial regulatory
                    agencies, as appropriate, to ensure that such actions
                    are taken. The Corporation may, at any time, amend any
                    orderly liquidation plan approved by the Secretary with
                    the concurrence of the Secretary.
                        (B) Mandatory repayment plan.--
                              (i) In general.--
                          No <<NOTE: Contracts.>> amount authorized under
                          paragraph (6)(B) may be provided by the Secretary
                          to the Corporation under paragraph (5), unless an
                          agreement is in effect between the Secretary and
                          the Corporation that--
                                        (I) provides a specific plan and
                                    schedule to achieve the repayment of the
                                    outstanding amount of any borrowing
                                    under paragraph (5); and
                                        (II) demonstrates that income to the
                                    Corporation from the liquidated assets
                                    of the covered financial company and
                                    assessments under subsection (o) will be
                                    sufficient to amortize the outstanding
                                    balance within the period established in
                                    the repayment schedule and pay the
                                    interest accruing on such balance within
                                    the time provided in subsection
                                    (o)(1)(B).
                              (ii) Consultation with and report to
                          congress.--The Secretary and the Corporation
                          shall--
                                        (I) consult with the Committee on
                                    Banking, Housing, and Urban Affairs of
                                    the Senate and the Committee on
                                    Financial Services of the House of
                                    Representatives on the terms of any
                                    repayment schedule agreement; and
                                        (II) submit <<NOTE: Records. Time
                                    period.>> a copy of the repayment
                                    schedule agreement to the Committees
                                    described in subclause (I) before the
                                    end of the 30-day period beginning on
                                    the date on which any amount is provided

    [[Page 124 STAT. 1509]]

                                    by the Secretary to the Corporation
                                    under paragraph (5).
                (10) Implementation expenses.--
                        (A) In general.--Reasonable implementation expenses
                    of the Corporation incurred after the date of enactment
                    of this Act shall be treated as expenses of the Council.
                        (B) Requests for reimbursement.--The Corporation
                    shall periodically submit a request for reimbursement
                    for implementation expenses to the Chairperson of the
                    Council, who shall arrange for prompt reimbursement to
                    the Corporation of reasonable implementation expenses.
                        (C) Definition.--As used in this paragraph, the term
                    ``implementation expenses''--
                              (i) means costs incurred by the Corporation
                          beginning on the date of enactment of this Act, as
                          part of its efforts to implement this title that
                          do not relate to a particular covered financial
                          company; and
                              (ii) includes the costs incurred in connection
                          with the development of policies, procedures,
                          rules, and regulations and other planning
                          activities of the Corporation consistent with
                          carrying out this title.

        (o) Assessments.--
                (1) Risk-based assessments.--
                        (A) Eligible financial companies defined.--For
                    purposes of this subsection, the term ``eligible
                    financial company'' means any bank holding company with
                    total consolidated assets equal to or greater than
                    $50,000,000,000 and any nonbank financial company
                    supervised by the Board of Governors.
                        (B) Assessments.--
                    The <<NOTE: Deadline.>> Corporation shall charge one or
                    more risk-based assessments in accordance with the
                    provisions of subparagraph (D), if such assessments are
                    necessary to pay in full the obligations issued by the
                    Corporation to the Secretary under this title within 60
                    months of the date of issuance of such obligations.
                        (C) Extensions authorized.--The Corporation may,
                    with the approval of the Secretary, extend the time
                    period under subparagraph (B), if the Corporation
                    determines that an extension is necessary to avoid a
                    serious adverse effect on the financial system of the
                    United States.
                        (D) Application of assessments.--To meet the
                    requirements of subparagraph (B), the Corporation
                    shall--
                              (i) impose assessments, as soon as
                          practicable, on any claimant that received
                          additional payments or amounts from the
                          Corporation pursuant to subsection (b)(4), (d)(4),
                          or (h)(5)(E), except for payments or amounts
                          necessary to initiate and continue operations
                          essential to implementation of the receivership or
                          any bridge financial company, to recover on a
                          cumulative basis, the entire difference between--
                                        (I) the aggregate value the claimant
                                    received from the Corporation on a claim
                                    pursuant to this title (including
                                    pursuant to subsection (b)(4), (d)(4),
                                    and (h)(5)(E)), as of the date on which
                                    such value was received; and
                                        (II) the value the claimant was
                                    entitled to receive from the Corporation
                                    on such claim solely

    [[Page 124 STAT. 1510]]

                                    from the proceeds of the liquidation of
                                    the covered financial company under this
                                    title; and
                              (ii) if the amounts to be recovered on a
                          cumulative basis under clause (i) are insufficient
                          to meet the requirements of subparagraph (B),
                          after taking into account the considerations set
                          forth in paragraph (4), impose assessments on--
                                        (I) eligible financial companies;
                                    and
                                        (II) financial companies with total
                                    consolidated assets equal to or greater
                                    than $50,000,000,000 that are not
                                    eligible financial companies.
                        (E) Provision of financing.--Payments or amounts
                    necessary to initiate and continue operations essential
                    to implementation of the receivership or any bridge
                    financial company described in subparagraph (D)(i) shall
                    not include the provision of financing, as defined by
                    rule of the Corporation, to third parties.
                (2) Graduated assessment rate.--The Corporation shall impose
            assessments on a graduated basis, with financial companies
            having greater assets and risk being assessed at a higher rate.
                (3) Notification and payment.--The Corporation shall notify
            each financial company of that company's assessment under this
            subsection. Any financial company subject to assessment under
            this subsection shall pay such assessment in accordance with the
            regulations prescribed pursuant to paragraph (6).
                (4) Risk-based assessment considerations.--
            In <<NOTE: Recommenda- tion.>> imposing assessments under
            paragraph (1)(D)(ii), the Corporation shall use a risk matrix.
            The Council shall make a recommendation to the Corporation on
            the risk matrix to be used in imposing such assessments, and the
            Corporation shall take into account any such recommendation in
            the establishment of the risk matrix to be used to impose such
            assessments. In recommending or establishing such risk matrix,
            the Council and the Corporation, respectively, shall take into
            account--
                        (A) economic conditions generally affecting
                    financial companies so as to allow assessments to
                    increase during more favorable economic conditions and
                    to decrease during less favorable economic conditions;
                        (B) any assessments imposed on a financial company
                    or an affiliate of a financial company that--
                              (i) is an insured depository institution,
                          assessed pursuant to section 7 or 13(c)(4)(G) of
                          the Federal Deposit Insurance Act;
                              (ii) is a member of the Securities Investor
                          Protection Corporation, assessed pursuant to
                          section 4 of the Securities Investor Protection
                          Act of 1970 (15 U.S.C. 78ddd);
                              (iii) is an insured credit union, assessed
                          pursuant to section 202(c)(1)(A)(i) of the Federal
                          Credit Union Act (12 U.S.C. 1782(c)(1)(A)(i)); or
                              (iv) is an insurance company, assessed
                          pursuant to applicable State law to cover (or
                          reimburse payments made to cover) the costs of the
                          rehabilitation, liquidation, or other State
                          insolvency proceeding with respect to 1 or more
                          insurance companies;

    [[Page 124 STAT. 1511]]

                        (C) the risks presented by the financial company to
                    the financial system and the extent to which the
                    financial company has benefitted, or likely would
                    benefit, from the orderly liquidation of a financial
                    company under this title, including--
                              (i) the amount, different categories, and
                          concentrations of assets of the financial company
                          and its affiliates, including both on-balance
                          sheet and off-balance sheet assets;
                              (ii) the activities of the financial company
                          and its affiliates;
                              (iii) the relevant market share of the
                          financial company and its affiliates;
                              (iv) the extent to which the financial company
                          is leveraged;
                              (v) the potential exposure to sudden calls on
                          liquidity precipitated by economic distress;
                              (vi) the amount, maturity, volatility, and
                          stability of the company's financial obligations
                          to, and relationship with, other financial
                          companies;
                              (vii) the amount, maturity, volatility, and
                          stability of the liabilities of the company,
                          including the degree of reliance on short-term
                          funding, taking into consideration existing
                          systems for measuring a company's risk-based
                          capital;
                              (viii) the stability and variety of the
                          company's sources of funding;
                              (ix) the company's importance as a source of
                          credit for households, businesses, and State and
                          local governments and as a source of liquidity for
                          the financial system;
                              (x) the extent to which assets are simply
                          managed and not owned by the financial company and
                          the extent to which ownership of assets under
                          management is diffuse; and
                              (xi) the amount, different categories, and
                          concentrations of liabilities, both insured and
                          uninsured, contingent and noncontingent, including
                          both on-balance sheet and off-balance sheet
                          liabilities, of the financial company and its
                          affiliates;
                        (D) any risks presented by the financial company
                    during the 10-year period immediately prior to the
                    appointment of the Corporation as receiver for the
                    covered financial company that contributed to the
                    failure of the covered financial company; and
                        (E) such other risk-related factors as the
                    Corporation, or the Council, as applicable, may
                    determine to be appropriate.
                (5) Collection of information.--The Corporation may impose
            on covered financial companies such collection of information
            requirements as the Corporation deems necessary to carry out
            this subsection after the appointment of the Corporation as
            receiver under this title.
                (6) Rulemaking.--
                        (A) In general.--
                    The <<NOTE: Consultation.>> Corporation shall prescribe
                    regulations to carry out this subsection. The
                    Corporation shall

    [[Page 124 STAT. 1512]]

                    consult with the Secretary in the development and
                    finalization of such regulations.
                        (B) Equitable treatment.--The regulations prescribed
                    under subparagraph (A) shall take into account the
                    differences in risks posed to the financial stability of
                    the United States by financial companies, the
                    differences in the liability structures of financial
                    companies, and the different bases for other assessments
                    that such financial companies may be required to pay, to
                    ensure that assessed financial companies are treated
                    equitably and that assessments under this subsection
                    reflect such differences.

        (p) Unenforceability of Certain Agreements.--
                (1) In general.--No provision described in paragraph (2)
            shall be enforceable against or impose any liability on any
            person, as such enforcement or liability shall be contrary to
            public policy.
                (2) Prohibited provisions.--A provision described in this
            paragraph is any term contained in any existing or future
            standstill, confidentiality, or other agreement that, directly
            or indirectly--
                        (A) affects, restricts, or limits the ability of any
                    person to offer to acquire or acquire;
                        (B) prohibits any person from offering to acquire or
                    acquiring; or
                        (C) prohibits any person from using any previously
                    disclosed information in connection with any such offer
                    to acquire or acquisition of,
            all or part of any covered financial company, including any
            liabilities, assets, or interest therein, in connection with any
            transaction in which the Corporation exercises its authority
            under this title.

        (q) Other Exemptions.--
                (1) In general.--When acting as a receiver under this
            title--
                        (A) the Corporation, including its franchise, its
                    capital, reserves and surplus, and its income, shall be
                    exempt from all taxation imposed by any State, county,
                    municipality, or local taxing authority, except that any
                    real property of the Corporation shall be subject to
                    State, territorial, county, municipal, or local taxation
                    to the same extent according to its value as other real
                    property is taxed, except that, notwithstanding the
                    failure of any person to challenge an assessment under
                    State law of the value of such property, such value, and
                    the tax thereon, shall be determined as of the period
                    for which such tax is imposed;
                        (B) no property of the Corporation shall be subject
                    to levy, attachment, garnishment, foreclosure, or sale
                    without the consent of the Corporation, nor shall any
                    involuntary lien attach to the property of the
                    Corporation; and
                        (C) the Corporation shall not be liable for any
                    amounts in the nature of penalties or fines, including
                    those arising from the failure of any person to pay any
                    real property, personal property, probate, or recording
                    tax or any recording or filing fees when due; and
                        (D) the Corporation shall be exempt from all
                    prosecution by the United States or any State, county,
                    municipality, or local authority for any criminal
                    offense arising

    [[Page 124 STAT. 1513]]

                    under Federal, State, county, municipal, or local law,
                    which was allegedly committed by the covered financial
                    company, or persons acting on behalf of the covered
                    financial company, prior to the appointment of the
                    Corporation as receiver.
                (2) Limitation.--Paragraph (1) shall not apply with respect
            to any tax imposed (or other amount arising) under the Internal
            Revenue Code of 1986.

        (r) Certain Sales of Assets Prohibited.--
                (1) Persons who engaged in improper conduct with, or caused
            losses to, covered <<NOTE: Regulations.>> financial companies.--
            The Corporation shall prescribe regulations which, at a minimum,
            shall prohibit the sale of assets of a covered financial company
            by the Corporation to--
                        (A) any person who--
                              (i) has defaulted, or was a member of a
                          partnership or an officer or director of a
                          corporation that has defaulted, on 1 or more
                          obligations, the aggregate amount of which exceeds
                          $1,000,000, to such covered financial company;
                              (ii) has been found to have engaged in
                          fraudulent activity in connection with any
                          obligation referred to in clause (i); and
                              (iii) proposes to purchase any such asset in
                          whole or in part through the use of the proceeds
                          of a loan or advance of credit from the
                          Corporation or from any covered financial company;
                        (B) any person who participated, as an officer or
                    director of such covered financial company or of any
                    affiliate of such company, in a material way in any
                    transaction that resulted in a substantial loss to such
                    covered financial company; or
                        (C) any person who has demonstrated a pattern or
                    practice of defalcation regarding obligations to such
                    covered financial company.
                (2) Convicted debtors.--Except as provided in paragraph (3),
            a person may not purchase any asset of such institution from the
            receiver, if that person--
                        (A) has been convicted of an offense under section
                    215, 656, 657, 1005, 1006, 1007, 1008, 1014, 1032, 1341,
                    1343, or 1344 of title 18, United States Code, or of
                    conspiring to commit such an offense, affecting any
                    covered financial company; and
                        (B) is in default on any loan or other extension of
                    credit from such covered financial company which, if not
                    paid, will cause substantial loss to the Fund or the
                    Corporation.
                (3) Settlement of claims.--Paragraphs (1) and (2) shall not
            apply to the sale or transfer by the Corporation of any asset of
            any covered financial company to any person, if the sale or
            transfer of the asset resolves or settles, or is part of the
            resolution or settlement, of 1 or more claims that have been, or
            could have been, asserted by the Corporation against the person.
                (4) Definition of default.--For purposes of this subsection,
            the term ``default'' means a failure to comply with

    [[Page 124 STAT. 1514]]

            the terms of a loan or other obligation to such an extent that
            the property securing the obligation is foreclosed upon.

        (s) Recoupment of Compensation From Senior Executives and
    Directors.--
                (1) In general.--The Corporation, as receiver of a covered
            financial company, may recover from any current or former senior
            executive or director substantially responsible for the failed
            condition of the covered financial company any compensation
            received during the 2-year period preceding the date on which
            the Corporation was appointed as the receiver of the covered
            financial company, except that, in the case of fraud, no time
            limit shall apply.
                (2) Cost considerations.--In seeking to recover any such
            compensation, the Corporation shall weigh the financial and
            deterrent benefits of such recovery against the cost of
            executing the recovery.
                (3) Rulemaking.--The Corporation shall promulgate
            regulations to implement the requirements of this subsection,
            including defining the term ``compensation'' to mean any
            financial remuneration, including salary, bonuses, incentives,
            benefits, severance, deferred compensation, or golden parachute
            benefits, and any profits realized from the sale of the
            securities of the covered financial company.
    SEC. 211. <<NOTE: 12 USC 5391.>> MISCELLANEOUS PROVISIONS.

        (a) Clarification of Prohibition Regarding Concealment of Assets
    From Receiver or Liquidating Agent.--Section 1032(1) of title 18, United
    States Code, is amended by inserting ``the Federal Deposit Insurance
    Corporation acting as receiver for a covered financial company, in
    accordance with title II of the Dodd-Frank Wall Street Reform and
    Consumer Protection Act,'' before ``or the National Credit''.
        (b) Conforming Amendment.--Section 1032 of title 18, United States
    Code, is amended in the section heading, by striking ``of financial
    institution''.
        (c) Federal Deposit Insurance Corporation Improvement Act of 1991.--
    Section 403(a) of the Federal Deposit Insurance Corporation Improvement
    Act of 1991 (12 U.S.C. 4403(a)) is amended by inserting ``section 210(c)
    of the Dodd-Frank Wall Street Reform and Consumer Protection Act,
    section 1367 of the Federal Housing Enterprises Financial Safety and
    Soundness Act of 1992 (12 U.S.C. 4617(d)),'' after ``section 11(e) of
    the Federal Deposit Insurance Act,''.
        (d) FDIC Inspector General Reviews.--
                (1) Scope.--The <<NOTE: Audits. Investigations.>> Inspector
            General of the Corporation shall conduct, supervise, and
            coordinate audits and investigations of the liquidation of any
            covered financial company by the Corporation as receiver under
            this title, including collecting and summarizing--
                        (A) a description of actions taken by the
                    Corporation as receiver;
                        (B) a description of any material sales, transfers,
                    mergers, obligations, purchases, and other material
                    transactions entered into by the Corporation;
                        (C) an evaluation of the adequacy of the policies
                    and procedures of the Corporation under section 203(d)
                    and orderly liquidation plan under section 210(n)(14);

    [[Page 124 STAT. 1515]]

                        (D) an evaluation of the utilization by the
                    Corporation of the private sector in carrying out its
                    functions, including the adequacy of any conflict-of-
                    interest reviews; and
                        (E) an evaluation of the overall performance of the
                    Corporation in liquidating the covered financial
                    company, including administrative costs, timeliness of
                    liquidation process, and impact on the financial system.
                (2) Frequency.--Not <<NOTE: Deadlines.>> later than 6 months
            after the date of appointment of the Corporation as receiver
            under this title and every 6 months thereafter, the Inspector
            General of the Corporation shall conduct the audit and
            investigation described in paragraph (1).
                (3) Reports and testimony.--The Inspector General of the
            Corporation shall include in the semiannual reports required by
            section 5(a) of the Inspector General Act of 1978 (5 U.S.C.
            App.), a summary of the findings and evaluations under paragraph
            (1), and shall appear before the appropriate committees of
            Congress, if requested, to present each such report.
                (4) Funding.--
                        (A) Initial funding.--The expenses of the Inspector
                    General of the Corporation in carrying out this
                    subsection shall be considered administrative expenses
                    of the receivership.
                        (B) Additional funding.--If the maximum amount
                    available to the Corporation as receiver under this
                    title is insufficient to enable the Inspector General of
                    the Corporation to carry out the duties under this
                    subsection, the Corporation shall pay such additional
                    amounts from assessments imposed under section 210.
                (5) Termination of responsibilities.--The duties and
            responsibilities of the Inspector General of the Corporation
            under this subsection shall terminate 1 year after the date of
            termination of the receivership under this title.

        (e) Treasury Inspector General Reviews.--
                (1) Scope.--The <<NOTE: Audits. Investigations.>> Inspector
            General of the Department of the Treasury shall conduct,
            supervise, and coordinate audits and investigations of actions
            taken by the Secretary related to the liquidation of any covered
            financial company under this title, including collecting and
            summarizing--
                        (A) a description of actions taken by the Secretary
                    under this title;
                        (B) an analysis of the approval by the Secretary of
                    the policies and procedures of the Corporation under
                    section 203 and acceptance of the orderly liquidation
                    plan of the Corporation under section 210; and
                        (C) an assessment of the terms and conditions
                    underlying the purchase by the Secretary of obligations
                    of the Corporation under section 210.
                (2) Frequency.--Not <<NOTE: Deadlines.>> later than 6 months
            after the date of appointment of the Corporation as receiver
            under this title and every 6 months thereafter, the Inspector
            General of the Department of the Treasury shall conduct the
            audit and investigation described in paragraph (1).
                (3) Reports and testimony.--The Inspector General of the
            Department of the Treasury shall include in the semiannual
            reports required by section 5(a) of the Inspector General Act

    [[Page 124 STAT. 1516]]

            of 1978 (5 U.S.C. App.), a summary of the findings and
            assessments under paragraph (1), and shall appear before the
            appropriate committees of Congress, if requested, to present
            each such report.
                (4) Termination of responsibilities.--The duties and
            responsibilities of the Inspector General of the Department of
            the Treasury under this subsection shall terminate 1 year after
            the date on which the obligations purchased by the Secretary
            from the Corporation under section 210 are fully redeemed.

        (f) Primary Financial Regulatory Agency Inspector General Reviews.--
                (1) Scope.--Upon <<NOTE: Reports.>> the appointment of the
            Corporation as receiver for a covered financial company
            supervised by a Federal primary financial regulatory agency or
            the Board of Governors under section 165, the Inspector General
            of the agency or the Board of Governors shall make a written
            report reviewing the supervision by the agency or the Board of
            Governors of the covered financial company, which shall--
                        (A) <<NOTE: Evaluation.>> evaluate the effectiveness
                    of the agency or the Board of Governors in carrying out
                    its supervisory responsibilities with respect to the
                    covered financial company;
                        (B) identify any acts or omissions on the part of
                    agency or Board of Governors officials that contributed
                    to the covered financial company being in default or in
                    danger of default;
                        (C) identify any actions that could have been taken
                    by the agency or the Board of Governors that would have
                    prevented the company from being in default or in danger
                    of default; and
                        (D) <<NOTE: Recommenda- tion.>> recommend
                    appropriate administrative or legislative action.
                (2) Reports and testimony.--Not later than 1 year after the
            date of appointment of the Corporation as receiver under this
            title, the Inspector General of the Federal primary financial
            regulatory agency or the Board of Governors shall provide the
            report required by paragraph (1) to such agency or the Board of
            Governors, and along with such agency or the Board of Governors,
            as applicable, shall appear before the appropriate committees of
            Congress, if requested, to present the report required by
            paragraph (1). Not later than 90 days after the date of receipt
            of the report required by paragraph (1), such agency or the
            Board of Governors, as applicable, shall provide a written
            report to Congress describing any actions taken in response to
            the recommendations in the report, and if no such actions were
            taken, describing the reasons why no actions were taken.
    SEC. 212. <<NOTE: 12 USC 5392.>> PROHIBITION OF CIRCUMVENTION AND
                            PREVENTION OF CONFLICTS OF INTEREST.

        (a) No Other Funding.--Funds for the orderly liquidation of any
    covered financial company under this title shall only be provided as
    specified under this title.
        (b) Limit on Governmental Actions.--No governmental entity may take
    any action to circumvent the purposes of this title.

    [[Page 124 STAT. 1517]]

        (c) Conflict of Interest.--In the event that the Corporation is
    appointed receiver for more than 1 covered financial company or is
    appointed receiver for a covered financial company and receiver for any
    insured depository institution that is an affiliate of such covered
    financial company, the Corporation shall take appropriate action, as
    necessary to avoid any conflicts of interest that may arise in
    connection with multiple receiverships.
    SEC. 213. <<NOTE: 12 USC 5393.>> BAN ON CERTAIN ACTIVITIES BY
                            SENIOR EXECUTIVES AND DIRECTORS.

        (a) Prohibition Authority.--The Board of Governors or, if the
    covered financial company was not supervised by the Board of Governors,
    the Corporation, may exercise the authority provided by this section.
        (b) Authority To Issue Order.--The appropriate agency described in
    subsection (a) may take any action authorized by subsection (c), if the
    agency determines that--
                (1) a senior executive or a director of the covered
            financial company, prior to the appointment of the Corporation
            as receiver, has, directly or indirectly--
                        (A) violated--
                              (i) any law or regulation;
                              (ii) any cease-and-desist order which has
                          become final;
                              (iii) any condition imposed in writing by a
                          Federal agency in connection with any action on
                          any application, notice, or request by such
                          company or senior executive; or
                              (iv) any written agreement between such
                          company and such agency;
                        (B) engaged or participated in any unsafe or unsound
                    practice in connection with any financial company; or
                        (C) committed or engaged in any act, omission, or
                    practice which constitutes a breach of the fiduciary
                    duty of such senior executive or director;
                (2) by reason of the violation, practice, or breach
            described in any subparagraph of paragraph (1), such senior
            executive or director has received financial gain or other
            benefit by reason of such violation, practice, or breach and
            such violation, practice, or breach contributed to the failure
            of the company; and
                (3) such violation, practice, or breach--
                        (A) involves personal dishonesty on the part of such
                    senior executive or director; or
                        (B) demonstrates willful or continuing disregard by
                    such senior executive or director for the safety or
                    soundness of such company.

        (c) Authorized Actions.--
                (1) In general.--The <<NOTE: Notice. Time
            period.>> appropriate agency for a financial company, as
            described in subsection (a), may serve upon a senior executive
            or director described in subsection (b) a written notice of the
            intention of the agency to prohibit any further participation by
            such person, in any manner, in the conduct of the affairs of any
            financial company for a period of time determined by the
            appropriate agency to be commensurate with such violation,
            practice, or breach, provided such period shall be not less than
            2 years.

    [[Page 124 STAT. 1518]]

                (2) Procedures.--The <<NOTE: Applicability.>> due process
            requirements and other procedures under section 8(e) of the
            Federal Deposit Insurance Act (12 U.S.C. 1818(e)) shall apply to
            actions under this section as if the covered financial company
            were an insured depository institution and the senior executive
            or director were an institution-affiliated party, as those terms
            are defined in that Act.

        (d) Regulations.--The Corporation and the Board of Governors, in
    consultation with the Council, shall jointly prescribe rules or
    regulations to administer and carry out this section, including rules,
    regulations, or guidelines to further define the term senior executive
    for the purposes of this section.
    SEC. 214. <<NOTE: 12 USC 5394.>> PROHIBITION ON TAXPAYER FUNDING.

        (a) Liquidation Required.--All financial companies put into
    receivership under this title shall be liquidated. No taxpayer funds
    shall be used to prevent the liquidation of any financial company under
    this title.
        (b) Recovery of Funds.--All funds expended in the liquidation of a
    financial company under this title shall be recovered from the
    disposition of assets of such financial company, or shall be the
    responsibility of the financial sector, through assessments.
        (c) No Losses to Taxpayers.--Taxpayers shall bear no losses from the
    exercise of any authority under this title.
    SEC. 215. STUDY ON SECURED CREDITOR HAIRCUTS.

        (a) Study Required.--The Council shall conduct a study evaluating
    the importance of maximizing United States taxpayer protections and
    promoting market discipline with respect to the treatment of fully
    secured creditors in the utilization of the orderly liquidation
    authority authorized by this Act. In carrying out such study, the
    Council shall--
                (1) not be prejudicial to current or past laws or
            regulations with respect to secured creditor treatment in a
            resolution process;
                (2) study the similarities and differences between the
            resolution mechanisms authorized by the Bankruptcy Code, the
            Federal Deposit Insurance Corporation Improvement Act of 1991,
            and the orderly liquidation authority authorized by this Act;
                (3) determine how various secured creditors are treated in
            such resolution mechanisms and examine how a haircut (of various
            degrees) on secured creditors could improve market discipline
            and protect taxpayers;
                (4) compare the benefits and dynamics of prudent lending
            practices by depository institutions in secured loans for
            consumers and small businesses to the lending practices of
            secured creditors to large, interconnected financial firms;
                (5) consider whether credit differs according to different
            types of collateral and different terms and timing of the
            extension of credit; amd
                (6) include an examination of stakeholders who were
            unsecured or under-collateralized and seek collateral when a
            firm is failing, and the impact that such behavior has on
            financial stability and an orderly resolution that protects
            taxpayers if the firm fails.

        (b) Report.--Not later than the end of the 1-year period beginning
    on the date of enactment of this Act, the Council shall issue a report
    to the Congress containing all findings and conclusions

    [[Page 124 STAT. 1519]]

    made by the Council in carrying out the study required under subsection
    (a).
    SEC. 216. STUDY ON BANKRUPTCY PROCESS FOR FINANCIAL AND NONBANK
                            FINANCIAL INSTITUTIONS.

        (a) Study.--
                (1) In general.--Upon enactment of this Act, the Board of
            Governors, in consultation with the Administrative Office of the
            United States Courts, shall conduct a study regarding the
            resolution of financial companies under the Bankruptcy Code,
            under chapter 7 or 11 thereof .
                (2) Issues to be studied.--Issues to be studied under this
            section include--
                        (A) the effectiveness of chapter 7 and chapter 11 of
                    the Bankruptcy Code in facilitating the orderly
                    resolution or reorganization of systemic financial
                    companies;
                        (B) whether a special financial resolution court or
                    panel of special masters or judges should be established
                    to oversee cases involving financial companies to
                    provide for the resolution of such companies under the
                    Bankruptcy Code, in a manner that minimizes adverse
                    impacts on financial markets without creating moral
                    hazard;
                        (C) whether amendments to the Bankruptcy Code should
                    be adopted to enhance the ability of the Code to resolve
                    financial companies in a manner that minimizes adverse
                    impacts on financial markets without creating moral
                    hazard;
                        (D) whether amendments should be made to the
                    Bankruptcy Code, the Federal Deposit Insurance Act, and
                    other insolvency laws to address the manner in which
                    qualified financial contracts of financial companies are
                    treated; and
                        (E) the implications, challenges, and benefits to
                    creating a new chapter or subchapter of the Bankruptcy
                    Code to deal with financial companies.

        (b) Reports to Congress.--Not later than 1 year after the date of
    enactment of this Act, and in each successive year until the fifth year
    after the date of enactment of this Act, the Administrative Office of
    the United States courts shall submit to the Committees on Banking,
    Housing, and Urban Affairs and the Judiciary of the Senate and the
    Committees on Financial Services and the Judiciary of the House of
    Representatives a report summarizing the results of the study conducted
    under subsection (a).
    SEC. 217. STUDY ON INTERNATIONAL COORDINATION RELATING TO
                            BANKRUPTCY PROCESS FOR NONBANK FINANCIAL
                            INSTITUTIONS.

        (a) Study.--
                (1) In general.--The Board of Governors, in consultation
            with the Administrative Office of the United States Courts,
            shall conduct a study regarding international coordination
            relating to the resolution of systemic financial companies under
            the United States Bankruptcy Code and applicable foreign law.
                (2) Issues to be studied.--With respect to the bankruptcy
            process for financial companies, issues to be studied under this
            section include--
                        (A) the extent to which international coordination
                    currently exists;

    [[Page 124 STAT. 1520]]

                        (B) current mechanisms and structures for
                    facilitating international cooperation;
                        (C) barriers to effective international
                    coordination; and
                        (D) ways to increase and make more effective
                    international coordination of the resolution of
                    financial companies, so as to minimize the impact on the
                    financial system without creating moral hazard.

        (b) Report to Congress.--Not later than 1 year after the date of
    enactment of this Act, the Administrative office of the United States
    Courts shall submit to the Committees on Banking, Housing, and Urban
    Affairs and the Judiciary of the Senate and the Committees on Financial
    Services and the Judiciary of the House of Representatives a report
    summarizing the results of the study conducted under subsection (a).

     TITLE III--TRANSFER <<NOTE: Enhancing Financial Institution Safety and
     Soundness Act of 2010.>> OF POWERS TO THE COMPTROLLER OF THE CURRENCY,
    THE CORPORATION, AND THE BOARD OF GOVERNORS
    SEC. 300. <<NOTE: 12 USC 5301 note.>> SHORT TITLE.

        This title may be cited as the ``Enhancing Financial Institution
    Safety and Soundness Act of 2010''.
    SEC. 301. <<NOTE: 12 USC 5401.>> PURPOSES.

        The purposes of this title are--
                (1) to provide for the safe and sound operation of the
            banking system of the United States;
                (2) to preserve and protect the dual system of Federal and
            State-chartered depository institutions;
                (3) to ensure the fair and appropriate supervision of each
            depository institution, regardless of the size or type of
            charter of the depository institution; and
                (4) to streamline and rationalize the supervision of
            depository institutions and the holding companies of depository
            institutions.
    SEC. 302. <<NOTE: 12 USC 5402.>> DEFINITION.

        In this title, the term ``transferred employee'' means, as the
    context requires, an employee transferred to the Office of the
    Comptroller of the Currency or the Corporation under section 322.

                    Subtitle A--Transfer of Powers and Duties

    SEC. 311. <<NOTE: 12 USC 5411.>> TRANSFER DATE.

        (a) Transfer Date.--Except <<NOTE: Definition.>> as provided in
    subsection (b), the term ``transfer date'' means the date that is 1 year
    after the date of enactment of this Act.

        (b) Extension Permitted.--
                (1) Notice required.--The <<NOTE: Deadline.>> Secretary, in
            consultation with the Comptroller of the Currency, the Director
            of the Office of Thrift Supervision, the Chairman of the Board
            of Governors, and the Chairperson of the Corporation, may extend
            the period under subsection (a) and designate a transfer date
            that is

    [[Page 124 STAT. 1521]]

            not later than 18 months after the date of enactment of this
            Act, if the Secretary transmits to the Committee on Banking,
            Housing, and Urban Affairs of the Senate and the Committee on
            Financial Services of the House of Representatives--
                        (A) a written determination that commencement of the
                    orderly process to implement this title is not feasible
                    by the date that is 1 year after the date of enactment
                    of this Act;
                        (B) an explanation of why an extension is necessary
                    to commence the process of orderly implementation of
                    this title;
                        (C) the transfer date designated under this
                    subsection; and
                        (D) a description of the steps that will be taken to
                    initiate the process of an orderly and timely
                    implementation of this title within the extended time
                    period.
                (2) Publication of notice.--Not <<NOTE: Deadline. Federal
            Register, publication.>> later than 270 days after the date of
            enactment of this Act, the Secretary shall publish in the
            Federal Register notice of any transfer date designated under
            paragraph (1).
    SEC. 312. <<NOTE: 12 USC 5412.>> POWERS AND DUTIES TRANSFERRED.

        (a) Effective Date.--This section, and the amendments made by this
    section, shall take effect on the transfer date.
        (b) Functions of the Office of Thrift Supervision.--
                (1) Savings and loan holding company functions
            transferred.--
                        (A) Transfer of functions.--There are transferred to
                    the Board of Governors all functions of the Office of
                    Thrift Supervision and the Director of the Office of
                    Thrift Supervision (including the authority to issue
                    orders) relating to--
                              (i) the supervision of--
                                        (I) any savings and loan holding
                                    company; and
                                        (II) any subsidiary (other than a
                                    depository institution) of a savings and
                                    loan holding company; and
                              (ii) all rulemaking authority of the Office of
                          Thrift Supervision and the Director of the Office
                          of Thrift Supervision relating to savings and loan
                          holding companies.
                        (B) Powers, authorities, rights, and duties.--The
                    Board of Governors shall succeed to all powers,
                    authorities, rights, and duties that were vested in the
                    Office of Thrift Supervision and the Director of the
                    Office of Thrift Supervision on the day before the
                    transfer date relating to the functions and authority
                    transferred under subparagraph (A).
                (2) All other functions transferred.--
                        (A) Board of governors.--All rulemaking authority of
                    the Office of Thrift Supervision and the Director of the
                    Office of Thrift Supervision under section 11 of the
                    Home Owners' Loan Act (12 U.S.C. 1468) relating to
                    transactions with affiliates and extensions of credit to
                    executive officers, directors, and principal
                    shareholders and under section 5(q) of such Act relating
                    to tying arrangements is transferred to the Board of
                    Governors.

    [[Page 124 STAT. 1522]]

                        (B) Comptroller of the currency.--Except as provided
                    in paragraph (1) and subparagraph (A)--
                              (i) there are transferred to the Office of the
                          Comptroller of the Currency and the Comptroller of
                          the Currency--
                                        (I) all functions of the Office of
                                    Thrift Supervision and the Director of
                                    the Office of Thrift Supervision,
                                    respectively, relating to Federal
                                    savings associations; and
                                        (II) all rulemaking authority of the
                                    Office of Thrift Supervision and the
                                    Director of the Office of Thrift
                                    Supervision, respectively, relating to
                                    savings associations; and
                              (ii) the Office of the Comptroller of the
                          Currency and the Comptroller of the Currency shall
                          succeed to all powers, authorities, rights, and
                          duties that were vested in the Office of Thrift
                          Supervision and the Director of the Office of
                          Thrift Supervision, respectively, on the day
                          before the transfer date relating to the functions
                          and authority transferred under clause (i).
                        (C) Corporation.--Except as provided in paragraph
                    (1) and subparagraphs (A) and (B)--
                              (i) all functions of the Office of Thrift
                          Supervision and the Director of the Office of
                          Thrift Supervision relating to State savings
                          associations are transferred to the Corporation;
                          and
                              (ii) the Corporation shall succeed to all
                          powers, authorities, rights, and duties that were
                          vested in the Office of Thrift Supervision and the
                          Director of the Office of Thrift Supervision on
                          the day before the transfer date relating to the
                          functions transferred under clause (i).

        (c) Conforming Amendments.--Section 3 of the Federal Deposit
    Insurance Act (12 U.S.C. 1813) is amended--
                (1) in subsection (q), by striking paragraphs (1) through
            (4) and inserting the following:
                ``(1) the Office of the Comptroller of the Currency, in the
            case of--
                        ``(A) any national banking association;
                        ``(B) any Federal branch or agency of a foreign
                    bank; and
                        ``(C) any Federal savings association;
                ``(2) the Federal Deposit Insurance Corporation, in the case
            of--
                        ``(A) any State nonmember insured bank;
                        ``(B) any foreign bank having an insured branch; and
                        ``(C) any State savings association;
                ``(3) the Board of Governors of the Federal Reserve System,
            in the case of--
                        ``(A) any State member bank;
                        ``(B) any branch or agency of a foreign bank with
                    respect to any provision of the Federal Reserve Act
                    which is made applicable under the International Banking
                    Act of 1978;
                        ``(C) any foreign bank which does not operate an
                    insured branch;

    [[Page 124 STAT. 1523]]

                        ``(D) any agency or commercial lending company other
                    than a Federal agency;
                        ``(E) supervisory or regulatory proceedings arising
                    from the authority given to the Board of Governors under
                    section 7(c)(1) of the International Banking Act of
                    1978, including such proceedings under the Financial
                    Institutions Supervisory Act of 1966;
                        ``(F) any bank holding company and any subsidiary
                    (other than a depository institution) of a bank holding
                    company; and
                        ``(G) any savings and loan holding company and any
                    subsidiary (other than a depository institution) of a
                    savings and loan holding company.''; and
                (2) in paragraphs (1) and (3) of subsection (u), by striking
            ``(other than a bank holding company'' and inserting ``(other
            than a bank holding company or savings and loan holding
            company''.

        (d) Consumer Protection.--Nothing in this section may be construed
    to limit or otherwise affect the transfer of powers under title X.
    SEC. 313. <<NOTE: 12 USC 5413.>> ABOLISHMENT.

        Effective <<NOTE: Effective date.>> 90 days after the transfer date,
    the Office of Thrift Supervision and the position of Director of the
    Office of Thrift Supervision are abolished.
    SEC. 314. AMENDMENTS TO THE REVISED STATUTES.

        (a) Amendment to Section 324.--Section 324 of the Revised Statutes
    of the United States (12 U.S.C. 1) is amended to read as follows:
    ``SEC. 324. COMPTROLLER OF THE CURRENCY.

        ``(a) Office of the Comptroller of the Currency Established.--There
    is established in the Department of the Treasury a bureau to be known as
    the `Office of the Comptroller of the Currency' which is charged with
    assuring the safety and soundness of, and compliance with laws and
    regulations, fair access to financial services, and fair treatment of
    customers by, the institutions and other persons subject to its
    jurisdiction.
        ``(b) Comptroller of the Currency.--
                ``(1) In general.--The chief officer of the Office of the
            Comptroller of the Currency shall be known as the Comptroller of
            the Currency. The Comptroller of the Currency shall perform the
            duties of the Comptroller of the Currency under the general
            direction of the Secretary of the Treasury. The Secretary of the
            Treasury may not delay or prevent the issuance of any rule or
            the promulgation of any regulation by the Comptroller of the
            Currency, and may not intervene in any matter or proceeding
            before the Comptroller of the Currency (including agency
            enforcement actions), unless otherwise specifically provided by
            law.
                ``(2) Additional authority.--The Comptroller of the Currency
            shall have the same authority with respect to functions
            transferred to the Comptroller of the Currency under the
            Enhancing Financial Institution Safety and Soundness Act of 2010
            as was vested in the Director of the Office of Thrift
            Supervision on the transfer date, as defined in section 311 of
            that Act.''.

    [[Page 124 STAT. 1524]]

        (b) Supervision of Federal Savings Associations.--Chapter 9 of title
    VII of the Revised Statutes of the United States (12 U.S.C. 1 et seq.)
    is amended by inserting after section 327A (12 U.S.C. 4a) the following:
    ``SEC. 327B. <<NOTE: 12 USC 4b.>> DEPUTY COMPTROLLER FOR THE
                              SUPERVISION AND EXAMINATION OF FEDERAL
                              SAVINGS ASSOCIATIONS.

        ``The <<NOTE: Designation.>> Comptroller of the Currency shall
    designate a Deputy Comptroller, who shall be responsible for the
    supervision and examination of Federal savings associations.''.

        (c) Amendment to Section 329.--Section 329 of the Revised Statutes
    of the United States (12 U.S.C. 11) is amended by inserting before the
    period at the end the following: ``or any Federal savings association''.
        (d) Effective <<NOTE: 12 USC 1 note.>> Date.--This section, and the
    amendments made by this section, shall take effect on the transfer date.
    SEC. 315. FEDERAL INFORMATION POLICY.

        Section 3502(5) of title 44, United States Code, is amended by
    inserting ``Office of the Comptroller of the Currency,'' after ``the
    Securities and Exchange Commission,''.
    SEC. 316. <<NOTE: 12 USC 5414.>> SAVINGS PROVISIONS.

        (a) Office of Thrift Supervision.--
                (1) Existing rights, duties, and obligations not affected.--
            Sections 312(b) and 313 shall not affect the validity of any
            right, duty, or obligation of the United States, the Director of
            the Office of Thrift Supervision, the Office of Thrift
            Supervision, or any other person, that existed on the day before
            the transfer date.
                (2) Continuation of suits.--This title shall not abate any
            action or proceeding commenced by or against the Director of the
            Office of Thrift Supervision or the Office of Thrift Supervision
            before the transfer date, except that--
                        (A) for any action or proceeding arising out of a
                    function of the Office of Thrift Supervision or the
                    Director of the Office of Thrift Supervision transferred
                    to the Board of Governors by this title, the Board of
                    Governors shall be substituted for the Office of Thrift
                    Supervision or the Director of the Office of Thrift
                    Supervision as a party to the action or proceeding on
                    and after the transfer date;
                        (B) for any action or proceeding arising out of a
                    function of the Office of Thrift Supervision or the
                    Director of the Office of Thrift Supervision transferred
                    to the Office of the Comptroller of the Currency or the
                    Comptroller of the Currency by this title, the Office of
                    the Comptroller of the Currency or the Comptroller of
                    the Currency shall be substituted for the Office of
                    Thrift Supervision or the Director of the Office of
                    Thrift Supervision, as the case may be, as a party to
                    the action or proceeding on and after the transfer date;
                    and
                        (C) for any action or proceeding arising out of a
                    function of the Office of Thrift Supervision or the
                    Director of the Office of Thrift Supervision transferred
                    to the Corporation by this title, the Corporation shall
                    be substituted for the Office of Thrift Supervision or
                    the Director of the Office of Thrift Supervision as a
                    party to the action or proceeding on and after the
                    transfer date.

    [[Page 124 STAT. 1525]]

        (b) Continuation of Existing OTS Orders, Resolutions,
    Determinations, Agreements, Regulations, etc.--All orders, resolutions,
    determinations, agreements, and regulations, interpretative rules, other
    interpretations, guidelines, procedures, and other advisory materials,
    that have been issued, made, prescribed, or allowed to become effective
    by the Office of Thrift Supervision or the Director of the Office of
    Thrift Supervision, or by a court of competent jurisdiction, in the
    performance of functions that are transferred by this title and that are
    in effect on the day before the transfer date, shall continue in effect
    according to the terms of such orders, resolutions, determinations,
    agreements, and regulations, interpretative rules, other
    interpretations, guidelines, procedures, and other advisory materials,
    and shall be enforceable by or against--
                (1) the Board of Governors, in the case of a function of the
            Office of Thrift Supervision or the Director of the Office of
            Thrift Supervision transferred to the Board of Governors, until
            modified, terminated, set aside, or superseded in accordance
            with applicable law by the Board of Governors, by any court of
            competent jurisdiction, or by operation of law;
                (2) the Office of the Comptroller of the Currency or the
            Comptroller of the Currency, in the case of a function of the
            Office of Thrift Supervision or the Director of the Office of
            Thrift Supervision transferred to the Office of the Comptroller
            of the Currency or the Comptroller of the Currency,
            respectively, until modified, terminated, set aside, or
            superseded in accordance with applicable law by the Office of
            the Comptroller of the Currency or the Comptroller of the
            Currency, by any court of competent jurisdiction, or by
            operation of law; and
                (3) the Corporation, in the case of a function of the Office
            of Thrift Supervision or the Director of the Office of Thrift
            Supervision transferred to the Corporation, until modified,
            terminated, set aside, or superseded in accordance with
            applicable law by the Corporation, by any court of competent
            jurisdiction, or by operation of law.

        (c) Identification <<NOTE: Deadlines. Federal Register,
    publication.>> of Regulations Continued.--
                (1) By the board of governors.--Not later than the transfer
            date, the Board of Governors shall--
                        (A) identify the regulations continued under
                    subsection (b) that will be enforced by the Board of
                    Governors; and
                        (B) publish a list of the regulations identified
                    under subparagraph (A) in the Federal Register.
                (2) By office of the comptroller of the currency.--Not later
            than the transfer date, the Office of the Comptroller of the
            Currency shall--
                        (A) after consultation with the Corporation,
                    identify the regulations continued under subsection (b)
                    that will be enforced by the Office of the Comptroller
                    of the Currency; and
                        (B) publish a list of the regulations identified
                    under subparagraph (A) in the Federal Register.
                (3) By the corporation.--Not later than the transfer date,
            the Corporation shall--
                        (A) after consultation with the Office of the
                    Comptroller of the Currency, identify the regulations
                    continued under subsection (b) that will be enforced by
                    the Corporation; and

    [[Page 124 STAT. 1526]]

                        (B) publish a list of the regulations identified
                    under subparagraph (A) in the Federal Register.

        (d) Status of Regulations Proposed or Not Yet Effective.--
                (1) Proposed regulations.--Any proposed regulation of the
            Office of Thrift Supervision, which the Office of Thrift
            Supervision in performing functions transferred by this title,
            has proposed before the transfer date but has not published as a
            final regulation before such date, shall be deemed to be a
            proposed regulation of the Office of the Comptroller of the
            Currency or the Board of Governors, as appropriate, according to
            the terms of the proposed regulation.
                (2) Regulations not yet effective.--Any interim or final
            regulation of the Office of Thrift Supervision, which the Office
            of Thrift Supervision, in performing functions transferred by
            this title, has published before the transfer date but which has
            not become effective before that date, shall become effective as
            a regulation of the Office of the Comptroller of the Currency or
            the Board of Governors, as appropriate, according to the terms
            of the interim or final regulation, unless modified, terminated,
            set aside, or superseded in accordance with applicable law by
            the Office of the Comptroller of the Currency or the Board of
            Governors, as appropriate, by any court of competent
            jurisdiction, or by operation of law.
    SEC. 317. <<NOTE: 12 USC 5415.>> REFERENCES IN FEDERAL LAW TO
                            FEDERAL BANKING AGENCIES.

        On and after the transfer date, any reference in Federal law to the
    Director of the Office of Thrift Supervision or the Office of Thrift
    Supervision, in connection with any function of the Director of the
    Office of Thrift Supervision or the Office of Thrift Supervision
    transferred under section 312(b) or any other provision of this
    subtitle, shall be deemed to be a reference to the Comptroller of the
    Currency, the Office of the Comptroller of the Currency, the Chairperson
    of the Corporation, the Corporation, the Chairman of the Board of
    Governors, or the Board of Governors, as appropriate and consistent with
    the amendments made in subtitle E.
    SEC. 318. FUNDING.

        (a) Compensation of Examiners.--Section 5240 of the Revised Statutes
    of the United States (12 U.S.C. 481 et seq.) is amended--
                (1) in the second undesignated paragraph (12 U.S.C. 481), in
            the fourth sentence, by striking ``without regard to the
            provisions of other laws applicable to officers or employees of
            the United States'' and inserting the following: ``set and
            adjusted subject to chapter 71 of title 5, United States Code,
            and without regard to the provisions of other laws applicable to
            officers or employees of the United States''; and
                (2) in the third undesignated paragraph (12 U.S.C. 482), in
            the first sentence, by striking ``shall fix'' and inserting
            ``shall, subject to chapter 71 of title 5, United States Code,
            fix''.

        (b) Funding of Office of the Comptroller of the Currency.--Chapter 4
    of title LXII of the Revised Statutes is amended by inserting after
    section 5240 (12 U.S.C. 481, 482) the following:
        ``Sec. <<NOTE: 12 USC 16.>> 5240A.  The Comptroller of the Currency
    may collect an assessment, fee, or other charge from any entity
    described in section 3(q)(1) of the Federal Deposit Insurance Act (12
    U.S.C.

    [[Page 124 STAT. 1527]]

    1813(q)(1)), as the Comptroller determines is necessary or appropriate
    to carry out the responsibilities of the Office of the Comptroller of
    the Currency. In establishing the amount of an assessment, fee, or
    charge collected from an entity under this section, the Comptroller of
    the Currency may take into account the nature and scope of the
    activities of the entity, the amount and type of assets that the entity
    holds, the financial and managerial condition of the entity, and any
    other factor, as the Comptroller of the Currency determines is
    appropriate. Funds derived from any assessment, fee, or charge collected
    or payment made pursuant to this section may be deposited by the
    Comptroller of the Currency in accordance with the provisions of section
    5234. Such funds shall not be construed to be Government funds or
    appropriated monies, and shall not be subject to apportionment for
    purposes of chapter 15 of title 31, United States Code, or any other
    provision of law. The authority of the Comptroller of the Currency under
    this section shall be in addition to the authority under section 5240.

        ``The Comptroller of the Currency shall have sole authority to
    determine the manner in which the obligations of the Office of the
    Comptroller of the Currency shall be incurred and its disbursements and
    expenses allowed and paid, in accordance with this section, except as
    provided in chapter 71 of title 5, United States Code (with respect to
    compensation).''.
        (c) Funding of Board of Governors.--Section 11 of the Federal
    Reserve Act (12 U.S.C. 248) is amended by adding at the end the
    following:
        ``(s) Assessments, Fees, and Other Charges for Certain Companies.--
                ``(1) In general.--The Board shall collect a total amount of
            assessments, fees, or other charges from the companies described
            in paragraph (2) that is equal to the total expenses the Board
            estimates are necessary or appropriate to carry out the
            supervisory and regulatory responsibilities of the Board with
            respect to such companies.
                ``(2) Companies.--The companies described in this paragraph
            are--
                        ``(A) all bank holding companies having total
                    consolidated assets of $50,000,000,000 or more;
                        ``(B) all savings and loan holding companies having
                    total consolidated assets of $50,000,000,000 or more;
                    and
                        ``(C) all nonbank financial companies supervised by
                    the Board under section 113 of the Dodd-Frank Wall
                    Street Reform and Consumer Protection Act.''.

        (d) Corporation Examination Fees.--Section 10(e) of the Federal
    Deposit Insurance Act (12 U.S.C. 1820(e)) is amended by striking
    paragraph (1) and inserting the following:
                ``(1) Regular and special examinations of depository
            institutions.--The cost of conducting any regular examination or
            special examination of any depository institution under
            subsection (b)(2), (b)(3), or (d) or of any entity described in
            section 3(q)(2) may be assessed by the Corporation against the
            institution or entity to meet the expenses of the Corporation in
            carrying out such examinations.''.

        (e) Effective <<NOTE: 12 USC 16 note.>> Date.--This section, and the
    amendments made by this section, shall take effect on the transfer date.

    [[Page 124 STAT. 1528]]

    SEC. 319. <<NOTE: 12 USC 5416.>> CONTRACTING AND LEASING
                            AUTHORITY.

        Notwithstanding the Federal Property and Administrative Services Act
    of 1949 (41 U.S.C. 251 et seq.) or any other provision of law (except
    the full and open competition requirements of the Competition in
    Contracting Act), the Office of the Comptroller of the Currency may--
                (1) enter into and perform contracts, execute instruments,
            and acquire real property (or property interest) as the
            Comptroller deems necessary to carry out the duties and
            responsibilities of the Office of the Comptroller of the
            Currency; and
                (2) hold, maintain, sell, lease, or otherwise dispose of the
            property (or property interest) acquired under paragraph (1).

                       Subtitle B--Transitional Provisions

    SEC. 321. <<NOTE: 12 USC 5431.>> INTERIM USE OF FUNDS, PERSONNEL,
                            AND PROPERTY OF THE OFFICE OF THRIFT
                            SUPERVISION.

        (a) In General.--Before the transfer date, the Office of the
    Comptroller of the Currency, the Corporation, and the Board of Governors
    shall--
                (1) consult <<NOTE: Consultation.>> and cooperate with the
            Office of Thrift Supervision to facilitate the orderly transfer
            of functions to the Office of the Comptroller of the Currency,
            the Corporation, and the Board of Governors in accordance with
            this title;
                (2) <<NOTE: Determination.>> determine jointly, from time to
            time--
                        (A) the amount of funds necessary to pay any
                    expenses associated with the transfer of functions
                    (including expenses for personnel, property, and
                    administrative services) during the period beginning on
                    the date of enactment of this Act and ending on the
                    transfer date;
                        (B) which personnel are appropriate to facilitate
                    the orderly transfer of functions by this title; and
                        (C) what property and administrative services are
                    necessary to support the Office of the Comptroller of
                    the Currency, the Corporation, and the Board of
                    Governors during the period beginning on the date of
                    enactment of this Act and ending on the transfer date;
                    and
                (3) take such actions as may be necessary to provide for the
            orderly implementation of this title.

        (b) Agency Consultation.--When requested jointly by the Office of
    the Comptroller of the Currency, the Corporation, and the Board of
    Governors to do so before the transfer date, the Office of Thrift
    Supervision shall--
                (1) pay <<NOTE: Payment.>> to the Office of the Comptroller
            of the Currency, the Corporation, or the Board of Governors, as
            applicable, from funds obtained by the Office of Thrift
            Supervision through assessments, fees, or other charges that the
            Office of Thrift Supervision is authorized by law to impose,
            such amounts as the Office of the Comptroller of the Currency,
            the Corporation, and the Board of Governors jointly determine to
            be necessary under subsection (a);
                (2) detail to the Office of the Comptroller of the Currency,
            the Corporation, or the Board of Governors, as applicable, such
            personnel as the Office of the Comptroller of the Currency, the
            Corporation, and the Board of Governors jointly determine to be
            appropriate under subsection (a); and

    [[Page 124 STAT. 1529]]

                (3) make available to the Office of the Comptroller of the
            Currency, the Corporation, or the Board of Governors, as
            applicable, such property and provide to the Office of the
            Comptroller of the Currency, the Corporation, or the Board of
            Governors, as applicable, such administrative services as the
            Office of the Comptroller of the Currency, the Corporation, and
            the Board of Governors jointly determine to be necessary under
            subsection (a).

        (c) Notice Required.--The Office of the Comptroller of the Currency,
    the Corporation, and the Board of Governors shall jointly give the
    Office of Thrift Supervision reasonable prior notice of any request that
    the Office of the Comptroller of the Currency, the Corporation, and the
    Board of Governors jointly intend to make under subsection (b).
    SEC. 322. <<NOTE: 12 USC 5432.>> TRANSFER OF EMPLOYEES.

        (a) In General.--
                (1) Office of thrift supervision employees.--
                        (A) In general.--Except as provided in section 1064,
                    all employees of the Office of Thrift Supervision shall
                    be transferred to the Office of the Comptroller of the
                    Currency or the Corporation for employment in accordance
                    with this section.
                        (B) Allocating employees for transfer to receiving
                    agencies.--The Director of the Office of Thrift
                    Supervision, the Comptroller of the Currency, and the
                    Chairperson of the Corporation shall--
                              (i) jointly <<NOTE: Determination.>> determine
                          the number of employees of the Office of Thrift
                          Supervision necessary to perform or support the
                          functions that are transferred to the Office of
                          the Comptroller of the Currency or the Corporation
                          by this title; and
                              (ii) consistent with the determination under
                          clause (i), jointly identify employees of the
                          Office of Thrift Supervision for transfer to the
                          Office of the Comptroller of the Currency or the
                          Corporation.
                (2) Employees transferred; service periods credited.--For
            purposes of this section, periods of service with a Federal home
            loan bank, a joint office of Federal home loan banks, or a
            Federal reserve bank shall be credited as periods of service
            with a Federal agency.
                (3) Appointment authority for excepted service
            transferred.--
                        (A) In general.--Except as provided in subparagraph
                    (B), any appointment authority of the Office of Thrift
                    Supervision under Federal law that relates to the
                    functions transferred under section 312, including the
                    regulations of the Office of Personnel Management, for
                    filling the positions of employees in the excepted
                    service shall be transferred to the Comptroller of the
                    Currency or the Chairperson of the Corporation, as
                    appropriate.
                        (B) Declining transfers allowed.--The Comptroller of
                    the Currency or the Chairperson of the Corporation may
                    decline to accept a transfer of authority under
                    subparagraph (A) (and the employees appointed under that
                    authority) to the extent that such authority relates to
                    positions excepted from the competitive service because
                    of their

    [[Page 124 STAT. 1530]]

                    confidential, policy-making, policy-determining, or
                    policy-advocating character.
                (4) Additional appointment authority.--Notwithstanding any
            other provision of law, the Office of the Comptroller of the
            Currency and the Corporation may appoint transferred employees
            to positions in the Office of the Comptroller of the Currency or
            the Corporation, respectively.

        (b) Timing of Transfers and <<NOTE: Deadlines.>> Position
    Assignments.--Each employee to be transferred under subsection (a)(1)
    shall--
                (1) be transferred not later than 90 days after the transfer
            date; and
                (2) receive <<NOTE: Notice.>> notice of the position
            assignment of the employee not later than 120 days after the
            effective date of the transfer of the employee.

        (c) Transfer of Functions.--
                (1) In general.--Notwithstanding any other provision of law,
            the transfer of employees under this subtitle shall be deemed a
            transfer of functions for the purpose of section 3503 of title
            5, United States Code.
                (2) Priority.--If any provision of this subtitle conflicts
            with any protection provided to a transferred employee under
            section 3503 of title 5, United States Code, the provisions of
            this subtitle shall control.

        (d) Employee Status and Eligibility.--The transfer of functions and
    employees under this subtitle, and the abolishment of the Office of
    Thrift Supervision under section 313, shall not affect the status of the
    transferred employees as employees of an agency of the United States
    under any provision of law.
        (e) Equal Status and Tenure Positions.--
                (1) Status and tenure.--Each transferred employee from the
            Office of Thrift Supervision shall be placed in a position at
            the Office of the Comptroller of the Currency or the Corporation
            with the same status and tenure as the transferred employee held
            on the day before the date on which the employee was
            transferred.
                (2) Functions.--To the extent practicable, each transferred
            employee shall be placed in a position at the Office of the
            Comptroller of the Currency or the Corporation, as applicable,
            responsible for the same functions and duties as the transferred
            employee had on the day before the date on which the employee
            was transferred, in accordance with the expertise and
            preferences of the transferred employee.

        (f) No Additional Certification Requirements.--An examiner who is a
    transferred employee shall not be subject to any additional
    certification requirements before being placed in a comparable position
    at the Office of the Comptroller of the Currency or the Corporation, if
    the examiner carries out examinations of the same type of institutions
    as an employee of the Office of the Comptroller of the Currency or the
    Corporation as the employee was responsible for carrying out before the
    date on which the employee was transferred.
        (g) Personnel Actions Limited.--
                (1) Protection.--
                        (A) In general.--Except <<NOTE: Time period.>> as
                    provided in paragraph (2), each affected employee shall
                    not, during the 30-month period beginning on the
                    transfer date, be involuntarily

    [[Page 124 STAT. 1531]]

                    separated, or involuntarily reassigned outside his or
                    her locality pay area.
                        (B) Affected employees.--
                    For <<NOTE: Definition.>> purposes of this paragraph,
                    the term ``affected employee'' means--
                              (i) an employee transferred from the Office of
                          Thrift Supervision holding a permanent position on
                          the day before the transfer date; and
                              (ii) an employee of the Office of the
                          Comptroller of the Currency or the Corporation
                          holding a permanent position on the day before the
                          transfer date.
                (2) Exceptions.--Paragraph (1) does not limit the right of
            the Office of the Comptroller of the Currency or the Corporation
            to--
                        (A) separate an employee for cause or for
                    unacceptable performance;
                        (B) terminate an appointment to a position excepted
                    from the competitive service because of its confidential
                    policy-making, policy-determining, or policy-advocating
                    character; or
                        (C) reassign an employee outside such employee's
                    locality pay area when the Office of the Comptroller of
                    the Currency or the Corporation determines that the
                    reassignment is necessary for the efficient operation of
                    the agency.

        (h) Pay.--
                (1) 30-month protection.--Except as provided in paragraph
            (2), during the 30-month period beginning on the date on which
            the employee was transferred under this subtitle, a transferred
            employee shall be paid at a rate that is not less than the basic
            rate of pay, including any geographic differential, that the
            transferred employee received during the pay period immediately
            preceding the date on which the employee was transferred.
            Notwithstanding the preceding sentence, if the employee was
            receiving a higher rate of basic pay on a temporary basis
            (because of a temporary assignment, temporary promotion, or
            other temporary action) immediately before the transfer, the
            Agency may reduce the rate of basic pay on the date the rate
            would have been reduced but for the transfer, and the protected
            rate for the remainder of the 30-month period will be the
            reduced rate that would have applied but for the transfer.
                (2) Exceptions.--The Comptroller of the Currency or the
            Corporation may reduce the rate of basic pay of a transferred
            employee--
                        (A) for cause, including for unacceptable
                    performance; or
                        (B) with the consent of the transferred employee.
                (3) Protection only while employed.--
            This <<NOTE: Applicability.>> subsection shall apply to a
            transferred employee only during the period that the transferred
            employee remains employed by Office of the Comptroller of the
            Currency or the Corporation.
                (4) Pay increases permitted.--Nothing in this subsection
            shall limit the authority of the Comptroller of the Currency or
            the Chairperson of the Corporation to increase the pay of a
            transferred employee.

        (i) Benefits.--
                (1) Retirement benefits for transferred employees.--

    [[Page 124 STAT. 1532]]

                        (A) In general.--
                              (i) Continuation of existing retirement
                          plan.--Each transferred employee shall remain
                          enrolled in the retirement plan of the transferred
                          employee, for as long as the transferred employee
                          is employed by the Office of the Comptroller of
                          the Currency or the Corporation.
                              (ii) Employer's contribution.--The Comptroller
                          of the Currency or the Chairperson of the
                          Corporation, as appropriate, shall pay any
                          employer contributions to the existing retirement
                          plan of each transferred employee, as required
                          under each such existing retirement plan.
                        (B) Definition.--In this paragraph, the term
                    ``existing retirement plan'' means, with respect to a
                    transferred employee, the retirement plan (including the
                    Financial Institutions Retirement Fund), and any
                    associated thrift savings plan, of the agency from which
                    the employee was transferred in which the employee was
                    enrolled on the day before the date on which the
                    employee was transferred.
                (2) Benefits other than retirement benefits.--
                        (A) During first year.--
                              (i) Existing <<NOTE: Time period.>> plans
                          continue.--During the 1-year period following the
                          transfer date, each transferred employee may
                          retain membership in any employee benefit program
                          (other than a retirement benefit program) of the
                          agency from which the employee was transferred
                          under this title, including any dental, vision,
                          long term care, or life insurance program to which
                          the employee belonged on the day before the
                          transfer date.
                              (ii) Employer's contribution.--The Office of
                          the Comptroller of the Currency or the
                          Corporation, as appropriate, shall pay any
                          employer cost required to extend coverage in the
                          benefit program to the transferred employee as
                          required under that program or negotiated
                          agreements.
                        (B) Dental, vision, or life insurance after first
                    year.--If, <<NOTE: Time period.>> after the 1-year
                    period beginning on the transfer date, the Office of the
                    Comptroller of the Currency or the Corporation
                    determines that the Office of the Comptroller of the
                    Currency or the Corporation, as the case may be, will
                    not continue to participate in any dental, vision, or
                    life insurance program of an agency from which an
                    employee was transferred, a transferred employee who is
                    a member of the program may, before the decision takes
                    effect and without regard to any regularly scheduled
                    open season, elect to enroll in--
                              (i) the enhanced dental benefits program
                          established under chapter 89A of title 5, United
                          States Code;
                              (ii) the enhanced vision benefits established
                          under chapter 89B of title 5, United States Code;
                          and
                              (iii) the Federal Employees' Group Life
                          Insurance Program established under chapter 87 of
                          title 5, United States Code, without regard to any
                          requirement of insurability.

    [[Page 124 STAT. 1533]]

                        (C) Long term care insurance after 1st year.--
                    If, <<NOTE: Time period.>> after the 1-year period
                    beginning on the transfer date, the Office of the
                    Comptroller of the Currency or the Corporation
                    determines that the Office of the Comptroller of the
                    Currency or the Corporation, as appropriate, will not
                    continue to participate in any long term care insurance
                    program of an agency from which an employee transferred,
                    a transferred employee who is a member of such a program
                    may, before the decision takes effect, elect to apply
                    for coverage under the Federal Long Term Care Insurance
                    Program established under chapter 90 of title 5, United
                    States Code, under the underwriting requirements
                    applicable to a new active workforce member, as
                    described in part 875 of title 5, Code of Federal
                    Regulations (or any successor thereto).
                        (D) Contribution of transferred employee.--
                              (i) In general.--Subject to clause (ii), a
                          transferred employee who is enrolled in a plan
                          under the Federal Employees Health Benefits
                          Program shall pay any employee contribution
                          required under the plan.
                              (ii) Cost differential.--The Office of the
                          Comptroller of the Currency or the Corporation, as
                          applicable, shall pay any difference in cost
                          between the employee contribution required under
                          the plan provided to transferred employees by the
                          agency from which the employee transferred on the
                          date of enactment of this Act and the plan
                          provided by the Office of the Comptroller of the
                          Currency or the Corporation, as the case may be,
                          under this section.
                              (iii) Funds transfer.--The Office of the
                          Comptroller of the Currency or the Corporation, as
                          the case may be, shall transfer to the Employees
                          Health Benefits Fund established under section
                          8909 of title 5, United States Code, an amount
                          determined by the Director of the Office of
                          Personnel Management, after consultation with the
                          Comptroller of the Currency or the Chairperson of
                          the Corporation, as the case may be, and the
                          Office of Management and Budget, to be necessary
                          to reimburse the Fund for the cost to the Fund of
                          providing any benefits under this subparagraph
                          that are not otherwise paid for by a transferred
                          employee under clause (i).
                        (E) Special provisions to ensure continuation of
                    life insurance benefits.--
                              (i) In general.--An annuitant, as defined in
                          section 8901 of title 5, United States Code, who
                          is enrolled in a life insurance plan administered
                          by an agency from which employees are transferred
                          under this title on the day before the transfer
                          date shall be eligible for coverage by a life
                          insurance plan under sections 8706(b), 8714a,
                          8714b, or 8714c of title 5, United States Code, or
                          by a life insurance plan established by the Office
                          of the Comptroller of the Currency or the
                          Corporation, as applicable, without regard to any
                          regularly scheduled open season or any requirement
                          of insurability.
                              (ii) Contribution of transferred employee.--

    [[Page 124 STAT. 1534]]

                                        (I) In general.--Subject to
                                    subclause (II), a transferred employee
                                    enrolled in a life insurance plan under
                                    this subparagraph shall pay any employee
                                    contribution required by the plan.
                                        (II) Cost differential.--The Office
                                    of the Comptroller of the Currency or
                                    the Corporation, as the case may be,
                                    shall pay any difference in cost between
                                    the benefits provided by the agency from
                                    which the employee transferred on the
                                    date of enactment of this Act and the
                                    benefits provided under this section.
                                        (III) Funds transfer.--The Office of
                                    the Comptroller of the Currency or the
                                    Corporation, as the case may be, shall
                                    transfer to the Federal Employees' Group
                                    Life Insurance Fund established under
                                    section 8714 of title 5, United States
                                    Code, an amount determined by the
                                    Director of the Office of Personnel
                                    Management, after consultation with the
                                    Comptroller of the Currency or the
                                    Chairperson of the Corporation, as the
                                    case may be, and the Office of
                                    Management and Budget, to be necessary
                                    to reimburse the Federal Employees'
                                    Group Life Insurance Fund for the cost
                                    to the Federal Employees' Group Life
                                    Insurance Fund of providing benefits
                                    under this subparagraph not otherwise
                                    paid for by a transferred employee under
                                    subclause (I).
                                        (IV) Credit for time enrolled in
                                    other plans.--For any transferred
                                    employee, enrollment in a life insurance
                                    plan administered by the agency from
                                    which the employee transferred,
                                    immediately before enrollment in a life
                                    insurance plan under chapter 87 of title
                                    5, United States Code, shall be
                                    considered as enrollment in a life
                                    insurance plan under that chapter for
                                    purposes of section 8706(b)(1)(A) of
                                    title 5, United States Code.

        (j) Incorporation Into Agency Pay System.--
    Not <<NOTE: Deadline.>> later than 30 months after the transfer date,
    the Comptroller of the Currency and the Chairperson of the Corporation
    shall place each transferred employee into the established pay system
    and structure of the appropriate employing agency.

        (k) Equitable Treatment.--In administering the provisions of this
    section, the Comptroller of the Currency and the Chairperson of the
    Corporation--
                (1) may not take any action that would unfairly disadvantage
            a transferred employee relative to any other employee of the
            Office of the Comptroller of the Currency or the Corporation on
            the basis of prior employment by the Office of Thrift
            Supervision;
                (2) may take such action as is appropriate in an individual
            case to ensure that a transferred employee receives equitable
            treatment, with respect to the status, tenure, pay, benefits
            (other than benefits under programs administered by the Office
            of Personnel Management), and accrued leave or vacation time for
            prior periods of service with any Federal agency of the
            transferred employee;

    [[Page 124 STAT. 1535]]

                (3) shall, <<NOTE: Procedures.>> jointly with the Director
            of the Office of Thrift Supervision, develop and adopt
            procedures and safeguards designed to ensure that the
            requirements of this subsection are met; and
                (4) shall <<NOTE: Study.>> conduct a study detailing the
            position assignments of all employees transferred pursuant to
            subsection (a), describing the procedures and safeguards adopted
            pursuant to paragraph (3), and demonstrating that the
            requirements of this subsection have been met;
            and <<NOTE: Deadline.>> shall, not later than 365 days after the
            transfer date, submit a copy of such study to Congress.

        (l) Reorganization.--
                (1) In general.--If <<NOTE: Time period.>> the Comptroller
            of the Currency or the Chairperson of the Corporation
            determines, during the 2-year period beginning 1 year after the
            transfer date, that a reorganization of the staff of the Office
            of the Comptroller of the Currency or the Corporation,
            respectively, is required, the reorganization shall be deemed a
            ``major reorganization'' for purposes of affording affected
            employees retirement under section 8336(d)(2) or 8414(b)(1)(B)
            of title 5, United States Code.
                (2) Service credit.--For purposes of this subsection,
            periods of service with a Federal home loan bank or a joint
            office of Federal home loan banks shall be credited as periods
            of service with a Federal agency.
    SEC. 323. <<NOTE: 12 USC 5433.>> PROPERTY TRANSFERRED.

        (a) Property Defined.--For purposes of this section, the term
    ``property'' includes all real property (including leaseholds) and all
    personal property, including computers, furniture, fixtures, equipment,
    books, accounts, records, reports, files, memoranda, paper, reports of
    examination, work papers, and correspondence related to such reports,
    and any other information or materials.
        (b) Property of the Office of Thrift Supervision.--
                (1) In general.--No <<NOTE: Deadline.>> later than 90 days
            after the transfer date, all property of the Office of Thrift
            Supervision (other than property described under paragraph
            (b)(2)) that the Comptroller of the Currency and the Chairperson
            of the Corporation jointly determine is used, on the day before
            the transfer date, to perform or support the functions of the
            Office of Thrift Supervision transferred to the Office of the
            Comptroller of the Currency or the Corporation under this title,
            shall be transferred to the Office of the Comptroller of the
            Currency or the Corporation in a manner consistent with the
            transfer of employees under this subtitle.
                (2) Personal property.--All books, accounts, records,
            reports, files, memoranda, papers, documents, reports of
            examination, work papers, and correspondence of the Office of
            Thrift Supervision that the Comptroller of the Currency, the
            Chairperson of the Corporation, and the Chairman of the Board of
            Governors jointly determine is used, on the day before the
            transfer date, to perform or support the functions of the Office
            of Thrift Supervision transferred to the Board of Governors
            under this title shall be transferred to the Board of Governors
            in a manner consistent with the purposes of this title.

        (c) Contracts Related to Property Transferred.--Each contract,
    agreement, lease, license, permit, and similar arrangement

    [[Page 124 STAT. 1536]]

    relating to property transferred to the Office of the Comptroller of the
    Currency or the Corporation by this section shall be transferred to the
    Office of the Comptroller of the Currency or the Corporation, as
    appropriate, together with the property to which it relates.
        (d) Preservation of Property.--Property identified for transfer
    under this section shall not be altered, destroyed, or deleted before
    transfer under this section.
    SEC. 324. <<NOTE: 12 USC 5434.>> FUNDS TRANSFERRED.

        The funds that, on the day before the transfer date, the Director of
    the Office of Thrift Supervision (in consultation with the Comptroller
    of the Currency, the Chairperson of the Corporation, and the Chairman of
    the Board of Governors) determines are not necessary to dispose of the
    affairs of the Office of Thrift Supervision under section 325 and are
    available to the Office of Thrift Supervision to pay the expenses of the
    Office of Thrift Supervision--
                (1) relating to the functions of the Office of Thrift
            Supervision transferred under section 312(b)(2)(B), shall be
            transferred to the Office of the Comptroller of the Currency on
            the transfer date;
                (2) relating to the functions of the Office of Thrift
            Supervision transferred under section 312(b)(2)(C), shall be
            transferred to the Corporation on the transfer date; and
                (3) relating to the functions of the Office of Thrift
            Supervision transferred under section 312(b)(1)(A), shall be
            transferred to the Board of Governors on the transfer date.
    SEC. 325. <<NOTE: Time periods. 12 USC 5435.>> DISPOSITION OF
                            AFFAIRS.

        (a) Authority of Director.--During the 90-day period beginning on
    the transfer date, the Director of the Office of Thrift Supervision--
                (1) shall, solely for the purpose of winding up the affairs
            of the Office of Thrift Supervision relating to any function
            transferred to the Office of the Comptroller of the Currency,
            the Corporation, or the Board of Governors under this title--
                        (A) manage the employees of the Office of Thrift
                    Supervision who have not yet been transferred and
                    provide for the payment of the compensation and benefits
                    of the employees that accrue before the date on which
                    the employees are transferred under this title; and
                        (B) manage any property of the Office of Thrift
                    Supervision, until the date on which the property is
                    transferred under section 323; and
                (2) may take any other action necessary to wind up the
            affairs of the Office of Thrift Supervision.

        (b) Status of Director.--
                (1) In general.--Notwithstanding the transfer of functions
            under this subtitle, during the 90-day period beginning on the
            transfer date, the Director of the Office of Thrift Supervision
            shall retain and may exercise any authority vested in the
            Director of the Office of Thrift Supervision on the day before
            the transfer date, only to the extent necessary--
                        (A) to wind up the Office of Thrift Supervision; and
                        (B) to carry out the transfer under this subtitle
                    during such 90-day period.

    [[Page 124 STAT. 1537]]

                (2) Other provisions.--For purposes of paragraph (1), the
            Director of the Office of Thrift Supervision shall, during the
            90-day period beginning on the transfer date, continue to be--
                        (A) treated as an officer of the United States; and
                        (B) entitled to receive compensation at the same
                    annual rate of basic pay that the Director of the Office
                    of Thrift Supervision received on the day before the
                    transfer date.
    SEC. 326. <<NOTE: 12 USC 5436.>> CONTINUATION OF SERVICES.

        Any agency, department, or other instrumentality of the United
    States, and any successor to any such agency, department, or
    instrumentality, that was, before the transfer date, providing support
    services to the Office of Thrift Supervision in connection with
    functions transferred to the Office of the Comptroller of the Currency,
    the Corporation or the Board of Governors under this title, shall--
                (1) continue to provide such services, subject to
            reimbursement by the Office of the Comptroller of the Currency,
            the Corporation, or the Board of Governors, until the transfer
            of functions under this title is complete; and
                (2) consult <<NOTE: Consultation.>> with the Comptroller of
            the Currency, the Chairperson of the Corporation, or the
            Chairman of the Board of Governors, as appropriate, to
            coordinate and facilitate a prompt and orderly transition.
    SEC. 327. <<NOTE: 12 USC 5437.>> IMPLEMENTATION PLAN AND REPORTS.

        (a) Plan Submission.--Within 180 days of the enactment of the Dodd-
    Frank Wall Street Reform and Consumer Protection Act, the Board of
    Governors, the Corporation, the Office of the Comptroller of the
    Currency, and the Office of Thrift Supervision, shall jointly submit a
    plan to the Committee on Banking, Housing, and Urban Affairs of the
    Senate, the Committee on Financial Services of the House of
    Representatives, and the Inspectors General of the Department of the
    Treasury, the Corporation, and the Board of Governors detailing the
    steps the Board of Governors, the Corporation, the Office of the
    Comptroller of the Currency, and the Office of Thrift Supervision will
    take to implement the provisions of sections 301 through 326, and the
    provisions of the amendments made by such sections.
        (b) Inspectors General Review of the Plan.--Within 60 days of
    receiving the plan required under subsection (a), the Inspectors General
    of the Department of the Treasury, the Corporation, and the Board of
    Governors shall jointly provide a written report to the Board of
    Governors, the Corporation, the Office of the Comptroller of the
    Currency, and the Office of Thrift Supervision and shall submit a copy
    to the Committee on Banking, Housing, and Urban Affairs of the Senate
    and the Committee on Financial Services of the House of Representatives
    detailing whether the plan conforms with the provisions of sections 301
    through 326, and the provisions of the amendments made by such sections,
    including--
                (1) whether the plan sufficiently takes into consideration
            the orderly transfer of personnel;
                (2) whether the plan describes procedures and safeguards to
            ensure that the Office of Thrift Supervision employees are not
            unfairly disadvantaged relative to employees of the Office of
            the Comptroller of the Currency and the Corporation;

    [[Page 124 STAT. 1538]]

                (3) whether the plan sufficiently takes into consideration
            the orderly transfer of authority and responsibilities;
                (4) whether the plan sufficiently takes into consideration
            the effective transfer of funds;
                (5) whether the plan sufficiently takes in consideration the
            orderly transfer of property; and
                (6) any additional recommendations for an orderly and
            effective process.

        (c) Implementation Reports.--Not later than 6 months after the date
    on which the Committee on Banking, Housing, and Urban Affairs of the
    Senate and the Committee on Financial Services of the House of
    Representatives receives the report required under subsection (b), and
    every 6 months thereafter until all aspects of the plan have been
    implemented, the Inspectors General of the Department of the Treasury,
    the Corporation, and the Board of Governors shall jointly provide a
    written report on the status of the implementation of the plan to the
    Board of Governors, the Corporation, the Office of the Comptroller of
    the Currency, and the Office of Thrift Supervision and shall submit a
    copy to the Committee on Banking, Housing, and Urban Affairs of the
    Senate and the Committee on Financial Services of the House of
    Representatives.

                Subtitle C--Federal Deposit Insurance Corporation

    SEC. 331. DEPOSIT INSURANCE REFORMS.

        (a) Size Distinctions.--Section 7(b)(2) of the Federal Deposit
    Insurance Act (12 U.S.C. 1817(b)(2)) is amended--
                (1) by striking subparagraph (D); and
                (2) by redesignating subparagraph (C) as subparagraph (D).

        (b) Assessment <<NOTE: 12 USC 1817 note.>> Base.--The Corporation
    shall amend the regulations issued by the Corporation under section
    7(b)(2) of the Federal Deposit Insurance Act (12 U.S.C. 1817(b)(2)) to
    define the term ``assessment base'' with respect to an insured
    depository institution for purposes of that section 7(b)(2), as an
    amount equal to--
                (1) the average consolidated total assets of the insured
            depository institution during the assessment period; minus
                (2) the sum of--
                        (A) the average tangible equity of the insured
                    depository institution during the assessment period; and
                        (B) in the case of an insured depository institution
                    that is a custodial bank (as defined by the Corporation,
                    based on factors including the percentage of total
                    revenues generated by custodial businesses and the level
                    of assets under custody) or a banker's bank (as that
                    term is used in section 5136 of the Revised Statutes (12
                    U.S.C. 24)), an amount that the Corporation determines
                    is necessary to establish assessments consistent with
                    the definition under section 7(b)(1) of the Federal
                    Deposit Insurance Act (12 U.S.C. 1817(b)(1)) for a
                    custodial bank or a banker's bank.

    [[Page 124 STAT. 1539]]

    SEC. 332. ELIMINATION OF PROCYCLICAL ASSESSMENTS.

        Section 7(e) of the Federal Deposit Insurance Act <<NOTE: 12 USC
    1817.>> is amended--
                (1) in paragraph (2)--
                        (A) by amending subparagraph (B) to read as follows:
                        ``(B) Limitation.--The Board of Directors may, in
                    its sole discretion, suspend or limit the declaration of
                    payment of dividends under subparagraph (A).'';
                        (B) by amending subparagraph (C) to read as follows:
                        ``(C) Notice and <<NOTE: Regulations.>> opportunity
                    for comment.--The Corporation shall prescribe, by
                    regulation, after notice and opportunity for comment,
                    the method for the declaration, calculation,
                    distribution, and payment of dividends under this
                    paragraph''; and
                        (C) by striking subparagraphs (D) through (G); and
                (2) in paragraph (4)(A) by striking ``paragraphs (2)(D)
            and'' and inserting ``paragraphs (2) and''.
    SEC. 333. ENHANCED ACCESS TO INFORMATION FOR DEPOSIT INSURANCE
                            PURPOSES.

        (a) Section 7(a)(2)(B) of the Federal Deposit Insurance Act is
    amended by striking ``agreement'' and inserting ``consultation''.
        (b) Section 7(b)(1)(E) of the Federal Deposit Insurance Act is
    amended--
                (1) in clause (i), by striking ``such as'' and inserting
            ``including''; and
                (2) in clause (iii), by striking ``Corporation'' and
            inserting ``Corporation, except as provided in section
            7(a)(2)(B)''.
    SEC. 334. TRANSITION RESERVE RATIO REQUIREMENTS TO REFLECT NEW
                            ASSESSMENT BASE.

        (a) Section 7(b)(3)(B) of the Federal Deposit Insurance Act is
    amended to read as follows:
                        ``(B) Minimum reserve ratio.--The reserve ratio
                    designated by the Board of Directors for any year may
                    not be less than 1.35 percent of estimated insured
                    deposits, or the comparable percentage of the assessment
                    base set forth in paragraph (2)(C).''.

        (b) Section 3(y)(3) of the <<NOTE: 12 USC 1813.>> Federal Deposit
    Insurance Act is amended by inserting ``, or such comparable percentage
    of the assessment base set forth in section 7(b)(2)(C)'' before the
    period.

        (c) For a <<NOTE: Time period. Public information. 12 USC 1817
    note.>> period of not less than 5 years after the date of the enactment
    of this title, the Federal Deposit Insurance Corporation shall make
    available to the public the reserve ratio and the designated reserve
    ratio using both estimated insured deposits and the assessment base
    under section 7(b)(2)(C) of the Federal Deposit Insurance Act.

        (d) Reserve Ratio.--Notwithstanding the timing requirements of
    section 7(b)(3)(E)(ii) of the Federal Deposit Insurance Act, the
    Corporation shall take such steps as may be necessary for the reserve
    ratio of the Deposit Insurance Fund to reach 1.35 percent of estimated
    insured deposits by September 30, 2020.
        (e) Offset.--In setting the assessments necessary to meet the
    requirements of subsection (d), the Corporation shall offset the effect
    of subsection (d) on insured depository institutions with total
    consolidated assets of less than $10,000,000,000.

    [[Page 124 STAT. 1540]]

    SEC. 335. PERMANENT INCREASE IN DEPOSIT AND SHARE INSURANCE.

        (a) Permanent Increase in Deposit Insurance.--Section 11(a)(1)(E) of
    the Federal Deposit Insurance Act (12 U.S.C. 1821(a)(1)(E)) is amended--
                (1) by striking ``$100,000'' and inserting ``$250,000''; and
                (2) by adding at the end the following new sentences:
            ``Notwithstanding any other provision of law, the increase in
            the standard maximum deposit insurance amount to $250,000 shall
            apply to depositors in any institution for which the Corporation
            was appointed as receiver or conservator on or after January 1,
            2008, and before October 3, 2008. The Corporation shall take
            such actions as are necessary to carry out the requirements of
            this section with respect to such depositors, without regard to
            any time limitations under this Act. In implementing this and
            the preceding 2 sentences, any payment on a deposit claim made
            by the Corporation as receiver or conservator to a depositor
            above the standard maximum deposit insurance amount in effect at
            the time of the appointment of the Corporation as receiver or
            conservator shall be deemed to be part of the net amount due to
            the depositor under subparagraph (B).''

        (b) Permanent Increase in Share Insurance.--Section 207(k)(5) of the
    Federal Credit Union Act (12 U.S.C. 1787(k)(5)) is amended by striking
    ``$100,000'' and inserting ``$250,000''.
    SEC. 336. MANAGEMENT OF THE FEDERAL DEPOSIT INSURANCE CORPORATION.

        (a) In General.--Section 2 of the Federal Deposit Insurance Act (12
    U.S.C. 1812) is amended--
                (1) in subsection (a)(1)(B), by striking ``Director of the
            Office of Thrift Supervision'' and inserting ``Director of the
            Consumer Financial Protection Bureau'';
                (2) by amending subsection (d)(2) to read as follows:
                ``(2) Acting officials may serve.--In the event of a vacancy
            in the office of the Comptroller of the Currency or the office
            of Director of the Consumer Financial Protection Bureau and
            pending the appointment of a successor, or during the absence or
            disability of the Comptroller of the Currency or the Director of
            the Consumer Financial Protection Bureau, the acting Comptroller
            of the Currency or the acting Director of the Consumer Financial
            Protection Bureau, as the case may be, shall be a member of the
            Board of Directors in the place of the Comptroller or
            Director.''; and
                (3) in subsection (f)(2), by striking ``Office of Thrift
            Supervision'' and inserting ``Consumer Financial Protection
            Bureau''.

        (b) Effective <<NOTE: 12 USC 1812 note.>> Date.--This section, and
    the amendments made by this section, shall take effect on the transfer
    date.

                            Subtitle D--Other Matters

    SEC. <<NOTE: 12 USC 5451.>> 341. BRANCHING.

        Notwithstanding the Federal Deposit Insurance Act (12 U.S.C. 1811 et
    seq.), the Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.), or
    any other provision of Federal or State law, a savings association that
    becomes a bank may--

    [[Page 124 STAT. 1541]]

                (1) continue to operate any branch or agency that the
            savings association operated immediately before the savings
            association became a bank; and
                (2) establish, acquire, and operate additional branches and
            agencies at any location within any State in which the savings
            association operated a branch immediately before the savings
            association became a bank, if the law of the State in which the
            branch is located, or is to be located, would permit
            establishment of the branch if the bank were a State bank
            chartered by such State.
    SEC. 342. <<NOTE: 12 USC 5452.>> OFFICE OF MINORITY AND WOMEN
                            INCLUSION.

        (a) Office of Minority and Women Inclusion.--
                (1) <<NOTE: Deadlines.>>  Establishment.--
                        (A) In general.--Except as provided in subparagraph
                    (B), not later than 6 months after the date of enactment
                    of this Act, each agency shall establish an Office of
                    Minority and Women Inclusion that shall be responsible
                    for all matters of the agency relating to diversity in
                    management, employment, and business activities.
                        (B) Bureau.--The Bureau shall establish an Office of
                    Minority and Women Inclusion not later than 6 months
                    after the designated transfer date established under
                    section 1062.
                (2) Transfer of responsibilities.--Each agency that, on the
            day before the date of enactment of this Act, assigned the
            responsibilities described in paragraph (1) (or comparable
            responsibilities) to another office of the agency shall ensure
            that such responsibilities are transferred to the Office.
                (3) Duties with respect to civil rights laws.--The
            responsibilities described in paragraph (1) do not include
            enforcement of statutes, regulations, or executive orders
            pertaining to civil rights, except each Director shall
            coordinate with the agency administrator, or the designee of the
            agency administrator, regarding the design and implementation of
            any remedies resulting from violations of such statutes,
            regulations, or executive orders.

        (b) Director.--
                (1) In general.--The Director of each Office shall be
            appointed by, and shall report to, the agency administrator. The
            position of Director shall be a career reserved position in the
            Senior Executive Service, as that position is defined in section
            3132 of title 5, United States Code, or an equivalent
            designation.
                (2) Duties.--Each <<NOTE: Standards.>> Director shall
            develop standards for--
                        (A) equal employment opportunity and the racial,
                    ethnic, and gender diversity of the workforce and senior
                    management of the agency;
                        (B) increased participation of minority-owned and
                    women-owned businesses in the programs and contracts of
                    the agency, including standards for coordinating
                    technical assistance to such businesses; and
                        (C) assessing the diversity policies and practices
                    of entities regulated by the agency.
                (3) Other duties.--Each Director shall advise the agency
            administrator on the impact of the policies and regulations of
            the agency on minority-owned and women-owned businesses.

    [[Page 124 STAT. 1542]]

                (4) Rule of construction.--Nothing in paragraph (2)(C) may
            be construed to mandate any requirement on or otherwise affect
            the lending policies and practices of any regulated entity, or
            to require any specific action based on the findings of the
            assessment.

        (c) Inclusion in All Levels of Business Activities.--
                (1) In general.--
            The <<NOTE: Standards. Procedures.>> Director of each Office
            shall develop and implement standards and procedures to ensure,
            to the maximum extent possible, the fair inclusion and
            utilization of minorities, women, and minority-owned and women-
            owned businesses in all business and activities of the agency at
            all levels, including in procurement, insurance, and all types
            of contracts.
                (2) Contracts.--The procedures established by each agency
            for review and evaluation of contract proposals and for hiring
            service providers shall include, to the extent consistent with
            applicable law, a component that gives consideration to the
            diversity of the applicant. Such procedure shall include a
            written statement, in a form and with such content as the
            Director shall prescribe, that a contractor shall ensure, to the
            maximum extent possible, the fair inclusion of women and
            minorities in the workforce of the contractor and, as
            applicable, subcontractors.
                (3) Termination.--
                        (A) Determination.--The standards and procedures
                    developed and implemented under this subsection shall
                    include a procedure for the Director to make a
                    determination whether an agency contractor, and, as
                    applicable, a subcontractor has failed to make a good
                    faith effort to include minorities and women in their
                    workforce.
                        (B) Effect of determination.--
                              (i) Recommendation to agency administrator.--
                          Upon a determination described in subparagraph
                          (A), the Director shall make a recommendation to
                          the agency administrator that the contract be
                          terminated.
                              (ii) Action by agency administrator.--Upon
                          receipt of a recommendation under clause (i), the
                          agency administrator may--
                                        (I) terminate the contract;
                                        (II) make a referral to the Office
                                    of Federal Contract Compliance Programs
                                    of the Department of Labor; or
                                        (III) take other appropriate action.

        (d) Applicability.--This section shall apply to all contracts of an
    agency for services of any kind, including the services of financial
    institutions, investment banking firms, mortgage banking firms, asset
    management firms, brokers, dealers, financial services entities,
    underwriters, accountants, investment consultants, and providers of
    legal services. The contracts referred to in this subsection include all
    contracts for all business and activities of an agency, at all levels,
    including contracts for the issuance or guarantee of any debt, equity,
    or security, the sale of assets, the management of the assets of the
    agency, the making of equity investments by the agency, and the
    implementation by the agency of programs to address economic recovery.

    [[Page 124 STAT. 1543]]

        (e) Reports.--Each Office shall submit to Congress an annual report
    regarding the actions taken by the agency and the Office pursuant to
    this section, which shall include--
                (1) a statement of the total amounts paid by the agency to
            contractors since the previous report;
                (2) the percentage of the amounts described in paragraph (1)
            that were paid to contractors described in subsection (c)(1);
                (3) the successes achieved and challenges faced by the
            agency in operating minority and women outreach programs;
                (4) the challenges the agency may face in hiring qualified
            minority and women employees and contracting with qualified
            minority-owned and women-owned businesses; and
                (5) any other information, findings, conclusions, and
            recommendations for legislative or agency action, as the
            Director determines appropriate.

        (f) Diversity in Agency Workforce.--Each agency shall take
    affirmative steps to seek diversity in the workforce of the agency at
    all levels of the agency in a manner consistent with applicable law.
    Such steps shall include--
                (1) recruiting at historically black colleges and
            universities, Hispanic-serving institutions, women's colleges,
            and colleges that typically serve majority minority populations;
                (2) sponsoring and recruiting at job fairs in urban
            communities;
                (3) placing employment advertisements in newspapers and
            magazines oriented toward minorities and women;
                (4) partnering with organizations that are focused on
            developing opportunities for minorities and women to place
            talented young minorities and women in industry internships,
            summer employment, and full-time positions;
                (5) where feasible, partnering with inner-city high schools,
            girls' high schools, and high schools with majority minority
            populations to establish or enhance financial literacy programs
            and provide mentoring; and
                (6) any other mass media communications that the Office
            determines necessary.

        (g) Definitions.--For <<NOTE: Applicability.>> purposes of this
    section, the following definitions shall apply:
                (1) Agency.--The term ``agency'' means--
                        (A) the Departmental Offices of the Department of
                    the Treasury;
                        (B) the Corporation;
                        (C) the Federal Housing Finance Agency;
                        (D) each of the Federal reserve banks;
                        (E) the Board;
                        (F) the National Credit Union Administration;
                        (G) the Office of the Comptroller of the Currency;
                        (H) the Commission; and
                        (I) the Bureau.
                (2) Agency administrator.--The term ``agency administrator''
            means the head of an agency.
                (3) Minority.--The term ``minority'' has the same meaning as
            in section 1204(c) of the Financial Institutions Reform,
            Recovery, and Enforcement Act of 1989 (12 U.S.C. 1811 note).
                (4) Minority-owned business.--The term ``minority-owned
            business'' has the same meaning as in section 21A(r)(4)(A)

    [[Page 124 STAT. 1544]]

            of the Federal Home Loan Bank Act (12 U.S.C. 1441a(r)(4)(A)), as
            in effect on the day before the transfer date.
                (5) Office.--The term ``Office'' means the Office of
            Minority and Women Inclusion established by an agency under
            subsection (a).
                (6) Women-owned business.--The term ``women-owned business''
            has the meaning given the term ``women's business'' in section
            21A(r)(4)(B) of the Federal Home Loan Bank Act (12 U.S.C.
            1441a(r)(4)(B)), as in effect on the day before the transfer
            date.
    SEC. 343. INSURANCE OF TRANSACTION ACCOUNTS.

        (a) Banks and Savings Associations.--
                (1) Amendments.--Section 11(a)(1) of the Federal Deposit
            Insurance Act (12 U.S.C. 1821(a)(1)) is amended--
                        (A) in subparagraph (B)--
                              (i) by striking ``The net amount'' and
                          inserting the following:
                              ``(i) In general.--Subject to clause (ii), the
                          net amount''; and
                              (ii) by adding at the end the following new
                          clauses:
                              ``(ii) Insurance for noninterest-bearing
                          transaction accounts.--Notwithstanding clause (i),
                          the Corporation shall fully insure the net amount
                          that any depositor at an insured depository
                          institution maintains in a noninterest-bearing
                          transaction account. Such amount shall not be
                          taken into account when computing the net amount
                          due to such depositor under clause (i).
                              ``(iii) Noninterest-bearing transaction
                          account defined.--For purposes of this
                          subparagraph, the term `noninterest-bearing
                          transaction account' means a deposit or account
                          maintained at an insured depository institution--
                                        ``(I) with respect to which interest
                                    is neither accrued nor paid;
                                        ``(II) on which the depositor or
                                    account holder is permitted to make
                                    withdrawals by negotiable or
                                    transferable instrument, payment orders
                                    of withdrawal, telephone or other
                                    electronic media transfers, or other
                                    similar items for the purpose of making
                                    payments or transfers to third parties
                                    or others; and
                                        ``(III) on which the insured
                                    depository institution does not reserve
                                    the right to require advance notice of
                                    an intended withdrawal.''; and
                        (B) in subparagraph (C), by striking ``subparagraph
                    (B)'' and inserting ``subparagraph (B)(i)''.
                (2) Effective date.--The <<NOTE: 12 USC 1821
            note.>> amendments made by paragraph (1) shall take effect on
            December 31, 2010.
                (3) Prospective <<NOTE: Effective date. 12 USC 1821
            note.>> repeal.--Effective January 1, 2013, section 11(a)(1) of
            the Federal Deposit Insurance Act (12 U.S.C. 1821(a)(1)), as
            amended by paragraph (1), is amended--
                        (A) in subparagraph (B)--
                              (i) by striking ``deposit.--'' and all that
                          follows through ``clause (ii), the net amount''
                          and insert ``deposit.--The net amount''; and

    [[Page 124 STAT. 1545]]

                              (ii) by striking clauses (ii) and (iii); and
                        (B) in subparagraph (C), by striking ``subparagraph
                    (B)(i)'' and inserting ``subparagraph (B)''.

        (b) Credit Unions.--
                (1) Amendments.--Section 207(k)(1) of the Federal Credit
            Union Act (12 U.S.C. 1787(k)(1)) is amended--
                        (A) in subparagraph (A)--
                              (i) by striking ``Subject to the provisions of
                          paragraph (2), the net amount'' and inserting the
                          following:
                              ``(i) Net amount of insurance payable.--
                          Subject to clause (ii) and the provisions of
                          paragraph (2), the net amount''; and
                              (ii) by adding at the end the following new
                          clauses:
                              ``(ii) Insurance for noninterest-bearing
                          transaction accounts.--Notwithstanding clause (i),
                          the Board shall fully insure the net amount that
                          any member or depositor at an insured credit union
                          maintains in a noninterest-bearing transaction
                          account. Such amount shall not be taken into
                          account when computing the net amount due to such
                          member or depositor under clause (i).
                              ``(iii) Noninterest-bearing transaction
                          account defined.--For purposes of this
                          subparagraph, the term `noninterest-bearing
                          transaction account' means an account or deposit
                          maintained at an insured credit union--
                                        ``(I) with respect to which interest
                                    is neither accrued nor paid;
                                        ``(II) on which the account holder
                                    or depositor is permitted to make
                                    withdrawals by negotiable or
                                    transferable instrument, payment orders
                                    of withdrawal, telephone or other
                                    electronic media transfers, or other
                                    similar items for the purpose of making
                                    payments or transfers to third parties
                                    or others; and
                                        ``(III) on which the insured credit
                                    union does not reserve the right to
                                    require advance notice of an intended
                                    withdrawal.''; and
                        (B) in subparagraph (B), by striking ``subparagraph
                    (A)'' and inserting ``subparagraph (A)(i)''.
                (2) Effective <<NOTE: 12 USC 1787 note.>> date.--The
            amendments made by paragraph (1) shall take effect upon the date
            of the enactment of this Act
                (3) Prospective <<NOTE: Effective date. 12 USC 1787
            note.>> repeal.--Effective January 1, 2013, section 207(k)(1) of
            the Federal Credit Union Act (12 U.S.C. 1787(k)(1)), as amended
            by paragraph (1), is amended--
                        (A) in subparagraph (A)--
                              (i) by striking ``(i) net amount of insurance
                          payable.--'' and all that follows through
                          ``paragraph (2), the net amount'' and inserting
                          ``Subject to the provisions of paragraph (2), the
                          net amount''; and
                              (ii) by striking clauses (ii) and (iii); and
                        (B) in subparagraph (B), by striking ``subparagraph
                    (A)(i)'' and inserting ``subparagraph (A)''.

    [[Page 124 STAT. 1546]]

                 Subtitle E--Technical and Conforming Amendments

    SEC. 351. <<NOTE: 12 USC 906 note.>> EFFECTIVE DATE.

        Except as provided in section 364(a), the amendments made by this
    subtitle shall take effect on the transfer date.
    SEC. 352. BALANCED BUDGET AND EMERGENCY DEFICIT CONTROL ACT OF
                            1985.

        Section 256(h) of the Balanced Budget and Emergency Deficit Control
    Act of 1985 (2 U.S.C. 906(h)) is amended--
                (1) in paragraph (4), by striking subparagraphs (C) and (G);
            and
                (2) by redesignating subparagraphs (D), (E), (F), and (H) as
            subparagraphs (C), (D), (E), and (F), respectively.
    SEC. 353. BANK ENTERPRISE ACT OF 1991.

        Section 232(a) of the Bank Enterprise Act of 1991 (12 U.S.C.
    1834(a)) is amended--
                (1) in the subsection heading, by striking ``by Federal
            Reserve Board'';
                (2) in paragraph (1)--
                        (A) by striking ``The Board of Governors of the
                    Federal Reserve System,'' and inserting ``The
                    Comptroller of the Currency''; and
                        (B) by striking ``section 7(b)(2)(H)'' and inserting
                    ``section 7(b)(2)(E)'';
                (3) in paragraph (2)(A), by striking ``Board'' and inserting
            ``Comptroller''; and
                (4) in paragraph (3)--
                        (A) by redesignating subparagraphs (A) through (C)
                    as subparagraphs (B) through (D), respectively; and
                        (B) by inserting before subparagraph (B) the
                    following:
                        ``(A) Comptroller.--The <<NOTE: Definition.>> term
                    `Comptroller' means the Comptroller of the Currency.''.
    SEC. 354. BANK HOLDING COMPANY ACT OF 1956.

        The Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.) is
    amended--
                (1) in section 2(j)(3) (12 U.S.C. 1841(j)(3)), strike
            ``Director of the Office of Thrift Supervision'' and inserting
            ``appropriate Federal banking agency'';
                (2) in section 4 (12 U.S.C. 1843)--
                        (A) in subsection (i)--
                              (i) in paragraph (4)--
                                        (I) in subparagraph (A)--
                                                (aa) in the subparagraph
                                            heading, by striking ``to
                                            director''; and
                                                (bb) by striking ``Board''
                                            and all that follows through the
                                            end of the subparagraph and
                                            inserting ``Board shall solicit
                                            comments and recommendations
                                            from--
                              ``(i) the Comptroller of the Currency, with
                          respect to the acquisition of a Federal savings
                          association; and

    [[Page 124 STAT. 1547]]

                              ``(ii) the Federal Deposit Insurance
                          Corporation, with respect to the acquisition of a
                          State savings association.''.
                                        (II) in subparagraph (B), by
                                    striking ``Director'' each place that
                                    term appears and inserting ``Comptroller
                                    of the Currency or the Federal Deposit
                                    Insurance Corporation, as applicable,'';
                              (ii) in paragraph (5)--
                                        (I) in subparagraph (B), by striking
                                    ``Director with'' and inserting
                                    ``Comptroller of the Currency or the
                                    Federal Deposit Insurance Corporation,
                                    as applicable, with''; and
                                        (II) by striking ``Director'' each
                                    place that term appears and inserting
                                    ``Comptroller of the Currency or the
                                    Federal Deposit Insurance Corporation'';
                              (iii) in paragraph (6), by striking
                          ``Director'' and inserting ``Comptroller of the
                          Currency or the Federal Deposit Insurance
                          Corporation, as applicable,''; and
                              (iv) by striking paragraph (7); and
                (3) in section 5(f) (12 U.S.C. 1844(f))--
                        (A) by striking ``subpena'' each place that term
                    appears and inserting ``subpoena'';
                        (B) by striking ``subpenas'' each place that term
                    appears and inserting ``subpoenas''; and
                        (C) by striking ``subpenaed'' and inserting
                    ``subpoenaed''.
    SEC. 355. BANK HOLDING COMPANY ACT AMENDMENTS OF 1970.

        Section 106(b)(1) of the Bank Holding Company Act Amendments of 1970
    (12 U.S.C. 1972(1)) is amended in the undesignated matter following
    subparagraph (E) by inserting ``issue such regulations as are necessary
    to carry out this section, and, in consultation with the Comptroller of
    the Currency and the Federal Deposit Insurance Company, may'' after
    ``The Board may''.
    SEC. 356. BANK PROTECTION ACT OF 1968.

        The Bank Protection Act of 1968 (12 U.S.C. 1881 et seq.) is
    amended--
                (1) in section 2 (12 U.S.C. 1881), by striking ``the term''
            and all that follows through the end of the section and
            inserting ``the <<NOTE: Definition.>> term `Federal supervisory
            agency' means the appropriate Federal banking agency, as defined
            in section 3(q) of the Federal Deposit Insurance Act (12 U.S.C.
            1813(q)).'';
                (2) in section 3 (12 U.S.C. 1882), by striking ``and loan''
            each place that term appears; and
                (3) in section 5 (12 U.S.C. 1884), by striking ``and loan''.
    SEC. 357. BANK SERVICE COMPANY ACT.

        The Bank Service Company Act (12 U.S.C. 1861 et seq.) is amended--
                (1) in section 1(b)(4) (12 U.S.C. 1861(b)(4))--
                        (A) by inserting after ``an insured bank,'' the
                    following: ``a savings association,'';
                        (B) by striking ``Director of the Office of Thrift
                    Supervision'' and inserting ``appropriate Federal
                    banking agency''; and

    [[Page 124 STAT. 1548]]

                        (C) by striking ``, the Federal Savings and Loan
                    Insurance Corporation,'';
                (2) in section 1(b)(5), by striking ``term `insured
            depository institution' has the same meaning as in section
            3(c)'' and inserting ``terms `depository institution' and
            `savings association' have the same meanings as in section 3'';
            and
                (3) in section 7(c)(2) (12 U.S.C. 1867(c)(2)), by inserting
            ``each'' after ``notify''.
    SEC. 358. COMMUNITY REINVESTMENT ACT OF 1977.

        The Community Reinvestment Act of 1977 (12 U.S.C. 2901 et seq.) is
    amended--
                (1) in section 803 (12 U.S.C. 2902)--
                        (A) in paragraph (1)--
                              (i) in subparagraph (A), by inserting ``and
                          Federal savings associations (the deposits of
                          which are insured by the Federal Deposit Insurance
                          Corporation)'' after ``banks'';
                              (ii) in subparagraph (B), by striking ``and
                          bank holding companies'' and inserting ``, bank
                          holding companies, and savings and loan holding
                          companies''; and
                              (iii) in subparagraph (C), by striking ``;
                          and'' and inserting ``, and State savings
                          associations (the deposits of which are insured by
                          the Federal Deposit Insurance Corporation).''; and
                        (B) by striking paragraph (2) (relating to the
                    Office of Thrift Supervision), as added by section
                    744(q) of the Financial Institutions Reform, Recovery,
                    and Enforcement Act of 1989 (Public Law 101-73; 103
                    Stat. 440); and
                (2) in <<NOTE: Regulations. Applicability.>> section 806 (12
            U.S.C. 2905), by inserting ``, except that the Comptroller of
            the Currency shall prescribe regulations applicable to savings
            associations and the Board of Governors shall prescribe
            regulations applicable to insured State member banks, bank
            holding companies and savings and loan holding companies,''
            after ``supervisory agency''.
    SEC. 359. CRIME CONTROL ACT OF 1990.

        The Crime Control Act of 1990 is amended--
                (1) in section 2539(c)(2) (28 U.S.C. 509 note)--
                        (A) by striking subparagraphs (C) and (D); and
                        (B) by redesignating subparagraphs (E) through (H)
                    as subparagraphs (C) through (G), respectively; and
                (2) in section 2554(b)(2) (Public Law 101-647; 104 Stat.
            4890)--
                        (A) in subparagraph (A), by striking ``, the
                    Director of the Office of Thrift Supervision,'' and
                    inserting ``the Comptroller of the Currency''; and
                        (B) in subparagraph (B), by striking ``, the
                    Director'' and all that follows through ``Trust
                    Corporation'' and inserting ``or the Federal Deposit
                    Insurance Corporation''.
    SEC. 360. DEPOSITORY INSTITUTION MANAGEMENT INTERLOCKS ACT.

        The Depository Institution Management Interlocks Act (12 U.S.C. 3201
    et seq.) is amended--
                (1) in section 207 (12 U.S.C. 3206)--
                        (A) in paragraph (1), by inserting before the comma
                    at the end the following: ``and Federal savings
                    associations

    [[Page 124 STAT. 1549]]

                    (the deposits of which are insured by the Federal
                    Deposit Insurance Corporation)'';
                        (B) in paragraph (2), by striking ``, and bank
                    holding companies'' and inserting ``, bank holding
                    companies, and savings and loan holding companies'';
                        (C) in paragraph (3), by striking ``Corporation,''
                    and inserting ``Corporation and State savings
                    associations (the deposits of which are insured by the
                    Federal Deposit Insurance Corporation),'';
                        (D) by striking paragraph (4);
                        (E) by redesignating paragraphs (5) and (6) as
                    paragraphs (4) and (5), respectively; and
                        (F) in paragraph (5), as so redesignated, by
                    striking ``through (5)'' and inserting ``through (4)'';
                (2) in section 209 (12 U.S.C. 3207)--
                        (A) in paragraph (1), by inserting before the comma
                    at the end the following: ``and Federal savings
                    associations (the deposits of which are insured by the
                    Federal Deposit Insurance Corporation)'';
                        (B) in paragraph (2), by striking ``, and bank
                    holding companies'' and inserting ``, bank holding
                    companies, and savings and loan holding companies'';
                        (C) in paragraph (3), by striking ``Corporation,''
                    and inserting ``Corporation and State savings
                    associations (the deposits of which are insured by the
                    Federal Deposit Insurance Corporation),'';
                        (D) by striking paragraph (4); and
                        (E) by redesignating paragraph (5) as paragraph (4);
                    and
                (3) in section 210(a) (12 U.S.C. 3208(a))--
                        (A) by striking ``his'' and inserting ``the''; and
                        (B) by inserting ``of the Attorney General'' after
                    ``enforcement functions''.
    SEC. 361. EMERGENCY HOMEOWNERS' RELIEF ACT.

        Section 110 of the Emergency Homeowners' Relief Act (12 U.S.C. 2709)
    is amended in the second sentence, by striking ``Home Loan Bank Board,
    the Federal Savings and Loan Insurance Corporation'' and inserting
    ``Housing Finance Agency''.
    SEC. 362. FEDERAL CREDIT UNION ACT.

        The Federal Credit Union Act (12 U.S.C. 1751 et seq.) is amended--
                (1) in section 107(8) (12 U.S.C. 1757(8)), by striking ``or
            the Federal Savings and Loan Insurance Corporation'';
                (2) in section 205 (12 U.S.C. 1785)--
                        (A) in subsection (b)(2)(G)(i), by striking ``the
                    Office of Thrift Supervision and''; and
                        (B) in subsection (i)(1), by striking ``or the
                    Federal Savings and Loan Insurance Corporation''; and
                (3) in section 206(g)(7) (12 U.S.C. 1786(g)(7))--
                        (A) in subparagraph (A)--
                              (i) in clause (ii), by striking ``(b)(8)'' and
                          inserting ``(b)(9)'';
                              (ii) in clause (v)--
                                        (I) by striking ``depository'' and
                                    inserting ``financial''; and
                                        (II) by adding ``and'' at the end;

    [[Page 124 STAT. 1550]]

                              (iii) in clause (vi)--
                                        (I) by striking ``Board'' and
                                    inserting ``Agency''; and
                                        (II) by striking ``; and'' and
                                    inserting a period; and
                              (iv) by striking clause (vii); and
                        (B) in subparagraph (D)--
                              (i) in clause (iii), by adding ``and'' at the
                          end;
                              (ii) in clause (iv)--
                                        (I) by striking ``Board'' and
                                    inserting ``Agency''; and
                                        (II) by striking ``and'' at the end;
                                    and
                              (iii) by striking clause (v).
    SEC. 363. FEDERAL DEPOSIT INSURANCE ACT.

        The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) is
    amended--
                (1) in section 3 (12 U.S.C. 1813)--
                        (A) in subsection (b)(1)(C), by striking ``Director
                    of the Office of Thrift Supervision'' and inserting
                    ``Comptroller of the Currency'';
                        (B) in subsection (l)(5), in the matter preceding
                    subparagraph (A), by striking ``Director of the Office
                    of Thrift Supervision,''; and
                        (C) in subsection (z), by striking ``the Director of
                    the Office of Thrift Supervision,'';
                (2) in section 7 (12 U.S.C. 1817)--
                        (A) in subsection (a)--
                              (i) in paragraph (2)--
                                        (I) in subparagraph (A)--
                                                (aa) in the first sentence,
                                            by striking ``the Director of
                                            the Office of Thrift
                                            Supervision,'';
                                                (bb) in the second
                                            sentence--
                                                    (AA) by striking ``the
                                                Director of the Office of
                                                Thrift Supervision,'' and
                                                inserting ``to''; and
                                                    (BB) by inserting ``to''
                                                before ``any Federal home'';
                                                and
                                                (cc) by striking ``Finance
                                            Board'' each place that term
                                            appears and inserting ``Finance
                                            Agency''; and
                                        (II) in subparagraph (B), by
                                    striking ``the Comptroller of the
                                    Currency, the Board of Governors of the
                                    Federal Reserve System, and the Director
                                    of the Office of Thrift Supervision,''
                                    and inserting ``the Comptroller of the
                                    Currency and the Board of Governors of
                                    the Federal Reserve System,'';
                              (ii) in paragraph (3), in the first sentence,
                          by striking ``Comptroller of the Currency, the
                          Chairman of the Board of Governors of the Federal
                          Reserve System, and the Director of the Office of
                          Thrift Supervision.'' and inserting ``Comptroller
                          of the Currency, and the Chairman of the Board of
                          Governors of the Federal Reserve System.'';
                              (iii) in paragraph (6), by striking ``section
                          232(a)(3)(C)'' and inserting ``section
                          232(a)(3)(D)''; and

    [[Page 124 STAT. 1551]]

                              (iv) in paragraph (7), by striking ``, the
                          Director of the Office of Thrift Supervision,'';
                          and
                        (B) in subsection (n)--
                              (i) in the heading, by striking ``Director of
                          the Office of Thrift Supervision'' and inserting
                          ``Comptroller of the Currency'';
                              (ii) in the first sentence--
                                        (I) by striking ``the Director of
                                    the Office of Thrift Supervision'' and
                                    inserting ``the Comptroller of the
                                    Currency''; and
                                        (II) by inserting ``Federal'' before
                                    ``savings associations'';
                              (iii) in the third sentence, by striking ``,
                          the Financing Corporation, and the Resolution
                          Funding Corporation''; and
                              (iv) by striking ``the Director'' each place
                          that term appears and inserting ``the
                          Comptroller'';
                (3) in section 8 (12 U.S.C. 1818)--
                        (A) in subsection (a)(8)(B)(ii), in the last
                    sentence, by striking ``Director of the Office of Thrift
                    Supervision'' each place that term appears and inserting
                    ``Comptroller of the Currency'';
                        (B) in subsection (b)(3)--
                              (i) by inserting ``any savings and loan
                          holding company and any subsidiary (other than a
                          depository institution) of a savings and loan
                          holding company (as such terms are defined in
                          section 10 of Home Owners' Loan Act)), any
                          noninsured State member bank'' after ``Bank
                          Holding Company Act of 1956,''; and
                              (ii) by inserting ``or against a savings and
                          loan holding company or any subsidiary thereof
                          (other than a depository institution or a
                          subsidiary of such depository institution)''
                          before the period at the end;
                        (C) by striking paragraph (9) of subsection (b) and
                    inserting the following new paragraph:
                ``(9) [Repealed]''.
                        (D) in subsection (e)(7)--
                              (i) in subparagraph (A)--
                                        (I) in clause (v), by inserting
                                    ``and'' after the semicolon;
                                        (II) in clause (vi)--
                                                (aa) by striking ``Board''
                                            and inserting ``Agency''; and
                                                (bb) by striking ``; and''
                                            and inserting a period; and
                                        (III) by striking clause (vii); and
                              (ii) in subparagraph (D)--
                                        (I) in clause (iii), by inserting
                                    ``and'' after the semicolon;
                                        (II) in clause (iv)--
                                                (aa) by striking ``Board''
                                            and inserting ``Agency''; and
                                                (bb) by striking ``; and''
                                            and inserting a period; and
                                        (III) by striking clause (v);
                        (E) in subsection (j)--

    [[Page 124 STAT. 1552]]

                              (i) in paragraph (2), by striking ``, or as a
                          savings association under subsection (b)(9) of
                          this section'';
                              (ii) in paragraph (3), by inserting ``or''
                          after the semicolon;
                              (iii) in paragraph (4), by striking ``; or''
                          and inserting a comma; and
                              (iv) by striking paragraph (5);
                        (F) in subsection (o), by striking ``Director of the
                    Office of Thrift Supervision'' and inserting
                    ``Comptroller of the Currency''; and
                        (G) in subsection (w)(3)(A), by striking ``and the
                    Office of Thrift Supervision'';
                (4) in section 10 (12 U.S.C. 1820)--
                        (A) in subsection (d)(5), by striking ``or the
                    Resolution Trust Corporation'' each place that term
                    appears; and
                        (B) in subsection (k)(5)(B)--
                              (i) in clause (ii), by inserting ``and'' after
                          the semicolon;
                              (ii) in clause (iii), by striking ``; and''
                          and inserting a period; and
                              (iii) by striking clause (iv);
                (5) in section 11 (12 U.S.C. 1821)--
                        (A) in subsection (c)--
                              (i) in paragraph (2)(A)(ii), by striking
                          ``(other than section 21A of the Federal Home Loan
                          Bank Act)'';
                              (ii) in paragraph (4), by striking ``Except as
                          otherwise provided in section 21A of the Federal
                          Home Loan Bank Act and notwithstanding'' and
                          inserting ``Notwithstanding'';
                              (iii) in paragraph (6)--
                                        (I) in the heading, by striking
                                    ``Director of the office of thrift
                                    supervision'' and inserting
                                    ``Comptroller of the currency'';
                                        (II) in subparagraph (A)--
                                                (aa) by striking ``or the
                                            Resolution Trust Corporation'';
                                            and
                                                (bb) by striking ``Director
                                            of the Office of Thrift
                                            Supervision'' and inserting
                                            ``Comptroller of the Currency'';
                                            and
                                        (III) by amending subparagraph (B)
                                    to read as follows:
                        ``(B) Receiver.--The Corporation may, at the
                    discretion of the Comptroller of the Currency, be
                    appointed receiver and the Corporation may accept any
                    such appointment.'';
                              (iv) in paragraph (12)(A), by striking ``or
                          the Resolution Trust Corporation'';
                        (B) in subsection (d)--
                              (i) in paragraph (17)(A), by striking ``or the
                          Director of the Office of Thrift Supervision'';
                          and
                              (ii) in paragraph (18)(B), by striking ``or
                          the Director of the Office of Thrift
                          Supervision'';
                        (C) in subsection (m)--
                              (i) in paragraph (9), by striking ``or the
                          Director of the Office of Thrift Supervision, as
                          appropriate'';

    [[Page 124 STAT. 1553]]

                              (ii) in paragraph (16), by striking ``or the
                          Director of the Office of Thrift Supervision, as
                          appropriate'' each place that term appears; and
                              (iii) in paragraph (18), by striking ``or the
                          Director of the Office of Thrift Supervision, as
                          appropriate'' each place that term appears;
                        (D) in subsection (n)--
                              (i) in paragraph (1)(A)--
                                        (I) by striking ``, or the Director
                                    of the Office of Thrift Supervision,
                                    with respect to'' and inserting ``or'';
                                    and
                                        (II) by striking ``applicable,,''
                                    and inserting ``applicable,'';
                              (ii) in paragraph (2)(A), by striking ``or the
                          Director of the Office of Thrift Supervision'';
                              (iii) in paragraph (4)(D), by striking ``and
                          the Director of the Office of Thrift Supervision,
                          as appropriate,'';
                              (iv) in paragraph (4)(G), by striking ``and
                          the Director of the Office of Thrift Supervision,
                          as appropriate,''; and
                              (v) in paragraph (12)(B)--
                                        (I) by inserting ``as'' after
                                    ``shall appoint the Corporation'';
                                        (II) by striking ``or the Director
                                    of the Office of Thrift Supervision, as
                                    appropriate,'' each place such term
                                    appears;
                        (E) in subsection (p)--
                              (i) in paragraph (2)(B), by striking ``the
                          Corporation, the FSLIC Resolution Fund, or the
                          Resolution Trust Corporation,'' and inserting ``or
                          the Corporation,''; and
                              (ii) in paragraph (3)(B), by striking ``, the
                          FSLIC Resolution Fund, the Resolution Trust
                          Corporation,''; and
                        (F) in subsection (r), by striking ``and the
                    Resolution Trust Corporation'';
                (6) in section 13(k)(1)(A)(iv) (12 U.S.C.
            1823(k)(1)(A)(iv)), by striking ``Director of the Office of
            Thrift Supervision'' and inserting ``Comptroller of the
            Currency'';
                (7) in section 18 (12 U.S.C. 1828)--
                        (A) in subsection (c)(2)--
                              (i) in subparagraph (A), by inserting ``or a
                          Federal savings association'' before the
                          semicolon;
                              (ii) in subparagraph (B), by adding ``and'' at
                          the end;
                              (iii) in subparagraph (C), by striking
                          ``(except'' and all that follows through ``; and''
                          and inserting ``or a State savings association.'';
                          and
                              (iv) by striking subparagraph (D);
                        (B) in subsection (g)(1), by striking ``the Director
                    of the Office of Thrift Supervision''and inserting ``the
                    Comptroller of the Currency'';
                        (C) in subsection (i)(2)(C), by striking ``Director
                    of the Office of Thrift Supervision'' and inserting
                    ``Corporation''; and
                        (D) in subsection (m)--

    [[Page 124 STAT. 1554]]

                              (i) in paragraph (1)--
                                        (I) in subparagraph (A), by striking
                                    ``and the Director of the Office of
                                    Thrift Supervision'' and inserting ``or
                                    the Comptroller of the Currency, as
                                    appropriate,''; and
                                        (II) in subparagraph (B), by
                                    striking ``and orders of the Director of
                                    the Office of Thrift Supervision'' and
                                    inserting ``of the Comptroller of the
                                    Currency and orders of the Corporation
                                    and the Comptroller of the Currency'';
                              (ii) in paragraph (2)--
                                        (I) in subparagraph (A), by striking
                                    ``Director of the Office of Thrift
                                    Supervision'' and inserting
                                    ``Comptroller of the Currency, as
                                    appropriate,''; and
                                        (II) in subparagraph (B)--
                                                (aa) in the matter before
                                            clause (i), by striking
                                            ``Director of the Office of
                                            Thrift Supervision'' and
                                            inserting ``Corporation or the
                                            Comptroller of the Currency, as
                                            appropriate,''; and
                                                (bb) in the matter following
                                            clause (ii)--
                                                    (AA) in the first
                                                sentence, by striking
                                                ``Director of the Office of
                                                Thrift Supervision'' and
                                                inserting ``Office of the
                                                Comptroller of the Currency,
                                                as appropriate,''; and
                                                    (BB) by striking the
                                                second sentence and
                                                inserting the following:
                                                ``The Corporation or the
                                                Comptroller of the Currency,
                                                as appropriate, may take any
                                                other corrective measures
                                                with respect to the
                                                subsidiary, including the
                                                authority to require the
                                                subsidiary to terminate the
                                                activities or operations
                                                posing such risks, as the
                                                Corporation or the
                                                Comptroller of the Currency,
                                                respectively, may deem
                                                appropriate.''; and
                              (iii) in paragraph (3)--
                                        (I) in subparagraph (A), in the
                                    second sentence--
                                                (aa) by inserting ``, in the
                                            case of a Federal savings
                                            association,'' before ``consult
                                            with''; and
                                                (bb) by striking ``Director
                                            of the Office of Thrift
                                            Supervision'' and inserting
                                            ``Comptroller of the Currency'';
                                            and
                                        (II) in subparagraph (B)--
                                                (aa) in the subparagraph
                                            heading, by striking
                                            ``Director'' and inserting
                                            ``Comptroller of the currency'';
                                                (bb) by striking ``Office of
                                            Thrift Supervision'' and
                                            inserting ``Comptroller of the
                                            Currency'';
                                                (cc) by inserting a comma
                                            after ``soundness''; and
                                                (dd) by inserting ``as to
                                            Federal savings associations''
                                            after ``compliance'';
                (8) in section 19(e) (12 U.S.C. 1829(e))--

    [[Page 124 STAT. 1555]]

                        (A) in paragraph (1), by striking ``Director of the
                    Office of Thrift Supervision'' and inserting ``Board of
                    Governors of the Federal Reserve System''; and
                        (B) in paragraph (2), by striking ``Director of the
                    Office of Thrift Supervision'' and inserting ``Board of
                    Governors of the Federal Reserve System'';
                (9) in section 28 (12 U.S.C. 1831e)--
                        (A) in subsection (e)--
                              (i) in paragraph (2)--
                                        (I) in subparagraph (A)(ii), by
                                    striking ``Director of the Office of
                                    Thrift Supervision'' and inserting
                                    ``Comptroller of the Currency or the
                                    Corporation, as appropriate'';
                                        (II) in subparagraph (C), by
                                    striking ``Director of the Office of
                                    Thrift Supervision'' and inserting
                                    ``Comptroller of the Currency or the
                                    Corporation, as appropriate,''; and
                                        (III) in subparagraph (F), by
                                    striking ``Director of the Office of
                                    Thrift Supervision'' and inserting
                                    ``Comptroller of the Currency or the
                                    Corporation, as appropriate''; and
                              (ii) in paragraph (3)--
                                        (I) in subparagraph (A), by striking
                                    ``Director of the Office of Thrift
                                    Supervision'' and inserting
                                    ``Comptroller of the Currency or the
                                    Corporation, as appropriate''; and
                                        (II) in subparagraph (B), by
                                    striking ``Director of the Office of
                                    Thrift Supervision'' and inserting
                                    ``Comptroller of the Currency or the
                                    Corporation, as appropriate,''; and
                        (B) in subsection (h)(2), by striking ``Director of
                    the Office of Thrift Supervision'' and inserting
                    ``Comptroller of the Currency, of the Corporation,'';
                    and
                (10) in section 33(e) (12 U.S.C. 1831j(e)), by striking
            ``Federal Housing Finance Board, the Comptroller of the
            Currency, and the Director of the Office of Thrift Supervision''
            and inserting ``Federal Housing Finance Agency and the
            Comptroller of the Currency''.
    SEC. 364. FEDERAL HOME LOAN BANK ACT.

        (a) Repeal <<NOTE: 12 USC 1438 note. Effective date.>> of Section
    18(c).--Effective 90 days after the transfer date, section 18(c) of the
    Federal Home Loan Bank Act (12 U.S.C. 1438(c)) is repealed.

        (b) Repeal of Section 21A.--Section 21A of the Federal Home Loan
    Bank Act (12 U.S.C. 1441a) is repealed.
    SEC. 365. FEDERAL HOUSING ENTERPRISES FINANCIAL SAFETY AND
                            SOUNDNESS ACT OF 1992.

        The Federal Housing Enterprises Financial Safety and Soundness Act
    of 1992 (12 U.S.C. 4501 et seq.) is amended--
                (1) in section 1315(b) (12 U.S.C. 4515(b)), by striking
            ``the Federal Deposit Insurance Corporation, and the Office of
            Thrift Supervision.'' and inserting ``and the Federal Deposit
            Insurance Corporation.''; and
                (2) in section 1317(c) (12 U.S.C. 4517(c)), by striking
            ``the Federal Deposit Insurance Corporation, or the Director of
            the Office of Thrift Supervision'' and inserting ``or the
            Federal Deposit Insurance Corporation''.

    [[Page 124 STAT. 1556]]

    SEC. 366. FEDERAL RESERVE ACT.

        The Federal Reserve Act (12 U.S.C. 221 et seq.) is amended--
                (1) in section 11(a)(2) (12 U.S.C. 248(a)(2))--
                        (A) by inserting ``State savings associations that
                    are insured depository institutions (as defined in
                    section 3 of the Federal Deposit Insurance Act),'' after
                    ``case of insured'';
                        (B) by striking ``Director of the Office of Thrift
                    Supervision'' and inserting ``Comptroller of the
                    Currency'';
                        (C) by inserting ``Federal'' before ``savings
                    association which''; and
                        (D) by striking ``savings and loan association'' and
                    inserting ``savings association''; and
                (2) in section 19(b) (12 U.S.C. 461(b))--
                        (A) in paragraph (1)(F), by striking ``Director of
                    the Office of Thrift Supervision'' and inserting
                    ``Comptroller of the Currency''; and
                        (B) in paragraph (4)(B), by striking ``Director of
                    the Office of Thrift Supervision'' and inserting
                    ``Comptroller of the Currency''.
    SEC. 367. FINANCIAL INSTITUTIONS REFORM, RECOVERY, AND ENFORCEMENT
                            ACT OF 1989.

        The Financial Institutions Reform, Recovery, and Enforcement Act of
    1989 is amended--
                (1) in section 203 (12 U.S.C. 1812 note), by striking
            subsection (b);
                (2) in section 302(1) (12 U.S.C. 1467a note), by striking
            ``Director of the Office of Thrift Supervision'' and inserting
            ``Comptroller of the Currency'';
                (3) in section 305(12 U.S.C. 1464 note), by striking
            subsection (b);
                (4) in section 308 (12 U.S.C. 1463 note)--
                        (A) in subsection (a), by striking ``Director of the
                    Office of Thrift Supervision'' and inserting ``Chairman
                    of the Board of Governors of the Federal Reserve System,
                    the Comptroller of the Currency, the Chairman of the
                    National Credit Union Administration,''; and
                        (B) by adding at the end the following new
                    subsection:

        ``(c) Reports.--The Secretary of the Treasury, the Chairman of the
    Board of Governors of the Federal Reserve System, the Comptroller of the
    Currency, the Chairman of the National Credit Union Administration, and
    the Chairperson of Board of Directors of the Federal Deposit Insurance
    Corporation shall each submit an annual report to the Congress
    containing a description of actions taken to carry out this section.'';
                (5) in section 402 (12 U.S.C. 1437 note)--
                        (A) in subsection (a), by striking ``Director of the
                    Office of Thrift Supervision'' and inserting
                    ``Comptroller of the Currency'';
                        (B) by striking subsection (b);
                        (C) in subsection (e)--
                              (i) in paragraph (1), by striking ``Office of
                          Thrift Supervision'' and inserting ``Comptroller
                          of the Currency''; and
                              (ii) in each of paragraphs (2), (3), and (4),
                          by striking ``Director of the Office of Thrift
                          Supervision''

    [[Page 124 STAT. 1557]]

                          each place that term appears and inserting
                          ``Comptroller of the Currency''; and
                        (D) by striking ``Federal Housing Finance Board''
                    each place that term appears and inserting ``Federal
                    Housing Finance Agency'';
                (6) in section 1103(a) (12 U.S.C. 3332(a)), by striking
            ``and the Resolution Trust Corporation'';
                (7) in section 1205(b) (12 U.S.C. 1818 note)--
                        (A) in paragraph (1)--
                              (i) by striking subparagraph (B); and
                              (ii) by redesignating subparagraphs (C)
                          through (F) as subparagraphs (B) through (E),
                          respectively; and
                        (B) in paragraph (2), by striking ``paragraph
                    (1)(F)'' and inserting ``paragraph (1)(E)'';
                (8) in section 1206 (12 U.S.C. 1833b)--
                        (A) by striking ``Board, the Oversight Board of the
                    Resolution Trust Corporation'' and inserting ``Agency,
                    and''; and
                        (B) by striking ``, and the Office of Thrift
                    Supervision'';
                (9) in section 1216 (12 U.S.C. 1833e)--
                        (A) in subsection (a)--
                              (i) in paragraph (3), by adding ``and'' at the
                          end;
                              (ii) in paragraph (4), by striking the
                          semicolon at the end and inserting a period;
                              (iii) by striking paragraphs (2), (5), and
                          (6); and
                              (iv) by redesignating paragraphs (3) and (4),
                          as paragraphs (2) and (3), respectively;
                        (B) in subsection (c)--
                              (i) by striking ``the Director of the Office
                          of Thrift Supervision,'' and inserting ``and'';
                          and
                              (ii) by striking ``the Thrift Depositor
                          Protection Oversight Board of the Resolution Trust
                          Corporation, and the Resolution Trust
                          Corporation''; and
                        (C) in subsection (d)--
                              (i) by striking paragraphs (3), (5), and (6);
                          and
                              (ii) by redesignating paragraphs (4), (7), and
                          (8) as paragraphs (3), (4), and (5), respectively.
    SEC. 368. FLOOD DISASTER PROTECTION ACT OF 1973.

        Section 3(a)(5) of the Flood Disaster Protection Act of 1973 (42
    U.S.C. 4003(a)(5)) is amended by striking ``, the Office of Thrift
    Supervision''.
    SEC. 369. HOME OWNERS' LOAN ACT.

        The Home Owners' Loan Act (12 U.S.C. 1461 et seq.) is amended--
                (1) in section 1 (12 U.S.C. 1461), by striking the table of
            contents;
                (2) in section 2 (12 U.S.C. 1462), as amended by this Act--
                        (A) by striking paragraphs (1) and (3);
                        (B) by redesignating paragraph (2) as paragraph (1);
                        (C) by redesignating paragraphs (4) through (9) as
                    paragraphs (2) through (7), respectively; and
                        (D) by <<NOTE: Definitions.>> adding at the end the
                    following:

    [[Page 124 STAT. 1558]]

                ``(8) Board.--The term `Board', other than in the context of
            the Board of Directors of the Corporation, means the Board of
            Governors of the Federal Reserve System.
                ``(9) Comptroller.--The term `Comptroller' means the
            Comptroller of the Currency.'';
                (3) in section 3 (12 U.S.C. 1462a)--
                        (A) by striking the section heading and inserting
                    the following:
    ``SEC. 3. ADMINISTRATIVE PROVISIONS.'';
                        (B) by striking subsections (a), (b), (c), (d), (g),
                    (h), (i), and (j);
                        (C) by redesignating subsections (e) and (f) as
                    subsections (a) and (b), respectively;
                        (D) in subsection (a), as so redesignated--
                              (i) in the heading by striking ``of the
                          Director''; and
                              (ii) in the matter preceding paragraph (1), by
                          striking ``The Director'' and inserting ``In
                          accordance with subtitle A of title III of the
                          Dodd-Frank Wall Street Reform and Consumer
                          Protection Act, the appropriate Federal banking
                          agency''; and
                        (E) in subsection (b), as so redesignated, by
                    striking ``Director'' and inserting ``appropriate
                    Federal banking agency'';
                (4) in section 4 (12 U.S.C. 1463)--
                        (A) in subsection (a)--
                              (i) in the subsection heading, by striking
                          ``Federal'';
                              (ii) by striking paragraphs (1) and (2) and
                          inserting the following:
                ``(1) Examination and safe and sound operation.--
                        ``(A) Federal savings associations.--The Comptroller
                    shall provide for the examination and safe and sound
                    operation of Federal savings associations.
                        ``(B) State savings associations.--The Corporation
                    shall provide for the examination and safe and sound
                    operation of State savings associations.
                ``(2) Regulations for savings associations.--The Comptroller
            may prescribe regulations with respect to savings associations,
            as the Comptroller determines to be appropriate to carry out the
            purposes of this Act.''; and
                              (iii) in paragraph (3), by striking
                          ``Director'' each place that term appears and
                          inserting ``Comptroller and the Corporation'';
                        (B) in subsection (b)--
                              (i) in paragraph (2)--
                                        (I) in subparagraph (A), by adding
                                    ``and'' at the end;
                                        (II) in subparagraph (B), by
                                    striking ``; and'' and inserting a
                                    period; and
                                        (III) by striking subparagraph (C);
                                    and
                              (ii) by striking ``Director'' each place that
                          term appears and inserting ``Comptroller'';
                        (C) in subsection (c)--

    [[Page 124 STAT. 1559]]

                              (i) by striking ``All regulations and policies
                          of the Director'' and inserting ``The regulations
                          of the Comptroller and the policies of the
                          Comptroller and the Corporation''; and
                              (ii) by striking ``of the Currency'';
                        (D) in subsection (e)(5), by striking ``Director''
                    and inserting ``Comptroller'';
                        (E) in subsection (f), by striking ``Director'' each
                    place that term appears and inserting ``appropriate
                    Federal banking agency''; and
                        (F) in subsection (h), by striking ``Director'' each
                    place that term appears and inserting ``appropriate
                    Federal banking agency'';
                (5) in section 5 (12 U.S.C. 1464)--
                        (A) in subsection (a), by striking ``Director'',
                    each place such term appears and inserting ``Comptroller
                    of the Currency'';
                        (B) in subsection (b), by striking ``Director'',
                    each place such term appears and inserting ``Comptroller
                    of the Currency'';
                        (C) in subsection (c)--
                              (i) in paragraph (5)--
                                        (I) in subparagraph (A), by striking
                                    ``Director'' and inserting ``appropriate
                                    Federal banking agency''; and
                                        (II) in subparagraph (B)--
                                                (aa) by striking ``The
                                            Director'' and inserting ``The
                                            appropriate Federal banking
                                            agency''; and
                                                (bb) by striking ``the
                                            Director'' and inserting ``the
                                            appropriate Federal banking
                                            agency'';
                        (D) in subsection (d)--
                              (i) in paragraph (1)--
                                        (I) in subparagraph (A)--
                                                (aa) in the first sentence,
                                            by striking ``Director'' and
                                            inserting ``appropriate Federal
                                            banking agency'';
                                                (bb) in the second
                                            sentence--
                                                    (AA) by striking
                                                ``Director's own name and
                                                through the Director's own
                                                attorneys'' and inserting
                                                ``name of the appropriate
                                                Federal banking agency and
                                                through the attorneys of the
                                                appropriate Federal banking
                                                agency''; and
                                                    (BB) by striking
                                                ``Director'' each place that
                                                term appears and inserting
                                                ``appropriate Federal
                                                banking agency''; and
                                                (cc) in the third sentence,
                                            by striking ``Director'' each
                                            place that term appears and
                                            inserting ``Comptroller'';
                                        (II) in subparagraph (B)--
                                                (aa) in clauses (i) through
                                            (iv), by striking ``Director''
                                            each place that term appears and
                                            inserting ``appropriate Federal
                                            banking agency'';
                                        (III) in clause (v)--

    [[Page 124 STAT. 1560]]

                                                (aa) in the matter preceding
                                            subclause (I), by striking
                                            ``Director'' and inserting
                                            ``appropriate Federal banking
                                            agency'';
                                                (bb) in subclause (II), by
                                            striking ``subpenas'' and
                                            inserting ``subpoenas''; and
                                                (cc) in the matter following
                                            subclause (II), by striking
                                            ``subpena'' and inserting
                                            ``subpoena'';
                                        (IV) in clause (vi)--
                                                (aa) in the first sentence,
                                            by striking ``Director'' and
                                            inserting ``appropriate Federal
                                            banking agency''; and
                                                (bb) in the second sentence,
                                            by striking ``Director'' and
                                            inserting ``Comptroller'';
                                        (V) in clause (vii)--
                                                (aa) in the first sentence,
                                            by striking ``subpena'' and
                                            inserting ``subpoena'';
                                                (bb) in the second sentence,
                                            by striking ``subpenaed'' and
                                            inserting ``subpoenaed''; and
                                                (cc) in the third sentence,
                                            by striking ``Director'' and
                                            inserting ``appropriate Federal
                                            banking agency'';
                              (ii) in paragraph (2)--
                                        (I) in subparagraph (A)--
                                                (aa) by striking ``Director
                                            of the Office of Thrift
                                            Supervision'' and inserting
                                            ``appropriate Federal banking
                                            agency'';
                                                (bb) by striking ``any
                                            insured savings association''
                                            and inserting ``an insured
                                            savings association''; and
                                                (cc) by striking ``Director
                                            determines, in the Director's
                                            discretion'' and inserting
                                            ``appropriate Federal banking
                                            agency determines, in the
                                            discretion of the appropriate
                                            Federal banking agency'';
                                        (II) in subparagraph (B), by
                                    striking ``Director'' each place that
                                    term appears and inserting ``appropriate
                                    Federal banking agency'';
                                        (III) in subparagraphs (C) and (D),
                                    by striking ``Director'' and inserting
                                    ``appropriate Federal banking agency'';
                                        (IV) in subparagraph (E)--
                                                (aa) in clause (ii)--
                                                    (AA) in the clause
                                                heading, by striking ``or
                                                rtc''; and
                                                    (BB) by striking ``or
                                                the Resolution Trust
                                                Corporation, as
                                                appropriate,'' each place
                                                that term appears; and
                                                (bb) by striking
                                            ``Director'' each place that
                                            term appears and inserting
                                            ``appropriate Federal banking
                                            agency''; and
                              (iii) in paragraph (3)--
                                        (I) in subparagraph (A), by striking
                                    ``Director'' each place that term
                                    appears and inserting ``Comptroller'';
                                    and
                                        (II) in subparagraph (B)--

    [[Page 124 STAT. 1561]]

                                                (aa) in the subparagraph
                                            heading, by striking ``or rtc'';
                                                (bb) by striking
                                            ``Corporation or the Resolution
                                            Trust''; and
                                                (cc) by striking
                                            ``Director'' and inserting
                                            ``Comptroller'';
                              (iv) in paragraph (4), by striking
                          ``Director'' and inserting ``appropriate Federal
                          banking agency'';
                              (v) in paragraph (6)--
                                        (I) in subparagraph (A), by striking
                                    ``Director'' and inserting
                                    ``Comptroller''; and
                                        (II) in subparagraphs (B) and (C),
                                    by striking ``Director'' each place that
                                    term appears and inserting ``appropriate
                                    Federal banking agency'';
                              (vi) in paragraph (7)--
                                        (I) in subparagraphs (A), (B), and
                                    (D), by striking ``Director'' each place
                                    that term appears and inserting
                                    ``appropriate Federal banking agency'';
                                        (II) in subparagraph (C), by
                                    striking ``Director'' and inserting
                                    ``Federal Deposit Insurance Corporation
                                    or the Comptroller, as appropriate,'';
                                    and
                                        (III) by striking subparagraph (E)
                                    and inserting the following:
                        ``(E) Administration by the comptroller and the
                    corporation.--The Comptroller may issue such
                    regulations, and the appropriate Federal banking agency
                    may issue such orders, including those issued pursuant
                    to section 8 of the Federal Deposit Insurance Act, as
                    may be necessary to administer and carry out this
                    paragraph and to prevent evasion of this paragraph.'';
                        (E) in subsection (e)(2), strike ``Director'' and
                    insert ``Comptroller'';
                        (F) in subsection (i)--
                              (i) by striking ``Director'', each place such
                          term appears, and inserting ``Comptroller'';
                              (ii) in paragraph (2), in the heading, by
                          striking ``director'' and inserting
                          ``Comptroller'';
                              (iii) in paragraph (5)(A), by striking ``of
                          the Currency''; and
                              (iv) except as provided in clauses (i) through
                          (iii), by striking ``Director'' each place such
                          term appears and inserting ``Comptroller'';
                        (G) in subsection (o)--
                              (i) in paragraph (1), by striking ``Director''
                          and inserting ``Comptroller''; and
                              (ii) in paragraph (2)(B), by striking
                          ``Director's determination'' and inserting
                          ``determination of the Comptroller'';
                        (H) in subsections (m), (n), (o), and (p), by
                    striking ``Director'', each place such term appears, and
                    inserting ``Comptroller'';
                        (I) in subsection (q)--
                              (i) in paragraph (6), by striking ``of
                          Governors of the Federal Reserve System'';
                              (ii) by striking ``Director'' each place that
                          term appears and inserting ``Board''; and

    [[Page 124 STAT. 1562]]

                              (iii) by inserting ``in consultation with the
                          Comptroller and the Corporation,'' before
                          ``considers'';
                        (J) in subsection (r)(3), by striking ``Director''
                    and inserting ``Comptroller of the Currency'';
                        (K) in subsection (s)--
                              (i) in paragraph (1), strike ``Director'' and
                          insert ``Comptroller of the Currency'';
                              (ii) in paragraph (2), strike ``Director'' and
                          insert ``Comptroller of the Currency'';
                              (iii) in paragraph (3), by striking
                          ``Director's discretion, the Director'' and
                          inserting ``discretion of the appropriate Federal
                          banking agency, the appropriate Federal banking
                          agency,'';
                              (iv) in paragraph (4), by striking
                          ``Director'' each place that term appears and
                          inserting ``appropriate Federal banking agency'';
                          and
                              (v) in paragraph (5)--
                                        (I) by striking ``Director'', each
                                    place such term appears, and inserting
                                    ``appropriate Federal banking agency'';
                                    and
                                        (II) by striking ``Director's
                                    approval'' and inserting ``approval of
                                    the appropriate Federal banking
                                    agency'';
                        (L) in subsection (t)--
                              (i) in paragraph (1), by striking subparagraph
                          (D);
                              (ii) by striking paragraph (3) and inserting
                          the following:
                ``(3) [Repealed].'';
                              (iii) in paragraph (5)--
                                        (I) in subparagraph (B), by striking
                                    ``Corporation, in its sole discretion''
                                    and inserting ``appropriate Federal
                                    banking agency, in the sole discretion
                                    of the appropriate Federal banking
                                    agency''; and
                                        (II) by striking subparagraph (D);
                              (iv) in paragraph (6)--
                                        (I) by striking subparagraph (A) and
                                    inserting the following:
                        ``(A) [Reserved].'';
                                        (II) in subparagraph (B), by
                                    striking ``Director'' each place that
                                    term appears and inserting ``appropriate
                                    Federal banking agency'';
                                        (III) in subparagraph (C)--
                                                (aa) in clause (i), by
                                            striking ``Director's prior
                                            approval'' and inserting ``prior
                                            approval of the appropriate
                                            Federal banking agency'';
                                                (bb) in clause (ii), by
                                            striking ``Director's
                                            discretion'' and inserting
                                            ``discretion of the appropriate
                                            Federal banking agency''; and
                                                (cc) by striking
                                            ``Director'' each place that
                                            term appears and inserting
                                            ``appropriate Federal banking
                                            agency'';
                                        (IV) in subparagraph (E), by
                                    striking ``Director shall'' and
                                    inserting ``appropriate Federal banking
                                    agency may''; and
                                        (V) in subparagraph (F), by striking
                                    ``Director'' and all that follows
                                    through the end of the

    [[Page 124 STAT. 1563]]

                                    subparagraph and inserting ``appropriate
                                    Federal banking agency under this Act or
                                    any other provision of law.'';
                              (v) in paragraph (7), by striking ``Director''
                          each place that term appears and inserting
                          ``appropriate Federal banking agency'';
                              (vi) by striking paragraph (8) and inserting
                          the following:
                ``(8) [Repealed].'';
                              (vii) in paragraph (9)--
                                        (I) in subparagraph (A), by striking
                                    ``Director'' and inserting
                                    ``Comptroller'';
                                        (II) in subparagraph (C), by
                                    striking ``of the Currency''; and
                                        (III) by striking subparagraph (B)
                                    and redesignating subparagraphs (C) and
                                    (D) as subparagraphs (B) and (C),
                                    respectively; and
                              (viii) except as provided in clauses (i)
                          through (vii), by striking ``Director'' each place
                          that term appears and inserting ``appropriate
                          Federal banking agency'';
                        (M) in subsection (u), by striking ``Director'' each
                    place that term appears and inserting ``appropriate
                    Federal banking agency'';
                        (N) in subsection (v)--
                              (i) in paragraph (2), by striking ``Director's
                          determinations'' and inserting ``determinations of
                          the appropriate Federal banking agency''; and
                              (ii) by striking ``Director'' each place that
                          term appears and inserting ``appropriate Federal
                          banking agency'';
                        (O) in subsection (w)(1)--
                              (i) in subparagraph (A)(II), by striking
                          ``Director's intention'' and inserting ``intention
                          of the Comptroller''; and
                              (ii) in subparagraph (B), by striking
                          ``Director's intention'' and inserting ``intention
                          of the Comptroller''; and
                        (P) except as provided in subparagraphs (A) through
                    (J), by striking ``Director'' each place that term
                    appears and inserting ``Comptroller'';
                (6) in section 8 (12 U.S.C. 1466a), by striking ``Director''
            each place that term appears and inserting ``Comptroller'';
                (7) in section 9 (12 U.S.C. 1467)--
                        (A) in subsection (a), by striking ``assessed by the
                    Director'' and all that follows through the end of the
                    subsection and inserting the following: ``assessed by--
                ``(1) the Comptroller, against each such Federal savings
            association, as the Comptroller deems necessary or appropriate;
            and
                ``(2) the Corporation, against each such State savings
            association, as the Corporation deems necessary or
            appropriate.'';
                        (B) in subsection (b), by striking ``Director'',
                    each place such term appears, and inserting
                    ``Comptroller or Corporation, as appropriate'';
                        (C) in subsection (e)--

    [[Page 124 STAT. 1564]]

                              (i) by striking ``Only the Director'' and
                          inserting ``The Comptroller''; and
                              (ii) by striking ``Director's designee'' and
                          inserting ``designee of the Comptroller'';
                        (D) by striking subsection (f) and inserting the
                    following:

        ``(f) [Reserved].'';
                        (E) in subsection (g)--
                              (i) in paragraph (1), by striking ``Director''
                          and inserting ``appropriate Federal banking
                          agency''; and
                              (ii) in paragraph (2), by striking ``Director,
                          or the Corporation, as the case may be,'' and
                          inserting ``appropriate Federal banking agency for
                          the savings association'';
                        (F) in subsection (i), by striking ``Director'' each
                    place that term appears and inserting ``appropriate
                    Federal banking agency'';
                        (G) in subsection (j), by striking ``Director's sole
                    discretion'' and inserting ``sole discretion of the
                    appropriate Federal banking agency'';
                        (H) in subsection (k), by striking ``Director may
                    assess against institutions for which the Director is
                    the appropriate Federal banking agency, as defined in
                    section 3 of the Federal Deposit Insurance Act,'' and
                    inserting ``appropriate Federal banking agency may
                    assess against an institution''; and
                        (I) except as provided in subparagraphs (A) through
                    (G), by striking ``Director'' each place that term
                    appears and inserting ``appropriate Federal banking
                    agency'';
                (8) in section 10 (12 U.S.C. 1467a)--
                        (A) in subsection (a)(1), by striking ``Director''
                    each place that term appears and inserting ``appropriate
                    Federal banking agency'';
                        (B) in subsection (b)--
                              (i) in paragraph (2), by striking ``and the
                          regional office of the Director of the district in
                          which its principal office is located,''; and
                              (ii) in paragraph (6), by striking
                          ``Director's own motion or application'' and
                          inserting ``motion or application of the Board'';
                        (C) in subsection (c)--
                              (i) in paragraph (2)(F), by striking ``of
                          Governors of the Federal Reserve System'';
                              (ii) in paragraph (4)(B), in the subparagraph
                          heading, by striking ``by director'';
                              (iii) in paragraph (6)(D), in the subparagraph
                          heading, by striking ``by director''; and
                              (iv) in paragraph (9)(E), by inserting ``(in
                          consultation with the appropriate Federal banking
                          agency)'' after ``including a determination'';
                        (D) in subsection (g)(5)(B), by striking ``the
                    Director's discretion'' and inserting ``the discretion
                    of the Board'';
                        (E) in subsection (l), by striking ``Director'' each
                    place that term appears and inserting ``appropriate
                    Federal banking agency'';
                        (F) in subsection (m), by striking ``Director'' and
                    inserting ``appropriate Federal banking agency'';

    [[Page 124 STAT. 1565]]

                        (G) in subsection (p)--
                              (i) in paragraph (1)--
                                        (I) by striking ``Director
                                    determines'' the 1st place such term
                                    appears and inserting ``Board or the
                                    appropriate Federal banking agency for
                                    the savings association determines'';
                                        (II) by striking ``Director may''
                                    and inserting ``Board may''; and
                                        (III) by striking ``Director
                                    determines'' the 2nd place such term
                                    appears and inserting ``Board, in
                                    consultation with the appropriate
                                    Federal banking agency for the savings
                                    association determines''; and
                              (ii) in paragraph (2), by striking
                          ``Director'', each place such term appears, and
                          inserting ``Board'';
                        (H) in subsection (q), by striking ``Director'',
                    each place such term appears, and inserting ``Board'';
                        (I) in subsection (r), by striking ``Director'',
                    each place such term appears, and inserting ``Board or
                    appropriate Federal banking agency'';
                        (J) in subsection (s)--
                              (i) in paragraph (2)--
                                        (I) in subparagraph (B)(ii), by
                                    striking ``Director's judgment'' and
                                    inserting ``judgment of the appropriate
                                    Federal banking agency for the savings
                                    association''; and
                                        (II) by striking ``Director'' each
                                    place that term appears and inserting
                                    ``appropriate Federal banking agency for
                                    the savings association''; and
                              (ii) in paragraph (4), by striking
                          ``Director'' and inserting ``Comptroller''; and
                        (K) except as provided in subparagraphs (A) through
                    (J), by striking ``Director'' each place that term
                    appears and inserting ``Board'';
                (9) in section 11 (12 U.S.C. 1468), by striking ``Director''
            each place that term appears and inserting ``appropriate Federal
            banking agency'';
                (10) in section 12 (12 U.S.C. 1468a), by striking ``the
            Director'' and inserting ``a Federal banking agency''; and
                (11) in section 13 (12 U.S.C. 1468a) is <<NOTE: 12 USC
            1468b.>> amended by striking ``Director'' and inserting ``a
            Federal banking agency''.
    SEC. 370. HOUSING ACT OF 1948.

        Section 502(c) of the Housing Act of 1948 (12 U.S.C. 1701c(c)) is
    amended--
                (1) in the matter preceding paragraph (1), by striking ``and
            the Director of the Office of Thrift Supervision'' and inserting
            ``, the Comptroller of the Currency, and the Federal Deposit
            Insurance Corporation''; and
                (2) in paragraph (3), by striking ``Board'' and inserting
            ``Agency''.
    SEC. 371. <<NOTE: 12 USC 1707 note.>> HOUSING AND COMMUNITY
                            DEVELOPMENT ACT OF 1992.

        Section 543 of the Housing and Community Development Act of 1992
    (Public Law 102-550; 106 Stat. 3798) is amended--
                (1) in subsection (c)(1)--
                        (A) by striking subparagraphs (D) through (F); and

    [[Page 124 STAT. 1566]]

                        (B) by redesignating subparagraphs (G) and (H) as
                    subparagraphs (D) and (E), respectively; and
                (2) in subsection (f)--
                        (A) in paragraph (2), by striking ``the Office of
                    Thrift Supervision,'' each place that term appears; and
                        (B) in paragraph (3)--
                              (i) in the matter preceding subparagraph (A),
                          by striking ``the Office of Thrift Supervision,'';
                          and
                              (ii) in subparagraph (D), by striking ``Office
                          of Thrift Supervision,''.
    SEC. 372. HOUSING AND URBAN-RURAL RECOVERY ACT OF 1983.

        Section 469 of the Housing and Urban-Rural Recovery Act of 1983 (12
    U.S.C. 1701p-1) is amended in the first sentence, by striking ``Federal
    Home Loan Bank Board'' and inserting ``Federal Housing Finance Agency''.
    SEC. 373. NATIONAL HOUSING ACT.

        Section 202(f) of the National Housing Act (12 U.S.C. 1708(f)) is
    amended--
                (1) by striking paragraph (5) and inserting the following:
                ``(5) if the mortgagee is a national bank, a subsidiary or
            affiliate of such bank, a Federal savings association or a
            subsidiary or affiliate of a savings association, the
            Comptroller of the Currency;'';
                (2) in paragraph (6), by adding ``and'' at the end;
                (3) in paragraph (7)--
                        (A) by inserting ``or State savings association''
                    after ``State bank''; and
                        (B) by striking ``; and'' and inserting a period;
                    and
                (4) by striking paragraph (8).
    SEC. 374. NEIGHBORHOOD REINVESTMENT CORPORATION ACT.

        Section 606(c)(3) of the Neighborhood Reinvestment Corporation Act
    (42 U.S.C. 8105(c)(3)) is amended by striking ``Federal Home Loan Bank
    Board'' and inserting ``Federal Housing Finance Agency''.
    SEC. 375. PUBLIC LAW 93-100.

        Section 5(d) of Public Law 93-100 (12 U.S.C. 1470(a)) is amended--
                (1) in paragraph (1), by striking ``Federal Savings and Loan
            Insurance Corporation with respect to insured institutions, the
            Board of Governors of the Federal Reserve System with respect to
            State member insured banks, and the Federal Deposit Insurance
            Corporation with respect to State nonmember insured banks'' and
            inserting ``appropriate Federal banking agency, with respect to
            the institutions subject to the jurisdiction of each such
            agency,''; and
                (2) in paragraph (2), by striking ``supervisory'' and
            inserting ``banking''.
    SEC. 376. SECURITIES EXCHANGE ACT OF 1934.

        The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is
    amended--
                (1) in section 3(a)(34) (15 U.S.C. 78c(a)(34))--
                        (A) in subparagraph (A)--

    [[Page 124 STAT. 1567]]

                              (i) in clause (i), by striking ``or a
                          subsidiary or a department or division of any such
                          bank'' and inserting ``a subsidiary or a
                          department or division of any such bank, a Federal
                          savings association (as defined in section 3(b)(2)
                          of the Federal Deposit Insurance Act (12 U.S.C.
                          1813(b)(2))), the deposits of which are insured by
                          the Federal Deposit Insurance Corporation, or a
                          subsidiary or department or division of any such
                          Federal savings association'';
                              (ii) in clause (ii), by striking ``or a
                          subsidiary or a department or division of such
                          subsidiary'' and inserting ``a subsidiary or a
                          department or division of such subsidiary, or a
                          savings and loan holding company'';
                              (iii) in clause (iii), by striking ``or a
                          subsidiary or department or division thereof;''
                          and inserting ``a subsidiary or department or
                          division of any such bank, a State savings
                          association (as defined in section 3(b)(3) of the
                          Federal Deposit Insurance Act (12 U.S.C.
                          1813(b)(3))), the deposits of which are insured by
                          the Federal Deposit Insurance Corporation, or a
                          subsidiary or a department or division of any such
                          State savings association; and'';
                              (iv) by striking clause (iv); and
                              (v) by redesignating clause (v) as clause
                          (iv);
                        (B) in subparagraph (B)--
                              (i) in clause (i), by striking ``or a
                          subsidiary of any such bank'' and inserting ``a
                          subsidiary of any such bank, a Federal savings
                          association (as defined in section 3(b)(2) of the
                          Federal Deposit Insurance Act (12 U.S.C.
                          1813(b)(2))), the deposits of which are insured by
                          the Federal Deposit Insurance Corporation, or a
                          subsidiary of any such Federal savings
                          association'';
                              (ii) in clause (ii), by striking ``or a
                          subsidiary of a bank holding company which is a
                          bank other than a bank specified in clause (i),
                          (iii), or (iv) of this subparagraph'' and
                          inserting ``a subsidiary of a bank holding company
                          that is a bank other than a bank specified in
                          clause (i) or (iii) of this subparagraph, or a
                          savings and loan holding company'';
                              (iii) in clause (iii), by striking ``or a
                          subsidiary thereof;'' and inserting ``a subsidiary
                          of any such bank, a State savings association (as
                          defined in section 3(b)(3) of the Federal Deposit
                          Insurance Act (12 U.S.C. 1813(b)(3))), the
                          deposits of which are insured by the Federal
                          Deposit Insurance Corporation, or a subsidiary of
                          any such State savings association; and'';
                              (iv) by striking clause (iv); and
                              (v) by redesignating clause (v) as clause
                          (iv);
                        (C) in subparagraph (C)--
                              (i) in clause (i), by striking ``bank'' and
                          inserting ``bank or a Federal savings association
                          (as defined in section 3(b)(2) of the Federal
                          Deposit Insurance Act (12 U.S.C. 1813(b)(2))), the
                          deposits of which are insured by the Federal
                          Deposit Insurance Corporation'';

    [[Page 124 STAT. 1568]]

                              (ii) in clause (ii), by striking ``or a
                          subsidiary of a bank holding company which is a
                          bank other than a bank specified in clause (i),
                          (iii), or (iv) of this subparagraph'' and
                          inserting ``a subsidiary of a bank holding company
                          that is a bank other than a bank specified in
                          clause (i) or (iii) of this subparagraph, or a
                          savings and loan holding company'';
                              (iii) in clause (iii), by striking ``System)''
                          and inserting, ``System) or a State savings
                          association (as defined in section 3(b)(3) of the
                          Federal Deposit Insurance Act (12 U.S.C.
                          1813(b)(3))), the deposits of which are insured by
                          the Federal Deposit Insurance Corporation; and'';
                              (iv) by striking clause (iv); and
                              (v) by redesignating clause (v) as clause
                          (iv);
                        (D) in subparagraph (D)--
                              (i) in clause (i), by inserting after ``bank''
                          the following: ``or a Federal savings association
                          (as defined in section 3(b)(2) of the Federal
                          Deposit Insurance Act (12 U.S.C. 1813(b)(2))), the
                          deposits of which are insured by the Federal
                          Deposit Insurance Corporation'';
                              (ii) in clause (ii), by adding ``and'' at the
                          end;
                              (iii) by striking clause (iii);
                              (iv) by redesignating clause (iv) as clause
                          (iii); and
                              (v) in clause (iii), as so redesignated, by
                          inserting after ``bank'' the following: ``or a
                          State savings association (as defined in section
                          3(b)(3) of the Federal Deposit Insurance Act (12
                          U.S.C. 1813(b)(3))), the deposits of which are
                          insured by the Federal Deposit Insurance
                          Corporation'';
                        (E) in subparagraph (F)--
                              (i) in clause (i), by inserting after ``bank''
                          the following: ``or a Federal savings association
                          (as defined in section 3(b)(2) of the Federal
                          Deposit Insurance Act (12 U.S.C. 1813(b)(2))), the
                          deposits of which are insured by the Federal
                          Deposit Insurance Corporation'';
                              (ii) by striking clause (ii);
                              (iii) by redesignating clauses (iii), (iv),
                          and (v) as clauses (ii), (iii), and (iv),
                          respectively; and
                              (iv) in clause (iii), as so redesignated, by
                          inserting before the semicolon the following: ``or
                          a State savings association (as defined in section
                          3(b)(3) of the Federal Deposit Insurance Act (12
                          U.S.C. 1813(b)(3))), the deposits of which are
                          insured by the Federal Deposit Insurance
                          Corporation'';
                        (F) in subparagraph (G)--
                              (i) in clause (i), by inserting after
                          ``national bank'' the following: ``, a Federal
                          savings association (as defined in section 3(b)(2)
                          of the Federal Deposit Insurance Act), the
                          deposits of which are insured by the Federal
                          Deposit Insurance Corporation,'';
                              (ii) in clause (iii)--
                                        (I) by inserting after ``bank)'' the
                                    following: ``, a State savings
                                    association (as defined in section
                                    3(b)(3) of the Federal Deposit Insurance
                                    Act), the deposits of which are insured
                                    by the Federal Deposit Insurance
                                    Corporation,''; and

    [[Page 124 STAT. 1569]]

                                        (II) by adding ``and'' at the end;
                              (iii) by striking clause (iv); and
                              (iv) by redesignating clause (v) as clause
                          (iv); and
                        (G) in the undesignated matter following
                    subparagraph (H), by striking ``, and the term `District
                    of Columbia savings and loan association' means any
                    association subject to examination and supervision by
                    the Office of Thrift Supervision under section 8 of the
                    Home Owners' Loan Act of 1933'';
                (2) in section 12(i) (15 U.S.C. 78l(i))--
                        (A) in paragraph (1), by inserting after ``national
                    banks'' the following: ``and Federal savings
                    associations, the accounts of which are insured by the
                    Federal Deposit Insurance Corporation'';
                        (B) by striking ``(3)'' and all that follows through
                    ``vested in the Office of Thrift Supervision'' and
                    inserting ``and (3) with respect to all other insured
                    banks and State savings associations, the accounts of
                    which are insured by the Federal Deposit Insurance
                    Corporation, are vested in the Federal Deposit Insurance
                    Corporation''; and
                        (C) in the second sentence, by striking ``the
                    Federal Deposit Insurance Corporation, and the Office of
                    Thrift Supervision'' and inserting ``and the Federal
                    Deposit Insurance Corporation'';
                (3) in section 15C(g)(1) (15 U.S.C. 78o-5(g)(1)), by
            striking ``the Director of the Office of Thrift Supervision, the
            Federal Savings and Loan Insurance Corporation,''; and
                (4) in section 23(b)(1) (15 U.S.C. 78w(b)(1)), by striking
            ``, other than the Office of Thrift Supervision,''.
    SEC. 377. TITLE 18, UNITED STATES CODE.

        Title 18, United States Code, is amended--
                (1) in section 212(c)(2)--
                        (A) by striking subparagraph (C); and
                        (B) by redesignating subparagraphs (D) through (H)
                    as subparagraphs (C) through (G), respectively;
                (2) in section 657, by striking ``Office of Thrift
            Supervision, the Resolution Trust Corporation,'';
                (3) in section 981(a)(1)(D)--
                        (A) by striking ``Resolution Trust Corporation,'';
                    and
                        (B) by striking ``or the Office of Thrift
                    Supervision'';
                (4) in section 982(a)(3)--
                        (A) by striking ``Resolution Trust Corporation,'';
                    and
                        (B) by striking ``or the Office of Thrift
                    Supervision'';
                (5) in section 1006--
                        (A) by striking ``Office of Thrift Supervision,'';
                    and
                        (B) by striking ``the Resolution Trust
                    Corporation,'';
                (6) in section 1014--
                        (A) by striking ``the Office of Thrift
                    Supervision''; and
                        (B) by striking ``the Resolution Trust
                    Corporation,''; and
                (7) in section 1032(1)--
                        (A) by striking ``the Resolution Trust
                    Corporation,''; and
                        (B) by striking ``or the Director of the Office of
                    Thrift Supervision''.

    [[Page 124 STAT. 1570]]

    SEC. 378. TITLE 31, UNITED STATES CODE.

        Title 31, United States Code, is amended--
                (1) in section 321--
                        (A) in subsection (c)--
                              (i) in paragraph (1), by adding ``and'' at the
                          end;
                              (ii) in paragraph (2), by striking ``; and''
                          and inserting a period; and
                              (iii) by striking paragraph (3); and
                        (B) by striking subsection (e); and
                (2) in section 714(a), by striking ``the Office of the
            Comptroller of the Currency, and the Office of Thrift
            Supervision.'' and inserting ``and the Office of the Comptroller
            of the Currency.''.

         TITLE IV--REGULATION <<NOTE: Private Fund Investment Advisers
    Registration Act of 2010.>> OF ADVISERS TO HEDGE FUNDS AND OTHERS
    SEC. 401. <<NOTE: 15 USC 80b-20 note.>> SHORT TITLE.

        This title may be cited as the ``Private Fund Investment Advisers
    Registration Act of 2010''.
    SEC. 402. DEFINITIONS.

        (a) Investment Advisers Act of 1940 Definitions.--Section 202(a) of
    the Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)) is amended by
    adding at the end the following:
                ``(29) The term `private fund' means an issuer that would be
            an investment company, as defined in section 3 of the Investment
            Company Act of 1940 (15 U.S.C. 80a-3), but for section 3(c)(1)
            or 3(c)(7) of that Act.
                ``(30) The term `foreign private adviser' means any
            investment adviser who--
                        ``(A) has no place of business in the United States;
                        ``(B) has, in total, fewer than 15 clients and
                    investors in the United States in private funds advised
                    by the investment adviser;
                        ``(C) has aggregate assets under management
                    attributable to clients in the United States and
                    investors in the United States in private funds advised
                    by the investment adviser of less than $25,000,000, or
                    such higher amount as the Commission may, by rule, deem
                    appropriate in accordance with the purposes of this
                    title; and
                        ``(D) neither--
                              ``(i) holds itself out generally to the public
                          in the United States as an investment adviser; nor
                              ``(ii) acts as--
                                        ``(I) an investment adviser to any
                                    investment company registered under the
                                    Investment Company Act of 1940; or
                                        ``(II) a company that has elected to
                                    be a business development company
                                    pursuant to section 54 of the Investment
                                    Company Act of 1940 (15 U.S.C. 80a-53),
                                    and has not withdrawn its election.''.

        (b) Other <<NOTE: 15 USC 80b-2 note.>> Definitions.--As used in this
    title, the terms ``investment adviser'' and ``private fund'' have the
    same meanings as in section 202 of the Investment Advisers Act of 1940,
    as amended by this title.

    [[Page 124 STAT. 1571]]

    SEC. 403. ELIMINATION OF PRIVATE ADVISER EXEMPTION; LIMITED
                            EXEMPTION FOR FOREIGN PRIVATE ADVISERS;
                            LIMITED INTRASTATE EXEMPTION.

        Section 203(b) of the Investment Advisers Act of 1940 (15 U.S.C.
    80b-3(b)) is amended--
                (1) in paragraph (1), by inserting ``, other than an
            investment adviser who acts as an investment adviser to any
            private fund,'' before ``all of whose'';
                (2) by striking paragraph (3) and inserting the following:
                ``(3) any investment adviser that is a foreign private
            adviser;''; and
                (3) in paragraph (5), by striking ``or'' at the end;
                (4) in paragraph (6)--
                        (A) by striking ``any investment adviser'' and
                    inserting ``(A) any investment adviser'';
                        (B) by redesignating subparagraphs (A) and (B) as
                    clauses (i) and (ii), respectively; and
                        (C) in clause (ii) (as so redesignated), by striking
                    the period at the end and inserting ``; or''; and
                        (D) by adding at the end the following:

        ``(B) any investment adviser that is registered with the Commodity
    Futures Trading Commission as a commodity trading advisor and advises a
    private fund, provided that, if after the date of enactment of the
    Private Fund Investment Advisers Registration Act of 2010, the business
    of the advisor should become predominately the provision of securities-
    related advice, then such adviser shall register with the Commission.''.
                (5) by adding at the end the following:
                ``(7) any investment adviser, other than any entity that has
            elected to be regulated or is regulated as a business
            development company pursuant to section 54 of the Investment
            Company Act of 1940 (15 U.S.C. 80a-54), who solely advises--
                        ``(A) small business investment companies that are
                    licensees under the Small Business Investment Act of
                    1958;
                        ``(B) entities that have received from the Small
                    Business Administration notice to proceed to qualify for
                    a license as a small business investment company under
                    the Small Business Investment Act of 1958, which notice
                    or license has not been revoked; or
                        ``(C) applicants that are affiliated with 1 or more
                    licensed small business investment companies described
                    in subparagraph (A) and that have applied for another
                    license under the Small Business Investment Act of 1958,
                    which application remains pending.''.
    SEC. 404. COLLECTION OF SYSTEMIC RISK DATA; REPORTS; EXAMINATIONS;
                            DISCLOSURES.

        Section 204 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-4)
    is amended--
                (1) by redesignating subsections (b) and (c) as subsections
            (c) and (d), respectively; and
                (2) by inserting after subsection (a) the following:

        ``(b) Records and Reports of Private Funds.--
                ``(1) In general.--The Commission may require any investment
            adviser registered under this title--
                        ``(A) to maintain such records of, and file with the
                    Commission such reports regarding, private funds advised

    [[Page 124 STAT. 1572]]

                    by the investment adviser, as necessary and appropriate
                    in the public interest and for the protection of
                    investors, or for the assessment of systemic risk by the
                    Financial Stability Oversight Council (in this
                    subsection referred to as the `Council'); and
                        ``(B) to provide or make available to the Council
                    those reports or records or the information contained
                    therein.
                ``(2) Treatment of records.--The records and reports of any
            private fund to which an investment adviser registered under
            this title provides investment advice shall be deemed to be the
            records and reports of the investment adviser.
                ``(3) Required information.--The records and reports
            required to be maintained by an investment adviser and subject
            to inspection by the Commission under this subsection shall
            include, for each private fund advised by the investment
            adviser, a description of--
                        ``(A) the amount of assets under management and use
                    of leverage, including off-balance-sheet leverage;
                        ``(B) counterparty credit risk exposure;
                        ``(C) trading and investment positions;
                        ``(D) valuation policies and practices of the fund;
                        ``(E) types of assets held;
                        ``(F) side arrangements or side letters, whereby
                    certain investors in a fund obtain more favorable rights
                    or entitlements than other investors;
                        ``(G) trading practices; and
                        ``(H) such other information as the Commission, in
                    consultation with the Council, determines is necessary
                    and appropriate in the public interest and for the
                    protection of investors or for the assessment of
                    systemic risk, which may include the establishment of
                    different reporting requirements for different classes
                    of fund advisers, based on the type or size of private
                    fund being advised.
                ``(4) Maintenance of records.--An investment adviser
            registered under this title shall maintain such records of
            private funds advised by the investment adviser for such period
            or periods as the Commission, by rule, may prescribe as
            necessary and appropriate in the public interest and for the
            protection of investors, or for the assessment of systemic risk.
                ``(5) Filing of records.--The Commission shall issue rules
            requiring each investment adviser to a private fund to file
            reports containing such information as the Commission deems
            necessary and appropriate in the public interest and for the
            protection of investors or for the assessment of systemic risk.
                ``(6) Examination of records.--
                        ``(A) Periodic and special examinations.--The
                    Commission--
                              ``(i) shall conduct periodic inspections of
                          the records of private funds maintained by an
                          investment adviser registered under this title in
                          accordance with a schedule established by the
                          Commission; and
                              ``(ii) may conduct at any time and from time
                          to time such additional, special, and other
                          examinations as the Commission may prescribe as
                          necessary and appropriate in the public interest
                          and for the protection of investors, or for the
                          assessment of systemic risk.

    [[Page 124 STAT. 1573]]

                        ``(B) Availability of records.--An investment
                    adviser registered under this title shall make available
                    to the Commission any copies or extracts from such
                    records as may be prepared without undue effort,
                    expense, or delay, as the Commission or its
                    representatives may reasonably request.
                ``(7) Information sharing.--
                        ``(A) In general.--The Commission shall make
                    available to the Council copies of all reports,
                    documents, records, and information filed with or
                    provided to the Commission by an investment adviser
                    under this subsection as the Council may consider
                    necessary for the purpose of assessing the systemic risk
                    posed by a private fund.
                        ``(B) Confidentiality.--The Council shall maintain
                    the confidentiality of information received under this
                    paragraph in all such reports, documents, records, and
                    information, in a manner consistent with the level of
                    confidentiality established for the Commission pursuant
                    to paragraph (8). The Council shall be exempt from
                    section 552 of title 5, United States Code, with respect
                    to any information in any report, document, record, or
                    information made available, to the Council under this
                    subsection.''.
                ``(8) Commission confidentiality of reports.--
            Notwithstanding any other provision of law, the Commission may
            not be compelled to disclose any report or information contained
            therein required to be filed with the Commission under this
            subsection, except that nothing in this subsection authorizes
            the Commission--
                        ``(A) to withhold information from Congress, upon an
                    agreement of confidentiality; or
                        ``(B) prevent the Commission from complying with--
                              ``(i) a request for information from any other
                          Federal department or agency or any self-
                          regulatory organization requesting the report or
                          information for purposes within the scope of its
                          jurisdiction; or
                              ``(ii) an order of a court of the United
                          States in an action brought by the United States
                          or the Commission.
                ``(9) Other recipients confidentiality.--Any department,
            agency, or self-regulatory organization that receives reports or
            information from the Commission under this subsection shall
            maintain the confidentiality of such reports, documents,
            records, and information in a manner consistent with the level
            of confidentiality established for the Commission under
            paragraph (8).
                ``(10) Public information exception.--
                        ``(A) In general.--The Commission, the Council, and
                    any other department, agency, or self-regulatory
                    organization that receives information, reports,
                    documents, records, or information from the Commission
                    under this subsection, shall be exempt from the
                    provisions of section 552 of title 5, United States
                    Code, with respect to any such report, document, record,
                    or information. Any proprietary information of an
                    investment adviser ascertained by the Commission from
                    any report required to be filed with the Commission
                    pursuant to this subsection shall be subject to the same
                    limitations on public disclosure as any facts

    [[Page 124 STAT. 1574]]

                    ascertained during an examination, as provided by
                    section 210(b) of this title.
                        ``(B) Proprietary information.--For purposes of this
                    paragraph, proprietary information includes sensitive,
                    non-public information regarding--
                              ``(i) the investment or trading strategies of
                          the investment adviser;
                              ``(ii) analytical or research methodologies;
                              ``(iii) trading data;
                              ``(iv) computer hardware or software
                          containing intellectual property; and
                              ``(v) any additional information that the
                          Commission determines to be proprietary.
                ``(11) Annual report to congress.--The Commission shall
            report annually to Congress on how the Commission has used the
            data collected pursuant to this subsection to monitor the
            markets for the protection of investors and the integrity of the
            markets.''.
    SEC. 405. DISCLOSURE PROVISION AMENDMENT.

        Section 210(c) of the Investment Advisers Act of 1940 (15 U.S.C.
    80b-10(c)) is amended by inserting before the period at the end the
    following: ``or for purposes of assessment of potential systemic risk''.
    SEC. 406. CLARIFICATION OF RULEMAKING AUTHORITY.

        Section 211 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-
    11) is amended--
                (1) in subsection (a), by inserting before the period at the
            end of the first sentence the following: ``, including rules and
            regulations defining technical, trade, and other terms used in
            this title, except that the Commission may not define the term
            `client' for purposes of paragraphs (1) and (2) of section 206
            to include an investor in a private fund managed by an
            investment adviser, if such private fund has entered into an
            advisory contract with such adviser''; and
                (2) by adding at the end the following:

        ``(e) Disclosure Rules on Private Funds.--
    The <<NOTE: Consultation. Deadline.>> Commission and the Commodity
    Futures Trading Commission shall, after consultation with the Council
    but not later than 12 months after the date of enactment of the Private
    Fund Investment Advisers Registration Act of 2010, jointly promulgate
    rules to establish the form and content of the reports required to be
    filed with the Commission under subsection 204(b) and with the Commodity
    Futures Trading Commission by investment advisers that are registered
    both under this title and the Commodity Exchange Act (7 U.S.C. 1a et
    seq.).''.
    SEC. 407. EXEMPTION OF AND REPORTING BY VENTURE CAPITAL FUND
                            ADVISERS.

        Section 203 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-3)
    is amended by adding at the end the following:
        ``(l) Exemption of Venture Capital Fund Advisers.--No investment
    adviser that acts as an investment adviser solely to 1 or more venture
    capital funds shall be subject to the registration requirements of this
    title with respect to the provision of investment advice relating to a
    venture <<NOTE: Regulations.>> capital fund. Not later than 1 year after
    the date of enactment of this subsection, the Commission

    [[Page 124 STAT. 1575]]

    shall issue final rules to define the term `venture capital fund' for
    purposes of this subsection. The <<NOTE: Records.>> Commission shall
    require such advisers to maintain such records and provide to the
    Commission such annual or other reports as the Commission determines
    necessary or appropriate in the public interest or for the protection of
    investors.''.
    SEC. 408. EXEMPTION OF AND REPORTING BY CERTAIN PRIVATE FUND
                            ADVISERS.

        Section 203 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-3)
    is amended by adding at the end the following:
        ``(m) Exemption of and Reporting by Certain Private Fund Advisers.--
                ``(1) In general.--The Commission shall provide an exemption
            from the registration requirements under this section to any
            investment adviser of private funds, if each of such investment
            adviser acts solely as an adviser to private funds and has
            assets under management in the United States of less than
            $150,000,000.
                ``(2) Reporting.--The <<NOTE: Records.>> Commission shall
            require investment advisers exempted by reason of this
            subsection to maintain such records and provide to the
            Commission such annual or other reports as the Commission
            determines necessary or appropriate in the public interest or
            for the protection of investors.

        ``(n) Registration and Examination of Mid-sized Private Fund
    Advisers.--In prescribing <<NOTE: Regulations. Procedures.>> regulations
    to carry out the requirements of this section with respect to investment
    advisers acting as investment advisers to mid-sized private funds, the
    Commission shall take into account the size, governance, and investment
    strategy of such funds to determine whether they pose systemic risk, and
    shall provide for registration and examination procedures with respect
    to the investment advisers of such funds which reflect the level of
    systemic risk posed by such funds.''.
    SEC. 409. FAMILY OFFICES.

        (a) In General.--Section 202(a)(11) of the Investment Advisers Act
    of 1940 (15 U.S.C. 80b-2(a)(11)) is amended by striking ``or (G)'' and
    inserting the following: ``; (G) any family office, as defined by rule,
    regulation, or order of the Commission, in accordance with the purposes
    of this title; or (H)''.
        (b) Rulemaking.--The <<NOTE: 15 USC 80b-2 note.>> rules,
    regulations, or orders issued by the Commission pursuant to section
    202(a)(11)(G) of the Investment Advisers Act of 1940, as added by this
    section, regarding the definition of the term ``family office'' shall
    provide for an exemption that--
                (1) is consistent with the previous exemptive policy of the
            Commission, as reflected in exemptive orders for family offices
            in effect on the date of enactment of this Act, and the
            grandfathering provisions in paragraph (3);
                (2) recognizes the range of organizational, management, and
            employment structures and arrangements employed by family
            offices; and
                (3) does not exclude any person who was not registered or
            required to be registered under the Investment Advisers Act of
            1940 on January 1, 2010 from the definition of the term ``family
            office'', solely because such person provides investment advice
            to, and was engaged before January 1, 2010 in providing
            investment advice to--

    [[Page 124 STAT. 1576]]

                        (A) natural persons who, at the time of their
                    applicable investment, are officers, directors, or
                    employees of the family office who--
                              (i) <<NOTE: Deadline.>> have invested with the
                          family office before January 1, 2010; and
                              (ii) are accredited investors, as defined in
                          Regulation D of the Commission (or any successor
                          thereto) under the Securities Act of 1933, or, as
                          the Commission may prescribe by rule, the
                          successors-in-interest thereto;
                        (B) any company owned exclusively and controlled by
                    members of the family of the family office, or as the
                    Commission may prescribe by rule;
                        (C) any investment adviser registered under the
                    Investment Adviser Act of 1940 that provides investment
                    advice to the family office and who identifies
                    investment opportunities to the family office, and
                    invests in such transactions on substantially the same
                    terms as the family office invests, but does not invest
                    in other funds advised by the family office, and whose
                    assets as to which the family office directly or
                    indirectly provides investment advice represent, in the
                    aggregate, not more than 5 percent of the value of the
                    total assets as to which the family office provides
                    investment advice.

        (c) Antifraud Authority.--A family office that would not be a family
    office, but for subsection (b)(3), shall be deemed to be an investment
    adviser for the purposes of paragraphs (1), (2) and (4) of section 206
    of the Investment Advisers Act of 1940.
    SEC. 410. STATE AND FEDERAL RESPONSIBILITIES; ASSET THRESHOLD FOR
                            FEDERAL REGISTRATION OF INVESTMENT
                            ADVISERS.

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

    [[Page 124 STAT. 1577]]

                              ``(ii) has assets under management between--
                                        ``(I) the amount specified under
                                    subparagraph (A) of paragraph (1), as
                                    such amount may have been adjusted by
                                    the Commission pursuant to that
                                    subparagraph; and
                                        ``(II) $100,000,000, or such higher
                                    amount as the Commission may, by rule,
                                    deem appropriate in accordance with the
                                    purposes of this title.''.
    SEC. 411. CUSTODY OF CLIENT ASSETS.

        The Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.) is
    amended by adding at the end the following new section:
    ``SEC. 223. <<NOTE: 15 USC 80b-18b.>>  CUSTODY OF CLIENT ACCOUNTS.

        ``An investment adviser registered under this title shall take such
    steps to safeguard client assets over which such adviser has custody,
    including, without limitation, verification of such assets by an
    independent public accountant, as the Commission may, by rule,
    prescribe.''.
    SEC. 412. COMPTROLLER GENERAL STUDY ON CUSTODY RULE COSTS.

        The Comptroller General of the United States shall--
                (1) conduct a study of--
                        (A) the compliance costs associated with the current
                    Securities and Exchange Commission rules 204-2 (17
                    C.F.R. Parts 275.204-2) and rule 206(4)-2 (17 C.F.R.
                    275.206(4)-2) under the Investment Advisers Act of 1940
                    regarding custody of funds or securities of clients by
                    investment advisers; and
                        (B) the additional costs if subsection (b)(6) of
                    rule 206(4)-2 (17 C.F.R. 275.206(4)-2(b)(6)) relating to
                    operational independence were eliminated; and
                (2) <<NOTE: Reports. Deadline.>> submit a report to the
            Committee on Banking, Housing, and Urban Affairs of the Senate
            and the Committee on Financial Services of the House of
            Representatives on the results of such study, not later than 3
            years after the date of enactment of this Act.
    SEC. 413. <<NOTE: 15 USC 77b note.>> ADJUSTING THE ACCREDITED
                            INVESTOR STANDARD.

        (a) In General.--The Commission shall adjust any net worth standard
    for an accredited investor, as set forth in the rules of the Commission
    under the Securities Act of 1933, so that the individual net worth of
    any natural person, or joint net worth with the spouse of that person,
    at the time of purchase, is more than $1,000,000 (as such amount is
    adjusted periodically by rule of the Commission), excluding the value of
    the primary residence of such natural person, except that during the 4-
    year period that begins on the date of enactment of this Act, any net
    worth standard shall be $1,000,000, excluding the value of the primary
    residence of such natural person.
        (b) Review and Adjustment.--
                (1) Initial review and adjustment.--
                        (A) Initial review.--The Commission may undertake a
                    review of the definition of the term ``accredited
                    investor'', as such term applies to natural persons, to
                    determine whether the requirements of the definition,
                    excluding the requirement relating to the net worth
                    standard described in subsection (a), should be adjusted
                    or modified for the

    [[Page 124 STAT. 1578]]

                    protection of investors, in the public interest, and in
                    light of the economy.
                        (B) Adjustment or modification.--Upon completion of
                    a review under subparagraph (A), the Commission may, by
                    notice and comment rulemaking, make such adjustments to
                    the definition of the term ``accredited investor'',
                    excluding adjusting or modifying the requirement
                    relating to the net worth standard described in
                    subsection (a), as such term applies to natural persons,
                    as the Commission may deem appropriate for the
                    protection of investors, in the public interest, and in
                    light of the economy.
                (2) Subsequent reviews and adjustment.--
                        (A) Subsequent reviews. <<NOTE: Deadlines.>> --Not
                    earlier than 4 years after the date of enactment of this
                    Act, and not less frequently than once every 4 years
                    thereafter, the Commission shall undertake a review of
                    the definition, in its entirety, of the term
                    ``accredited investor'', as defined in section 230.215
                    of title 17, Code of Federal Regulations, or any
                    successor thereto, as such term applies to natural
                    persons, to determine whether the requirements of the
                    definition should be adjusted or modified for the
                    protection of investors, in the public interest, and in
                    light of the economy.
                        (B) Adjustment or modification.--Upon completion of
                    a review under subparagraph (A), the Commission may, by
                    notice and comment rulemaking, make such adjustments to
                    the definition of the term ``accredited investor'', as
                    defined in section 230.215 of title 17, Code of Federal
                    Regulations, or any successor thereto, as such term
                    applies to natural persons, as the Commission may deem
                    appropriate for the protection of investors, in the
                    public interest, and in light of the economy.
    SEC. 414. RULE OF CONSTRUCTION RELATING TO THE COMMODITIES
                            EXCHANGE ACT.

        The Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.) is
    further amended by adding at the end the following new section:
    ``SEC. 224. <<NOTE: 15 USC 80b-18c.>>  RULE OF CONSTRUCTION
                            RELATING TO THE COMMODITIES EXCHANGE ACT.

        ``Nothing in this title shall relieve any person of any obligation
    or duty, or affect the availability of any right or remedy available to
    the Commodity Futures Trading Commission or any private party, arising
    under the Commodity Exchange Act (7 U.S.C. 1 et seq.) governing
    commodity pools, commodity pool operators, or commodity trading
    advisors.''.
    SEC. 415. GAO STUDY AND REPORT ON ACCREDITED INVESTORS.

        The Comptroller General of the United States shall conduct a study
    on the appropriate criteria for determining the financial thresholds or
    other criteria needed to qualify for accredited investor status and
    eligibility to invest in private funds, and shall submit a report to the
    Committee on Banking, Housing, and Urban Affairs of the Senate and the
    Committee on Financial Services of the House of Representatives on the
    results of such study not later than 3 years after the date of enactment
    of this Act.

    [[Page 124 STAT. 1579]]

    SEC. 416. GAO STUDY ON SELF-REGULATORY ORGANIZATION FOR PRIVATE
                            FUNDS.

        The Comptroller General of the United States shall--
                (1) conduct a study of the feasibility of forming a self-
            regulatory organization to oversee private funds; and
                (2) <<NOTE: Reports. Deadline.>> submit a report to the
            Committee on Banking, Housing, and Urban Affairs of the Senate
            and the Committee on Financial Services of the House of
            Representatives on the results of such study, not later than 1
            year after the date of enactment of this Act.
    SEC. 417. COMMISSION STUDY AND REPORT ON SHORT SELLING.

        (a) Studies.--The Division of Risk, Strategy, and Financial
    Innovation of the Commission shall conduct--
                (1) a study, taking into account current scholarship, on the
            state of short selling on national securities exchanges and in
            the over-the-counter markets, with particular attention to the
            impact of recent rule changes and the incidence of--
                        (A) the failure to deliver shares sold short; or
                        (B) delivery of shares on the fourth day following
                    the short sale transaction; and
                (2) a study of--
                        (A) the feasibility, benefits, and costs of
                    requiring reporting publicly, in real time short sale
                    positions of publicly listed securities, or, in the
                    alternative, reporting such short positions in real time
                    only to the Commission and the Financial Industry
                    Regulatory Authority; and
                        (B) the feasibility, benefits, and costs of
                    conducting a voluntary pilot program in which public
                    companies will agree to have all trades of their shares
                    marked ``short'', ``market maker short'', ``buy'',
                    ``buy-to-cover'', or ``long'', and reported in real time
                    through the Consolidated Tape.

        (b) Reports.--The Commission shall submit a report to the Committee
    on Banking, Housing, and Urban Affairs of the Senate and the Committee
    on Financial Services of the House of Representatives--
                (1) on the results of the study required under subsection
            (a)(1), including recommendations for market improvements, not
            later than 2 years after the date of enactment of this Act; and
                (2) on the results of the study required under subsection
            (a)(2), not later than 1 year after the date of enactment of
            this Act.
    SEC. 418. QUALIFIED CLIENT STANDARD.

        Section 205(e) of the Investment Advisers Act of 1940 (15 U.S.C.
    80b-5(e)) is amended by adding at the end the following: ``With
    respect <<NOTE: Order. Deadlines.>>  to any factor used in any rule or
    regulation by the Commission in making a determination under this
    subsection, if the Commission uses a dollar amount test in connection
    with such factor, such as a net asset threshold, the Commission shall,
    by order, not later than 1 year after the date of enactment of the
    Private Fund Investment Advisers Registration Act of 2010, and every 5
    years thereafter, adjust for the effects of inflation on such test. Any
    such adjustment that is not a multiple of $100,000 shall be rounded to
    the nearest multiple of $100,000.''.

    [[Page 124 STAT. 1580]]

    SEC. 419. <<NOTE: 15 USC 80b-2 note. Effective date.>>  TRANSITION
                            PERIOD.

        Except as otherwise provided in this title, this title and the
    amendments made by this title shall become effective 1 year after the
    date of enactment of this Act, except that any investment adviser may,
    at the discretion of the investment adviser, register with the
    Commission under the Investment Advisers Act of 1940 during that 1-year
    period, subject to the rules of the Commission.

                               TITLE V--INSURANCE

       Subtitle <<NOTE: Federal Insurance Office Act of 2010. 31 USC 301
    note.>>  A--Federal Insurance Office
    SEC. 501. SHORT TITLE.

        This subtitle may be cited as the ``Federal Insurance Office Act of
    2010''.
    SEC. 502. FEDERAL INSURANCE OFFICE.

        (a) Establishment of Office.--Subchapter I of chapter 3 of subtitle
    I of title 31, United States Code, is amended--
                (1) by redesignating section 312 as section 315;
                (2) by redesignating section 313 as section 312; and
                (3) by inserting after section 312 (as so redesignated) the
            following new sections:
    ``SEC. 313. FEDERAL INSURANCE OFFICE.

        ``(a) Establishment.--There is established within the Department of
    the Treasury the Federal Insurance Office.
        ``(b) Leadership.--The Office shall be headed by a Director, who
    shall be appointed by the Secretary of the Treasury. The position of
    Director shall be a career reserved position in the Senior Executive
    Service, as that position is defined under section 3132 of title 5,
    United States Code.
        ``(c) Functions.--
                ``(1) Authority pursuant to direction of secretary.--The
            Office, pursuant to the direction of the Secretary, shall have
            the authority--
                        ``(A) to monitor all aspects of the insurance
                    industry, including identifying issues or gaps in the
                    regulation of insurers that could contribute to a
                    systemic crisis in the insurance industry or the United
                    States financial system;
                        ``(B) to monitor the extent to which traditionally
                    underserved communities and consumers, minorities (as
                    such term is defined in section 1204(c) of the Financial
                    Institutions Reform, Recovery, and Enforcement Act of
                    1989 (12 U.S.C. 1811 note)), and low- and moderate-
                    income persons have access to affordable insurance
                    products regarding all lines of insurance, except health
                    insurance;
                        ``(C) to recommend to the Financial Stability
                    Oversight Council that it designate an insurer,
                    including the affiliates of such insurer, as an entity
                    subject to regulation as a nonbank financial company
                    supervised by the Board of Governors pursuant to title I
                    of the Dodd-Frank Wall Street Reform and Consumer
                    Protection Act;
                        ``(D) to assist the Secretary in administering the
                    Terrorism Insurance Program established in the
                    Department

    [[Page 124 STAT. 1581]]

                    of the Treasury under the Terrorism Risk Insurance Act
                    of 2002 (15 U.S.C. 6701 note);
                        ``(E) to coordinate Federal efforts and develop
                    Federal policy on prudential aspects of international
                    insurance matters, including representing the United
                    States, as appropriate, in the International Association
                    of Insurance Supervisors (or a successor entity) and
                    assisting the Secretary in negotiating covered
                    agreements (as such term is defined in subsection (r));
                        ``(F) to determine, in accordance with subsection
                    (f), whether State insurance measures are preempted by
                    covered agreements;
                        ``(G) to consult with the States (including State
                    insurance regulators) regarding insurance matters of
                    national importance and prudential insurance matters of
                    international importance; and
                        ``(H) to perform such other related duties and
                    authorities as may be assigned to the Office by the
                    Secretary.
                ``(2) Advisory functions.--The Office shall advise the
            Secretary on major domestic and prudential international
            insurance policy issues.
                ``(3) Advisory capacity on council.--The Director shall
            serve in an advisory capacity on the Financial Stability
            Oversight Council established under the Financial Stability Act
            of 2010.

        ``(d) Scope.--The authority of the Office shall extend to all lines
    of insurance except--
                ``(1) health insurance, as determined by the Secretary in
            coordination with the Secretary of Health and Human Services
            based on section 2791 of the Public Health Service Act (42
            U.S.C. 300gg-91);
                ``(2) long-term care insurance, except long-term care
            insurance that is included with life or annuity insurance
            components, as determined by the Secretary in coordination with
            the Secretary of Health and Human Services, and in the case of
            long-term care insurance that is included with such components,
            the Secretary shall coordinate with the Secretary of Health and
            Human Services in performing the functions of the Office; and
                ``(3) crop insurance, as established by the Federal Crop
            Insurance Act (7 U.S.C. 1501 et seq.).

        ``(e) Gathering of Information.--
                ``(1) In general.--In carrying out the functions required
            under subsection (c), the Office may--
                        ``(A) receive and collect data and information on
                    and from the insurance industry and insurers;
                        ``(B) enter into information-sharing agreements;
                        ``(C) analyze and disseminate data and information;
                    and
                        ``(D) issue reports regarding all lines of insurance
                    except health insurance.
                ``(2) Collection of information from insurers and
            affiliates.--
                        ``(A) In general.--Except as provided in paragraph
                    (3), the Office may require an insurer, or any affiliate
                    of an insurer, to submit such data or information as the

    [[Page 124 STAT. 1582]]

                    Office may reasonably require in carrying out the
                    functions described under subsection (c).
                        ``(B) Rule of construction.--Notwithstanding any
                    other provision of this section, for purposes of
                    subparagraph (A), the term `insurer' means any entity
                    that writes insurance or reinsures risks and issues
                    contracts or policies in 1 or more States.
                ``(3) Exception for small insurers.--Paragraph (2) shall not
            apply with respect to any insurer or affiliate thereof that
            meets a minimum size threshold that the Office may establish,
            whether by order or rule.
                ``(4) Advance coordination.--Before collecting any data or
            information under paragraph (2) from an insurer, or affiliate of
            an insurer, the Office shall coordinate with each relevant
            Federal agency and State insurance regulator (or other relevant
            Federal or State regulatory agency, if any, in the case of an
            affiliate of an insurer) and any publicly available sources to
            determine if the information to be collected is available from,
            and may be obtained in a timely manner by, such Federal agency
            or State insurance regulator, individually or collectively,
            other regulatory agency, or publicly available sources. If the
            Director determines that such data or information is available,
            and may be obtained in a timely manner, from such an agency,
            regulator, regulatory agency, or source, the Director shall
            obtain the data or information from such agency, regulator,
            regulatory agency, or source. If the Director determines that
            such data or information is not so available, the Director may
            collect such data or information from an insurer (or affiliate)
            only if the Director complies with the requirements of
            subchapter I of chapter 35 of title 44, United States Code
            (relating to Federal information policy; commonly known as the
            Paperwork Reduction Act), in collecting such data or
            information. Notwithstanding any other provision of law, each
            such relevant Federal agency and State insurance regulator or
            other Federal or State regulatory agency is authorized to
            provide to the Office such data or information.
                ``(5) Confidentiality.--
                        ``(A) Retention of privilege.--The submission of any
                    nonpublicly available data and information to the Office
                    under this subsection shall not constitute a waiver of,
                    or otherwise affect, any privilege arising under Federal
                    or State law (including the rules of any Federal or
                    State court) to which the data or information is
                    otherwise subject.
                        ``(B) Continued application of prior confidentiality
                    agreements.--Any requirement under Federal or State law
                    to the extent otherwise applicable, or any requirement
                    pursuant to a written agreement in effect between the
                    original source of any nonpublicly available data or
                    information and the source of such data or information
                    to the Office, regarding the privacy or confidentiality
                    of any data or information in the possession of the
                    source to the Office, shall continue to apply to such
                    data or information after the data or information has
                    been provided pursuant to this subsection to the Office.
                        ``(C) Information-sharing agreement.--Any data or
                    information obtained by the Office may be made available

    [[Page 124 STAT. 1583]]

                    to State insurance regulators, individually or
                    collectively, through an information-sharing agreement
                    that--
                              ``(i) shall comply with applicable Federal
                          law; and
                              ``(ii) shall not constitute a waiver of, or
                          otherwise affect, any privilege under Federal or
                          State law (including the rules of any Federal or
                          State court) to which the data or information is
                          otherwise subject.
                        ``(D) Agency disclosure requirements.--Section 552
                    of title 5, United States Code, shall apply to any data
                    or information submitted to the Office by an insurer or
                    an affiliate of an insurer.
                ``(6) Subpoenas and enforcement.--The Director shall have
            the power to require by subpoena the production of the data or
            information requested under paragraph (2), but only upon a
            written finding by the Director that such data or information is
            required to carry out the functions described under subsection
            (c) and that the Office has coordinated with such regulator or
            agency as required under paragraph (4). Subpoenas shall bear the
            signature of the Director and shall be served by any person or
            class of persons designated by the Director for that purpose. In
            the case of contumacy or failure to obey a subpoena, the
            subpoena shall be enforceable by order of any appropriate
            district court of the United States. Any failure to obey the
            order of the court may be punished by the court as a contempt of
            court.

        ``(f) Preemption of State Insurance Measures.--
                ``(1) Standard.--A State insurance measure shall be
            preempted pursuant to this section or section 314 if, and only
            to the extent that the Director determines, in accordance with
            this subsection, that the measure--
                        ``(A) results in less favorable treatment of a non-
                    United States insurer domiciled in a foreign
                    jurisdiction that is subject to a covered agreement than
                    a United States insurer domiciled, licensed, or
                    otherwise admitted in that State; and
                        ``(B) is inconsistent with a covered agreement.
                ``(2) Determination.--
                        ``(A) Notice of potential inconsistency.--Before
                    making any determination under paragraph (1), the
                    Director shall--
                              ``(i) notify and consult with the appropriate
                          State regarding any potential inconsistency or
                          preemption;
                              ``(ii) notify and consult with the United
                          States Trade Representative regarding any
                          potential inconsistency or preemption;
                              ``(iii) <<NOTE: Federal Register,
                          publication.>>  cause to be published in the
                          Federal Register notice of the issue regarding the
                          potential inconsistency or preemption, including a
                          description of each State insurance measure at
                          issue and any applicable covered agreement;
                              ``(iv) <<NOTE: Comments.>> provide interested
                          parties a reasonable opportunity to submit written
                          comments to the Office; and
                              ``(v) consider any comments received.
                        ``(B) Scope of review.--For purposes of this
                    subsection, any determination of the Director regarding
                    State insurance measures, and any preemption under
                    paragraph (1) as a result of such determination, shall
                    be limited

    [[Page 124 STAT. 1584]]

                    to the subject matter contained within the covered
                    agreement involved and shall achieve a level of
                    protection for insurance or reinsurance consumers that
                    is substantially equivalent to the level of protection
                    achieved under State insurance or reinsurance
                    regulation.
                        ``(C) Notice of determination of inconsistency.--
                    Upon making any determination under paragraph (1), the
                    Director shall--
                              ``(i) notify the appropriate State of the
                          determination and the extent of the inconsistency;
                              ``(ii) establish a reasonable period of time,
                          which shall not be less than 30 days, before the
                          determination shall become effective; and
                              ``(iii) notify the Committees on Financial
                          Services and Ways and Means of the House of
                          Representatives and the Committees on Banking,
                          Housing, and Urban Affairs and Finance of the
                          Senate.
                ``(3) Notice of effectiveness.--Upon the conclusion of the
            period referred to in paragraph (2)(C)(ii), if the basis for
            such determination still exists, the determination shall become
            effective and the Director shall--
                        ``(A) cause to be published a notice in the Federal
                    Register that the preemption has become effective, as
                    well as the effective date; and
                        ``(B) notify the appropriate State.
                ``(4) Limitation.--No State may enforce a State insurance
            measure to the extent that such measure has been preempted under
            this subsection.

        ``(g) Applicability of Administrative Procedures Act.--
    Determinations of inconsistency made pursuant to subsection (f)(2) shall
    be subject to the applicable provisions of subchapter II of chapter 5 of
    title 5, United States Code (relating to administrative procedure), and
    chapter 7 of such title (relating to judicial review), except that in
    any action for judicial review of a determination of inconsistency, the
    court shall determine the matter de novo.
        ``(h) Regulations, Policies, and Procedures.--The Secretary may
    issue orders, regulations, policies, and procedures to implement this
    section.
        ``(i) Consultation.--The Director shall consult with State insurance
    regulators, individually or collectively, to the extent the Director
    determines appropriate, in carrying out the functions of the Office.
        ``(j) Savings Provisions.--Nothing in this section shall--
                ``(1) preempt--
                        ``(A) any State insurance measure that governs any
                    insurer's rates, premiums, underwriting, or sales
                    practices;
                        ``(B) any State coverage requirements for insurance;
                        ``(C) the application of the antitrust laws of any
                    State to the business of insurance; or
                        ``(D) any State insurance measure governing the
                    capital or solvency of an insurer, except to the extent
                    that such State insurance measure results in less
                    favorable treatment of a non-United State insurer than a
                    United States insurer;
                ``(2) be construed to alter, amend, or limit any provision
            of the Consumer Financial Protection Agency Act of 2010; or
                ``(3) affect the preemption of any State insurance measure
            otherwise inconsistent with and preempted by Federal law.

    [[Page 124 STAT. 1585]]

        ``(k) Retention of Existing State Regulatory Authority.--Nothing in
    this section or section 314 shall be construed to establish or provide
    the Office or the Department of the Treasury with general supervisory or
    regulatory authority over the business of insurance.
        ``(l) Retention of Authority of Federal Financial Regulatory
    Agencies.--Nothing in this section or section 314 shall be construed to
    limit the authority of any Federal financial regulatory agency,
    including the authority to develop and coordinate policy, negotiate, and
    enter into agreements with foreign governments, authorities, regulators,
    and multinational regulatory committees and to preempt State measures to
    affect uniformity with international regulatory agreements.
        ``(m) Retention of Authority of United States Trade
    Representative.--Nothing in this section or section 314 shall be
    construed to affect the authority of the Office of the United States
    Trade Representative pursuant to section 141 of the Trade Act of 1974
    (19 U.S.C. 2171) or any other provision of law, including authority over
    the development and coordination of United States international trade
    policy and the administration of the United States trade agreements
    program.
        ``(n) Annual Reports to Congress.--
                ``(1) Section 313(f) reports.--Beginning September 30, 2011,
            the Director shall submit a report on or before September 30 of
            each calendar year to the President and to the Committees on
            Financial Services and Ways and Means of the House of
            Representatives and the Committees on Banking, Housing, and
            Urban Affairs and Finance of the Senate on any actions taken by
            the Office pursuant to subsection (f) (regarding preemption of
            inconsistent State insurance measures).
                ``(2) Insurance industry.--Beginning September 30, 2011, the
            Director shall submit a report on or before September 30 of each
            calendar year to the President and to the Committee on Financial
            Services of the House of Representatives and the Committee on
            Banking, Housing, and Urban Affairs of the Senate on the
            insurance industry and any other information as deemed relevant
            by the Director or requested by such Committees.

        ``(o) Reports on U.S. and Global Reinsurance Market.--The Director
    shall submit to the Committee on Financial Services of the House of
    Representatives and the Committee on Banking, Housing, and Urban Affairs
    of the Senate--
                ``(1) a report received not later than September 30, 2012,
            describing the breadth and scope of the global reinsurance
            market and the critical role such market plays in supporting
            insurance in the United States; and
                ``(2) a report received not later than January 1, 2013, and
            updated not later than January 1, 2015, describing the impact of
            part II of the Nonadmitted and Reinsurance Reform Act of 2010 on
            the ability of State regulators to access reinsurance
            information for regulated companies in their jurisdictions.

        ``(p) Study and Report on Regulation of Insurance.--
                ``(1) In general.--Not later than 18 months after the date
            of enactment of this section, the Director shall conduct a study
            and submit a report to Congress on how to modernize and improve
            the system of insurance regulation in the United States.

    [[Page 124 STAT. 1586]]

                ``(2) Considerations.--The study and report required under
            paragraph (1) shall be based on and guided by the following
            considerations:
                        ``(A) Systemic risk regulation with respect to
                    insurance.
                        ``(B) Capital standards and the relationship between
                    capital allocation and liabilities, including standards
                    relating to liquidity and duration risk.
                        ``(C) Consumer protection for insurance products and
                    practices, including gaps in State regulation.
                        ``(D) The degree of national uniformity of State
                    insurance regulation.
                        ``(E) The regulation of insurance companies and
                    affiliates on a consolidated basis.
                        ``(F) International coordination of insurance
                    regulation.
                ``(3) Additional factors.--The study and report required
            under paragraph (1) shall also examine the following factors:
                        ``(A) The costs and benefits of potential Federal
                    regulation of insurance across various lines of
                    insurance (except health insurance).
                        ``(B) The feasibility of regulating only certain
                    lines of insurance at the Federal level, while leaving
                    other lines of insurance to be regulated at the State
                    level.
                        ``(C) The ability of any potential Federal
                    regulation or Federal regulators to eliminate or
                    minimize regulatory arbitrage.
                        ``(D) The impact that developments in the regulation
                    of insurance in foreign jurisdictions might have on the
                    potential Federal regulation of insurance.
                        ``(E) The ability of any potential Federal
                    regulation or Federal regulator to provide robust
                    consumer protection for policyholders.
                        ``(F) The potential consequences of subjecting
                    insurance companies to a Federal resolution authority,
                    including the effects of any Federal resolution
                    authority--
                              ``(i) on the operation of State insurance
                          guaranty fund systems, including the loss of
                          guaranty fund coverage if an insurance company is
                          subject to a Federal resolution authority;
                              ``(ii) on policyholder protection, including
                          the loss of the priority status of policyholder
                          claims over other unsecured general creditor
                          claims;
                              ``(iii) in the case of life insurance
                          companies, on the loss of the special status of
                          separate account assets and separate account
                          liabilities; and
                              ``(iv) on the international competitiveness of
                          insurance companies.
                        ``(G) Such other factors as the Director determines
                    necessary or appropriate, consistent with the principles
                    set forth in paragraph (2).
                ``(4) Required recommendations.--The study and report
            required under paragraph (1) shall also contain any legislative,
            administrative, or regulatory recommendations, as the Director
            determines appropriate, to carry out or effectuate the findings
            set forth in such report.
                ``(5) Consultation.--With respect to the study and report
            required under paragraph (1), the Director shall consult with

    [[Page 124 STAT. 1587]]

            the State insurance regulators, consumer organizations,
            representatives of the insurance industry and policyholders, and
            other organizations and experts, as appropriate.

        ``(q) Use of Existing Resources.--To carry out this section, the
    Office may employ personnel, facilities, and any other resource of the
    Department of the Treasury available to the Secretary and the Secretary
    shall dedicate specific personnel to the Office.
        ``(r) Definitions.--In this section and section 314, the following
    definitions shall apply:
                ``(1) Affiliate.--The term `affiliate' means, with respect
            to an insurer, any person who controls, is controlled by, or is
            under common control with the insurer.
                ``(2) Covered agreement.--The term `covered agreement' means
            a written bilateral or multilateral agreement regarding
            prudential measures with respect to the business of insurance or
            reinsurance that--
                        ``(A) is entered into between the United States and
                    one or more foreign governments, authorities, or
                    regulatory entities; and
                        ``(B) relates to the recognition of prudential
                    measures with respect to the business of insurance or
                    reinsurance that achieves a level of protection for
                    insurance or reinsurance consumers that is substantially
                    equivalent to the level of protection achieved under
                    State insurance or reinsurance regulation.
                ``(3) Insurer.--The term `insurer' means any person engaged
            in the business of insurance, including reinsurance.
                ``(4) Federal financial regulatory agency.--The term
            `Federal financial regulatory agency' means the Department of
            the Treasury, the Board of Governors of the Federal Reserve
            System, the Office of the Comptroller of the Currency, the
            Office of Thrift Supervision, the Securities and Exchange
            Commission, the Commodity Futures Trading Commission, the
            Federal Deposit Insurance Corporation, the Federal Housing
            Finance Agency, or the National Credit Union Administration.
                ``(5) Non-united states insurer.--The term `non-United
            States insurer' means an insurer that is organized under the
            laws of a jurisdiction other than a State, but does not include
            any United States branch of such an insurer.
                ``(6) Office.--The term `Office' means the Federal Insurance
            Office established by this section.
                ``(7) State insurance measure.--The term `State insurance
            measure' means any State law, regulation, administrative ruling,
            bulletin, guideline, or practice relating to or affecting
            prudential measures applicable to insurance or reinsurance.
                ``(8) State insurance regulator.--The term `State insurance
            regulator' means any State regulatory authority responsible for
            the supervision of insurers.
                ``(9) Substantially equivalent to the level of protection
            achieved.--The term `substantially equivalent to the level of
            protection achieved' means the prudential measures of a foreign
            government, authority, or regulatory entity achieve a similar
            outcome in consumer protection as the outcome achieved under
            State insurance or reinsurance regulation.
                ``(10) United states insurer.--The term `United States
            insurer' means--

    [[Page 124 STAT. 1588]]

                        ``(A) an insurer that is organized under the laws of
                    a State; or
                        ``(B) a United States branch of a non-United States
                    insurer.

        ``(s) Authorization of Appropriations.--There are authorized to be
    appropriated for the Office for each fiscal year such sums as may be
    necessary.
    ``SEC. 314. COVERED AGREEMENTS.

        ``(a) Authority.--The Secretary and the United States Trade
    Representative are authorized, jointly, to negotiate and enter into
    covered agreements on behalf of the United States.
        ``(b) Requirements for Consultation With Congress.--
                ``(1) In general.--Before initiating negotiations to enter
            into a covered agreement under subsection (a), during such
            negotiations, and before entering into any such agreement, the
            Secretary and the United States Trade Representative shall
            jointly consult with the Committee on Financial Services and the
            Committee on Ways and Means of the House of Representatives and
            the Committee on Banking, Housing, and Urban Affairs and the
            Committee on Finance of the Senate.
                ``(2) Scope.--The consultation described in paragraph (1)
            shall include consultation with respect to--
                        ``(A) the nature of the agreement;
                        ``(B) how and to what extent the agreement will
                    achieve the applicable purposes, policies, priorities,
                    and objectives of section 313 and this section; and
                        ``(C) the implementation of the agreement, including
                    the general effect of the agreement on existing State
                    laws.

        ``(c) Submission and Layover Provisions.--A covered agreement under
    subsection (a) may enter into force with respect to the United States
    only if--
                ``(1) the Secretary and the United States Trade
            Representative jointly submit to the congressional committees
            specified in subsection (b)(1), on a day on which both Houses of
            Congress are in session, a copy of the final legal text of the
            agreement; and
                ``(2) <<NOTE: Time period.>> a period of 90 calendar days
            beginning on the date on which the copy of the final legal text
            of the agreement is submitted to the congressional committees
            under paragraph (1) has expired.''.

        (b) Duties of Secretary.--Section 321(a) of title 31, United States
    Code, is amended--
                (1) in paragraph (7), by striking ``; and'' and inserting a
            semicolon;
                (2) in paragraph (8)(C), by striking the period at the end
            and inserting ``; and''; and
                (3) by adding at the end the following new paragraph:
                ``(9) advise the President on major domestic and
            international prudential policy issues in connection with all
            lines of insurance except health insurance.''.

        (c) Clerical Amendment.--The table of sections for subchapter I of
    chapter 3 of title 31, United States Code, is amended by striking the
    item relating to section 312 and inserting the following new items:

    ``Sec. 312. Terrorism and financial intelligence.
    ``Sec. 313. Federal Insurance Office.

    [[Page 124 STAT. 1589]]

    ``Sec. 314. Covered agreements.
    ``Sec. 315. Continuing in office.''.

    Subtitle <<NOTE: Nonadmitted and Reinsurance Reform Act of 2010. 15 USC
    8201 note.>>  B--State-Based Insurance Reform
    SEC. 511. SHORT TITLE.

        This subtitle may be cited as the ``Nonadmitted and Reinsurance
    Reform Act of 2010''.
    SEC. 512. <<NOTE: 15 USC 8201 note.>>  EFFECTIVE DATE.

        Except as otherwise specifically provided in this subtitle, this
    subtitle shall take effect upon the expiration of the 12-month period
    beginning on the date of the enactment of this subtitle.

                          PART I--NONADMITTED INSURANCE

    SEC. 521. <<NOTE: 15 USC 8201.>> REPORTING, PAYMENT, AND
                            ALLOCATION OF PREMIUM TAXES.

        (a) Home State's Exclusive Authority.--No State other than the home
    State of an insured may require any premium tax payment for nonadmitted
    insurance.
        (b) Allocation of Nonadmitted Premium Taxes.--
                (1) In general.--The States may enter into a compact or
            otherwise establish procedures to allocate among the States the
            premium taxes paid to an insured's home State described in
            subsection (a).
                (2) <<NOTE: Applicability.>> Effective date.--Except as
            expressly otherwise provided in such compact or other
            procedures, any such compact or other procedures--
                        (A) if adopted on or before the expiration of the
                    330-day period that begins on the date of the enactment
                    of this subtitle, shall apply to any premium taxes that,
                    on or after such date of enactment, are required to be
                    paid to any State that is subject to such compact or
                    procedures; and
                        (B) if adopted after the expiration of such 330-day
                    period, shall apply to any premium taxes that, on or
                    after January 1 of the first calendar year that begins
                    after the expiration of such 330-day period, are
                    required to be paid to any State that is subject to such
                    compact or procedures.
                (3) Report.--Upon the expiration of the 330-day period
            referred to in paragraph (2), the NAIC may submit a report to
            the Committee on Financial Services and the Committee on the
            Judiciary of the House of Representatives and the Committee on
            Banking, Housing, and Urban Affairs of the Senate identifying
            and describing any compact or other procedures for allocation
            among the States of premium taxes that have been adopted during
            such period by any States.
                (4) Nationwide system.--The Congress intends that each State
            adopt nationwide uniform requirements, forms, and procedures,
            such as an interstate compact, that provide for the reporting,
            payment, collection, and allocation of premium taxes for
            nonadmitted insurance consistent with this section.

        (c) Allocation Based on Tax Allocation Report.--To facilitate the
    payment of premium taxes among the States, an insured's home State may
    require surplus lines brokers and insureds who

    [[Page 124 STAT. 1590]]

    have independently procured insurance to annually file tax allocation
    reports with the insured's home State detailing the portion of the
    nonadmitted insurance policy premium or premiums attributable to
    properties, risks, or exposures located in each State. The filing of a
    nonadmitted insurance tax allocation report and the payment of tax may
    be made by a person authorized by the insured to act as its agent.
    SEC. 522. <<NOTE: 15 USC 8202.>> REGULATION OF NONADMITTED
                            INSURANCE BY INSURED'S HOME STATE.

        (a) Home State Authority.--Except as otherwise provided in this
    section, the placement of nonadmitted insurance shall be subject to the
    statutory and regulatory requirements solely of the insured's home
    State.
        (b) Broker Licensing.--No State other than an insured's home State
    may require a surplus lines broker to be licensed in order to sell,
    solicit, or negotiate nonadmitted insurance with respect to such
    insured.
        (c) Enforcement Provision.--With respect to section 521 and
    subsections (a) and (b) of this section, any law, regulation, provision,
    or action of any State that applies or purports to apply to nonadmitted
    insurance sold to, solicited by, or negotiated with an insured whose
    home State is another State shall be preempted with respect to such
    application.
        (d) Workers' Compensation Exception.--This section may not be
    construed to preempt any State law, rule, or regulation that restricts
    the placement of workers' compensation insurance or excess insurance for
    self-funded workers' compensation plans with a nonadmitted insurer.
    SEC. 523. <<NOTE: 15 USC 8203.>> PARTICIPATION IN NATIONAL
                            PRODUCER DATABASE.

         <<NOTE: Time period.>> After the expiration of the 2-year period
    beginning on the date of the enactment of this subtitle, a State may not
    collect any fees relating to licensing of an individual or entity as a
    surplus lines broker in the State unless the State has in effect at such
    time laws or regulations that provide for participation by the State in
    the national insurance producer database of the NAIC, or any other
    equivalent uniform national database, for the licensure of surplus lines
    brokers and the renewal of such licenses.
    SEC. 524. <<NOTE: 15 USC 8204.>>  UNIFORM STANDARDS FOR SURPLUS
                            LINES ELIGIBILITY.

        A State may not--
                (1) impose eligibility requirements on, or otherwise
            establish eligibility criteria for, nonadmitted insurers
            domiciled in a United States jurisdiction, except in conformance
            with such requirements and criteria in sections 5A(2) and
            5C(2)(a) of the Non-Admitted Insurance Model Act, unless the
            State has adopted nationwide uniform requirements, forms, and
            procedures developed in accordance with section 521(b) of this
            subtitle that include alternative nationwide uniform eligibility
            requirements; or
                (2) prohibit a surplus lines broker from placing nonadmitted
            insurance with, or procuring nonadmitted insurance from, a
            nonadmitted insurer domiciled outside the United States that is
            listed on the Quarterly Listing of Alien Insurers maintained by
            the International Insurers Department of the NAIC.

    [[Page 124 STAT. 1591]]

    SEC. 525. <<NOTE: 15 USC 8205.>> STREAMLINED APPLICATION FOR
                            COMMERCIAL PURCHASERS.

        A surplus lines broker seeking to procure or place nonadmitted
    insurance in a State for an exempt commercial purchaser shall not be
    required to satisfy any State requirement to make a due diligence search
    to determine whether the full amount or type of insurance sought by such
    exempt commercial purchaser can be obtained from admitted insurers if--
                (1) the broker procuring or placing the surplus lines
            insurance has disclosed to the exempt commercial purchaser that
            such insurance may or may not be available from the admitted
            market that may provide greater protection with more regulatory
            oversight; and
                (2) <<NOTE: Written request.>> the exempt commercial
            purchaser has subsequently requested in writing the broker to
            procure or place such insurance from a nonadmitted insurer.
    SEC. 526. GAO STUDY OF NONADMITTED INSURANCE MARKET.

        (a) In General.--The Comptroller General of the United States shall
    conduct a study of the nonadmitted insurance market to determine the
    effect of the enactment of this part on the size and market share of the
    nonadmitted insurance market for providing coverage typically provided
    by the admitted insurance market.
        (b) Contents.--The study shall determine and analyze--
                (1) the change in the size and market share of the
            nonadmitted insurance market and in the number of insurance
            companies and insurance holding companies providing such
            business in the 18-month period that begins upon the effective
            date of this subtitle;
                (2) the extent to which insurance coverage typically
            provided by the admitted insurance market has shifted to the
            nonadmitted insurance market;
                (3) the consequences of any change in the size and market
            share of the nonadmitted insurance market, including differences
            in the price and availability of coverage available in both the
            admitted and nonadmitted insurance markets;
                (4) the extent to which insurance companies and insurance
            holding companies that provide both admitted and nonadmitted
            insurance have experienced shifts in the volume of business
            between admitted and nonadmitted insurance; and
                (5) the extent to which there has been a change in the
            number of individuals who have nonadmitted insurance policies,
            the type of coverage provided under such policies, and whether
            such coverage is available in the admitted insurance market.

        (c) Consultation With NAIC.--In conducting the study under this
    section, the Comptroller General shall consult with the NAIC.
        (d) Report.--The Comptroller General shall complete the study under
    this section and submit a report to the Committee on Banking, Housing,
    and Urban Affairs of the Senate and the Committee on Financial Services
    of the House of Representatives regarding the findings of the study not
    later than 30 months after the effective date of this subtitle.
    SEC. 527. <<NOTE: 15 USC 8206.>> DEFINITIONS.

        For purposes of this part, the following definitions shall apply:

    [[Page 124 STAT. 1592]]

                (1) Admitted insurer.--The term ``admitted insurer'' means,
            with respect to a State, an insurer licensed to engage in the
            business of insurance in such State.
                (2) Affiliate.--The term ``affiliate'' means, with respect
            to an insured, any entity that controls, is controlled by, or is
            under common control with the insured.
                (3) Affiliated group.--The term ``affiliated group'' means
            any group of entities that are all affiliated.
                (4) Control.--An entity has ``control'' over another entity
            if--
                        (A) the entity directly or indirectly or acting
                    through 1 or more other persons owns, controls, or has
                    the power to vote 25 percent or more of any class of
                    voting securities of the other entity; or
                        (B) the entity controls in any manner the election
                    of a majority of the directors or trustees of the other
                    entity.
                (5) Exempt commercial purchaser.--The term ``exempt
            commercial purchaser'' means any person purchasing commercial
            insurance that, at the time of placement, meets the following
            requirements:
                        (A) The person employs or retains a qualified risk
                    manager to negotiate insurance coverage.
                        (B) The person has paid aggregate nationwide
                    commercial property and casualty insurance premiums in
                    excess of $100,000 in the immediately preceding 12
                    months.
                        (C)(i) The person meets at least 1 of the following
                    criteria:
                              (I) The person possesses a net worth in excess
                          of $20,000,000, as such amount is adjusted
                          pursuant to clause (ii).
                              (II) The person generates annual revenues in
                          excess of $50,000,000, as such amount is adjusted
                          pursuant to clause (ii).
                              (III) The person employs more than 500 full-
                          time or full-time equivalent employees per
                          individual insured or is a member of an affiliated
                          group employing more than 1,000 employees in the
                          aggregate.
                              (IV) The person is a not-for-profit
                          organization or public entity generating annual
                          budgeted expenditures of at least $30,000,000, as
                          such amount is adjusted pursuant to clause (ii).
                              (V) The person is a municipality with a
                          population in excess of 50,000 persons.
                        (ii) <<NOTE: Effective dates.>> Effective on the
                    fifth January 1 occurring after the date of the
                    enactment of this subtitle and each fifth January 1
                    occurring thereafter, the amounts in subclauses (I),
                    (II), and (IV) of clause (i) shall be adjusted to
                    reflect the percentage change for such 5-year period in
                    the Consumer Price Index for All Urban Consumers
                    published by the Bureau of Labor Statistics of the
                    Department of Labor.
                (6) Home state.--
                        (A) In general.--Except as provided in subparagraph
                    (B), the term ``home State'' means, with respect to an
                    insured--

    [[Page 124 STAT. 1593]]

                              (i) the State in which an insured maintains
                          its principal place of business or, in the case of
                          an individual, the individual's principal
                          residence; or
                              (ii) if 100 percent of the insured risk is
                          located out of the State referred to in clause
                          (i), the State to which the greatest percentage of
                          the insured's taxable premium for that insurance
                          contract is allocated.
                        (B) Affiliated groups.--If more than 1 insured from
                    an affiliated group are named insureds on a single
                    nonadmitted insurance contract, the term ``home State''
                    means the home State, as determined pursuant to
                    subparagraph (A), of the member of the affiliated group
                    that has the largest percentage of premium attributed to
                    it under such insurance contract.
                (7) Independently procured insurance.--The term
            ``independently procured insurance'' means insurance procured
            directly by an insured from a nonadmitted insurer.
                (8) NAIC.--The term ``NAIC'' means the National Association
            of Insurance Commissioners or any successor entity.
                (9) Nonadmitted insurance.--The term ``nonadmitted
            insurance'' means any property and casualty insurance permitted
            to be placed directly or through a surplus lines broker with a
            nonadmitted insurer eligible to accept such insurance.
                (10) Non-admitted insurance model act.--The term ``Non-
            Admitted Insurance Model Act'' means the provisions of the Non-
            Admitted Insurance Model Act, as adopted by the NAIC on August
            3, 1994, and amended on September 30, 1996, December 6, 1997,
            October 2, 1999, and June 8, 2002.
                (11) Nonadmitted insurer.--The term ``nonadmitted
            insurer''--
                        (A) means, with respect to a State, an insurer not
                    licensed to engage in the business of insurance in such
                    State; but
                        (B) does not include a risk retention group, as that
                    term is defined in section 2(a)(4) of the Liability Risk
                    Retention Act of 1986 (15 U.S.C. 3901(a)(4)).
                (12) Premium tax.--The term ``premium tax'' means, with
            respect to surplus lines or independently procured insurance
            coverage, any tax, fee, assessment, or other charge imposed by a
            government entity directly or indirectly based on any payment
            made as consideration for an insurance contract for such
            insurance, including premium deposits, assessments, registration
            fees, and any other compensation given in consideration for a
            contract of insurance.
                (13) Qualified risk manager.--The term ``qualified risk
            manager'' means, with respect to a policyholder of commercial
            insurance, a person who meets all of the following requirements:
                        (A) The person is an employee of, or third-party
                    consultant retained by, the commercial policyholder.
                        (B) The person provides skilled services in loss
                    prevention, loss reduction, or risk and insurance
                    coverage analysis, and purchase of insurance.
                        (C) The person--
                              (i)(I) has a bachelor's degree or higher from
                          an accredited college or university in risk
                          management, business administration, finance,
                          economics, or any

    [[Page 124 STAT. 1594]]

                          other field determined by a State insurance
                          commissioner or other State regulatory official or
                          entity to demonstrate minimum competence in risk
                          management; and
                              (II)(aa) has 3 years of experience in risk
                          financing, claims administration, loss prevention,
                          risk and insurance analysis, or purchasing
                          commercial lines of insurance; or
                              (bb) has--
                                        (AA) a designation as a Chartered
                                    Property and Casualty Underwriter (in
                                    this subparagraph referred to as
                                    ``CPCU'') issued by the American
                                    Institute for CPCU/Insurance Institute
                                    of America;
                                        (BB) a designation as an Associate
                                    in Risk Management (ARM) issued by the
                                    American Institute for CPCU/Insurance
                                    Institute of America;
                                        (CC) a designation as Certified Risk
                                    Manager (CRM) issued by the National
                                    Alliance for Insurance Education &
                                    Research;
                                        (DD) a designation as a RIMS Fellow
                                    (RF) issued by the Global Risk
                                    Management Institute; or
                                        (EE) any other designation,
                                    certification, or license determined by
                                    a State insurance commissioner or other
                                    State insurance regulatory official or
                                    entity to demonstrate minimum competency
                                    in risk management;
                              (ii)(I) has at least 7 years of experience in
                          risk financing, claims administration, loss
                          prevention, risk and insurance coverage analysis,
                          or purchasing commercial lines of insurance; and
                              (II) has any 1 of the designations specified
                          in subitems (AA) through (EE) of clause
                          (i)(II)(bb);
                              (iii) has at least 10 years of experience in
                          risk financing, claims administration, loss
                          prevention, risk and insurance coverage analysis,
                          or purchasing commercial lines of insurance; or
                              (iv) has a graduate degree from an accredited
                          college or university in risk management, business
                          administration, finance, economics, or any other
                          field determined by a State insurance commissioner
                          or other State regulatory official or entity to
                          demonstrate minimum competence in risk management.
                (14) Reinsurance.--The term ``reinsurance'' means the
            assumption by an insurer of all or part of a risk undertaken
            originally by another insurer.
                (15) Surplus lines broker.--The term ``surplus lines
            broker'' means an individual, firm, or corporation which is
            licensed in a State to sell, solicit, or negotiate insurance on
            properties, risks, or exposures located or to be performed in a
            State with nonadmitted insurers.
                (16) State.--The term ``State'' includes any State of the
            United States, the District of Columbia, the Commonwealth of
            Puerto Rico, Guam, the Northern Mariana Islands, the Virgin
            Islands, and American Samoa.

    [[Page 124 STAT. 1595]]

                              PART II--REINSURANCE

    SEC. 531. <<NOTE: 15 USC 8221.>>  REGULATION OF CREDIT FOR
                            REINSURANCE AND REINSURANCE AGREEMENTS.

        (a) Credit for Reinsurance.--If the State of domicile of a ceding
    insurer is an NAIC-accredited State, or has financial solvency
    requirements substantially similar to the requirements necessary for
    NAIC accreditation, and recognizes credit for reinsurance for the
    insurer's ceded risk, then no other State may deny such credit for
    reinsurance.
        (b) Additional Preemption of Extraterritorial Application of State
    Law.--In addition to the application of subsection (a), all laws,
    regulations, provisions, or other actions of a State that is not the
    domiciliary State of the ceding insurer, except those with respect to
    taxes and assessments on insurance companies or insurance income, are
    preempted to the extent that they--
                (1) restrict or eliminate the rights of the ceding insurer
            or the assuming insurer to resolve disputes pursuant to
            contractual arbitration to the extent such contractual provision
            is not inconsistent with the provisions of title 9, United
            States Code;
                (2) require that a certain State's law shall govern the
            reinsurance contract, disputes arising from the reinsurance
            contract, or requirements of the reinsurance contract;
                (3) attempt to enforce a reinsurance contract on terms
            different than those set forth in the reinsurance contract, to
            the extent that the terms are not inconsistent with this part;
            or
                (4) otherwise apply the laws of the State to reinsurance
            agreements of ceding insurers not domiciled in that State.
    SEC. 532. <<NOTE: 15 USC 8222.>>  REGULATION OF REINSURER
                            SOLVENCY.

        (a) Domiciliary State Regulation.--If the State of domicile of a
    reinsurer is an NAIC-accredited State or has financial solvency
    requirements substantially similar to the requirements necessary for
    NAIC accreditation, such State shall be solely responsible for
    regulating the financial solvency of the reinsurer.
        (b) Nondomiciliary States.--
                (1) Limitation on financial information requirements.--If
            the State of domicile of a reinsurer is an NAIC-accredited State
            or has financial solvency requirements substantially similar to
            the requirements necessary for NAIC accreditation, no other
            State may require the reinsurer to provide any additional
            financial information other than the information the reinsurer
            is required to file with its domiciliary State.
                (2) Receipt of information.--No provision of this section
            shall be construed as preventing or prohibiting a State that is
            not the State of domicile of a reinsurer from receiving a copy
            of any financial statement filed with its domiciliary State.
    SEC. 533. <<NOTE: 15 USC 8223.>>  DEFINITIONS.

        For purposes of this part, the following definitions shall apply:
                (1) Ceding insurer.--The term ``ceding insurer'' means an
            insurer that purchases reinsurance.
                (2) Domiciliary state.--The terms ``State of domicile'' and
            ``domiciliary State'' mean, with respect to an insurer or

    [[Page 124 STAT. 1596]]

            reinsurer, the State in which the insurer or reinsurer is
            incorporated or entered through, and licensed.
                (3) NAIC.--The term ``NAIC'' means the National Association
            of Insurance Commissioners or any successor entity.
                (4) Reinsurance.--The term ``reinsurance'' means the
            assumption by an insurer of all or part of a risk undertaken
            originally by another insurer.
                (5) Reinsurer.--
                        (A) In general.--The term ``reinsurer'' means an
                    insurer to the extent that the insurer--
                              (i) is principally engaged in the business of
                          reinsurance;
                              (ii) does not conduct significant amounts of
                          direct insurance as a percentage of its net
                          premiums; and
                              (iii) is not engaged in an ongoing basis in
                          the business of soliciting direct insurance.
                        (B) Determination.--A determination of whether an
                    insurer is a reinsurer shall be made under the laws of
                    the State of domicile in accordance with this paragraph.
                (6) State.--The term ``State'' includes any State of the
            United States, the District of Columbia, the Commonwealth of
            Puerto Rico, Guam, the Northern Mariana Islands, the Virgin
            Islands, and American Samoa.

                         PART III--RULE OF CONSTRUCTION

    SEC. 541. <<NOTE: 15 USC 8231.>> RULE OF CONSTRUCTION.

        Nothing in this subtitle or the amendments made by this subtitle
    shall be construed to modify, impair, or supersede the application of
    the antitrust laws. Any implied or actual conflict between this subtitle
    and any amendments to this subtitle and the antitrust laws shall be
    resolved in favor of the operation of the antitrust laws.
    SEC. 542. <<NOTE: 15 USC 8232.>>  SEVERABILITY.

        If any section or subsection of this subtitle, or any application of
    such provision to any person or circumstance, is held to be
    unconstitutional, the remainder of this subtitle, and the application of
    the provision to any other person or circumstance, shall not be
    affected.

     TITLE VI--IMPROVEMENTS TO <<NOTE: Bank and Savings Association Holding
       Company and Depository Institution Regulatory Improvements Act of
     2010. 12 USC 1811 note.>>  REGULATION OF BANK AND SAVINGS ASSOCIATION
    HOLDING COMPANIES AND DEPOSITORY INSTITUTIONS
    SEC. 601. SHORT TITLE.

        This title may be cited as the ``Bank and Savings Association
    Holding Company and Depository Institution Regulatory Improvements Act
    of 2010''.
    SEC. 602. <<NOTE: 12 USC 1815 note.>>  DEFINITION.

        For purposes of this title, a company is a ``commercial firm'' if
    the annual gross revenues derived by the company and all of its
    affiliates from activities that are financial in nature (as defined

    [[Page 124 STAT. 1597]]

    in section 4(k) of the Bank Holding Company Act of 1956 (12 U.S.C.
    1843(k))) and, if applicable, from the ownership or control of one or
    more insured depository institutions, represent less than 15 percent of
    the consolidated annual gross revenues of the company.
    SEC. 603. MORATORIUM AND STUDY ON TREATMENT OF CREDIT CARD BANKS,
                            INDUSTRIAL LOAN COMPANIES, AND CERTAIN
                            OTHER COMPANIES UNDER THE BANK HOLDING
                            COMPANY ACT OF 1956.

        (a) <<NOTE: 12 USC 1815 note.>>  Moratorium.--
                (1) Definitions.--In this subsection--
                        (A) the term ``credit card bank'' means an
                    institution described in section 2(c)(2)(F) of the Bank
                    Holding Company Act of 1956 (12 U.S.C. 1841(c)(2)(F));
                        (B) the term ``industrial bank'' means an
                    institution described in section 2(c)(2)(H) of the Bank
                    Holding Company Act of 1956 (12 U.S.C. 1841(c)(2)(H));
                    and
                        (C) the term ``trust bank'' means an institution
                    described in section 2(c)(2)(D) of the Bank Holding
                    Company Act of 1956 (12 U.S.C. 1841(c)(2)(D)).
                (2) Moratorium on provision of deposit insurance.--The
            Corporation may not approve an application for deposit insurance
            under section 5 of the Federal Deposit Insurance Act (12 U.S.C.
            1815) that is received after November 23, 2009, for an
            industrial bank, a credit card bank, or a trust bank that is
            directly or indirectly owned or controlled by a commercial firm.
                (3) Change in control.--
                        (A) In general.--Except as provided in subparagraph
                    (B), the appropriate Federal banking agency shall
                    disapprove a change in control, as provided in section
                    7(j) of the Federal Deposit Insurance Act (12 U.S.C.
                    1817(j)), of an industrial bank, a credit card bank, or
                    a trust bank if the change in control would result in
                    direct or indirect control of the industrial bank,
                    credit card bank, or trust bank by a commercial firm.
                        (B) Exceptions.--Subparagraph (A) shall not apply to
                    a change in control of an industrial bank, credit card
                    bank, or trust bank--
                              (i) that--
                                        (I) is in danger of default, as
                                    determined by the appropriate Federal
                                    banking agency;
                                        (II) results from the merger or
                                    whole acquisition of a commercial firm
                                    that directly or indirectly controls the
                                    industrial bank, credit card bank, or
                                    trust bank in a bona fide merger with or
                                    acquisition by another commercial firm,
                                    as determined by the appropriate Federal
                                    banking agency; or
                                        (III) results from an acquisition of
                                    voting shares of a publicly traded
                                    company that controls an industrial
                                    bank, credit card bank, or trust bank,
                                    if, after the acquisition, the acquiring
                                    shareholder (or group of shareholders
                                    acting in concert) holds less than 25
                                    percent of any class of the voting
                                    shares of the company; and

    [[Page 124 STAT. 1598]]

                              (ii) that has obtained all regulatory
                          approvals otherwise required for such change of
                          control under any applicable Federal or State law,
                          including section 7(j) of the Federal Deposit
                          Insurance Act (12 U.S.C. 1817(j)).
                (4) Sunset.--This subsection shall cease to have effect 3
            years after the date of enactment of this Act.

        (b) Government Accountability Office Study of Exceptions Under the
    Bank Holding Company Act of 1956.--
                (1) Study required.--The Comptroller General of the United
            States shall carry out a study to determine whether it is
            necessary, in order to strengthen the safety and soundness of
            institutions or the stability of the financial system, to
            eliminate the exceptions under section 2 of the Bank Holding
            Company Act of 1956 (12 U.S.C. 1841) for institutions described
            in--
                        (A) section 2(a)(5)(E) of the Bank Holding Company
                    Act of 1956 (12 U.S.C. 1841(a)(5)(E));
                        (B) section 2(a)(5)(F) of the Bank Holding Company
                    Act of 1956 (12 U.S.C. 1841(a)(5)(F));
                        (C) section 2(c)(2)(D) of the Bank Holding Company
                    Act of 1956 (12 U.S.C. 1841(c)(2)(D));
                        (D) section 2(c)(2)(F) of the Bank Holding Company
                    Act of 1956 (12 U.S.C. 1841(c)(2)(F));
                        (E) section 2(c)(2)(H) of the Bank Holding Company
                    Act of 1956 (12 U.S.C. 1841(c)(2)(H)); and
                        (F) section 2(c)(2)(B) of the Bank Holding Company
                    Act of 1956 (12 U.S.C. 1841(c)(2)(B)).
                (2) Content of study.--
                        (A) In general.--The study required under paragraph
                    (1), with respect to the institutions referenced in each
                    of subparagraphs (A) through (E) of paragraph (1),
                    shall, to the extent feasible be based on information
                    provided to the Comptroller General by the appropriate
                    Federal or State regulator, and shall--
                              (i) identify the types and number of
                          institutions excepted from section 2 of the Bank
                          Holding Company Act of 1956 (12 U.S.C. 1841) under
                          each of the subparagraphs described in
                          subparagraphs (A) through (E) of paragraph (1);
                              (ii) generally describe the size and
                          geographic locations of the institutions described
                          in clause (i);
                              (iii) determine the extent to which the
                          institutions described in clause (i) are held by
                          holding companies that are commercial firms;
                              (iv) determine whether the institutions
                          described in clause (i) have any affiliates that
                          are commercial firms;
                              (v) identify the Federal banking agency
                          responsible for the supervision of the
                          institutions described in clause (i) on and after
                          the transfer date;
                              (vi) determine the adequacy of the Federal
                          bank regulatory framework applicable to each
                          category of institution described in clause (i),
                          including any restrictions (including limitations
                          on affiliate transactions or cross-marketing) that
                          apply to transactions between

    [[Page 124 STAT. 1599]]

                          an institution, the holding company of the
                          institution, and any other affiliate of the
                          institution; and
                              (vii) evaluate the potential consequences of
                          subjecting the institutions described in clause
                          (i) to the requirements of the Bank Holding
                          Company Act of 1956, including with respect to the
                          availability and allocation of credit, the
                          stability of the financial system and the economy,
                          the safe and sound operation of each category of
                          institution, and the impact on the types of
                          activities in which such institutions, and the
                          holding companies of such institutions, may
                          engage.
                        (B) Savings associations.--With respect to
                    institutions described in paragraph (1)(F), the study
                    required under paragraph (1) shall--
                              (i) determine the adequacy of the Federal bank
                          regulatory framework applicable to such
                          institutions, including any restrictions
                          (including limitations on affiliate transactions
                          or cross-marketing) that apply to transactions
                          between an institution, the holding company of the
                          institution, and any other affiliate of the
                          institution; and
                              (ii) evaluate the potential consequences of
                          subjecting the institutions described in paragraph
                          (1)(F) to the requirements of the Bank Holding
                          Company Act of 1956, including with respect to the
                          availability and allocation of credit, the
                          stability of the financial system and the economy,
                          the safe and sound operation of such institutions,
                          and the impact on the types of activities in which
                          such institutions, and the holding companies of
                          such institutions, may engage.
                (3) Report.--Not later than 18 months after the date of
            enactment of this Act, the Comptroller General shall submit to
            the Committee on Banking, Housing, and Urban Affairs of the
            Senate and the Committee on Financial Services of the House of
            Representatives a report on the study required under paragraph
            (1).
    SEC. 604. REPORTS AND EXAMINATIONS OF HOLDING COMPANIES;
                            REGULATION OF FUNCTIONALLY REGULATED
                            SUBSIDIARIES.

        (a) Reports by Bank Holding Companies.--Sections 5(c)(1) of the Bank
    Holding Company Act of 1956 (12 U.S.C. 1844(c)(1)) is amended--
                (1) by striking subclause (A)(ii) and inserting the
            following:
                              ``(ii) compliance by the bank holding company
                          or subsidiary with--
                                        ``(I) this Act;
                                        ``(II) Federal laws that the Board
                                    has specific jurisdiction to enforce
                                    against the company or subsidiary; and
                                        ``(III) other than in the case of an
                                    insured depository institution or
                                    functionally regulated subsidiary, any
                                    other applicable provision of Federal
                                    law.'';
                (2) by striking subparagraph (B) and inserting the
            following:

    [[Page 124 STAT. 1600]]

                        ``(B) Use of existing reports and other supervisory
                    information.--The Board shall, to the fullest extent
                    possible, use--
                              ``(i) reports and other supervisory
                          information that the bank holding company or any
                          subsidiary thereof has been required to provide to
                          other Federal or State regulatory agencies;
                              ``(ii) externally audited financial statements
                          of the bank holding company or subsidiary;
                              ``(iii) information otherwise available from
                          Federal or State regulatory agencies; and
                              ``(iv) information that is otherwise required
                          to be reported publicly.''; and
                (3) by adding at the end the following:
                        ``(C) Availability.--Upon the request of the Board,
                    the bank holding company or a subsidiary of the bank
                    holding company shall promptly provide to the Board any
                    information described in clauses (i) through (iii) of
                    subparagraph (B).''.

        (b) Examinations of Bank Holding Companies.--Section 5(c)(2) of the
    Bank Holding Company Act of 1956 (12 U.S.C. 1844(c)(2)) is amended to
    read as follows:
                ``(2) Examinations.--
                        ``(A) In general.--Subject to subtitle B of the
                    Consumer Financial Protection Act of 2010, the Board may
                    make examinations of a bank holding company and each
                    subsidiary of a bank holding company in order to--
                              ``(i) inform the Board of--
                                        ``(I) the nature of the operations
                                    and financial condition of the bank
                                    holding company and the subsidiary;
                                        ``(II) the financial, operational,
                                    and other risks within the bank holding
                                    company system that may pose a threat
                                    to--
                                                ``(aa) the safety and
                                            soundness of the bank holding
                                            company or of any depository
                                            institution subsidiary of the
                                            bank holding company; or
                                                ``(bb) the stability of the
                                            financial system of the United
                                            States; and
                                        ``(III) the systems of the bank
                                    holding company for monitoring and
                                    controlling the risks described in
                                    subclause (II); and
                              ``(ii) monitor the compliance of the bank
                          holding company and the subsidiary with--
                                        ``(I) this Act;
                                        ``(II) Federal laws that the Board
                                    has specific jurisdiction to enforce
                                    against the company or subsidiary; and
                                        ``(III) other than in the case of an
                                    insured depository institution or
                                    functionally regulated subsidiary, any
                                    other applicable provisions of Federal
                                    law.
                        ``(B) Use of reports to reduce examinations.--For
                    purposes of this paragraph, the Board shall, to the
                    fullest extent possible, rely on--

    [[Page 124 STAT. 1601]]

                              ``(i) examination reports made by other
                          Federal or State regulatory agencies relating to a
                          bank holding company and any subsidiary of a bank
                          holding company; and
                              ``(ii) the reports and other information
                          required under paragraph (1).
                        ``(C) Coordination with other regulators.--The Board
                    shall--
                              ``(i) <<NOTE: Notice. Consultation.>> provide
                          reasonable notice to, and consult with, the
                          appropriate Federal banking agency, the Securities
                          and Exchange Commission, the Commodity Futures
                          Trading Commission, or State regulatory agency, as
                          appropriate, for a subsidiary that is a depository
                          institution or a functionally regulated subsidiary
                          of a bank holding company before commencing an
                          examination of the subsidiary under this section;
                          and
                              ``(ii) to the fullest extent possible, avoid
                          duplication of examination activities, reporting
                          requirements, and requests for information.''.

        (c) Authority To Regulate Functionally Regulated Subsidiaries of
    Bank Holding Companies.--The Bank Holding Company Act of 1956 (12 U.S.C.
    1841 et seq.) is amended--
                (1) in section 5(c)(5)(B) (12 U.S.C. 1844(c)(5)(B)), by
            striking clause (v) and inserting the following:
                              ``(v) an entity that is subject to regulation
                          by, or registration with, the Commodity Futures
                          Trading Commission, with respect to activities
                          conducted as a futures commission merchant,
                          commodity trading adviser, commodity pool,
                          commodity pool operator, swap execution facility,
                          swap data repository, swap dealer, major swap
                          participant, and activities that are incidental to
                          such commodities and swaps activities.''; and
                (2) by striking section 10A (12 U.S.C. 1848a).

        (d) Acquisitions of Banks.--Section 3(c) of the Bank Holding Company
    Act of 1956 (12 U.S.C. 1842(c)) is amended by adding at the end the
    following:
                ``(7) Financial stability.--In every case, the Board shall
            take into consideration the extent to which a proposed
            acquisition, merger, or consolidation would result in greater or
            more concentrated risks to the stability of the United States
            banking or financial system.''.

        (e) Acquisitions of Nonbanks.--
                (1) Notice procedures.--Section 4(j)(2)(A) of the Bank
            Holding Company Act of 1956 (12 U.S.C. 1843(j)(2)(A)) is amended
            by striking ``or unsound banking practices'' and inserting
            ``unsound banking practices, or risk to the stability of the
            United States banking or financial system''.
                (2) Activities that are financial in nature.--Section
            4(k)(6)(B) of the Bank Holding Company Act of 1956 (12 U.S.C.
            1843(k)(6)(B)) is amended to read as follows:
                        ``(B) Approval not required for certain financial
                    activities.--
                              ``(i) In general.--Except as provided in
                          subsection (j) with regard to the acquisition of a
                          savings association and clause (ii), a financial
                          holding company may

    [[Page 124 STAT. 1602]]

                          commence any activity, or acquire any company,
                          pursuant to paragraph (4) or any regulation
                          prescribed or order issued under paragraph (5),
                          without prior approval of the Board.
                              ``(ii) Exception.--A financial holding company
                          may not acquire a company, without the prior
                          approval of the Board, in a transaction in which
                          the total consolidated assets to be acquired by
                          the financial holding company exceed
                          $10,000,000,000.
                              ``(iii) Hart-Scott-Rodino filing
                          requirement.--Solely for purposes of section
                          7A(c)(8) of the Clayton Act (15 U.S.C. 18a(c)(8)),
                          the transactions subject to the requirements of
                          this paragraph shall be treated as if the approval
                          of the Board is not required.''.

        (f) Bank Merger Act Transactions.--Section 18(c)(5) of the Federal
    Deposit Insurance Act (12 U.S.C. 1828(c)(5)) is amended, in the matter
    immediately following subparagraph (B), by striking ``and the
    convenience and needs of the community to be served'' and inserting
    ``the convenience and needs of the community to be served, and the risk
    to the stability of the United States banking or financial system''.
        (g) Reports by Savings and Loan Holding Companies.--Section 10(b)(2)
    of the Home Owners' Loan Act (12 U.S.C. 1467a(b)(2) is amended--
                (1) by striking ``Each savings'' and inserting the
            following:
                        ``(A) In general.--Each savings''; and
                (2) by adding at the end the following:
                        ``(B) Use of existing reports and other supervisory
                    information.--The Board shall, to the fullest extent
                    possible, use--
                              ``(i) reports and other supervisory
                          information that the savings and loan holding
                          company or any subsidiary thereof has been
                          required to provide to other Federal or State
                          regulatory agencies;
                              ``(ii) externally audited financial statements
                          of the savings and loan holding company or
                          subsidiary;
                              ``(iii) information that is otherwise
                          available from Federal or State regulatory
                          agencies; and
                              ``(iv) information that is otherwise required
                          to be reported publicly.
                        ``(C) Availability.--Upon the request of the Board,
                    a savings and loan holding company or a subsidiary of a
                    savings and loan holding company shall promptly provide
                    to the Board any information described in clauses (i)
                    through (iii) of subparagraph (B).''.

        (h) Examination of Savings and Loan Holding Companies.--
                (1) Definitions.--Section 2 of the Home Owners' Loan Act (12
            U.S.C. 1462) is amended by adding at the end the following:
                ``(10) Appropriate federal banking agency.--The term
            `appropriate Federal banking agency' has the same meaning as in
            section 3(q) of the Federal Deposit Insurance Act (12 U.S.C.
            1813(q)).
                ``(11) Functionally regulated subsidiary.--The term
            `functionally regulated subsidiary' has the same meaning as in
            section 5(c)(5) of the Bank Holding Company Act of 1956 (12
            U.S.C. 1844(c)(5)).''.

    [[Page 124 STAT. 1603]]

                (2) Examination.--Section 10(b) of the Home Owners' Loan Act
            (12 U.S.C. 1467a(b)) is amended by striking paragraph (4) and
            inserting the following:
                ``(4) Examinations.--
                        ``(A) In general.--Subject to subtitle B of the
                    Consumer Financial Protection Act of 2010, the Board may
                    make examinations of a savings and loan holding company
                    and each subsidiary of a savings and loan holding
                    company system, in order to--
                              ``(i) inform the Board of--
                                        ``(I) the nature of the operations
                                    and financial condition of the savings
                                    and loan holding company and the
                                    subsidiary;
                                        ``(II) the financial, operational,
                                    and other risks within the savings and
                                    loan holding company system that may
                                    pose a threat to--
                                                ``(aa) the safety and
                                            soundness of the savings and
                                            loan holding company or of any
                                            depository institution
                                            subsidiary of the savings and
                                            loan holding company; or
                                                ``(bb) the stability of the
                                            financial system of the United
                                            States; and
                                        ``(III) the systems of the savings
                                    and loan holding company for monitoring
                                    and controlling the risks described in
                                    subclause (II); and
                              ``(ii) monitor the compliance of the savings
                          and loan holding company and the subsidiary with--
                                        ``(I) this Act;
                                        ``(II) Federal laws that the Board
                                    has specific jurisdiction to enforce
                                    against the company or subsidiary; and
                                        ``(III) other than in the case of an
                                    insured depository institution or
                                    functionally regulated subsidiary, any
                                    other applicable provisions of Federal
                                    law.
                        ``(B) Use of reports to reduce examinations.--For
                    purposes of this subsection, the Board shall, to the
                    fullest extent possible, rely on--
                              ``(i) the examination reports made by other
                          Federal or State regulatory agencies relating to a
                          savings and loan holding company and any
                          subsidiary; and
                              ``(ii) the reports and other information
                          required under paragraph (2).
                        ``(C) Coordination with other regulators.--The Board
                    shall--
                              ``(i) <<NOTE: Notice. Consultation.>>  provide
                          reasonable notice to, and consult with, the
                          appropriate Federal banking agency, the Securities
                          and Exchange Commission, the Commodity Futures
                          Trading Commission, or State regulatory agency, as
                          appropriate, for a subsidiary that is a depository
                          institution or a functionally regulated subsidiary
                          of a savings and loan holding company before
                          commencing an examination of the subsidiary under
                          this section; and
                              ``(ii) to the fullest extent possible, avoid
                          duplication of examination activities, reporting
                          requirements, and requests for information.''.

    [[Page 124 STAT. 1604]]

        (i) Definition of the Term ``Savings and Loan Holding Company''.--
    Section 10(a)(1)(D)(ii) of the Home Owners' Loan Act (12 U.S.C.
    1467a(a)(1)(D)(ii)) is amended to read as follows:
                              ``(ii) Exclusion.--The term `savings and loan
                          holding company' does not include--
                                        ``(I) a bank holding company that is
                                    registered under, and subject to, the
                                    Bank Holding Company Act of 1956 (12
                                    U.S.C. 1841 et seq.), or to any company
                                    directly or indirectly controlled by
                                    such company (other than a savings
                                    association);
                                        ``(II) a company that controls a
                                    savings association that functions
                                    solely in a trust or fiduciary capacity
                                    as described in section 2(c)(2)(D) of
                                    the Bank Holding Company Act of 1956 (12
                                    U.S.C. 1841(c)(2)(D)); or
                                        ``(III) a company described in
                                    subsection (c)(9)(C) solely by virtue of
                                    such company's control of an
                                    intermediate holding company established
                                    pursuant to section 10A.''.

        (j) <<NOTE: 12 USC 1462 note.>>  Effective Date.--The amendments
    made by this section shall take effect on the transfer date.
    SEC. 605. ASSURING CONSISTENT OVERSIGHT OF PERMISSIBLE ACTIVITIES
                            OF DEPOSITORY INSTITUTION SUBSIDIARIES OF
                            HOLDING COMPANIES.

        (a) In General.--The Federal Deposit Insurance Act (12 U.S.C. 1811
    et seq.) is amended by inserting after section 25 the following new
    section:
    ``SEC. 26. <<NOTE: 12 USC 1831c.>>  ASSURING CONSISTENT OVERSIGHT
                          OF SUBSIDIARIES OF HOLDING COMPANIES.

        ``(a) Definitions.--For purposes of this section:
                ``(1) Board.--The term `Board' means the Board of Governors
            of the Federal Reserve System.
                ``(2) Functionally regulated subsidiary.--The term
            `functionally regulated subsidiary' has the same meaning as in
            section 5(c)(5) of the Bank Holding Company Act.
                ``(3) Lead insured depository institution.--The term `lead
            insured depository institution' has the same meaning as in
            section 2(o)(8) of the Bank Holding Company Act.

        ``(b) Examination Requirements.--Subject to subtitle B of the
    Consumer Financial Protection Act of 2010, the Board shall examine the
    activities of a nondepository institution subsidiary (other than a
    functionally regulated subsidiary or a subsidiary of a depository
    institution) of a depository institution holding company that are
    permissible for the insured depository institution subsidiaries of the
    depository institution holding company in the same manner, subject to
    the same standards, and with the same frequency as would be required if
    such activities were conducted in the lead insured depository
    institution of the depository institution holding company.
        ``(c) State Coordination.--
                ``(1) Consultation and coordination.--If a nondepository
            institution subsidiary is supervised by a State bank supervisor
            or other State regulatory authority, the Board, in conducting
            the examinations required in subsection (b), shall consult and
            coordinate with such State regulator.

    [[Page 124 STAT. 1605]]

                ``(2) Alternating examinations permitted.--The examinations
            required under subsection (b) may be conducted in joint or
            alternating manner with a State regulator, if the Board
            determines that an examination of a nondepository institution
            subsidiary conducted by the State carries out the purposes of
            this section.

        ``(d) Appropriate Federal Banking Agency Backup Examination
    Authority.--
                ``(1) In general.--In the event that the Board does not
            conduct examinations required under subsection (b) in the same
            manner, subject to the same standards, and with the same
            frequency as would be required if such activities were conducted
            by the lead insured depository institution subsidiary of the
            depository institution holding company, the appropriate Federal
            banking agency for the lead insured depository institution may
            recommend in writing (which shall include a written explanation
            of the concerns giving rise to the recommendation) that the
            Board perform the examination required under subsection (b).
                ``(2) Examination by an appropriate federal banking
            agency.--If the <<NOTE: Time period.>>  Board does not, before
            the end of the 60-day period beginning on the date on which the
            Board receives a recommendation under paragraph (1), begin an
            examination as required under subsection (b) or provide a
            written explanation or plan to the appropriate Federal banking
            agency making such recommendation responding to the concerns
            raised by the appropriate Federal banking agency for the lead
            insured depository institution, the appropriate Federal banking
            agency for the lead insured depository institution may, subject
            to the Consumer Financial Protection Act of 2010, examine the
            activities that are permissible for a depository institution
            subsidiary conducted by such nondepository institution
            subsidiary (other than a functionally regulated subsidiary or a
            subsidiary of a depository institution) of the depository
            institution holding company as if the nondepository institution
            subsidiary were an insured depository institution for which the
            appropriate Federal banking agency of the lead insured
            depository institution was the appropriate Federal banking
            agency, to determine whether the activities--
                        ``(A) pose a material threat to the safety and
                    soundness of any insured depository institution
                    subsidiary of the depository institution holding
                    company;
                        ``(B) are conducted in accordance with applicable
                    Federal law; and
                        ``(C) are subject to appropriate systems for
                    monitoring and controlling the financial, operating, and
                    other material risks of the activities that may pose a
                    material threat to the safety and soundness of the
                    insured depository institution subsidiaries of the
                    holding company.
                ``(3) Agency coordination with the board.--An appropriate
            Federal banking agency that conducts an examination pursuant to
            paragraph (2) shall coordinate examination of the activities of
            nondepository institution subsidiaries described in subsection
            (b) with the Board in a manner that--
                        ``(A) avoids duplication;
                        ``(B) shares information relevant to the supervision
                    of the depository institution holding company;

    [[Page 124 STAT. 1606]]

                        ``(C) achieves the objectives of subsection (b); and
                        ``(D) ensures that the depository institution
                    holding company and the subsidiaries of the depository
                    institution holding company are not subject to
                    conflicting supervisory demands by such agency and the
                    Board.
                ``(4) Fee permitted for examination costs.--An appropriate
            Federal banking agency that conducts an examination or
            enforcement action pursuant to this section may collect an
            assessment, fee, or such other charge from the subsidiary as the
            appropriate Federal banking agency determines necessary or
            appropriate to carry out the responsibilities of the appropriate
            Federal banking agency in connection with such examination.

        ``(e) Referrals for Enforcement by Appropriate Federal Banking
    Agency.--
                ``(1) Recommendation of enforcement action.--The appropriate
            Federal banking agency for the lead insured depository
            institution, based upon its examination of a nondepository
            institution subsidiary conducted pursuant to subsection (d), or
            other relevant information, may submit to the Board, in writing,
            a recommendation that the Board take enforcement action against
            such nondepository institution subsidiary, together with an
            explanation of the concerns giving rise to the recommendation,
            if the appropriate Federal banking agency determines (by a vote
            of its members, if applicable) that the activities of the
            nondepository institution subsidiary pose a material threat to
            the safety and soundness of any insured depository institution
            subsidiary of the depository institution holding company.
                ``(2) Back-up authority of the appropriate federal banking
            agency.--If, within <<NOTE: Time period.>>  the 60-day period
            beginning on the date on which the Board receives a
            recommendation under paragraph (1), the Board does not take
            enforcement action against the nondepository institution
            subsidiary or provide a plan for supervisory or enforcement
            action that is acceptable to the appropriate Federal banking
            agency that made the recommendation pursuant to paragraph (1),
            such agency may take the recommended enforcement action against
            the nondepository institution subsidiary, in the same manner as
            if the nondepository institution subsidiary were an insured
            depository institution for which the agency was the appropriate
            Federal banking agency.

        ``(f) Coordination Among Appropriate Federal Banking Agencies.--Each
    Federal banking agency, prior to or when exercising authority under
    subsection (d) or (e) shall--
                ``(1) <<NOTE: Notice. Consultation.>>  provide reasonable
            notice to, and consult with, the appropriate Federal banking
            agency or State bank supervisor (or other State regulatory
            agency) of the nondepository institution subsidiary of a
            depository institution holding company that is described in
            subsection (d) before commencing any examination of the
            subsidiary;
                ``(2) to the fullest extent possible--
                        ``(A) rely on the examinations, inspections, and
                    reports of the appropriate Federal banking agency or the
                    State bank supervisor (or other State regulatory agency)
                    of the subsidiary;

    [[Page 124 STAT. 1607]]

                        ``(B) avoid duplication of examination activities,
                    reporting requirements, and requests for information;
                    and
                        ``(C) ensure that the depository institution holding
                    company and the subsidiaries of the depository
                    institution holding company are not subject to
                    conflicting supervisory demands by the appropriate
                    Federal banking agencies.

        ``(g) Rule of Construction.--No provision of this section shall be
    construed as limiting any authority of the Board, the Corporation, or
    the Comptroller of the Currency under any other provision of law.''.
        (b) <<NOTE: 12 USC 1831c note.>>  Effective Date.--The amendment
    made by subsection (a) shall take effect on the transfer date.
    SEC. 606. REQUIREMENTS FOR FINANCIAL HOLDING COMPANIES TO REMAIN
                            WELL CAPITALIZED AND WELL MANAGED.

        (a) Amendment.--Section 4(l)(1) of the Bank Holding Company Act of
    1956 (12 U.S.C. 1843(l)(1)) is amended--
                (1) in subparagraph (B), by striking ``and'' at the end;
                (2) by redesignating subparagraph (C) as subparagraph (D);
                (3) by inserting after subparagraph (B) the following:
                        ``(C) the bank holding company is well capitalized
                    and well managed; and''; and
                (4) in subparagraph (D)(ii), as so redesignated, by striking
            ``subparagraphs (A) and (B)'' and inserting ``subparagraphs (A),
            (B), and (C)''.

        (b) Home Owners' Loan Act Amendment.--Section 10(c)(2) of the Home
    Owners' Loan Act (12 U.S.C. 1467a(c)(2)) is amended by adding at the end
    the following new subparagraph:
                        ``(H) Any activity that is permissible for a
                    financial holding company (as such term is defined under
                    section 2(p) of the Bank Holding Company Act of 1956 (12
                    U.S.C. 1841(p)) to conduct under section 4(k) of the
                    Bank Holding Company Act of 1956 if--
                              ``(i) the savings and loan holding company
                          meets all of the criteria to qualify as a
                          financial holding company, and complies with all
                          of the requirements applicable to a financial
                          holding company, under sections 4(l) and 4(m) of
                          the Bank Holding Company Act and section 804(c) of
                          the Community Reinvestment Act of 1977 (12 U.S.C.
                          2903(c)) as if the savings and loan holding
                          company was a bank holding company; and
                              ``(ii) the savings and loan holding company
                          conducts the activity in accordance with the same
                          terms, conditions, and requirements that apply to
                          the conduct of such activity by a bank holding
                          company under the Bank Holding Company Act of 1956
                          and the Board's regulations and interpretations
                          under such Act.''.

        (c) <<NOTE: 12 USC 1467a note.>>  Effective Date.--The amendments
    made by this section shall take effect on the transfer date.
    SEC. 607. STANDARDS FOR INTERSTATE ACQUISITIONS.

        (a) Acquisition of Banks.--Section 3(d)(1)(A) of the Bank Holding
    Company Act of 1956 (12 U.S.C. 1842(d)(1)(A)) is amended by striking
    ``adequately capitalized and adequately managed'' and inserting ``well
    capitalized and well managed''.

    [[Page 124 STAT. 1608]]

        (b) Interstate Bank Mergers.--Section 44(b)(4)(B) of the Federal
    Deposit Insurance Act (12 U.S.C. 1831u(b)(4)(B)) is amended by striking
    ``will continue to be adequately capitalized and adequately managed''
    and inserting ``will be well capitalized and well managed''.
        (c) <<NOTE: 12 USC 1831u note.>>  Effective Date.--The amendments
    made by this section shall take effect on the transfer date.
    SEC. 608. ENHANCING EXISTING RESTRICTIONS ON BANK TRANSACTIONS
                            WITH AFFILIATES.

        (a) Affiliate Transactions.--Section 23A of the Federal Reserve Act
    (12 U.S.C. 371c) is amended--
                (1) in subsection (b)--
                        (A) in paragraph (1), by striking subparagraph (D)
                    and inserting the following:
                        ``(D) any investment fund with respect to which a
                    member bank or affiliate thereof is an investment
                    adviser; and''; and
                        (B) in paragraph (7)--
                              (i) in subparagraph (A), by inserting before
                          the semicolon at the end the following: ``,
                          including a purchase of assets subject to an
                          agreement to repurchase'';
                              (ii) in subparagraph (C), by striking ``,
                          including assets subject to an agreement to
                          repurchase,'';
                              (iii) in subparagraph (D)--
                                        (I) by inserting ``or other debt
                                    obligations'' after ``acceptance of
                                    securities''; and
                                        (II) by striking ``or'' at the end;
                                    and
                              (iv) by adding at the end the following:
                        ``(F) a transaction with an affiliate that involves
                    the borrowing or lending of securities, to the extent
                    that the transaction causes a member bank or a
                    subsidiary to have credit exposure to the affiliate; or
                        ``(G) a derivative transaction, as defined in
                    paragraph (3) of section 5200(b) of the Revised Statutes
                    of the United States (12 U.S.C. 84(b)), with an
                    affiliate, to the extent that the transaction causes a
                    member bank or a subsidiary to have credit exposure to
                    the affiliate;'';
                (2) in subsection (c)--
                        (A) in paragraph (1)--
                              (i) in the matter preceding subparagraph (A),
                          by striking ``subsidiary'' and all that follows
                          through ``time of the transaction'' and inserting
                          ``subsidiary, and any credit exposure of a member
                          bank or a subsidiary to an affiliate resulting
                          from a securities borrowing or lending
                          transaction, or a derivative transaction, shall be
                          secured at all times''; and
                              (ii) in each of subparagraphs (A) through (D),
                          by striking ``or letter of credit'' and inserting
                          ``letter of credit, or credit exposure'';
                        (B) by striking paragraph (2);
                        (C) by redesignating paragraphs (3) through (5) as
                    paragraphs (2) through (4), respectively;
                        (D) in paragraph (2), as so redesignated, by
                    inserting before the period at the end ``, or credit
                    exposure to an affiliate resulting from a securities
                    borrowing or lending transaction, or derivative
                    transaction''; and

    [[Page 124 STAT. 1609]]

                        (E) in paragraph (3), as so redesignated--
                              (i) by inserting ``or other debt obligations''
                          after ``securities''; and
                              (ii) by striking ``or guarantee'' and all that
                          follows through ``behalf of,'' and inserting
                          ``guarantee, acceptance, or letter of credit
                          issued on behalf of, or credit exposure from a
                          securities borrowing or lending transaction, or
                          derivative transaction to,'';
                (3) in subsection (d)(4), in the matter preceding
            subparagraph (A), by striking ``or issuing'' and all that
            follows through ``behalf of,'' and inserting ``issuing a
            guarantee, acceptance, or letter of credit on behalf of, or
            having credit exposure resulting from a securities borrowing or
            lending transaction, or derivative transaction to,''; and
                (4) in subsection (f)--
                        (A) in paragraph (2)--
                              (i) by striking ``or order'';
                              (ii) by striking ``if it finds'' and all that
                          follows through the end of the paragraph and
                          inserting the following: ``if--
                              ``(i) <<NOTE: Notification.>>  the Board finds
                          the exemption to be in the public interest and
                          consistent with the purposes of this section, and
                          notifies the Federal Deposit Insurance Corporation
                          of such finding; and
                              ``(ii) <<NOTE: Time period. Notice.>>  before
                          the end of the 60-day period beginning on the date
                          on which the Federal Deposit Insurance Corporation
                          receives notice of the finding under clause (i),
                          the Federal Deposit Insurance Corporation does not
                          object, in writing, to the finding, based on a
                          determination that the exemption presents an
                          unacceptable risk to the Deposit Insurance
                          Fund.'';
                              (iii) by striking the Board and inserting the
                          following:
                        ``(A) In general.--The Board''; and
                              (iv) by adding at the end the following:
                        ``(B) Additional exemptions.--
                              ``(i) National banks.--The Comptroller of the
                          Currency may, by order, exempt a transaction of a
                          national bank from the requirements of this
                          section if--
                                        ``(I) <<NOTE: Notification.>> the
                                    Board and the Office of the Comptroller
                                    of the Currency jointly find the
                                    exemption to be in the public interest
                                    and consistent with the purposes of this
                                    section and notify the Federal Deposit
                                    Insurance Corporation of such finding;
                                    and
                                        ``(II) <<NOTE: Time
                                    period. Notice.>>  before the end of the
                                    60-day period beginning on the date on
                                    which the Federal Deposit Insurance
                                    Corporation receives notice of the
                                    finding under subclause (I), the Federal
                                    Deposit Insurance Corporation does not
                                    object, in writing, to the finding,
                                    based on a determination that the
                                    exemption presents an unacceptable risk
                                    to the Deposit Insurance Fund.
                              ``(ii) State banks.--The Federal Deposit
                          Insurance Corporation may, by order, exempt a
                          transaction of a State nonmember bank, and the
                          Board may, by order, exempt a transaction of a
                          State member bank, from the requirements of this
                          section if--

    [[Page 124 STAT. 1610]]

                                        ``(I) the Board and the Federal
                                    Deposit Insurance Corporation jointly
                                    find that the exemption is in the public
                                    interest and consistent with the
                                    purposes of this section; and
                                        ``(II) the Federal Deposit Insurance
                                    Corporation finds that the exemption
                                    does not present an unacceptable risk to
                                    the Deposit Insurance Fund.''; and
                        (B) by adding at the end the following:
                ``(4) Amounts of covered transactions.--The Board may issue
            such regulations or interpretations as the Board determines are
            necessary or appropriate with respect to the manner in which a
            netting agreement may be taken into account in determining the
            amount of a covered transaction between a member bank or a
            subsidiary and an affiliate, including the extent to which
            netting agreements between a member bank or a subsidiary and an
            affiliate may be taken into account in determining whether a
            covered transaction is fully secured for purposes of subsection
            (d)(4). An interpretation under this paragraph with respect to a
            specific member bank, subsidiary, or affiliate shall be issued
            jointly with the appropriate Federal banking agency for such
            member bank, subsidiary, or affiliate.''.

        (b) Transactions With Affiliates.--Section 23B(e) of the Federal
    Reserve Act (12 U.S.C. 371c-1(e)) is amended--
                (1) by striking the undesignated matter following
            subparagraph (B);
                (2) by redesignating subparagraphs (A) and (B) as clauses
            (i) and (ii), respectively, and adjusting the clause margins
            accordingly;
                (3) by redesignating paragraphs (1) and (2) as subparagraphs
            (A) and (B), respectively, and adjusting the subparagraph
            margins accordingly;
                (4) by striking ``The Board'' and inserting the following:
                ``(1) In general.--The Board'';
                (5) in paragraph (1)(B), as so redesignated--
                        (A) in the matter preceding clause (i), by inserting
                    before ``regulations'' the following: ``subject to
                    paragraph (2), <<NOTE: Notification.>>  if the Board
                    finds that an exemption or exclusion is in the public
                    interest and is consistent with the purposes of this
                    section, and notifies the Federal Deposit Insurance
                    Corporation of such finding,''; and
                        (B) in clause (ii), by striking the comma at the end
                    and inserting a period; and
                (6) by adding at the end the following:
                ``(2) Exception.-- <<NOTE: Time period. Notice.>> The Board
            may grant an exemption or exclusion under this subsection only
            if, during the 60-day period beginning on the date of receipt of
            notice of the finding from the Board under paragraph (1)(B), the
            Federal Deposit Insurance Corporation does not object, in
            writing, to such exemption or exclusion, based on a
            determination that the exemption presents an unacceptable risk
            to the Deposit Insurance Fund.''.

        (c) Home Owners' Loan Act.--Section 11 of the Home Owners' Loan Act
    (12 U.S.C. 1468) is amended by adding at the end the following:
        ``(d) Exemptions.--

    [[Page 124 STAT. 1611]]

                ``(1) Federal savings associations.--The Comptroller of the
            Currency may, by order, exempt a transaction of a Federal
            savings association from the requirements of this section if--
                        ``(A) <<NOTE: Notification.>> the Board and the
                    Office of the Comptroller of the Currency jointly find
                    the exemption to be in the public interest and
                    consistent with the purposes of this section and notify
                    the Federal Deposit Insurance Corporation of such
                    finding; and
                        ``(B) <<NOTE: Time period. Notice.>>  before the end
                    of the 60-day period beginning on the date on which the
                    Federal Deposit Insurance Corporation receives notice of
                    the finding under subparagraph (A), the Federal Deposit
                    Insurance Corporation does not object, in writing, to
                    the finding, based on a determination that the exemption
                    presents an unacceptable risk to the Deposit Insurance
                    Fund.
                ``(2) State savings association.--The Federal Deposit
            Insurance Corporation may, by order, exempt a transaction of a
            State savings association from the requirements of this section
            if the Board and the Federal Deposit Insurance Corporation
            jointly find that--
                        ``(A) the exemption is in the public interest and
                    consistent with the purposes of this section; and
                        ``(B) the exemption does not present an unacceptable
                    risk to the Deposit Insurance Fund.''.

        (d) <<NOTE: 12 USC 371c note.>>  Effective Date.--The amendments
    made by this section shall take effect 1 year after the transfer date.
    SEC. 609. ELIMINATING EXCEPTIONS FOR TRANSACTIONS WITH FINANCIAL
                            SUBSIDIARIES.

        (a) Amendment.--Section 23A(e) of the Federal Reserve Act (12 U.S.C.
    371c(e)) is amended--
                (1) by striking paragraph (3); and
                (2) by redesignating paragraph (4) as paragraph (3).

        (b) <<NOTE: 12 USC 371c note.>>  Prospective Application of
    Amendment.--The amendments made by this section shall apply with respect
    to any covered transaction between a bank and a subsidiary of the bank,
    as those terms are defined in section 23A of the Federal Reserve Act (12
    U.S.C. 371c), that is entered into on or after the date of enactment of
    this Act.

        (c) <<NOTE: 12 USC 371c note.>> Effective Date.--The amendments made
    by this section shall take effect 1 year after the transfer date.
    SEC. 610. LENDING LIMITS APPLICABLE TO CREDIT EXPOSURE ON
                            DERIVATIVE TRANSACTIONS, REPURCHASE
                            AGREEMENTS, REVERSE REPURCHASE AGREEMENTS,
                            AND SECURITIES LENDING AND BORROWING
                            TRANSACTIONS.

        (a) National Banks.--Section 5200(b) of the Revised Statutes of the
    United States (12 U.S.C. 84(b)) is amended--
                (1) in paragraph (1), by striking ``shall include'' and all
            that follows through the end of the paragraph and inserting the
            following: ``shall include--
                        ``(A) all direct or indirect advances of funds to a
                    person made on the basis of any obligation of that
                    person to repay the funds or repayable from specific
                    property pledged by or on behalf of the person;
                        ``(B) to the extent specified by the Comptroller of
                    the Currency, any liability of a national banking
                    association

    [[Page 124 STAT. 1612]]

                    to advance funds to or on behalf of a person pursuant to
                    a contractual commitment; and
                        ``(C) any credit exposure to a person arising from a
                    derivative transaction, repurchase agreement, reverse
                    repurchase agreement, securities lending transaction, or
                    securities borrowing transaction between the national
                    banking association and the person;'';
                (2) in paragraph (2), by striking the period at the end and
            inserting ``; and''; and
                (3) by adding at the end the following:
                ``(3) the term `derivative transaction' includes any
            transaction that is a contract, agreement, swap, warrant, note,
            or option that is based, in whole or in part, on the value of,
            any interest in, or any quantitative measure or the occurrence
            of any event relating to, one or more commodities, securities,
            currencies, interest or other rates, indices, or other
            assets.''.

        (b) Savings Associations.--Section 5(u)(3) of the Home Owners' Loan
    Act (12 U.S.C. 1464(u)(3)) is amended by striking ``Director'' each
    place that term appears and inserting ``Comptroller of the Currency''.
        (c) <<NOTE: 12 USC 84 note.>> Effective Date.--The amendments made
    by this section shall take effect 1 year after the transfer date.
    SEC. 611. CONSISTENT TREATMENT OF DERIVATIVE TRANSACTIONS IN
                            LENDING LIMITS.

        (a) Amendment.--Section 18 of the Federal Deposit Insurance Act (12
    U.S.C. 1828) is amended by adding at the end the following:
        ``(y) State Lending Limit Treatment of Derivatives Transactions.--An
    insured State bank may engage in a derivative transaction, as defined in
    section 5200(b)(3) of the Revised Statutes of the United States (12
    U.S.C. 84(b)(3)), only if the law with respect to lending limits of the
    State in which the insured State bank is chartered takes into
    consideration credit exposure to derivative transactions.''.
        (b) <<NOTE: 12 USC 1828 note.>>  Effective Date.--The amendment made
    by this section shall take effect 18 months after the transfer date.
    SEC. 612. RESTRICTION ON CONVERSIONS OF TROUBLED BANKS.

        (a) Conversion of a National Banking Association.--The Act entitled
    ``An Act to provide for the conversion of national banking associations
    into and their merger or consolidation with State banks, and for other
    purposes.'' (12 U.S.C. 214 et seq.) is amended by adding at the end the
    following:
    ``SEC. 10. <<NOTE: 12 USC 214d.>> PROHIBITION ON CONVERSION.

        ``A national banking association may not convert to a State bank or
    State savings association during any period in which the national
    banking association is subject to a cease and desist order (or other
    formal enforcement order) issued by, or a memorandum of understanding
    entered into with, the Comptroller of the Currency with respect to a
    significant supervisory matter.''.
        (b) Conversion of a State Bank or Savings Association.--Section 5154
    of the Revised Statutes of the United States (12 U.S.C. 35) is amended
    by adding at the end the following: ``The Comptroller of the Currency
    may not approve the conversion of a State bank or State savings
    association to a national banking association or Federal savings
    association during any period in which the State bank or State savings
    association is subject to

    [[Page 124 STAT. 1613]]

    a cease and desist order (or other formal enforcement order) issued by,
    or a memorandum of understanding entered into with, a State bank
    supervisor or the appropriate Federal banking agency with respect to a
    significant supervisory matter or a final enforcement action by a State
    Attorney General.''.
        (c) Conversion of a Federal Savings Association.--Section 5(i) of
    the Home Owners' Loan Act (12 U.S.C. 1464(i)) is amended by adding at
    the end the following:
                ``(6) Limitation on certain conversions by federal savings
            associations.--A Federal savings association may not convert to
            a State bank or State savings association during any period in
            which the Federal savings association is subject to a cease and
            desist order (or other formal enforcement order) issued by, or a
            memorandum of understanding entered into with, the Office of
            Thrift Supervision or the Comptroller of the Currency with
            respect to a significant supervisory matter.''.

        (d) <<NOTE: 12 USC 35 note.>> Exception.--The prohibition on the
    approval of conversions under the amendments made by subsections (a),
    (b), and (c) shall not apply, if--
                (1) <<NOTE: Notice.>>  the Federal banking agency that would
            be the appropriate Federal banking agency after the proposed
            conversion gives the appropriate Federal banking agency or State
            bank supervisor that issued the cease and desist order (or other
            formal enforcement order) or memorandum of understanding, as
            appropriate, written notice of the proposed conversion including
            a plan to address the significant supervisory matter in a manner
            that is consistent with the safe and sound operation of the
            institution;
                (2) <<NOTE: Deadline.>>  within 30 days of receipt of the
            written notice required under paragraph (1), the appropriate
            Federal banking agency or State bank supervisor that issued the
            cease and desist order (or other formal enforcement order) or
            memorandum of understanding, as appropriate, does not object to
            the conversion or the plan to address the significant
            supervisory matter;
                (3) after conversion of the insured depository institution,
            the appropriate Federal banking agency after the conversion
            implements such plan; and
                (4) in the case of a final enforcement action by a State
            Attorney General, approval of the conversion is conditioned on
            compliance by the insured depository institution with the terms
            of such final enforcement action.

        (e) <<NOTE: 12 USC 35 note.>>  Notification of Pending Enforcement
    Actions.--
                (1) Copy of conversion application.--At the time an insured
            depository institution files a conversion application, the
            insured depository institution shall transmit a copy of the
            conversion application to--
                        (A) the appropriate Federal banking agency for the
                    insured depository institution; and
                        (B) the Federal banking agency that would be the
                    appropriate Federal banking agency of the insured
                    depository institution after the proposed conversion.
                (2) Notification and access to information.--Upon receipt of
            a copy of the application described in paragraph (1), the
            appropriate Federal banking agency for the insured depository
            institution proposing the conversion shall--
                        (A) notify the Federal banking agency that would be
                    the appropriate Federal banking agency for the
                    institution

    [[Page 124 STAT. 1614]]

                    after the proposed conversion in writing of any ongoing
                    supervisory or investigative proceedings that the
                    appropriate Federal banking agency for the institution
                    proposing to convert believes is likely to result, in
                    the near term and absent the proposed conversion, in a
                    cease and desist order (or other formal enforcement
                    order) or memorandum of understanding with respect to a
                    significant supervisory matter; and
                        (B) provide the Federal banking agency that would be
                    the appropriate Federal banking agency for the
                    institution after the proposed conversion access to all
                    investigative and supervisory information relating to
                    the proceedings described in subparagraph (A).
    SEC. 613. DE NOVO BRANCHING INTO STATES.

        (a) National Banks.--Section 5155(g)(1)(A) of the Revised Statutes
    of the United States (12 U.S.C. 36(g)(1)(A)) is amended to read as
    follows:
                        ``(A) the law of the State in which the branch is
                    located, or is to be located, would permit establishment
                    of the branch, if the national bank were a State bank
                    chartered by such State; and''.

        (b) State Insured Banks.--Section 18(d)(4)(A)(i) of the Federal
    Deposit Insurance Act (12 U.S.C. 1828(d)(4)(A)(i)) is amended to read as
    follows:
                              ``(i) the law of the State in which the branch
                          is located, or is to be located, would permit
                          establishment of the branch, if the bank were a
                          State bank chartered by such State; and''.
    SEC. 614. LENDING LIMITS TO INSIDERS.

        (a) Extensions of Credit.--Section 22(h)(9)(D)(i) of the Federal
    Reserve Act (12 U.S.C. 375b(9)(D)(i)) is amended--
                (1) by striking the period at the end and inserting ``;
            or'';
                (2) by striking ``a person'' and inserting ``the person'';
                (3) by striking ``extends credit by making'' and inserting
            the following: ``extends credit to a person by--
                                        ``(I) making''; and
                (4) by adding at the end the following:
                                        ``(II) having credit exposure to the
                                    person arising from a derivative
                                    transaction (as defined in section
                                    5200(b) of the Revised Statutes of the
                                    United States (12 U.S.C. 84(b))),
                                    repurchase agreement, reverse repurchase
                                    agreement, securities lending
                                    transaction, or securities borrowing
                                    transaction between the member bank and
                                    the person.''.

        (b) <<NOTE: 12 USC 375b note.>>  Effective Date.--The amendments
    made by this section shall take effect 1 year after the transfer date.
    SEC. 615. LIMITATIONS ON PURCHASES OF ASSETS FROM INSIDERS.

        (a) Amendment to the Federal Deposit Insurance Act.--Section 18 of
    the Federal Deposit Insurance Act (12 U.S.C. 1828) is amended by adding
    at the end the following:
        ``(z) General Prohibition on Sale of Assets.--
                ``(1) In general.--An insured depository institution may not
            purchase an asset from, or sell an asset to, an executive
            officer, director, or principal shareholder of the insured
            depository institution, or any related interest of such person
            (as

    [[Page 124 STAT. 1615]]

            such terms are defined in section 22(h) of Federal Reserve Act),
            unless--
                        ``(A) the transaction is on market terms; and
                        ``(B) if the transaction represents more than 10
                    percent of the capital stock and surplus of the insured
                    depository institution, the transaction has been
                    approved in advance by a majority of the members of the
                    board of directors of the insured depository institution
                    who do not have an interest in the transaction.
                ``(2) <<NOTE: Consultation.>>  Rulemaking.--The Board of
            Governors of the Federal Reserve System may issue such rules as
            may be necessary to define terms and to carry out the purposes
            this subsection. Before proposing or adopting a rule under this
            paragraph, the Board of Governors of the Federal Reserve System
            shall consult with the Comptroller of the Currency and the
            Corporation as to the terms of the rule.''.

        (b) Amendments to the Federal Reserve Act.--Section 22(d) of the
    Federal Reserve Act (12 U.S.C. 375) is amended to read as follows:
        ``(d) [Reserved]''.
        (c) <<NOTE: 12 USC 375 note.>>  Effective Date.--The amendments made
    by this section shall take effect on the transfer date.
    SEC. 616. REGULATIONS REGARDING CAPITAL LEVELS.

        (a) Capital Levels of Bank Holding Companies.--Section 5(b) of the
    Bank Holding Company Act of 1956 (12 U.S.C. 1844(b)) is amended--
                (1) by inserting after ``orders'' the following: ``,
            including regulations and orders relating to the capital
            requirements for bank holding companies,''; and
                (2) by adding at the end the following: ``In establishing
            capital regulations pursuant to this subsection, the Board shall
            seek to make such requirements countercyclical, so that the
            amount of capital required to be maintained by a company
            increases in times of economic expansion and decreases in times
            of economic contraction, consistent with the safety and
            soundness of the company.''.

        (b) Capital Levels of Savings and Loan Holding Companies.--Section
    10(g)(1) of the Home Owners' Loan Act (12 U.S.C. 1467a(g)(1)) is
    amended--
                (1) by inserting after ``orders'' the following: ``,
            including regulations and orders relating to capital
            requirements for savings and loan holding companies,''; and
                (2) by inserting at the end the following: ``In establishing
            capital regulations pursuant to this subsection, the appropriate
            Federal banking agency shall seek to make such requirements
            countercyclical so that the amount of capital required to be
            maintained by a company increases in times of economic expansion
            and decreases in times of economic contraction, consistent with
            the safety and soundness of the company.''.

        (c) Capital Levels of Insured Depository Institutions.--Section
    908(a)(1) of the International Lending Supervision Act of 1983 (12
    U.S.C. 3907(a)(1)) is amended by adding at the end the following: ``Each
    appropriate Federal banking agency shall seek to make the capital
    standards required under this section or other provisions of Federal law
    for insured depository institutions countercyclical so that the amount
    of capital required to be maintained

    [[Page 124 STAT. 1616]]

    by an insured depository institution increases in times of economic
    expansion and decreases in times of economic contraction, consistent
    with the safety and soundness of the insured depository institution.''
        (d) Source of Strength.--The Federal Deposit Insurance Act (12
    U.S.C. 1811 et seq.) is amended by inserting after section 38 (12 U.S.C.
    1831o) the following:
    ``SEC. 38A. <<NOTE: 12 USC 1831o-1.>>  SOURCE OF STRENGTH.

        ``(a) Holding Companies.--The appropriate Federal banking agency for
    a bank holding company or savings and loan holding company shall require
    the bank holding company or savings and loan holding company to serve as
    a source of financial strength for any subsidiary of the bank holding
    company or savings and loan holding company that is a depository
    institution.
        ``(b) Other Companies.--If an insured depository institution is not
    the subsidiary of a bank holding company or savings and loan holding
    company, the appropriate Federal banking agency for the insured
    depository institution shall require any company that directly or
    indirectly controls the insured depository institution to serve as a
    source of financial strength for such institution.
        ``(c) Reports.--The appropriate Federal banking agency for an
    insured depository institution described in subsection (b) may, from
    time to time, require the company, or a company that directly or
    indirectly controls the insured depository institution, to submit a
    report, under oath, for the purposes of--
                ``(1) assessing the ability of such company to comply with
            the requirement under subsection (b); and
                ``(2) enforcing the compliance of such company with the
            requirement under subsection (b).

        ``(d) <<NOTE: Deadline.>>  Rules.--Not later than 1 year after the
    transfer date, as defined in section 311 of the Enhancing Financial
    Institution Safety and Soundness Act of 2010, the appropriate Federal
    banking agencies shall jointly issue final rules to carry out this
    section.

        ``(e) Definition.--In this section, the term `source of financial
    strength' means the ability of a company that directly or indirectly
    owns or controls an insured depository institution to provide financial
    assistance to such insured depository institution in the event of the
    financial distress of the insured depository institution.''.
        (e) <<NOTE: 12 USC 1467a note.>> Effective Date.--The amendments
    made by this section shall take effect on the transfer date.
    SEC. 617. ELIMINATION OF ELECTIVE INVESTMENT BANK HOLDING COMPANY
                            FRAMEWORK.

        (a) Amendment.--Section 17 of the Securities Exchange Act of 1934
    (15 U.S.C. 78q) is amended--
                (1) by striking subsection (i); and
                (2) by redesignating subsections (j) and (k) as subsections
            (i) and (j), respectively.

        (b) <<NOTE: 15 USC 78q note.>>  Effective Date.--The amendments made
    by this section shall take effect on the transfer date.
    SEC. 618. <<NOTE: 12 USC 1850a.>>  SECURITIES HOLDING COMPANIES.

        (a) Definitions.--In this section--
                (1) the term ``associated person of a securities holding
            company'' means a person directly or indirectly controlling,
            controlled by, or under common control with, a securities
            holding company;

    [[Page 124 STAT. 1617]]

                (2) the term ``foreign bank'' has the same meaning as in
            section 1(b)(7) of the International Banking Act of 1978 (12
            U.S.C. 3101(7));
                (3) the term ``insured bank'' has the same meaning as in
            section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813);
                (4) the term ``securities holding company''--
                        (A) means--
                              (i) a person (other than a natural person)
                          that owns or controls 1 or more brokers or dealers
                          registered with the Commission; and
                              (ii) the associated persons of a person
                          described in clause (i); and
                        (B) does not include a person that is--
                              (i) a nonbank financial company supervised by
                          the Board under title I;
                              (ii) an insured bank (other than an
                          institution described in subparagraphs (D), (F),
                          or (H) of section 2(c)(2) of the Bank Holding
                          Company Act of 1956 (12 U.S.C. 1841(c)(2)) or a
                          savings association;
                              (iii) an affiliate of an insured bank (other
                          than an institution described in subparagraphs
                          (D), (F), or (H) of section 2(c)(2) of the Bank
                          Holding Company Act of 1956 (12 U.S.C. 1841(c)(2))
                          or an affiliate of a savings association;
                              (iv) a foreign bank, foreign company, or
                          company that is described in section 8(a) of the
                          International Banking Act of 1978 (12 U.S.C.
                          3106(a));
                              (v) a foreign bank that controls, directly or
                          indirectly, a corporation chartered under section
                          25A of the Federal Reserve Act (12 U.S.C. 611 et
                          seq.); or
                              (vi) subject to comprehensive consolidated
                          supervision by a foreign regulator;
                (5) the term ``supervised securities holding company'' means
            a securities holding company that is supervised by the Board of
            Governors under this section; and
                (6) the terms ``affiliate'', ``bank'', ``bank holding
            company'', ``company'', ``control'', ``savings association'',
            and ``subsidiary'' have the same meanings as in section 2 of the
            Bank Holding Company Act of 1956.

        (b) Supervision of a Securities Holding Company Not Having a Bank or
    Savings Association Affiliate.--
                (1) In general.--A securities holding company that is
            required by a foreign regulator or provision of foreign law to
            be subject to comprehensive consolidated supervision may
            register with the Board of Governors under paragraph (2) to
            become a supervised securities holding
            company. <<NOTE: Regulations.>>  Any securities holding company
            filing such a registration shall be supervised in accordance
            with this section, and shall comply with the rules and orders
            prescribed by the Board of Governors applicable to supervised
            securities holding companies.
                (2) Registration as a supervised securities holding
            company.--
                        (A) Registration.--A securities holding company that
                    elects to be subject to comprehensive consolidated
                    supervision shall register by filing with the Board of
                    Governors

    [[Page 124 STAT. 1618]]

                    such information and documents as the Board of
                    Governors, by regulation, may prescribe as necessary or
                    appropriate in furtherance of the purposes of this
                    section.
                        (B) Effective date.--A securities holding company
                    that registers under subparagraph (A) shall be deemed to
                    be a supervised securities holding company, effective on
                    the date that is 45 days after the date of receipt of
                    the registration information and documents under
                    subparagraph (A) by the Board of Governors, or within
                    such shorter period as the Board of Governors, by rule
                    or order, may determine.

        (c) Supervision of Securities Holding Companies.--
                (1) Recordkeeping and reporting.--
                        (A) Recordkeeping and reporting required.--Each
                    supervised securities holding company and each affiliate
                    of a supervised securities holding company shall make
                    and keep for periods determined by the Board of
                    Governors such records, furnish copies of such records,
                    and make such reports, as the Board of Governors
                    determines to be necessary or appropriate to carry out
                    this section, to prevent evasions thereof, and to
                    monitor compliance by the supervised securities holding
                    company or affiliate with applicable provisions of law.
                        (B) Form and contents.--
                              (i) In general.--Any record or report required
                          to be made, furnished, or kept under this
                          paragraph shall--
                                        (I) be prepared in such form and
                                    according to such specifications
                                    (including certification by a registered
                                    public accounting firm), as the Board of
                                    Governors may require; and
                                        (II) be provided promptly to the
                                    Board of Governors at any time, upon
                                    request by the Board of Governors.
                              (ii) Contents.--Records and reports required
                          to be made, furnished, or kept under this
                          paragraph may include--
                                        (I) a balance sheet or income
                                    statement of the supervised securities
                                    holding company or an affiliate of a
                                    supervised securities holding company;
                                        (II) an assessment of the
                                    consolidated capital and liquidity of
                                    the supervised securities holding
                                    company;
                                        (III) a report by an independent
                                    auditor attesting to the compliance of
                                    the supervised securities holding
                                    company with the internal risk
                                    management and internal control
                                    objectives of the supervised securities
                                    holding company; and
                                        (IV) a report concerning the extent
                                    to which the supervised securities
                                    holding company or affiliate has
                                    complied with the provisions of this
                                    section and any regulations prescribed
                                    and orders issued under this section.
                (2) Use of existing reports.--
                        (A) In general.--The Board of Governors shall, to
                    the fullest extent possible, accept reports in
                    fulfillment

    [[Page 124 STAT. 1619]]

                    of the requirements of this paragraph that a supervised
                    securities holding company or an affiliate of a
                    supervised securities holding company has been required
                    to provide to another regulatory agency or a self-
                    regulatory organization.
                        (B) Availability.--A supervised securities holding
                    company or an affiliate of a supervised securities
                    holding company shall promptly provide to the Board of
                    Governors, at the request of the Board of Governors, any
                    report described in subparagraph (A), as permitted by
                    law.
                (3) Examination authority.--
                        (A) Focus of examination authority.--The Board of
                    Governors may make examinations of any supervised
                    securities holding company and any affiliate of a
                    supervised securities holding company to carry out this
                    subsection, to prevent evasions thereof, and to monitor
                    compliance by the supervised securities holding company
                    or affiliate with applicable provisions of law.
                        (B) Deference to other examinations.--For purposes
                    of this subparagraph, the Board of Governors shall, to
                    the fullest extent possible, use the reports of
                    examination made by other appropriate Federal or State
                    regulatory authorities with respect to any functionally
                    regulated subsidiary or any institution described in
                    subparagraph (D), (F), or (H) of section 2(c)(2) of the
                    Bank Holding Company Act of 1956 (12 U.S.C. 1841(c)(2)).

        (d) Capital and Risk Management.--
                (1) In general.-- <<NOTE: Regulations.>> The Board of
            Governors shall, by regulation or order, prescribe capital
            adequacy and other risk management standards for supervised
            securities holding companies that are appropriate to protect the
            safety and soundness of the supervised securities holding
            companies and address the risks posed to financial stability by
            supervised securities holding companies.
                (2) Differentiation.--In imposing standards under this
            subsection, the Board of Governors may differentiate among
            supervised securities holding companies on an individual basis,
            or by category, taking into consideration the requirements under
            paragraph (3).
                (3) Content.--Any standards imposed on a supervised
            securities holding company under this subsection shall take into
            account--
                        (A) the differences among types of business
                    activities carried out by the supervised securities
                    holding company;
                        (B) the amount and nature of the financial assets of
                    the supervised securities holding company;
                        (C) the amount and nature of the liabilities of the
                    supervised securities holding company, including the
                    degree of reliance on short-term funding;
                        (D) the extent and nature of the off-balance sheet
                    exposures of the supervised securities holding company;
                        (E) the extent and nature of the transactions and
                    relationships of the supervised securities holding
                    company with other financial companies;
                        (F) the importance of the supervised securities
                    holding company as a source of credit for households,
                    businesses,

    [[Page 124 STAT. 1620]]

                    and State and local governments, and as a source of
                    liquidity for the financial system; and
                        (G) the nature, scope, and mix of the activities of
                    the supervised securities holding company.
                (4) <<NOTE: Effective date.>> Notice.--A capital requirement
            imposed under this subsection may not take effect earlier than
            180 days after the date on which a supervised securities holding
            company is provided notice of the capital requirement.

        (e) Other Provisions of Law Applicable to Supervised Securities
    Holding Companies.--
                (1) Federal deposit insurance act.--Subsections (b), (c)
            through (s), and (u) of section 8 of the Federal Deposit
            Insurance Act (12 U.S.C. 1818) shall apply to any supervised
            securities holding company, and to any subsidiary (other than a
            bank or an institution described in subparagraph (D), (F), or
            (H) of section 2(c)(2) of the Bank Holding Company Act of 1956
            (12 U.S.C. 1841(c)(2))) of a supervised securities holding
            company, in the same manner as such subsections apply to a bank
            holding company for which the Board of Governors is the
            appropriate Federal banking agency. For purposes of applying
            such subsections to a supervised securities holding company or a
            subsidiary (other than a bank or an institution described in
            subparagraph (D), (F), or (H) of section 2(c)(2) of the Bank
            Holding Company Act of 1956 (12 U.S.C. 1841(c)(2))) of a
            supervised securities holding company, the Board of Governors
            shall be deemed the appropriate Federal banking agency for the
            supervised securities holding company or subsidiary.
                (2) Bank holding company act of 1956.--Except as the Board
            of Governors may otherwise provide by regulation or order, a
            supervised securities holding company shall be subject to the
            provisions of the Bank Holding Company Act of 1956 (12 U.S.C.
            1841 et seq.) in the same manner and to the same extent a bank
            holding company is subject to such provisions, except that a
            supervised securities holding company may not, by reason of this
            paragraph, be deemed to be a bank holding company for purposes
            of section 4 of the Bank Holding Company Act of 1956 (12 U.S.C.
            1843).
    SEC. 619. PROHIBITIONS ON PROPRIETARY TRADING AND CERTAIN
                            RELATIONSHIPS WITH HEDGE FUNDS AND PRIVATE
                            EQUITY FUNDS.

        The Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.) is
    amended by adding at the end the following:
    ``SEC. 13. <<NOTE: 12 USC 1851.>> PROHIBITIONS ON PROPRIETARY
                          TRADING AND CERTAIN RELATIONSHIPS WITH HEDGE
                          FUNDS AND PRIVATE EQUITY FUNDS.

        ``(a) In General.--
                ``(1) Prohibition.--Unless otherwise provided in this
            section, a banking entity shall not--
                        ``(A) engage in proprietary trading; or
                        ``(B) acquire or retain any equity, partnership, or
                    other ownership interest in or sponsor a hedge fund or a
                    private equity fund.
                ``(2) Nonbank financial companies supervised by the board.--
            Any nonbank financial company supervised by the Board that
            engages in proprietary trading or takes or retains

    [[Page 124 STAT. 1621]]

            any equity, partnership, or other ownership interest in or
            sponsors a hedge fund or a private equity fund shall be subject,
            by rule, as provided in subsection (b)(2), to additional capital
            requirements for and additional quantitative limits with regards
            to such proprietary trading and taking or retaining any equity,
            partnership, or other ownership interest in or sponsorship of a
            hedge fund or a private equity fund, except that permitted
            activities as described in subsection (d) shall not be subject
            to the additional capital and additional quantitative limits
            except as provided in subsection (d)(3), as if the nonbank
            financial company supervised by the Board were a banking entity.

        ``(b) Study and Rulemaking.--
                ``(1) Study.-- <<NOTE: Deadline. Recommenda- tions.>> Not
            later than 6 months after the date of enactment of this section,
            the Financial Stability Oversight Council shall study and make
            recommendations on implementing the provisions of this section
            so as to--
                        ``(A) promote and enhance the safety and soundness
                    of banking entities;
                        ``(B) protect taxpayers and consumers and enhance
                    financial stability by minimizing the risk that insured
                    depository institutions and the affiliates of insured
                    depository institutions will engage in unsafe and
                    unsound activities;
                        ``(C) limit the inappropriate transfer of Federal
                    subsidies from institutions that benefit from deposit
                    insurance and liquidity facilities of the Federal
                    Government to unregulated entities;
                        ``(D) reduce conflicts of interest between the self-
                    interest of banking entities and nonbank financial
                    companies supervised by the Board, and the interests of
                    the customers of such entities and companies;
                        ``(E) limit activities that have caused undue risk
                    or loss in banking entities and nonbank financial
                    companies supervised by the Board, or that might
                    reasonably be expected to create undue risk or loss in
                    such banking entities and nonbank financial companies
                    supervised by the Board;
                        ``(F) appropriately accommodate the business of
                    insurance within an insurance company, subject to
                    regulation in accordance with the relevant insurance
                    company investment laws, while protecting the safety and
                    soundness of any banking entity with which such
                    insurance company is affiliated and of the United States
                    financial system; and
                        ``(G) appropriately time the divestiture of illiquid
                    assets that are affected by the implementation of the
                    prohibitions under subsection (a).
                ``(2) Rulemaking.--
                        ``(A) In general.-- <<NOTE: Deadline.>> Unless
                    otherwise provided in this section, not later than 9
                    months after the completion of the study under paragraph
                    (1), the appropriate Federal banking agencies, the
                    Securities and Exchange Commission, and the Commodity
                    Futures Trading Commission, shall consider the findings
                    of the study under paragraph (1) and adopt rules to
                    carry out this section, as provided in subparagraph (B).

    [[Page 124 STAT. 1622]]

                        ``(B) Coordinated rulemaking.--
                              ``(i) Regulatory authority.--The regulations
                          issued under this paragraph shall be issued by--
                                        ``(I) the appropriate Federal
                                    banking agencies, jointly, with respect
                                    to insured depository institutions;
                                        ``(II) the Board, with respect to
                                    any company that controls an insured
                                    depository institution, or that is
                                    treated as a bank holding company for
                                    purposes of section 8 of the
                                    International Banking Act, any nonbank
                                    financial company supervised by the
                                    Board, and any subsidiary of any of the
                                    foregoing (other than a subsidiary for
                                    which an agency described in subclause
                                    (I), (III), or (IV) is the primary
                                    financial regulatory agency);
                                        ``(III) the Commodity Futures
                                    Trading Commission, with respect to any
                                    entity for which the Commodity Futures
                                    Trading Commission is the primary
                                    financial regulatory agency, as defined
                                    in section 2 of the Dodd-Frank Wall
                                    Street Reform and Consumer Protection
                                    Act; and
                                        ``(IV) the Securities and Exchange
                                    Commission, with respect to any entity
                                    for which the Securities and Exchange
                                    Commission is the primary financial
                                    regulatory agency, as defined in section
                                    2 of the Dodd-Frank Wall Street Reform
                                    and Consumer Protection Act.
                              ``(ii) Coordination, consistency, and
                          comparability.--In
                          developing <<NOTE: Consultation.>>  and issuing
                          regulations pursuant to this section, the
                          appropriate Federal banking agencies, the
                          Securities and Exchange Commission, and the
                          Commodity Futures Trading Commission shall consult
                          and coordinate with each other, as appropriate,
                          for the purposes of assuring, to the extent
                          possible, that such regulations are comparable and
                          provide for consistent application and
                          implementation of the applicable provisions of
                          this section to avoid providing advantages or
                          imposing disadvantages to the companies affected
                          by this subsection and to protect the safety and
                          soundness of banking entities and nonbank
                          financial companies supervised by the Board.
                              ``(iii) Council role.--The Chairperson of the
                          Financial Stability Oversight Council shall be
                          responsible for coordination of the regulations
                          issued under this section.

        ``(c) Effective Date.--
                ``(1) In general.--Except as provided in paragraphs (2) and
            (3), this section shall take effect on the earlier of--
                        ``(A) 12 months after the date of the issuance of
                    final rules under subsection (b); or
                        ``(B) 2 years after the date of enactment of this
                    section.
                ``(2) Conformance period for divestiture.--
            A <<NOTE: Deadline.>>  banking entity or nonbank financial
            company supervised by the Board shall bring its activities and
            investments into compliance with the requirements of this
            section not later than 2 years after the date on which the
            requirements become effective pursuant

    [[Page 124 STAT. 1623]]

            to this section or 2 years after the date on which the entity or
            company becomes a nonbank financial company supervised by the
            Board. The Board may, by rule or order, extend this two-year
            period for not more than one year at a time, if, in the judgment
            of the Board, such an extension is consistent with the purposes
            of this section and would not be detrimental to the public
            interest. The extensions made by the Board under the preceding
            sentence may not exceed an aggregate of 3 years.
                ``(3) Extended transition for illiquid funds.--
                        ``(A) Application.--The Board may, upon the
                    application of a banking entity, extend the period
                    during which the banking entity, to the extent necessary
                    to fulfill a contractual obligation that was in effect
                    on May 1, 2010, may take or retain its equity,
                    partnership, or other ownership interest in, or
                    otherwise provide additional capital to, an illiquid
                    fund.
                        ``(B) Time limit on approval.--The Board may grant 1
                    extension under subparagraph (A), which may not exceed 5
                    years.
                ``(4) Divestiture required.--Except as otherwise provided in
            subsection (d)(1)(G), a banking entity may not engage in any
            activity prohibited under subsection (a)(1)(B) after the earlier
            of--
                        ``(A) the date on which the contractual obligation
                    to invest in the illiquid fund terminates; and
                        ``(B) the date on which any extensions granted by
                    the Board under paragraph (3) expire.
                ``(5) <<NOTE: Regulations.>>  Additional capital during
            transition period.--Notwithstanding paragraph (2), on the date
            on which the rules are issued under subsection (b)(2), the
            appropriate Federal banking agencies, the Securities and
            Exchange Commission, and the Commodity Futures Trading
            Commission shall issue rules, as provided in subsection (b)(2),
            to impose additional capital requirements, and any other
            restrictions, as appropriate, on any equity, partnership, or
            ownership interest in or sponsorship of a hedge fund or private
            equity fund by a banking entity.
                ``(6) Special rulemaking.--Not later <<NOTE: Deadline.>>
            than 6 months after the date of enactment of this section, the
            Board shall issues rules to implement paragraphs (2) and (3).

        ``(d) Permitted Activities.--
                ``(1) In general.--Notwithstanding the restrictions under
            subsection (a), to the extent permitted by any other provision
            of Federal or State law, and subject to the limitations under
            paragraph (2) and any restrictions or limitations that the
            appropriate Federal banking agencies, the Securities and
            Exchange Commission, and the Commodity Futures Trading
            Commission, may determine, the following activities (in this
            section referred to as `permitted activities') are permitted:
                        ``(A) The purchase, sale, acquisition, or
                    disposition of obligations of the United States or any
                    agency thereof, obligations, participations, or other
                    instruments of or issued by the Government National
                    Mortgage Association, the Federal National Mortgage
                    Association, the Federal Home Loan Mortgage Corporation,
                    a Federal Home Loan Bank, the Federal Agricultural
                    Mortgage Corporation, or a Farm Credit System
                    institution chartered under and subject to

    [[Page 124 STAT. 1624]]

                    the provisions of the Farm Credit Act of 1971 (12 U.S.C.
                    2001 et seq.), and obligations of any State or of any
                    political subdivision thereof.
                        ``(B) The purchase, sale, acquisition, or
                    disposition of securities and other instruments
                    described in subsection (h)(4) in connection with
                    underwriting or market-making-related activities, to the
                    extent that any such activities permitted by this
                    subparagraph are designed not to exceed the reasonably
                    expected near term demands of clients, customers, or
                    counterparties.
                        ``(C) Risk-mitigating hedging activities in
                    connection with and related to individual or aggregated
                    positions, contracts, or other holdings of a banking
                    entity that are designed to reduce the specific risks to
                    the banking entity in connection with and related to
                    such positions, contracts, or other holdings.
                        ``(D) The purchase, sale, acquisition, or
                    disposition of securities and other instruments
                    described in subsection (h)(4) on behalf of customers.
                        ``(E) Investments in one or more small business
                    investment companies, as defined in section 102 of the
                    Small Business Investment Act of 1958 (15 U.S.C. 662),
                    investments designed primarily to promote the public
                    welfare, of the type permitted under paragraph (11) of
                    section 5136 of the Revised Statutes of the United
                    States (12 U.S.C. 24), or investments that are qualified
                    rehabilitation expenditures with respect to a qualified
                    rehabilitated building or certified historic structure,
                    as such terms are defined in section 47 of the Internal
                    Revenue Code of 1986 or a similar State historic tax
                    credit program.
                        ``(F) The purchase, sale, acquisition, or
                    disposition of securities and other instruments
                    described in subsection (h)(4) by a regulated insurance
                    company directly engaged in the business of insurance
                    for the general account of the company and by any
                    affiliate of such regulated insurance company, provided
                    that such activities by any affiliate are solely for the
                    general account of the regulated insurance company, if--
                              ``(i) the purchase, sale, acquisition, or
                          disposition is conducted in compliance with, and
                          subject to, the insurance company investment laws,
                          regulations, and written guidance of the State or
                          jurisdiction in which each such insurance company
                          is domiciled; and
                              ``(ii) the appropriate Federal banking
                          agencies, after consultation with the Financial
                          Stability Oversight Council and the relevant
                          insurance commissioners of the States and
                          territories of the United States, have not jointly
                          determined, after notice and comment, that a
                          particular law, regulation, or written guidance
                          described in clause (i) is insufficient to protect
                          the safety and soundness of the banking entity, or
                          of the financial stability of the United States.
                        ``(G) Organizing and offering a private equity or
                    hedge fund, including serving as a general partner,
                    managing member, or trustee of the fund and in any
                    manner selecting or controlling (or having employees,
                    officers, directors, or agents who constitute) a
                    majority of the directors, trustees,

    [[Page 124 STAT. 1625]]

                    or management of the fund, including any necessary
                    expenses for the foregoing, only if--
                              ``(i) the banking entity provides bona fide
                          trust, fiduciary, or investment advisory services;
                              ``(ii) the fund is organized and offered only
                          in connection with the provision of bona fide
                          trust, fiduciary, or investment advisory services
                          and only to persons that are customers of such
                          services of the banking entity;
                              ``(iii) the banking entity does not acquire or
                          retain an equity interest, partnership interest,
                          or other ownership interest in the funds except
                          for a de minimis investment subject to and in
                          compliance with paragraph (4);
                              ``(iv) the banking entity complies with the
                          restrictions under paragraphs (1) and (2) of
                          subparagraph (f);
                              ``(v) the banking entity does not, directly or
                          indirectly, guarantee, assume, or otherwise insure
                          the obligations or performance of the hedge fund
                          or private equity fund or of any hedge fund or
                          private equity fund in which such hedge fund or
                          private equity fund invests;
                              ``(vi) the banking entity does not share with
                          the hedge fund or private equity fund, for
                          corporate, marketing, promotional, or other
                          purposes, the same name or a variation of the same
                          name;
                              ``(vii) no director or employee of the banking
                          entity takes or retains an equity interest,
                          partnership interest, or other ownership interest
                          in the hedge fund or private equity fund, except
                          for any director or employee of the banking entity
                          who is directly engaged in providing investment
                          advisory or other services to the hedge fund or
                          private equity fund; and
                              ``(viii) the banking entity discloses to
                          prospective and actual investors in the fund, in
                          writing, that any losses in such hedge fund or
                          private equity fund are borne solely by investors
                          in the fund and not by the banking entity, and
                          otherwise complies with any additional rules of
                          the appropriate Federal banking agencies, the
                          Securities and Exchange Commission, or the
                          Commodity Futures Trading Commission, as provided
                          in subsection (b)(2), designed to ensure that
                          losses in such hedge fund or private equity fund
                          are borne solely by investors in the fund and not
                          by the banking entity.
                        ``(H) Proprietary trading conducted by a banking
                    entity pursuant to paragraph (9) or (13) of section
                    4(c), provided that the trading occurs solely outside of
                    the United States and that the banking entity is not
                    directly or indirectly controlled by a banking entity
                    that is organized under the laws of the United States or
                    of one or more States.
                        ``(I) The acquisition or retention of any equity,
                    partnership, or other ownership interest in, or the
                    sponsorship of, a hedge fund or a private equity fund by
                    a banking entity pursuant to paragraph (9) or (13) of
                    section 4(c)

    [[Page 124 STAT. 1626]]

                    solely outside of the United States, provided that no
                    ownership interest in such hedge fund or private equity
                    fund is offered for sale or sold to a resident of the
                    United States and that the banking entity is not
                    directly or indirectly controlled by a banking entity
                    that is organized under the laws of the United States or
                    of one or more States.
                        ``(J) Such other activity as the appropriate Federal
                    banking agencies, the Securities and Exchange
                    Commission, and the Commodity Futures Trading Commission
                    determine, by rule, as provided in subsection (b)(2),
                    would promote and protect the safety and soundness of
                    the banking entity and the financial stability of the
                    United States.
                ``(2) Limitation on permitted activities.--
                        ``(A) In general.--No transaction, class of
                    transactions, or activity may be deemed a permitted
                    activity under paragraph (1) if the transaction, class
                    of transactions, or activity--
                              ``(i) would involve or result in a material
                          conflict of interest (as such term shall be
                          defined by rule as provided in subsection (b)(2))
                          between the banking entity and its clients,
                          customers, or counterparties;
                              ``(ii) would result, directly or indirectly,
                          in a material exposure by the banking entity to
                          high-risk assets or high-risk trading strategies
                          (as such terms shall be defined by rule as
                          provided in subsection (b)(2));
                              ``(iii) would pose a threat to the safety and
                          soundness of such banking entity; or
                              ``(iv) would pose a threat to the financial
                          stability of the United States.
                        ``(B) Rulemaking.--The appropriate Federal banking
                    agencies, the Securities and Exchange Commission, and
                    the Commodity Futures Trading Commission shall issue
                    regulations to implement subparagraph (A), as part of
                    the regulations issued under subsection (b)(2).
                ``(3) Capital and quantitative limitations.--The appropriate
            Federal banking agencies, the Securities and Exchange
            Commission, and the Commodity Futures Trading Commission shall,
            as provided in subsection (b)(2), adopt rules imposing
            additional capital requirements and quantitative limitations,
            including diversification requirements, regarding the activities
            permitted under this section if the appropriate Federal banking
            agencies, the Securities and Exchange Commission, and the
            Commodity Futures Trading Commission determine that additional
            capital and quantitative limitations are appropriate to protect
            the safety and soundness of banking entities engaged in such
            activities.
                ``(4) De minimis investment.--
                        ``(A) In general.--A banking entity may make and
                    retain an investment in a hedge fund or private equity
                    fund that the banking entity organizes and offers,
                    subject to the limitations and restrictions in
                    subparagraph (B) for the purposes of--
                              ``(i) establishing the fund and providing the
                          fund with sufficient initial equity for investment
                          to permit the fund to attract unaffiliated
                          investors; or

    [[Page 124 STAT. 1627]]

                              ``(ii) making a de minimis investment.
                        ``(B) Limitations and restrictions on investments.--
                              ``(i) Requirement to seek other investors.--A
                          banking entity shall actively seek unaffiliated
                          investors to reduce or dilute the investment of
                          the banking entity to the amount permitted under
                          clause (ii).
                              ``(ii) Limitations on size of investments.--
                          Notwithstanding any other provision of law,
                          investments by a banking entity in a hedge fund or
                          private equity fund shall--
                                        ``(I) <<NOTE: Deadline.>>  not later
                                    than 1 year after the date of
                                    establishment of the fund, be reduced
                                    through redemption, sale, or dilution to
                                    an amount that is not more than 3
                                    percent of the total ownership interests
                                    of the fund;
                                        ``(II) be immaterial to the banking
                                    entity, as defined, by rule, pursuant to
                                    subsection (b)(2), but in no case may
                                    the aggregate of all of the interests of
                                    the banking entity in all such funds
                                    exceed 3 percent of the Tier 1 capital
                                    of the banking entity.
                              ``(iii) Capital.--For purposes of determining
                          compliance with applicable capital standards under
                          paragraph (3), the aggregate amount of the
                          outstanding investments by a banking entity under
                          this paragraph, including retained earnings, shall
                          be deducted from the assets and tangible equity of
                          the banking entity, and the amount of the
                          deduction shall increase commensurate with the
                          leverage of the hedge fund or private equity fund.
                        ``(C) Extension.--Upon an application by a banking
                    entity, the Board may extend the period of time to meet
                    the requirements under subparagraph (B)(ii)(I) for 2
                    additional years, if the Board finds that an extension
                    would be consistent with safety and soundness and in the
                    public interest.

        ``(e) Anti-evasion.--
                ``(1) Rulemaking.--The appropriate Federal banking agencies,
            the Securities and Exchange Commission, and the Commodity
            Futures Trading Commission shall issue regulations, as part of
            the rulemaking provided for in subsection (b)(2), regarding
            internal controls and recordkeeping, in order to insure
            compliance with this section.
                ``(2) Termination of activities or investment.--
            Notwithstanding any other provision of law, whenever an
            appropriate Federal banking agency, the Securities and Exchange
            Commission, or the Commodity Futures Trading Commission, as
            appropriate, has reasonable cause to believe that a banking
            entity or nonbank financial company supervised by the Board
            under the respective agency's jurisdiction has made an
            investment or engaged in an activity in a manner that functions
            as an evasion of the requirements of this section (including
            through an abuse of any permitted activity) or otherwise
            violates the restrictions under this section, the appropriate
            Federal banking agency, the Securities and Exchange Commission,
            or the Commodity Futures Trading Commission, as appropriate,
            shall

    [[Page 124 STAT. 1628]]

            order, after due notice and opportunity for hearing, the banking
            entity or nonbank financial company supervised by the Board to
            terminate the activity and, as relevant, dispose of the
            investment. Nothing in this paragraph shall be construed to
            limit the inherent authority of any Federal agency or State
            regulatory authority to further restrict any investments or
            activities under otherwise applicable provisions of law.

        ``(f) Limitations on Relationships With Hedge Funds and Private
    Equity Funds.--
                ``(1) In general.--No banking entity that serves, directly
            or indirectly, as the investment manager, investment adviser, or
            sponsor to a hedge fund or private equity fund, or that
            organizes and offers a hedge fund or private equity fund
            pursuant to paragraph (d)(1)(G), and no affiliate of such
            entity, may enter into a transaction with the fund, or with any
            other hedge fund or private equity fund that is controlled by
            such fund, that would be a covered transaction, as defined in
            section 23A of the Federal Reserve Act (12 U.S.C. 371c), with
            the hedge fund or private equity fund, as if such banking entity
            and the affiliate thereof were a member bank and the hedge fund
            or private equity fund were an affiliate thereof.
                ``(2) Treatment as member bank.--A banking entity that
            serves, directly or indirectly, as the investment manager,
            investment adviser, or sponsor to a hedge fund or private equity
            fund, or that organizes and offers a hedge fund or private
            equity fund pursuant to paragraph (d)(1)(G), shall be subject to
            section 23B of the Federal Reserve Act (12 U.S.C. 371c-1), as if
            such banking entity were a member bank and such hedge fund or
            private equity fund were an affiliate thereof.
                ``(3) Permitted services.--
                        ``(A) In general.--Notwithstanding paragraph (1),
                    the Board may permit a banking entity to enter into any
                    prime brokerage transaction with any hedge fund or
                    private equity fund in which a hedge fund or private
                    equity fund managed, sponsored, or advised by such
                    banking entity has taken an equity, partnership, or
                    other ownership interest, if--
                              ``(i) the banking entity is in compliance with
                          each of the limitations set forth in subsection
                          (d)(1)(G) with regard to a hedge fund or private
                          equity fund organized and offered by such banking
                          entity;
                              ``(ii) the chief executive officer (or
                          equivalent officer) of the banking entity
                          certifies in writing annually (with a duty to
                          update the certification if the information in the
                          certification materially changes) that the
                          conditions specified in subsection (d)(1)(g)(v)
                          are satisfied; and
                              ``(iii) the Board has determined that such
                          transaction is consistent with the safe and sound
                          operation and condition of the banking entity.
                        ``(B) Treatment of prime brokerage transactions.--
                    For purposes of subparagraph (A), a prime brokerage
                    transaction described in subparagraph (A) shall be
                    subject to section 23B of the Federal Reserve Act (12
                    U.S.C. 371c-1) as if the counterparty were an affiliate
                    of the banking entity.

    [[Page 124 STAT. 1629]]

                ``(4) Application to nonbank financial companies supervised
            by the board.--The appropriate <<NOTE: Regulations.>>  Federal
            banking agencies, the Securities and Exchange Commission, and
            the Commodity Futures Trading Commission shall adopt rules, as
            provided in subsection (b)(2), imposing additional capital
            charges or other restrictions for nonbank financial companies
            supervised by the Board to address the risks to and conflicts of
            interest of banking entities described in paragraphs (1), (2),
            and (3) of this subsection.

        ``(g) Rules of Construction.--
                ``(1) Limitation on contrary authority.--Except as provided
            in this section, notwithstanding any other provision of law, the
            prohibitions and restrictions under this section shall apply to
            activities of a banking entity or nonbank financial company
            supervised by the Board, even if such activities are authorized
            for a banking entity or nonbank financial company supervised by
            the Board.
                ``(2) Sale or securitization of loans.--Nothing in this
            section shall be construed to limit or restrict the ability of a
            banking entity or nonbank financial company supervised by the
            Board to sell or securitize loans in a manner otherwise
            permitted by law.
                ``(3) Authority of federal agencies and state regulatory
            authorities.--Nothing in this section shall be construed to
            limit the inherent authority of any Federal agency or State
            regulatory authority under otherwise applicable provisions of
            law.

        ``(h) Definitions.--In this section, the following definitions shall
    apply:
                ``(1) Banking entity.--The term `banking entity' means any
            insured depository institution (as defined in section 3 of the
            Federal Deposit Insurance Act (12 U.S.C. 1813)), any company
            that controls an insured depository institution, or that is
            treated as a bank holding company for purposes of section 8 of
            the International Banking Act of 1978, and any affiliate or
            subsidiary of any such entity. For purposes of this paragraph,
            the term `insured depository institution' does not include an
            institution that functions solely in a trust or fiduciary
            capacity, if--
                        ``(A) all or substantially all of the deposits of
                    such institution are in trust funds and are received in
                    a bona fide fiduciary capacity;
                        ``(B) no deposits of such institution which are
                    insured by the Federal Deposit Insurance Corporation are
                    offered or marketed by or through an affiliate of such
                    institution;
                        ``(C) such institution does not accept demand
                    deposits or deposits that the depositor may withdraw by
                    check or similar means for payment to third parties or
                    others or make commercial loans; and
                        ``(D) such institution does not--
                              ``(i) obtain payment or payment related
                          services from any Federal Reserve bank, including
                          any service referred to in section 11A of the
                          Federal Reserve Act (12 U.S.C. 248a); or
                              ``(ii) exercise discount or borrowing
                          privileges pursuant to section 19(b)(7) of the
                          Federal Reserve Act (12 U.S.C. 461(b)(7)).

    [[Page 124 STAT. 1630]]

                ``(2) Hedge fund; private equity fund.--The terms `hedge
            fund' and `private equity fund' mean an issuer that would be an
            investment company, as defined in the Investment Company Act of
            1940 (15 U.S.C. 80a-1 et seq.), but for section 3(c)(1) or
            3(c)(7) of that Act, or such similar funds as the appropriate
            Federal banking agencies, the Securities and Exchange
            Commission, and the Commodity Futures Trading Commission may, by
            rule, as provided in subsection (b)(2), determine.
                ``(3) Nonbank financial company supervised by the board.--
            The term `nonbank financial company supervised by the Board'
            means a nonbank financial company supervised by the Board of
            Governors, as defined in section 102 of the Financial Stability
            Act of 2010.
                ``(4) Proprietary trading.--The term `proprietary trading',
            when used with respect to a banking entity or nonbank financial
            company supervised by the Board, means engaging as a principal
            for the trading account of the banking entity or nonbank
            financial company supervised by the Board in any transaction to
            purchase or sell, or otherwise acquire or dispose of, any
            security, any derivative, any contract of sale of a commodity
            for future delivery, any option on any such security,
            derivative, or contract, or any other security or financial
            instrument that the appropriate Federal banking agencies, the
            Securities and Exchange Commission, and the Commodity Futures
            Trading Commission may, by rule as provided in subsection
            (b)(2), determine.
                ``(5) Sponsor.--The term to `sponsor' a fund means--
                        ``(A) to serve as a general partner, managing
                    member, or trustee of a fund;
                        ``(B) in any manner to select or to control (or to
                    have employees, officers, or directors, or agents who
                    constitute) a majority of the directors, trustees, or
                    management of a fund; or
                        ``(C) to share with a fund, for corporate,
                    marketing, promotional, or other purposes, the same name
                    or a variation of the same name.
                ``(6) Trading account.--The term `trading account' means any
            account used for acquiring or taking positions in the securities
            and instruments described in paragraph (4) principally for the
            purpose of selling in the near term (or otherwise with the
            intent to resell in order to profit from short-term price
            movements), and any such other accounts as the appropriate
            Federal banking agencies, the Securities and Exchange
            Commission, and the Commodity Futures Trading Commission may, by
            rule as provided in subsection (b)(2), determine.
                ``(7) Illiquid fund.--
                        ``(A) In general.--The term `illiquid fund' means a
                    hedge fund or private equity fund that--
                              ``(i) as of May 1, 2010, was principally
                          invested in, or was invested and contractually
                          committed to principally invest in, illiquid
                          assets, such as portfolio companies, real estate
                          investments, and venture capital investments; and
                              ``(ii) makes all investments pursuant to, and
                          consistent with, an investment strategy to
                          principally invest in illiquid assets. In issuing
                          rules regarding

    [[Page 124 STAT. 1631]]

                          this subparagraph, the Board shall take into
                          consideration the terms of investment for the
                          hedge fund or private equity fund, including
                          contractual obligations, the ability of the fund
                          to divest of assets held by the fund, and any
                          other factors that the Board determines are
                          appropriate.
                        ``(B) Hedge fund.--For the purposes of this
                    paragraph, the term `hedge fund' means any fund
                    identified under subsection (h)(2), and does not include
                    a private equity fund, as such term is used in section
                    203(m) of the Investment Advisers Act of 1940 (15 U.S.C.
                    80b-3(m)).''.
    SEC. 620. STUDY OF BANK INVESTMENT ACTIVITIES.

        (a) Study.--
                (1) <<NOTE: Deadline.>> In general.--Not later than 18
            months after the date of enactment of this Act, the appropriate
            Federal banking agencies shall jointly review and prepare a
            report on the activities that a banking entity, as such term is
            defined in the Bank Holding Company Act of 1956 (12 U.S.C. 1841
            et. seq.), may engage in under Federal and State law, including
            activities authorized by statute and by order, interpretation
            and guidance.
                (2) Content.--In carrying out the study under paragraph (1),
            the appropriate Federal banking agencies shall review and
            consider--
                        (A) the type of activities or investments;
                        (B) any financial, operational, managerial, or
                    reputation risks associated with or presented as a
                    result of the banking entity engaged in the activity or
                    making the investment; and
                        (C) risk mitigation activities undertaken by the
                    banking entity with regard to the risks.

        (b) Report and Recommendations to the Council and to Congress.--The
    appropriate Federal banking agencies shall submit to the Council, the
    Committee on Financial Services of the House of Representatives, and the
    Committee on Banking, Housing, and Urban Affairs of the Senate the study
    conducted pursuant to subsection (a) no later than 2 months after its
    completion. In addition to the information described in subsection (a),
    the report shall include recommendations regarding--
                (1) whether each activity or investment has or could have a
            negative effect on the safety and soundness of the banking
            entity or the United States financial system;
                (2) the appropriateness of the conduct of each activity or
            type of investment by banking entities; and
                (3) additional restrictions as may be necessary to address
            risks to safety and soundness arising from the activities or
            types of investments described in subsection (a).
    SEC. 621. CONFLICTS OF INTEREST.

        (a) In General.--The Securities Act of 1933 (15 U.S.C. 77a et seq.)
    is amended by inserting after section 27A the following:
    ``SEC. 27B. <<NOTE: 15 USC 77z-2a.>>  CONFLICTS OF INTEREST
                            RELATING TO CERTAIN SECURITIZATIONS.

        ``(a) In General.--An underwriter, placement agent, initial
    purchaser, or sponsor, or any affiliate or subsidiary of any such
    entity, of an asset-backed security (as such term is defined in

    [[Page 124 STAT. 1632]]

    section 3 of the Securities and Exchange Act of 1934 (15 U.S.C. 78c),
    which for the purposes of this section shall include a synthetic asset-
    backed security), shall not, at any time for a period ending on the date
    that is one year after the date of the first closing of the sale of the
    asset-backed security, engage in any transaction that would involve or
    result in any material conflict of interest with respect to any investor
    in a transaction arising out of such activity.
        ``(b) <<NOTE: Deadline.>>  Rulemaking.--Not later than 270 days
    after the date of enactment of this section, the Commission shall issue
    rules for the purpose of implementing subsection (a).

        ``(c) Exception.--The prohibitions of subsection (a) shall not apply
    to--
                ``(1) risk-mitigating hedging activities in connection with
            positions or holdings arising out of the underwriting,
            placement, initial purchase, or sponsorship of an asset-backed
            security, provided that such activities are designed to reduce
            the specific risks to the underwriter, placement agent, initial
            purchaser, or sponsor associated with positions or holdings
            arising out of such underwriting, placement, initial purchase,
            or sponsorship; or
                ``(2) purchases or sales of asset-backed securities made
            pursuant to and consistent with--
                        ``(A) commitments of the underwriter, placement
                    agent, initial purchaser, or sponsor, or any affiliate
                    or subsidiary of any such entity, to provide liquidity
                    for the asset-backed security, or
                        ``(B) bona fide market-making in the asset backed
                    security.

        ``(d) Rule of Construction.--This subsection shall not otherwise
    limit the application of section 15G of the Securities Exchange Act of
    1934.''.
        (b) <<NOTE: 15 USC 77z-2a note.>>  Effective Date.--Section 27B of
    the Securities Act of 1933, as added by this section, shall take effect
    on the effective date of final rules issued by the Commission under
    subsection (b) of such section 27B, except that subsections (b) and (d)
    of such section 27B shall take effect on the date of enactment of this
    Act.
    SEC. 622. CONCENTRATION LIMITS ON LARGE FINANCIAL FIRMS.

        The Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.) is
    amended by adding at the end the following:
    ``SEC. 14. <<NOTE: 12 USC 1852.>> CONCENTRATION LIMITS ON LARGE
                          FINANCIAL FIRMS.

        ``(a) Definitions.--In this section--
                ``(1) the term `Council' means the Financial Stability
            Oversight Council;
                ``(2) the term `financial company' means--
                        ``(A) an insured depository institution;
                        ``(B) a bank holding company;
                        ``(C) a savings and loan holding company;
                        ``(D) a company that controls an insured depository
                    institution;
                        ``(E) a nonbank financial company supervised by the
                    Board under title I of the Dodd-Frank Wall Street Reform
                    and Consumer Protection Act; and
                        ``(F) a foreign bank or company that is treated as a
                    bank holding company for purposes of this Act; and
                ``(3) the term `liabilities' means--

    [[Page 124 STAT. 1633]]

                        ``(A) with respect to a United States financial
                    company--
                              ``(i) the total risk-weighted assets of the
                          financial company, as determined under the risk-
                          based capital rules applicable to bank holding
                          companies, as adjusted to reflect exposures that
                          are deducted from regulatory capital; less
                              ``(ii) the total regulatory capital of the
                          financial company under the risk-based capital
                          rules applicable to bank holding companies;
                        ``(B) with respect to a foreign-based financial
                    company--
                              ``(i) the total risk-weighted assets of the
                          United States operations of the financial company,
                          as determined under the applicable risk-based
                          capital rules, as adjusted to reflect exposures
                          that are deducted from regulatory capital; less
                              ``(ii) the total regulatory capital of the
                          United States operations of the financial company,
                          as determined under the applicable risk-based
                          capital rules; and
                        ``(C) with respect to an insurance company or other
                    nonbank financial company supervised by the Board, such
                    assets of the company as the Board shall specify by
                    rule, in order to provide for consistent and equitable
                    treatment of such companies.

        ``(b) Concentration Limit.--Subject to the recommendations by the
    Council under subsection (e), a financial company may not merge or
    consolidate with, acquire all or substantially all of the assets of, or
    otherwise acquire control of, another company, if the total consolidated
    liabilities of the acquiring financial company upon consummation of the
    transaction would exceed 10 percent of the aggregate consolidated
    liabilities of all financial companies at the end of the calendar year
    preceding the transaction.
        ``(c) Exception to Concentration Limit.--With the prior written
    consent of the Board, the concentration limit under subsection (b) shall
    not apply to an acquisition--
                ``(1) of a bank in default or in danger of default;
                ``(2) with respect to which assistance is provided by the
            Federal Deposit Insurance Corporation under section 13(c) of the
            Federal Deposit Insurance Act (12 U.S.C. 1823(c)); or
                ``(3) that would result only in a de minimis increase in the
            liabilities of the financial company.

        ``(d) Rulemaking and Guidance.--The Board shall issue regulations
    implementing this section in accordance with the recommendations of the
    Council under subsection (e), including the definition of terms, as
    necessary. The Board may issue interpretations or guidance regarding the
    application of this section to an individual financial company or to
    financial companies in general.
        ``(e) Council Study and Rulemaking.--
                ``(1) <<NOTE: Deadline.>>  Study and recommendations.--Not
            later than 6 months after the date of enactment of this section,
            the Council shall--
                        ``(A) complete a study of the extent to which the
                    concentration limit under this section would affect
                    financial stability, moral hazard in the financial
                    system, the efficiency and competitiveness of United
                    States financial firms

    [[Page 124 STAT. 1634]]

                    and financial markets, and the cost and availability of
                    credit and other financial services to households and
                    businesses in the United States; and
                        ``(B) make recommendations regarding any
                    modifications to the concentration limit that the
                    Council determines would more effectively implement this
                    section.
                ``(2) <<NOTE: Deadline.>> Rulemaking.--Not later than 9
            months after the date of completion of the study under paragraph
            (1), and notwithstanding subsections (b) and (d), the Board
            shall issue final regulations implementing this section, which
            shall reflect any recommendations by the Council under paragraph
            (1)(B).''.
    SEC. 623. INTERSTATE MERGER TRANSACTIONS.

        (a) Interstate Merger Transactions.--Section 18(c) of the Federal
    Deposit Insurance Act (12 U.S.C. 1828(c)) is amended by adding at the
    end the following:
        ``(13)(A) Except as provided in subparagraph (B), the responsible
    agency may not approve an application for an interstate merger
    transaction if the resulting insured depository institution (including
    all insured depository institutions which are affiliates of the
    resulting insured depository institution), upon consummation of the
    transaction, would control more than 10 percent of the total amount of
    deposits of insured depository institutions in the United States.
        ``(B) Subparagraph (A) shall not apply to an interstate merger
    transaction that involves 1 or more insured depository institutions in
    default or in danger of default, or with respect to which the
    Corporation provides assistance under section 13.
        ``(C) In this paragraph--
                ``(i) the term `interstate merger transaction' means a
            merger transaction involving 2 or more insured depository
            institutions that have different home States and that are not
            affiliates; and
                ``(ii) the term `home State' means--
                        ``(I) with respect to a national bank, the State in
                    which the main office of the bank is located;
                        ``(II) with respect to a State bank or State savings
                    association, the State by which the State bank or State
                    savings association is chartered; and
                        ``(III) with respect to a Federal savings
                    association, the State in which the home office (as
                    defined by the regulations of the Director of the Office
                    of Thrift Supervision, or, on and after the transfer
                    date, the Comptroller of the Currency) of the Federal
                    savings association is located.''.

        (b) Acquisitions by Bank Holding Companies.--
                (1) In general.--Section 4 of the Bank Holding Company Act
            of 1956 (12 U.S.C. 1843) is amended--
                        (A) in subsection (i), by adding at the end the
                    following:
                ``(8) Interstate acquisitions.--
                        ``(A) In general.--The Board may not approve an
                    application by a bank holding company to acquire an
                    insured depository institution under subsection (c)(8)
                    or any other provision of this Act if--
                              ``(i) the home State of such insured
                          depository institution is a State other than the
                          home State of the bank holding company; and

    [[Page 124 STAT. 1635]]

                              ``(ii) the applicant (including all insured
                          depository institutions which are affiliates of
                          the applicant) controls, or upon consummation of
                          the transaction would control, more than 10
                          percent of the total amount of deposits of insured
                          depository institutions in the United States.
                        ``(B) Exception.--Subparagraph (A) shall not apply
                    to an acquisition that involves an insured depository
                    institution in default or in danger of default, or with
                    respect to which the Federal Deposit Insurance
                    Corporation provides assistance under section 13 of the
                    Federal Deposit Insurance Act (12 U.S.C. 1823).''; and
                        (B) in subsection (k)(6)(B), by striking ``savings
                    association'' and inserting ``insured depository
                    institution''.
                (2) Definitions.--Section 2(o)(4) of the Bank Holding
            Company Act of 1956 (12 U.S.C. 1841(o)(4)) is amended--
                        (A) in subparagraph (B), by striking ``and'' at the
                    end;
                        (B) in subparagraph (C)(ii), by striking the period
                    at the end and inserting a semicolon; and
                        (C) by adding at the end the following:
                        ``(D) with respect to a State savings association,
                    the State by which the savings association is chartered;
                    and
                        ``(E) with respect to a Federal savings association,
                    the State in which the home office (as defined by the
                    regulations of the Director of the Office of Thrift
                    Supervision, or, on and after the transfer date, the
                    Comptroller of the Currency) of the Federal savings
                    association is located.''.

        (c) Acquisitions by Savings and Loan Holding Companies.--Section
    10(e)(2) of the Home Owners' Loan Act (12 U.S.C. 1467a(e)(2)) is
    amended--
                (1) in paragraph (2)--
                        (A) in subparagraph (C), by striking ``or'' at the
                    end;
                        (B) in subparagraph (D), by striking the period at
                    the end and inserting ``, or''; and
                        (C) by adding at the end the following:
                        ``(E) in the case of an application by a savings and
                    loan holding company to acquire an insured depository
                    institution, if--
                              ``(i) the home State of the insured depository
                          institution is a State other than the home State
                          of the savings and loan holding company;
                              ``(ii) the applicant (including all insured
                          depository institutions which are affiliates of
                          the applicant) controls, or upon consummation of
                          the transaction would control, more than 10
                          percent of the total amount of deposits of insured
                          depository institutions in the United States; and
                              ``(iii) the acquisition does not involve an
                          insured depository institution in default or in
                          danger of default, or with respect to which the
                          Federal Deposit Insurance Corporation provides
                          assistance under section 13 of the Federal Deposit
                          Insurance Act (12 U.S.C. 1823).''; and
                (2) by adding at the end the following:
                ``(7) Definitions.--For purposes of paragraph (2)(E)--
                        ``(A) the terms `default', `in danger of default',
                    and `insured depository institution' have the same
                    meanings

    [[Page 124 STAT. 1636]]

                    as in section 3 of the Federal Deposit Insurance Act (12
                    U.S.C. 1813); and
                        ``(B) the term `home State' means--
                              ``(i) with respect to a national bank, the
                          State in which the main office of the bank is
                          located;
                              ``(ii) with respect to a State bank or State
                          savings association, the State by which the
                          savings association is chartered;
                              ``(iii) with respect to a Federal savings
                          association, the State in which the home office
                          (as defined by the regulations of the Director of
                          the Office of Thrift Supervision, or, on and after
                          the transfer date, the Comptroller of the
                          Currency) of the Federal savings association is
                          located; and
                              ``(iv) with respect to a savings and loan
                          holding company, the State in which the amount of
                          total deposits of all insured depository
                          institution subsidiaries of such company was the
                          greatest on the date on which the company became a
                          savings and loan holding company.''.
    SEC. 624. QUALIFIED THRIFT LENDERS.

        Section 10(m)(3) of the Home Owners' Loan Act (12 U.S.C.
    1467a(m)(3)) is amended--
                (1) by striking subparagraph (A) and inserting the
            following:
                        ``(A) In general.--A savings association that fails
                    to become or remain a qualified thrift lender shall
                    immediately be subject to the restrictions under
                    subparagraph (B).''; and
                (2) in subparagraph (B)(i), by striking subclause (III) and
            inserting the following:
                                        ``(III) Dividends.--The savings
                                    association may not pay dividends,
                                    except for dividends that--
                                                ``(aa) would be permissible
                                            for a national bank;
                                                ``(bb) are necessary to meet
                                            obligations of a company that
                                            controls such savings
                                            association; and
                                                ``(cc) are specifically
                                            approved by the Comptroller of
                                            the Currency and the Board after
                                            a written request submitted to
                                            the Comptroller of the Currency
                                            and the Board by the savings
                                            association not later than 30
                                            days before the date of the
                                            proposed payment.
                                        ``(IV) Regulatory authority.--A
                                    savings association that fails to become
                                    or remain a qualified thrift lender
                                    shall be deemed to have violated section
                                    5 of the Home Owners' Loan Act (12
                                    U.S.C. 1464) and subject to actions
                                    authorized by section 5(d) of the Home
                                    Owners' Loan Act (12 U.S.C. 1464(d)).''.
    SEC. 625. TREATMENT OF DIVIDENDS BY CERTAIN MUTUAL HOLDING
                            COMPANIES.

        (a) In General.--Section 10(o) of the Home Owners' Loan Act (12
    U.S.C. 1467a(o) is amended by adding at the end the following:

    [[Page 124 STAT. 1637]]

                ``(11) Dividends.--
                        ``(A) Declaration of dividends.--
                              ``(i) <<NOTE: Deadline.>> Advance notice
                          required.--Each subsidiary of a mutual holding
                          company that is a savings association shall give
                          the appropriate Federal banking agency and the
                          Board notice not later than 30 days before the
                          date of a proposed declaration by the board of
                          directors of the savings association of any
                          dividend on the guaranty, permanent, or other
                          nonwithdrawable stock of the savings association.
                              ``(ii) <<NOTE: Time period.>>  Invalid
                          dividends.--Any dividend described in clause (i)
                          that is declared without giving notice to the
                          appropriate Federal banking agency and the Board
                          under clause (i), or that is declared during the
                          30-day period preceding the date of a proposed
                          declaration for which notice is given to the
                          appropriate Federal banking agency and the Board
                          under clause (i), shall be invalid and shall
                          confer no rights or benefits upon the holder of
                          any such stock.
                        ``(B) Waiver of dividends.--A mutual holding company
                    may waive the right to receive any dividend declared by
                    a subsidiary of the mutual holding company, if--
                              ``(i) no insider of the mutual holding
                          company, associate of an insider, or tax-qualified
                          or non-tax-qualified employee stock benefit plan
                          of the mutual holding company holds any share of
                          the stock in the class of stock to which the
                          waiver would apply; or
                              ``(ii) <<NOTE: Deadline.>> the mutual holding
                          company gives written notice to the Board of the
                          intent of the mutual holding company to waive the
                          right to receive dividends, not later than 30 days
                          before the date of the proposed date of payment of
                          the dividend, and the Board does not object to the
                          waiver.
                        ``(C) Resolution included in waiver notice.--A
                    notice of a waiver under subparagraph (B) shall include
                    a copy of the resolution of the board of directors of
                    the mutual holding company, in such form and substance
                    as the Board may determine, together with any supporting
                    materials relied upon by the board of directors of the
                    mutual holding company, concluding that the proposed
                    dividend waiver is consistent with the fiduciary duties
                    of the board of directors to the mutual members of the
                    mutual holding company.
                        ``(D) Standards for waiver of dividend.--The Board
                    may not object to a waiver of dividends under
                    subparagraph (B) if--
                              ``(i) the waiver would not be detrimental to
                          the safe and sound operation of the savings
                          association;
                              ``(ii) the board of directors of the mutual
                          holding company expressly determines that a waiver
                          of the dividend by the mutual holding company is
                          consistent with the fiduciary duties of the board
                          of directors to the mutual members of the mutual
                          holding company; and
                              ``(iii) the mutual holding company has, prior
                          to December 1, 2009--

    [[Page 124 STAT. 1638]]

                                        ``(I) reorganized into a mutual
                                    holding company under subsection (o);
                                        ``(II) issued minority stock either
                                    from its mid-tier stock holding company
                                    or its subsidiary stock savings
                                    association; and
                                        ``(III) waived dividends it had a
                                    right to receive from the subsidiary
                                    stock savings association.
                        ``(E) Valuation.--
                              ``(i) In general.--The appropriate Federal
                          banking agency shall consider waived dividends in
                          determining an appropriate exchange ratio in the
                          event of a full conversion to stock form.
                              ``(ii) Exception.--In the case of a savings
                          association that has reorganized into a mutual
                          holding company, has issued minority stock from a
                          mid-tier stock holding company or a subsidiary
                          stock savings association of the mutual holding
                          company, and has waived dividends it had a right
                          to receive from a subsidiary savings association
                          before December 1, 2009, the appropriate Federal
                          banking agency shall not consider waived dividends
                          in determining an appropriate exchange ratio in
                          the event of a full conversion to stock form.''.

        (b) <<NOTE: 12 USC 1467a note.>> Effective Date.--The amendment made
    by subsection (a) shall take effect on the transfer date.
    SEC. 626. INTERMEDIATE HOLDING COMPANIES.

        The Home Owners' Loan Act (12 U.S.C. 1461 et seq.) is amended by
    inserting after section 10 (12 U.S.C. 1467a) the following new section:
    ``SEC. 10A. <<NOTE: 12 USC 1467b.>>  INTERMEDIATE HOLDING
                            COMPANIES.

        ``(a) Definition.--For purposes of this section:
                ``(1) Financial activities.--The term `financial activities'
            means activities described in clauses (i) and (ii) of section
            10(c)(9)(A).
                ``(2) Grandfathered unitary savings and loan holding
            company.--The term `grandfathered unitary savings and loan
            holding company' means a company described in section
            10(c)(9)(C).
                ``(3) Internal financial activities.--The term `internal
            financial activities' includes--
                        ``(A) internal financial activities conducted by a
                    grandfathered savings and loan holding company or any
                    affiliate; and
                        ``(B) internal treasury, investment, and employee
                    benefit functions.

        ``(b) Requirement.--
                ``(1) In general.--
                        ``(A) Activities other than financial activities.--
                    If <<NOTE: Deadline.>>  a grandfathered unitary savings
                    and loan holding company conducts activities other than
                    financial activities, the Board may require such company
                    to establish and conduct all or a portion of such
                    financial activities in or through an intermediate
                    holding company, which shall be a savings and loan
                    holding company, established pursuant to regulations of
                    the Board, not later than 90 days (or such longer

    [[Page 124 STAT. 1639]]

                    period as the Board may deem appropriate) after the
                    transfer date.
                        ``(B) Other activities.--Notwithstanding
                    subparagraph (A), the Board shall require a
                    grandfathered unitary savings and loan holding company
                    to establish an intermediate holding company if the
                    Board makes a determination that the establishment of
                    such intermediate holding company is necessary--
                              ``(i) to appropriately supervise activities
                          that are determined to be financial activities; or
                              ``(ii) to ensure that supervision by the Board
                          does not extend to the activities of such company
                          that are not financial activities.
                ``(2) Internal financial activities.--
                        ``(A) Treatment of internal financial activities.--
                    For purposes of this subsection, the internal financial
                    activities of a grandfathered unitary savings and loan
                    holding company shall not be required to be placed in an
                    intermediate holding company.
                        ``(B) Grandfathered activities.--A grandfathered
                    unitary savings and loan holding company may continue to
                    engage in an internal financial activity, subject to
                    review by the Board to determine whether engaging in
                    such activity presents undue risk to the grandfathered
                    unitary savings and loan holding company or to the
                    financial stability of the United States, if--
                              ``(i) the grandfathered unitary savings and
                          loan holding company engaged in the activity
                          during the year before the date of enactment of
                          this section; and
                              ``(ii) at least \2/3\ of the assets or \2/3\
                          of the revenues generated from the activity are
                          from or attributable to the grandfathered unitary
                          savings and loan holding company.
                ``(3) Source of strength.--A grandfathered unitary savings
            and loan holding company that directly or indirectly controls an
            intermediate holding company established under this section
            shall serve as a source of strength to its subsidiary
            intermediate holding company.
                ``(4) Parent company reports.--The Board, may from time to
            time, examine and require reports under oath from a
            grandfathered unitary savings and loan holding company that
            controls an intermediate holding company, and from the
            appropriate officers or directors of such company, solely for
            purposes of ensuring compliance with the provisions of this
            section, including assessing the ability of the company to serve
            as a source of strength to its subsidiary intermediate holding
            company as required under paragraph (3) and enforcing compliance
            with such requirement.
                ``(5) Limited parent company enforcement.--
                        ``(A) In general.--In addition to any other
                    authority of the Board, the Board may enforce compliance
                    with the provisions of this subsection that are
                    applicable to any company described in paragraph (1)(A)
                    that controls an intermediate holding company under
                    section 8 of the Federal Deposit Insurance Act, and a
                    company described in paragraph (1)(A) shall be subject
                    to such section (solely for purposes of this
                    subparagraph) in the same manner

    [[Page 124 STAT. 1640]]

                    and to the same extent as if the company described in
                    paragraph (1)(A) were a savings and loan holding
                    company.
                        ``(B) Application of other act.--Any violation of
                    this subsection by a grandfathered unitary savings and
                    loan holding company that controls an intermediate
                    holding company may also be treated as a violation of
                    the Federal Deposit Insurance Act for purposes of
                    subparagraph (A).
                        ``(C) No effect on other authority.--No provision of
                    this paragraph shall be construed as limiting any
                    authority of the Board or any other Federal agency under
                    any other provision of law.

        ``(c) Regulations.--The Board--
                ``(1) shall promulgate regulations to establish the criteria
            for determining whether to require a grandfathered unitary
            savings and loan holding company to establish an intermediate
            holding company under subsection (b); and
                ``(2) may promulgate regulations to establish any
            restrictions or limitations on transactions between an
            intermediate holding company or a parent of such company and its
            affiliates, as necessary to prevent unsafe and unsound practices
            in connection with transactions between the intermediate holding
            company, or any subsidiary thereof, and its parent company or
            affiliates that are not subsidiaries of the intermediate holding
            company, except that such regulations shall not restrict or
            limit any transaction in connection with the bona fide
            acquisition or lease by an unaffiliated person of assets, goods,
            or services.

        ``(d) Rules of Construction.--
                ``(1) Activities.--Nothing in this section shall be
            construed to require a grandfathered unitary savings and loan
            holding company to conform its activities to permissible
            activities.
                ``(2) Permissible corporate reorganization.--The formation
            of an intermediate holding company as required in subsection (b)
            shall be presumed to be a permissible corporate reorganization
            as described in section 10(c)(9)(D).''.
    SEC. 627. INTEREST-BEARING TRANSACTION ACCOUNTS AUTHORIZED.

        (a) Repeal of Prohibition on Payment of Interest on Demand
    Deposits.--
                (1) Federal reserve act.--Section 19(i) of the Federal
            Reserve Act (12 U.S.C. 371a) is amended to read as follows:

        ``(i) [Repealed]''.
                (2) Home owners' loan act.--The first sentence of section
            5(b)(1)(B) of the Home Owners' Loan Act (12 U.S.C.
            1464(b)(1)(B)) is amended by striking ``savings association may
            not--'' and all that follows through ``(ii) permit any'' and
            inserting ``savings association may not permit any''.
                (3) Federal deposit insurance act.--Section 18(g) of the
            Federal Deposit Insurance Act (12 U.S.C. 1828(g)) is amended to
            read as follows:

        ``(g) [Repealed]''.
        (b) <<NOTE: 12 USC 371a note.>> Effective Date.--The amendments made
    by subsection (a) shall take effect 1 year after the date of the
    enactment of this Act.
    SEC. 628. CREDIT CARD BANK SMALL BUSINESS LENDING.

        Section 2(c)(2)(F)(v) of the Bank Holding Company Act of 1956 (12
    U.S.C. 1841(c)(2)(F)(v)) is amended by inserting before the

    [[Page 124 STAT. 1641]]

    period the following: ``, other than credit card loans that are made to
    businesses that meet the criteria for a small business concern to be
    eligible for business loans under regulations established by the Small
    Business Administration under part 121 of title 13, Code of Federal
    Regulations''.

        TITLE <<NOTE: Wall Street Transparency and Accountability Act of
    2010.>>  VII--WALL STREET TRANSPARENCY AND ACCOUNTABILITY
    SEC. 701. <<NOTE: 15 USC 8301 note.>>  SHORT TITLE.

        This title may be cited as the ``Wall Street Transparency and
    Accountability Act of 2010''.

            Subtitle A--Regulation of Over-the-Counter Swaps Markets

                          PART I--REGULATORY AUTHORITY

    SEC. 711. <<NOTE: 15 USC 8301.>>  DEFINITIONS.

        In this subtitle, the terms ``prudential regulator'', ``swap'',
    ``swap dealer'', ``major swap participant'', ``swap data repository'',
    ``associated person of a swap dealer or major swap participant'',
    ``eligible contract participant'', ``swap execution facility'',
    ``security-based swap'', ``security-based swap dealer'', ``major
    security-based swap participant'', and ``associated person of a
    security-based swap dealer or major security-based swap participant''
    have the meanings given the terms in section 1a of the Commodity
    Exchange Act (7 U.S.C. 1a), including any modification of the meanings
    under section 721(b) of this Act.
    SEC. 712. <<NOTE: 15 USC 8302.>>  REVIEW OF REGULATORY AUTHORITY.

        (a) Consultation.--
                (1) Commodity futures trading commission.--Before commencing
            any rulemaking or issuing an order regarding swaps, swap
            dealers, major swap participants, swap data repositories,
            derivative clearing organizations with regard to swaps, persons
            associated with a swap dealer or major swap participant,
            eligible contract participants, or swap execution facilities
            pursuant to this subtitle, the Commodity Futures Trading
            Commission shall consult and coordinate to the extent possible
            with the Securities and Exchange Commission and the prudential
            regulators for the purposes of assuring regulatory consistency
            and comparability, to the extent possible.
                (2) Securities and exchange commission.--Before commencing
            any rulemaking or issuing an order regarding security-based
            swaps, security-based swap dealers, major security-based swap
            participants, security-based swap data repositories, clearing
            agencies with regard to security-based swaps, persons associated
            with a security-based swap dealer or major security-based swap
            participant, eligible contract participants with regard to
            security-based swaps, or security-based swap execution
            facilities pursuant to subtitle B, the Securities and Exchange
            Commission shall consult and coordinate to the

    [[Page 124 STAT. 1642]]

            extent possible with the Commodity Futures Trading Commission
            and the prudential regulators for the purposes of assuring
            regulatory consistency and comparability, to the extent
            possible.
                (3) Procedures and deadline.--Such regulations shall be
            prescribed in accordance with applicable requirements of title
            5, United States Code, and shall be issued in final form not
            later than 360 days after the date of enactment of this Act.
                (4) Applicability.--The requirements of paragraphs (1) and
            (2) shall not apply to an order issued--
                        (A) in connection with or arising from a violation
                    or potential violation of any provision of the Commodity
                    Exchange Act (7 U.S.C. 1 et seq.);
                        (B) in connection with or arising from a violation
                    or potential violation of any provision of the
                    securities laws; or
                        (C) in any proceeding that is conducted on the
                    record in accordance with sections 556 and 557 of title
                    5, United States Code.
                (5) Effect.--Nothing in this subsection authorizes any
            consultation or procedure for consultation that is not
            consistent with the requirements of subchapter II of chapter 5,
            and chapter 7, of title 5, United States Code (commonly known as
            the ``Administrative Procedure Act'').
                (6) Rules; orders.--In developing and promulgating rules or
            orders pursuant to this subsection, each Commission shall
            consider the views of the prudential regulators.
                (7) Treatment of similar products and entities.--
                        (A) In general.--In adopting rules and orders under
                    this subsection, the Commodity Futures Trading
                    Commission and the Securities and Exchange Commission
                    shall treat functionally or economically similar
                    products or entities described in paragraphs (1) and (2)
                    in a similar manner.
                        (B) Effect.--Nothing in this subtitle requires the
                    Commodity Futures Trading Commission or the Securities
                    and Exchange Commission to adopt joint rules or orders
                    that treat functionally or economically similar products
                    or entities described in paragraphs (1) and (2) in an
                    identical manner.
                (8) Mixed swaps.--The Commodity Futures Trading Commission
            and the Securities and Exchange Commission, after consultation
            with the Board of Governors, shall jointly prescribe such
            regulations regarding mixed swaps, as described in section
            1a(47)(D) of the Commodity Exchange Act (7 U.S.C. 1a(47)(D)) and
            in section 3(a)(68)(D) of the Securities Exchange Act of 1934
            (15 U.S.C. 78c(a)(68)(D)), as may be necessary to carry out the
            purposes of this title.

        (b) Limitation.--
                (1) Commodity futures trading commission.--Nothing in this
            title, unless specifically provided, confers jurisdiction on the
            Commodity Futures Trading Commission to issue a rule,
            regulation, or order providing for oversight or regulation of--
                        (A) security-based swaps; or
                        (B) with regard to its activities or functions
                    concerning security-based swaps--

    [[Page 124 STAT. 1643]]

                              (i) security-based swap dealers;
                              (ii) major security-based swap participants;
                              (iii) security-based swap data repositories;
                              (iv) associated persons of a security-based
                          swap dealer or major security-based swap
                          participant;
                              (v) eligible contract participants with
                          respect to security-based swaps; or
                              (vi) swap execution facilities with respect to
                          security-based swaps.
                (2) Securities and exchange commission.--Nothing in this
            title, unless specifically provided, confers jurisdiction on the
            Securities and Exchange Commission or State securities
            regulators to issue a rule, regulation, or order providing for
            oversight or regulation of--
                        (A) swaps; or
                        (B) with regard to its activities or functions
                    concerning swaps--
                              (i) swap dealers;
                              (ii) major swap participants;
                              (iii) swap data repositories;
                              (iv) persons associated with a swap dealer or
                          major swap participant;
                              (v) eligible contract participants with
                          respect to swaps; or
                              (vi) swap execution facilities with respect to
                          swaps.
                (3) Prohibition on certain futures associations and national
            securities associations.--
                        (A) Futures associations.--Notwithstanding any other
                    provision of law (including regulations), unless
                    otherwise authorized by this title, no futures
                    association registered under section 17 of the Commodity
                    Exchange Act (7 U.S.C. 21) may issue a rule, regulation,
                    or order for the oversight or regulation of, or
                    otherwise assert jurisdiction over, for any purpose, any
                    security-based swap, except that this subparagraph shall
                    not limit the authority of a registered futures
                    association to examine for compliance with, and enforce,
                    its rules on capital adequacy.
                        (B) National securities associations.--
                    Notwithstanding any other provision of law (including
                    regulations), unless otherwise authorized by this title,
                    no national securities association registered under
                    section 15A of the Securities Exchange Act of 1934 (15
                    U.S.C. 78o-3) may issue a rule, regulation, or order for
                    the oversight or regulation of, or otherwise assert
                    jurisdiction over, for any purpose, any swap, except
                    that this subparagraph shall not limit the authority of
                    a national securities association to examine for
                    compliance with, and enforce, its rules on capital
                    adequacy.

        (c) Objection to Commission Regulation.--
                (1) Filing of petition for review.--
                        (A) <<NOTE: Deadline.>> In general.--If either
                    Commission referred to in this section determines that a
                    final rule, regulation, or order of the other Commission
                    conflicts with subsection (a)(7) or (b), then the
                    complaining Commission may obtain review of the final
                    rule, regulation, or order in the United States Court of
                    Appeals for the District of Columbia Circuit by filing
                    in the court, not later than 60 days after the

    [[Page 124 STAT. 1644]]

                    date of publication of the final rule, regulation, or
                    order, a written petition requesting that the rule,
                    regulation, or order be set aside.
                        (B) Expedited proceeding.--A proceeding described in
                    subparagraph (A) shall be expedited by the United States
                    Court of Appeals for the District of Columbia Circuit.
                (2) Transmittal of petition and record.--
                        (A) In general.--A copy <<NOTE: Deadline.>>  of a
                    petition described in paragraph (1) shall be transmitted
                    not later than 1 business day after the date of filing
                    by the complaining Commission to the Secretary of the
                    responding Commission.
                        (B) Duty of responding commission.--On receipt of
                    the copy of a petition described in paragraph (1), the
                    responding Commission shall file with the United States
                    Court of Appeals for the District of Columbia Circuit--
                              (i) a copy of the rule, regulation, or order
                          under review (including any documents referred to
                          therein); and
                              (ii) any other materials prescribed by the
                          United States Court of Appeals for the District of
                          Columbia Circuit.
                (3) Standard of review.--The United States Court of Appeals
            for the District of Columbia Circuit shall--
                        (A) give deference to the views of neither
                    Commission; and
                        (B) determine to affirm or set aside a rule,
                    regulation, or order of the responding Commission under
                    this subsection, based on the determination of the court
                    as to whether the rule, regulation, or order is in
                    conflict with subsection (a)(7) or (b), as applicable.
                (4) Judicial stay.--The filing of a petition by the
            complaining Commission pursuant to paragraph (1) shall operate
            as a stay of the rule, regulation, or order until the date on
            which the determination of the United States Court of Appeals
            for the District of Columbia Circuit is final (including any
            appeal of the determination).

        (d) Joint Rulemaking.--
                (1) In general.--Notwithstanding any other provision of this
            title and subsections (b) and (c), the Commodity Futures Trading
            Commission and the Securities and Exchange Commission, in
            consultation with the Board of Governors, shall further define
            the terms ``swap'', ``security-based swap'', ``swap dealer'',
            ``security-based swap dealer'', ``major swap participant'',
            ``major security-based swap participant'', ``eligible contract
            participant'', and ``security-based swap agreement'' in section
            1a(47)(A)(v) of the Commodity Exchange Act (7 U.S.C.
            1a(47)(A)(v)) and section 3(a)(78) of the Securities Exchange
            Act of 1934 (15 U.S.C. 78c(a)(78)).
                (2) Authority of the commissions.--
                        (A) In general.--Notwithstanding any other provision
                    of this title, the Commodity Futures Trading Commission
                    and the Securities and Exchange Commission, in
                    consultation with the Board of Governors, shall jointly
                    adopt such other rules regarding such definitions as the
                    Commodity Futures Trading Commission and the Securities
                    and

    [[Page 124 STAT. 1645]]

                    Exchange Commission determine are necessary and
                    appropriate, in the public interest, and for the
                    protection of investors.
                        (B) Trade repository recordkeeping.--Notwithstanding
                    any other provision of this title, the Commodity Futures
                    Trading Commission and the Securities and Exchange
                    Commission, in consultation with the Board of Governors,
                    shall engage in joint rulemaking to jointly adopt a rule
                    or rules governing the books and records that are
                    required to be kept and maintained regarding security-
                    based swap agreements by persons that are registered as
                    swap data repositories under the Commodity Exchange Act,
                    including uniform rules that specify the data elements
                    that shall be collected and maintained by each
                    repository.
                        (C) Books and records.--Notwithstanding any other
                    provision of this title, the Commodity Futures Trading
                    Commission and the Securities and Exchange Commission,
                    in consultation with the Board of Governors, shall
                    engage in joint rulemaking to jointly adopt a rule or
                    rules governing books and records regarding security-
                    based swap agreements, including daily trading records,
                    for swap dealers, major swap participants, security-
                    based swap dealers, and security-based swap
                    participants.
                        (D) Comparable rules.--Rules and regulations
                    prescribed jointly under this title by the Commodity
                    Futures Trading Commission and the Securities and
                    Exchange Commission shall be comparable to the maximum
                    extent possible, taking into consideration differences
                    in instruments and in the applicable statutory
                    requirements.
                        (E) Tracking uncleared transactions.--Any rules
                    prescribed under subparagraph (A) shall require the
                    maintenance of records of all activities relating to
                    security-based swap agreement transactions defined under
                    subparagraph (A) that are not cleared.
                        (F) Sharing of information.--The Commodity Futures
                    Trading Commission shall make available to the
                    Securities and Exchange Commission information relating
                    to security-based swap agreement transactions defined in
                    subparagraph (A) that are not cleared.
                (3) Financial stability oversight council.--In the event
            that the Commodity Futures Trading Commission and the Securities
            and Exchange Commission fail to jointly prescribe rules pursuant
            to paragraph (1) or (2) in a timely manner, at the request of
            either Commission, the Financial Stability Oversight Council
            shall resolve the dispute--
                        (A) within a reasonable time after receiving the
                    request;
                        (B) after consideration of relevant information
                    provided by each Commission; and
                        (C) by agreeing with 1 of the Commissions regarding
                    the entirety of the matter or by determining a
                    compromise position.
                (4) Joint interpretation.--Any interpretation of, or
            guidance by either Commission regarding, a provision of this
            title, shall be effective only if issued jointly by the
            Commodity Futures Trading Commission and the Securities and
            Exchange Commission, after consultation with the Board of
            Governors,

    [[Page 124 STAT. 1646]]

            if this title requires the Commodity Futures Trading Commission
            and the Securities and Exchange Commission to issue joint
            regulations to implement the provision.

        (e) <<NOTE: Deadline.>> Global Rulemaking Timeframe.--Unless
    otherwise provided in this title, or an amendment made by this title,
    the Commodity Futures Trading Commission or the Securities and Exchange
    Commission, or both, shall individually, and not jointly, promulgate
    rules and regulations required of each Commission under this title or an
    amendment made by this title not later than 360 days after the date of
    enactment of this Act.

        (f) Rules and Registration Before Final Effective Dates.--Beginning
    on the date of enactment of this Act and notwithstanding the effective
    date of any provision of this Act, the Commodity Futures Trading
    Commission and the Securities and Exchange Commission may, in order to
    prepare for the effective dates of the provisions of this Act--
                (1) promulgate rules, regulations, or orders permitted or
            required by this Act;
                (2) conduct studies and prepare reports and recommendations
            required by this Act;
                (3) register persons under the provisions of this Act; and
                (4) exempt persons, agreements, contracts, or transactions
            from provisions of this Act, under the terms contained in this
            Act,

    provided, however, that no action by the Commodity Futures Trading
    Commission or the Securities and Exchange Commission described in
    paragraphs (1) through (4) shall become effective prior to the effective
    date applicable to such action under the provisions of this Act.
    SEC. 713. PORTFOLIO MARGINING CONFORMING CHANGES.

        (a) Securities Exchange Act of 1934.--Section 15(c)(3) of the
    Securities Exchange Act of 1934 (15 U.S.C. 78o(c)(3)) is amended by
    adding at the end the following:
                        ``(C) Notwithstanding any provision of sections
                    2(a)(1)(C)(i) or 4d(a)(2) of the Commodity Exchange Act
                    and the rules and regulations thereunder, and pursuant
                    to an exemption granted by the Commission under section
                    36 of this title or pursuant to a rule or regulation,
                    cash and securities may be held by a broker or dealer
                    registered pursuant to subsection (b)(1) and also
                    registered as a futures commission merchant pursuant to
                    section 4f(a)(1) of the Commodity Exchange Act, in a
                    portfolio margining account carried as a futures account
                    subject to section 4d of the Commodity Exchange Act and
                    the rules and regulations thereunder, pursuant to a
                    portfolio margining program approved by the Commodity
                    Futures Trading Commission, and subject to subchapter IV
                    of chapter 7 of title 11 of the United States Code and
                    the rules and regulations
                    thereunder. <<NOTE: Consultation.>>  The Commission
                    shall consult with the Commodity Futures Trading
                    Commission to adopt rules to ensure that such
                    transactions and accounts are subject to comparable
                    requirements to the extent practicable for similar
                    products.''.

        (b) Commodity Exchange Act.--Section 4d of the Commodity Exchange
    Act (7 U.S.C. 6d) is amended by adding at the end the following:

    [[Page 124 STAT. 1647]]

        ``(h) <<NOTE: Contracts.>>  Notwithstanding subsection (a)(2) or the
    rules and regulations thereunder, and pursuant to an exemption granted
    by the Commission under section 4(c) of this Act or pursuant to a rule
    or regulation, a futures commission merchant that is registered pursuant
    to section 4f(a)(1) of this Act and also registered as a broker or
    dealer pursuant to section 15(b)(1) of the Securities Exchange Act of
    1934 may, pursuant to a portfolio margining program approved by the
    Securities and Exchange Commission pursuant to section 19(b) of the
    Securities Exchange Act of 1934, hold in a portfolio margining account
    carried as a securities account subject to section 15(c)(3) of the
    Securities Exchange Act of 1934 and the rules and regulations
    thereunder, a contract for the purchase or sale of a commodity for
    future delivery or an option on such a contract, and any money,
    securities or other property received from a customer to margin,
    guarantee or secure such a contract, or accruing to a customer as the
    result of such a contract. <<NOTE: Consultation.>> The Commission shall
    consult with the Securities and Exchange Commission to adopt rules to
    ensure that such transactions and accounts are subject to comparable
    requirements to the extent practical for similar products.''.

        (c) Duty of Commodity Futures Trading Commission.--Section 20 of the
    Commodity Exchange Act (7 U.S.C. 24) is amended by adding at the end the
    following:
        ``(c) The Commission shall exercise its authority to ensure that
    securities held in a portfolio margining account carried as a futures
    account are customer property and the owners of those accounts are
    customers for the purposes of subchapter IV of chapter 7 of title 11 of
    the United States Code.''.
    SEC. 714. <<NOTE: 15 USC 8303.>>  ABUSIVE SWAPS.

        The Commodity Futures Trading Commission or the Securities and
    Exchange Commission, or both, individually may, by rule or order--
                (1) collect information as may be necessary concerning the
            markets for any types of--
                        (A) swap (as defined in section 1a of the Commodity
                    Exchange Act (7 U.S.C. 1a)); or
                        (B) security-based swap (as defined in section 1a of
                    the Commodity Exchange Act (7 U.S.C. 1a)); and
                (2) <<NOTE: Reports.>>  issue a report with respect to any
            types of swaps or security-based swaps that the Commodity
            Futures Trading Commission or the Securities and Exchange
            Commission determines to be detrimental to--
                        (A) the stability of a financial market; or
                        (B) participants in a financial market.
    SEC. 715. <<NOTE: 15 USC 8304.>>  AUTHORITY TO PROHIBIT
                            PARTICIPATION IN SWAP ACTIVITIES.

        Except as provided in section 4 of the Commodity Exchange Act (7
    U.S.C. 6), if the Commodity Futures Trading Commission or the Securities
    and Exchange Commission determines that the regulation of swaps or
    security-based swaps markets in a foreign country undermines the
    stability of the United States financial system, either Commission, in
    consultation with the Secretary of the Treasury, may prohibit an entity
    domiciled in the foreign country from participating in the United States
    in any swap or security-based swap activities.

    [[Page 124 STAT. 1648]]

    SEC. 716. <<NOTE: 15 USC 8305.>>  PROHIBITION AGAINST FEDERAL
                            GOVERNMENT BAILOUTS OF SWAPS ENTITIES.

        (a) Prohibition on Federal Assistance.--Notwithstanding any other
    provision of law (including regulations), no Federal assistance may be
    provided to any swaps entity with respect to any swap, security-based
    swap, or other activity of the swaps entity.
        (b) Definitions.--In this section:
                (1) Federal assistance.--The term ``Federal assistance''
            means the use of any advances from any Federal Reserve credit
            facility or discount window that is not part of a program or
            facility with broad-based eligibility under section 13(3)(A) of
            the Federal Reserve Act, Federal Deposit Insurance Corporation
            insurance or guarantees for the purpose of--
                        (A) making any loan to, or purchasing any stock,
                    equity interest, or debt obligation of, any swaps
                    entity;
                        (B) purchasing the assets of any swaps entity;
                        (C) guaranteeing any loan or debt issuance of any
                    swaps entity; or
                        (D) entering into any assistance arrangement
                    (including tax breaks), loss sharing, or profit sharing
                    with any swaps entity.
                (2) Swaps entity.--
                        (A) In general.--The term ``swaps entity'' means any
                    swap dealer, security-based swap dealer, major swap
                    participant, major security-based swap participant, that
                    is registered under--
                              (i) the Commodity Exchange Act (7 U.S.C. 1 et
                          seq.); or
                              (ii) the Securities Exchange Act of 1934 (15
                          U.S.C. 78a et seq.).
                        (B) Exclusion.--The term ``swaps entity'' does not
                    include any major swap participant or major security-
                    based swap participant that is an insured depository
                    institution.

        (c) Affiliates of Insured Depository Institutions.--The prohibition
    on Federal assistance contained in subsection (a) does not apply to and
    shall not prevent an insured depository institution from having or
    establishing an affiliate which is a swaps entity, as long as such
    insured depository institution is part of a bank holding company, or
    savings and loan holding company, that is supervised by the Federal
    Reserve and such swaps entity affiliate complies with sections 23A and
    23B of the Federal Reserve Act and such other requirements as the
    Commodity Futures Trading Commission or the Securities Exchange
    Commission, as appropriate, and the Board of Governors of the Federal
    Reserve System, may determine to be necessary and appropriate.
        (d) Only Bona Fide Hedging and Traditional Bank Activities
    Permitted.--The prohibition <<NOTE: Applicability.>>  in subsection (a)
    shall apply to any insured depository institution unless the insured
    depository institution limits its swap or security-based swap activities
    to:
                (1) Hedging and other similar risk mitigating activities
            directly related to the insured depository institution's
            activities.
                (2) Acting as a swaps entity for swaps or security-based
            swaps involving rates or reference assets that are permissible
            for investment by a national bank under the paragraph designated
            as ``Seventh.'' of section 5136 of the Revised Statutes of the
            United States ( 12 U.S.C. 24), other than as described in
            paragraph (3).

    [[Page 124 STAT. 1649]]

                (3) Limitation on credit default swaps.--Acting as a swaps
            entity for credit default swaps, including swaps or security-
            based swaps referencing the credit risk of asset-backed
            securities as defined in section 3(a)(77) of the Securities
            Exchange Act of 1934 (15 U.S.C. 78c(a)(77)) (as amended by this
            Act) shall not be considered a bank permissible activity for
            purposes of subsection (d)(2) unless such swaps or security-
            based swaps are cleared by a derivatives clearing organization
            (as such term is defined in section la of the Commodity Exchange
            Act (7 U.S.C. la)) or a clearing agency (as such term is defined
            in section 3 of the Securities Exchange Act (15 U.S.C. 78c))
            that is registered, or exempt from registration, as a
            derivatives clearing organization under the Commodity Exchange
            Act or as a clearing agency under the Securities Exchange Act,
            respectively.

        (e) <<NOTE: Applicability.>>  Existing Swaps and Security-based
    Swaps.--The prohibition in subsection (a) shall only apply to swaps or
    security-based swaps entered into by an insured depository institution
    after the end of the transition period described in subsection (f).

        (f) Transition Period.--To the extent an insured depository
    institution qualifies as a ``swaps entity'' and would be subject to the
    Federal assistance prohibition in subsection (a), the appropriate
    Federal banking agency, after consulting with and considering the views
    of the Commodity Futures Trading Commission or the Securities Exchange
    Commission, as appropriate, shall permit the insured depository
    institution up to 24 months to divest the swaps entity or cease the
    activities that require registration as a swaps entity. In establishing
    the appropriate transition period to effect such divestiture or
    cessation of activities, which may include making the swaps entity an
    affiliate of the insured depository institution, the appropriate Federal
    banking agency shall take into account and make written findings
    regarding the potential impact of such divestiture or cessation of
    activities on the insured depository institution's (1) mortgage lending,
    (2) small business lending, (3) job creation, and (4) capital formation
    versus the potential negative impact on insured depositors and the
    Deposit Insurance Fund of the Federal Deposit Insurance Corporation. The
    appropriate Federal banking agency may consider such other factors as
    may be appropriate. The appropriate Federal banking agency may place
    such conditions on the insured depository institution's divestiture or
    ceasing of activities of the swaps entity as it deems necessary and
    appropriate. The transition period under this subsection may be extended
    by the appropriate Federal banking agency, after consultation with the
    Commodity Futures Trading Commission and the Securities and Exchange
    Commission, for a period of up to 1 additional year.
        (g) Excluded Entities.--For purposes of this section, the term
    ``swaps entity'' shall not include any insured depository institution
    under the Federal Deposit Insurance Act or a covered financial company
    under title II which is in a conservatorship, receivership, or a bridge
    bank operated by the Federal Deposit Insurance Corporation.
        (h) Effective Date.--The prohibition in subsection (a) shall be
    effective 2 years following the date on which this Act is effective.
        (i) Liquidation Required.--
                (1) In general.--

    [[Page 124 STAT. 1650]]

                        (A) FDIC insured institutions.--All swaps entities
                    that are FDIC insured institutions that are put into
                    receivership or declared insolvent as a result of swap
                    or security-based swap activity of the swaps entities
                    shall be subject to the termination or transfer of that
                    swap or security-based swap activity in accordance with
                    applicable law prescribing the treatment of those
                    contracts. No taxpayer funds shall be used to prevent
                    the receivership of any swap entity resulting from swap
                    or security-based swap activity of the swaps entity.
                        (B) Institutions that pose a systemic risk and are
                    subject to heightened prudential supervision as
                    regulated under section 113.--All swaps entities that
                    are institutions that pose a systemic risk and are
                    subject to heightened prudential supervision as
                    regulated under section 113, that are put into
                    receivership or declared insolvent as a result of swap
                    or security-based swap activity of the swaps entities
                    shall be subject to the termination or transfer of that
                    swap or security-based swap activity in accordance with
                    applicable law prescribing the treatment of those
                    contracts. No taxpayer funds shall be used to prevent
                    the receivership of any swap entity resulting from swap
                    or security-based swap activity of the swaps entity.
                        (C) Non-FDIC insured, non-systemically significant
                    institutions not subject to heightened prudential
                    supervision as regulated under section 113.--No taxpayer
                    resources shall be used for the orderly liquidation of
                    any swaps entities that are non-FDIC insured, non-
                    systemically significant institutions not subject to
                    heightened prudential supervision as regulated under
                    section 113.
                (2) Recovery of funds.--All funds expended on the
            termination or transfer of the swap or security-based swap
            activity of the swaps entity shall be recovered in accordance
            with applicable law from the disposition of assets of such swap
            entity or through assessments, including on the financial sector
            as provided under applicable law.
                (3) No losses to taxpayers.--Taxpayers shall bear no losses
            from the exercise of any authority under this title.

        (j) Prohibition on Unregulated Combination of Swaps Entities and
    Banking.--At no time following adoption of the rules in subsection (k)
    may a bank or bank holding company be permitted to be or become a swap
    entity unless it conducts its swap or security-based swap activity in
    compliance with such minimum standards set by its prudential regulator
    as are reasonably calculated to permit the swaps entity to conduct its
    swap or security-based swap activities in a safe and sound manner and
    mitigate systemic risk.
        (k) Rules.--In prescribing rules, the prudential regulator for a
    swaps entity shall consider the following factors:
                (1) The expertise and managerial strength of the swaps
            entity, including systems for effective oversight.
                (2) The financial strength of the swaps entity.
                (3) Systems for identifying, measuring and controlling risks
            arising from the swaps entity's operations.
                (4) Systems for identifying, measuring and controlling the
            swaps entity's participation in existing markets.

    [[Page 124 STAT. 1651]]

                (5) Systems for controlling the swaps entity's participation
            or entry into in new markets and products.

        (l) Authority of the Financial Stability Oversight Council.--The
    Financial Stability Oversight Council may determine that, when other
    provisions established by this Act are insufficient to effectively
    mitigate systemic risk and protect taxpayers, that swaps entities may no
    longer access Federal assistance with respect to any swap, security-
    based swap, or other activity of the swaps entity. Any such
    determination by the Financial Stability Oversight Council of a
    prohibition of federal assistance shall be made on an institution-by-
    institution basis, and shall require the vote of not fewer than two-
    thirds of the members of the Financial Stability Oversight Council,
    which must include the vote by the Chairman of the Council, the Chairman
    of the Board of Governors of the Federal Reserve System, and the
    Chairperson of the Federal Deposit Insurance Corporation. Notice and
    hearing requirements for such determinations shall be consistent with
    the standards provided in title I.
        (m) Ban on Proprietary Trading in Derivatives.--An insured
    depository institution shall comply with the prohibition on proprietary
    trading in derivatives as required by section 619 of the Dodd-Frank Wall
    Street Reform and Consumer Protection Act.
    SEC. 717. NEW PRODUCT APPROVAL CFTC--SEC PROCESS.

        (a) Amendments to the Commodity Exchange Act.--Section 2(a)(1)(C) of
    the Commodity Exchange Act (7 U.S.C. 2(a)(1)(C)) is amended--
                (1) in clause (i) by striking ``This'' and inserting ``(I)
            Except as provided in subclause (II), this''; and
                (2) by adding at the end of clause (i) the following:
                                        ``(II) This Act shall apply to and
                                    the Commission shall have jurisdiction
                                    with respect to accounts, agreements,
                                    and transactions involving, and may
                                    permit the listing for trading pursuant
                                    to section 5c(c) of, a put, call, or
                                    other option on 1 or more securities (as
                                    defined in section 2(a)(1) of the
                                    Securities Act of 1933 or section
                                    3(a)(10) of the Securities Exchange Act
                                    of 1934 on the date of enactment of the
                                    Futures Trading Act of 1982), including
                                    any group or index of such securities,
                                    or any interest therein or based on the
                                    value thereof, that is exempted by the
                                    Securities and Exchange Commission
                                    pursuant to section 36(a)(1) of the
                                    Securities Exchange Act of 1934 with the
                                    condition that the Commission exercise
                                    concurrent jurisdiction over such put,
                                    call, or other option; provided,
                                    however, that nothing in this paragraph
                                    shall be construed to affect the
                                    jurisdiction and authority of the
                                    Securities and Exchange Commission over
                                    such put, call, or other option.''.

        (b) Amendments to the Securities Exchange Act of 1934.--The
    Securities Exchange Act of 1934 is amended by adding the following
    section after section 3A (15 U.S.C. 78c-1):
    ``SEC. 3B. <<NOTE: 15 USC 78c-2.>>  SECURITIES-RELATED
                          DERIVATIVES.

        ``(a) Any agreement, contract, or transaction (or class thereof)
    that is exempted by the Commodity Futures Trading Commission

    [[Page 124 STAT. 1652]]

    pursuant to section 4(c)(1) of the Commodity Exchange Act (7 U.S.C.
    6(c)(1)) with the condition that the Commission exercise concurrent
    jurisdiction over such agreement, contract, or transaction (or class
    thereof) shall be deemed a security for purposes of the securities laws.
        ``(b) With respect to any agreement, contract, or transaction (or
    class thereof) that is exempted by the Commodity Futures Trading
    Commission pursuant to section 4(c)(1) of the Commodity Exchange Act (7
    U.S.C. 6(c)(1)) with the condition that the Commission exercise
    concurrent jurisdiction over such agreement, contract, or transaction
    (or class thereof), references in the securities laws to the `purchase'
    or `sale' of a security shall be deemed to include the execution,
    termination (prior to its scheduled maturity date), assignment,
    exchange, or similar transfer or conveyance of, or extinguishing of
    rights or obligations under such agreement, contract, or transaction, as
    the context may require.''.
        (c) Amendment to Securities Exchange Act of 1934.--Section 19(b) of
    the Securities Exchange Act of 1934 (15 U.S.C. 78s(b)) is amended by
    adding at the end the following:
                ``(10) Notwithstanding paragraph (2), the time period within
            which the Commission is required by order to approve a proposed
            rule change or institute proceedings to determine whether the
            proposed rule change should be disapproved is stayed pending a
            determination by the Commission upon the request of the
            Commodity Futures Trading Commission or its Chairman that the
            Commission issue a determination as to whether a product that is
            the subject of such proposed rule change is a security pursuant
            to section 718 of the Wall Street Transparency and
            Accountability Act of 2010.''.

        (d) Amendment to Commodity Exchange Act.--Section 5c(c)(1) of the
    Commodity Exchange Act (7 U.S.C. 7a-2(c)(1)) is amended--
                (1) by striking ``Subject to paragraph (2)'' and inserting
            the following:
                        ``(A) Election.--Subject to paragraph (2)''; and
                (2) by adding at the end the following:
                        ``(B) Certification.--The certification of a product
                    pursuant to this paragraph shall be stayed pending a
                    determination by the Commission upon the request of the
                    Securities and Exchange Commission or its Chairman that
                    the Commission issue a determination as to whether the
                    product that is the subject of such certification is a
                    contract of sale of a commodity for future delivery, an
                    option on such a contract, or an option on a commodity
                    pursuant to section 718 of the Wall Street Transparency
                    and Accountability Act of 2010.''.
    SEC. 718. <<NOTE: 15 USC 8306.>>  DETERMINING STATUS OF NOVEL
                            DERIVATIVE PRODUCTS.

        (a) Process for Determining the Status of a Novel Derivative
    Product.--
                (1) Notice.--
                        (A) In general.--Any person filing a proposal to
                    list or trade a novel derivative product that may have
                    elements of both securities and contracts of sale of a
                    commodity for future delivery (or options on such
                    contracts or options on commodities) may concurrently
                    provide notice and furnish a copy of such filing with
                    the Securities and Exchange

    [[Page 124 STAT. 1653]]

                    Commission and the Commodity Futures Trading Commission.
                    Any such notice shall state that notice has been made
                    with both Commissions.
                        (B) <<NOTE: Deadline.>>  Notification.--If no
                    concurrent notice is made pursuant to subparagraph (A),
                    within 5 business days after determining that a proposal
                    that seeks to list or trade a novel derivative product
                    may have elements of both securities and contracts of
                    sale of a commodity for future delivery (or options on
                    such contracts or options on commodities), the
                    Securities and Exchange Commission or the Commodity
                    Futures Trading Commission, as applicable, shall notify
                    the other Commission and provide a copy of such filing
                    to the other Commission.
                (2) Request for determination.--
                        (A) <<NOTE: Deadline.>> In general.--No later than
                    21 days after receipt of a notice under paragraph (1),
                    or upon its own initiative if no such notice is
                    received, the Commodity Futures Trading Commission may
                    request that the Securities and Exchange Commission
                    issue a determination as to whether a product is a
                    security, as defined in section 3(a)(10) of the
                    Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(10)).
                        (B) <<NOTE: Deadline.>> Request.--No later than 21
                    days after receipt of a notice under paragraph (1), or
                    upon its own initiative if no such notice is received,
                    the Securities and Exchange Commission may request that
                    the Commodity Futures Trading Commission issue a
                    determination as to whether a product is a contract of
                    sale of a commodity for future delivery, an option on
                    such a contract, or an option on a commodity subject to
                    the Commodity Futures Trading Commission's exclusive
                    jurisdiction under section 2(a)(1)(A) of the Commodity
                    Exchange Act (7 U.S.C. 2(a)(1)(A)).
                        (C) Requirement relating to request.--A request
                    under subparagraph (A) or (B) shall be made by
                    submitting such request, in writing, to the Securities
                    and Exchange Commission or the Commodity Futures Trading
                    Commission, as applicable.
                        (D) Effect.--Nothing in this paragraph shall be
                    construed to prevent--
                              (i) the Commodity Futures Trading Commission
                          from requesting that the Securities and Exchange
                          Commission grant an exemption pursuant to section
                          36(a)(1) of the Securities Exchange Act of 1934
                          (15 U.S.C. 78mm(a)(1)) with respect to a product
                          that is the subject of a filing under paragraph
                          (1); or
                              (ii) the Securities and Exchange Commission
                          from requesting that the Commodity Futures Trading
                          Commission grant an exemption pursuant to section
                          4(c)(1) of the Commodity Exchange Act (7 U.S.C.
                          6(c)(1)) with respect to a product that is the
                          subject of a filing under paragraph (1),
                    Provided, however, that nothing in this subparagraph
                    shall be construed to require the Commodity Futures
                    Trading Commission or the Securities and Exchange
                    Commission to issue an exemption requested pursuant to
                    this subparagraph; provided further, That an order
                    granting or denying an exemption described in this
                    subparagraph and issued

    [[Page 124 STAT. 1654]]

                    under paragraph (3)(B) shall not be subject to judicial
                    review pursuant to subsection (b).
                        (E) Withdrawal of request.--A request under
                    subparagraph (A) or (B) may be withdrawn by the
                    Commission making the request at any time prior to a
                    determination being made pursuant to paragraph (3) for
                    any reason by providing written notice to the head of
                    the other Commission.
                (3) <<NOTE: Deadline.>>  Determination.--Notwithstanding any
            other provision of law, no later than 120 days after the date of
            receipt of a request--
                        (A) under subparagraph (A) or (B) of paragraph (2),
                    unless such request has been withdrawn pursuant to
                    paragraph (2)(E), the Securities and Exchange Commission
                    or the Commodity Futures Trading Commission, as
                    applicable, shall, by order, issue the determination
                    requested in subparagraph (A) or (B) of paragraph (2),
                    as applicable, and the reasons therefor; or
                        (B) under paragraph (2)(D), unless such request has
                    been withdrawn, the Securities and Exchange Commission
                    or the Commodity Futures Trading Commission, as
                    applicable, shall grant an exemption or provide reasons
                    for not granting such exemption, provided that any
                    decision by the Securities and Exchange Commission not
                    to grant such exemption shall not be reviewable under
                    section 25 of the Securities Exchange Act of 1934 (15
                    U.S.C. 78y).

        (b) Judicial Resolution.--
                (1) In general.--The Commodity <<NOTE: Deadline.>>  Futures
            Trading Commission or the Securities and Exchange Commission may
            petition the United States Court of Appeals for the District of
            Columbia Circuit for review of a final order of the other
            Commission issued pursuant to subsection (a)(3)(A), with respect
            to a novel derivative product that may have elements of both
            securities and contracts of sale of a commodity for future
            delivery (or options on such contracts or options on
            commodities) that it believes affects its statutory jurisdiction
            within 60 days after the date of entry of such order, a written
            petition requesting a review of the order. Any such proceeding
            shall be expedited by the Court of Appeals.
                (2) Transmittal of petition and record.--A
            copy <<NOTE: Deadline.>>  of a petition described in paragraph
            (1) shall be transmitted not later than 1 business day after
            filing by the complaining Commission to the responding
            Commission. On receipt of the petition, the responding
            Commission shall file with the court a copy of the order under
            review and any documents referred to therein, and any other
            materials prescribed by the court.
                (3) Standard of review.--The court, in considering a
            petition filed pursuant to paragraph (1), shall give no
            deference to, or presumption in favor of, the views of either
            Commission.
                (4) Judicial stay.--The filing of a petition by the
            complaining Commission pursuant to paragraph (1) shall operate
            as a stay of the order, until the date on which the
            determination of the court is final (including any appeal of the
            determination).
    SEC. 719. <<NOTE: 15 USC 8307.>>  STUDIES.

        (a) Study on Effects of Position Limits on Trading on Exchanges in
    the United States.--

    [[Page 124 STAT. 1655]]

                (1) Study.--The Commodity Futures Trading Commission, in
            consultation with each entity that is a designated contract
            market under the Commodity Exchange Act, shall conduct a study
            of the effects (if any) of the position limits imposed pursuant
            to the other provisions of this title on excessive speculation
            and on the movement of transactions from exchanges in the United
            States to trading venues outside the United States.
                (2) Report to the congress.--Within 12 months after the
            imposition of position limits pursuant to the other provisions
            of this title, the Commodity Futures Trading Commission, in
            consultation with each entity that is a designated contract
            market under the Commodity Exchange Act, shall submit to the
            Congress a report on the matters described in paragraph (1).
                (3) Required hearing.-- <<NOTE: Deadline.>> Within 30
            legislative days after the submission to the Congress of the
            report described in paragraph (2), the Committee on Agriculture
            of the House of Representatives shall hold a hearing examining
            the findings of the report.
                (4) Biennial reporting.--In addition to the study required
            in paragraph (1), the Chairman of the Commodity Futures Trading
            Commission shall prepare and submit to the Congress biennial
            reports on the growth or decline of the derivatives markets in
            the United States and abroad, which shall include assessments of
            the causes of any such growth or decline, the effectiveness of
            regulatory regimes in managing systemic risk, a comparison of
            the costs of compliance at the time of the report for market
            participants subject to regulation by the United States with the
            costs of compliance in December 2008 for the market
            participants, and the quality of the available data. In
            preparing the report, the Chairman shall solicit the views of,
            consult with, and address the concerns raised by, market
            participants, regulators, legislators, and other interested
            parties.

        (b) Study on Feasibility of Requiring Use of Standardized
    Algorithmic Descriptions for Financial Derivatives.--
                (1) In general.--The Securities and Exchange Commission and
            the Commodity Futures Trading Commission shall conduct a joint
            study of the feasibility of requiring the derivatives industry
            to adopt standardized computer-readable algorithmic descriptions
            which may be used to describe complex and standardized financial
            derivatives.
                (2) Goals.--The algorithmic descriptions defined in the
            study shall be designed to facilitate computerized analysis of
            individual derivative contracts and to calculate net exposures
            to complex derivatives. The algorithmic descriptions shall be
            optimized for simultaneous use by--
                        (A) commercial users and traders of derivatives;
                        (B) derivative clearing houses, exchanges and
                    electronic trading platforms;
                        (C) trade repositories and regulator investigations
                    of market activities; and
                        (D) systemic risk regulators.
            The study will also examine the extent to which the algorithmic
            description, together with standardized and extensible legal

    [[Page 124 STAT. 1656]]

            definitions, may serve as the binding legal definition of
            derivative contracts. The study will examine the logistics of
            possible implementations of standardized algorithmic
            descriptions for derivatives contracts. The study shall be
            limited to electronic formats for exchange of derivative
            contract descriptions and will not contemplate disclosure of
            proprietary valuation models.
                (3) International coordination.--In conducting the study,
            the Securities and Exchange Commission and the Commodity Futures
            Trading Commission shall coordinate the study with international
            financial institutions and regulators as appropriate and
            practical.
                (4) Report.--Within 8 months after the date of the enactment
            of this Act, the Securities and Exchange Commission and the
            Commodity Futures Trading Commission shall jointly submit to the
            Committees on Agriculture and on Financial Services of the House
            of Representatives and the Committees on Agriculture, Nutrition,
            and Forestry and on Banking, Housing, and Urban Affairs of the
            Senate a written report which contains the results of the study
            required by paragraphs (1) through (3).

        (c) International Swap Regulation.--
                (1) In general.-- <<NOTE: Study.>> The Commodity Futures
            Trading Commission and the Securities and Exchange Commission
            shall jointly conduct a study--
                        (A) relating to--
                              (i) swap regulation in the United States,
                          Asia, and Europe; and
                              (ii) clearing house and clearing agency
                          regulation in the United States, Asia, and Europe;
                          and
                        (B) that identifies areas of regulation that are
                    similar in the United States, Asia and Europe and other
                    areas of regulation that could be harmonized
                (2) Report.--Not later than 18 months after the date of
            enactment of this Act, the Commodity Futures Trading Commission
            and the Securities and Exchange Commission shall submit to the
            Committee on Agriculture, Nutrition, and Forestry and the
            Committee on Banking, Housing, and Urban Affairs of the Senate
            and the Committee on Agriculture and the Committee on Financial
            Services of the House of Representatives a report that includes
            a description of the results of the study under subsection (a),
            including--
                        (A) identification of the major exchanges and their
                    regulator in each geographic area for the trading of
                    swaps and security-based swaps including a listing of
                    the major contracts and their trading volumes and
                    notional values as well as identification of the major
                    swap dealers participating in such markets;
                        (B) identification of the major clearing houses and
                    clearing agencies and their regulator in each geographic
                    area for the clearing of swaps and security-based swaps,
                    including a listing of the major contracts and the
                    clearing volumes and notional values as well as
                    identification of the major clearing members of such
                    clearing houses and clearing agencies in such markets;
                        (C) a description of the comparative methods of
                    clearing swaps in the United States, Asia, and Europe;
                    and

    [[Page 124 STAT. 1657]]

                        (D) a description of the various systems used for
                    establishing margin on individual swaps, security-based
                    swaps, and swap portfolios.

        (d) Stable Value Contracts.--
                (1) Determination.--
                        (A) Status.--Not later <<NOTE: Deadline. Study.>>
                    than 15 months after the date of the enactment of this
                    Act, the Securities and Exchange Commission and the
                    Commodity Futures Trading Commission shall, jointly,
                    conduct a study to determine whether stable value
                    contracts fall within the definition of a swap. In
                    making the determination required under this
                    subparagraph, the Commissions jointly shall consult with
                    the Department of Labor, the Department of the Treasury,
                    and the State entities that regulate the issuers of
                    stable value contracts.
                        (B) Regulations.--If the Commissions determine that
                    stable value contracts fall within the definition of a
                    swap, the Commissions jointly shall determine if an
                    exemption for stable value contracts from the definition
                    of swap is appropriate and in the public interest. The
                    Commissions shall issue regulations implementing the
                    determinations required under this paragraph. Until the
                    effective date of such regulations, and notwithstanding
                    any other provision of this title, the requirements of
                    this title shall not apply to stable value contracts.
                        (C) Legal certainty.--Stable value contracts in
                    effect prior to the effective date of the regulations
                    described in subparagraph (B) shall not be considered
                    swaps.
                (2) Definition.--For purposes of this subsection, the term
            ``stable value contract'' means any contract, agreement, or
            transaction that provides a crediting interest rate and guaranty
            or financial assurance of liquidity at contract or book value
            prior to maturity offered by a bank, insurance company, or other
            State or federally regulated financial institution for the
            benefit of any individual or commingled fund available as an
            investment in an employee benefit plan (as defined in section
            3(3) of the Employee Retirement Income Security Act of 1974,
            including plans described in section 3(32) of such Act) subject
            to participant direction, an eligible deferred compensation plan
            (as defined in section 457(b) of the Internal Revenue Code of
            1986) that is maintained by an eligible employer described in
            section 457(e)(1)(A) of such Code, an arrangement described in
            section 403(b) of such Code, or a qualified tuition program (as
            defined in section 529 of such Code).
    SEC. 720. <<NOTE: 15 USC 8308.>>  MEMORANDUM.

        (a)(1) <<NOTE: Deadline.>>  The Commodity Futures Trading Commission
    and the Federal Energy Regulatory Commission shall, not later than 180
    days after the date of the enactment of this Act, negotiate a memorandum
    of understanding to establish procedures for--
                (A) applying their respective authorities in a manner so as
            to ensure effective and efficient regulation in the public
            interest;
                (B) resolving conflicts concerning overlapping jurisdiction
            between the 2 agencies; and
                (C) avoiding, to the extent possible, conflicting or
            duplicative regulation.

    [[Page 124 STAT. 1658]]

        (2) Such memorandum and any subsequent amendments to the memorandum
    shall be promptly submitted to the appropriate committees of Congress.
        (b) <<NOTE: Deadline.>> The Commodity Futures Trading Commission and
    the Federal Energy Regulatory Commission shall, not later than 180 days
    after the date of the enactment of this section, negotiate a memorandum
    of understanding to share information that may be requested where either
    Commission is conducting an investigation into potential manipulation,
    fraud, or market power abuse in markets subject to such Commission's
    regulation or oversight. Shared information shall remain subject to the
    same restrictions on disclosure applicable to the Commission initially
    holding the information.

                       PART II--REGULATION OF SWAP MARKETS

    SEC. 721. DEFINITIONS.

        (a) In General.--Section 1a of the Commodity Exchange Act (7 U.S.C.
    1a) is amended--
                (1) by redesignating paragraphs (2), (3) and (4), (5)
            through (17), (18) through (23), (24) through (28), (29), (30),
            (31) through (33), and (34) as paragraphs (6), (8) and (9), (11)
            through (23), (26) through (31), (34) through (38), (40), (41),
            (44) through (46), and (51), respectively;
                (2) by inserting after paragraph (1) the following:
                ``(2) Appropriate federal banking agency.--The term
            `appropriate Federal banking agency'--
                        ``(A) has the meaning given the term in section 3 of
                    the Federal Deposit Insurance Act (12 U.S.C. 1813);
                        ``(B) means the Board in the case of a noninsured
                    State bank; and
                        ``(C) is the Farm Credit Administration for farm
                    credit system institutions.
                ``(3) Associated person of a security-based swap dealer or
            major security-based swap participant.--The term `associated
            person of a security-based swap dealer or major security-based
            swap participant' has the meaning given the term in section 3(a)
            of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)).
                ``(4) Associated person of a swap dealer or major swap
            participant.--
                        ``(A) In general.--The term `associated person of a
                    swap dealer or major swap participant' means a person
                    who is associated with a swap dealer or major swap
                    participant as a partner, officer, employee, or agent
                    (or any person occupying a similar status or performing
                    similar functions), in any capacity that involves--
                              ``(i) the solicitation or acceptance of swaps;
                          or
                              ``(ii) the supervision of any person or
                          persons so engaged.
                        ``(B) Exclusion.--Other than for purposes of section
                    4s(b)(6), the term `associated person of a swap dealer
                    or major swap participant' does not include any person
                    associated with a swap dealer or major swap participant
                    the functions of which are solely clerical or
                    ministerial.
                ``(5) Board.--The term `Board' means the Board of Governors
            of the Federal Reserve System.'';

    [[Page 124 STAT. 1659]]

                (3) by inserting after paragraph (6) (as redesignated by
            paragraph (1)) the following:
                ``(7) Cleared swap.--The term `cleared swap' means any swap
            that is, directly or indirectly, submitted to and cleared by a
            derivatives clearing organization registered with the
            Commission.'';
                (4) in paragraph (9) (as redesignated by paragraph (1)), by
            striking ``except onions'' and all that follows through the
            period at the end and inserting the following: ``except onions
            (as provided by the first section of Public Law 85-839 (7 U.S.C.
            13-1)) and motion picture box office receipts (or any index,
            measure, value, or data related to such receipts), and all
            services, rights, and interests (except motion picture box
            office receipts, or any index, measure, value or data related to
            such receipts) in which contracts for future delivery are
            presently or in the future dealt in.'';
                (5) by inserting after paragraph (9) (as redesignated by
            paragraph (1)) the following:
                ``(10) Commodity pool.--
                        ``(A) In general.--The term `commodity pool' means
                    any investment trust, syndicate, or similar form of
                    enterprise operated for the purpose of trading in
                    commodity interests, including any--
                              ``(i) commodity for future delivery, security
                          futures product, or swap;
                              ``(ii) agreement, contract, or transaction
                          described in section 2(c)(2)(C)(i) or section
                          2(c)(2)(D)(i);
                              ``(iii) commodity option authorized under
                          section 4c; or
                              ``(iv) leverage transaction authorized under
                          section 19.
                        ``(B) Further definition.--The Commission, by rule
                    or regulation, may include within, or exclude from, the
                    term `commodity pool' any investment trust, syndicate,
                    or similar form of enterprise if the Commission
                    determines that the rule or regulation will effectuate
                    the purposes of this Act.'';
                (6) by striking paragraph (11) (as redesignated by paragraph
            (1)) and inserting the following:
                ``(11) Commodity pool operator.--
                        ``(A) In general.--The term `commodity pool
                    operator' means any person--
                              ``(i) engaged in a business that is of the
                          nature of a commodity pool, investment trust,
                          syndicate, or similar form of enterprise, and who,
                          in connection therewith, solicits, accepts, or
                          receives from others, funds, securities, or
                          property, either directly or through capital
                          contributions, the sale of stock or other forms of
                          securities, or otherwise, for the purpose of
                          trading in commodity interests, including any--
                                        ``(I) commodity for future delivery,
                                    security futures product, or swap;
                                        ``(II) agreement, contract, or
                                    transaction described in section
                                    2(c)(2)(C)(i) or section 2(c)(2)(D)(i);
                                        ``(III) commodity option authorized
                                    under section 4c; or

    [[Page 124 STAT. 1660]]

                                        ``(IV) leverage transaction
                                    authorized under section 19; or
                              ``(ii) who is registered with the Commission
                          as a commodity pool operator.
                        ``(B) Further definition.--The Commission, by rule
                    or regulation, may include within, or exclude from, the
                    term `commodity pool operator' any person engaged in a
                    business that is of the nature of a commodity pool,
                    investment trust, syndicate, or similar form of
                    enterprise if the Commission determines that the rule or
                    regulation will effectuate the purposes of this Act.'';
                (7) in paragraph (12) (as redesignated by paragraph (1)), in
            subparagraph (A)--
                        (A) in clause (i)--
                              (i) in subclause (I), by striking ``made or to
                          be made on or subject to the rules of a contract
                          market or derivatives transaction execution
                          facility'' and inserting ``, security futures
                          product, or swap'';
                              (ii) by redesignating subclauses (II) and
                          (III) as subclauses (III) and (IV);
                              (iii) by inserting after subclause (I) the
                          following:
                                        ``(II) any agreement, contract, or
                                    transaction described in section
                                    2(c)(2)(C)(i) or section
                                    2(c)(2)(D)(i)''; and
                              (iv) in subclause (IV) (as so redesignated),
                          by striking ``or'';
                        (B) in clause (ii), by striking the period at the
                    end and inserting a semicolon; and
                        (C) by adding at the end the following:
                              ``(iii) is registered with the Commission as a
                          commodity trading advisor; or
                              ``(iv) the Commission, by rule or regulation,
                          may include if the Commission determines that the
                          rule or regulation will effectuate the purposes of
                          this Act.'';
                (8) in paragraph (17) (as redesignated by paragraph (1)), in
            subparagraph (A), in the matter preceding clause (i), by
            striking ``paragraph (12)(A)'' and inserting ``paragraph
            (18)(A)'';
                (9) in paragraph (18) (as redesignated by paragraph (1))--
                        (A) in subparagraph (A)--
                              (i) in the matter following clause
                          (vii)(III)--
                                        (I) by striking ``section 1a
                                    (11)(A)'' and inserting ``paragraph
                                    (17)(A)''; and
                                        (II) by striking ``$25,000,000'' and
                                    inserting ``$50,000,000''; and
                              (ii) in clause (xi), in the matter preceding
                          subclause (I), by striking ``total assets in an
                          amount'' and inserting ``amounts invested on a
                          discretionary basis, the aggregate of which is'';
                (10) by striking paragraph (22) (as redesignated by
            paragraph (1)) and inserting the following:
                ``(22) Floor broker.--
                        ``(A) In general.--The term `floor broker' means any
                    person--
                              ``(i) who, in or surrounding any pit, ring,
                          post, or other place provided by a contract market
                          for the meeting of persons similarly engaged,
                          shall purchase or sell for any other person--

    [[Page 124 STAT. 1661]]

                                        ``(I) any commodity for future
                                    delivery, security futures product, or
                                    swap; or
                                        ``(II) any commodity option
                                    authorized under section 4c; or
                              ``(ii) who is registered with the Commission
                          as a floor broker.
                        ``(B) Further definition.--The Commission, by rule
                    or regulation, may include within, or exclude from, the
                    term `floor broker' any person in or surrounding any
                    pit, ring, post, or other place provided by a contract
                    market for the meeting of persons similarly engaged who
                    trades for any other person if the Commission determines
                    that the rule or regulation will effectuate the purposes
                    of this Act.'';
                (11) by striking paragraph (23) (as redesignated by
            paragraph (1)) and inserting the following:
                ``(23) Floor trader.--
                        ``(A) In general.--The term `floor trader' means any
                    person--
                              ``(i) who, in or surrounding any pit, ring,
                          post, or other place provided by a contract market
                          for the meeting of persons similarly engaged,
                          purchases, or sells solely for such person's own
                          account--
                                        ``(I) any commodity for future
                                    delivery, security futures product, or
                                    swap; or
                                        ``(II) any commodity option
                                    authorized under section 4c; or
                              ``(ii) who is registered with the Commission
                          as a floor trader.
                        ``(B) Further definition.--The Commission, by rule
                    or regulation, may include within, or exclude from, the
                    term `floor trader' any person in or surrounding any
                    pit, ring, post, or other place provided by a contract
                    market for the meeting of persons similarly engaged who
                    trades solely for such person's own account if the
                    Commission determines that the rule or regulation will
                    effectuate the purposes of this Act.'';
                (12) by inserting after paragraph (23) (as redesignated by
            paragraph (1)) the following:
                ``(24) Foreign exchange forward.--The term `foreign exchange
            forward' means a transaction that solely involves the exchange
            of 2 different currencies on a specific future date at a fixed
            rate agreed upon on the inception of the contract covering the
            exchange.
                ``(25) Foreign exchange swap.--The term `foreign exchange
            swap' means a transaction that solely involves--
                        ``(A) an exchange of 2 different currencies on a
                    specific date at a fixed rate that is agreed upon on the
                    inception of the contract covering the exchange; and
                        ``(B) a reverse exchange of the 2 currencies
                    described in subparagraph (A) at a later date and at a
                    fixed rate that is agreed upon on the inception of the
                    contract covering the exchange.'';
                (13) by striking paragraph (28) (as redesignated by
            paragraph (1)) and inserting the following:
                ``(28) Futures commission merchant.--

    [[Page 124 STAT. 1662]]

                        ``(A) In general.--The term `futures commission
                    merchant' means an individual, association, partnership,
                    corporation, or trust--
                              ``(i) that--
                                        ``(I) is--
                                                ``(aa) engaged in soliciting
                                            or in accepting orders for--
                                                    ``(AA) the purchase or
                                                sale of a commodity for
                                                future delivery;
                                                    ``(BB) a security
                                                futures product;
                                                    ``(CC) a swap;
                                                    ``(DD) any agreement,
                                                contract, or transaction
                                                described in section
                                                2(c)(2)(C)(i) or section
                                                2(c)(2)(D)(i);
                                                    ``(EE) any commodity
                                                option authorized under
                                                section 4c; or
                                                    ``(FF) any leverage
                                                transaction authorized under
                                                section 19; or
                                                ``(bb) acting as a
                                            counterparty in any agreement,
                                            contract, or transaction
                                            described in section
                                            2(c)(2)(C)(i) or section
                                            2(c)(2)(D)(i); and
                                        ``(II) in or in connection with the
                                    activities described in items (aa) or
                                    (bb) of subclause (I), accepts any
                                    money, securities, or property (or
                                    extends credit in lieu thereof) to
                                    margin, guarantee, or secure any trades
                                    or contracts that result or may result
                                    therefrom; or
                              ``(ii) that is registered with the Commission
                          as a futures commission merchant.
                        ``(B) Further definition.--The Commission, by rule
                    or regulation, may include within, or exclude from, the
                    term `futures commission merchant' any person who
                    engages in soliciting or accepting orders for, or acting
                    as a counterparty in, any agreement, contract, or
                    transaction subject to this Act, and who accepts any
                    money, securities, or property (or extends credit in
                    lieu thereof) to margin, guarantee, or secure any trades
                    or contracts that result or may result therefrom, if the
                    Commission determines that the rule or regulation will
                    effectuate the purposes of this Act.'';
                (14) in paragraph (30) (as redesignated by paragraph (1)),
            in subparagraph (B), by striking ``state'' and inserting
            ``State'';
                (15) by striking paragraph (31) (as redesignated by
            paragraph (1)) and inserting the following:
                ``(31) Introducing broker.--
                        ``(A) In general.--The term `introducing broker'
                    means any person (except an individual who elects to be
                    and is registered as an associated person of a futures
                    commission merchant)--
                              ``(i) who--
                                        ``(I) is engaged in soliciting or in
                                    accepting orders for--
                                                ``(aa) the purchase or sale
                                            of any commodity for future
                                            delivery, security futures
                                            product, or swap;

    [[Page 124 STAT. 1663]]

                                                ``(bb) any agreement,
                                            contract, or transaction
                                            described in section
                                            2(c)(2)(C)(i) or section
                                            2(c)(2)(D)(i);
                                                ``(cc) any commodity option
                                            authorized under section 4c; or
                                                ``(dd) any leverage
                                            transaction authorized under
                                            section 19; and
                                        ``(II) does not accept any money,
                                    securities, or property (or extend
                                    credit in lieu thereof) to margin,
                                    guarantee, or secure any trades or
                                    contracts that result or may result
                                    therefrom; or
                              ``(ii) who is registered with the Commission
                          as an introducing broker.
                        ``(B) Further definition.--The Commission, by rule
                    or regulation, may include within, or exclude from, the
                    term `introducing broker' any person who engages in
                    soliciting or accepting orders for any agreement,
                    contract, or transaction subject to this Act, and who
                    does not accept any money, securities, or property (or
                    extend credit in lieu thereof) to margin, guarantee, or
                    secure any trades or contracts that result or may result
                    therefrom, if the Commission determines that the rule or
                    regulation will effectuate the purposes of this Act.'';
                (16) by inserting after paragraph (31) (as redesignated by
            paragraph (1)) the following:
                ``(32) Major security-based swap participant.--The term
            `major security-based swap participant' has the meaning given
            the term in section 3(a) of the Securities Exchange Act of 1934
            (15 U.S.C. 78c(a)).
                ``(33) Major swap participant.--
                        ``(A) In general.--The term `major swap participant'
                    means any person who is not a swap dealer, and--
                              ``(i) maintains a substantial position in
                          swaps for any of the major swap categories as
                          determined by the Commission, excluding--
                                        ``(I) positions held for hedging or
                                    mitigating commercial risk; and
                                        ``(II) positions maintained by any
                                    employee benefit plan (or any contract
                                    held by such a plan) as defined in
                                    paragraphs (3) and (32) of section 3 of
                                    the Employee Retirement Income Security
                                    Act of 1974 (29 U.S.C. 1002) for the
                                    primary purpose of hedging or mitigating
                                    any risk directly associated with the
                                    operation of the plan;
                              ``(ii) whose outstanding swaps create
                          substantial counterparty exposure that could have
                          serious adverse effects on the financial stability
                          of the United States banking system or financial
                          markets; or
                              ``(iii)(I) is a financial entity that is
                          highly leveraged relative to the amount of capital
                          it holds and that is not subject to capital
                          requirements established by an appropriate Federal
                          banking agency; and
                              ``(II) maintains a substantial position in
                          outstanding swaps in any major swap category as
                          determined by the Commission.
                        ``(B) <<NOTE: Regulations.>>  Definition of
                    substantial position.--For purposes of subparagraph (A),
                    the Commission shall define

    [[Page 124 STAT. 1664]]

                    by rule or regulation the term `substantial position' at
                    the threshold that the Commission determines to be
                    prudent for the effective monitoring, management, and
                    oversight of entities that are systemically important or
                    can significantly impact the financial system of the
                    United States. In setting the definition under this
                    subparagraph, the Commission shall consider the person's
                    relative position in uncleared as opposed to cleared
                    swaps and may take into consideration the value and
                    quality of collateral held against counterparty
                    exposures.
                        ``(C) Scope of designation.--For purposes of
                    subparagraph (A), a person may be designated as a major
                    swap participant for 1 or more categories of swaps
                    without being classified as a major swap participant for
                    all classes of swaps.
                        ``(D) Exclusions.--The definition under this
                    paragraph shall not include an entity whose primary
                    business is providing financing, and uses derivatives
                    for the purpose of hedging underlying commercial risks
                    related to interest rate and foreign currency exposures,
                    90 percent or more of which arise from financing that
                    facilitates the purchase or lease of products, 90
                    percent or more of which are manufactured by the parent
                    company or another subsidiary of the parent company.'';
                (17) by inserting after paragraph (38) (as redesignated by
            paragraph (1)) the following:
                ``(39) Prudential regulator.--The term `prudential
            regulator' means--
                        ``(A) the Board in the case of a swap dealer, major
                    swap participant, security-based swap dealer, or major
                    security-based swap participant that is--
                              ``(i) a State-chartered bank that is a member
                          of the Federal Reserve System;
                              ``(ii) a State-chartered branch or agency of a
                          foreign bank;
                              ``(iii) any foreign bank which does not
                          operate an insured branch;
                              ``(iv) any organization operating under
                          section 25A of the Federal Reserve Act or having
                          an agreement with the Board under section 225 of
                          the Federal Reserve Act;
                              ``(v) any bank holding company (as defined in
                          section 2 of the Bank Holding Company Act of 1965
                          (12 U.S.C. 1841)), any foreign bank (as defined in
                          section 1(b)(7) of the International Banking Act
                          of 1978 (12 U.S.C. 3101(b)(7)) that is treated as
                          a bank holding company under section 8(a) of the
                          International Banking Act of 1978 (12 U.S.C.
                          3106(a)), and any subsidiary of such a company or
                          foreign bank (other than a subsidiary that is
                          described in subparagraph (A) or (B) or that is
                          required to be registered with the Commission as a
                          swap dealer or major swap participant under this
                          Act or with the Securities and Exchange Commission
                          as a security-based swap dealer or major security-
                          based swap participant);

    [[Page 124 STAT. 1665]]

                              ``(vi) after the transfer date (as defined in
                          section 311 of the Dodd-Frank Wall Street Reform
                          and Consumer Protection Act), any savings and loan
                          holding company (as defined in section 10 of the
                          Home Owners' Loan Act (12 U.S.C. 1467a)) and any
                          subsidiary of such company (other than a
                          subsidiary that is described in subparagraph (A)
                          or (B) or that is required to be registered as a
                          swap dealer or major swap participant with the
                          Commission under this Act or with the Securities
                          and Exchange Commission as a security-based swap
                          dealer or major security-based swap participant);
                          or
                              ``(vii) any organization operating under
                          section 25A of the Federal Reserve Act (12U.S.C.
                          611 et seq.) or having an agreement with the Board
                          under section 25 of the Federal Reserve Act (12
                          U.S.C. 601 et seq.);
                        ``(B) the Office of the Comptroller of the Currency
                    in the case of a swap dealer, major swap participant,
                    security-based swap dealer, or major security-based swap
                    participant that is--
                              ``(i) a national bank;
                              ``(ii) a federally chartered branch or agency
                          of a foreign bank; or
                              ``(iii) any Federal savings association;
                        ``(C) the Federal Deposit Insurance Corporation in
                    the case of a swap dealer, major swap participant,
                    security-based swap dealer, or major security-based swap
                    participant that is--
                              ``(i) a State-chartered bank that is not a
                          member of the Federal Reserve System; or
                              ``(ii) any State savings association;
                        ``(D) the Farm Credit Administration, in the case of
                    a swap dealer, major swap participant, security-based
                    swap dealer, or major security-based swap participant
                    that is an institution chartered under the Farm Credit
                    Act of 1971 (12 U.S.C. 2001 et seq.); and
                        ``(E) the Federal Housing Finance Agency in the case
                    of a swap dealer, major swap participant, security-based
                    swap dealer, or major security-based swap participant
                    that is a regulated entity (as such term is defined in
                    section 1303 of the Federal Housing Enterprises
                    Financial Safety and Soundness Act of 1992).'';
                (18) in paragraph (40) (as redesignated by paragraph (1))--
                        (A) by striking subparagraph (B);
                        (B) by redesignating subparagraphs (C), (D), and (E)
                    as subparagraphs (B), (C), and (F), respectively;
                        (C) in subparagraph (C) (as so redesignated), by
                    striking ``and''; and
                        (D) by inserting after subparagraph (C) (as so
                    redesignated) the following:
                        ``(D) a swap execution facility registered under
                    section 5h;
                        ``(E) a swap data repository registered under
                    section 21; and'';
                (19) by inserting after paragraph (41) (as redesignated by
            paragraph (1)) the following:

    [[Page 124 STAT. 1666]]

                ``(42) Security-based swap.--The term `security-based swap'
            has the meaning given the term in section 3(a) of the Securities
            Exchange Act of 1934 (15 U.S.C. 78c(a)).
                ``(43) Security-based swap dealer.--The term `security-based
            swap dealer' has the meaning given the term in section 3(a) of
            the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)).'';
                (20) in paragraph (46) (as redesignated by paragraph (1)),
            by striking ``subject to section 2(h)(7)'' and inserting
            ``subject to section 2(h)(5)'';
                (21) by inserting after paragraph (46) (as redesignated by
            paragraph (1)) the following:
                ``(47) Swap.--
                        ``(A) In general.--Except as provided in
                    subparagraph (B), the term `swap' means any agreement,
                    contract, or transaction--
                              ``(i) that is a put, call, cap, floor, collar,
                          or similar option of any kind that is for the
                          purchase or sale, or based on the value, of 1 or
                          more interest or other rates, currencies,
                          commodities, securities, instruments of
                          indebtedness, indices, quantitative measures, or
                          other financial or economic interests or property
                          of any kind;
                              ``(ii) that provides for any purchase, sale,
                          payment, or delivery (other than a dividend on an
                          equity security) that is dependent on the
                          occurrence, nonoccurrence, or the extent of the
                          occurrence of an event or contingency associated
                          with a potential financial, economic, or
                          commercial consequence;
                              ``(iii) that provides on an executory basis
                          for the exchange, on a fixed or contingent basis,
                          of 1 or more payments based on the value or level
                          of 1 or more interest or other rates, currencies,
                          commodities, securities, instruments of
                          indebtedness, indices, quantitative measures, or
                          other financial or economic interests or property
                          of any kind, or any interest therein or based on
                          the value thereof, and that transfers, as between
                          the parties to the transaction, in whole or in
                          part, the financial risk associated with a future
                          change in any such value or level without also
                          conveying a current or future direct or indirect
                          ownership interest in an asset (including any
                          enterprise or investment pool) or liability that
                          incorporates the financial risk so transferred,
                          including any agreement, contract, or transaction
                          commonly known as--
                                        ``(I) an interest rate swap;
                                        ``(II) a rate floor;
                                        ``(III) a rate cap;
                                        ``(IV) a rate collar;
                                        ``(V) a cross-currency rate swap;
                                        ``(VI) a basis swap;
                                        ``(VII) a currency swap;
                                        ``(VIII) a foreign exchange swap;
                                        ``(IX) a total return swap;
                                        ``(X) an equity index swap;
                                        ``(XI) an equity swap;
                                        ``(XII) a debt index swap;
                                        ``(XIII) a debt swap;

    [[Page 124 STAT. 1667]]

                                        ``(XIV) a credit spread;
                                        ``(XV) a credit default swap;
                                        ``(XVI) a credit swap;
                                        ``(XVII) a weather swap;
                                        ``(XVIII) an energy swap;
                                        ``(XIX) a metal swap;
                                        ``(XX) an agricultural swap;
                                        ``(XXI) an emissions swap; and
                                        ``(XXII) a commodity swap;
                              ``(iv) that is an agreement, contract, or
                          transaction that is, or in the future becomes,
                          commonly known to the trade as a swap;
                              ``(v) including any security-based swap
                          agreement which meets the definition of `swap
                          agreement' as defined in section 206A of the
                          Gramm-Leach-Bliley Act (15 U.S.C. 78c note) of
                          which a material term is based on the price,
                          yield, value, or volatility of any security or any
                          group or index of securities, or any interest
                          therein; or
                              ``(vi) that is any combination or permutation
                          of, or option on, any agreement, contract, or
                          transaction described in any of clauses (i)
                          through (v).
                        ``(B) Exclusions.--The term `swap' does not
                    include--
                              ``(i) any contract of sale of a commodity for
                          future delivery (or option on such a contract),
                          leverage contract authorized under section 19,
                          security futures product, or agreement, contract,
                          or transaction described in section 2(c)(2)(C)(i)
                          or section 2(c)(2)(D)(i);
                              ``(ii) any sale of a nonfinancial commodity or
                          security for deferred shipment or delivery, so
                          long as the transaction is intended to be
                          physically settled;
                              ``(iii) any put, call, straddle, option, or
                          privilege on any security, certificate of deposit,
                          or group or index of securities, including any
                          interest therein or based on the value thereof,
                          that is subject to--
                                        ``(I) the Securities Act of 1933 (15
                                    U.S.C. 77a et seq.); and
                                        ``(II) the Securities Exchange Act
                                    of 1934 (15 U.S.C. 78a et seq.);
                              ``(iv) any put, call, straddle, option, or
                          privilege relating to a foreign currency entered
                          into on a national securities exchange registered
                          pursuant to section 6(a) of the Securities
                          Exchange Act of 1934 (15 U.S.C. 78f(a));
                              ``(v) any agreement, contract, or transaction
                          providing for the purchase or sale of 1 or more
                          securities on a fixed basis that is subject to--
                                        ``(I) the Securities Act of 1933 (15
                                    U.S.C. 77a et seq.); and
                                        ``(II) the Securities Exchange Act
                                    of 1934 (15 U.S.C. 78a et seq.);
                              ``(vi) any agreement, contract, or transaction
                          providing for the purchase or sale of 1 or more
                          securities on a contingent basis that is subject
                          to the Securities Act of 1933 (15 U.S.C. 77a et
                          seq.) and the Securities Exchange Act of 1934 (15
                          U.S.C. 78a et seq.), unless the agreement,
                          contract, or transaction predicates the

    [[Page 124 STAT. 1668]]

                          purchase or sale on the occurrence of a bona fide
                          contingency that might reasonably be expected to
                          affect or be affected by the creditworthiness of a
                          party other than a party to the agreement,
                          contract, or transaction;
                              ``(vii) any note, bond, or evidence of
                          indebtedness that is a security, as defined in
                          section 2(a)(1) of the Securities Act of 1933 (15
                          U.S.C. 77b(a)(1));
                              ``(viii) any agreement, contract, or
                          transaction that is--
                                        ``(I) based on a security; and
                                        ``(II) entered into directly or
                                    through an underwriter (as defined in
                                    section 2(a)(11) of the Securities Act
                                    of 1933 (15 U.S.C. 77b(a)(11)) by the
                                    issuer of such security for the purposes
                                    of raising capital, unless the
                                    agreement, contract, or transaction is
                                    entered into to manage a risk associated
                                    with capital raising;
                              ``(ix) any agreement, contract, or transaction
                          a counterparty of which is a Federal Reserve bank,
                          the Federal Government, or a Federal agency that
                          is expressly backed by the full faith and credit
                          of the United States; and
                              ``(x) any security-based swap, other than a
                          security-based swap as described in subparagraph
                          (D).
                        ``(C) Rule of construction regarding master
                    agreements.--
                              ``(i) In general.--Except as provided in
                          clause (ii), the term `swap' includes a master
                          agreement that provides for an agreement,
                          contract, or transaction that is a swap under
                          subparagraph (A), together with each supplement to
                          any master agreement, without regard to whether
                          the master agreement contains an agreement,
                          contract, or transaction that is not a swap
                          pursuant to subparagraph (A).
                              ``(ii) Exception.--For purposes of clause (i),
                          the master agreement shall be considered to be a
                          swap only with respect to each agreement,
                          contract, or transaction covered by the master
                          agreement that is a swap pursuant to subparagraph
                          (A).
                        ``(D) Mixed swap.--The term `security-based swap'
                    includes any agreement, contract, or transaction that is
                    as described in section 3(a)(68)(A) of the Securities
                    Exchange Act of 1934 (15 U.S.C. 78c(a)(68)(A)) and also
                    is based on the value of 1 or more interest or other
                    rates, currencies, commodities, instruments of
                    indebtedness, indices, quantitative measures, other
                    financial or economic interest or property of any kind
                    (other than a single security or a narrow-based security
                    index), or the occurrence, non-occurrence, or the extent
                    of the occurrence of an event or contingency associated
                    with a potential financial, economic, or commercial
                    consequence (other than an event described in
                    subparagraph (A)(iii)).
                        ``(E) Treatment of foreign exchange swaps and
                    forwards.--
                              ``(i) In <<NOTE: Determination.>>  general.--
                          Foreign exchange swaps and foreign exchange
                          forwards shall be considered swaps under this
                          paragraph unless the Secretary makes a

    [[Page 124 STAT. 1669]]

                          written determination under section 1b that either
                          foreign exchange swaps or foreign exchange
                          forwards or both--
                                        ``(I) should be not be regulated as
                                    swaps under this Act; and
                                        ``(II) are not structured to evade
                                    the Dodd-Frank Wall Street Reform and
                                    Consumer Protection Act in violation of
                                    any rule promulgated by the Commission
                                    pursuant to section 721(c) of that Act.
                              ``(ii) Congressional notice; effectiveness.--
                          The Secretary shall submit any written
                          determination under clause (i) to the appropriate
                          committees of Congress, including the Committee on
                          Agriculture, Nutrition, and Forestry of the Senate
                          and the Committee on Agriculture of the House of
                          Representatives. Any such written determination by
                          the Secretary shall not be effective until it is
                          submitted to the appropriate committees of
                          Congress.
                              ``(iii) Reporting.--Notwithstanding a written
                          determination by the Secretary under clause (i),
                          all foreign exchange swaps and foreign exchange
                          forwards shall be reported to either a swap data
                          repository, or, if there is no swap data
                          repository that would accept such swaps or
                          forwards, to the Commission pursuant to section 4r
                          within such time period as the Commission may by
                          rule or regulation prescribe.
                              ``(iv) Business standards.--Notwithstanding a
                          written determination by the Secretary pursuant to
                          clause (i), any party to a foreign exchange swap
                          or forward that is a swap dealer or major swap
                          participant shall conform to the business conduct
                          standards contained in section 4s(h).
                              ``(v) Secretary.--For purposes of this
                          subparagraph, the term `Secretary' means the
                          Secretary of the Treasury.
                        ``(F) Exception for certain foreign exchange swaps
                    and forwards.--
                              ``(i) Registered entities.--Any foreign
                          exchange swap and any foreign exchange forward
                          that is listed and traded on or subject to the
                          rules of a designated contract market or a swap
                          execution facility, or that is cleared by a
                          derivatives clearing organization, shall not be
                          exempt from any provision of this Act or
                          amendments made by the Wall Street Transparency
                          and Accountability Act of 2010 prohibiting fraud
                          or manipulation.
                              ``(ii) Retail transactions.--Nothing in
                          subparagraph (E) shall affect, or be construed to
                          affect, the applicability of this Act or the
                          jurisdiction of the Commission with respect to
                          agreements, contracts, or transactions in foreign
                          currency pursuant to section 2(c)(2).
                ``(48) Swap data repository.--The term `swap data
            repository' means any person that collects and maintains
            information or records with respect to transactions or positions
            in, or the terms and conditions of, swaps entered into by third
            parties

    [[Page 124 STAT. 1670]]

            for the purpose of providing a centralized recordkeeping
            facility for swaps.
                ``(49) Swap dealer.--
                        ``(A) In general.--The term `swap dealer' means any
                    person who--
                              ``(i) holds itself out as a dealer in swaps;
                              ``(ii) makes a market in swaps;
                              ``(iii) regularly enters into swaps with
                          counterparties as an ordinary course of business
                          for its own account; or
                              ``(iv) engages in any activity causing the
                          person to be commonly known in the trade as a
                          dealer or market maker in swaps,
                    provided however, in no event shall an insured
                    depository institution be considered to be a swap dealer
                    to the extent it offers to enter into a swap with a
                    customer in connection with originating a loan with that
                    customer.
                        ``(B) Inclusion.--A person may be designated as a
                    swap dealer for a single type or single class or
                    category of swap or activities and considered not to be
                    a swap dealer for other types, classes, or categories of
                    swaps or activities.
                        ``(C) Exception.--The term `swap dealer' does not
                    include a person that enters into swaps for such
                    person's own account, either individually or in a
                    fiduciary capacity, but not as a part of a regular
                    business.
                        ``(D) De minimis exception.--The Commission shall
                    exempt from designation as a swap dealer an entity that
                    engages in a de minimis quantity of swap dealing in
                    connection with transactions with or on behalf of its
                    customers. The Commission shall promulgate regulations
                    to establish factors with respect to the making of this
                    determination to exempt.
                ``(50) Swap execution facility.--The term `swap execution
            facility' means a trading system or platform in which multiple
            participants have the ability to execute or trade swaps by
            accepting bids and offers made by multiple participants in the
            facility or system, through any means of interstate commerce,
            including any trading facility, that--
                        ``(A) facilitates the execution of swaps between
                    persons; and
                        ``(B) is not a designated contract market.''.
                (22) in paragraph (51) (as redesignated by paragraph (1)),
            in subparagraph (A)(i), by striking ``partipants'' and inserting
            ``participants''.

        (b) Authority <<NOTE: 15 USC 8321.>>  To Define Terms.--The
    Commodity Futures Trading Commission may adopt a rule to define--
                (1) the term ``commercial risk''; and
                (2) any other term included in an amendment to the Commodity
            Exchange Act (7 U.S.C. 1 et seq.) made by this subtitle.

        (c) Modification <<NOTE: 15 USC 8321.>>  of Definitions.--To include
    transactions and entities that have been structured to evade this
    subtitle (or an amendment made by this subtitle), the Commodity Futures
    Trading Commission shall adopt a rule to further define the terms
    ``swap'', ``swap dealer'', ``major swap participant'', and ``eligible
    contract participant''.

    [[Page 124 STAT. 1671]]

        (d) Exemptions.--Section 4(c)(1) of the Commodity Exchange Act (7
    U.S.C. 6(c)(1)) is amended by striking ``except that'' and all that
    follows through the period at the end and inserting the following:
    ``except that--
                ``(A) unless the Commission is expressly authorized by any
            provision described in this subparagraph to grant exemptions,
            with respect to amendments made by subtitle A of the Wall Street
            Transparency and Accountability Act of 2010--
                        ``(i) with respect to--
                              ``(I) paragraphs (2), (3), (4), (5), and (7),
                          paragraph (18)(A)(vii)(III), paragraphs (23),
                          (24), (31), (32), (38), (39), (41), (42), (46),
                          (47), (48), and (49) of section 1a, and sections
                          2(a)(13), 2(c)(1)(D), 4a(a), 4a(b), 4d(c), 4d(d),
                          4r, 4s, 5b(a), 5b(b), 5(d), 5(g), 5(h), 5b(c),
                          5b(i), 8e, and 21; and
                              ``(II) section 206(e) of the Gramm-Leach-
                          Bliley Act (Public Law 106-102; 15 U.S.C. 78c
                          note); and
                        ``(ii) in sections 721(c) and 742 of the Dodd-Frank
                    Wall Street Reform and Consumer Protection Act; and
                ``(B) the Commission and the Securities and Exchange
            Commission may by rule, regulation, or order jointly exclude any
            agreement, contract, or transaction from section 2(a)(1)(D)) if
            the Commissions determine that the exemption would be consistent
            with the public interest.''.

        (e) Conforming Amendments.--
                (1) Section 2(c)(2)(B)(i)(II) of the Commodity Exchange Act
            (7 U.S.C. 2(c)(2)(B)(i)(II)) is amended--
                        (A) in item (cc)--
                              (i) in subitem (AA), by striking ``section
                          1a(20)'' and inserting ``section 1a''; and
                              (ii) in subitem (BB), by striking ``section
                          1a(20)'' and inserting ``section 1a''; and
                        (B) in item (dd), by striking ``section
                    1a(12)(A)(ii)'' and inserting ``section 1a(18)(A)(ii)''.
                (2) Section 4m(3) of the Commodity Exchange Act (7 U.S.C.
            6m(3)) is amended by striking ``section 1a(6)'' and inserting
            ``section 1a''.
                (3) Section 4q(a)(1) of the Commodity Exchange Act (7 U.S.C.
            6o-1(a)(1)) is <<NOTE: 7 USC 6q.>>  amended by striking
            ``section 1a(4)'' and inserting ``section 1a(9)''.
                (4) Section 5(e)(1) of the Commodity Exchange Act (7 U.S.C.
            7(e)(1)) is amended by striking ``section 1a(4)'' and inserting
            ``section 1a(9)''.
                (5) Section 5a(b)(2)(F) of the Commodity Exchange Act (7
            U.S.C. 7a(b)(2)(F)) is amended by striking ``section 1a(4)'' and
            inserting ``section 1a(9)''.
                (6) Section 5b(a) of the Commodity Exchange Act (7 U.S.C.
            7a-1(a)) is amended, in the matter preceding paragraph (1), by
            striking ``section 1a(9)'' and inserting ``section 1a''.
                (7) Section 5c(c)(2)(B) of the Commodity Exchange Act (7
            U.S.C. 7a-2(c)(2)(B)) is amended by striking ``section 1a(4)''
            and inserting ``section 1a(9)''.
                (8) Section 6(g)(5)(B)(i) of the Securities Exchange Act of
            1934 (15 U.S.C. 78f(g)(5)(B)(i)) is amended--
                        (A) in subclause (I), by striking ``section
                    1a(12)(B)(ii)'' and inserting ``section 1a(18)(B)(ii)'';
                    and

    [[Page 124 STAT. 1672]]

                        (B) in subclause (II), by striking ``section
                    1a(12)'' and inserting ``section 1a(18)''.
                (9) Section 402 of the Legal Certainty for Bank Products Act
            of 2000 <<NOTE: 7 USC 27.>>  (7 U.S.C. 27 et seq.) is amended--
                        (A) in subsection (a)(7), by striking ``section
                    1a(20)'' and inserting ``section 1a'';
                        (B) in subsection (b)(2), by striking ``section
                    1a(12)'' and inserting ``section 1a''; and
                        (C) in subsection (c), by striking ``section 1a(4)''
                    and inserting ``section 1a''.
                (10) The first section of Public Law 85-839 (7 U.S.C. 13-1)
            is amended in subsection (a), in the first sentence, by
            inserting ``motion picture box office receipts (or any index,
            measure, value, or data related to such receipts) or'' after
            ``sale of''.

        (f) <<NOTE: 7 USC 1a note.>>  Effective Date.--Notwithstanding any
    other provision of this Act, the amendments made by subsection (a)(4)
    shall take effect on June 1, 2010.
    SEC. 722. JURISDICTION.

        (a) Exclusive Jurisdiction.--Section 2(a)(1) of the Commodity
    Exchange Act (7 U.S.C. 2(a)(1)) is amended--
                (1) in subparagraph (A), in the first sentence--
                        (A) by inserting ``the Wall Street Transparency and
                    Accountability Act of 2010 (including an amendment made
                    by that Act) and'' after ``otherwise provided in'';
                        (B) by striking ``(C) and (D)'' and inserting ``(C),
                    (D), and (I)'';
                        (C) by striking ``(c) through (i) of this section''
                    and inserting ``(c) and (f)'';
                        (D) by striking ``contracts of sale'' and inserting
                    ``swaps or contracts of sale''; and
                        (E) by striking ``or derivatives transaction
                    execution facility registered pursuant to section 5 or
                    5a'' and inserting ``pursuant to section 5 or a swap
                    execution facility pursuant to section 5h''; and
                (2) by adding at the end the following:
                        ``(G)(i) Nothing in this paragraph shall limit the
                    jurisdiction conferred on the Securities and Exchange
                    Commission by the Wall Street Transparency and
                    Accountability Act of 2010 with regard to security-based
                    swap agreements as defined pursuant to section 3(a)(78)
                    of the Securities Exchange Act of 1934, and security-
                    based swaps.
                        ``(ii) In addition to the authority of the
                    Securities and Exchange Commission described in clause
                    (i), nothing in this subparagraph shall limit or affect
                    any statutory authority of the Commission with respect
                    to an agreement, contract, or transaction described in
                    clause (i).
                        ``(H) Notwithstanding any other provision of law,
                    the Wall Street Transparency and Accountability Act of
                    2010 shall not apply to, and the Commodity Futures
                    Trading Commission shall have no jurisdiction under such
                    Act (or any amendments to the Commodity Exchange Act
                    made by such Act) with respect to, any security other
                    than a security-based swap.''.

    [[Page 124 STAT. 1673]]

        (b) Regulation of Swaps Under Federal and State Law.--Section 12 of
    the Commodity Exchange Act (7 U.S.C. 16) is amended by adding at the end
    the following:
        ``(h) Regulation of Swaps as Insurance Under State Law.--A swap--
                ``(1) shall not be considered to be insurance; and
                ``(2) may not be regulated as an insurance contract under
            the law of any State.''.

        (c) Agreements, Contracts, and Transactions Traded on an Organized
    Exchange.--Section 2(c)(2)(A) of the Commodity Exchange Act (7 U.S.C.
    2(c)(2)(A)) is amended--
                (1) in clause (i), by striking ``or'' at the end;
                (2) by redesignating clause (ii) as clause (iii); and
                (3) by inserting after clause (i) the following:
                              ``(ii) a swap; or''.

        (d) Applicability.--Section 2 of the Commodity Exchange Act (7
    U.S.C. 2) (as amended by section 723(a)(3)) is amended by adding at the
    end the following:
        ``(i) Applicability.--The provisions of this Act relating to swaps
    that were enacted by the Wall Street Transparency and Accountability Act
    of 2010 (including any rule prescribed or regulation promulgated under
    that Act), shall not apply to activities outside the United States
    unless those activities--
                ``(1) have a direct and significant connection with
            activities in, or effect on, commerce of the United States; or
                ``(2) contravene such rules or regulations as the Commission
            may prescribe or promulgate as are necessary or appropriate to
            prevent the evasion of any provision of this Act that was
            enacted by the Wall Street Transparency and Accountability Act
            of 2010.''.

        (e) Federal Energy Regulatory Commission.--Section 2(a)(1) of the
    Commodity Exchange Act (7 U.S.C. 2(a)(1)) is amended by adding at the
    end the following:
                        ``(I)(i) Nothing in this Act shall limit or affect
                    any statutory authority of the Federal Energy Regulatory
                    Commission or a State regulatory authority (as defined
                    in section 3(21) of the Federal Power Act (16 U.S.C.
                    796(21)) with respect to an agreement, contract, or
                    transaction that is entered into pursuant to a tariff or
                    rate schedule approved by the Federal Energy Regulatory
                    Commission or a State regulatory authority and is--
                              ``(I) not executed, traded, or cleared on a
                          registered entity or trading facility; or
                              ``(II) executed, traded, or cleared on a
                          registered entity or trading facility owned or
                          operated by a regional transmission organization
                          or independent system operator.
                        ``(ii) In addition to the authority of the Federal
                    Energy Regulatory Commission or a State regulatory
                    authority described in clause (i), nothing in this
                    subparagraph shall limit or affect--
                              ``(I) any statutory authority of the
                          Commission with respect to an agreement, contract,
                          or transaction described in clause (i); or
                              ``(II) the jurisdiction of the Commission
                          under subparagraph (A) with respect to an
                          agreement, contract, or transaction that is
                          executed, traded, or cleared

    [[Page 124 STAT. 1674]]

                          on a registered entity or trading facility that is
                          not owned or operated by a regional transmission
                          organization or independent system operator (as
                          defined by sections 3(27) and (28) of the Federal
                          Power Act (16 U.S.C. 796(27), 796(28)).''.

        (f) Public Interest Waiver.--Section 4(c) of the Commodity Exchange
    Act (7 U.S.C. 6(c)) (as amended by section 721(d)) is amended by adding
    at the end the following:
                ``(6) If the Commission determines that the exemption would
            be consistent with the public interest and the purposes of this
            Act, the Commission shall, in accordance with paragraphs (1) and
            (2), exempt from the requirements of this Act an agreement,
            contract, or transaction that is entered into--
                        ``(A) pursuant to a tariff or rate schedule approved
                    or permitted to take effect by the Federal Energy
                    Regulatory Commission;
                        ``(B) pursuant to a tariff or rate schedule
                    establishing rates or charges for, or protocols
                    governing, the sale of electric energy approved or
                    permitted to take effect by the regulatory authority of
                    the State or municipality having jurisdiction to
                    regulate rates and charges for the sale of electric
                    energy within the State or municipality; or
                        ``(C) between entities described in section 201(f)
                    of the Federal Power Act (16 U.S.C. 824(f)).''.

        (g) <<NOTE: 15 USC 8322.>> Authority of FERC.--Nothing in the Wall
    Street Transparency and Accountability Act of 2010 or the amendments to
    the Commodity Exchange Act made by such Act shall limit or affect any
    statutory enforcement authority of the Federal Energy Regulatory
    Commission pursuant to section 222 of the Federal Power Act and section
    4A of the Natural Gas Act that existed prior to the date of enactment of
    the Wall Street Transparency and Accountability Act of 2010.

        (h) Determination.--The Commodity Exchange Act is amended by
    inserting after section 1a (7 U.S.C. 1a) the following:
    ``SEC. 1b. <<NOTE: 7 USC 1b.>>  REQUIREMENTS OF SECRETARY OF THE
                          TREASURY REGARDING EXEMPTION OF FOREIGN
                          EXCHANGE SWAPS AND FOREIGN EXCHANGE FORWARDS
                          FROM DEFINITION OF THE TERM `SWAP'.

        ``(a) Required Considerations.--In determining whether to exempt
    foreign exchange swaps and foreign exchange forwards from the definition
    of the term `swap', the Secretary of the Treasury (referred to in this
    section as the `Secretary') shall consider--
                ``(1) whether the required trading and clearing of foreign
            exchange swaps and foreign exchange forwards would create
            systemic risk, lower transparency, or threaten the financial
            stability of the United States;
                ``(2) whether foreign exchange swaps and foreign exchange
            forwards are already subject to a regulatory scheme that is
            materially comparable to that established by this Act for other
            classes of swaps;
                ``(3) the extent to which bank regulators of participants in
            the foreign exchange market provide adequate supervision,
            including capital and margin requirements;
                ``(4) the extent of adequate payment and settlement systems;
            and

    [[Page 124 STAT. 1675]]

                ``(5) the use of a potential exemption of foreign exchange
            swaps and foreign exchange forwards to evade otherwise
            applicable regulatory requirements.

        ``(b) Determination.--If the Secretary makes a determination to
    exempt foreign exchange swaps and foreign exchange forwards from the
    definition of the term `swap', the Secretary shall submit to the
    appropriate committees of Congress a determination that contains--
                ``(1) an explanation regarding why foreign exchange swaps
            and foreign exchange forwards are qualitatively different from
            other classes of swaps in a way that would make the foreign
            exchange swaps and foreign exchange forwards ill-suited for
            regulation as swaps; and
                ``(2) an identification of the objective differences of
            foreign exchange swaps and foreign exchange forwards with
            respect to standard swaps that warrant an exempted status.

        ``(c) Effect of Determination.--A determination by the Secretary
    under subsection (b) shall not exempt any foreign exchange swaps and
    foreign exchange forwards traded on a designated contract market or swap
    execution facility from any applicable antifraud and antimanipulation
    provision under this title.''.
    SEC. 723. CLEARING.

        (a) Clearing Requirement.--
                (1) In general.--Section 2 of the Commodity Exchange Act (7
            U.S.C. 2) is amended--
                        (A) by striking subsections (d), (e), (g), and (h);
                    and
                        (B) by redesignating subsection (i) as subsection
                    (g).
                (2) Swaps; limitation on participation.--Section 2 of the
            Commodity Exchange Act (7 U.S.C. 2) (as amended by paragraph
            (1)) is amended by inserting after subsection (c) the following:

        ``(d) Swaps.--Nothing in this Act (other than subparagraphs (A),
    (B), (C), (D), (G), and (H) of subsection (a)(1), subsections (f) and
    (g), sections 1a, 2(a)(13), 2(c)(2)(A)(ii), 2(e), 2(h), 4(c), 4a, 4b,
    and 4b-1, subsections (a), (b), and (g) of section 4c, sections 4d, 4e,
    4f, 4g, 4h, 4i, 4j, 4k, 4l, 4m, 4n, 4o, 4p, 4r, 4s, 4t, 5, 5b, 5c, 5e,
    and 5h, subsections (c) and (d) of section 6, sections 6c, 6d, 8, 8a,
    and 9, subsections (e)(2), (f), and (h) of section 12, subsections (a)
    and (b) of section 13, sections 17, 20, 21, and 22(a)(4), and any other
    provision of this Act that is applicable to registered entities or
    Commission registrants) governs or applies to a swap.
        ``(e) Limitation on Participation.--It shall be unlawful for any
    person, other than an eligible contract participant, to enter into a
    swap unless the swap is entered into on, or subject to the rules of, a
    board of trade designated as a contract market under section 5.''.
                (3) Mandatory clearing of swaps.--Section 2 of the Commodity
            Exchange Act (7 U.S.C. 2) is amended by inserting after
            subsection (g) (as redesignated by paragraph (1)(B)) the
            following:

        ``(h) Clearing Requirement.--
                ``(1) In general.--
                        ``(A) Standard for clearing.--It shall be unlawful
                    for any person to engage in a swap unless that person
                    submits such swap for clearing to a derivatives clearing

    [[Page 124 STAT. 1676]]

                    organization that is registered under this Act or a
                    derivatives clearing organization that is exempt from
                    registration under this Act if the swap is required to
                    be cleared.
                        ``(B) Open access.--The rules of a derivatives
                    clearing organization described in subparagraph (A)
                    shall--
                              ``(i) prescribe that all swaps (but not
                          contracts of sale of a commodity for future
                          delivery or options on such contracts) submitted
                          to the derivatives clearing organization with the
                          same terms and conditions are economically
                          equivalent within the derivatives clearing
                          organization and may be offset with each other
                          within the derivatives clearing organization; and
                              ``(ii) provide for non-discriminatory clearing
                          of a swap (but not a contract of sale of a
                          commodity for future delivery or option on such
                          contract) executed bilaterally or on or through
                          the rules of an unaffiliated designated contract
                          market or swap execution facility.
                ``(2) Commission review.--
                        ``(A) Commission-initiated review.--
                              ``(i) The Commission on an ongoing basis shall
                          review each swap, or any group, category, type, or
                          class of swaps to make a determination as to
                          whether the swap or group, category, type, or
                          class of swaps should be required to be cleared.
                              ``(ii) <<NOTE: Public comment. Time period.>>
                          The Commission shall provide at least a 30-day
                          public comment period regarding any determination
                          made under clause (i).
                        ``(B) Swap submissions.--
                              ``(i) <<NOTE: Notice.>>  A derivatives
                          clearing organization shall submit to the
                          Commission each swap, or any group, category,
                          type, or class of swaps that it plans to accept
                          for clearing, and provide notice to its members
                          (in a manner to be determined by the Commission)
                          of the submission.
                              ``(ii) Any swap or group, category, type, or
                          class of swaps listed for clearing by a derivative
                          clearing organization as of the date of enactment
                          of this subsection shall be considered submitted
                          to the Commission.
                              ``(iii) <<NOTE: Public information.>>  The
                          Commission shall--
                                        ``(I) make available to the public
                                    submissions received under clauses (i)
                                    and (ii);
                                        ``(II) review each submission made
                                    under clauses (i) and (ii), and
                                    determine whether the swap, or group,
                                    category, type, or class of swaps
                                    described in the submission is required
                                    to be cleared; and
                                        ``(III) <<NOTE: Public comment. Time
                                    period.>>  provide at least a 30-day
                                    public comment period regarding its
                                    determination as to whether the clearing
                                    requirement under paragraph (1)(A) shall
                                    apply to the submission.
                        ``(C) Deadline.--The Commission shall make its
                    determination under subparagraph (B)(iii) not later than
                    90 days after receiving a submission made under
                    subparagraphs (B)(i) and (B)(ii), unless the submitting
                    derivatives clearing organization agrees to an extension
                    for the time limitation established under this
                    subparagraph.

    [[Page 124 STAT. 1677]]

                        ``(D) Determination.--
                              ``(i) In reviewing a submission made under
                          subparagraph (B), the Commission shall review
                          whether the submission is consistent with section
                          5b(c)(2).
                              ``(ii) In reviewing a swap, group of swaps, or
                          class of swaps pursuant to subparagraph (A) or a
                          submission made under subparagraph (B), the
                          Commission shall take into account the following
                          factors:
                                        ``(I) The existence of significant
                                    outstanding notional exposures, trading
                                    liquidity, and adequate pricing data.
                                        ``(II) The availability of rule
                                    framework, capacity, operational
                                    expertise and resources, and credit
                                    support infrastructure to clear the
                                    contract on terms that are consistent
                                    with the material terms and trading
                                    conventions on which the contract is
                                    then traded.
                                        ``(III) The effect on the mitigation
                                    of systemic risk, taking into account
                                    the size of the market for such contract
                                    and the resources of the derivatives
                                    clearing organization available to clear
                                    the contract.
                                        ``(IV) The effect on competition,
                                    including appropriate fees and charges
                                    applied to clearing.
                                        ``(V) The existence of reasonable
                                    legal certainty in the event of the
                                    insolvency of the relevant derivatives
                                    clearing organization or 1 or more of
                                    its clearing members with regard to the
                                    treatment of customer and swap
                                    counterparty positions, funds, and
                                    property.
                              ``(iii) In making a determination under
                          subparagraph (A) or (B)(iii) that the clearing
                          requirement shall apply, the Commission may
                          require such terms and conditions to the
                          requirement as the Commission determines to be
                          appropriate.
                        ``(E) <<NOTE: Deadline.>>  Rules.--Not later than 1
                    year after the date of the enactment of this subsection,
                    the Commission shall adopt rules for a derivatives
                    clearing organization's submission for review, pursuant
                    to this paragraph, of a swap, or a group, category,
                    type, or class of swaps, that it seeks to accept for
                    clearing. Nothing in this subparagraph limits the
                    Commission from making a determination under
                    subparagraph (B)(iii) for swaps described in
                    subparagraph (B)(ii).
                ``(3) Stay of clearing requirement.--
                        ``(A) In general.--After making a determination
                    pursuant to paragraph (2)(B), the Commission, on
                    application of a counterparty to a swap or on its own
                    initiative, may stay the clearing requirement of
                    paragraph (1) until the Commission completes a review of
                    the terms of the swap (or the group, category, type, or
                    class of swaps) and the clearing arrangement.
                        ``(B) Deadline.--The Commission shall complete a
                    review undertaken pursuant to subparagraph (A) not later
                    than 90 days after issuance of the stay, unless the
                    derivatives clearing organization that clears the swap,
                    or group,

    [[Page 124 STAT. 1678]]

                    category, type, or class of swaps agrees to an extension
                    of the time limitation established under this
                    subparagraph.
                        ``(C) Determination.--Upon completion of the review
                    undertaken pursuant to subparagraph (A), the Commission
                    may--
                              ``(i) determine, unconditionally or subject to
                          such terms and conditions as the Commission
                          determines to be appropriate, that the swap, or
                          group, category, type, or class of swaps must be
                          cleared pursuant to this subsection if it finds
                          that such clearing is consistent with paragraph
                          (2)(D); or
                              ``(ii) determine that the clearing requirement
                          of paragraph (1) shall not apply to the swap, or
                          group, category, type, or class of swaps.
                        ``(D) <<NOTE: Deadline.>>  Rules.--Not later than 1
                    year after the date of the enactment of the Wall Street
                    Transparency and Accountability Act of 2010, the
                    Commission shall adopt rules for reviewing, pursuant to
                    this paragraph, a derivatives clearing organization's
                    clearing of a swap, or a group, category, type, or class
                    of swaps, that it has accepted for clearing.
                ``(4) Prevention of evasion.--
                        ``(A) <<NOTE: Regulations.>>  In general.--The
                    Commission shall prescribe rules under this subsection
                    (and issue interpretations of rules prescribed under
                    this subsection) as determined by the Commission to be
                    necessary to prevent evasions of the mandatory clearing
                    requirements under this Act.
                        ``(B) Duty of commission to investigate and take
                    certain actions.--To the extent the Commission finds
                    that a particular swap, group, category, type, or class
                    of swaps would otherwise be subject to mandatory
                    clearing but no derivatives clearing organization has
                    listed the swap, group, category, type, or class of
                    swaps for clearing, the Commission shall--
                              ``(i) investigate the relevant facts and
                          circumstances;
                              ``(ii) <<NOTE: Deadline. Public
                          information. Reports.>>  within 30 days issue a
                          public report containing the results of the
                          investigation; and
                              ``(iii) take such actions as the Commission
                          determines to be necessary and in the public
                          interest, which may include requiring the
                          retaining of adequate margin or capital by parties
                          to the swap, group, category, type, or class of
                          swaps.
                        ``(C) Effect on authority.--Nothing in this
                    paragraph--
                              ``(i) authorizes the Commission to adopt rules
                          requiring a derivatives clearing organization to
                          list for clearing a swap, group, category, type,
                          or class of swaps if the clearing of the swap,
                          group, category, type, or class of swaps would
                          threaten the financial integrity of the
                          derivatives clearing organization; and
                              ``(ii) affects the authority of the Commission
                          to enforce the open access provisions of paragraph
                          (1)(B) with respect to a swap, group, category,
                          type, or class of swaps that is listed for
                          clearing by a derivatives clearing organization.

    [[Page 124 STAT. 1679]]

                ``(5) Reporting transition rules.--Rules adopted by the
            Commission under this section shall provide for the reporting of
            data, as follows:
                        ``(A) Swaps entered into before the date of the
                    enactment of this subsection shall be reported to a
                    registered swap data repository or the Commission no
                    later than 180 days after the effective date of this
                    subsection.
                        ``(B) Swaps entered into on or after such date of
                    enactment shall be reported to a registered swap data
                    repository or the Commission no later than the later
                    of--
                              ``(i) 90 days after such effective date; or
                              ``(ii) such other time after entering into the
                          swap as the Commission may prescribe by rule or
                          regulation.
                ``(6) Clearing transition rules.--
                        ``(A) Swaps entered into before the date of the
                    enactment of this subsection are exempt from the
                    clearing requirements of this subsection if reported
                    pursuant to paragraph (5)(A).
                        ``(B) Swaps entered into before application of the
                    clearing requirement pursuant to this subsection are
                    exempt from the clearing requirements of this subsection
                    if reported pursuant to paragraph (5)(B).
                ``(7) Exceptions.--
                        ``(A) In general.--The requirements of paragraph
                    (1)(A) shall not apply to a swap if 1 of the
                    counterparties to the swap--
                              ``(i) is not a financial entity;
                              ``(ii) is using swaps to hedge or mitigate
                          commercial risk; and
                              ``(iii) <<NOTE: Notification.>>  notifies the
                          Commission, in a manner set forth by the
                          Commission, how it generally meets its financial
                          obligations associated with entering into non-
                          cleared swaps.
                        ``(B) Option to clear.--The application of the
                    clearing exception in subparagraph (A) is solely at the
                    discretion of the counterparty to the swap that meets
                    the conditions of clauses (i) through (iii) of
                    subparagraph (A).
                        ``(C) Financial entity definition.--
                              ``(i) In general.--For the purposes of this
                          paragraph, the term `financial entity' means--
                                        ``(I) a swap dealer;
                                        ``(II) a security-based swap dealer;
                                        ``(III) a major swap participant;
                                        ``(IV) a major security-based swap
                                    participant;
                                        ``(V) a commodity pool;
                                        ``(VI) a private fund as defined in
                                    section 202(a) of the Investment
                                    Advisers Act of 1940 (15 U.S.C. 80-b-
                                    2(a));
                                        ``(VII) an employee benefit plan as
                                    defined in paragraphs (3) and (32) of
                                    section 3 of the Employee Retirement
                                    Income Security Act of 1974 (29 U.S.C.
                                    1002);
                                        ``(VIII) a person predominantly
                                    engaged in activities that are in the
                                    business of banking, or in activities
                                    that are financial in nature, as defined
                                    in section 4(k) of the Bank Holding
                                    Company Act of 1956.

    [[Page 124 STAT. 1680]]

                              ``(ii) Exclusion.--The Commission shall
                          consider whether to exempt small banks, savings
                          associations, farm credit system institutions, and
                          credit unions, including--
                                        ``(I) depository institutions with
                                    total assets of $10,000,000,000 or less;
                                        ``(II) farm credit system
                                    institutions with total assets of
                                    $10,000,000,000 or less; or
                                        ``(III) credit unions with total
                                    assets of $10,000,000,000 or less.
                              ``(iii) Limitation.--Such definition shall not
                          include an entity whose primary business is
                          providing financing, and uses derivatives for the
                          purpose of hedging underlying commercial risks
                          related to interest rate and foreign currency
                          exposures, 90 percent or more of which arise from
                          financing that facilitates the purchase or lease
                          of products, 90 percent or more of which are
                          manufactured by the parent company or another
                          subsidiary of the parent company.
                        ``(D) Treatment of affiliates.--
                              ``(i) In general.--An affiliate of a person
                          that qualifies for an exception under subparagraph
                          (A) (including affiliate entities predominantly
                          engaged in providing financing for the purchase of
                          the merchandise or manufactured goods of the
                          person) may qualify for the exception only if the
                          affiliate, acting on behalf of the person and as
                          an agent, uses the swap to hedge or mitigate the
                          commercial risk of the person or other affiliate
                          of the person that is not a financial entity.
                              ``(ii) Prohibition relating to certain
                          affiliates.--The exception in clause (i) shall not
                          apply if the affiliate is--
                                        ``(I) a swap dealer;
                                        ``(II) a security-based swap dealer;
                                        ``(III) a major swap participant;
                                        ``(IV) a major security-based swap
                                    participant;
                                        ``(V) an issuer that would be an
                                    investment company, as defined in
                                    section 3 of the Investment Company Act
                                    of 1940 (15 U.S.C. 80a-3), but for
                                    paragraph (1) or (7) of subsection (c)
                                    of that Act (15 U.S.C. 80a-3(c));
                                        ``(VI) a commodity pool; or
                                        ``(VII) a bank holding company with
                                    over $50,000,000,000 in consolidated
                                    assets.
                              ``(iii) Transition rule for affiliates.--
                          An <<NOTE: Exemption. Time period.>>  affiliate,
                          subsidiary, or a wholly owned entity of a person
                          that qualifies for an exception under subparagraph
                          (A) and is predominantly engaged in providing
                          financing for the purchase or lease of merchandise
                          or manufactured goods of the person shall be
                          exempt from the margin requirement described in
                          section 4s(e) and the clearing requirement
                          described in paragraph (1) with regard to swaps
                          entered into to mitigate the risk of the financing
                          activities for not less than a 2-year period
                          beginning on the date of enactment of this clause.
                        ``(E) Election of counterparty.--

    [[Page 124 STAT. 1681]]

                              ``(i) Swaps required to be cleared.--With
                          respect to any swap that is subject to the
                          mandatory clearing requirement under this
                          subsection and entered into by a swap dealer or a
                          major swap participant with a counterparty that is
                          not a swap dealer, major swap participant,
                          security-based swap dealer, or major security-
                          based swap participant, the counterparty shall
                          have the sole right to select the derivatives
                          clearing organization at which the swap will be
                          cleared.
                              ``(ii) Swaps not required to be cleared.--With
                          respect to any swap that is not subject to the
                          mandatory clearing requirement under this
                          subsection and entered into by a swap dealer or a
                          major swap participant with a counterparty that is
                          not a swap dealer, major swap participant,
                          security-based swap dealer, or major security-
                          based swap participant, the counterparty--
                                        ``(I) may elect to require clearing
                                    of the swap; and
                                        ``(II) shall have the sole right to
                                    select the derivatives clearing
                                    organization at which the swap will be
                                    cleared.
                        ``(F) Abuse of exception.--The Commission may
                    prescribe such rules or issue interpretations of the
                    rules as the Commission determines to be necessary to
                    prevent abuse of the exceptions described in this
                    paragraph. The Commission may also request information
                    from those persons claiming the clearing exception as
                    necessary to prevent abuse of the exceptions described
                    in this paragraph.
                ``(8) Trade execution.--
                        ``(A) In general.--With respect to transactions
                    involving swaps subject to the clearing requirement of
                    paragraph (1), counterparties shall--
                              ``(i) execute the transaction on a board of
                          trade designated as a contract market under
                          section 5; or
                              ``(ii) execute the transaction on a swap
                          execution facility registered under 5h or a swap
                          execution facility that is exempt from
                          registration under section 5h(f) of this Act.
                        ``(B) Exception.--The requirements of clauses (i)
                    and (ii) of subparagraph (A) shall not apply if no board
                    of trade or swap execution facility makes the swap
                    available to trade or for swap transactions subject to
                    the clearing exception under paragraph (7).''.

        (b) Commodity Exchange Act.--Section 2 of the Commodity Exchange Act
    (7 U.S.C. 2) is amended by adding at the end the following:
        ``(j)  Committee Approval by Board.--Exemptions from the
    requirements of subsection (h)(1) to clear a swap and subsection (h)(8)
    to execute a swap through a board of trade or swap execution facility
    shall be available to a counterparty that is an issuer of securities
    that are registered under section 12 of the Securities Exchange Act of
    1934 (15 U.S.C. 78l) or that is required to file reports pursuant to
    section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78o)
    only if an appropriate committee of the issuer's board or governing body
    has reviewed and approved its decision to enter into swaps that are
    subject to such exemptions.''.

    [[Page 124 STAT. 1682]]

        (c) <<NOTE: 7 USC 2 note.>>  Grandfather Provisions.--
                (1) Legal certainty for certain transactions in exempt
            commodities.--Not <<NOTE: Deadline.>>  later than 60 days after
            the date of enactment of this Act, a person may submit to the
            Commodity Futures Trading Commission a petition to remain
            subject to section 2(h) of the Commodity Exchange Act (7 U.S.C.
            2(h)) (as in effect on the day before the date of enactment of
            this Act).
                (2) Consideration; authority of commodity futures trading
            commission.--The Commodity Futures Trading Commission--
                        (A) shall consider any petition submitted under
                    subparagraph (A) in a prompt manner; and
                        (B) may allow a person to continue operating subject
                    to section 2(h) of the Commodity Exchange Act (7 U.S.C.
                    2(h)) (as in effect on the day before the date of
                    enactment of this Act) for not longer than a 1-year
                    period.
                (3) Agricultural swaps.--
                        (A) In general.--Except as provided in subparagraph
                    (B), no person shall offer to enter into, enter into, or
                    confirm the execution of, any swap in an agricultural
                    commodity (as defined by the Commodity Futures Trading
                    Commission).
                        (B) <<NOTE: Regulations.>>  Exception.--
                    Notwithstanding subparagraph (A), a person may offer to
                    enter into, enter into, or confirm the execution of, any
                    swap in an agricultural commodity pursuant to section
                    4(c) of the Commodity Exchange Act (7 U.S.C. 6(c)) or
                    any rule, regulation, or order issued thereunder
                    (including any rule, regulation, or order in effect as
                    of the date of enactment of this Act) by the Commodity
                    Futures Trading Commission to allow swaps under such
                    terms and conditions as the Commission shall prescribe.
                (4) Required reporting.--If <<NOTE: Compliance. Records.>>
            the exception described in section 2(h)(8)(B) of the Commodity
            Exchange Act applies, the counterparties shall comply with any
            recordkeeping and transaction reporting requirements that may be
            prescribed by the Commission with respect to swaps subject to
            section 2(h)(8)(B) of the Commodity Exchange Act.
    SEC. 724. SWAPS; SEGREGATION AND BANKRUPTCY TREATMENT.

        (a) Segregation Requirements for Cleared Swaps.--Section 4d of the
    Commodity Exchange Act (7 U.S.C. 6d) (as amended by section 732) is
    amended by adding at the end the following:
        ``(f) Swaps.--
                ``(1) Registration requirement.--It shall be unlawful for
            any person to accept any money, securities, or property (or to
            extend any credit in lieu of money, securities, or property)
            from, for, or on behalf of a swaps customer to margin,
            guarantee, or secure a swap cleared by or through a derivatives
            clearing organization (including money, securities, or property
            accruing to the customer as the result of such a swap), unless
            the person shall have registered under this Act with the
            Commission as a futures commission merchant, and the
            registration shall not have expired nor been suspended nor
            revoked.
                ``(2) Cleared swaps.--

    [[Page 124 STAT. 1683]]

                        ``(A) Segregation required.--A futures commission
                    merchant shall treat and deal with all money,
                    securities, and property of any swaps customer received
                    to margin, guarantee, or secure a swap cleared by or
                    though a derivatives clearing organization (including
                    money, securities, or property accruing to the swaps
                    customer as the result of such a swap) as belonging to
                    the swaps customer.
                        ``(B) Commingling prohibited.--Money, securities,
                    and property of a swaps customer described in
                    subparagraph (A) shall be separately accounted for and
                    shall not be commingled with the funds of the futures
                    commission merchant or be used to margin, secure, or
                    guarantee any trades or contracts of any swaps customer
                    or person other than the person for whom the same are
                    held.
                ``(3) Exceptions.--
                        ``(A) Use of funds.--
                              ``(i) In general.--Notwithstanding paragraph
                          (2), money, securities, and property of swap
                          customers of a futures commission merchant
                          described in paragraph (2) may, for convenience,
                          be commingled and deposited in the same account or
                          accounts with any bank or trust company or with a
                          derivatives clearing organization.
                              ``(ii) Withdrawal.--Notwithstanding paragraph
                          (2), such share of the money, securities, and
                          property described in clause (i) as in the normal
                          course of business shall be necessary to margin,
                          guarantee, secure, transfer, adjust, or settle a
                          cleared swap with a derivatives clearing
                          organization, or with any member of the
                          derivatives clearing organization, may be
                          withdrawn and applied to such purposes, including
                          the payment of commissions, brokerage, interest,
                          taxes, storage, and other charges, lawfully
                          accruing in connection with the cleared swap.
                        ``(B) Commission action.--Notwithstanding paragraph
                    (2), in accordance with such terms and conditions as the
                    Commission may prescribe by rule, regulation, or order,
                    any money, securities, or property of the swaps
                    customers of a futures commission merchant described in
                    paragraph (2) may be commingled and deposited in
                    customer accounts with any other money, securities, or
                    property received by the futures commission merchant and
                    required by the Commission to be separately accounted
                    for and treated and dealt with as belonging to the swaps
                    customer of the futures commission merchant.
                ``(4) Permitted investments.--Money described in paragraph
            (2) may be invested in obligations of the United States, in
            general obligations of any State or of any political subdivision
            of a State, and in obligations fully guaranteed as to principal
            and interest by the United States, or in any other investment
            that the Commission may by rule or regulation prescribe, and
            such investments shall be made in accordance with such rules and
            regulations and subject to such conditions as the Commission may
            prescribe.
                ``(5) Commodity contract.--A swap cleared by or through a
            derivatives clearing organization shall be considered to be a
            commodity contract as such term is defined in section 761

    [[Page 124 STAT. 1684]]

            of title 11, United States Code, with regard to all money,
            securities, and property of any swaps customer received by a
            futures commission merchant or a derivatives clearing
            organization to margin, guarantee, or secure the swap (including
            money, securities, or property accruing to the customer as the
            result of the swap).
                ``(6) Prohibition.--It shall be unlawful for any person,
            including any derivatives clearing organization and any
            depository institution, that has received any money, securities,
            or property for deposit in a separate account or accounts as
            provided in paragraph (2) to hold, dispose of, or use any such
            money, securities, or property as belonging to the depositing
            futures commission merchant or any person other than the swaps
            customer of the futures commission merchant.''.

        (b) Bankruptcy Treatment of Cleared Swaps.--Section 761 of title 11,
    United States Code, is amended--
                (1) in paragraph (4), by striking subparagraph (F) and
            inserting the following:
                        ``(F)(i) any other contract, option, agreement, or
                    transaction that is similar to a contract, option,
                    agreement, or transaction referred to in this paragraph;
                    and
                        ``(ii) with respect to a futures commission merchant
                    or a clearing organization, any other contract, option,
                    agreement, or transaction, in each case, that is cleared
                    by a clearing organization;''; and
                (2) in paragraph (9)(A)(i), by striking ``the commodity
            futures account'' and inserting ``a commodity contract
            account''.

        (c) Segregation Requirements for Uncleared Swaps.--Section 4s of the
    Commodity Exchange Act <<NOTE: 7 USC 6s.>>  (as added by section 731) is
    amended by adding at the end the following:

        ``(l) Segregation Requirements.--
                ``(1) Segregation of assets held as collateral in uncleared
            swap transactions.--
                        ``(A) Notification.--A swap dealer or major swap
                    participant shall be required to notify the counterparty
                    of the swap dealer or major swap participant at the
                    beginning of a swap transaction that the counterparty
                    has the right to require segregation of the funds or
                    other property supplied to margin, guarantee, or secure
                    the obligations of the counterparty.
                        ``(B) Segregation and maintenance of funds.--At the
                    request of a counterparty to a swap that provides funds
                    or other property to a swap dealer or major swap
                    participant to margin, guarantee, or secure the
                    obligations of the counterparty, the swap dealer or
                    major swap participant shall--
                              ``(i) segregate the funds or other property
                          for the benefit of the counterparty; and
                              ``(ii) in accordance with such rules and
                          regulations as the Commission may promulgate,
                          maintain the funds or other property in a
                          segregated account separate from the assets and
                          other interests of the swap dealer or major swap
                          participant.
                ``(2) Applicability.--The requirements described in
            paragraph (1) shall--

    [[Page 124 STAT. 1685]]

                        ``(A) apply only to a swap between a counterparty
                    and a swap dealer or major swap participant that is not
                    submitted for clearing to a derivatives clearing
                    organization; and
                        ``(B)(i) not apply to variation margin payments; or
                        ``(ii) not preclude any commercial arrangement
                    regarding--
                              ``(I) the investment of segregated funds or
                          other property that may only be invested in such
                          investments as the Commission may permit by rule
                          or regulation; and
                              ``(II) the related allocation of gains and
                          losses resulting from any investment of the
                          segregated funds or other property.
                ``(3) Use of independent third-party custodians.--The
            segregated account described in paragraph (1) shall be--
                        ``(A) carried by an independent third-party
                    custodian; and
                        ``(B) designated as a segregated account for and on
                    behalf of the counterparty.
                ``(4) Reporting requirement.--If the counterparty does not
            choose to require segregation of the funds or other property
            supplied to margin, guarantee, or secure the obligations of the
            counterparty, the swap dealer or major swap participant shall
            report to the counterparty of the swap dealer or major swap
            participant on a quarterly basis that the back office procedures
            of the swap dealer or major swap participant relating to margin
            and collateral requirements are in compliance with the agreement
            of the counterparties.''.
    SEC. 725. DERIVATIVES CLEARING ORGANIZATIONS.

        (a) Registration Requirement.--Section 5b of the Commodity Exchange
    Act (7 U.S.C. 7a-1) is amended by striking subsections (a) and (b) and
    inserting the following:
        ``(a) Registration Requirement.--
                ``(1) In general.--Except as provided in paragraph (2), it
            shall be unlawful for a derivatives clearing organization,
            directly or indirectly, to make use of the mails or any means or
            instrumentality of interstate commerce to perform the functions
            of a derivatives clearing organization with respect to--
                        ``(A) <<NOTE: Contracts.>>  a contract of sale of a
                    commodity for future delivery (or an option on the
                    contract of sale) or option on a commodity, in each
                    case, unless the contract or option is--
                              ``(i) excluded from this Act by subsection
                          (a)(1)(C)(i), (c), or (f) of section 2; or
                              ``(ii) a security futures product cleared by a
                          clearing agency registered with the Securities and
                          Exchange Commission under the Securities Exchange
                          Act of 1934 (15 U.S.C. 78a et seq.); or
                        ``(B) a swap.
                ``(2) Exception.--Paragraph (1) shall not apply to a
            derivatives clearing organization that is registered with the
            Commission.

        ``(b) Voluntary Registration.--A person that clears 1 or more
    agreements, contracts, or transactions that are not required to

    [[Page 124 STAT. 1686]]

    be cleared under this Act may register with the Commission as a
    derivatives clearing organization.''.
        (b) Registration for Depository Institutions and Clearing Agencies;
    Exemptions; Compliance Officer; Annual Reports.--Section 5b of the
    Commodity Exchange Act (7 U.S.C. 7a-1) is amended by adding at the end
    the following:
        ``(g) Existing Depository Institutions and Clearing Agencies.--
                ``(1) In general.--A depository institution or clearing
            agency registered with the Securities and Exchange Commission
            under the Securities Exchange Act of 1934 (15 U.S.C. 78a et
            seq.) that is required to be registered as a derivatives
            clearing organization under this section is deemed to be
            registered under this section to the extent that, before the
            date of enactment of this subsection--
                        ``(A) the depository institution cleared swaps as a
                    multilateral clearing organization; or
                        ``(B) the clearing agency cleared swaps.
                ``(2) Conversion of depository institutions.--A depository
            institution to which this subsection applies may, by the vote of
            the shareholders owning not less than 51 percent of the voting
            interests of the depository institution, be converted into a
            State corporation, partnership, limited liability company, or
            similar legal form pursuant to a plan of conversion, if the
            conversion is not in contravention of applicable State law.
                ``(3) Sharing of information.--The Securities and Exchange
            Commission shall make available to the Commission, upon request,
            all information determined to be relevant by the Securities and
            Exchange Commission regarding a clearing agency deemed to be
            registered with the Commission under paragraph (1).

        ``(h) Exemptions.--The Commission may exempt, conditionally or
    unconditionally, a derivatives clearing organization from registration
    under this section for the clearing of swaps if the Commission
    determines that the derivatives clearing organization is subject to
    comparable, comprehensive supervision and regulation by the Securities
    and Exchange Commission or the appropriate government authorities in the
    home country of the organization. Such conditions may include, but are
    not limited to, requiring that the derivatives clearing organization be
    available for inspection by the Commission and make available all
    information requested by the Commission.
        ``(i) Designation of Chief Compliance Officer.--
                ``(1) In general.--Each derivatives clearing organization
            shall designate an individual to serve as a chief compliance
            officer.
                ``(2) Duties.--The chief compliance officer shall--
                        ``(A) report directly to the board or to the senior
                    officer of the derivatives clearing organization;
                        ``(B) review the compliance of the derivatives
                    clearing organization with respect to the core
                    principles described in subsection (c)(2);
                        ``(C) in consultation with the board of the
                    derivatives clearing organization, a body performing a
                    function similar to the board of the derivatives
                    clearing organization, or the senior officer of the
                    derivatives clearing organization, resolve any conflicts
                    of interest that may arise;

    [[Page 124 STAT. 1687]]

                        ``(D) be responsible for administering each policy
                    and procedure that is required to be established
                    pursuant to this section;
                        ``(E) ensure compliance with this Act (including
                    regulations) relating to agreements, contracts, or
                    transactions, including each rule prescribed by the
                    Commission under this section;
                        ``(F) establish procedures for the remediation of
                    noncompliance issues identified by the compliance
                    officer through any--
                              ``(i) compliance office review;
                              ``(ii) look-back;
                              ``(iii) internal or external audit finding;
                              ``(iv) self-reported error; or
                              ``(v) validated complaint; and
                        ``(G) establish and follow appropriate procedures
                    for the handling, management response, remediation,
                    retesting, and closing of noncompliance issues.
                ``(3) Annual reports.--
                        ``(A) In general.--In accordance with rules
                    prescribed by the Commission, the chief compliance
                    officer shall annually prepare and sign a report that
                    contains a description of--
                              ``(i) the compliance of the derivatives
                          clearing organization of the compliance officer
                          with respect to this Act (including regulations);
                          and
                              ``(ii) each policy and procedure of the
                          derivatives clearing organization of the
                          compliance officer (including the code of ethics
                          and conflict of interest policies of the
                          derivatives clearing organization).
                        ``(B) Requirements.--A compliance report under
                    subparagraph (A) shall--
                              ``(i) accompany each appropriate financial
                          report of the derivatives clearing organization
                          that is required to be furnished to the Commission
                          pursuant to this section; and
                              ``(ii) <<NOTE: Certification.>>  include a
                          certification that, under penalty of law, the
                          compliance report is accurate and complete.''.

        (c) Core Principles for Derivatives Clearing Organizations.--Section
    5b(c) of the Commodity Exchange Act (7 U.S.C. 7a-1(c)) is amended by
    striking paragraph (2) and inserting the following:
                ``(2) Core principles for derivatives clearing
            organizations.--
                        ``(A) Compliance.--
                              ``(i) In general.--To be registered and to
                          maintain registration as a derivatives clearing
                          organization, a derivatives clearing organization
                          shall comply with each core principle described in
                          this paragraph and any requirement that the
                          Commission may impose by rule or regulation
                          pursuant to section 8a(5).
                              ``(ii) Discretion of derivatives clearing
                          organization.--Subject to any rule or regulation
                          prescribed by the Commission, a derivatives
                          clearing organization shall have reasonable
                          discretion in establishing the manner by which the
                          derivatives clearing

    [[Page 124 STAT. 1688]]

                          organization complies with each core principle
                          described in this paragraph.
                        ``(B) Financial resources.--
                              ``(i) In general.--Each derivatives clearing
                          organization shall have adequate financial,
                          operational, and managerial resources, as
                          determined by the Commission, to discharge each
                          responsibility of the derivatives clearing
                          organization.
                              ``(ii) Minimum amount of financial
                          resources.--Each derivatives clearing organization
                          shall possess financial resources that, at a
                          minimum, exceed the total amount that would--
                                        ``(I) enable the organization to
                                    meet its financial obligations to its
                                    members and participants notwithstanding
                                    a default by the member or participant
                                    creating the largest financial exposure
                                    for that organization in extreme but
                                    plausible market conditions; and
                                        ``(II) enable the derivatives
                                    clearing organization to cover the
                                    operating costs of the derivatives
                                    clearing organization for a period of 1
                                    year (as calculated on a rolling basis).
                        ``(C) Participant and product eligibility.--
                              ``(i) In general.--Each derivatives clearing
                          organization shall establish--
                                        ``(I) appropriate admission and
                                    continuing eligibility standards
                                    (including sufficient financial
                                    resources and operational capacity to
                                    meet obligations arising from
                                    participation in the derivatives
                                    clearing organization) for members of,
                                    and participants in, the derivatives
                                    clearing organization; and
                                        ``(II) appropriate standards for
                                    determining the eligibility of
                                    agreements, contracts, or transactions
                                    submitted to the derivatives clearing
                                    organization for clearing.
                              ``(ii) Required procedures.--Each derivatives
                          clearing organization shall establish and
                          implement procedures to verify, on an ongoing
                          basis, the compliance of each participation and
                          membership requirement of the derivatives clearing
                          organization.
                              ``(iii) Requirements.--The participation and
                          membership requirements of each derivatives
                          clearing organization shall--
                                        ``(I) be objective;
                                        ``(II) be publicly disclosed; and
                                        ``(III) permit fair and open access.
                        ``(D) Risk management.--
                              ``(i) In general.--Each derivatives clearing
                          organization shall ensure that the derivatives
                          clearing organization possesses the ability to
                          manage the risks associated with discharging the
                          responsibilities of the derivatives clearing
                          organization through the use of appropriate tools
                          and procedures.
                              ``(ii) Measurement of credit exposure.--Each
                          derivatives clearing organization shall--
                                        ``(I) not less than once during each
                                    business day of the derivatives clearing
                                    organization,

    [[Page 124 STAT. 1689]]

                                    measure the credit exposures of the
                                    derivatives clearing organization to
                                    each member and participant of the
                                    derivatives clearing organization; and
                                        ``(II) monitor each exposure
                                    described in subclause (I) periodically
                                    during the business day of the
                                    derivatives clearing organization.
                              ``(iii) Limitation of exposure to potential
                          losses from defaults.--Each derivatives clearing
                          organization, through margin requirements and
                          other risk control mechanisms, shall limit the
                          exposure of the derivatives clearing organization
                          to potential losses from defaults by members and
                          participants of the derivatives clearing
                          organization to ensure that--
                                        ``(I) the operations of the
                                    derivatives clearing organization would
                                    not be disrupted; and
                                        ``(II) nondefaulting members or
                                    participants would not be exposed to
                                    losses that nondefaulting members or
                                    participants cannot anticipate or
                                    control.
                              ``(iv) Margin requirements.--The margin
                          required from each member and participant of a
                          derivatives clearing organization shall be
                          sufficient to cover potential exposures in normal
                          market conditions.
                              ``(v) Requirements regarding models and
                          parameters.--Each model and parameter used in
                          setting margin requirements under clause (iv)
                          shall be--
                                        ``(I) risk-based; and
                                        ``(II) reviewed on a regular basis.
                        ``(E) Settlement procedures.--Each derivatives
                    clearing organization shall--
                              ``(i) complete money settlements on a timely
                          basis (but not less frequently than once each
                          business day);
                              ``(ii) employ money settlement arrangements to
                          eliminate or strictly limit the exposure of the
                          derivatives clearing organization to settlement
                          bank risks (including credit and liquidity risks
                          from the use of banks to effect money
                          settlements);
                              ``(iii) ensure that money settlements are
                          final when effected;
                              ``(iv) maintain an accurate record of the flow
                          of funds associated with each money settlement;
                              ``(v) possess the ability to comply with each
                          term and condition of any permitted netting or
                          offset arrangement with any other clearing
                          organization;
                              ``(vi) regarding physical settlements,
                          establish rules that clearly state each obligation
                          of the derivatives clearing organization with
                          respect to physical deliveries; and
                              ``(vii) ensure that each risk arising from an
                          obligation described in clause (vi) is identified
                          and managed.
                        ``(F) Treatment of funds.--
                              ``(i) Required standards and procedures.--Each
                          derivatives clearing organization shall establish
                          standards and procedures that are designed to
                          protect and ensure the safety of member and
                          participant funds and assets.

    [[Page 124 STAT. 1690]]

                              ``(ii) Holding of funds and assets.--Each
                          derivatives clearing organization shall hold
                          member and participant funds and assets in a
                          manner by which to minimize the risk of loss or of
                          delay in the access by the derivatives clearing
                          organization to the assets and funds.
                              ``(iii) Permissible investments.--Funds and
                          assets invested by a derivatives clearing
                          organization shall be held in instruments with
                          minimal credit, market, and liquidity risks.
                        ``(G) Default rules and procedures.--
                              ``(i) In general.--Each derivatives clearing
                          organization shall have rules and procedures
                          designed to allow for the efficient, fair, and
                          safe management of events during which members or
                          participants--
                                        ``(I) become insolvent; or
                                        ``(II) otherwise default on the
                                    obligations of the members or
                                    participants to the derivatives clearing
                                    organization.
                              ``(ii) Default procedures.--Each derivatives
                          clearing organization shall--
                                        ``(I) clearly state the default
                                    procedures of the derivatives clearing
                                    organization;
                                        ``(II) <<NOTE: Public
                                    information.>>  make publicly available
                                    the default rules of the derivatives
                                    clearing organization; and
                                        ``(III) ensure that the derivatives
                                    clearing organization may take timely
                                    action--
                                                ``(aa) to contain losses and
                                            liquidity pressures; and
                                                ``(bb) to continue meeting
                                            each obligation of the
                                            derivatives clearing
                                            organization.
                        ``(H) Rule enforcement.--Each derivatives clearing
                    organization shall--
                              ``(i) maintain adequate arrangements and
                          resources for--
                                        ``(I) the effective monitoring and
                                    enforcement of compliance with the rules
                                    of the derivatives clearing
                                    organization; and
                                        ``(II) the resolution of disputes;
                              ``(ii) have the authority and ability to
                          discipline, limit, suspend, or terminate the
                          activities of a member or participant due to a
                          violation by the member or participant of any rule
                          of the derivatives clearing organization; and
                              ``(iii) <<NOTE: Reports.>>  report to the
                          Commission regarding rule enforcement activities
                          and sanctions imposed against members and
                          participants as provided in clause (ii).
                        ``(I) System safeguards.--Each derivatives clearing
                    organization shall--
                              ``(i) establish and maintain a program of risk
                          analysis and oversight to identify and minimize
                          sources of operational risk through the
                          development of appropriate controls and
                          procedures, and automated systems, that are
                          reliable, secure, and have adequate scalable
                          capacity;

    [[Page 124 STAT. 1691]]

                              ``(ii) <<NOTE: Procedures.>>  establish and
                          maintain emergency procedures, backup facilities,
                          and a plan for disaster recovery that allows for--
                                        ``(I) the timely recovery and
                                    resumption of operations of the
                                    derivatives clearing organization; and
                                        ``(II) the fulfillment of each
                                    obligation and responsibility of the
                                    derivatives clearing organization; and
                              ``(iii) <<NOTE: Tests.>>  periodically conduct
                          tests to verify that the backup resources of the
                          derivatives clearing organization are sufficient
                          to ensure daily processing, clearing, and
                          settlement.
                        ``(J) Reporting.--Each derivatives clearing
                    organization shall provide to the Commission all
                    information that the Commission determines to be
                    necessary to conduct oversight of the derivatives
                    clearing organization.
                        ``(K) Recordkeeping.--Each derivatives clearing
                    organization shall maintain records of all activities
                    related to the business of the derivatives clearing
                    organization as a derivatives clearing organization--
                              ``(i) in a form and manner that is acceptable
                          to the Commission; and
                              ``(ii) <<NOTE: Time period.>>  for a period of
                          not less than 5 years.
                        ``(L) Public information.--
                              ``(i) In general.--Each derivatives clearing
                          organization shall provide to market participants
                          sufficient information to enable the market
                          participants to identify and evaluate accurately
                          the risks and costs associated with using the
                          services of the derivatives clearing organization.
                              ``(ii) Availability of information.--Each
                          derivatives clearing organization shall make
                          information concerning the rules and operating and
                          default procedures governing the clearing and
                          settlement systems of the derivatives clearing
                          organization available to market participants.
                              ``(iii) Public disclosure.--Each derivatives
                          clearing organization shall disclose publicly and
                          to the Commission information concerning--
                                        ``(I) the terms and conditions of
                                    each contract, agreement, and
                                    transaction cleared and settled by the
                                    derivatives clearing organization;
                                        ``(II) each clearing and other fee
                                    that the derivatives clearing
                                    organization charges the members and
                                    participants of the derivatives clearing
                                    organization;
                                        ``(III) the margin-setting
                                    methodology, and the size and
                                    composition, of the financial resource
                                    package of the derivatives clearing
                                    organization;
                                        ``(IV) daily settlement prices,
                                    volume, and open interest for each
                                    contract settled or cleared by the
                                    derivatives clearing organization; and
                                        ``(V) any other matter relevant to
                                    participation in the settlement and
                                    clearing activities of the derivatives
                                    clearing organization.

    [[Page 124 STAT. 1692]]

                        ``(M) Information-sharing.--Each derivatives
                    clearing organization shall--
                              ``(i) <<NOTE: Contracts.>>  enter into, and
                          abide by the terms of, each appropriate and
                          applicable domestic and international information-
                          sharing agreement; and
                              ``(ii) use relevant information obtained from
                          each agreement described in clause (i) in carrying
                          out the risk management program of the derivatives
                          clearing organization.
                        ``(N) Antitrust considerations.--Unless necessary or
                    appropriate to achieve the purposes of this Act, a
                    derivatives clearing organization shall not--
                              ``(i) adopt any rule or take any action that
                          results in any unreasonable restraint of trade; or
                              ``(ii) impose any material anticompetitive
                          burden.
                        ``(O) Governance fitness standards.--
                              ``(i) Governance arrangements.--Each
                          derivatives clearing organization shall establish
                          governance arrangements that are transparent--
                                        ``(I) to fulfill public interest
                                    requirements; and
                                        ``(II) to permit the consideration
                                    of the views of owners and participants.
                              ``(ii) Fitness standards.--Each derivatives
                          clearing organization shall establish and enforce
                          appropriate fitness standards for--
                                        ``(I) directors;
                                        ``(II) members of any disciplinary
                                    committee;
                                        ``(III) members of the derivatives
                                    clearing organization;
                                        ``(IV) any other individual or
                                    entity with direct access to the
                                    settlement or clearing activities of the
                                    derivatives clearing organization; and
                                        ``(V) any party affiliated with any
                                    individual or entity described in this
                                    clause.
                        ``(P) Conflicts of interest.--Each derivatives
                    clearing organization shall--
                              ``(i) <<NOTE: Regulations.>>  establish and
                          enforce rules to minimize conflicts of interest in
                          the decision-making process of the derivatives
                          clearing organization; and
                              ``(ii) establish a process for resolving
                          conflicts of interest described in clause (i).
                        ``(Q) Composition of governing boards.--Each
                    derivatives clearing organization shall ensure that the
                    composition of the governing board or committee of the
                    derivatives clearing organization includes market
                    participants.
                        ``(R) Legal risk.--Each derivatives clearing
                    organization shall have a well-founded, transparent, and
                    enforceable legal framework for each aspect of the
                    activities of the derivatives clearing organization.''.

        (d) <<NOTE: Regulations. 7 USC 7a-1 note.>>  Conflicts of
    Interest.--The Commodity Futures Trading Commission shall adopt rules
    mitigating conflicts of interest in connection with the conduct of
    business by a swap dealer or a major swap participant with a derivatives
    clearing organization, board of trade, or a swap execution facility that
    clears or trades swaps in which the swap dealer or major swap
    participant has a material debt or material equity investment.

    [[Page 124 STAT. 1693]]

        (e) Reporting Requirements.--Section 5b of the Commodity Exchange
    Act (7 U.S.C. 7a-1) (as amended by subsection (b)) is amended by adding
    at the end the following:
        ``(k) Reporting Requirements.--
                ``(1) Duty of derivatives clearing organizations.--Each
            derivatives clearing organization that clears swaps shall
            provide to the Commission all information that is determined by
            the Commission to be necessary to perform each responsibility of
            the Commission under this Act.
                ``(2) Data collection and maintenance requirements.--The
            Commission shall adopt data collection and maintenance
            requirements for swaps cleared by derivatives clearing
            organizations that are comparable to the corresponding
            requirements for--
                        ``(A) swaps data reported to swap data repositories;
                    and
                        ``(B) swaps traded on swap execution facilities.
                ``(3) Reports on security-based swap agreements to be shared
            with the securities and exchange commission.--
                        ``(A) In general.--A derivatives clearing
                    organization that clears security-based swap agreements
                    (as defined in section 1a(47)(A)(v)) shall, upon
                    request, open to inspection and examination to the
                    Securities and Exchange Commission all books and records
                    relating to such security-based swap agreements,
                    consistent with the confidentiality and disclosure
                    requirements of section 8.
                        ``(B) Jurisdiction.--Nothing in this paragraph shall
                    affect the exclusive jurisdiction of the Commission to
                    prescribe recordkeeping and reporting requirements for a
                    derivatives clearing organization that is registered
                    with the Commission.
                ``(4) Information sharing.--Subject to section 8, and upon
            request, the Commission shall share information collected under
            paragraph (2) with--
                        ``(A) the Board;
                        ``(B) the Securities and Exchange Commission;
                        ``(C) each appropriate prudential regulator;
                        ``(D) the Financial Stability Oversight Council;
                        ``(E) the Department of Justice; and
                        ``(F) any other person that the Commission
                    determines to be appropriate, including--
                              ``(i) foreign financial supervisors (including
                          foreign futures authorities);
                              ``(ii) foreign central banks; and
                              ``(iii) foreign ministries.
                ``(5) Confidentiality and indemnification agreement.--Before
            the Commission may share information with any entity described
            in paragraph (4)--
                        ``(A) the Commission shall receive a written
                    agreement from each entity stating that the entity shall
                    abide by the confidentiality requirements described in
                    section 8 relating to the information on swap
                    transactions that is provided; and
                        ``(B) each entity shall agree to indemnify the
                    Commission for any expenses arising from litigation
                    relating to the information provided under section 8.

    [[Page 124 STAT. 1694]]

                ``(6) Public information.--Each derivatives clearing
            organization that clears swaps shall provide to the Commission
            (including any designee of the Commission) information under
            paragraph (2) in such form and at such frequency as is required
            by the Commission to comply with the public reporting
            requirements contained in section 2(a)(13).''.

        (f) Public Disclosure.--Section 8(e) of the Commodity Exchange Act
    (7 U.S.C. 12(e)) is amended in the last sentence--
                (1) by inserting ``, central bank and ministries,'' after
            ``department'' each place it appears; and
                (2) by striking ``. is a party.'' and inserting ``, is a
            party.''.

        (g) Legal Certainty for Identified Banking Products.--
                (1) Repeals.--The Legal Certainty for Bank Products Act of
            2000 (7 U.S.C. 27 et seq.) is amended--
                        (A) by striking sections 404 and 407 (7 U.S.C. 27b,
                    27e);
                        (B) in section 402 (7 U.S.C. 27), by striking
                    subsection (d); and
                        (C) in section 408 (7 U.S.C. 27f)--
                              (i) in subsection (c)--
                                        (I) by striking ``in the case'' and
                                    all that follows through ``a hybrid''
                                    and inserting ``in the case of a
                                    hybrid'';
                                        (II) by striking ``; or'' and
                                    inserting a period; and
                                        (III) by striking paragraph (2);
                              (ii) by striking subsection (b); and
                              (iii) by redesignating subsection (c) as
                          subsection (b).
                (2) Legal certainty for bank products act of 2000.--Section
            403 of the Legal Certainty for Bank Products Act of 2000 (7
            U.S.C. 27a) is amended to read as follows:
    ``SEC. 403. EXCLUSION OF IDENTIFIED BANKING PRODUCT.

        ``(a) Exclusion.--Except as provided in subsection (b) or (c)--
                ``(1) the Commodity Exchange Act (7 U.S.C. 1 et seq.) shall
            not apply to, and the Commodity Futures Trading Commission shall
            not exercise regulatory authority under the Commodity Exchange
            Act (7 U.S.C. 1 et seq.) with respect to, an identified banking
            product; and
                ``(2) the definitions of `security-based swap' in section
            3(a)(68) of the Securities Exchange Act of 1934 and `security-
            based swap agreement' in section 1a(47)(A)(v) of the Commodity
            Exchange Act and section 3(a)(78) of the Securities Exchange Act
            of 1934 do not include any identified bank product.

        ``(b) Exception.--An appropriate Federal banking agency may except
    an identified banking product of a bank under its regulatory
    jurisdiction from the exclusion in subsection (a) if the agency
    determines, in consultation with the Commodity Futures Trading
    Commission and the Securities and Exchange Commission, that the
    product--
                ``(1) would meet the definition of a `swap' under section
            1a(47) of the Commodity Exchange Act (7 U.S.C. 1a) or a
            `security-based swap' under that section 3(a)(68) of the
            Securities Exchange Act of 1934; and
                ``(2) has become known to the trade as a swap or security-
            based swap, or otherwise has been structured as an identified

    [[Page 124 STAT. 1695]]

            banking product for the purpose of evading the provisions of the
            Commodity Exchange Act (7 U.S.C. 1 et seq.), the Securities Act
            of 1933 (15 U.S.C. 77a et seq.), or the Securities Exchange Act
            of 1934 (15 U.S.C. 78a et seq.).

        ``(c) Exception.--The exclusions in subsection (a) shall not apply
    to an identified bank product that--
                ``(1) is a product of a bank that is not under the
            regulatory jurisdiction of an appropriate Federal banking
            agency;
                ``(2) meets the definition of swap in section 1a(47) of the
            Commodity Exchange Act or security-based swap in section
            3(a)(68) of the Securities Exchange Act of 1934; and
                ``(3) has become known to the trade as a swap or security-
            based swap, or otherwise has been structured as an identified
            banking product for the purpose of evading the provisions of the
            Commodity Exchange Act (7 U.S.C. 1 et seq.), the Securities Act
            of 1933 (15 U.S.C. 77a et seq.), or the Securities Exchange Act
            of 1934 (15 U.S.C. 78a et seq.).''.

        (h) Reducing Clearing Systemic Risk.--Section 5b(f)(1) of the
    Commodity Exchange Act (7 U.S.C. 7a-1(F)(i)) is amended by adding at the
    end the following: ``In order to minimize systemic risk, under no
    circumstances shall a derivatives clearing organization be compelled to
    accept the counterparty credit risk of another clearing organization.''.
    SEC. 726. <<NOTE: 15 USC 8323.>>  RULEMAKING ON CONFLICT OF
                            INTEREST.

        (a) In General.--In <<NOTE: Deadline.>>  order to mitigate conflicts
    of interest, not later than 180 days after the date of enactment of the
    Wall Street Transparency and Accountability Act of 2010, the Commodity
    Futures Trading Commission shall adopt rules which may include numerical
    limits on the control of, or the voting rights with respect to, any
    derivatives clearing organization that clears swaps, or swap execution
    facility or board of trade designated as a contract market that posts
    swaps or makes swaps available for trading, by a bank holding company
    (as defined in section 2 of the Bank Holding Company Act of 1956 (12
    U.S.C. 1841)) with total consolidated assets of $50,000,000,000 or more,
    a nonbank financial company (as defined in section 102) supervised by
    the Board, an affiliate of such a bank holding company or nonbank
    financial company, a swap dealer, major swap participant, or associated
    person of a swap dealer or major swap participant.

        (b) Purposes.--The Commission shall adopt rules if it determines,
    after the review described in subsection (a), that such rules are
    necessary or appropriate to improve the governance of, or to mitigate
    systemic risk, promote competition, or mitigate conflicts of interest in
    connection with a swap dealer or major swap participant's conduct of
    business with, a derivatives clearing organization, contract market, or
    swap execution facility that clears or posts swaps or makes swaps
    available for trading and in which such swap dealer or major swap
    participant has a material debt or equity investment.
        (c) Considerations.--In adopting rules pursuant to this section, the
    Commodity Futures Trading Commission shall consider any conflicts of
    interest arising from the amount of equity owned by a single investor,
    the ability to vote, cause the vote of, or withhold votes entitled to be
    cast on any matters by the holders of the ownership interest, and the
    governance arrangements of any derivatives clearing organization that
    clears swaps, or swap

    [[Page 124 STAT. 1696]]

    execution facility or board of trade designated as a contract market
    that posts swaps or makes swaps available for trading.
    SEC. 727. PUBLIC REPORTING OF SWAP TRANSACTION DATA.

        Section 2(a) of the Commodity Exchange Act (7 U.S.C. 2(a)) is
    amended by adding at the end the following:
                ``(13) Public availability of swap transaction data.--
                        ``(A) Definition of real-time public reporting.--In
                    this paragraph, the term `real-time public reporting'
                    means to report data relating to a swap transaction,
                    including price and volume, as soon as technologically
                    practicable after the time at which the swap transaction
                    has been executed.
                        ``(B) Purpose.--The purpose of this section is to
                    authorize the Commission to make swap transaction and
                    pricing data available to the public in such form and at
                    such times as the Commission determines appropriate to
                    enhance price discovery.
                        ``(C) General rule.--The Commission is authorized
                    and required to provide by rule for the public
                    availability of swap transaction and pricing data as
                    follows:
                              ``(i) With respect to those swaps that are
                          subject to the mandatory clearing requirement
                          described in subsection (h)(1) (including those
                          swaps that are excepted from the requirement
                          pursuant to subsection (h)(7)), the Commission
                          shall require real-time public reporting for such
                          transactions.
                              ``(ii) With respect to those swaps that are
                          not subject to the mandatory clearing requirement
                          described in subsection (h)(1), but are cleared at
                          a registered derivatives clearing organization,
                          the Commission shall require real-time public
                          reporting for such transactions.
                              ``(iii) With respect to swaps that are not
                          cleared at a registered derivatives clearing
                          organization and which are reported to a swap data
                          repository or the Commission under subsection
                          (h)(6), the Commission shall require real-time
                          public reporting for such transactions, in a
                          manner that does not disclose the business
                          transactions and market positions of any person.
                              ``(iv) With respect to swaps that are
                          determined to be required to be cleared under
                          subsection (h)(2) but are not cleared, the
                          Commission shall require real-time public
                          reporting for such transactions.
                        ``(D) Registered entities and public reporting.--The
                    Commission may require registered entities to publicly
                    disseminate the swap transaction and pricing data
                    required to be reported under this paragraph.
                        ``(E) Rulemaking required.--With respect to the rule
                    providing for the public availability of transaction and
                    pricing data for swaps described in clauses (i) and (ii)
                    of subparagraph (C), the rule promulgated by the
                    Commission shall contain provisions--
                              ``(i) to ensure such information does not
                          identify the participants;

    [[Page 124 STAT. 1697]]

                              ``(ii) <<NOTE: Criteria.>> to specify the
                          criteria for determining what constitutes a large
                          notional swap transaction (block trade) for
                          particular markets and contracts;
                              ``(iii) to specify the appropriate time delay
                          for reporting large notional swap transactions
                          (block trades) to the public; and
                              ``(iv) that take into account whether the
                          public disclosure will materially reduce market
                          liquidity.
                        ``(F) Timeliness of reporting.--Parties to a swap
                    (including agents of the parties to a swap) shall be
                    responsible for reporting swap transaction information
                    to the appropriate registered entity in a timely manner
                    as may be prescribed by the Commission.
                        ``(G) Reporting of swaps to registered swap data
                    repositories.--Each swap (whether cleared or uncleared)
                    shall be reported to a registered swap data repository.
                ``(14) Semiannual and annual public reporting of aggregate
            swap data.--
                        ``(A) In general.--In accordance with subparagraph
                    (B), the Commission shall issue a written report on a
                    semiannual and annual basis to make available to the
                    public information relating to--
                              ``(i) the trading and clearing in the major
                          swap categories; and
                              ``(ii) the market participants and
                          developments in new products.
                        ``(B) Use; consultation.--In preparing a report
                    under subparagraph (A), the Commission shall--
                              ``(i) use information from swap data
                          repositories and derivatives clearing
                          organizations; and
                              ``(ii) consult with the Office of the
                          Comptroller of the Currency, the Bank for
                          International Settlements, and such other
                          regulatory bodies as may be necessary.
                        ``(C) Authority of the commission.--The Commission
                    may, by rule, regulation, or order, delegate the public
                    reporting responsibilities of the Commission under this
                    paragraph in accordance with such terms and conditions
                    as the Commission determines to be appropriate and in
                    the public interest.''.
    SEC. 728. SWAP DATA REPOSITORIES.

        The Commodity Exchange Act is amended by inserting after section 20
    (7 U.S.C. 24) the following:
    ``SEC. 21. <<NOTE: 7 USC 24a.>>  SWAP DATA REPOSITORIES.

        ``(a) Registration Requirement.--
                ``(1) Requirement; authority of derivatives clearing
            organization.--
                        ``(A) In general.--It shall be unlawful for any
                    person, unless registered with the Commission, directly
                    or indirectly to make use of the mails or any means or
                    instrumentality of interstate commerce to perform the
                    functions of a swap data repository.
                        ``(B) Registration of derivatives clearing
                    organizations.--A derivatives clearing organization may
                    register as a swap data repository.

    [[Page 124 STAT. 1698]]

                ``(2) Inspection and examination.--Each registered swap data
            repository shall be subject to inspection and examination by any
            representative of the Commission.
                ``(3) Compliance with core principles.--
                        ``(A) In general.--To be registered, and maintain
                    registration, as a swap data repository, the swap data
                    repository shall comply with--
                              ``(i) the requirements and core principles
                          described in this section; and
                              ``(ii) any requirement that the Commission may
                          impose by rule or regulation pursuant to section
                          8a(5).
                        ``(B) Reasonable discretion of swap data
                    repository.--Unless otherwise determined by the
                    Commission by rule or regulation, a swap data repository
                    described in subparagraph (A) shall have reasonable
                    discretion in establishing the manner in which the swap
                    data repository complies with the core principles
                    described in this section.

        ``(b) Standard Setting.--
                ``(1) Data identification.--
                        ``(A) In general.--In accordance with subparagraph
                    (B), the Commission shall prescribe standards that
                    specify the data elements for each swap that shall be
                    collected and maintained by each registered swap data
                    repository.
                        ``(B) Requirement.--In carrying out subparagraph
                    (A), the Commission shall prescribe consistent data
                    element standards applicable to registered entities and
                    reporting counterparties.
                ``(2) Data collection and maintenance.--The Commission shall
            prescribe data collection and data maintenance standards for
            swap data repositories.
                ``(3) Comparability.--The standards prescribed by the
            Commission under this subsection shall be comparable to the data
            standards imposed by the Commission on derivatives clearing
            organizations in connection with their clearing of swaps.

        ``(c) Duties.--A swap data repository shall--
                ``(1) accept data prescribed by the Commission for each swap
            under subsection (b);
                ``(2) confirm with both counterparties to the swap the
            accuracy of the data that was submitted;
                ``(3) maintain the data described in paragraph (1) in such
            form, in such manner, and for such period as may be required by
            the Commission;
                ``(4)(A) provide direct electronic access to the Commission
            (or any designee of the Commission, including another registered
            entity); and
                ``(B) provide the information described in paragraph (1) in
            such form and at such frequency as the Commission may require to
            comply with the public reporting requirements contained in
            section 2(a)(13);
                ``(5) at the direction of the Commission, establish
            automated systems for monitoring, screening, and analyzing swap
            data, including compliance and frequency of end user clearing
            exemption claims by individual and affiliated entities;
                ``(6) maintain the privacy of any and all swap transaction
            information that the swap data repository receives from a swap
            dealer, counterparty, or any other registered entity; and

    [[Page 124 STAT. 1699]]

                ``(7) on a confidential basis pursuant to section 8, upon
            request, and after notifying the Commission of the request, make
            available all data obtained by the swap data repository,
            including individual counterparty trade and position data, to--
                        ``(A) each appropriate prudential regulator;
                        ``(B) the Financial Stability Oversight Council;
                        ``(C) the Securities and Exchange Commission;
                        ``(D) the Department of Justice; and
                        ``(E) any other person that the Commission
                    determines to be appropriate, including--
                              ``(i) foreign financial supervisors (including
                          foreign futures authorities);
                              ``(ii) foreign central banks; and
                              ``(iii) foreign ministries; and
                ``(8) establish and maintain emergency procedures, backup
            facilities, and a plan for disaster recovery that allows for the
            timely recovery and resumption of operations and the fulfillment
            of the responsibilities and obligations of the organization.

        ``(d) Confidentiality and Indemnification Agreement.--Before the
    swap data repository may share information with any entity described in
    subsection (c)(7)--
                ``(1) the swap data repository shall receive a written
            agreement from each entity stating that the entity shall abide
            by the confidentiality requirements described in section 8
            relating to the information on swap transactions that is
            provided; and
                ``(2) each entity shall agree to indemnify the swap data
            repository and the Commission for any expenses arising from
            litigation relating to the information provided under section 8.

        ``(e) Designation of Chief Compliance Officer.--
                ``(1) In general.--Each swap data repository shall designate
            an individual to serve as a chief compliance officer.
                ``(2) Duties.--The chief compliance officer shall--
                        ``(A) report directly to the board or to the senior
                    officer of the swap data repository;
                        ``(B) review the compliance of the swap data
                    repository with respect to the requirements and core
                    principles described in this section;
                        ``(C) in consultation with the board of the swap
                    data repository, a body performing a function similar to
                    the board of the swap data repository, or the senior
                    officer of the swap data repository, resolve any
                    conflicts of interest that may arise;
                        ``(D) be responsible for administering each policy
                    and procedure that is required to be established
                    pursuant to this section;
                        ``(E) ensure compliance with this Act (including
                    regulations) relating to agreements, contracts, or
                    transactions, including each rule prescribed by the
                    Commission under this section;
                        ``(F) establish procedures for the remediation of
                    noncompliance issues identified by the chief compliance
                    officer through any--
                              ``(i) compliance office review;
                              ``(ii) look-back;
                              ``(iii) internal or external audit finding;
                              ``(iv) self-reported error; or

    [[Page 124 STAT. 1700]]

                              ``(v) validated complaint; and
                        ``(G) establish and follow appropriate procedures
                    for the handling, management response, remediation,
                    retesting, and closing of noncompliance issues.
                ``(3) Annual reports.--
                        ``(A) In general.--In accordance with rules
                    prescribed by the Commission, the chief compliance
                    officer shall annually prepare and sign a report that
                    contains a description of--
                              ``(i) the compliance of the swap data
                          repository of the chief compliance officer with
                          respect to this Act (including regulations); and
                              ``(ii) each policy and procedure of the swap
                          data repository of the chief compliance officer
                          (including the code of ethics and conflict of
                          interest policies of the swap data repository).
                        ``(B) Requirements.--A compliance report under
                    subparagraph (A) shall--
                              ``(i) accompany each appropriate financial
                          report of the swap data repository that is
                          required to be furnished to the Commission
                          pursuant to this section; and
                              ``(ii) <<NOTE: Certification.>>  include a
                          certification that, under penalty of law, the
                          compliance report is accurate and complete.

        ``(f) Core Principles Applicable To Swap Data Repositories.--
                ``(1) Antitrust considerations.--Unless necessary or
            appropriate to achieve the purposes of this Act, a swap data
            repository shall not--
                        ``(A) adopt any rule or take any action that results
                    in any unreasonable restraint of trade; or
                        ``(B) impose any material anticompetitive burden on
                    the trading, clearing, or reporting of transactions.
                ``(2) Governance arrangements.--Each swap data repository
            shall establish governance arrangements that are transparent--
                        ``(A) to fulfill public interest requirements; and
                        ``(B) to support the objectives of the Federal
                    Government, owners, and participants.
                ``(3) Conflicts of interest.--Each swap data repository
            shall--
                        ``(A) <<NOTE: Regulations.>>  establish and enforce
                    rules to minimize conflicts of interest in the decision-
                    making process of the swap data repository; and
                        ``(B) establish a process for resolving conflicts of
                    interest described in subparagraph (A).
                ``(4) Additional duties developed by commission.--
                        ``(A) In general.--The Commission may develop 1 or
                    more additional duties applicable to swap data
                    repositories.
                        ``(B) Consideration of evolving standards.--In
                    developing additional duties under subparagraph (A), the
                    Commission may take into consideration any evolving
                    standard of the United States or the international
                    community.
                        ``(C) Additional duties for commission designees.--
                    The Commission shall establish additional duties for any
                    registrant described in section 1a(48) in order to
                    minimize

    [[Page 124 STAT. 1701]]

                    conflicts of interest, protect data, ensure compliance,
                    and guarantee the safety and security of the swap data
                    repository.

        ``(g) Required Registration for Swap Data Repositories.--Any person
    that is required to be registered as a swap data repository under this
    section shall register with the Commission regardless of whether that
    person is also licensed as a bank or registered with the Securities and
    Exchange Commission as a swap data repository.
        ``(h) Rules.--The Commission shall adopt rules governing persons
    that are registered under this section.''.
    SEC. 729. REPORTING AND RECORDKEEPING.

        The Commodity Exchange Act is amended by inserting after section
    4q <<NOTE: 7 USC 6q.>>  (7 U.S.C. 6o-1) the following:
    ``SEC. 4r. <<NOTE: 7 USC 6r.>>  REPORTING AND RECORDKEEPING FOR
                          UNCLEARED SWAPS.

        ``(a) Required Reporting of Swaps Not Accepted by Any Derivatives
    Clearing Organization.--
                ``(1) In general.--Each swap that is not accepted for
            clearing by any derivatives clearing organization shall be
            reported to--
                        ``(A) a swap data repository described in section
                    21; or
                        ``(B) in the case in which there is no swap data
                    repository that would accept the swap, to the Commission
                    pursuant to this section within such time period as the
                    Commission may by rule or regulation prescribe.
                ``(2) Transition rule for preenactment swaps.--
                        ``(A) Swaps entered into before the date of
                    enactment of the wall street transparency and
                    accountability act of 2010.--Each swap entered into
                    before the date of enactment of the Wall Street
                    Transparency and Accountability Act of 2010, the terms
                    of which have not expired as of the date of enactment of
                    that Act, shall be reported to a registered swap data
                    repository or the Commission by a date that is not later
                    than--
                              ``(i) 30 days after issuance of the interim
                          final rule; or
                              ``(ii) such other period as the Commission
                          determines to be appropriate.
                        ``(B) Commission rulemaking.--The Commission shall
                    promulgate an interim final rule within 90 days of the
                    date of enactment of this section providing for the
                    reporting of each swap entered into before the date of
                    enactment as referenced in subparagraph (A).
                        ``(C) Effective date.--The reporting provisions
                    described in this section shall be effective upon the
                    enactment of this section.
                ``(3) Reporting obligations.--
                        ``(A) Swaps in which only 1 counterparty is a swap
                    dealer or major swap participant.--With respect to a
                    swap in which only 1 counterparty is a swap dealer or
                    major swap participant, the swap dealer or major swap
                    participant shall report the swap as required under
                    paragraphs (1) and (2).
                        ``(B) Swaps in which 1 counterparty is a swap dealer
                    and the other a major swap participant.--With

    [[Page 124 STAT. 1702]]

                    respect to a swap in which 1 counterparty is a swap
                    dealer and the other a major swap participant, the swap
                    dealer shall report the swap as required under
                    paragraphs (1) and (2).
                        ``(C) Other swaps.--With respect to any other swap
                    not described in subparagraph (A) or (B), the
                    counterparties to the swap shall select a counterparty
                    to report the swap as required under paragraphs (1) and
                    (2).

        ``(b) Duties of Certain Individuals.--Any individual or entity that
    enters into a swap shall meet each requirement described in subsection
    (c) if the individual or entity did not--
                ``(1) clear the swap in accordance with section 2(h)(1); or
                ``(2) have the data regarding the swap accepted by a swap
            data repository in accordance with rules (including timeframes)
            adopted by the Commission under section 21.

        ``(c) Requirements.--An individual or entity described in subsection
    (b) shall--
                ``(1) upon written request from the Commission, provide
            reports regarding the swaps held by the individual or entity to
            the Commission in such form and in such manner as the Commission
            may request; and
                ``(2) maintain books and records pertaining to the swaps
            held by the individual or entity in such form, in such manner,
            and for such period as the Commission may require, which shall
            be open to inspection by--
                        ``(A) any representative of the Commission;
                        ``(B) an appropriate prudential regulator;
                        ``(C) the Securities and Exchange Commission;
                        ``(D) the Financial Stability Oversight Council; and
                        ``(E) the Department of Justice.

        ``(d) Identical Data.--In prescribing rules under this section, the
    Commission shall require individuals and entities described in
    subsection (b) to submit to the Commission a report that contains data
    that is not less comprehensive than the data required to be collected by
    swap data repositories under section 21.''.
    SEC. 730. LARGE SWAP TRADER REPORTING.

        The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by adding
    after section 4s (as added by section 731) the following:
    ``SEC. 4t. <<NOTE: 7 USC 6t.>>  LARGE SWAP TRADER REPORTING.

        ``(a) Prohibition.--
                ``(1) In general.--Except as provided in paragraph (2), it
            shall be unlawful for any person to enter into any swap that the
            Commission determines to perform a significant price discovery
            function with respect to registered entities if--
                        ``(A) the person directly or indirectly enters into
                    the swap during any 1 day in an amount equal to or in
                    excess of such amount as shall be established
                    periodically by the Commission; and
                        ``(B) the person directly or indirectly has or
                    obtains a position in the swap equal to or in excess of
                    such amount as shall be established periodically by the
                    Commission.
                ``(2) Exception.--Paragraph (1) shall not apply if--
                        ``(A) the person files or causes to be filed with
                    the properly designated officer of the Commission such
                    reports

    [[Page 124 STAT. 1703]]

                    regarding any transactions or positions described in
                    subparagraphs (A) and (B) of paragraph (1) as the
                    Commission may require by rule or regulation; and
                        ``(B) in accordance with the rules and regulations
                    of the Commission, the person keeps books and records of
                    all such swaps and any transactions and positions in any
                    related commodity traded on or subject to the rules of
                    any designated contract market or swap execution
                    facility, and of cash or spot transactions in,
                    inventories of, and purchase and sale commitments of,
                    such a commodity.

        ``(b) <<NOTE: Records.>>  Requirements.--
                ``(1) In general.--Books and records described in subsection
            (a)(2)(B) shall--
                        ``(A) show such complete details concerning all
                    transactions and positions as the Commission may
                    prescribe by rule or regulation;
                        ``(B) be open at all times to inspection and
                    examination by any representative of the Commission; and
                        ``(C) be open at all times to inspection and
                    examination by the Securities and Exchange Commission,
                    to the extent such books and records relate to
                    transactions in swaps (as that term is defined in
                    section 1a(47)(A)(v)), and consistent with the
                    confidentiality and disclosure requirements of section
                    8.
                ``(2) Jurisdiction.--Nothing in paragraph (1) shall affect
            the exclusive jurisdiction of the Commission to prescribe
            recordkeeping and reporting requirements for large swap traders
            under this section.

        ``(c) Applicability.--For purposes of this section, the swaps,
    futures, and cash or spot transactions and positions of any person shall
    include the swaps, futures, and cash or spot transactions and positions
    of any persons directly or indirectly controlled by the person.
        ``(d) Significant Price Discovery Function.--In making a
    determination as to whether a swap performs or affects a significant
    price discovery function with respect to registered entities, the
    Commission shall consider the factors described in section 4a(a)(3).''.
    SEC. 731. REGISTRATION AND REGULATION OF SWAP DEALERS AND MAJOR
                            SWAP PARTICIPANTS.

        The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by
    inserting after section 4r (as added by section 729) the following:
    ``SEC. 4s. <<NOTE: 7 USC 6s.>>  REGISTRATION AND REGULATION OF
                          SWAP DEALERS AND MAJOR SWAP PARTICIPANTS.

        ``(a) Registration.--
                ``(1) Swap dealers.--It shall be unlawful for any person to
            act as a swap dealer unless the person is registered as a swap
            dealer with the Commission.
                ``(2) Major swap participants.--It shall be unlawful for any
            person to act as a major swap participant unless the person is
            registered as a major swap participant with the Commission.

        ``(b) Requirements.--
                ``(1) In general.--A person shall register as a swap dealer
            or major swap participant by filing a registration application
            with the Commission.
                ``(2) Contents.--

    [[Page 124 STAT. 1704]]

                        ``(A) In general.--The application shall be made in
                    such form and manner as prescribed by the Commission,
                    and shall contain such information, as the Commission
                    considers necessary concerning the business in which the
                    applicant is or will be engaged.
                        ``(B) Continual reporting.--A person that is
                    registered as a swap dealer or major swap participant
                    shall continue to submit to the Commission reports that
                    contain such information pertaining to the business of
                    the person as the Commission may require.
                ``(3) Expiration.--Each registration under this section
            shall expire at such time as the Commission may prescribe by
            rule or regulation.
                ``(4) Rules.--Except as provided in subsections (d) and (e),
            the Commission may prescribe rules applicable to swap dealers
            and major swap participants, including rules that limit the
            activities of swap dealers and major swap participants.
                ``(5) Transition.--Rules <<NOTE: Regulations. Deadline.>>
            under this section shall provide for the registration of swap
            dealers and major swap participants not later than 1 year after
            the date of enactment of the Wall Street Transparency and
            Accountability Act of 2010.
                ``(6) Statutory disqualification.--Except to the extent
            otherwise specifically provided by rule, regulation, or order,
            it shall be unlawful for a swap dealer or a major swap
            participant to permit any person associated with a swap dealer
            or a major swap participant who is subject to a statutory
            disqualification to effect or be involved in effecting swaps on
            behalf of the swap dealer or major swap participant, if the swap
            dealer or major swap participant knew, or in the exercise of
            reasonable care should have known, of the statutory
            disqualification.

        ``(c) Dual Registration.--
                ``(1) Swap dealer.--Any person that is required to be
            registered as a swap dealer under this section shall register
            with the Commission regardless of whether the person also is a
            depository institution or is registered with the Securities and
            Exchange Commission as a security-based swap dealer.
                ``(2) Major swap participant.--Any person that is required
            to be registered as a major swap participant under this section
            shall register with the Commission regardless of whether the
            person also is a depository institution or is registered with
            the Securities and Exchange Commission as a major security-based
            swap participant.

        ``(d) Rulemakings.--
                ``(1) In general.--The Commission shall adopt rules for
            persons that are registered as swap dealers or major swap
            participants under this section.
                ``(2) Exception for prudential requirements.--
                        ``(A) In general.--The Commission may not prescribe
                    rules imposing prudential requirements on swap dealers
                    or major swap participants for which there is a
                    prudential regulator.
                        ``(B) Applicability.--Subparagraph (A) does not
                    limit the authority of the Commission to prescribe rules
                    as directed under this section.

        ``(e) Capital and Margin Requirements.--
                ``(1) <<NOTE: Regulations.>>  In general.--

    [[Page 124 STAT. 1705]]

                        ``(A) Swap dealers and major swap participants that
                    are banks.--Each registered swap dealer and major swap
                    participant for which there is a prudential regulator
                    shall meet such minimum capital requirements and minimum
                    initial and variation margin requirements as the
                    prudential regulator shall by rule or regulation
                    prescribe under paragraph (2)(A).
                        ``(B) Swap dealers and major swap participants that
                    are not banks.--Each registered swap dealer and major
                    swap participant for which there is not a prudential
                    regulator shall meet such minimum capital requirements
                    and minimum initial and variation margin requirements as
                    the Commission shall by rule or regulation prescribe
                    under paragraph (2)(B).
                ``(2) Rules.--
                        ``(A) Swap dealers and major swap participants that
                    are banks.--The prudential regulators, in consultation
                    with the Commission and the Securities and Exchange
                    Commission, shall jointly adopt rules for swap dealers
                    and major swap participants, with respect to their
                    activities as a swap dealer or major swap participant,
                    for which there is a prudential regulator imposing--
                              ``(i) capital requirements; and
                              ``(ii) both initial and variation margin
                          requirements on all swaps that are not cleared by
                          a registered derivatives clearing organization.
                        ``(B) Swap dealers and major swap participants that
                    are not banks.--The Commission shall adopt rules for
                    swap dealers and major swap participants, with respect
                    to their activities as a swap dealer or major swap
                    participant, for which there is not a prudential
                    regulator imposing--
                              ``(i) capital requirements; and
                              ``(ii) both initial and variation margin
                          requirements on all swaps that are not cleared by
                          a registered derivatives clearing organization.
                        ``(C) Capital.--In setting capital requirements for
                    a person that is designated as a swap dealer or a major
                    swap participant for a single type or single class or
                    category of swap or activities, the prudential regulator
                    and the Commission shall take into account the risks
                    associated with other types of swaps or classes of swaps
                    or categories of swaps engaged in and the other
                    activities conducted by that person that are not
                    otherwise subject to regulation applicable to that
                    person by virtue of the status of the person as a swap
                    dealer or a major swap participant.
                ``(3) Standards for capital and margin.--
                        ``(A) In general.--To offset the greater risk to the
                    swap dealer or major swap participant and the financial
                    system arising from the use of swaps that are not
                    cleared, the requirements imposed under paragraph (2)
                    shall--
                              ``(i) help ensure the safety and soundness of
                          the swap dealer or major swap participant; and
                              ``(ii) be appropriate for the risk associated
                          with the non-cleared swaps held as a swap dealer
                          or major swap participant.
                        ``(B) Rule of construction.--

    [[Page 124 STAT. 1706]]

                              ``(i) In general.--Nothing in this section
                          shall limit, or be construed to limit, the
                          authority--
                                        ``(I) of the Commission to set
                                    financial responsibility rules for a
                                    futures commission merchant or
                                    introducing broker registered pursuant
                                    to section 4f(a) (except for section
                                    4f(a)(3)) in accordance with section
                                    4f(b); or
                                        ``(II) of the Securities and
                                    Exchange Commission to set financial
                                    responsibility rules for a broker or
                                    dealer registered pursuant to section
                                    15(b) of the Securities Exchange Act of
                                    1934 (15 U.S.C. 78o(b)) (except for
                                    section 15(b)(11) of that Act (15 U.S.C.
                                    78o(b)(11)) in accordance with section
                                    15(c)(3) of the Securities Exchange Act
                                    of 1934 (15 U.S.C. 78o(c)(3)).
                              ``(ii) Futures commission merchants and other
                          dealers.--A futures commission merchant,
                          introducing broker, broker, or dealer shall
                          maintain sufficient capital to comply with the
                          stricter of any applicable capital requirements to
                          which such futures commission merchant,
                          introducing broker, broker, or dealer is subject
                          to under this Act or the Securities Exchange Act
                          of 1934 (15 U.S.C. 78a et seq.).
                        ``(C) Margin requirements.--In prescribing margin
                    requirements under this subsection, the prudential
                    regulator with respect to swap dealers and major swap
                    participants for which it is the prudential regulator
                    and the Commission with respect to swap dealers and
                    major swap participants for which there is no prudential
                    regulator shall permit the use of noncash collateral, as
                    the regulator or the Commission determines to be
                    consistent with--
                              ``(i) preserving the financial integrity of
                          markets trading swaps; and
                              ``(ii) preserving the stability of the United
                          States financial system.
                        ``(D) Comparability of capital and margin
                    requirements.--
                              ``(i) In general.--
                          The <<NOTE: Consultation.>>  prudential
                          regulators, the Commission, and the Securities and
                          Exchange Commission shall periodically (but not
                          less frequently than annually) consult on minimum
                          capital requirements and minimum initial and
                          variation margin requirements.
                              ``(ii) Comparability.--The entities described
                          in clause (i) shall, to the maximum extent
                          practicable, establish and maintain comparable
                          minimum capital requirements and minimum initial
                          and variation margin requirements, including the
                          use of non cash collateral, for--
                                        ``(I) swap dealers; and
                                        ``(II) major swap participants.

        ``(f) Reporting and Recordkeeping.--
                ``(1) In general.--Each registered swap dealer and major
            swap participant--

    [[Page 124 STAT. 1707]]

                        ``(A) <<NOTE: Reports. Regulations.>>  shall make
                    such reports as are required by the Commission by rule
                    or regulation regarding the transactions and positions
                    and financial condition of the registered swap dealer or
                    major swap participant;
                        ``(B)(i) for which there is a prudential regulator,
                    shall keep books and records of all activities related
                    to the business as a swap dealer or major swap
                    participant in such form and manner and for such period
                    as may be prescribed by the Commission by rule or
                    regulation; and
                        ``(ii) for which there is no prudential regulator,
                    shall keep books and records in such form and manner and
                    for such period as may be prescribed by the Commission
                    by rule or regulation;
                        ``(C) shall keep books and records described in
                    subparagraph (B) open to inspection and examination by
                    any representative of the Commission; and
                        ``(D) shall keep any such books and records relating
                    to swaps defined in section 1a(47)(A)(v) open to
                    inspection and examination by the Securities and
                    Exchange Commission.
                ``(2) Rules.--The Commission shall adopt rules governing
            reporting and recordkeeping for swap dealers and major swap
            participants.

        ``(g) Daily Trading Records.--
                ``(1) In general.--Each registered swap dealer and major
            swap participant shall maintain daily trading records of the
            swaps of the registered swap dealer and major swap participant
            and all related records (including related cash or forward
            transactions) and recorded communications, including electronic
            mail, instant messages, and recordings of telephone calls, for
            such period as may be required by the Commission by rule or
            regulation.
                ``(2) Information requirements.--The daily trading records
            shall include such information as the Commission shall require
            by rule or regulation.
                ``(3) Counterparty records.--Each registered swap dealer and
            major swap participant shall maintain daily trading records for
            each counterparty in a manner and form that is identifiable with
            each swap transaction.
                ``(4) Audit trail.--Each registered swap dealer and major
            swap participant shall maintain a complete audit trail for
            conducting comprehensive and accurate trade reconstructions.
                ``(5) Rules.--The Commission shall adopt rules governing
            daily trading records for swap dealers and major swap
            participants.

        ``(h) Business Conduct Standards.--
                ``(1) In general.--Each registered swap dealer and major
            swap participant shall conform with such business conduct
            standards as prescribed in paragraph (3) and as may be
            prescribed by the Commission by rule or regulation that relate
            to--
                        ``(A) fraud, manipulation, and other abusive
                    practices involving swaps (including swaps that are
                    offered but not entered into);
                        ``(B) diligent supervision of the business of the
                    registered swap dealer and major swap participant;
                        ``(C) adherence to all applicable position limits;
                    and

    [[Page 124 STAT. 1708]]

                        ``(D) such other matters as the Commission
                    determines to be appropriate.
                ``(2) Responsibilities with respect to special entities.--
                        ``(A) Advising special entities.--A swap dealer or
                    major swap participant that acts as an advisor to a
                    special entity regarding a swap shall comply with the
                    requirements of subparagraph (4) with respect to such
                    Special Entity.
                        ``(B) Entering of swaps with respect to special
                    entities.--A <<NOTE: Compliance.>>  swap dealer that
                    enters into or offers to enter into swap with a Special
                    Entity shall comply with the requirements of
                    subparagraph (5) with respect to such Special Entity.
                        ``(C) Special entity defined.--For purposes of this
                    subsection, the term `special entity' means--
                              ``(i) a Federal agency;
                              ``(ii) a State, State agency, city, county,
                          municipality, or other political subdivision of a
                          State;
                              ``(iii) any employee benefit plan, as defined
                          in section 3 of the Employee Retirement Income
                          Security Act of 1974 (29 U.S.C. 1002);
                              ``(iv) any governmental plan, as defined in
                          section 3 of the Employee Retirement Income
                          Security Act of 1974 (29 U.S.C. 1002); or
                              ``(v) any endowment, including an endowment
                          that is an organization described in section
                          501(c)(3) of the Internal Revenue Code of 1986.
                ``(3) Business conduct requirements.--Business conduct
            requirements adopted by the Commission shall--
                        ``(A) establish a duty for a swap dealer or major
                    swap participant to verify that any counterparty meets
                    the eligibility standards for an eligible contract
                    participant;
                        ``(B) require disclosure by the swap dealer or major
                    swap participant to any counterparty to the transaction
                    (other than a swap dealer, major swap participant,
                    security-based swap dealer, or major security-based swap
                    participant) of--
                              ``(i) information about the material risks and
                          characteristics of the swap;
                              ``(ii) any material incentives or conflicts of
                          interest that the swap dealer or major swap
                          participant may have in connection with the swap;
                          and
                              ``(iii)(I) for cleared swaps, upon the request
                          of the counterparty, receipt of the daily mark of
                          the transaction from the appropriate derivatives
                          clearing organization; and
                              ``(II) for uncleared swaps, receipt of the
                          daily mark of the transaction from the swap dealer
                          or the major swap participant;
                        ``(C) establish a duty for a swap dealer or major
                    swap participant to communicate in a fair and balanced
                    manner based on principles of fair dealing and good
                    faith; and
                        ``(D) establish such other standards and
                    requirements as the Commission may determine are
                    appropriate in the public interest, for the protection
                    of investors, or otherwise in furtherance of the
                    purposes of this Act.
                ``(4) Special requirements for swap dealers acting as
            advisors.--

    [[Page 124 STAT. 1709]]

                        ``(A) In general.--It shall be unlawful for a swap
                    dealer or major swap participant--
                              ``(i) to employ any device, scheme, or
                          artifice to defraud any Special Entity or
                          prospective customer who is a Special Entity;
                              ``(ii) to engage in any transaction, practice,
                          or course of business that operates as a fraud or
                          deceit on any Special Entity or prospective
                          customer who is a Special Entity; or
                              ``(iii) to engage in any act, practice, or
                          course of business that is fraudulent, deceptive
                          or manipulative.
                        ``(B) Duty.--Any swap dealer that acts as an advisor
                    to a Special Entity shall have a duty to act in the best
                    interests of the Special Entity.
                        ``(C) Reasonable efforts.--Any swap dealer that acts
                    as an advisor to a Special Entity shall make reasonable
                    efforts to obtain such information as is necessary to
                    make a reasonable determination that any swap
                    recommended by the swap dealer is in the best interests
                    of the Special Entity, including information relating
                    to--
                              ``(i) the financial status of the Special
                          Entity;
                              ``(ii) the tax status of the Special Entity;
                              ``(iii) the investment or financing objectives
                          of the Special Entity; and
                              ``(iv) any other information that the
                          Commission may prescribe by rule or regulation.
                ``(5) Special requirements for swap dealers as
            counterparties to special entities.--
                        ``(A) Any swap dealer or major swap participant that
                    offers to enter or enters into a swap with a Special
                    Entity shall--
                              ``(i) comply with any duty established by the
                          Commission for a swap dealer or major swap
                          participant, with respect to a counterparty that
                          is an eligible contract participant within the
                          meaning of subclause (I) or (II) of clause (vii)
                          of section 1a(18) of this Act, that requires the
                          swap dealer or major swap participant to have a
                          reasonable basis to believe that the counterparty
                          that is a Special Entity has an independent
                          representative that--
                                        ``(I) has sufficient knowledge to
                                    evaluate the transaction and risks;
                                        ``(II) is not subject to a statutory
                                    disqualification;
                                        ``(III) is independent of the swap
                                    dealer or major swap participant;
                                        ``(IV) undertakes a duty to act in
                                    the best interests of the counterparty
                                    it represents;
                                        ``(V) makes appropriate disclosures;
                                        ``(VI) will provide written
                                    representations to the Special Entity
                                    regarding fair pricing and the
                                    appropriateness of the transaction; and
                                        ``(VII) in the case of employee
                                    benefit plans subject to the Employee
                                    Retirement Income Security act of 1974,
                                    is a fiduciary as defined in section 3
                                    of that Act (29 U.S.C. 1002); and

    [[Page 124 STAT. 1710]]

                              ``(ii) before the initiation of the
                          transaction, disclose to the Special Entity in
                          writing the capacity in which the swap dealer is
                          acting; and
                        ``(B) the Commission may establish such other
                    standards and requirements as the Commission may
                    determine are appropriate in the public interest, for
                    the protection of investors, or otherwise in furtherance
                    of the purposes of this Act.
                ``(6) Rules.--The Commission shall prescribe rules under
            this subsection governing business conduct standards for swap
            dealers and major swap participants.
                ``(7) Applicability.--This section shall not apply with
            respect to a transaction that is--
                        ``(A) initiated by a Special Entity on an exchange
                    or swap execution facility; and
                        ``(B) one in which the swap dealer or major swap
                    participant does not know the identity of the
                    counterparty to the transaction.

        ``(i) Documentation Standards.--
                ``(1) In general.--Each registered swap dealer and major
            swap participant shall conform with such standards as may be
            prescribed by the Commission by rule or regulation that relate
            to timely and accurate confirmation, processing, netting,
            documentation, and valuation of all swaps.
                ``(2) Rules.--The Commission shall adopt rules governing
            documentation standards for swap dealers and major swap
            participants.

        ``(j) Duties.--Each registered swap dealer and major swap
    participant at all times shall comply with the following requirements:
                ``(1) Monitoring of trading.--The swap dealer or major swap
            participant shall monitor its trading in swaps to prevent
            violations of applicable position limits.
                ``(2) Risk management procedures.--The swap dealer or major
            swap participant shall establish robust and professional risk
            management systems adequate for managing the day-to-day business
            of the swap dealer or major swap participant.
                ``(3) Disclosure of general information.--The swap dealer or
            major swap participant shall disclose to the Commission and to
            the prudential regulator for the swap dealer or major swap
            participant, as applicable, information concerning--
                        ``(A) terms and conditions of its swaps;
                        ``(B) swap trading operations, mechanisms, and
                    practices;
                        ``(C) financial integrity protections relating to
                    swaps; and
                        ``(D) other information relevant to its trading in
                    swaps.
                ``(4) Ability to obtain information.--The swap dealer or
            major swap participant shall--
                        ``(A) establish and enforce internal systems and
                    procedures to obtain any necessary information to
                    perform any of the functions described in this section;
                    and
                        ``(B) provide the information to the Commission and
                    to the prudential regulator for the swap dealer or major
                    swap participant, as applicable, on request.

    [[Page 124 STAT. 1711]]

                ``(5) Conflicts of interest.--The swap dealer and major swap
            participant shall implement conflict-of-interest systems and
            procedures that--
                        ``(A) establish structural and institutional
                    safeguards to ensure that the activities of any person
                    within the firm relating to research or analysis of the
                    price or market for any commodity or swap or acting in a
                    role of providing clearing activities or making
                    determinations as to accepting clearing customers are
                    separated by appropriate informational partitions within
                    the firm from the review, pressure, or oversight of
                    persons whose involvement in pricing, trading, or
                    clearing activities might potentially bias their
                    judgment or supervision and contravene the core
                    principles of open access and the business conduct
                    standards described in this Act; and
                        ``(B) address such other issues as the Commission
                    determines to be appropriate.
                ``(6) Antitrust considerations.--Unless necessary or
            appropriate to achieve the purposes of this Act, a swap dealer
            or major swap participant shall not--
                        ``(A) adopt any process or take any action that
                    results in any unreasonable restraint of trade; or
                        ``(B) impose any material anticompetitive burden on
                    trading or clearing.
                ``(7) Rules.--The Commission shall prescribe rules under
            this subsection governing duties of swap dealers and major swap
            participants.

        ``(k) Designation of Chief Compliance Officer.--
                ``(1) In general.--Each swap dealer and major swap
            participant shall designate an individual to serve as a chief
            compliance officer.
                ``(2) Duties.--The chief compliance officer shall--
                        ``(A) report directly to the board or to the senior
                    officer of the swap dealer or major swap participant;
                        ``(B) review the compliance of the swap dealer or
                    major swap participant with respect to the swap dealer
                    and major swap participant requirements described in
                    this section;
                        ``(C) in consultation with the board of directors, a
                    body performing a function similar to the board, or the
                    senior officer of the organization, resolve any
                    conflicts of interest that may arise;
                        ``(D) be responsible for administering each policy
                    and procedure that is required to be established
                    pursuant to this section;
                        ``(E) ensure compliance with this Act (including
                    regulations) relating to swaps, including each rule
                    prescribed by the Commission under this section;
                        ``(F) establish procedures for the remediation of
                    noncompliance issues identified by the chief compliance
                    officer through any--
                              ``(i) compliance office review;
                              ``(ii) look-back;
                              ``(iii) internal or external audit finding;
                              ``(iv) self-reported error; or
                              ``(v) validated complaint; and

    [[Page 124 STAT. 1712]]

                        ``(G) establish and follow appropriate procedures
                    for the handling, management response, remediation,
                    retesting, and closing of noncompliance issues.
                ``(3) Annual reports.--
                        ``(A) In general.--In accordance with rules
                    prescribed by the Commission, the chief compliance
                    officer shall annually prepare and sign a report that
                    contains a description of--
                              ``(i) the compliance of the swap dealer or
                          major swap participant with respect to this Act
                          (including regulations); and
                              ``(ii) each policy and procedure of the swap
                          dealer or major swap participant of the chief
                          compliance officer (including the code of ethics
                          and conflict of interest policies).
                        ``(B) Requirements.--A compliance report under
                    subparagraph (A) shall--
                              ``(i) accompany each appropriate financial
                          report of the swap dealer or major swap
                          participant that is required to be furnished to
                          the Commission pursuant to this section; and
                              ``(ii) <<NOTE: Certification.>>  include a
                          certification that, under penalty of law, the
                          compliance report is accurate and complete.''.
    SEC. 732. CONFLICTS OF INTEREST.

        Section 4d of the Commodity Exchange Act (7 U.S.C. 6d) is amended--
                (1) by redesignating subsection (c) as subsection (e); and
                (2) by inserting after subsection (b) the following:

        ``(c) <<NOTE: Procedures.>>  Conflicts of Interest.--The Commission
    shall require that futures commission merchants and introducing brokers
    implement conflict-of-interest systems and procedures that--
                ``(1) establish structural and institutional safeguards to
            ensure that the activities of any person within the firm
            relating to research or analysis of the price or market for any
            commodity are separated by appropriate informational partitions
            within the firm from the review, pressure, or oversight of
            persons whose involvement in trading or clearing activities
            might potentially bias the judgment or supervision of the
            persons; and
                ``(2) address such other issues as the Commission determines
            to be appropriate.

        ``(d) <<NOTE: Regulations.>>  Designation of Chief Compliance
    Officer.--Each futures commission merchant shall designate an individual
    to serve as its Chief Compliance Officer and perform such duties and
    responsibilities as shall be set forth in regulations to be adopted by
    the Commission or rules to be adopted by a futures association
    registered under section 17.''.
    SEC. 733. SWAP EXECUTION FACILITIES.

        The Commodity Exchange Act is amended by inserting after section 5g
    (7 U.S.C. 7b-2) the following:
    ``SEC. 5h. <<NOTE: 7 USC 7b-3.>>  SWAP EXECUTION FACILITIES.

        ``(a) Registration.--
                ``(1) In general.--No person may operate a facility for the
            trading or processing of swaps unless the facility is registered
            as a swap execution facility or as a designated contract market
            under this section.

    [[Page 124 STAT. 1713]]

                ``(2) Dual registration.--Any person that is registered as a
            swap execution facility under this section shall register with
            the Commission regardless of whether the person also is
            registered with the Securities and Exchange Commission as a swap
            execution facility.

        ``(b) Trading and Trade Processing.--
                ``(1) In general.--Except as specified in paragraph (2), a
            swap execution facility that is registered under subsection (a)
            may--
                        ``(A) make available for trading any swap; and
                        ``(B) facilitate trade processing of any swap.
                ``(2) Agricultural swaps.--A swap execution facility may not
            list for trading or confirm the execution of any swap in an
            agricultural commodity (as defined by the Commission) except
            pursuant to a rule or regulation of the Commission allowing the
            swap under such terms and conditions as the Commission shall
            prescribe.

        ``(c) Identification of Facility Used To Trade Swaps by Contract
    Markets.--A board of trade that operates a contract market shall, to the
    extent that the board of trade also operates a swap execution facility
    and uses the same electronic trade execution system for listing and
    executing trades of swaps on or through the contract market and the swap
    execution facility, identify whether the electronic trading of such
    swaps is taking place on or through the contract market or the swap
    execution facility.
        ``(d) Rule-writing.--
                ``(1) The Securities and Exchange Commission and Commodity
            Futures Trading Commission may promulgate rules defining the
            universe of swaps that can be executed on a swap execution
            facility. These rules shall take into account the price and
            nonprice requirements of the counterparties to a swap and the
            goal of this section as set forth in subsection (e).
                ``(2) For all swaps that are not required to be executed
            through a swap execution facility as defined in paragraph (1),
            such trades may be executed through any other available means of
            interstate commerce.
                ``(3) The Securities and Exchange Commission and Commodity
            Futures Trading Commission shall update these rules as necessary
            to account for technological and other innovation.

        ``(e) Rule of Construction.--The goal of this section is to promote
    the trading of swaps on swap execution facilities and to promote pre-
    trade price transparency in the swaps market.
        ``(f) <<NOTE: Regulations.>>  Core Principles for Swap Execution
    Facilities.--
                ``(1) Compliance with core principles.--
                        ``(A) In general.--To be registered, and maintain
                    registration, as a swap execution facility, the swap
                    execution facility shall comply with--
                              ``(i) the core principles described in this
                          subsection; and
                              ``(ii) any requirement that the Commission may
                          impose by rule or regulation pursuant to section
                          8a(5).
                        ``(B) Reasonable discretion of swap execution
                    facility.--Unless otherwise determined by the Commission
                    by rule or regulation, a swap execution facility

    [[Page 124 STAT. 1714]]

                    described in subparagraph (A) shall have reasonable
                    discretion in establishing the manner in which the swap
                    execution facility complies with the core principles
                    described in this subsection.
                ``(2) Compliance with rules.--A swap execution facility
            shall--
                        ``(A) establish and enforce compliance with any rule
                    of the swap execution facility, including--
                              ``(i) the terms and conditions of the swaps
                          traded or processed on or through the swap
                          execution facility; and
                              ``(ii) any limitation on access to the swap
                          execution facility;
                        ``(B) establish and enforce trading, trade
                    processing, and participation rules that will deter
                    abuses and have the capacity to detect, investigate, and
                    enforce those rules, including means--
                              ``(i) to provide market participants with
                          impartial access to the market; and
                              ``(ii) to capture information that may be used
                          in establishing whether rule violations have
                          occurred;
                        ``(C) establish rules governing the operation of the
                    facility, including rules specifying trading procedures
                    to be used in entering and executing orders traded or
                    posted on the facility, including block trades; and
                        ``(D) provide by its rules that when a swap dealer
                    or major swap participant enters into or facilitates a
                    swap that is subject to the mandatory clearing
                    requirement of section 2(h), the swap dealer or major
                    swap participant shall be responsible for compliance
                    with the mandatory trading requirement under section
                    2(h)(8).
                ``(3) Swaps not readily susceptible to manipulation.--The
            swap execution facility shall permit trading only in swaps that
            are not readily susceptible to manipulation.
                ``(4) Monitoring of trading and trade processing.--The swap
            execution facility shall--
                        ``(A) establish and enforce rules or terms and
                    conditions defining, or specifications detailing--
                              ``(i) trading procedures to be used in
                          entering and executing orders traded on or through
                          the facilities of the swap execution facility; and
                              ``(ii) procedures for trade processing of
                          swaps on or through the facilities of the swap
                          execution facility; and
                        ``(B) monitor trading in swaps to prevent
                    manipulation, price distortion, and disruptions of the
                    delivery or cash settlement process through
                    surveillance, compliance, and disciplinary practices and
                    procedures, including methods for conducting real-time
                    monitoring of trading and comprehensive and accurate
                    trade reconstructions.
                ``(5) Ability to obtain information.--The swap execution
            facility shall--
                        ``(A) establish and enforce rules that will allow
                    the facility to obtain any necessary information to
                    perform any of the functions described in this section;
                        ``(B) provide the information to the Commission on
                    request; and

    [[Page 124 STAT. 1715]]

                        ``(C) have the capacity to carry out such
                    international information-sharing agreements as the
                    Commission may require.
                ``(6) Position limits or accountability.--
                        ``(A) In general.--To reduce the potential threat of
                    market manipulation or congestion, especially during
                    trading in the delivery month, a swap execution facility
                    that is a trading facility shall adopt for each of the
                    contracts of the facility, as is necessary and
                    appropriate, position limitations or position
                    accountability for speculators.
                        ``(B) <<NOTE: Contracts.>>  Position limits.--For
                    any contract that is subject to a position limitation
                    established by the Commission pursuant to section 4a(a),
                    the swap execution facility shall--
                              ``(i) set its position limitation at a level
                          no higher than the Commission limitation; and
                              ``(ii) monitor positions established on or
                          through the swap execution facility for compliance
                          with the limit set by the Commission and the
                          limit, if any, set by the swap execution facility.
                ``(7) <<NOTE: Procedures.>>  Financial integrity of
            transactions.--The swap execution facility shall establish and
            enforce rules and procedures for ensuring the financial
            integrity of swaps entered on or through the facilities of the
            swap execution facility, including the clearance and settlement
            of the swaps pursuant to section 2(h)(1).
                ``(8) Emergency authority.--The swap execution facility
            shall adopt rules to provide for the exercise of emergency
            authority, in consultation or cooperation with the Commission,
            as is necessary and appropriate, including the authority to
            liquidate or transfer open positions in any swap or to suspend
            or curtail trading in a swap.
                ``(9) Timely publication of trading information.--
                        ``(A) <<NOTE: Public information.>>  In general.--
                    The swap execution facility shall make public timely
                    information on price, trading volume, and other trading
                    data on swaps to the extent prescribed by the
                    Commission.
                        ``(B) Capacity of swap execution facility.--The swap
                    execution facility shall be required to have the
                    capacity to electronically capture and transmit trade
                    information with respect to transactions executed on the
                    facility.
                ``(10) Recordkeeping and reporting.--
                        ``(A) In general.--A swap execution facility shall--
                              ``(i) <<NOTE: Time period.>>  maintain records
                          of all activities relating to the business of the
                          facility, including a complete audit trail, in a
                          form and manner acceptable to the Commission for a
                          period of 5 years;
                              ``(ii) report to the Commission, in a form and
                          manner acceptable to the Commission, such
                          information as the Commission determines to be
                          necessary or appropriate for the Commission to
                          perform the duties of the Commission under this
                          Act; and
                              ``(iii) shall keep any such records relating
                          to swaps defined in section 1a(47)(A)(v) open to
                          inspection and examination by the Securities and
                          Exchange Commission.''

    [[Page 124 STAT. 1716]]

                        ``(B) Requirements.--The Commission shall adopt data
                    collection and reporting requirements for swap execution
                    facilities that are comparable to corresponding
                    requirements for derivatives clearing organizations and
                    swap data repositories.
                ``(11) Antitrust considerations.--Unless necessary or
            appropriate to achieve the purposes of this Act, the swap
            execution facility shall not--
                        ``(A) adopt any rules or taking any actions that
                    result in any unreasonable restraint of trade; or
                        ``(B) impose any material anticompetitive burden on
                    trading or clearing.
                ``(12) Conflicts of interest.--The swap execution facility
            shall--
                        ``(A) establish and enforce rules to minimize
                    conflicts of interest in its decision-making process;
                    and
                        ``(B) establish a process for resolving the
                    conflicts of interest.
                ``(13) Financial resources.--
                        ``(A) In general.--The swap execution facility shall
                    have adequate financial, operational, and managerial
                    resources to discharge each responsibility of the swap
                    execution facility.
                        ``(B <<NOTE: Time period.>>  Determination of
                    resource adequacy.--The financial resources of a swap
                    execution facility shall be considered to be adequate if
                    the value of the financial resources exceeds the total
                    amount that would enable the swap execution facility to
                    cover the operating costs of the swap execution facility
                    for a 1-year period, as calculated on a rolling basis.
                ``(14) System safeguards.--The swap execution facility
            shall--
                        ``(A) establish and maintain a program of risk
                    analysis and oversight to identify and minimize sources
                    of operational risk, through the development of
                    appropriate controls and procedures, and automated
                    systems, that--
                              ``(i) are reliable and secure; and
                              ``(ii) have adequate scalable capacity;
                        ``(B) establish and maintain emergency procedures,
                    backup facilities, and a plan for disaster recovery that
                    allow for--
                              ``(i) the timely recovery and resumption of
                          operations; and
                              ``(ii) the fulfillment of the responsibilities
                          and obligations of the swap execution facility;
                          and
                        ``(C) periodically conduct tests to verify that the
                    backup resources of the swap execution facility are
                    sufficient to ensure continued--
                              ``(i) order processing and trade matching;
                              ``(ii) price reporting;
                              ``(iii) market surveillance and
                              ``(iv) maintenance of a comprehensive and
                          accurate audit trail.
                ``(15) Designation of chief compliance officer.--
                        ``(A) In general.--Each swap execution facility
                    shall designate an individual to serve as a chief
                    compliance officer.

    [[Page 124 STAT. 1717]]

                        ``(B) Duties.--The chief compliance officer shall--
                              ``(i) report directly to the board or to the
                          senior officer of the facility;
                              ``(ii) review compliance with the core
                          principles in this subsection;
                              ``(iii) in consultation with the board of the
                          facility, a body performing a function similar to
                          that of a board, or the senior officer of the
                          facility, resolve any conflicts of interest that
                          may arise;
                              ``(iv) be responsible for establishing and
                          administering the policies and procedures required
                          to be established pursuant to this section;
                              ``(v) ensure compliance with this Act and the
                          rules and regulations issued under this Act,
                          including rules prescribed by the Commission
                          pursuant to this section; and
                              ``(vi) establish procedures for the
                          remediation of noncompliance issues found during
                          compliance office reviews, look backs, internal or
                          external audit findings, self-reported errors, or
                          through validated complaints.
                        ``(C) Requirements for procedures.--In establishing
                    procedures under subparagraph (B)(vi), the chief
                    compliance officer shall design the procedures to
                    establish the handling, management response,
                    remediation, retesting, and closing of noncompliance
                    issues.
                        ``(D) Annual reports.--
                              ``(i) In general.--In accordance with rules
                          prescribed by the Commission, the chief compliance
                          officer shall annually prepare and sign a report
                          that contains a description of--
                                        ``(I) the compliance of the swap
                                    execution facility with this Act; and
                                        ``(II) the policies and procedures,
                                    including the code of ethics and
                                    conflict of interest policies, of the
                                    swap execution facility.
                              ``(ii) Requirements.--The chief compliance
                          officer shall--
                                        ``(I) submit each report described
                                    in clause (i) with the appropriate
                                    financial report of the swap execution
                                    facility that is required to be
                                    submitted to the Commission pursuant to
                                    this section; and
                                        ``(II) <<NOTE: Certification.>>
                                    include in the report a certification
                                    that, under penalty of law, the report
                                    is accurate and complete.

        ``(g) Exemptions.--The Commission may exempt, conditionally or
    unconditionally, a swap execution facility from registration under this
    section if the Commission finds that the facility is subject to
    comparable, comprehensive supervision and regulation on a consolidated
    basis by the Securities and Exchange Commission, a prudential regulator,
    or the appropriate governmental authorities in the home country of the
    facility.
        ``(h) Rules.--The Commission shall prescribe rules governing the
    regulation of alternative swap execution facilities under this
    section.''.

    [[Page 124 STAT. 1718]]

    SEC. 734. DERIVATIVES TRANSACTION EXECUTION FACILITIES AND EXEMPT
                            BOARDS OF TRADE.

        (a) <<NOTE: Repeal.>>  In General.--Sections 5a and 5d of the
    Commodity Exchange Act (7 U.S.C. 7a, 7a-3) are repealed.

        (b) Conforming Amendments.--
                (1) Section 2 of the Commodity Exchange Act (7 U.S.C. 2) is
            amended--
                        (A) in subsection (a)(1)(A), in the first sentence,
                    by striking ``or 5a''; and
                        (B) in paragraph (2) of subsection (g) (as
                    redesignated by section 723(a)(1)(B)), by striking
                    ``section 5a of this Act'' and all that follows through
                    ``5d of this Act'' and inserting ``section 5b of this
                    Act''.
                (2) Section 6(g)(1)(A) of the Securities Exchange Act of
            1934 (15 U.S.C. 78f(g)(1)(A)) is amended--
                        (A) by striking ``that--'' and all that follows
                    through ``(i) has been designated'' and inserting ``that
                    has been designated'';
                        (B) by striking ``; or'' and inserting ``; and'' and
                        (C) by striking clause (ii).

        (c) <<NOTE: 7 USC 7a-3 note.>>  Ability to Petition Commission.--
                (1) In general.--Prior to the final effective dates in this
            title, a person may petition the Commodity Futures Trading
            Commission to remain subject to the provisions of section 5d of
            the Commodity Exchange Act, as such provisions existed prior to
            the effective date of this subtitle.
                (2) Consideration of petition.--The Commodity Futures
            Trading Commission shall consider any petition submitted under
            paragraph (1) in a prompt manner and may allow a person to
            continue operating subject to the provisions of section 5d of
            the Commodity Exchange Act for up to 1 year after the effective
            date of this subtitle.
    SEC. 735. <<NOTE: Regulations. Procedures.>>  DESIGNATED CONTRACT
                            MARKETS.

        (a) Criteria for Designation.--Section 5 of the Commodity Exchange
    Act (7 U.S.C. 7) is amended by striking subsection (b).
        (b) Core Principles for Contract Markets.--Section 5 of the
    Commodity Exchange Act (7 U.S.C. 7) is amended by striking subsection
    (d) and inserting the following:
        ``(d) Core Principles for Contract Markets.--
                ``(1) Designation as contract market.--
                        ``(A) In general.--To be designated, and maintain a
                    designation, as a contract market, a board of trade
                    shall comply with--
                              ``(i) any core principle described in this
                          subsection; and
                              ``(ii) any requirement that the Commission may
                          impose by rule or regulation pursuant to section
                          8a(5).
                        ``(B) Reasonable discretion of contract market.--
                    Unless otherwise determined by the Commission by rule or
                    regulation, a board of trade described in subparagraph
                    (A) shall have reasonable discretion in establishing the
                    manner in which the board of trade complies with the
                    core principles described in this subsection.
                ``(2) Compliance with rules.--

    [[Page 124 STAT. 1719]]

                        ``(A) In general.--The board of trade shall
                    establish, monitor, and enforce compliance with the
                    rules of the contract market, including--
                              ``(i) access requirements;
                              ``(ii) the terms and conditions of any
                          contracts to be traded on the contract market; and
                              ``(iii) rules prohibiting abusive trade
                          practices on the contract market.
                        ``(B) Capacity of contract market.--The board of
                    trade shall have the capacity to detect, investigate,
                    and apply appropriate sanctions to any person that
                    violates any rule of the contract market.
                        ``(C) Requirement of rules.--The rules of the
                    contract market shall provide the board of trade with
                    the ability and authority to obtain any necessary
                    information to perform any function described in this
                    subsection, including the capacity to carry out such
                    international information-sharing agreements as the
                    Commission may require.
                ``(3) Contracts not readily subject to manipulation.--The
            board of trade shall list on the contract market only contracts
            that are not readily susceptible to manipulation.
                ``(4) Prevention of market disruption.--The board of trade
            shall have the capacity and responsibility to prevent
            manipulation, price distortion, and disruptions of the delivery
            or cash-settlement process through market surveillance,
            compliance, and enforcement practices and procedures,
            including--
                        ``(A) methods for conducting real-time monitoring of
                    trading; and
                        ``(B) comprehensive and accurate trade
                    reconstructions.
                ``(5) Position limitations or accountability.--
                        ``(A) In general.--To reduce the potential threat of
                    market manipulation or congestion (especially during
                    trading in the delivery month), the board of trade shall
                    adopt for each contract of the board of trade, as is
                    necessary and appropriate, position limitations or
                    position accountability for speculators.
                        ``(B) Maximum allowable position limitation.--For
                    any contract that is subject to a position limitation
                    established by the Commission pursuant to section 4a(a),
                    the board of trade shall set the position limitation of
                    the board of trade at a level not higher than the
                    position limitation established by the Commission.
                ``(6) Emergency authority.--The board of trade, in
            consultation or cooperation with the Commission, shall adopt
            rules to provide for the exercise of emergency authority, as is
            necessary and appropriate, including the authority--
                        ``(A) to liquidate or transfer open positions in any
                    contract;
                        ``(B) to suspend or curtail trading in any contract;
                    and
                        ``(C) to require market participants in any contract
                    to meet special margin requirements.
                ``(7) Availability of general information.--The board of
            trade shall make available to market authorities, market
            participants, and the public accurate information concerning--
                        ``(A) the terms and conditions of the contracts of
                    the contract market; and

    [[Page 124 STAT. 1720]]

                        ``(B)(i) the rules, regulations, and mechanisms for
                    executing transactions on or through the facilities of
                    the contract market; and
                        ``(ii) the rules and specifications describing the
                    operation of the contract market's--
                              ``(I) electronic matching platform; or
                              ``(II) trade execution facility.
                ``(8) <<NOTE: Public information.>>  Daily publication of
            trading information.--The board of trade shall make public daily
            information on settlement prices, volume, open interest, and
            opening and closing ranges for actively traded contracts on the
            contract market.
                ``(9) Execution of transactions.--
                        ``(A) In general.--The board of trade shall provide
                    a competitive, open, and efficient market and mechanism
                    for executing transactions that protects the price
                    discovery process of trading in the centralized market
                    of the board of trade.
                        ``(B) Rules.--The rules of the board of trade may
                    authorize, for bona fide business purposes--
                              ``(i) transfer trades or office trades;
                              ``(ii) an exchange of--
                                        ``(I) futures in connection with a
                                    cash commodity transaction;
                                        ``(II) futures for cash commodities;
                                    or
                                        ``(III) futures for swaps; or
                              ``(iii) a futures commission merchant, acting
                          as principal or agent, to enter into or confirm
                          the execution of a contract for the purchase or
                          sale of a commodity for future delivery if the
                          contract is reported, recorded, or cleared in
                          accordance with the rules of the contract market
                          or a derivatives clearing organization.
                ``(10) <<NOTE: Records.>>  Trade information.--The board of
            trade shall maintain rules and procedures to provide for the
            recording and safe storage of all identifying trade information
            in a manner that enables the contract market to use the
            information--
                        ``(A) to assist in the prevention of customer and
                    market abuses; and
                        ``(B) to provide evidence of any violations of the
                    rules of the contract market.
                ``(11) Financial integrity of transactions.--The board of
            trade shall establish and enforce--
                        ``(A) rules and procedures for ensuring the
                    financial integrity of transactions entered into on or
                    through the facilities of the contract market (including
                    the clearance and settlement of the transactions with a
                    derivatives clearing organization); and
                        ``(B) rules to ensure--
                              ``(i) the financial integrity of any--
                                        ``(I) futures commission merchant;
                                    and
                                        ``(II) introducing broker; and
                              ``(ii) the protection of customer funds.
                ``(12) Protection of markets and market participants.--The
            board of trade shall establish and enforce rules--

    [[Page 124 STAT. 1721]]

                        ``(A) to protect markets and market participants
                    from abusive practices committed by any party, including
                    abusive practices committed by a party acting as an
                    agent for a participant; and
                        ``(B) to promote fair and equitable trading on the
                    contract market.
                ``(13) Disciplinary procedures.--The board of trade shall
            establish and enforce disciplinary procedures that authorize the
            board of trade to discipline, suspend, or expel members or
            market participants that violate the rules of the board of
            trade, or similar methods for performing the same functions,
            including delegation of the functions to third parties.
                ``(14) Dispute resolution.--The board of trade shall
            establish and enforce rules regarding, and provide facilities
            for alternative dispute resolution as appropriate for, market
            participants and any market intermediaries.
                ``(15) Governance fitness standards.--The board of trade
            shall establish and enforce appropriate fitness standards for
            directors, members of any disciplinary committee, members of the
            contract market, and any other person with direct access to the
            facility (including any party affiliated with any person
            described in this paragraph).
                ``(16) Conflicts of interest.--The board of trade shall
            establish and enforce rules--
                        ``(A) to minimize conflicts of interest in the
                    decision-making process of the contract market; and
                        ``(B) to establish a process for resolving conflicts
                    of interest described in subparagraph (A).
                ``(17) Composition of governing boards of contract
            markets.--The governance arrangements of the board of trade
            shall be designed to permit consideration of the views of market
            participants.
                ``(18) Recordkeeping.--The board of trade shall maintain
            records of all activities relating to the business of the
            contract market--
                        ``(A) in a form and manner that is acceptable to the
                    Commission; and
                        ``(B) <<NOTE: Time period.>>  for a period of at
                    least 5 years.
                ``(19) Antitrust considerations.--Unless necessary or
            appropriate to achieve the purposes of this Act, the board of
            trade shall not--
                        ``(A) adopt any rule or taking any action that
                    results in any unreasonable restraint of trade; or
                        ``(B) impose any material anticompetitive burden on
                    trading on the contract market.
                ``(20) System safeguards.--The board of trade shall--
                        ``(A) establish and maintain a program of risk
                    analysis and oversight to identify and minimize sources
                    of operational risk, through the development of
                    appropriate controls and procedures, and the development
                    of automated systems, that are reliable, secure, and
                    have adequate scalable capacity;
                        ``(B) establish and maintain emergency procedures,
                    backup facilities, and a plan for disaster recovery that
                    allow for the timely recovery and resumption of
                    operations and the fulfillment of the responsibilities
                    and obligations of the board of trade; and

    [[Page 124 STAT. 1722]]

                        ``(C) periodically conduct tests to verify that
                    backup resources are sufficient to ensure continued
                    order processing and trade matching, price reporting,
                    market surveillance, and maintenance of a comprehensive
                    and accurate audit trail.
                ``(21) Financial resources.--
                        ``(A) In general.--The board of trade shall have
                    adequate financial, operational, and managerial
                    resources to discharge each responsibility of the board
                    of trade.
                        ``(B) Determination of adequacy.--The financial
                    resources of the board of trade shall be considered to
                    be adequate if the value of the financial resources
                    exceeds the total amount that would enable the contract
                    market to cover the operating costs of the contract
                    market for a 1-year period, as calculated on a rolling
                    basis.
                ``(22) Diversity of board of directors.--The board of trade,
            if a publicly traded company, shall endeavor to recruit
            individuals to serve on the board of directors and the other
            decision-making bodies (as determined by the Commission) of the
            board of trade from among, and to have the composition of the
            bodies reflect, a broad and culturally diverse pool of qualified
            candidates.
                ``(23) <<NOTE: Records.>>  Securities and exchange
            commission.--The board of trade shall keep any such records
            relating to swaps defined in section 1a(47)(A)(v) open to
            inspection and examination by the Securities and Exchange
            Commission.''.
    SEC. 736. MARGIN.

        Section 8a(7) of the Commodity Exchange Act (7 U.S.C. 12a(7)) is
    amended--
                (1) in subparagraph (C), by striking ``, excepting the
            setting of levels of margin'';
                (2) by redesignating subparagraphs (D) through (F) as
            subparagraphs (E) through (G), respectively; and
                (3) by inserting after subparagraph (C) the following:
                        ``(D) margin requirements, provided that the rules,
                    regulations, or orders shall--
                              ``(i) be limited to protecting the financial
                          integrity of the derivatives clearing
                          organization;
                              ``(ii) be designed for risk management
                          purposes to protect the financial integrity of
                          transactions; and
                              ``(iii) not set specific margin amounts;''.
    SEC. 737. POSITION LIMITS.

        (a) Aggregate Position Limits.--Section 4a(a) of the Commodity
    Exchange Act (7 U.S.C. 6a(a)) is amended--
                (1) by inserting after ``(a)'' the following:
                ``(1) In general.--'';
                (2) in the first sentence, by striking ``on electronic
            trading facilities with respect to a significant price discovery
            contract'' and inserting ``swaps that perform or affect a
            significant price discovery function with respect to registered
            entities'';
                (3) in the second sentence--
                        (A) by inserting ``, including any group or class of
                    traders,'' after ``held by any person''; and
                        (B) by striking ``on an electronic trading facility
                    with respect to a significant price discovery
                    contract,'' and inserting ``swaps traded on or subject
                    to the rules of a

    [[Page 124 STAT. 1723]]

                    designated contract market or a swap execution facility,
                    or swaps not traded on or subject to the rules of a
                    designated contract market or a swap execution facility
                    that performs a significant price discovery function
                    with respect to a registered entity,''; and
                (4) by adding at the end the following:
                ``(2) Establishment of limitations.--
                        ``(A) <<NOTE: Regulations. Contracts.>>  In
                    general.--In accordance with the standards set forth in
                    paragraph (1) of this subsection and consistent with the
                    good faith exception cited in subsection (b)(2), with
                    respect to physical commodities other than excluded
                    commodities as defined by the Commission, the Commission
                    shall by rule, regulation, or order establish limits on
                    the amount of positions, as appropriate, other than bona
                    fide hedge positions, that may be held by any person
                    with respect to contracts of sale for future delivery or
                    with respect to options on the contracts or commodities
                    traded on or subject to the rules of a designated
                    contract market.
                        ``(B) Timing.--
                              ``(i) Exempt commodities.--For exempt
                          commodities, the limits required under
                          subparagraph (A) shall be established within 180
                          days after the date of the enactment of this
                          paragraph.
                              ``(ii) Agricultural commodities.--For
                          agricultural commodities, the limits required
                          under subparagraph (A) shall be established within
                          270 days after the date of the enactment of this
                          paragraph.
                        ``(C) Goal.--In establishing the limits required
                    under subparagraph (A), the Commission shall strive to
                    ensure that trading on foreign boards of trade in the
                    same commodity will be subject to comparable limits and
                    that any limits to be imposed by the Commission will not
                    cause price discovery in the commodity to shift to
                    trading on the foreign boards of trade.
                ``(3) Specific limitations.--In establishing the limits
            required in paragraph (2), the Commission, as appropriate, shall
            set limits--
                        ``(A) on the number of positions that may be held by
                    any person for the spot month, each other month, and the
                    aggregate number of positions that may be held by any
                    person for all months; and
                        ``(B) to the maximum extent practicable, in its
                    discretion--
                              ``(i) to diminish, eliminate, or prevent
                          excessive speculation as described under this
                          section;
                              ``(ii) to deter and prevent market
                          manipulation, squeezes, and corners;
                              ``(iii) to ensure sufficient market liquidity
                          for bona fide hedgers; and
                              ``(iv) to ensure that the price discovery
                          function of the underlying market is not
                          disrupted.
                ``(4) Significant price discovery function.--In making a
            determination whether a swap performs or affects a significant
            price discovery function with respect to regulated markets, the
            Commission shall consider, as appropriate:

    [[Page 124 STAT. 1724]]

                        ``(A) Price linkage.--The extent to which the swap
                    uses or otherwise relies on a daily or final settlement
                    price, or other major price parameter, of another
                    contract traded on a regulated market based upon the
                    same underlying commodity, to value a position, transfer
                    or convert a position, financially settle a position, or
                    close out a position.
                        ``(B) Arbitrage.--The extent to which the price for
                    the swap is sufficiently related to the price of another
                    contract traded on a regulated market based upon the
                    same underlying commodity so as to permit market
                    participants to effectively arbitrage between the
                    markets by simultaneously maintaining positions or
                    executing trades in the swaps on a frequent and
                    recurring basis.
                        ``(C) Material price reference.--The extent to
                    which, on a frequent and recurring basis, bids, offers,
                    or transactions in a contract traded on a regulated
                    market are directly based on, or are determined by
                    referencing, the price generated by the swap.
                        ``(D) Material liquidity.--The extent to which the
                    volume of swaps being traded in the commodity is
                    sufficient to have a material effect on another contract
                    traded on a regulated market.
                        ``(E) Other material factors.--Such other material
                    factors as the Commission specifies by rule or
                    regulation as relevant to determine whether a swap
                    serves a significant price discovery function with
                    respect to a regulated market.
                ``(5) Economically equivalent contracts.--
                        ``(A) Notwithstanding any other provision of this
                    section, the Commission shall establish limits on the
                    amount of positions, including aggregate position
                    limits, as appropriate, other than bona fide hedge
                    positions, that may be held by any person with respect
                    to swaps that are economically equivalent to contracts
                    of sale for future delivery or to options on the
                    contracts or commodities traded on or subject to the
                    rules of a designated contract market subject to
                    paragraph (2).
                        ``(B) In establishing limits pursuant to
                    subparagraph (A), the Commission shall--
                              ``(i) develop the limits concurrently with
                          limits established under paragraph (2), and the
                          limits shall have similar requirements as under
                          paragraph (3)(B); and
                              ``(ii) establish the limits simultaneously
                          with limits established under paragraph (2).
                ``(6) <<NOTE: Contracts.>>  Aggregate position limits.--The
            Commission shall, by rule or regulation, establish limits
            (including related hedge exemption provisions) on the aggregate
            number or amount of positions in contracts based upon the same
            underlying commodity (as defined by the Commission) that may be
            held by any person, including any group or class of traders, for
            each month across--
                        ``(A) contracts listed by designated contract
                    markets;
                        ``(B) with respect to an agreement contract, or
                    transaction that settles against any price (including
                    the daily or final settlement price) of 1 or more
                    contracts listed

    [[Page 124 STAT. 1725]]

                    for trading on a registered entity, contracts traded on
                    a foreign board of trade that provides members or other
                    participants located in the United States with direct
                    access to its electronic trading and order matching
                    system; and
                        ``(C) swap contracts that perform or affect a
                    significant price discovery function with respect to
                    regulated entities.
                ``(7) Exemptions.--The Commission, by rule, regulation, or
            order, may exempt, conditionally or unconditionally, any person
            or class of persons, any swap or class of swaps, any contract of
            sale of a commodity for future delivery or class of such
            contracts, any option or class of options, or any transaction or
            class of transactions from any requirement it may establish
            under this section with respect to position limits.''.

        (b) Conforming Amendments.--Section 4a(b) of the Commodity Exchange
    Act (7 U.S.C. 6a(b)) is amended--
                (1) in paragraph (1), by striking ``or derivatives
            transaction execution facility or facilities or electronic
            trading facility'' and inserting ``or swap execution facility or
            facilities''; and
                (2) in paragraph (2), by striking ``or derivatives
            transaction execution facility or facilities or electronic
            trading facility'' and inserting ``or swap execution facility''.

        (c) Bona Fide Hedging Transaction.--Section 4a(c) of the Commodity
    Exchange Act is amended--
                (1) by inserting ``(1)'' after ``(c)''; and
                (2) by adding at the end the following:
                ``(2) <<NOTE: Contracts.>>  For the purposes of
            implementation of subsection (a)(2) for contracts of sale for
            future delivery or options on the contracts or commodities, the
            Commission shall define what constitutes a bona fide hedging
            transaction or position as a transaction or position that--
                        ``(A)(i) represents a substitute for transactions
                    made or to be made or positions taken or to be taken at
                    a later time in a physical marketing channel;
                        ``(ii) is economically appropriate to the reduction
                    of risks in the conduct and management of a commercial
                    enterprise; and
                        ``(iii) arises from the potential change in the
                    value of--
                              ``(I) assets that a person owns, produces,
                          manufactures, processes, or merchandises or
                          anticipates owning, producing, manufacturing,
                          processing, or merchandising;
                              ``(II) liabilities that a person owns or
                          anticipates incurring; or
                              ``(III) services that a person provides,
                          purchases, or anticipates providing or purchasing;
                          or
                        ``(B) reduces risks attendant to a position
                    resulting from a swap that--
                              ``(i) was executed opposite a counterparty for
                          which the transaction would qualify as a bona fide
                          hedging transaction pursuant to subparagraph (A);
                          or
                              ``(ii) meets the requirements of subparagraph
                          (A).''.

        (d) <<NOTE: 7 USC 6a note.>>  Effective Date.--This section and the
    amendments made by this section shall become effective on the date of
    the enactment of this section.

    [[Page 124 STAT. 1726]]

    SEC. 738. FOREIGN BOARDS OF TRADE.

        (a) In General.--Section 4(b) of the Commodity Exchange Act (7
    U.S.C. 6(b)) is amended--
                (1) in the first sentence, by striking ``The Commission''
            and inserting the following:
                ``(2) Persons located in the united states.--
                        ``(A) In general.--The Commission'';
                (2) in the second sentence, by striking ``Such rules and
            regulations'' and inserting the following:
                        ``(B) Different requirements.--Rules and regulations
                    described in subparagraph (A)'';
                (3) in the third sentence--
                        (A) by striking ``No rule or regulation'' and
                    inserting the following:
                        ``(C) Prohibition.--Except as provided in paragraphs
                    (1) and (2), no rule or regulation'';
                        (B) by striking ``that (1) requires'' and inserting
                    the following: ``that--
                              ``(i) requires''; and
                        (C) by striking ``market, or (2) governs'' and
                    inserting the following: ``market; or
                              ``(ii) governs''; and
                (4) by inserting before paragraph (2) (as designated by
            paragraph (1)) the following:
                ``(1) Foreign boards of trade.--
                        ``(A) Registration.--The Commission may adopt rules
                    and regulations requiring registration with the
                    Commission for a foreign board of trade that provides
                    the members of the foreign board of trade or other
                    participants located in the United States with direct
                    access to the electronic trading and order matching
                    system of the foreign board of trade, including rules
                    and regulations prescribing procedures and requirements
                    applicable to the registration of such foreign boards of
                    trade. For purposes of this paragraph, `direct access'
                    refers to an explicit grant of authority by a foreign
                    board of trade to an identified member or other
                    participant located in the United States to enter trades
                    directly into the trade matching system of the foreign
                    board of trade. In adopting such rules and regulations,
                    the commission shall consider--
                              ``(i) whether any such foreign board of trade
                          is subject to comparable, comprehensive
                          supervision and regulation by the appropriate
                          governmental authorities in the foreign board of
                          trade's home country; and
                              ``(ii) any previous commission findings that
                          the foreign board of trade is subject to
                          comparable comprehensive supervision and
                          regulation by the appropriate government
                          authorities in the foreign board of trade's home
                          country.
                        ``(B) Linked contracts.--The Commission may not
                    permit a foreign board of trade to provide to the
                    members of the foreign board of trade or other
                    participants located in the United States direct access
                    to the electronic trading and order-matching system of
                    the foreign board of trade with respect to an agreement,
                    contract, or transaction that settles against any price
                    (including the daily or final settlement price) of 1 or
                    more contracts listed for trading on

    [[Page 124 STAT. 1727]]

                    a registered entity, unless the Commission determines
                    that--
                              ``(i) the foreign board of trade makes public
                          daily trading information regarding the agreement,
                          contract, or transaction that is comparable to the
                          daily trading information published by the
                          registered entity for the 1 or more contracts
                          against which the agreement, contract, or
                          transaction traded on the foreign board of trade
                          settles; and
                              ``(ii) the foreign board of trade (or the
                          foreign futures authority that oversees the
                          foreign board of trade)--
                                        ``(I) adopts position limits
                                    (including related hedge exemption
                                    provisions) for the agreement, contract,
                                    or transaction that are comparable to
                                    the position limits (including related
                                    hedge exemption provisions) adopted by
                                    the registered entity for the 1 or more
                                    contracts against which the agreement,
                                    contract, or transaction traded on the
                                    foreign board of trade settles;
                                        ``(II) has the authority to require
                                    or direct market participants to limit,
                                    reduce, or liquidate any position the
                                    foreign board of trade (or the foreign
                                    futures authority that oversees the
                                    foreign board of trade) determines to be
                                    necessary to prevent or reduce the
                                    threat of price manipulation, excessive
                                    speculation as described in section 4a,
                                    price distortion, or disruption of
                                    delivery or the cash settlement process;
                                        ``(III) <<NOTE: Notification.>>
                                    agrees to promptly notify the
                                    Commission, with regard to the
                                    agreement, contract, or transaction that
                                    settles against any price (including the
                                    daily or final settlement price) of 1 or
                                    more contracts listed for trading on a
                                    registered entity, of any change
                                    regarding--
                                                ``(aa) <<NOTE: Public
                                            information.>>  the information
                                            that the foreign board of trade
                                            will make publicly available;
                                                ``(bb) the position limits
                                            that the foreign board of trade
                                            or foreign futures authority
                                            will adopt and enforce;
                                                ``(cc) the position
                                            reductions required to prevent
                                            manipulation, excessive
                                            speculation as described in
                                            section 4a, price distortion, or
                                            disruption of delivery or the
                                            cash settlement process; and
                                                ``(dd) any other area of
                                            interest expressed by the
                                            Commission to the foreign board
                                            of trade or foreign futures
                                            authority;
                                        ``(IV) provides information to the
                                    Commission regarding large trader
                                    positions in the agreement, contract, or
                                    transaction that is comparable to the
                                    large trader position information
                                    collected by the Commission for the 1 or
                                    more contracts against which the
                                    agreement, contract, or transaction
                                    traded on the foreign board of trade
                                    settles; and
                                        ``(V) <<NOTE: Reports.>>  provides
                                    the Commission such information as is
                                    necessary to publish reports on
                                    aggregate

    [[Page 124 STAT. 1728]]

                                    trader positions for the agreement,
                                    contract, or transaction traded on the
                                    foreign board of trade that are
                                    comparable to such reports on aggregate
                                    trader positions for the 1 or more
                                    contracts against which the agreement,
                                    contract, or transaction traded on the
                                    foreign board of trade settles.
                        ``(C) <<NOTE: Effective date.>>  Existing foreign
                    boards of trade.--Subparagraphs (A) and (B) shall not be
                    effective with respect to any foreign board of trade to
                    which, prior to the date of enactment of this paragraph,
                    the Commission granted direct access permission until
                    the date that is 180 days after that date of
                    enactment.''.

        (b) Liability of Registered Persons Trading on a Foreign Board of
    Trade.--Section 4 of the Commodity Exchange Act (7 U.S.C. 6) is
    amended--
                (1) in subsection (a), in the matter preceding paragraph
            (1), by inserting ``or by subsection (e)'' after ``Unless
            exempted by the Commission pursuant to subsection (c)''; and
                (2) by adding at the end the following:

        ``(e) Liability of Registered Persons Trading on a Foreign Board of
    Trade.--
                ``(1) In general.--A person registered with the Commission,
            or exempt from registration by the Commission, under this Act
            may not be found to have violated subsection (a) with respect to
            a transaction in, or in connection with, a contract of sale of a
            commodity for future delivery if the person--
                        ``(A) has reason to believe that the transaction and
                    the contract is made on or subject to the rules of a
                    foreign board of trade that is--
                              ``(i) legally organized under the laws of a
                          foreign country;
                              ``(ii) authorized to act as a board of trade
                          by a foreign futures authority; and
                              ``(iii) subject to regulation by the foreign
                          futures authority; and
                        ``(B) has not been determined by the Commission to
                    be operating in violation of subsection (a).
                ``(2) Rule of construction.--Nothing in this subsection
            shall be construed as implying or creating any presumption that
            a board of trade, exchange, or market is located outside the
            United States, or its territories or possessions, for purposes
            of subsection (a).''.

        (c) Contract Enforcement for Foreign Futures Contracts.--Section
    22(a) of the Commodity Exchange Act (7 U.S.C. 25(a)) (as amended by
    section 739) is amended by adding at the end the following:
        ``(6) Contract Enforcement for Foreign Futures Contracts.--A
    contract of sale of a commodity for future delivery traded or executed
    on or through the facilities of a board of trade, exchange, or market
    located outside the United States for purposes of section 4(a) shall not
    be void, voidable, or unenforceable, and a party to such a contract
    shall not be entitled to rescind or recover any payment made with
    respect to the contract, based on the failure of the foreign board of
    trade to comply with any provision of this Act.''.

    [[Page 124 STAT. 1729]]

    SEC. 739. LEGAL CERTAINTY FOR SWAPS.

        Section 22(a) of the Commodity Exchange Act (7 U.S.C. 25(a)) is
    amended by striking paragraph (4) and inserting the following:
        ``(4) Contract Enforcement Between Eligible Counterparties.--
                ``(A) In general.--No hybrid instrument sold to any investor
            shall be void, voidable, or unenforceable, and no party to a
            hybrid instrument shall be entitled to rescind, or recover any
            payment made with respect to, the hybrid instrument under this
            section or any other provision of Federal or State law, based
            solely on the failure of the hybrid instrument to comply with
            the terms or conditions of section 2(f) or regulations of the
            Commission.
                ``(B) Swaps.--No agreement, contract, or transaction between
            eligible contract participants or persons reasonably believed to
            be eligible contract participants shall be void, voidable, or
            unenforceable, and no party to such agreement, contract, or
            transaction shall be entitled to rescind, or recover any payment
            made with respect to, the agreement, contract, or transaction
            under this section or any other provision of Federal or State
            law, based solely on the failure of the agreement, contract, or
            transaction--
                        ``(i) to meet the definition of a swap under section
                    1a; or
                        ``(ii) to be cleared in accordance with section
                    2(h)(1).

        ``(5) Legal Certainty for Long-term Swaps Entered Into Before the
    Date of Enactment of the Wall Street Transparency and Accountability Act
    of 2010.--
                ``(A) Effect on swaps.--Unless specifically reserved in the
            applicable swap, neither the enactment of the Wall Street
            Transparency and Accountability Act of 2010, nor any requirement
            under that Act or an amendment made by that Act, shall
            constitute a termination event, force majeure, illegality,
            increased costs, regulatory change, or similar event under a
            swap (including any related credit support arrangement) that
            would permit a party to terminate, renegotiate, modify, amend,
            or supplement 1 or more transactions under the swap.
                ``(B) Position limits.--Any position limit established under
            the Wall Street Transparency and Accountability Act of 2010
            shall not apply to a position acquired in good faith prior to
            the effective date of any rule, regulation, or order under the
            Act that establishes the position limit; provided, however, that
            such positions shall be attributed to the trader if the trader's
            position is increased after the effective date of such position
            limit rule, regulation, or order.''.
    SEC. 740. MULTILATERAL CLEARING ORGANIZATIONS.

        Sections <<NOTE: Repeal.>>  408 and 409 of the Federal Deposit
    Insurance Corporation Improvement Act of 1991 (12 U.S.C. 4421, 4422) are
    repealed.
    SEC. 741. ENFORCEMENT.

        (a) Enforcement Authority.--The Commodity Exchange Act is amended by
    inserting after section 4b (7 U.S.C. 6b) the following:
    ``SEC. 4b-1. <<NOTE: 7 USC 6b-1.>> ENFORCEMENT AUTHORITY.

        ``(a) Commodity Futures Trading Commission.--Except as provided in
    subsections (b), (c), and (d), the Commission shall have exclusive
    authority to enforce the provisions of subtitle A of the

    [[Page 124 STAT. 1730]]

    Wall Street Transparency and Accountability Act of 2010 with respect to
    any person.
        ``(b) Prudential Regulators.--The prudential regulators shall have
    exclusive authority to enforce the provisions of section 4s(e) with
    respect to swap dealers or major swap participants for which they are
    the prudential regulator.
        ``(c) Referrals.--
                ``(1) Prudential regulators.--If the prudential regulator
            for a swap dealer or major swap participant has cause to believe
            that the swap dealer or major swap participant, or any affiliate
            or division of the swap dealer or major swap participant, may
            have engaged in conduct that constitutes a violation of the
            nonprudential requirements of this Act (including section 4s or
            rules adopted by the Commission under that section), the
            prudential regulator may promptly notify the Commission in a
            written report that includes--
                        ``(A) a request that the Commission initiate an
                    enforcement proceeding under this Act; and
                        ``(B) an explanation of the facts and circumstances
                    that led to the preparation of the written report.
                ``(2) Commission.--If the Commission has cause to believe
            that a swap dealer or major swap participant that has a
            prudential regulator may have engaged in conduct that
            constitutes a violation of any prudential requirement of section
            4s or rules adopted by the Commission under that section, the
            Commission may notify the prudential regulator of the conduct in
            a written report that includes--
                        ``(A) a request that the prudential regulator
                    initiate an enforcement proceeding under this Act or any
                    other Federal law (including regulations); and
                        ``(B) an explanation of the concerns of the
                    Commission, and a description of the facts and
                    circumstances, that led to the preparation of the
                    written report.

        ``(d) <<NOTE: Time period.>>  Backstop Enforcement Authority.--
                ``(1) Initiation of enforcement proceeding by prudential
            regulator.--If the Commission does not initiate an enforcement
            proceeding before the end of the 90-day period beginning on the
            date on which the Commission receives a written report under
            subsection (c)(1), the prudential regulator may initiate an
            enforcement proceeding.
                ``(2) Initiation of enforcement proceeding by commission.--
            If the prudential regulator does not initiate an enforcement
            proceeding before the end of the 90-day period beginning on the
            date on which the prudential regulator receives a written report
            under subsection (c)(2), the Commission may initiate an
            enforcement proceeding.''.

        (b) Conforming Amendments.--
                (1) Section 4b of the Commodity Exchange Act (7 U.S.C. 6b)
            is amended--
                        (A) in subsection (a)(2), by striking ``or other
                    agreement, contract, or transaction subject to
                    paragraphs (1) and (2) of section 5a(g),'' and inserting
                    ``or swap,'';
                        (B) in subsection (b), by striking ``or other
                    agreement, contract or transaction subject to paragraphs
                    (1) and (2) of section 5a(g),'' and inserting ``or
                    swap,''; and
                        (C) by adding at the end the following:

    [[Page 124 STAT. 1731]]

        ``(e) It shall be unlawful for any person, directly or indirectly,
    by the use of any means or instrumentality of interstate commerce, or of
    the mails, or of any facility of any registered entity, in or in
    connection with any order to make, or the making of, any contract of
    sale of any commodity for future delivery (or option on such a
    contract), or any swap, on a group or index of securities (or any
    interest therein or based on the value thereof)--
                ``(1) to employ any device, scheme, or artifice to defraud;
                ``(2) to make any untrue statement of a material fact or to
            omit to state a material fact necessary in order to make the
            statements made, in the light of the circumstances under which
            they were made, not misleading; or
                ``(3) to engage in any act, practice, or course of business
            which operates or would operate as a fraud or deceit upon any
            person.''.
                (2) Section 4c(a)(1) of the Commodity Exchange Act (7 U.S.C.
            6c(a)(1)) is amended by inserting ``or swap'' before ``if the
            transaction is used or may be used''.
                (3) Section 6(c) of the Commodity Exchange Act (7 U.S.C. 9)
            is amended in the first sentence by inserting ``or of any
            swap,'' before ``or has willfully made''.
                (4) Section 6(d) of the Commodity Exchange Act (7 U.S.C.
            13b) is amended in the first sentence, in the matter preceding
            the proviso, by inserting ``or of any swap,'' before ``or
            otherwise is violating''.
                (5) Section 6c(a) of the Commodity Exchange Act (7 U.S.C.
            13a-1(a)) is amended in the matter preceding the proviso by
            inserting ``or any swap'' after ``commodity for future
            delivery''.
                (6) Section 9 of the Commodity Exchange Act (7 U.S.C. 13) is
            amended--
                        (A) in subsection (a)--
                              (i) in paragraph (2), by inserting ``or of any
                          swap,'' before ``or to corner''; and
                              (ii) in paragraph (4), by inserting ``swap
                          data repository,'' before ``or futures
                          association'' and
                        (B) in subsection (e)(1)--
                              (i) by inserting ``swap data repository,''
                          before ``or registered futures association''; and
                              (ii) by inserting ``, or swaps,'' before ``on
                          the basis''.
                (7) Section 9(a) of the Commodity Exchange Act (7 U.S.C.
            13(a)) is amended by adding at the end the following:
                ``(6) Any person to abuse the end user clearing exemption
            under section 2(h)(4), as determined by the Commission.''.
                (8) Section 2(c)(2)(B) of the Commodity Exchange Act (7
            U.S.C. 2(c)(2)(B)) is amended--
                        (A) by striking ``(dd),'' each place it appears;
                        (B) in clause (iii), by inserting ``, and accounts
                    or pooled investment vehicles described in clause
                    (vi),'' before ``shall be subject to''; and
                        (C) by adding at the end the following:
                              ``(vi) <<NOTE: Applicability.>>  This Act
                          applies to, and the Commission shall have
                          jurisdiction over, an account or pooled investment
                          vehicle that is offered for the purpose of
                          trading, or that trades, any agreement, contract,
                          or transaction in foreign currency described in
                          clause (i).''.
                (9) Section 2(c)(2)(C) of the Commodity Exchange Act (7
            U.S.C. 2(c)(2)(C)) is amended--

    [[Page 124 STAT. 1732]]

                        (A) by striking ``(dd),'' each place it appears;
                        (B) in clause (ii)(I), by inserting ``, and accounts
                    or pooled investment vehicles described in clause
                    (vii),'' before ``shall be subject to''; and
                        (C) by adding at the end the following:
                              ``(vii) <<NOTE: Applicability.>>  This Act
                          applies to, and the Commission shall have
                          jurisdiction over, an account or pooled investment
                          vehicle that is offered for the purpose of
                          trading, or that trades, any agreement, contract,
                          or transaction in foreign currency described in
                          clause (i).''.
                (10) Section 1a(19)(A)(iv)(II) of the Commodity Exchange Act
            (7 U.S.C. 1a(19)(A)(iv)(II)) (as redesignated by section
            721(a)(1)) is amended by inserting before the semicolon at the
            end the following: ``provided, however, that for purposes of
            section 2(c)(2)(B)(vi) and section 2(c)(2)(C)(vii), the term
            `eligible contract participant' shall not include a commodity
            pool in which any participant is not otherwise an eligible
            contract participant''.
                (11) Section 6(e) of the Commodity Exchange Act (7 U.S.C.
            9a) is amended by adding at the end the following:
                ``(4) <<NOTE: Penalty.>>  Any designated clearing
            organization that knowingly or recklessly evades or participates
            in or facilitates an evasion of the requirements of section 2(h)
            shall be liable for a civil money penalty in twice the amount
            otherwise available for a violation of section 2(h).
                ``(5) <<NOTE: Penalty.>>  Any swap dealer or major swap
            participant that knowingly or recklessly evades or participates
            in or facilitates an evasion of the requirements of section 2(h)
            shall be liable for a civil money penalty in twice the amount
            otherwise available for a violation of section 2(h).''.

        (c) <<NOTE: 15 USC 8324.>>  Savings Clause.--Notwithstanding any
    other provision of this title, nothing in this subtitle shall be
    construed as divesting any appropriate Federal banking agency of any
    authority it may have to establish or enforce, with respect to a person
    for which such agency is the appropriate Federal banking agency,
    prudential or other standards pursuant to authority granted by Federal
    law other than this title.
    SEC. 742. RETAIL COMMODITY TRANSACTIONS.

        (a) In General.--Section 2(c) of the Commodity Exchange Act (7
    U.S.C. 2(c)) is amended--
                (1) in paragraph (1), by striking ``5a (to the extent
            provided in section 5a(g)), 5b, 5d, or 12(e)(2)(B))'' and
            inserting ``, 5b, or 12(e)(2)(B))''; and
                (2) in paragraph (2), by adding at the end the following:
                        ``(D) <<NOTE: Contracts.>>  Retail commodity
                    transactions.--
                              ``(i) Applicability.--Except as provided in
                          clause (ii), this subparagraph shall apply to any
                          agreement, contract, or transaction in any
                          commodity that is--
                                        ``(I) entered into with, or offered
                                    to (even if not entered into with), a
                                    person that is not an eligible contract
                                    participant or eligible commercial
                                    entity; and
                                        ``(II) entered into, or offered
                                    (even if not entered into), on a
                                    leveraged or margined basis, or financed
                                    by the offeror, the counterparty, or

    [[Page 124 STAT. 1733]]

                                    a person acting in concert with the
                                    offeror or counterparty on a similar
                                    basis.
                              ``(ii) Exceptions.--This subparagraph shall
                          not apply to--
                                        ``(I) an agreement, contract, or
                                    transaction described in paragraph (1)
                                    or subparagraphs (A), (B), or (C),
                                    including any agreement, contract, or
                                    transaction specifically excluded from
                                    subparagraph (A), (B), or (C);
                                        ``(II) any security;
                                        ``(III) a contract of sale that--
                                                ``(aa) results in actual
                                            delivery within 28 days or such
                                            other longer period as the
                                            Commission may determine by rule
                                            or regulation based upon the
                                            typical commercial practice in
                                            cash or spot markets for the
                                            commodity involved; or
                                                ``(bb) creates an
                                            enforceable obligation to
                                            deliver between a seller and a
                                            buyer that have the ability to
                                            deliver and accept delivery,
                                            respectively, in connection with
                                            the line of business of the
                                            seller and buyer; or
                                        ``(IV) an agreement, contract, or
                                    transaction that is listed on a national
                                    securities exchange registered under
                                    section 6(a) of the Securities Exchange
                                    Act of 1934 (15 U.S.C. 78f(a)); or
                                        ``(V) an identified banking product,
                                    as defined in section 402(b) of the
                                    Legal Certainty for Bank Products Act of
                                    2000 (7 U.S.C.27(b)).
                              ``(iii) <<NOTE: Applicability.>>
                          Enforcement.--Sections 4(a), 4(b), and 4b apply to
                          any agreement, contract, or transaction described
                          in clause (i), as if the agreement, contract, or
                          transaction was a contract of sale of a commodity
                          for future delivery.
                              ``(iv) Eligible commercial entity.--For
                          purposes of this subparagraph, an agricultural
                          producer, packer, or handler shall be considered
                          to be an eligible commercial entity for any
                          agreement, contract, or transaction for a
                          commodity in connection with the line of business
                          of the agricultural producer, packer, or
                          handler.''.

        (b) Gramm-Leach-Bliley Act.--Section 206(a) of the Gramm-Leach-
    Bliley Act (Public Law 106-102; 15 U.S.C. 78c note) is amended, in the
    matter preceding paragraph (1), by striking ``For purposes of'' and
    inserting ``Except as provided in subsection (e), for purposes of''.
        (c) Conforming Amendments Relating to Retail Foreign Exchange
    Transactions.--
                (1) Section 2(c)(2)(B)(i)(II) of the Commodity Exchange Act
            (7 U.S.C. 2(c)(2)(B)(i)(II)) is amended--
                        (A) in item (aa), by inserting ``United States''
                    before ``financial institution'';
                        (B) by striking items (dd) and (ff);
                        (C) by redesignating items (ee) and (gg) as items
                    (dd) and (ff), respectively; and
                        (D) in item (dd) (as so redesignated), by striking
                    the semicolon and inserting ``; or''.

    [[Page 124 STAT. 1734]]

                (2) Section 2(c)(2) of the Commodity Exchange Act (7 U.S.C.
            2(c)(2)) (as amended by subsection (a)(2)) is amended by adding
            at the end the following:
                        ``(E) Prohibition.--
                              ``(i) Definition of federal regulatory
                          agency.--In this subparagraph, the term `Federal
                          regulatory agency' means--
                                        ``(I) the Commission;
                                        ``(II) the Securities and Exchange
                                    Commission;
                                        ``(III) an appropriate Federal
                                    banking agency;
                                        ``(IV) the National Credit Union
                                    Association; and
                                        ``(V) the Farm Credit
                                    Administration.
                              ``(ii) <<NOTE: Contracts.>>  Prohibition.--
                                        ``(I) In general.--Except as
                                    provided in subclause (II), a person
                                    described in subparagraph (B)(i)(II) for
                                    which there is a Federal regulatory
                                    agency shall not offer to, or enter into
                                    with, a person that is not an eligible
                                    contract participant, any agreement,
                                    contract, or transaction in foreign
                                    currency described in subparagraph
                                    (B)(i)(I) except pursuant to a rule or
                                    regulation of a Federal regulatory
                                    agency allowing the agreement, contract,
                                    or transaction under such terms and
                                    conditions as the Federal regulatory
                                    agency shall prescribe.
                                        ``(II) Effective date.--With regard
                                    to persons described in subparagraph
                                    (B)(i)(II) for which a Federal
                                    regulatory agency has issued a proposed
                                    rule concerning agreements, contracts,
                                    or transactions in foreign currency
                                    described in subparagraph (B)(i)(I)
                                    prior to the date of enactment of this
                                    subclause, subclause (I) shall take
                                    effect 90 days after the date of
                                    enactment of this subclause.
                              ``(iii) Requirements of rules and
                          regulations.--
                                        ``(I) In general.--The rules and
                                    regulations described in clause (ii)
                                    shall prescribe appropriate requirements
                                    with respect to--
                                                ``(aa) disclosure;
                                                ``(bb) recordkeeping;
                                                ``(cc) capital and margin;
                                                ``(dd) reporting;
                                                ``(ee) business conduct;
                                                ``(ff) documentation; and

                                            ``(gg) <<NOTE: Determination.>>
                                            such other standards or
                                            requirements as the Federal
                                            regulatory agency shall
                                            determine to be necessary.
                                        ``(II) Treatment.--The rules or
                                    regulations described in clause (ii)
                                    shall treat all agreements, contracts,
                                    and transactions in foreign currency
                                    described in subparagraph (B)(i)(I), and
                                    all agreements, contracts, and
                                    transactions in foreign currency that
                                    are functionally or economically similar
                                    to agreements, contracts, or
                                    transactions described in subparagraph
                                    (B)(i)(I), similarly.''.

    [[Page 124 STAT. 1735]]

    SEC. <<NOTE: 7 USC 1a note.>>  743. OTHER AUTHORITY.

        Unless otherwise provided by the amendments made by this subtitle,
    the amendments made by this subtitle do not divest any appropriate
    Federal banking agency, the Commodity Futures Trading Commission, the
    Securities and Exchange Commission, or other Federal or State agency of
    any authority derived from any other applicable law.
    SEC. 744. RESTITUTION REMEDIES.

        Section 6c(d) of the Commodity Exchange Act (7 U.S.C. 13a-1(d)) is
    amended by adding at the end the following:
                ``(3) Equitable remedies.--In any action brought under this
            section, the Commission may seek, and the court may impose, on a
            proper showing, on any person found in the action to have
            committed any violation, equitable remedies including--
                        ``(A) restitution to persons who have sustained
                    losses proximately caused by such violation (in the
                    amount of such losses); and
                        ``(B) disgorgement of gains received in connection
                    with such violation.''.
    SEC. 745. ENHANCED COMPLIANCE BY REGISTERED ENTITIES.

        (a) Effect of Interpretation.--Section 5c(a) of the Commodity
    Exchange Act (7 U.S.C. 7a-2(a)) is amended by striking paragraph (2) and
    inserting the following:
                ``(2) Effect of interpretation.--An interpretation issued
            under paragraph (1) may provide the exclusive means for
            complying with each section described in paragraph (1).''.

        (b) New Contracts, New Rules, and Rule Amendments.--Section 5c of
    the Commodity Exchange Act (7 U.S.C. 7a-2) is amended by striking
    subsection (c) and inserting the following:
        ``(c) <<NOTE: Certification.>>  New Contracts, New Rules, and Rule
    Amendments.--
                ``(1) In general.--A registered entity may elect to list for
            trading or accept for clearing any new contract, or other
            instrument, or may elect to approve and implement any new rule
            or rule amendment, by providing to the Commission (and the
            Secretary of the Treasury, in the case of a contract of sale of
            a government security for future delivery (or option on such a
            contract) or a rule or rule amendment specifically related to
            such a contract) a written certification that the new contract
            or instrument or clearing of the new contract or instrument, new
            rule, or rule amendment complies with this Act (including
            regulations under this Act).
                ``(2) Rule review.--The new rule or rule amendment described
            in paragraph (1) <<NOTE: Effective
            date. Notification. Determination.>>  shall become effective,
            pursuant to the certification of the registered entity and
            notice of such certification to its members (in a manner to be
            determined by the Commission), on the date that is 10 business
            days after the date on which the Commission receives the
            certification (or such shorter period as determined by the
            Commission by rule or regulation) unless the Commission notifies
            the registered entity within such time that it is staying the
            certification because there exist novel or complex issues that
            require additional time to analyze, an inadequate explanation by
            the submitting registered entity, or a potential inconsistency
            with this Act (including regulations under this Act).

    [[Page 124 STAT. 1736]]

                ``(3) <<NOTE: Notification. Time period.>>  Stay of
            certification for rules.--
                        ``(A) A notification by the Commission pursuant to
                    paragraph (2) shall stay the certification of the new
                    rule or rule amendment for up to an additional 90 days
                    from the date of the notification.
                        ``(B) <<NOTE: Effective date.>>  A rule or rule
                    amendment subject to a stay pursuant to subparagraph (A)
                    shall become effective, pursuant to the certification of
                    the registered entity, at the expiration of the period
                    described in subparagraph (A) unless the Commission--
                              ``(i) withdraws the stay prior to that time;
                          or
                              ``(ii) notifies the registered entity during
                          such period that it objects to the proposed
                          certification on the grounds that it is
                          inconsistent with this Act (including regulations
                          under this Act).
                        ``(C) <<NOTE: Public comment.>>  The Commission
                    shall provide a not less than 30-day public comment
                    period, within the 90-day period in which the stay is in
                    effect as described in subparagraph (A), whenever the
                    Commission reviews a rule or rule amendment pursuant to
                    a notification by the Commission under this paragraph.
                ``(4) Prior approval.--
                        ``(A) In general.--A registered entity may request
                    that the Commission grant prior approval to any new
                    contract or other instrument, new rule, or rule
                    amendment.
                        ``(B) Prior approval required.--Notwithstanding any
                    other provision of this section, a designated contract
                    market shall submit to the Commission for prior approval
                    each rule amendment that materially changes the terms
                    and conditions, as determined by the Commission, in any
                    contract of sale for future delivery of a commodity
                    specifically enumerated in section 1a(10) (or any option
                    thereon) traded through its facilities if the rule
                    amendment applies to contracts and delivery months which
                    have already been listed for trading and have open
                    interest.
                        ``(C) Deadline.--If prior approval is requested
                    under subparagraph (A), the Commission shall take final
                    action on the request not later than 90 days after
                    submission of the request, unless the person submitting
                    the request agrees to an extension of the time
                    limitation established under this subparagraph.
                ``(5) Approval.--
                        ``(A) Rules.--The Commission shall approve a new
                    rule, or rule amendment, of a registered entity unless
                    the Commission finds that the new rule, or rule
                    amendment, is inconsistent with this subtitle (including
                    regulations).
                        ``(B) Contracts and instruments.--The Commission
                    shall approve a new contract or other instrument unless
                    the Commission finds that the new contract or other
                    instrument would violate this Act (including
                    regulations).
                        ``(C) Special rule for review and approval of event
                    contracts and swaps contracts.--
                              ``(i) Event contracts.--In connection with the
                          listing of agreements, contracts, transactions, or
                          swaps in excluded commodities that are based upon
                          the occurrence, extent of an occurrence, or
                          contingency (other than a change in the price,
                          rate, value, or levels of

    [[Page 124 STAT. 1737]]

                          a commodity described in section 1a(2)(i)), by a
                          designated contract market or swap execution
                          facility, the Commission may determine that such
                          agreements, contracts, or transactions are
                          contrary to the public interest if the agreements,
                          contracts, or transactions involve--
                                        ``(I) activity that is unlawful
                                    under any Federal or State law;
                                        ``(II) terrorism;
                                        ``(III) assassination;
                                        ``(IV) war;
                                        ``(V) gaming; or
                                        ``(VI) other similar activity
                                    determined by the Commission, by rule or
                                    regulation, to be contrary to the public
                                    interest.
                              ``(ii) Prohibition.--No agreement, contract,
                          or transaction determined by the Commission to be
                          contrary to the public interest under clause (i)
                          may be listed or made available for clearing or
                          trading on or through a registered entity.
                              ``(iii) Swaps contracts.--
                                        ``(I) In general.--
                                    In <<NOTE: Determination.>>  connection
                                    with the listing of a swap for clearing
                                    by a derivatives clearing organization,
                                    the Commission shall determine, upon
                                    request or on its own motion, the
                                    initial eligibility, or the continuing
                                    qualification, of a derivatives clearing
                                    organization to clear such a swap under
                                    those criteria, conditions, or rules
                                    that the Commission, in its discretion,
                                    determines.
                                        ``(II) Requirements.--Any such
                                    criteria, conditions, or rules shall
                                    consider--
                                                ``(aa) the financial
                                            integrity of the derivatives
                                            clearing organization; and
                                                ``(bb) any other factors
                                            which the Commission determines
                                            may be appropriate.
                              ``(iv) Deadline.--The Commission shall take
                          final action under clauses (i) and (ii) in not
                          later than 90 days from the commencement of its
                          review unless the party seeking to offer the
                          contract or swap agrees to an extension of this
                          time limitation.''.

        (c) Violation of Core Principles.--Section 5c of the Commodity
    Exchange Act (7 U.S.C. 7a-2) is amended by striking subsection (d).
    SEC. 746. INSIDER TRADING.

        Section 4c(a) of the Commodity Exchange Act (7 U.S.C. 6c(a)) is
    amended by adding at the end the following:
                ``(3) Contract of sale.--It shall be unlawful for any
            employee or agent of any department or agency of the Federal
            Government who, by virtue of the employment or position of the
            employee or agent, acquires information that may affect or tend
            to affect the price of any commodity in interstate commerce, or
            for future delivery, or any swap, and which information has not
            been disseminated by the department or agency of the Federal
            Government holding or creating the information in a manner which
            makes it generally available to the trading public, or disclosed
            in a criminal, civil, or

    [[Page 124 STAT. 1738]]

            administrative hearing, or in a congressional, administrative,
            or Government Accountability Office report, hearing, audit, or
            investigation, to use the information in his personal capacity
            and for personal gain to enter into, or offer to enter into--
                        ``(A) a contract of sale of a commodity for future
                    delivery (or option on such a contract);
                        ``(B) an option (other than an option executed or
                    traded on a national securities exchange registered
                    pursuant to section 6(a) of the Securities Exchange Act
                    of 1934 (15 U.S.C. 78f(a)); or
                        ``(C) a swap.
                ``(4) Nonpublic information.--
                        ``(A) Imparting of nonpublic information.--It shall
                    be unlawful for any employee or agent of any department
                    or agency of the Federal Government who, by virtue of
                    the employment or position of the employee or agent,
                    acquires information that may affect or tend to affect
                    the price of any commodity in interstate commerce, or
                    for future delivery, or any swap, and which information
                    has not been disseminated by the department or agency of
                    the Federal Government holding or creating the
                    information in a manner which makes it generally
                    available to the trading public, or disclosed in a
                    criminal, civil, or administrative hearing, or in a
                    congressional, administrative, or Government
                    Accountability Office report, hearing, audit, or
                    investigation, to impart the information in his personal
                    capacity and for personal gain with intent to assist
                    another person, directly or indirectly, to use the
                    information to enter into, or offer to enter into--
                              ``(i) a contract of sale of a commodity for
                          future delivery (or option on such a contract);
                              ``(ii) an option (other than an option
                          executed or traded on a national securities
                          exchange registered pursuant to section 6(a) of
                          the Securities Exchange Act of 1934 (15 U.S.C.
                          78f(a)); or
                              ``(iii) a swap.
                        ``(B) Knowing use.--It shall be unlawful for any
                    person who receives information imparted by any employee
                    or agent of any department or agency of the Federal
                    Government as described in subparagraph (A) to knowingly
                    use such information to enter into, or offer to enter
                    into--
                              ``(i) a contract of sale of a commodity for
                          future delivery (or option on such a contract);
                              ``(ii) an option (other than an option
                          executed or traded on a national securities
                          exchange registered pursuant to section 6(a) of
                          the Securities Exchange Act of 1934 (15 U.S.C.
                          78f(a)); or
                              ``(iii) a swap.
                        ``(C) Theft of nonpublic information.--It shall be
                    unlawful for any person to steal, convert, or
                    misappropriate, by any means whatsoever, information
                    held or created by any department or agency of the
                    Federal Government that may affect or tend to affect the
                    price of any commodity in interstate commerce, or for
                    future delivery, or any swap, where such person knows,
                    or acts in reckless disregard of the fact, that such
                    information has not been disseminated by the department
                    or agency of the Federal Government

    [[Page 124 STAT. 1739]]

                    holding or creating the information in a manner which
                    makes it generally available to the trading public, or
                    disclosed in a criminal, civil, or administrative
                    hearing, or in a congressional, administrative, or
                    Government Accountability Office report, hearing, audit,
                    or investigation, and to use such information, or to
                    impart such information with the intent to assist
                    another person, directly or indirectly, to use such
                    information to enter into, or offer to enter into--
                              ``(i) a contract of sale of a commodity for
                          future delivery (or option on such a contract);
                              ``(ii) an option (other than an option
                          executed or traded on a national securities
                          exchange registered pursuant to section 6(a) of
                          the Securities Exchange Act of 1934 (15 U.S.C.
                          78f(a)); or
                              ``(iii) a swap, provided, however, that
                          nothing in this subparagraph shall preclude a
                          person that has provided information concerning,
                          or generated by, the person, its operations or
                          activities, to any employee or agent of any
                          department or agency of the Federal Government,
                          voluntarily or as required by law, from using such
                          information to enter into, or offer to enter into,
                          a contract of sale, option, or swap described in
                          clauses (i), (ii), or (iii).''.
    SEC. 747. ANTIDISRUPTIVE PRACTICES AUTHORITY.

        Section 4c(a) of the Commodity Exchange Act (7 U.S.C. 6c(a)) (as
    amended by section 746) is amended by adding at the end the following:
                ``(5) Disruptive practices.--It shall be unlawful for any
            person to engage in any trading, practice, or conduct on or
            subject to the rules of a registered entity that--
                        ``(A) violates bids or offers;
                        ``(B) demonstrates intentional or reckless disregard
                    for the orderly execution of transactions during the
                    closing period; or
                        ``(C) is, is of the character of, or is commonly
                    known to the trade as, `spoofing' (bidding or offering
                    with the intent to cancel the bid or offer before
                    execution).
                ``(6) Rulemaking authority.--The Commission may make and
            promulgate such rules and regulations as, in the judgment of the
            Commission, are reasonably necessary to prohibit the trading
            practices described in paragraph (5) and any other trading
            practice that is disruptive of fair and equitable trading.
                ``(7) Use of swaps to defraud.--It shall be unlawful for any
            person to enter into a swap knowing, or acting in reckless
            disregard of the fact, that its counterparty will use the swap
            as part of a device, scheme, or artifice to defraud any third
            party.''.
    SEC. 748. COMMODITY WHISTLEBLOWER INCENTIVES AND PROTECTION.

        The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by adding
    at the end the following:
    ``SEC. 23. <<NOTE: 7 USC 26.>>  COMMODITY WHISTLEBLOWER INCENTIVES
                          AND PROTECTION.

        ``(a) Definitions.--In this section:

    [[Page 124 STAT. 1740]]

                ``(1) Covered judicial or administrative action.--The term
            `covered judicial or administrative action' means any judicial
            or administrative action brought by the Commission under this
            Act that results in monetary sanctions exceeding $1,000,000.
                ``(2) Fund.--The term `Fund' means the Commodity Futures
            Trading Commission Customer Protection Fund established under
            subsection (g).
                ``(3) Monetary sanctions.--The term `monetary sanctions',
            when used with respect to any judicial or administrative action
            means--
                        ``(A) any monies, including penalties, disgorgement,
                    restitution, and interest ordered to be paid; and
                        ``(B) any monies deposited into a disgorgement fund
                    or other fund pursuant to section 308(b) of the
                    Sarbanes-Oxley Act of 2002 (15 U.S.C. 7246(b)), as a
                    result of such action or any settlement of such action.
                ``(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 Commission from any other
                    source, unless the whistleblower is the original source
                    of the information; and
                        ``(C) is not exclusively derived from an allegation
                    made in a judicial or administrative hearing, in a
                    governmental report, hearing, audit, or investigation,
                    or from the news media, unless the whistleblower is a
                    source of the information.
                ``(5) Related action.--The term `related action', when used
            with respect to any judicial or administrative action brought by
            the Commission under this Act, means any judicial or
            administrative action brought by an entity described in
            subclauses (I) through (VI) of subsection (h)(2)(C) that is
            based upon the original information provided by a whistleblower
            pursuant to subsection (a) that led to the successful
            enforcement of the Commission action.
                ``(6) Successful resolution.--The term `successful
            resolution', when used with respect to any judicial or
            administrative action brought by the Commission under this Act,
            includes any settlement of such action.
                ``(7) Whistleblower.--The term `whistleblower' means any
            individual, or 2 or more individuals acting jointly, who
            provides information relating to a violation of this Act to the
            Commission, in a manner established by rule or regulation by the
            Commission.

        ``(b) Awards.--
                ``(1) <<NOTE: Regulations.>>  In general.--In any covered
            judicial or administrative action, or related action, the
            Commission, under regulations prescribed by the Commission and
            subject to subsection (c), shall pay an award or awards to 1 or
            more whistleblowers who voluntarily provided original
            information to the Commission that led to the successful
            enforcement of the covered judicial or administrative action, or
            related action, in an aggregate amount equal to--

    [[Page 124 STAT. 1741]]

                        ``(A) not less than 10 percent, in total, of what
                    has been collected of the monetary sanctions imposed in
                    the action or related actions; and
                        ``(B) not more than 30 percent, in total, of what
                    has been collected of the monetary sanctions imposed in
                    the action or related actions.
                ``(2) Payment of awards.--Any amount paid under paragraph
            (1) shall be paid from the Fund.

        ``(c) Determination of Amount of Award; Denial of Award.--
                ``(1) Determination of amount of award.--
                        ``(A) Discretion.--The determination of the amount
                    of an award made under subsection (b) shall be in the
                    discretion of the Commission.
                        ``(B) Criteria.--In determining the amount of an
                    award made under subsection (b), the Commission--
                              ``(i) shall take into consideration--
                                        ``(I) the significance of the
                                    information provided by the
                                    whistleblower to the success of the
                                    covered judicial or administrative
                                    action;
                                        ``(II) the degree of assistance
                                    provided by the whistleblower and any
                                    legal representative of the
                                    whistleblower in a covered judicial or
                                    administrative action;
                                        ``(III) the programmatic interest of
                                    the Commission in deterring violations
                                    of the Act (including regulations under
                                    the Act) 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 Commission may establish
                                    by rule or regulation; and
                              ``(ii) shall not take into consideration the
                          balance of the Fund.
                ``(2) Denial of award.--No award under subsection (b) shall
            be made--
                        ``(A) to any whistleblower who is, or was at the
                    time the whistleblower acquired the original information
                    submitted to the Commission, a member, officer, or
                    employee of--
                              ``(i) a appropriate regulatory agency;
                              ``(ii) the Department of Justice;
                              ``(iii) a registered entity;
                              ``(iv) a registered futures association;
                              ``(v) a self-regulatory organization as
                          defined in section 3(a) of the Securities Exchange
                          Act of 1934 (15 U.S.C. 78c(a)); or
                              ``(vi) a law enforcement organization;
                        ``(B) to any whistleblower who is convicted of a
                    criminal violation related to the judicial or
                    administrative action for which the whistleblower
                    otherwise could receive an award under this section;
                        ``(C) to any whistleblower who submits information
                    to the Commission that is based on the facts underlying
                    the covered action submitted previously by another
                    whistleblower;

    [[Page 124 STAT. 1742]]

                        ``(D) to any whistleblower who fails to submit
                    information to the Commission in such form as the
                    Commission may, by rule or regulation, 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 Commission may require, directly or through
                    counsel for the whistleblower.

        ``(e) No Contract Necessary.--No contract with the Commission is
    necessary for any whistleblower to receive an award under subsection
    (b), unless otherwise required by the Commission, by rule or regulation.
        ``(f) Appeals.--
                ``(1) In general.--Any determination made under this
            section, including whether, to whom, or in what amount to make
            awards, shall be in the discretion of the Commission.
                ``(2) Appeals.--Any <<NOTE: Deadline.>>  determination
            described in paragraph (1) may be appealed to the appropriate
            court of appeals of the United States not more than 30 days
            after the determination is issued by the Commission.
                ``(3) Review.--The court shall review the determination made
            by the Commission in accordance with section 7064 of title 5,
            United States Code.

        ``(g) Commodity Futures Trading Commission Customer Protection
    Fund.--
                ``(1) Establishment.--There is established in the Treasury
            of the United States a revolving fund to be known as the
            `Commodity Futures Trading Commission Customer Protection Fund'.
                ``(2) Use of fund.--The Fund shall be available to the
            Commission, without further appropriation or fiscal year
            limitation, for--
                        ``(A) the payment of awards to whistleblowers as
                    provided in subsection (a); and
                        ``(B) the funding of customer education initiatives
                    designed to help customers protect themselves against
                    fraud or other violations of this Act, or the rules and
                    regulations thereunder.
                ``(3) Deposits and credits.--There shall be deposited into
            or credited to the Fund:
                        ``(A) Monetary sanctions.--Any monetary sanctions
                    collected by the Commission in any covered judicial or
                    administrative action that is not otherwise distributed
                    to victims of a violation of this Act or the rules and
                    regulations thereunder underlying such action, unless
                    the balance of the Fund at the time the monetary
                    judgment is collected exceeds $100,000,000.

    [[Page 124 STAT. 1743]]

                        ``(B) Additional amounts.--If the amounts deposited
                    into or credited to the Fund under subparagraph (A) are
                    not sufficient to satisfy an award made under subsection
                    (b), there shall be deposited into or credited to the
                    Fund an amount equal to the unsatisfied portion of the
                    award from any monetary sanction collected by the
                    Commission in any judicial or administrative action
                    brought by the Commission under this Act that is based
                    on information provided by a whistleblower.
                        ``(C) Investment income.--All income from
                    investments made under paragraph (4).
                ``(4) Investments.--
                        ``(A) Amounts in fund may be invested.--The
                    Commission may request the Secretary of the Treasury to
                    invest the portion of the Fund that is not, in the
                    Commission's judgment, required to meet the current
                    needs of the Fund.
                        ``(B) Eligible investments.--Investments shall be
                    made by the Secretary of the Treasury in obligations of
                    the United States or obligations that are guaranteed as
                    to principal and interest by the United States, with
                    maturities suitable to the needs of the Fund as
                    determined by the Commission.
                        ``(C) Interest and proceeds credited.--The interest
                    on, and the proceeds from the sale or redemption of, any
                    obligations held in the Fund shall be credited to, and
                    form a part of, the Fund.
                ``(5) Reports to congress.--Not later than October 30 of
            each year, the Commission shall transmit to the Committee on
            Agriculture, Nutrition, and Forestry of the Senate, and the
            Committee on Agriculture of the House of Representatives a
            report on--
                        ``(A) the Commission'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;
                        ``(B) customer education initiatives described in
                    paragraph (2)(B) that were funded by the Fund during the
                    preceding fiscal year;
                        ``(C) the balance of the Fund at the beginning of
                    the preceding fiscal year;
                        ``(D) the amounts deposited into or credited to the
                    Fund during the preceding fiscal year;
                        ``(E) the amount of earnings on investments of
                    amounts in the Fund during the preceding fiscal year;
                        ``(F) the amount paid from the Fund during the
                    preceding fiscal year to whistleblowers pursuant to
                    subsection (b);
                        ``(G) the amount paid from the Fund during the
                    preceding fiscal year for customer education initiatives
                    described in paragraph (2)(B);
                        ``(H) the balance of the Fund at the end of the
                    preceding fiscal year; and
                        ``(I) a complete set of audited financial
                    statements, including a balance sheet, income statement,
                    and cash flow analysis.

        ``(h) Protection of Whistleblowers.--

    [[Page 124 STAT. 1744]]

                ``(1) Prohibition against retaliation.--
                        ``(A) In general.--No employer may discharge,
                    demote, suspend, threaten, harass, directly or
                    indirectly, or in any other manner discriminate against,
                    a whistleblower in the terms and conditions of
                    employment because of any lawful act done by the
                    whistleblower--
                              ``(i) in providing information to the
                          Commission in accordance with subsection (b); or
                              ``(ii) in assisting in any investigation or
                          judicial or administrative action of the
                          Commission based upon or related to such
                          information.
                        ``(B) Enforcement.--
                              ``(i) Cause of action.--An individual who
                          alleges discharge or other discrimination in
                          violation of subparagraph (A) may bring an action
                          under this subsection in the appropriate district
                          court of the United States for the relief provided
                          in subparagraph (C), unless the individual who is
                          alleging discharge or other discrimination in
                          violation of subparagraph (A) is an employee of
                          the Federal Government, in which case the
                          individual shall only bring an action under
                          section 1221 of title 5, United States Code.
                              ``(ii) Subpoenas.--A subpoena requiring the
                          attendance of a witness at a trial or hearing
                          conducted under this subsection may be served at
                          any place in the United States.
                              ``(iii) Statute of limitations.--An action
                          under this subsection may not be brought more than
                          2 years after the date on which the violation
                          reported in subparagraph (A) is committed.
                        ``(C) Relief.--Relief for an individual prevailing
                    in an action brought under subparagraph (B) shall
                    include--
                              ``(i) reinstatement with the same seniority
                          status that the individual would have had, but for
                          the discrimination;
                              ``(ii) the amount of back pay otherwise owed
                          to the individual, with interest; and
                              ``(iii) compensation for any special damages
                          sustained as a result of the discharge or
                          discrimination, including litigation costs, expert
                          witness fees, and reasonable attorney's fees.
                ``(2) Confidentiality.--
                        ``(A) In general.--Except as provided in
                    subparagraphs (B) and (C), the Commission, and any
                    officer or employee of the Commission, shall not
                    disclose any information, including information provided
                    by a whistleblower to the Commission, which could
                    reasonably be expected to reveal the identity of a
                    whistleblower, except in accordance with the provisions
                    of section 552a of title 5, United States Code, unless
                    and until required to be disclosed to a defendant or
                    respondent in connection with a public proceeding
                    instituted by the Commission or any entity described in
                    subparagraph (C). For purposes of section 552 of title
                    5, United States Code, this paragraph shall be
                    considered a statute described in subsection (b)(3)(B)
                    of such section 552.

    [[Page 124 STAT. 1745]]

                        ``(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
                          Commission, all information referred to in
                          subparagraph (A) may, in the discretion of the
                          Commission, when determined by the Commission to
                          be necessary or appropriate to accomplish the
                          purposes of this Act and protect customers and in
                          accordance with clause (ii), 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 registered entity,
                                    registered futures association, or self-
                                    regulatory organization as defined in
                                    section 3(a) of the Securities Exchange
                                    Act of 1934 (15 U.S.C. 78c(a));
                                        ``(IV) a State attorney general in
                                    connection with any criminal
                                    investigation;
                                        ``(V) an appropriate department or
                                    agency of any State, acting within the
                                    scope of its jurisdiction; and
                                        ``(VI) a foreign futures 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).
                              ``(iii) Study on impact of foia exemption on
                          commodity futures trading commission.--
                                        ``(I) Study.--The Inspector General
                                    of the Commission shall conduct a
                                    study--
                                                ``(aa) on whether the
                                            exemption under section
                                            552(b)(3) of title 5, United
                                            States Code (known as the
                                            Freedom of Information Act)
                                            established in paragraph (2)(A)
                                            aids whistleblowers in
                                            disclosing information to the
                                            Commission;
                                                ``(bb) on what impact the
                                            exemption has had on the
                                            public's ability to access
                                            information about the
                                            Commission's regulation of
                                            commodity futures and option
                                            markets; and
                                                ``(cc) to make any
                                            recommendations on whether the
                                            Commission should continue to
                                            use the exemption.
                                        ``(II) Report.--Not later than 30
                                    months after the date of enactment of
                                    this clause, the Inspector General
                                    shall--
                                                ``(aa) submit a report on
                                            the findings of the study
                                            required under this clause to
                                            the Committee on Banking,
                                            Housing, and Urban Affairs of
                                            the Senate and the Committee on

    [[Page 124 STAT. 1746]]

                                            Financial Services of the House
                                            of Representatives; and
                                                ``(bb) <<NOTE: Public
                                            information. Web posting.>>
                                            make the report available to the
                                            public through publication of a
                                            report on the website of the
                                            Commission.
                ``(3) Rights retained.--Nothing in this section shall be
            deemed to diminish the rights, privileges, or remedies of any
            whistleblower under any Federal or State law, or under any
            collective bargaining agreement.

        ``(i) Rulemaking Authority.--The Commission shall have the authority
    to issue such rules and regulations as may be necessary or appropriate
    to implement the provisions of this section consistent with the purposes
    of this section.
        ``(j) <<NOTE: Deadline.>>  Implementing Rules.--The Commission shall
    issue final rules or regulations implementing the provisions of this
    section not later than 270 days after the date of enactment of the Wall
    Street Transparency and Accountability Act of 2010.

        ``(k) Original Information.--Information submitted to the Commission
    by a whistleblower in accordance with rules or regulations 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 or regulations, provided such information
    was submitted after the date of enactment of the Wall Street
    Transparency and Accountability Act of 2010.
        ``(l) Awards.--A whistleblower may receive an award pursuant to this
    section regardless of whether any violation of a provision of this Act,
    or a rule or regulation thereunder, underlying the judicial or
    administrative action upon which the award is based occurred prior to
    the date of enactment of the Wall Street Transparency and Accountability
    Act of 2010.
        ``(m) Provision of False Information.--A 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, shall not be entitled to an award under this section
    and shall be subject to prosecution under section 1001 of title 18,
    United States Code.
        ``(n) Nonenforceability of Certain Provisions Waiving Rights and
    Remedies or Requiring Arbitration of Disputes.--
                ``(1) Waiver of rights and remedies.--The rights and
            remedies provided for in this section may not be waived by any
            agreement, policy form, or condition of employment including by
            a predispute arbitration agreement.
                ``(2) Predispute arbitration agreements.--No predispute
            arbitration agreement shall be valid or enforceable, if the
            agreement requires arbitration of a dispute arising under this
            section.''.
    SEC. 749. CONFORMING AMENDMENTS.

        (a) Section 4d of the Commodity Exchange Act (7 U.S.C. 6d) (as
    amended by section 724) is amended--
                (1) in subsection (a)--
                        (A) in the matter preceding paragraph (1)--
                              (i) by striking ``engage as'' and inserting
                          ``be a''; and

    [[Page 124 STAT. 1747]]

                              (ii) by striking ``or introducing broker'' and
                          all that follows through ``or derivatives
                          transaction execution facility'';
                        (B) in paragraph (1), by striking ``or introducing
                    broker''; and
                        (C) in paragraph (2), by striking ``if a futures
                    commission merchant,''; and
                (2) by adding at the end the following:

        ``(g) It shall be unlawful for any person to be an introducing
    broker unless such person shall have registered under this Act with the
    Commission as an introducing broker and such registration shall not have
    expired nor been suspended nor revoked.''.
        (b) Section 4m(3) of the Commodity Exchange Act (7 U.S.C. 6m(3)) is
    amended--
                (1) by striking ``(3) Subsection (1) of this section'' and
            inserting the following:

        ``(3) Exception.--
                ``(A) In general.--Paragraph (1)''; and
                (2) by striking ``to any investment trust'' and all that
            follows through the period at the end and inserting the
            following: ``to any commodity pool that is engaged primarily in
            trading commodity interests.
                ``(B) Engaged primarily.--For purposes of subparagraph (A),
            a commodity trading advisor or a commodity pool shall be
            considered to be `engaged primarily' in the business of being a
            commodity trading advisor or commodity pool if it is or holds
            itself out to the public as being engaged primarily, or proposes
            to engage primarily, in the business of advising on commodity
            interests or investing, reinvesting, owning, holding, or trading
            in commodity interests, respectively.
                ``(C) Commodity interests.--For purposes of this paragraph,
            commodity interests shall include contracts of sale of a
            commodity for future delivery, options on such contracts,
            security futures, swaps, leverage contracts, foreign exchange,
            spot and forward contracts on physical commodities, and any
            monies held in an account used for trading commodity
            interests.''.

        (c) Section 5c of the Commodity Exchange Act (7 U.S.C. 7a-2) is
    amended--
                (1) in subsection (a)(1)--
                        (A) by striking ``, 5a(d),''; and
                        (B) by striking ``and section (2)(h)(7) with respect
                    to significant price discovery contracts,''; and
                (2) in subsection (f)(1), by striking ``section 4d(c) of
            this Act'' and inserting ``section 4d(e)''.

        (d) Section 5e of the Commodity Exchange Act (7 U.S.C. 7b) is
    amended by striking ``or revocation of the right of an electronic
    trading facility to rely on the exemption set forth in section 2(h)(3)
    with respect to a significant price discovery contract,''.
        (e) Section 6(b) of the Commodity Exchange Act (7 U.S.C. 8(b)) is
    amended in the first sentence by striking ``, or to revoke the right of
    an electronic trading facility to rely on the exemption set forth in
    section 2(h)(3) with respect to a significant price discovery
    contract,''.
        (f) Section 12(e)(2)(B) of the Commodity Exchange Act (7 U.S.C.
    16(e)(2)(B)) is amended--

    [[Page 124 STAT. 1748]]

                (1) by striking ``section 2(c), 2(d), 2(f), or 2(g) of this
            Act'' and inserting ``section 2(c) or 2(f) of this Act''; and
                (2) by striking ``2(h) or''.

        (g) Section 17(r)(1) of the Commodity Exchange Act (7 U.S.C.
    21(r)(1)) is amended by striking ``section 4d(c) of this Act'' and
    inserting ``section 4d(e)''.
        (h) Section 22 of the Commodity Exchange Act <<NOTE: 7 USC 25.>>  is
    amended--
                (1) in subsection (a)(1)(B), by--
                        (A) inserting ``or any swap'' after ``commodity)'';
                    and
                        (B) inserting ``or any swap'' after ``such
                    contract'';
                (2) in subsection (a)(1)(C), by adding at the end the
            following:
                              ``(iv) a swap; or''; and
                (3) in subsection (b)(1)(A), by striking ``section 2(h)(7)
            or sections 5 through 5c'' and inserting ``section 5, 5b, 5c,
            5h, or 21''.

        (i) Section 408(2)(C) of the Federal Deposit Insurance Corporation
    Improvement Act of 1991 (12 U.S.C. 4421(2)(C)) is amended--
                (1) by striking ``section 2(c), 2(d), 2(f), or (2)(g) of
            such Act'' and inserting ``section 2(c), 2(f), or 2(i) of that
            Act''; and
                (2) by striking ``2(h) or''.
    SEC. 750. STUDY ON OVERSIGHT OF CARBON MARKETS.

        (a) <<NOTE: Establishment.>>  Interagency Working Group.--There is
    established to carry out this section an interagency working group
    (referred to in this section as the ``interagency group'') composed of
    the following members or designees:
                (1) The Chairman of the Commodity Futures Trading Commission
            (referred to in this section as the ``Commission''), who shall
            serve as Chairman of the interagency group.
                (2) The Secretary of Agriculture.
                (3) The Secretary of the Treasury.
                (4) The Chairman of the Securities and Exchange Commission.
                (5) The Administrator of the Environmental Protection
            Agency.
                (6) The Chairman of the Federal Energy Regulatory
            Commission.
                (7) The Commissioner of the Federal Trade Commission.
                (8) The Administrator of the Energy Information
            Administration.

        (b) Administrative Support.--The Commission shall provide the
    interagency group such administrative support services as are necessary
    to enable the interagency group to carry out the functions of the
    interagency group under this section.
        (c) Consultation.--In carrying out this section, the interagency
    group shall consult with representatives of exchanges, clearinghouses,
    self-regulatory bodies, major carbon market participants, consumers, and
    the general public, as the interagency group determines to be
    appropriate.
        (d) Study.--The interagency group shall conduct a study on the
    oversight of existing and prospective carbon markets to ensure an
    efficient, secure, and transparent carbon market, including oversight of
    spot markets and derivative markets.
        (e) Report.--Not later than 180 days after the date of enactment of
    this Act, the interagency group shall submit to Congress a report on the
    results of the study conducted under subsection

    [[Page 124 STAT. 1749]]

    (b), including recommendations for the oversight of existing and
    prospective carbon markets to ensure an efficient, secure, and
    transparent carbon market, including oversight of spot markets and
    derivative markets.
    SEC. 751. ENERGY AND ENVIRONMENTAL MARKETS ADVISORY COMMITTEE.

        Section 2(a) of the Commodity Exchange Act (7 U.S.C. 2(a)) (as
    amended by section 727) is amended by adding at the end the following:
                ``(15) Energy and environmental markets advisory
            committee.--
                        ``(A) Establishment.--
                              ``(i) In general.--An Energy and Environmental
                          Markets Advisory Committee is hereby established.
                              ``(ii) Membership.--The Committee shall have 9
                          members.
                              ``(iii) Activities.--The Committee's
                          objectives and scope of activities shall be--
                                        ``(I) to conduct public meetings;
                                        ``(II) to submit reports and
                                    recommendations to the Commission
                                    (including dissenting or minority views,
                                    if any); and
                                        ``(III) otherwise to serve as a
                                    vehicle for discussion and communication
                                    on matters of concern to exchanges,
                                    firms, end users, and regulators
                                    regarding energy and environmental
                                    markets and their regulation by the
                                    Commission.
                        ``(B) Requirements.--
                              ``(i) In general.--The <<NOTE: Public
                          meetings.>>  Committee shall hold public meetings
                          at such intervals as are necessary to carry out
                          the functions of the Committee, but not less
                          frequently than 2 times per year.
                              ``(ii) Members.--Members shall be appointed to
                          3-year terms, but may be removed for cause by vote
                          of the Commission.
                        ``(C) Appointment.--The Commission shall appoint
                    members with a wide diversity of opinion and who
                    represent a broad spectrum of interests, including
                    hedgers and consumers.
                        ``(D) Reimbursement.--Members shall be entitled to
                    per diem and travel expense reimbursement by the
                    Commission.
                        ``(E) FACA.--The Committee shall not be subject to
                    the Federal Advisory Committee Act (5 U.S.C. App.).''.
    SEC. 752. <<NOTE: Consultation. Standards. 15 USC 8325.>>
                            INTERNATIONAL HARMONIZATION.

        (a) <<NOTE: Securities.>>  In order to promote effective and
    consistent global regulation of swaps and security-based swaps, the
    Commodity Futures Trading Commission, the Securities and Exchange
    Commission, and the prudential regulators (as that term is defined in
    section 1a(39) of the Commodity Exchange Act), as appropriate, shall
    consult and coordinate with foreign regulatory authorities on the
    establishment of consistent international standards with respect to the
    regulation (including fees) of swaps, security-based swaps, swap
    entities, and security-based swap entities and may agree to such
    information-sharing arrangements as may be deemed to be necessary or

    [[Page 124 STAT. 1750]]

    appropriate in the public interest or for the protection of investors,
    swap counterparties, and security-based swap counterparties.

        (b) <<NOTE: Contracts.>>  In order to promote effective and
    consistent global regulation of contracts of sale of a commodity for
    future delivery and options on such contracts, the Commodity Futures
    Trading Commission shall consult and coordinate with foreign regulatory
    authorities on the establishment of consistent international standards
    with respect to the regulation of contracts of sale of a commodity for
    future delivery and options on such contracts, and may agree to such
    information-sharing arrangements as may be deemed necessary or
    appropriate in the public interest for the protection of users of
    contracts of sale of a commodity for future delivery.
    SEC. 753. ANTI-MANIPULATION AUTHORITY.

        (a) Prohibition Regarding Manipulation and False Information.--
    Subsection (c) of section 6 of the Commodity Exchange Act (7 U.S.C. 9,
    15) is amended to read as follows:
        ``(c) Prohibition Regarding Manipulation and False Information.--
                ``(1) <<NOTE: Regulations. Deadline.>>  Prohibition against
            manipulation.--It shall be unlawful for any person, directly or
            indirectly, to use or employ, or attempt to use or employ, in
            connection with any swap, or a contract of sale of any commodity
            in interstate commerce, or for future delivery on or subject to
            the rules of any registered entity, any manipulative or
            deceptive device or contrivance, in contravention of such rules
            and regulations as the Commission shall promulgate by not later
            than 1 year after the date of enactment of the Dodd-Frank Wall
            Street Reform and Consumer Protection Act, provided no rule or
            regulation promulgated by the Commission shall require any
            person to disclose to another person nonpublic information that
            may be material to the market price, rate, or level of the
            commodity transaction, except as necessary to make any statement
            made to the other person in or in connection with the
            transaction not misleading in any material respect.
                        ``(A) Special provision for manipulation by false
                    reporting.--Unlawful manipulation for purposes of this
                    paragraph shall include, but not be limited to,
                    delivering, or causing to be delivered for transmission
                    through the mails or interstate commerce, by any means
                    of communication whatsoever, a false or misleading or
                    inaccurate report concerning crop or market information
                    or conditions that affect or tend to affect the price of
                    any commodity in interstate commerce, knowing, or acting
                    in reckless disregard of the fact that such report is
                    false, misleading or inaccurate.
                        ``(B) Effect on other law.--Nothing in this
                    paragraph shall affect, or be construed to affect, the
                    applicability of section 9(a)(2).
                        ``(C) Good faith mistakes.--Mistakenly transmitting,
                    in good faith, false or misleading or inaccurate
                    information to a price reporting service would not be
                    sufficient to violate subsection (c)(1)(A).
                ``(2) Prohibition regarding false information.--It shall be
            unlawful for any person to make any false or misleading
            statement of a material fact to the Commission, including in any
            registration application or any report filed with the

    [[Page 124 STAT. 1751]]

            Commission under this Act, or any other information relating to
            a swap, or a contract of sale of a commodity, in interstate
            commerce, or for future delivery on or subject to the rules of
            any registered entity, or to omit to state in any such statement
            any material fact that is necessary to make any statement of a
            material fact made not misleading in any material respect, if
            the person knew, or reasonably should have known, the statement
            to be false or misleading.
                ``(3) Other manipulation.--In addition to the prohibition in
            paragraph (1), it shall be unlawful for any person, directly or
            indirectly, to manipulate or attempt to manipulate the price of
            any swap, or of any commodity in interstate commerce, or for
            future delivery on or subject to the rules of any registered
            entity.
                ``(4) Enforcement.--
                        ``(A) Authority of commission.--If the Commission
                    has reason to believe that any person (other than a
                    registered entity) is violating or has violated this
                    subsection, or any other provision of this Act
                    (including any rule, regulation, or order of the
                    Commission promulgated in accordance with this
                    subsection or any other provision of this Act), the
                    Commission may serve upon the person a complaint.
                        ``(B) Contents of complaint.--A complaint under
                    subparagraph (A) shall--
                              ``(i) contain a description of the charges
                          against the person that is the subject of the
                          complaint; and
                              ``(ii) have attached or contain a notice of
                          hearing that specifies the date and location of
                          the hearing regarding the complaint.
                        ``(C) Hearing.--A hearing described in subparagraph
                    (B)(ii)--
                              ``(i) <<NOTE: Deadline.>>  shall be held not
                          later than 3 days after service of the complaint
                          described in subparagraph (A);
                              ``(ii) shall require the person to show cause
                          regarding why--
                                        ``(I) an order should not be made--
                                                ``(aa) to prohibit the
                                            person from trading on, or
                                            subject to the rules of, any
                                            registered entity; and
                                                ``(bb) to direct all
                                            registered entities to refuse
                                            all privileges to the person
                                            until further notice of the
                                            Commission; and
                                        ``(II) the registration of the
                                    person, if registered with the
                                    Commission in any capacity, should not
                                    be suspended or revoked; and
                              ``(iii) may be held before--
                                        ``(I) the Commission; or
                                        ``(II) <<NOTE: Records.>>  an
                                    administrative law judge designated by
                                    the Commission, under which the
                                    administrative law judge shall ensure
                                    that all evidence is recorded in written
                                    form and submitted to the Commission.
                ``(5) Subpoena.--For the purpose of securing effective
            enforcement of the provisions of this Act, for the purpose of
            any investigation or proceeding under this Act, and for the
            purpose of any action taken under section 12(f), any member

    [[Page 124 STAT. 1752]]

            of the Commission or any Administrative Law Judge or other
            officer designated by the Commission (except as provided in
            paragraph (7)) may administer oaths and affirmations, subpoena
            witnesses, compel their attendance, take evidence, and require
            the production of any books, papers, correspondence, memoranda,
            or other records that the Commission deems relevant or material
            to the inquiry.
                ``(6) Witnesses.--The attendance of witnesses and the
            production of any such records may be required from any place in
            the United States, any State, or any foreign country or
            jurisdiction at any designated place of hearing.
                ``(7) Service.--A subpoena issued under this section may be
            served upon any person who is not to be found within the
            territorial jurisdiction of any court of the United States in
            such manner as the Federal Rules of Civil Procedure prescribe
            for service of process in a foreign country, except that a
            subpoena to be served on a person who is not to be found within
            the territorial jurisdiction of any court of the United States
            may be issued only on the prior approval of the Commission.
                ``(8) Refusal to obey.--In case of contumacy by, or refusal
            to obey a subpoena issued to, any person, the Commission may
            invoke the aid of any court of the United States within the
            jurisdiction in which the investigation or proceeding is
            conducted, or where such person resides or transacts business,
            in requiring the attendance and testimony of witnesses and the
            production of books, papers, correspondence, memoranda, and
            other records. Such court may issue an order requiring such
            person to appear before the Commission or member or
            Administrative Law Judge or other officer designated by the
            Commission, there to produce records, if so ordered, or to give
            testimony touching the matter under investigation or in
            question.
                ``(9) Failure to obey.--Any failure to obey such order of
            the court may be punished by the court as a contempt thereof.
            All process in any such case may be served in the judicial
            district wherein such person is an inhabitant or transacts
            business or wherever such person may be found.
                ``(10) Evidence.--On the receipt of evidence under paragraph
            (4)(C)(iii), the Commission may--
                        ``(A) prohibit the person that is the subject of the
                    hearing from trading on, or subject to the rules of, any
                    registered entity and require all registered entities to
                    refuse the person all privileges on the registered
                    entities for such period as the Commission may require
                    in the order;
                        ``(B) if the person is registered with the
                    Commission in any capacity, suspend, for a period not to
                    exceed 180 days, or revoke, the registration of the
                    person;
                        ``(C) assess such person--
                              ``(i) a civil penalty of not more than an
                          amount equal to the greater of--
                                        ``(I) $140,000; or
                                        ``(II) triple the monetary gain to
                                    such person for each such violation; or
                              ``(ii) in any case of manipulation or
                          attempted manipulation in violation of this
                          subsection or section

    [[Page 124 STAT. 1753]]

                          9(a)(2), a civil penalty of not more than an
                          amount equal to the greater of--
                                        ``(I) $1,000,000; or
                                        ``(II) triple the monetary gain to
                                    the person for each such violation; and
                        ``(D) require restitution to customers of damages
                    proximately caused by violations of the person.
                ``(11) Orders.--
                        ``(A) Notice.--The Commission shall provide to a
                    person described in paragraph (10) and the appropriate
                    governing board of the registered entity notice of the
                    order described in paragraph (10) by--
                              ``(i) registered mail;
                              ``(ii) certified mail; or
                              ``(iii) personal delivery.
                        ``(B) Review.--
                              ``(i) In general.--A person described in
                          paragraph (10) may obtain a review of the order or
                          such other equitable relief as determined to be
                          appropriate by a court described in clause (ii).
                              ``(ii) Petition.--To obtain a review or other
                          relief under clause (i), a person may, not later
                          than 15 days after notice is given to the person
                          under clause (i), file a written petition to set
                          aside the order with the United States Court of
                          Appeals--
                                        ``(I) for the circuit in which the
                                    petitioner carries out the business of
                                    the petitioner; or
                                        ``(II) in the case of an order
                                    denying registration, the circuit in
                                    which the principal place of business of
                                    the petitioner is located, as listed on
                                    the application for registration of the
                                    petitioner.
                        ``(C) <<NOTE: Records.>>  Procedure.--
                              ``(i) Duty of clerk of appropriate court.--The
                          clerk of the appropriate court under subparagraph
                          (B)(ii) shall transmit to the Commission a copy of
                          a petition filed under subparagraph (B)(ii).
                              ``(ii) Duty of commission.--In accordance with
                          section 2112 of title 28, United States Code, the
                          Commission shall file in the appropriate court
                          described in subparagraph (B)(ii) the record
                          theretofore made.
                              ``(iii) Jurisdiction of appropriate court.--
                          Upon the filing of a petition under subparagraph
                          (B)(ii), the appropriate court described in
                          subparagraph (B)(ii) may affirm, set aside, or
                          modify the order of the Commission.''.

        (b) Cease and Desist Orders, Fines.--Section 6(d) of the Commodity
    Exchange Act (7 U.S.C. 13b) is amended to read as follows:
        ``(d) <<NOTE: Penalty.>>  If any person (other than a registered
    entity), is violating or has violated subsection (c) or any other
    provisions of this Act or of the rules, regulations, or orders of the
    Commission thereunder, the Commission may, upon notice and hearing, and
    subject to appeal as in other cases provided for in subsection (c), make
    and enter an order directing that such person shall cease and desist
    therefrom and, if such person thereafter and after the lapse of the
    period allowed for appeal of such order or after the affirmance

    [[Page 124 STAT. 1754]]

    of such order, shall knowingly fail or refuse to obey or comply with
    such order, such person, upon conviction thereof, shall be fined not
    more than the higher of $140,000 or triple the monetary gain to such
    person, or imprisoned for not more than 1 year, or both, except that if
    such knowing failure or refusal to obey or comply with such order
    involves any offense within subsection (a) or (b) of section 9, such
    person, upon conviction thereof, shall be subject to the penalties of
    said subsection (a) or (b):  Provided, That any such cease and desist
    order under this subsection against any respondent in any case of
    manipulation shall be issued only in conjunction with an order issued
    against such respondent under subsection (c).''.

        (c) Manipulations; Private Rights of Action.--Section 22(a)(1) of
    the Commodity Exchange Act (7 U.S.C. 25(a)(1)) is amended by striking
    subparagraph (D) and inserting the following:
                ``(D) who purchased or sold a contract referred to in
            subparagraph (B) hereof or swap if the violation constitutes--
                        ``(i) the use or employment of, or an attempt to use
                    or employ, in connection with a swap, or a contract of
                    sale of a commodity, in interstate commerce, or for
                    future delivery on or subject to the rules of any
                    registered entity, any manipulative device or
                    contrivance in contravention of such rules and
                    regulations as the Commission shall promulgate by not
                    later than 1 year after the date of enactment of the
                    Dodd-Frank Wall Street Reform and Consumer Protection
                    Act; or
                        ``(ii) a manipulation of the price of any such
                    contract or swap or the price of the commodity
                    underlying such contract or swap.''.

        (d) <<NOTE: 7 USC 9 note.>>  Effective Date.--
                (1) The amendments made by this section shall take effect on
            the date on which the final rule promulgated by the Commodity
            Futures Trading Commission pursuant to this Act takes effect.
                (2) Paragraph (1) shall not preclude the Commission from
            undertaking prior to the effective date any rulemaking necessary
            to implement the amendments contained in this section.
    SEC. 754. <<NOTE: 7 USC 7a note.>>  EFFECTIVE DATE.

        Unless otherwise provided in this title, the provisions of this
    subtitle shall take effect on the later of 360 days after the date of
    the enactment of this subtitle or, to the extent a provision of this
    subtitle requires a rulemaking, not less than 60 days after publication
    of the final rule or regulation implementing such provision of this
    subtitle.

              Subtitle B--Regulation of Security-Based Swap Markets

    SEC. 761. DEFINITIONS UNDER THE SECURITIES EXCHANGE ACT OF 1934.

        (a) Definitions.--Section 3(a) of the Securities Exchange Act of
    1934 (15 U.S.C. 78c(a)) is amended--

    [[Page 124 STAT. 1755]]

                (1) in subparagraphs (A) and (B) of paragraph (5), by
            inserting ``(not including security-based swaps, other than
            security-based swaps with or for persons that are not eligible
            contract participants)'' after ``securities'' each place that
            term appears;
                (2) in paragraph (10), by inserting ``security-based swap,''
            after ``security future,'';
                (3) in paragraph (13), by adding at the end the following:
            ``For security-based swaps, such terms include the execution,
            termination (prior to its scheduled maturity date), assignment,
            exchange, or similar transfer or conveyance of, or extinguishing
            of rights or obligations under, a security-based swap, as the
            context may require.'';
                (4) in paragraph (14), by adding at the end the following:
            ``For security-based swaps, such terms include the execution,
            termination (prior to its scheduled maturity date), assignment,
            exchange, or similar transfer or conveyance of, or extinguishing
            of rights or obligations under, a security-based swap, as the
            context may require.'';
                (5) in paragraph (39)--
                        (A) in subparagraph (B)(i)--
                              (i) in subclause (I), by striking ``or
                          government securities dealer'' and inserting
                          ``government securities dealer, security-based
                          swap dealer, or major security-based swap
                          participant''; and
                              (ii) in subclause (II), by inserting
                          ``security-based swap dealer, major security-based
                          swap participant,'' after ``government securities
                          dealer,'';
                        (B) in subparagraph (C), by striking ``or government
                    securities dealer'' and inserting ``government
                    securities dealer, security-based swap dealer, or major
                    security-based swap participant''; and
                        (C) in subparagraph (D), by inserting ``security-
                    based swap dealer, major security-based swap
                    participant,'' after ``government securities dealer,'';
                    and
                (6) by adding at the end the following:
                ``(65) Eligible contract participant.--The term `eligible
            contract participant' has the same meaning as in section 1a of
            the Commodity Exchange Act (7 U.S.C. 1a).
                ``(66) Major swap participant.--The term `major swap
            participant' has the same meaning as in section 1a of the
            Commodity Exchange Act (7 U.S.C. 1a).
                ``(67) Major security-based swap participant.--
                        ``(A) In general.--The term `major security-based
                    swap participant' means any person--
                              ``(i) who is not a security-based swap dealer;
                          and
                              ``(ii)(I) who maintains a substantial position
                          in security-based swaps for any of the major
                          security-based swap categories, as such categories
                          are determined by the Commission, excluding both
                          positions held for hedging or mitigating
                          commercial risk and positions maintained by any
                          employee benefit plan (or any contract held by
                          such a plan) as defined in paragraphs (3) and (32)
                          of section 3 of the Employee Retirement Income
                          Security Act of 1974 (29 U.S.C. 1002) for the
                          primary purpose of hedging or mitigating any risk
                          directly associated with the operation of the
                          plan;

    [[Page 124 STAT. 1756]]

                              ``(II) whose outstanding security-based swaps
                          create substantial counterparty exposure that
                          could have serious adverse effects on the
                          financial stability of the United States banking
                          system or financial markets; or
                              ``(III) that is a financial entity that--
                                        ``(aa) is highly leveraged relative
                                    to the amount of capital such entity
                                    holds and that is not subject to capital
                                    requirements established by an
                                    appropriate Federal banking agency; and
                                        ``(bb) maintains a substantial
                                    position in outstanding security-based
                                    swaps in any major security-based swap
                                    category, as such categories are
                                    determined by the Commission.
                        ``(B) Definition of substantial position.--For
                    purposes of subparagraph (A), the Commission shall
                    define, by rule or regulation, the term `substantial
                    position' at the threshold that the Commission
                    determines to be prudent for the effective monitoring,
                    management, and oversight of entities that are
                    systemically important or can significantly impact the
                    financial system of the United States. In setting the
                    definition under this subparagraph, the Commission shall
                    consider the person's relative position in uncleared as
                    opposed to cleared security-based swaps and may take
                    into consideration the value and quality of collateral
                    held against counterparty exposures.
                        ``(C) Scope of designation.--For purposes of
                    subparagraph (A), a person may be designated as a major
                    security-based swap participant for 1 or more categories
                    of security-based swaps without being classified as a
                    major security-based swap participant for all classes of
                    security-based swaps.
                ``(68) Security-based swap.--
                        ``(A) In general.--Except as provided in
                    subparagraph (B), the term `security-based swap' means
                    any agreement, contract, or transaction that--
                              ``(i) is a swap, as that term is defined under
                          section 1a of the Commodity Exchange Act (without
                          regard to paragraph (47)(B)(x) of such section);
                          and
                              ``(ii) is based on--
                                        ``(I) an index that is a narrow-
                                    based security index, including any
                                    interest therein or on the value
                                    thereof;
                                        ``(II) a single security or loan,
                                    including any interest therein or on the
                                    value thereof; or
                                        ``(III) the occurrence,
                                    nonoccurrence, or extent of the
                                    occurrence of an event relating to a
                                    single issuer of a security or the
                                    issuers of securities in a narrow-based
                                    security index, provided that such event
                                    directly affects the financial
                                    statements, financial condition, or
                                    financial obligations of the issuer.
                        ``(B) Rule of construction regarding master
                    agreements.--The term `security-based swap' shall be
                    construed to include a master agreement that provides
                    for an agreement, contract, or transaction that is a
                    security-based swap pursuant to subparagraph (A),
                    together with

    [[Page 124 STAT. 1757]]

                    all supplements to any such master agreement, without
                    regard to whether the master agreement contains an
                    agreement, contract, or transaction that is not a
                    security-based swap pursuant to subparagraph (A), except
                    that the master agreement shall be considered to be a
                    security-based swap only with respect to each agreement,
                    contract, or transaction under the master agreement that
                    is a security-based swap pursuant to subparagraph (A).
                        ``(C) Exclusions.--The term `security-based swap'
                    does not include any agreement, contract, or transaction
                    that meets the definition of a security-based swap only
                    because such agreement, contract, or transaction
                    references, is based upon, or settles through the
                    transfer, delivery, or receipt of an exempted security
                    under paragraph (12), as in effect on the date of
                    enactment of the Futures Trading Act of 1982 (other than
                    any municipal security as defined in paragraph (29) as
                    in effect on the date of enactment of the Futures
                    Trading Act of 1982), unless such agreement, contract,
                    or transaction is of the character of, or is commonly
                    known in the trade as, a put, call, or other option.
                        ``(D) Mixed swap.--The term `security-based swap'
                    includes any agreement, contract, or transaction that is
                    as described in subparagraph (A) and also is based on
                    the value of 1 or more interest or other rates,
                    currencies, commodities, instruments of indebtedness,
                    indices, quantitative measures, other financial or
                    economic interest or property of any kind (other than a
                    single security or a narrow-based security index), or
                    the occurrence, non-occurrence, or the extent of the
                    occurrence of an event or contingency associated with a
                    potential financial, economic, or commercial consequence
                    (other than an event described in subparagraph
                    (A)(ii)(III)).
                        ``(E) Rule of construction regarding use of the term
                    index.--The term `index' means an index or group of
                    securities, including any interest therein or based on
                    the value thereof.
                ``(69) Swap.--The term `swap' has the same meaning as in
            section 1a of the Commodity Exchange Act (7 U.S.C. 1a).
                ``(70) Person associated with a security-based swap dealer
            or major security-based swap participant.--
                        ``(A) In general.--The term `person associated with
                    a security-based swap dealer or major security-based
                    swap participant' or `associated person of a security-
                    based swap dealer or major security-based swap
                    participant' means--
                              ``(i) any partner, officer, director, or
                          branch manager of such security-based swap dealer
                          or major security-based swap participant (or any
                          person occupying a similar status or performing
                          similar functions);
                              ``(ii) any person directly or indirectly
                          controlling, controlled by, or under common
                          control with such security-based swap dealer or
                          major security-based swap participant; or
                              ``(iii) any employee of such security-based
                          swap dealer or major security-based swap
                          participant.
                        ``(B) Exclusion.--Other than for purposes of section
                    15F(l)(2), the term `person associated with a security-
                    based swap dealer or major security-based swap
                    participant' or

    [[Page 124 STAT. 1758]]

                    `associated person of a security-based swap dealer or
                    major security-based swap participant' does not include
                    any person associated with a security-based swap dealer
                    or major security-based swap participant whose functions
                    are solely clerical or ministerial.
                ``(71) Security-based swap dealer.--
                        ``(A) In general.--The term `security-based swap
                    dealer' means any person who--
                              ``(i) holds themself out as a dealer in
                          security-based swaps;
                              ``(ii) makes a market in security-based swaps;
                              ``(iii) regularly enters into security-based
                          swaps with counterparties as an ordinary course of
                          business for its own account; or
                              ``(iv) engages in any activity causing it to
                          be commonly known in the trade as a dealer or
                          market maker in security-based swaps.
                        ``(B) Designation by type or class.--A person may be
                    designated as a security-based swap dealer for a single
                    type or single class or category of security-based swap
                    or activities and considered not to be a security-based
                    swap dealer for other types, classes, or categories of
                    security-based swaps or activities.
                        ``(C) Exception.--The term `security-based swap
                    dealer' does not include a person that enters into
                    security-based swaps for such person's own account,
                    either individually or in a fiduciary capacity, but not
                    as a part of regular business.
                        ``(D) De minimis exception.--The Commission shall
                    exempt from designation as a security-based swap dealer
                    an entity that engages in a de minimis quantity of
                    security-based swap dealing in connection with
                    transactions with or on behalf of its customers. The
                    Commission shall promulgate regulations to establish
                    factors with respect to the making of any determination
                    to exempt.
                ``(72) Appropriate federal banking agency.--The term
            `appropriate Federal banking agency' has the same meaning as in
            section 3(q) of the Federal Deposit Insurance Act (12 U.S.C.
            1813(q)).
                ``(73) Board.--The term `Board' means the Board of Governors
            of the Federal Reserve System.
                ``(74) Prudential regulator.--The term `prudential
            regulator' has the same meaning as in section 1a of the
            Commodity Exchange Act (7 U.S.C. 1a).
                ``(75) Security-based swap data repository.--The term
            `security-based swap data repository' means any person that
            collects and maintains information or records with respect to
            transactions or positions in, or the terms and conditions of,
            security-based swaps entered into by third parties for the
            purpose of providing a centralized recordkeeping facility for
            security-based swaps.
                ``(76) Swap dealer.--The term `swap dealer' has the same
            meaning as in section 1a of the Commodity Exchange Act (7 U.S.C.
            1a).
                ``(77) Security-based swap execution facility.--The term
            `security-based swap execution facility' means a trading system
            or platform in which multiple participants have the

    [[Page 124 STAT. 1759]]

            ability to execute or trade security-based swaps by accepting
            bids and offers made by multiple participants in the facility or
            system, through any means of interstate commerce, including any
            trading facility, that--
                        ``(A) facilitates the execution of security-based
                    swaps between persons; and
                        ``(B) is not a national securities exchange.
                ``(78) Security-based swap agreement.--
                        ``(A) In general.--For purposes of sections 9, 10,
                    16, 20, and 21A of this Act, and section 17 of the
                    Securities Act of 1933 (15 U.S.C. 77q), the term
                    `security-based swap agreement' means a swap agreement
                    as defined in section 206A of the Gramm-Leach-Bliley Act
                    (15 U.S.C. 78c note) of which a material term is based
                    on the price, yield, value, or volatility of any
                    security or any group or index of securities, or any
                    interest therein.
                        ``(B) Exclusions.--The term `security-based swap
                    agreement' does not include any security-based swap.''.

        (b) <<NOTE: 15 USC 8341.>>  Authority To Further Define Terms.--The
    Securities and Exchange Commission may, by rule, further define--
                (1) the term ``commercial risk'';
                (2) any other term included in an amendment to the
            Securities Exchange Act of 1934 (15 U.S.C. 78c(a)) made by this
            subtitle; and
                (3) the terms ``security-based swap'', ``security-based swap
            dealer'', ``major security-based swap participant'', and
            ``eligible contract participant'', with regard to security-based
            swaps (as such terms are defined in the amendments made by
            subsection (a)) for the purpose of including transactions and
            entities that have been structured to evade this subtitle or the
            amendments made by this subtitle.
    SEC. 762. REPEAL OF PROHIBITION ON REGULATION OF SECURITY-BASED
                            SWAP AGREEMENTS.

        (a) Repeal.--Sections 206B and 206C of the Gramm-Leach-Bliley Act
    (Public Law 106-102; 15 U.S.C. 78c note) are repealed.
        (b) Conforming Amendments to Gramm-Leach-Bliley.--Section 206A(a) of
    the Gramm-Leach-Bliley Act (15 U.S.C. 78c note) is amended in the
    material preceding paragraph (1), by striking ``Except as'' and all that
    follows through ``that--'' and inserting the following: ``Except as
    provided in subsection (b), as used in this section, the term `swap
    agreement' means any agreement, contract, or transaction that--''.
        (c) Conforming Amendments to the Securities Act of 1933.--
                (1) Section 2A of the Securities Act of 1933 (15 U.S.C. 77b-
            1) is amended--
                        (A) by striking subsection (a) and reserving that
                    subsection; and
                        (B) by striking ``(as defined in section 206B of the
                    Gramm-Leach-Bliley Act)'' each place that such term
                    appears and inserting ``(as defined in section 3(a)(78)
                    of the Securities Exchange Act of 1934)''.
                (2) Section 17 of the Securities Act of 1933 (15 U.S.C. 77q)
            is amended--
                        (A) in subsection (a)--

    [[Page 124 STAT. 1760]]

                              (i) by inserting ``(including security-based
                          swaps)'' after ``securities''; and
                              (ii) by striking ``(as defined in section 206B
                          of the Gramm-Leach-Bliley Act)'' and inserting
                          ``(as defined in section 3(a)(78) of the
                          Securities Exchange Act)''; and
                        (B) in subsection (d), by striking ``206B of the
                    Gramm-Leach-Bliley Act'' and inserting ``3(a)(78) of the
                    Securities Exchange Act of 1934''.

        (d) Conforming Amendments to the Securities Exchange Act of 1934.--
    The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended--
                (1) in section 3A (15 U.S.C. 78c-1)--
                        (A) by striking subsection (a) and reserving that
                    subsection; and
                        (B) by striking ``(as defined in section 206B of the
                    Gramm-Leach-Bliley Act)'' each place that the term
                    appears;
                (2) in section 9 (15 U.S.C. 78i)--
                        (A) in subsection (a), by striking paragraphs (2)
                    through (5) and inserting the following:

        ``(2) To effect, alone or with 1 or more other persons, a series of
    transactions in any security registered on a national securities
    exchange, any security not so registered, or in connection with any
    security-based swap or security-based swap agreement with respect to
    such security creating actual or apparent active trading in such
    security, or raising or depressing the price of such security, for the
    purpose of inducing the purchase or sale of such security by others.
        ``(3) If a dealer, broker, security-based swap dealer, major
    security-based swap participant, or other person selling or offering for
    sale or purchasing or offering to purchase the security, a security-
    based swap, or a security-based swap agreement with respect to such
    security, to induce the purchase or sale of any security registered on a
    national securities exchange, any security not so registered, any
    security-based swap, or any security-based swap agreement with respect
    to such security by the circulation or dissemination in the ordinary
    course of business of information to the effect that the price of any
    such security will or is likely to rise or fall because of market
    operations of any 1 or more persons conducted for the purpose of raising
    or depressing the price of such security.
        ``(4) If a dealer, broker, security-based swap dealer, major
    security-based swap participant, or other person selling or offering for
    sale or purchasing or offering to purchase the security, a security-
    based swap, or security-based swap agreement with respect to such
    security, to make, regarding any security registered on a national
    securities exchange, any security not so registered, any security-based
    swap, or any security-based swap agreement with respect to such
    security, for the purpose of inducing the purchase or sale of such
    security, such security-based swap, or such security-based swap
    agreement any statement which was at the time and in the light of the
    circumstances under which it was made, false or misleading with respect
    to any material fact, and which that person knew or had reasonable
    ground to believe was so false or misleading.

    [[Page 124 STAT. 1761]]

        ``(5) For a consideration, received directly or indirectly from a
    broker, dealer, security-based swap dealer, major security-based swap
    participant, or other person selling or offering for sale or purchasing
    or offering to purchase the security, a security-based swap, or
    security-based swap agreement with respect to such security, to induce
    the purchase of any security registered on a national securities
    exchange, any security not so registered, any security-based swap, or
    any security-based swap agreement with respect to such security by the
    circulation or dissemination of information to the effect that the price
    of any such security will or is likely to rise or fall because of the
    market operations of any 1 or more persons conducted for the purpose of
    raising or depressing the price of such security.''; and
                        (B) in subsection (i), by striking ``(as defined in
                    section 206B of the Gramm-Leach-Bliley Act)'';
                (3) in section 10 (15 U.S.C. 78j)--
                        (A) in subsection (b), by striking ``(as defined in
                    section 206B of the Gramm-Leach-Bliley Act),'' each
                    place that term appears; and
                        (B) in the matter following subsection (b), by
                    striking ``(as defined in section 206B of the Gramm-
                    Leach-Bliley Act), in each place that such terms
                    appear'';
                (4) in section 15 (15 U.S.C. 78o)--
                        (A) in subsection (c)(1)(A), by striking ``(as
                    defined in section 206B of the Gramm-Leach-Bliley
                    Act),'';
                        (B) in subparagraphs (B) and (C) of subsection
                    (c)(1), by striking ``(as defined in section 206B of the
                    Gramm-Leach-Bliley Act)'' each place that term appears;
                        (C) by redesignating subsection (i), as added by
                    section 303(f) of the Commodity Futures Modernization
                    Act of 2000 (Public Law 106-554; 114 Stat. 2763A-455)),
                    as subsection (j); and
                        (D) in subsection (j), as redesignated by
                    subparagraph (C), by striking ``(as defined in section
                    206B of the Gramm-Leach-Bliley Act)'';
                (5) in section 16 (15 U.S.C. 78p)--
                        (A) in subsection (a)(2)(C), by striking ``(as
                    defined in section 206(b) of the Gramm-Leach-Bliley Act
                    (15 U.S.C. 78c note))'';
                        (B) in subsection (a)(3)(B), by inserting ``or
                    security-based swaps'' after ``security-based swap
                    agreement'';
                        (C) in the first sentence of subsection (b), by
                    striking ``(as defined in section 206B of the Gramm-
                    Leach-Bliley Act)'';
                        (D) in the third sentence of subsection (b), by
                    striking ``(as defined in section 206B of the Gramm-
                    Leach Bliley Act)'' and inserting ``or a security-based
                    swap''; and
                        (E) in subsection (g), by striking ``(as defined in
                    section 206B of the Gramm-Leach-Bliley Act)'';
                (6) in section 20 (15 U.S.C. 78t),
                        (A) in subsection (d), by striking ``(as defined in
                    section 206B of the Gramm-Leach-Bliley Act)''; and
                        (B) in subsection (f), by striking ``(as defined in
                    section 206B of the Gramm-Leach-Bliley Act)''; and
                (7) in section 21A (15 U.S.C. 78u-1)--
                        (A) in subsection (a)(1), by striking ``(as defined
                    in section 206B of the Gramm-Leach-Bliley Act)''; and

    [[Page 124 STAT. 1762]]

                        (B) in subsection (g), by striking ``(as defined in
                    section 206B of the Gramm-Leach-Bliley Act)''.
    SEC. 763. AMENDMENTS TO THE SECURITIES EXCHANGE ACT OF 1934.

        (a) Clearing for Security-based Swaps.--The Securities Exchange Act
    of 1934 (15 U.S.C. 78a et seq.) is amended by inserting after section 3B
    (as added by section 717 of this Act):
    ``SEC. 3C. <<NOTE: 15 USC 78c-3.>>  CLEARING FOR SECURITY-BASED
                          SWAPS.

        ``(a) In General.--
                ``(1) Standard for clearing.--It shall be unlawful for any
            person to engage in a security-based swap unless that person
            submits such security-based swap for clearing to a clearing
            agency that is registered under this Act or a clearing agency
            that is exempt from registration under this Act if the security-
            based swap is required to be cleared.
                ``(2) Open access.--The rules of a clearing agency described
            in paragraph (1) shall--
                        ``(A) prescribe that all security-based swaps
                    submitted to the clearing agency with the same terms and
                    conditions are economically equivalent within the
                    clearing agency and may be offset with each other within
                    the clearing agency; and
                        ``(B) provide for non-discriminatory clearing of a
                    security-based swap executed bilaterally or on or
                    through the rules of an unaffiliated national securities
                    exchange or security-based swap execution facility.

        ``(b) Commission Review.--
                ``(1) Commission-initiated review.--
                        ``(A) The Commission on an ongoing basis shall
                    review each security-based swap, or any group, category,
                    type, or class of security-based swaps to make a
                    determination that such security-based swap, or group,
                    category, type, or class of security-based swaps should
                    be required to be cleared.
                        ``(B) <<NOTE: Public comment.>>  The Commission
                    shall provide at least a 30-day public comment period
                    regarding any determination under subparagraph (A).
                ``(2) Swap submissions.--
                        ``(A) <<NOTE: Notice.>>  A clearing agency shall
                    submit to the Commission each security-based swap, or
                    any group, category, type, or class of security-based
                    swaps that it plans to accept for clearing and provide
                    notice to its members (in a manner to be determined by
                    the Commission) of such submission.
                        ``(B) Any security-based swap or group, category,
                    type, or class of security-based swaps listed for
                    clearing by a clearing agency as of the date of
                    enactment of this subsection shall be considered
                    submitted to the Commission.
                        ``(C) The Commission shall--
                              ``(i) <<NOTE: Public information.>>  make
                          available to the public any submission received
                          under subparagraphs (A) and (B);
                              ``(ii) review each submission made under
                          subparagraphs (A) and (B), and determine whether
                          the security-based swap, or group, category, type,
                          or class of security-based swaps, described in the
                          submission is required to be cleared; and
                              ``(iii) <<NOTE: Public comment.>>  provide at
                          least a 30-day public comment period regarding its
                          determination whether the

    [[Page 124 STAT. 1763]]

                          clearing requirement under subsection (a)(1) shall
                          apply to the submission.
                ``(3) Deadline.--The Commission shall make its determination
            under paragraph (2)(C) not later than 90 days after receiving a
            submission made under paragraphs (2)(A) and (2)(B), unless the
            submitting clearing agency agrees to an extension for the time
            limitation established under this paragraph.
                ``(4) Determination.--
                        ``(A) In reviewing a submission made under paragraph
                    (2), the Commission shall review whether the submission
                    is consistent with section 17A.
                        ``(B) In reviewing a security-based swap, group of
                    security-based swaps or class of security-based swaps
                    pursuant to paragraph (1) or a submission made under
                    paragraph (2), the Commission shall take into account
                    the following factors:
                              ``(i) The existence of significant outstanding
                          notional exposures, trading liquidity and adequate
                          pricing data.
                              ``(ii) The availability of rule framework,
                          capacity, operational expertise and resources, and
                          credit support infrastructure to clear the
                          contract on terms that are consistent with the
                          material terms and trading conventions on which
                          the contract is then traded.
                              ``(iii) The effect on the mitigation of
                          systemic risk, taking into account the size of the
                          market for such contract and the resources of the
                          clearing agency available to clear the contract.
                              ``(iv) The effect on competition, including
                          appropriate fees and charges applied to clearing.
                              ``(v) The existence of reasonable legal
                          certainty in the event of the insolvency of the
                          relevant clearing agency or 1 or more of its
                          clearing members with regard to the treatment of
                          customer and security-based swap counterparty
                          positions, funds, and property.
                        ``(C) In making a determination under subsection
                    (b)(1) or paragraph (2)(C) that the clearing requirement
                    shall apply, the Commission may require such terms and
                    conditions to the requirement as the Commission
                    determines to be appropriate.
                ``(5) Rules.--Not <<NOTE: Deadline.>>  later than 1 year
            after the date of the enactment of this section, the Commission
            shall adopt rules for a clearing agency's submission for review,
            pursuant to this subsection, of a security-based swap, or a
            group, category, type, or class of security-based swaps, that it
            seeks to accept for clearing. Nothing in this paragraph limits
            the Commission from making a determination under paragraph
            (2)(C) for security-based swaps described in paragraph (2)(B).

        ``(c) Stay of Clearing Requirement.--
                ``(1) In general.--After making a determination pursuant to
            subsection (b)(2), the Commission, on application of a
            counterparty to a security-based swap or on its own initiative,
            may stay the clearing requirement of subsection (a)(1) until the
            Commission completes a review of the terms of the security-based
            swap (or the group, category, type, or class of security-based
            swaps) and the clearing arrangement.

    [[Page 124 STAT. 1764]]

                ``(2) Deadline.--The Commission shall complete a review
            undertaken pursuant to paragraph (1) not later than 90 days
            after issuance of the stay, unless the clearing agency that
            clears the security-based swap, or group, category, type, or
            class of security-based swaps, agrees to an extension of the
            time limitation established under this paragraph.
                ``(3) Determination.--Upon completion of the review
            undertaken pursuant to paragraph (1), the Commission may--
                        ``(A) determine, unconditionally or subject to such
                    terms and conditions as the Commission determines to be
                    appropriate, that the security-based swap, or group,
                    category, type, or class of security-based swaps, must
                    be cleared pursuant to this subsection if it finds that
                    such clearing is consistent with subsection (b)(4); or
                        ``(B) determine that the clearing requirement of
                    subsection (a)(1) shall not apply to the security-based
                    swap, or group, category, type, or class of security-
                    based swaps.
                ``(4) Rules.--Not <<NOTE: Deadline.>>  later than 1 year
            after the date of the enactment of this section, the Commission
            shall adopt rules for reviewing, pursuant to this subsection, a
            clearing agency's clearing of a security-based swap, or a group,
            category, type, or class of security-based swaps, that it has
            accepted for clearing.

        ``(d) Prevention of Evasion.--
                ``(1) In general.--The <<NOTE: Regulations.>>  Commission
            shall prescribe rules under this section (and issue
            interpretations of rules prescribed under this section), as
            determined by the Commission to be necessary to prevent evasions
            of the mandatory clearing requirements under this Act.
                ``(2) Duty of commission to investigate and take certain
            actions.--To the extent the Commission finds that a particular
            security-based swap or any group, category, type, or class of
            security-based swaps that would otherwise be subject to
            mandatory clearing but no clearing agency has listed the
            security-based swap or the group, category, type, or class of
            security-based swaps for clearing, the Commission shall--
                        ``(A) investigate the relevant facts and
                    circumstances;
                        ``(B) <<NOTE: Deadline. Reports.>>  within 30 days
                    issue a public report containing the results of the
                    investigation; and
                        ``(C) take such actions as the Commission determines
                    to be necessary and in the public interest, which may
                    include requiring the retaining of adequate margin or
                    capital by parties to the security-based swap or the
                    group, category, type, or class of security-based swaps.
                ``(3) Effect on authority.--Nothing in this subsection--
                        ``(A) authorizes the Commission to adopt rules
                    requiring a clearing agency to list for clearing a
                    security-based swap or any group, category, type, or
                    class of security-based swaps if the clearing of the
                    security-based swap or the group, category, type, or
                    class of security-based swaps would threaten the
                    financial integrity of the clearing agency; and
                        ``(B) affects the authority of the Commission to
                    enforce the open access provisions of subsection (a)(2)
                    with respect to a security-based swap or the group,
                    category, type, or class of security-based swaps that is
                    listed for clearing by a clearing agency.

    [[Page 124 STAT. 1765]]

        ``(e) Reporting <<NOTE: Deadlines.>>  Transition Rules.--Rules
    adopted by the Commission under this section shall provide for the
    reporting of data, as follows:
                ``(1) Security-based swaps entered into before the date of
            the enactment of this section shall be reported to a registered
            security-based swap data repository or the Commission no later
            than 180 days after the effective date of this section.
                ``(2) Security-based swaps entered into on or after such
            date of enactment shall be reported to a registered security-
            based swap data repository or the Commission no later than the
            later of--
                        ``(A) 90 days after such effective date; or
                        ``(B) such other time after entering into the
                    security-based swap as the Commission may prescribe by
                    rule or regulation.

        ``(f) Clearing Transition Rules.--
                ``(1) Security-based swaps entered into before the date of
            the enactment of this section are exempt from the clearing
            requirements of this subsection if reported pursuant to
            subsection (e)(1).
                ``(2) Security-based swaps entered into before application
            of the clearing requirement pursuant to this section are exempt
            from the clearing requirements of this section if reported
            pursuant to subsection (e)(2).

        ``(g) Exceptions.--
                ``(1) In general.--The requirements of subsection (a)(1)
            shall not apply to a security-based swap if 1 of the
            counterparties to the security-based swap--
                        ``(A) is not a financial entity;
                        ``(B) is using security-based swaps to hedge or
                    mitigate commercial risk; and
                        ``(C) <<NOTE: Notification.>>  notifies the
                    Commission, in a manner set forth by the Commission, how
                    it generally meets its financial obligations associated
                    with entering into non-cleared security-based swaps.
                ``(2) Option to clear.--The application of the clearing
            exception in paragraph (1) is solely at the discretion of the
            counterparty to the security-based swap that meets the
            conditions of subparagraphs (A) through (C) of paragraph (1).
                ``(3) Financial entity definition.--
                        ``(A) In general.--For the purposes of this
                    subsection, the term `financial entity' means--
                              ``(i) a swap dealer;
                              ``(ii) a security-based swap dealer;
                              ``(iii) a major swap participant;
                              ``(iv) a major security-based swap
                          participant;
                              ``(v) a commodity pool as defined in section
                          1a(10) of the Commodity Exchange Act;
                              ``(vi) a private fund as defined in section
                          202(a) of the Investment Advisers Act of 1940 (15
                          U.S.C. 80-b-2(a));
                              ``(vii) an employee benefit plan as defined in
                          paragraphs (3) and (32) of section 3 of the
                          Employee Retirement Income Security Act of 1974
                          (29 U.S.C. 1002);
                              ``(viii) a person predominantly engaged in
                          activities that are in the business of banking or
                          financial in

    [[Page 124 STAT. 1766]]

                          nature, as defined in section 4(k) of the Bank
                          Holding Company Act of 1956.
                        ``(B) Exclusion.--The Commission shall consider
                    whether to exempt small banks, savings associations,
                    farm credit system institutions, and credit unions,
                    including--
                              ``(i) depository institutions with total
                          assets of $10,000,000,000 or less;
                              ``(ii) farm credit system institutions with
                          total assets of $10,000,000,000 or less; or
                              ``(iii) credit unions with total assets of
                          $10,000,000,000 or less.
                ``(4) Treatment of affiliates.--
                        ``(A) In general.--An affiliate of a person that
                    qualifies for an exception under this subsection
                    (including affiliate entities predominantly engaged in
                    providing financing for the purchase of the merchandise
                    or manufactured goods of the person) may qualify for the
                    exception only if the affiliate, acting on behalf of the
                    person and as an agent, uses the security-based swap to
                    hedge or mitigate the commercial risk of the person or
                    other affiliate of the person that is not a financial
                    entity.
                        ``(B) Prohibition relating to certain affiliates.--
                    The exception in subparagraph (A) shall not apply if the
                    affiliate is--
                              ``(i) a swap dealer;
                              ``(ii) a security-based swap dealer;
                              ``(iii) a major swap participant;
                              ``(iv) a major security-based swap
                          participant;
                              ``(v) an issuer that would be an investment
                          company, as defined in section 3 of the Investment
                          Company Act of 1940 (15 U.S.C. 80a-3), but for
                          paragraph (1) or (7) of subsection (c) of that Act
                          (15 U.S.C. 80a-3(c));
                              ``(vi) a commodity pool; or
                              ``(vii) a bank holding company with over
                          $50,000,000,000 in consolidated assets.
                        ``(C) Transition rule for affiliates.--An affiliate,
                    subsidiary, or a wholly owned entity of a person that
                    qualifies for an exception under subparagraph (A) and is
                    predominantly engaged in providing financing for the
                    purchase or lease of merchandise or manufactured goods
                    of the person shall be exempt from the margin
                    requirement described in section 15F(e) and the clearing
                    requirement described in subsection (a) with regard to
                    security-based swaps entered into to mitigate the risk
                    of the financing activities for not less than a 2-year
                    period beginning on the date of enactment of this
                    subparagraph.
                ``(5) Election of counterparty.--
                        ``(A) Security-based swaps required to be cleared.--
                    With respect to any security-based swap that is subject
                    to the mandatory clearing requirement under subsection
                    (a) and entered into by a security-based swap dealer or
                    a major security-based swap participant with a
                    counterparty that is not a swap dealer, major swap
                    participant, security-based swap dealer, or major
                    security-based swap participant, the counterparty shall
                    have the

    [[Page 124 STAT. 1767]]

                    sole right to select the clearing agency at which the
                    security-based swap will be cleared.
                        ``(B) Security-based swaps not required to be
                    cleared.--With respect to any security-based swap that
                    is not subject to the mandatory clearing requirement
                    under subsection (a) and entered into by a security-
                    based swap dealer or a major security-based swap
                    participant with a counterparty that is not a swap
                    dealer, major swap participant, security-based swap
                    dealer, or major security-based swap participant, the
                    counterparty--
                              ``(i) may elect to require clearing of the
                          security-based swap; and
                              ``(ii) shall have the sole right to select the
                          clearing agency at which the security-based swap
                          will be cleared.
                ``(6) Abuse of exception.--The Commission may prescribe such
            rules or issue interpretations of the rules as the Commission
            determines to be necessary to prevent abuse of the exceptions
            described in this subsection. The Commission may also request
            information from those persons claiming the clearing exception
            as necessary to prevent abuse of the exceptions described in
            this subsection.

        ``(h) Trade Execution.--
                ``(1) In general.--With respect to transactions involving
            security-based swaps subject to the clearing requirement of
            subsection (a)(1), counterparties shall--
                        ``(A) execute the transaction on an exchange; or
                        ``(B) execute the transaction on a security-based
                    swap execution facility registered under section 3D or a
                    security-based swap execution facility that is exempt
                    from registration under section 3D(e).
                ``(2) Exception.--The requirements of subparagraphs (A) and
            (B) of paragraph (1) shall not apply if no exchange or security-
            based swap execution facility makes the security-based swap
            available to trade or for security-based swap transactions
            subject to the clearing exception under subsection (g).

        ``(i) Board Approval.--Exemptions from the requirements of this
    section to clear a security-based swap or execute a security-based swap
    through a national securities exchange or security-based swap execution
    facility shall be available to a counterparty that is an issuer of
    securities that are registered under section 12 or that is required to
    file reports pursuant to section 15(d), only if an appropriate committee
    of the issuer's board or governing body has reviewed and approved the
    issuer's decision to enter into security-based swaps that are subject to
    such exemptions.
        ``(j) Designation of Chief Compliance Officer.--
                ``(1) In general.--Each registered clearing agency shall
            designate an individual to serve as a chief compliance officer.
                ``(2) Duties.--The chief compliance officer shall--
                        ``(A) report directly to the board or to the senior
                    officer of the clearing agency;
                        ``(B) in consultation with its board, a body
                    performing a function similar thereto, or the senior
                    officer of the registered clearing agency, resolve any
                    conflicts of interest that may arise;

    [[Page 124 STAT. 1768]]

                        ``(C) be responsible for administering each policy
                    and procedure that is required to be established
                    pursuant to this section;
                        ``(D) ensure compliance with this title (including
                    regulations issued under this title) relating to
                    agreements, contracts, or transactions, including each
                    rule prescribed by the Commission under this section;
                        ``(E) establish procedures for the remediation of
                    noncompliance issues identified by the compliance
                    officer through any--
                              ``(i) compliance office review;
                              ``(ii) look-back;
                              ``(iii) internal or external audit finding;
                              ``(iv) self-reported error; or
                              ``(v) validated complaint; and
                        ``(F) establish and follow appropriate procedures
                    for the handling, management response, remediation,
                    retesting, and closing of noncompliance issues.
                ``(3) Annual reports.--
                        ``(A) In general.--In accordance with rules
                    prescribed by the Commission, the chief compliance
                    officer shall annually prepare and sign a report that
                    contains a description of--
                              ``(i) the compliance of the registered
                          clearing agency or security-based swap execution
                          facility of the compliance officer with respect to
                          this title (including regulations under this
                          title); and
                              ``(ii) each policy and procedure of the
                          registered clearing agency of the compliance
                          officer (including the code of ethics and conflict
                          of interest policies of the registered clearing
                          agency).
                        ``(B) Requirements.--A compliance report under
                    subparagraph (A) shall--
                              ``(i) accompany each appropriate financial
                          report of the registered clearing agency that is
                          required to be furnished to the Commission
                          pursuant to this section; and
                              ``(ii) include a certification that, under
                          penalty of law, the compliance report is accurate
                          and complete.''.

        (b) Clearing Agency Requirements.--Section 17A of the Securities
    Exchange Act of 1934 (15 U.S.C. 78q-1) is amended by adding at the end
    the following:
        ``(g) Registration Requirement.--It shall be unlawful for a clearing
    agency, unless registered with the Commission, directly or indirectly to
    make use of the mails or any means or instrumentality of interstate
    commerce to perform the functions of a clearing agency with respect to a
    security-based swap.
        ``(h) Voluntary Registration.--A person that clears agreements,
    contracts, or transactions that are not required to be cleared under
    this title may register with the Commission as a clearing agency.
        ``(i) Standards for Clearing Agencies Clearing Security-based Swap
    Transactions.--To be registered and to maintain registration as a
    clearing agency that clears security-based swap transactions, a clearing
    agency shall comply with such standards as the Commission may establish
    by rule. In establishing any such standards, and in the exercise of its
    oversight of such a

    [[Page 124 STAT. 1769]]

    clearing agency pursuant to this title, the Commission may conform such
    standards or oversight to reflect evolving United States and
    international standards. Except where the Commission determines
    otherwise by rule or regulation, a clearing agency shall have reasonable
    discretion in establishing the manner in which it complies with any such
    standards.
        ``(j) Rules.--The Commission shall adopt rules governing persons
    that are registered as clearing agencies for security-based swaps under
    this title.
        ``(k) Exemptions.--The Commission may exempt, conditionally or
    unconditionally, a clearing agency from registration under this section
    for the clearing of security-based swaps if the Commission determines
    that the clearing agency is subject to comparable, comprehensive
    supervision and regulation by the Commodity Futures Trading Commission
    or the appropriate government authorities in the home country of the
    agency. Such conditions may include, but are not limited to, requiring
    that the clearing agency be available for inspection by the Commission
    and make available all information requested by the Commission.
        ``(l) Existing Depository Institutions and Derivative Clearing
    Organizations.--
                ``(1) In general.--A depository institution or derivative
            clearing organization registered with the Commodity Futures
            Trading Commission under the Commodity Exchange Act that is
            required to be registered as a clearing agency under this
            section is deemed to be registered under this section solely for
            the purpose of clearing security-based swaps to the extent that,
            before the date of enactment of this subsection--
                        ``(A) the depository institution cleared swaps as a
                    multilateral clearing organization; or
                        ``(B) the derivative clearing organization cleared
                    swaps pursuant to an exemption from registration as a
                    clearing agency.
                ``(2) Conversion of depository institutions.--A depository
            institution to which this subsection applies may, by the vote of
            the shareholders owning not less than 51 percent of the voting
            interests of the depository institution, be converted into a
            State corporation, partnership, limited liability company, or
            similar legal form pursuant to a plan of conversion, if the
            conversion is not in contravention of applicable State law.
                ``(3) Sharing of information.--The Commodity Futures Trading
            Commission shall make available to the Commission, upon request,
            all information determined to be relevant by the Commodity
            Futures Trading Commission regarding a derivatives clearing
            organization deemed to be registered with the Commission under
            paragraph (1).

        ``(m) Modification of Core Principles.--The Commission may conform
    the core principles established in this section to reflect evolving
    United States and international standards.''.
        (c) Security-based Swap Execution Facilities.--The Securities
    Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended by inserting
    after section 3C (as added by subsection (a) of this section) the
    following:
    ``SEC. 3D. <<NOTE: 15 USC 78c-4.>>  SECURITY-BASED SWAP EXECUTION
                          FACILITIES.

        ``(a) Registration.--

    [[Page 124 STAT. 1770]]

                ``(1) In general.--No person may operate a facility for the
            trading or processing of security-based swaps, unless the
            facility is registered as a security-based swap execution
            facility or as a national securities exchange under this
            section.
                ``(2) Dual registration.--Any person that is registered as a
            security-based swap execution facility under this section shall
            register with the Commission regardless of whether the person
            also is registered with the Commodity Futures Trading Commission
            as a swap execution facility.

        ``(b) Trading and Trade Processing.--A security-based swap execution
    facility that is registered under subsection (a) may--
                ``(1) make available for trading any security-based swap;
            and
                ``(2) facilitate trade processing of any security-based
            swap.

        ``(c) Identification of Facility Used To Trade Security-based Swaps
    by National Securities Exchanges.--A national securities exchange shall,
    to the extent that the exchange also operates a security-based swap
    execution facility and uses the same electronic trade execution system
    for listing and executing trades of security-based swaps on or through
    the exchange and the facility, identify whether electronic trading of
    such security-based swaps is taking place on or through the national
    securities exchange or the security-based swap execution facility.
        ``(d) Core Principles for Security-based Swap Execution
    Facilities.--
                ``(1) Compliance with core principles.--
                        ``(A) In general.--To be registered, and maintain
                    registration, as a security-based swap execution
                    facility, the security-based swap execution facility
                    shall comply with--
                              ``(i) the core principles described in this
                          subsection; and
                              ``(ii) any requirement that the Commission may
                          impose by rule or regulation.
                        ``(B) Reasonable discretion of security-based swap
                    execution facility.--Unless otherwise determined by the
                    Commission, by rule or regulation, a security-based swap
                    execution facility described in subparagraph (A) shall
                    have reasonable discretion in establishing the manner in
                    which it complies with the core principles described in
                    this subsection.
                ``(2) Compliance with rules.--A security-based swap
            execution facility shall--
                        ``(A) establish and enforce compliance with any rule
                    established by such security-based swap execution
                    facility, including--
                              ``(i) the terms and conditions of the
                          security-based swaps traded or processed on or
                          through the facility; and
                              ``(ii) any limitation on access to the
                          facility;
                        ``(B) establish and enforce trading, trade
                    processing, and participation rules that will deter
                    abuses and have the capacity to detect, investigate, and
                    enforce those rules, including means--
                              ``(i) to provide market participants with
                          impartial access to the market; and
                              ``(ii) to capture information that may be used
                          in establishing whether rule violations have
                          occurred; and

    [[Page 124 STAT. 1771]]

                        ``(C) establish rules governing the operation of the
                    facility, including rules specifying trading procedures
                    to be used in entering and executing orders traded or
                    posted on the facility, including block trades.
                ``(3) Security-based swaps not readily susceptible to
            manipulation.--The security-based swap execution facility shall
            permit trading only in security-based swaps that are not readily
            susceptible to manipulation.
                ``(4) Monitoring of trading and trade processing.--The
            security-based swap execution facility shall--
                        ``(A) establish and enforce rules or terms and
                    conditions defining, or specifications detailing--
                              ``(i) trading procedures to be used in
                          entering and executing orders traded on or through
                          the facilities of the security-based swap
                          execution facility; and
                              ``(ii) procedures for trade processing of
                          security-based swaps on or through the facilities
                          of the security-based swap execution facility; and
                        ``(B) monitor trading in security-based swaps to
                    prevent manipulation, price distortion, and disruptions
                    of the delivery or cash settlement process through
                    surveillance, compliance, and disciplinary practices and
                    procedures, including methods for conducting real-time
                    monitoring of trading and comprehensive and accurate
                    trade reconstructions.
                ``(5) Ability to obtain information.--The security-based
            swap execution facility shall--
                        ``(A) <<NOTE: Regulations.>>  establish and enforce
                    rules that will allow the facility to obtain any
                    necessary information to perform any of the functions
                    described in this subsection;
                        ``(B) provide the information to the Commission on
                    request; and
                        ``(C) have the capacity to carry out such
                    international information-sharing agreements as the
                    Commission may require.
                ``(6) Financial integrity of transactions.--
            The <<NOTE: Regulations. Procedures.>>  security-based swap
            execution facility shall establish and enforce rules and
            procedures for ensuring the financial integrity of security-
            based swaps entered on or through the facilities of the
            security-based swap execution facility, including the clearance
            and settlement of security-based swaps pursuant to section
            3C(a)(1).
                ``(7) Emergency authority.--The <<NOTE: Regulations.>>
            security-based swap execution facility shall adopt rules to
            provide for the exercise of emergency authority, in consultation
            or cooperation with the Commission, as is necessary and
            appropriate, including the authority to liquidate or transfer
            open positions in any security-based swap or to suspend or
            curtail trading in a security-based swap.
                ``(8) Timely publication of trading information.--
                        ``(A) <<NOTE: Public information.>>  In general.--
                    The security-based swap execution facility shall make
                    public timely information on price, trading volume, and
                    other trading data on security-based swaps to the extent
                    prescribed by the Commission.
                        ``(B) Capacity of security-based swap execution
                    facility.--The security-based swap execution facility
                    shall be required to have the capacity to electronically
                    capture

    [[Page 124 STAT. 1772]]

                    and transmit and disseminate trade information with
                    respect to transactions executed on or through the
                    facility.
                ``(9) Recordkeeping and reporting.--
                        ``(A) In general.--A security-based swap execution
                    facility shall--
                              ``(i) <<NOTE: Time period.>>  maintain records
                          of all activities relating to the business of the
                          facility, including a complete audit trail, in a
                          form and manner acceptable to the Commission for a
                          period of 5 years; and
                              ``(ii) report to the Commission, in a form and
                          manner acceptable to the Commission, such
                          information as the Commission determines to be
                          necessary or appropriate for the Commission to
                          perform the duties of the Commission under this
                          title.
                        ``(B) Requirements.--The Commission shall adopt data
                    collection and reporting requirements for security-based
                    swap execution facilities that are comparable to
                    corresponding requirements for clearing agencies and
                    security-based swap data repositories.
                ``(10) Antitrust considerations.--Unless necessary or
            appropriate to achieve the purposes of this title, the security-
            based swap execution facility shall not--
                        ``(A) adopt any rules or taking any actions that
                    result in any unreasonable restraint of trade; or
                        ``(B) impose any material anticompetitive burden on
                    trading or clearing.
                ``(11) Conflicts of interest.--The security-based swap
            execution facility shall--
                        ``(A) <<NOTE: Regulations.>>  establish and enforce
                    rules to minimize conflicts of interest in its decision-
                    making process; and
                        ``(B) <<NOTE: Process.>>  establish a process for
                    resolving the conflicts of interest.
                ``(12) Financial resources.--
                        ``(A) In general.--The security-based swap execution
                    facility shall have adequate financial, operational, and
                    managerial resources to discharge each responsibility of
                    the security-based swap execution facility, as
                    determined by the Commission.
                        ``(B) Determination of resource adequacy.--The
                    financial resources of a security-based swap execution
                    facility shall be considered to be adequate if the value
                    of the financial resources--
                              ``(i) enables the organization to meet its
                          financial obligations to its members and
                          participants notwithstanding a default by the
                          member or participant creating the largest
                          financial exposure for that organization in
                          extreme but plausible market conditions; and
                              ``(ii) exceeds the total amount that would
                          enable the security-based swap execution facility
                          to cover the operating costs of the security-based
                          swap execution facility for a 1-year period, as
                          calculated on a rolling basis.
                ``(13) System safeguards.--The security-based swap execution
            facility shall--

    [[Page 124 STAT. 1773]]

                        ``(A) establish and maintain a program of risk
                    analysis and oversight to identify and minimize sources
                    of operational risk, through the development of
                    appropriate controls and procedures, and automated
                    systems, that--
                              ``(i) are reliable and secure; and
                              ``(ii) have adequate scalable capacity;
                        ``(B) <<NOTE: Procedures.>>  establish and maintain
                    emergency procedures, backup facilities, and a plan for
                    disaster recovery that allow for--
                              ``(i) the timely recovery and resumption of
                          operations; and
                              ``(ii) the fulfillment of the responsibilities
                          and obligations of the security-based swap
                          execution facility; and
                        ``(C) <<NOTE: Tests.>>  periodically conduct tests
                    to verify that the backup resources of the security-
                    based swap execution facility are sufficient to ensure
                    continued--
                              ``(i) order processing and trade matching;
                              ``(ii) price reporting;
                              ``(iii) market surveillance; and
                              ``(iv) maintenance of a comprehensive and
                          accurate audit trail.
                ``(14) Designation of chief compliance officer.--
                        ``(A) In general.--Each security-based swap
                    execution facility shall designate an individual to
                    serve as a chief compliance officer.
                        ``(B) Duties.--The chief compliance officer shall--
                              ``(i) report directly to the board or to the
                          senior officer of the facility;
                              ``(ii) review compliance with the core
                          principles in this subsection;
                              ``(iii) in consultation with the board of the
                          facility, a body performing a function similar to
                          that of a board, or the senior officer of the
                          facility, resolve any conflicts of interest that
                          may arise;
                              ``(iv) be responsible for establishing and
                          administering the policies and procedures required
                          to be established pursuant to this section;
                              ``(v) ensure compliance with this title and
                          the rules and regulations issued under this title,
                          including rules prescribed by the Commission
                          pursuant to this section;
                              ``(vi) establish procedures for the
                          remediation of noncompliance issues found during--
                                        ``(I) compliance office reviews;
                                        ``(II) look backs;
                                        ``(III) internal or external audit
                                    findings;
                                        ``(IV) self-reported errors; or
                                        ``(V) through validated complaints;
                                    and
                              ``(vii) establish and follow appropriate
                          procedures for the handling, management response,
                          remediation, retesting, and closing of
                          noncompliance issues.
                        ``(C) Annual reports.--
                              ``(i) In general.--In accordance with rules
                          prescribed by the Commission, the chief compliance
                          officer shall annually prepare and sign a report
                          that contains a description of--

    [[Page 124 STAT. 1774]]

                                        ``(I) the compliance of the
                                    security-based swap execution facility
                                    with this title; and
                                        ``(II) the policies and procedures,
                                    including the code of ethics and
                                    conflict of interest policies, of the
                                    security-based security-based swap
                                    execution facility.
                              ``(ii) Requirements.--The chief compliance
                          officer shall--
                                        ``(I) submit each report described
                                    in clause (i) with the appropriate
                                    financial report of the security-based
                                    swap execution facility that is required
                                    to be submitted to the Commission
                                    pursuant to this section; and
                                        ``(II) include in the report a
                                    certification that, under penalty of
                                    law, the report is accurate and
                                    complete.

        ``(e) Exemptions.--The Commission may exempt, conditionally or
    unconditionally, a security-based swap execution facility from
    registration under this section if the Commission finds that the
    facility is subject to comparable, comprehensive supervision and
    regulation on a consolidated basis by the Commodity Futures Trading
    Commission.
        ``(f) Rules.--The Commission shall prescribe rules governing the
    regulation of security-based swap execution facilities under this
    section.''.
        (d) Segregation of Assets Held as Collateral in Security-based Swap
    Transactions.--The Securities Exchange Act of 1934 (15 U.S.C. 78a et
    seq.) is amended by inserting after section 3D (as added by subsection
    (b)) the following:
    ``SEC. 3E. <<NOTE: 15 USC 78c-5.>>  SEGREGATION OF ASSETS HELD AS
                          COLLATERAL IN SECURITY-BASED SWAP
                          TRANSACTIONS.

        ``(a) Registration Requirement.--It shall be unlawful for any person
    to accept any money, securities, or property (or to extend any credit in
    lieu of money, securities, or property) from, for, or on behalf of a
    security-based swaps customer to margin, guarantee, or secure a
    security-based swap cleared by or through a clearing agency (including
    money, securities, or property accruing to the customer as the result of
    such a security-based swap), unless the person shall have registered
    under this title with the Commission as a broker, dealer, or security-
    based swap dealer, and the registration shall not have expired nor been
    suspended nor revoked.
        ``(b) Cleared Security-based Swaps.--
                ``(1) Segregation required.--A broker, dealer, or security-
            based swap dealer shall treat and deal with all money,
            securities, and property of any security-based swaps customer
            received to margin, guarantee, or secure a security-based swap
            cleared by or though a clearing agency (including money,
            securities, or property accruing to the security-based swaps
            customer as the result of such a security-based swap) as
            belonging to the security-based swaps customer.
                ``(2) Commingling prohibited.--Money, securities, and
            property of a security-based swaps customer described in
            paragraph (1) shall be separately accounted for and shall not be
            commingled with the funds of the broker, dealer, or security-
            based swap dealer or be used to margin, secure, or guarantee

    [[Page 124 STAT. 1775]]

            any trades or contracts of any security-based swaps customer or
            person other than the person for whom the same are held.

        ``(c) Exceptions.--
                ``(1) Use of funds.--
                        ``(A) In general.--Notwithstanding subsection (b),
                    money, securities, and property of a security-based
                    swaps customer of a broker, dealer, or security-based
                    swap dealer described in subsection (b) may, for
                    convenience, be commingled and deposited in the same 1
                    or more accounts with any bank or trust company or with
                    a clearing agency.
                        ``(B) Withdrawal.--Notwithstanding subsection (b),
                    such share of the money, securities, and property
                    described in subparagraph (A) as in the normal course of
                    business shall be necessary to margin, guarantee,
                    secure, transfer, adjust, or settle a cleared security-
                    based swap with a clearing agency, or with any member of
                    the clearing agency, may be withdrawn and applied to
                    such purposes, including the payment of commissions,
                    brokerage, interest, taxes, storage, and other charges,
                    lawfully accruing in connection with the cleared
                    security-based swap.
                ``(2) Commission action.--Notwithstanding subsection (b), in
            accordance with such terms and conditions as the Commission may
            prescribe by rule, regulation, or order, any money, securities,
            or property of the security-based swaps customer of a broker,
            dealer, or security-based swap dealer described in subsection
            (b) may be commingled and deposited as provided in this section
            with any other money, securities, or property received by the
            broker, dealer, or security-based swap dealer and required by
            the Commission to be separately accounted for and treated and
            dealt with as belonging to the security-based swaps customer of
            the broker, dealer, or security-based swap dealer.

        ``(d) Permitted Investments.--Money described in subsection (b) may
    be invested in obligations of the United States, in general obligations
    of any State or of any political subdivision of a State, and in
    obligations fully guaranteed as to principal and interest by the United
    States, or in any other investment that the Commission may by rule or
    regulation prescribe, and such investments shall be made in accordance
    with such rules and regulations and subject to such conditions as the
    Commission may prescribe.
        ``(e) Prohibition.--It shall be unlawful for any person, including
    any clearing agency and any depository institution, that has received
    any money, securities, or property for deposit in a separate account or
    accounts as provided in subsection (b) to hold, dispose of, or use any
    such money, securities, or property as belonging to the depositing
    broker, dealer, or security-based swap dealer or any person other than
    the swaps customer of the broker, dealer, or security-based swap dealer.
        ``(f) Segregation Requirements for Uncleared Security-based Swaps.--
                ``(1) Segregation of assets held as collateral in uncleared
            security-based swap transactions.--
                        ``(A) Notification.--A security-based swap dealer or
                    major security-based swap participant shall be required
                    to notify the counterparty of the security-based swap
                    dealer or major security-based swap participant at the
                    beginning of a security-based swap transaction that the
                    counterparty

    [[Page 124 STAT. 1776]]

                    has the right to require segregation of the funds of
                    other property supplied to margin, guarantee, or secure
                    the obligations of the counterparty.
                        ``(B) Segregation and maintenance of funds.--At the
                    request of a counterparty to a security-based swap that
                    provides funds or other property to a security-based
                    swap dealer or major security-based swap participant to
                    margin, guarantee, or secure the obligations of the
                    counterparty, the security-based swap dealer or major
                    security-based swap participant shall--
                              ``(i) segregate the funds or other property
                          for the benefit of the counterparty; and
                              ``(ii) in accordance with such rules and
                          regulations as the Commission may promulgate,
                          maintain the funds or other property in a
                          segregated account separate from the assets and
                          other interests of the security-based swap dealer
                          or major security-based swap participant.
                ``(2) Applicability.--The requirements described in
            paragraph (1) shall--
                        ``(A) apply only to a security-based swap between a
                    counterparty and a security-based swap dealer or major
                    security-based swap participant that is not submitted
                    for clearing to a clearing agency; and
                        ``(B)(i) not apply to variation margin payments; or
                        ``(ii) not preclude any commercial arrangement
                    regarding--
                              ``(I) the investment of segregated funds or
                          other property that may only be invested in such
                          investments as the Commission may permit by rule
                          or regulation; and
                              ``(II) the related allocation of gains and
                          losses resulting from any investment of the
                          segregated funds or other property.
                ``(3) Use of independent third-party custodians.--The
            segregated account described in paragraph (1) shall be--
                        ``(A) carried by an independent third-party
                    custodian; and
                        ``(B) designated as a segregated account for and on
                    behalf of the counterparty.
                ``(4) Reporting requirement.--If the counterparty does not
            choose to require segregation of the funds or other property
            supplied to margin, guarantee, or secure the obligations of the
            counterparty, the security-based swap dealer or major security-
            based swap participant shall report to the counterparty of the
            security-based swap dealer or major security-based swap
            participant on a quarterly basis that the back office procedures
            of the security-based swap dealer or major security-based swap
            participant relating to margin and collateral requirements are
            in compliance with the agreement of the counterparties.

        ``(g) Bankruptcy.--A security-based swap, as defined in section
    3(a)(68) shall be considered to be a security as such term is used in
    section 101(53A)(B) and subchapter III of title 11, United States Code.
    An account that holds a security-based swap, other than a portfolio
    margining account referred to in section 15(c)(3)(C) shall be considered
    to be a securities account, as that term is defined in section 741 of
    title 11, United States Code. <<NOTE: Applicability.>>  The definitions

    [[Page 124 STAT. 1777]]

    of the terms `purchase' and `sale' in section 3(a)(13) and (14) shall be
    applied to the terms `purchase' and `sale', as used in section 741 of
    title 11, United States Code. The term `customer', as defined in section
    741 of title 11, United States Code, excludes any person, to the extent
    that such person has a claim based on any open repurchase agreement,
    open reverse repurchase agreement, stock borrowed agreement, non-cleared
    option, or non-cleared security-based swap except to the extent of any
    margin delivered to or by the customer with respect to which there is a
    customer protection requirement under section 15(c)(3) or a segregation
    requirement.''.

        (e) Trading in Security-based Swaps.--Section 6 of the Securities
    Exchange Act of 1934 (15 U.S.C. 78f) is amended by adding at the end the
    following:
        ``(l) Security-based Swaps.--It shall be unlawful for any person to
    effect a transaction in a security-based swap with or for a person that
    is not an eligible contract participant, unless such transaction is
    effected on a national securities exchange registered pursuant to
    subsection (b).''.
        (f) Additions of Security-based Swaps to Certain Enforcement
    Provisions.--Section 9(b) of the Securities Exchange Act of 1934 (15
    U.S.C. 78i(b)) is amended by striking paragraphs (1) through (3) and
    inserting the following:
                ``(1) any transaction in connection with any security
            whereby any party to such transaction acquires--
                        ``(A) any put, call, straddle, or other option or
                    privilege of buying the security from or selling the
                    security to another without being bound to do so;
                        ``(B) any security futures product on the security;
                    or
                        ``(C) any security-based swap involving the security
                    or the issuer of the security;
                ``(2) any transaction in connection with any security with
            relation to which such person has, directly or indirectly, any
            interest in any--
                        ``(A) such put, call, straddle, option, or
                    privilege;
                        ``(B) such security futures product; or
                        ``(C) such security-based swap; or
                ``(3) any transaction in any security for the account of any
            person who such person has reason to believe has, and who
            actually has, directly or indirectly, any interest in any--
                        ``(A) such put, call, straddle, option, or
                    privilege;
                        ``(B) such security futures product with relation to
                    such security; or
                        ``(C) any security-based swap involving such
                    security or the issuer of such security.''.

        (g) Rulemaking Authority To Prevent Fraud, Manipulation and
    Deceptive Conduct in Security-based Swaps.--Section 9 of the Securities
    Exchange Act of 1934 (15 U.S.C. 78i) is amended by adding at the end the
    following:
        ``(j) It shall be unlawful for any person, directly or indirectly,
    by the use of any means or instrumentality of interstate commerce or of
    the mails, or of any facility of any national securities exchange, to
    effect any transaction in, or to induce or attempt to induce the
    purchase or sale of, any security-based swap, in connection with which
    such person engages in any fraudulent, deceptive, or manipulative act or
    practice, makes any fictitious quotation, or engages in any transaction,
    practice, or course of business which operates as a fraud or deceit upon
    any person. <<NOTE: Regulations.>>  The Commission

    [[Page 124 STAT. 1778]]

    shall, for the purposes of this subsection, by rules and regulations
    define, and prescribe means reasonably designed to prevent, such
    transactions, acts, practices, and courses of business as are
    fraudulent, deceptive, or manipulative, and such quotations as are
    fictitious.''.

        (h) Position Limits and Position Accountability for Security-based
    Swaps.--The Securities Exchange Act of 1934 is amended by inserting
    after section 10A (15 U.S.C. 78j-1) the following:
    ``SEC. 10B. <<NOTE: 15 USC 78j-2.>>  POSITION LIMITS AND POSITION
                            ACCOUNTABILITY FOR SECURITY-BASED SWAPS
                            AND LARGE TRADER REPORTING.

        ``(a) Position Limits.-- <<NOTE: Fraud. Regulations.>> As a means
    reasonably designed to prevent fraud and manipulation, the Commission
    shall, by rule or regulation, as necessary or appropriate in the public
    interest or for the protection of investors, establish limits (including
    related hedge exemption provisions) on the size of positions in any
    security-based swap that may be held by any person. In establishing such
    limits, the Commission may require any person to aggregate positions
    in--
                ``(1) any security-based swap and any security or loan or
            group of securities or loans on which such security-based swap
            is based, which such security-based swap references, or to which
            such security-based swap is related as described in paragraph
            (68) of section 3(a), and any other instrument relating to such
            security or loan or group or index of securities or loans; or
                ``(2) any security-based swap and--
                        ``(A) any security or group or index of securities,
                    the price, yield, value, or volatility of which, or of
                    which any interest therein, is the basis for a material
                    term of such security-based swap as described in
                    paragraph (68) of section 3(a); and
                        ``(B) any other instrument relating to the same
                    security or group or index of securities described under
                    subparagraph (A).

        ``(b) Exemptions.--The Commission, by rule, regulation, or order,
    may conditionally or unconditionally exempt any person or class of
    persons, any security-based swap or class of security-based swaps, or
    any transaction or class of transactions from any requirement the
    Commission may establish under this section with respect to position
    limits.
        ``(c) SRO Rules.--
                ``(1) In general.--As a means reasonably designed to prevent
            fraud or manipulation, the Commission, by rule, regulation, or
            order, as necessary or appropriate in the public interest, for
            the protection of investors, or otherwise in furtherance of the
            purposes of this title, may direct a self-regulatory
            organization--
                        ``(A) to adopt rules regarding the size of positions
                    in any security-based swap that may be held by--
                              ``(i) any member of such self-regulatory
                          organization; or
                              ``(ii) any person for whom a member of such
                          self-regulatory organization effects transactions
                          in such security-based swap; and

    [[Page 124 STAT. 1779]]

                        ``(B) to adopt rules reasonably designed to ensure
                    compliance with requirements prescribed by the
                    Commission under this subsection.
                ``(2) Requirement to aggregate positions.--In establishing
            the limits under paragraph (1), the self-regulatory organization
            may require such member or person to aggregate positions in--
                        ``(A) any security-based swap and any security or
                    loan or group or narrow-based security index of
                    securities or loans on which such security-based swap is
                    based, which such security-based swap references, or to
                    which such security-based swap is related as described
                    in section 3(a)(68), and any other instrument relating
                    to such security or loan or group or narrow-based
                    security index of securities or loans; or
                        ``(B)(i) any security-based swap; and
                        ``(ii) any security-based swap and any other
                    instrument relating to the same security or group or
                    narrow-based security index of securities.

        ``(d) Large Trader Reporting.--The Commission, by rule or
    regulation, may require any person that effects transactions for such
    person's own account or the account of others in any securities-based
    swap or uncleared security-based swap and any security or loan or group
    or narrow-based security index of securities or loans as set forth in
    paragraphs (1) and (2) of subsection (a) under this section to report
    such information as the Commission may prescribe regarding any position
    or positions in any security-based swap or uncleared security-based swap
    and any security or loan or group or narrow-based security index of
    securities or loans and any other instrument relating to such security
    or loan or group or narrow-based security index of securities or loans
    as set forth in paragraphs (1) and (2) of subsection (a) under this
    section.''.
        (i) Public Reporting and Repositories for Security-based Swaps.--
    Section 13 of the Securities Exchange Act of 1934 (15 U.S.C. 78m) is
    amended by adding at the end the following:
        ``(m) Public Availability of Security-based Swap Transaction Data.--
                ``(1) In general.--
                        ``(A) Definition of real-time public reporting.--In
                    this paragraph, the term `real-time public reporting'
                    means to report data relating to a security-based swap
                    transaction, including price and volume, as soon as
                    technologically practicable after the time at which the
                    security-based swap transaction has been executed.
                        ``(B) Purpose.--The purpose of this subsection is to
                    authorize the Commission to make security-based swap
                    transaction and pricing data available to the public in
                    such form and at such times as the Commission determines
                    appropriate to enhance price discovery.
                        ``(C) General rule.--The Commission is authorized to
                    provide by rule for the public availability of security-
                    based swap transaction, volume, and pricing data as
                    follows:
                              ``(i) With respect to those security-based
                          swaps that are subject to the mandatory clearing
                          requirement described in section 3C(a)(1)
                          (including those security-based swaps that are
                          excepted from the requirement

    [[Page 124 STAT. 1780]]

                          pursuant to section 3C(g)), the Commission shall
                          require real-time public reporting for such
                          transactions.
                              ``(ii) With respect to those security-based
                          swaps that are not subject to the mandatory
                          clearing requirement described in section
                          3C(a)(1), but are cleared at a registered clearing
                          agency, the Commission shall require real-time
                          public reporting for such transactions.
                              ``(iii) With respect to security-based swaps
                          that are not cleared at a registered clearing
                          agency and which are reported to a security-based
                          swap data repository or the Commission under
                          section 3C(a)(6), the Commission shall require
                          real-time public reporting for such transactions,
                          in a manner that does not disclose the business
                          transactions and market positions of any person.
                              ``(iv) With respect to security-based swaps
                          that are determined to be required to be cleared
                          under section 3C(b) but are not cleared, the
                          Commission shall require real-time public
                          reporting for such transactions.
                        ``(D) Registered entities and public reporting.--The
                    Commission may require registered entities to publicly
                    disseminate the security-based swap transaction and
                    pricing data required to be reported under this
                    paragraph.
                        ``(E) Rulemaking required.--With respect to the rule
                    providing for the public availability of transaction and
                    pricing data for security-based swaps described in
                    clauses (i) and (ii) of subparagraph (C), the rule
                    promulgated by the Commission shall contain provisions--
                              ``(i) to ensure such information does not
                          identify the participants;
                              ``(ii) <<NOTE: Criteria.>> to specify the
                          criteria for determining what constitutes a large
                          notional security-based swap transaction (block
                          trade) for particular markets and contracts;
                              ``(iii) to specify the appropriate time delay
                          for reporting large notional security-based swap
                          transactions (block trades) to the public; and
                              ``(iv) that take into account whether the
                          public disclosure will materially reduce market
                          liquidity.
                        ``(F) Timeliness of reporting.--Parties to a
                    security-based swap (including agents of the parties to
                    a security-based swap) shall be responsible for
                    reporting security-based swap transaction information to
                    the appropriate registered entity in a timely manner as
                    may be prescribed by the Commission.
                        ``(G) Reporting of swaps to registered security-
                    based swap data repositories.--Each security-based swap
                    (whether cleared or uncleared) shall be reported to a
                    registered security-based swap data repository.
                        ``(H) Registration of clearing agencies.--A clearing
                    agency may register as a security-based swap data
                    repository.
                ``(2) Semiannual and annual public reporting of aggregate
            security-based swap data.--

    [[Page 124 STAT. 1781]]

                        ``(A) In general.--In accordance with subparagraph
                    (B), the Commission shall issue a written report on a
                    semiannual and annual basis to make available to the
                    public information relating to--
                              ``(i) the trading and clearing in the major
                          security-based swap categories; and
                              ``(ii) the market participants and
                          developments in new products.
                        ``(B) Use; consultation.--In preparing a report
                    under subparagraph (A), the Commission shall--
                              ``(i) use information from security-based swap
                          data repositories and clearing agencies; and
                              ``(ii) consult with the Office of the
                          Comptroller of the Currency, the Bank for
                          International Settlements, and such other
                          regulatory bodies as may be necessary.
                        ``(C) Authority of commission.--The Commission may,
                    by rule, regulation, or order, delegate the public
                    reporting responsibilities of the Commission under this
                    paragraph in accordance with such terms and conditions
                    as the Commission determines to be appropriate and in
                    the public interest.

        ``(n) Security-based Swap Data Repositories.--
                ``(1) Registration requirement.--It shall be unlawful for
            any person, unless registered with the Commission, directly or
            indirectly, to make use of the mails or any means or
            instrumentality of interstate commerce to perform the functions
            of a security-based swap data repository.
                ``(2) Inspection and examination.--Each registered security-
            based swap data repository shall be subject to inspection and
            examination by any representative of the Commission.
                ``(3) Compliance with core principles.--
                        ``(A) In general.--To be registered, and maintain
                    registration, as a security-based swap data repository,
                    the security-based swap data repository shall comply
                    with--
                              ``(i) the requirements and core principles
                          described in this subsection; and
                              ``(ii) any requirement that the Commission may
                          impose by rule or regulation.
                        ``(B) Reasonable discretion of security-based swap
                    data repository.--Unless otherwise determined by the
                    Commission, by rule or regulation, a security-based swap
                    data repository described in subparagraph (A) shall have
                    reasonable discretion in establishing the manner in
                    which the security-based swap data repository complies
                    with the core principles described in this subsection.
                ``(4) Standard setting.--
                        ``(A) Data identification.--
                              ``(i) In general.--In accordance with clause
                          (ii), the Commission shall prescribe standards
                          that specify the data elements for each security-
                          based swap that shall be collected and maintained
                          by each registered security-based swap data
                          repository.
                              ``(ii) Requirement.--In carrying out clause
                          (i), the Commission shall prescribe consistent
                          data element standards applicable to registered
                          entities and reporting counterparties.

    [[Page 124 STAT. 1782]]

                        ``(B) Data collection and maintenance.--The
                    Commission shall prescribe data collection and data
                    maintenance standards for security-based swap data
                    repositories.
                        ``(C) Comparability.--The standards prescribed by
                    the Commission under this subsection shall be comparable
                    to the data standards imposed by the Commission on
                    clearing agencies in connection with their clearing of
                    security-based swaps.
                ``(5) Duties.--A security-based swap data repository shall--
                        ``(A) accept data prescribed by the Commission for
                    each security-based swap under subsection (b);
                        ``(B) confirm with both counterparties to the
                    security-based swap the accuracy of the data that was
                    submitted;
                        ``(C) maintain the data described in subparagraph
                    (A) in such form, in such manner, and for such period as
                    may be required by the Commission;
                        ``(D)(i) provide direct electronic access to the
                    Commission (or any designee of the Commission, including
                    another registered entity); and
                        ``(ii) provide the information described in
                    subparagraph (A) in such form and at such frequency as
                    the Commission may require to comply with the public
                    reporting requirements set forth in subsection (m);
                        ``(E) at the direction of the Commission, establish
                    automated systems for monitoring, screening, and
                    analyzing security-based swap data;
                        ``(F) maintain the privacy of any and all security-
                    based swap transaction information that the security-
                    based swap data repository receives from a security-
                    based swap dealer, counterparty, or any other registered
                    entity; and
                        ``(G) <<NOTE: Confidentiality. Notification.>>  on a
                    confidential basis pursuant to section 24, upon request,
                    and after notifying the Commission of the request, make
                    available all data obtained by the security-based swap
                    data repository, including individual counterparty trade
                    and position data, to--
                              ``(i) each appropriate prudential regulator;
                              ``(ii) the Financial Stability Oversight
                          Council;
                              ``(iii) the Commodity Futures Trading
                          Commission;
                              ``(iv) the Department of Justice; and
                              ``(v) any other person that the Commission
                          determines to be appropriate, including--
                                        ``(I) foreign financial supervisors
                                    (including foreign futures authorities);
                                        ``(II) foreign central banks; and
                                        ``(III) foreign ministries.
                        ``(H) Confidentiality and indemnification
                    agreement.--Before the security-based swap data
                    repository may share information with any entity
                    described in subparagraph (G)--
                              ``(i) the security-based swap data repository
                          shall receive a written agreement from each entity
                          stating that the entity shall abide by the
                          confidentiality requirements described in section
                          24 relating to the information on security-based
                          swap transactions that is provided; and

    [[Page 124 STAT. 1783]]

                              ``(ii) each entity shall agree to indemnify
                          the security-based swap data repository and the
                          Commission for any expenses arising from
                          litigation relating to the information provided
                          under section 24.
                ``(6) Designation of chief compliance officer.--
                        ``(A) In general.--Each security-based swap data
                    repository shall designate an individual to serve as a
                    chief compliance officer.
                        ``(B) Duties.--The chief compliance officer shall--
                              ``(i) report directly to the board or to the
                          senior officer of the security-based swap data
                          repository;
                              ``(ii) review the compliance of the security-
                          based swap data repository with respect to the
                          requirements and core principles described in this
                          subsection;
                              ``(iii) in consultation with the board of the
                          security-based swap data repository, a body
                          performing a function similar to the board of the
                          security-based swap data repository, or the senior
                          officer of the security-based swap data
                          repository, resolve any conflicts of interest that
                          may arise;
                              ``(iv) be responsible for administering each
                          policy and procedure that is required to be
                          established pursuant to this section;
                              ``(v) ensure compliance with this title
                          (including regulations) relating to agreements,
                          contracts, or transactions, including each rule
                          prescribed by the Commission under this section;
                              ``(vi) establish procedures for the
                          remediation of noncompliance issues identified by
                          the chief compliance officer through any--
                                        ``(I) compliance office review;
                                        ``(II) look-back;
                                        ``(III) internal or external audit
                                    finding;
                                        ``(IV) self-reported error; or
                                        ``(V) validated complaint; and
                              ``(vii) establish and follow appropriate
                          procedures for the handling, management response,
                          remediation, retesting, and closing of
                          noncompliance issues.
                        ``(C) Annual reports.--
                              ``(i) <<NOTE: Regulations.>>  In general.--In
                          accordance with rules prescribed by the
                          Commission, the chief compliance officer shall
                          annually prepare and sign a report that contains a
                          description of--
                                        ``(I) the compliance of the
                                    security-based swap data repository of
                                    the chief compliance officer with
                                    respect to this title (including
                                    regulations); and
                                        ``(II) each policy and procedure of
                                    the security-based swap data repository
                                    of the chief compliance officer
                                    (including the code of ethics and
                                    conflict of interest policies of the
                                    security-based swap data repository).
                              ``(ii) Requirements.--A compliance report
                          under clause (i) shall--
                                        ``(I) accompany each appropriate
                                    financial report of the security-based
                                    swap data repository that is required to
                                    be furnished to the Commission pursuant
                                    to this section; and

    [[Page 124 STAT. 1784]]

                                        ``(II) <<NOTE: Certification.>>
                                    include a certification that, under
                                    penalty of law, the compliance report is
                                    accurate and complete.
                ``(7) Core principles applicable to security-based swap data
            repositories.--
                        ``(A) Antitrust considerations.--Unless necessary or
                    appropriate to achieve the purposes of this title, the
                    swap data repository shall not--
                              ``(i) adopt any rule or take any action that
                          results in any unreasonable restraint of trade; or
                              ``(ii) impose any material anticompetitive
                          burden on the trading, clearing, or reporting of
                          transactions.
                        ``(B) Governance arrangements.--Each security-based
                    swap data repository shall establish governance
                    arrangements that are transparent--
                              ``(i) to fulfill public interest requirements;
                          and
                              ``(ii) to support the objectives of the
                          Federal Government, owners, and participants.
                        ``(C) Conflicts of interest.--Each security-based
                    swap data repository shall--
                              ``(i) <<NOTE: Regulations.>>  establish and
                          enforce rules to minimize conflicts of interest in
                          the decision-making process of the security-based
                          swap data repository; and
                              ``(ii) <<NOTE: Process.>>  establish a process
                          for resolving any conflicts of interest described
                          in clause (i).
                        ``(D) Additional duties developed by commission.--
                              ``(i) In general.--The Commission may develop
                          1 or more additional duties applicable to
                          security-based swap data repositories.
                              ``(ii) Consideration of evolving standards.--
                          In developing additional duties under subparagraph
                          (A), the Commission may take into consideration
                          any evolving standard of the United States or the
                          international community.
                              ``(iii) Additional duties for commission
                          designees.--The Commission shall establish
                          additional duties for any registrant described in
                          section 13(m)(2)(C) in order to minimize conflicts
                          of interest, protect data, ensure compliance, and
                          guarantee the safety and security of the security-
                          based swap data repository.
                ``(8) Required registration for security-based swap data
            repositories.--Any person that is required to be registered as a
            security-based swap data repository under this subsection shall
            register with the Commission, regardless of whether that person
            is also licensed under the Commodity Exchange Act as a swap data
            repository.
                ``(9) Rules.--The Commission shall adopt rules governing
            persons that are registered under this subsection.''.
    SEC. 764. REGISTRATION AND REGULATION OF SECURITY-BASED SWAP
                            DEALERS AND MAJOR SECURITY-BASED SWAP
                            PARTICIPANTS.

        (a) In General.--The Securities Exchange Act of 1934 (15 U.S.C. 78a
    et seq.) is amended by inserting after section 15E (15 U.S.C. 78o-7) the
    following:

    [[Page 124 STAT. 1785]]

    <<NOTE: 15 USC 78o-8.>> ``SEC. 15F. REGISTRATION AND REGULATION OF
                            SECURITY-BASED SWAP DEALERS AND MAJOR
                            SECURITY-BASED SWAP PARTICIPANTS.

        ``(a) Registration.--
                ``(1) Security-based swap dealers.--It shall be unlawful for
            any person to act as a security-based swap dealer unless the
            person is registered as a security-based swap dealer with the
            Commission.
                ``(2) Major security-based swap participants.--It shall be
            unlawful for any person to act as a major security-based swap
            participant unless the person is registered as a major security-
            based swap participant with the Commission.

        ``(b) Requirements.--
                ``(1) In general.--A person shall register as a security-
            based swap dealer or major security-based swap participant by
            filing a registration application with the Commission.
                ``(2) Contents.--
                        ``(A) In general.--The application shall be made in
                    such form and manner as prescribed by the Commission,
                    and shall contain such information, as the Commission
                    considers necessary concerning the business in which the
                    applicant is or will be engaged.
                        ``(B) Continual reporting.--A person that is
                    registered as a security-based swap dealer or major
                    security-based swap participant shall continue to submit
                    to the Commission reports that contain such information
                    pertaining to the business of the person as the
                    Commission may require.
                ``(3) Expiration.--Each registration under this section
            shall expire at such time as the Commission may prescribe by
            rule or regulation.
                ``(4) Rules.--Except as provided in subsections (d) and (e),
            the Commission may prescribe rules applicable to security-based
            swap dealers and major security-based swap participants,
            including rules that limit the activities of non-bank security-
            based swap dealers and major security-based swap participants.
                ``(5) Transition.-- <<NOTE: Deadline.>> Not later than 1
            year after the date of enactment of the Wall Street Transparency
            and Accountability Act of 2010, the Commission shall issue rules
            under this section to provide for the registration of security-
            based swap dealers and major security-based swap participants.
                ``(6) Statutory disqualification.--Except to the extent
            otherwise specifically provided by rule, regulation, or order of
            the Commission, it shall be unlawful for a security-based swap
            dealer or a major security-based swap participant to permit any
            person associated with a security-based swap dealer or a major
            security-based swap participant who is subject to a statutory
            disqualification to effect or be involved in effecting security-
            based swaps on behalf of the security-based swap dealer or major
            security-based swap participant, if the security-based swap
            dealer or major security-based swap participant knew, or in the
            exercise of reasonable care should have known, of the statutory
            disqualification.

        ``(c) Dual Registration.--
                ``(1) Security-based swap dealer.--Any person that is
            required to be registered as a security-based swap dealer under
            this section shall register with the Commission, regardless

    [[Page 124 STAT. 1786]]

            of whether the person also is registered with the Commodity
            Futures Trading Commission as a swap dealer.
                ``(2) Major security-based swap participant.--Any person
            that is required to be registered as a major security-based swap
            participant under this section shall register with the
            Commission, regardless of whether the person also is registered
            with the Commodity Futures Trading Commission as a major swap
            participant.

        ``(d) Rulemaking.--
                ``(1) In general.--The Commission shall adopt rules for
            persons that are registered as security-based swap dealers or
            major security-based swap participants under this section.
                ``(2) Exception for prudential requirements.--
                        ``(A) In general.--The Commission may not prescribe
                    rules imposing prudential requirements on security-based
                    swap dealers or major security-based swap participants
                    for which there is a prudential regulator.
                        ``(B) Applicability.--Subparagraph (A) does not
                    limit the authority of the Commission to prescribe rules
                    as directed under this section.

        ``(e) Capital and Margin Requirements.--
                ``(1) In general.--
                        ``(A) Security-based swap dealers and major
                    security-based swap participants that are banks.--Each
                    registered security-based swap dealer and major
                    security-based swap participant for which there is not a
                    prudential regulator shall meet such minimum capital
                    requirements and minimum initial and variation margin
                    requirements as the prudential regulator shall by rule
                    or regulation prescribe under paragraph (2)(A).
                        ``(B) Security-based swap dealers and major
                    security-based swap participants that are not banks.--
                    Each registered security-based swap dealer and major
                    security-based swap participant for which there is not a
                    prudential regulator shall meet such minimum capital
                    requirements and minimum initial and variation margin
                    requirements as the Commission shall by rule or
                    regulation prescribe under paragraph (2)(B).
                ``(2) Rules.--
                        ``(A) Security-based swap dealers and major
                    security-based swap participants that are banks.--The
                    prudential regulators, in consultation with the
                    Commission and the Commodity Futures Trading Commission,
                    shall adopt rules for security-based swap dealers and
                    major security-based swap participants, with respect to
                    their activities as a swap dealer or major swap
                    participant, for which there is a prudential regulator
                    imposing--
                              ``(i) capital requirements; and
                              ``(ii) both initial and variation margin
                          requirements on all security-based swaps that are
                          not cleared by a registered clearing agency.
                        ``(B) Security-based swap dealers and major
                    security-based swap participants that are not banks.--
                    The Commission shall adopt rules for security-based swap
                    dealers and major security-based swap participants, with
                    respect to their activities as a swap dealer or major
                    swap

    [[Page 124 STAT. 1787]]

                    participant, for which there is not a prudential
                    regulator imposing--
                              ``(i) capital requirements; and
                              ``(ii) both initial and variation margin
                          requirements on all swaps that are not cleared by
                          a registered clearing agency.
                        ``(C) Capital.--In setting capital requirements for
                    a person that is designated as a security-based swap
                    dealer or a major security-based swap participant for a
                    single type or single class or category of security-
                    based swap or activities, the prudential regulator and
                    the Commission shall take into account the risks
                    associated with other types of security-based swaps or
                    classes of security-based swaps or categories of
                    security-based swaps engaged in and the other activities
                    conducted by that person that are not otherwise subject
                    to regulation applicable to that person by virtue of the
                    status of the person.
                ``(3) Standards for capital and margin.--
                        ``(A) In general.--To offset the greater risk to the
                    security-based swap dealer or major security-based swap
                    participant and the financial system arising from the
                    use of security-based swaps that are not cleared, the
                    requirements imposed under paragraph (2) shall --
                              ``(i) help ensure the safety and soundness of
                          the security-based swap dealer or major security-
                          based swap participant; and
                              ``(ii) be appropriate for the risk associated
                          with the non-cleared security-based swaps held as
                          a security-based swap dealer or major security-
                          based swap participant.
                        ``(B) Rule of construction.--
                              ``(i) In general.--Nothing in this section
                          shall limit, or be construed to limit, the
                          authority--
                                        ``(I) of the Commission to set
                                    financial responsibility rules for a
                                    broker or dealer registered pursuant to
                                    section 15(b) (except for section
                                    15(b)(11) thereof) in accordance with
                                    section 15(c)(3); or
                                        ``(II) of the Commodity Futures
                                    Trading Commission to set financial
                                    responsibility rules for a futures
                                    commission merchant or introducing
                                    broker registered pursuant to section
                                    4f(a) of the Commodity Exchange Act
                                    (except for section 4f(a)(3) thereof) in
                                    accordance with section 4f(b) of the
                                    Commodity Exchange Act.
                              ``(ii) Futures commission merchants and other
                          dealers.--A futures commission merchant,
                          introducing broker, broker, or dealer shall
                          maintain sufficient capital to comply with the
                          stricter of any applicable capital requirements to
                          which such futures commission merchant,
                          introducing broker, broker, or dealer is subject
                          to under this title or the Commodity Exchange Act.
                        ``(C) Margin requirements.--In prescribing margin
                    requirements under this subsection, the prudential
                    regulator with respect to security-based swap dealers
                    and major security-based swap participants that are
                    depository

    [[Page 124 STAT. 1788]]

                    institutions, and the Commission with respect to
                    security-based swap dealers and major security-based
                    swap participants that are not depository institutions
                    shall permit the use of noncash collateral, as the
                    regulator or the Commission determines to be consistent
                    with--
                              ``(i) preserving the financial integrity of
                          markets trading security-based swaps; and
                              ``(ii) preserving the stability of the United
                          States financial system.
                        ``(D) Comparability of capital and margin
                    requirements.--
                              ``(i) In general.--
                          <<NOTE: Deadline. Consultation.>> The prudential
                          regulators, the Commission, and the Securities and
                          Exchange Commission shall periodically (but not
                          less frequently than annually) consult on minimum
                          capital requirements and minimum initial and
                          variation margin requirements.
                              ``(ii) Comparability.--The entities described
                          in clause (i) shall, to the maximum extent
                          practicable, establish and maintain comparable
                          minimum capital requirements and minimum initial
                          and variation margin requirements, including the
                          use of noncash collateral, for--
                                        ``(I) security-based swap dealers;
                                    and
                                        ``(II) major security-based swap
                                    participants.

        ``(f) Reporting and Recordkeeping.--
                ``(1) In general.--Each registered security-based swap
            dealer and major security-based swap participant--
                        ``(A) shall make such reports as are required by the
                    Commission, by rule or regulation, regarding the
                    transactions and positions and financial condition of
                    the registered security-based swap dealer or major
                    security-based swap participant;
                        ``(B)(i) for which there is a prudential regulator,
                    shall keep books and records of all activities related
                    to the business as a security-based swap dealer or major
                    security-based swap participant in such form and manner
                    and for such period as may be prescribed by the
                    Commission by rule or regulation; and
                        ``(ii) for which there is no prudential regulator,
                    shall keep books and records in such form and manner and
                    for such period as may be prescribed by the Commission
                    by rule or regulation; and
                        ``(C) shall keep books and records described in
                    subparagraph (B) open to inspection and examination by
                    any representative of the Commission.
                ``(2) Rules.--The Commission shall adopt rules governing
            reporting and recordkeeping for security-based swap dealers and
            major security-based swap participants.

        ``(g) Daily Trading Records.--
                ``(1) In general.--Each registered security-based swap
            dealer and major security-based swap participant shall maintain
            daily trading records of the security-based swaps of the
            registered security-based swap dealer and major security-based
            swap participant and all related records (including related cash
            or forward transactions) and recorded communications, including
            electronic mail, instant messages, and recordings of

    [[Page 124 STAT. 1789]]

            telephone calls, for such period as may be required by the
            Commission by rule or regulation.
                ``(2) Information requirements.--The daily trading records
            shall include such information as the Commission shall require
            by rule or regulation.
                ``(3) Counterparty records.--Each registered security-based
            swap dealer and major security-based swap participant shall
            maintain daily trading records for each counterparty in a manner
            and form that is identifiable with each security-based swap
            transaction.
                ``(4) Audit trail.--Each registered security-based swap
            dealer and major security-based swap participant shall maintain
            a complete audit trail for conducting comprehensive and accurate
            trade reconstructions.
                ``(5) Rules.--The Commission shall adopt rules governing
            daily trading records for security-based swap dealers and major
            security-based swap participants.

        ``(h) Business Conduct Standards.--
                ``(1) In general.--Each registered security-based swap
            dealer and major security-based swap participant shall conform
            with such business conduct standards as prescribed in paragraph
            (3) and as may be prescribed by the Commission by rule or
            regulation that relate to--
                        ``(A) fraud, manipulation, and other abusive
                    practices involving security-based swaps (including
                    security-based swaps that are offered but not entered
                    into);
                        ``(B) diligent supervision of the business of the
                    registered security-based swap dealer and major
                    security-based swap participant;
                        ``(C) adherence to all applicable position limits;
                    and
                        ``(D) such other matters as the Commission
                    determines to be appropriate.
                ``(2) <<NOTE: Compliance.>>  Responsibilities with respect
            to special entities.--
                        ``(A) Advising special entities.--A security-based
                    swap dealer or major security-based swap participant
                    that acts as an advisor to special entity regarding a
                    security-based swap shall comply with the requirements
                    of paragraph (4) with respect to such special entity.
                        ``(B) Entering of security-based swaps with respect
                    to special entities.--A security-based swap dealer that
                    enters into or offers to enter into security-based swap
                    with a special entity shall comply with the requirements
                    of paragraph (5) with respect to such special entity.
                        ``(C) Special entity defined.--For purposes of this
                    subsection, the term `special entity' means--
                              ``(i) a Federal agency;
                              ``(ii) a State, State agency, city, county,
                          municipality, or other political subdivision of a
                          State or;
                              ``(iii) any employee benefit plan, as defined
                          in section 3 of the Employee Retirement Income
                          Security Act of 1974 (29 U.S.C. 1002);
                              ``(iv) any governmental plan, as defined in
                          section 3 of the Employee Retirement Income
                          Security Act of 1974 (29 U.S.C. 1002); or

    [[Page 124 STAT. 1790]]

                              ``(v) any endowment, including an endowment
                          that is an organization described in section
                          501(c)(3) of the Internal Revenue Code of 1986.
                ``(3) Business conduct requirements.--Business conduct
            requirements adopted by the Commission shall--
                        ``(A) <<NOTE: Verification.>>  establish a duty for
                    a security-based swap dealer or major security-based
                    swap participant to verify that any counterparty meets
                    the eligibility standards for an eligible contract
                    participant;
                        ``(B) require disclosure by the security-based swap
                    dealer or major security-based swap participant to any
                    counterparty to the transaction (other than a security-
                    based swap dealer, major security-based swap
                    participant, security-based swap dealer, or major
                    security-based swap participant) of--
                              ``(i) information about the material risks and
                          characteristics of the security-based swap;
                              ``(ii) any material incentives or conflicts of
                          interest that the security-based swap dealer or
                          major security-based swap participant may have in
                          connection with the security-based swap; and
                              ``(iii)(I) for cleared security-based swaps,
                          upon the request of the counterparty, receipt of
                          the daily mark of the transaction from the
                          appropriate derivatives clearing organization; and
                              ``(II) for uncleared security-based swaps,
                          receipt of the daily mark of the transaction from
                          the security-based swap dealer or the major
                          security-based swap participant;
                        ``(C) establish a duty for a security-based swap
                    dealer or major security-based swap participant to
                    communicate in a fair and balanced manner based on
                    principles of fair dealing and good faith; and
                        ``(D) establish such other standards and
                    requirements as the Commission may determine are
                    appropriate in the public interest, for the protection
                    of investors, or otherwise in furtherance of the
                    purposes of this Act.
                ``(4) Special requirements for security-based swap dealers
            acting as advisors.--
                        ``(A) In general.--It shall be unlawful for a
                    security-based swap dealer or major security-based swap
                    participant--
                              ``(i) to employ any device, scheme, or
                          artifice to defraud any special entity or
                          prospective customer who is a special entity;
                              ``(ii) to engage in any transaction, practice,
                          or course of business that operates as a fraud or
                          deceit on any special entity or prospective
                          customer who is a special entity; or
                              ``(iii) to engage in any act, practice, or
                          course of business that is fraudulent, deceptive,
                          or manipulative.
                        ``(B) Duty.--Any security-based swap dealer that
                    acts as an advisor to a special entity shall have a duty
                    to act in the best interests of the special entity.
                        ``(C) Reasonable efforts.--Any security-based swap
                    dealer that acts as an advisor to a special entity shall
                    make reasonable efforts to obtain such information as is

    [[Page 124 STAT. 1791]]

                    necessary to make a reasonable determination that any
                    security-based swap recommended by the security-based
                    swap dealer is in the best interests of the special
                    entity, including information relating to--
                              ``(i) the financial status of the special
                          entity;
                              ``(ii) the tax status of the special entity;
                              ``(iii) the investment or financing objectives
                          of the special entity; and
                              ``(iv) any other information that the
                          Commission may prescribe by rule or regulation.
                ``(5) Special requirements for security-based swap dealers
            as counterparties to special entities.--
                        ``(A) In general.--Any security-based swap dealer or
                    major security-based swap participant that offers to or
                    enters into a security-based swap with a special entity
                    shall--
                              ``(i) <<NOTE: Compliance.>>  comply with any
                          duty established by the Commission for a security-
                          based swap dealer or major security-based swap
                          participant, with respect to a counterparty that
                          is an eligible contract participant within the
                          meaning of subclause (I) or (II) of clause (vii)
                          of section 1a(18) of the Commodity Exchange Act,
                          that requires the security-based swap dealer or
                          major security-based swap participant to have a
                          reasonable basis to believe that the counterparty
                          that is a special entity has an independent
                          representative that--
                                        ``(I) has sufficient knowledge to
                                    evaluate the transaction and risks;
                                        ``(II) is not subject to a statutory
                                    disqualification;
                                        ``(III) is independent of the
                                    security-based swap dealer or major
                                    security-based swap participant;
                                        ``(IV) undertakes a duty to act in
                                    the best interests of the counterparty
                                    it represents;
                                        ``(V) makes appropriate disclosures;
                                        ``(VI) will provide written
                                    representations to the special entity
                                    regarding fair pricing and the
                                    appropriateness of the transaction; and
                                        ``(VII) in the case of employee
                                    benefit plans subject to the Employee
                                    Retirement Income Security act of 1974,
                                    is a fiduciary as defined in section 3
                                    of that Act (29 U.S.C. 1002); and
                              ``(ii) before the initiation of the
                          transaction, disclose to the special entity in
                          writing the capacity in which the security-based
                          swap dealer is acting.
                        ``(B) Commission authority.--The Commission may
                    establish such other standards and requirements under
                    this paragraph as the Commission may determine are
                    appropriate in the public interest, for the protection
                    of investors, or otherwise in furtherance of the
                    purposes of this Act.
                ``(6) Rules.--The Commission shall prescribe rules under
            this subsection governing business conduct standards for
            security-based swap dealers and major security-based swap
            participants.

    [[Page 124 STAT. 1792]]

                ``(7) Applicability.--This subsection shall not apply with
            respect to a transaction that is--
                        ``(A) initiated by a special entity on an exchange
                    or security-based swaps execution facility; and
                        ``(B) the security-based swap dealer or major
                    security-based swap participant does not know the
                    identity of the counterparty to the transaction.''

        ``(i) Documentation Standards.--
                ``(1) In general.--Each registered security-based swap
            dealer and major security-based swap participant shall conform
            with such standards as may be prescribed by the Commission, by
            rule or regulation, that relate to timely and accurate
            confirmation, processing, netting, documentation, and valuation
            of all security-based swaps.
                ``(2) Rules.--The Commission shall adopt rules governing
            documentation standards for security-based swap dealers and
            major security-based swap participants.

        ``(j) <<NOTE: Compliance.>>  Duties.--Each registered security-based
    swap dealer and major security-based swap participant shall, at all
    times, comply with the following requirements:
                ``(1) Monitoring of trading.--The security-based swap dealer
            or major security-based swap participant shall monitor its
            trading in security-based swaps to prevent violations of
            applicable position limits.
                ``(2) Risk management procedures.--The security-based swap
            dealer or major security-based swap participant shall establish
            robust and professional risk management systems adequate for
            managing the day-to-day business of the security-based swap
            dealer or major security-based swap participant.
                ``(3) Disclosure of general information.--The security-based
            swap dealer or major security-based swap participant shall
            disclose to the Commission and to the prudential regulator for
            the security-based swap dealer or major security-based swap
            participant, as applicable, information concerning--
                        ``(A) terms and conditions of its security-based
                    swaps;
                        ``(B) security-based swap trading operations,
                    mechanisms, and practices;
                        ``(C) financial integrity protections relating to
                    security-based swaps; and
                        ``(D) other information relevant to its trading in
                    security-based swaps.
                ``(4) Ability to obtain information.--The security-based
            swap dealer or major security-based swap participant shall--
                        ``(A) establish and enforce internal systems and
                    procedures to obtain any necessary information to
                    perform any of the functions described in this section;
                    and
                        ``(B) provide the information to the Commission and
                    to the prudential regulator for the security-based swap
                    dealer or major security-based swap participant, as
                    applicable, on request.
                ``(5) <<NOTE: Procedures.>>  Conflicts of interest.--The
            security-based swap dealer and major security-based swap
            participant shall implement conflict-of-interest systems and
            procedures that--
                        ``(A) establish structural and institutional
                    safeguards to ensure that the activities of any person
                    within the firm relating to research or analysis of the
                    price or market for any security-based swap or acting in
                    a role of providing

    [[Page 124 STAT. 1793]]

                    clearing activities or making determinations as to
                    accepting clearing customers are separated by
                    appropriate informational partitions within the firm
                    from the review, pressure, or oversight of persons whose
                    involvement in pricing, trading, or clearing activities
                    might potentially bias their judgment or supervision and
                    contravene the core principles of open access and the
                    business conduct standards described in this title; and
                        ``(B) address such other issues as the Commission
                    determines to be appropriate.
                ``(6) Antitrust considerations.--Unless necessary or
            appropriate to achieve the purposes of this title, the security-
            based swap dealer or major security-based swap participant shall
            not--
                        ``(A) adopt any process or take any action that
                    results in any unreasonable restraint of trade; or
                        ``(B) impose any material anticompetitive burden on
                    trading or clearing.
                ``(7) Rules.--The Commission shall prescribe rules under
            this subsection governing duties of security-based swap dealers
            and major security-based swap participants.

        ``(k) Designation of Chief Compliance Officer.--
                ``(1) In general.--Each security-based swap dealer and major
            security-based swap participant shall designate an individual to
            serve as a chief compliance officer.
                ``(2) Duties.--The chief compliance officer shall--
                        ``(A) report directly to the board or to the senior
                    officer of the security-based swap dealer or major
                    security-based swap participant;
                        ``(B) review the compliance of the security-based
                    swap dealer or major security-based swap participant
                    with respect to the security-based swap dealer and major
                    security-based swap participant requirements described
                    in this section;
                        ``(C) in consultation with the board of directors, a
                    body performing a function similar to the board, or the
                    senior officer of the organization, resolve any
                    conflicts of interest that may arise;
                        ``(D) be responsible for administering each policy
                    and procedure that is required to be established
                    pursuant to this section;
                        ``(E) ensure compliance with this title (including
                    regulations) relating to security-based swaps, including
                    each rule prescribed by the Commission under this
                    section;
                        ``(F) establish procedures for the remediation of
                    noncompliance issues identified by the chief compliance
                    officer through any--
                              ``(i) compliance office review;
                              ``(ii) look-back;
                              ``(iii) internal or external audit finding;
                              ``(iv) self-reported error; or
                              ``(v) validated complaint; and
                        ``(G) establish and follow appropriate procedures
                    for the handling, management response, remediation,
                    retesting, and closing of noncompliance issues.
                ``(3) Annual reports.--

    [[Page 124 STAT. 1794]]

                        ``(A) In general.--In accordance with rules
                    prescribed by the Commission, the chief compliance
                    officer shall annually prepare and sign a report that
                    contains a description of--
                              ``(i) the compliance of the security-based
                          swap dealer or major swap participant with respect
                          to this title (including regulations); and
                              ``(ii) each policy and procedure of the
                          security-based swap dealer or major security-based
                          swap participant of the chief compliance officer
                          (including the code of ethics and conflict of
                          interest policies).
                        ``(B) Requirements.--A compliance report under
                    subparagraph (A) shall--
                              ``(i) accompany each appropriate financial
                          report of the security-based swap dealer or major
                          security-based swap participant that is required
                          to be furnished to the Commission pursuant to this
                          section; and
                              ``(ii) <<NOTE: Certification.>>  include a
                          certification that, under penalty of law, the
                          compliance report is accurate and complete.

        ``(l) Enforcement and Administrative Proceeding Authority.--
                ``(1) Primary enforcement authority.--
                        ``(A) Securities and exchange commission.--Except as
                    provided in subparagraph (B), (C), or (D), the
                    Commission shall have primary authority to enforce
                    subtitle B, and the amendments made by subtitle B of the
                    Wall Street Transparency and Accountability Act of 2010,
                    with respect to any person.
                        ``(B) Prudential regulators.--The prudential
                    regulators shall have exclusive authority to enforce the
                    provisions of subsection (e) and other prudential
                    requirements of this title (including risk management
                    standards), with respect to security-based swap dealers
                    or major security-based swap participants for which they
                    are the prudential regulator.
                        ``(C) Referral.--
                              ``(i) Violations of nonprudential
                          requirements.--If the appropriate Federal banking
                          agency for security-based swap dealers or major
                          security-based swap participants that are
                          depository institutions has cause to believe that
                          such security-based swap dealer or major security-
                          based swap participant may have engaged in conduct
                          that constitutes a violation of the nonprudential
                          requirements of this section or rules adopted by
                          the Commission thereunder, the agency may
                          recommend in writing to the Commission that the
                          Commission initiate an enforcement proceeding as
                          authorized under this title. The recommendation
                          shall be accompanied by a written explanation of
                          the concerns giving rise to the recommendation.
                              ``(ii) Violations of prudential
                          requirements.--If the Commission has cause to
                          believe that a securities-based swap dealer or
                          major securities-based swap participant that has a
                          prudential regulator may have engaged in conduct
                          that constitute a violation of the prudential
                          requirements of subsection (e) or rules adopted
                          thereunder, the Commission may recommend

    [[Page 124 STAT. 1795]]

                          in writing to the prudential regulator that the
                          prudential regulator initiate an enforcement
                          proceeding as authorized under this title. The
                          recommendation shall be accompanied by a written
                          explanation of the concerns giving rise to the
                          recommendation.
                        ``(D) <<NOTE: Time period.>>  Backstop enforcement
                    authority.--
                              ``(i) Initiation of enforcement proceeding by
                          prudential regulator.--If the Commission does not
                          initiate an enforcement proceeding before the end
                          of the 90-day period beginning on the date on
                          which the Commission receives a written report
                          under subsection (C)(i), the prudential regulator
                          may initiate an enforcement proceeding.
                              ``(ii) Initiation of enforcement proceeding by
                          commission.--If the prudential regulator does not
                          initiate an enforcement proceeding before the end
                          of the 90-day period beginning on the date on
                          which the prudential regulator receives a written
                          report under subsection (C)(ii), the Commission
                          may initiate an enforcement proceeding.
                ``(2) Censure, denial, suspension; notice and hearing.--The
            Commission, by order, shall censure, place limitations on the
            activities, functions, or operations of, or revoke the
            registration of any security-based swap dealer or major
            security-based swap participant that has registered with the
            Commission pursuant to subsection (b) if the Commission finds,
            on the record after notice and opportunity for hearing, that
            such censure, placing of limitations, or revocation is in the
            public interest and that such security-based swap dealer or
            major security-based swap participant, or any person associated
            with such security-based swap dealer or major security-based
            swap participant effecting or involved in effecting transactions
            in security-based swaps on behalf of such security-based swap
            dealer or major security-based swap participant, whether prior
            or subsequent to becoming so associated--
                        ``(A) has committed or omitted any act, or is
                    subject to an order or finding, enumerated in
                    subparagraph (A), (D), or (E) of paragraph (4) of
                    section 15(b);
                        ``(B) has been convicted of any offense specified in
                    subparagraph (B) of such paragraph (4) within 10 years
                    of the commencement of the proceedings under this
                    subsection;
                        ``(C) is enjoined from any action, conduct, or
                    practice specified in subparagraph (C) of such paragraph
                    (4);
                        ``(D) is subject to an order or a final order
                    specified in subparagraph (F) or (H), respectively, of
                    such paragraph (4); or
                        ``(E) has been found by a foreign financial
                    regulatory authority to have committed or omitted any
                    act, or violated any foreign statute or regulation,
                    enumerated in subparagraph (G) of such paragraph (4).
                ``(3) <<NOTE: Time period.>>  Associated persons.--With
            respect to any person who is associated, who is seeking to
            become associated, or, at the time of the alleged misconduct,
            who was associated or was seeking to become associated with a
            security-based swap dealer or major security-based swap
            participant for the purpose of effecting or being involved in
            effecting security-based swaps

    [[Page 124 STAT. 1796]]

            on behalf of such security-based swap dealer or major security-
            based swap participant, the Commission, by order, shall censure,
            place limitations on the activities or functions of such person,
            or suspend for a period not exceeding 12 months, or bar such
            person from being associated with a security-based swap dealer
            or major security-based swap participant, if the Commission
            finds, on the record after notice and opportunity for a hearing,
            that such censure, placing of limitations, suspension, or bar is
            in the public interest and that such person--
                        ``(A) has committed or omitted any act, or is
                    subject to an order or finding, enumerated in
                    subparagraph (A), (D), or (E) of paragraph (4) of
                    section 15(b);
                        ``(B) <<NOTE: Deadline.>>  has been convicted of any
                    offense specified in subparagraph (B) of such paragraph
                    (4) within 10 years of the commencement of the
                    proceedings under this subsection;
                        ``(C) is enjoined from any action, conduct, or
                    practice specified in subparagraph (C) of such paragraph
                    (4);
                        ``(D) is subject to an order or a final order
                    specified in subparagraph (F) or (H), respectively, of
                    such paragraph (4); or
                        ``(E) has been found by a foreign financial
                    regulatory authority to have committed or omitted any
                    act, or violated any foreign statute or regulation,
                    enumerated in subparagraph (G) of such paragraph (4).
                ``(4) Unlawful conduct.--It shall be unlawful--
                        ``(A) for any person as to whom an order under
                    paragraph (3) is in effect, without the consent of the
                    Commission, willfully to become, or to be, associated
                    with a security-based swap dealer or major security-
                    based swap participant in contravention of such order;
                    or
                        ``(B) for any security-based swap dealer or major
                    security-based swap participant to permit such a person,
                    without the consent of the Commission, to become or
                    remain a person associated with the security-based swap
                    dealer or major security-based swap participant in
                    contravention of such order, if such security-based swap
                    dealer or major security-based swap participant knew, or
                    in the exercise of reasonable care should have known, of
                    such order.''.

        (b) <<NOTE: 15 USC 8342.>>  Savings Clause.--Notwithstanding any
    other provision of this title, nothing in this subtitle shall be
    construed as divesting any appropriate Federal banking agency of any
    authority it may have to establish or enforce, with respect to a person
    for which such agency is the appropriate Federal banking agency,
    prudential or other standards pursuant to authority by Federal law other
    than this title.
    SEC. 765. <<NOTE: 15 USC 8343.>>  RULEMAKING ON CONFLICT OF
                            INTEREST.

        (a) <<NOTE: Deadline.>>  In General.--In order to mitigate conflicts
    of interest, not later than 180 days after the date of enactment of the
    Wall Street Transparency and Accountability Act of 2010, the Securities
    and Exchange Commission shall adopt rules which may include numerical
    limits on the control of, or the voting rights with respect to, any
    clearing agency that clears security-based swaps, or on the control of
    any security-based swap execution facility or national securities
    exchange that posts or makes available for trading security-based swaps,
    by a bank holding company (as defined in section

    [[Page 124 STAT. 1797]]

    2 of the Bank Holding Company Act of 1956 (12 U.S.C. 1841)) with total
    consolidated assets of $50,000,000,000 or more, a nonbank financial
    company (as defined in section 102) supervised by the Board of Governors
    of the Federal Reserve System, affiliate of such a bank holding company
    or nonbank financial company, a security-based swap dealer, major
    security-based swap participant, or person associated with a security-
    based swap dealer or major security-based swap participant.

        (b) Purposes.--The Securities and Exchange Commission shall adopt
    rules if the Commission determines, after the review described in
    subsection (a), that such rules are necessary or appropriate to improve
    the governance of, or to mitigate systemic risk, promote competition, or
    mitigate conflicts of interest in connection with a security-based swap
    dealer or major security-based swap participant's conduct of business
    with, a clearing agency, national securities exchange, or security-based
    swap execution facility that clears, posts, or makes available for
    trading security-based swaps and in which such security-based swap
    dealer or major security-based swap participant has a material debt or
    equity investment.
        (c) Considerations.--In adopting rules pursuant to this section, the
    Securities and Exchange Commission shall consider any conflicts of
    interest arising from the amount of equity owned by a single investor,
    the ability to vote, cause the vote of, or withhold votes entitled to be
    cast on any matters by the holders of the ownership interest, and the
    governance arrangements of any derivatives clearing organization that
    clears swaps, or swap execution facility or board of trade designated as
    a contract market that posts swaps or makes swaps available for trading.
    SEC. 766. REPORTING AND RECORDKEEPING.

        (a) In General.--The Securities Exchange Act of 1934 (15 U.S.C. 78a
    et seq.) is amended by inserting after section 13 the following:
    ``SEC. 13A. <<NOTE: 15 USC 78m-1.>>  REPORTING AND RECORDKEEPING
                            FOR CERTAIN SECURITY-BASED SWAPS.

        ``(a) Required Reporting of Security-based Swaps Not Accepted by Any
    Clearing Agency or Derivatives Clearing Organization.--
                ``(1) In general.--Each security-based swap that is not
            accepted for clearing by any clearing agency or derivatives
            clearing organization shall be reported to--
                        ``(A) a security-based swap data repository
                    described in section 13(n); or
                        ``(B) in the case in which there is no security-
                    based swap data repository that would accept the
                    security-based swap, to the Commission pursuant to this
                    section within such time period as the Commission may by
                    rule or regulation prescribe.
                ``(2) Transition rule for preenactment security-based
            swaps.--
                        ``(A) Security-based swaps entered into before the
                    date of enactment of the wall street transparency and
                    accountability act of 2010.--Each security-based swap
                    entered into before the date of enactment of the Wall
                    Street Transparency and Accountability Act of 2010, the
                    terms of which have not expired as of the date of
                    enactment of that Act, shall be reported to a registered

    [[Page 124 STAT. 1798]]

                    security-based swap data repository or the Commission by
                    a date that is not later than--
                              ``(i) 30 days after issuance of the interim
                          final rule; or
                              ``(ii) such other period as the Commission
                          determines to be appropriate.
                        ``(B) Commission rulemaking.--The Commission shall
                    promulgate an interim final rule within 90 days of the
                    date of enactment of this section providing for the
                    reporting of each security-based swap entered into
                    before the date of enactment as referenced in
                    subparagraph (A).
                        ``(C) Effective date.--The reporting provisions
                    described in this section shall be effective upon the
                    date of the enactment of this section.
                ``(3) Reporting obligations.--
                        ``(A) Security-based swaps in which only 1
                    counterparty is a security-based swap dealer or major
                    security-based swap participant.--With respect to a
                    security-based swap in which only 1 counterparty is a
                    security-based swap dealer or major security-based swap
                    participant, the security-based swap dealer or major
                    security-based swap participant shall report the
                    security-based swap as required under paragraphs (1) and
                    (2).
                        ``(B) Security-based swaps in which 1 counterparty
                    is a security-based swap dealer and the other a major
                    security-based swap participant.--With respect to a
                    security-based swap in which 1 counterparty is a
                    security-based swap dealer and the other a major
                    security-based swap participant, the security-based swap
                    dealer shall report the security-based swap as required
                    under paragraphs (1) and (2).
                        ``(C) Other security-based swaps.--With respect to
                    any other security-based swap not described in
                    subparagraph (A) or (B), the counterparties to the
                    security-based swap shall select a counterparty to
                    report the security-based swap as required under
                    paragraphs (1) and (2).

        ``(b) Duties of Certain Individuals.--Any individual or entity that
    enters into a security-based swap shall meet each requirement described
    in subsection (c) if the individual or entity did not--
                ``(1) clear the security-based swap in accordance with
            section 3C(a)(1); or
                ``(2) have the data regarding the security-based swap
            accepted by a security-based swap data repository in accordance
            with rules (including timeframes) adopted by the Commission
            under this title.

        ``(c) Requirements.--An individual or entity described in subsection
    (b) shall--
                ``(1) upon written request from the Commission, provide
            reports regarding the security-based swaps held by the
            individual or entity to the Commission in such form and in such
            manner as the Commission may request; and
                ``(2) maintain books and records pertaining to the security-
            based swaps held by the individual or entity in such form, in
            such manner, and for such period as the Commission may require,
            which shall be open to inspection by--
                        ``(A) any representative of the Commission;
                        ``(B) an appropriate prudential regulator;

    [[Page 124 STAT. 1799]]

                        ``(C) the Commodity Futures Trading Commission;
                        ``(D) the Financial Stability Oversight Council; and
                        ``(E) the Department of Justice.

        ``(d) Identical Data.--In prescribing rules under this section, the
    Commission shall require individuals and entities described in
    subsection (b) to submit to the Commission a report that contains data
    that is not less comprehensive than the data required to be collected by
    security-based swap data repositories under this title.''.
        (b) Beneficial Ownership Reporting.--Section 13 of the Securities
    Exchange Act of 1934 (15 U.S.C. 78m) is amended--
                (1) in subsection (d)(1), by inserting ``or otherwise
            becomes or is deemed to become a beneficial owner of any of the
            foregoing upon the purchase or sale of a security-based swap
            that the Commission may define by rule, and'' after ``Alaska
            Native Claims Settlement Act,''; and
                (2) in subsection (g)(1), by inserting ``or otherwise
            becomes or is deemed to become a beneficial owner of any
            security of a class described in subsection (d)(1) upon the
            purchase or sale of a security-based swap that the Commission
            may define by rule'' after ``subsection (d)(1) of this
            section''.

        (c) Reports by Institutional Investment Managers.--Section 13(f)(1)
    of the Securities Exchange Act of 1934 (15 U.S.C. 78m(f)(1)) is amended
    by inserting ``or otherwise becomes or is deemed to become a beneficial
    owner of any security of a class described in subsection (d)(1) upon the
    purchase or sale of a security-based swap that the Commission may define
    by rule,'' after ``subsection (d)(1) of this section''.
        (d) Administrative Proceeding Authority.--Section 15(b)(4) of the
    Securities Exchange Act of 1934 (15 U.S.C. 78o(b)(4)) is amended--
                (1) in subparagraph (C), by inserting ``security-based swap
            dealer, major security-based swap participant,'' after
            ``government securities dealer,''; and
                (2) in subparagraph (F), by striking ``broker or dealer''
            and inserting ``broker, dealer, security-based swap dealer, or a
            major security-based swap participant''.

        (e) Security-based Swap Beneficial Ownership.--Section 13 of the
    Securities Exchange Act of 1934 (15 U.S.C. 78m) is amended by adding at
    the end the following:
        ``(o) Beneficial Ownership.--For purposes of this section and
    section 16, a person shall be deemed to acquire beneficial ownership of
    an equity security based on the purchase or sale of a security-based
    swap, only to the extent that the Commission, by rule, determines after
    consultation with the prudential regulators and the Secretary of the
    Treasury, that the purchase or sale of the security-based swap, or class
    of security-based swap, provides incidents of ownership comparable to
    direct ownership of the equity security, and that it is necessary to
    achieve the purposes of this section that the purchase or sale of the
    security-based swaps, or class of security-based swap, be deemed the
    acquisition of beneficial ownership of the equity security.''.
    SEC. 767. STATE GAMING AND BUCKET SHOP LAWS.

        Section 28(a) of the Securities Exchange Act of 1934 (15 U.S.C.
    78bb(a)) is amended to read as follows:
        ``(a) Limitation on Judgments.--

    [[Page 124 STAT. 1800]]

                ``(1) In general.--No person permitted to maintain a suit
            for damages under the provisions of this title shall recover,
            through satisfaction of judgment in 1 or more actions, a total
            amount in excess of the actual damages to that person on account
            of the act complained of. Except as otherwise specifically
            provided in this title, nothing in this title shall affect the
            jurisdiction of the securities commission (or any agency or
            officer performing like functions) of any State over any
            security or any person insofar as it does not conflict with the
            provisions of this title or the rules and regulations under this
            title.
                ``(2) Rule of construction.--Except as provided in
            subsection (f), the rights and remedies provided by this title
            shall be in addition to any and all other rights and remedies
            that may exist at law or in equity.
                ``(3) State bucket shop laws.--No State law which prohibits
            or regulates the making or promoting of wagering or gaming
            contracts, or the operation of `bucket shops' or other similar
            or related activities, shall invalidate--
                        ``(A) any put, call, straddle, option, privilege, or
                    other security subject to this title (except any
                    security that has a pari-mutuel payout or otherwise is
                    determined by the Commission, acting by rule,
                    regulation, or order, to be appropriately subject to
                    such laws), or apply to any activity which is incidental
                    or related to the offer, purchase, sale, exercise,
                    settlement, or closeout of any such security;
                        ``(B) any security-based swap between eligible
                    contract participants; or
                        ``(C) any security-based swap effected on a national
                    securities exchange registered pursuant to section 6(b).
                ``(4) Other state provisions.--No provision of State law
            regarding the offer, sale, or distribution of securities shall
            apply to any transaction in a security-based swap or a security
            futures product, except that this paragraph may not be construed
            as limiting any State antifraud law of general applicability. A
            security-based swap may not be regulated as an insurance
            contract under any provision of State law.''.
    SEC. 768. AMENDMENTS TO THE SECURITIES ACT OF 1933; TREATMENT OF
                            SECURITY-BASED SWAPS.

        (a) Definitions.--Section 2(a) of the Securities Act of 1933 (15
    U.S.C. 77b(a)) is amended--
                (1) in paragraph (1), by inserting ``security-based swap,''
            after ``security future,'';
                (2) in paragraph (3), by adding at the end the following:
            ``Any offer or sale of a security-based swap by or on behalf of
            the issuer of the securities upon which such security-based swap
            is based or is referenced, an affiliate of the issuer, or an
            underwriter, shall constitute a contract for sale of, sale of,
            offer for sale, or offer to sell such securities.''; and
                (3) by adding at the end the following:
                ``(17) The terms `swap' and `security-based swap' have the
            same meanings as in section 1a of the Commodity Exchange Act (7
            U.S.C. 1a).
                ``(18) The terms `purchase' or `sale' of a security-based
            swap shall be deemed to mean the execution, termination (prior
            to its scheduled maturity date), assignment, exchange, or

    [[Page 124 STAT. 1801]]

            similar transfer or conveyance of, or extinguishing of rights or
            obligations under, a security-based swap, as the context may
            require.''.

        (b) Registration of Security-based Swaps.--Section 5 of the
    Securities Act of 1933 (15 U.S.C. 77e) is amended by adding at the end
    the following:
        ``(d) Notwithstanding the provisions of section 3 or 4, unless a
    registration statement meeting the requirements of section 10(a) is in
    effect as to a security-based swap, it shall be unlawful for any person,
    directly or indirectly, to make use of any means or instruments of
    transportation or communication in interstate commerce or of the mails
    to offer to sell, offer to buy or purchase or sell a security-based swap
    to any person who is not an eligible contract participant as defined in
    section 1a(18) of the Commodity Exchange Act (7 U.S.C. 1a(18)).''.
    SEC. 769. DEFINITIONS UNDER THE INVESTMENT COMPANY ACT OF 1940.

        Section 2(a) of the Investment Company Act of 1940 (15 U.S.C. 80a-2)
    is amended by adding at the end the following:
                ``(54) The terms `commodity pool', `commodity pool
            operator', `commodity trading advisor', `major swap
            participant', `swap', `swap dealer', and `swap execution
            facility' have the same meanings as in section 1a of the
            Commodity Exchange Act (7 U.S.C. 1a).''.
    SEC. 770. DEFINITIONS UNDER THE INVESTMENT ADVISERS ACT OF 1940.

        Section 202(a) of the Investment Advisers Act of 1940 (15 U.S.C.
    80b-2) is amended by adding at the end the following:
                ``(29) The terms `commodity pool', `commodity pool
            operator', `commodity trading advisor', `major swap
            participant', `swap', `swap dealer', and `swap execution
            facility' have the same meanings as in section 1a of the
            Commodity Exchange Act (7 U.S.C. 1a).''.
    SEC. 771. <<NOTE: 15 USC 8344.>>  OTHER AUTHORITY.

        Unless otherwise provided by its terms, this subtitle does not
    divest any appropriate Federal banking agency, the Securities and
    Exchange Commission, the Commodity Futures Trading Commission, or any
    other Federal or State agency, of any authority derived from any other
    provision of applicable law.
    SEC. 772. JURISDICTION.

        (a) In General.--Section 36 of the Securities Exchange Act of 1934
    (15 U.S.C. 78mm) is amended by adding at the end the following:
        ``(c) Derivatives.--Unless the Commission is expressly authorized by
    any provision described in this subsection to grant exemptions, the
    Commission shall not grant exemptions, with respect to amendments made
    by subtitle B of the Wall Street Transparency and Accountability Act of
    2010, with respect to paragraphs (65), (66), (68), (69), (70), (71),
    (72), (73), (74), (75), (76), and (79) of section 3(a), and sections
    10B(a), 10B(b), 10B(c), 13A, 15F, 17A(g), 17A(h), 17A(i), 17A(j),
    17A(k), and 17A(l); provided that the Commission shall have exemptive
    authority under this title with respect to security-based swaps as to
    the same matters that the Commodity

    [[Page 124 STAT. 1802]]

    Futures Trading Commission has under the Wall Street Transparency and
    Accountability Act of 2010 with respect to swaps, including under
    section 4(c) of the Commodity Exchange Act.''.
        (b) Rule of Construction.--Section 30 of the Securities Exchange Act
    of 1934 (15 U.S.C. 78dd) is amended by adding at the end the following:
        ``(c) Rule of Construction.--No provision of this title that was
    added by the Wall Street Transparency and Accountability Act of 2010, or
    any rule or regulation thereunder, shall apply to any person insofar as
    such person transacts a business in security-based swaps without the
    jurisdiction of the United States, unless such person transacts such
    business in contravention of such rules and regulations as the
    Commission may prescribe as necessary or appropriate to prevent the
    evasion of any provision of this title that was added by the Wall Street
    Transparency and Accountability Act of 2010. This subsection shall not
    be construed to limit the jurisdiction of the Commission under any
    provision of this title, as in effect prior to the date of enactment of
    the Wall Street Transparency and Accountability Act of 2010.''.
    SEC. 773. CIVIL PENALTIES.

        Section 21B of the Securities Exchange Act of 1934 <<NOTE: 15 USC
    78u-2.>>  (15 U.S.C. 78p-2) is amended by adding at the end the
    following:

        ``(f) Security-based Swaps.--
                ``(1) Clearing agency.--Any clearing agency that knowingly
            or recklessly evades or participates in or facilitates an
            evasion of the requirements of section 3C shall be liable for a
            civil money penalty in twice the amount otherwise available for
            a violation of section 3C.
                ``(2) Security-based swap dealer or major security-based
            swap participant.--Any security-based swap dealer or major
            security-based swap participant that knowingly or recklessly
            evades or participates in or facilitates an evasion of the
            requirements of section 3C shall be liable for a civil money
            penalty in twice the amount otherwise available for a violation
            of section 3C.''.
    SEC. 774. <<NOTE: 15 USC 77b note.>>  EFFECTIVE DATE.

        Unless otherwise provided, the provisions of this subtitle shall
    take effect on the later of 360 days after the date of the enactment of
    this subtitle or, to the extent a provision of this subtitle requires a
    rulemaking, not less than 60 days after publication of the final rule or
    regulation implementing such provision of this subtitle.

       TITLE <<NOTE: Payment, Clearing, and Settlement Supervision Act of
    2010.>>  VIII--PAYMENT, CLEARING, AND SETTLEMENT SUPERVISION
    SEC. 801. <<NOTE: 12 USC 5301 note.>>  SHORT TITLE.

        This title may be cited as the ``Payment, Clearing, and Settlement
    Supervision Act of 2010''.
    SEC. 802. <<NOTE: 12 USC 5461.>>  FINDINGS AND PURPOSES.

        (a) Findings.--Congress finds the following:
                (1) The proper functioning of the financial markets is
            dependent upon safe and efficient arrangements for the clearing

    [[Page 124 STAT. 1803]]

            and settlement of payment, securities, and other financial
            transactions.
                (2) Financial market utilities that conduct or support
            multilateral payment, clearing, or settlement activities may
            reduce risks for their participants and the broader financial
            system, but such utilities may also concentrate and create new
            risks and thus must be well designed and operated in a safe and
            sound manner.
                (3) Payment, clearing, and settlement activities conducted
            by financial institutions also present important risks to the
            participating financial institutions and to the financial
            system.
                (4) Enhancements to the regulation and supervision of
            systemically important financial market utilities and the
            conduct of systemically important payment, clearing, and
            settlement activities by financial institutions are necessary--
                        (A) to provide consistency;
                        (B) to promote robust risk management and safety and
                    soundness;
                        (C) to reduce systemic risks; and
                        (D) to support the stability of the broader
                    financial system.

        (b) Purpose.--The purpose of this title is to mitigate systemic risk
    in the financial system and promote financial stability by--
                (1) authorizing the Board of Governors to promote uniform
            standards for the--
                        (A) management of risks by systemically important
                    financial market utilities; and
                        (B) conduct of systemically important payment,
                    clearing, and settlement activities by financial
                    institutions;
                (2) providing the Board of Governors an enhanced role in the
            supervision of risk management standards for systemically
            important financial market utilities;
                (3) strengthening the liquidity of systemically important
            financial market utilities; and
                (4) providing the Board of Governors an enhanced role in the
            supervision of risk management standards for systemically
            important payment, clearing, and settlement activities by
            financial institutions.
    SEC. 803. <<NOTE: 12 USC 5462.>>  DEFINITIONS.

        In this title, the following definitions shall apply:
                (1) Appropriate financial regulator.--The term ``appropriate
            financial regulator'' means--
                        (A) the primary financial regulatory agency, as
                    defined in section 2 of this Act;
                        (B) the National Credit Union Administration, with
                    respect to any insured credit union under the Federal
                    Credit Union Act (12 U.S.C. 1751 et seq.); and
                        (C) the Board of Governors, with respect to
                    organizations operating under section 25A of the Federal
                    Reserve Act (12 U.S.C. 611), and any other financial
                    institution engaged in a designated activity.
                (2) Designated activity.--The term ``designated activity''
            means a payment, clearing, or settlement activity that the
            Council has designated as systemically important under section
            804.

    [[Page 124 STAT. 1804]]

                (3) Designated clearing entity.--The term ``designated
            clearing entity'' means a designated financial market utility
            that is a derivatives clearing organization registered under
            section 5b of the Commodity Exchange Act (7 U.S.C. 7a-1) or a
            clearing agency registered with the Securities and Exchange
            Commission under section 17A of the Securities Exchange Act of
            1934 (15 U.S.C. 78q-1).
                (4) Designated financial market utility.--The term
            ``designated financial market utility'' means a financial market
            utility that the Council has designated as systemically
            important under section 804.
                (5) Financial institution.--
                        (A) In general.--The term ``financial institution''
                    means--
                              (i) a depository institution, as defined in
                          section 3 of the Federal Deposit Insurance Act (12
                          U.S.C. 1813);
                              (ii) a branch or agency of a foreign bank, as
                          defined in section 1(b) of the International
                          Banking Act of 1978 (12 U.S.C. 3101);
                              (iii) an organization operating under section
                          25 or 25A of the Federal Reserve Act (12 U.S.C.
                          601-604a and 611 through 631);
                              (iv) a credit union, as defined in section 101
                          of the Federal Credit Union Act (12 U.S.C. 1752);
                              (v) a broker or dealer, as defined in section
                          3 of the Securities Exchange Act of 1934 (15
                          U.S.C. 78c);
                              (vi) an investment company, as defined in
                          section 3 of the Investment Company Act of 1940
                          (15 U.S.C. 80a-3);
                              (vii) an insurance company, as defined in
                          section 2 of the Investment Company Act of 1940
                          (15 U.S.C. 80a-2);
                              (viii) an investment adviser, as defined in
                          section 202 of the Investment Advisers Act of 1940
                          (15 U.S.C. 80b-2);
                              (ix) a futures commission merchant, commodity
                          trading advisor, or commodity pool operator, as
                          defined in section 1a of the Commodity Exchange
                          Act (7 U.S.C. 1a); and
                              (x) any company engaged in activities that are
                          financial in nature or incidental to a financial
                          activity, as described in section 4 of the Bank
                          Holding Company Act of 1956 (12 U.S.C. 1843(k)).
                        (B) Exclusions.--The term ``financial institution''
                    does not include designated contract markets, registered
                    futures associations, swap data repositories, and swap
                    execution facilities registered under the Commodity
                    Exchange Act (7 U.S.C. 1 et seq.), or national
                    securities exchanges, national securities associations,
                    alternative trading systems, securities information
                    processors solely with respect to the activities of the
                    entity as a securities information processor, security-
                    based swap data repositories, and swap execution
                    facilities registered under the Securities Exchange Act
                    of 1934 (15 U.S.C. 78a et seq.), or designated clearing
                    entities, provided that the exclusions in this

    [[Page 124 STAT. 1805]]

                    subparagraph apply only with respect to the activities
                    that require the entity to be so registered.
                (6) Financial market utility.--
                        (A) Inclusion.--The term ``financial market
                    utility'' means any person that manages or operates a
                    multilateral system for the purpose of transferring,
                    clearing, or settling payments, securities, or other
                    financial transactions among financial institutions or
                    between financial institutions and the person.
                        (B) Exclusions.--The term ``financial market
                    utility'' does not include--
                              (i) <<NOTE: Applicability.>>  designated
                          contract markets, registered futures associations,
                          swap data repositories, and swap execution
                          facilities registered under the Commodity Exchange
                          Act (7 U.S.C. 1 et seq.), or national securities
                          exchanges, national securities associations,
                          alternative trading systems, security-based swap
                          data repositories, and swap execution facilities
                          registered under the Securities Exchange Act of
                          1934 (15 U.S.C. 78a et seq.), solely by reason of
                          their providing facilities for comparison of data
                          respecting the terms of settlement of securities
                          or futures transactions effected on such exchange
                          or by means of any electronic system operated or
                          controlled by such entities, provided that the
                          exclusions in this clause apply only with respect
                          to the activities that require the entity to be so
                          registered; and
                              (ii) any broker, dealer, transfer agent, or
                          investment company, or any futures commission
                          merchant, introducing broker, commodity trading
                          advisor, or commodity pool operator, solely by
                          reason of functions performed by such institution
                          as part of brokerage, dealing, transfer agency, or
                          investment company activities, or solely by reason
                          of acting on behalf of a financial market utility
                          or a participant therein in connection with the
                          furnishing by the financial market utility of
                          services to its participants or the use of
                          services of the financial market utility by its
                          participants, provided that services performed by
                          such institution do not constitute critical risk
                          management or processing functions of the
                          financial market utility.
                (7) Payment, clearing, or settlement activity.--
                        (A) In general.--The term ``payment, clearing, or
                    settlement activity'' means an activity carried out by 1
                    or more financial institutions to facilitate the
                    completion of financial transactions, but shall not
                    include any offer or sale of a security under the
                    Securities Act of 1933 (15 U.S.C. 77a et seq.), or any
                    quotation, order entry, negotiation, or other pre-trade
                    activity or execution activity.
                        (B) Financial transaction.--For the purposes of
                    subparagraph (A), the term ``financial transaction''
                    includes--
                              (i) funds transfers;
                              (ii) securities contracts;
                              (iii) contracts of sale of a commodity for
                          future delivery;
                              (iv) forward contracts;
                              (v) repurchase agreements;

    [[Page 124 STAT. 1806]]

                              (vi) swaps;
                              (vii) security-based swaps;
                              (viii) swap agreements;
                              (ix) security-based swap agreements;
                              (x) foreign exchange contracts;
                              (xi) financial derivatives contracts; and
                              (xii) any similar transaction that the Council
                          determines to be a financial transaction for
                          purposes of this title.
                        (C) Included activities.--When conducted with
                    respect to a financial transaction, payment, clearing,
                    and settlement activities may include--
                              (i) the calculation and communication of
                          unsettled financial transactions between
                          counterparties;
                              (ii) the netting of transactions;
                              (iii) provision and maintenance of trade,
                          contract, or instrument information;
                              (iv) the management of risks and activities
                          associated with continuing financial transactions;
                              (v) transmittal and storage of payment
                          instructions;
                              (vi) the movement of funds;
                              (vii) the final settlement of financial
                          transactions; and
                              (viii) other similar functions that the
                          Council may determine.
                        (D) Exclusion.--Payment, clearing, and settlement
                    activities shall not include public reporting of swap
                    transaction data under section 727 or 763(i) of the Wall
                    Street Transparency and Accountability Act of 2010.
                (8) Supervisory agency.--
                        (A) In general.--The term ``Supervisory Agency''
                    means the Federal agency that has primary jurisdiction
                    over a designated financial market utility under Federal
                    banking, securities, or commodity futures laws, as
                    follows:
                              (i) The Securities and Exchange Commission,
                          with respect to a designated financial market
                          utility that is a clearing agency registered with
                          the Securities and Exchange Commission.
                              (ii) The Commodity Futures Trading Commission,
                          with respect to a designated financial market
                          utility that is a derivatives clearing
                          organization registered with the Commodity Futures
                          Trading Commission.
                              (iii) The appropriate Federal banking agency,
                          with respect to a designated financial market
                          utility that is an institution described in
                          section 3(q) of the Federal Deposit Insurance Act.
                              (iv) The Board of Governors, with respect to a
                          designated financial market utility that is
                          otherwise not subject to the jurisdiction of any
                          agency listed in clauses (i), (ii), and (iii).
                        (B) Multiple agency jurisdiction.--If a designated
                    financial market utility is subject to the
                    jurisdictional supervision of more than 1 agency listed
                    in subparagraph (A), then such agencies should agree on
                    1 agency to act as the Supervisory Agency, and if such
                    agencies cannot agree on which agency has primary
                    jurisdiction, the Council

    [[Page 124 STAT. 1807]]

                    shall decide which agency is the Supervisory Agency for
                    purposes of this title.
                (9) Systemically important and systemic importance.--The
            terms ``systemically important'' and ``systemic importance''
            mean a situation where the failure of or a disruption to the
            functioning of a financial market utility or the conduct of a
            payment, clearing, or settlement activity could create, or
            increase, the risk of significant liquidity or credit problems
            spreading among financial institutions or markets and thereby
            threaten the stability of the financial system of the United
            States.
    SEC. 804. <<NOTE: 12 USC 5463.>>  DESIGNATION OF SYSTEMIC
                            IMPORTANCE.

        (a) Designation.--
                (1) Financial stability oversight council.--The Council, on
            a nondelegable basis and by a vote of not fewer than \2/3\ of
            members then serving, including an affirmative vote by the
            Chairperson of the Council, shall designate those financial
            market utilities or payment, clearing, or settlement activities
            that the Council determines are, or are likely to become,
            systemically important.
                (2) Considerations.--In determining whether a financial
            market utility or payment, clearing, or settlement activity is,
            or is likely to become, systemically important, the Council
            shall take into consideration the following:
                        (A) The aggregate monetary value of transactions
                    processed by the financial market utility or carried out
                    through the payment, clearing, or settlement activity.
                        (B) The aggregate exposure of the financial market
                    utility or a financial institution engaged in payment,
                    clearing, or settlement activities to its
                    counterparties.
                        (C) The relationship, interdependencies, or other
                    interactions of the financial market utility or payment,
                    clearing, or settlement activity with other financial
                    market utilities or payment, clearing, or settlement
                    activities.
                        (D) The effect that the failure of or a disruption
                    to the financial market utility or payment, clearing, or
                    settlement activity would have on critical markets,
                    financial institutions, or the broader financial system.
                        (E) Any other factors that the Council deems
                    appropriate.

        (b) Rescission of Designation.--
                (1) In general.--The Council, on a nondelegable basis and by
            a vote of not fewer than \2/3\ of members then serving,
            including an affirmative vote by the Chairperson of the Council,
            shall rescind a designation of systemic importance for a
            designated financial market utility or designated activity if
            the Council determines that the utility or activity no longer
            meets the standards for systemic importance.
                (2) Effect of rescission.--Upon rescission, the financial
            market utility or financial institutions conducting the activity
            will no longer be subject to the provisions of this title or any
            rules or orders prescribed under this title.

        (c) Consultation and Notice and Opportunity for Hearing.--

    [[Page 124 STAT. 1808]]

                (1) Consultation.--Before making any determination under
            subsection (a) or (b), the Council shall consult with the
            relevant Supervisory Agency and the Board of Governors.
                (2) Advance notice and opportunity for hearing.--
                        (A) In general.--Before making any determination
                    under subsection (a) or (b), the Council shall provide
                    the financial market utility or, in the case of a
                    payment, clearing, or settlement activity, financial
                    institutions with advance notice of the proposed
                    determination of the Council.
                        (B) Notice in federal register.--The Council shall
                    provide such advance notice to financial institutions by
                    publishing a notice in the Federal Register.
                        (C) <<NOTE: Deadline.>>  Requests for hearing.--
                    Within 30 days from the date of any notice of the
                    proposed determination of the Council, the financial
                    market utility or, in the case of a payment, clearing,
                    or settlement activity, a financial institution engaged
                    in the designated activity may request, in writing, an
                    opportunity for a written or oral hearing before the
                    Council to demonstrate that the proposed designation or
                    rescission of designation is not supported by
                    substantial evidence.
                        (D) <<NOTE: Deadline.>>  Written submissions.--Upon
                    receipt of a timely request, the Council shall fix a
                    time, not more than 30 days after receipt of the
                    request, unless extended at the request of the financial
                    market utility or financial institution, and place at
                    which the financial market utility or financial
                    institution may appear, personally or through counsel,
                    to submit written materials, or, at the sole discretion
                    of the Council, oral testimony or oral argument.
                (3) Emergency exception.--
                        (A) Waiver or modification by vote of the council.--
                    The Council may waive or modify the requirements of
                    paragraph (2) if the Council determines, by an
                    affirmative vote of not fewer than \2/3\ of members then
                    serving, including an affirmative vote by the
                    Chairperson of the Council, that the waiver or
                    modification is necessary to prevent or mitigate an
                    immediate threat to the financial system posed by the
                    financial market utility or the payment, clearing, or
                    settlement activity.
                        (B) <<NOTE: Deadlines.>>  Notice of waiver or
                    modification.--The Council shall provide notice of the
                    waiver or modification to the financial market utility
                    concerned or, in the case of a payment, clearing, or
                    settlement activity, to financial institutions, as soon
                    as practicable, which shall be no later than 24 hours
                    after the waiver or modification in the case of a
                    financial market utility and 3 business days in the case
                    of financial institutions. <<NOTE: Web posting. Federal
                    Register, publication.>> The Council shall provide the
                    notice to financial institutions by posting a notice on
                    the website of the Council and by publishing a notice in
                    the Federal Register.

        (d) <<NOTE: Deadlines.>>  Notification of Final Determination.--
                (1) After hearing.--Within 60 days of any hearing under
            subsection (c)(2), the Council shall notify the financial market
            utility or financial institutions of the final determination of
            the Council in writing, which shall include findings of fact
            upon which the determination of the Council is based.

    [[Page 124 STAT. 1809]]

                (2) When no hearing requested.--If the Council does not
            receive a timely request for a hearing under subsection (c)(2),
            the Council shall notify the financial market utility or
            financial institutions of the final determination of the Council
            in writing not later than 30 days after the expiration of the
            date by which a financial market utility or a financial
            institution could have requested a hearing. <<NOTE: Federal
            Register, publication.>> All notices to financial institutions
            under this subsection shall be published in the Federal
            Register.

        (e) Extension of Time Periods.--The Council may extend the time
    periods established in subsections (c) and (d) as the Council determines
    to be necessary or appropriate.
    SEC. 805. <<NOTE: 12 USC 5464.>>  STANDARDS FOR SYSTEMICALLY
                            IMPORTANT FINANCIAL MARKET UTILITIES AND
                            PAYMENT, CLEARING, OR SETTLEMENT
                            ACTIVITIES.

        (a) Authority to Prescribe Standards.--
                (1) Board of governors.--Except as provided in paragraph
            (2), the Board of Governors, by rule or order, and in
            consultation with the Council and the Supervisory Agencies,
            shall prescribe risk management standards, taking into
            consideration relevant international standards and existing
            prudential requirements, governing--
                        (A) the operations related to the payment, clearing,
                    and settlement activities of designated financial market
                    utilities; and
                        (B) the conduct of designated activities by
                    financial institutions.
                (2) Special procedures for designated clearing entities and
            designated activities of certain financial institutions.--
                        (A) CFTC and commission.--The Commodity Futures
                    Trading Commission and the Commission may each prescribe
                    regulations, in consultation with the Council and the
                    Board of Governors, containing risk management
                    standards, taking into consideration relevant
                    international standards and existing prudential
                    requirements, for those designated clearing entities and
                    financial institutions engaged in designated activities
                    for which each is the Supervisory Agency or the
                    appropriate financial regulator, governing--
                              (i) the operations related to payment,
                          clearing, and settlement activities of such
                          designated clearing entities; and
                              (ii) the conduct of designated activities by
                          such financial institutions.
                        (B) Review and determination.--The Board of
                    Governors may determine that existing prudential
                    requirements of the Commodity Futures Trading
                    Commission, the Commission, or both (including
                    requirements prescribed pursuant to subparagraph (A))
                    with respect to designated clearing entities and
                    financial institutions engaged in designated activities
                    for which the Commission or the Commodity Futures
                    Trading Commission is the Supervisory Agency or the
                    appropriate financial regulator are insufficient to
                    prevent or mitigate significant liquidity, credit,

    [[Page 124 STAT. 1810]]

                    operational, or other risks to the financial markets or
                    to the financial stability of the United States.
                        (C) Written determination.--Any determination by the
                    Board of Governors under subparagraph (B) shall be
                    provided in writing to the Commodity Futures Trading
                    Commission or the Commission, as applicable, and the
                    Council, and shall explain why existing prudential
                    requirements, considered as a whole, are insufficient to
                    ensure that the operations and activities of the
                    designated clearing entities or the activities of
                    financial institutions described in subparagraph (B)
                    will not pose significant liquidity, credit,
                    operational, or other risks to the financial markets or
                    to the financial stability of the United States. The
                    Board of Governors' determination shall contain a
                    detailed analysis supporting its findings and identify
                    the specific prudential requirements that are
                    insufficient.
                        (D) <<NOTE: Deadline.>>  CFTC and commission
                    response.--The Commodity Futures Trading Commission or
                    the Commission, as applicable, shall within 60 days
                    either object to the Board of Governors' determination
                    with a detailed analysis as to why existing prudential
                    requirements are sufficient, or submit an explanation to
                    the Council and the Board of Governors describing the
                    actions to be taken in response to the Board of
                    Governors' determination.
                        (E) Authorization.--Upon an affirmative vote by not
                    fewer than 2/3 of members then serving on the Council,
                    the Council shall either find that the response
                    submitted under subparagraph (D) is sufficient, or
                    require the Commodity Futures Trading Commission, or the
                    Commission, as applicable, to prescribe such risk
                    management standards as the Council determines is
                    necessary to address the specific prudential
                    requirements that are determined to be insufficient.''

        (b) Objectives and Principles.--The objectives and principles for
    the risk management standards prescribed under subsection (a) shall be
    to--
                (1) promote robust risk management;
                (2) promote safety and soundness;
                (3) reduce systemic risks; and
                (4) support the stability of the broader financial system.

        (c) Scope.--The standards prescribed under subsection (a) may
    address areas such as--
                (1) risk management policies and procedures;
                (2) margin and collateral requirements;
                (3) participant or counterparty default policies and
            procedures;
                (4) the ability to complete timely clearing and settlement
            of financial transactions;
                (5) capital and financial resource requirements for
            designated financial market utilities; and
                (6) other areas that are necessary to achieve the objectives
            and principles in subsection (b).

        (d) Limitation on Scope.--Except as provided in subsections (e) and
    (f) of section 807, nothing in this title shall be construed to permit
    the Council or the Board of Governors to take any action or exercise any
    authority granted to the Commodity Futures Trading Commission under
    section 2(h) of the Commodity Exchange

    [[Page 124 STAT. 1811]]

    Act or the Securities and Exchange Commission under section 3C(a) of the
    Securities Exchange Act of 1934, including--
                (1) the approval of, disapproval of, or stay of the clearing
            requirement for any group, category, type, or class of swaps
            that a designated clearing entity may accept for clearing;
                (2) the determination that any group, category, type, or
            class of swaps shall be subject to the mandatory clearing
            requirement of section 2(h)(1) of the Commodity Exchange Act or
            section 3C(a)(1) of the Securities Exchange Act of 1934;
                (3) the determination that any person is exempt from the
            mandatory clearing requirement of section 2(h)(1) of the
            Commodity Exchange Act or section 3C(a)(1) of the Securities
            Exchange Act of 1934; or
                (4) any authority granted to the Commodity Futures Trading
            Commission or the Securities and Exchange Commission with
            respect to transaction reporting or trade execution.

        (e) Threshold Level.--The standards prescribed under subsection (a)
    governing the conduct of designated activities by financial institutions
    shall, where appropriate, establish a threshold as to the level or
    significance of engagement in the activity at which a financial
    institution will become subject to the standards with respect to that
    activity.
        (f) Compliance Required.--Designated financial market utilities and
    financial institutions subject to the standards prescribed under
    subsection (a) for a designated activity shall conduct their operations
    in compliance with the applicable risk management standards.
    SEC. 806. <<NOTE: 12 USC 5465.>>  OPERATIONS OF DESIGNATED
                            FINANCIAL MARKET UTILITIES.

        (a) Federal Reserve Account and Services.--The Board of Governors
    may authorize a Federal Reserve Bank to establish and maintain an
    account for a designated financial market utility and provide the
    services listed in section 11A(b) of the Federal Reserve Act (12 U.S.C.
    248a(b)) and deposit accounts under the first undesignated paragraph of
    section 13 of the Federal Reserve Act (12 U.S.C. 342) to the designated
    financial market utility that the Federal Reserve Bank is authorized
    under the Federal Reserve Act to provide to a depository institution,
    subject to any applicable rules, orders, standards, or guidelines
    prescribed by the Board of Governors.
        (b) Advances.--The Board of Governors may authorize a Federal
    Reserve bank under section 10B of the Federal Reserve Act (12 U.S.C.
    347b) to provide to a designated financial market utility discount and
    borrowing privileges only in unusual or exigent circumstances, upon the
    affirmative vote of a majority of the Board of Governors then serving
    (or such other number in accordance with the provisions of section
    11(r)(2) of the Federal Reserve Act (12 U.S.C. 248(r)(2)) after
    consultation with the Secretary, and upon a showing by the designated
    financial market utility that it is unable to secure adequate credit
    accommodations from other banking institutions. All such discounts and
    borrowing privileges shall be subject to such other limitations,
    restrictions, and regulations as the Board of Governors may prescribe.
    Access to discount and borrowing privileges under section 10B of the
    Federal Reserve Act as authorized in this section does not require a
    designated

    [[Page 124 STAT. 1812]]

    financial market utility to be or become a bank or bank holding company.
        (c) Earnings on Federal Reserve Balances.--A Federal Reserve Bank
    may pay earnings on balances maintained by or on behalf of a designated
    financial market utility in the same manner and to the same extent as
    the Federal Reserve Bank may pay earnings to a depository institution
    under the Federal Reserve Act, subject to any applicable rules, orders,
    standards, or guidelines prescribed by the Board of Governors.
        (d) Reserve Requirements.--The Board of Governors may exempt a
    designated financial market utility from, or modify any, reserve
    requirements under section 19 of the Federal Reserve Act (12 U.S.C. 461)
    applicable to a designated financial market utility.
        (e) Changes to Rules, Procedures, or Operations.--
                (1) Advance notice.--
                        (A) Advance notice of proposed changes required.--A
                    designated financial market utility shall provide notice
                    60 days in advance notice to its Supervisory Agency of
                    any proposed change to its rules, procedures, or
                    operations that could, as defined in rules of each
                    Supervisory Agency, materially affect, the nature or
                    level of risks presented by the designated financial
                    market utility.
                        (B) Terms and standards prescribed by the
                    supervisory agencies.--Each Supervisory Agency, in
                    consultation with the Board of Governors, shall
                    prescribe regulations that define and describe the
                    standards for determining when notice is required to be
                    provided under subparagraph (A).
                        (C) Contents of notice.--The notice of a proposed
                    change shall describe--
                              (i) the nature of the change and expected
                          effects on risks to the designated financial
                          market utility, its participants, or the market;
                          and
                              (ii) how the designated financial market
                          utility plans to manage any identified risks.
                        (D) Additional information.--The Supervisory Agency
                    may require a designated financial market utility to
                    provide any information necessary to assess the effect
                    the proposed change would have on the nature or level of
                    risks associated with the designated financial market
                    utility's payment, clearing, or settlement activities
                    and the sufficiency of any proposed risk management
                    techniques.
                        (E) <<NOTE: Deadline.>>  Notice of objection.--The
                    Supervisory Agency shall notify the designated financial
                    market utility of any objection regarding the proposed
                    change within 60 days from the later of--
                              (i) the date that the notice of the proposed
                          change is received; or
                              (ii) the date any further information
                          requested for consideration of the notice is
                          received.
                        (F) Change not allowed if objection.--A designated
                    financial market utility shall not implement a change to
                    which the Supervisory Agency has an objection.
                        (G) Change allowed if no objection within 60 days.--
                    A designated financial market utility may implement a
                    change if it has not received an objection to the
                    proposed change within 60 days of the later of--

    [[Page 124 STAT. 1813]]

                              (i) the date that the Supervisory Agency
                          receives the notice of proposed change; or
                              (ii) the date the Supervisory Agency receives
                          any further information it requests for
                          consideration of the notice.
                        (H) Review extension for novel or complex issues.--
                    <<NOTE: Time period.>> The Supervisory Agency may,
                    during the 60-day review period, extend the review
                    period for an additional 60 days for proposed changes
                    that raise novel or complex issues, subject to the
                    Supervisory Agency providing the designated financial
                    market utility with prompt written notice of the
                    extension. Any extension under this subparagraph will
                    extend the time periods under subparagraphs (E) and (G).
                        (I) Change allowed earlier if notified of no
                    objection.-- <<NOTE: Time period.>> A designated
                    financial market utility may implement a change in less
                    than 60 days from the date of receipt of the notice of
                    proposed change by the Supervisory Agency, or the date
                    the Supervisory Agency receives any further information
                    it requested, if the Supervisory Agency notifies the
                    designated financial market utility in writing that it
                    does not object to the proposed change and authorizes
                    the designated financial market utility to implement the
                    change on an earlier date, subject to any conditions
                    imposed by the Supervisory Agency.
                (2) Emergency changes.--
                        (A) In general.--A designated financial market
                    utility may implement a change that would otherwise
                    require advance notice under this subsection if it
                    determines that--
                              (i) an emergency exists; and
                              (ii) immediate implementation of the change is
                          necessary for the designated financial market
                          utility to continue to provide its services in a
                          safe and sound manner.
                        (B) Notice required within 24 hours.--The designated
                    financial market utility shall provide notice of any
                    such emergency change to its Supervisory Agency, as soon
                    as practicable, which shall be no later than 24 hours
                    after implementation of the change.
                        (C) Contents of emergency notice.--In addition to
                    the information required for changes requiring advance
                    notice, the notice of an emergency change shall
                    describe--
                              (i) the nature of the emergency; and
                              (ii) the reason the change was necessary for
                          the designated financial market utility to
                          continue to provide its services in a safe and
                          sound manner.
                        (D) Modification or rescission of change may be
                    required.--The Supervisory Agency may require
                    modification or rescission of the change if it finds
                    that the change is not consistent with the purposes of
                    this Act or any applicable rules, orders, or standards
                    prescribed under section 805(a).
                (3) Copying the board of governors.--The Supervisory Agency
            shall provide the Board of Governors concurrently with a
            complete copy of any notice, request, or other information it
            issues, submits, or receives under this subsection.

    [[Page 124 STAT. 1814]]

                (4) Consultation with board of governors.--Before taking any
            action on, or completing its review of, a change proposed by a
            designated financial market utility, the Supervisory Agency
            shall consult with the Board of Governors.
    SEC. 807. <<NOTE: 12 USC 5466.>>  EXAMINATION OF AND ENFORCEMENT
                            ACTIONS AGAINST DESIGNATED FINANCIAL
                            MARKET UTILITIES.

        (a) Examination.--Notwithstanding any other provision of law and
    subject to subsection (d), the Supervisory Agency shall conduct
    examinations of a designated financial market utility at least once
    annually in order to determine the following:
                (1) The nature of the operations of, and the risks borne by,
            the designated financial market utility.
                (2) The financial and operational risks presented by the
            designated financial market utility to financial institutions,
            critical markets, or the broader financial system.
                (3) The resources and capabilities of the designated
            financial market utility to monitor and control such risks.
                (4) The safety and soundness of the designated financial
            market utility.
                (5) The designated financial market utility's compliance
            with--
                        (A) this title; and
                        (B) the rules and orders prescribed under this
                    title.

        (b) Service Providers.--Whenever a service integral to the operation
    of a designated financial market utility is performed for the designated
    financial market utility by another entity, whether an affiliate or non-
    affiliate and whether on or off the premises of the designated financial
    market utility, the Supervisory Agency may examine whether the provision
    of that service is in compliance with applicable law, rules, orders, and
    standards to the same extent as if the designated financial market
    utility were performing the service on its own premises.
        (c) Enforcement.--For purposes of enforcing the provisions of this
    title, a designated financial market utility shall be subject to, and
    the appropriate Supervisory Agency shall have authority under the
    provisions of subsections (b) through (n) of section 8 of the Federal
    Deposit Insurance Act (12 U.S.C. 1818) in the same manner and to the
    same extent as if the designated financial market utility was an insured
    depository institution and the Supervisory Agency was the appropriate
    Federal banking agency for such insured depository institution.
        (d) Board of Governors Involvement in Examinations.--
                (1) Board of governors consultation on examination
            planning.-- <<NOTE: Deadline.>> The Supervisory Agency shall
            consult annually with the Board of Governors regarding the scope
            and methodology of any examination conducted under subsections
            (a) and (b). The Supervisory Agency shall lead all examinations
            conducted under subsections (a) and (b)
                (2) Board of governors participation in examination.--The
            Board of Governors may, in its discretion, participate in any
            examination led by a Supervisory Agency and conducted under
            subsections (a) and (b).

        (e) Board of Governors Enforcement Recommendations.--
                (1) Recommendation.--The Board of Governors may, after
            consulting with the Council and the Supervisory Agency, at any
            time recommend to the Supervisory Agency that such

    [[Page 124 STAT. 1815]]

            agency take enforcement action against a designated financial
            market utility in order to prevent or mitigate significant
            liquidity, credit, operational, or other risks to the financial
            markets or to the financial stability of the United States. Any
            such recommendation for enforcement action shall provide a
            detailed analysis supporting the recommendation of the Board of
            Governors.
                (2) <<NOTE: Deadline.>>  Consideration.--The Supervisory
            Agency shall consider the recommendation of the Board of
            Governors and submit a response to the Board of Governors within
            60 days.
                (3) Binding arbitration.--If the Supervisory Agency rejects,
            in whole or in part, the recommendation of the Board of
            Governors, the Board of Governors may refer the recommendation
            to the Council for a binding decision on whether an enforcement
            action is warranted.
                (4) Enforcement action.--Upon an affirmative vote by a
            majority of the Council in favor of the Board of Governors'
            recommendation under paragraph (3), the Council may require the
            Supervisory Agency to--
                        (A) exercise the enforcement authority referenced in
                    subsection (c); and
                        (B) take enforcement action against the designated
                    financial market utility.

        (f) Emergency Enforcement Actions by the Board of Governors.--
                (1) Imminent risk of substantial harm.--The Board of
            Governors may, after consulting with the Supervisory Agency and
            upon an affirmative vote by a majority the Council, take
            enforcement action against a designated financial market utility
            if the Board of Governors has reasonable cause to conclude
            that--
                        (A) either--
                              (i) an action engaged in, or contemplated by,
                          a designated financial market utility (including
                          any change proposed by the designated financial
                          market utility to its rules, procedures, or
                          operations that would otherwise be subject to
                          section 806(e)) poses an imminent risk of
                          substantial harm to financial institutions,
                          critical markets, or the broader financial system
                          of the United States; or
                              (ii) the condition of a designated financial
                          market utility poses an imminent risk of
                          substantial harm to financial institutions,
                          critical markets, or the broader financial system;
                          and
                        (B) the imminent risk of substantial harm precludes
                    the Board of Governors' use of the procedures in
                    subsection (e).
                (2) Enforcement authority.--For purposes of taking
            enforcement action under paragraph (1), a designated financial
            market utility shall be subject to, and the Board of Governors
            shall have authority under the provisions of subsections (b)
            through (n) of section 8 of the Federal Deposit Insurance Act
            (12 U.S.C. 1818) in the same manner and to the same extent as if
            the designated financial market utility was an insured
            depository institution and the Board of Governors was the
            appropriate Federal banking agency for such insured depository
            institution.

    [[Page 124 STAT. 1816]]

    SEC. 808. <<NOTE: 12 USC 5467.>>  EXAMINATION OF AND ENFORCEMENT
                            ACTIONS AGAINST FINANCIAL INSTITUTIONS
                            SUBJECT TO STANDARDS FOR DESIGNATED
                            ACTIVITIES.

        (a) Examination.--The appropriate financial regulator is authorized
    to examine a financial institution subject to the standards prescribed
    under section 805(a) for a designated activity in order to determine the
    following:
                (1) The nature and scope of the designated activities
            engaged in by the financial institution.
                (2) The financial and operational risks the designated
            activities engaged in by the financial institution may pose to
            the safety and soundness of the financial institution.
                (3) The financial and operational risks the designated
            activities engaged in by the financial institution may pose to
            other financial institutions, critical markets, or the broader
            financial system.
                (4) The resources available to and the capabilities of the
            financial institution to monitor and control the risks described
            in paragraphs (2) and (3).
                (5) The financial institution's compliance with this title
            and the rules and orders prescribed under section 805(a).

        (b) Enforcement.--For purposes of enforcing the provisions of this
    title, and the rules and orders prescribed under this section, a
    financial institution subject to the standards prescribed under section
    805(a) for a designated activity shall be subject to, and the
    appropriate financial regulator shall have authority under the
    provisions of subsections (b) through (n) of section 8 of the Federal
    Deposit Insurance Act (12 U.S.C. 1818) in the same manner and to the
    same extent as if the financial institution was an insured depository
    institution and the appropriate financial regulator was the appropriate
    Federal banking agency for such insured depository institution.
        (c) <<NOTE: Consultation.>>  Technical Assistance.--The Board of
    Governors shall consult with and provide such technical assistance as
    may be required by the appropriate financial regulators to ensure that
    the rules and orders prescribed under this title are interpreted and
    applied in as consistent and uniform a manner as practicable.

        (d) Delegation.--
                (1) Examination.--
                        (A) Request to board of governors.--The appropriate
                    financial regulator may request the Board of Governors
                    to conduct or participate in an examination of a
                    financial institution subject to the standards
                    prescribed under section 805(a) for a designated
                    activity in order to assess the compliance of such
                    financial institution with--
                              (i) this title; or
                              (ii) the rules or orders prescribed under this
                          title.
                        (B) Examination by board of governors.--Upon receipt
                    of an appropriate written request, the Board of
                    Governors will conduct the examination under such terms
                    and conditions to which the Board of Governors and the
                    appropriate financial regulator mutually agree.
                (2) Enforcement.--
                        (A) Request to board of governors.--The appropriate
                    financial regulator may request the Board of Governors
                    to enforce this title or the rules or orders prescribed

    [[Page 124 STAT. 1817]]

                    under this title against a financial institution that is
                    subject to the standards prescribed under section 805(a)
                    for a designated activity.
                        (B) <<NOTE: Determination.>>  Enforcement by board
                    of governors.--Upon receipt of an appropriate written
                    request, the Board of Governors shall determine whether
                    an enforcement action is warranted, and, if so, it shall
                    enforce compliance with this title or the rules or
                    orders prescribed under this title and, if so, the
                    financial institution shall be subject to, and the Board
                    of Governors shall have authority under the provisions
                    of subsections (b) through (n) of section 8 of the
                    Federal Deposit Insurance Act (12 U.S.C. 1818) in the
                    same manner and to the same extent as if the financial
                    institution was an insured depository institution and
                    the Board of Governors was the appropriate Federal
                    banking agency for such insured depository institution.

        (e) Back-up Authority of the Board of Governors.--
                (1) Examination and enforcement.--Notwithstanding any other
            provision of law, the Board of Governors may--
                        (A) conduct an examination of the type described in
                    subsection (a) of any financial institution that is
                    subject to the standards prescribed under section 805(a)
                    for a designated activity; and
                        (B) enforce the provisions of this title or any
                    rules or orders prescribed under this title against any
                    financial institution that is subject to the standards
                    prescribed under section 805(a) for a designated
                    activity.
                (2) Limitations.--
                        (A) Examination.--The Board of Governors may
                    exercise the authority described in paragraph (1)(A)
                    only if the Board of Governors has--
                              (i) reasonable cause to believe that a
                          financial institution is not in compliance with
                          this title or the rules or orders prescribed under
                          this title with respect to a designated activity;
                              (ii) <<NOTE: Notification.>>  notified, in
                          writing, the appropriate financial regulator and
                          the Council of its belief under clause (i) with
                          supporting documentation included;
                              (iii) requested the appropriate financial
                          regulator to conduct a prompt examination of the
                          financial institution;
                              (iv) either--
                                        (I) <<NOTE: Deadline.>>  not been
                                    afforded a reasonable opportunity to
                                    participate in an examination of the
                                    financial institution by the appropriate
                                    financial regulator within 30 days after
                                    the date of the Board's notification
                                    under clause (ii); or
                                        (II) reasonable cause to believe
                                    that the financial institution's
                                    noncompliance with this title or the
                                    rules or orders prescribed under this
                                    title poses a substantial risk to other
                                    financial institutions, critical
                                    markets, or the broader financial
                                    system, subject to the Board of
                                    Governors affording the appropriate
                                    financial regulator a reasonable
                                    opportunity to participate in the
                                    examination; and
                              (v) obtained the approval of the Council upon
                          an affirmative vote by a majority of the Council.

    [[Page 124 STAT. 1818]]

                        (B) Enforcement.--The Board of Governors may
                    exercise the authority described in paragraph (1)(B)
                    only if the Board of Governors has--
                              (i) reasonable cause to believe that a
                          financial institution is not in compliance with
                          this title or the rules or orders prescribed under
                          this title with respect to a designated activity;
                              (ii) <<NOTE: Notification.>>  notified, in
                          writing, the appropriate financial regulator and
                          the Council of its belief under clause (i) with
                          supporting documentation included and with a
                          recommendation that the appropriate financial
                          regulator take 1 or more specific enforcement
                          actions against the financial institution;
                              (iii) either--
                                        (I) <<NOTE: Deadline.>>  not been
                                    notified, in writing, by the appropriate
                                    financial regulator of the commencement
                                    of an enforcement action recommended by
                                    the Board of Governors against the
                                    financial institution within 60 days
                                    from the date of the notification under
                                    clause (ii); or
                                        (II) reasonable cause to believe
                                    that the financial institution's
                                    noncompliance with this title or the
                                    rules or orders prescribed under this
                                    title poses significant liquidity,
                                    credit, operational, or other risks to
                                    the financial markets or to the
                                    financial stability of the United
                                    States, subject to the Board of
                                    Governors notifying the appropriate
                                    financial regulator of the Board's
                                    enforcement action; and
                              (iv) obtained the approval of the Council upon
                          an affirmative vote by a majority of the Council.
                (3) Enforcement provisions.--For purposes of taking
            enforcement action under paragraph (1), the financial
            institution shall be subject to, and the Board of Governors
            shall have authority under the provisions of subsections (b)
            through (n) of section 8 of the Federal Deposit Insurance Act
            (12 U.S.C. 1818) in the same manner and to the same extent as if
            the financial institution was an insured depository institution
            and the Board of Governors was the appropriate Federal banking
            agency for such insured depository institution.
    SEC. 809. <<NOTE: 12 USC 5468.>>  REQUESTS FOR INFORMATION,
                            REPORTS, OR RECORDS.

        (a) Information To Assess Systemic Importance.--
                (1) Financial market utilities.--The Council is authorized
            to require any financial market utility to submit such
            information as the Council may require for the sole purpose of
            assessing whether that financial market utility is systemically
            important, but only if the Council has reasonable cause to
            believe that the financial market utility meets the standards
            for systemic importance set forth in section 804.
                (2) Financial institutions engaged in payment, clearing, or
            settlement activities.--The Council is authorized to require any
            financial institution to submit such information as the Council
            may require for the sole purpose of assessing whether any
            payment, clearing, or settlement activity engaged in or
            supported by a financial institution is systemically important,
            but only if the Council has reasonable cause to believe

    [[Page 124 STAT. 1819]]

            that the activity meets the standards for systemic importance
            set forth in section 804.

        (b) Reporting After Designation.--
                (1) Designated financial market utilities.--The Board of
            Governors and the Council may each require a designated
            financial market utility to submit reports or data to the Board
            of Governors and the Council in such frequency and form as
            deemed necessary by the Board of Governors or the Council in
            order to assess the safety and soundness of the utility and the
            systemic risk that the utility's operations pose to the
            financial system.
                (2) Financial institutions subject to standards for
            designated activities.--The Board of Governors and the Council
            may each require 1 or more financial institutions subject to the
            standards prescribed under section 805(a) for a designated
            activity to submit, in such frequency and form as deemed
            necessary by the Board of Governors or the Council, reports and
            data to the Board of Governors and the Council solely with
            respect to the conduct of the designated activity and solely to
            assess whether--
                        (A) the rules, orders, or standards prescribed under
                    section 805(a) with respect to the designated activity
                    appropriately address the risks to the financial system
                    presented by such activity; and
                        (B) the financial institutions are in compliance
                    with this title and the rules and orders prescribed
                    under section 805(a) with respect to the designated
                    activity.
                (3) Limitation.--The Board of Governors may, upon an
            affirmative vote by a majority of the Council, prescribe
            regulations under this section that impose a recordkeeping or
            reporting requirement on designated clearing entities or
            financial institutions engaged in designated activities that are
            subject to standards that have been prescribed under section
            805(a)(2).

        (c) Coordination With Appropriate Federal Supervisory Agency.--
                (1) Advance coordination.--Before requesting any material
            information from, or imposing reporting or recordkeeping
            requirements on, any financial market utility or any financial
            institution engaged in a payment, clearing, or settlement
            activity, the Board of Governors or the Council shall coordinate
            with the Supervisory Agency for a financial market utility or
            the appropriate financial regulator for a financial institution
            to determine if the information is available from or may be
            obtained by the agency in the form, format, or detail required
            by the Board of Governors or the Council.
                (2) Supervisory reports.--Notwithstanding any other
            provision of law, the Supervisory Agency, the appropriate
            financial regulator, and the Board of Governors are authorized
            to disclose to each other and the Council copies of its
            examination reports or similar reports regarding any financial
            market utility or any financial institution engaged in payment,
            clearing, or settlement activities.

        (d) Timing of Response From Appropriate Federal Supervisory
    Agency.-- <<NOTE: Deadline. Notice.>> If the information, report,
    records, or data requested by the Board of Governors or the Council
    under subsection (c)(1) are not provided in full by the Supervisory
    Agency

    [[Page 124 STAT. 1820]]

    or the appropriate financial regulator in less than 15 days after the
    date on which the material is requested, the Board of Governors or the
    Council may request the information or impose recordkeeping or reporting
    requirements directly on such persons as provided in subsections (a) and
    (b) with notice to the agency.

        (e) Sharing of Information.--
                (1) Material concerns.--Notwithstanding any other provision
            of law, the Board of Governors, the Council, the appropriate
            financial regulator, and any Supervisory Agency are authorized
            to--
                        (A) <<NOTE: Notification.>>  promptly notify each
                    other of material concerns about a designated financial
                    market utility or any financial institution engaged in
                    designated activities; and
                        (B) share appropriate reports, information, or data
                    relating to such concerns.
                (2) Other information.--Notwithstanding any other provision
            of law, the Board of Governors, the Council, the appropriate
            financial regulator, or any Supervisory Agency may, under such
            terms and conditions as it deems appropriate, provide
            confidential supervisory information and other information
            obtained under this title to each other, and to the Secretary,
            Federal Reserve Banks, State financial institution supervisory
            agencies, foreign financial supervisors, foreign central banks,
            and foreign finance ministries, subject to reasonable assurances
            of confidentiality, provided, however, that no person or entity
            receiving information pursuant to this section may disseminate
            such information to entities or persons other than those listed
            in this paragraph without complying with applicable law,
            including section 8 of the Commodity Exchange Act (7 U.S.C. 12).

        (f) Privilege Maintained.--The Board of Governors, the Council, the
    appropriate financial regulator, and any Supervisory Agency providing
    reports or data under this section shall not be deemed to have waived
    any privilege applicable to those reports or data, or any portion
    thereof, by providing the reports or data to the other party or by
    permitting the reports or data, or any copies thereof, to be used by the
    other party.
        (g) Disclosure Exemption.--Information obtained by the Board of
    Governors, the Supervisory Agencies, or the Council under this section
    and any materials prepared by the Board of Governors, the Supervisory
    Agencies, or the Council regarding their assessment of the systemic
    importance of financial market utilities or any payment, clearing, or
    settlement activities engaged in by financial institutions, and in
    connection with their supervision of designated financial market
    utilities and designated activities, shall be confidential supervisory
    information exempt from disclosure under section 552 of title 5, United
    States Code. For purposes of such section 552, this subsection shall be
    considered a statute described in subsection (b)(3) of such section 552.
    SEC. 810. <<NOTE: 12 USC 5469.>>  RULEMAKING.

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

    [[Page 124 STAT. 1821]]

    SEC. 811. <<NOTE: 12 USC 5470.>>  OTHER AUTHORITY.

        Unless otherwise provided by its terms, this title does not divest
    any appropriate financial regulator, any Supervisory Agency, or any
    other Federal or State agency, of any authority derived from any other
    applicable law, except that any standards prescribed by the Board of
    Governors under section 805 shall supersede any less stringent
    requirements established under other authority to the extent of any
    conflict.
    SEC. 812. <<NOTE: 12 USC 5471.>>  CONSULTATION.

        (a) CFTC.--The Commodity Futures Trading Commission shall consult
    with the Board of Governors--
                (1) prior to exercising its authorities under sections
            2(h)(2)(C), 2(h)(3)(A), 2(h)(3)(C), 2(h)(4)(A), and 2(h)(4)(B)
            of the Commodity Exchange Act, as amended by the Wall Street
            Transparency and Accountability Act of 2010;
                (2) with respect to any rule or rule amendment of a
            derivatives clearing organization for which a stay of
            certification has been issued under section 745(b)(3) of the
            Wall Street Transparency and Accountability Act of 2010; and
                (3) prior to exercising its rulemaking authorities under
            section 728 of the Wall Street Transparency and Accountability
            Act of 2010.

        (b) SEC.--The Commission shall consult with the Board of Governors--
                (1) prior to exercising its authorities under sections
            3C(a)(2)(C), 3C(a)(3)(A), 3C(a)(3)(C), 3C(a)(4)(A), and
            3C(a)(4)(B) of the Securities Exchange Act of 1934, as amended
            by the Wall Street Transparency and Accountability Act of 2010;
                (2) with respect to any proposed rule change of a clearing
            agency for which an extension of the time for review has been
            designated under section 19(b)(2) of the Securities Exchange Act
            of 1934; and
                (3) prior to exercising its rulemaking authorities under
            section 13(n) of the Securities Exchange Act of 1934, as added
            by section 763(i) of the Wall Street Transparency and
            Accountability Act of 2010.
    SEC. 813. <<NOTE: 12 USC 5472.>>  COMMON FRAMEWORK FOR DESIGNATED
                            CLEARING ENTITY RISK MANAGEMENT.

        The Commodity Futures Trading Commission and the Commission shall
    coordinate with the Board of Governors to jointly develop risk
    management supervision programs for designated clearing
    entities. <<NOTE: Deadline. Reports.>>  Not later than 1 year after the
    date of enactment of this Act, the Commodity Futures Trading Commission,
    the Commission, and the Board of Governors shall submit a joint report
    to the Committee on Banking, Housing, and Urban Affairs and the
    Committee on Agriculture, Nutrition, and Forestry of the Senate, and the
    Committee on Financial Services and the Committee on Agriculture of the
    House of Representatives recommendations for--
                (1) improving consistency in the designated clearing entity
            oversight programs of the Commission and the Commodity Futures
            Trading Commission;
                (2) promoting robust risk management by designated clearing
            entities;
                (3) promoting robust risk management oversight by regulators
            of designated clearing entities; and

    [[Page 124 STAT. 1822]]

                (4) improving regulators' ability to monitor the potential
            effects of designated clearing entity risk management on the
            stability of the financial system of the United States.
    SEC. 814. <<NOTE: 12 USC 5461 note.>>  EFFECTIVE DATE.

        This title is effective as of the date of enactment of this Act.

    TITLE <<NOTE: Investor Protection and Securities Reform Act of 2010.>>
         IX--INVESTOR PROTECTIONS AND IMPROVEMENTS TO THE REGULATION OF
    SECURITIES
    SEC. 901. <<NOTE: 15 USC 78a note.>>  SHORT TITLE.

        This title may be cited as the ``Investor Protection and Securities
    Reform Act of 2010''.

                   Subtitle A--Increasing Investor Protection

    SEC. 911. INVESTOR ADVISORY COMMITTEE ESTABLISHED.

        Title I of the Securities Exchange Act of 1934 (15 U.S.C. 78a et
    seq.) is amended by adding at the end the following:
    ``SEC. 39. <<NOTE: 15 USC 78pp.>>  INVESTOR ADVISORY COMMITTEE.

        ``(a) Establishment and Purpose.--
                ``(1) Establishment.--There is established within the
            Commission the Investor Advisory Committee (referred to in this
            section as the `Committee').
                ``(2) Purpose.--The Committee shall--
                        ``(A) advise and consult with the Commission on--
                              ``(i) regulatory priorities of the Commission;
                              ``(ii) issues relating to the regulation of
                          securities products, trading strategies, and fee
                          structures, and the effectiveness of disclosure;
                              ``(iii) initiatives to protect investor
                          interest; and
                              ``(iv) initiatives to promote investor
                          confidence and the integrity of the securities
                          marketplace; and
                        ``(B) submit to the Commission such findings and
                    recommendations as the Committee determines are
                    appropriate, including recommendations for proposed
                    legislative changes.

        ``(b) Membership.--
                ``(1) In general.--The members of the Committee shall be--
                        ``(A) the Investor Advocate;
                        ``(B) a representative of State securities
                    commissions;
                        ``(C) a representative of the interests of senior
                    citizens; and
                        ``(D) not fewer than 10, and not more than 20,
                    members appointed by the Commission, from among
                    individuals who--
                              ``(i) represent the interests of individual
                          equity and debt investors, including investors in
                          mutual funds;
                              ``(ii) represent the interests of
                          institutional investors, including the interests
                          of pension funds and registered investment
                          companies;

    [[Page 124 STAT. 1823]]

                              ``(iii) are knowledgeable about investment
                          issues and decisions; and
                              ``(iv) have reputations of integrity.
                ``(2) Term.--Each member of the Committee appointed under
            paragraph (1)(B) shall serve for a term of 4 years.
                ``(3) Members not commission employees.--Members appointed
            under paragraph (1)(B) shall not be deemed to be employees or
            agents of the Commission solely because of membership on the
            Committee.

        ``(c) Chairman; Vice Chairman; Secretary; Assistant Secretary.--
                ``(1) In general.--The members of the Committee shall elect,
            from among the members of the Committee--
                        ``(A) a chairman, who may not be employed by an
                    issuer;
                        ``(B) a vice chairman, who may not be employed by an
                    issuer;
                        ``(C) a secretary; and
                        ``(D) an assistant secretary.
                ``(2) Term.--Each member elected under paragraph (1) shall
            serve for a term of 3 years in the capacity for which the member
            was elected under paragraph (1).

        ``(d) Meetings.--
                ``(1) Frequency of meetings.--The Committee shall meet--
                        ``(A) not less frequently than twice annually, at
                    the call of the chairman of the Committee; and
                        ``(B) from time to time, at the call of the
                    Commission.
                ``(2) <<NOTE: Deadline.>>  Notice.--The chairman of the
            Committee shall give the members of the Committee written notice
            of each meeting, not later than 2 weeks before the date of the
            meeting.

        ``(e) Compensation and Travel Expenses.--Each member of the
    Committee who is not a full-time employee of the United States shall--
                ``(1) be entitled to receive compensation at a rate not to
            exceed the daily equivalent of the annual rate of basic pay in
            effect for a position at level V of the Executive Schedule under
            section 5316 of title 5, United States Code, for each day during
            which the member is engaged in the actual performance of the
            duties of the Committee; and
                ``(2) while away from the home or regular place of business
            of the member in the performance of services for the Committee,
            be allowed travel expenses, including per diem in lieu of
            subsistence, in the same manner as persons employed
            intermittently in the Government service are allowed expenses
            under section 5703(b) of title 5, United States Code.

        ``(f) Staff.--The Commission shall make available to the Committee
    such staff as the chairman of the Committee determines are necessary to
    carry out this section.
        ``(g) Review by Commission.--The Commission shall--
                ``(1) review the findings and recommendations of the
            Committee; and
                ``(2) each time the Committee submits a finding or
            recommendation to the Commission, promptly issue a public
            statement--
                        ``(A) assessing the finding or recommendation of the
                    Committee; and

    [[Page 124 STAT. 1824]]

                        ``(B) disclosing the action, if any, the Commission
                    intends to take with respect to the finding or
                    recommendation.

        ``(h) Committee Findings.--Nothing in this section shall require the
    Commission to agree to or act upon any finding or recommendation of the
    Committee.
        ``(i) Federal Advisory Committee Act.--The Federal Advisory
    Committee Act (5 U.S.C. App.) shall not apply with respect to the
    Committee and its activities.
        ``(j) Authorization of Appropriations.--There is authorized to be
    appropriated to the Commission such sums as are necessary to carry out
    this section.''.
    SEC. 912. CLARIFICATION OF AUTHORITY OF THE COMMISSION TO ENGAGE
                            IN INVESTOR TESTING.

        Section 19 of the Securities Act of 1933 (15 U.S.C. 77s) is amended
    by adding at the end the following:
        ``(e) Evaluation of Rules or Programs.--For the purpose of
    evaluating any rule or program of the Commission issued or carried out
    under any provision of the securities laws, as defined in section 3 of
    the Securities Exchange Act of 1934 (15 U.S.C. 78c), and the purposes of
    considering, proposing, adopting, or engaging in any such rule or
    program or developing new rules or programs, the Commission may--
                ``(1) gather information from and communicate with investors
            or other members of the public;
                ``(2) engage in such temporary investor testing programs as
            the Commission determines are in the public interest or would
            protect investors; and
                ``(3) consult with academics and consultants, as necessary
            to carry out this subsection.

        ``(f) Rule of Construction.--For purposes of the Paperwork Reduction
    Act (44 U.S.C. 3501 et seq.), any action taken under subsection (e)
    shall not be construed to be a collection of information.''.
    SEC. 913. STUDY AND RULEMAKING REGARDING OBLIGATIONS OF BROKERS,
                            DEALERS, AND INVESTMENT ADVISERS.

        (a) <<NOTE: 15 USC 78o note.>>  Definition.--For purposes of this
    section, the term ``retail customer'' means a natural person, or the
    legal representative of such natural person, who--
                (1) receives personalized investment advice about securities
            from a broker or dealer or investment adviser; and
                (2) uses such advice primarily for personal, family, or
            household purposes.

        (b) <<NOTE: 15 USC 78o note.>>  Study.--The Commission shall conduct
    a study to evaluate--
                (1) the effectiveness of existing legal or regulatory
            standards of care for brokers, dealers, investment advisers,
            persons associated with brokers or dealers, and persons
            associated with investment advisers for providing personalized
            investment advice and recommendations about securities to retail
            customers imposed by the Commission and a national securities
            association, and other Federal and State legal or regulatory
            standards; and
                (2) whether there are legal or regulatory gaps,
            shortcomings, or overlaps in legal or regulatory standards in
            the protection of retail customers relating to the standards of
            care

    [[Page 124 STAT. 1825]]

            for brokers, dealers, investment advisers, persons associated
            with brokers or dealers, and persons associated with investment
            advisers for providing personalized investment advice about
            securities to retail customers that should be addressed by rule
            or statute.

        (c) <<NOTE: 15 USC 78o note.>>  Considerations.--In conducting the
    study required under subsection (b), the Commission shall consider--
                (1) the effectiveness of existing legal or regulatory
            standards of care for brokers, dealers, investment advisers,
            persons associated with brokers or dealers, and persons
            associated with investment advisers for providing personalized
            investment advice and recommendations about securities to retail
            customers imposed by the Commission and a national securities
            association, and other Federal and State legal or regulatory
            standards;
                (2) whether there are legal or regulatory gaps,
            shortcomings, or overlaps in legal or regulatory standards in
            the protection of retail customers relating to the standards of
            care for brokers, dealers, investment advisers, persons
            associated with brokers or dealers, and persons associated with
            investment advisers for providing personalized investment advice
            about securities to retail customers that should be addressed by
            rule or statute;
                (3) whether retail customers understand that there are
            different standards of care applicable to brokers, dealers,
            investment advisers, persons associated with brokers or dealers,
            and persons associated with investment advisers in the provision
            of personalized investment advice about securities to retail
            customers;
                (4) whether the existence of different standards of care
            applicable to brokers, dealers, investment advisers, persons
            associated with brokers or dealers, and persons associated with
            investment advisers is a source of confusion for retail
            customers regarding the quality of personalized investment
            advice that retail customers receive;
                (5) the regulatory, examination, and enforcement resources
            devoted to, and activities of, the Commission, the States, and a
            national securities association to enforce the standards of care
            for brokers, dealers, investment advisers, persons associated
            with brokers or dealers, and persons associated with investment
            advisers when providing personalized investment advice and
            recommendations about securities to retail customers,
            including--
                        (A) the effectiveness of the examinations of
                    brokers, dealers, and investment advisers in determining
                    compliance with regulations;
                        (B) the frequency of the examinations; and
                        (C) the length of time of the examinations;
                (6) the substantive differences in the regulation of
            brokers, dealers, and investment advisers, when providing
            personalized investment advice and recommendations about
            securities to retail customers;
                (7) the specific instances related to the provision of
            personalized investment advice about securities in which--
                        (A) the regulation and oversight of investment
                    advisers provide greater protection to retail customers
                    than the regulation and oversight of brokers and
                    dealers; and

    [[Page 124 STAT. 1826]]

                        (B) the regulation and oversight of brokers and
                    dealers provide greater protection to retail customers
                    than the regulation and oversight of investment
                    advisers;
                (8) the existing legal or regulatory standards of State
            securities regulators and other regulators intended to protect
            retail customers;
                (9) the potential impact on retail customers, including the
            potential impact on access of retail customers to the range of
            products and services offered by brokers and dealers, of
            imposing upon brokers, dealers, and persons associated with
            brokers or dealers--
                        (A) the standard of care applied under the
                    Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et
                    seq.) for providing personalized investment advice about
                    securities to retail customers of investment advisers,
                    as interpreted by the Commission and the courts; and
                        (B) other requirements of the Investment Advisers
                    Act of 1940 (15 U.S.C. 80b-1 et seq.);
                (10) the potential impact of eliminating the broker and
            dealer exclusion from the definition of ``investment adviser''
            under section 202(a)(11)(C) of the Investment Advisers Act of
            1940 (15 U.S.C. 80b-2(a)(11)(C)), in terms of--
                        (A) the impact and potential benefits and harm to
                    retail customers that could result from such a change,
                    including any potential impact on access to personalized
                    investment advice and recommendations about securities
                    to retail customers or the availability of such advice
                    and recommendations;
                        (B) the number of additional entities and
                    individuals that would be required to register under, or
                    become subject to, the Investment Advisers Act of 1940
                    (15 U.S.C. 80b-1 et seq.), and the additional
                    requirements to which brokers, dealers, and persons
                    associated with brokers and dealers would become
                    subject, including--
                              (i) any potential additional associated person
                          licensing, registration, and examination
                          requirements; and
                              (ii) the additional costs, if any, to the
                          additional entities and individuals; and
                        (C) the impact on Commission and State resources
                    to--
                              (i) conduct examinations of registered
                          investment advisers and the representatives of
                          registered investment advisers, including the
                          impact on the examination cycle; and
                              (ii) enforce the standard of care and other
                          applicable requirements imposed under the
                          Investment Advisers Act of 1940 (15 U.S.C. 80b-1
                          et seq.);
                (11) the varying level of services provided by brokers,
            dealers, investment advisers, persons associated with brokers or
            dealers, and persons associated with investment advisers to
            retail customers and the varying scope and terms of retail
            customer relationships of brokers, dealers, investment advisers,
            persons associated with brokers or dealers, and persons
            associated with investment advisers with such retail customers;
                (12) the potential impact upon retail customers that could
            result from potential changes in the regulatory requirements

    [[Page 124 STAT. 1827]]

            or legal standards of care affecting brokers, dealers,
            investment advisers, persons associated with brokers or dealers,
            and persons associated with investment advisers relating to
            their obligations to retail customers regarding the provision of
            investment advice, including any potential impact on--
                        (A) protection from fraud;
                        (B) access to personalized investment advice, and
                    recommendations about securities to retail customers; or
                        (C) the availability of such advice and
                    recommendations;
                (13) the potential additional costs and expenses to--
                        (A) retail customers regarding and the potential
                    impact on the profitability of their investment
                    decisions; and
                        (B) brokers, dealers, and investment advisers
                    resulting from potential changes in the regulatory
                    requirements or legal standards affecting brokers,
                    dealers, investment advisers, persons associated with
                    brokers or dealers, and persons associated with
                    investment advisers relating to their obligations,
                    including duty of care, to retail customers; and
                (14) any other consideration that the Commission considers
            necessary and appropriate in determining whether to conduct a
            rulemaking under subsection (f).

        (d) <<NOTE: 15 USC 78o note.>>  Report.--
                (1) In general.--Not later than 6 months after the date of
            enactment of this Act, the Commission shall submit a report on
            the study required under subsection (b) 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.
                (2) Content requirements.--The report required under
            paragraph (1) shall describe the findings, conclusions, and
            recommendations of the Commission from the study required under
            subsection (b), including--
                        (A) a description of the considerations, analysis,
                    and public and industry input that the Commission
                    considered, as required under subsection (b), to make
                    such findings, conclusions, and policy recommendations;
                    and
                        (B) an analysis of whether any identified legal or
                    regulatory gaps, shortcomings, or overlap in legal or
                    regulatory standards in the protection of retail
                    customers relating to the standards of care for brokers,
                    dealers, investment advisers, persons associated with
                    brokers or dealers, and persons associated with
                    investment advisers for providing personalized
                    investment advice about securities to retail customers.

        (e) <<NOTE: 15 USC 78o note.>>  Public Comment.--The Commission
    shall seek and consider public input, comments, and data in order to
    prepare the report required under subsection (d).

        (f) <<NOTE: 15 USC 78o note.>>  Rulemaking.--The Commission may
    commence a rulemaking, as necessary or appropriate in the public
    interest and for the protection of retail customers (and such other
    customers as the Commission may by rule provide), to address the legal
    or regulatory standards of care for brokers, dealers, investment
    advisers, persons associated with brokers or dealers, and persons
    associated with investment advisers for providing personalized

    [[Page 124 STAT. 1828]]

    investment advice about securities to such retail customers. The
    Commission shall consider the findings conclusions, and recommendations
    of the study required under subsection (b).

        (g) Authority to Establish a Fiduciary Duty for Brokers and
    Dealers.--
                (1) Securities exchange act of 1934.--Section 15 of the
            Securities Exchange Act of 1934 (15 U.S.C. 78o) is amended by
            adding at the end the following:

        ``(k) Standard of Conduct.--
                ``(1) In general.--Notwithstanding any other provision of
            this Act or the Investment Advisers Act of 1940, the Commission
            may promulgate rules to provide that, with respect to a broker
            or dealer, when providing personalized investment advice about
            securities to a retail customer (and such other customers as the
            Commission may by rule provide), the standard of conduct for
            such broker or dealer with respect to such customer shall be the
            same as the standard of conduct applicable to an investment
            adviser under section 211 of the Investment Advisers Act of
            1940. The receipt of compensation based on commission or other
            standard compensation for the sale of securities shall not, in
            and of itself, be considered a violation of such standard
            applied to a broker or dealer. Nothing in this section shall
            require a broker or dealer or registered representative to have
            a continuing duty of care or loyalty to the customer after
            providing personalized investment advice about securities.
                ``(2) Disclosure of range of products offered.--Where a
            broker or dealer sells only proprietary or other limited range
            of products, as determined by the Commission, the Commission may
            by rule require that such broker or dealer provide notice to
            each retail customer and obtain the consent or acknowledgment of
            the customer. The sale of only proprietary or other limited
            range of products by a broker or dealer shall not, in and of
            itself, be considered a violation of the standard set forth in
            paragraph (1).

        ``(l) Other Matters.--The Commission shall--
                ``(1) facilitate the provision of simple and clear
            disclosures to investors regarding the terms of their
            relationships with brokers, dealers, and investment advisers,
            including any material conflicts of interest; and
                ``(2) examine and, where appropriate, promulgate rules
            prohibiting or restricting certain sales practices, conflicts of
            interest, and compensation schemes for brokers, dealers, and
            investment advisers that the Commission deems contrary to the
            public interest and the protection of investors.''.
                (2) Investment advisers act of 1940.--Section 211 of the
            Investment Advisers Act of 1940, <<NOTE: 15 USC 80b-11.>>  is
            further amended by adding at the end the following new
            subsections:

        ``(g) Standard of Conduct.--
                ``(1) In general.--The Commission may promulgate rules to
            provide that the standard of conduct for all brokers, dealers,
            and investment advisers, when providing personalized investment
            advice about securities to retail customers (and such other
            customers as the Commission may by rule provide), shall be to
            act in the best interest of the customer without regard to the
            financial or other interest of the broker, dealer, or investment
            adviser providing the advice. In accordance with such

    [[Page 124 STAT. 1829]]

            rules, any material conflicts of interest shall be disclosed and
            may be consented to by the customer. Such rules shall provide
            that such standard of conduct shall be no less stringent than
            the standard applicable to investment advisers under section
            206(1) and (2) of this Act when providing personalized
            investment advice about securities, except the Commission shall
            not ascribe a meaning to the term `customer' that would include
            an investor in a private fund managed by an investment adviser,
            where such private fund has entered into an advisory contract
            with such adviser. The receipt of compensation based on
            commission or fees shall not, in and of itself, be considered a
            violation of such standard applied to a broker, dealer, or
            investment adviser.
                ``(2) Retail customer defined.--For purposes of this
            subsection, the term `retail customer' means a natural person,
            or the legal representative of such natural person, who--
                        ``(A) receives personalized investment advice about
                    securities from a broker, dealer, or investment adviser;
                    and
                        ``(B) uses such advice primarily for personal,
                    family, or household purposes.

        ``(h) Other Matters.--The Commission shall--
                ``(1) facilitate the provision of simple and clear
            disclosures to investors regarding the terms of their
            relationships with brokers, dealers, and investment advisers,
            including any material conflicts of interest; and
                ``(2) examine and, where appropriate, promulgate rules
            prohibiting or restricting certain sales practices, conflicts of
            interest, and compensation schemes for brokers, dealers, and
            investment advisers that the Commission deems contrary to the
            public interest and the protection of investors.''.

        (h) Harmonization of Enforcement.--
                (1) Securities exchange act of 1934.--Section 15 of the
            Securities Exchange Act of 1934, <<NOTE: 15 USC 78o.>>  as
            amended by subsection (g)(1), is further amended by adding at
            the end the following new subsection:

        ``(m) Harmonization of Enforcement.--The enforcement authority of
    the Commission with respect to violations of the standard of conduct
    applicable to a broker or dealer providing personalized investment
    advice about securities to a retail customer shall include--
                ``(1) the enforcement authority of the Commission with
            respect to such violations provided under this Act; and
                ``(2) the enforcement authority of the Commission with
            respect to violations of the standard of conduct applicable to
            an investment adviser under the Investment Advisers Act of 1940,
            including the authority to impose sanctions for such violations,
            and

    the Commission shall seek to prosecute and sanction violators of the
    standard of conduct applicable to a broker or dealer providing
    personalized investment advice about securities to a retail customer
    under this Act to same extent as the Commission prosecutes and sanctions
    violators of the standard of conduct applicable to an investment advisor
    under the Investment Advisers Act of 1940.''.
                (2) Investment advisers act of 1940.--Section 211 of the
            Investment Advisers Act of 1940, as amended by subsection

    [[Page 124 STAT. 1830]]

            (g)(2), is further amended by adding at the end the following
            new subsection:

        ``(i) Harmonization of Enforcement.--The enforcement authority of
    the Commission with respect to violations of the standard of conduct
    applicable to an investment adviser shall include--
                ``(1) the enforcement authority of the Commission with
            respect to such violations provided under this Act; and
                ``(2) the enforcement authority of the Commission with
            respect to violations of the standard of conduct applicable to a
            broker or dealer providing personalized investment advice about
            securities to a retail customer under the Securities Exchange
            Act of 1934, including the authority to impose sanctions for
            such violations, and

    the Commission shall seek to prosecute and sanction violators of the
    standard of conduct applicable to an investment adviser under this Act
    to same extent as the Commission prosecutes and sanctions violators of
    the standard of conduct applicable to a broker or dealer providing
    personalized investment advice about securities to a retail customer
    under the Securities Exchange Act of 1934.''.
    SEC. 914. <<NOTE: 15 USC 80b-11 note.>>  STUDY ON ENHANCING
                            INVESTMENT ADVISER EXAMINATIONS.

        (a) Study Required.--
                (1) <<NOTE: Review.>>  In general.--The Commission shall
            review and analyze the need for enhanced examination and
            enforcement resources for investment advisers.
                (2) Areas of consideration.--The study required by this
            subsection shall examine--
                        (A) <<NOTE: Time period.>>  the number and frequency
                    of examinations of investment advisers by the Commission
                    over the 5 years preceding the date of the enactment of
                    this subtitle;
                        (B) the extent to which having Congress authorize
                    the Commission to designate one or more self-regulatory
                    organizations to augment the Commission's efforts in
                    overseeing investment advisers would improve the
                    frequency of examinations of investment advisers; and
                        (C) current and potential approaches to examining
                    the investment advisory activities of dually registered
                    broker-dealers and investment advisers or affiliated
                    broker-dealers and investment advisers.

        (b) Report Required.--The Commission shall report its findings to
    the Committee on Financial Services of the House of Representatives and
    the Committee on Banking, Housing, and Urban Affairs of the Senate, not
    later than 180 days after the date of enactment of this subtitle, and
    shall use such findings to revise its rules and regulations, as
    necessary. The report shall include a discussion of regulatory or
    legislative steps that are recommended or that may be necessary to
    address concerns identified in the study.
    SEC. 915. OFFICE OF THE INVESTOR ADVOCATE.

        Section 4 of the Securities Exchange Act of 1934 (15 U.S.C. 78d) is
    amended by adding at the end the following:
        ``(g) Office of the Investor Advocate.--
                ``(1) Office established.--There is established within the
            Commission the Office of the Investor Advocate (in this
            subsection referred to as the `Office').

    [[Page 124 STAT. 1831]]

                ``(2) Investor advocate.--
                        ``(A) In general.--The head of the Office shall be
                    the Investor Advocate, who shall--
                              ``(i) report directly to the Chairman; and
                              ``(ii) be appointed by the Chairman, in
                          consultation with the Commission, from among
                          individuals having experience in advocating for
                          the interests of investors in securities and
                          investor protection issues, from the perspective
                          of investors.
                        ``(B) Compensation.--The annual rate of pay for the
                    Investor Advocate shall be equal to the highest rate of
                    annual pay for other senior executives who report to the
                    Chairman of the Commission.
                        ``(C) <<NOTE: Time periods.>>  Limitation on
                    service.--An individual who serves as the Investor
                    Advocate may not be employed by the Commission--
                              ``(i) during the 2-year period ending on the
                          date of appointment as Investor Advocate; or
                              ``(ii) during the 5-year period beginning on
                          the date on which the person ceases to serve as
                          the Investor Advocate.
                ``(3) Staff of office.--The Investor Advocate, after
            consultation with the Chairman of the Commission, may retain or
            employ independent counsel, research staff, and service staff,
            as the Investor Advocate deems necessary to carry out the
            functions, powers, and duties of the Office.
                ``(4) Functions of the investor advocate.--The Investor
            Advocate shall--
                        ``(A) assist retail investors in resolving
                    significant problems such investors may have with the
                    Commission or with self-regulatory organizations;
                        ``(B) identify areas in which investors would
                    benefit from changes in the regulations of the
                    Commission or the rules of self-regulatory
                    organizations;
                        ``(C) identify problems that investors have with
                    financial service providers and investment products;
                        ``(D) analyze the potential impact on investors of--
                              ``(i) proposed regulations of the Commission;
                          and
                              ``(ii) proposed rules of self-regulatory
                          organizations registered under this title; and
                        ``(E) to the extent practicable, propose to the
                    Commission changes in the regulations or orders of the
                    Commission and to Congress any legislative,
                    administrative, or personnel changes that may be
                    appropriate to mitigate problems identified under this
                    paragraph and to promote the interests of investors.
                ``(5) Access to documents.--The Commission shall ensure that
            the Investor Advocate has full access to the documents of the
            Commission and any self-regulatory organization, as necessary to
            carry out the functions of the Office.
                ``(6) Annual reports.--
                        ``(A) Report on objectives.--
                              ``(i) In general.--Not later than June 30 of
                          each year after 2010, the Investor Advocate shall
                          submit to the Committee on Banking, Housing, and
                          Urban Affairs of the Senate and the Committee on
                          Financial Services of the House of Representatives
                          a report on

    [[Page 124 STAT. 1832]]

                          the objectives of the Investor Advocate for the
                          following fiscal year.
                              ``(ii) Contents.--Each report required under
                          clause (i) shall contain full and substantive
                          analysis and explanation.
                        ``(B) Report on activities.--
                              ``(i) In general.--Not later than December 31
                          of each year after 2010, the Investor Advocate
                          shall submit to the Committee on Banking, Housing,
                          and Urban Affairs of the Senate and the Committee
                          on Financial Services of the House of
                          Representatives a report on the activities of the
                          Investor Advocate during the immediately preceding
                          fiscal year.
                              ``(ii) Contents.--Each report required under
                          clause (i) shall include--
                                        ``(I) appropriate statistical
                                    information and full and substantive
                                    analysis;
                                        ``(II) information on steps that the
                                    Investor Advocate has taken during the
                                    reporting period to improve investor
                                    services and the responsiveness of the
                                    Commission and self-regulatory
                                    organizations to investor concerns;
                                        ``(III) a summary of the most
                                    serious problems encountered by
                                    investors during the reporting period;
                                        ``(IV) an inventory of the items
                                    described in subclause (III) that
                                    includes--
                                                ``(aa) identification of any
                                            action taken by the Commission
                                            or the self-regulatory
                                            organization and the result of
                                            such action;
                                                ``(bb) the length of time
                                            that each item has remained on
                                            such inventory; and
                                                ``(cc) for items on which no
                                            action has been taken, the
                                            reasons for inaction, and an
                                            identification of any official
                                            who is responsible for such
                                            action;
                                        ``(V) recommendations for such
                                    administrative and legislative actions
                                    as may be appropriate to resolve
                                    problems encountered by investors; and
                                        ``(VI) any other information, as
                                    determined appropriate by the Investor
                                    Advocate.
                              ``(iii) Independence.--Each report required
                          under this paragraph shall be provided directly to
                          the Committees listed in clause (i) without any
                          prior review or comment from the Commission, any
                          commissioner, any other officer or employee of the
                          Commission, or the Office of Management and
                          Budget.
                              ``(iv) Confidentiality.--No report required
                          under clause (i) may contain confidential
                          information.
                ``(7) <<NOTE: Procedures. Deadline.>>  Regulations.--The
            Commission shall, by regulation, establish procedures requiring
            a formal response to all recommendations submitted to the
            Commission by the Investor Advocate, not later than 3 months
            after the date of such submission.''.

    [[Page 124 STAT. 1833]]

    SEC. 916. STREAMLINING OF FILING PROCEDURES FOR SELF-REGULATORY
                            ORGANIZATIONS.

        (a) Filing Procedures.--Section 19(b) of the Securities Exchange Act
    of 1934 (15 U.S.C. 78s(b)) is amended by striking paragraph (2)
    (including the undesignated matter immediately following subparagraph
    (B)) and inserting the following:
                ``(2) <<NOTE: Deadlines.>>  Approval process.--
                        ``(A) Approval process established.--
                              ``(i) In general.--Except as provided in
                          clause (ii), not later than 45 days after the date
                          of publication of a proposed rule change under
                          paragraph (1), the Commission shall--
                                        ``(I) by order, approve or
                                    disapprove the proposed rule change; or
                                        ``(II) institute proceedings under
                                    subparagraph (B) to determine whether
                                    the proposed rule change should be
                                    disapproved.
                              ``(ii) Extension of time period.--The
                          Commission may extend the period established under
                          clause (i) by not more than an additional 45 days,
                          if--
                                        ``(I) <<NOTE: Publication.>>  the
                                    Commission determines that a longer
                                    period is appropriate and publishes the
                                    reasons for such determination; or
                                        ``(II) the self-regulatory
                                    organization that filed the proposed
                                    rule change consents to the longer
                                    period.
                        ``(B) Proceedings.--
                              ``(i) Notice and hearing.--If the Commission
                          does not approve or disapprove a proposed rule
                          change under subparagraph (A), the Commission
                          shall provide to the self-regulatory organization
                          that filed the proposed rule change--
                                        ``(I) notice of the grounds for
                                    disapproval under consideration; and
                                        ``(II) opportunity for hearing, to
                                    be concluded not later than 180 days
                                    after the date of publication of notice
                                    of the filing of the proposed rule
                                    change.
                              ``(ii) Order of approval or disapproval.--
                                        ``(I) In general.--Except as
                                    provided in subclause (II), not later
                                    than 180 days after the date of
                                    publication under paragraph (1), the
                                    Commission shall issue an order
                                    approving or disapproving the proposed
                                    rule change.
                                        ``(II) Extension of time period.--
                                    The Commission may extend the period for
                                    issuance under clause (I) by not more
                                    than 60 days, if--

                                            ``(aa) <<NOTE: Publication.>>
                                            the Commission determines that a
                                            longer period is appropriate and
                                            publishes the reasons for such
                                            determination; or
                                                ``(bb) the self-regulatory
                                            organization that filed the
                                            proposed rule change consents to
                                            the longer period.
                        ``(C) Standards for approval and disapproval.--
                              ``(i) Approval.--The Commission shall approve
                          a proposed rule change of a self-regulatory
                          organization if it finds that such proposed rule
                          change is consistent

    [[Page 124 STAT. 1834]]

                          with the requirements of this title and the rules
                          and regulations issued under this title that are
                          applicable to such organization.
                              ``(ii) Disapproval.--The Commission shall
                          disapprove a proposed rule change of a self-
                          regulatory organization if it does not make a
                          finding described in clause (i).
                              ``(iii) <<NOTE: Publication.>>  Time for
                          approval.--The Commission may not approve a
                          proposed rule change earlier than 30 days after
                          the date of publication under paragraph (1),
                          unless the Commission finds good cause for so
                          doing and publishes the reason for the finding.
                        ``(D) Result of failure to institute or conclude
                    proceedings.--A proposed rule change shall be deemed to
                    have been approved by the Commission, if--
                              ``(i) the Commission does not approve or
                          disapprove the proposed rule change or begin
                          proceedings under subparagraph (B) within the
                          period described in subparagraph (A); or
                              ``(ii) the Commission does not issue an order
                          approving or disapproving the proposed rule change
                          under subparagraph (B) within the period described
                          in subparagraph (B)(ii).
                        ``(E) Publication date based on federal register
                    publishing.-- <<NOTE: Notice. Deadline. Web
                    posting.>> For purposes of this paragraph, if, after
                    filing a proposed rule change with the Commission
                    pursuant to paragraph (1), a self-regulatory
                    organization publishes a notice of the filing of such
                    proposed rule change, together with the substantive
                    terms of such proposed rule change, on a publicly
                    accessible website, the Commission shall thereafter send
                    the notice to the Federal Register for publication
                    thereof under paragraph (1) within 15 days of the date
                    on which such website publication is made. If the
                    Commission fails to send the notice for publication
                    thereof within such 15 day period, then the date of
                    publication shall be deemed to be the date on which such
                    website publication was made.
                        ``(F) Rulemaking.--
                              ``(i) <<NOTE: Deadline. Procedures.>>  In
                          general.--Not later than 180 days after the date
                          of enactment of the Investor Protection and
                          Securities Reform Act of 2010, after consultation
                          with other regulatory agencies, the Commission
                          shall promulgate rules setting forth the
                          procedural requirements of the proceedings
                          required under this paragraph.
                              ``(ii) Notice and comment not required.--The
                          rules promulgated by the Commission under clause
                          (i) are not required to include republication of
                          proposed rule changes or solicitation of public
                          comment.''.

        (b) Clarification of Filing Date.--
                (1) Rule of construction.--Section 19(b) of the Securities
            Exchange Act of 1934 (15 U.S.C. 78s(b)) is amended by adding at
            the end the following:
                ``(10) Rule of construction relating to filing date of
            proposed rule changes.--
                        ``(A) In general.--For purposes of this subsection,
                    the date of filing of a proposed rule change shall be
                    deemed

    [[Page 124 STAT. 1835]]

                    to be the date on which the Commission receives the
                    proposed rule change.
                        ``(B) <<NOTE: Deadlines. Notification.>>
                    Exception.--A proposed rule change has not been received
                    by the Commission for purposes of subparagraph (A) if,
                    not later than 7 business days after the date of receipt
                    by the Commission, the Commission notifies the self-
                    regulatory organization that such proposed rule change
                    does not comply with the rules of the Commission
                    relating to the required form of a proposed rule change,
                    except that if the Commission determines that the
                    proposed rule change is unusually lengthy and is complex
                    or raises novel regulatory issues, the Commission shall
                    inform the self-regulatory organization of such
                    determination not later than 7 business days after the
                    date of receipt by the Commission and, for the purposes
                    of subparagraph (A), a proposed rule change has not been
                    received by the Commission, if, not later than 21 days
                    after the date of receipt by the Commission, the
                    Commission notifies the self-regulatory organization
                    that such proposed rule change does not comply with the
                    rules of the Commission relating to the required form of
                    a proposed rule change.''.
                (2) Publication.--Section 19(b)(1) of the Securities
            Exchange Act of 1934 (15 U.S.C. 78s(b)(1)) is amended by
            striking ``upon'' and inserting ``as soon as practicable after
            the date of''.

        (c) Effective Date of Proposed Rules.--Section 19(b)(3) of the
    Securities Exchange Act of 1934 (15 U.S.C. 78s(b)(3)) is amended--
                (1) in subparagraph (A)--
                        (A) by striking ``may take effect'' and inserting
                    ``shall take effect''; and
                        (B) by inserting ``on any person, whether or not the
                    person is a member of the self-regulatory organization''
                    after ``charge imposed by the self-regulatory
                    organization''; and
                (2) in subparagraph (C)--
                        (A) by amending the second sentence to read as
                    follows: ``At any time <<NOTE: Time period.>>  within
                    the 60-day period beginning on the date of filing of
                    such a proposed rule change in accordance with the
                    provisions of paragraph (1), the Commission summarily
                    may temporarily suspend the change in the rules of the
                    self-regulatory organization made thereby, if it appears
                    to the Commission that such action is necessary or
                    appropriate in the public interest, for the protection
                    of investors, or otherwise in furtherance of the
                    purposes of this title.'';
                        (B) by inserting after the second sentence the
                    following: ``If the Commission takes such action, the
                    Commission shall institute proceedings under paragraph
                    (2)(B) to determine whether the proposed rule should be
                    approved or disapproved.''; and
                        (C) in the third sentence, by striking ``the
                    preceding sentence'' and inserting ``this
                    subparagraph''.

        (d) Conforming Change.--Section 19(b)(4)(D) of the Securities
    Exchange Act of 1934 (15 U.S.C. 78s(b)(4)(D)) is amended to read as
    follows:

    [[Page 124 STAT. 1836]]

                        ``(D)(i) <<NOTE: Notification. Deadline.>>  The
                    Commission shall order the temporary suspension of any
                    change in the rules of a clearing agency made by a
                    proposed rule change that has taken effect under
                    paragraph (3), if the appropriate regulatory agency for
                    the clearing agency notifies the Commission not later
                    than 30 days after the date on which the proposed rule
                    change was filed of--
                              ``(I) the determination by the appropriate
                          regulatory agency that the rules of such clearing
                          agency, as so changed, may be inconsistent with
                          the safeguarding of securities or funds in the
                          custody or control of such clearing agency or for
                          which it is responsible; and
                              ``(II) the reasons for the determination
                          described in subclause (I).
                        ``(ii) If the Commission takes action under clause
                    (i), the Commission shall institute proceedings under
                    paragraph (2)(B) to determine if the proposed rule
                    change should be approved or disapproved.''.
    SEC. 917. STUDY REGARDING FINANCIAL LITERACY AMONG INVESTORS.

        (a) In General.--The Commission shall conduct a study to identify--
                (1) the existing level of financial literacy among retail
            investors, including subgroups of investors identified by the
            Commission;
                (2) methods to improve the timing, content, and format of
            disclosures to investors with respect to financial
            intermediaries, investment products, and investment services;
                (3) the most useful and understandable relevant information
            that retail investors need to make informed financial decisions
            before engaging a financial intermediary or purchasing an
            investment product or service that is typically sold to retail
            investors, including shares of open-end companies, as that term
            is defined in section 5 of the Investment Company Act of 1940
            (15 U.S.C. 80a-5) that are registered under section 8 of that
            Act;
                (4) methods to increase the transparency of expenses and
            conflicts of interests in transactions involving investment
            services and products, including shares of open-end companies
            described in paragraph (3);
                (5) the most effective existing private and public efforts
            to educate investors; and
                (6) in consultation with the Financial Literacy and
            Education Commission, a strategy (including, to the extent
            practicable, measurable goals and objectives) to increase the
            financial literacy of investors in order to bring about a
            positive change in investor behavior.

        (b) Report.--Not later than 2 years after the date of enactment of
    this Act, the Commission shall submit a report on the study required
    under subsection (a) to--
                (1) the Committee on Banking, Housing, and Urban Affairs of
            the Senate; and
                (2) the Committee on Financial Services of the House of
            Representatives.

    [[Page 124 STAT. 1837]]

    SEC. 918. STUDY REGARDING MUTUAL FUND ADVERTISING.

        (a) In General.--The Comptroller General of the United States shall
    conduct a study on mutual fund advertising to identify--
                (1) existing and proposed regulatory requirements for open-
            end investment company advertisements;
                (2) current marketing practices for the sale of open-end
            investment company shares, including the use of past performance
            data, funds that have merged, and incubator funds;
                (3) the impact of such advertising on consumers; and
                (4) recommendations to improve investor protections in
            mutual fund advertising and additional information necessary to
            ensure that investors can make informed financial decisions when
            purchasing shares.

        (b) Report.--Not later than 18 months 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 subsection (a) to--
                (1) the Committee on Banking, Housing, and Urban Affairs of
            the United States Senate; and
                (2) the Committee on Financial Services of the House of
            Representatives.
    SEC. 919. CLARIFICATION OF COMMISSION AUTHORITY TO REQUIRE
                            INVESTOR DISCLOSURES BEFORE PURCHASE OF
                            INVESTMENT PRODUCTS AND SERVICES.

        Section 15 of the Securities Exchange Act of 1934 (15 U.S.C. 78o) is
    amended by adding at the end the following:
        ``(n) Disclosures to Retail Investors.--
                ``(1) In general.--Notwithstanding any other provision of
            the securities laws, the Commission may issue rules designating
            documents or information that shall be provided by a broker or
            dealer to a retail investor before the purchase of an investment
            product or service by the retail investor.
                ``(2) Considerations.--In developing any rules under
            paragraph (1), the Commission shall consider whether the rules
            will promote investor protection, efficiency, competition, and
            capital formation.
                ``(3) Form and contents of documents and information.--Any
            documents or information designated under a rule promulgated
            under paragraph (1) shall--
                        ``(A) be in a summary format; and
                        ``(B) contain clear and concise information about--
                              ``(i) investment objectives, strategies,
                          costs, and risks; and
                              ``(ii) any compensation or other financial
                          incentive received by a broker, dealer, or other
                          intermediary in connection with the purchase of
                          retail investment products.''.
    SEC. 919A. STUDY ON CONFLICTS OF INTEREST.

        (a) In General.--The Comptroller General of the United States shall
    conduct a study--
                (1) to identify and examine potential conflicts of interest
            that exist between the staffs of the investment banking and
            equity and fixed income securities analyst functions within the
            same firm; and

    [[Page 124 STAT. 1838]]

                (2) to make recommendations to Congress designed to protect
            investors in light of such conflicts.

        (b) Considerations.--In conducting the study under subsection (a),
    the Comptroller General shall--
                (1) consider--
                        (A) the potential for investor harm resulting from
                    conflicts, including consideration of the forms of
                    misconduct engaged in by the several securities firms
                    and individuals that entered into the Global Analyst
                    Research Settlements in 2003 (also known as the ``Global
                    Settlement'');
                        (B) the nature and benefits of the undertakings to
                    which those firms agreed in enforcement proceedings,
                    including firewalls between research and investment
                    banking, separate reporting lines, dedicated legal and
                    compliance staffs, allocation of budget, physical
                    separation, compensation, employee performance
                    evaluations, coverage decisions, limitations on
                    soliciting investment banking business, disclosures,
                    transparency, and other measures;
                        (C) whether any such undertakings should be codified
                    and applied permanently to securities firms, or whether
                    the Commission should adopt rules applying any such
                    undertakings to securities firms; and
                        (D) whether to recommend regulatory or legislative
                    measures designed to mitigate possible adverse
                    consequences to investors arising from the conflicts of
                    interest or to enhance investor protection or confidence
                    in the integrity of the securities markets; and
                (2) consult with State attorneys general, State securities
            officials, the Commission, the Financial Industry Regulatory
            Authority (``FINRA''), NYSE Regulation, investor advocates,
            brokers, dealers, retail investors, institutional investors, and
            academics.

        (c) Report.--The Comptroller General shall submit a report on the
    results of the study required by this section to the Committee on
    Banking, Housing, and Urban Affairs of the Senate and the Committee on
    Financial Services of the House of Representatives, not later than 18
    months after the date of enactment of this Act.
    SEC. 919B. <<NOTE: 15 USC 80b-10 note.>>  STUDY ON IMPROVED
                              INVESTOR ACCESS TO INFORMATION ON
                              INVESTMENT ADVISERS AND BROKER-DEALERS.

        (a) Study.--
                (1) <<NOTE: Deadlines.>>  In general.--Not later than 6
            months after the date of enactment of this Act, the Commission
            shall complete a study, including recommendations, of ways to
            improve the access of investors to registration information
            (including disciplinary actions, regulatory, judicial, and
            arbitration proceedings, and other information) about registered
            and previously registered investment advisers, associated
            persons of investment advisers, brokers and dealers and their
            associated persons on the existing Central Registration
            Depository and Investment Adviser Registration Depository
            systems, as well as identify additional information that should
            be made publicly available.
                (2) Contents.--The study required by subsection (a) shall
            include an analysis of the advantages and disadvantages of
            further centralizing access to the information contained in the
            2 systems, including--

    [[Page 124 STAT. 1839]]

                        (A) identification of those data pertinent to
                    investors; and
                        (B) the identification of the method and format for
                    displaying and publishing such data to enhance
                    accessibility by and utility to investors.

        (b) <<NOTE: Deadlines.>>  Implementation.--Not later than 18 months
    after the date of completion of the study required by subsection (a),
    the Commission shall implement any recommendations of the study.
    SEC. 919C. STUDY ON FINANCIAL PLANNERS AND THE USE OF FINANCIAL
                              DESIGNATIONS.

        (a) <<NOTE: Evaluation. Regulations.>>  In General.--The Comptroller
    General of the United States shall conduct a study to evaluate--
                (1) the effectiveness of State and Federal regulations to
            protect investors and other consumers from individuals who hold
            themselves out as financial planners through the use of
            misleading titles, designations, or marketing materials;
                (2) current State and Federal oversight structure and
            regulations for financial planners; and
                (3) legal or regulatory gaps in the regulation of financial
            planners and other individuals who provide or offer to provide
            financial planning services to consumers.

        (b) Considerations.--In conducting the study required under
    subsection (a), the Comptroller General shall consider--
                (1) the role of financial planners in providing advice
            regarding the management of financial resources, including
            investment planning, income tax planning, education planning,
            retirement planning, estate planning, and risk management;
                (2) whether current regulations at the State and Federal
            level provide adequate ethical and professional standards for
            financial planners;
                (3) the possible risk posed to investors and other consumers
            by individuals who hold themselves out as financial planners or
            as otherwise providing financial planning services in connection
            with the sale of financial products, including insurance and
            securities;
                (4) the possible risk posed to investors and other consumers
            by individuals who otherwise use titles, designations, or
            marketing materials in a misleading way in connection with the
            delivery of financial advice;
                (6) the ability of investors and other consumers to
            understand licensing requirements and standards of care that
            apply to individuals who hold themselves out as financial
            planners or as otherwise providing financial planning services;
                (7) the possible benefits to investors and other consumers
            of regulation and professional oversight of financial planners;
            and
                (8) any other consideration that the Comptroller General
            deems necessary or appropriate to effectively execute the study
            required under subsection (a).

        (c) Recommendations.--In providing recommendations for the
    appropriate regulation of financial planners and other individuals who
    provide or offer to provide financial planning services, in order to
    protect investors and other consumers of financial planning services,
    the Comptroller General shall consider--

    [[Page 124 STAT. 1840]]

                (1) the appropriate structure for regulation of financial
            planners and individuals providing financial planning services;
            and
                (2) the appropriate scope of the regulations needed to
            protect investors and other consumers, including but not limited
            to the need to establish competency standards, practice
            standards, ethical guidelines, disciplinary authority, and
            transparency to investors and other consumers.

        (d) Report.--
                (1) In general.--Not later than 180 days after the date of
            enactment of this Act, the Comptroller General shall submit a
            report on the study required under subsection (a) to--
                        (A) the Committee on Banking, Housing, and Urban
                    Affairs of the Senate;
                        (B) the Special Committee on Aging of the Senate;
                    and
                        (C) the Committee on Financial Services of the House
                    of Representatives.
                (2) Content requirements.--The report required under
            paragraph (1) shall describe the findings and determinations
            made by the Comptroller General in carrying out the study
            required under subsection (a), including a description of the
            considerations, analysis, and government, public, industry,
            nonprofit and consumer input that the Comptroller General
            considered to make such findings, conclusions, and legislative,
            regulatory, or other recommendations.
    SEC. 919D. <<NOTE: 15 USC 78d.>>  OMBUDSMAN.

        Section 4(g) of the Securities Exchange Act of 1934, as added by
    section 914, is amended by adding at the end the following:
                ``(8) Ombudsman.--
                        ``(A) <<NOTE: Deadline.>>  Appointment.--Not later
                    than 180 days after the date on which the first Investor
                    Advocate is appointed under paragraph (2)(A)(i), the
                    Investor Advocate shall appoint an Ombudsman, who shall
                    report directly to the Investor Advocate.
                        ``(B) Duties.--The Ombudsman appointed under
                    subparagraph (A) shall--
                              ``(i) act as a liaison between the Commission
                          and any retail investor in resolving problems that
                          retail investors may have with the Commission or
                          with self-regulatory organizations;
                              ``(ii) review and make recommendations
                          regarding policies and procedures to encourage
                          persons to present questions to the Investor
                          Advocate regarding compliance with the securities
                          laws; and
                              ``(iii) establish safeguards to maintain the
                          confidentiality of communications between the
                          persons described in clause (ii) and the
                          Ombudsman.
                        ``(C) Limitation.--In carrying out the duties of the
                    Ombudsman under subparagraph (B), the Ombudsman shall
                    utilize personnel of the Commission to the extent
                    practicable. Nothing in this paragraph shall be
                    construed as replacing, altering, or diminishing the
                    activities of any ombudsman or similar office of any
                    other agency.
                        ``(D) Report.--The Ombudsman shall submit a
                    semiannual report to the Investor Advocate that
                    describes the

    [[Page 124 STAT. 1841]]

                    activities and evaluates the effectiveness of the
                    Ombudsman during the preceding year. The Investor
                    Advocate shall include the reports required under this
                    section in the reports required to be submitted by the
                    Inspector Advocate under paragraph (6).''.

           Subtitle B--Increasing Regulatory Enforcement and Remedies

    SEC. 921. AUTHORITY TO RESTRICT MANDATORY PRE-DISPUTE ARBITRATION.

        (a) Amendment to Securities Exchange Act of 1934.--Section 15 of the
    Securities Exchange Act of 1934 (15 U.S.C. 78o), as amended by this
    title, is further amended by adding at the end the following new
    subsection:
        ``(o) Authority to Restrict Mandatory Pre-dispute Arbitration.--The
    Commission, by rule, may prohibit, or impose conditions or limitations
    on the use of, agreements that require customers or clients of any
    broker, dealer, or municipal securities dealer to arbitrate any future
    dispute between them arising under the Federal securities laws, the
    rules and regulations thereunder, or the rules of a self-regulatory
    organization if it finds that such prohibition, imposition of
    conditions, or limitations are in the public interest and for the
    protection of investors.''.
        (b) Amendment to Investment Advisers Act of 1940.--Section 205 of
    the Investment Advisers Act of 1940 (15 U.S.C. 80b-5) is amended by
    adding at the end the following new subsection:
        ``(f) Authority to Restrict Mandatory Pre-dispute Arbitration.--The
    Commission, by rule, may prohibit, or impose conditions or limitations
    on the use of, agreements that require customers or clients of any
    investment adviser to arbitrate any future dispute between them arising
    under the Federal securities laws, the rules and regulations thereunder,
    or the rules of a self-regulatory organization if it finds that such
    prohibition, imposition of conditions, or limitations are in the public
    interest and for the protection of investors.''.
    SEC. 922. WHISTLEBLOWER PROTECTION.

        (a) In General.--The Securities Exchange Act of 1934 (15 U.S.C. 78a
    et seq.) is amended by inserting after section 21E the following:
    ``SEC. 21F. <<NOTE: 15 USC 78u-6.>>  SECURITIES WHISTLEBLOWER
                            INCENTIVES AND PROTECTION.

        ``(a) Definitions.--In this section the following definitions shall
    apply:
                ``(1) Covered judicial or administrative action.--The term
            `covered judicial or administrative action' means any judicial
            or administrative action brought by the Commission under the
            securities laws that results in monetary sanctions exceeding
            $1,000,000.
                ``(2) Fund.--The term `Fund' means the Securities and
            Exchange Commission Investor Protection Fund.
                ``(3) Original information.--The term `original information'
            means information that--

    [[Page 124 STAT. 1842]]

                        ``(A) is derived from the independent knowledge or
                    analysis of a whistleblower;
                        ``(B) is not known to the Commission from any other
                    source, unless the whistleblower is the original source
                    of the information; and
                        ``(C) is not exclusively derived from an allegation
                    made in a judicial or administrative hearing, in a
                    governmental report, hearing, audit, or investigation,
                    or from the news media, unless the whistleblower is a
                    source of the information.
                ``(4) Monetary sanctions.--The term `monetary sanctions',
            when used with respect to any judicial or administrative action,
            means--
                        ``(A) any monies, including penalties, disgorgement,
                    and interest, ordered to be paid; and
                        ``(B) any monies deposited into a disgorgement fund
                    or other fund pursuant to section 308(b) of the
                    Sarbanes-Oxley Act of 2002 (15 U.S.C. 7246(b)), as a
                    result of such action or any settlement of such action.
                ``(5) Related action.--The term `related action', when used
            with respect to any judicial or administrative action brought by
            the Commission under the securities laws, means any judicial or
            administrative action brought by an entity described in
            subclauses (I) through (IV) of subsection (h)(2)(D)(i) that is
            based upon the original information provided by a whistleblower
            pursuant to subsection (a) that led to the successful
            enforcement of the Commission action.
                ``(6) Whistleblower.--The term `whistleblower' means any
            individual who provides, or 2 or more individuals acting jointly
            who provide, information relating to a violation of the
            securities laws to the Commission, in a manner established, by
            rule or regulation, by the Commission.

        ``(b) Awards.--
                ``(1) In general.--In any covered judicial or administrative
            action, or related action, the Commission, under regulations
            prescribed by the Commission and subject to subsection (c),
            shall pay an award or awards to 1 or more whistleblowers who
            voluntarily provided original information to the Commission that
            led to the successful enforcement of the covered judicial or
            administrative action, or related action, in an aggregate amount
            equal to--
                        ``(A) not less than 10 percent, in total, of what
                    has been collected of the monetary sanctions imposed in
                    the action or related actions; and
                        ``(B) not more than 30 percent, in total, of what
                    has been collected of the monetary sanctions imposed in
                    the action or related actions.
                ``(2) Payment of awards.--Any amount paid under paragraph
            (1) shall be paid from the Fund.

        ``(c) Determination of Amount of Award; Denial of Award.--
                ``(1) Determination of amount of award.--
                        ``(A) Discretion.--The determination of the amount
                    of an award made under subsection (b) shall be in the
                    discretion of the Commission.
                        ``(B) Criteria.--In determining the amount of an
                    award made under subsection (b), the Commission--

    [[Page 124 STAT. 1843]]

                              ``(i) shall take into consideration--
                                        ``(I) the significance of the
                                    information provided by the
                                    whistleblower to the success of the
                                    covered judicial or administrative
                                    action;
                                        ``(II) the degree of assistance
                                    provided by the whistleblower and any
                                    legal representative of the
                                    whistleblower in a covered judicial or
                                    administrative action;
                                        ``(III) the programmatic interest of
                                    the Commission in deterring violations
                                    of the securities laws by making awards
                                    to whistleblowers who provide
                                    information that lead to the successful
                                    enforcement of such laws; and
                                        ``(IV) such additional relevant
                                    factors as the Commission may establish
                                    by rule or regulation; and
                              ``(ii) shall not take into consideration the
                          balance of the Fund.
                ``(2) Denial of award.--No award under subsection (b) shall
            be made--
                        ``(A) to any whistleblower who is, or was at the
                    time the whistleblower acquired the original information
                    submitted to the Commission, a member, officer, or
                    employee of--
                              ``(i) an appropriate regulatory agency;
                              ``(ii) the Department of Justice;
                              ``(iii) a self-regulatory organization;
                              ``(iv) the Public Company Accounting Oversight
                          Board; or
                              ``(v) a law enforcement organization;
                        ``(B) to any whistleblower who is convicted of a
                    criminal violation related to the judicial or
                    administrative action for which the whistleblower
                    otherwise could receive an award under this section;
                        ``(C) to any whistleblower who gains the information
                    through the performance of an audit of financial
                    statements required under the securities laws and for
                    whom such submission would be contrary to the
                    requirements of section 10A of the Securities Exchange
                    Act of 1934 (15 U.S.C. 78j-1); or
                        ``(D) to any whistleblower who fails to submit
                    information to the Commission in such form as the
                    Commission may, by rule, require.

        ``(d) Representation.--
                ``(1) Permitted representation.--Any whistleblower who makes
            a claim for an award under subsection (b) may be represented by
            counsel.
                ``(2) Required representation.--
                        ``(A) In general.--Any whistleblower who anonymously
                    makes a claim for an award under subsection (b) shall be
                    represented by counsel if the whistleblower anonymously
                    submits the information upon which the claim is based.
                        ``(B) Disclosure of identity.--Prior to the payment
                    of an award, a whistleblower shall disclose the identity
                    of the whistleblower and provide such other information

    [[Page 124 STAT. 1844]]

                    as the Commission may require, directly or through
                    counsel for the whistleblower.

        ``(e) No Contract Necessary.--No contract with the Commission is
    necessary for any whistleblower to receive an award under subsection
    (b), unless otherwise required by the Commission by rule or regulation.
        ``(f) <<NOTE: Determination. Deadline.>>  Appeals.--Any
    determination made under this section, including whether, to whom, or in
    what amount to make awards, shall be in the discretion of the
    Commission. Any such determination, except the determination of the
    amount of an award if the award was made in accordance with subsection
    (b), may be appealed to the appropriate court of appeals of the United
    States not more than 30 days after the determination is issued by the
    Commission. The court shall <<NOTE: Courts.>>  review the determination
    made by the Commission in accordance with section 706 of title 5, United
    States Code.

        ``(g) Investor Protection Fund.--
                ``(1) Fund established.--There is established in the
            Treasury of the United States a fund to be known as the
            `Securities and Exchange Commission Investor Protection Fund'.
                ``(2) Use of fund.--The Fund shall be available to the
            Commission, without further appropriation or fiscal year
            limitation, for--
                        ``(A) paying awards to whistleblowers as provided in
                    subsection (b); and
                        ``(B) funding the activities of the Inspector
                    General of the Commission under section 4(i).
                ``(3) Deposits and credits.--
                        ``(A)  In general.--There shall be deposited into or
                    credited to the Fund an amount equal to--
                              ``(i) any monetary sanction collected by the
                          Commission in any judicial or administrative
                          action brought by the Commission under the
                          securities laws that is not added to a
                          disgorgement fund or other fund under section 308
                          of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7246)
                          or otherwise distributed to victims of a violation
                          of the securities laws, or the rules and
                          regulations thereunder, underlying such action,
                          unless the balance of the Fund at the time the
                          monetary sanction is collected exceeds
                          $300,000,000;
                              ``(ii) any monetary sanction added to a
                          disgorgement fund or other fund under section 308
                          of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7246)
                          that is not distributed to the victims for whom
                          the Fund was established, unless the balance of
                          the disgorgement fund at the time the
                          determination is made not to distribute the
                          monetary sanction to such victims exceeds
                          $200,000,000; and
                              ``(iii) all income from investments made under
                          paragraph (4).
                        ``(B) Additional amounts.--If the amounts deposited
                    into or credited to the Fund under subparagraph (A) are
                    not sufficient to satisfy an award made under subsection
                    (b), there shall be deposited into or credited to the
                    Fund an amount equal to the unsatisfied portion of the
                    award from any monetary sanction collected by the
                    Commission

    [[Page 124 STAT. 1845]]

                    in the covered judicial or administrative action on
                    which the award is based.
                ``(4) Investments.--
                        ``(A) Amounts in fund may be invested.--The
                    Commission may request the Secretary of the Treasury to
                    invest the portion of the Fund that is not, in the
                    discretion of the Commission, required to meet the
                    current needs of the Fund.
                        ``(B) Eligible investments.--Investments shall be
                    made by the Secretary of the Treasury in obligations of
                    the United States or obligations that are guaranteed as
                    to principal and interest by the United States, with
                    maturities suitable to the needs of the Fund as
                    determined by the Commission on the record.
                        ``(C) Interest and proceeds credited.--The interest
                    on, and the proceeds from the sale or redemption of, any
                    obligations held in the Fund shall be credited to the
                    Fund.
                ``(5) Reports to congress.--Not later than October 30 of
            each fiscal year beginning after the date of enactment of this
            subsection, the Commission shall submit to the Committee on
            Banking, Housing, and Urban Affairs of the Senate, and the
            Committee on Financial Services of the House of Representatives
            a report on--
                        ``(A) the whistleblower award program, established
                    under this section, including--
                              ``(i) a description of the number of awards
                          granted; and
                              ``(ii) the types of cases in which awards were
                          granted during the preceding fiscal year;
                        ``(B) the balance of the Fund at the beginning of
                    the preceding fiscal year;
                        ``(C) the amounts deposited into or credited to the
                    Fund during the preceding fiscal year;
                        ``(D) the amount of earnings on investments made
                    under paragraph (4) during the preceding fiscal year;
                        ``(E) the amount paid from the Fund during the
                    preceding fiscal year to whistleblowers pursuant to
                    subsection (b);
                        ``(F) the balance of the Fund at the end of the
                    preceding fiscal year; and
                        ``(G) a complete set of audited financial
                    statements, including--
                              ``(i) a balance sheet;
                              ``(ii) income statement; and
                              ``(iii) cash flow analysis.

        ``(h) Protection of Whistleblowers.--
                ``(1) Prohibition against retaliation.--
                        ``(A) In general.--No employer may discharge,
                    demote, suspend, threaten, harass, directly or
                    indirectly, or in any other manner discriminate against,
                    a whistleblower in the terms and conditions of
                    employment because of any lawful act done by the
                    whistleblower--
                              ``(i) in providing information to the
                          Commission in accordance with this section;
                              ``(ii) in initiating, testifying in, or
                          assisting in any investigation or judicial or
                          administrative action of

    [[Page 124 STAT. 1846]]

                          the Commission based upon or related to such
                          information; or
                              ``(iii) in making disclosures that are
                          required or protected under the Sarbanes-Oxley Act
                          of 2002 (15 U.S.C. 7201 et seq.), the Securities
                          Exchange Act of 1934 (15 U.S.C. 78a et seq.),
                          including section 10A(m) of such Act (15 U.S.C.
                          78f(m)), section 1513(e) of title 18, United
                          States Code, and any other law, rule, or
                          regulation subject to the jurisdiction of the
                          Commission.
                        ``(B) Enforcement.--
                              ``(i) Cause of action.--An individual who
                          alleges discharge or other discrimination in
                          violation of subparagraph (A) may bring an action
                          under this subsection in the appropriate district
                          court of the United States for the relief provided
                          in subparagraph (C).
                              ``(ii) Subpoenas.--A subpoena requiring the
                          attendance of a witness at a trial or hearing
                          conducted under this section may be served at any
                          place in the United States.
                              ``(iii) Statute of limitations.--
                                        ``(I) In general.--An action under
                                    this subsection may not be brought--
                                                ``(aa) more than 6 years
                                            after the date on which the
                                            violation of subparagraph (A)
                                            occurred; or
                                                ``(bb) more than 3 years
                                            after the date when facts
                                            material to the right of action
                                            are known or reasonably should
                                            have been known by the employee
                                            alleging a violation of
                                            subparagraph (A).
                                        ``(II) Required action within 10
                                    years.--Notwithstanding subclause (I),
                                    an action under this subsection may not
                                    in any circumstance be brought more than
                                    10 years after the date on which the
                                    violation occurs.
                        ``(C) Relief.--Relief for an individual prevailing
                    in an action brought under subparagraph (B) shall
                    include--
                              ``(i) reinstatement with the same seniority
                          status that the individual would have had, but for
                          the discrimination;
                              ``(ii) 2 times the amount of back pay
                          otherwise owed to the individual, with interest;
                          and
                              ``(iii) compensation for litigation costs,
                          expert witness fees, and reasonable attorneys'
                          fees.
                ``(2) Confidentiality.--
                        ``(A) In general.--Except as provided in
                    subparagraphs (B) and (C), the Commission and any
                    officer or employee of the Commission shall not disclose
                    any information, including information provided by a
                    whistleblower to the Commission, which could reasonably
                    be expected to reveal the identity of a whistleblower,
                    except in accordance with the provisions of section 552a
                    of title 5, United States Code, unless and until
                    required to be disclosed to a defendant or respondent in
                    connection with a public proceeding instituted by the
                    Commission or any entity described in subparagraph (C).
                    For purposes of section

    [[Page 124 STAT. 1847]]

                    552 of title 5, United States Code, this paragraph shall
                    be considered a statute described in subsection
                    (b)(3)(B) of such section.
                        ``(B) Exempted statute.--For purposes of section 552
                    of title 5, United States Code, this paragraph shall be
                    considered a statute described in subsection (b)(3)(B)
                    of such section 552.
                        ``(C) Rule of construction.--Nothing in this section
                    is intended to limit, or shall be construed to limit,
                    the ability of the Attorney General to present such
                    evidence to a grand jury or to share such evidence with
                    potential witnesses or defendants in the course of an
                    ongoing criminal investigation.
                        ``(D) Availability to government agencies.--
                              ``(i) In general.--Without the loss of its
                          status as confidential in the hands of the
                          Commission, all information referred to in
                          subparagraph (A) may, in the discretion of the
                          Commission, when determined by the Commission to
                          be necessary to accomplish the purposes of this
                          Act and to protect investors, be made available
                          to--
                                        ``(I) the Attorney General of the
                                    United States;
                                        ``(II) an appropriate regulatory
                                    authority;
                                        ``(III) a self-regulatory
                                    organization;
                                        ``(IV) a State attorney general in
                                    connection with any criminal
                                    investigation;
                                        ``(V) any appropriate State
                                    regulatory authority;
                                        ``(VI) the Public Company Accounting
                                    Oversight Board;
                                        ``(VII) a foreign securities
                                    authority; and
                                        ``(VIII) a foreign law enforcement
                                    authority.
                              ``(ii) Confidentiality.--
                                        ``(I) In general.--Each of the
                                    entities described in subclauses (I)
                                    through (VI) of clause (i) shall
                                    maintain such information as
                                    confidential in accordance with the
                                    requirements established under
                                    subparagraph (A).
                                        ``(II) Foreign authorities.--Each of
                                    the entities described in subclauses
                                    (VII) and (VIII) of clause (i) shall
                                    maintain such information in accordance
                                    with such assurances of confidentiality
                                    as the Commission determines
                                    appropriate.
                ``(3) Rights retained.--Nothing in this section shall be
            deemed to diminish the rights, privileges, or remedies of any
            whistleblower under any Federal or State law, or under any
            collective bargaining agreement.

        ``(i) Provision of False Information.--A whistleblower shall not be
    entitled to an award under this section if the whistleblower--
                ``(1) knowingly and willfully makes any false, fictitious,
            or fraudulent statement or representation; or
                ``(2) uses any false writing or document knowing the writing
            or document contains any false, fictitious, or fraudulent
            statement or entry.

        ``(j) Rulemaking Authority.--The Commission shall have the authority
    to issue such rules and regulations as may be necessary

    [[Page 124 STAT. 1848]]

    or appropriate to implement the provisions of this section consistent
    with the purposes of this section.''.
        (b) Protection for Employees of Nationally Recognized Statistical
    Rating Organizations.--Section 1514A(a) of title 18, United States Code,
    is amended--
                (1) by inserting ``or nationally recognized statistical
            rating organization (as defined in section 3(a) of the
            Securities Exchange Act of 1934 (15 U.S.C. 78c),'' after
            ``78o(d)),''; and
                (2) by inserting ``or nationally recognized statistical
            rating organization'' after ``such company''.

        (c) Section 1514A of Title 18, United States Code.--
                (1) Statute of limitations; jury trial.--Section 1514A(b)(2)
            of title 18, United States Code, is amended--
                        (A) in subparagraph (D)--
                              (i) by striking ``90'' and inserting ``180'';
                          and
                              (ii) by striking the period at the end and
                          inserting ``, or after the date on which the
                          employee became aware of the violation.''; and
                        (B) by adding at the end the following:
                        ``(E) Jury trial.--A party to an action brought
                    under paragraph (1)(B) shall be entitled to trial by
                    jury.''.
                (2) Private securities litigation witnesses;
            nonenforceability; information.--Section 1514A of title 18,
            United States Code, is amended by adding at the end the
            following:

        ``(e) Nonenforceability of Certain Provisions Waiving Rights and
    Remedies or Requiring Arbitration of Disputes.--
                ``(1) Waiver of rights and remedies.--The rights and
            remedies provided for in this section may not be waived by any
            agreement, policy form, or condition of employment, including by
            a predispute arbitration agreement.
                ``(2) Predispute arbitration agreements.--No predispute
            arbitration agreement shall be valid or enforceable, if the
            agreement requires arbitration of a dispute arising under this
            section.''.

        (d) Study of Whistleblower Protection Program.--
                (1) Study.--The Inspector General of the Commission shall
            conduct a study of the whistleblower protections established
            under the amendments made by this section, including--
                        (A) whether the final rules and regulation issued
                    under the amendments made by this section have made the
                    whistleblower protection program (referred to in this
                    subsection as the ``program'') clearly defined and user-
                    friendly;
                        (B) whether the program is promoted on the website
                    of the Commission and has been widely publicized;
                        (C) whether the Commission is prompt in--
                              (i) responding to--
                                        (I) information provided by
                                    whistleblowers; and
                                        (II) applications for awards filed
                                    by whistleblowers;
                              (ii) updating whistleblowers about the status
                          of their applications; and
                              (iii) otherwise communicating with the
                          interested parties;
                        (D) whether the minimum and maximum reward levels
                    are adequate to entice whistleblowers to come forward
                    with

    [[Page 124 STAT. 1849]]

                    information and whether the reward levels are so high as
                    to encourage illegitimate whistleblower claims;
                        (E) whether the appeals process has been unduly
                    burdensome for the Commission;
                        (F) whether the funding mechanism for the Investor
                    Protection Fund is adequate;
                        (G) whether, in the interest of protecting investors
                    and identifying and preventing fraud, it would be useful
                    for Congress to consider empowering whistleblowers or
                    other individuals, who have already attempted to pursue
                    the case through the Commission, to have a private right
                    of action to bring suit based on the facts of the same
                    case, on behalf of the Government and themselves,
                    against persons who have committee securities fraud;
                        (H)(i) whether the exemption under section 552(b)(3)
                    of title 5 (known as the Freedom of Information Act)
                    established in section 21F(h)(2)(A) of the Securities
                    Exchange Act of 1934, as added by this Act, aids
                    whistleblowers in disclosing information to the
                    Commission;
                        (ii) what impact the exemption described in clause
                    (i) has had on the ability of the public to access
                    information about the regulation and enforcement by the
                    Commission of securities; and
                        (iii) any recommendations on whether the exemption
                    described in clause (i) should remain in effect; and
                        (I) such other matters as the Inspector General
                    deems appropriate.
                (2) Report.--Not later than 30 months after the date of
            enactment of this Act, the Inspector General shall--
                        (A) submit a report on the findings of the study
                    required under paragraph (1) to the Committee on
                    Banking, Housing, and Urban Affairs of the Senate and
                    the Committee on Financial Services of the House; and
                        (B) <<NOTE: Public information. Web posting.>>  make
                    the report described in subparagraph (A) available to
                    the public through publication of the report on the
                    website of the Commission.
    SEC. 923. CONFORMING AMENDMENTS FOR WHISTLEBLOWER PROTECTION.

        (a) In General.--
                (1) Securities act of 1933.--Section 20(d)(3)(A) of the
            Securities Act of 1933 (15 U.S.C. 77t(d)(3)(A)) is amended by
            inserting ``and section 21F of the Securities Exchange Act of
            1934'' after ``the Sarbanes-Oxley Act of 2002''.
                (2) Investment company act of 1940.--Section 42(e)(3)(A) of
            the Investment Company Act of 1940 (15 U.S.C. 80a-41(e)(3)(A))
            is amended by inserting ``and section 21F of the Securities
            Exchange Act of 1934'' after ``the Sarbanes-Oxley Act of 2002''.
                (3) Investment advisers act of 1940.--Section 209(e)(3)(A)
            of the Investment Advisers Act of 1940 (15 U.S.C. 80b-
            9(e)(3)(A)) is amended by inserting ``and section 21F of the
            Securities Exchange Act of 1934'' after ``the Sarbanes-Oxley Act
            of 2002''.

        (b) Securities Exchange Act.--
                (1) Section 21.--Section 21(d)(3)(C)(i) of the Securities
            Exchange Act of 1934 (15 U.S.C. 78u(d)(3)(C)(i)) is amended

    [[Page 124 STAT. 1850]]

            by inserting ``and section 21F of this title'' after ``the
            Sarbanes-Oxley Act of 2002''.
                (2) Section 21a.--Section 21A of the Securities Exchange Act
            of 1934 (15 U.S.C. 78u-1) is amended--
                        (A) in subsection (d)(1) by--
                              (i) striking ``(subject to subsection (e))'';
                          and
                              (ii) inserting ``and section 21F of this
                          title'' after ``the Sarbanes-Oxley Act of 2002'';
                        (B) by striking subsection (e); and
                        (C) by redesignating subsections (f) and (g) as
                    subsections (e) and (f), respectively.
    SEC. 924. <<NOTE: 15 USC 78u-7.>>  IMPLEMENTATION AND TRANSITION
                            PROVISIONS FOR WHISTLEBLOWER PROTECTION.

        (a) <<NOTE: Deadline.>>  Implementing Rules.--The Commission shall
    issue final regulations implementing the provisions of section 21F of
    the Securities Exchange Act of 1934, as added by this subtitle, not
    later than 270 days after the date of enactment of this Act.

        (b) Original Information.--Information provided to the Commission in
    writing by a whistleblower shall not lose the status of original
    information (as defined in section 21F(a)(3) of the Securities Exchange
    Act of 1934, as added by this subtitle) solely because the whistleblower
    provided the information prior to the effective date of the regulations,
    if the information is provided by the whistleblower after the date of
    enactment of this subtitle.
        (c) Awards.--A whistleblower may receive an award pursuant to
    section 21F of the Securities Exchange Act of 1934, as added by this
    subtitle, regardless of whether any violation of a provision of the
    securities laws, or a rule or regulation thereunder, underlying the
    judicial or administrative action upon which the award is based,
    occurred prior to the date of enactment of this subtitle.
        (d) <<NOTE: Establishment.>>  Administration and Enforcement.--The
    Securities and Exchange Commission shall establish a separate office
    within the Commission to administer and enforce the provisions of
    section 21F of the Securities Exchange Act of 1934 (as add by section
    922(a)). <<NOTE: Reports. Deadline.>>  Such office shall report annually
    to the Committee on Banking, Housing, and Urban Affairs of the Senate
    and the Committee on Financial Services of the House of Representatives
    on its activities, whistleblower complaints, and the response of the
    Commission to such complaints.
    SEC. 925. COLLATERAL BARS.

        (a) Securities Exchange Act of 1934.--
                (1) Section 15.--Section 15(b)(6)(A) of the Securities
            Exchange Act of 1934 (15 U.S.C. 78o(b)(6)(A)) is amended by
            striking ``12 months, or bar such person from being associated
            with a broker or dealer,'' and inserting ``12 months, or bar any
            such person from being associated with a broker, dealer,
            investment adviser, municipal securities dealer, municipal
            advisor, transfer agent, or nationally recognized statistical
            rating organization,''.
                (2) Section 15b.--Section 15B(c)(4) of the Securities
            Exchange Act of 1934 (15 U.S.C. 78o-4(c)(4)) is amended by
            striking ``twelve months or bar any such person from being
            associated with a municipal securities dealer,'' and inserting
            ``12 months or bar any such person from being associated with a
            broker, dealer, investment adviser, municipal securities

    [[Page 124 STAT. 1851]]

            dealer, municipal advisor, transfer agent, or nationally
            recognized statistical rating organization,''.
                (3) Section 17a.--Section 17A(c)(4)(C) of the Securities
            Exchange Act of 1934 (15 U.S.C. 78q-1(c)(4)(C)) is amended by
            striking ``twelve months or bar any such person from being
            associated with the transfer agent,'' and inserting ``12 months
            or bar any such person from being associated with any transfer
            agent, broker, dealer, investment adviser, municipal securities
            dealer, municipal advisor, or nationally recognized statistical
            rating organization,''.

        (b) Investment Advisers Act of 1940.--Section 203(f) of the
    Investment Advisers Act of 1940 (15 U.S.C. 80b-3(f)) is amended by
    striking ``twelve months or bar any such person from being associated
    with an investment adviser,'' and inserting ``12 months or bar any such
    person from being associated with an investment adviser, broker, dealer,
    municipal securities dealer, municipal advisor, transfer agent, or
    nationally recognized statistical rating organization,''.
    SEC. 926. <<NOTE: 15 USC 77d note.>>  DISQUALIFYING FELONS AND
                            OTHER ``BAD ACTORS'' FROM REGULATION D
                            OFFERINGS.

        Not later <<NOTE: Deadline.>>  than 1 year after the date of
    enactment of this Act, the Commission shall issue rules for the
    disqualification of offerings and sales of securities made under section
    230.506 of title 17, Code of Federal Regulations, that--
                (1) are substantially similar to the provisions of section
            230.262 of title 17, Code of Federal Regulations, or any
            successor thereto; and
                (2) disqualify any offering or sale of securities by a
            person that--
                        (A) is subject to a final order of a State
                    securities commission (or an agency or officer of a
                    State performing like functions), a State authority that
                    supervises or examines banks, savings associations, or
                    credit unions, a State insurance commission (or an
                    agency or officer of a State performing like functions),
                    an appropriate Federal banking agency, or the National
                    Credit Union Administration, that--
                              (i) bars the person from--
                                        (I) association with an entity
                                    regulated by such commission, authority,
                                    agency, or officer;
                                        (II) engaging in the business of
                                    securities, insurance, or banking; or
                                        (III) engaging in savings
                                    association or credit union activities;
                                    or
                              (ii) constitutes a final order based on a
                          violation of any law or regulation that prohibits
                          fraudulent, manipulative, or deceptive conduct
                          within the 10-year period ending on the date of
                          the filing of the offer or sale; or
                        (B) has been convicted of any felony or misdemeanor
                    in connection with the purchase or sale of any security
                    or involving the making of any false filing with the
                    Commission.

    [[Page 124 STAT. 1852]]

    SEC. 927. EQUAL TREATMENT OF SELF-REGULATORY ORGANIZATION RULES.

        Section 29(a) of the Securities Exchange Act of 1934 (15 U.S.C.
    78cc(a)) is amended by striking ``an exchange required thereby'' and
    inserting ``a self-regulatory organization,''.
    SEC. 928. CLARIFICATION THAT SECTION 205 OF THE INVESTMENT
                            ADVISERS ACT OF 1940 DOES NOT APPLY TO
                            STATE-REGISTERED ADVISERS.

        Section 205(a) of the Investment Advisers Act of 1940 (15 U.S.C.
    80b-5(a)) is amended, in the matter preceding paragraph (1)--
                (1) by striking ``, unless exempt from registration pursuant
            to section 203(b),'' and inserting ``registered or required to
            be registered with the Commission'';
                (2) by striking ``make use of the mails or any means or
            instrumentality of interstate commerce, directly or indirectly,
            to''; and
                (3) by striking ``to'' after ``in any way''.
    SEC. 929. UNLAWFUL MARGIN LENDING.

        Section 7(c)(1)(A) of the Securities Exchange Act of 1934 (15 U.S.C.
    78g(c)(1)(A)) is amended by striking ``; and'' and inserting ``; or''.
    SEC. 929A. PROTECTION FOR EMPLOYEES OF SUBSIDIARIES AND AFFILIATES
                              OF PUBLICLY TRADED COMPANIES.

        Section 1514A of title 18, United States Code, is amended by
    inserting ``including any subsidiary or affiliate whose financial
    information is included in the consolidated financial statements of such
    company'' after ``the Securities Exchange Act of 1934 (15 U.S.C.
    78o(d))''.
    SEC. 929B. FAIR FUND AMENDMENTS.

        Section 308 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7246(a)) is
    amended--
                (1) by striking subsection (a) and inserting the following:

        ``(a) Civil Penalties to Be Used for the Relief of Victims.--If, in
    any judicial or administrative action brought by the Commission under
    the securities laws, the Commission obtains a civil penalty against any
    person for a violation of such laws, or such person agrees, in
    settlement of any such action, to such civil penalty, the amount of such
    civil penalty shall, on the motion or at the direction of the
    Commission, be added to and become part of a disgorgement fund or other
    fund established for the benefit of the victims of such violation.'';
                (2) in subsection (b)--
                        (A) by striking ``for a disgorgement fund described
                    in subsection (a)'' and inserting ``for a disgorgement
                    fund or other fund described in subsection (a)''; and
                        (B) by striking ``in the disgorgement fund'' and
                    inserting ``in such fund''; and
                (3) by striking subsection (e).
    SEC. 929C. INCREASING THE BORROWING LIMIT ON TREASURY LOANS.

        Section 4(h) of the Securities Investor Protection Act of 1970 (15
    U.S.C. 78ddd(h)) is amended in the first sentence, by striking
    ``$1,000,000,000'' and inserting ``$2,500,000,000''.

    [[Page 124 STAT. 1853]]

    SEC. 929D. LOST AND STOLEN SECURITIES.

        Section 17(f)(1) of the Securities Exchange Act of 1934 (15 U.S.C.
    78q(f)(1)) is amended--
                (1) in subparagraph (A), by striking ``missing, lost,
            counterfeit, or stolen securities'' and inserting ``securities
            that are missing, lost, counterfeit, stolen, or cancelled''; and
                (2) in subparagraph (B), by striking ``or stolen'' and
            inserting ``stolen, cancelled, or reported in such other manner
            as the Commission, by rule, may prescribe''.
    SEC. 929E. NATIONWIDE SERVICE OF SUBPOENAS.

        (a) Securities Act of 1933.--Section 22(a) of the Securities Act of
    1933 (15 U.S.C. 77v(a)) is amended by inserting after the second
    sentence the following: ``In any action or proceeding instituted by the
    Commission under this title in a United States district court for any
    judicial district, a subpoena issued to compel the attendance of a
    witness or the production of documents or tangible things (or both) at a
    hearing or trial may be served at any place within the United States.
    Rule 45(c)(3)(A)(ii) of the Federal Rules of Civil Procedure shall not
    apply to a subpoena issued under the preceding sentence.''.
        (b) Securities Exchange Act of 1934.--Section 27 of the Securities
    Exchange Act of 1934 (15 U.S.C. 78aa) is amended by inserting after the
    third sentence the following: ``In any action or proceeding instituted
    by the Commission under this title in a United States district court for
    any judicial district, a subpoena issued to compel the attendance of a
    witness or the production of documents or tangible things (or both) at a
    hearing or trial may be served at any place within the United States.
    Rule 45(c)(3)(A)(ii) of the Federal Rules of Civil Procedure shall not
    apply to a subpoena issued under the preceding sentence.''.
        (c) Investment Company Act of 1940.--Section 44 of the Investment
    Company Act of 1940 (15 U.S.C. 80a-43) is amended by inserting after the
    fourth sentence the following: ``In any action or proceeding instituted
    by the Commission under this title in a United States district court for
    any judicial district, a subpoena issued to compel the attendance of a
    witness or the production of documents or tangible things (or both) at a
    hearing or trial may be served at any place within the United States.
    Rule 45(c)(3)(A)(ii) of the Federal Rules of Civil Procedure shall not
    apply to a subpoena issued under the preceding sentence.''.
        (d) Investment Advisers Act of 1940.--Section 214 of the Investment
    Advisers Act of 1940 (15 U.S.C. 80b-14) is amended by inserting after
    the third sentence the following: ``In any action or proceeding
    instituted by the Commission under this title in a United States
    district court for any judicial district, a subpoena issued to compel
    the attendance of a witness or the production of documents or tangible
    things (or both) at a hearing or trial may be served at any place within
    the United States. Rule 45(c)(3)(A)(ii) of the Federal Rules of Civil
    Procedure shall not apply to a subpoena issued under the preceding
    sentence.''.
    SEC. 929F. FORMERLY ASSOCIATED PERSONS.

        (a) Member or Employee of the Municipal Securities Rulemaking
    Board.--Section 15B(c)(8) of the Securities Exchange Act of 1934 (15
    U.S.C. 78o-4(c)(8)) is amended by striking ``any member

    [[Page 124 STAT. 1854]]

    or employee'' and inserting ``any person who is, or at the time of the
    alleged violation or abuse was, a member or employee''.
        (b) Person Associated With a Government Securities Broker or
    Dealer.--Section 15C(c) of the Securities Exchange Act of 1934 (15
    U.S.C. 78o-5(c)) is amended--
                (1) in paragraph (1)(C), by striking ``any person
            associated, or seeking to become associated,'' and inserting
            ``any person who is, or at the time of the alleged misconduct
            was, associated or seeking to become associated''; and
                (2) in paragraph (2)--
                        (A) in subparagraph (A), by inserting ``, seeking to
                    become associated, or, at the time of the alleged
                    misconduct, associated or seeking to become associated''
                    after ``any person associated''; and
                        (B) in subparagraph (B), by inserting ``, seeking to
                    become associated, or, at the time of the alleged
                    misconduct, associated or seeking to become associated''
                    after ``any person associated''.

        (c) Person Associated With a Member of a National Securities
    Exchange or Registered Securities Association.--Section 21(a)(1) of the
    Securities Exchange Act of 1934 (15 U.S.C. 78u(a)(1)) is amended, in the
    first sentence, by inserting ``, or, as to any act or practice, or
    omission to act, while associated with a member, formerly associated''
    after ``member or a person associated''.
        (d) Participant of a Registered Clearing Agency.--Section 21(a)(1)
    of the Securities Exchange Act of 1934 (15 U.S.C. 78u(a)(1)) is amended,
    in the first sentence, by inserting ``or, as to any act or practice, or
    omission to act, while a participant, was a participant,'' after ``in
    which such person is a participant,''.
        (e) Officer or Director of a Self-regulatory Organization.--Section
    19(h)(4) of the Securities Exchange Act of 1934 (15 U.S.C. 78s(h)(4)) is
    amended--
                (1) by striking ``any officer or director'' and inserting
            ``any person who is, or at the time of the alleged misconduct
            was, an officer or director''; and
                (2) by striking ``such officer or director'' and inserting
            ``such person''.

        (f) Officer or Director of an Investment Company.--Section 36(a) of
    the Investment Company Act of 1940 (15 U.S.C. 80a-35(a)) is amended--
                (1) by striking ``a person serving or acting'' and inserting
            ``a person who is, or at the time of the alleged misconduct was,
            serving or acting''; and
                (2) by striking ``such person so serves or acts'' and
            inserting ``such person so serves or acts, or at the time of the
            alleged misconduct, so served or acted''.

        (g) Person Associated With a Public Accounting Firm.--
                (1) Sarbanes-oxley act of 2002 amendment.--Section 2(a)(9)
            of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7201(9)) is amended
            by adding at the end the following:
                        ``(C) <<NOTE: Applicability.>>  Investigative and
                    enforcement authority.--For purposes of sections 3(c),
                    101(c), 105, and 107(c) and the rules of the Board and
                    Commission issued thereunder, except to the extent
                    specifically excepted by such rules, the terms defined
                    in subparagraph (A) shall include any

    [[Page 124 STAT. 1855]]

                    person associated, seeking to become associated, or
                    formerly associated with a public accounting firm,
                    except that--
                              ``(i) the authority to conduct an
                          investigation of such person under section 105(b)
                          shall apply only with respect to any act or
                          practice, or omission to act, by the person while
                          such person was associated or seeking to become
                          associated with a registered public accounting
                          firm; and
                              ``(ii) the authority to commence a
                          disciplinary proceeding under section 105(c)(1),
                          or impose sanctions under section 105(c)(4),
                          against such person shall apply only with respect
                          to--
                                        ``(I) conduct occurring while such
                                    person was associated or seeking to
                                    become associated with a registered
                                    public accounting firm; or
                                        ``(II) non-cooperation, as described
                                    in section 105(b)(3), with respect to a
                                    demand in a Board investigation for
                                    testimony, documents, or other
                                    information relating to a period when
                                    such person was associated or seeking to
                                    become associated with a registered
                                    public accounting firm.''.
                (2) Securities exchange act of 1934 amendment.--Section
            21(a)(1) of the Securities Exchange Act of 1934 (15 U.S.C.
            78u(a)(1)) is amended by striking ``or a person associated with
            such a firm'' and inserting ``, a person associated with such a
            firm, or, as to any act, practice, or omission to act, while
            associated with such firm, a person formerly associated with
            such a firm''.

        (h) Supervisory Personnel of an Audit Firm.--Section 105(c)(6) of
    the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7215(c)(6)) is amended--
                (1) in subparagraph (A), by striking ``the supervisory
            personnel'' and inserting ``any person who is, or at the time of
            the alleged failure reasonably to supervise was, a supervisory
            person''; and
                (2) in subparagraph (B)--
                        (A) by striking ``No associated person'' and
                    inserting ``No current or former supervisory person'';
                    and
                        (B) by striking ``any other person'' and inserting
                    ``any associated person''.

        (i) Member of the Public Company Accounting Oversight Board.--
    Section 107(d)(3) of the Sarbanes-Oxley Act of 2002 (15 U.S.C.
    7217(d)(3)) is amended by striking ``any member'' and inserting ``any
    person who is, or at the time of the alleged misconduct was, a member''.
    SEC. 929G. STREAMLINED HIRING AUTHORITY FOR MARKET SPECIALISTS.

        (a) Appointment Authority.--Section 3114 of title 5, United States
    Code, is amended by striking the section heading and all that follows
    through the end of subsection (a) and inserting the following:

    [[Page 124 STAT. 1856]]

    ``Sec. 3114. Appointment of candidates to certain positions in the
                      competitive service by the Securities and
                      Exchange Commission

        ``(a) Applicability.--This section applies with respect to any
    position of accountant, economist, and securities compliance examiner at
    the Commission that is in the competitive service, and any position at
    the Commission in the competitive service that requires specialized
    knowledge of financial and capital market formation or regulation,
    financial market structures or surveillance, or information
    technology.''.
        (b) Clerical Amendment.--The table of sections for chapter 31 of
    title 5, United States Code, is amended by striking the item relating to
    section 3114 and inserting the following:

    ``3114. Appointment of candidates to positions in the competitive
               service by the Securities and Exchange Commission.''.

        (c) <<NOTE: 15 USC 78d note.>>  Pay Authority.--The Commission may
    set the rate of pay for experts and consultants appointed under the
    authority of section 3109 of title 5, United States Code, in the same
    manner in which it sets the rate of pay for employees of the Commission.
    SEC. 929H. SIPC REFORMS.

        (a) Increasing the Cash Limit of Protection.--Section 9 of the
    Securities Investor Protection Act of 1970 (15 U.S.C. 78fff-3) is
    amended--
                (1) in subsection (a)(1), by striking ``$100,000 for each
            such customer'' and inserting ``the standard maximum cash
            advance amount for each such customer, as determined in
            accordance with subsection (d)''; and
                (2) by adding the following new subsections:

        ``(d) Standard Maximum Cash Advance Amount Defined.--For purposes of
    this section, the term `standard maximum cash advance amount' means
    $250,000, as such amount may be adjusted after December 31, 2010, as
    provided under subsection (e).
        ``(e) Inflation Adjustment.--
                ``(1) <<NOTE: Deadlines. Determination.>>  In general.--Not
            later than January 1, 2011, and every 5 years thereafter, and
            subject to the approval of the Commission as provided under
            section 3(e)(2), the Board of Directors of SIPC shall determine
            whether an inflation adjustment to the standard maximum cash
            advance amount is appropriate. If the Board of Directors of SIPC
            determines such an adjustment is appropriate, then the standard
            maximum cash advance amount shall be an amount equal to--
                        ``(A) $250,000 multiplied by--
                        ``(B) the ratio of the annual value of the Personal
                    Consumption Expenditures Chain-Type Price Index (or any
                    successor index thereto), published by the Department of
                    Commerce, for the calendar year preceding the year in
                    which such determination is made, to the published
                    annual value of such index for the calendar year
                    preceding the year in which this subsection was enacted.
            The index values used in calculations under this paragraph shall
            be, as of the date of the calculation, the values most recently
            published by the Department of Commerce.
                ``(2) Rounding.--If the standard maximum cash advance amount
            determined under paragraph (1) for any period is not

    [[Page 124 STAT. 1857]]

            a multiple of $10,000, the amount so determined shall be rounded
            down to the nearest $10,000.
                ``(3) Publication and report to the congress.--Not later
            than April 5 of any calendar year in which a determination is
            required to be made under paragraph (1)--
                        ``(A) <<NOTE: Federal Register, publication.>>  the
                    Commission shall publish in the Federal Register the
                    standard maximum cash advance amount; and
                        ``(B) the Board of Directors of SIPC shall submit a
                    report to the Congress stating the standard maximum cash
                    advance amount.
                ``(4) Implementation period.-- <<NOTE: Effective date.>> Any
            adjustment to the standard maximum cash advance amount shall
            take effect on January 1 of the year immediately succeeding the
            calendar year in which such adjustment is made.
                ``(5) Inflation adjustment considerations.--In making any
            determination under paragraph (1) to increase the standard
            maximum cash advance amount, the Board of Directors of SIPC
            shall consider--
                        ``(A) the overall state of the fund and the economic
                    conditions affecting members of SIPC;
                        ``(B) the potential problems affecting members of
                    SIPC; and
                        ``(C) such other factors as the Board of Directors
                    of SIPC may determine appropriate.''.

        (b) Liquidation of a Carrying Broker-dealer.--Section 5(a)(3) of the
    Securities Investor Protection Act of 1970 (15 U.S.C. 78eee(a)(3)) is
    amended--
                (1) by striking the undesignated matter immediately
            following subparagraph (B);
                (2) in subparagraph (A), by striking ``any member of SIPC''
            and inserting ``the member'';
                (3) in subparagraph (B), by striking the comma at the end
            and inserting a period;
                (4) by striking ``If SIPC'' and inserting the following:
                        ``(A) In general.--SIPC may, upon notice to a member
                    of SIPC, file an application for a protective decree
                    with any court of competent jurisdiction specified in
                    section 21(e) or 27 of the Securities Exchange Act of
                    1934, except that no such application shall be filed
                    with respect to a member, the only customers of which
                    are persons whose claims could not be satisfied by SIPC
                    advances pursuant to section 9, if SIPC''; and
                (5) by adding at the end the following:
                        ``(B) Consent required.--No member of SIPC that has
                    a customer may enter into an insolvency, receivership,
                    or bankruptcy proceeding, under Federal or State law,
                    without the specific consent of SIPC, except as provided
                    in title II of the Dodd-Frank Wall Street Reform and
                    Consumer Protection Act.''.
    SEC. 929I. PROTECTING CONFIDENTIALITY OF MATERIALS SUBMITTED TO
                              THE COMMISSION.

        (a) Securities Exchange Act of 1934.--Section 24 of the Securities
    Exchange Act of 1934 (15 U.S.C. 78x) is amended--
                (1) in subsection (d), by striking ``subsection (e)'' and
            inserting ``subsection (f)'';
                (2) by redesignating subsection (e) as subsection (f); and

    [[Page 124 STAT. 1858]]

                (3) by inserting after subsection (d) the following:

        ``(e) Records Obtained From Registered Persons.--
                ``(1) In general.--Except as provided in subsection (f), the
            Commission shall not be compelled to disclose records or
            information obtained pursuant to section 17(b), or records or
            information based upon or derived from such records or
            information, if such records or information have been obtained
            by the Commission for use in furtherance of the purposes of this
            title, including surveillance, risk assessments, or other
            regulatory and oversight activities.
                ``(2) Treatment of information.--For purposes of section 552
            of title 5, United States Code, this subsection shall be
            considered a statute described in subsection (b)(3)(B) of such
            section 552. Collection of information pursuant to section 17
            shall be an administrative action involving an agency against
            specific individuals or agencies pursuant to section 3518(c)(1)
            of title 44, United States Code.''.

        (b) Investment Company Act of 1940.--Section 31 of the Investment
    Company Act of 1940 (15 U.S.C. 80a-30) is amended--
                (1) by striking subsection (c) and inserting the following:

        ``(c) Limitations on Disclosure by Commission.--Notwithstanding any
    other provision of law, the Commission shall not be compelled to
    disclose any records or information provided to the Commission under
    this section, or records or information based upon or derived from such
    records or information, if such records or information have been
    obtained by the Commission for use in furtherance of the purposes of
    this title, including surveillance, risk assessments, or other
    regulatory and oversight activities. Nothing in this subsection
    authorizes the Commission to withhold information from the Congress or
    prevent the Commission from complying with a request for information
    from any other Federal department or agency requesting the information
    for purposes within the scope of jurisdiction of that department or
    agency, or complying with an order of a court of the United States in an
    action brought by the United States or the Commission. For purposes of
    section 552 of title 5, United States Code, this section shall be
    considered a statute described in subsection (b)(3)(B) of such section
    552. Collection of information pursuant to section 31 shall be an
    administrative action involving an agency against specific individuals
    or agencies pursuant to section 3518(c)(1) of title 44, United States
    Code.'';
                (2) by striking subsection (d); and
                (3) by redesignating subsections (e) and (f) as subsections
            (d) and (e), respectively.

        (c) Investment Advisers Act of 1940.--Section 210 of the Investment
    Advisers Act of 1940 (15 U.S.C. 80b-10) is amended by adding at the end
    the following:
        ``(d) Limitations on Disclosure by the Commission.--Notwithstanding
    any other provision of law, the Commission shall not be compelled to
    disclose any records or information provided to the Commission under
    section 204, or records or information based upon or derived from such
    records or information, if such records or information have been
    obtained by the Commission for use in furtherance of the purposes of
    this title, including surveillance, risk assessments, or other
    regulatory and oversight activities. Nothing in this subsection
    authorizes the Commission to withhold information from the Congress or
    prevent the Commission from

    [[Page 124 STAT. 1859]]

    complying with a request for information from any other Federal
    department or agency requesting the information for purposes within the
    scope of jurisdiction of that department or agency, or complying with an
    order of a court of the United States in an action brought by the United
    States or the Commission. For purposes of section 552 of title 5, United
    States Code, this subsection shall be considered a statute described in
    subsection (b)(3)(B) of such section 552. Collection of information
    pursuant to section 204 shall be an administrative action involving an
    agency against specific individuals or agencies pursuant to section
    3518(c)(1) of title 44, United States Code.''.
    SEC. 929J. EXPANSION OF AUDIT INFORMATION TO BE PRODUCED AND
                              EXCHANGED.

        Section 106 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7216) is
    amended--
                (1) by striking subsection (b) and inserting the following:

        ``(b) Production of Documents.--
                ``(1) Production by foreign firms.--If a foreign public
            accounting firm performs material services upon which a
            registered public accounting firm relies in the conduct of an
            audit or interim review, issues an audit report, performs audit
            work, or conducts interim reviews, the foreign public accounting
            firm shall--
                        ``(A) produce the audit work papers of the foreign
                    public accounting firm and all other documents of the
                    firm related to any such audit work or interim review to
                    the Commission or the Board, upon request of the
                    Commission or the Board; and
                        ``(B) be subject to the jurisdiction of the courts
                    of the United States for purposes of enforcement of any
                    request for such documents.
                ``(2) Other production.--Any registered public accounting
            firm that relies, in whole or in part, on the work of a foreign
            public accounting firm in issuing an audit report, performing
            audit work, or conducting an interim review, shall--
                        ``(A) produce the audit work papers of the foreign
                    public accounting firm and all other documents related
                    to any such work in response to a request for production
                    by the Commission or the Board; and
                        ``(B) secure the agreement of any foreign public
                    accounting firm to such production, as a condition of
                    the reliance by the registered public accounting firm on
                    the work of that foreign public accounting firm.'';
                (2) by redesignating subsection (d) as subsection (g); and
                (3) by inserting after subsection (c) the following:

        ``(d) Service of Requests or Process.--
                ``(1) In general.--Any foreign public accounting firm that
            performs work for a domestic registered public accounting firm
            shall furnish to the domestic registered public accounting firm
            a written irrevocable consent and power of attorney that
            designates the domestic registered public accounting firm as an
            agent upon whom may be served any request by the Commission or
            the Board under this section or upon whom may be served any
            process, pleadings, or other papers in any action brought to
            enforce this section.

    [[Page 124 STAT. 1860]]

                ``(2) <<NOTE: Designation.>>  Specific audit work.--Any
            foreign public accounting firm that performs material services
            upon which a registered public accounting firm relies in the
            conduct of an audit or interim review, issues an audit report,
            performs audit work, or, performs interim reviews, shall
            designate to the Commission or the Board an agent in the United
            States upon whom may be served any request by the Commission or
            the Board under this section or upon whom may be served any
            process, pleading, or other papers in any action brought to
            enforce this section.

        ``(e) Sanctions.--A willful refusal to comply, in whole in or in
    part, with any request by the Commission or the Board under this
    section, shall be deemed a violation of this Act.
        ``(f) Other Means of Satisfying Production Obligations.--
    Notwithstanding any other provisions of this section, the staff of the
    Commission or the Board may allow a foreign public accounting firm that
    is subject to this section to meet production obligations under this
    section through alternate means, such as through foreign counterparts of
    the Commission or the Board.''.
    SEC. 929K. SHARING PRIVILEGED INFORMATION WITH OTHER AUTHORITIES.

        Section 24 of the Securities Exchange Act of 1934 (15 U.S.C. 78x) is
    amended--
                (1) in subsection (d), as amended by subsection (d)(1)(A),
            by striking ``subsection (f)'' and inserting ``subsection (g)'';
                (2) in subsection (e), as added by subsection (d)(1)(C), by
            striking ``subsection (f)'' and inserting ``subsection (g)'';
                (3) by redesignating subsection (f) as subsection (g); and
                (4) by inserting after subsection (e) the following:

        ``(f) Sharing Privileged Information With Other Authorities.--
                ``(1) Privileged information provided by the commission.--
            The Commission shall not be deemed to have waived any privilege
            applicable to any information by transferring that information
            to or permitting that information to be used by--
                        ``(A) any agency (as defined in section 6 of title
                    18, United States Code);
                        ``(B) the Public Company Accounting Oversight Board;
                        ``(C) any self-regulatory organization;
                        ``(D) any foreign securities authority;
                        ``(E) any foreign law enforcement authority; or
                        ``(F) any State securities or law enforcement
                    authority.
                ``(2) Nondisclosure of privileged information provided to
            the commission.--The Commission shall not be compelled to
            disclose privileged information obtained from any foreign
            securities authority, or foreign law enforcement authority, if
            the authority has in good faith determined and represented to
            the Commission that the information is privileged.
                ``(3) Nonwaiver of privileged information provided to the
            commission.--
                        ``(A) In general.--Federal agencies, State
                    securities and law enforcement authorities, self-
                    regulatory organizations, and the Public Company
                    Accounting Oversight Board shall not be deemed to have
                    waived any privilege applicable to any information by
                    transferring that information to or permitting that
                    information to be used by the Commission.

    [[Page 124 STAT. 1861]]

                        ``(B) Exception.--The provisions of subparagraph (A)
                    shall not apply to a self-regulatory organization or the
                    Public Company Accounting Oversight Board with respect
                    to information used by the Commission in an action
                    against such organization.
                ``(4) Definitions.--For purposes of this subsection--
                        ``(A) the term `privilege' includes any work-product
                    privilege, attorney-client privilege, governmental
                    privilege, or other privilege recognized under Federal,
                    State, or foreign law;
                        ``(B) the term `foreign law enforcement authority'
                    means any foreign authority that is empowered under
                    foreign law to detect, investigate or prosecute
                    potential violations of law; and
                        ``(C) the term `State securities or law enforcement
                    authority' means the authority of any State or territory
                    that is empowered under State or territory law to
                    detect, investigate, or prosecute potential violations
                    of law.''.
    SEC. 929L. ENHANCED APPLICATION OF ANTIFRAUD PROVISIONS.

        The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is
    amended--
                (1) in <<NOTE: 15 USC 78i.>>  section 9--
                        (A) by striking ``registered on a national
                    securities exchange'' each place that term appears and
                    inserting ``other than a government security'';
                        (B) in subsection (b), by striking ``by use of any
                    facility of a national securities exchange,''; and
                        (C) in subsection (c), by inserting after ``unlawful
                    for any'' the following: ``broker, dealer, or'';
                (2) in section 10(a)(1), <<NOTE: 15 USC 78j.>>  by striking
            ``registered on a national securities exchange'' and inserting
            ``other than a government security''; and
                (3) in section 15(c)(1)(A), <<NOTE: 15 USC 78o.>>  by
            striking ``otherwise than on a national securities exchange of
            which it is a member''.
    SEC. 929M. AIDING AND ABETTING AUTHORITY UNDER THE SECURITIES ACT
                              AND THE INVESTMENT COMPANY ACT.

        (a) Under the Securities Act of 1933.--Section 15 of the Securities
    Act of 1933 (15 U.S.C. 77o) is amended--
                (1) by striking ``Every person who'' and inserting ``(a)
            Controlling Persons.--Every person who''; and
                (2) by adding at the end the following:

        ``(b) Prosecution of Persons Who Aid and Abet Violations.--For
    purposes of any action brought by the Commission under subparagraph (b)
    or (d) of section 20, any person that knowingly or recklessly provides
    substantial assistance to another person in violation of a provision of
    this Act, or of any rule or regulation issued under this Act, shall be
    deemed to be in violation of such provision to the same extent as the
    person to whom such assistance is provided.''.
        (b) Under the Investment Company Act of 1940.--Section 48 of the
    Investment Company Act of 1940 <<NOTE: 15 USC 80a-47.>>  (15 U.S.C. 80a-
    48) is amended by redesignating subsection (b) as subsection (c) and
    inserting after subsection (a) the following:

        ``(b) For purposes of any action brought by the Commission under
    subsection (d) or (e) of section 42, any person that knowingly or
    recklessly provides substantial assistance to another person in

    [[Page 124 STAT. 1862]]

    violation of a provision of this Act, or of any rule or regulation
    issued under this Act, shall be deemed to be in violation of such
    provision to the same extent as the person to whom such assistance is
    provided.''.
    SEC. 929N. AUTHORITY TO IMPOSE PENALTIES FOR AIDING AND ABETTING
                              VIOLATIONS OF THE INVESTMENT ADVISERS
                              ACT.

        Section 209 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-9)
    is amended by inserting at the end the following new subsection:
        ``(f) Aiding and Abetting.--For purposes of any action brought by
    the Commission under subsection (e), any person that knowingly or
    recklessly has aided, abetted, counseled, commanded, induced, or
    procured a violation of any provision of this Act, or of any rule,
    regulation, or order hereunder, shall be deemed to be in violation of
    such provision, rule, regulation, or order to the same extent as the
    person that committed such violation.''.
    SEC. 929O. AIDING AND ABETTING STANDARD OF KNOWLEDGE SATISFIED BY
                              RECKLESSNESS.

        Section 20(e) of the Securities Exchange Act of 1934 (15 U.S.C.
    78t(e)) is amended by inserting ``or recklessly'' after ``knowingly''.
    SEC. 929P. STRENGTHENING ENFORCEMENT BY THE COMMISSION.

        (a) Authority to Impose Civil Penalties in Cease and Desist
    Proceedings.--
                (1) Under the securities act of 1933.--Section 8A of the
            Securities Act of 1933 (15 U.S.C. 77h-1) is amended by adding at
            the end the following new subsection:

        ``(g) Authority to Impose Money Penalties.--
                ``(1) Grounds.--In any cease-and-desist proceeding under
            subsection (a), the Commission may impose a civil penalty on a
            person if the Commission finds, on the record, after notice and
            opportunity for hearing, that--
                        ``(A) such person--
                              ``(i) is violating or has violated any
                          provision of this title, or any rule or regulation
                          issued under this title; or
                              ``(ii) is or was a cause of the violation of
                          any provision of this title, or any rule or
                          regulation thereunder; and
                        ``(B) such penalty is in the public interest.
                ``(2) Maximum amount of penalty.--
                        ``(A) First tier.--The maximum amount of a penalty
                    for each act or omission described in paragraph (1)
                    shall be $7,500 for a natural person or $75,000 for any
                    other person.
                        ``(B) Second tier.--Notwithstanding subparagraph
                    (A), the maximum amount of penalty for each such act or
                    omission shall be $75,000 for a natural person or
                    $375,000 for any other person, if the act or omission
                    described in paragraph (1) involved fraud, deceit,
                    manipulation, or deliberate or reckless disregard of a
                    regulatory requirement.
                        ``(C) Third tier.--Notwithstanding subparagraphs (A)
                    and (B), the maximum amount of penalty for each such act
                    or omission shall be $150,000 for a natural person or
                    $725,000 for any other person, if--

    [[Page 124 STAT. 1863]]

                              ``(i) the act or omission described in
                          paragraph (1) involved fraud, deceit,
                          manipulation, or deliberate or reckless disregard
                          of a regulatory requirement; and
                              ``(ii) such act or omission directly or
                          indirectly resulted in--
                                        ``(I) substantial losses or created
                                    a significant risk of substantial losses
                                    to other persons; or
                                        ``(II) substantial pecuniary gain to
                                    the person who committed the act or
                                    omission.
                ``(3) Evidence concerning ability to pay.--In any proceeding
            in which the Commission may impose a penalty under this section,
            a respondent may present evidence of the ability of the
            respondent to pay such penalty. The Commission may, in its
            discretion, consider such evidence in determining whether such
            penalty is in the public interest. Such evidence may relate to
            the extent of the ability of the respondent to continue in
            business and the collectability of a penalty, taking into
            account any other claims of the United States or third parties
            upon the assets of the respondent and the amount of the assets
            of the respondent.''.
                (2) Under the securities exchange act of 1934.--Section
            21B(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78u-
            2(a)) is amended--
                        (A) by striking the matter following paragraph (4);
                        (B) in the matter preceding paragraph (1), by
                    inserting after ``opportunity for hearing,'' the
                    following: ``that such penalty is in the public interest
                    and'';
                        (C) by redesignating paragraphs (1) through (4) as
                    subparagraphs (A) through (D), respectively, and
                    adjusting the margins accordingly;
                        (D) by striking ``In any proceeding'' and inserting
                    the following:
                ``(1) In general.--In any proceeding''; and
                        (E) by adding at the end the following:
                ``(2) Cease-and-desist proceedings.--In any proceeding
            instituted under section 21C against any person, the Commission
            may impose a civil penalty, if the Commission finds, on the
            record after notice and opportunity for hearing, that such
            person--
                        ``(A) is violating or has violated any provision of
                    this title, or any rule or regulation issued under this
                    title; or
                        ``(B) is or was a cause of the violation of any
                    provision of this title, or any rule or regulation
                    issued under this title.''.
                (3) Under the investment company act of 1940.--Section
            9(d)(1) of the Investment Company Act of 1940 (15 U.S.C. 80a-
            9(d)(1)) is amended--
                        (A) by striking the matter following subparagraph
                    (C);
                        (B) in the matter preceding subparagraph (A), by
                    inserting after ``opportunity for hearing,'' the
                    following: ``that such penalty is in the public
                    interest, and'';
                        (C) by redesignating subparagraphs (A) through (C)
                    as clauses (i) through (iii), respectively, and
                    adjusting the margins accordingly;
                        (D) by striking ``In any proceeding'' and inserting
                    the following:

    [[Page 124 STAT. 1864]]

                        ``(A) In general.--In any proceeding''; and
                        (E) by adding at the end the following:
                        ``(B) Cease-and-desist proceedings.--In any
                    proceeding instituted pursuant to subsection (f) against
                    any person, the Commission may impose a civil penalty if
                    the Commission finds, on the record, after notice and
                    opportunity for hearing, that such person--
                              ``(i) is violating or has violated any
                          provision of this title, or any rule or regulation
                          issued under this title; or
                              ``(ii) is or was a cause of the violation of
                          any provision of this title, or any rule or
                          regulation issued under this title.''.
                (4) Under the investment advisers act of 1940.--Section
            203(i)(1) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-
            3(i)(1)) is amended--
                        (A) by striking the matter following subparagraph
                    (D);
                        (B) in the matter preceding subparagraph (A), by
                    inserting after ``opportunity for hearing,'' the
                    following: ``that such penalty is in the public interest
                    and'';
                        (C) by redesignating subparagraphs (A) through (D)
                    as clauses (i) through (iv), respectively, and adjusting
                    the margins accordingly;
                        (D) by striking ``In any proceeding'' and inserting
                    the following:
                        ``(A) In general.--In any proceeding''; and
                        (E) by adding at the end the following new
                    subparagraph:
                        ``(B) Cease-and-desist proceedings.--In any
                    proceeding instituted pursuant to subsection (k) against
                    any person, the Commission may impose a civil penalty if
                    the Commission finds, on the record, after notice and
                    opportunity for hearing, that such person--
                              ``(i) is violating or has violated any
                          provision of this title, or any rule or regulation
                          issued under this title; or
                              ``(ii) is or was a cause of the violation of
                          any provision of this title, or any rule or
                          regulation issued under this title.''.

        (b) <<NOTE: Courts.>>  Extraterritorial Jurisdiction of the
    Antifraud Provisions of the Federal Securities Laws.--
                (1) Under the securities act of 1933.--Section 22 of the
            Securities Act of 1933 (15 U.S.C. 77v(a)) is amended by adding
            at the end the following new subsection:

        ``(c) Extraterritorial Jurisdiction.--The district courts of the
    United States and the United States courts of any Territory shall have
    jurisdiction of an action or proceeding brought or instituted by the
    Commission or the United States alleging a violation of section 17(a)
    involving--
                ``(1) conduct within the United States that constitutes
            significant steps in furtherance of the violation, even if the
            securities transaction occurs outside the United States and
            involves only foreign investors; or
                ``(2) conduct occurring outside the United States that has a
            foreseeable substantial effect within the United States.''.

    [[Page 124 STAT. 1865]]

                (2) Under the securities exchange act of 1934.--Section 27
            of the Securities Exchange Act of 1934 (15 U.S.C. 78aa) is
            amended--
                        (A) by striking ``The district'' and inserting the
                    following:

        ``(a) In General.--The district''; and
                        (B) by adding at the end the following new
                    subsection:

        ``(b) Extraterritorial Jurisdiction.--The district courts of the
    United States and the United States courts of any Territory shall have
    jurisdiction of an action or proceeding brought or instituted by the
    Commission or the United States alleging a violation of the antifraud
    provisions of this title involving--
                ``(1) conduct within the United States that constitutes
            significant steps in furtherance of the violation, even if the
            securities transaction occurs outside the United States and
            involves only foreign investors; or
                ``(2) conduct occurring outside the United States that has a
            foreseeable substantial effect within the United States.''.
                (3) Under the investment advisers act of 1940.--Section 214
            of the Investment Advisers Act of 1940 (15 U.S.C. 80b-14) is
            amended--
                        (A) by striking ``The district'' and inserting the
                    following:

        ``(a) In General.--The district''; and
                        (B) by adding at the end the following new
                    subsection:

        ``(b) Extraterritorial Jurisdiction.--The district courts of the
    United States and the United States courts of any Territory shall have
    jurisdiction of an action or proceeding brought or instituted by the
    Commission or the United States alleging a violation of section 206
    involving--
                ``(1) conduct within the United States that constitutes
            significant steps in furtherance of the violation, even if the
            violation is committed by a foreign adviser and involves only
            foreign investors; or
                ``(2) conduct occurring outside the United States that has a
            foreseeable substantial effect within the United States.''.

        (c) Control Person Liability Under the Securities Exchange Act of
    1934.--Section 20(a) of the Securities Exchange Act of 1934 (15 U.S.C.
    78t(a)) is amended by inserting after ``controlled person is liable''
    the following: ``(including to the Commission in any action brought
    under paragraph (1) or (3) of section 21(d))''.
    SEC. 929Q. REVISION TO RECORDKEEPING RULE.

        (a) Investment Company Act of 1940 Amendments.--Section 31 of the
    Investment Company Act of 1940 (15 U.S.C. 80a-30) is amended--
                (1) in subsection (a)(1), by adding at the end the
            following: ``Each person having custody or use of the
            securities, deposits, or credits of a registered investment
            company shall maintain and preserve all records that relate to
            the custody or use by such person of the securities, deposits,
            or credits of the registered investment company for such period
            or periods as the Commission, by rule or regulation, may
            prescribe, as necessary or appropriate in the public interest or
            for the protection of investors.''; and
                (2) in subsection (b), by adding at the end the following:
                ``(4) Records of persons with custody or use.--

    [[Page 124 STAT. 1866]]

                        ``(A) In general.--Records of persons having custody
                    or use of the securities, deposits, or credits of a
                    registered investment company that relate to such
                    custody or use, are subject at any time, or from time to
                    time, to such reasonable periodic, special, or other
                    examinations and other information and document requests
                    by representatives of the Commission, as the Commission
                    deems necessary or appropriate in the public interest or
                    for the protection of investors.
                        ``(B) Certain persons subject to other regulation.--
                    Any person that is subject to regulation and examination
                    by a Federal financial institution regulatory agency (as
                    such term is defined under section 212(c)(2) of title
                    18, United States Code) may satisfy any examination
                    request, information request, or document request
                    described under subparagraph (A), by providing to the
                    Commission a detailed listing, in writing, of the
                    securities, deposits, or credits of the registered
                    investment company within the custody or use of such
                    person.''.

        (b) Investment Advisers Act of 1940 Amendment.--Section 204 of the
    Investment Advisers Act of 1940 (15 U.S.C. 80b-4) is amended by adding
    at the end the following new subsection:
        ``(d) Records of Persons With Custody or Use.--
                ``(1) In general.--Records of persons having custody or use
            of the securities, deposits, or credits of a client, that relate
            to such custody or use, are subject at any time, or from time to
            time, to such reasonable periodic, special, or other
            examinations and other information and document requests by
            representatives of the Commission, as the Commission deems
            necessary or appropriate in the public interest or for the
            protection of investors.
                ``(2) Certain persons subject to other regulation.--Any
            person that is subject to regulation and examination by a
            Federal financial institution regulatory agency (as such term is
            defined under section 212(c)(2) of title 18, United States Code)
            may satisfy any examination request, information request, or
            document request described under paragraph (1), by providing the
            Commission with a detailed listing, in writing, of the
            securities, deposits, or credits of the client within the
            custody or use of such person.''.
    SEC. 929R. BENEFICIAL OWNERSHIP AND SHORT-SWING PROFIT REPORTING.

        (a) Beneficial Ownership Reporting.--Section 13 of the Securities
    Exchange Act of 1934 (15 U.S.C. 78m) is amended--
                (1) in subsection (d)(1)--
                        (A) by inserting after ``within ten days after such
                    acquisition'' the following: ``or within such shorter
                    time as the Commission may establish by rule''; and
                        (B) by striking ``send to the issuer of the security
                    at its principal executive office, by registered or
                    certified mail, send to each exchange where the security
                    is traded, and'';
                (2) in subsection (d)(2)--
                        (A) by striking ``in the statements to the issuer
                    and the exchange, and''; and

    [[Page 124 STAT. 1867]]

                        (B) by striking ``shall be transmitted to the issuer
                    and the exchange and'';
                (3) in subsection (g)(1), by striking ``shall send to the
            issuer of the security and''; and
                (4) in subsection (g)(2)--
                        (A) by striking ``sent to the issuer and''; and
                        (B) by striking ``shall be transmitted to the issuer
                    and''.

        (b) Short-swing Profit Reporting.--Section 16(a) of the Securities
    Exchange Act of 1934 (15 U.S.C. 78p(a)) is amended--
                (1) in paragraph (1), by striking ``(and, if such security
            is registered on a national securities exchange, also with the
            exchange)''; and
                (2) in paragraph (2)(B), by inserting after ``officer'' the
            following: ``, or within such shorter time as the Commission may
            establish by rule''.
    SEC. 929S. FINGERPRINTING.

        Section 17(f)(2) of the Securities Exchange Act of 1934 (15 U.S.C.
    78q(f)(2)) is amended--
                (1) in the first sentence, by striking ``and registered
            clearing agency,'' and inserting ``registered clearing agency,
            registered securities information processor, national securities
            exchange, and national securities association''; and
                (2) in the second sentence, by striking ``or clearing
            agency,'' and inserting ``clearing agency, securities
            information processor, national securities exchange, or national
            securities association,''.
    SEC. 929T. EQUAL TREATMENT OF SELF-REGULATORY ORGANIZATION RULES.

        Section 29(a) of the Securities Exchange Act of 1934 (15 U.S.C.
    78cc(a)) is amended by striking ``an exchange required thereby'' and
    inserting ``a self-regulatory organization,''.
    SEC. 929U. DEADLINE FOR COMPLETING EXAMINATIONS, INSPECTIONS AND
                              ENFORCEMENT ACTIONS.

        The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is
    amended by inserting after section 4D the following new section:
    ``SEC. 4E. <<NOTE: 15 USC 78d-5.>>  DEADLINE FOR COMPLETING
                          ENFORCEMENT INVESTIGATIONS AND COMPLIANCE
                          EXAMINATIONS AND INSPECTIONS.

        ``(a) Enforcement Investigations.--
                ``(1) <<NOTE: Notification. Filing.>>  In general.--Not
            later than 180 days after the date on which Commission staff
            provide a written Wells notification to any person, the
            Commission staff shall either file an action against such person
            or provide notice to the Director of the Division of Enforcement
            of its intent to not file an action.
                ``(2) <<NOTE: Time period.>>  Exceptions for certain complex
            actions.--Notwithstanding paragraph (1), if the Director of the
            Division of Enforcement of the Commission or the Director's
            designee determines that a particular enforcement investigation
            is sufficiently complex such that a determination regarding the
            filing of an action against a person cannot be completed within
            the deadline specified in paragraph (1), the Director of the
            Division of Enforcement of the Commission or the Director's
            designee may, after providing notice to the Chairman of the
            Commission,

    [[Page 124 STAT. 1868]]

            extend such deadline as needed for one additional 180-day
            period. If after the additional 180-day period the Director of
            the Division of Enforcement of the Commission or the Director's
            designee determines that a particular enforcement investigation
            is sufficiently complex such that a determination regarding the
            filing of an action against a person cannot be completed within
            the additional 180-day period, the Director of the Division of
            Enforcement of the Commission or the Director's designee may,
            after providing notice to and receiving approval of the
            Commission, extend such deadline as needed for one or more
            additional successive 180-day periods.

        ``(b) Compliance Examinations and Inspections.--
                ``(1) <<NOTE: Notification.>>  In general.--Not later than
            180 days after the date on which Commission staff completes the
            on-site portion of its compliance examination or inspection or
            receives all records requested from the entity being examined or
            inspected, whichever is later, Commission staff shall provide
            the entity being examined or inspected with written notification
            indicating either that the examination or inspection has
            concluded, has concluded without findings, or that the staff
            requests the entity undertake corrective action.
                ``(2) <<NOTE: Time period.>>  Exception for certain complex
            actions.--Notwithstanding paragraph (1), if the head of any
            division or office within the Commission responsible for
            compliance examinations and inspections or his designee
            determines that a particular compliance examination or
            inspection is sufficiently complex such that a determination
            regarding concluding the examination or inspection, or regarding
            the staff requests the entity undertake corrective action,
            cannot be completed within the deadline specified in paragraph
            (1), the head of any division or office within the Commission
            responsible for compliance examinations and inspections or his
            designee may, after providing notice to the Chairman of the
            Commission, extend such deadline as needed for one additional
            180-day period.''.
    SEC. 929V. SECURITY INVESTOR PROTECTION ACT AMENDMENTS.

        (a) Increasing the Minimum Assessment Paid by SIPC Members.--Section
    4(d)(1)(C) of the Securities Investor Protection Act of 1970 (15 U.S.C.
    78ddd(d)(1)(C)) is amended by striking ``$150 per annum'' and inserting
    the following: ``0.02 percent of the gross revenues from the securities
    business of such member of SIPC''.
        (b) Increasing the Fine for Prohibited Acts Under SIPA.--Section
    14(c) of the Securities Investor Protection Act of 1970 (15 U.S.C.
    78jjj(c)) is amended--
                (1) in paragraph (1), by striking ``$50,000'' and inserting
            ``$250,000''; and
                (2) in paragraph (2), by striking ``$50,000'' and inserting
            ``$250,000''.

        (c) Penalty for Misrepresentation of SIPC Membership or
    Protection.--Section 14 of the Securities Investor Protection Act of
    1970 (15 U.S.C. 78jjj) is amended by adding at the end the following new
    subsection:
        ``(d) Misrepresentation of SIPC Membership or Protection.--
                ``(1) In general.--Any person who falsely represents by any
            means (including, without limitation, through the Internet or
            any other medium of mass communication), with actual

    [[Page 124 STAT. 1869]]

            knowledge of the falsity of the representation and with an
            intent to deceive or cause injury to another, that such person,
            or another person, is a member of SIPC or that any person or
            account is protected or is eligible for protection under this
            Act or by SIPC, shall be liable for any damages caused thereby
            and shall be fined not more than $250,000 or imprisoned for not
            more than 5 years.
                ``(2) <<NOTE: Procedures. Certification. Records.>>
            Injunctions.--Any court having jurisdiction of a civil action
            arising under this Act may grant temporary injunctions and final
            injunctions on such terms as the court deems reasonable to
            prevent or restrain any violation of paragraph (1). Any such
            injunction may be served anywhere in the United States on the
            person enjoined, shall be operative throughout the United
            States, and shall be enforceable, by proceedings in contempt or
            otherwise, by any United States court having jurisdiction over
            that person. The clerk of the court granting the injunction
            shall, when requested by any other court in which enforcement of
            the injunction is sought, transmit promptly to the other court a
            certified copy of all papers in the case on file in such clerk's
            office.''.
    SEC. 929W. NOTICE TO MISSING SECURITY HOLDERS.

        Section 17A of the Securities Exchange Act of 1934 (15 U.S.C. 78q-1)
    is amended by adding at the end the following new subsection:
        ``(g) Due Diligence for the Delivery of Dividends, Interest, and
    Other Valuable Property Rights.--
                ``(1) Revision of rules required.--The Commission shall
            revise its regulations in section 240.17Ad-17 of title 17, Code
            of Federal Regulations, as in effect on December 8, 1997, to
            extend the application of such section to brokers and dealers
            and to provide for the following:
                        ``(A) <<NOTE: Notification. Deadline.>>  A
                    requirement that the paying agent provide a single
                    written notification to each missing security holder
                    that the missing security holder has been sent a check
                    that has not yet been negotiated. The written
                    notification may be sent along with a check or other
                    mailing subsequently sent to the missing security holder
                    but must be provided no later than 7 months after the
                    sending of the not yet negotiated check.
                        ``(B) An exclusion for paying agents from the
                    notification requirements when the value of the not yet
                    negotiated check is less than $25.
                        ``(C) A provision clarifying that the requirements
                    described in subparagraph (A) shall have no effect on
                    State escheatment laws.
                        ``(D) For purposes of such revised regulations--
                              ``(i) a security holder shall be considered a
                          `missing security holder' if a check is sent to
                          the security holder and the check is not
                          negotiated before the earlier of the paying agent
                          sending the next regularly scheduled check or the
                          elapsing of 6 months after the sending of the not
                          yet negotiated check; and
                              ``(ii) the term `paying agent' includes any
                          issuer, transfer agent, broker, dealer, investment
                          adviser, indenture trustee, custodian, or any
                          other person that

    [[Page 124 STAT. 1870]]

                          accepts payments from the issuer of a security and
                          distributes the payments to the holders of the
                          security.
                ``(2) <<NOTE: Deadline.>>  Rulemaking.--The Commission shall
            adopt such rules, regulations, and orders necessary to implement
            this subsection no later than 1 year after the date of enactment
            of this subsection. In proposing such rules, the Commission
            shall seek to minimize disruptions to current systems used by or
            on behalf of paying agents to process payment to account holders
            and avoid requiring multiple paying agents to send written
            notification to a missing security holder regarding the same not
            yet negotiated check.''.
    SEC. 929X. SHORT SALE REFORMS.

        (a) Short Sale Disclosure.--Section 13(f) of the Securities Exchange
    Act of 1934 (15 U.S.C. 78m(f)) is amended by redesignating paragraphs
    (2), (3), (4), and (5) as paragraphs (3), (4), (5), and (6),
    respectively, and inserting after paragraph (1) the following:
                ``(2) <<NOTE: Regulations.>>  The Commission shall prescribe
            rules providing for the public disclosure of the name of the
            issuer and the title, class, CUSIP number, aggregate amount of
            the number of short sales of each security, and any additional
            information determined by the Commission following the end of
            the reporting period. <<NOTE: Deadline.>> At a minimum, such
            public disclosure shall occur every month.''.

        (b) Short Selling Enforcement.--Section 9 of the Securities Exchange
    Act of 1934 (15 U.S.C. 78i) is amended--
                (1) by redesignating subsections (d), (e), (f), (g), (h),
            and (i) as subsections (e), (f), (g), (h), (i), and (j),
            respectively; and
                (2) inserting after subsection (c), the following new
            subsection:

        ``(d) Transactions Relating to Short Sales of Securities.--It shall
    be unlawful for any person, directly or indirectly, by the use of the
    mails or any means or instrumentality of interstate commerce, or of any
    facility of any national securities exchange, or for any member of a
    national securities exchange to effect, alone or with one or more other
    persons, a manipulative short sale of any
    security. <<NOTE: Regulations.>>  The Commission shall issue such other
    rules as are necessary or appropriate to ensure that the appropriate
    enforcement options and remedies are available for violations of this
    subsection in the public interest or for the protection of investors.''.

        (c) Investor Notification.--Section 15 of the Securities Exchange
    Act of 1934 (15 U.S.C. 78o) is amended--
                (1) by redesignating subsections (e), (f), (g), (h), and (i)
            as subsections (f), (g), (h), (i), and (j), respectively; and
                (2) inserting after subsection (d) the following new
            subsection:

        ``(e) Notices to Customers Regarding Securities Lending.--Every
    registered broker or dealer shall provide notice to its customers that
    they may elect not to allow their fully paid securities to be used in
    connection with short sales. If a broker or dealer uses a customer's
    securities in connection with short sales, the broker or dealer shall
    provide notice to its customer that the broker or dealer may receive
    compensation in connection with lending the customer's securities. The
    Commission, by rule, as it deems necessary or appropriate in the public
    interest and for the protection

    [[Page 124 STAT. 1871]]

    of investors, may prescribe the form, content, time, and manner of
    delivery of any notice required under this paragraph.''.
    SEC. 929Y. STUDY ON EXTRATERRITORIAL PRIVATE RIGHTS OF ACTION.

        (a) <<NOTE: Public comment.>>  In General.--The Securities and
    Exchange Commission of the United States shall solicit public comment
    and thereafter conduct a study to determine the extent to which private
    rights of action under the antifraud provisions of the Securities and
    Exchange Act of 1934 (15 U.S.C. 78u-4) should be extended to cover--
                (1) conduct within the United States that constitutes a
            significant step in the furtherance of the violation, even if
            the securities transaction occurs outside the United States and
            involves only foreign investors; and
                (2) conduct occurring outside the United States that has a
            foreseeable substantial effect within the United States.

        (b) Contents.--The study shall consider and analyze, among other
    things--
                (1) the scope of such a private right of action, including
            whether it should extend to all private actors or whether it
            should be more limited to extend just to institutional investors
            or otherwise;
                (2) what implications such a private right of action would
            have on international comity;
                (3) the economic costs and benefits of extending a private
            right of action for transnational securities frauds; and
                (4) whether a narrower extraterritorial standard should be
            adopted.

        (c) Report.--A report of the study shall be submitted and
    recommendations made to the Committee on Banking, Housing, and Urban
    Affairs of the Senate and the Committee on Financial Services of the
    House not later than 18 months after the date of enactment of this Act.
    SEC. 929Z. GAO STUDY ON SECURITIES LITIGATION.

        (a) Study.--The Comptroller General of the United States shall
    conduct a study on the impact of authorizing a private right of action
    against any person who aids or abets another person in violation of the
    securities laws. To the extent feasible, this study shall include--
                (1) a review of the role of secondary actors in companies
            issuance of securities;
                (2) the courts interpretation of the scope of liability for
            secondary actors under Federal securities laws after January 14,
            2008; and
                (3) the types of lawsuits decided under the Private
            Securities Litigation Act of 1995.

        (b) Report.--Not later than 1 year after the date of enactment of
    this Act, the Comptroller General shall submit a report to Congress on
    the findings of the study required under subsection (a).

    [[Page 124 STAT. 1872]]

      Subtitle C--Improvements to the Regulation of Credit Rating Agencies

    SEC. 931. <<NOTE: 15 USC 78o-7 note.>>  FINDINGS.

        Congress finds the following:
                (1) Because of the systemic importance of credit ratings and
            the reliance placed on credit ratings by individual and
            institutional investors and financial regulators, the activities
            and performances of credit rating agencies, including nationally
            recognized statistical rating organizations, are matters of
            national public interest, as credit rating agencies are central
            to capital formation, investor confidence, and the efficient
            performance of the United States economy.
                (2) Credit rating agencies, including nationally recognized
            statistical rating organizations, play a critical ``gatekeeper''
            role in the debt market that is functionally similar to that of
            securities analysts, who evaluate the quality of securities in
            the equity market, and auditors, who review the financial
            statements of firms. Such role justifies a similar level of
            public oversight and accountability.
                (3) Because credit rating agencies perform evaluative and
            analytical services on behalf of clients, much as other
            financial ``gatekeepers'' do, the activities of credit rating
            agencies are fundamentally commercial in character and should be
            subject to the same standards of liability and oversight as
            apply to auditors, securities analysts, and investment bankers.
                (4) In certain activities, particularly in advising
            arrangers of structured financial products on potential ratings
            of such products, credit rating agencies face conflicts of
            interest that need to be carefully monitored and that therefore
            should be addressed explicitly in legislation in order to give
            clearer authority to the Securities and Exchange Commission.
                (5) In the recent financial crisis, the ratings on
            structured financial products have proven to be inaccurate. This
            inaccuracy contributed significantly to the mismanagement of
            risks by financial institutions and investors, which in turn
            adversely impacted the health of the economy in the United
            States and around the world. Such inaccuracy necessitates
            increased accountability on the part of credit rating agencies.
    SEC. 932. ENHANCED REGULATION, ACCOUNTABILITY, AND TRANSPARENCY OF
                            NATIONALLY RECOGNIZED STATISTICAL RATING
                            ORGANIZATIONS.

        (a) In General.--Section 15E of the Securities Exchange Act of 1934
    (15 U.S.C. 78o-7) is amended--
                (1) in subsection (b)--
                        (A) in paragraph (1)(A), by striking ``furnished''
                    and inserting ``filed'' and by striking ``furnishing''
                    and inserting ``filing'';
                        (B) in paragraph (1)(B), by striking ``furnishing''
                    and inserting ``filing''; and
                        (C) in the first sentence of paragraph (2), by
                    striking ``furnish to'' and inserting ``file with'';
                (2) in subsection (c)--
                        (A) in paragraph (2)--

    [[Page 124 STAT. 1873]]

                              (i) in the second sentence, by inserting ``any
                          other provision of this section, or'' after
                          ``Notwithstanding''; and
                              (ii) by inserting after the period at the end
                          the following: ``Nothing in this paragraph may be
                          construed to afford a defense against any action
                          or proceeding brought by the Commission to enforce
                          the antifraud provisions of the securities
                          laws.''; and
                        (B) by adding at the end the following:
                ``(3) Internal controls over processes for determining
            credit ratings.--
                        ``(A) In general.--Each nationally recognized
                    statistical rating organization shall establish,
                    maintain, enforce, and document an effective internal
                    control structure governing the implementation of and
                    adherence to policies, procedures, and methodologies for
                    determining credit ratings, taking into consideration
                    such factors as the Commission may prescribe, by rule.
                        ``(B) <<NOTE: Deadline. Reports.>>  Attestation
                    requirement.--The Commission shall prescribe rules
                    requiring each nationally recognized statistical rating
                    organization to submit to the Commission an annual
                    internal controls report, which shall contain--
                              ``(i) a description of the responsibility of
                          the management of the nationally recognized
                          statistical rating organization in establishing
                          and maintaining an effective internal control
                          structure under subparagraph (A);
                              ``(ii) <<NOTE: Assessment.>>  an assessment of
                          the effectiveness of the internal control
                          structure of the nationally recognized statistical
                          rating organization; and
                              ``(iii) the attestation of the chief executive
                          officer, or equivalent individual, of the
                          nationally recognized statistical rating
                          organization.'';
                (3) in subsection (d)--
                        (A) <<NOTE: Censure.>>  by inserting after ``or
                    revoke the registration of any nationally recognized
                    statistical rating organization'' the following: ``, or
                    with respect to any person who is associated with, who
                    is seeking to become associated with, or, at the time of
                    the alleged misconduct, who was associated or was
                    seeking to become associated with a nationally
                    recognized statistical rating organization, the
                    Commission, by order, shall censure, place limitations
                    on the activities or functions of such person, suspend
                    for a period not exceeding 1 year, or bar such person
                    from being associated with a nationally recognized
                    statistical rating organization,'';
                        (B) by inserting ``bar'' after ``placing of
                    limitations, suspension,'';
                        (C) in paragraph (2), by striking ``furnished to''
                    and inserting ``filed with'';
                        (D) in paragraph (2), by redesignating subparagraphs
                    (A) and (B) as clauses (i) and (ii), respectively, and
                    adjusting the clause margins accordingly;
                        (E) by redesignating paragraphs (1) through (5) as
                    subparagraphs (A) through (E), respectively, and
                    adjusting the subparagraph margins accordingly;

    [[Page 124 STAT. 1874]]

                        (F) in the matter preceding subparagraph (A), as so
                    redesignated, by striking ``The Commission'' and
                    inserting the following:
                ``(1) In general.--The Commission'';
                        (G) in subparagraph (D), as so redesignated--
                              (i) by striking ``furnish'' and inserting
                          ``file''; and
                              (ii) by striking ``or'' at the end.
                        (H) in subparagraph (E), as so redesignated, by
                    striking the period at the end and inserting a
                    semicolon; and
                        (I) by adding at the end the following:
                        ``(F) has failed reasonably to supervise, with a
                    view to preventing a violation of the securities laws,
                    an individual who commits such a violation, if the
                    individual is subject to the supervision of that person.
                ``(2) Suspension or revocation for particular class of
            securities.--
                        ``(A) In general.--The Commission may temporarily
                    suspend or permanently revoke the registration of a
                    nationally recognized statistical rating organization
                    with respect to a particular class or subclass of
                    securities, if the Commission finds, on the record after
                    notice and opportunity for hearing, that the nationally
                    recognized statistical rating organization does not have
                    adequate financial and managerial resources to
                    consistently produce credit ratings with integrity.
                        ``(B) Considerations.--In making any determination
                    under subparagraph (A), the Commission shall consider--
                              ``(i) whether the nationally recognized
                          statistical rating organization has failed over a
                          sustained period of time, as determined by the
                          Commission, to produce ratings that are accurate
                          for that class or subclass of securities; and
                              ``(ii) such other factors as the Commission
                          may determine.'';
                (4) in subsection (h), by adding at the end the following:
                ``(3) Separation of ratings from sales and marketing.--
                        ``(A) Rules required.--The Commission shall issue
                    rules to prevent the sales and marketing considerations
                    of a nationally recognized statistical rating
                    organization from influencing the production of ratings
                    by the nationally recognized statistical rating
                    organization.
                        ``(B) Contents of rules.--The rules issued under
                    subparagraph (A) shall provide for--
                              ``(i) exceptions for small nationally
                          recognized statistical rating organizations with
                          respect to which the Commission determines that
                          the separation of the production of ratings and
                          sales and marketing activities is not appropriate;
                          and
                              ``(ii) suspension or revocation of the
                          registration of a nationally recognized
                          statistical rating organization, if the Commission
                          finds, on the record, after notice and opportunity
                          for a hearing, that--
                                        ``(I) the nationally recognized
                                    statistical rating organization has
                                    committed a violation of a rule issued
                                    under this subsection; and
                                        ``(II) the violation of a rule
                                    issued under this subsection affected a
                                    rating.

    [[Page 124 STAT. 1875]]

                ``(4) Look-back requirement.--
                        ``(A) Review by the nationally recognized
                    statistical rating organization.--
                    <<NOTE: Procedures.>> Each nationally recognized
                    statistical rating organization shall establish,
                    maintain, and enforce policies and procedures reasonably
                    designed to ensure that, in any case in which an
                    employee of a person subject to a credit rating of the
                    nationally recognized statistical rating organization or
                    the issuer, underwriter, or sponsor of a security or
                    money market instrument subject to a credit rating of
                    the nationally recognized statistical rating
                    organization was employed by the nationally recognized
                    statistical rating organization and participated in any
                    capacity in determining credit ratings for the person or
                    the securities or money market instruments during the 1-
                    year period preceding the date an action was taken with
                    respect to the credit rating, the nationally recognized
                    statistical rating organization shall--
                              ``(i) conduct a review to determine whether
                          any conflicts of interest of the employee
                          influenced the credit rating; and
                              ``(ii) take action to revise the rating if
                          appropriate, in accordance with such rules as the
                          Commission shall prescribe.
                        ``(B) Review by commission.--
                              ``(i) In general.--The Commission shall
                          conduct periodic reviews of the policies described
                          in subparagraph (A) and the implementation of the
                          policies at each nationally recognized statistical
                          rating organization to ensure they are reasonably
                          designed and implemented to most effectively
                          eliminate conflicts of interest.
                              ``(ii) Timing of reviews.--The Commission
                          shall review the code of ethics and conflict of
                          interest policy of each nationally recognized
                          statistical rating organization--
                                        ``(I) not less frequently than
                                    annually; and
                                        ``(II) whenever such policies are
                                    materially modified or amended.
                ``(5) Report to commission on certain employment
            transitions.--
                        ``(A) Report required.--Each nationally recognized
                    statistical rating organization shall report to the
                    Commission any case such organization knows or can
                    reasonably be expected to know where a person associated
                    with such organization within the previous 5 years
                    obtains employment with any obligor, issuer,
                    underwriter, or sponsor of a security or money market
                    instrument for which the organization issued a credit
                    rating during the 12-month period prior to such
                    employment, if such employee--
                              ``(i) was a senior officer of such
                          organization;
                              ``(ii) participated in any capacity in
                          determining credit ratings for such obligor,
                          issuer, underwriter, or sponsor; or
                              ``(iii) supervised an employee described in
                          clause (ii).

    [[Page 124 STAT. 1876]]

                        ``(B) Public disclosure.--Upon receiving such a
                    report, the Commission shall make such information
                    publicly available.'';
                (5) in subsection (j)--
                        (A) by striking ``Each'' and inserting the
                    following:
                ``(1) In general.--Each''; and
                        (B) by adding at the end the following:
                ``(2) Limitations.--
                        ``(A) In general.--Except as provided in
                    subparagraph (B), an individual designated under
                    paragraph (1) may not, while serving in the designated
                    capacity--
                              ``(i) perform credit ratings;
                              ``(ii) participate in the development of
                          ratings methodologies or models;
                              ``(iii) perform marketing or sales functions;
                          or
                              ``(iv) participate in establishing
                          compensation levels, other than for employees
                          working for that individual.
                        ``(B) Exception.--The Commission may exempt a small
                    nationally recognized statistical rating organization
                    from the limitations under this paragraph, if the
                    Commission finds that compliance with such limitations
                    would impose an unreasonable burden on the nationally
                    recognized statistical rating organization.
                ``(3) Other duties.-- <<NOTE: Procedures.>> Each individual
            designated under paragraph (1) shall establish procedures for
            the receipt, retention, and treatment of--
                        ``(A) complaints regarding credit ratings, models,
                    methodologies, and compliance with the securities laws
                    and the policies and procedures developed under this
                    section; and
                        ``(B) confidential, anonymous complaints by
                    employees or users of credit ratings.
                ``(4) Compensation.--The compensation of each compliance
            officer appointed under paragraph (1) shall not be linked to the
            financial performance of the nationally recognized statistical
            rating organization and shall be arranged so as to ensure the
            independence of the officer's judgment.
                ``(5) Annual reports required.--
                        ``(A) Annual reports required.--Each individual
                    designated under paragraph (1) shall submit to the
                    nationally recognized statistical rating organization an
                    annual report on the compliance of the nationally
                    recognized statistical rating organization with the
                    securities laws and the policies and procedures of the
                    nationally recognized statistical rating organization
                    that includes--
                              ``(i) a description of any material changes to
                          the code of ethics and conflict of interest
                          policies of the nationally recognized statistical
                          rating organization; and
                              ``(ii) a certification that the report is
                          accurate and complete.
                        ``(B) Submission of reports to the commission.--Each
                    nationally recognized statistical rating organization
                    shall file the reports required under subparagraph (A)
                    together with the financial report that is required to
                    be submitted to the Commission under this section.'';

    [[Page 124 STAT. 1877]]

                (6) in subsection (k), by striking ``furnish to'' and
            inserting ``file with'';
                (7) in subsection (l)(2)(A)(i), by striking ``furnished''
            and inserting ``filed''; and
                (8) by striking subsection (p) and inserting the following:

        ``(p) Regulation of Nationally Recognized Statistical Rating
    Organizations.--
                ``(1) Establishment of office of credit ratings.--
                        ``(A) Office established.--The Commission shall
                    establish within the Commission an Office of Credit
                    Ratings (referred to in this subsection as the `Office')
                    to administer the rules of the Commission--
                              ``(i) with respect to the practices of
                          nationally recognized statistical rating
                          organizations in determining ratings, for the
                          protection of users of credit ratings and in the
                          public interest;
                              ``(ii) to promote accuracy in credit ratings
                          issued by nationally recognized statistical rating
                          organizations; and
                              ``(iii) to ensure that such ratings are not
                          unduly influenced by conflicts of interest.
                        ``(B) Director of the office.--The head of the
                    Office shall be the Director, who shall report to the
                    Chairman.
                ``(2) Staffing.--The Office established under this
            subsection shall be staffed sufficiently to carry out fully the
            requirements of this section. The staff shall include persons
            with knowledge of and expertise in corporate, municipal, and
            structured debt finance.
                ``(3) Commission examinations.--
                        ``(A) Annual examinations required.--The Office
                    shall conduct an examination of each nationally
                    recognized statistical rating organization at least
                    annually.
                        ``(B) Conduct of examinations.--Each examination
                    under subparagraph (A) shall include a review of--
                              ``(i) whether the nationally recognized
                          statistical rating organization conducts business
                          in accordance with the policies, procedures, and
                          rating methodologies of the nationally recognized
                          statistical rating organization;
                              ``(ii) the management of conflicts of interest
                          by the nationally recognized statistical rating
                          organization;
                              ``(iii) implementation of ethics policies by
                          the nationally recognized statistical rating
                          organization;
                              ``(iv) the internal supervisory controls of
                          the nationally recognized statistical rating
                          organization;
                              ``(v) the governance of the nationally
                          recognized statistical rating organization;
                              ``(vi) the activities of the individual
                          designated by the nationally recognized
                          statistical rating organization under subsection
                          (j)(1);
                              ``(vii) the processing of complaints by the
                          nationally recognized statistical rating
                          organization; and
                              ``(viii) the policies of the nationally
                          recognized statistical rating organization
                          governing the post-employment activities of former
                          staff of the nationally recognized statistical
                          rating organization.

    [[Page 124 STAT. 1878]]

                        ``(C) Inspection reports.-- <<NOTE: Public
                    information.>> The Commission shall make available to
                    the public, in an easily understandable format, an
                    annual report summarizing--
                              ``(i) the essential findings of all
                          examinations conducted under subparagraph (A), as
                          deemed appropriate by the Commission;
                              ``(ii) the responses by the nationally
                          recognized statistical rating organizations to any
                          material regulatory deficiencies identified by the
                          Commission under clause (i); and
                              ``(iii) whether the nationally recognized
                          statistical rating organizations have
                          appropriately addressed the recommendations of the
                          Commission contained in previous reports under
                          this subparagraph.
                ``(4) <<NOTE: Fines. Penalties.>>  Rulemaking authority.--
            The Commission shall--
                        ``(A) establish, by rule, fines, and other penalties
                    applicable to any nationally recognized statistical
                    rating organization that violates the requirements of
                    this section and the rules thereunder; and
                        ``(B) issue such rules as may be necessary to carry
                    out this section.

        ``(q) Transparency of Ratings Performance.--
                ``(1) Rulemaking required.-- <<NOTE: Public
            information.>> The Commission shall, by rule, require that each
            nationally recognized statistical rating organization publicly
            disclose information on the initial credit ratings determined by
            the nationally recognized statistical rating organization for
            each type of obligor, security, and money market instrument, and
            any subsequent changes to such credit ratings, for the purpose
            of allowing users of credit ratings to evaluate the accuracy of
            ratings and compare the performance of ratings by different
            nationally recognized statistical rating organizations.
                ``(2) Content.--The rules of the Commission under this
            subsection shall require, at a minimum, disclosures that--
                        ``(A) are comparable among nationally recognized
                    statistical rating organizations, to allow users of
                    credit ratings to compare the performance of credit
                    ratings across nationally recognized statistical rating
                    organizations;
                        ``(B) are clear and informative for investors having
                    a wide range of sophistication who use or might use
                    credit ratings;
                        ``(C) include performance information over a range
                    of years and for a variety of types of credit ratings,
                    including for credit ratings withdrawn by the nationally
                    recognized statistical rating organization;
                        ``(D) are published and made freely available by the
                    nationally recognized statistical rating organization,
                    on an easily accessible portion of its website, and in
                    writing, when requested;
                        ``(E) are appropriate to the business model of a
                    nationally recognized statistical rating organization;
                    and
                        ``(F) each nationally recognized statistical rating
                    organization include an attestation with any credit
                    rating it issues affirming that no part of the rating
                    was influenced by any other business activities, that
                    the rating was based solely on the merits of the
                    instruments being rated, and

    [[Page 124 STAT. 1879]]

                    that such rating was an independent evaluation of the
                    risks and merits of the instrument.

        ``(r) Credit Ratings Methodologies.-- <<NOTE: Regulations.>> The
    Commission shall prescribe rules, for the protection of investors and in
    the public interest, with respect to the procedures and methodologies,
    including qualitative and quantitative data and models, used by
    nationally recognized statistical rating organizations that require each
    nationally recognized statistical rating organization--
                ``(1) to ensure that credit ratings are determined using
            procedures and methodologies, including qualitative and
            quantitative data and models, that are--
                        ``(A) approved by the board of the nationally
                    recognized statistical rating organization, a body
                    performing a function similar to that of a board; and
                        ``(B) in accordance with the policies and procedures
                    of the nationally recognized statistical rating
                    organization for the development and modification of
                    credit rating procedures and methodologies;
                ``(2) to ensure that when material changes to credit rating
            procedures and methodologies (including changes to qualitative
            and quantitative data and models) are made, that--
                        ``(A) the changes are applied consistently to all
                    credit ratings to which the changed procedures and
                    methodologies apply;
                        ``(B) to the extent that changes are made to credit
                    rating surveillance procedures and methodologies, the
                    changes are applied to then-current credit ratings by
                    the nationally recognized statistical rating
                    organization within a reasonable time period determined
                    by the Commission, by rule; and
                        ``(C) the nationally recognized statistical rating
                    organization publicly discloses the reason for the
                    change; and
                ``(3) <<NOTE: Notification.>>  to notify users of credit
            ratings--
                        ``(A) of the version of a procedure or methodology,
                    including the qualitative methodology or quantitative
                    inputs, used with respect to a particular credit rating;
                        ``(B) when a material change is made to a procedure
                    or methodology, including to a qualitative model or
                    quantitative inputs;
                        ``(C) when a significant error is identified in a
                    procedure or methodology, including a qualitative or
                    quantitative model, that may result in credit rating
                    actions; and
                        ``(D) of the likelihood of a material change
                    described in subparagraph (B) resulting in a change in
                    current credit ratings.

        ``(s) Transparency of Credit Rating Methodologies and Information
    Reviewed.--
                ``(1) Form for disclosures.-- <<NOTE: Regulations.>> The
            Commission shall require, by rule, each nationally recognized
            statistical rating organization to prescribe a form to accompany
            the publication of each credit rating that discloses--
                        ``(A) information relating to--
                              ``(i) the assumptions underlying the credit
                          rating procedures and methodologies;
                              ``(ii) the data that was relied on to
                          determine the credit rating; and

    [[Page 124 STAT. 1880]]

                              ``(iii) if applicable, how the nationally
                          recognized statistical rating organization used
                          servicer or remittance reports, and with what
                          frequency, to conduct surveillance of the credit
                          rating; and
                        ``(B) information that can be used by investors and
                    other users of credit ratings to better understand
                    credit ratings in each class of credit rating issued by
                    the nationally recognized statistical rating
                    organization.
                ``(2) Format.--The form developed under paragraph (1)
            shall--
                        ``(A) be easy to use and helpful for users of credit
                    ratings to understand the information contained in the
                    report;
                        ``(B) require the nationally recognized statistical
                    rating organization to provide the content described in
                    paragraph (3)(B) in a manner that is directly comparable
                    across types of securities; and
                        ``(C) be made readily available to users of credit
                    ratings, in electronic or paper form, as the Commission
                    may, by rule, determine.
                ``(3) Content of form.--
                        ``(A) Qualitative content.--Each nationally
                    recognized statistical rating organization shall
                    disclose on the form developed under paragraph (1)--
                              ``(i) the credit ratings produced by the
                          nationally recognized statistical rating
                          organization;
                              ``(ii) the main assumptions and principles
                          used in constructing procedures and methodologies,
                          including qualitative methodologies and
                          quantitative inputs and assumptions about the
                          correlation of defaults across underlying assets
                          used in rating structured products;
                              ``(iii) the potential limitations of the
                          credit ratings, and the types of risks excluded
                          from the credit ratings that the nationally
                          recognized statistical rating organization does
                          not comment on, including liquidity, market, and
                          other risks;
                              ``(iv) information on the uncertainty of the
                          credit rating, including--
                                        ``(I) information on the
                                    reliability, accuracy, and quality of
                                    the data relied on in determining the
                                    credit rating; and
                                        ``(II) a statement relating to the
                                    extent to which data essential to the
                                    determination of the credit rating were
                                    reliable or limited, including--
                                                ``(aa) any limits on the
                                            scope of historical data; and
                                                ``(bb) any limits in
                                            accessibility to certain
                                            documents or other types of
                                            information that would have
                                            better informed the credit
                                            rating;
                              ``(v) whether and to what extent third party
                          due diligence services have been used by the
                          nationally recognized statistical rating
                          organization, a description of the information
                          that such third party reviewed in conducting due
                          diligence services, and a description of the
                          findings or conclusions of such third party;

    [[Page 124 STAT. 1881]]

                              ``(vi) a description of the data about any
                          obligor, issuer, security, or money market
                          instrument that were relied upon for the purpose
                          of determining the credit rating;
                              ``(vii) a statement containing an overall
                          assessment of the quality of information available
                          and considered in producing a rating for an
                          obligor, security, or money market instrument, in
                          relation to the quality of information available
                          to the nationally recognized statistical rating
                          organization in rating similar issuances;
                              ``(viii) information relating to conflicts of
                          interest of the nationally recognized statistical
                          rating organization; and
                              ``(ix) such additional information as the
                          Commission may require.
                        ``(B) Quantitative content.--Each nationally
                    recognized statistical rating organization shall
                    disclose on the form developed under this subsection--
                              ``(i) an explanation or measure of the
                          potential volatility of the credit rating,
                          including--
                                        ``(I) any factors that might lead to
                                    a change in the credit ratings; and
                                        ``(II) the magnitude of the change
                                    that a user can expect under different
                                    market conditions;
                              ``(ii) information on the content of the
                          rating, including--
                                        ``(I) the historical performance of
                                    the rating; and
                                        ``(II) the expected probability of
                                    default and the expected loss in the
                                    event of default;
                              ``(iii) information on the sensitivity of the
                          rating to assumptions made by the nationally
                          recognized statistical rating organization,
                          including--
                                        ``(I) 5 assumptions made in the
                                    ratings process that, without accounting
                                    for any other factor, would have the
                                    greatest impact on a rating if the
                                    assumptions were proven false or
                                    inaccurate; and
                                        ``(II) an analysis, using specific
                                    examples, of how each of the 5
                                    assumptions identified under subclause
                                    (I) impacts a rating;
                              ``(iv) such additional information as may be
                          required by the Commission.
                ``(4) Due diligence services for asset-backed securities.--
                        ``(A) Findings.-- <<NOTE: Public information.>> The
                    issuer or underwriter of any asset-backed security shall
                    make publicly available the findings and conclusions of
                    any third-party due diligence report obtained by the
                    issuer or underwriter.
                        ``(B) Certification required.--In any case in which
                    third-party due diligence services are employed by a
                    nationally recognized statistical rating organization,
                    an issuer, or an underwriter, the person providing the
                    due diligence services shall provide to any nationally
                    recognized statistical rating organization that produces
                    a rating to which

    [[Page 124 STAT. 1882]]

                    such services relate, written certification, as provided
                    in subparagraph (C).
                        ``(C) Format and content.--The Commission shall
                    establish the appropriate format and content for the
                    written certifications required under subparagraph (B),
                    to ensure that providers of due diligence services have
                    conducted a thorough review of data, documentation, and
                    other relevant information necessary for a nationally
                    recognized statistical rating organization to provide an
                    accurate rating.
                        ``(D) Disclosure of certification.--
                    <<NOTE: Regulations. Public information.>> The
                    Commission shall adopt rules requiring a nationally
                    recognized statistical rating organization, at the time
                    at which the nationally recognized statistical rating
                    organization produces a rating, to disclose the
                    certification described in subparagraph (B) to the
                    public in a manner that allows the public to determine
                    the adequacy and level of due diligence services
                    provided by a third party.

        ``(t) Corporate Governance, Organization, and Management of
    Conflicts of Interest.--
                ``(1) Board of directors.-- <<NOTE: Establishment.>> Each
            nationally recognized statistical rating organization shall have
            a board of directors.
                ``(2) Independent directors.--
                        ``(A) In general.--At least \1/2\ of the board of
                    directors, but not fewer than 2 of the members thereof,
                    shall be independent of the nationally recognized
                    statistical rating agency. A portion of the independent
                    directors shall include users of ratings from a
                    nationally recognized statistical rating organization.
                        ``(B) Independence determination.--In order to be
                    considered independent for purposes of this subsection,
                    a member of the board of directors of a nationally
                    recognized statistical rating organization--
                              ``(i) may not, other than in his or her
                          capacity as a member of the board of directors or
                          any committee thereof--
                                        ``(I) accept any consulting,
                                    advisory, or other compensatory fee from
                                    the nationally recognized statistical
                                    rating organization; or
                                        ``(II) be a person associated with
                                    the nationally recognized statistical
                                    rating organization or with any
                                    affiliated company thereof; and
                              ``(ii) shall be disqualified from any
                          deliberation involving a specific rating in which
                          the independent board member has a financial
                          interest in the outcome of the rating.
                        ``(C) Compensation and term.--The compensation of
                    the independent members of the board of directors of a
                    nationally recognized statistical rating organization
                    shall not be linked to the business performance of the
                    nationally recognized statistical rating organization,
                    and shall be arranged so as to ensure the independence
                    of their judgment. The term of office of the independent
                    directors shall be for a pre-agreed fixed period, not to
                    exceed 5 years, and shall not be renewable.
                ``(3) Duties of board of directors.--In addition to the
            overall responsibilities of the board of directors, the board
            shall oversee--

    [[Page 124 STAT. 1883]]

                        ``(A) the establishment, maintenance, and
                    enforcement of policies and procedures for determining
                    credit ratings;
                        ``(B) the establishment, maintenance, and
                    enforcement of policies and procedures to address,
                    manage, and disclose any conflicts of interest;
                        ``(C) the effectiveness of the internal control
                    system with respect to policies and procedures for
                    determining credit ratings; and
                        ``(D) the compensation and promotion policies and
                    practices of the nationally recognized statistical
                    rating organization.
                ``(4) Treatment of nrsro subsidiaries.--If a nationally
            recognized statistical rating organization is a subsidiary of a
            parent entity, the board of the directors of the parent entity
            may satisfy the requirements of this subsection by assigning to
            a committee of such board of directors the duties under
            paragraph (3), if--
                        ``(A) at least \1/2\ of the members of the committee
                    (including the chairperson of the committee) are
                    independent, as defined in this section; and
                        ``(B) at least 1 member of the committee is a user
                    of ratings from a nationally recognized statistical
                    rating organization.
                ``(5) Exception authority.--If the Commission finds that
            compliance with the provisions of this subsection present an
            unreasonable burden on a small nationally recognized statistical
            rating organization, the Commission may permit the nationally
            recognized statistical rating organization to delegate such
            responsibilities to a committee that includes at least one
            individual who is a user of ratings of a nationally recognized
            statistical rating organization.''.

        (b) Conforming Amendment.--Section 3(a)(62) of the Securities
    Exchange Act of 1934 (15 U.S.C. 78c(a)(62)) is amended by striking
    subparagraph (A) and redesignating subparagraphs (B) and (C) as
    subparagraphs (A) and (B), respectively.
    SEC. 933. STATE OF MIND IN PRIVATE ACTIONS.

        (a) Accountability.--Section 15E(m) of the Securities Exchange Act
    of 1934 (15 U.S.C. 78o-7(m)) is amended to read as follows:
        ``(m) Accountability.--
                ``(1) In general.-- <<NOTE: Applicability.>> The enforcement
            and penalty provisions of this title shall apply to statements
            made by a credit rating agency in the same manner and to the
            same extent as such provisions apply to statements made by a
            registered public accounting firm or a securities analyst under
            the securities laws, and such statements shall not be deemed
            forward-looking statements for the purposes of section 21E.
                ``(2) Rulemaking.--The Commission shall issue such rules as
            may be necessary to carry out this subsection.''.

        (b) State of Mind.--Section 21D(b)(2) of the Securities Exchange Act
    of 1934 (15 U.S.C. 78u-4(b)(2)) is amended--
                (1) by striking ``In any'' and inserting the following:
                        ``(A) In general.--Except as provided in
                    subparagraph (B), in any''; and
                (2) by adding at the end the following:

    [[Page 124 STAT. 1884]]

                        ``(B) Exception.--In the case of an action for money
                    damages brought against a credit rating agency or a
                    controlling person under this title, it shall be
                    sufficient, for purposes of pleading any required state
                    of mind in relation to such action, that the complaint
                    state with particularity facts giving rise to a strong
                    inference that the credit rating agency knowingly or
                    recklessly failed--
                              ``(i) to conduct a reasonable investigation of
                          the rated security with respect to the factual
                          elements relied upon by its own methodology for
                          evaluating credit risk; or
                              ``(ii) to obtain reasonable verification of
                          such factual elements (which verification may be
                          based on a sampling technique that does not amount
                          to an audit) from other sources that the credit
                          rating agency considered to be competent and that
                          were independent of the issuer and underwriter.''.
    SEC. 934. REFERRING TIPS TO LAW ENFORCEMENT OR REGULATORY
                            AUTHORITIES.

        Section 15E of the Securities Exchange Act of 1934 (15 U.S.C. 78o-
    7), as amended by this subtitle, is amended by adding at the end the
    following:
        ``(u) Duty To Report Tips Alleging Material Violations of Law.--
                ``(1) Duty to report.--Each nationally recognized
            statistical rating organization shall refer to the appropriate
            law enforcement or regulatory authorities any information that
            the nationally recognized statistical rating organization
            receives from a third party and finds credible that alleges that
            an issuer of securities rated by the nationally recognized
            statistical rating organization has committed or is committing a
            material violation of law that has not been adjudicated by a
            Federal or State court.
                ``(2) Rule of construction.--Nothing in paragraph (1) may be
            construed to require a nationally recognized statistical rating
            organization to verify the accuracy of the information described
            in paragraph (1).''.
    SEC. 935. CONSIDERATION OF INFORMATION FROM SOURCES OTHER THAN THE
                            ISSUER IN RATING DECISIONS.

        Section 15E of the Securities Exchange Act of 1934 (15 U.S.C. 78o-
    7), as amended by this subtitle, is amended by adding at the end the
    following:
        ``(v) Information From Sources Other Than the Issuer.--In producing
    a credit rating, a nationally recognized statistical rating organization
    shall consider information about an issuer that the nationally
    recognized statistical rating organization has, or receives from a
    source other than the issuer or underwriter, that the nationally
    recognized statistical rating organization finds credible and
    potentially significant to a rating decision.''.
    SEC. 936. <<NOTE: 15 USC 78o-7 note.>> QUALIFICATION STANDARDS FOR
                            CREDIT RATING ANALYSTS.

        Not <<NOTE: Deadline. Regulations.>>  later than 1 year after the
    date of enactment of this Act, the Commission shall issue rules that are
    reasonably designed to ensure that any person employed by a nationally
    recognized statistical rating organization to perform credit ratings--

    [[Page 124 STAT. 1885]]

                (1) meets standards of training, experience, and competence
            necessary to produce accurate ratings for the categories of
            issuers whose securities the person rates; and
                (2) is tested for knowledge of the credit rating process.
    SEC. 937. <<NOTE: 15 USC 78o-7 note.>> TIMING OF REGULATIONS.

        Unless otherwise specifically provided in this subtitle, the
    Commission shall issue final regulations, as required by this subtitle
    and the amendments made by this subtitle, not later than 1 year after
    the date of enactment of this Act.
    SEC. 938. <<NOTE: 15 USC 78o-8.>> UNIVERSAL RATINGS SYMBOLS.

        (a) <<NOTE: Procedures.>>  Rulemaking.--The Commission shall
    require, by rule, each nationally recognized statistical rating
    organization to establish, maintain, and enforce written policies and
    procedures that--
                (1) assess the probability that an issuer of a security or
            money market instrument will default, fail to make timely
            payments, or otherwise not make payments to investors in
            accordance with the terms of the security or money market
            instrument;
                (2) clearly define and disclose the meaning of any symbol
            used by the nationally recognized statistical rating
            organization to denote a credit rating; and
                (3) apply any symbol described in paragraph (2) in a manner
            that is consistent for all types of securities and money market
            instruments for which the symbol is used.

        (b) Rule of Construction.--Nothing in this section shall prohibit a
    nationally recognized statistical rating organization from using
    distinct sets of symbols to denote credit ratings for different types of
    securities or money market instruments.
    SEC. 939. REMOVAL OF STATUTORY REFERENCES TO CREDIT RATINGS.

        (a) Federal Deposit Insurance Act.--The Federal Deposit Insurance
    Act (12 U.S.C. 1811 et seq.) is amended--
                (1) in section 7(b)(1)(E)(i), <<NOTE: 12 USC 1817.>> by
            striking ``credit rating entities, and other private economic''
            and insert ``private economic, credit,'';
                (2) in section <<NOTE: 12 USC 1831e.>> 28(d)--
                        (A) in the subsection heading, by striking ``Not of
                    Investment Grade'';
                        (B) in paragraph (1), by striking ``not of
                    investment grade'' and inserting ``that does not meet
                    standards of credit-worthiness as established by the
                    Corporation'';
                        (C) in paragraph (2), by striking ``not of
                    investment grade'';
                        (D) by striking paragraph (3);
                        (E) by redesignating paragraph (4) as paragraph (3);
                    and
                        (F) in paragraph (3), as so redesignated--
                              (i) by striking subparagraph (A);
                              (ii) by redesignating subparagraphs (B) and
                          (C) as subparagraphs (A) and (B), respectively;
                          and
                              (iii) in subparagraph (B), as so redesignated,
                          by striking ``not of investment grade'' and
                          inserting ``that does not meet standards of
                          credit-worthiness as established by the
                          Corporation''; and
                (3) in section 28(e)--

    [[Page 124 STAT. 1886]]

                        (A) in the subsection heading, by striking ``Not of
                    Investment Grade'';
                        (B) in paragraph (1), by striking ``not of
                    investment grade'' and inserting ``that does not meet
                    standards of credit-worthiness as established by the
                    Corporation''; and
                        (C) in paragraphs (2) and (3), by striking ``not of
                    investment grade'' each place that it appears and
                    inserting ``that does not meet standards of credit-
                    worthiness established by the Corporation''.

        (b) Federal Housing Enterprises Financial Safety and Soundness Act
    of 1992.--Section 1319 of the Federal Housing Enterprises Financial
    Safety and Soundness Act of 1992 (12 U.S.C. 4519) is amended by striking
    ``that is a nationally recognized statistical rating organization, as
    such term is defined in section 3(a) of the Securities Exchange Act of
    1934,''.
        (c) Investment Company Act of 1940.--Section 6(a)(5)(A)(iv)(I)
    Investment Company Act of 1940 (15 U.S.C. 80a-6(a)(5)(A)(iv)(I)) is
    amended by striking ``is rated investment grade by not less than 1
    nationally recognized statistical rating organization'' and inserting
    ``meets such standards of credit-worthiness as the Commission shall
    adopt''.
        (d) Revised Statutes.--Section 5136A of title LXII of the Revised
    Statutes of the United States (12 U.S.C. 24a) is amended--
                (1) in subsection (a)(2)(E), by striking ``any applicable
            rating'' and inserting ``standards of credit-worthiness
            established by the Comptroller of the Currency'';
                (2) in the heading for subsection (a)(3) by striking
            ``Rating or Comparable Requirement'' and inserting
            ``Requirement'';
                (3) subsection (a)(3), by amending subparagraph (A) to read
            as follows:
                        ``(A) In general.--A national bank meets the
                    requirements of this paragraph if the bank is one of the
                    100 largest insured banks and has not fewer than 1 issue
                    of outstanding debt that meets standards of credit-
                    worthiness or other criteria as the Secretary of the
                    Treasury and the Board of Governors of the Federal
                    Reserve System may jointly establish.''.
                (4) in the heading for subsection (f), by striking
            ``Maintain Public Rating or'' and inserting ``Meet Standards of
            Credit-worthiness''; and
                (5) in subsection (f)(1), by striking ``any applicable
            rating'' and inserting ``standards of credit-worthiness
            established by the Comptroller of the Currency''.

        (e) Securities Exchange Act of 1934.--Section 3(a) Securities
    Exchange Act of 1934 <<NOTE: 15 USC 78c.>> (15 U.S.C. 78a(3)(a)) is
    amended--
                (1) in paragraph (41), by striking ``is rated in one of the
            two highest rating categories by at least one nationally
            recognized statistical rating organization'' and inserting
            ``meets standards of credit-worthiness as established by the
            Commission''; and
                (2) in paragraph (53)(A), by striking ``is rated in 1 of the
            4 highest rating categories by at least 1 nationally recognized
            statistical rating organization'' and inserting ``meets
            standards of credit-worthiness as established by the
            Commission''.

        (f) World Bank Discussions.--Section 3(a)(6) of the amendment in the
    nature of a substitute to the text of H.R. 4645, as ordered reported
    from the Committee on Banking, Finance and

    [[Page 124 STAT. 1887]]

    Urban Affairs on September 22, 1988, as enacted into law by section 555
    of Public Law 100-461, (22 U.S.C. 286hh(a)(6)), is amended by striking
    ``credit rating'' and inserting ``credit-worthiness''.
        (g) <<NOTE: 12 USC 24a note.>>  Effective Date.--The amendments made
    by this section shall take effect 2 years after the date of enactment of
    this Act.

        (h) Study and Report.--
                (1) In general.--Commission shall undertake a study on the
            feasability and desirability of--
                        (A) standardizing credit ratings terminology, so
                    that all credit rating agencies issue credit ratings
                    using identical terms;
                        (B) standardizing the market stress conditions under
                    which ratings are evaluated;
                        (C) requiring a quantitative correspondence between
                    credit ratings and a range of default probabilities and
                    loss expectations under standardized conditions of
                    economic stress; and
                        (D) standardizing credit rating terminology across
                    asset classes, so that named ratings correspond to a
                    standard range of default probabilities and expected
                    losses independent of asset class and issuing entity.
                (2) Report.--Not later than 1 year after the date of
            enactment of this Act, the Commission shall submit to Congress a
            report containing the findings of the study under paragraph (1)
            and the recommendations, if any, of the Commission with respect
            to the study.
    SEC. 939A. <<NOTE: Regulations. 15 USC 78o-7 note.>> REVIEW OF
                              RELIANCE ON RATINGS.

        (a) Agency Review.-- <<NOTE: Deadline.>> Not later than 1 year after
    the date of the enactment of this subtitle, each Federal agency shall,
    to the extent applicable, review--
                (1) any regulation issued by such agency that requires the
            use of an assessment of the credit-worthiness of a security or
            money market instrument; and
                (2) any references to or requirements in such regulations
            regarding credit ratings.

        (b) Modifications Required.--Each such agency shall modify any such
    regulations identified by the review conducted under subsection (a) to
    remove any reference to or requirement of reliance on credit ratings and
    to substitute in such regulations such standard of credit-worthiness as
    each respective agency shall determine as appropriate for such
    regulations. <<NOTE: Standards.>> In making such determination, such
    agencies shall seek to establish, to the extent feasible, uniform
    standards of credit-worthiness for use by each such agency, taking into
    account the entities regulated by each such agency and the purposes for
    which such entities would rely on such standards of credit-worthiness.

        (c) Report.--Upon conclusion of the review required under subsection
    (a), each Federal agency shall transmit a report to Congress containing
    a description of any modification of any regulation such agency made
    pursuant to subsection (b).
    SEC. 939B. <<NOTE: 15 USC 78m note.>> ELIMINATION OF EXEMPTION
                              FROM FAIR DISCLOSURE RULE.

        Not <<NOTE: Deadline.>> later than 90 days after the date of
    enactment of this subtitle, the Securities Exchange Commission shall
    revise Regulation FD (17 C.F.R. 243.100) to remove from such regulation
    the

    [[Page 124 STAT. 1888]]

    exemption for entities whose primary business is the issuance of credit
    ratings (17 C.F.R. 243.100(b)(2)(iii)).
    SEC. 939C. SECURITIES AND EXCHANGE COMMISSION STUDY ON
                              STRENGTHENING CREDIT RATING AGENCY
                              INDEPENDENCE.

        (a) Study.--The Commission shall conduct a study of--
                (1) the independence of nationally recognized statistical
            rating organizations; and
                (2) how the independence of nationally recognized
            statistical rating organizations affects the ratings issued by
            the nationally recognized statistical rating organizations.

        (b) Subjects for Evaluation.--In conducting the study under
    subsection (a), the Commission shall evaluate--
                (1) the management of conflicts of interest raised by a
            nationally recognized statistical rating organization providing
            other services, including risk management advisory services,
            ancillary assistance, or consulting services;
                (2) the potential impact of rules prohibiting a nationally
            recognized statistical rating organization that provides a
            rating to an issuer from providing other services to the issuer;
            and
                (3) any other issue relating to nationally recognized
            statistical rating organizations, as the Chairman of the
            Commission determines is appropriate.

        (c) Report.--Not later than 3 years after the date of enactment of
    this Act, the Chairman of the Commission shall submit to the Committee
    on Banking, Housing, and Urban Affairs of the Senate and the Committee
    on Financial Services of the House of Representatives a report on the
    results of the study conducted under subsection (a), including
    recommendations, if any, for improving the integrity of ratings issued
    by nationally recognized statistical rating organizations.
    SEC. 939D. <<NOTE: 15 USC 78o-9 note.>> GOVERNMENT ACCOUNTABILITY
                              OFFICE STUDY ON ALTERNATIVE BUSINESS
                              MODELS.

        (a) Study.--The Comptroller General of the United States shall
    conduct a study on alternative means for compensating nationally
    recognized statistical rating organizations in order to create
    incentives for nationally recognized statistical rating organizations to
    provide more accurate credit ratings, including any statutory changes
    that would be required to facilitate the use of an alternative means of
    compensation.
        (b) Report.--Not later than 18 months after the date of enactment of
    this Act, the Comptroller General shall submit to the Committee on
    Banking, Housing, and Urban Affairs of the Senate and the Committee on
    Financial Services of the House of Representatives a report on the
    results of the study conducted under subsection (a), including
    recommendations, if any, for providing incentives to credit rating
    agencies to improve the credit rating process.
    SEC. 939E. GOVERNMENT ACCOUNTABILITY OFFICE STUDY ON THE CREATION
                              OF AN INDEPENDENT PROFESSIONAL ANALYST
                              ORGANIZATION.

        (a) Study.--The Comptroller General of the United States shall
    conduct a study on the feasibility and merits of creating an independent
    professional organization for rating analysts employed by nationally
    recognized statistical rating organizations that would be responsible
    for--

    [[Page 124 STAT. 1889]]

                (1) establishing independent standards for governing the
            profession of rating analysts;
                (2) establishing a code of ethical conduct; and
                (3) overseeing the profession of rating analysts.

        (b) Report.--Not later than 1 year after the date of publication of
    the rules issued by the Commission pursuant to section 936, the
    Comptroller General shall submit to the Committee on Banking, Housing,
    and Urban Affairs of the Senate and the Committee on Financial Services
    of the House of Representatives a report on the results of the study
    conducted under subsection (a).
    SEC. 939F. <<NOTE: 15 USC 78o-9.>> STUDY AND RULEMAKING ON
                              ASSIGNED CREDIT RATINGS.

        (a) Definition.--In this section, the term ``structured finance
    product'' means an asset-backed security, as defined in section 3(a)(77)
    of the Securities Exchange Act of 1934, as added by section 941, and any
    structured product based on an asset-backed security, as determined by
    the Commission, by rule.
        (b) Study.--The Commission shall carry out a study of--
                (1) the credit rating process for structured finance
            products and the conflicts of interest associated with the
            issuer-pay and the subscriber-pay models;
                (2) the feasibility of establishing a system in which a
            public or private utility or a self-regulatory organization
            assigns nationally recognized statistical rating organizations
            to determine the credit ratings of structured finance products,
            including--
                        (A) an assessment of potential mechanisms for
                    determining fees for the nationally recognized
                    statistical rating organizations;
                        (B) appropriate methods for paying fees to the
                    nationally recognized statistical rating organizations;
                        (C) the extent to which the creation of such a
                    system would be viewed as the creation of moral hazard
                    by the Federal Government; and
                        (D) any constitutional or other issues concerning
                    the establishment of such a system;
                (3) the range of metrics that could be used to determine the
            accuracy of credit ratings; and
                (4) alternative means for compensating nationally recognized
            statistical rating organizations that would create incentives
            for accurate credit ratings.

        (c) Report and Recommendation.--Not later than 24 months after the
    date of enactment of this Act, the Commission shall submit to the
    Committee on Banking, Housing, and Urban Affairs of the Senate and the
    Committee on Financial Services of the House of Representatives a report
    that contains--
                (1) the findings of the study required under subsection (b);
            and
                (2) any recommendations for regulatory or statutory changes
            that the Commission determines should be made to implement the
            findings of the study required under subsection (b).

        (d) Rulemaking.--
                (1) Rulemaking.-- <<NOTE: Determinations.>> After submission
            of the report under subsection (c), the Commission shall, by
            rule, as the Commission determines is necessary or appropriate
            in the public interest or for the protection of investors,
            establish a system

    [[Page 124 STAT. 1890]]

            for the assignment of nationally recognized statistical rating
            organizations to determine the initial credit ratings of
            structured finance products, in a manner that prevents the
            issuer, sponsor, or underwriter of the structured finance
            product from selecting the nationally recognized statistical
            rating organization that will determine the initial credit
            ratings and monitor such credit ratings. In issuing any rule
            under this paragraph, the Commission shall give thorough
            consideration to the provisions of section 15E(w) of the
            Securities Exchange Act of 1934, as that provision would have
            been added by section 939D of H.R. 4173 (111th Congress), as
            passed by the Senate on May 20, 2010, and shall implement the
            system described in such section 939D unless the Commission
            determines that an alternative system would better serve the
            public interest and the protection of investors.
                (2) Rule of construction.--Nothing in this subsection may be
            construed to limit or suspend any other rulemaking authority of
            the Commission.
    SEC. 939G. EFFECT OF RULE 436(G).

        Rule 436(g), promulgated by the Securities and Exchange Commission
    under the Securities Act of 1933, shall have no force or effect.
    SEC. 939H. SENSE OF CONGRESS.

        It is the sense of Congress that the Securities and Exchange
    Commission should exercise the rulemaking authority of the Commission
    under section 15E(h)(2)(B) of the Securities Exchange Act of 1934 (15
    U.S.C. 78o-7(h)(2)(B)) to prevent improper conflicts of interest arising
    from employees of nationally recognized statistical rating organizations
    providing services to issuers of securities that are unrelated to the
    issuance of credit ratings, including consulting, advisory, and other
    services.

       Subtitle D--Improvements to the Asset-Backed Securitization Process

    SEC. 941. REGULATION OF CREDIT RISK RETENTION.

        (a) Definition of Asset-backed Security.--Section 3(a) of the
    Securities Exchange Act of 1934 (15 U.S.C. 78c(a)) is amended by adding
    at the end the following:
                ``(77) Asset-backed security.--The term `asset-backed
            security'--
                        ``(A) means a fixed-income or other security
                    collateralized by any type of self-liquidating financial
                    asset (including a loan, a lease, a mortgage, or a
                    secured or unsecured receivable) that allows the holder
                    of the security to receive payments that depend
                    primarily on cash flow from the asset, including--
                              ``(i) a collateralized mortgage obligation;
                              ``(ii) a collateralized debt obligation;
                              ``(iii) a collateralized bond obligation;
                              ``(iv) a collateralized debt obligation of
                          asset-backed securities;
                              ``(v) a collateralized debt obligation of
                          collateralized debt obligations; and

    [[Page 124 STAT. 1891]]

                              ``(vi) a security that the Commission, by
                          rule, determines to be an asset-backed security
                          for purposes of this section; and
                        ``(B) does not include a security issued by a
                    finance subsidiary held by the parent company or a
                    company controlled by the parent company, if none of the
                    securities issued by the finance subsidiary are held by
                    an entity that is not controlled by the parent
                    company.''.

        (b) Credit Risk Retention.--The Securities Exchange Act of 1934 (15
    U.S.C. 78a et seq.) is amended by inserting after section 15F, as added
    by this Act, the following:
    ``SEC. 15G. <<NOTE: 15 USC 78o-11.>> CREDIT RISK RETENTION.

        ``(a) Definitions.--In this section--
                ``(1) the term `Federal banking agencies' means the Office
            of the Comptroller of the Currency, the Board of Governors of
            the Federal Reserve System, and the Federal Deposit Insurance
            Corporation;
                ``(2) the term `insured depository institution' has the same
            meaning as in section 3(c) of the Federal Deposit Insurance Act
            (12 U.S.C. 1813(c));
                ``(3) the term `securitizer' means--
                        ``(A) an issuer of an asset-backed security; or
                        ``(B) a person who organizes and initiates an asset-
                    backed securities transaction by selling or transferring
                    assets, either directly or indirectly, including through
                    an affiliate, to the issuer; and
                ``(4) the term `originator' means a person who--
                        ``(A) through the extension of credit or otherwise,
                    creates a financial asset that collateralizes an asset-
                    backed security; and
                        ``(B) sells an asset directly or indirectly to a
                    securitizer.

        ``(b) Regulations <<NOTE: Deadline.>> Required.--
                ``(1) In general.--Not later than 270 days after the date of
            enactment of this section, the Federal banking agencies and the
            Commission shall jointly prescribe regulations to require any
            securitizer to retain an economic interest in a portion of the
            credit risk for any asset that the securitizer, through the
            issuance of an asset-backed security, transfers, sells, or
            conveys to a third party.
                ``(2) Residential mortgages.--Not later than 270 days after
            the date of the enactment of this section, the Federal banking
            agencies, the Commission, the Secretary of Housing and Urban
            Development, and the Federal Housing Finance Agency, shall
            jointly prescribe regulations to require any securitizer to
            retain an economic interest in a portion of the credit risk for
            any residential mortgage asset that the securitizer, through the
            issuance of an asset-backed security, transfers, sells, or
            conveys to a third party.

        ``(c) Standards for Regulations.--
                ``(1) Standards.--The regulations prescribed under
            subsection (b) shall--
                        ``(A) prohibit a securitizer from directly or
                    indirectly hedging or otherwise transferring the credit
                    risk that the securitizer is required to retain with
                    respect to an asset;
                        ``(B) require a securitizer to retain--

    [[Page 124 STAT. 1892]]

                              ``(i) not less than 5 percent of the credit
                          risk for any asset--
                                        ``(I) that is not a qualified
                                    residential mortgage that is
                                    transferred, sold, or conveyed through
                                    the issuance of an asset-backed security
                                    by the securitizer; or
                                        ``(II) that is a qualified
                                    residential mortgage that is
                                    transferred, sold, or conveyed through
                                    the issuance of an asset-backed security
                                    by the securitizer, if 1 or more of the
                                    assets that collateralize the asset-
                                    backed security are not qualified
                                    residential mortgages; or
                              ``(ii) less than 5 percent of the credit risk
                          for an asset that is not a qualified residential
                          mortgage that is transferred, sold, or conveyed
                          through the issuance of an asset-backed security
                          by the securitizer, if the originator of the asset
                          meets the underwriting standards prescribed under
                          paragraph (2)(B);
                        ``(C) specify--
                              ``(i) the permissible forms of risk retention
                          for purposes of this section;
                              ``(ii) the minimum duration of the risk
                          retention required under this section; and
                              ``(iii) that a securitizer is not required to
                          retain any part of the credit risk for an asset
                          that is transferred, sold or conveyed through the
                          issuance of an asset-backed security by the
                          securitizer, if all of the assets that
                          collateralize the asset-backed security are
                          qualified residential mortgages;
                        ``(D) <<NOTE: Applicability.>> apply, regardless of
                    whether the securitizer is an insured depository
                    institution;
                        ``(E) with respect to a commercial mortgage, specify
                    the permissible types, forms, and amounts of risk
                    retention that would meet the requirements of
                    subparagraph (B), which in the determination of the
                    Federal banking agencies and the Commission may
                    include--
                              ``(i) retention of a specified amount or
                          percentage of the total credit risk of the asset;
                              ``(ii) retention of the first-loss position by
                          a third-party purchaser that specifically
                          negotiates for the purchase of such first loss
                          position, holds adequate financial resources to
                          back losses, provides due diligence on all
                          individual assets in the pool before the issuance
                          of the asset-backed securities, and meets the same
                          standards for risk retention as the Federal
                          banking agencies and the Commission require of the
                          securitizer;
                              ``(iii) a determination by the Federal banking
                          agencies and the Commission that the underwriting
                          standards and controls for the asset are adequate;
                          and
                              ``(iv) provision of adequate representations
                          and warranties and related enforcement mechanisms;
                          and
                        ``(F) establish appropriate standards for retention
                    of an economic interest with respect to collateralized
                    debt obligations, securities collateralized by
                    collateralized debt obligations, and similar instruments
                    collateralized by other asset-backed securities; and
                        ``(G) provide for--

    [[Page 124 STAT. 1893]]

                              ``(i) a total or partial exemption of any
                          securitization, as may be appropriate in the
                          public interest and for the protection of
                          investors;
                              ``(ii) a total or partial exemption for the
                          securitization of an asset issued or guaranteed by
                          the United States, or an agency of the United
                          States, as the Federal banking agencies and the
                          Commission jointly determine appropriate in the
                          public interest and for the protection of
                          investors, except that, for purposes of this
                          clause, the Federal National Mortgage Association
                          and the Federal Home Loan Mortgage Corporation are
                          not agencies of the United States;
                              ``(iii) a total or partial exemption for any
                          asset-backed security that is a security issued or
                          guaranteed by any State of the United States, or
                          by any political subdivision of a State or
                          territory, or by any public instrumentality of a
                          State or territory that is exempt from the
                          registration requirements of the Securities Act of
                          1933 by reason of section 3(a)(2) of that Act (15
                          U.S.C. 77c(a)(2)), or a security defined as a
                          qualified scholarship funding bond in section
                          150(d)(2) of the Internal Revenue Code of 1986, as
                          may be appropriate in the public interest and for
                          the protection of investors; and
                              ``(iv) the allocation of risk retention
                          obligations between a securitizer and an
                          originator in the case of a securitizer that
                          purchases assets from an originator, as the
                          Federal banking agencies and the Commission
                          jointly determine appropriate.
                ``(2) Asset classes.--
                        ``(A) Asset classes.--The regulations prescribed
                    under subsection (b) shall establish asset classes with
                    separate rules for securitizers of different classes of
                    assets, including residential mortgages, commercial
                    mortgages, commercial loans, auto loans, and any other
                    class of assets that the Federal banking agencies and
                    the Commission deem appropriate.
                        ``(B) Contents.--For each asset class established
                    under subparagraph (A), the regulations prescribed under
                    subsection (b) shall include underwriting standards
                    established by the Federal banking agencies that specify
                    the terms, conditions, and characteristics of a loan
                    within the asset class that indicate a low credit risk
                    with respect to the loan.

        ``(d) Originators.--In determining how to allocate risk retention
    obligations between a securitizer and an originator under subsection
    (c)(1)(E)(iv), the Federal banking agencies and the Commission shall--
                ``(1) reduce the percentage of risk retention obligations
            required of the securitizer by the percentage of risk retention
            obligations required of the originator; and
                ``(2) consider--
                        ``(A) whether the assets sold to the securitizer
                    have terms, conditions, and characteristics that reflect
                    low credit risk;
                        ``(B) whether the form or volume of transactions in
                    securitization markets creates incentives for imprudent

    [[Page 124 STAT. 1894]]

                    origination of the type of loan or asset to be sold to
                    the securitizer; and
                        ``(C) the potential impact of the risk retention
                    obligations on the access of consumers and businesses to
                    credit on reasonable terms, which may not include the
                    transfer of credit risk to a third party.

        ``(e) Exemptions, Exceptions, and Adjustments.--
                ``(1) In general.--The Federal banking agencies and the
            Commission may jointly adopt or issue exemptions, exceptions, or
            adjustments to the rules issued under this section, including
            exemptions, exceptions, or adjustments for classes of
            institutions or assets relating to the risk retention
            requirement and the prohibition on hedging under subsection
            (c)(1).
                ``(2) Applicable standards.--Any exemption, exception, or
            adjustment adopted or issued by the Federal banking agencies and
            the Commission under this paragraph shall--
                        ``(A) help ensure high quality underwriting
                    standards for the securitizers and originators of assets
                    that are securitized or available for securitization;
                    and
                        ``(B) encourage appropriate risk management
                    practices by the securitizers and originators of assets,
                    improve the access of consumers and businesses to credit
                    on reasonable terms, or otherwise be in the public
                    interest and for the protection of investors.
                ``(3) Certain institutions and programs exempt.--
                        ``(A) Farm credit system institutions.--
                    Notwithstanding any other provision of this section, the
                    requirements of this section shall not apply to any loan
                    or other financial asset made, insured, guaranteed, or
                    purchased by any institution that is subject to the
                    supervision of the Farm Credit Administration, including
                    the Federal Agricultural Mortgage Corporation.
                        ``(B) Other federal programs.--This section shall
                    not apply to any residential, multifamily, or health
                    care facility mortgage loan asset, or securitization
                    based directly or indirectly on such an asset, which is
                    insured or guaranteed by the United States or an agency
                    of the United States. For purposes of this subsection,
                    the Federal National Mortgage Association, the Federal
                    Home Loan Mortgage Corporation, and the Federal home
                    loan banks shall not be considered an agency of the
                    United States.
                ``(4) Exemption for qualified residential mortgages.--
                        ``(A) <<NOTE: Regulations.>>  In general.--The
                    Federal banking agencies, the Commission, the Secretary
                    of Housing and Urban Development, and the Director of
                    the Federal Housing Finance Agency shall jointly issue
                    regulations to exempt qualified residential mortgages
                    from the risk retention requirements of this subsection.
                        ``(B) <<NOTE: Definition.>>  Qualified residential
                    mortgage.--The Federal banking agencies, the Commission,
                    the Secretary of Housing and Urban Development, and the
                    Director of the Federal Housing Finance Agency shall
                    jointly define the term `qualified residential mortgage'
                    for purposes of this subsection, taking into
                    consideration underwriting and product features that
                    historical loan performance data indicate result in a
                    lower risk of default, such as--

    [[Page 124 STAT. 1895]]

                              ``(i) documentation and verification of the
                          financial resources relied upon to qualify the
                          mortgagor;
                              ``(ii) standards with respect to--
                                        ``(I) the residual income of the
                                    mortgagor after all monthly obligations;
                                        ``(II) the ratio of the housing
                                    payments of the mortgagor to the monthly
                                    income of the mortgagor;
                                        ``(III) the ratio of total monthly
                                    installment payments of the mortgagor to
                                    the income of the mortgagor;
                              ``(iii) mitigating the potential for payment
                          shock on adjustable rate mortgages through product
                          features and underwriting standards;
                              ``(iv) mortgage guarantee insurance or other
                          types of insurance or credit enhancement obtained
                          at the time of origination, to the extent such
                          insurance or credit enhancement reduces the risk
                          of default; and
                              ``(v) prohibiting or restricting the use of
                          balloon payments, negative amortization,
                          prepayment penalties, interest-only payments, and
                          other features that have been demonstrated to
                          exhibit a higher risk of borrower default.
                        ``(C) Limitation on definition.--The Federal banking
                    agencies, the Commission, the Secretary of Housing and
                    Urban Development, and the Director of the Federal
                    Housing Finance Agency in defining the term `qualified
                    residential mortgage', as required by subparagraph (B),
                    shall define that term to be no broader than the
                    definition `qualified mortgage' as the term is defined
                    under section 129C(c)(2) of the Truth in Lending Act, as
                    amended by the Consumer Financial Protection Act of
                    2010, and regulations adopted thereunder.
                ``(5) Condition for qualified residential mortgage
            exemption.--The regulations issued under paragraph (4) shall
            provide that an asset-backed security that is collateralized by
            tranches of other asset-backed securities shall not be exempt
            from the risk retention requirements of this subsection.
                ``(6) Certification.--The Commission shall require an issuer
            to certify, for each issuance of an asset-backed security
            collateralized exclusively by qualified residential mortgages,
            that the issuer has evaluated the effectiveness of the internal
            supervisory controls of the issuer with respect to the process
            for ensuring that all assets that collateralize the asset-backed
            security are qualified residential mortgages.

        ``(f) Enforcement.--The regulations issued under this section shall
    be enforced by--
                ``(1) the appropriate Federal banking agency, with respect
            to any securitizer that is an insured depository institution;
            and
                ``(2) the Commission, with respect to any securitizer that
            is not an insured depository institution.

        ``(g) Authority of Commission.--The authority of the Commission
    under this section shall be in addition to the authority of the
    Commission to otherwise enforce the securities laws.
        ``(h) Authority to Coordinate on Rulemaking.--The Chairperson of the
    Financial Stability Oversight Council shall coordinate all joint
    rulemaking required under this section.

    [[Page 124 STAT. 1896]]

        ``(i) Effective Date of Regulations.--The regulations issued under
    this section shall become effective--
                ``(1) with respect to securitizers and originators of asset-
            backed securities backed by residential mortgages, 1 year after
            the date on which final rules under this section are published
            in the Federal Register; and
                ``(2) with respect to securitizers and originators of all
            other classes of asset-backed securities, 2 years after the date
            on which final rules under this section are published in the
            Federal Register.''.

        (c) Study on Risk Retention.--
                (1) Study.--The Board of Governors of the Federal Reserve
            System, in coordination and consultation with the Comptroller of
            the Currency, the Director of the Office of Thrift Supervision,
            the Chairperson of the Federal Deposit Insurance Corporation,
            and the Securities and Exchange Commission shall conduct a study
            of the combined impact on each individual class of asset-backed
            security established under section 15G(c)(2) of the Securities
            Exchange Act of 1934, as added by subsection (b), of--
                        (A) the new credit risk retention requirements
                    contained in the amendment made by subsection (b),
                    including the effect credit risk retention requirements
                    have on increasing the market for Federally subsidized
                    loans; and
                        (B) the Financial Accounting Statements 166 and 167
                    issued by the Financial Accounting Standards Board.
                (2) Report.--Not later than 90 days after the date of
            enactment of this Act, the Board of Governors of the Federal
            Reserve System shall submit to Congress a report on the study
            conducted under paragraph (1). Such report shall include
            statutory and regulatory recommendations for eliminating any
            negative impacts on the continued viability of the asset-backed
            securitization markets and on the availability of credit for new
            lending identified by the study conducted under paragraph (1).
    SEC. 942. DISCLOSURES AND REPORTING FOR ASSET-BACKED SECURITIES.

        (a) Securities Exchange Act of 1934.--Section 15(d) of the
    Securities Exchange Act of 1934 (15 U.S.C. 78o(d)) is amended--
                (1) by striking ``(d) Each'' and inserting the following:

        ``(d) Supplementary and Periodic Information.--
                ``(1) In general.--Each'';
                (2) in the third sentence, by inserting after ``securities
            of each class'' the following: ``, other than any class of
            asset-backed securities,''; and
                (3) by adding at the end the following:
                ``(2) Asset-backed securities.--
                        ``(A) Suspension of duty to file.--The Commission
                    may, by rule or regulation, provide for the suspension
                    or termination of the duty to file under this subsection
                    for any class of asset-backed security, on such terms
                    and conditions and for such period or periods as the
                    Commission deems necessary or appropriate in the public
                    interest or for the protection of investors.
                        ``(B) Classification of issuers.--The Commission
                    may, for purposes of this subsection, classify issuers
                    and

    [[Page 124 STAT. 1897]]

                    prescribe requirements appropriate for each class of
                    issuers of asset-backed securities.''.

        (b) Securities Act of 1933.--Section 7 of the Securities Act of 1933
    (15 U.S.C. 77g) is amended by adding at the end the following:
        ``(c) Disclosure Requirements.--
                ``(1) <<NOTE: Regulations.>>  In general.--The Commission
            shall adopt regulations under this subsection requiring each
            issuer of an asset-backed security to disclose, for each tranche
            or class of security, information regarding the assets backing
            that security.
                ``(2) Content of regulations.--In adopting regulations under
            this subsection, the Commission shall--
                        ``(A) set standards for the format of the data
                    provided by issuers of an asset-backed security, which
                    shall, to the extent feasible, facilitate comparison of
                    such data across securities in similar types of asset
                    classes; and
                        ``(B) require issuers of asset-backed securities, at
                    a minimum, to disclose asset-level or loan-level data,
                    if such data are necessary for investors to
                    independently perform due diligence, including--
                              ``(i) data having unique identifiers relating
                          to loan brokers or originators;
                              ``(ii) the nature and extent of the
                          compensation of the broker or originator of the
                          assets backing the security; and
                              ``(iii) the amount of risk retention by the
                          originator and the securitizer of such assets.''.
    SEC. 943. <<NOTE: 15 USC 78o-7 note.>> REPRESENTATIONS AND
                            WARRANTIES IN ASSET-BACKED OFFERINGS.

        Not <<NOTE: Deadline. Regulations.>> later than 180 days after the
    date of enactment of this Act, the Securities and Exchange Commission
    shall prescribe regulations on the use of representations and warranties
    in the market for asset-backed securities (as that term is defined in
    section 3(a)(77) of the Securities Exchange Act of 1934, as added by
    this subtitle) that--
                (1) require each national recognized statistical rating
            organization to include in any report accompanying a credit
            rating a description of--
                        (A) the representations, warranties, and enforcement
                    mechanisms available to investors; and
                        (B) how they differ from the representations,
                    warranties, and enforcement mechanisms in issuances of
                    similar securities; and
                (2) require any securitizer (as that term is defined in
            section 15G(a) of the Securities Exchange Act of 1934, as added
            by this subtitle) to disclose fulfilled and unfulfilled
            repurchase requests across all trusts aggregated by the
            securitizer, so that investors may identify asset originators
            with clear underwriting deficiencies.
    SEC. 944. EXEMPTED TRANSACTIONS UNDER THE SECURITIES ACT OF 1933.

        (a) Exemption Eliminated.--Section 4 of the Securities Act of 1933
    (15 U.S.C. 77d) is amended--
                (1) by striking paragraph (5); and
                (2) by striking ``(6) transactions'' and inserting the
            following:

    [[Page 124 STAT. 1898]]

                ``(5) transactions''.

        (b) Conforming Amendment.--Section 3(a)(4)(B)(vii)(I) of the
    Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(4)(B)(vii)(I)) is
    amended by striking ``4(6)'' and inserting ``4(5)''.
    SEC. 945. DUE DILIGENCE ANALYSIS AND DISCLOSURE IN ASSET-BACKED
                            SECURITIES ISSUES.

        Section 7 of the Securities Act of 1933 (15 U.S.C. 77g), as amended
    by this subtitle, is amended by adding at the end the following:
        ``(d) <<NOTE: Deadline. Regulations.>>  Registration Statement for
    Asset-backed Securities.--Not later than 180 days after the date of
    enactment of this subsection, the Commission shall issue rules relating
    to the registration statement required to be filed by any issuer of an
    asset-backed security (as that term is defined in section 3(a)(77) of
    the Securities Exchange Act of 1934) that require any issuer of an
    asset-backed security--
                ``(1) to perform a review of the assets underlying the
            asset-backed security; and
                ``(2) to disclose the nature of the review under paragraph
            (1).''.
    SEC. 946. STUDY ON THE MACROECONOMIC EFFECTS OF RISK RETENTION
                            REQUIREMENTS.

        (a) Study Required.--The Chairman of the Financial Services
    Oversight Council shall carry out a study on the macroeconomic effects
    of the risk retention requirements under this subtitle, and the
    amendments made by this subtitle, with emphasis placed on potential
    beneficial effects with respect to stabilizing the real estate market.
    Such study shall include--
                (1) an analysis of the effects of risk retention on real
            estate asset price bubbles, including a retrospective estimate
            of what fraction of real estate losses may have been averted had
            such requirements been in force in recent years;
                (2) an analysis of the feasibility of minimizing real estate
            price bubbles by proactively adjusting the percentage of risk
            retention that must be borne by creditors and securitizers of
            real estate debt, as a function of regional or national market
            conditions;
                (3) a comparable analysis for proactively adjusting mortgage
            origination requirements;
                (4) an assessment of whether such proactive adjustments
            should be made by an independent regulator, or in a formulaic
            and transparent manner;
                (5) an assessment of whether such adjustments should take
            place independently or in concert with monetary policy; and
                (6) recommendations for implementation and enabling
            legislation.

        (b) Report.--Not later than the end of the 180-day period beginning
    on the date of the enactment of this title, the Chairman of the
    Financial Services Oversight Council shall issue a report to the
    Congress containing any findings and determinations made in carrying out
    the study required under subsection (a).

    [[Page 124 STAT. 1899]]

              Subtitle E--Accountability and Executive Compensation

    SEC. 951. SHAREHOLDER VOTE ON EXECUTIVE COMPENSATION DISCLOSURES.

        The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is
    amended by inserting after section 14 (15 U.S.C. 78n) the following:
    ``SEC. 14A. <<NOTE: 15 USC 78n-1.>>  SHAREHOLDER APPROVAL OF
                            EXECUTIVE COMPENSATION.

        ``(a) <<NOTE: Deadlines.>>  Separate Resolution Required.--
                ``(1) In general.--Not less frequently than once every 3
            years, a proxy or consent or authorization for an annual or
            other meeting of the shareholders for which the proxy
            solicitation rules of the Commission require compensation
            disclosure shall include a separate resolution subject to
            shareholder vote to approve the compensation of executives, as
            disclosed pursuant to section 229.402 of title 17, Code of
            Federal Regulations, or any successor thereto.
                ``(2) Frequency of vote.--Not less frequently than once
            every 6 years, a proxy or consent or authorization for an annual
            or other meeting of the shareholders for which the proxy
            solicitation rules of the Commission require compensation
            disclosure shall include a separate resolution subject to
            shareholder vote to determine whether votes on the resolutions
            required under paragraph (1) will occur every 1, 2, or 3 years.
                ``(3) Effective date.--The proxy or consent or authorization
            for the first annual or other meeting of the shareholders
            occurring after the end of the 6-month period beginning on the
            date of enactment of this section shall include--
                        ``(A) the resolution described in paragraph (1); and
                        ``(B) a separate resolution subject to shareholder
                    vote to determine whether votes on the resolutions
                    required under paragraph (1) will occur every 1, 2, or 3
                    years.

        ``(b) Shareholder Approval of Golden Parachute Compensation.--
                ``(1) Disclosure.-- <<NOTE: Regulations.>> In any proxy or
            consent solicitation material (the solicitation of which is
            subject to the rules of the Commission pursuant to subsection
            (a)) for a meeting of the shareholders occurring after the end
            of the 6-month period beginning on the date of enactment of this
            section, at which shareholders are asked to approve an
            acquisition, merger, consolidation, or proposed sale or other
            disposition of all or substantially all the assets of an issuer,
            the person making such solicitation shall disclose in the proxy
            or consent solicitation material, in a clear and simple form in
            accordance with regulations to be promulgated by the Commission,
            any agreements or understandings that such person has with any
            named executive officers of such issuer (or of the acquiring
            issuer, if such issuer is not the acquiring issuer) concerning
            any type of compensation (whether present, deferred, or
            contingent) that is based on or otherwise relates to the
            acquisition, merger, consolidation, sale, or other disposition
            of all or substantially all of the assets of the issuer and the
            aggregate total of all such compensation that may (and the
            conditions upon which

    [[Page 124 STAT. 1900]]

            it may) be paid or become payable to or on behalf of such
            executive officer.
                ``(2) Shareholder approval.--Any proxy or consent or
            authorization relating to the proxy or consent solicitation
            material containing the disclosure required by paragraph (1)
            shall include a separate resolution subject to shareholder vote
            to approve such agreements or understandings and compensation as
            disclosed, unless such agreements or understandings have been
            subject to a shareholder vote under subsection (a).

        ``(c) Rule of Construction.--The shareholder vote referred to in
    subsections (a) and (b) shall not be binding on the issuer or the board
    of directors of an issuer, and may not be construed--
                ``(1) as overruling a decision by such issuer or board of
            directors;
                ``(2) to create or imply any change to the fiduciary duties
            of such issuer or board of directors;
                ``(3) to create or imply any additional fiduciary duties for
            such issuer or board of directors; or
                ``(4) to restrict or limit the ability of shareholders to
            make proposals for inclusion in proxy materials related to
            executive compensation.

        ``(d) Disclosure of Votes.-- <<NOTE: Reports. Deadline.>> Every
    institutional investment manager subject to section 13(f) shall report
    at least annually how it voted on any shareholder vote pursuant to
    subsections (a) and (b), unless such vote is otherwise required to be
    reported publicly by rule or regulation of the Commission.

        ``(e) Exemption.--The Commission may, by rule or order, exempt an
    issuer or class of issuers from the requirement under subsection (a) or
    (b). In determining whether to make an exemption under this subsection,
    the Commission shall take into account, among other considerations,
    whether the requirements under subsections (a) and (b)
    disproportionately burdens small issuers.''.
    SEC. 952. COMPENSATION COMMITTEE INDEPENDENCE.

        (a) In General.--The Securities Exchange Act of 1934 (15 U.S.C. 78
    et seq.) is amended by inserting after section 10B, as added by section
    753, the following:
    ``SEC. 10C. <<NOTE: 15 USC 78j-3.>> COMPENSATION COMMITTEES.

        ``(a) Independence of Compensation Committees.--
                ``(1) <<NOTE: Regulations.>>  Listing standards.--The
            Commission shall, by rule, direct the national securities
            exchanges and national securities associations to prohibit the
            listing of any equity security of an issuer, other than an
            issuer that is a controlled company, limited partnership,
            company in bankruptcy proceedings, open-ended management
            investment company that is registered under the Investment
            Company Act of 1940, or a foreign private issuer that provides
            annual disclosures to shareholders of the reasons that the
            foreign private issuer does not have an independent compensation
            committee, that does not comply with the requirements of this
            subsection.
                ``(2) Independence of compensation committees.--The rules of
            the Commission under paragraph (1) shall require that each
            member of the compensation committee of the board of directors
            of an issuer be--
                        ``(A) a member of the board of directors of the
                    issuer; and
                        ``(B) independent.

    [[Page 124 STAT. 1901]]

                ``(3) Independence.--The rules of the Commission under
            paragraph (1) shall require that, in determining the definition
            of the term `independence' for purposes of paragraph (2), the
            national securities exchanges and the national securities
            associations shall consider relevant factors, including--
                        ``(A) the source of compensation of a member of the
                    board of directors of an issuer, including any
                    consulting, advisory, or other compensatory fee paid by
                    the issuer to such member of the board of directors; and
                        ``(B) whether a member of the board of directors of
                    an issuer is affiliated with the issuer, a subsidiary of
                    the issuer, or an affiliate of a subsidiary of the
                    issuer.
                ``(4) Exemption authority.--The rules of the Commission
            under paragraph (1) shall permit a national securities exchange
            or a national securities association to exempt a particular
            relationship from the requirements of paragraph (2), with
            respect to the members of a compensation committee, as the
            national securities exchange or national securities association
            determines is appropriate, taking into consideration the size of
            an issuer and any other relevant factors.

        ``(b) Independence of Compensation Consultants and Other
    Compensation Committee Advisers.--
                ``(1) In general.--The compensation committee of an issuer
            may only select a compensation consultant, legal counsel, or
            other adviser to the compensation committee after taking into
            consideration the factors identified by the Commission under
            paragraph (2).
                ``(2) Rules.--The Commission shall identify factors that
            affect the independence of a compensation consultant, legal
            counsel, or other adviser to a compensation committee of an
            issuer. Such factors shall be competitively neutral among
            categories of consultants, legal counsel, or other advisers and
            preserve the ability of compensation committees to retain the
            services of members of any such category, and shall include--
                        ``(A) the provision of other services to the issuer
                    by the person that employs the compensation consultant,
                    legal counsel, or other adviser;
                        ``(B) the amount of fees received from the issuer by
                    the person that employs the compensation consultant,
                    legal counsel, or other adviser, as a percentage of the
                    total revenue of the person that employs the
                    compensation consultant, legal counsel, or other
                    adviser;
                        ``(C) the policies and procedures of the person that
                    employs the compensation consultant, legal counsel, or
                    other adviser that are designed to prevent conflicts of
                    interest;
                        ``(D) any business or personal relationship of the
                    compensation consultant, legal counsel, or other adviser
                    with a member of the compensation committee; and
                        ``(E) any stock of the issuer owned by the
                    compensation consultant, legal counsel, or other
                    adviser.

        ``(c) Compensation Committee Authority Relating to Compensation
    Consultants.--
                ``(1) Authority to retain compensation consultant.--

    [[Page 124 STAT. 1902]]

                        ``(A) In general.--The compensation committee of an
                    issuer, in its capacity as a committee of the board of
                    directors, may, in its sole discretion, retain or obtain
                    the advice of a compensation consultant.
                        ``(B) Direct responsibility of compensation
                    committee.--The compensation committee of an issuer
                    shall be directly responsible for the appointment,
                    compensation, and oversight of the work of a
                    compensation consultant.
                        ``(C) Rule of construction.--This paragraph may not
                    be construed--
                              ``(i) to require the compensation committee to
                          implement or act consistently with the advice or
                          recommendations of the compensation consultant; or
                              ``(ii) to affect the ability or obligation of
                          a compensation committee to exercise its own
                          judgment in fulfillment of the duties of the
                          compensation committee.
                ``(2) Disclosure.--In any proxy or consent solicitation
            material for an annual meeting of the shareholders (or a special
            meeting in lieu of the annual meeting) occurring on or after the
            date that is 1 year after the date of enactment of this section,
            each issuer shall disclose in the proxy or consent material, in
            accordance with regulations of the Commission, whether--
                        ``(A) the compensation committee of the issuer
                    retained or obtained the advice of a compensation
                    consultant; and
                        ``(B) the work of the compensation consultant has
                    raised any conflict of interest and, if so, the nature
                    of the conflict and how the conflict is being addressed.

        ``(d) Authority To Engage Independent Legal Counsel and Other
    Advisers.--
                ``(1) In general.--The compensation committee of an issuer,
            in its capacity as a committee of the board of directors, may,
            in its sole discretion, retain and obtain the advice of
            independent legal counsel and other advisers.
                ``(2) Direct responsibility of compensation committee.--The
            compensation committee of an issuer shall be directly
            responsible for the appointment, compensation, and oversight of
            the work of independent legal counsel and other advisers.
                ``(3) Rule of construction.--This subsection may not be
            construed--
                        ``(A) to require a compensation committee to
                    implement or act consistently with the advice or
                    recommendations of independent legal counsel or other
                    advisers under this subsection; or
                        ``(B) to affect the ability or obligation of a
                    compensation committee to exercise its own judgment in
                    fulfillment of the duties of the compensation committee.

        ``(e) Compensation of Compensation Consultants, Independent Legal
    Counsel, and Other Advisers.--Each issuer shall provide for appropriate
    funding, as determined by the compensation committee in its capacity as
    a committee of the board of directors, for payment of reasonable
    compensation--
                ``(1) to a compensation consultant; and
                ``(2) to independent legal counsel or any other adviser to
            the compensation committee.

    [[Page 124 STAT. 1903]]

        ``(f) Commission Rules.--
                ``(1) In general.-- <<NOTE: Deadline.>> Not later than 360
            days after the date of enactment of this section, the Commission
            shall, by rule, direct the national securities exchanges and
            national securities associations to prohibit the listing of any
            security of an issuer that is not in compliance with the
            requirements of this section.
                ``(2) <<NOTE: Procedures.>>  Opportunity to cure defects.--
            The rules of the Commission under paragraph (1) shall provide
            for appropriate procedures for an issuer to have a reasonable
            opportunity to cure any defects that would be the basis for the
            prohibition under paragraph (1), before the imposition of such
            prohibition.
                ``(3) Exemption authority.--
                        ``(A) In general.--The rules of the Commission under
                    paragraph (1) shall permit a national securities
                    exchange or a national securities association to exempt
                    a category of issuers from the requirements under this
                    section, as the national securities exchange or the
                    national securities association determines is
                    appropriate.
                        ``(B) Considerations.--In determining appropriate
                    exemptions under subparagraph (A), the national
                    securities exchange or the national securities
                    association shall take into account the potential impact
                    of the requirements of this section on smaller reporting
                    issuers.

        ``(g) Controlled Company Exemption.--
                ``(1) In general.--This section shall not apply to any
            controlled company.
                ``(2) Definition.--For purposes of this section, the term
            `controlled company' means an issuer--
                        ``(A) that is listed on a national securities
                    exchange or by a national securities association; and
                        ``(B) that holds an election for the board of
                    directors of the issuer in which more than 50 percent of
                    the voting power is held by an individual, a group, or
                    another issuer.''.

        (b) Study and Report.--
                (1) Study.--The Securities and Exchange Commission shall
            conduct a study and review of the use of compensation
            consultants and the effects of such use.
                (2) Report.--Not later than 2 years after the date of the
            enactment of this Act, the Commission shall submit a report to
            Congress on the results of the study and review required by this
            subsection.
    SEC. 953. EXECUTIVE COMPENSATION DISCLOSURES.

        (a) Disclosure of Pay Versus Performance.--Section 14 of the
    Securities Exchange Act of 1934 (15 U.S.C. 78n), as amended by this
    title, is amended by adding at the end the following:
        ``(i) <<NOTE: Regulations.>>  Disclosure of Pay Versus
    Performance.--The Commission shall, by rule, require each issuer to
    disclose in any proxy or consent solicitation material for an annual
    meeting of the shareholders of the issuer a clear description of any
    compensation required to be disclosed by the issuer under section
    229.402 of title 17, Code of Federal Regulations (or any successor
    thereto), including information that shows the relationship between
    executive compensation actually paid and the financial performance of
    the issuer, taking into account any change in the value of the shares of
    stock and dividends of the issuer and any distributions. The

    [[Page 124 STAT. 1904]]

    disclosure under this subsection may include a graphic representation of
    the information required to be disclosed.''.

        (b) <<NOTE: 15 USC 78l note.>>  Additional Disclosure
    Requirements.--
                (1) In general.-- <<NOTE: Regulations.>> The Commission
            shall amend section 229.402 of title 17, Code of Federal
            Regulations, to require each issuer to disclose in any filing of
            the issuer described in section 229.10(a) of title 17, Code of
            Federal Regulations (or any successor thereto)--
                        (A) the median of the annual total compensation of
                    all employees of the issuer, except the chief executive
                    officer (or any equivalent position) of the issuer;
                        (B) the annual total compensation of the chief
                    executive officer (or any equivalent position) of the
                    issuer; and
                        (C) the ratio of the amount described in
                    subparagraph (A) to the amount described in subparagraph
                    (B).
                (2) Total compensation.--For purposes of this subsection,
            the total compensation of an employee of an issuer shall be
            determined in accordance with section 229.402(c)(2)(x) of title
            17, Code of Federal Regulations, as in effect on the day before
            the date of enactment of this Act.
    SEC. 954. RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION.

        The Securities Exchange Act of 1934 is amended by inserting after
    section 10C, as added by section 952, the following:
    ``SEC. 10D. <<NOTE: 15 USC 78j-4.>>  RECOVERY OF ERRONEOUSLY
                            AWARDED COMPENSATION POLICY.

        ``(a) Listing Standards.-- <<NOTE: Regulations.>> The Commission
    shall, by rule, direct the national securities exchanges and national
    securities associations to prohibit the listing of any security of an
    issuer that does not comply with the requirements of this section.

        ``(b) Recovery of Funds.--The rules of the Commission under
    subsection (a) shall require each issuer to develop and implement a
    policy providing--
                ``(1) for disclosure of the policy of the issuer on
            incentive-based compensation that is based on financial
            information required to be reported under the securities laws;
            and
                ``(2) that, in the event that the issuer is required to
            prepare an accounting restatement due to the material
            noncompliance of the issuer with any financial reporting
            requirement under the securities laws, the issuer will recover
            from any current or former executive officer of the issuer who
            received incentive-based compensation (including stock options
            awarded as compensation) during the 3-year period preceding the
            date on which the issuer is required to prepare an accounting
            restatement, based on the erroneous data, in excess of what
            would have been paid to the executive officer under the
            accounting restatement.''.
    SEC. 955. DISCLOSURE REGARDING EMPLOYEE AND DIRECTOR HEDGING.

        Section 14 of the Securities Exchange Act of 1934 (15 U.S.C. 78n),
    as amended by this title, is amended by adding at the end the following:
        ``(j) Disclosure of Hedging by Employees and Directors.--
    The <<NOTE: Regulations.>> Commission shall, by rule, require each
    issuer to disclose in any proxy or consent solicitation material for an
    annual meeting of the shareholders of the issuer whether any employee or
    member

    [[Page 124 STAT. 1905]]

    of the board of directors of the issuer, or any designee of such
    employee or member, is permitted to purchase financial instruments
    (including prepaid variable forward contracts, equity swaps, collars,
    and exchange funds) that are designed to hedge or offset any decrease in
    the market value of equity securities--
                ``(1) granted to the employee or member of the board of
            directors by the issuer as part of the compensation of the
            employee or member of the board of directors; or
                ``(2) held, directly or indirectly, by the employee or
            member of the board of directors.''.
    SEC. 956. <<NOTE: 12 USC 5641.>>  ENHANCED COMPENSATION STRUCTURE
                            REPORTING.

        (a) Enhanced Disclosure and Reporting of Compensation
    Arrangements.--
                (1) In general.-- <<NOTE: Deadline. Regulations.>> Not later
            than 9 months after the date of enactment of this title, the
            appropriate Federal regulators jointly shall prescribe
            regulations or guidelines to require each covered financial
            institution to disclose to the appropriate Federal regulator the
            structures of all incentive-based compensation arrangements
            offered by such covered financial institutions sufficient to
            determine whether the compensation structure--
                        (A) provides an executive officer, employee,
                    director, or principal shareholder of the covered
                    financial institution with excessive compensation, fees,
                    or benefits; or
                        (B) could lead to material financial loss to the
                    covered financial institution.
                (2) Rules of construction.--Nothing in this section shall be
            construed as requiring the reporting of the actual compensation
            of particular individuals. Nothing in this section shall be
            construed to require a covered financial institution that does
            not have an incentive-based payment arrangement to make the
            disclosures required under this subsection.

        (b) Prohibition on Certain Compensation
    Arrangements. <<NOTE: Deadline. Regulations.>> --Not later than 9 months
    after the date of enactment of this title, the appropriate Federal
    regulators shall jointly prescribe regulations or guidelines that
    prohibit any types of incentive-based payment arrangement, or any
    feature of any such arrangement, that the regulators determine
    encourages inappropriate risks by covered financial institutions--
                (1) by providing an executive officer, employee, director,
            or principal shareholder of the covered financial institution
            with excessive compensation, fees, or benefits; or
                (2) that could lead to material financial loss to the
            covered financial institution.

        (c) Standards.--The appropriate Federal regulators shall--
                (1) ensure that any standards for compensation established
            under subsections (a) or (b) are comparable to the standards
            established under section of the Federal Deposit Insurance Act
            (12 U.S.C. 2 1831p-1) for insured depository institutions; and
                (2) in establishing such standards under such subsections,
            take into consideration the compensation standards described in
            section 39(c) of the Federal Deposit Insurance Act (12 U.S.C.
            1831p- 9 1(c)).

        (d) Enforcement.--The provisions of this section and the regulations
    issued under this section shall be enforced under section

    [[Page 124 STAT. 1906]]

    505 of the Gramm-Leach-Bliley Act and, for purposes of such section, a
    violation of this section or such regulations shall be treated as a
    violation of subtitle A of title V of such Act.
        (e) Definitions.--As used in this section--
                (1) the term ``appropriate Federal regulator'' means the
            Board of Governors of the Federal Reserve System, the Office of
            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 Securities and Exchange Commission,
            the Federal Housing Finance Agency; and
                (2) the term ``covered financial institution'' means--
                        (A) a depository institution or depository
                    institution holding company, as such terms are defined
                    in section 3 of the Federal Deposit Insurance Act (12
                    U.S.C. 1813);
                        (B) a broker-dealer registered under section 15 of
                    the Securities Exchange Act of 1934 (15 U.S.C. 78o);
                        (C) a credit union, as described in section
                    19(b)(1)(A)(iv) of the Federal Reserve Act;
                        (D) an investment advisor, as such term is defined
                    in section 202(a)(11) of the Investment Advisers Act of
                    1940 (15 U.S.C. 80b-2(a)(11));
                        (E) the Federal National Mortgage Association;
                        (F) the Federal Home Loan Mortgage Corporation; and
                        (G) any other financial institution that the
                    appropriate Federal regulators, jointly, by rule,
                    determine should be treated as a covered financial
                    institution for purposes of this section.

        (f) Exemption for Certain Financial Institutions.--The requirements
    of this section shall not apply to covered financial institutions with
    assets of less than $1,000,000,000.
    SEC. 957. VOTING BY BROKERS.

        Section 6(b) of the Securities Exchange Act of 1934 (15 U.S.C.
    78f(b)) is amended--
                (1) in paragraph (9)--
                        (A) in subparagraph (A), by redesignating clauses
                    (i) through (v) as subclauses (I) through (V),
                    respectively, and adjusting the margins accordingly;
                        (B) by redesignating subparagraphs (A) through (D)
                    as clauses (i) through (iv), respectively, and adjusting
                    the margins accordingly;
                        (C) by inserting ``(A)'' after ``(9)''; and
                        (D) in the matter immediately following clause (iv),
                    as so redesignated, by striking ``As used'' and
                    inserting the following:
                ``(B) As used''.
                (2) by adding at the end the following:
                ``(10)(A) The rules of the exchange prohibit any member that
            is not the beneficial owner of a security registered under
            section 12 from granting a proxy to vote the security in
            connection with a shareholder vote described in subparagraph
            (B), unless the beneficial owner of the security has instructed
            the member to vote the proxy in accordance with the voting
            instructions of the beneficial owner.
                ``(B) A shareholder vote described in this subparagraph is a
            shareholder vote with respect to the election of a member

    [[Page 124 STAT. 1907]]

            of the board of directors of an issuer, executive compensation,
            or any other significant matter, as determined by the
            Commission, by rule, and does not include a vote with respect to
            the uncontested election of a member of the board of directors
            of any investment company registered under the Investment
            Company Act of 1940 (15 U.S.C. 80b-1 et seq.).
                ``(C) Nothing in this paragraph shall be construed to
            prohibit a national securities exchange from prohibiting a
            member that is not the beneficial owner of a security registered
            under section 12 from granting a proxy to vote the security in
            connection with a shareholder vote not described in subparagraph
            (A).''.

        Subtitle F--Improvements to the Management of the Securities and
                               Exchange Commission

    SEC. 961. <<NOTE: 15 USC 78d-6.>> REPORT AND CERTIFICATION OF
                            INTERNAL SUPERVISORY CONTROLS.

        (a) Annual Reports and Certification.--Not later than 90 days after
    the end of each fiscal year, the Commission shall submit a report to the
    Committee on Banking, Housing, and Urban Affairs of the Senate and the
    Committee on Financial Services of the House of Representatives on the
    conduct by the Commission of examinations of registered entities,
    enforcement investigations, and review of corporate financial securities
    filings.
        (b) Contents of Reports.--Each report under subsection (a) shall
    contain--
                (1) an assessment, as of the end of the most recent fiscal
            year, of the effectiveness of--
                        (A) the internal supervisory controls of the
                    Commission; and
                        (B) the procedures of the Commission applicable to
                    the staff of the Commission who perform examinations of
                    registered entities, enforcement investigations, and
                    reviews of corporate financial securities filings;
                (2) a certification that the Commission has adequate
            internal supervisory controls to carry out the duties of the
            Commission described in paragraph (1)(B); and
                (3) a summary by the Comptroller General of the United
            States of the review carried out under subsection (d).

        (c) Certification.--
                (1) Signature.--The certification under subsection (b)(2)
            shall be signed by the Director of the Division of Enforcement,
            the Director of the Division of Corporation Finance, and the
            Director of the Office of Compliance Inspections and
            Examinations (or the head of any successor division or office).
                (2) Content of certification.--Each individual described in
            paragraph (1) shall certify that the individual--
                        (A) is directly responsible for establishing and
                    maintaining the internal supervisory controls of the
                    Division or Office of which the individual is the head;
                        (B) is knowledgeable about the internal supervisory
                    controls of the Division or Office of which the
                    individual is the head;

    [[Page 124 STAT. 1908]]

                        (C) <<NOTE: Time period.>>  has evaluated the
                    effectiveness of the internal supervisory controls
                    during the 90-day period ending on the final day of the
                    fiscal year to which the report relates; and
                        (D) has disclosed to the Commission any significant
                    deficiencies in the design or operation of internal
                    supervisory controls that could adversely affect the
                    ability of the Division or Office to consistently
                    conduct inspections, or investigations, or reviews of
                    filings with professional competence and integrity.

        (d) New Director or Acting Director.-- <<NOTE: Time
    period.>> Notwithstanding subsection (a), if the Director of the
    Division of Enforcement, the Director of the Division of Corporate
    Finance, or the Director of the Office of Compliance Inspections and
    Examinations has served as Director of the Division or Office for less
    than 90 days on the date on which a report is required to be submitted
    under subsection (a), the Commission may submit the report on the date
    on which the Director has served as Director for 90 days. If there is no
    Director of the Division of Enforcement, the Division of Corporate
    Finance, or the Office of Compliance Inspections and Examinations, on
    the date on which a report is required to be submitted under subsection
    (a), the Acting Director of the Division or Office may make the
    certification required under subsection (c).

        (e) Review by the Comptroller General.--
                (1) Report.--The Comptroller General of the United States
            shall submit to the Committee on Banking, Housing, and Urban
            Affairs of the Senate and the Committee on Financial Services of
            the House of Representatives a report that contains a review of
            the adequacy and effectiveness of the internal supervisory
            control structure and procedures described in subsection (b)(1),
            not less frequently than once every 3 years, at a time to
            coincide with the publication of the reports of the Commission
            under this section.
                (2) Authority to hire experts.--The Comptroller General of
            the United States may hire independent consultants with
            specialized expertise in any area relevant to the duties of the
            Comptroller General described in this section, in order to
            assist the Comptroller General in carrying out such duties.
    SEC. 962. <<NOTE: 15 USC 78d-7.>> TRIENNIAL REPORT ON PERSONNEL
                            MANAGEMENT.

        (a) Triennial Report Required.--Once every 3 years, the Comptroller
    General of the United States shall submit a report to the Committee on
    Banking, Housing, and Urban Affairs of the Senate and the Committee on
    Financial Services of the House of Representatives on the quality of
    personnel management by the Commission.
        (b) Contents of Report.--Each report under subsection (a) shall
    include--
                (1) an evaluation of--
                        (A) the effectiveness of supervisors in using the
                    skills, talents, and motivation of the employees of the
                    Commission to achieve the goals of the Commission;
                        (B) the criteria for promoting employees of the
                    Commission to supervisory positions;
                        (C) the fairness of the application of the promotion
                    criteria to the decisions of the Commission;

    [[Page 124 STAT. 1909]]

                        (D) the competence of the professional staff of the
                    Commission;
                        (E) the efficiency of communication between the
                    units of the Commission regarding the work of the
                    Commission (including communication between divisions
                    and between subunits of a division) and the efforts by
                    the Commission to promote such communication;
                        (F) the turnover within subunits of the Commission,
                    including the consideration of supervisors whose
                    subordinates have an unusually high rate of turnover;
                        (G) whether there are excessive numbers of low-
                    level, mid-level, or senior-level managers;
                        (H) any initiatives of the Commission that increase
                    the competence of the staff of the Commission;
                        (I) the actions taken by the Commission regarding
                    employees of the Commission who have failed to perform
                    their duties and circumstances under which the
                    Commission has issued to employees a notice of
                    termination; and
                        (J) such other factors relating to the management of
                    the Commission as the Comptroller General determines are
                    appropriate;
                (2) an evaluation of any improvements made with respect to
            the areas described in paragraph (1) since the date of
            submission of the previous report; and
                (3) recommendations for how the Commission can use the human
            resources of the Commission more effectively and efficiently to
            carry out the mission of the Commission.

        (c) Consultation.--In preparing the report under subsection (a), the
    Comptroller General shall consult with current employees of the
    Commission, retired employees and other former employees of the
    Commission, the Inspector General of the Commission, persons that have
    business before the Commission, any union representing the employees of
    the Commission, private management consultants, academics, and any other
    source that the Comptroller General deems appropriate.
        (d) Report by Commission.--Not later than 90 days after the date on
    which the Comptroller General submits each report under subsection (a),
    the Commission shall submit to the Committee on Banking, Housing, and
    Urban Affairs of the Senate and the Committee on Financial Services of
    the House of Representatives a report describing the actions taken by
    the Commission in response to the recommendations contained in the
    report under subsection (a).
        (e) Reimbursements for Cost of Reports.--
                (1) Reimbursements required.--The Commission shall reimburse
            the Government Accountability Office for the full cost of making
            the reports under this section, as billed therefor by the
            Comptroller General.
                (2) Crediting and use of reimbursements.--Such
            reimbursements shall--
                        (A) be credited to the appropriation account
                    ``Salaries and Expenses, Government Accountability
                    Office'' current when the payment is received; and
                        (B) remain available until expended.

        (f) Authority to Hire Experts.--The Comptroller General of the
    United States may hire independent consultants with specialized
    expertise in any area relevant to the duties of the Comptroller

    [[Page 124 STAT. 1910]]

    General described in this section, in order to assist the Comptroller
    General in carrying out such duties.
    SEC. 963. <<NOTE: 15 USC 78d-8.>> ANNUAL FINANCIAL CONTROLS AUDIT.

        (a) Reports of Commission.--
                (1) Annual reports required.--Not later than 6 months after
            the end of each fiscal year, the Commission shall publish and
            submit to Congress a report that--
                        (A) describes the responsibility of the management
                    of the Commission for establishing and maintaining an
                    adequate internal control structure and procedures for
                    financial reporting; and
                        (B) contains an assessment of the effectiveness of
                    the internal control structure and procedures for
                    financial reporting of the Commission during that fiscal
                    year.
                (2) Attestation.--The reports required under paragraph (1)
            shall be attested to by the Chairman and chief financial officer
            of the Commission.

        (b) Report by Comptroller General.--
                (1) Report required.--Not later than 6 months after the end
            of the first fiscal year after the date of enactment of this
            Act, the Comptroller General of the United States shall submit a
            report to Congress that assesses--
                        (A) the effectiveness of the internal control
                    structure and procedures of the Commission for financial
                    reporting; and
                        (B) the assessment of the Commission under
                    subsection (a)(1)(B).
                (2) Attestation.--The Comptroller General shall attest to,
            and report on, the assessment made by the Commission under
            subsection (a).

        (c) Reimbursements for Cost of Reports.--
                (1) Reimbursements required.--The Commission shall reimburse
            the Government Accountability Office for the full cost of making
            the reports under subsection (b), as billed therefor by the
            Comptroller General.
                (2) Crediting and use of reimbursements.--Such
            reimbursements shall--
                        (A) be credited to the appropriation account
                    ``Salaries and Expenses, Government Accountability
                    Office'' current when the payment is received; and
                        (B) remain available until expended.
    SEC. 964. <<NOTE: 15 USC 78d-9.>>  REPORT ON OVERSIGHT OF NATIONAL
                            SECURITIES ASSOCIATIONS.

        (a) Report Required.--Not later than 2 years after the date of
    enactment of this Act, and every 3 years thereafter, the Comptroller
    General of the United States shall submit to the Committee on Banking,
    Housing, and Urban Affairs of the Senate and the Committee on Financial
    Services of the House of Representatives a report that includes an
    evaluation of the oversight by the Commission of national securities
    associations registered under section 15A of the Securities Exchange Act
    of 1934 (15 U.S.C. 78o-3) with respect to--
                (1) the governance of such national securities associations,
            including the identification and management of conflicts of
            interest by such national securities associations, together with
            an analysis of the impact of any conflicts of interest on the

    [[Page 124 STAT. 1911]]

            regulatory enforcement or rulemaking by such national securities
            associations;
                (2) the examinations carried out by the national securities
            associations, including the expertise of the examiners;
                (3) the executive compensation practices of such national
            securities associations;
                (4) the arbitration services provided by the national
            securities associations;
                (5) the review performed by national securities associations
            of advertising by the members of the national securities
            associations;
                (6) the cooperation with and assistance to State securities
            administrators by the national securities associations to
            promote investor protection;
                (7) how the funding of national securities associations is
            used to support the mission of the national securities
            associations, including--
                        (A) the methods of funding;
                        (B) the sufficiency of funds;
                        (C) how funds are invested by the national
                    securities association pending use; and
                        (D) the impact of the methods, sufficiency, and
                    investment of funds on regulatory enforcement by the
                    national securities associations;
                (8) the policies regarding the employment of former
            employees of national securities associations by regulated
            entities;
                (9) the ongoing effectiveness of the rules of the national
            securities associations in achieving the goals of the rules;
                (10) the transparency of governance and activities of the
            national securities associations; and
                (11) any other issue that has an impact, as determined by
            the Comptroller General, on the effectiveness of such national
            securities associations in performing their mission and in
            dealing fairly with investors and members;

        (b) Reimbursements for Cost of Reports.--
                (1) Reimbursements required.--The Commission shall reimburse
            the Government Accountability Office for the full cost of making
            the reports under subsection (a), as billed therefor by the
            Comptroller General.
                (2) Crediting and use of reimbursements.--Such
            reimbursements shall--
                        (A) be credited to the appropriation account
                    ``Salaries and Expenses, Government Accountability
                    Office'' current when the payment is received; and
                        (B) remain available until expended.
    SEC. 965. COMPLIANCE EXAMINERS.

        Section 4 of the Securities Exchange Act of 1934 (15 U.S.C. 78d) is
    amended by adding at the end the following:
        ``(h) Examiners.--
                ``(1) Division of trading and markets.--The Division of
            Trading and Markets of the Commission, or any successor
            organizational unit, shall have a staff of examiners who shall--
                        ``(A) perform compliance inspections and
                    examinations of entities under the jurisdiction of that
                    Division; and
                        ``(B) report to the Director of that Division.

    [[Page 124 STAT. 1912]]

                ``(2) Division of investment management.--The Division of
            Investment Management of the Commission, or any successor
            organizational unit, shall have a staff of examiners who shall--
                        ``(A) perform compliance inspections and
                    examinations of entities under the jurisdiction of that
                    Division; and
                        ``(B) report to the Director of that Division.''.
    SEC. 966. SUGGESTION PROGRAM FOR EMPLOYEES OF THE COMMISSION.

        The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is
    amended by inserting after section 4C (15 U.S.C. 78d-3) the following:
    ``SEC. 4D. <<NOTE: 15 USC 78d-4.>> ADDITIONAL DUTIES OF INSPECTOR
                          GENERAL.

        ``(a) Suggestion Submissions by Commission Employees.--
                ``(1) Hotline established.--The Inspector General of the
            Commission shall establish and maintain a telephone hotline or
            other electronic means for the receipt of--
                        ``(A) suggestions by employees of the Commission for
                    improvements in the work efficiency, effectiveness, and
                    productivity, and the use of the resources, of the
                    Commission; and
                        ``(B) allegations by employees of the Commission of
                    waste, abuse, misconduct, or mismanagement within the
                    Commission.
                ``(2) Confidentiality.--The Inspector General shall maintain
            as confidential--
                        ``(A) the identity of any individual who provides
                    information by the means established under paragraph
                    (1), unless the individual requests otherwise, in
                    writing; and
                        ``(B) at the request of any such individual, any
                    specific information provided by the individual.

        ``(b) Consideration of Reports.--The Inspector General shall
    consider any suggestions or allegations received by the means
    established under subsection (a)(1), and shall recommend appropriate
    action in relation to such suggestions or allegations.
        ``(c) Recognition.--The Inspector General may recognize any employee
    who makes a suggestion under subsection (a)(1) (or by other means) that
    would or does--
                ``(1) increase the work efficiency, effectiveness, or
            productivity of the Commission; or
                ``(2) reduce waste, abuse, misconduct, or mismanagement
            within the Commission.

        ``(d) Report.--The Inspector General of the Commission shall submit
    to Congress an annual report containing a description of--
                ``(1) the nature, number, and potential benefits of any
            suggestions received under subsection (a);
                ``(2) the nature, number, and seriousness of any allegations
            received under subsection (a);
                ``(3) any recommendations made or actions taken by the
            Inspector General in response to substantiated allegations
            received under subsection (a); and
                ``(4) any action the Commission has taken in response to
            suggestions or allegations received under subsection (a).

        ``(e) Funding.--The activities of the Inspector General under this
    subsection shall be funded by the Securities and Exchange

    [[Page 124 STAT. 1913]]

    Commission Investor Protection Fund established under section 21F.''.
    SEC. 967. COMMISSION ORGANIZATIONAL STUDY AND REFORM.

        (a) Study Required.--
                (1) In general.-- <<NOTE: Deadline.>> Not later than the end
            of the 90-day period beginning on the date of the enactment of
            this subtitle, the Securities and Exchange Commission
            (hereinafter in this section referred to as the ``SEC'') shall
            hire an independent consultant of high caliber and with
            expertise in organizational restructuring and the operations of
            capital markets to examine the internal operations, structure,
            funding, and the need for comprehensive reform of the SEC, as
            well as the SEC's relationship with and the reliance on self-
            regulatory organizations and other entities relevant to the
            regulation of securities and the protection of securities
            investors that are under the SEC's oversight.
                (2) Specific areas for study.--The study required under
            paragraph (1) shall, at a minimum, include the study of--
                        (A) the possible elimination of unnecessary or
                    redundant units at the SEC;
                        (B) improving communications between SEC offices and
                    divisions;
                        (C) the need to put in place a clear chain-of-
                    command structure, particularly for enforcement
                    examinations and compliance inspections;
                        (D) the effect of high-frequency trading and other
                    technological advances on the market and what the SEC
                    requires to monitor the effect of such trading and
                    advances on the market;
                        (E) the SEC's hiring authorities, workplace
                    policies, and personal practices, including--
                              (i) whether there is a need to further
                          streamline hiring authorities for those who are
                          not lawyers, accountants, compliance examiners, or
                          economists;
                              (ii) whether there is a need for further pay
                          reforms;
                              (iii) the diversity of skill sets of SEC
                          employees and whether the present skill set
                          diversity efficiently and effectively fosters the
                          SEC's mission of investor protection; and
                              (iv) the application of civil service laws by
                          the SEC;
                        (F) whether the SEC's oversight and reliance on
                    self-regulatory organizations promotes efficient and
                    effective governance for the securities markets; and
                        (G) whether adjusting the SEC's reliance on self-
                    regulatory organizations is necessary to promote more
                    efficient and effective governance for the securities
                    markets.

        (b) Consultant Report.--Not later than the end of the 150-day period
    after being retained, the independent consultant hired pursuant to
    subsection (a)(1) shall issue a report to the SEC and the Congress
    containing--
                (1) a detailed description of any findings and conclusions
            made while carrying out the study required under subsection
            (a)(1); and
                (2) recommendations for legislative, regulatory, or
            administrative action that the consultant determines appropriate
            to

    [[Page 124 STAT. 1914]]

            enable the SEC and other entities on which the consultant
            reports to perform their statutorily or otherwise mandated
            missions.

        (c) SEC Report.--Not later than the end of the 6-month period
    beginning on the date the consultant issues the report under subsection
    (b), and every 6-months thereafter during the 2-year period following
    the date on which the consultant issues such report, the SEC shall issue
    a report to the Committee on Financial Services of the House of
    Representatives and the Committee on Banking, Housing, and Urban Affairs
    of the Senate describing the SEC's implementation of the regulatory and
    administrative recommendations contained in the consultant's report.
    SEC. 968. STUDY ON SEC REVOLVING DOOR.

        (a) Government Accountability Office Study.--The Comptroller General
    of the United States shall conduct a study that will--
                (1) review the number of employees who leave the Securities
            and Exchange Commission to work for financial institutions
            regulated by such Commission;
                (2) determine how many employees who leave the Securities
            and Exchange Commission worked on cases that involved financial
            institutions regulated by such Commission;
                (3) review the length of time employees work for the
            Securities and Exchange Commission before leaving to be employed
            by financial institutions regulated by such Commission;
                (4) review existing internal controls and make
            recommendations on strengthening such controls to ensure that
            employees of the Securities and Exchange Commission who are
            later employed by financial institutions did not assist such
            institutions in violating any rules or regulations of the
            Commission during the course of their employment with such
            Commission;
                (5) determine if greater post-employment restrictions are
            necessary to prevent employees of the Securities and Exchange
            Commission from being employed by financial institutions after
            employment with such Commission;
                (6) determine if the volume of employees of the Securities
            and Exchange Commission who are later employed by financial
            institutions has led to inefficiencies in enforcement;
                (7) determine if employees of the Securities and Exchange
            Commission who are later employed by financial institutions
            assisted such institutions in circumventing Federal rules and
            regulations while employed by such Commission;
                (8) review any information that may address the volume of
            employees of the Securities and Exchange Commission who are
            later employed by financial institutions, and make
            recommendations to Congress; and
                (9) review other additional issues as may be raised during
            the course of the study conducted under this subsection.

        (b) Report.--Not later than 1 year after the date of the enactment
    of this subtitle, the Comptroller General of the United States shall
    submit to the Committee on Financial Services of the House of
    Representatives and the Committee on Banking, Housing, and Urban Affairs
    of the Senate a report on the results of the study required by
    subsection (a).

    [[Page 124 STAT. 1915]]

                 Subtitle G--Strengthening Corporate Governance

    SEC. 971. PROXY ACCESS.

        (a) Proxy Access.--Section 14(a) of the Securities Exchange Act of
    1934 (15 U.S.C. 78n(a)) is amended--
                (1) by inserting ``(1)'' after ``(a)''; and
                (2) by adding at the end the following:

        ``(2) The rules and regulations prescribed by the Commission under
    paragraph (1) may include--
                ``(A) a requirement that a solicitation of proxy, consent,
            or authorization by (or on behalf of) an issuer include a
            nominee submitted by a shareholder to serve on the board of
            directors of the issuer; and
                ``(B) a requirement that an issuer follow a certain
            procedure in relation to a solicitation described in
            subparagraph (A).''.

        (b) <<NOTE: 15 USC 78n note.>>  Regulations.--The Commission may
    issue rules permitting the use by a shareholder of proxy solicitation
    materials supplied by an issuer of securities for the purpose of
    nominating individuals to membership on the board of directors of the
    issuer, under such terms and conditions as the Commission determines are
    in the interests of shareholders and for the protection of investors.

        (c) <<NOTE: 15 USC 78n note.>>  Exemptions.--The Commission may, by
    rule or order, exempt an issuer or class of issuers from the requirement
    made by this section or an amendment made by this section. In
    determining whether to make an exemption under this subsection, the
    Commission shall take into account, among other considerations, whether
    the requirement in the amendment made by subsection (a)
    disproportionately burdens small issuers.
    SEC. 972. DISCLOSURES REGARDING CHAIRMAN AND CEO STRUCTURES.

        The Securities Exchange Act of 1934 (15 U.S. C. 78a et seq.) is
    amended by inserting after section 14A, as added by this title, the
    following:
    ``SEC. 14B. <<NOTE: 15 USC 78n-2.>> CORPORATE GOVERNANCE.

        `` <<NOTE: Deadline. Regulations.>> Not later than 180 days after
    the date of enactment of this subsection, the Commission shall issue
    rules that require an issuer to disclose in the annual proxy sent to
    investors the reasons why the issuer has chosen--
                ``(1) the same person to serve as chairman of the board of
            directors and chief executive officer (or in equivalent
            positions); or
                ``(2) different individuals to serve as chairman of the
            board of directors and chief executive officer (or in equivalent
            positions of the issuer).''.

                        Subtitle H--Municipal Securities

    SEC. 975. REGULATION OF MUNICIPAL SECURITIES AND CHANGES TO THE
                            BOARD OF THE MSRB.

        (a) Registration of Municipal Securities Dealers and Municipal
    Advisors.--Section 15B(a) of the Securities Exchange Act of 1934 (15
    U.S.C. 78o-4(a)) is amended--

    [[Page 124 STAT. 1916]]

                (1) in paragraph (1)--
                        (A) by inserting ``(A)'' after ``(1)''; and
                        (B) by adding at the end the following:
                        ``(B) It shall be unlawful for a municipal advisor
                    to provide advice to or on behalf of a municipal entity
                    or obligated person with respect to municipal financial
                    products or the issuance of municipal securities, or to
                    undertake a solicitation of a municipal entity or
                    obligated person, unless the municipal advisor is
                    registered in accordance with this subsection.'';
                (2) in paragraph (2), by inserting ``or municipal advisor''
            after ``municipal securities dealer'' each place that term
            appears;
                (3) in paragraph (3), by inserting ``or municipal advisor''
            after ``municipal securities dealer'' each place that term
            appears;
                (4) in paragraph (4), by striking ``dealer, or municipal
            securities dealer or class of brokers, dealers, or municipal
            securities dealers'' and inserting ``dealer, municipal
            securities dealer, or municipal advisor, or class of brokers,
            dealers, municipal securities dealers, or municipal advisors'';
            and
                (5) by adding at the end the following:
                ``(5) No municipal advisor shall make use of the mails or
            any means or instrumentality of interstate commerce to provide
            advice to or on behalf of a municipal entity or obligated person
            with respect to municipal financial products, the issuance of
            municipal securities, or to undertake a solicitation of a
            municipal entity or obligated person, in connection with which
            such municipal advisor engages in any fraudulent, deceptive, or
            manipulative act or practice.''.

        (b) Municipal Securities Rulemaking Board.--Section 15B(b) of the
    Securities Exchange Act of 1934 (15 U.S.C. 78o-4(b)) is amended--
                (1) in paragraph (1)--
                        (A) in the first sentence, by striking ``Not later
                    than'' and all that follows through ``appointed by the
                    Commission'' and inserting ``The Municipal Securities
                    Rulemaking Board shall be composed of 15 members, or
                    such other number of members as specified by rules of
                    the Board pursuant to paragraph (2)(B),'';
                        (B) by striking the second sentence and inserting
                    the following: ``The members of the Board shall serve as
                    members for a term of 3 years or for such other terms as
                    specified by rules of the Board pursuant to paragraph
                    (2)(B), and shall consist of (A) 8 individuals who are
                    independent of any municipal securities broker,
                    municipal securities dealer, or municipal advisor, at
                    least 1 of whom shall be representative of institutional
                    or retail investors in municipal securities, at least 1
                    of whom shall be representative of municipal entities,
                    and at least 1 of whom shall be a member of the public
                    with knowledge of or experience in the municipal
                    industry (which members are hereinafter referred to as
                    `public representatives'); and (B) 7 individuals who are
                    associated with a broker, dealer, municipal securities
                    dealer, or municipal advisor, including at least 1
                    individual who is associated with and representative of
                    brokers, dealers, or municipal securities dealers that
                    are not banks or subsidiaries or departments or
                    divisions of banks (which members are hereinafter
                    referred

    [[Page 124 STAT. 1917]]

                    to as `broker-dealer representatives'), at least 1
                    individual who is associated with and representative of
                    municipal securities dealers which are banks or
                    subsidiaries or departments or divisions of banks (which
                    members are hereinafter referred to as `bank
                    representatives'), and at least 1 individual who is
                    associated with a municipal advisor (which members are
                    hereinafter referred to as `advisor representatives'
                    and, together with the broker-dealer representatives and
                    the bank representatives, are referred to as `regulated
                    representatives'). Each member of the board shall be
                    knowledgeable of matters related to the municipal
                    securities markets.''; and
                        (C) in the third sentence, by striking ``initial'';
                (2) in paragraph (2)--
                        (A) in the matter preceding subparagraph (A)--
                              (i) by inserting before the period at the end
                          of the first sentence the following: ``and advice
                          provided to or on behalf of municipal entities or
                          obligated persons by brokers, dealers, municipal
                          securities dealers, and municipal advisors with
                          respect to municipal financial products, the
                          issuance of municipal securities, and
                          solicitations of municipal entities or obligated
                          persons undertaken by brokers, dealers, municipal
                          securities dealers, and municipal advisors''; and
                              (ii) by striking the second sentence;
                        (B) in subparagraph (A)--
                              (i) in the matter preceding clause (i)--
                                        (I) by inserting ``, and no broker,
                                    dealer, municipal securities dealer, or
                                    municipal advisor shall provide advice
                                    to or on behalf of a municipal entity or
                                    obligated person with respect to
                                    municipal financial products or the
                                    issuance of municipal securities,''
                                    after ``sale of, any municipal
                                    security''; and
                                        (II) by inserting ``and municipal
                                    entities or obligated persons'' after
                                    ``protection of investors'';
                              (ii) in clause (i), by striking ``municipal
                          securities brokers and municipal securities
                          dealers'' each place that term appears and
                          inserting ``municipal securities brokers,
                          municipal securities dealers, and municipal
                          advisors'';
                              (iii) in clause (ii), by adding ``and'' at the
                          end;
                              (iv) in clause (iii), by striking ``; and''
                          and inserting a period; and
                              (v) by striking clause (iv);
                        (C) by amending subparagraph (B) to read as follows:
                ``(B) <<NOTE: Procedures.>> establish fair procedures for
            the nomination and election of members of the Board and assure
            fair representation in such nominations and elections of public
            representatives, broker dealer representatives, bank
            representatives, and advisor representatives. Such rules--
                        ``(i) shall provide that the number of public
                    representatives of the Board shall at all times exceed
                    the total number of regulated representatives and that
                    the membership shall at all times be as evenly divided
                    in number as possible between public representatives and
                    regulated representatives;

    [[Page 124 STAT. 1918]]

                        ``(ii) shall specify the length or lengths of terms
                    members shall serve;
                        ``(iii) may increase the number of members which
                    shall constitute the whole Board, provided that such
                    number is an odd number; and
                        ``(iv) <<NOTE: Requirements.>> shall establish
                    requirements regarding the independence of public
                    representatives.''.
                        (D) in subparagraph (C)--
                              (i) by inserting ``and municipal financial
                          products'' after ``municipal securities'' the
                          first two times that term appears;
                              (ii) by inserting ``, municipal entities,
                          obligated persons,'' before ``and the public
                          interest'';
                              (iii) by striking ``between'' and inserting
                          ``among'';
                              (iv) by striking ``issuers, municipal
                          securities brokers, or municipal securities
                          dealers, to fix'' and inserting ``municipal
                          entities, obligated persons, municipal securities
                          brokers, municipal securities dealers, or
                          municipal advisors, to fix''; and
                              (v) by striking ``brokers or municipal
                          securities dealers, to regulate'' and inserting
                          ``brokers, municipal securities dealers, or
                          municipal advisors, to regulate'';
                        (E) in subparagraph (D)--
                              (i) by inserting ``and advice concerning
                          municipal financial products'' after
                          ``transactions in municipal securities'';
                              (ii) by striking ``That no'' and inserting
                          ``that no'';
                              (iii) by inserting ``municipal advisor,''
                          before ``or person associated''; and
                              (iv) by striking ``a municipal securities
                          broker or municipal securities dealer may be
                          compelled'' and inserting ``a municipal securities
                          broker, municipal securities dealer, or municipal
                          advisor may be compelled'';
                        (F) in subparagraph (E)--
                              (i) by striking ``municipal securities brokers
                          and municipal securities dealers'' and inserting
                          ``municipal securities brokers, municipal
                          securities dealers, and municipal advisors''; and
                              (ii) by striking ``municipal securities broker
                          or municipal securities dealer'' and inserting
                          ``municipal securities broker, municipal
                          securities dealer, or municipal advisor'';
                        (G) in subparagraph (G), by striking ``municipal
                    securities brokers and municipal securities dealers''
                    and inserting ``municipal securities brokers, municipal
                    securities dealers, and municipal advisors'';
                        (H) in subparagraph (J)--
                              (i) by striking ``municipal securities broker
                          and each municipal securities dealer'' and
                          inserting ``municipal securities broker, municipal
                          securities dealer, and municipal advisor''; and
                              (ii) by striking the period at the end of the
                          second sentence and inserting ``, which may
                          include charges for failure to submit to the
                          Board, or to any information system operated by
                          the Board, within the prescribed timeframes, any
                          items of information or documents

    [[Page 124 STAT. 1919]]

                          required to be submitted under any rule issued by
                          the Board.'';
                        (I) in subparagraph (K)--
                              (i) by inserting ``broker, dealer, or'' before
                          ``municipal securities dealer'' each place that
                          term appears; and
                              (ii) by striking ``municipal securities
                          investment portfolio'' and inserting ``related
                          account of a broker, dealer, or municipal
                          securities dealer''; and
                        (J) by adding at the end the following:
                        ``(L) with respect to municipal advisors--
                              ``(i) prescribe means reasonably designed to
                          prevent acts, practices, and courses of business
                          as are not consistent with a municipal advisor's
                          fiduciary duty to its clients;
                              ``(ii) provide continuing education
                          requirements for municipal advisors;
                              ``(iii) provide professional standards; and
                              ``(iv) not impose a regulatory burden on small
                          municipal advisors that is not necessary or
                          appropriate in the public interest and for the
                          protection of investors, municipal entities, and
                          obligated persons, provided that there is robust
                          protection of investors against fraud.'';
                (3) by redesignating paragraph (3) as paragraph (7); and
                (4) by inserting after paragraph (2) the following:
                ``(3) The Board, in conjunction with or on behalf of any
            Federal financial regulator or self-regulatory organization,
            may--
                        ``(A) establish information systems; and
                        ``(B) assess such reasonable fees and charges for
                    the submission of information to, or the receipt of
                    information from, such systems from any persons which
                    systems may be developed for the purposes of serving as
                    a repository of information from municipal market
                    participants or otherwise in furtherance of the purposes
                    of the Board, a Federal financial regulator, or a self-
                    regulatory organization, except that the Board--
                              ``(i) may not charge a fee to municipal
                          entities or obligated persons to submit documents
                          or other information to the Board or charge a fee
                          to any person to obtain, directly from the
                          Internet site of the Board, documents or
                          information submitted by municipal entities,
                          obligated persons, brokers, dealers, municipal
                          securities dealers, or municipal advisors,
                          including documents submitted under the rules of
                          the Board or the Commission; and
                              ``(ii) shall not be prohibited from charging
                          commercially reasonable fees for automated
                          subscription-based feeds or similar services, or
                          for charging for other data or document-based
                          services customized upon request of any person,
                          made available to commercial enterprises,
                          municipal securities market professionals, or the
                          general public, whether delivered through the
                          Internet or any other means, that contain all or
                          part of the documents or information, subject to
                          approval of the fees by the Commission under
                          section 19(b).

    [[Page 124 STAT. 1920]]

                ``(4) The Board may provide guidance and assistance in the
            enforcement of, and examination for, compliance with the rules
            of the Board to the Commission, a registered securities
            association under section 15A, or any other appropriate
            regulatory agency, as applicable.
                ``(5) The Board, the Commission, and a registered securities
            association under section 15A, or the designees of the Board,
            the Commission, or such association, shall meet not less
            frequently than 2 times a year--
                        ``(A) to describe the work of the Board, the
                    Commission, and the registered securities association
                    involving the regulation of municipal securities; and
                        ``(B) to share information about--
                              ``(i) the interpretation of the Board, the
                          Commission, and the registered securities
                          association of Board rules; and
                              ``(ii) examination and enforcement of
                          compliance with Board rules.''.

        (c) Discipline of Brokers, Dealers, Municipal Securities Dealers and
    Municipal Advisors; Fiduciary Duty of Municipal Advisors.--Section
    15B(c) of the Securities Exchange Act of 1934 (15 U.S.C. 78o-4(c)) is
    amended--
                (1) in paragraph (1), by inserting ``, and no broker,
            dealer, municipal securities dealer, or municipal advisor shall
            make use of the mails or any means or instrumentality of
            interstate commerce to provide advice to or on behalf of a
            municipal entity or obligated person with respect to municipal
            financial products, the issuance of municipal securities, or to
            undertake a solicitation of a municipal entity or obligated
            person,'' after ``any municipal security'';
                (2) by adding at the end of paragraph (1) the following: ``A
            municipal advisor and any person associated with such municipal
            advisor shall be deemed to have a fiduciary duty to any
            municipal entity for whom such municipal advisor acts as a
            municipal advisor, and no municipal advisor may engage in any
            act, practice, or course of business which is not consistent
            with a municipal advisor's fiduciary duty or that is in
            contravention of any rule of the Board.''.
                (3) in paragraph (2), by inserting ``or municipal advisor''
            after ``municipal securities dealer'' each place that term
            appears;
                (4) in paragraph (3)--
                        (A) by inserting ``or municipal entities or
                    obligated person'' after ``protection of investors''
                    each place that term appears; and
                        (B) by inserting ``or municipal advisor'' after
                    ``municipal securities dealer'' each place that term
                    appears;
                (5) in paragraph (4), by inserting ``or municipal advisor''
            after ``municipal securities dealer or obligated person'' each
            place that term appears;
                (6) in paragraph (6)(B), by inserting ``or municipal
            entities or obligated person'' after ``protection of
            investors'';
                (7) in paragraph (7)--
                        (A) in subparagraph (A)--
                              (i) in clause (i), by striking ``; and'' and
                          inserting a semicolon;
                              (ii) in clause (ii), by striking the period
                          and inserting ``; and''; and

    [[Page 124 STAT. 1921]]

                              (iii) by adding at the end the following:
                              ``(iii) the Commission, or its designee, in
                          the case of municipal advisors.''.
                        (B) in subparagraph (B), by inserting ``or municipal
                    entities or obligated person'' after ``protection of
                    investors''; and
                (8) by adding at the end the following:
                ``(9)(A) <<NOTE: Fines.>> Fines collected by the Commission
            for violations of the rules of the Board shall be equally
            divided between the Commission and the Board.
                ``(B) Fines collected by a registered securities association
            under section 15A(7) with respect to violations of the rules of
            the Board shall be accounted for by such registered securities
            association separately from other fines collected under section
            15A(7) and shall be allocated between such registered securities
            association and the Board, and such allocation shall require the
            registered securities association to pay to the Board \1/3\ of
            all fines collected by the registered securities association
            reasonably allocable to violations of the rules of the Board, or
            such other portion of such fines as may be directed by the
            Commission upon agreement between the registered securities
            association and the Board.''.

        (d) Issuance of Municipal Securities.--Section 15B(d)(2) of the
    Securities Exchange Act of 1934 (15 U.S.C. 78o-4(d)) is amended--
                (1) by striking ``through a municipal securities broker or
            municipal securities dealer or otherwise'' and inserting
            ``through a municipal securities broker, municipal securities
            dealer, municipal advisor, or otherwise''; and
                (2) by inserting ``or municipal advisors'' before ``to
            furnish''.

        (e) Definitions.--Section 15B of the Securities Exchange Act of 1934
    (15 U.S.C. 78o-4) is amended by adding at the end the following:
        ``(e) Definitions.--For purposes of this section--
                ``(1) the term `Board' means the Municipal Securities
            Rulemaking Board established under subsection (b)(1);
                ``(2) the term `guaranteed investment contract' includes any
            investment that has specified withdrawal or reinvestment
            provisions and a specifically negotiated or bid interest rate,
            and also includes any agreement to supply investments on 2 or
            more future dates, such as a forward supply contract;
                ``(3) the term `investment strategies' includes plans or
            programs for the investment of the proceeds of municipal
            securities that are not municipal derivatives, guaranteed
            investment contracts, and the recommendation of and brokerage of
            municipal escrow investments;
                ``(4) the term `municipal advisor'--
                        ``(A) means a person (who is not a municipal entity
                    or an employee of a municipal entity) that--
                              ``(i) provides advice to or on behalf of a
                          municipal entity or obligated person with respect
                          to municipal financial products or the issuance of
                          municipal securities, including advice with
                          respect to the structure, timing, terms, and other
                          similar matters concerning such financial products
                          or issues; or
                              ``(ii) undertakes a solicitation of a
                          municipal entity;

    [[Page 124 STAT. 1922]]

                        ``(B) includes financial advisors, guaranteed
                    investment contract brokers, third-party marketers,
                    placement agents, solicitors, finders, and swap
                    advisors, if such persons are described in any of
                    clauses (i) through (iii) of subparagraph (A); and
                        ``(C) does not include a broker, dealer, or
                    municipal securities dealer serving as an underwriter
                    (as defined in section 2(a)(11) of the Securities Act of
                    1933) (15 U.S.C. 77b(a)(11)), any investment adviser
                    registered under the Investment Advisers Act of 1940, or
                    persons associated with such investment advisers who are
                    providing investment advice, any commodity trading
                    advisor registered under the Commodity Exchange Act or
                    persons associated with a commodity trading advisor who
                    are providing advice related to swaps, attorneys
                    offering legal advice or providing services that are of
                    a traditional legal nature, or engineers providing
                    engineering advice;
                ``(5) the term `municipal financial product' means municipal
            derivatives, guaranteed investment contracts, and investment
            strategies;
                ``(6) the term `rules of the Board' means the rules proposed
            and adopted by the Board under subsection (b)(2);
                ``(7) the term `person associated with a municipal advisor'
            or `associated person of an advisor' means--
                        ``(A) any partner, officer, director, or branch
                    manager of such municipal advisor (or any person
                    occupying a similar status or performing similar
                    functions);
                        ``(B) any other employee of such municipal advisor
                    who is engaged in the management, direction,
                    supervision, or performance of any activities relating
                    to the provision of advice to or on behalf of a
                    municipal entity or obligated person with respect to
                    municipal financial products or the issuance of
                    municipal securities; and
                        ``(C) any person directly or indirectly controlling,
                    controlled by, or under common control with such
                    municipal advisor;
                ``(8) the term `municipal entity' means any State, political
            subdivision of a State, or municipal corporate instrumentality
            of a State, including--
                        ``(A) any agency, authority, or instrumentality of
                    the State, political subdivision, or municipal corporate
                    instrumentality;
                        ``(B) any plan, program, or pool of assets sponsored
                    or established by the State, political subdivision, or
                    municipal corporate instrumentality or any agency,
                    authority, or instrumentality thereof; and
                        ``(C) any other issuer of municipal securities;
                ``(9) the term `solicitation of a municipal entity or
            obligated person' means a direct or indirect communication with
            a municipal entity or obligated person made by a person, for
            direct or indirect compensation, on behalf of a broker, dealer,
            municipal securities dealer, municipal advisor, or investment
            adviser (as defined in section 202 of the Investment Advisers
            Act of 1940) that does not control, is not controlled by, or is
            not under common control with the person undertaking such
            solicitation for the purpose of obtaining or retaining an
            engagement by a municipal entity or obligated person of a
            broker, dealer,

    [[Page 124 STAT. 1923]]

            municipal securities dealer, or municipal advisor for or in
            connection with municipal financial products, the issuance of
            municipal securities, or of an investment adviser to provide
            investment advisory services to or on behalf of a municipal
            entity; and
                ``(10) the term `obligated person' means any person,
            including an issuer of municipal securities, who is either
            generally or through an enterprise, fund, or account of such
            person, committed by contract or other arrangement to support
            the payment of all or part of the obligations on the municipal
            securities to be sold in an offering of municipal securities.''.

        (f) Registered Securities Association.--Section 15A(b) of the
    Securities Exchange Act of 1934 (15 U.S.C. 78o-3(b)) is amended by
    adding at the end the following:
                ``(15) The rules of the association provide that the
            association shall--
                        ``(A) request guidance from the Municipal Securities
                    Rulemaking Board in interpretation of the rules of the
                    Municipal Securities Rulemaking Board; and
                        ``(B) provide information to the Municipal
                    Securities Rulemaking Board about the enforcement
                    actions and examinations of the association under
                    section 15B(b)(2)(E), so that the Municipal Securities
                    Rulemaking Board may--
                              ``(i) assist in such enforcement actions and
                          examinations; and
                              ``(ii) evaluate the ongoing effectiveness of
                          the rules of the Board.''.

        (g) Registration and Regulation of Brokers and Dealers.--Section 15
    of the Securities Exchange Act of 1934 <<NOTE: 15 USC 78o.>> is
    amended--
                (1) in subsection (b)(4), by inserting ``municipal
            advisor,'' after ``municipal securities dealer'' each place that
            term appears; and
                (2) in subsection (c), by inserting ``broker, dealer, or''
            before ``municipal securities dealer'' each place that term
            appears.

        (h) Accounts and Records, Reports, Examinations of Exchanges,
    Members, and Others.--Section 17(a)(1) of the Securities Exchange Act of
    1934 <<NOTE: 15 USC 78q.>> is amended by inserting ``municipal
    advisor,'' after ``municipal securities dealer''.

        (i) <<NOTE: 15 USC 78o note.>>  Effective Date.--This section, and
    the amendments made by this section, shall take effect on October 1,
    2010.
    SEC. 976. GOVERNMENT ACCOUNTABILITY OFFICE STUDY OF INCREASED
                            DISCLOSURE TO INVESTORS.

        (a) Study.--The Comptroller General of the United States shall
    conduct a study and review of the disclosure required to be made by
    issuers of municipal securities.
        (b) Subjects for Evaluation.--In conducting the study under
    subsection (a), the Comptroller General of the United States shall--
                (1) broadly describe--
                        (A) the size of the municipal securities markets and
                    the issuers and investors; and
                        (B) the disclosures provided by issuers to
                    investors;
                (2) compare the amount, frequency, and quality of
            disclosures that issuers of municipal securities are required by
            law to provide for the benefit of municipal securities holders,
            including the amount of and frequency of disclosures actually

    [[Page 124 STAT. 1924]]

            provided by issuers of municipal securities, with the amount of
            and frequency of disclosures that issuers of corporate
            securities provide for the benefit of corporate securities
            holders, taking into account the differences between issuers of
            municipal securities and issuers of corporate securities;
                (3) evaluate the costs and benefits to various types of
            issuers of municipal securities of requiring issuers of
            municipal bonds to provide additional financial disclosures for
            the benefit of investors;
                (4) evaluate the potential benefit to investors from
            additional financial disclosures by issuers of municipal bonds;
            and
                (5) make recommendations relating to disclosure requirements
            for municipal issuers, including the advisability of the repeal
            or retention of section 15B(d) of the Securities Exchange Act of
            1934 (15 U.S.C. 78o-4(d)) (commonly known as the ``Tower
            Amendment'').

        (c) Report.--Not later than 24 months after the date of enactment of
    this Act, the Comptroller General of the United States shall submit a
    report to Congress on the results of the study conducted under
    subsection (a), including recommendations for how to improve disclosure
    by issuers of municipal securities.
    SEC. 977. GOVERNMENT ACCOUNTABILITY OFFICE STUDY ON THE MUNICIPAL
                            SECURITIES MARKETS.

        (a) Study.--The Comptroller General of the United States shall
    conduct a study of the municipal securities markets.
        (b) Report.--Not later than 18 months after the date of enactment of
    this Act, the Comptroller General of the United States shall submit a
    report to the Committee on Banking, Housing, and Urban Affairs of the
    Senate, and the Committee on Financial Services of the House of
    Representatives, with copies to the Special Committee on Aging of the
    Senate and the Commission, on the results of the study conducted under
    subsection (a), including--
                (1) an analysis of the mechanisms for trading, quality of
            trade executions, market transparency, trade reporting, price
            discovery, settlement clearing, and credit enhancements;
                (2) the needs of the markets and investors and the impact of
            recent innovations;
                (3) recommendations for how to improve the transparency,
            efficiency, fairness, and liquidity of trading in the municipal
            securities markets, including with reference to items listed in
            paragraph (1); and
                (4) potential uses of derivatives in the municipal
            securities markets.

        (c) Responses.-- <<NOTE: Deadline.>> Not later than 180 days after
    receipt of the report required under subsection (b), the Commission
    shall submit a response to the Committee on Banking, Housing, and Urban
    Affairs of the Senate, and the Committee on Financial Services of the
    House of Representatives, with a copy to the Special Committee on Aging
    of the Senate, stating the actions the Commission has taken in response
    to the recommendations contained in such report.
    SEC. 978. FUNDING FOR GOVERNMENTAL ACCOUNTING STANDARDS BOARD.

        (a) Amendment to the Securities Act of 1933.--Section 19 of the
    Securities Act of 1933 (15 U.S.C. 77s), as amended by section 912, is
    further amended by adding at the end the following:

    [[Page 124 STAT. 1925]]

        ``(g) Funding for the GASB.--
                ``(1) In general.--The Commission may, subject to the
            limitations imposed by section 15B of the Securities Exchange
            Act of 1934 (15 U.S.C. 78o-4), require a national securities
            association registered under the Securities Exchange Act of 1934
            to establish--
                        ``(A) a reasonable annual accounting support fee to
                    adequately fund the annual budget of the Governmental
                    Accounting Standards Board (referred to in this
                    subsection as the `GASB'); and
                        ``(B) rules and procedures, in consultation with the
                    principal organizations representing State governors,
                    legislators, local elected officials, and State and
                    local finance officers, to provide for the equitable
                    allocation, assessment, and collection of the accounting
                    support fee established under subparagraph (A) from the
                    members of the association, and the remittance of all
                    such accounting support fees to the Financial Accounting
                    Foundation.
                ``(2) Annual budget.--For purposes of this subsection, the
            annual budget of the GASB is the annual budget reviewed and
            approved according to the internal procedures of the Financial
            Accounting Foundation.
                ``(3) Use of funds.--Any fees or funds collected under this
            subsection shall be used to support the efforts of the GASB to
            establish standards of financial accounting and reporting
            recognized as generally accepted accounting principles
            applicable to State and local governments of the United States.
                ``(4) Limitation on fee.--The annual accounting support fees
            collected under this subsection for a fiscal year shall not
            exceed the recoverable annual budgeted expenses of the GASB
            (which may include operating expenses, capital, and accrued
            items).
                ``(5) Rules of construction.--
                        ``(A) Fees not public monies.--Accounting support
                    fees collected under this subsection and other receipts
                    of the GASB shall not be considered public monies of the
                    United States.
                        ``(B) Limitation on authority of the commission.--
                    Nothing in this subsection shall be construed to--
                              ``(i) provide the Commission or any national
                          securities association direct or indirect
                          oversight of the budget or technical agenda of the
                          GASB; or
                              ``(ii) affect the setting of generally
                          accepted accounting principles by the GASB.
                        ``(C) Noninterference with states.--Nothing in this
                    subsection shall be construed to impair or limit the
                    authority of a State or local government to establish
                    accounting and financial reporting standards.''.

        (b) Study of Funding for Governmental Accounting Standards Board.--
                (1) Study.--The Comptroller General of the United States
            shall conduct a study that evaluates--
                        (A) the role and importance of the Governmental
                    Accounting Standards Board in the municipal securities
                    markets; and
                        (B) the manner and the level at which the
                    Governmental Accounting Standards Board has been funded.

    [[Page 124 STAT. 1926]]

                (2) Consultation.--In conducting the study required under
            paragraph (1), the Comptroller General shall consult with the
            principal organizations representing State governors,
            legislators, local elected officials, and State and local
            finance officers.
                (3) Report.--Not later than 180 days after the date of
            enactment of this Act, the Comptroller General shall submit to
            the Committee on Banking, Housing, and Urban Affairs of the
            Senate and the Committee on Financial Services of the House of
            Representatives a report on the study required under paragraph
            (1).
    SEC. 979. <<NOTE: 15 USC 78o-4a.>>  COMMISSION OFFICE OF MUNICIPAL
                            SECURITIES.

        (a) <<NOTE: Establishment.>>  In General.--There shall be in the
    Commission an Office of Municipal Securities, which shall--
                (1) administer the rules of the Commission with respect to
            the practices of municipal securities brokers and dealers,
            municipal securities advisors, municipal securities investors,
            and municipal securities issuers; and
                (2) coordinate with the Municipal Securities Rulemaking
            Board for rulemaking and enforcement actions as required by law.

        (b) Director of the Office.--The head of the Office of Municipal
    Securities shall be the Director, who shall report to the Chairman.
        (c) Staffing.--
                (1) In general.--The Office of Municipal Securities shall be
            staffed sufficiently to carry out the requirements of this
            section.
                (2) Requirement.--The staff of the Office of Municipal
            Securities shall include individuals with knowledge of and
            expertise in municipal finance.

        Subtitle I--Public Company Accounting Oversight Board, Portfolio
                          Margining, and Other Matters

    SEC. 981. AUTHORITY TO SHARE CERTAIN INFORMATION WITH FOREIGN
                            AUTHORITIES.

        (a) Definition.--Section 2(a) of the Sarbanes-Oxley Act of 2002 (15
    U.S.C. 7201(a)) is amended by adding at the end the following:
                ``(17) Foreign auditor oversight authority.--The term
            `foreign auditor oversight authority' means any governmental
            body or other entity empowered by a foreign government to
            conduct inspections of public accounting firms or otherwise to
            administer or enforce laws related to the regulation of public
            accounting firms.''.

        (b) Availability to Share Information.--Section 105(b)(5) of the
    Sarbanes-Oxley Act of 2002 (15 U.S.C. 7215(b)(5)) is amended by adding
    at the end the following:
                        ``(C) Availability to foreign oversight
                    authorities.--Without the loss of its status as
                    confidential and privileged in the hands of the Board,
                    all information referred to in subparagraph (A) that
                    relates to a public accounting firm that a foreign
                    government has empowered

    [[Page 124 STAT. 1927]]

                    a foreign auditor oversight authority to inspect or
                    otherwise enforce laws with respect to, may, at the
                    discretion of the Board, be made available to the
                    foreign auditor oversight authority, if--
                              ``(i) the Board finds that it is necessary to
                          accomplish the purposes of this Act or to protect
                          investors;
                              ``(ii) the foreign auditor oversight authority
                          provides--
                                        ``(I) such assurances of
                                    confidentiality as the Board may
                                    request;
                                        ``(II) a description of the
                                    applicable information systems and
                                    controls of the foreign auditor
                                    oversight authority; and
                                        ``(III) a description of the laws
                                    and regulations of the foreign
                                    government of the foreign auditor
                                    oversight authority that are relevant to
                                    information access; and
                              ``(iii) the Board determines that it is
                          appropriate to share such information.''.

        (c) Conforming Amendment.--Section 105(b)(5)(A) of the Sarbanes-
    Oxley Act of 2002 (15 U.S.C. 7215(b)(5)(A)) is amended by striking
    ``subparagraph (B)'' and inserting ``subparagraphs (B) and (C)''.
    SEC. 982. OVERSIGHT OF BROKERS AND DEALERS.

        (a) Definitions.--
                (1) Definitions amended.--Title I of the Sarbanes-Oxley Act
            of 2002 (15 U.S.C. 7201 et seq.) is amended by adding at the end
            the following new section:
    ``SEC. 110. <<NOTE: 15 USC 7220.>>  DEFINITIONS.

        ``For the purposes of this title, the following definitions shall
    apply:
                ``(1) Audit.--The term `audit' means an examination of the
            financial statements, reports, documents, procedures, controls,
            or notices of any issuer, broker, or dealer by an independent
            public accounting firm in accordance with the rules of the Board
            or the Commission, for the purpose of expressing an opinion on
            the financial statements or providing an audit report.
                ``(2) Audit report.--The term `audit report' means a
            document, report, notice, or other record--
                        ``(A) prepared following an audit performed for
                    purposes of compliance by an issuer, broker, or dealer
                    with the requirements of the securities laws; and
                        ``(B) in which a public accounting firm either--
                              ``(i) sets forth the opinion of that firm
                          regarding a financial statement, report, notice,
                          or other document, procedures, or controls; or
                              ``(ii) asserts that no such opinion can be
                          expressed.
                ``(3) Broker.--The term `broker' means a broker (as such
            term is defined in section 3(a)(4) of the Securities Exchange
            Act of 1934 (15 U.S.C. 78c(a)(4))) that is required to file a
            balance sheet, income statement, or other financial statement
            under section 17(e)(1)(A) of such Act (15 U.S.C. 78q(e)(1)(A)),
            where such balance sheet, income statement, or financial
            statement is required to be certified by a registered public
            accounting firm.

    [[Page 124 STAT. 1928]]

                ``(4) Dealer.--The term `dealer' means a dealer (as such
            term is defined in section 3(a)(5) of the Securities Exchange
            Act of 1934 (15 U.S.C. 78c(a)(5))) that is required to file a
            balance sheet, income statement, or other financial statement
            under section 17(e)(1)(A) of such Act (15 U.S.C. 78q(e)(1)(A)),
            where such balance sheet, income statement, or financial
            statement is required to be certified by a registered public
            accounting firm.
                ``(5) Professional standards.--The term `professional
            standards' means--
                        ``(A) accounting principles that are--
                              ``(i) established by the standard setting body
                          described in section 19(b) of the Securities Act
                          of 1933, as amended by this Act, or prescribed by
                          the Commission under section 19(a) of that Act (15
                          U.S.C. 17a(s)) or section 13(b) of the Securities
                          Exchange Act of 1934 (15 U.S.C. 78a(m)); and
                              ``(ii) relevant to audit reports for
                          particular issuers, brokers, or dealers, or dealt
                          with in the quality control system of a particular
                          registered public accounting firm; and
                        ``(B) auditing standards, standards for attestation
                    engagements, quality control policies and procedures,
                    ethical and competency standards, and independence
                    standards (including rules implementing title II) that
                    the Board or the Commission determines--
                              ``(i) relate to the preparation or issuance of
                          audit reports for issuers, brokers, or dealers;
                          and
                              ``(ii) are established or adopted by the Board
                          under section 103(a), or are promulgated as rules
                          of the Commission.
                ``(6) Self-regulatory organization.--The term `self-
            regulatory organization' has the same meaning as in section 3(a)
            of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)).''.
                (2) Conforming amendment.--Section 2(a) of the Sarbanes-
            Oxley Act of 2002 (15 U.S.C. 7201(a)) is amended in the matter
            preceding paragraph (1), by striking ``In this'' and inserting
            ``Except as otherwise specifically provided in this Act, in
            this''.

        (b) Establishment and Administration of the Public Company
    Accounting Oversight Board.--Section 101 of the Sarbanes-Oxley Act of
    2002 (15 U.S.C. 7211) is amended--
                (1) by striking ``issuers'' each place that term appears and
            inserting ``issuers, brokers, and dealers''; and
                (2) in subsection (a)--
                        (A) by striking ``public companies'' and inserting
                    ``companies''; and
                        (B) by striking ``for companies the securities of
                    which are sold to, and held by and for, public
                    investors''.

        (c) Registration With the Board.--Section 102 of the Sarbanes-Oxley
    Act of 2002 (15 U.S.C. 7212) is amended--
                (1) in subsection (a)--
                        (A) by striking ``Beginning 180'' and all that
                    follows through ``101(d), it'' and inserting ``It''; and
                        (B) by striking ``issuer'' and inserting ``issuer,
                    broker, or dealer'';
                (2) in subsection (b)--

    [[Page 124 STAT. 1929]]

                        (A) in paragraph (2)(A), by striking ``issuers'' and
                    inserting ``issuers, brokers, and dealers''; and
                        (B) by striking ``issuer'' each place that term
                    appears and inserting ``issuer, broker, or dealer''.

        (d) Auditing and Independence.--Section 103(a) of the Sarbanes-Oxley
    Act of 2002 (15 U.S.C. 7213(a)) is amended--
                (1) in paragraph (1), by striking ``and such ethics
            standards'' and inserting ``such ethics standards, and such
            independence standards'';
                (2) in paragraph (2)(A)(iii), by striking ``describe in each
            audit report'' and inserting ``in each audit report for an
            issuer, describe''; and
                (3) in paragraph (2)(B)(i), by striking ``issuers'' and
            inserting ``issuers, brokers, and dealers''.

        (e) Inspections of Registered Public Accounting Firms.--
                (1) Amendments.--Section 104(a) of the Sarbanes-Oxley Act of
            2002 (15 U.S.C. 7214(a)) is amended--
                        (A) by striking ``The Board shall'' and inserting
                    the following:
                ``(1) Inspections generally.--The Board shall''; and
                        (B) by adding at the end the following:
                ``(2) Inspections of audit reports for brokers and
            dealers.--
                        ``(A) The Board may, by rule, conduct and require a
                    program of inspection in accordance with paragraph (1),
                    on a basis to be determined by the Board, of registered
                    public accounting firms that provide one or more audit
                    reports for a broker or dealer. The Board, in
                    establishing such a program, may allow for
                    differentiation among classes of brokers and dealers, as
                    appropriate.
                        ``(B) If the Board determines to establish a program
                    of inspection pursuant to subparagraph (A), the Board
                    shall consider in establishing any inspection schedules
                    whether differing schedules would be appropriate with
                    respect to registered public accounting firms that issue
                    audit reports only for one or more brokers or dealers
                    that do not receive, handle, or hold customer securities
                    or cash or are not a member of the Securities Investor
                    Protection Corporation.
                        ``(C) Any rules of the Board pursuant to this
                    paragraph shall be subject to prior approval by the
                    Commission pursuant to section 107(b) before the rules
                    become effective, including an opportunity for public
                    notice and comment.
                        ``(D) Notwithstanding anything to the contrary in
                    section 102 of this Act, a public accounting firm shall
                    not be required to register with the Board if the public
                    accounting firm is exempt from the inspection program
                    which may be established by the Board under subparagraph
                    (A).''.
                (2) Conforming amendment.--Section 17(e)(1)(A) of the
            Securities Exchange Act of 1934 (15 U.S.C. 78q(e)(1)(A)) is
            amended by striking ``registered public accounting firm'' and
            inserting ``independent public accounting firm, or by a
            registered public accounting firm if the firm is required to be
            registered under the Sarbanes-Oxley Act of 2002,''.

        (f) Investigations and Disciplinary Proceedings.--Section
    105(c)(7)(B) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7215(c)(7)(B))
    is amended--

    [[Page 124 STAT. 1930]]

                (1) in the subparagraph heading, by inserting ``, broker, or
            dealer'' after ``issuer'';
                (2) by striking ``any issuer'' each place that term appears
            and inserting ``any issuer, broker, or dealer''; and
                (3) by striking ``an issuer under this subsection'' and
            inserting ``a registered public accounting firm under this
            subsection''.

        (g) Foreign Public Accounting Firms.--Section 106(a) of the
    Sarbanes-Oxley Act of 2002 (15 U.S.C. 7216(a)) is amended--
                (1) in paragraph (1), by striking ``issuer'' and inserting
            ``issuer, broker, or dealer''; and
                (2) in paragraph (2), by striking ``issuers'' and inserting
            ``issuers, brokers, or dealers''.

        (h) Funding.--Section 109 of the Sarbanes-Oxley Act of 2002 (15
    U.S.C. 7219) is amended--
                (1) in subsection (c)(2), by striking ``subsection (i)'' and
            inserting ``subsection (j)'';
                (2) in subsection (d)--
                        (A) in paragraph (2), by striking ``allowing for
                    differentiation among classes of issuers, as
                    appropriate'' and inserting ``and among brokers and
                    dealers, in accordance with subsection (h), and allowing
                    for differentiation among classes of issuers, brokers
                    and dealers, as appropriate''; and
                        (B) by adding at the end the following:
                ``(3) Brokers and dealers.-- <<NOTE: Fees.>> The Board shall
            begin the allocation, assessment, and collection of fees under
            paragraph (2) with respect to brokers and dealers with the
            payment of support fees to fund the first full fiscal year
            beginning after the date of enactment of the Investor Protection
            and Securities Reform Act of 2010.'';
                (3) <<NOTE: 15 USC 78m.>>  by redesignating subsections (h),
            (i), and (j) as subsections (i), (j), and (k), respectively; and
                (4) by inserting after subsection (g) the following:

        ``(h) Allocation of Accounting Support Fees Among Brokers and
    Dealers.--
                ``(1) Obligation to pay.--Each broker or dealer shall pay to
            the Board the annual accounting support fee allocated to such
            broker or dealer under this section.
                ``(2) Allocation.--Any amount due from a broker or dealer
            (or from a particular class of brokers and dealers) under this
            section shall be allocated among brokers and dealers and payable
            by the broker or dealer (or the brokers and dealers in the
            particular class, as applicable).
                ``(3) Proportionality.--The amount due from a broker or
            dealer shall be in proportion to the net capital of the broker
            or dealer (before or after any adjustments), compared to the
            total net capital of all brokers and dealers (before or after
            any adjustments), in accordance with rules issued by the
            Board.''.

        (i) Referral of Investigations to a Self-regulatory Organization.--
    Section 105(b)(4)(B) of the Sarbanes-Oxley Act of 2002 (15 U.S.C.
    7215(b)(4)(B)) is amended--
                (1) by redesignating clauses (ii) and (iii) as clauses (iii)
            and (iv), respectively; and
                (2) by inserting after clause (i) the following:

    [[Page 124 STAT. 1931]]

                              ``(ii) to a self-regulatory organization, in
                          the case of an investigation that concerns an
                          audit report for a broker or dealer that is under
                          the jurisdiction of such self-regulatory
                          organization;''.

        (j) Use of Documents Related to an Inspection or Investigation.--
    Section 105(b)(5)(B)(ii) of the Sarbanes-Oxley Act of 2002 (15 U.S.C.
    7215(b)(5)(B)(ii)) is amended--
                (1) in subclause (III), by striking ``and'' at the end;
                (2) in subclause (IV), by striking the comma and inserting
            ``; and''; and
                (3) by inserting after subclause (IV) the following:
                                        ``(V) a self-regulatory
                                    organization, with respect to an audit
                                    report for a broker or dealer that is
                                    under the jurisdiction of such self-
                                    regulatory organization,''.
    SEC. 983. PORTFOLIO MARGINING.

        (a) Advances.--Section 9(a)(1) of the Securities Investor Protection
    Act of 1970 <<NOTE: 15 USC 78fff-3.>>  (15 U.S.C. 78fff3(a)(1)) is
    amended by inserting ``or options on commodity futures contracts'' after
    ``claim for securities''.

        (b) Definitions.--Section 16 of the Securities Investor Protection
    Act of 1970 (15 U.S.C. 78lll) is amended--
                (1) by striking paragraph (2) and inserting the following:
                ``(2) Customer.--
                        ``(A) In general.--The term `customer' of a debtor
                    means any person (including any person with whom the
                    debtor deals as principal or agent) who has a claim on
                    account of securities received, acquired, or held by the
                    debtor in the ordinary course of its business as a
                    broker or dealer from or for the securities accounts of
                    such person for safekeeping, with a view to sale, to
                    cover consummated sales, pursuant to purchases, as
                    collateral, security, or for purposes of effecting
                    transfer.
                        ``(B) Included persons.--The term `customer'
                    includes--
                              ``(i) any person who has deposited cash with
                          the debtor for the purpose of purchasing
                          securities;
                              ``(ii) any person who has a claim against the
                          debtor for cash, securities, futures contracts, or
                          options on futures contracts received, acquired,
                          or held in a portfolio margining account carried
                          as a securities account pursuant to a portfolio
                          margining program approved by the Commission; and
                              ``(iii) any person who has a claim against the
                          debtor arising out of sales or conversions of such
                          securities.
                        ``(C) Excluded persons.--The term `customer' does
                    not include any person, to the extent that--
                              ``(i) the claim of such person arises out of
                          transactions with a foreign subsidiary of a member
                          of SIPC; or
                              ``(ii) such person has a claim for cash or
                          securities which by contract, agreement, or
                          understanding, or by operation of law, is part of
                          the capital of the debtor, or is subordinated to
                          the claims of any or all creditors of the debtor,
                          notwithstanding that some ground exists

    [[Page 124 STAT. 1932]]

                          for declaring such contract, agreement, or
                          understanding void or voidable in a suit between
                          the claimant and the debtor.'';
                (2) in paragraph (4)--
                        (A) in subparagraph (C), by striking ``and'' at the
                    end;
                        (B) by redesignating subparagraph (D) as
                    subparagraph (E); and
                        (C) by inserting after subparagraph (C) the
                    following:
                        ``(D) in the case of a portfolio margining account
                    of a customer that is carried as a securities account
                    pursuant to a portfolio margining program approved by
                    the Commission, a futures contract or an option on a
                    futures contract received, acquired, or held by or for
                    the account of a debtor from or for such portfolio
                    margining account, and the proceeds thereof; and'';
                (3) in paragraph (9), in the matter following subparagraph
            (L), by inserting after ``Such term'' the following: ``includes
            revenues earned by a broker or dealer in connection with a
            transaction in the portfolio margining account of a customer
            carried as securities accounts pursuant to a portfolio margining
            program approved by the Commission. Such term''; and
                (4) in paragraph (11)--
                        (A) in subparagraph (A)--
                              (i) by striking ``filing date, all'' and all
                          that follows through the end of the subparagraph
                          and inserting the following: ``filing date--
                              ``(i) all securities positions of such
                          customer (other than customer name securities
                          reclaimed by such customer); and
                              ``(ii) all positions in futures contracts and
                          options on futures contracts held in a portfolio
                          margining account carried as a securities account
                          pursuant to a portfolio margining program approved
                          by the Commission, including all property
                          collateralizing such positions, to the extent that
                          such property is not otherwise included herein;
                          minus''; and
                        (B) in the matter following subparagraph (C), by
                    striking ``In determining'' and inserting the following:
                    ``A claim for a commodity futures contract received,
                    acquired, or held in a portfolio margining account
                    pursuant to a portfolio margining program approved by
                    the Commission or a claim for a security futures
                    contract, shall be deemed to be a claim with respect to
                    such contract as of the filing date, and such claim
                    shall be treated as a claim for cash. In determining''.
    SEC. 984. LOAN OR BORROWING OF SECURITIES.

        (a) Rulemaking Authority.--Section 10 of the Securities Exchange Act
    of 1934 (15 U.S.C. 78j) is amended by adding at the end the following:
                ``(c)(1) To effect, accept, or facilitate a transaction
            involving the loan or borrowing of securities in contravention
            of such rules and regulations as the Commission may prescribe as
            necessary or appropriate in the public interest or for the
            protection of investors.
                ``(2) Nothing in paragraph (1) may be construed to limit the
            authority of the appropriate Federal banking agency (as

    [[Page 124 STAT. 1933]]

            defined in section 3(q) of the Federal Deposit Insurance Act (12
            U.S.C. 1813(q))), the National Credit Union Administration, or
            any other Federal department or agency having a responsibility
            under Federal law to prescribe rules or regulations restricting
            transactions involving the loan or borrowing of securities in
            order to protect the safety and soundness of a financial
            institution or to protect the financial system from systemic
            risk.''.

        (b) <<NOTE: Deadline. 15 USC 78j note.>>  Rulemaking Required.--Not
    later than 2 years after the date of enactment of this Act, the
    Commission shall promulgate rules that are designed to increase the
    transparency of information available to brokers, dealers, and
    investors, with respect to the loan or borrowing of securities.
    SEC. 985. TECHNICAL CORRECTIONS TO FEDERAL SECURITIES LAWS.

        (a) Securities Act of 1933.--The Securities Act of 1933 (15 U.S.C.
    77a et seq.) is amended--
                (1) in section 3(a)(4) (15 U.S.C. 77c(a)(4)), by striking
            ``individual;'' and inserting ``individual,'';
                (2) in section 18 (15 U.S.C. 77r)--
                        (A) in subsection (b)(1)(C), by striking ``is a
                    security'' and inserting ``a security''; and
                        (B) in subsection (c)(2)(B)(i), by striking ``State,
                    or'' and inserting ``State or'';
                (3) in section 19(d)(6)(A) (15 U.S.C. 77s(d)(6)(A)), by
            striking ``in paragraph (1) of (3)'' and inserting ``in
            paragraph (1) or (3)''; and
                (4) in section 27A(c)(1)(B)(ii) (15 U.S.C. 77z-
            2(c)(1)(B)(ii)), by striking ``business entity;'' and inserting
            ``business entity,''.

        (b) Securities Exchange Act of 1934.--The Securities Exchange Act of
    1934 (15 U.S.C. 78a et seq.) is amended--
                (1) in section 2 (15 U.S.C. 78b), by striking ``affected''
            and inserting ``effected'';
                (2) in section 3 (15 U.S.C. 78c)--
                        (A) in subsection (a)(55)(A), by striking ``section
                    3(a)(12) of the Securities Exchange Act of 1934'' and
                    inserting ``section 3(a)(12) of this title''; and
                        (B) in subsection (g), by striking ``company,
                    account person, or entity'' and inserting ``company,
                    account, person, or entity'';
                (3) in section 10A(i)(1)(B) (15 U.S.C. 78j-1(i)(1)(B))--
                        (A) in the subparagraph heading, by striking
                    ``minimus'' and inserting ``minimis''; and
                        (B) in clause (i), by striking ``nonaudit'' and
                    inserting ``non-audit'';
                (4) in section 13(b)(1) (15 U.S.C. 78m(b)(1)), by striking
            ``earning statement'' and inserting ``earnings statement'';
                (5) in section 15 (15 U.S.C. 78o)--
                        (A) in subsection (b)(1)--
                              (i) in subparagraph (B), by striking ``The
                          order granting'' and all that follows through
                          ``from such membership.''; and
                              (ii) in the undesignated matter immediately
                          following subparagraph (B), by inserting after the
                          first sentence the following: ``The order granting
                          registration shall not be effective until such
                          broker or dealer has become a member of a
                          registered securities association,

    [[Page 124 STAT. 1934]]

                          or until such broker or dealer has become a member
                          of a national securities exchange, if such broker
                          or dealer effects transactions solely on that
                          exchange, unless the Commission has exempted such
                          broker or dealer, by rule or order, from such
                          membership.'';
                (6) in section 15C(a)(2) (15 U.S.C. 78o-5(a)(2))--
                        (A) by redesignating clauses (i) and (ii) as
                    subparagraphs (A) and (B), respectively, and adjusting
                    the subparagraph margins accordingly;
                        (B) in subparagraph (B), as so redesignated, by
                    striking ``The order granting'' and all that follows
                    through ``from such membership.''; and
                        (C) in the matter following subparagraph (B), as so
                    redesignated, by inserting after the first sentence the
                    following: ``The order granting registration shall not
                    be effective until such government securities broker or
                    government securities dealer has become a member of a
                    national securities exchange registered under section 6
                    of this title, or a securities association registered
                    under section 15A of this title, unless the Commission
                    has exempted such government securities broker or
                    government securities dealer, by rule or order, from
                    such membership.'';
                (7) in section 17(b)(1)(B) (15 U.S.C. 78q(b)(1)(B)), by
            striking ``15A(k) gives'' and inserting ``15A(k), give''; and
                (8) in section 21C(c)(2) (15 U.S.C. 78u-3(c)(2)), by
            striking ``paragraph (1) subsection'' and inserting ``Paragraph
            (1)''.

        (c) Trust Indenture Act of 1939.--The Trust Indenture Act of 1939
    (15 U.S.C. 77aaa et seq.) is amended--
                (1) in section 304(b) (15 U.S.C. 77ddd(b)), by striking
            ``section 2 of such Act'' and inserting ``section 2(a) of such
            Act''; and
                (2) in section 317(a)(1) (15 U.S.C. 77qqq(a)(1)), by
            striking ``, in the'' and inserting ``in the''.

        (d) Investment Company Act of 1940.--The Investment Company Act of
    1940 (15 U.S.C. 80a-1 et seq.) is amended--
                (1) in section 2(a)(19) (15 U.S.C. 80a-2(a)(19)), in the
            matter following subparagraph (B)(vii)--
                        (A) by striking ``clause (vi)'' each place that term
                    appears and inserting ``clause (vii)''; and
                        (B) in each of subparagraphs (A)(vi) and (B)(vi), by
                    adding ``and'' at the end of subclause (III);
                (2) in section 9(b)(4)(B) (15 U.S.C. 80a-9(b)(4)(B)), by
            adding ``or'' after the semicolon at the end;
                (3) in section 12(d)(1)(J) (15 U.S.C. 80a-12(d)(1)(J)), by
            striking ``any provision of this subsection'' and inserting
            ``any provision of this paragraph'';
                (4) in section 17(f) (15 U.S.C. 80a-17(f))--
                        (A) in paragraph (4), by striking ``No such member''
                    and inserting ``No member of a national securities
                    exchange''; and
                        (B) in paragraph (6), by striking ``company may
                    serve'' and inserting ``company, may serve''; and
                (5) in section 61(a)(3)(B)(iii) (15 U.S.C. 80a-
            60(a)(3)(B)(iii))--
                        (A) by striking ``paragraph (1) of section 205'' and
                    inserting ``section 205(a)(1)''; and

    [[Page 124 STAT. 1935]]

                        (B) by striking ``clause (A) or (B) of that
                    section'' and inserting ``paragraph (1) or (2) of
                    section 205(b)''.

        (e) Investment Advisers Act of 1940.--The Investment Advisers Act of
    1940 (15 U.S.C. 80b-1 et seq.) is amended--
                (1) in section 203 (15 U.S.C. 80b-3)--
                        (A) in subsection (c)(1)(A), by striking ``principal
                    business office and'' and inserting ``principal office,
                    principal place of business, and''; and
                        (B) in subsection (k)(4)(B), in the matter following
                    clause (ii), by striking ``principal place of business''
                    and inserting ``principal office or place of business'';
                (2) in section 206(3) (15 U.S.C. 80b-6(3)), by adding ``or''
            after the semicolon at the end;
                (3) in section 213(a) (15 U.S.C. 80b-13(a)), by striking
            ``principal place of business'' and inserting ``principal office
            or place of business''; and
                (4) in section 222 (15 U.S.C. 80b-18a), by striking
            ``principal place of business'' each place that term appears and
            inserting ``principal office and place of business''.
    SEC. 986. CONFORMING AMENDMENTS RELATING TO REPEAL OF THE PUBLIC
                            UTILITY HOLDING COMPANY ACT OF 1935.

        (a) Securities Exchange Act of 1934.--The Securities Exchange Act of
    1934 (15 U.S.C. 78 et seq.) is amended--
                (1) in section 3(a)(47) (15 U.S.C. 78c(a)(47)), by striking
            ``the Public Utility Holding Company Act of 1935 (15 U.S.C. 79a
            et seq.),'';
                (2) in section 12(k) (15 U.S.C. 78l(k)), by amending
            paragraph (7) to read as follows:
                ``(7) Definition.--For purposes of this subsection, the term
            `emergency' means--
                        ``(A) a major market disturbance characterized by or
                    constituting--
                              ``(i) sudden and excessive fluctuations of
                          securities prices generally, or a substantial
                          threat thereof, that threaten fair and orderly
                          markets; or
                              ``(ii) a substantial disruption of the safe or
                          efficient operation of the national system for
                          clearance and settlement of transactions in
                          securities, or a substantial threat thereof; or
                        ``(B) a major disturbance that substantially
                    disrupts, or threatens to substantially disrupt--
                              ``(i) the functioning of securities markets,
                          investment companies, or any other significant
                          portion or segment of the securities markets; or
                              ``(ii) the transmission or processing of
                          securities transactions.''; and
                (3) in section 21(h)(2) (15 U.S.C. 78u(h)(2)), by striking
            ``section 18(c) of the Public Utility Holding Company Act of
            1935,''.

        (b) Trust Indenture Act of 1939.--The Trust Indenture Act of 1939
    (15 U.S.C. 77aaa et seq.) is amended--
                (1) in section 303 (15 U.S.C. 77ccc), by striking paragraph
            (17) and inserting the following:
                ``(17) The terms `Securities Act of 1933' and `Securities
            Exchange Act of 1934' shall be deemed to refer, respectively,

    [[Page 124 STAT. 1936]]

            to such Acts, as amended, whether amended prior to or after the
            enactment of this title.'';
                (2) in section 308 (15 U.S.C. 77hhh), by striking
            ``Securities Act of 1933, the Securities Exchange Act of 1934,
            or the Public Utility Holding Company Act of 1935'' each place
            that term appears and inserting ``Securities Act of 1933 or the
            Securities Exchange Act of 1934'';
                (3) in section 310 (15 U.S.C. 77jjj), by striking subsection
            (c);
                (4) in section 311 (15 U.S.C. 77kkk), by striking subsection
            (c);
                (5) in section 323(b) (15 U.S.C. 77www(b)), by striking
            ``Securities Act of 1933, or the Securities Exchange Act of
            1934, or the Public Utility Holding Company Act of 1935'' and
            inserting ``Securities Act of 1933 or the Securities Exchange
            Act of 1934''; and
                (6) in section 326 (15 U.S.C. 77zzz), by striking
            ``Securities Act of 1933, or the Securities Exchange Act of
            1934, or the Public Utility Holding Company Act of 1935,'' and
            inserting ``Securities Act of 1933 or the Securities Exchange
            Act of 1934''.

        (c) Investment Company Act of 1940.--The Investment Company Act of
    1940 (15 U.S.C. 80a-1 et seq.) is amended--
                (1) in section 2(a)(44) (15 U.S.C. 80a-2(a)(44)), by
            striking `` `Public Utility Holding Company Act of 1935','';
                (2) in section 3(c) (15 U.S.C. 80a-3(c)), by striking
            paragraph (8) and inserting the following:
                ``(8) [Repealed]'';
                (3) in section 38(b) (15 U.S.C. 80a-37(b)), by striking
            ``the Public Utility Holding Company Act of 1935,''; and
                (4) in section 50 (15 U.S.C. 80a-49), by striking ``the
            Public Utility Holding Company Act of 1935,''.

        (d) Investment Advisers Act of 1940.--Section 202(a)(21) of the
    Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)(21)) is amended by
    striking `` `Public Utility Holding Company Act of 1935',''.
    SEC. 987. AMENDMENT TO DEFINITION OF MATERIAL LOSS AND NONMATERIAL
                            LOSSES TO THE DEPOSIT INSURANCE FUND FOR
                            PURPOSES OF INSPECTOR GENERAL REVIEWS.

        (a) In General.--Section 38(k) of the Federal Deposit Insurance
    Act <<NOTE: 12 USC 1831o.>>  (U.S.C. 1831o(k)) is amended--
                (1) in paragraph (2), by striking subparagraph (B) and
            inserting the following:
                        ``(B) Material loss defined.--The term `material
                    loss' means any estimated loss in excess of--
                              ``(i) $200,000,000, if the loss occurs during
                          the period beginning on January 1, 2010, and
                          ending on December 31, 2011;
                              ``(ii) $150,000,000, if the loss occurs during
                          the period beginning on January 1, 2012, and
                          ending on December 31, 2013; and
                              ``(iii) $50,000,000, if the loss occurs on or
                          after January 1, 2014, provided that if the
                          inspector general of a Federal banking agency
                          certifies to the Committee on Banking, Housing,
                          and Urban Affairs of the Senate and the Committee
                          on Financial Services of the House

    [[Page 124 STAT. 1937]]

                          of Representatives that the number of projected
                          failures of depository institutions that would
                          require material loss reviews for the following 12
                          months will be greater than 30 and would hinder
                          the effectiveness of its oversight functions, then
                          the definition of `material loss' shall be
                          $75,000,000 for a duration of 1 year from the date
                          of the certification.'';
                (2) in paragraph (4)(A) by striking ``the report'' and
            inserting ``any report on losses required under this
            subsection,'';
                (3) by striking paragraph (6);
                (4) by redesignating paragraph (5) as paragraph (6); and
                (5) by inserting after paragraph (4) the following:
                ``(5) Losses that are not material.--
                        ``(A) Semiannual report.-- <<NOTE: Time
                    period.>> For the 6-month period ending on March 31,
                    2010, and each 6-month period thereafter, the Inspector
                    General of each Federal banking agency shall--
                              ``(i) identify losses that the Inspector
                          General estimates have been incurred by the
                          Deposit Insurance Fund during that 6-month period,
                          with respect to the insured depository
                          institutions supervised by the Federal banking
                          agency;
                              ``(ii) for each loss incurred by the Deposit
                          Insurance Fund that is not a material loss,
                          determine--
                                        ``(I) the grounds identified by the
                                    Federal banking agency or State bank
                                    supervisor for appointing the
                                    Corporation as receiver under section
                                    11(c)(5); and
                                        ``(II) whether any unusual
                                    circumstances exist that might warrant
                                    an in-depth review of the loss; and
                              ``(iii) prepare and submit a written report to
                          the appropriate Federal banking agency and to
                          Congress on the results of any determination by
                          the Inspector General, including--
                                        ``(I) an identification of any loss
                                    that warrants an in-depth review,
                                    together with the reasons why such
                                    review is warranted, or, if the
                                    Inspector General determines that no
                                    review is warranted, an explanation of
                                    such determination; and
                                        ``(II) for each loss identified
                                    under subclause (I) that warrants an in-
                                    depth review, the date by which such
                                    review, and a report on such review
                                    prepared in a manner consistent with
                                    reports under paragraph (1)(A), will be
                                    completed and submitted to the Federal
                                    banking agency and Congress.
                        ``(B) Deadline for semiannual report.--The Inspector
                    General of each Federal banking agency shall--
                              ``(i) submit each report required under
                          paragraph (A) expeditiously, and not later than 90
                          days after the end of the 6-month period covered
                          by the report; and
                              ``(ii) provide a copy of the report required
                          under paragraph (A) to any Member of Congress,
                          upon request.''.

    [[Page 124 STAT. 1938]]

        (b) Technical and Conforming Amendment.--The heading for subsection
    (k) of section 38 of the Federal Deposit Insurance Act (U.S.C. 1831o(k))
    is amended to read as follows:
        ``(k) Reviews Required When Deposit Insurance Fund Incurs Losses.--
    ''.
    SEC. 988. AMENDMENT TO DEFINITION OF MATERIAL LOSS AND NONMATERIAL
                            LOSSES TO THE NATIONAL CREDIT UNION SHARE
                            INSURANCE FUND FOR PURPOSES OF INSPECTOR
                            GENERAL REVIEWS.

        (a) In General.--Section 216(j) of the Federal Credit Union Act (12
    U.S.C. 1790d(j)) is amended to read as follows:
        ``(j) Reviews Required When Share Insurance Fund Experiences
    Losses.--
                ``(1) In general.--If the Fund incurs a material loss with
            respect to an insured credit union, the Inspector General of the
            Board shall--
                        ``(A) <<NOTE: Reports.>> submit to the Board a
                    written report reviewing the supervision of the credit
                    union by the Administration (including the
                    implementation of this section by the Administration),
                    which shall include--
                              ``(i) a description of the reasons why the
                          problems of the credit union resulted in a
                          material loss to the Fund; and
                              ``(ii) recommendations for preventing any such
                          loss in the future; and
                        ``(B) submit a copy of the report under subparagraph
                    (A) to--
                              ``(i) the Comptroller General of the United
                          States;
                              ``(ii) the Corporation;
                              ``(iii) in the case of a report relating to a
                          State credit union, the appropriate State
                          supervisor; and
                              ``(iv) to any Member of Congress, upon
                          request.
                ``(2) Material loss defined.--For purposes of determining
            whether the Fund has incurred a material loss with respect to an
            insured credit union, a loss is material if it exceeds the sum
            of--
                        ``(A) $25,000,000; and
                        ``(B) an amount equal to 10 percent of the total
                    assets of the credit union on the date on which the
                    Board initiated assistance under section 208 or was
                    appointed liquidating agent.
                ``(3) Public disclosure required.--
                        ``(A) In general.--The Board shall disclose a report
                    under this subsection, upon request under section 552 of
                    title 5, United States Code, without excising--
                              ``(i) any portion under section 552(b)(5) of
                          title 5, United States Code; or
                              ``(ii) any information about the insured
                          credit union (other than trade secrets) under
                          section 552(b)(8) of title 5, United States Code.
                        ``(B) Rule of construction.--Subparagraph (A) may
                    not be construed as requiring the agency to disclose the
                    name of any customer of the insured credit union (other
                    than an institution-affiliated party), or information
                    from which the identity of such customer could
                    reasonably be ascertained.

    [[Page 124 STAT. 1939]]

                ``(4) Losses that are not material.--
                        ``(A) Semiannual report.-- <<NOTE: Time
                    periods.>> For the 6-month period ending on March 31,
                    2010, and each 6-month period thereafter, the Inspector
                    General of the Board shall--
                              ``(i) identify any losses that the Inspector
                          General estimates were incurred by the Fund during
                          such 6-month period, with respect to insured
                          credit unions;
                              ``(ii) <<NOTE: Determination.>>  for each loss
                          to the Fund that is not a material loss,
                          determine--
                                        ``(I) the grounds identified by the
                                    Board or the State official having
                                    jurisdiction over a State credit union
                                    for appointing the Board as the
                                    liquidating agent for any Federal or
                                    State credit union; and
                                        ``(II) whether any unusual
                                    circumstances exist that might warrant
                                    an in-depth review of the loss; and
                              ``(iii) prepare and submit a written report to
                          the Board and to Congress on the results of the
                          determinations of the Inspector General that
                          includes--
                                        ``(I) an identification of any loss
                                    that warrants an in-depth review, and
                                    the reasons such review is warranted, or
                                    if the Inspector General determines that
                                    no review is warranted, an explanation
                                    of such determination; and
                                        ``(II) for each loss identified in
                                    subclause (I) that warrants an in-depth
                                    review, the date by which such review,
                                    and a report on the review prepared in a
                                    manner consistent with reports under
                                    paragraph (1)(A), will be completed.
                        ``(B) Deadline for semiannual report.--The Inspector
                    General of the Board shall--
                              ``(i) submit each report required under
                          subparagraph (A) expeditiously, and not later than
                          90 days after the end of the 6-month period
                          covered by the report; and
                              ``(ii) provide a copy of the report required
                          under subparagraph (A) to any Member of Congress,
                          upon request.
                ``(5) GAO review.--The Comptroller General of the United
            States shall, under such conditions as the Comptroller General
            determines to be appropriate--
                        ``(A) review each report made under paragraph (1),
                    including the extent to which the Inspector General of
                    the Board complied with the requirements under section
                    8L of the Inspector General Act of 1978 (5 U.S.C. App.)
                    with respect to each such report; and
                        ``(B) <<NOTE: Recommenda- tions.>>  recommend
                    improvements to the supervision of insured credit unions
                    (including improvements relating to the implementation
                    of this section).''.
    SEC. 989. GOVERNMENT ACCOUNTABILITY OFFICE STUDY ON PROPRIETARY
                            TRADING.

        (a) Definitions.--In this section--
                (1) the term ``covered entity'' means--
                        (A) an insured depository institution, an affiliate
                    of an insured depository institution, a bank holding
                    company,

    [[Page 124 STAT. 1940]]

                    a financial holding company, or a subsidiary of a bank
                    holding company or a financial holding company, as those
                    terms are defined in the Bank Holding Company Act of
                    1956 (12 U.S.C. 1841 et seq.); and
                        (B) any other entity, as the Comptroller General of
                    the United States may determine; and
                (2) the term ``proprietary trading'' means the act of a
            covered entity investing as a principal in securities,
            commodities, derivatives, hedge funds, private equity firms, or
            such other financial products or entities as the Comptroller
            General may determine.

        (b) Study.--
                (1) In general.--The Comptroller General of the United
            States shall conduct a study regarding the risks and conflicts
            associated with proprietary trading by and within covered
            entities, including an evaluation of--
                        (A) whether proprietary trading presents a material
                    systemic risk to the stability of the United States
                    financial system, and if so, the costs and benefits of
                    options for mitigating such systemic risk;
                        (B) whether proprietary trading presents material
                    risks to the safety and soundness of the covered
                    entities that engage in such activities, and if so, the
                    costs and benefits of options for mitigating such risks;
                        (C) whether proprietary trading presents material
                    conflicts of interest between covered entities that
                    engage in proprietary trading and the clients of the
                    institutions who use the firm to execute trades or who
                    rely on the firm to manage assets, and if so, the costs
                    and benefits of options for mitigating such conflicts of
                    interest;
                        (D) whether adequate disclosure regarding the risks
                    and conflicts of proprietary trading is provided to the
                    depositors, trading and asset management clients, and
                    investors of covered entities that engage in proprietary
                    trading, and if not, the costs and benefits of options
                    for the improvement of such disclosure; and
                        (E) whether the banking, securities, and commodities
                    regulators of institutions that engage in proprietary
                    trading have in place adequate systems and controls to
                    monitor and contain any risks and conflicts of interest
                    related to proprietary trading, and if not, the costs
                    and benefits of options for the improvement of such
                    systems and controls.
                (2) Considerations.--In carrying out the study required
            under paragraph (1), the Comptroller General shall consider--
                        (A) current practice relating to proprietary
                    trading;
                        (B) the advisability of a complete ban on
                    proprietary trading;
                        (C) limitations on the scope of activities that
                    covered entities may engage in with respect to
                    proprietary trading;
                        (D) the advisability of additional capital
                    requirements for covered entities that engage in
                    proprietary trading;
                        (E) enhanced restrictions on transactions between
                    affiliates related to proprietary trading;
                        (F) enhanced accounting disclosures relating to
                    proprietary trading;
                        (G) enhanced public disclosure relating to
                    proprietary trading; and

    [[Page 124 STAT. 1941]]

                        (H) any other options the Comptroller General deems
                    appropriate.

        (c) Report to Congress.--Not later than 15 months after the date of
    enactment of this Act, the Comptroller General shall submit a report to
    Congress on the results of the study conducted under subsection (b).
        (d) Access by Comptroller General.--For purposes of conducting the
    study required under subsection (b), the Comptroller General shall have
    access, upon request, to any information, data, schedules, books,
    accounts, financial records, reports, files, electronic communications,
    or other papers, things, or property belonging to or in use by a covered
    entity that engages in proprietary trading, and to the officers,
    directors, employees, independent public accountants, financial
    advisors, staff, and agents and representatives of a covered entity (as
    related to the activities of the agent or representative on behalf of
    the covered entity), at such reasonable times as the Comptroller General
    may request. The Comptroller General may make and retain copies of
    books, records, accounts, and other records, as the Comptroller General
    deems appropriate.
        (e) Confidentiality of Reports.--
                (1) In general.--Except as provided in paragraph (2), the
            Comptroller General may not disclose information regarding--
                        (A) any proprietary trading activity of a covered
                    entity, unless such information is disclosed at a level
                    of generality that does not reveal the investment or
                    trading position or strategy of the covered entity for
                    any specific security, commodity, derivative, or other
                    investment or financial product; or
                        (B) any individual interviewed by the Comptroller
                    General for purposes of the study under subsection (b),
                    unless such information is disclosed at a level of
                    generality that does not reveal--
                              (i) the name of or identifying details
                          relating to such individual; or
                              (ii) in the case of an individual who is an
                          employee of a third party that provides
                          professional services to a covered entity believed
                          to be engaged in proprietary trading, the name of
                          or any identifying details relating to such third
                          party.
                (2) Exceptions.--The Comptroller General may disclose the
            information described in paragraph (1)--
                        (A) to a department, agency, or official of the
                    Federal Government, for official use, upon request;
                        (B) to a committee of Congress, upon request; and
                        (C) to a court, upon an order of such court.
    SEC. 989A. <<NOTE: 12 USC 5537.>>  SENIOR INVESTOR PROTECTIONS.

        (a) Definitions.--As used in this section--
                (1) the term ``eligible entity'' means--
                        (A) a securities commission (or any agency or office
                    performing like functions) of a State that the Office
                    determines has adopted rules on the appropriate use of
                    designations in the offer or sale of securities or the
                    provision of investment advice that meet or exceed the
                    minimum requirements of the NASAA Model Rule on the Use
                    of

    [[Page 124 STAT. 1942]]

                    Senior-Specific Certifications and Professional
                    Designations (or any successor thereto);
                        (B) the insurance commission (or any agency or
                    office performing like functions) of any State that the
                    Office determines has--
                              (i) adopted rules on the appropriate use of
                          designations in the sale of insurance products
                          that, to the extent practicable, conform to the
                          minimum requirements of the National Association
                          of Insurance Commissioners Model Regulation on the
                          Use of Senior-Specific Certifications and
                          Professional Designations in the Sale of Life
                          Insurance and Annuities (or any successor
                          thereto); and
                              (ii) adopted rules with respect to fiduciary
                          or suitability requirements in the sale of
                          annuities that meet or exceed the minimum
                          requirements established by the Suitability in
                          Annuity Transactions Model Regulation of the
                          National Association of Insurance Commissioners
                          (or any successor thereto); or
                        (C) a consumer protection agency of any State, if--
                              (i) the securities commission (or any agency
                          or office performing like functions) of the State
                          is eligible under subparagraph (A); or
                              (ii) the insurance commission (or any agency
                          or office performing like functions) of the State
                          is eligible under subparagraph (B);
                (2) the term ``financial product'' means a security, an
            insurance product (including an insurance product that pays a
            return, whether fixed or variable), a bank product, and a loan
            product;
                (3) the term ``misleading designation''--
                        (A) means a certification, professional designation,
                    or other purported credential that indicates or implies
                    that a salesperson or adviser has special certification
                    or training in advising or servicing seniors; and
                        (B) does not include a certification, professional
                    designation, license, or other credential that--
                              (i) was issued by or obtained from an academic
                          institution having regional accreditation;
                              (ii) meets the standards for certifications
                          and professional designations outlined by the
                          NASAA Model Rule on the Use of Senior-Specific
                          Certifications and Professional Designations (or
                          any successor thereto) or by the Model Regulations
                          on the Use of Senior-Specific Certifications and
                          Professional Designations in the Sale of Life
                          Insurance and Annuities, adopted by the National
                          Association of Insurance Commissioners (or any
                          successor thereto); or
                              (iii) was issued by or obtained from a State;
                (4) the term ``misleading or fraudulent marketing'' means
            the use of a misleading designation by a person that sells to or
            advises a senior in connection with the sale of a financial
            product;
                (5) the term ``NASAA'' means the North American Securities
            Administrators Association;
                (6) the term ``Office'' means the Office of Financial
            Literacy of the Bureau;

    [[Page 124 STAT. 1943]]

                (7) the term ``senior'' means any individual who has
            attained the age of 62 years or older; and
                (8) the term ``State'' has the same meaning as in section 3
            of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)).

        (b) Grants to States for Enhanced Protection of Seniors From Being
    Misled by False Designations.--The Office shall establish a program
    under which the Office may make grants to States or eligible entities--
                (1) to hire staff to identify, investigate, and prosecute
            (through civil, administrative, or criminal enforcement actions)
            cases involving misleading or fraudulent marketing;
                (2) to fund technology, equipment, and training for
            regulators, prosecutors, and law enforcement officers, in order
            to identify salespersons and advisers who target seniors through
            the use of misleading designations;
                (3) to fund technology, equipment, and training for
            prosecutors to increase the successful prosecution of
            salespersons and advisers who target seniors with the use of
            misleading designations;
                (4) to provide educational materials and training to
            regulators on the appropriateness of the use of designations by
            salespersons and advisers in connection with the sale and
            marketing of financial products;
                (5) to provide educational materials and training to seniors
            to increase awareness and understanding of misleading or
            fraudulent marketing;
                (6) to develop comprehensive plans to combat misleading or
            fraudulent marketing of financial products to seniors; and
                (7) to enhance provisions of State law to provide protection
            for seniors against misleading or fraudulent marketing.

        (c) Applications.--A State or eligible entity desiring a grant under
    this section shall submit an application to the Office, in such form and
    in such a manner as the Office may determine, that includes--
                (1) a proposal for activities to protect seniors from
            misleading or fraudulent marketing that are proposed to be
            funded using a grant under this section, including--
                        (A) an identification of the scope of the problem of
                    misleading or fraudulent marketing in the State;
                        (B) a description of how the proposed activities
                    would--
                              (i) protect seniors from misleading or
                          fraudulent marketing in the sale of financial
                          products, including by proactively identifying
                          victims of misleading and fraudulent marketing who
                          are seniors;
                              (ii) assist in the investigation and
                          prosecution of those using misleading or
                          fraudulent marketing; and
                              (iii) discourage and reduce cases of
                          misleading or fraudulent marketing; and
                        (C) a description of how the proposed activities
                    would be coordinated with other State efforts; and
                (2) any other information, as the Office determines is
            appropriate.

        (d) Performance Objectives and Reporting Requirements.--The Office
    may establish such performance objectives and reporting requirements for
    States and eligible entities receiving a grant under this section as the
    Office determines are necessary

    [[Page 124 STAT. 1944]]

    to carry out and assess the effectiveness of the program under this
    section.
        (e) Maximum Amount.--The amount of a grant under this section may
    not exceed--
                (1) $500,000 for each of 3 consecutive fiscal years, if the
            recipient is a State, or an eligible entity of a State, that has
            adopted rules--
                        (A) on the appropriate use of designations in the
                    offer or sale of securities or investment advice that
                    meet or exceed the minimum requirements of the NASAA
                    Model Rule on the Use of Senior-Specific Certifications
                    and Professional Designations (or any successor
                    thereto);
                        (B) on the appropriate use of designations in the
                    sale of insurance products that, to the extent
                    practicable, conform to the minimum requirements of the
                    National Association of Insurance Commissioners Model
                    Regulation on the Use of Senior-Specific Certifications
                    and Professional Designations in the Sale of Life
                    Insurance and Annuities (or any successor thereto); and
                        (C) with respect to fiduciary or suitability
                    requirements in the sale of annuities that meet or
                    exceed the minimum requirements established by the
                    Suitability in Annuity Transactions Model Regulation of
                    the National Association of Insurance Commissioners (or
                    any successor thereto); and
                (2) $100,000 for each of 3 consecutive fiscal years, if the
            recipient is a State, or an eligible entity of a State, that has
            adopted--
                        (A) rules on the appropriate use of designations in
                    the offer or sale of securities or investment advice
                    that meet or exceed the minimum requirements of the
                    NASAA Model Rule on the Use of Senior-Specific
                    Certifications and Professional Designations (or any
                    successor thereto); or
                        (B) rules--
                              (i) on the appropriate use of designations in
                          the sale of insurance products that, to the extent
                          practicable, conform to the minimum requirements
                          of the National Association of Insurance
                          Commissioners Model Regulation on the Use of
                          Senior-Specific Certifications and Professional
                          Designations in the Sale of Life Insurance and
                          Annuities (or any successor thereto); and
                              (ii) with respect to fiduciary or suitability
                          requirements in the sale of annuities that meet or
                          exceed the minimum requirements established by the
                          Suitability in Annuity Transactions Model
                          Regulation of the National Association of
                          Insurance Commissioners (or any successor
                          thereto).

        (f) Subgrants.--A State or eligible entity that receives a grant
    under this section may make a subgrant, as the State or eligible entity
    determines is necessary to carry out the activities funded using a grant
    under this section.
        (g) Reapplication.--A State or eligible entity that receives a grant
    under this section may reapply for a grant under this section,
    notwithstanding the limitations on grant amounts under subsection (e).

    [[Page 124 STAT. 1945]]

        (h) Authorization of Appropriations.--There are authorized to be
    appropriated to carry out this section, $8,000,000 for each of fiscal
    years 2011 through 2015.
    SEC. 989B. DESIGNATED FEDERAL ENTITY INSPECTORS GENERAL
                              INDEPENDENCE.

        Section 8G of the Inspector General Act of 1978 (5 U.S.C. App.) is
    amended--
                (1) in subsection (a)(4)--
                        (A) in the matter preceding subparagraph (A), by
                    inserting ``the board or commission of the designated
                    Federal entity, or in the event the designated Federal
                    entity does not have a board or commission,'' after
                    ``means'';
                        (B) in subparagraph (A), by striking ``and'' after
                    the semicolon; and
                        (C) by adding after subparagraph (B) the following:
                        ``(C) with respect to the Federal Labor Relations
                    Authority, such term means the members of the Authority
                    (described under section 7104 of title 5, United States
                    Code);
                        ``(D) with respect to the National Archives and
                    Records Administration, such term means the Archivist of
                    the United States;
                        ``(E) with respect to the National Credit Union
                    Administration, such term means the National Credit
                    Union Administration Board (described under section 102
                    of the Federal Credit Union Act (12 U.S.C. 1752a);
                        ``(F) with respect to the National Endowment of the
                    Arts, such term means the National Council on the Arts;
                        ``(G) with respect to the National Endowment for the
                    Humanities, such term means the National Council on the
                    Humanities; and
                        ``(H) with respect to the Peace Corps, such term
                    means the Director of the Peace Corps;''; and
                (2) in subsection (h), by inserting ``if the designated
            Federal entity is not a board or commission, include'' after
            ``designated Federal entities and''.
    SEC. 989C. STRENGTHENING INSPECTOR GENERAL ACCOUNTABILITY.

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

    [[Page 124 STAT. 1946]]

            reporting period, including a list of any outstanding
            recommendations made from any previous peer review (including
            any peer review conducted before the reporting period) that
            remain outstanding or have not been fully implemented.''.
    SEC. 989D. REMOVAL OF INSPECTORS GENERAL OF DESIGNATED FEDERAL
                              ENTITIES.

        Section 8G(e) of the Inspector General Act of 1978 (5 U.S.C. App.)
    is amended--
                (1) by redesignating the sentences following ``(e)'' as
            paragraph (2); and
                (2) by striking ``(e)'' and inserting the following:

        ``(e)(1) In the case of a designated Federal entity for which a
    board or commission is the head of the designated Federal entity, a
    removal under this subsection may only be made upon the written
    concurrence of a \2/3\ majority of the board or commission.''.
    SEC. 989E. <<NOTE: 5 USC app. 11 note.>> ADDITIONAL OVERSIGHT OF
                              FINANCIAL REGULATORY SYSTEM.

        (a) Council of Inspectors General on Financial Oversight.--
                (1) Establishment and membership.--There is established a
            Council of Inspectors General on Financial Oversight (in this
            section referred to as the ``Council of Inspectors General'')
            chaired by the Inspector General of the Department of the
            Treasury and composed of the inspectors general of the
            following:
                        (A) The Board of Governors of the Federal Reserve
                    System.
                        (B) The Commodity Futures Trading Commission.
                        (C) The Department of Housing and Urban Development.
                        (D) The Department of the Treasury.
                        (E) The Federal Deposit Insurance Corporation.
                        (F) The Federal Housing Finance Agency.
                        (G) The National Credit Union Administration.
                        (H) The Securities and Exchange Commission.
                        (I) The Troubled Asset Relief Program (until the
                    termination of the authority of the Special Inspector
                    General for such program under section 121(k) of the
                    Emergency Economic Stabilization Act of 2008 (12 U.S.C.
                    5231(k))).
                (2) Duties.--
                        (A) Meetings.--The Council of Inspectors General
                    shall meet not less than once each quarter, or more
                    frequently if the chair considers it appropriate, to
                    facilitate the sharing of information among inspectors
                    general and to discuss the ongoing work of each
                    inspector general who is a member of the Council of
                    Inspectors General, with a focus on concerns that may
                    apply to the broader financial sector and ways to
                    improve financial oversight.
                        (B) Annual report.--Each year the Council of
                    Inspectors General shall submit to the Council and to
                    Congress a report including--
                              (i) for each inspector general who is a member
                          of the Council of Inspectors General, a section
                          within the exclusive editorial control of such
                          inspector general that highlights the concerns and
                          recommendations of such inspector general in such
                          inspector general's

    [[Page 124 STAT. 1947]]

                          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.
    SEC. 989F. GAO STUDY OF PERSON TO PERSON LENDING.

        (a) Study.--
                (1) In general.--The Comptroller General of the United
            States shall conduct a study of person to person lending to
            determine the optimal Federal regulatory structure.
                (2) Consultation.--In conducting the study required under
            paragraph (1), the Comptroller General shall consult with
            Federal banking agencies, the Commission, consumer groups,
            outside experts, and the person to person lending industry.
                (3) Content of study.--The study required under paragraph
            (1) shall include an examination of--
                        (A) the regulatory structure as it exists on the
                    date of enactment of this Act, as determined by the
                    Commission, with particular attention to--
                              (i) the application of the Securities Act of
                          1933 to person to person lending platforms;
                              (ii) the posting of consumer loan information
                          on the EDGAR database of the Commission; and
                              (iii) the treatment of privately held person
                          to person lending platforms as public companies;
                        (B) the State and other Federal regulators
                    responsible for the oversight and regulation of person
                    to person lending markets;
                        (C) any Federal, State, or local government or
                    private studies of person to person lending completed or
                    in progress on the date of enactment of this Act;
                        (D) consumer privacy and data protections, minimum
                    credit standards, anti-money laundering and risk
                    management in the regulatory structure as it exists on
                    the date of enactment of this Act, and whether
                    additional or alternative safeguards are needed; and

    [[Page 124 STAT. 1948]]

                        (E) the uses of person to person lending.

        (b) Report.--
                (1) In general.--Not later than 1 year after the date of
            enactment of this Act, the Comptroller General shall submit a
            report on the study required under subsection (a) to the
            Committee on Banking, Housing, and Urban Affairs of the Senate
            and the Committee on Financial Services of the House of
            Representatives.
                (2) Content of report.--The report required under paragraph
            (1) shall include alternative regulatory options, including--
                        (A) the involvement of other Federal agencies; and
                        (B) alternative approaches by the Commission and
                    recommendations on whether the alternative approaches
                    are effective.
    SEC. 989G. EXEMPTION FOR NONACCELERATED FILERS.

        (a) Exemption.--Section 404 <<NOTE: 15 USC 7262.>> of the Sarbanes-
    Oxley Act of 2002 is amended by adding at the end the following:

        ``(c) Exemption for Smaller Issuers.--Subsection (b) shall not apply
    with respect to any audit report prepared for an issuer that is neither
    a `large accelerated filer' nor an `accelerated filer' as those terms
    are defined in Rule 12b-2 of the Commission (17 C.F.R. 240.12b-2).''.
        (b) Study.--The Securities and Exchange Commission shall conduct a
    study to determine how the Commission could reduce the burden of
    complying with section 404(b) of the Sarbanes-Oxley Act of 2002 for
    companies whose market capitalization is between $75,000,000 and
    $250,000,000 for the relevant reporting period while maintaining
    investor protections for such companies. The study shall also consider
    whether any such methods of reducing the compliance burden or a complete
    exemption for such companies from compliance with such section would
    encourage companies to list on exchanges in the United States in their
    initial public offerings. <<NOTE: Deadline. Reports.>>  Not later than 9
    months after the date of the enactment of this subtitle, the Commission
    shall transmit a report of such study to Congress.
    SEC. 989H. <<NOTE: 5 USC app. 5 note.>> CORRECTIVE RESPONSES BY
                              HEADS OF CERTAIN ESTABLISHMENTS TO
                              DEFICIENCIES IDENTIFIED BY INSPECTORS
                              GENERAL.

        The Chairman of the Board of Governors of the Federal Reserve
    System, the Chairman of the Commodity Futures Trading Commission, the
    Chairman of the National Credit Union Administration, the Director of
    the Pension Benefit Guaranty Corporation, and the Chairman of the
    Securities and Exchange Commission shall each--
                (1) take action to address deficiencies identified by a
            report or investigation of the Inspector General of the
            establishment concerned; or
                (2) <<NOTE: Certification.>>  certify to both Houses of
            Congress that no action is necessary or appropriate in
            connection with a deficiency described in paragraph (1).
    SEC. 989I. GAO STUDY REGARDING EXEMPTION FOR SMALLER ISSUERS.

        (a) Study Regarding Exemption for Smaller Issuers.--The Comptroller
    General of the United States shall carry out a study

    [[Page 124 STAT. 1949]]

    on the impact of the amendments made by this Act to section 404(b) of
    the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7262(b)), which shall include
    an analysis of--
                (1) whether issuers that are exempt from such section 404(b)
            have fewer or more restatements of published accounting
            statements than issuers that are required to comply with such
            section 404(b);
                (2) the cost of capital for issuers that are exempt from
            such section 404(b) compared to the cost of capital for issuers
            that are required to comply with such section 404(b);
                (3) whether there is any difference in the confidence of
            investors in the integrity of financial statements of issuers
            that comply with such section 404(b) and issuers that are exempt
            from compliance with such section 404(b);
                (4) whether issuers that do not receive the attestation for
            internal controls required under such section 404(b) should be
            required to disclose the lack of such attestation to investors;
            and
                (5) the costs and benefits to issuers that are exempt from
            such section 404(b) that voluntarily have obtained the
            attestation of an independent auditor.

        (b) Report.--Not later than 3 years after the date of enactment of
    this Act, the Comptroller General shall submit to the Committee on
    Banking, Housing, and Urban Affairs of the Senate and the Committee on
    Financial Services of the House of Representatives a report on the
    results of the study required under subsection (a).
    SEC. 989J. <<NOTE: 15 USC 77c note.>> FURTHER PROMOTING THE
                              ADOPTION OF THE NAIC MODEL REGULATIONS
                              THAT ENHANCE PROTECTION OF SENIORS AND
                              OTHER CONSUMERS.

        (a) In General.--The Commission shall treat as exempt securities
    described under section 3(a)(8) of the Securities Act of 1933 (15 U.S.C.
    77c(a)(8)) any insurance or endowment policy or annuity contract or
    optional annuity contract--
                (1) the value of which does not vary according to the
            performance of a separate account;
                (2) that--
                        (A) satisfies standard nonforfeiture laws or similar
                    requirements of the applicable State at the time of
                    issue; or
                        (B) in the absence of applicable standard
                    nonforfeiture laws or requirements, satisfies the Model
                    Standard Nonforfeiture Law for Life Insurance or Model
                    Standard Nonforfeiture Law for Individual Deferred
                    Annuities, or any successor model law, as published by
                    the National Association of Insurance Commissioners; and
                (3) that is issued--
                        (A) on and after June 16, 2013, in a State, or
                    issued by an insurance company that is domiciled in a
                    State, that--
                              (i) adopts rules that govern suitability
                          requirements in the sale of an insurance or
                          endowment policy or annuity contract or optional
                          annuity contract, which shall substantially meet
                          or exceed the minimum requirements established by
                          the Suitability in Annuity Transactions Model
                          Regulation adopted by the

    [[Page 124 STAT. 1950]]

                          National Association of Insurance Commissioners in
                          March 2010; and
                              (ii) <<NOTE: Deadline.>>  adopts rules that
                          substantially meet or exceed the minimum
                          requirements of any successor modifications to the
                          model regulations described in subparagraph (A)
                          within 5 years of the adoption by the Association
                          of any further successors thereto; or
                        (B) by an insurance company that adopts and
                    implements practices on a nationwide basis for the sale
                    of any insurance or endowment policy or annuity contract
                    or optional annuity contract that meet or exceed the
                    minimum requirements established by the National
                    Association of Insurance Commissioners Suitability in
                    Annuity Transactions Model Regulation (Model 275), and
                    any successor thereto, and is therefore subject to
                    examination by the State of domicile of the insurance
                    company, or by any other State where the insurance
                    company conducts sales of such products, for the purpose
                    of monitoring compliance under this section.

        (b) Rule of Construction.--Nothing in this section shall be
    construed to affect whether any insurance or endowment policy or annuity
    contract or optional annuity contract that is not described in this
    section is or is not an exempt security under section 3(a)(8) of the
    Securities Act of 1933 (15 U.S.C. 77c(a)(8)).

          Subtitle J--Securities and Exchange Commission Match Funding

    SEC. 991. SECURITIES AND EXCHANGE COMMISSION MATCH FUNDING.

        (a) Match Funding Authority.--
                (1) Amendments.--Section 31 of the Securities Exchange Act
            of 1934 (15 U.S.C. 78ee) is amended--
                        (A) by striking subsection (a) and inserting the
                    following:

        ``(a) Recovery of Costs of Annual Appropriation.--
    <<NOTE: Fees. Assessments.>> The Commission shall, in accordance with
    this section, collect transaction fees and assessments that are designed
    to recover the costs to the Government of the annual appropriation to
    the Commission by Congress.'';
                        (B) in subsection (e)(2), by striking ``September
                    30'' and inserting ``September 25'';
                        (C) in subsection (g), by striking ``April 30 of the
                    fiscal year preceding the fiscal year to which such rate
                    applies'' and inserting ``30 days after the date on
                    which an Act making a regular appropriation to the
                    Commission for such fiscal year is enacted'';
                        (D) by striking subsection (j) and inserting the
                    following:

        ``(j) Adjustments to Fee Rates.--
                ``(1) Annual adjustment.--Subject to subsections (i)(1)(B)
            and (k), for each fiscal year, the Commission shall by order
            adjust each of the rates applicable under subsections (b) and
            (c) for such fiscal year to a uniform adjusted rate that, when
            applied to the baseline estimate of the aggregate dollar amount
            of sales for such fiscal year, is reasonably likely to produce

    [[Page 124 STAT. 1951]]

            aggregate fee collections under this section (including
            assessments collected under subsection (d) of this section) that
            are equal to the regular appropriation to the Commission by
            Congress for such fiscal year.
                ``(2) Mid-year adjustment.--
            <<NOTE: Determination. Deadline.>> Subject to subsections
            (i)(1)(B) and (k), for each fiscal year, the Commission shall
            determine, by March 1 of such fiscal year, whether, based on the
            actual aggregate dollar volume of sales during the first 5
            months of such fiscal year, the baseline estimate of the
            aggregate dollar volume of sales used under paragraph (1) for
            such fiscal year is reasonably likely to be 10 percent (or more)
            greater or less than the actual aggregate dollar volume of sales
            for such fiscal year. <<NOTE: Order. Deadline.>>  If the
            Commission so determines, the Commission shall by order, no
            later than March 1, adjust each of the rates applicable under
            subsections (b) and (c) for such fiscal year to a uniform
            adjusted rate that, when applied to the revised estimate of the
            aggregate dollar amount of sales for the remainder of such
            fiscal year, is reasonably likely to produce aggregate fee
            collections under this section (including fees collected during
            such five-month period and assessments collected under
            subsection (d) of this section) that are equal to the regular
            appropriation to the Commission by Congress for such fiscal
            year. In making such revised estimate, the Commission shall,
            after consultation with the Congressional Budget Office and the
            Office of Management and Budget, use the same methodology
            required by subsection (l).
                ``(3) Review.--In exercising its authority under this
            subsection, the Commission shall not be required to comply with
            the provisions of section 553 of title 5, United States Code. An
            adjusted rate prescribed under paragraph (1) or (2) and
            published under subsection (g) shall not be subject to judicial
            review.
                ``(4) Effective date.--
                        ``(A) Annual adjustment.--Subject to subsections
                    (i)(1)(B) and (k), an adjusted rate prescribed under
                    paragraph (1) shall take effect on the later of--
                              ``(i) the first day of the fiscal year to
                          which such rate applies; or
                              ``(ii) 60 days after the date on which an Act
                          making a regular appropriation to the Commission
                          for such fiscal year is enacted.
                        ``(B) Mid-year adjustment.--An adjusted rate
                    prescribed under paragraph (2) shall take effect on
                    April 1 of the fiscal year to which such rate
                    applies.'';
                        (E) in subsection (k), by striking ``30 days'' and
                    inserting ``60 days''; and
                        (F) in subsection (l), by striking ``Definitions.--
                    '' and all that follows through ``sales.--The baseline''
                    and inserting ``Baseline Estimate of the Aggregate
                    Dollar Amount of Sales.--The baseline''.
                (2) <<NOTE: 15 USC 78ee.>>  Effective date.--The amendments
            made by this subsection shall take effect on the later of--
                        (A) October 1, 2011; or
                        (B) the date of enactment of an Act making a regular
                    appropriation to the Commission for fiscal year 2012.

        (b) Amendments to Registration Fee Provisions.--

    [[Page 124 STAT. 1952]]

                (1) Section 6(b) of the securities act of 1933.--Section
            6(b) of the Securities Act of 1933 (15 U.S.C. 77f(b)) is
            amended--
                        (A) by striking ``offsetting'' each place that term
                    appears and inserting ``fee'';
                        (B) by striking paragraphs (1), (3), (4), (6), (8),
                    and (9);
                        (C) by redesignating paragraph (2) as paragraph (1);
                        (D) by redesignating paragraph (5) as paragraph (2);
                        (E) by redesignating paragraph (7) as paragraph (3);
                        (F) by redesignating paragraph (10) as paragraph
                    (5);
                        (G) by redesignating paragraph (11) as paragraph
                    (6);
                        (H) in paragraph (1), as so redesignated, by
                    striking ``paragraph (5) or (6).'' and inserting
                    ``paragraph (2).'';
                        (I) in paragraph (2), as so redesignated--
                              (i) by striking ``of the fiscal years 2003
                          through 2011'' and inserting ``fiscal year''; and
                              (ii) by striking ``paragraph (2)'' and
                          inserting ``paragraph (1)'';
                        (J) by inserting after paragraph (3), as so
                    redesignated, the following:
                ``(4) Review and effective date.--In exercising its
            authority under this subsection, the Commission shall not be
            required to comply with the provisions of section 553 of title
            5, United States Code. An adjusted rate prescribed under
            paragraph (2) and published under paragraph (5) shall not be
            subject to judicial review. An adjusted rate prescribed under
            paragraph (2) shall take effect on the first day of the fiscal
            year to which such rate applies.'';
                        (K) in paragraph (5), as redesignated, by striking
                    ``April 30'' and inserting ``August 31'';
                        (L) in paragraph (6), as so redesignated--
                              (i) by striking ``of the fiscal years 2002
                          through 2011'' and inserting ``fiscal year''; and
                              (ii) by inserting at the end of the table in
                          subparagraph (A) the following:

        ``2012................$425,000,000
        2013..................$455,000,000
        2014..................$485,000,000
        2015..................$515,000,000
        2016..................$550,000,000
        2017..................$585,000,000
        2018..................$620,000,000
        2019..................$660,000,000
        2020..................$705,000,000
        2021 and each fiscal yAn amount that is equal to the target fee
            thereafter.           collection amount for the prior fiscal
                                  year, adjusted by the rate of
                                  inflation.''.

                (2) Section 13(e) of the securities exchange act of 1934.--
            Section 13(e) of the Securities Exchange Act of 1934 (15 U.S.C.
            78m(e)) is amended--
                        (A) in paragraph (3), by striking ``paragraphs (5)
                    and (6)'' and inserting ``paragraph (4)'';
                        (B) by striking paragraphs (4), (5), and (6);
                        (C) by inserting after paragraph (3) the following:

    [[Page 124 STAT. 1953]]

                ``(4) Annual adjustment.--For each fiscal year, the
            Commission shall by order adjust the rate required by paragraph
            (3) for such fiscal year to a rate that is equal to the rate
            (expressed in dollars per million) that is applicable under
            section 6(b) of the Securities Act of 1933 for such fiscal year.
                ``(5) Fee collections.--Fees collected pursuant to this
            subsection for fiscal year 2012 and each fiscal year thereafter
            shall be deposited and credited as general revenue of the
            Treasury and shall not be available for obligation.
                ``(6) Effective date; publication.--In exercising its
            authority under this subsection, the Commission shall not be
            required to comply with the provisions of section 553 of title
            5, United States Code. An adjusted rate prescribed under
            paragraph (4) shall be published and take effect in accordance
            with section 6(b) of the Securities Act of 1933 (15 U.S.C.
            77f(b)).''; and
                        (D) by striking paragraphs (8), (9), and (10).
                (3) Section 14(g) of the securities exchange act of 1934.--
            Section 14(g) of the Securities Exchange Act of 1934 (15 U.S.C.
            78n(g)) is amended--
                        (A) in paragraph (1), by striking ``paragraphs (5)
                    and (6)'' each time that term appears and inserting
                    ``paragraph (4)'';
                        (B) in paragraph (3), by striking ``paragraphs (5)
                    and (6)'' and inserting ``paragraph (4)'';
                        (C) by striking paragraphs (4), (5), and (6);
                        (D) by inserting after paragraph (3) the following:
                ``(4) <<NOTE: Order.>>  Annual adjustment.--For each fiscal
            year, the Commission shall by order adjust the rate required by
            paragraphs (1) and (3) for such fiscal year to a rate that is
            equal to the rate (expressed in dollars per million) that is
            applicable under section 6(b) of the Securities Act of 1933 (15
            U.S.C. 77f(b)) for such fiscal year.
                ``(5) Fee collection.--Fees collected pursuant to this
            subsection for fiscal year 2012 and each fiscal year thereafter
            shall be deposited and credited as general revenue of the
            Treasury and shall not be available for obligation.
                ``(6) Review; effective date; publication.--In exercising
            its authority under this subsection, the Commission shall not be
            required to comply with the provisions of section 553 of title
            5, United States Code. An adjusted rate prescribed under
            paragraph (4) shall be published and take effect in accordance
            with section 6(b) of the Securities Act of 1933 (15 U.S.C.
            77f(b)).'';
                        (E) by striking paragraphs (8), (9), and (10); and
                        (F) by redesignating paragraph (11) as paragraph
                    (8).
                (4) Effective date.-- <<NOTE: Publication. 15 USC 77f
            note.>> The amendments made by this subsection shall take effect
            on October 1, 2011, except that for fiscal year 2012, the
            Commission shall publish the rate established under section 6(b)
            of the Securities Act of 1933 (15 U.S.C. 77f(b)), as amended by
            this Act, on August 31, 2011.

        (c) Authorization of Appropriations.--Section 35 of the Securities
    Exchange Act of 1934 (15 U.S.C. 78kk) is amended to read as follows:

    [[Page 124 STAT. 1954]]

    ``SEC. 35. AUTHORIZATION OF APPROPRIATIONS.

        ``In addition to any other funds authorized to be appropriated to
    the Commission, there are authorized to be appropriated to carry out the
    functions, powers, and duties of the Commission--
                ``(1) for fiscal year 2011, $1,300,000,000;
                ``(2) for fiscal year 2012, $1,500,000,000;
                ``(3) for fiscal year 2013, $1,750,000,000;
                ``(4) for fiscal year 2014, $2,000,000,000; and
                ``(5) for fiscal year 2015, $2,250,000,000.''.

        (d) Transmittal of Budget Requests.--
                (1) Amendment.--Section 31 of the Securities Exchange Act of
            1934 (15 U.S.C. 78ee) is amended by adding at the end the
            following:

        ``(m) Transmittal of Commission Budget Requests.--
                ``(1) Budget required.--For fiscal year 2012, and each
            fiscal year thereafter, the Commission shall prepare and submit
            a budget to the President. Whenever the Commission submits a
            budget estimate or request to the President or the Office of
            Management and Budget, the Commission shall concurrently
            transmit copies of the estimate or request to the Committee on
            Appropriations of the Senate, the Committee on Appropriations of
            the House of Representatives, the Committee on Banking, Housing,
            and Urban Affairs of the Senate, and the Committee on Financial
            Services of the House of Representatives.
                ``(2) Submission to congress.--The President shall submit
            each budget submitted under paragraph (1) to Congress, in
            unaltered form, together with the annual budget for the
            Administration submitted by the President.
                ``(3) Contents.--The Commission shall include in each budget
            submitted under paragraph (1)--
                        ``(A) an itemization of the amount of funds
                    necessary to carry out the functions of the Commission.
                        ``(B) an amount to be designated as contingency
                    funding to be used by the Commission to address
                    unanticipated needs; and
                        ``(C) a designation of any activities of the
                    Commission for which multi-year budget authority would
                    be suitable.''.
                (2) <<NOTE: 15 USC 78ee note.>>  Budget of the president.--
            For fiscal year 2012, and each fiscal year thereafter, the
            annual budget for the Administration submitted by the President
            to Congress shall reflect the amendments made by this section.

        (e) Securities and Exchange Commission Reserve Fund.--
                (1) Amendment.--Section 4 of the Securities Exchange Act of
            1934 (15 U.S.C. 78d), as amended by this Act, is amended by
            adding at the end the following:

        ``(i) Securities and Exchange Commission Reserve Fund.--
                ``(1) Reserve fund established.--There is established in the
            Treasury of the United States a separate fund, to be known as
            the `Securities and Exchange Commission Reserve Fund' (referred
            to in this subsection as the `Reserve Fund').
                ``(2) Reserve fund amounts.--
                        ``(A) In general.--Except as provided in
                    subparagraph (B), any registration fees collected by the
                    Commission under section 6(b) of the Securities Act of
                    1933 (15 U.S.C. 77f(b)) or section 24(f) of the
                    Investment Company Act of 1940

    [[Page 124 STAT. 1955]]

                    (15 U.S.C. 80a-24(f)) shall be deposited into the
                    Reserve Fund.
                        ``(B) Limitations.--For any 1 fiscal year--
                              ``(i) the amount deposited in the Fund may not
                          exceed $50,000,000; and
                              ``(ii) the balance in the Fund may not exceed
                          $100,000,000.
                        ``(C) Excess fees.--Any amounts in excess of the
                    limitations described in subparagraph (B) that the
                    Commission collects from registration fees under section
                    6(b) of the Securities Act of 1933 (15 U.S.C. 77f(b)) or
                    section 24(f) of the Investment Company Act of 1940 (15
                    U.S.C. 80a-24(f)) shall be deposited in the General Fund
                    of the Treasury of the United States and shall not be
                    available for obligation by the Commission.
                ``(3) Use of amounts in reserve fund.--The Commission may
            obligate amounts in the Reserve Fund, not to exceed a total of
            $100,000,000 in any 1 fiscal year, as the Commission determines
            is necessary to carry out the functions of the Commission. Any
            amounts in the reserve fund shall remain available until
            expended. <<NOTE: Deadline. Notification.>>  Not later than 10
            days after the date on which the Commission obligates amounts
            under this paragraph, the Commission shall notify Congress of
            the date, amount, and purpose of the obligation.
                ``(4) Rule of construction.--Amounts collected and deposited
            in the Reserve Fund shall not be construed to be Government
            funds or appropriated monies and shall not be subject to
            apportionment for the purpose of chapter 15 of title 31, United
            States Code, or under any other authority.''.
                (2) <<NOTE: 15 USC 78d note.>>  Effective date.--The
            amendment made by this subsection shall take effect on October
            1, 2011.

    TITLE X-- <<NOTE: Consumer Financial Protection Act of 2010.>> BUREAU OF
    CONSUMER FINANCIAL PROTECTION
    SEC. 1001. <<NOTE: 12 USC 5301 note.>> SHORT TITLE.

        This title may be cited as the ``Consumer Financial Protection Act
    of 2010''.
    SEC. 1002. <<NOTE: 12 USC 5481.>> 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.

    [[Page 124 STAT. 1956]]

                (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

    [[Page 124 STAT. 1957]]

                          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--

    [[Page 124 STAT. 1958]]

                              (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--

    [[Page 124 STAT. 1959]]

                                        (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

    [[Page 124 STAT. 1960]]

                                    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.

    [[Page 124 STAT. 1961]]

                (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

    [[Page 124 STAT. 1962]]

            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--

    [[Page 124 STAT. 1963]]

                              (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

    [[Page 124 STAT. 1964]]

                              (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. <<NOTE: 12 USC 5491.>> ESTABLISHMENT OF THE BUREAU OF
                              CONSUMER FINANCIAL PROTECTION.

        (a) Bureau Established.--There is established in the Federal Reserve
    System, an independent bureau 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. <<NOTE: Applicability.>>  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.-- <<NOTE: President.>> Subject to paragraph
            (3), the Director shall be appointed by the President, by and
            with the advice and consent of the Senate.
                (3) Qualification.-- <<NOTE: President.>> 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.

    [[Page 124 STAT. 1965]]

        (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.
        (e) Offices.--The principal office of the Bureau shall be in the
    District of Columbia. The Director 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.
    SEC. 1012. <<NOTE: 12 USC 5492.>> 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 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 may
    delegate to any duly authorized employee, representative, or agent any
    power vested in the Bureau by law.
        (c) Autonomy of the Bureau.--
                (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;

    [[Page 124 STAT. 1966]]

                        (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. <<NOTE: 12 USC 5493.>>  ADMINISTRATION.

        (a) Personnel.--
                (1) Appointment.--
                        (A) In general.--The Director 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 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 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;

    [[Page 124 STAT. 1967]]

                                        (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 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. <<NOTE: Expiration date.>> 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.-- <<NOTE: Applicability.>> 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.
                        (B) The Director 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.-- <<NOTE: Deadline.>> 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.

    [[Page 124 STAT. 1968]]

                        (C) <<NOTE: Payments.>>  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.--
            <<NOTE: Applicability.>> 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.--
                    <<NOTE: Deadline. Appointment.>> 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) <<NOTE: Establishment.>>  Specific Functional Units.--
                (1) Research.--The Director 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.

    [[Page 124 STAT. 1969]]

                (2) Community affairs.--The Director 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 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 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 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

    [[Page 124 STAT. 1970]]

                    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 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
            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) <<NOTE: Establishment.>>  Administration of office.--
            There is established the position of Assistant Director of the
            Bureau for Fair Lending and Equal Opportunity, who--
                        (A) shall be appointed by the Director; and
                        (B) shall carry out such duties as the Director may
                    delegate to such Assistant Director.

        (d) Office of Financial Education.--
                (1) Establishment.--The Director 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.-- <<NOTE: Strategy.>> 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;

    [[Page 124 STAT. 1971]]

                        (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 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 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 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 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;

    [[Page 124 STAT. 1972]]

                              (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.-- <<NOTE: Establishment.>> The Director
            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 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 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.-- <<NOTE: Deadline.>> Before the end of
            the 180-day period beginning on the designated transfer date,
            the Director shall

    [[Page 124 STAT. 1973]]

            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.--The Office of Financial Protection
            for Older Americans (in this subsection referred to as the
            ``Office'') shall be headed by an assistant director.
                (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) <<NOTE: Deadline. Recommenda- tions.>>  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).

    [[Page 124 STAT. 1974]]

    SEC. 1014. CONSUMER ADVISORY BOARD.

        (a) Establishment Required.--The Director 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 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.
        (c) Meetings.--The Consumer Advisory Board shall meet from time to
    time at the call of the Director, 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 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. 1015. <<NOTE: 12 USC 5495.>> COORDINATION.

        The Bureau shall coordinate with the Commission, the Commodity
    Futures Trading Commission, the Federal Trade Commission, and other
    Federal agencies and State regulators, as appropriate, to promote
    consistent regulatory treatment of consumer financial and investment
    products and services.
    SEC. 1016. <<NOTE: 12 USC 5496.>> APPEARANCES BEFORE AND REPORTS
                              TO CONGRESS.

        (a) Appearances Before Congress.--The Director 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--

    [[Page 124 STAT. 1975]]

                (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.
    SEC. 1017. <<NOTE: 12 USC 5497.>> FUNDING; PENALTIES AND FINES.

        (a) Transfer of Funds From Board Of Governors.--
                (1) In general.-- <<NOTE: Effective date. Deadlines.>> 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

    [[Page 124 STAT. 1976]]

                    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 <<NOTE: Transfer
            authority.>>  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) Budget and financial management.--
                        (A) Financial operating plans and forecasts.--The
                    Director shall provide to the Director of the Office of
                    Management and Budget copies of the financial operating
                    plans and forecasts of the Director, as prepared by the
                    Director 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 in the ordinary
                    course of the operations of the Bureau.
                        (B) Financial statements.--The
                    Bureau <<NOTE: Deadline.>>  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
                    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) Audit of the bureau.--

    [[Page 124 STAT. 1977]]

                        (A) In general.--The
                    Comptroller <<NOTE: Deadline.>>  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 <<NOTE: Transfer authority.>>  of the
                    Comptroller General, the Director of the 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.--

    [[Page 124 STAT. 1978]]

                (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) 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.

    [[Page 124 STAT. 1979]]

                (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. 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) 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.
                (4) Annual report.--The Director 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, 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. 1018. <<NOTE: 12 USC 5491 note.>>  EFFECTIVE DATE.

        This subtitle shall become effective on the date of enactment of
    this Act.

                    Subtitle B--General Powers of the Bureau

    SEC. 1021. <<NOTE: 12 USC 5511.>>  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

    [[Page 124 STAT. 1980]]

    for consumer financial products and services and that markets for
    consumer financial products and services are fair, transparent, and
    competitive.
        (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. <<NOTE: 12 USC 5512.>>  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 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

    [[Page 124 STAT. 1981]]

                              (ii) the impact of proposed rules on covered
                          persons, as described in section 1026, and the
                          impact on consumers in rural areas;
                        (B) <<NOTE: Consultation.>>  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 <<NOTE: Applicability.>>  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.

        (c) Monitoring.--

    [[Page 124 STAT. 1982]]

                (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 <<NOTE: Publication. Reports. Deadline.>>  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

    [[Page 124 STAT. 1983]]

                          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

    [[Page 124 STAT. 1984]]

                          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

    [[Page 124 STAT. 1985]]

            reflect available evidence and any data that the Bureau
            reasonably may collect.
                (2) Reports.--The Bureau <<NOTE: Publication.>>  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. 1023. <<NOTE: 12 USC 5513.>>  REVIEW OF BUREAU REGULATIONS.

        (a) Review of Bureau Regulations.--On the petition of a member
    agency of the Council, the Council may set aside a final regulation
    prescribed by the Bureau, or any provision thereof, if the Council
    decides, in accordance with subsection (c), that the regulation or
    provision would put the safety and soundness of the United States
    banking system or the stability of the financial system of the United
    States at risk.
        (b) Petition.--
                (1) Procedure.--An agency represented by a member of the
            Council may petition the Council, in writing, and in accordance
            with rules prescribed pursuant to subsection (f), to stay the
            effectiveness of, or set aside, a regulation if the member
            agency filing the petition--
                        (A) has in good faith attempted to work with the
                    Bureau to resolve concerns regarding the effect of the
                    rule on the safety and soundness of the United States
                    banking system or the stability of the financial system
                    of the United States; and
                        (B) <<NOTE: Deadline.>>  files the petition with the
                    Council not later than 10 days after the date on which
                    the regulation has been published in the Federal
                    Register.
                (2) <<NOTE: Federal Register, publication.>>  Publication.--
            Any petition filed with the Council under this section shall be
            published in the Federal Register and transmitted
            contemporaneously with filing to the Committee on Banking,
            Housing, and Urban Affairs of the Senate and the Committee on
            Financial Services of the House of Representatives.

        (c) Stays and Set Asides.--
                (1) Stay.--
                        (A) In general.--Upon the request of any member
                    agency, the Chairperson of the Council may stay the
                    effectiveness of a regulation for the purpose of
                    allowing appropriate consideration of the petition by
                    the Council.
                        (B) Expiration.--A stay issued under this paragraph
                    shall expire on the earlier of--
                              (i) 90 days after the date of filing of the
                          petition under subsection (b); or
                              (ii) the date on which the Council makes a
                          decision under paragraph (3).
                (2) No adverse inference.--After the expiration of any stay
            imposed under this section, no inference shall be drawn
            regarding the validity or enforceability of a regulation which
            was the subject of the petition.
                (3) Vote.--
                        (A) In general.--The decision to issue a stay of, or
                    set aside, any regulation under this section shall be
                    made

    [[Page 124 STAT. 1986]]

                    only with the affirmative vote in accordance with
                    subparagraph (B) of \2/3\ of the members of the Council
                    then serving.
                        (B) Authorization to vote.--A member of the Council
                    may vote to stay the effectiveness of, or set aside, a
                    final regulation prescribed by the Bureau only if the
                    agency or department represented by that member has--
                              (i) considered any relevant information
                          provided by the agency submitting the petition and
                          by the Bureau; and
                              (ii) made an official determination, at a
                          public meeting where applicable, that the
                          regulation which is the subject of the petition
                          would put the safety and soundness of the United
                          States banking system or the stability of the
                          financial system of the United States at risk.
                (4) Decisions to set aside.--
                        (A) Effect of decision.--A decision by the Council
                    to set aside a regulation prescribed by the Bureau, or
                    provision thereof, shall render such regulation, or
                    provision thereof, unenforceable.
                        (B) Timely action required.--The Council may not
                    issue a decision to set aside a regulation, or provision
                    thereof, which is the subject of a petition under this
                    section after the expiration of the later of--
                              (i) 45 days following the date of filing of
                          the petition, unless a stay is issued under
                          paragraph (1); or
                              (ii) the expiration of a stay issued by the
                          Council under this section.
                        (C) Separate authority.--The issuance of a stay
                    under this section does not affect the authority of the
                    Council to set aside a regulation.
                (5) Dismissal due to inaction.--A petition under this
            section shall be deemed dismissed if the Council has not issued
            a decision to set aside a regulation, or provision thereof,
            within the period for timely action under paragraph (4)(B).
                (6) <<NOTE: Federal Register, publication.>>  Publication of
            decision.--Any decision under this subsection to issue a stay
            of, or set aside, a regulation or provision thereof shall be
            published by the Council in the Federal Register as soon as
            practicable after the decision is made, with an explanation of
            the reasons for the decision.
                (7) Rulemaking procedures inapplicable.--The notice and
            comment procedures under section 553 of title 5, United States
            Code, shall not apply to any decision under this section of the
            Council to issue a stay of, or set aside, a regulation.
                (8) Judicial review of decisions by the council.--A decision
            by the Council to set aside a regulation prescribed by the
            Bureau, or provision thereof, shall be subject to review under
            chapter 7 of title 5, United States Code.

        (d) Application of Other Law.--Nothing in this section shall be
    construed as altering, limiting, or restricting the application of any
    other provision of law, except as otherwise specifically provided in
    this section, including chapter 5 and chapter 7 of title 5, United
    States Code, to a regulation which is the subject of a petition filed
    under this section.
        (e) Savings Clause.--Nothing in this section shall be construed as
    limiting or restricting the Bureau from engaging in a rulemaking in
    accordance with applicable law.

    [[Page 124 STAT. 1987]]

        (f) Implementing Rules.--The Council shall prescribe procedural
    rules to implement this section.
    SEC. 1024. <<NOTE: 12 USC 5514.>>  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 <<NOTE: Consultation.>>  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 <<NOTE: Deadline.>>  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 <<NOTE: Reports. Examinations.>>  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

    [[Page 124 STAT. 1988]]

            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 and the State bank
            regulatory authorities, including establishing their respective
            schedules for examining persons described in subsection (a)(1)
            and requirements regarding reports to be submitted by such
            persons.
                (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 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) <<NOTE: Regulations.>>  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.

    [[Page 124 STAT. 1989]]

                        (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 <<NOTE: Contracts.>>
                    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

    [[Page 124 STAT. 1990]]

    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 <<NOTE: Coordination.>>
    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. <<NOTE: 12 USC 5515.>>  SUPERVISION OF VERY LARGE
                              BANKS, SAVINGS ASSOCIATIONS, AND CREDIT
                              UNIONS.

        (a) Scope of Coverage.--This section <<NOTE: Applicability.>>  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) <<NOTE: Reports.>>  Supervision.--
                (1) <<NOTE: Examinations.>>  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 to require
            reports from a person described in subsection (a), as permitted
            under paragraph (1), regarding information owned

    [[Page 124 STAT. 1991]]

            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 <<NOTE: Deadline. Time period.>>  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). <<NOTE: Coordination.>>  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) <<NOTE: Reports. Deadline.>>  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

    [[Page 124 STAT. 1992]]

                        (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 <<NOTE: Deadline.>>  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) <<NOTE: Establishment.>>  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

    [[Page 124 STAT. 1993]]

                                        (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) <<NOTE: Determination. Deadline.>>
                                    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) <<NOTE: Publication.>>  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) <<NOTE: Regulations.>>  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. <<NOTE: 12 USC 5516.>>  OTHER BANKS, SAVINGS
                              ASSOCIATIONS, AND CREDIT UNIONS.

        (a) Scope of Coverage.--This section <<NOTE: Applicability.>>  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 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

    [[Page 124 STAT. 1994]]

    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 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) <<NOTE: Reports. Records.>>  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 <<NOTE: Notification. Recommenda- tion.>>  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 <<NOTE: Deadline.>>  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

    [[Page 124 STAT. 1995]]

    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. <<NOTE: 12 USC 5517.>>  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

    [[Page 124 STAT. 1996]]

                              (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) <<NOTE: Applicability.>>  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

    [[Page 124 STAT. 1997]]

                          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.--

    [[Page 124 STAT. 1998]]

                (1) In general.--The Director 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

    [[Page 124 STAT. 1999]]

                        (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.

    [[Page 124 STAT. 2000]]

        (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

    [[Page 124 STAT. 2001]]

                          respect to the provision of services relating to
                          any specified plan or arrangement.
                              (ii) Agency response.--In
                          response <<NOTE: Deadline.>>  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) <<NOTE: Definition.>>  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, 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

    [[Page 124 STAT. 2002]]

            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. <<NOTE: Contracts. Procedures. Notification.>>  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.--

    [[Page 124 STAT. 2003]]

                (1) In general.--The Director 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.
    SEC. 1028. <<NOTE: 12 USC 5518.>>  AUTHORITY TO RESTRICT MANDATORY
                              PRE-DISPUTE ARBITRATION.

        (a) Study and Report.--The Bureau shall conduct a study of, and
    shall provide a report to Congress concerning, the use of agreements
    providing for arbitration of any future dispute

    [[Page 124 STAT. 2004]]

    between covered persons and consumers in connection with the offering or
    providing of consumer financial products or services.
        (b) Further Authority.--The Bureau, by regulation, may prohibit or
    impose conditions or limitations on the use of an agreement between a
    covered person and a consumer for a consumer financial product or
    service providing for arbitration of any future dispute between the
    parties, if the Bureau finds that such a prohibition or imposition of
    conditions or limitations is in the public interest and for the
    protection of consumers. The findings in such rule shall be consistent
    with the study conducted under subsection (a).
        (c) Limitation.--The authority described in subsection (b) may not
    be construed to prohibit or restrict a consumer from entering into a
    voluntary arbitration agreement with a covered person after a dispute
    has arisen.
        (d) Effective Date.--Notwithstanding any <<NOTE: Applicability.>>
    other provision of law, any regulation prescribed by the Bureau under
    subsection (b) shall apply, consistent with the terms of the regulation,
    to any agreement between a consumer and a covered person entered into
    after the end of the 180-day period beginning on the effective date of
    the regulation, as established by the Bureau.
    SEC. 1029. <<NOTE: 12 USC 5519.>>  EXCLUSION FOR AUTO DEALERS.

        (a) Sale, Servicing, and Leasing of Motor Vehicles Excluded.--Except
    as permitted in subsection (b), the Bureau may not exercise any
    rulemaking, supervisory, enforcement or any other authority, including
    any authority to order assessments, over a motor vehicle dealer that is
    predominantly engaged in the sale and servicing of motor vehicles, the
    leasing and servicing of motor vehicles, or both.
        (b) Certain Functions Excepted.--Subsection (a) shall not apply to
    any person, to the extent that such person--
                (1) provides consumers with any services related to
            residential or commercial mortgages or self-financing
            transactions involving real property;
                (2) operates a line of business--
                        (A) that involves the extension of retail credit or
                    retail leases involving motor vehicles; and
                        (B) in which--
                              (i) the extension of retail credit or retail
                          leases are provided directly to consumers; and
                              (ii) the contract governing such extension of
                          retail credit or retail leases is not routinely
                          assigned to an unaffiliated third party finance or
                          leasing source; or
                (3) offers or provides a consumer financial product or
            service not involving or related to the sale, financing,
            leasing, rental, repair, refurbishment, maintenance, or other
            servicing of motor vehicles, motor vehicle parts, or any related
            or ancillary product or service.

        (c) Preservation of Authorities of Other Agencies.--Except as
    provided in subsections (b) and (d), nothing in this title, including
    subtitle F, shall be construed as modifying, limiting, or superseding
    the operation of any provision of Federal law, or otherwise affecting
    the authority of the Board of Governors, the Federal Trade Commission,
    or any other Federal agency, with respect to a person described in
    subsection (a).
        (d) Federal Trade Commission Authority.--Notwithstanding section 18
    of the Federal Trade Commission Act, the Federal Trade

    [[Page 124 STAT. 2005]]

    Commission is authorized to prescribe rules under sections 5 and
    18(a)(1)(B) of the Federal Trade Commission Act. in accordance with
    section 553 of title 5, United States Code, with respect to a person
    described in subsection (a).
        (e) Coordination With Office Of Service Member Affairs.--The Board
    of Governors and the Federal Trade Commission shall coordinate with the
    Office of Service Member Affairs, to ensure that--
                (1) service members and their families are educated and
            empowered to make better informed decisions regarding consumer
            financial products and services offered by motor vehicle
            dealers, with a focus on motor vehicle dealers in the proximity
            of military installations; and
                (2) complaints by service members and their families
            concerning such motor vehicle dealers are effectively monitored
            and responded to, and where appropriate, enforcement action is
            pursued by the authorized agencies.

        (f) Definitions.--For purposes of this section, the following
    definitions shall apply:
                (1) Motor vehicle.--The term ``motor vehicle'' means--
                        (A) any self-propelled vehicle designed for
                    transporting persons or property on a street, highway,
                    or other road;
                        (B) recreational boats and marine equipment;
                        (C) motorcycles;
                        (D) motor homes, recreational vehicle trailers, and
                    slide-in campers, as those terms are defined in sections
                    571.3 and 575.103 (d) of title 49, Code of Federal
                    Regulations, or any successor thereto; and
                        (E) other vehicles that are titled and sold through
                    dealers.
                (2) Motor vehicle dealer.--The term ``motor vehicle dealer''
            means any person or resident in the United States, or any
            territory of the United States, who--
                        (A) is licensed by a State, a territory of the
                    United States, or the District of Columbia to engage in
                    the sale of motor vehicles; and
                        (B) takes title to, holds an ownership in, or takes
                    physical custody of motor vehicles.
    SEC. 1029A. <<NOTE: 12 USC 5511 note.>>  EFFECTIVE DATE.

        This subtitle shall become effective on the designated transfer
    date, except that sections 1022, 1024, and 1025(e) shall become
    effective on the date of enactment of this Act.

                     Subtitle C--Specific Bureau Authorities

    SEC. 1031. <<NOTE: 12 USC 5531.>>  PROHIBITING UNFAIR, DECEPTIVE,
                              OR ABUSIVE ACTS OR PRACTICES.

        (a) In General.--The Bureau may take any action authorized under
    subtitle E to prevent a covered person or service provider from
    committing or engaging in an unfair, deceptive, or abusive act or
    practice under Federal law in connection with any transaction with a
    consumer for a consumer financial product or service, or the offering of
    a consumer financial product or service.
        (b) Rulemaking.--The Bureau may prescribe rules applicable to a
    covered person or service provider identifying as unlawful

    [[Page 124 STAT. 2006]]

    unfair, deceptive, or abusive acts or practices in connection with any
    transaction with a consumer for a consumer financial product or service,
    or the offering of a consumer financial product or service. Rules under
    this section may include requirements for the purpose of preventing such
    acts or practices.
        (c) Unfairness.--
                (1) In general.--The Bureau shall have no authority under
            this section to declare an act or practice in connection with a
            transaction with a consumer for a consumer financial product or
            service, or the offering of a consumer financial product or
            service, to be unlawful on the grounds that such act or practice
            is unfair, unless the Bureau has a reasonable basis to conclude
            that--
                        (A) the act or practice causes or is likely to cause
                    substantial injury to consumers which is not reasonably
                    avoidable by consumers; and
                        (B) such substantial injury is not outweighed by
                    countervailing benefits to consumers or to competition.
                (2) Consideration of public policies.--In determining
            whether an act or practice is unfair, the Bureau may consider
            established public policies as evidence to be considered with
            all other evidence. Such public policy considerations may not
            serve as a primary basis for such determination.

        (d) Abusive.--The Bureau shall have no authority under this section
    to declare an act or practice abusive in connection with the provision
    of a consumer financial product or service, unless the act or practice--
                (1) materially interferes with the ability of a consumer to
            understand a term or condition of a consumer financial product
            or service; or
                (2) takes unreasonable advantage of--
                        (A) a lack of understanding on the part of the
                    consumer of the material risks, costs, or conditions of
                    the product or service;
                        (B) the inability of the consumer to protect the
                    interests of the consumer in selecting or using a
                    consumer financial product or service; or
                        (C) the reasonable reliance by the consumer on a
                    covered person to act in the interests of the consumer.

        (e) Consultation.--In prescribing rules under this section, the
    Bureau shall consult with the Federal banking agencies, or other Federal
    agencies, as appropriate, concerning the consistency of the proposed
    rule with prudential, market, or systemic objectives administered by
    such agencies.
        (f) Consideration of Seasonal Income.--The rules of the Bureau under
    this section shall provide, with respect to an extension of credit
    secured by residential real estate or a dwelling, if documented income
    of the borrower, including income from a small business, is a repayment
    source for an extension of credit secured by residential real estate or
    a dwelling, the creditor may consider the seasonality and irregularity
    of such income in the underwriting of and scheduling of payments for
    such credit.
    SEC. 1032. <<NOTE: 12 USC 5532.>>  DISCLOSURES.

        (a) In General.--The Bureau may prescribe rules to ensure that the
    features of any consumer financial product or service, both initially
    and over the term of the product or service, are

    [[Page 124 STAT. 2007]]

    fully, accurately, and effectively disclosed to consumers in a manner
    that permits consumers to understand the costs, benefits, and risks
    associated with the product or service, in light of the facts and
    circumstances.
        (b) Model Disclosures.--
                (1) In general.--Any final rule prescribed by the Bureau
            under this section requiring disclosures may include a model
            form that may be used at the option of the covered person for
            provision of the required disclosures.
                (2) Format.--A model form issued pursuant to paragraph (1)
            shall contain a clear and conspicuous disclosure that, at a
            minimum--
                        (A) uses plain language comprehensible to consumers;
                        (B) contains a clear format and design, such as an
                    easily readable type font; and
                        (C) succinctly explains the information that must be
                    communicated to the consumer.
                (3) Consumer testing.--Any model form issued pursuant to
            this subsection shall be validated through consumer testing.

        (c) Basis for Rulemaking.--In prescribing rules under this section,
    the Bureau shall consider available evidence about consumer awareness,
    understanding of, and responses to disclosures or communications about
    the risks, costs, and benefits of consumer financial products or
    services.
        (d) Safe Harbor.--Any covered person that uses a model form included
    with a rule issued under this section shall be deemed to be in
    compliance with the disclosure requirements of this section with respect
    to such model form.
        (e) Trial Disclosure Programs.--
                (1) In general.--The Bureau may permit a covered person to
            conduct a trial program that is limited in time and scope,
            subject to specified standards and procedures, for the purpose
            of providing trial disclosures to consumers that are designed to
            improve upon any model form issued pursuant to subsection
            (b)(1), or any other model form issued to implement an
            enumerated statute, as applicable.
                (2) Safe harbor.--The standards and procedures issued by the
            Bureau shall be designed to encourage covered persons to conduct
            trial disclosure programs. For the purposes of administering
            this subsection, the Bureau may establish a limited period
            during which a covered person conducting a trial disclosure
            program shall be deemed to be in compliance with, or may be
            exempted from, a requirement of a rule or an enumerated consumer
            law.
                (3) Public disclosure.--The rules of the Bureau shall
            provide for public disclosure of trial disclosure programs,
            which public disclosure may be limited, to the extent necessary
            to encourage covered persons to conduct effective trials.

        (f) Combined Mortgage Loan Disclosure.--Not
    later <<NOTE: Deadline. Public comment.>>  than 1 year after the
    designated transfer date, the Bureau shall propose for public comment
    rules and model disclosures that combine the disclosures required under
    the Truth in Lending Act and sections 4 and 5 of the Real Estate
    Settlement Procedures Act of 1974, into a single, integrated disclosure
    for mortgage loan transactions covered by those laws, unless the Bureau
    determines that any proposal issued by the Board of Governors and the
    Secretary of Housing and Urban Development carries out the same purpose.

    [[Page 124 STAT. 2008]]

    SEC. 1033. <<NOTE: 12 USC 5533.>>  CONSUMER RIGHTS TO ACCESS
                              INFORMATION.

        (a) In General.--Subject to rules prescribed by the Bureau, a
    covered person shall make available to a consumer, upon request,
    information in the control or possession of the covered person
    concerning the consumer financial product or service that the consumer
    obtained from such covered person, including information relating to any
    transaction, series of transactions, or to the account including costs,
    charges and usage data. The information shall be made available in an
    electronic form usable by consumers.
        (b) Exceptions.--A covered person may not be required by this
    section to make available to the consumer--
                (1) any confidential commercial information, including an
            algorithm used to derive credit scores or other risk scores or
            predictors;
                (2) any information collected by the covered person for the
            purpose of preventing fraud or money laundering, or detecting,
            or making any report regarding other unlawful or potentially
            unlawful conduct;
                (3) any information required to be kept confidential by any
            other provision of law; or
                (4) any information that the covered person cannot retrieve
            in the ordinary course of its business with respect to that
            information.

        (c) No Duty To Maintain Records.--Nothing in this section shall be
    construed to impose any duty on a covered person to maintain or keep any
    information about a consumer.
        (d) Standardized Formats for Data.--The Bureau, by rule, shall
    prescribe standards applicable to covered persons to promote the
    development and use of standardized formats for information, including
    through the use of machine readable files, to be made available to
    consumers under this section.
        (e) Consultation.--The Bureau shall, when prescribing any rule under
    this section, consult with the Federal banking agencies and the Federal
    Trade Commission to ensure, to the extent appropriate, that the rules--
                (1) impose substantively similar requirements on covered
            persons;
                (2) take into account conditions under which covered persons
            do business both in the United States and in other countries;
            and
                (3) do not require or promote the use of any particular
            technology in order to develop systems for compliance.
    SEC. 1034. <<NOTE: 12 USC 5534.>>  RESPONSE TO CONSUMER COMPLAINTS
                              AND INQUIRIES.

        (a) <<NOTE: Procedures.>>  Timely Regulator Response to Consumers.--
    The Bureau shall establish, in consultation with the appropriate Federal
    regulatory agencies, reasonable procedures to provide a timely response
    to consumers, in writing where appropriate, to complaints against, or
    inquiries concerning, a covered person, including--
                (1) steps that have been taken by the regulator in response
            to the complaint or inquiry of the consumer;
                (2) any responses received by the regulator from the covered
            person; and
                (3) any follow-up actions or planned follow-up actions by
            the regulator in response to the complaint or inquiry of the
            consumer.

    [[Page 124 STAT. 2009]]

        (b) Timely Response to Regulator by Covered Person.--A covered
    person subject to supervision and primary enforcement by the Bureau
    pursuant to section 1025 shall provide a timely response, in writing
    where appropriate, to the Bureau, the prudential regulators, and any
    other agency having jurisdiction over such covered person concerning a
    consumer complaint or inquiry, including--
                (1) steps that have been taken by the covered person to
            respond to the complaint or inquiry of the consumer;
                (2) responses received by the covered person from the
            consumer; and
                (3) follow-up actions or planned follow-up actions by the
            covered person to respond to the complaint or inquiry of the
            consumer.

        (c) Provision of Information to Consumers.--
                (1) In general.--A covered <<NOTE: Compliance.>>  person
            subject to supervision and primary enforcement by the Bureau
            pursuant to section 1025 shall, in a timely manner, comply with
            a consumer request for information in the control or possession
            of such covered person concerning the consumer financial product
            or service that the consumer obtained from such covered person,
            including supporting written documentation, concerning the
            account of the consumer.
                (2) Exceptions.--A covered person subject to supervision and
            primary enforcement by the Bureau pursuant to section 1025, a
            prudential regulator, and any other agency having jurisdiction
            over a covered person subject to supervision and primary
            enforcement by the Bureau pursuant to section 1025 may not be
            required by this section to make available to the consumer--
                        (A) any confidential commercial information,
                    including an algorithm used to derive credit scores or
                    other risk scores or predictors;
                        (B) any information collected by the covered person
                    for the purpose of preventing fraud or money laundering,
                    or detecting or making any report regarding other
                    unlawful or potentially unlawful conduct;
                        (C) any information required to be kept confidential
                    by any other provision of law; or
                        (D) any nonpublic or confidential information,
                    including confidential supervisory information.

        (d) Agreements With Other Agencies.--The
    Bureau <<NOTE: Memorandum.>>  shall enter into a memorandum of
    understanding with any affected Federal regulatory agency regarding
    procedures by which any covered person, and the prudential regulators,
    and any other agency having jurisdiction over a covered person,
    including the Secretary of the Department of Housing and Urban
    Development and the Secretary of Education, shall comply with this
    section.
    SEC. 1035. <<NOTE: 12 USC 5535.>>  PRIVATE EDUCATION LOAN
                              OMBUDSMAN.

        (a) Establishment.--The Secretary, <<NOTE: Designation.>>  in
    consultation with the Director, 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 shall
    disseminate information about the availability and functions of the
    Ombudsman to borrowers and potential borrowers, as well

    [[Page 124 STAT. 2010]]

    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, 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) <<NOTE: Deadline. Memorandum.>>  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) <<NOTE: Recommenda- tions.>>  make appropriate
            recommendations to the Director, 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).
    SEC. 1036. <<NOTE: 12 USC 5536.>>  PROHIBITED ACTS.

        (a) In General.--It shall be unlawful for--
                (1) any covered person or service provider--
                        (A) to offer or provide to a consumer any financial
                    product or service not in conformity with Federal
                    consumer financial law, or otherwise commit any act or
                    omission in violation of a Federal consumer financial
                    law; or
                        (B) to engage in any unfair, deceptive, or abusive
                    act or practice;
                (2) any covered person or service provider to fail or
            refuse, as required by Federal consumer financial law, or any
            rule or order issued by the Bureau thereunder--
                        (A) to permit access to or copying of records;
                        (B) to establish or maintain records; or

    [[Page 124 STAT. 2011]]

                        (C) to make reports or provide information to the
                    Bureau; or
                (3) any person to knowingly or recklessly provide
            substantial assistance to a covered person or service provider
            in violation of the provisions of section 1031, or any rule or
            order issued thereunder, and notwithstanding any provision of
            this title, the provider of such substantial assistance shall be
            deemed to be in violation of that section to the same extent as
            the person to whom such assistance is provided.

        (b) Exception.--No person shall be held to have violated subsection
    (a)(1) solely by virtue of providing or selling time or space to a
    covered person or service provider placing an advertisement.
    SEC. 1037. <<NOTE: 12 USC 5531 note.>>  EFFECTIVE DATE.

        This subtitle shall take effect on the designated transfer date.

                      Subtitle D--Preservation of State Law

    SEC. 1041. <<NOTE: 12 USC 5551.>>  RELATION TO STATE LAW.

        (a) In General.--
                (1) Rule of construction.--This title, other than sections
            1044 through 1048, may not be construed as annulling, altering,
            or affecting, or exempting any person subject to the provisions
            of this title from complying with, the statutes, regulations,
            orders, or interpretations in effect in any State, except to the
            extent that any such provision of law is inconsistent with the
            provisions of this title, and then only to the extent of the
            inconsistency.
                (2) Greater protection under state law.--For purposes of
            this subsection, a statute, regulation, order, or interpretation
            in effect in any State is not inconsistent with the provisions
            of this title if the protection that such statute, regulation,
            order, or interpretation affords to consumers is greater than
            the protection provided under this title. A determination
            regarding whether a statute, regulation, order, or
            interpretation in effect in any State is inconsistent with the
            provisions of this title may be made by the Bureau on its own
            motion or in response to a nonfrivolous petition initiated by
            any interested person.

        (b) Relation to Other Provisions of Enumerated Consumer Laws That
    Relate to State Law.--No provision of this title, except as provided in
    section 1083, shall be construed as modifying, limiting, or superseding
    the operation of any provision of an enumerated consumer law that
    relates to the application of a law in effect in any State with respect
    to such Federal law.
        (c) Additional Consumer Protection Regulations in Response to State
    Action.--
                (1) Notice of proposed rule required.--The Bureau shall
            issue a notice of proposed rulemaking whenever a majority of the
            States has enacted a resolution in support of the establishment
            or modification of a consumer protection regulation by the
            Bureau.
                (2) Bureau considerations required for issuance of final
            regulation.--Before prescribing a final regulation based upon a
            notice issued pursuant to paragraph (1), the Bureau shall take
            into account whether--

    [[Page 124 STAT. 2012]]

                        (A) the proposed regulation would afford greater
                    protection to consumers than any existing regulation;
                        (B) the intended benefits of the proposed regulation
                    for consumers would outweigh any increased costs or
                    inconveniences for consumers, and would not discriminate
                    unfairly against any category or class of consumers; and
                        (C) a Federal banking agency has advised that the
                    proposed regulation is likely to present an unacceptable
                    safety and soundness risk to insured depository
                    institutions.
                (3) Explanation of considerations.--The Bureau--
                        (A) shall include a discussion of the considerations
                    required in paragraph (2) in the Federal Register notice
                    of a final regulation prescribed pursuant to this
                    subsection; and
                        (B) <<NOTE: Federal Register, publication.>>
                    whenever the Bureau determines not to prescribe a final
                    regulation, shall publish an explanation of such
                    determination in the Federal Register, and provide a
                    copy of such explanation to each State that enacted a
                    resolution in support of the proposed regulation, the
                    Committee on Banking, Housing, and Urban Affairs of the
                    Senate, and the Committee on Financial Services of the
                    House of Representatives.
                (4) Reservation of authority.--No provision of this
            subsection shall be construed as limiting or restricting the
            authority of the Bureau to enhance consumer protection standards
            established pursuant to this title in response to its own motion
            or in response to a request by any other interested person.
                (5) Rule of construction.--No provision of this subsection
            shall be construed as exempting the Bureau from complying with
            subchapter II of chapter 5 of title 5, United States Code.
                (6) Definition.--For purposes of this subsection, the term
            ``consumer protection regulation'' means a regulation that the
            Bureau is authorized to prescribe under the Federal consumer
            financial laws.
    SEC. 1042. <<NOTE: 12 USC 5552.>>  PRESERVATION OF ENFORCEMENT
                              POWERS OF STATES.

        (a) In General.--
                (1) Action by state.--Except as provided in paragraph (2),
            the attorney general (or the equivalent thereof) of any State
            may bring a civil action in the name of such State in any
            district court of the United States in that State or in State
            court that is located in that State and that has jurisdiction
            over the defendant, to enforce provisions of this title or
            regulations issued under this title, and to secure remedies
            under provisions of this title or remedies otherwise provided
            under other law. A State regulator may bring a civil action or
            other appropriate proceeding to enforce the provisions of this
            title or regulations issued under this title with respect to any
            entity that is State-chartered, incorporated, licensed, or
            otherwise authorized to do business under State law (except as
            provided in paragraph (2)), and to secure remedies under
            provisions of this title or remedies otherwise provided under
            other provisions of law with respect to such an entity.

    [[Page 124 STAT. 2013]]

                (2) Action by state against national bank or federal savings
            association to enforce rules.--
                        (A) In general.--Except as permitted under
                    subparagraph (B), the attorney general (or equivalent
                    thereof) of any State may not bring a civil action in
                    the name of such State against a national bank or
                    Federal savings association to enforce a provision of
                    this title.
                        (B) Enforcement of rules permitted.--The attorney
                    general (or the equivalent thereof) of any State may
                    bring a civil action in the name of such State against a
                    national bank or Federal savings association in any
                    district court of the United States in the State or in
                    State court that is located in that State and that has
                    jurisdiction over the defendant to enforce a regulation
                    prescribed by the Bureau under a provision of this title
                    and to secure remedies under provisions of this title or
                    remedies otherwise provided under other law.
                (3) Rule of construction.--No provision of this title shall
            be construed as modifying, limiting, or superseding the
            operation of any provision of an enumerated consumer law that
            relates to the authority of a State attorney general or State
            regulator to enforce such Federal law.

        (b) Consultation Required.--
                (1) <<NOTE: Records.>>  Notice.--
                        (A) In general.--Before initiating any action in a
                    court or other administrative or regulatory proceeding
                    against any covered person as authorized by subsection
                    (a) to enforce any provision of this title, including
                    any regulation prescribed by the Bureau under this
                    title, a State attorney general or State regulator shall
                    timely provide a copy of the complete complaint to be
                    filed and written notice describing such action or
                    proceeding to the Bureau and the prudential regulator,
                    if any, or the designee thereof.
                        (B) Emergency action.--If prior notice is not
                    practicable, the State attorney general or State
                    regulator shall provide a copy of the complete complaint
                    and the notice to the Bureau and the prudential
                    regulator, if any, immediately upon instituting the
                    action or proceeding.
                        (C) Contents of notice.--The notification required
                    under this paragraph shall, at a minimum, describe--
                              (i) the identity of the parties;
                              (ii) the alleged facts underlying the
                          proceeding; and
                              (iii) whether there may be a need to
                          coordinate the prosecution of the proceeding so as
                          not to interfere with any action, including any
                          rulemaking, undertaken by the Bureau, a prudential
                          regulator, or another Federal agency.
                (2) Bureau response.--In any action described in paragraph
            (1), the Bureau may--
                        (A) intervene in the action as a party;
                        (B) upon intervening--
                              (i) remove the action to the appropriate
                          United States district court, if the action was
                          not originally brought there; and

    [[Page 124 STAT. 2014]]

                              (ii) be heard on all matters arising in the
                          action; and
                        (C) appeal any order or judgment, to the same extent
                    as any other party in the proceeding may.

        (c) Regulations.--The Bureau shall prescribe regulations to
    implement the requirements of this section and, from time to time,
    provide guidance in order to further coordinate actions with the State
    attorneys general and other regulators.
        (d) Preservation of State Authority.--
                (1) State claims.--No provision of this section shall be
            construed as altering, limiting, or affecting the authority of a
            State attorney general or any other regulatory or enforcement
            agency or authority to bring an action or other regulatory
            proceeding arising solely under the law in effect in that State.
                (2) State securities regulators.--No provision of this title
            shall be construed as altering, limiting, or affecting the
            authority of a State securities commission (or any agency or
            office performing like functions) under State law to adopt
            rules, initiate enforcement proceedings, or take any other
            action with respect to a person regulated by such commission or
            authority.
                (3) State insurance regulators.--No provision of this title
            shall be construed as altering, limiting, or affecting the
            authority of a State insurance commission or State insurance
            regulator under State law to adopt rules, initiate enforcement
            proceedings, or take any other action with respect to a person
            regulated by such commission or regulator.
    SEC. 1043. <<NOTE: 12 USC 5553.>>  PRESERVATION OF EXISTING
                              CONTRACTS.

        This title, and regulations, orders, guidance, and interpretations
    prescribed, issued, or established by the Bureau, shall not be construed
    to alter or affect the applicability of any regulation, order, guidance,
    or interpretation prescribed, issued, and established by the Comptroller
    of the Currency or the Director of the Office of Thrift Supervision
    regarding the applicability of State law under Federal banking law to
    any contract entered into on or before the date of enactment of this
    Act, by national banks, Federal savings associations, or subsidiaries
    thereof that are regulated and supervised by the Comptroller of the
    Currency or the Director of the Office of Thrift Supervision,
    respectively.
    SEC. 1044. STATE LAW PREEMPTION STANDARDS FOR NATIONAL BANKS AND
                              SUBSIDIARIES CLARIFIED.

        (a) In General.--Chapter one of title LXII of the Revised Statutes
    of the United States (12 U.S.C. 21 et seq.) is amended by inserting
    after section 5136B the following new section:
    ``SEC. 5136C. <<NOTE: 12 USC 25b.>>  STATE LAW PREEMPTION
                                STANDARDS FOR NATIONAL BANKS AND
                                SUBSIDIARIES CLARIFIED.

        ``(a) Definitions.--For purposes of this section, the following
    definitions shall apply:
                ``(1) National bank.--The term `national bank' includes--
                        ``(A) any bank organized under the laws of the
                    United States; and
                        ``(B) any Federal branch established in accordance
                    with the International Banking Act of 1978.
                ``(2) State consumer financial laws.--The term `State
            consumer financial law' means a State law that does not directly
            or indirectly discriminate against national banks and that

    [[Page 124 STAT. 2015]]

            directly and specifically regulates the manner, content, or
            terms and conditions of any financial transaction (as may be
            authorized for national banks to engage in), or any account
            related thereto, with respect to a consumer.
                ``(3) Other definitions.--The terms `affiliate',
            `subsidiary', `includes', and `including' have the same meanings
            as in section 3 of the Federal Deposit Insurance Act.

        ``(b) Preemption Standard.--
                ``(1) In general.--State consumer financial laws are
            preempted, only if--
                        ``(A) application of a State consumer financial law
                    would have a discriminatory effect on national banks, in
                    comparison with the effect of the law on a bank
                    chartered by that State;
                        ``(B) in accordance with the legal standard for
                    preemption in the decision of the Supreme Court of the
                    United States in Barnett Bank of Marion County, N. A. v.
                    Nelson, Florida Insurance Commissioner, et al., 517 U.S.
                    25 (1996), the State consumer financial law prevents or
                    significantly interferes with the exercise by the
                    national bank of its powers; and any preemption
                    determination under this subparagraph may be made by a
                    court, or by regulation or order of the Comptroller of
                    the Currency on a case-by-case basis, in accordance with
                    applicable law; or
                        ``(C) the State consumer financial law is preempted
                    by a provision of Federal law other than this title.
                ``(2) Savings clause.--This title and section 24 of the
            Federal Reserve Act (12 U.S.C. 371) do not preempt, annul, or
            affect the applicability of any State law to any subsidiary or
            affiliate of a national bank (other than a subsidiary or
            affiliate that is chartered as a national bank).
                ``(3) Case-by-case basis.--
                        ``(A) Definition.--As used in this section the term
                    `case-by-case basis' refers to a determination pursuant
                    to this section made by the Comptroller concerning the
                    impact of a particular State consumer financial law on
                    any national bank that is subject to that law, or the
                    law of any other State with substantively equivalent
                    terms.
                        ``(B) Consultation.--When making a determination on
                    a case-by-case basis that a State consumer financial law
                    of another State has substantively equivalent terms as
                    one that the Comptroller is preempting, the Comptroller
                    shall first consult with the Bureau of Consumer
                    Financial Protection and shall take the views of the
                    Bureau into account when making the determination.
                ``(4) Rule of construction.--This title does not occupy the
            field in any area of State law.
                ``(5) Standards of review.--
                        ``(A) Preemption.--A court reviewing any
                    determinations made by the Comptroller regarding
                    preemption of a State law by this title or section 24 of
                    the Federal Reserve Act (12 U.S.C. 371) shall assess the
                    validity of such determinations, depending upon the
                    thoroughness evident in the consideration of the agency,
                    the validity of the reasoning of the agency, the
                    consistency with other valid determinations made by the
                    agency, and other factors

    [[Page 124 STAT. 2016]]

                    which the court finds persuasive and relevant to its
                    decision.
                        ``(B) Savings clause.--Except as provided in
                    subparagraph (A), nothing in this section shall affect
                    the deference that a court may afford to the Comptroller
                    in making determinations regarding the meaning or
                    interpretation of title LXII of the Revised Statutes of
                    the United States or other Federal laws.
                ``(6) Comptroller determination not delegable.--Any
            regulation, order, or determination made by the Comptroller of
            the Currency under paragraph (1)(B) shall be made by the
            Comptroller, and shall not be delegable to another officer or
            employee of the Comptroller of the Currency.

        ``(c) Substantial Evidence.--No regulation or order of the
    Comptroller of the Currency prescribed under subsection (b)(1)(B), shall
    be interpreted or applied so as to invalidate, or otherwise declare
    inapplicable to a national bank, the provision of the State consumer
    financial law, unless substantial evidence, made on the record of the
    proceeding, supports the specific finding regarding the preemption of
    such provision in accordance with the legal standard of the decision of
    the Supreme Court of the United States in Barnett Bank of Marion County,
    N.A. v. Nelson, Florida Insurance Commissioner, et al., 517 U.S. 25
    (1996).
        ``(d) Periodic Review of Preemption Determinations.--
                ``(1) In general.--The Comptroller <<NOTE: Notice. Public
            comment.>>  of the Currency shall periodically conduct a review,
            through notice and public comment, of each determination that a
            provision of Federal law preempts a State consumer financial
            law. <<NOTE: Deadline.>>  The agency shall conduct such review
            within the 5-year period after prescribing or otherwise issuing
            such determination, and at least once during each 5-year period
            thereafter. <<NOTE: Federal Register, publication.>>  After
            conducting the review of, and inspecting the comments made on,
            the determination, the agency shall publish a notice in the
            Federal Register announcing the decision to continue or rescind
            the determination or a proposal to amend the determination. Any
            such notice of a proposal to amend a determination and the
            subsequent resolution of such proposal shall comply with the
            procedures set forth in subsections (a) and (b) of section 5244
            of the Revised Statutes of the United States (12 U.S.C. 43 (a),
            (b)).
                ``(2) Reports to congress.--At the time of issuing a review
            conducted under paragraph (1), the Comptroller of the Currency
            shall submit a report regarding such review to the Committee on
            Financial Services of the House of Representatives and the
            Committee on Banking, Housing, and Urban Affairs of the Senate.
            The report submitted to the respective committees shall address
            whether the agency intends to continue, rescind, or propose to
            amend any determination that a provision of Federal law preempts
            a State consumer financial law, and the reasons therefor.

        ``(e) Application of State Consumer Financial Law to Subsidiaries
    and Affiliates.--Notwithstanding any provision of this title or section
    24 of Federal Reserve Act (12 U.S.C. 371), a State consumer financial
    law shall apply to a subsidiary or affiliate of a national bank (other
    than a subsidiary or affiliate that is chartered as a national bank) to
    the same extent that

    [[Page 124 STAT. 2017]]

    the State consumer financial law applies to any person, corporation, or
    other entity subject to such State law.
        ``(f) Preservation of Powers Related to Charging Interest.--No
    provision of this title shall be construed as altering or otherwise
    affecting the authority conferred by section 5197 of the Revised
    Statutes of the United States (12 U.S.C. 85) for the charging of
    interest by a national bank at the rate allowed by the laws of the
    State, territory, or district where the bank is located, including with
    respect to the meaning of `interest' under such provision.
        ``(g) Transparency of OCC Preemption Determinations.--The
    Comptroller <<NOTE: Publication. Deadline. Records.>>  of the Currency
    shall publish and update no less frequently than quarterly, a list of
    preemption determinations by the Comptroller of the Currency then in
    effect that identifies the activities and practices covered by each
    determination and the requirements and constraints determined to be
    preempted.''.

        (b) Clerical Amendment.--The table of sections for chapter one of
    title LXII of the Revised Statutes of the United States is amended by
    inserting after the item relating to section 5136B the following new
    item:

    ``Sec. 5136C. State law preemption standards for national banks and
               subsidiaries clarified.''.

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

        Section 5136C of the Revised Statutes of the United <<NOTE: 12 USC
    25b.>>  States (as added by this subtitle) is amended by adding at the
    end the following:

        ``(h) Clarification of Law Applicable to Nondepository Institution
    Subsidiaries and Affiliates of National Banks.--
                ``(1) Definitions.--For purposes of this subsection, the
            terms `depository institution', `subsidiary', and `affiliate'
            have the same meanings as in section 3 of the Federal Deposit
            Insurance Act.
                ``(2) Rule of construction.--No provision of this title or
            section 24 of the Federal Reserve Act (12 U.S.C. 371) shall be
            construed as preempting, annulling, or affecting the
            applicability of State law to any subsidiary, affiliate, or
            agent of a national bank (other than a subsidiary, affiliate, or
            agent that is chartered as a national bank).''.
    SEC. 1046. STATE LAW PREEMPTION STANDARDS FOR FEDERAL SAVINGS
                              ASSOCIATIONS AND SUBSIDIARIES CLARIFIED.

        (a) In General.--The Home Owners' Loan Act (12 U.S.C. 1461 et seq.)
    is amended by inserting after section 5 the following new section:
    ``SEC. 6. <<NOTE: 12 USC 1465.>>  STATE LAW PREEMPTION STANDARDS
                        FOR FEDERAL SAVINGS ASSOCIATIONS CLARIFIED.

        ``(a) In General.--Any determination by a court or by the Director
    or any successor officer or agency regarding the relation of State law
    to a provision of this Act or any regulation or order prescribed under
    this Act shall be made in accordance with the laws and legal standards
    applicable to national banks regarding the preemption of State law.
        ``(b) Principles of Conflict Preemption Applicable.--Notwithstanding
    the authorities granted under sections 4 and 5, this Act does not occupy
    the field in any area of State law.''.

    [[Page 124 STAT. 2018]]

        (b) Clerical Amendment.--The table of sections for the Home Owners'
    Loan Act (12 U.S.C. 1461 et seq.) is amended by striking the item
    relating to section 6 and inserting the following new item:

            ``Sec. 6. State law preemption standards for Federal savings
                                associations and subsidiaries clarified.''.
    SEC. 1047. VISITORIAL STANDARDS FOR NATIONAL BANKS AND SAVINGS
                              ASSOCIATIONS.

        (a) National Banks.--Section 5136C of the Revised Statutes of the
    United States <<NOTE: 12 USC 25b.>>  (as added by this subtitle) is
    amended by adding at the end the following:

        ``(i) Visitorial Powers.--
                ``(1) In general.--In accordance with the decision of the
            Supreme Court of the United States in Cuomo v. Clearing House
            Assn., L. L. C. (129 S. Ct. 2710 (2009)), no provision of this
            title which relates to visitorial powers or otherwise limits or
            restricts the visitorial authority to which any national bank is
            subject shall be construed as limiting or restricting the
            authority of any attorney general (or other chief law
            enforcement officer) of any State to bring an action against a
            national bank in a court of appropriate jurisdiction to enforce
            an applicable law and to seek relief as authorized by such law.

        ``(j) Enforcement Actions.--The ability of the Comptroller of the
    Currency to bring an enforcement action under this title or section 5 of
    the Federal Trade Commission Act does not preclude any private party
    from enforcing rights granted under Federal or State law in the
    courts.''.
        (b) Savings Associations.--Section 6 of the Home Owners' Loan
    Act <<NOTE: 12 USC 1465.>>  (as added by this title) is amended by
    adding at the end the following:

        ``(c) Visitorial Powers.--The provisions <<NOTE: Applicability.>>
    of sections 5136C(i) of the Revised Statutes of the United States shall
    apply to Federal savings associations, and any subsidiary thereof, to
    the same extent and in the same manner as if such savings associations,
    or subsidiaries thereof, were national banks or subsidiaries of national
    banks, respectively.''

        ``(d) Enforcement Actions.--The ability of the Comptroller of the
    Currency to bring an enforcement action under this Act or section 5 of
    the Federal Trade Commission Act does not preclude any private party
    from enforcing rights granted under Federal or State law in the
    courts.''.
    SEC. 1048. <<NOTE: 12 USC 5551 note.>>  EFFECTIVE DATE.

        This subtitle shall become effective on the designated transfer
    date.

                         Subtitle E--Enforcement Powers

    SEC. 1051. <<NOTE: 12 USC 5561.>>  DEFINITIONS.

        For purposes of this subtitle, the following definitions shall
    apply:
                (1) Bureau investigation.--The term ``Bureau investigation''
            means any inquiry conducted by a Bureau investigator for the
            purpose of ascertaining whether any person is or has

    [[Page 124 STAT. 2019]]

            been engaged in any conduct that is a violation, as defined in
            this section.
                (2) Bureau investigator.--The term ``Bureau investigator''
            means any attorney or investigator employed by the Bureau who is
            charged with the duty of enforcing or carrying into effect any
            Federal consumer financial law.
                (3) Custodian.--The term ``custodian'' means the custodian
            or any deputy custodian designated by the Bureau.
                (4) Documentary material.--The term ``documentary material''
            includes the original or any copy of any book, document, record,
            report, memorandum, paper, communication, tabulation, chart,
            logs, electronic files, or other data or data compilations
            stored in any medium.
                (5) Violation.--The term ``violation'' means any act or
            omission that, if proved, would constitute a violation of any
            provision of Federal consumer financial law.
    SEC. 1052. <<NOTE: 12 USC 5562.>>  INVESTIGATIONS AND
                              ADMINISTRATIVE DISCOVERY.

        (a) Joint Investigations.--
                (1) In general.--The Bureau or, where appropriate, a Bureau
            investigator, may engage in joint investigations and requests
            for information, as authorized under this title.
                (2) Fair lending.--The authority under paragraph (1)
            includes matters relating to fair lending, and where
            appropriate, joint investigations with, and requests for
            information from, the Secretary of Housing and Urban
            Development, the Attorney General of the United States, or both.

        (b) Subpoenas.--
                (1) In general.--The Bureau or a Bureau investigator may
            issue subpoenas for the attendance and testimony of witnesses
            and the production of relevant papers, books, documents, or
            other material in connection with hearings under this title.
                (2) Failure to obey.--In the case of contumacy or refusal to
            obey a subpoena issued pursuant to this paragraph and served
            upon any person, the district court of the United States for any
            district in which such person is found, resides, or transacts
            business, upon application by the Bureau or a Bureau
            investigator and after notice to such person, may issue an order
            requiring such person to appear and give testimony or to appear
            and produce documents or other material.
                (3) Contempt.--Any failure to obey an order of the court
            under this subsection may be punished by the court as a contempt
            thereof.

        (c) Demands.--
                (1) In general.--Whenever the Bureau has reason to believe
            that any person may be in possession, custody, or control of any
            documentary material or tangible things, or may have any
            information, relevant to a violation, the Bureau may, before the
            institution of any proceedings under the Federal consumer
            financial law, issue in writing, and cause to be served upon
            such person, a civil investigative demand requiring such person
            to--
                        (A) produce such documentary material for inspection
                    and copying or reproduction in the form or medium
                    requested by the Bureau;
                        (B) submit such tangible things;
                        (C) file written reports or answers to questions;

    [[Page 124 STAT. 2020]]

                        (D) give oral testimony concerning documentary
                    material, tangible things, or other information; or
                        (E) furnish any combination of such material,
                    answers, or testimony.
                (2) Requirements.--Each civil investigative demand shall
            state the nature of the conduct constituting the alleged
            violation which is under investigation and the provision of law
            applicable to such violation.
                (3) Production of documents.--Each civil investigative
            demand for the production of documentary material shall--
                        (A) describe each class of documentary material to
                    be produced under the demand with such definiteness and
                    certainty as to permit such material to be fairly
                    identified;
                        (B) prescribe a return date or dates which will
                    provide a reasonable period of time within which the
                    material so demanded may be assembled and made available
                    for inspection and copying or reproduction; and
                        (C) identify the custodian to whom such material
                    shall be made available.
                (4) Production of things.--Each civil investigative demand
            for the submission of tangible things shall--
                        (A) describe each class of tangible things to be
                    submitted under the demand with such definiteness and
                    certainty as to permit such things to be fairly
                    identified;
                        (B) prescribe a return date or dates which will
                    provide a reasonable period of time within which the
                    things so demanded may be assembled and submitted; and
                        (C) identify the custodian to whom such things shall
                    be submitted.
                (5) Demand for written reports or answers.--Each civil
            investigative demand for written reports or answers to questions
            shall--
                        (A) propound with definiteness and certainty the
                    reports to be produced or the questions to be answered;
                        (B) prescribe a date or dates at which time written
                    reports or answers to questions shall be submitted; and
                        (C) identify the custodian to whom such reports or
                    answers shall be submitted.
                (6) Oral testimony.--Each civil investigative demand for the
            giving of oral testimony shall--
                        (A) prescribe a date, time, and place at which oral
                    testimony shall be commenced; and
                        (B) identify a Bureau investigator who shall conduct
                    the investigation and the custodian to whom the
                    transcript of such investigation shall be submitted.
                (7) Service.--Any civil investigative demand issued, and any
            enforcement petition filed, under this section may be served--
                        (A) by any Bureau investigator at any place within
                    the territorial jurisdiction of any court of the United
                    States; and
                        (B) upon any person who is not found within the
                    territorial jurisdiction of any court of the United
                    States--
                              (i) in such manner as the Federal Rules of
                          Civil Procedure prescribe for service in a foreign
                          nation; and

    [[Page 124 STAT. 2021]]

                              (ii) to the extent that the courts of the
                          United States have authority to assert
                          jurisdiction over such person, consistent with due
                          process, the United States District Court for the
                          District of Columbia shall have the same
                          jurisdiction to take any action respecting
                          compliance with this section by such person that
                          such district court would have if such person were
                          personally within the jurisdiction of such
                          district court.
                (8) Method of service.--Service of any civil investigative
            demand or any enforcement petition filed under this section may
            be made upon a person, including any legal entity, by--
                        (A) delivering a duly executed copy of such demand
                    or petition to the individual or to any partner,
                    executive officer, managing agent, or general agent of
                    such person, or to any agent of such person authorized
                    by appointment or by law to receive service of process
                    on behalf of such person;
                        (B) delivering a duly executed copy of such demand
                    or petition to the principal office or place of business
                    of the person to be served; or
                        (C) depositing a duly executed copy in the United
                    States mails, by registered or certified mail, return
                    receipt requested, duly addressed to such person at the
                    principal office or place of business of such person.
                (9) Proof of service.--
                        (A) In general.--A verified return by the individual
                    serving any civil investigative demand or any
                    enforcement petition filed under this section setting
                    forth the manner of such service shall be proof of such
                    service.
                        (B) Return receipts.--In the case of service by
                    registered or certified mail, such return shall be
                    accompanied by the return post office receipt of
                    delivery of such demand or enforcement petition.
                (10) <<NOTE: Certificate.>>  Production of documentary
            material.--The production of documentary material in response to
            a civil investigative demand shall be made under a sworn
            certificate, in such form as the demand designates, by the
            person, if a natural person, to whom the demand is directed or,
            if not a natural person, by any person having knowledge of the
            facts and circumstances relating to such production, to the
            effect that all of the documentary material required by the
            demand and in the possession, custody, or control of the person
            to whom the demand is directed has been produced and made
            available to the custodian.
                (11) <<NOTE: Certificate.>>  Submission of tangible
            things.--The submission of tangible things in response to a
            civil investigative demand shall be made under a sworn
            certificate, in such form as the demand designates, by the
            person to whom the demand is directed or, if not a natural
            person, by any person having knowledge of the facts and
            circumstances relating to such production, to the effect that
            all of the tangible things required by the demand and in the
            possession, custody, or control of the person to whom the demand
            is directed have been submitted to the custodian.
                (12) <<NOTE: Certificate.>>  Separate answers.--Each
            reporting requirement or question in a civil investigative
            demand shall be answered separately and fully in writing under
            oath, unless it is objected

    [[Page 124 STAT. 2022]]

            to, in which event the reasons for the objection shall be stated
            in lieu of an answer, and it shall be submitted under a sworn
            certificate, in such form as the demand designates, by the
            person, if a natural person, to whom the demand is directed or,
            if not a natural person, by any person responsible for answering
            each reporting requirement or question, to the effect that all
            information required by the demand and in the possession,
            custody, control, or knowledge of the person to whom the demand
            is directed has been submitted.
                (13) Testimony.--
                        (A) In general.--
                              (i) Oath and recordation.--The examination of
                          any person pursuant to a demand for oral testimony
                          served under this subsection shall be taken before
                          an officer authorized to administer oaths and
                          affirmations by the laws of the United States or
                          of the place at which the examination is held. The
                          officer before whom oral testimony is to be taken
                          shall put the witness on oath or affirmation and
                          shall personally, or by any individual acting
                          under the direction of and in the presence of the
                          officer, record the testimony of the witness.
                              (ii) Transcription.--The testimony shall be
                          taken stenographically and transcribed.
                              (iii) Transmission to custodian.--After the
                          testimony is fully transcribed, the officer
                          investigator before whom the testimony is taken
                          shall promptly transmit a copy of the transcript
                          of the testimony to the custodian.
                        (B) Parties present.--Any Bureau investigator before
                    whom oral testimony is to be taken shall exclude from
                    the place where the testimony is to be taken all other
                    persons, except the person giving the testimony, the
                    attorney for that person, the officer before whom the
                    testimony is to be taken, an investigator or
                    representative of an agency with which the Bureau is
                    engaged in a joint investigation, and any stenographer
                    taking such testimony.
                        (C) Location.--The oral testimony of any person
                    taken pursuant to a civil investigative demand shall be
                    taken in the judicial district of the United States in
                    which such person resides, is found, or transacts
                    business, or in such other place as may be agreed upon
                    by the Bureau investigator before whom the oral
                    testimony of such person is to be taken and such person.
                        (D) Attorney representation.--
                              (i) In general.--Any person compelled to
                          appear under a civil investigative demand for oral
                          testimony pursuant to this section may be
                          accompanied, represented, and advised by an
                          attorney.
                              (ii) Authority.--The attorney may advise a
                          person described in clause (i), in confidence,
                          either upon the request of such person or upon the
                          initiative of the attorney, with respect to any
                          question asked of such person.
                              (iii) Objections.--A person described in
                          clause (i), or the attorney for that person, may
                          object on the record to any question, in whole or
                          in part, and such

    [[Page 124 STAT. 2023]]

                          person shall briefly state for the record the
                          reason for the objection. An objection may
                          properly be made, received, and entered upon the
                          record when it is claimed that such person is
                          entitled to refuse to answer the question on
                          grounds of any constitutional or other legal right
                          or privilege, including the privilege against
                          self-incrimination, but such person shall not
                          otherwise object to or refuse to answer any
                          question, and such person or attorney shall not
                          otherwise interrupt the oral examination.
                              (iv) Refusal to answer.--If a person described
                          in clause (i) refuses to answer any question--
                                        (I) the Bureau may petition the
                                    district court of the United States
                                    pursuant to this section for an order
                                    compelling such person to answer such
                                    question; and
                                        (II) if the refusal is on grounds of
                                    the privilege against self-
                                    incrimination, the testimony of such
                                    person may be compelled in accordance
                                    with the provisions of section 6004 of
                                    title 18, United States Code.
                        (E) Transcripts.--For purposes of this subsection--
                              (i) after the testimony of any witness is
                          fully transcribed, the Bureau investigator shall
                          afford the witness (who may be accompanied by an
                          attorney) a reasonable opportunity to examine the
                          transcript;
                              (ii) the transcript shall be read to or by the
                          witness, unless such examination and reading are
                          waived by the witness;
                              (iii) any changes in form or substance which
                          the witness desires to make shall be entered and
                          identified upon the transcript by the Bureau
                          investigator, with a statement of the reasons
                          given by the witness for making such changes;
                              (iv) the transcript shall be signed by the
                          witness, unless the witness in writing waives the
                          signing, is ill, cannot be found, or refuses to
                          sign; and
                              (v) <<NOTE: Time period.>>  if the transcript
                          is not signed by the witness during the 30-day
                          period following the date on which the witness is
                          first afforded a reasonable opportunity to examine
                          the transcript, the Bureau investigator shall sign
                          the transcript and state on the record the fact of
                          the waiver, illness, absence of the witness, or
                          the refusal to sign, together with any reasons
                          given for the failure to sign.
                        (F) Certification by investigator.--The Bureau
                    investigator shall certify on the transcript that the
                    witness was duly sworn by him or her and that the
                    transcript is a true record of the testimony given by
                    the witness, and the Bureau investigator shall promptly
                    deliver the transcript or send it by registered or
                    certified mail to the custodian.
                        (G) Copy of transcript.--The Bureau investigator
                    shall furnish a copy of the transcript (upon payment of
                    reasonable charges for the transcript) to the witness
                    only, except that the Bureau may for good cause limit
                    such

    [[Page 124 STAT. 2024]]

                    witness to inspection of the official transcript of his
                    testimony.
                        (H) Witness fees.--Any witness appearing for the
                    taking of oral testimony pursuant to a civil
                    investigative demand shall be entitled to the same fees
                    and mileage which are paid to witnesses in the district
                    courts of the United States.

        (d) Confidential Treatment of Demand Material.--
                (1) In general.--Documentary materials and tangible things
            received as a result of a civil investigative demand shall be
            subject to requirements and procedures regarding
            confidentiality, in accordance with rules established by the
            Bureau.
                (2) Disclosure to congress.--No rule established by the
            Bureau regarding the confidentiality of materials submitted to,
            or otherwise obtained by, the Bureau shall be intended to
            prevent disclosure to either House of Congress or to an
            appropriate committee of the Congress, except that the Bureau is
            permitted to adopt rules allowing prior notice to any party that
            owns or otherwise provided the material to the Bureau and had
            designated such material as confidential.

        (e) Petition for Enforcement.--
                (1) In general.--Whenever any person fails to comply with
            any civil investigative demand duly served upon him under this
            section, or whenever satisfactory copying or reproduction of
            material requested pursuant to the demand cannot be accomplished
            and such person refuses to surrender such material, the Bureau,
            through such officers or attorneys as it may designate, may
            file, in the district court of the United States for any
            judicial district in which such person resides, is found, or
            transacts business, and serve upon such person, a petition for
            an order of such court for the enforcement of this section.
                (2) Service of process.--All process of any court to which
            application may be made as provided in this subsection may be
            served in any judicial district.

        (f) Petition for Order Modifying or Setting Aside Demand.--
                (1) In general.--Not later <<NOTE: Deadline.>>  than 20 days
            after the service of any civil investigative demand upon any
            person under subsection (b), or at any time before the return
            date specified in the demand, whichever period is shorter, or
            within such period exceeding 20 days after service or in excess
            of such return date as may be prescribed in writing, subsequent
            to service, by any Bureau investigator named in the demand, such
            person may file with the Bureau a petition for an order by the
            Bureau modifying or setting aside the demand.
                (2) Compliance during pendency.--The time permitted for
            compliance with the demand in whole or in part, as determined
            proper and ordered by the Bureau, shall not run during the
            pendency of a petition under paragraph (1) at the Bureau, except
            that such person shall comply with any portions of the demand
            not sought to be modified or set aside.
                (3) Specific grounds.--A petition under paragraph (1) shall
            specify each ground upon which the petitioner relies in seeking
            relief, and may be based upon any failure of the demand to
            comply with the provisions of this section, or upon any
            constitutional or other legal right or privilege of such person.

    [[Page 124 STAT. 2025]]

        (g) Custodial Control.--At any time during which any custodian is in
    custody or control of any documentary material, tangible things,
    reports, answers to questions, or transcripts of oral testimony given by
    any person in compliance with any civil investigative demand, such
    person may file, in the district court of the United States for the
    judicial district within which the office of such custodian is situated,
    and serve upon such custodian, a petition for an order of such court
    requiring the performance by such custodian of any duty imposed upon him
    by this section or rule promulgated by the Bureau.
        (h) Jurisdiction of Court.--
                (1) In general.--Whenever any petition is filed in any
            district court of the United States under this section, such
            court shall have jurisdiction to hear and determine the matter
            so presented, and to enter such order or orders as may be
            required to carry out the provisions of this section.
                (2) Appeal.--Any final order entered as described in
            paragraph (1) shall be subject to appeal pursuant to section
            1291 of title 28, United States Code.
    SEC. 1053. <<NOTE: 12 USC 5563.>>  HEARINGS AND ADJUDICATION
                              PROCEEDINGS.

        (a) In General.--The Bureau is authorized to conduct hearings and
    adjudication proceedings with respect to any person in the manner
    prescribed by chapter 5 of title 5, United States Code in order to
    ensure or enforce compliance with--
                (1) the provisions of this title, including any rules
            prescribed by the Bureau under this title; and
                (2) any other Federal law that the Bureau is authorized to
            enforce, including an enumerated consumer law, and any
            regulations or order prescribed thereunder, unless such Federal
            law specifically limits the Bureau from conducting a hearing or
            adjudication proceeding and only to the extent of such
            limitation.

        (b) Special Rules for Cease-and-desist Proceedings.--
                (1) Orders authorized.--
                        (A) In general.--If, in the opinion of the Bureau,
                    any covered person or service provider is engaging or
                    has engaged in an activity that violates a law, rule, or
                    any condition imposed in writing on the person by the
                    Bureau, the Bureau may, subject to sections 1024, 1025,
                    and 1026, issue and serve upon the covered person or
                    service provider a notice of charges in respect thereof.
                        (B) Content of notice.--The
                    notice <<NOTE: Deadlines.>>  under subparagraph (A)
                    shall contain a statement of the facts constituting the
                    alleged violation or violations, and shall fix a time
                    and place at which a hearing will be held to determine
                    whether an order to cease and desist should issue
                    against the covered person or service provider, such
                    hearing to be held not earlier than 30 days nor later
                    than 60 days after the date of service of such notice,
                    unless an earlier or a later date is set by the Bureau,
                    at the request of any party so served.
                        (C) Consent.--Unless the party or parties served
                    under subparagraph (B) appear at the hearing personally
                    or by a duly authorized representative, such person
                    shall be deemed to have consented to the issuance of the
                    cease-and-desist order.

    [[Page 124 STAT. 2026]]

                        (D) Procedure.--In the event of consent under
                    subparagraph (C), or if, upon the record, made at any
                    such hearing, the Bureau finds that any violation
                    specified in the notice of charges has been established,
                    the Bureau may issue and serve upon the covered person
                    or service provider an order to cease and desist from
                    the violation or practice. Such order may, by provisions
                    which may be mandatory or otherwise, require the covered
                    person or service provider to cease and desist from the
                    subject activity, and to take affirmative action to
                    correct the conditions resulting from any such
                    violation.
                (2) Effectiveness of order.--A cease-and-desist order shall
            become effective at the expiration of 30 days after the date of
            service of an order under paragraph (1) upon the covered person
            or service provider concerned (except in the case of a cease-
            and-desist order issued upon consent, which shall become
            effective at the time specified therein), and shall remain
            effective and enforceable as provided therein, except to such
            extent as the order is stayed, modified, terminated, or set
            aside by action of the Bureau or a reviewing court.
                (3) Decision and appeal.--Any hearing provided for in this
            subsection shall be held in the Federal judicial district or in
            the territory in which the residence or principal office or
            place of business of the person is located unless the person
            consents to another place, and shall be conducted in accordance
            with the provisions of chapter 5 of title 5 of the United States
            Code. After <<NOTE: Deadline. Notification. Order.>>  such
            hearing, and within 90 days after the Bureau has notified the
            parties that the case has been submitted to the Bureau for final
            decision, the Bureau shall render its decision (which shall
            include findings of fact upon which its decision is predicated)
            and shall issue and serve upon each party to the proceeding an
            order or orders consistent with the provisions of this section.
            Judicial review of any such order shall be exclusively as
            provided in this subsection. Unless a petition for review is
            timely filed in a court of appeals of the United States, as
            provided in paragraph (4), and thereafter until the record in
            the proceeding has been filed as provided in paragraph (4), the
            Bureau may at any time, upon such notice and in such manner as
            the Bureau shall determine proper, modify, terminate, or set
            aside any such order. Upon filing of the record as provided, the
            Bureau may modify, terminate, or set aside any such order with
            permission of the court.
                (4) Appeal to court of appeals.--Any
            party <<NOTE: Deadline. Petition.>>  to any proceeding under
            this subsection may obtain a review of any order served pursuant
            to this subsection (other than an order issued with the consent
            of the person concerned) by the filing in the court of appeals
            of the United States for the circuit in which the principal
            office of the covered person is located, or in the United States
            Court of Appeals for the District of Columbia Circuit, within 30
            days after the date of service of such order, a written petition
            praying that the order of the Bureau be modified, terminated, or
            set aside. <<NOTE: Records.>>  A copy of such petition shall be
            forthwith transmitted by the clerk of the court to the Bureau,
            and thereupon the Bureau shall file in the court the record in
            the proceeding, as provided in section 2112 of title 28 of the
            United States Code. Upon the filing of such petition, such court
            shall have jurisdiction, which upon

    [[Page 124 STAT. 2027]]

            the filing of the record shall except as provided in the last
            sentence of paragraph (3) be exclusive, to affirm, modify,
            terminate, or set aside, in whole or in part, the order of the
            Bureau. Review of such proceedings shall be had as provided in
            chapter 7 of title 5 of the United States Code. The judgment and
            decree of the court shall be final, except that the same shall
            be subject to review by the Supreme Court of the United States,
            upon certiorari, as provided in section 1254 of title 28 of the
            United States Code.
                (5) No stay.--The commencement of proceedings for judicial
            review under paragraph (4) shall not, unless specifically
            ordered by the court, operate as a stay of any order issued by
            the Bureau.

        (c) Special Rules for Temporary Cease-and-desist Proceedings.--
                (1) In general.--Whenever the Bureau determines that the
            violation specified in the notice of charges served upon a
            person, including a service provider, pursuant to subsection
            (b), or the continuation thereof, is likely to cause the person
            to be insolvent or otherwise prejudice the interests of
            consumers before the completion of the proceedings conducted
            pursuant to subsection (b), the Bureau may issue a temporary
            order requiring the person to cease and desist from any such
            violation or practice and to take affirmative action to prevent
            or remedy such insolvency or other condition pending completion
            of such proceedings. Such order may include any requirement
            authorized under this subtitle. Such order shall become
            effective upon service upon the person and, unless set aside,
            limited, or suspended by a court in proceedings authorized by
            paragraph (2), shall remain effective and enforceable pending
            the completion of the administrative proceedings pursuant to
            such notice and until such time as the Bureau shall dismiss the
            charges specified in such notice, or if a cease-and-desist order
            is issued against the person, until the effective date of such
            order.
                (2) Appeal.--Not later <<NOTE: Deadline.>>  than 10 days
            after the covered person or service provider concerned has been
            served with a temporary cease-and-desist order, the person may
            apply to the United States district court for the judicial
            district in which the residence or principal office or place of
            business of the person is located, or the United States District
            Court for the District of Columbia, for an injunction setting
            aside, limiting, or suspending the enforcement, operation, or
            effectiveness of such order pending the completion of the
            administrative proceedings pursuant to the notice of charges
            served upon the person under subsection (b), and such court
            shall have jurisdiction to issue such injunction.
                (3) Incomplete or inaccurate records.--
                        (A) Temporary order.--If a notice of charges served
                    under subsection (b) specifies, on the basis of
                    particular facts and circumstances, that the books and
                    records of a covered person or service provider are so
                    incomplete or inaccurate that the Bureau is unable to
                    determine the financial condition of that person or the
                    details or purpose of any transaction or transactions
                    that may have a material effect on the financial
                    condition of that person, the Bureau may issue a
                    temporary order requiring--

    [[Page 124 STAT. 2028]]

                              (i) the cessation of any activity or practice
                          which gave rise, whether in whole or in part, to
                          the incomplete or inaccurate state of the books or
                          records; or
                              (ii) affirmative action to restore such books
                          or records to a complete and accurate state, until
                          the completion of the proceedings under subsection
                          (b)(1).
                        (B) Effective period.--Any temporary order issued
                    under subparagraph (A)--
                              (i) shall become effective upon service; and
                              (ii) unless set aside, limited, or suspended
                          by a court in proceedings under paragraph (2),
                          shall remain in effect and enforceable until the
                          earlier of--
                                        (I) the completion of the proceeding
                                    initiated under subsection (b) in
                                    connection with the notice of charges;
                                    or
                                        (II) the date the Bureau determines,
                                    by examination or otherwise, that the
                                    books and records of the covered person
                                    or service provider are accurate and
                                    reflect the financial condition thereof.

        (d) Special Rules for Enforcement of Orders.--
                (1) In general.--The Bureau may in its discretion apply to
            the United States district court within the jurisdiction of
            which the principal office or place of business of the person is
            located, for the enforcement of any effective and outstanding
            notice or order issued under this section, and such court shall
            have jurisdiction and power to order and require compliance
            herewith.
                (2) Exception.--Except as otherwise provided in this
            subsection, no court shall have jurisdiction to affect by
            injunction or otherwise the issuance or enforcement of any
            notice or order or to review, modify, suspend, terminate, or set
            aside any such notice or order.

        (e) Rules.--The Bureau shall prescribe rules establishing such
    procedures as may be necessary to carry out this section.
    SEC. 1054. <<NOTE: 12 USC 5564.>>  LITIGATION AUTHORITY.

        (a) In General.--If any person violates a Federal consumer financial
    law, the Bureau may, subject to sections 1024, 1025, and 1026, commence
    a civil action against such person to impose a civil penalty or to seek
    all appropriate legal and equitable relief including a permanent or
    temporary injunction as permitted by law.
        (b) Representation.--The Bureau may act in its own name and through
    its own attorneys in enforcing any provision of this title, rules
    thereunder, or any other law or regulation, or in any action, suit, or
    proceeding to which the Bureau is a party.
        (c) Compromise of Actions.--The Bureau may compromise or settle any
    action if such compromise is approved by the court.
        (d) Notice to the Attorney General.--
                (1) In general.--When commencing a civil action under
            Federal consumer financial law, or any rule thereunder, the
            Bureau shall notify the Attorney General and, with respect to a
            civil action against an insured depository institution or
            insured credit union, the appropriate prudential regulator.
                (2) Notice and coordination.--
                        (A) Notice of other actions.--In addition to any
                    notice required under paragraph (1), the Bureau shall

    [[Page 124 STAT. 2029]]

                    notify the Attorney General concerning any action, suit,
                    or proceeding to which the Bureau is a party, except an
                    action, suit, or proceeding that involves the offering
                    or provision of consumer financial products or services.
                        (B) Coordination.--In
                    order <<NOTE: Consultation. Deadline.>>  to avoid
                    conflicts and promote consistency regarding litigation
                    of matters under Federal law, the Attorney General and
                    the Bureau shall consult regarding the coordination of
                    investigations and proceedings, including by negotiating
                    an agreement for coordination by not later than 180 days
                    after the designated transfer date. The agreement under
                    this subparagraph shall include provisions to ensure
                    that parallel investigations and proceedings involving
                    the Federal consumer financial laws are conducted in a
                    manner that avoids conflicts and does not impede the
                    ability of the Attorney General to prosecute violations
                    of Federal criminal laws.
                        (C) Rule of construction.--Nothing in this paragraph
                    shall be construed to limit the authority of the Bureau
                    under this title, including the authority to interpret
                    Federal consumer financial law.

        (e) <<NOTE: Deadlines.>>  Appearance Before the Supreme Court.--The
    Bureau may represent itself in its own name before the Supreme Court of
    the United States, provided that the Bureau makes a written request to
    the Attorney General within the 10-day period which begins on the date
    of entry of the judgment which would permit any party to file a petition
    for writ of certiorari, and the Attorney General concurs with such
    request or fails to take action within 60 days of the request of the
    Bureau.

        (f) Forum.--Any civil action brought under this title may be brought
    in a United States district court or in any court of competent
    jurisdiction of a state in a district in which the defendant is located
    or resides or is doing business, and such court shall have jurisdiction
    to enjoin such person and to require compliance with any Federal
    consumer financial law.
        (g) Time for Bringing Action.--
                (1) In general.--Except as otherwise permitted by law or
            equity, no action may be brought under this title more than 3
            years after the date of discovery of the violation to which an
            action relates.
                (2) Limitations under other federal laws.--
                        (A) In general.--An action arising under this title
                    does not include claims arising solely under enumerated
                    consumer laws.
                        (B) Bureau authority.--In any action arising solely
                    under an enumerated consumer law, the Bureau may
                    commence, defend, or intervene in the action in
                    accordance with the requirements of that provision of
                    law, as applicable.
                        (C) Transferred authority.--In any action arising
                    solely under laws for which authorities were transferred
                    under subtitles F and H, the Bureau may commence,
                    defend, or intervene in the action in accordance with
                    the requirements of that provision of law, as
                    applicable.
    SEC. 1055. <<NOTE: 12 USC 5565.>>  RELIEF AVAILABLE.

        (a) Administrative Proceedings or Court Actions.--

    [[Page 124 STAT. 2030]]

                (1) Jurisdiction.--The court (or the Bureau, as the case may
            be) in an action or adjudication proceeding brought under
            Federal consumer financial law, shall have jurisdiction to grant
            any appropriate legal or equitable relief with respect to a
            violation of Federal consumer financial law, including a
            violation of a rule or order prescribed under a Federal consumer
            financial law.
                (2) Relief.--Relief under this section may include, without
            limitation--
                        (A) rescission or reformation of contracts;
                        (B) refund of moneys or return of real property;
                        (C) restitution;
                        (D) disgorgement or compensation for unjust
                    enrichment;
                        (E) payment of damages or other monetary relief;
                        (F) public notification regarding the violation,
                    including the costs of notification;
                        (G) limits on the activities or functions of the
                    person; and
                        (H) civil money penalties, as set forth more fully
                    in subsection (c).
                (3) No exemplary or punitive damages.--Nothing in this
            subsection shall be construed as authorizing the imposition of
            exemplary or punitive damages.

        (b) Recovery of Costs.--In any action brought by the Bureau, a State
    attorney general, or any State regulator to enforce any Federal consumer
    financial law, the Bureau, the State attorney general, or the State
    regulator may recover its costs in connection with prosecuting such
    action if the Bureau, the State attorney general, or the State regulator
    is the prevailing party in the action.
        (c) Civil Money Penalty in Court and Administrative Actions.--
                (1) In general.--Any person that violates, through any act
            or omission, any provision of Federal consumer financial law
            shall forfeit and pay a civil penalty pursuant to this
            subsection.
                (2) Penalty amounts.--
                        (A) First tier.--For any violation of a law, rule,
                    or final order or condition imposed in writing by the
                    Bureau, a civil penalty may not exceed $5,000 for each
                    day during which such violation or failure to pay
                    continues.
                        (B) Second tier.--Notwithstanding paragraph (A), for
                    any person that recklessly engages in a violation of a
                    Federal consumer financial law, a civil penalty may not
                    exceed $25,000 for each day during which such violation
                    continues.
                        (C) Third tier.--Notwithstanding subparagraphs (A)
                    and (B), for any person that knowingly violates a
                    Federal consumer financial law, a civil penalty may not
                    exceed $1,000,000 for each day during which such
                    violation continues.
                (3) Mitigating factors.--In determining the amount of any
            penalty assessed under paragraph (2), the Bureau or the court
            shall take into account the appropriateness of the penalty with
            respect to--
                        (A) the size of financial resources and good faith
                    of the person charged;

    [[Page 124 STAT. 2031]]

                        (B) the gravity of the violation or failure to pay;
                        (C) the severity of the risks to or losses of the
                    consumer, which may take into account the number of
                    products or services sold or provided;
                        (D) the history of previous violations; and
                        (E) such other matters as justice may require.
                (4) Authority to modify or remit penalty.--The Bureau may
            compromise, modify, or remit any penalty which may be assessed
            or had already been assessed under paragraph (2). The amount of
            such penalty, when finally determined, shall be exclusive of any
            sums owed by the person to the United States in connection with
            the costs of the proceeding, and may be deducted from any sums
            owing by the United States to the person charged.
                (5) Notice and hearing.--No civil penalty may be assessed
            under this subsection with respect to a violation of any Federal
            consumer financial law, unless--
                        (A) the Bureau gives notice and an opportunity for a
                    hearing to the person accused of the violation; or
                        (B) the appropriate court has ordered such
                    assessment and entered judgment in favor of the Bureau.
    SEC. 1056. <<NOTE: 12 USC 5566.>>  REFERRALS FOR CRIMINAL
                              PROCEEDINGS.

        If the Bureau obtains evidence that any person, domestic or foreign,
    has engaged in conduct that may constitute a violation of Federal
    criminal law, the Bureau shall transmit such evidence to the Attorney
    General of the United States, who may institute criminal proceedings
    under appropriate law. Nothing in this section affects any other
    authority of the Bureau to disclose information.
    SEC. 1057. <<NOTE: 12 USC 5567.>>  EMPLOYEE PROTECTION.

        (a) In General.--No covered person or service provider shall
    terminate or in any other way discriminate against, or cause to be
    terminated or discriminated against, any covered employee or any
    authorized representative of covered employees by reason of the fact
    that such employee or representative, whether at the initiative of the
    employee or in the ordinary course of the duties of the employee (or any
    person acting pursuant to a request of the employee), has--
                (1) provided, caused to be provided, or is about to provide
            or cause to be provided, information to the employer, the
            Bureau, or any other State, local, or Federal, government
            authority or law enforcement agency relating to any violation
            of, or any act or omission that the employee reasonably believes
            to be a violation of, any provision of this title or any other
            provision of law that is subject to the jurisdiction of the
            Bureau, or any rule, order, standard, or prohibition prescribed
            by the Bureau;
                (2) testified or will testify in any proceeding resulting
            from the administration or enforcement of any provision of this
            title or any other provision of law that is subject to the
            jurisdiction of the Bureau, or any rule, order, standard, or
            prohibition prescribed by the Bureau;
                (3) filed, instituted, or caused to be filed or instituted
            any proceeding under any Federal consumer financial law; or
                (4) objected to, or refused to participate in, any activity,
            policy, practice, or assigned task that the employee (or other
            such person) reasonably believed to be in violation of any law,

    [[Page 124 STAT. 2032]]

            rule, order, standard, or prohibition, subject to the
            jurisdiction of, or enforceable by, the Bureau.

        (b) Definition of Covered Employee.--For the purposes of this
    section, the term ``covered employee'' means any individual performing
    tasks related to the offering or provision of a consumer financial
    product or service.
        (c) <<NOTE: Deadlines.>>  Procedures and Timetables.--
                (1) Complaint.--
                        (A) In general.--A person who believes that he or
                    she has been discharged or otherwise discriminated
                    against by any person in violation of subsection (a)
                    may, not later than 180 days after the date on which
                    such alleged violation occurs, file (or have any person
                    file on his or her behalf) a complaint with the
                    Secretary of Labor alleging such discharge or
                    discrimination and identifying the person responsible
                    for such act.
                        (B) <<NOTE: Notification.>>  Actions of secretary of
                    labor.--Upon receipt of such a complaint, the Secretary
                    of Labor shall notify, in writing, the person named in
                    the complaint who is alleged to have committed the
                    violation, of--
                              (i) the filing of the complaint;
                              (ii) the allegations contained in the
                          complaint;
                              (iii) the substance of evidence supporting the
                          complaint; and
                              (iv) opportunities that will be afforded to
                          such person under paragraph (2).
                (2) Investigation by secretary of labor.--
                        (A) In general.--Not later than 60 days after the
                    date of receipt of a complaint filed under paragraph
                    (1), and after affording the complainant and the person
                    named in the complaint who is alleged to have committed
                    the violation that is the basis for the complaint an
                    opportunity to submit to the Secretary of Labor a
                    written response to the complaint and an opportunity to
                    meet with a representative of the Secretary of Labor to
                    present statements from witnesses, the Secretary of
                    Labor shall--
                              (i) <<NOTE: Determination.>>  initiate an
                          investigation and determine whether there is
                          reasonable cause to believe that the complaint has
                          merit; and
                              (ii) <<NOTE: Notification.>>  notify the
                          complainant and the person alleged to have
                          committed the violation of subsection (a), in
                          writing, of such determination.
                        (B) Notice of relief available.--If
                    the <<NOTE: Order.>>  Secretary of Labor concludes that
                    there is reasonable cause to believe that a violation of
                    subsection (a) has occurred, the Secretary of Labor
                    shall, together with the notice under subparagraph
                    (A)(ii), issue a preliminary order providing the relief
                    prescribed by paragraph (4)(B).
                        (C) Request for hearing.--Not later than 30 days
                    after the date of receipt of notification of a
                    determination of the Secretary of Labor under this
                    paragraph, either the person alleged to have committed
                    the violation or the complainant may file objections to
                    the findings or preliminary order, or both, and request
                    a hearing on the record. The filing of such objections
                    shall not operate to stay any reinstatement remedy
                    contained in the preliminary order. Any such hearing
                    shall be conducted expeditiously, and

    [[Page 124 STAT. 2033]]

                    if a hearing is not requested in such 30-day period, the
                    preliminary order shall be deemed a final order that is
                    not subject to judicial review.
                (3) Grounds for determination of complaints.--
                        (A) In general.--The Secretary of Labor shall
                    dismiss a complaint filed under this subsection, and
                    shall not conduct an investigation otherwise required
                    under paragraph (2), unless the complainant makes a
                    prima facie showing that any behavior described in
                    paragraphs (1) through (4) of subsection (a) was a
                    contributing factor in the unfavorable personnel action
                    alleged in the complaint.
                        (B) Rebuttal evidence.--Notwithstanding a finding by
                    the Secretary of Labor that the complainant has made the
                    showing required under subparagraph (A), no
                    investigation otherwise required under paragraph (2)
                    shall be conducted, if the employer demonstrates, by
                    clear and convincing evidence, that the employer would
                    have taken the same unfavorable personnel action in the
                    absence of that behavior.
                        (C) Evidentiary standards.--The Secretary of Labor
                    may determine that a violation of subsection (a) has
                    occurred only if the complainant demonstrates that any
                    behavior described in paragraphs (1) through (4) of
                    subsection (a) was a contributing factor in the
                    unfavorable personnel action alleged in the complaint.
                    Relief may not be ordered under subparagraph (A) if the
                    employer demonstrates by clear and convincing evidence
                    that the employer would have taken the same unfavorable
                    personnel action in the absence of that behavior.
                (4) Issuance of final orders; review procedures.--
                        (A) Timing.--Not later than 120 days after the date
                    of conclusion of any hearing under paragraph (2), the
                    Secretary of Labor shall issue a final order providing
                    the relief prescribed by this paragraph or denying the
                    complaint. At any time before issuance of a final order,
                    a proceeding under this subsection may be terminated on
                    the basis of a settlement agreement entered into by the
                    Secretary of Labor, the complainant, and the person
                    alleged to have committed the violation.
                        (B) Penalties.--
                              (i) Order of secretary of labor.--If, in
                          response to a complaint filed under paragraph (1),
                          the Secretary of Labor determines that a violation
                          of subsection (a) has occurred, the Secretary of
                          Labor shall order the person who committed such
                          violation--
                                        (I) to take affirmative action to
                                    abate the violation;
                                        (II) to reinstate the complainant to
                                    his or her former position, together
                                    with compensation (including back pay)
                                    and restore the terms, conditions, and
                                    privileges associated with his or her
                                    employment; and
                                        (III) to provide compensatory
                                    damages to the complainant.
                              (ii) Penalty.--If an <<NOTE: Assessment.>>
                          order is issued under clause (i), the Secretary of
                          Labor, at the request of the complainant, shall
                          assess against the person against

    [[Page 124 STAT. 2034]]

                          whom the order is issued, a sum equal to the
                          aggregate amount of all costs and expenses
                          (including attorney fees and expert witness fees)
                          reasonably incurred, as determined by the
                          Secretary of Labor, by the complainant for, or in
                          connection with, the bringing of the complaint
                          upon which the order was issued.
                        (C) Penalty for frivolous claims.--If the Secretary
                    of Labor finds that a complaint under paragraph (1) is
                    frivolous or has been brought in bad faith, the
                    Secretary of Labor may award to the prevailing employer
                    a reasonable attorney fee, not exceeding $1,000, to be
                    paid by the complainant.
                        (D) De novo review.--
                              (i) <<NOTE: Deadlines.>>  Failure of the
                          secretary to act.--If the Secretary of Labor has
                          not issued a final order within 210 days after the
                          date of filing of a complaint under this
                          subsection, or within 90 days after the date of
                          receipt of a written determination, the
                          complainant may bring an action at law or equity
                          for de novo review in the appropriate district
                          court of the United States having jurisdiction,
                          which shall have jurisdiction over such an action
                          without regard to the amount in controversy, and
                          which action shall, at the request of either party
                          to such action, be tried by the court with a jury.
                              (ii) Procedures.--A proceeding under clause
                          (i) shall be governed by the same legal burdens of
                          proof specified in paragraph (3). The court shall
                          have jurisdiction to grant all relief necessary to
                          make the employee whole, including injunctive
                          relief and compensatory damages, including--
                                        (I) reinstatement with the same
                                    seniority status that the employee would
                                    have had, but for the discharge or
                                    discrimination;
                                        (II) the amount of back pay, with
                                    interest; and
                                        (III) compensation for any special
                                    damages sustained as a result of the
                                    discharge or discrimination, including
                                    litigation costs, expert witness fees,
                                    and reasonable attorney fees.
                        (E) <<NOTE: Deadline.>>  Other appeals.--Unless the
                    complainant brings an action under subparagraph (D), any
                    person adversely affected or aggrieved by a final order
                    issued under subparagraph (A) may file a petition for
                    review of the order in the United States Court of
                    Appeals for the circuit in which the violation with
                    respect to which the order was issued, allegedly
                    occurred or the circuit in which the complainant resided
                    on the date of such violation, not later than 60 days
                    after the date of the issuance of the final order of the
                    Secretary of Labor under subparagraph (A). Review shall
                    conform to chapter 7 of title 5, United States Code. The
                    commencement of proceedings under this subparagraph
                    shall not, unless ordered by the court, operate as a
                    stay of the order. An order of the Secretary of Labor
                    with respect to which review could have been obtained
                    under this subparagraph shall not be subject to judicial
                    review in any criminal or other civil proceeding.

    [[Page 124 STAT. 2035]]

                (5) Failure to comply with order.--
                        (A) Actions by the secretary.--If any person has
                    failed to comply with a final order issued under
                    paragraph (4), the Secretary of Labor may file a civil
                    action in the United States district court for the
                    district in which the violation was found to have
                    occurred, or in the United States district court for the
                    District of Columbia, to enforce such order. In actions
                    brought under this paragraph, the district courts shall
                    have jurisdiction to grant all appropriate relief
                    including injunctive relief and compensatory damages.
                        (B) Civil actions to compel compliance.--A person on
                    whose behalf an order was issued under paragraph (4) may
                    commence a civil action against the person to whom such
                    order was issued to require compliance with such order.
                    The appropriate United States district court shall have
                    jurisdiction, without regard to the amount in
                    controversy or the citizenship of the parties, to
                    enforce such order.
                        (C) Award of costs authorized.--The court, in
                    issuing any final order under this paragraph, may award
                    costs of litigation (including reasonable attorney and
                    expert witness fees) to any party, whenever the court
                    determines such award is appropriate.
                        (D) Mandamus proceedings.--Any nondiscretionary duty
                    imposed by this section shall be enforceable in a
                    mandamus proceeding brought under section 1361 of title
                    28, United States Code.

        (d) Unenforceability of Certain Agreements.--
                (1) No waiver of rights and remedies.--Except as provided
            under paragraph (3), and notwithstanding any other provision of
            law, the rights and remedies provided for in this section may
            not be waived by any agreement, policy, form, or condition of
            employment, including by any predispute arbitration agreement.
                (2) No predispute arbitration agreements.--Except as
            provided under paragraph (3), and notwithstanding any other
            provision of law, no predispute arbitration agreement shall be
            valid or enforceable to the extent that it requires arbitration
            of a dispute arising under this section.
                (3) <<NOTE: Regulation.>>  Exception.--Notwithstanding
            paragraphs (1) and (2), an arbitration provision in a collective
            bargaining agreement shall be enforceable as to disputes arising
            under subsection (a)(4), unless the Bureau determines, by rule,
            that such provision is inconsistent with the purposes of this
            title.
    SEC. 1058. <<NOTE: 12 USC 5561 note.>>  EFFECTIVE DATE.

        This subtitle shall become effective on the designated transfer
    date.

    Subtitle F--Transfer of Functions and Personnel; Transitional Provisions

    SEC. 1061. <<NOTE: 12 USC 5581.>>  TRANSFER OF CONSUMER FINANCIAL
                              PROTECTION FUNCTIONS.

        (a) Defined Terms.--For purposes of this subtitle--

    [[Page 124 STAT. 2036]]

                (1) the term ``consumer financial protection functions''
            means--
                        (A) all authority to prescribe rules or issue orders
                    or guidelines pursuant to any Federal consumer financial
                    law, including performing appropriate functions to
                    promulgate and review such rules, orders, and
                    guidelines; and
                        (B) the examination authority described in
                    subsection (c)(1), with respect to a person described in
                    subsection 1025(a); and
                (2) the terms ``transferor agency'' and ``transferor
            agencies'' mean, respectively--
                        (A) the Board of Governors (and any Federal reserve
                    bank, as the context requires), the Federal Deposit
                    Insurance Corporation, the Federal Trade Commission, the
                    National Credit Union Administration, the Office of the
                    Comptroller of the Currency, the Office of Thrift
                    Supervision, and the Department of Housing and Urban
                    Development, and the heads of those agencies; and
                        (B) the agencies listed in subparagraph (A),
                    collectively.

        (b) In General.--Except as provided in subsection (c), consumer
    financial protection functions are transferred as follows:
                (1) Board of governors.--
                        (A) Transfer of functions.--All consumer financial
                    protection functions of the Board of Governors are
                    transferred to the Bureau.
                        (B) Board of governors authority.--The Bureau shall
                    have all powers and duties that were vested in the Board
                    of Governors, relating to consumer financial protection
                    functions, on the day before the designated transfer
                    date.
                (2) Comptroller of the currency.--
                        (A) Transfer of functions.--All consumer financial
                    protection functions of the Comptroller of the Currency
                    are transferred to the Bureau.
                        (B) Comptroller authority.--The Bureau shall have
                    all powers and duties that were vested in the
                    Comptroller of the Currency, relating to consumer
                    financial protection functions, on the day before the
                    designated transfer date.
                (3) Director of the office of thrift supervision.--
                        (A) Transfer of functions.--All consumer financial
                    protection functions of the Director of the Office of
                    Thrift Supervision are transferred to the Bureau.
                        (B) Director authority.--The Bureau shall have all
                    powers and duties that were vested in the Director of
                    the Office of Thrift Supervision, relating to consumer
                    financial protection functions, on the day before the
                    designated transfer date.
                (4) Federal deposit insurance corporation.--
                        (A) Transfer of functions.--All consumer financial
                    protection functions of the Federal Deposit Insurance
                    Corporation are transferred to the Bureau.
                        (B) Corporation authority.--The Bureau shall have
                    all powers and duties that were vested in the Federal
                    Deposit Insurance Corporation, relating to consumer
                    financial protection functions, on the day before the
                    designated transfer date.
                (5) Federal trade commission.--

    [[Page 124 STAT. 2037]]

                        (A) Transfer of functions.--The authority of the
                    Federal Trade Commission under an enumerated consumer
                    law to prescribe rules, issue guidelines, or conduct a
                    study or issue a report mandated under such law shall be
                    transferred to the Bureau on the designated transfer
                    date. Nothing in this title shall be construed to
                    require a mandatory transfer of any employee of the
                    Federal Trade Commission.
                        (B) Bureau authority.--
                              (i) In general.--The Bureau shall have all
                          powers and duties under the enumerated consumer
                          laws to prescribe rules, issue guidelines, or to
                          conduct studies or issue reports mandated by such
                          laws, that were vested in the Federal Trade
                          Commission on the day before the designated
                          transfer date.
                              (ii) Federal trade commission act.--Subject to
                          subtitle B, the Bureau may enforce a rule
                          prescribed under the Federal Trade Commission Act
                          by the Federal Trade Commission with respect to an
                          unfair or deceptive act or practice to the extent
                          that such rule applies to a covered person or
                          service provider with respect to the offering or
                          provision of a consumer financial product or
                          service as if it were a rule prescribed under
                          section 1031 of this title.
                        (C) Authority of the federal trade commission.--
                              (i) In general.--No provision of this title
                          shall be construed as modifying, limiting, or
                          otherwise affecting the authority of the Federal
                          Trade Commission (including its authority with
                          respect to affiliates described in section
                          1025(a)(1)) under the Federal Trade Commission Act
                          or any other law, other than the authority under
                          an enumerated consumer law to prescribe rules,
                          issue official guidelines, or conduct a study or
                          issue a report mandated under such law.
                              (ii) Commission authority relating to rules
                          prescribed by the bureau.--Subject to subtitle B,
                          the Federal Trade Commission shall have authority
                          to enforce under the Federal Trade Commission Act
                          (15 U.S.C. 41 et seq.) a rule prescribed by the
                          Bureau under this title with respect to a covered
                          person subject to the jurisdiction of the Federal
                          Trade Commission under that Act, and a violation
                          of such a rule by such a person shall be treated
                          as a violation of a rule issued under section 18
                          of that Act (15 U.S.C. 57a) with respect to unfair
                          or deceptive acts or practices.
                        (D) Coordination.--To avoid <<NOTE: Contracts.>>
                    duplication of or conflict between rules prescribed by
                    the Bureau under section 1031 of this title and the
                    Federal Trade Commission under section 18(a)(1)(B) of
                    the Federal Trade Commission Act that apply to a covered
                    person or service provider with respect to the offering
                    or provision of consumer financial products or services,
                    the agencies shall negotiate an agreement with respect
                    to rulemaking by each agency, including consultation
                    with the other agency prior to proposing a rule and
                    during the comment period.

    [[Page 124 STAT. 2038]]

                        (E) Deference.--No provision of this title shall be
                    construed as altering, limiting, expanding, or otherwise
                    affecting the deference that a court affords to the--
                              (i) Federal Trade Commission in making
                          determinations regarding the meaning or
                          interpretation of any provision of the Federal
                          Trade Commission Act, or of any other Federal law
                          for which the Commission has authority to
                          prescribe rules; or
                              (ii) Bureau in making determinations regarding
                          the meaning or interpretation of any provision of
                          a Federal consumer financial law (other than any
                          law described in clause (i)).
                (6) National credit union administration.--
                        (A) Transfer of functions.--All consumer financial
                    protection functions of the National Credit Union
                    Administration are transferred to the Bureau.
                        (B) National credit union administration
                    authority.--The Bureau shall have all powers and duties
                    that were vested in the National Credit Union
                    Administration, relating to consumer financial
                    protection functions, on the day before the designated
                    transfer date.
                (7) Department of housing and urban development.--
                        (A) Transfer of functions.--All consumer protection
                    functions of the Secretary of the Department of Housing
                    and Urban Development relating to the Real Estate
                    Settlement Procedures Act of 1974 (12 U.S.C. 2601 et
                    seq.), the Secure and Fair Enforcement for Mortgage
                    Licensing Act of 2008 (12 U.S.C. 5102 et seq.), and the
                    Interstate Land Sales Full Disclosure Act (15 U.S.C.
                    1701 et seq.) are transferred to the Bureau.
                        (B) Authority of the department of housing and urban
                    development.--The Bureau shall have all powers and
                    duties that were vested in the Secretary of the
                    Department of Housing and Urban Development relating to
                    the Real Estate Settlement Procedures Act of 1974 (12
                    U.S.C. 2601 et seq.), the Secure and Fair Enforcement
                    for Mortgage Licensing Act of 2008 (12 U.S.C. 5101 et
                    seq.), and the Interstate Land Sales Full Disclosure Act
                    (15 U.S.C. 1701 et seq.), on the day before the
                    designated transfer date.

        (c) Authorities of the Prudential Regulators.--
                (1) Examination.--A transferor agency that is a prudential
            regulator shall have--
                        (A) authority to require reports from and conduct
                    examinations for compliance with Federal consumer
                    financial laws with respect to a person described in
                    section 1025(a), that is incidental to the backup and
                    enforcement procedures provided to the regulator under
                    section 1025(c); and
                        (B) exclusive authority (relative to the Bureau) to
                    require reports from and conduct examinations for
                    compliance with Federal consumer financial laws with
                    respect to a person described in section 1026(a), except
                    as provided to the Bureau under subsections (b) and (c)
                    of section 1026.
                (2) Enforcement.--

    [[Page 124 STAT. 2039]]

                        (A) Limitation.--The authority of a transferor
                    agency that is a prudential regulator to enforce
                    compliance with Federal consumer financial laws with
                    respect to a person described in section 1025(a), shall
                    be limited to the backup and enforcement procedures in
                    described in section 1025(c).
                        (B) Exclusive authority.--A transferor agency that
                    is a prudential regulator shall have exclusive authority
                    (relative to the Bureau) to enforce compliance with
                    Federal consumer financial laws with respect to a person
                    described in section 1026(a), except as provided to the
                    Bureau under subsections (b) and (c) of section 1026.
                        (C) Statutory enforcement.--For purposes of carrying
                    out the authorities under, and subject to the
                    limitations of, subtitle B, each prudential regulator
                    may enforce compliance with the requirements imposed
                    under this title, and any rule or order prescribed by
                    the Bureau under this title, under--
                              (i) the Federal Credit Union Act (12 U.S.C.
                          1751 et seq.), by the National Credit Union
                          Administration Board with respect to any covered
                          person or service provider that is an insured
                          credit union, or service provider thereto, or any
                          affiliate of an insured credit union, who is
                          subject to the jurisdiction of the Board under
                          that Act; and
                              (ii) section 8 of the Federal Deposit
                          Insurance Act (12 U.S.C. 1818), by the appropriate
                          Federal banking agency, as defined in section 3(q)
                          of the Federal Deposit Insurance Act (12 U.S.C.
                          1813(q)), with respect to a covered person or
                          service provider that is a person described in
                          section 3(q) of that Act and who is subject to the
                          jurisdiction of that agency, as set forth in
                          sections 3(q) and 8 of the Federal Deposit
                          Insurance Act; or
                              (iii) the Bank Service Company Act (12 U.S.C.
                          1861 et seq.).

        (d) Effective Date.--Subsections (b) and (c) shall become effective
    on the designated transfer date.
    SEC. 1062. <<NOTE: 12 USC 5582.>>  DESIGNATED TRANSFER DATE.

        (a) In General.--Not later <<NOTE: Deadline.>>  than 60 days after
    the date of enactment of this Act, the Secretary shall--
                (1) in consultation with the Chairman of the Board of
            Governors, the Chairperson of the Corporation, the Chairman of
            the Federal Trade Commission, the Chairman of the National
            Credit Union Administration Board, the Comptroller of the
            Currency, the Director of the Office of Thrift Supervision, the
            Secretary of the Department of Housing and Urban Development,
            and the Director of the Office of Management and Budget,
            designate a single calendar date for the transfer of functions
            to the Bureau under section 1061; and
                (2) <<NOTE: Notice. Federal Register, publication.>>
            publish notice of that designated date in the Federal Register.

        (b) Changing Designation.--The Secretary--
                (1) may, in consultation with the Chairman of the Board of
            Governors, the Chairperson of the Federal Deposit Insurance
            Corporation, the Chairman of the Federal Trade Commission, the
            Chairman of the National Credit Union Administration

    [[Page 124 STAT. 2040]]

            Board, the Comptroller of the Currency, the Director of the
            Office of Thrift Supervision, the Secretary of the Department of
            Housing and Urban Development, and the Director of the Office of
            Management and Budget, change the date designated under
            subsection (a); and
                (2) <<NOTE: Notice. Federal Register, publication.>>  shall
            publish notice of any changed designated date in the Federal
            Register.

        (c) Permissible Dates.--
                (1) In general.--Except as <<NOTE: Time period.>>  provided
            in paragraph (2), any date designated under this section shall
            be not earlier than 180 days, nor later than 12 months, after
            the date of enactment of this Act.
                (2) Extension of time.--The Secretary may designate a date
            that is later than 12 months after the date of enactment of this
            Act if the Secretary transmits to appropriate committees of
            Congress--
                        (A) <<NOTE: Determination.>>  a written
                    determination that orderly implementation of this title
                    is not feasible before the date that is 12 months after
                    the date of enactment of this Act;
                        (B) an explanation of why an extension is necessary
                    for the orderly implementation of this title; and
                        (C) a description of the steps that will be taken to
                    effect an orderly and timely implementation of this
                    title within the extended time period.
                (3) Extension limited.--In no case may any date designated
            under this section be later than 18 months after the date of
            enactment of this Act.
    SEC. 1063. <<NOTE: 12 USC 5583.>>  SAVINGS PROVISIONS.

        (a) Board of Governors.--
                (1) Existing rights, duties, and obligations not affected.--
            Section 1061(b)(1) does not affect the validity of any right,
            duty, or obligation of the United States, the Board of Governors
            (or any Federal reserve bank), or any other person that--
                        (A) arises under any provision of law relating to
                    any consumer financial protection function of the Board
                    of Governors transferred to the Bureau by this title;
                    and
                        (B) existed on the day before the designated
                    transfer date.
                (2) Continuation of suits.--No provision of this Act shall
            abate any proceeding commenced by or against the Board of
            Governors (or any Federal reserve bank) before the designated
            transfer date with respect to any consumer financial protection
            function of the Board of Governors (or any Federal reserve bank)
            transferred to the Bureau by this title, except that the Bureau,
            subject to sections 1024, 1025, and 1026, shall be substituted
            for the Board of Governors (or Federal reserve bank) as a party
            to any such proceeding as of the designated transfer date.

        (b) Federal Deposit Insurance Corporation.--
                (1) Existing rights, duties, and obligations not affected.--
            Section 1061(b)(4) does not affect the validity of any right,
            duty, or obligation of the United States, the Federal Deposit
            Insurance Corporation, the Board of Directors of that
            Corporation, or any other person, that--

    [[Page 124 STAT. 2041]]

                        (A) arises under any provision of law relating to
                    any consumer financial protection function of the
                    Federal Deposit Insurance Corporation transferred to the
                    Bureau by this title; and
                        (B) existed on the day before the designated
                    transfer date.
                (2) Continuation of suits.--No provision of this Act shall
            abate any proceeding commenced by or against the Federal Deposit
            Insurance Corporation (or the Board of Directors of that
            Corporation) before the designated transfer date with respect to
            any consumer financial protection function of the Federal
            Deposit Insurance Corporation transferred to the Bureau by this
            title, except that the Bureau, subject to sections 1024, 1025,
            and 1026, shall be substituted for the Federal Deposit Insurance
            Corporation (or Board of Directors) as a party to any such
            proceeding as of the designated transfer date.

        (c) Federal Trade Commission.--Section 1061(b)(5) does not affect
    the validity of any right, duty, or obligation of the United States, the
    Federal Trade Commission, or any other person, that--
                (1) arises under any provision of law relating to any
            consumer financial protection function of the Federal Trade
            Commission transferred to the Bureau by this title; and
                (2) existed on the day before the designated transfer date.

        (d) National Credit Union Administration.--
                (1) Existing rights, duties, and obligations not affected.--
            Section 1061(b)(6) does not affect the validity of any right,
            duty, or obligation of the United States, the National Credit
            Union Administration, the National Credit Union Administration
            Board, or any other person, that--
                        (A) arises under any provision of law relating to
                    any consumer financial protection function of the
                    National Credit Union Administration transferred to the
                    Bureau by this title; and
                        (B) existed on the day before the designated
                    transfer date.
                (2) Continuation of suits.--No provision of this Act shall
            abate any proceeding commenced by or against the National Credit
            Union Administration (or the National Credit Union
            Administration Board) before the designated transfer date with
            respect to any consumer financial protection function of the
            National Credit Union Administration transferred to the Bureau
            by this title, except that the Bureau, subject to sections 1024,
            1025, and 1026, shall be substituted for the National Credit
            Union Administration (or National Credit Union Administration
            Board) as a party to any such proceeding as of the designated
            transfer date.

        (e) Office of the Comptroller of the Currency.--
                (1) Existing rights, duties, and obligations not affected.--
            Section 1061(b)(2) does not affect the validity of any right,
            duty, or obligation of the United States, the Comptroller of the
            Currency, the Office of the Comptroller of the Currency, or any
            other person, that--
                        (A) arises under any provision of law relating to
                    any consumer financial protection function of the
                    Comptroller of the Currency transferred to the Bureau by
                    this title; and

    [[Page 124 STAT. 2042]]

                        (B) existed on the day before the designated
                    transfer date.
                (2) Continuation of suits.--No provision of this Act shall
            abate any proceeding commenced by or against the Comptroller of
            the Currency (or the Office of the Comptroller of the Currency)
            with respect to any consumer financial protection function of
            the Comptroller of the Currency transferred to the Bureau by
            this title before the designated transfer date, except that the
            Bureau, subject to sections 1024, 1025, and 1026, shall be
            substituted for the Comptroller of the Currency (or the Office
            of the Comptroller of the Currency) as a party to any such
            proceeding as of the designated transfer date.

        (f) Office of Thrift Supervision.--
                (1) Existing rights, duties, and obligations not affected.--
            Section 1061(b)(3) does not affect the validity of any right,
            duty, or obligation of the United States, the Director of the
            Office of Thrift Supervision, the Office of Thrift Supervision,
            or any other person, that--
                        (A) arises under any provision of law relating to
                    any consumer financial protection function of the
                    Director of the Office of Thrift Supervision transferred
                    to the Bureau by this title; and
                        (B) that existed on the day before the designated
                    transfer date.
                (2) Continuation of suits.--No provision of this Act shall
            abate any proceeding commenced by or against the Director of the
            Office of Thrift Supervision (or the Office of Thrift
            Supervision) with respect to any consumer financial protection
            function of the Director of the Office of Thrift Supervision
            transferred to the Bureau by this title before the designated
            transfer date, except that the Bureau, subject to sections 1024,
            1025, and 1026, shall be substituted for the Director (or the
            Office of Thrift Supervision) as a party to any such proceeding
            as of the designated transfer date.

        (g) Department of Housing and Urban Development.--
                (1) Existing rights, duties, and obligations not affected.--
            Section 1061(b)(7) shall not affect the validity of any right,
            duty, or obligation of the United States, the Secretary of the
            Department of Housing and Urban Development (or the Department
            of Housing and Urban Development), or any other person, that--
                        (A) arises under any provision of law relating to
                    any function of the Secretary of the Department of
                    Housing and Urban Development with respect to the Real
                    Estate Settlement Procedures Act of 1974 (12 U.S.C. 2601
                    et seq.), the Secure and Fair Enforcement for Mortgage
                    Licensing Act of 2008 (12 U.S.C. 5102 et seq.), or the
                    Interstate Land Sales Full Disclosure Act (15 U.S.C.
                    1701 et seq) transferred to the Bureau by this title;
                    and
                        (B) existed on the day before the designated
                    transfer date.
                (2) Continuation of suits.--This title shall not abate any
            proceeding commenced by or against the Secretary of the
            Department of Housing and Urban Development (or the Department
            of Housing and Urban Development) with respect to any consumer
            financial protection function of the Secretary

    [[Page 124 STAT. 2043]]

            of the Department of Housing and Urban Development transferred
            to the Bureau by this title before the designated transfer date,
            except that the Bureau, subject to sections 1024, 1025, and
            1026, shall be substituted for the Secretary of the Department
            of Housing and Urban Development (or the Department of Housing
            and Urban Development) as a party to any such proceeding as of
            the designated transfer date.

        (h) Continuation of Existing Orders, Rulings, Determinations,
    Agreements, and Resolutions.--
                (1) In general.--Except as provided in paragraph (2) and
            under subsection (i), all orders, resolutions, determinations,
            agreements, and rulings that have been issued, made, prescribed,
            or allowed to become effective by any transferor agency or by a
            court of competent jurisdiction, in the performance of consumer
            financial protection functions that are transferred by this
            title and that are in effect on the day before the designated
            transfer date, shall continue in effect, and shall continue to
            be enforceable by the appropriate transferor agency, according
            to the terms of those orders, resolutions, determinations,
            agreements, and rulings, and shall not be enforceable by or
            against the Bureau.
                (2) Exception for orders applicable to persons described in
            section 1025(a).--All orders, resolutions, determinations,
            agreements, and rulings that have been issued, made, prescribed,
            or allowed to become effective by any transferor agency or by a
            court of competent jurisdiction, in the performance of consumer
            financial protection functions that are transferred by this
            title and that are in effect on the day before the designated
            transfer date with respect to any person described in section
            1025(a), shall continue in effect, according to the terms of
            those orders, resolutions, determinations, agreements, and
            rulings, and shall be enforceable by or against the Bureau or
            transferor agency.

        (i) Identification of Rules and Orders Continued.--Not later than
    the designated transfer date, the Bureau--
                (1) shall, after consultation with the head of each
            transferor agency, identify the rules and orders that will be
            enforced by the Bureau; and
                (2) <<NOTE: List. Federal Register, publication.>>  shall
            publish a list of such rules and orders in the Federal Register.

        (j) Status of Rules Proposed or Not Yet Effective.--
                (1) Proposed rules.--Any proposed rule of a transferor
            agency which that agency, in performing consumer financial
            protection functions transferred by this title, has proposed
            before the designated transfer date, but has not been published
            as a final rule before that date, shall be deemed to be a
            proposed rule of the Bureau.
                (2) Rules not yet effective.--Any interim or final rule of a
            transferor agency which that agency, in performing consumer
            financial protection functions transferred by this title, has
            published before the designated transfer date, but which has not
            become effective before that date, shall become effective as a
            rule of the Bureau according to its terms.
    SEC. 1064. <<NOTE: 12 USC 5584.>>  TRANSFER OF CERTAIN PERSONNEL.

        (a) <<NOTE: Determinations.>>  In General.--

    [[Page 124 STAT. 2044]]

                (1) Certain federal reserve system employees transferred.--
                        (A) Identifying employees for transfer.--The Bureau
                    and the Board of Governors shall--
                              (i) jointly determine the number of employees
                          of the Board of Governors necessary to perform or
                          support the consumer financial protection
                          functions of the Board of Governors that are
                          transferred to the Bureau by this title; and
                              (ii) consistent with the number determined
                          under clause (i), jointly identify employees of
                          the Board of Governors for transfer to the Bureau,
                          in a manner that the Bureau and the Board of
                          Governors, in their sole discretion, determine
                          equitable.
                        (B) Identified employees transferred.--All employees
                    of the Board of Governors identified under subparagraph
                    (A)(ii) shall be transferred to the Bureau for
                    employment.
                        (C) Federal reserve bank employees.--Employees of
                    any Federal reserve bank who are performing consumer
                    financial protection functions on behalf of the Board of
                    Governors shall be treated as employees of the Board of
                    Governors for purposes of subparagraphs (A) and (B).
                (2) Certain fdic employees transferred.--
                        (A) Identifying employees for transfer.--The Bureau
                    and the Board of Directors of the Federal Deposit
                    Insurance Corporation shall--
                              (i) jointly determine the number of employees
                          of that Corporation necessary to perform or
                          support the consumer financial protection
                          functions of the Corporation that are transferred
                          to the Bureau by this title; and
                              (ii) consistent with the number determined
                          under clause (i), jointly identify employees of
                          the Corporation for transfer to the Bureau, in a
                          manner that the Bureau and the Board of Directors
                          of the Corporation, in their sole discretion,
                          determine equitable.
                        (B) Identified employees transferred.--All employees
                    of the Corporation identified under subparagraph (A)(ii)
                    shall be transferred to the Bureau for employment.
                (3) Certain ncua employees transferred.--
                        (A) Identifying employees for transfer.--The Bureau
                    and the National Credit Union Administration Board
                    shall--
                              (i) jointly determine the number of employees
                          of the National Credit Union Administration
                          necessary to perform or support the consumer
                          financial protection functions of the National
                          Credit Union Administration that are transferred
                          to the Bureau by this title; and
                              (ii) consistent with the number determined
                          under clause (i), jointly identify employees of
                          the National Credit Union Administration for
                          transfer to the Bureau, in a manner that the
                          Bureau and the National Credit Union
                          Administration Board, in their sole discretion,
                          determine equitable.

    [[Page 124 STAT. 2045]]

                        (B) Identified employees transferred.--All employees
                    of the National Credit Union Administration identified
                    under subparagraph (A)(ii) shall be transferred to the
                    Bureau for employment.
                (4) Certain office of the comptroller of the currency
            employees transferred.--
                        (A) Identifying employees for transfer.--The Bureau
                    and the Comptroller of the Currency shall--
                              (i) jointly determine the number of employees
                          of the Office of the Comptroller of the Currency
                          necessary to perform or support the consumer
                          financial protection functions of the Office of
                          the Comptroller of the Currency that are
                          transferred to the Bureau by this title; and
                              (ii) consistent with the number determined
                          under clause (i), jointly identify employees of
                          the Office of the Comptroller of the Currency for
                          transfer to the Bureau, in a manner that the
                          Bureau and the Office of the Comptroller of the
                          Currency, in their sole discretion, determine
                          equitable.
                        (B) Identified employees transferred.--All employees
                    of the Office of the Comptroller of the Currency
                    identified under subparagraph (A)(ii) shall be
                    transferred to the Bureau for employment.
                (5) Certain office of thrift supervision employees
            transferred.--
                        (A) Identifying employees for transfer.--The Bureau
                    and the Director of the Office of Thrift Supervision
                    shall--
                              (i) jointly determine the number of employees
                          of the Office of Thrift Supervision necessary to
                          perform or support the consumer financial
                          protection functions of the Office of Thrift
                          Supervision that are transferred to the Bureau by
                          this title; and
                              (ii) consistent with the number determined
                          under clause (i), jointly identify employees of
                          the Office of Thrift Supervision for transfer to
                          the Bureau, in a manner that the Bureau and the
                          Office of Thrift Supervision, in their sole
                          discretion, determine equitable.
                        (B) Identified employees transferred.--All employees
                    of the Office of Thrift Supervision identified under
                    subparagraph (A)(ii) shall be transferred to the Bureau
                    for employment.
                (6) Certain employees of department of housing and urban
            development transferred.--
                        (A) Identifying employees for transfer.--The Bureau
                    and the Secretary of the Department of Housing and Urban
                    Development shall--
                              (i) jointly determine the number of employees
                          of the Department of Housing and Urban Development
                          necessary to perform or support the consumer
                          protection functions of the Department that are
                          transferred to the Bureau by this title; and
                              (ii) consistent with the number determined
                          under clause (i), jointly identify employees of
                          the Department of Housing and Urban Development
                          for transfer to the Bureau in a manner that the
                          Bureau and the

    [[Page 124 STAT. 2046]]

                          Secretary of the Department of Housing and Urban
                          Development, in their sole discretion, deem
                          equitable.
                        (B) Identified employees transferred.--All employees
                    of the Department of Housing and Urban Development
                    identified under subparagraph (A)(ii) shall be
                    transferred to the Bureau for employment.
                (7) Consumer education, financial literacy, consumer
            complaints, and research functions.--The Bureau and each of the
            transferor agencies (except the Federal Trade Commission) shall
            jointly determine the number of employees and the types and
            grades of employees necessary to perform the functions of the
            Bureau under subtitle A, including consumer education, financial
            literacy, policy analysis, responses to consumer complaints and
            inquiries, research, and similar functions. All employees
            jointly identified under this paragraph shall be transferred to
            the Bureau for employment.
                (8) Authority of the president to resolve disputes.--
                        (A) Action authorized.--In the event that the Bureau
                    and a transferor agency are unable to reach an agreement
                    under paragraphs (1) through (7) by the designated
                    transfer date, the President, or the designee thereof,
                    may issue an order or directive to the transferor agency
                    to effect the transfer of personnel and property under
                    this subtitle.
                        (B) Transmittal to congress required.--If an order
                    or directive is issued under subparagraph (A), the
                    President shall transmit a copy of the written
                    determination made with respect to such order or
                    directive, including an explanation for the need for the
                    order or directive, to the Committee on Banking,
                    Housing, and Urban Affairs and the Committee on
                    Appropriations of the Senate and the Committee on
                    Financial Services and the Committee on Appropriations
                    of the House of Representatives.
                        (C) Sunset.--The authority provided in this
                    paragraph shall terminate 3 years after the designated
                    transfer date.
                (9) Appointment authority for excepted service and senior
            executive service transferred.--
                        (A) In general.--In the case of an employee
                    occupying a position in the excepted service or the
                    Senior Executive Service, any appointment authority
                    established pursuant to law or regulations of the Office
                    of Personnel Management for filling such positions shall
                    be transferred, subject to subparagraph (B).
                        (B) Declining transfers allowed.--An agency or
                    entity may decline to make a transfer of authority under
                    subparagraph (A) (and the employees appointed pursuant
                    thereto) to the extent that such authority relates to
                    positions excepted from the competitive service because
                    of their confidential, policy-making, policy-
                    determining, or policy-advocating character, and non-
                    career positions in the Senior Executive Service (within
                    the meaning of section 3132(a)(7) of title 5, United
                    States Code).

        (b) Timing of Transfers and Position Assignments.--Each employee to
    be transferred under this section shall--
                (1) be transferred not later than 90 days after the
            designated transfer date; and
                (2) receive notice of a position assignment not later than
            120 days after the effective date of his or her transfer.

    [[Page 124 STAT. 2047]]

        (c) Transfer of Function.--
                (1) In general.--Notwithstanding any other provision of law,
            the transfer of employees shall be deemed a transfer of
            functions for the purpose of section 3503 of title 5, United
            States Code.
                (2) Priority of this title.--If any provisions of this title
            conflict with any protection provided to transferred employees
            under section 3503 of title 5, United States Code, the
            provisions of this title shall control.

        (d) Equal Status and Tenure Positions.--
                (1) Employees transferred from the federal reserve system,
            fdic, hud, ncua, occ, and ots.--Each employee transferred to the
            Bureau from the Board of Governors, a Federal reserve bank, the
            Federal Deposit Insurance Corporation, the Department of Housing
            and Urban Development, the National Credit Union Administration,
            the Office of the Comptroller of the Currency, or the Office of
            Thrift Supervision shall be placed in a position at the Bureau
            with the same status and tenure as that employee held on the day
            before the designated transfer date.
                (2) Employees transferred from the federal reserve system.--
            For purposes of determining the status and position placement of
            a transferred employee, any period of service with the Board of
            Governors or a Federal reserve bank shall be credited as a
            period of service with a Federal agency.

        (e) Additional Certification Requirements Limited.--Examiners
    transferred to the Bureau are not subject to any additional
    certification requirements before being placed in a comparable examiner
    position at the Bureau examining the same types of institutions as they
    examined before they were transferred.
        (f) Personnel Actions Limited.--
                (1) 2-year protection.--Except as provided in paragraph (2),
            each transferred employee holding a permanent position on the
            day before the designated transfer date may not, during the 2-
            year period beginning on the designated transfer date, be
            involuntarily separated, or involuntarily reassigned outside his
            or her locality pay area.
                (2) Exceptions.--Paragraph (1) does not limit the right of
            the Bureau--
                        (A) to separate an employee for cause or for
                    unacceptable performance;
                        (B) to terminate an appointment to a position
                    excepted from the competitive service because of its
                    confidential policy-making, policy-determining, or
                    policy-advocating character; or
                        (C) to reassign a supervisory employee outside of
                    his or her locality pay area when the Bureau determines
                    that the reassignment is necessary for the efficient
                    operation of the Bureau.

        (g) Pay.--
                (1) 2-year protection.--
                        (A) In general.--Except as provided in paragraph
                    (2), each transferred employee shall, during the 2-year
                    period beginning on the designated transfer date,
                    receive pay at a rate equal to not less than the basic
                    rate of pay (including any geographic differential) that
                    the employee received

    [[Page 124 STAT. 2048]]

                    during the pay period immediately preceding the date of
                    transfer.
                        (B) Limitation.--Notwithstanding subparagraph (A),
                    if the employee was receiving a higher rate of basic pay
                    on a temporary basis (because of a temporary assignment,
                    temporary promotion, or other temporary action)
                    immediately before the date of transfer, the Bureau may
                    reduce the rate of basic pay on the date on which the
                    rate would have been reduced but for the transfer, and
                    the protected rate for the remainder of the 2-year
                    period shall be the reduced rate that would have
                    applied, but for the transfer.
                (2) Exceptions.--Paragraph (1) does not limit the right of
            the Bureau to reduce the rate of basic pay of a transferred
            employee--
                        (A) for cause;
                        (B) for unacceptable performance; or
                        (C) with the consent of the employee.
                (3) <<NOTE: Applicability.>>  Protection only while
            employed.--Paragraph (1) applies to a transferred employee only
            while that employee remains employed by the Bureau.
                (4) Pay increases permitted.--Paragraph (1) does not limit
            the authority of the Bureau to increase the pay of a transferred
            employee.

        (h) Reorganization.--
                (1) Between 1st and 3rd year.--
                        (A) In general.--If the <<NOTE: Determination. Time
                    period.>>  Bureau determines, during the 2-year period
                    beginning 1 year after the designated transfer date,
                    that a reorganization of the staff of the Bureau is
                    required--
                              (i) that reorganization shall be deemed a
                          ``substantial reorganization'' for purposes of
                          affording affected employees retirement under
                          section 8336(d)(2) or 8414(b)(1)(B) of title 5,
                          United States Code;
                              (ii) before the reorganization occurs, all
                          employees in the same locality pay area as defined
                          by the Office of Personnel Management shall be
                          placed in a uniform position classification
                          system; and
                              (iii) any resulting reduction in force shall
                          be governed by the provisions of chapter 35 of
                          title 5, United States Code, except that the
                          Bureau shall--
                                        (I) establish competitive areas (as
                                    that term is defined in regulations
                                    issued by the Office of Personnel
                                    Management) to include at a minimum all
                                    employees in the same locality pay area
                                    as defined by the Office of Personnel
                                    Management;
                                        (II) establish competitive levels
                                    (as that term is defined in regulations
                                    issued by the Office of Personnel
                                    Management) without regard to whether
                                    the particular employees have been
                                    appointed to positions in the
                                    competitive service or the excepted
                                    service; and
                                        (III) afford employees appointed to
                                    positions in the excepted service (other
                                    than to a position excepted from the
                                    competitive service because of its
                                    confidential policy-making, policy-
                                    determining, or policy-advocating
                                    character) the same assignment rights to
                                    positions within the Bureau as

    [[Page 124 STAT. 2049]]

                                    employees appointed to positions in the
                                    competitive service.
                        (B) Service credit for reductions in force.--For
                    purposes of this paragraph, periods of service with a
                    Federal home loan bank, a joint office of the Federal
                    home loan banks, the Board of Governors, a Federal
                    reserve bank, the Federal Deposit Insurance Corporation,
                    or the National Credit Union Administration shall be
                    credited as periods of service with a Federal agency.
                (2) After 3rd year.--
                        (A) In general.--If the Bureau determines, at any
                    time after the 3-year period beginning on the designated
                    transfer date, that a reorganization of the staff of the
                    Bureau is required, any resulting reduction in force
                    shall be governed by the provisions of chapter 35 of
                    title 5, United States Code, except that the Bureau
                    shall establish competitive levels (as that term is
                    defined in regulations issued by the Office of Personnel
                    Management) without regard to types of appointment held
                    by particular employees transferred under this section.
                        (B) Service credit for reductions in force.--For
                    purposes of this paragraph, periods of service with a
                    Federal home loan bank, a joint office of the Federal
                    home loan banks, the Board of Governors, a Federal
                    reserve bank, the Federal Deposit Insurance Corporation,
                    or the National Credit Union Administration shall be
                    credited as periods of service with a Federal agency.

        (i) Benefits.--
                (1) Retirement benefits for transferred employees.--
                        (A) In general.--
                              (i) Continuation of existing retirement
                          plan.--Unless an election is made under clause
                          (iii) or subparagraph (B), each employee
                          transferred pursuant to this subtitle shall remain
                          enrolled in the existing retirement plan of that
                          employee as of the date of transfer, through any
                          period of continuous employment with the Bureau.
                              (ii) Employer contribution.--The
                          Bureau <<NOTE: Payments.>>  shall pay any employer
                          contributions to the existing retirement plan of
                          each transferred employee, as required under that
                          plan.
                              (iii) Option to elect into the federal reserve
                          system retirement plan and federal reserve system
                          thrift plan.--Any employee transferred pursuant to
                          this subtitle may, during the 1-year period
                          beginning 6 months after the designated transfer
                          date, elect to end their participation and benefit
                          accruals under their existing retirement plan or
                          plans and elect to participate in both the Federal
                          Reserve System Retirement Plan and the Federal
                          Reserve System Thrift Plan, through any period of
                          continuous employment with the Bureau, under the
                          same terms as are applicable to Federal Reserve
                          System transferred employees, as provided in
                          subparagraph (C). <<NOTE: Effective date.>>  An
                          election of coverage by the Federal Reserve System
                          Retirement Plan and the Federal Reserve System
                          Thrift Plan shall begin on the day following the
                          end of the 18-

    [[Page 124 STAT. 2050]]

                          month period beginning on the designated transfer
                          date, and benefit accruals under the existing
                          retirement plan of the transferred employee shall
                          end on the last day of the 18-month period
                          beginning on the designated transfer date If an
                          employee elects to participate in the Federal
                          Reserve System Retirement Plan and the Federal
                          Reserve System Thrift Plan, all of the service of
                          the employee that was creditable under their
                          existing retirement plan shall be transferred to
                          the Federal Reserve System Retirement Plan on the
                          day following the end of the 18-month period
                          beginning on the designated transfer date.
                              (iv) Bureau 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 under this subparagraph. 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 the Federal Reserve
                          System Thrift Plan.
                              (v) Additional funding.--The Bureau shall
                          transfer to the Federal Reserve System Retirement
                          Plan an amount determined by the Board of
                          Governors, in consultation with the Bureau, to be
                          necessary to reimburse the Federal Reserve System
                          Retirement Plan for the costs to such plan of
                          providing benefits to employees electing coverage
                          under the Federal Reserve System Retirement Plan
                          under subparagraph (iii), and who were transferred
                          to the Bureau from outside of the Federal Reserve
                          System.
                              (vi) Option to elect into thrift plan created
                          by the bureau.--If the Bureau chooses to establish
                          a thrift plan, the employees transferred pursuant
                          to this subtitle shall have the option to elect,
                          under such terms and conditions as the Bureau may
                          establish, coverage under such a thrift plan
                          established by the Bureau. Transferred employees
                          may not remain in the thrift plan of the agency
                          from which the employee transferred under this
                          subtitle, if the employee elects to participate in
                          a thrift plan established by the Bureau.
                        (B) Option for employees transferred from federal
                    reserve system to be subject to the federal employee
                    retirement program.--
                              (i) Election.--Any Federal Reserve System
                          transferred employee who was enrolled in the
                          Federal Reserve System Retirement Plan on the day
                          before the date of his or her transfer to the
                          Bureau may, during the 1-year period beginning 6
                          months after the designated transfer date, elect
                          to be subject to the Federal Employee Retirement
                          Program.

    [[Page 124 STAT. 2051]]

                              (ii) Effective date of coverage.--An election
                          of coverage by the Federal Employee Retirement
                          Program under this subparagraph shall begin on the
                          day following the end of the 18-month period
                          beginning on the designated transfer date, and
                          benefit accruals under the existing retirement
                          plan of the Federal Reserve System transferred
                          employee shall end on the last day of the 18-month
                          period beginning on the designated transfer date.
                        (C) Bureau participation in federal reserve system
                    retirement plan.--
                              (i) Benefits provided.--Federal Reserve System
                          employees transferred pursuant to this subtitle
                          shall continue to be eligible to participate in
                          the Federal Reserve System Retirement Plan and
                          Federal Reserve System Thrift Plan through any
                          period of continuous employment with the Bureau,
                          unless the employee makes an election under
                          subparagraph (A)(vi) or (B). The retirement
                          benefits, formulas, and features offered to the
                          Federal Reserve System transferred employees shall
                          be the same as those offered to employees of the
                          Board of Governors who participate in the Federal
                          Reserve System Retirement Plan and the Federal
                          Reserve System Thrift Plan, as amended from time
                          to time.
                              (ii) Limitation.--The Bureau shall not have
                          responsibility or authority--
                                        (I) to amend an existing retirement
                                    plan (including the Federal Reserve
                                    System Retirement Plan or Federal
                                    Reserve System Thrift Plan);
                                        (II) for administering an existing
                                    retirement plan (including the Federal
                                    Reserve System Retirement Plan or
                                    Federal Reserve System Thrift Plan); or
                                        (III) for ensuring the plans comply
                                    with applicable laws, fiduciary rules,
                                    and related responsibilities.
                              (iii) Tax qualified status.--Notwithstanding
                          any other provision of law, providing benefits to
                          Federal Reserve System employees transferred to
                          the Bureau pursuant to this subtitle, and to
                          employees who elect coverage pursuant to
                          subparagraph (A)(iii) or under section
                          1013(a)(2)(B), shall not cause any existing
                          retirement plan (including the Federal Reserve
                          System Retirement Plan and the Federal Reserve
                          System Thrift Plan) to lose its tax-qualified
                          status under sections 401(a) and 501(a) of the
                          Internal Revenue Code of 1986.
                              (iv) Bureau contribution.--The Bureau shall
                          pay any employer contributions to the existing
                          retirement plan (including the Federal Reserve
                          System Retirement Plan and the Federal Reserve
                          System Thrift Plan) for each Federal Reserve
                          System transferred employee participating in those
                          plans, as required under the plan, after the
                          designated transfer date.
                              (v) Controlled group status.--The Bureau is
                          the same employer as the Federal Reserve System

    [[Page 124 STAT. 2052]]

                          (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).
                        (D) Definitions.--For purposes of this paragraph--
                              (i) the term ``existing retirement plan''
                          means, with respect to an employee transferred
                          pursuant to this subtitle, the retirement plan
                          (including the Financial Institutions Retirement
                          Fund) and any associated thrift savings plan, of
                          the agency from which the employee was transferred
                          under this subtitle, in which the employee was
                          enrolled on the day before the date on which the
                          employee was transferred;
                              (ii) the term ``Federal Employee Retirement
                          Program'' means either the Civil Service
                          Retirement System established under chapter 83 of
                          title 5, United States Code, or the Federal
                          Employees Retirement System established under
                          chapter 84 of title 5, United States Code,
                          depending upon the service history of the
                          individual;
                              (iii) the term ``Federal Reserve System
                          transferred employee'' means a transferred
                          employee who is an employee of the Board of
                          Governors or a Federal reserve bank on the day
                          before the designated transfer date, and who is
                          transferred to the Bureau on the designated
                          transfer date pursuant to this subtitle;
                              (iv) the term ``Federal Reserve System
                          Retirement Plan'' means the Retirement Plan for
                          Employees of the Federal Reserve System; and
                              (v) the term ``Federal Reserve System Thrift
                          Plan'' means the Thrift Plan for Employees of the
                          Federal Reserve System.
                (2) Benefits other than retirement benefits for transferred
            employees.--
                        (A) During 1st year.--
                              (i) Existing plans continue.--Each employee
                          transferred pursuant to this subtitle may, for 1
                          year after the designated transfer date, retain
                          membership in any other employee benefit program
                          of the agency or bank from which the employee
                          transferred, including a medical, dental, vision,
                          long term care, or life insurance program, to
                          which the employee belonged on the day before the
                          designated transfer date.
                              (ii) Employer contribution.--The Bureau shall
                          reimburse the agency or bank from which an
                          employee was transferred for any cost incurred by
                          that agency or bank in continuing to extend
                          coverage in the benefit program to the employee,
                          as required under that program or negotiated
                          agreements.
                        (B) Medical, dental, vision, or life insurance after
                    first year.--If, at the end of the 1-year period
                    beginning on the designated transfer date, the Bureau
                    has not established its own, or arranged for
                    participation in another entity's, medical, dental,
                    vision, or life insurance program, an employee
                    transferred pursuant to this subtitle who was a member
                    of such a program at the agency or

    [[Page 124 STAT. 2053]]

                    Federal reserve bank from which the employee transferred
                    may, before the coverage of that employee ends under
                    subparagraph (A)(i), elect to enroll, without regard to
                    any regularly scheduled open season, in--
                              (i) the enhanced dental benefits program
                          established under chapter 89A of title 5, United
                          States Code;
                              (ii) the enhanced vision benefits established
                          under chapter 89B of title 5, United States Code;
                              (iii) the Federal Employees Group Life
                          Insurance Program established under chapter 87 of
                          title 5, United States Code, without regard to any
                          requirement of insurability; and
                              (iv) the Federal Employees Health Benefits
                          Program established under chapter 89 of title 5,
                          United States Code.
                        (C) Long term care insurance after 1st year.--If, at
                    the end of the 1-year period beginning on the designated
                    transfer date, the Bureau has not established its own,
                    or arranged for participation in another entity's, long
                    term care insurance program, an employee transferred
                    pursuant to this subtitle who was a member of such a
                    program at the agency or Federal reserve bank from which
                    the employee transferred may, before the coverage of
                    that employee ends under subparagraph (A)(i), elect to
                    apply for coverage under the Federal Long Term Care
                    Insurance Program established under chapter 90 of title
                    5, United States Code, under the underwriting
                    requirements applicable to a new active workforce member
                    (as defined in part 875 of title 5, Code of Federal
                    Regulations).
                        (D) Employee contribution.--An individual enrolled
                    in the Federal Employees Health Benefits program shall
                    pay any employee contribution required by the plan.
                        (E) Additional funding.--The Bureau shall transfer
                    to the Federal Employees Health Benefits Fund
                    established under section 8909 of title 5, United States
                    Code, an amount determined by the Director of the Office
                    of Personnel Management, after consultation with the
                    Bureau and the Office of Management and Budget, to be
                    necessary to reimburse the Fund for the cost to the Fund
                    of providing benefits under this paragraph.
                        (F) Credit for time enrolled in other plans.--For
                    employees transferred under this title, enrollment in a
                    health benefits plan administered by a transferor agency
                    or a Federal reserve bank, as the case may be,
                    immediately before enrollment in a health benefits plan
                    under chapter 89 of title 5, United States Code, shall
                    be considered as enrollment in a health benefits plan
                    under that chapter for purposes of section 8905(b)(1)(A)
                    of title 5, United States Code.
                        (G) Special provisions to ensure continuation of
                    life insurance benefits.--
                              (i) In general.--An annuitant (as defined in
                          section 8901(3) of title 5, United States Code)
                          who is enrolled in a life insurance plan
                          administered by a transferor agency on the day
                          before the designated transfer date shall be
                          eligible for coverage by a life

    [[Page 124 STAT. 2054]]

                          insurance plan under sections 8706(b), 8714a,
                          8714b, and 8714c of title 5, United States Code,
                          or in a life insurance plan established by the
                          Bureau, without regard to any regularly scheduled
                          open season and requirement of insurability.
                              (ii) Employee contribution.--An individual
                          enrolled in a life insurance plan under this
                          subparagraph shall pay any employee contribution
                          required by the plan.
                              (iii) Additional funding.--The Bureau shall
                          transfer to the Employees' Life Insurance Fund
                          established under section 8714 of title 5, United
                          States Code, an amount determined by the Director
                          of the Office of Personnel Management, after
                          consultation with the Bureau and the Office of
                          Management and Budget, to be necessary to
                          reimburse the Fund for the cost to the Fund of
                          providing benefits under this subparagraph not
                          otherwise paid for by the employee under clause
                          (ii).
                              (iv) Credit for time enrolled in other
                          plans.--For employees transferred under this
                          title, enrollment in a life insurance plan
                          administered by a transferor agency immediately
                          before enrollment in a life insurance plan under
                          chapter 87 of title 5, United States Code, shall
                          be considered as enrollment in a life insurance
                          plan under that chapter for purposes of section
                          8706(b)(1)(A) of title 5, United States Code.
                (3) OPM rules.--The Office of Personnel Management shall
            issue such rules as are necessary to carry out this subsection.

        (j) Implementation of Uniform Pay and Classification System.--Not
    later <<NOTE: Deadline.>>  than 2 years after the designated transfer
    date, the Bureau shall implement a uniform pay and classification system
    for all employees transferred under this title.

        (k) Equitable Treatment.--In administering the provisions of this
    section, the Bureau--
                (1) shall take no action that would unfairly disadvantage
            transferred employees relative to each other based on their
            prior employment by the Board of Governors, the Federal Deposit
            Insurance Corporation, the Department of Housing and Urban
            Development, the National Credit Union Administration, the
            Office of the Comptroller of the Currency, the Office of Thrift
            Supervision, a Federal reserve bank, a Federal home loan bank,
            or a joint office of the Federal home loan banks; and
                (2) may take such action as is appropriate in individual
            cases so that employees transferred under this section receive
            equitable treatment, with respect to the status, tenure, pay,
            benefits (other than benefits under programs administered by the
            Office of Personnel Management), and accrued leave or vacation
            time of those employees, for prior periods of service with any
            Federal agency, including the Board of Governors, the
            Corporation, the Department of Housing and Urban Development,
            the National Credit Union Administration, the Office of the
            Comptroller of the Currency, the Office of Thrift Supervision, a
            Federal reserve bank, a Federal home loan bank, or a joint
            office of the Federal home loan banks.

    [[Page 124 STAT. 2055]]

        (l) Implementation.--In implementing the provisions of this section,
    the Bureau shall coordinate with the Office of Personnel Management and
    other entities having expertise in matters related to employment to
    ensure a fair and orderly transition for affected employees.
    SEC. 1065. <<NOTE: 12 USC 5585.>>  INCIDENTAL TRANSFERS.

        (a) Incidental Transfers Authorized.--The Director of the Office of
    Management and Budget, in consultation with the Secretary, shall make
    such additional incidental transfers and dispositions of assets and
    liabilities held, used, arising from, available, or to be made
    available, in connection with the functions transferred by this title,
    as the Director may determine necessary to accomplish the purposes of
    this title.
        (b) Sunset.--The authority provided in this section shall terminate
    5 years after the date of enactment of this Act.
    SEC. 1066. <<NOTE: 12 USC 5586.>>  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.
    SEC. 1067. <<NOTE: 12 USC 5587.>>  TRANSITION OVERSIGHT.

        (a) Purpose.--The purpose of this section is to ensure that the
    Bureau--
                (1) has an orderly and organized startup;
                (2) attracts and retains a qualified workforce; and
                (3) establishes comprehensive employee training and benefits
            programs.

        (b) Reporting Requirement.--
                (1) In general.--The Bureau shall submit an annual report to
            the Committee on Banking, Housing, and Urban Affairs of the
            Senate and the Committee on Financial Services of the House of
            Representatives that includes the plans described in paragraph
            (2).
                (2) Plans.--The plans described in this paragraph are as
            follows:
                        (A) Training and workforce development plan.--The
                    Bureau shall submit a training and workforce development
                    plan that includes, to the extent practicable--
                              (i) identification of skill and technical
                          expertise needs and actions taken to meet those
                          requirements;
                              (ii) steps taken to foster innovation and
                          creativity;
                              (iii) leadership development and succession
                          planning; and
                              (iv) effective use of technology by employees.
                        (B) Workplace flexibilities plan.--The Bureau shall
                    submit a workforce flexibility plan that includes, to
                    the extent practicable--
                              (i) telework;
                              (ii) flexible work schedules;
                              (iii) phased retirement;
                              (iv) reemployed annuitants;

    [[Page 124 STAT. 2056]]

                              (v) part-time work;
                              (vi) job sharing;
                              (vii) parental leave benefits and childcare
                          assistance;
                              (viii) domestic partner benefits;
                              (ix) other workplace flexibilities; or
                              (x) any combination of the items described in
                          clauses (i) through (ix).
                        (C) Recruitment and retention plan.--The Bureau
                    shall submit a recruitment and retention plan that
                    includes, to the extent practicable, provisions relating
                    to--
                              (i) the steps necessary to target highly
                          qualified applicant pools with diverse
                          backgrounds;
                              (ii) streamlined employment application
                          processes;
                              (iii) the provision of timely notification of
                          the status of employment applications to
                          applicants; and
                              (iv) the collection of information to measure
                          indicators of hiring effectiveness.

        (c) Expiration.--The reporting requirement under subsection (b)
    shall terminate 5 years after the date of enactment of this Act.
        (d) Rule of Construction.--Nothing in this section may be construed
    to affect--
                (1) a collective bargaining agreement, as that term is
            defined in section 7103(a)(8) of title 5, United States Code,
            that is in effect on the date of enactment of this Act; or
                (2) the rights of employees under chapter 71 of title 5,
            United States Code.

        (e) Participation in Examinations.--In order to prepare the Bureau
    to conduct examinations under section 1025 upon the designated transfer
    date, the Bureau and the applicable prudential regulator may agree to
    include, on a sampling basis, examiners on examinations of the
    compliance with Federal consumer financial law of institutions described
    in section 1025(a) conducted by the prudential regulators prior to the
    designated transfer date.

                       Subtitle G--Regulatory Improvements

    SEC. 1071. SMALL BUSINESS DATA COLLECTION.

        (a) In General.--The Equal Credit Opportunity Act (15 U.S.C. 1691 et
    seq.) is amended by inserting after section 704A the following:
    ``SEC. 704B. <<NOTE: 15 USC 1691o-2.>>  SMALL BUSINESS LOAN DATA
                              COLLECTION.

        ``(a) Purpose.--The purpose of this section is to facilitate
    enforcement of fair lending laws and enable communities, governmental
    entities, and creditors to identify business and community development
    needs and opportunities of women-owned, minority-owned, and small
    businesses.
        ``(b) Information Gathering.--Subject to the requirements of this
    section, in the case of any application to a financial institution for
    credit for women-owned, minority-owned, or small business, the financial
    institution shall--
                ``(1) inquire whether the business is a women-owned,
            minority-owned, or small business, without regard to whether
            such application is received in person, by mail, by telephone,

    [[Page 124 STAT. 2057]]

            by electronic mail or other form of electronic transmission, or
            by any other means, and whether or not such application is in
            response to a solicitation by the financial institution; and
                ``(2) <<NOTE: Records.>>  maintain a record of the responses
            to such inquiry, separate from the application and accompanying
            information.

        ``(c) Right To Refuse.--Any applicant for credit may refuse to
    provide any information requested pursuant to subsection (b) in
    connection with any application for credit.
        ``(d) No Access by Underwriters.--
                ``(1) Limitation.--Where feasible, no loan underwriter or
            other officer or employee of a financial institution, or any
            affiliate of a financial institution, involved in making any
            determination concerning an application for credit shall have
            access to any information provided by the applicant pursuant to
            a request under subsection (b) in connection with such
            application.
                ``(2) Limited access.--If
            a <<NOTE: Determination. Notice.>>  financial institution
            determines that a loan underwriter or other officer or employee
            of a financial institution, or any affiliate of a financial
            institution, involved in making any determination concerning an
            application for credit should have access to any information
            provided by the applicant pursuant to a request under subsection
            (b), the financial institution shall provide notice to the
            applicant of the access of the underwriter to such information,
            along with notice that the financial institution may not
            discriminate on the basis of such information.

        ``(e) Form and Manner of Information.--
                ``(1) In general.--Each financial <<NOTE: Records.>>
            institution shall compile and maintain, in accordance with
            regulations of the Bureau, a record of the information provided
            by any loan applicant pursuant to a request under subsection
            (b).
                ``(2) Itemization.--Information compiled and maintained
            under paragraph (1) shall be itemized in order to clearly and
            conspicuously disclose--
                        ``(A) the number of the application and the date on
                    which the application was received;
                        ``(B) the type and purpose of the loan or other
                    credit being applied for;
                        ``(C) the amount of the credit or credit limit
                    applied for, and the amount of the credit transaction or
                    the credit limit approved for such applicant;
                        ``(D) the type of action taken with respect to such
                    application, and the date of such action;
                        ``(E) the census tract in which is located the
                    principal place of business of the women-owned,
                    minority-owned, or small business loan applicant;
                        ``(F) the gross annual revenue of the business in
                    the last fiscal year of the women-owned, minority-owned,
                    or small business loan applicant preceding the date of
                    the application;
                        ``(G) the race, sex, and ethnicity of the principal
                    owners of the business; and
                        ``(H) any additional data that the Bureau determines
                    would aid in fulfilling the purposes of this section.
                ``(3) No personally identifiable information.--In compiling
            and maintaining any record of information under this

    [[Page 124 STAT. 2058]]

            section, a financial institution may not include in such record
            the name, specific address (other than the census tract required
            under paragraph (1)(E)), telephone number, electronic mail
            address, or any other personally identifiable information
            concerning any individual who is, or is connected with, the
            women-owned, minority-owned, or small business loan applicant.
                ``(4) Discretion to delete or modify publicly available
            data.--The Bureau may, at its discretion, delete or modify data
            collected under this section which is or will be available to
            the public, if the Bureau determines that the deletion or
            modification of the data would advance a privacy interest.

        ``(f) Availability of Information.--
                ``(1) Submission to bureau.--The data <<NOTE: Deadline.>>
            required to be compiled and maintained under this section by any
            financial institution shall be submitted annually to the Bureau.
                ``(2) Availability of information.--Information compiled and
            maintained under this section shall be--
                        ``(A) <<NOTE: Time period.>>  retained for not less
                    than 3 years after the date of preparation;
                        ``(B) made available to any member of the public,
                    upon request, in the form required under regulations
                    prescribed by the Bureau;
                        ``(C) annually made available to the public
                    generally by the Bureau, in such form and in such manner
                    as is determined by the Bureau, by regulation.
                ``(3) Compilation of aggregate data.--The Bureau may, at its
            discretion--
                        ``(A) compile and aggregate data collected under
                    this section for its own use; and
                        ``(B) make public such compilations of aggregate
                    data.

        ``(g) Bureau Action.--
                ``(1) In general.--The Bureau shall prescribe such rules and
            issue such guidance as may be necessary to carry out, enforce,
            and compile data pursuant to this section.
                ``(2) Exceptions.--The Bureau, by rule or order, may adopt
            exceptions to any requirement of this section and may,
            conditionally or unconditionally, exempt any financial
            institution or class of financial institutions from the
            requirements of this section, as the Bureau deems necessary or
            appropriate to carry out the purposes of this section.
                ``(3) Guidance.--The Bureau shall issue guidance designed to
            facilitate compliance with the requirements of this section,
            including assisting financial institutions in working with
            applicants to determine whether the applicants are women-owned,
            minority-owned, or small businesses for purposes of this
            section.

        ``(h) Definitions.--For purposes of this section, the following
    definitions shall apply:
                ``(1) Financial institution.--The term `financial
            institution' means any partnership, company, corporation,
            association (incorporated or unincorporated), trust, estate,
            cooperative organization, or other entity that engages in any
            financial activity.
                ``(2) Small business.--The term `small business' has the
            same meaning as the term `small business concern' in section 3
            of the Small Business Act (15 U.S.C. 632).

    [[Page 124 STAT. 2059]]

                ``(3) Small business loan.--The term `small business loan'
            means a loan made to a small business.
                ``(4) Minority.--The term `minority' has the same meaning as
            in section 1204(c)(3) of the Financial Institutions Reform,
            Recovery, and Enforcement Act of 1989.
                ``(5) Minority-owned business.--The term `minority-owned
            business' means a business--
                        ``(A) more than 50 percent of the ownership or
                    control of which is held by 1 or more minority
                    individuals; and
                        ``(B) more than 50 percent of the net profit or loss
                    of which accrues to 1 or more minority individuals.
                ``(6) Women-owned business.--The term `women-owned business'
            means a business--
                        ``(A) more than 50 percent of the ownership or
                    control of which is held by 1 or more women; and
                        ``(B) more than 50 percent of the net profit or loss
                    of which accrues to 1 or more women.''.

        (b) Technical and Conforming Amendments.--Section 701(b) of the
    Equal Credit Opportunity Act (15 U.S.C. 1691(b)) is amended--
                (1) in paragraph (3), by striking ``or'' at the end;
                (2) in paragraph (4), by striking the period at the end and
            inserting ``; or''; and
                (3) by inserting after paragraph (4), the following:
                ``(5) to make an inquiry under section 704B, in accordance
            with the requirements of that section.''.

        (c) <<NOTE: 15 USC 1691 note.>>  Clerical Amendment.--The table of
    sections for title VII of the Consumer Credit Protection Act is amended
    by inserting after the item relating to section 704A the following new
    item:

    ``704B. Small business loan data collection.''.

        (d) Effective Date.--This section shall become effective on the
    designated transfer date.
    SEC. 1072. ASSISTANCE FOR ECONOMICALLY VULNERABLE INDIVIDUALS AND
                              FAMILIES.

        (a) HERA Amendments.--Section 1132 of the Housing and Economic
    Recovery Act of 2008 (12 U.S.C. 1701x note) is amended--
                (1) in subsection (a), by inserting in each of paragraphs
            (1), (2), (3), and (4) ``or economically vulnerable individuals
            and families'' after ``homebuyers'' each place that term
            appears;
                (2) in subsection (b)(1), by inserting ``or economically
            vulnerable individuals and families'' after ``homebuyers'';
                (3) in subsection (c)(1)--
                        (A) in subparagraph (A), by striking ``or'' at the
                    end;
                        (B) in subparagraph (B), by striking the period at
                    the end and inserting ``; or''; and
                        (C) by adding at the end the following:
                        ``(C) a nonprofit corporation that--
                              ``(i) is exempt from taxation under section
                          501(c)(3) of the Internal Revenue Code of 1986;
                          and
                              ``(ii) specializes or has expertise in working
                          with economically vulnerable individuals and
                          families, but whose primary purpose is not
                          provision of credit counseling services.''; and
                (4) in subsection (d)(1), by striking ``not more than 5''.

    [[Page 124 STAT. 2060]]

        (b) <<NOTE: 12 USC 1701x note.>>  Applicability.--Amendments made by
    subsection (a) shall not apply to programs authorized by section 1132 of
    the Housing and Economic Recovery Act of 2008 (12 U.S.C. 1701x note)
    that are funded with appropriations prior to fiscal year 2011.
    SEC. 1073. <<NOTE: 12 USC 5601.>>  REMITTANCE TRANSFERS.

        (a) Treatment of Remittance Transfers.--The Electronic Fund Transfer
    Act (15 U.S.C. 1693 et seq.) is amended--
                (1) in section 902(b) (15 U.S.C. 1693(b)), by inserting
            ``and remittance'' after ``electronic fund'';
                (2) in section 904(c) (15 U.S.C. 1693b(c)), in the first
            sentence, by inserting ``or remittance transfers'' after
            ``electronic fund transfers'';
                (3) by redesignating sections 919, 920, 921, and
            922 <<NOTE: 15 USC 1693p-1693r, 1693 note.>>  as sections 920,
            921, 922, and 923, respectively; and
                (4) by inserting after section 918 the following:
    ``SEC. 919. <<NOTE: 15 USC 1693o-1.>>  REMITTANCE TRANSFERS.

        ``(a) Disclosures Required for Remittance Transfers.--
                ``(1) In general.--Each remittance transfer provider shall
            make disclosures as required under this section and in
            accordance with rules prescribed by the Board. Disclosures
            required under this section shall be in addition to any other
            disclosures applicable under this title.
                ``(2) Disclosures.--Subject to rules prescribed by the
            Board, a remittance transfer provider shall provide, in writing
            and in a form that the sender may keep, to each sender
            requesting a remittance transfer, as applicable to the
            transaction--
                        ``(A) at the time at which the sender requests a
                    remittance transfer to be initiated, and prior to the
                    sender making any payment in connection with the
                    remittance transfer, a disclosure describing--
                              ``(i) the amount of currency that will be
                          received by the designated recipient, using the
                          values of the currency into which the funds will
                          be exchanged;
                              ``(ii) the amount of transfer and any other
                          fees charged by the remittance transfer provider
                          for the remittance transfer; and
                              ``(iii) any exchange rate to be used by the
                          remittance transfer provider for the remittance
                          transfer, to the nearest 1/100th of a point; and
                        ``(B) at the time at which the sender makes payment
                    in connection with the remittance transfer--
                              ``(i) a receipt showing--
                                        ``(I) the information described in
                                    subparagraph (A);
                                        ``(II) the promised date of delivery
                                    to the designated recipient; and
                                        ``(III) the name and either the
                                    telephone number or the address of the
                                    designated recipient, if either the
                                    telephone number or the address of the
                                    designated recipient is provided by the
                                    sender; and
                              ``(ii) a statement containing--
                                        ``(I) information about the rights
                                    of the sender under this section
                                    regarding the resolution of errors; and

    [[Page 124 STAT. 2061]]

                                        ``(II) appropriate contact
                                    information for--
                                                ``(aa) the remittance
                                            transfer provider; and
                                                ``(bb) the State agency that
                                            regulates the remittance
                                            transfer provider and the Board,
                                            including the toll-free
                                            telephone number established
                                            under section 1013 of the
                                            Consumer Financial Protection
                                            Act of 2010.
                ``(3) Requirements relating to disclosures.--With respect to
            each disclosure required to be provided under paragraph (2) a
            remittance transfer provider shall--
                        ``(A) <<NOTE: Notice.>>  provide an initial notice
                    and receipt, as required by subparagraphs (A) and (B) of
                    paragraph (2), and an error resolution statement, as
                    required by subsection (d), that clearly and
                    conspicuously describe the information required to be
                    disclosed therein; and
                        ``(B) with respect to any transaction that a sender
                    conducts electronically, comply with the Electronic
                    Signatures in Global and National Commerce Act (15
                    U.S.C. 7001 et seq.).
                ``(4) Exception for disclosures of amount received.--
                        ``(A) In general.--Subject to the rules prescribed
                    by the Board, and except as provided under subparagraph
                    (B), the disclosures required regarding the amount of
                    currency that will be received by the designated
                    recipient shall be deemed to be accurate, so long as the
                    disclosures provide a reasonably accurate estimate of
                    the foreign currency to be
                    received. <<NOTE: Applicability.>>  This paragraph shall
                    apply only to a remittance transfer provider who is an
                    insured depository institution, as defined in section 3
                    of the Federal Deposit Insurance Act (12 U.S.C. 1813),
                    or an insured credit union, as defined in section 101 of
                    the Federal Credit Union Act (12 U.S.C. 1752), and if--
                              ``(i) a remittance transfer is conducted
                          through a demand deposit, savings deposit, or
                          other asset account that the sender holds with
                          such remittance transfer provider; and
                              ``(ii) at the time at which the sender
                          requests the transaction, the remittance transfer
                          provider is unable to know, for reasons beyond its
                          control, the amount of currency that will be made
                          available to the designated recipient.
                        ``(B) Deadline.--The application <<NOTE: Termination
                    date. Determination.>>  of subparagraph (A) shall
                    terminate 5 years after the date of enactment of the
                    Consumer Financial Protection Act of 2010, unless the
                    Board determines that termination of such provision
                    would negatively affect the ability of remittance
                    transfer providers described in subparagraph (A) to send
                    remittances to locations in foreign countries, in which
                    case, the Board may, by rule, extend the application of
                    subparagraph (A) to not longer than 10 years after the
                    date of enactment of the Consumer Financial Protection
                    Act of 2010.
                ``(5) Exemption authority.--The Board may, by rule, permit a
            remittance transfer provider to satisfy the requirements of--
                        ``(A) paragraph (2)(A) orally, if the transaction is
                    conducted entirely by telephone;

    [[Page 124 STAT. 2062]]

                        ``(B) <<NOTE: Deadline.>>  paragraph (2)(B), in the
                    case of a transaction conducted entirely by telephone,
                    by mailing the disclosures required under such
                    subparagraph to the sender, not later than 1 business
                    day after the date on which the transaction is
                    conducted, or by including such documents in the next
                    periodic statement, if the telephone transaction is
                    conducted through a demand deposit, savings deposit, or
                    other asset account that the sender holds with the
                    remittance transfer provider;
                        ``(C) subparagraphs (A) and (B) of paragraph (2)
                    together in one written disclosure, but only to the
                    extent that the information provided in accordance with
                    paragraph (3)(A) is accurate at the time at which
                    payment is made in connection with the subject
                    remittance transfer; and
                        ``(D) paragraph (2)(A), without compliance with
                    section 101(c) of the Electronic Signatures in Global
                    Commerce Act, if a sender initiates the transaction
                    electronically and the information is displayed
                    electronically in a manner that the sender can keep.
                ``(6) Storefront and internet notices.--
                        ``(A) In general.--
                              ``(i) Prominent posting.--Subject to
                          subparagraph (B), the Board may prescribe rules to
                          require a remittance transfer provider to
                          prominently post, and timely update, a notice
                          describing a model remittance transfer for one or
                          more amounts, as the Board may determine, which
                          notice shall show the amount of currency that will
                          be received by the designated recipient, using the
                          values of the currency into which the funds will
                          be exchanged.
                              ``(ii) Onsite displays.--The Board may require
                          the notice prescribed under this subparagraph to
                          be displayed in every physical storefront location
                          owned or controlled by the remittance transfer
                          provider.
                              ``(iii) Internet notices.--Subject to
                          paragraph (3), the Board shall prescribe rules to
                          require a remittance transfer provider that
                          provides remittance transfers via the Internet to
                          provide a notice, comparable to a storefront
                          notice described in this subparagraph, located on
                          the home page or landing page (with respect to
                          such remittance transfer services) owned or
                          controlled by the remittance transfer provider.
                              ``(iv) Rulemaking authority.--In prescribing
                          rules under this subparagraph, the Board may
                          impose standards or requirements regarding the
                          provision of the storefront and Internet notices
                          required under this subparagraph and the provision
                          of the disclosures required under paragraphs (2)
                          and (3).
                        ``(B) Study and analysis.--Prior to proposing rules
                    under subparagraph (A), the Board shall undertake
                    appropriate studies and analyses, which shall be
                    consistent with section 904(a)(2), and may include an
                    advanced notice of proposed rulemaking, to determine
                    whether a storefront notice or Internet notice
                    facilitates the ability of a consumer--
                              ``(i) to compare prices for remittance
                          transfers; and

    [[Page 124 STAT. 2063]]

                              ``(ii) to understand the types and amounts of
                          any fees or costs imposed on remittance transfers.

        ``(b) Foreign Language Disclosures.--The disclosures required under
    this section shall be made in English and in each of the foreign
    languages principally used by the remittance transfer provider, or any
    of its agents, to advertise, solicit, or market, either orally or in
    writing, at that office.
        ``(c) Regulations Regarding Transfers to Certain Nations.--If
    the <<NOTE: Deadline.>>  Board determines that a recipient nation does
    not legally allow, or the method by which transactions are made in the
    recipient country do not allow, a remittance transfer provider to know
    the amount of currency that will be received by the designated
    recipient, the Board may prescribe rules (not later than 18 months after
    the date of enactment of the Consumer Financial Protection Act of 2010)
    addressing the issue, which rules shall include standards for a
    remittance transfer provider to provide--
                ``(1) a receipt that is consistent with subsections (a) and
            (b); and
                ``(2) a reasonably accurate estimate of the foreign currency
            to be received, based on the rate provided to the sender by the
            remittance transfer provider at the time at which the
            transaction was initiated by the sender.

        ``(d) <<NOTE: Notices. Deadlines.>>  Remittance Transfer Errors.--
                ``(1) Error resolution.--
                        ``(A) In general.--If a remittance transfer provider
                    receives oral or written notice from the sender within
                    180 days of the promised date of delivery that an error
                    occurred with respect to a remittance transfer,
                    including the amount of currency designated in
                    subsection (a)(3)(A) that was to be sent to the
                    designated recipient of the remittance transfer, using
                    the values of the currency into which the funds should
                    have been exchanged, but was not made available to the
                    designated recipient in the foreign country, the
                    remittance transfer provider shall resolve the error
                    pursuant to this subsection and investigate the reason
                    for the error.
                        ``(B) Remedies.--Not later than 90 days after the
                    date of receipt of a notice from the sender pursuant to
                    subparagraph (A), the remittance transfer provider
                    shall, as applicable to the error and as designated by
                    the sender--
                              ``(i) refund to the sender the total amount of
                          funds tendered by the sender in connection with
                          the remittance transfer which was not properly
                          transmitted;
                              ``(ii) make available to the designated
                          recipient, without additional cost to the
                          designated recipient or to the sender, the amount
                          appropriate to resolve the error;
                              ``(iii) provide such other remedy, as
                          determined appropriate by rule of the Board for
                          the protection of senders; or
                              ``(iv) provide written notice to the sender
                          that there was no error with an explanation
                          responding to the specific complaint of the
                          sender.
                ``(2) Rules.--The Board <<NOTE: Deadline.>>  shall
            establish, by rule issued not later than 18 months after the
            date of enactment of the Consumer Financial Protection Act of
            2010, clear and appropriate standards for remittance transfer
            providers with respect to

    [[Page 124 STAT. 2064]]

            error resolution relating to remittance transfers, to protect
            senders from such errors. Standards prescribed under this
            paragraph shall include appropriate standards regarding record
            keeping, as required, including documentation--
                        ``(A) of the complaint of the sender;
                        ``(B) that the sender provides the remittance
                    transfer provider with respect to the alleged error; and
                        ``(C) of the findings of the remittance transfer
                    provider regarding the investigation of the alleged
                    error that the sender brought to their attention.
                ``(3) <<NOTE: Deadline.>>  Cancellation and refund policy
            rules.--Not later than 18 months after the date of enactment of
            the Consumer Financial Protection Act of 2010, the Board shall
            issue final rules regarding appropriate remittance transfer
            cancellation and refund policies for consumers.

        ``(e) Applicability of This Title.--
                ``(1) In general.--A remittance transfer that is not an
            electronic fund transfer, as defined in section 903, shall not
            be subject to any of the provisions of sections 905 through 913.
            A remittance transfer that is an electronic fund transfer, as
            defined in section 903, shall be subject to all provisions of
            this title, except for section 908, that are otherwise
            applicable to electronic fund transfers under this title.
                ``(2) Rule of construction.--Nothing in this section shall
            be construed--
                        ``(A) to affect the application to any transaction,
                    to any remittance provider, or to any other person of
                    any of the provisions of subchapter II of chapter 53 of
                    title 31, United States Code, section 21 of the Federal
                    Deposit Insurance Act (12 U.S.C. 1829b), or chapter 2 of
                    title I of Public Law 91-508 (12 U.S.C. 1951-1959), or
                    any regulations promulgated thereunder; or
                        ``(B) to cause any fund transfer that would not
                    otherwise be treated as such under paragraph (1) to be
                    treated as an electronic fund transfer, or as otherwise
                    subject to this title, for the purposes of any of the
                    provisions referred to in subparagraph (A) or any
                    regulations promulgated thereunder.

        ``(f) Acts of Agents.--
                ``(1) In general.--A remittance transfer provider shall be
            liable for any violation of this section by any agent,
            authorized delegate, or person affiliated with such provider,
            when such agent, authorized delegate, or affiliate acts for that
            remittance transfer provider.
                ``(2) Obligations of remittance transfer providers.--The
            Board shall prescribe rules to implement appropriate standards
            or conditions of, liability of a remittance transfer provider,
            including a provider who acts through an agent or authorized
            delegate. An agency charged with enforcing the requirements of
            this section, or rules prescribed by the Board under this
            section, may consider, in any action or other proceeding against
            a remittance transfer provider, the extent to which the provider
            had established and maintained policies or procedures for
            compliance, including policies, procedures, or other appropriate
            oversight measures designed to assure compliance by an agent or
            authorized delegate acting for such provider.

    [[Page 124 STAT. 2065]]

        ``(g) Definitions.--As used in this section--
                ``(1) the term `designated recipient' means any person
            located in a foreign country and identified by the sender as the
            authorized recipient of a remittance transfer to be made by a
            remittance transfer provider, except that a designated recipient
            shall not be deemed to be a consumer for purposes of this Act;
                ``(2) the term `remittance transfer'--
                        ``(A) means the electronic (as defined in section
                    106(2) of the Electronic Signatures in Global and
                    National Commerce Act (15 U.S.C. 7006(2))) transfer of
                    funds requested by a sender located in any State to a
                    designated recipient that is initiated by a remittance
                    transfer provider, whether or not the sender holds an
                    account with the remittance transfer provider or whether
                    or not the remittance transfer is also an electronic
                    fund transfer, as defined in section 903; and
                        ``(B) does not include a transfer described in
                    subparagraph (A) in an amount that is equal to or lesser
                    than the amount of a small-value transaction determined,
                    by rule, to be excluded from the requirements under
                    section 906(a);
                ``(3) the term `remittance transfer provider' means any
            person or financial institution that provides remittance
            transfers for a consumer in the normal course of its business,
            whether or not the consumer holds an account with such person or
            financial institution; and
                ``(4) the term `sender' means a consumer who requests a
            remittance provider to send a remittance transfer for the
            consumer to a designated recipient.''.

        (b) Automated Clearinghouse System.--
                (1) Expansion of system.--The Board of Governors shall work
            with the Federal reserve banks and the Department of the
            Treasury to expand the use of the automated clearinghouse system
            and other payment mechanisms for remittance transfers to foreign
            countries, with a focus on countries that receive significant
            remittance transfers from the United States, based on--
                        (A) the number, volume, and size of such transfers;
                        (B) the significance of the volume of such transfers
                    relative to the external financial flows of the
                    receiving country, including--
                              (i) the total amount transferred; and
                              (ii) the total volume of payments made by
                          United States Government agencies to beneficiaries
                          and retirees living abroad;
                        (C) the feasibility of such an expansion; and
                        (D) the ability of the Federal Reserve System to
                    establish payment gateways in different geographic
                    regions and currency zones to receive remittance
                    transfers and route them through the payments systems in
                    the destination countries.
                (2) Report to congress.--Not later than one calendar year
            after the date of enactment of this Act, and on April 30
            biennially thereafter during the 10-year period beginning on
            that date of enactment, the Board of Governors shall submit a
            report to the Committee on Banking, Housing, and Urban

    [[Page 124 STAT. 2066]]

            Affairs of the Senate and the Committee on Financial Services of
            the House of Representatives on the status of the automated
            clearinghouse system and its progress in complying with the
            requirements of this subsection. The report shall include an
            analysis of adoption rates of International ACH Transactions
            rules and formats, the efficacy of increasing adoption rates,
            and potential recommendations to increase adoption.

        (c) Expansion of Financial Institution Provision of Remittance
    Transfers.--
                (1) Provision of guidelines to institutions.--Each of the
            Federal banking agencies and the National Credit Union
            Administration shall provide guidelines to financial
            institutions under the jurisdiction of the agency regarding the
            offering of low-cost remittance transfers and no-cost or low-
            cost basic consumer accounts, as well as agency services to
            remittance transfer providers.
                (2) Assistance to financial literacy commission.--As part of
            its duties as members of the Financial Literacy and Education
            Commission, the Bureau, the Federal banking agencies, and the
            National Credit Union Administration shall assist the Financial
            Literacy and Education Commission in executing the Strategy for
            Assuring Financial Empowerment (or the ``SAFE Strategy''), as it
            relates to remittances.

        (d) Federal Credit Union Act Conforming Amendment.--Paragraph (12)
    of section 107 of the Federal Credit Union Act (12 U.S.C. 1757) is
    amended to read as follows:
                ``(12) in accordance with regulations prescribed by the
            Board--
                        ``(A) to sell, to persons in the field of
                    membership, negotiable checks (including travelers
                    checks), money orders, and other similar money transfer
                    instruments (including international and domestic
                    electronic fund transfers and remittance transfers, as
                    defined in section 919 of the Electronic Fund Transfer
                    Act); and
                        ``(B) to cash checks and money orders for persons in
                    the field of membership for a fee;''.

        (e) Report on Feasibility of and Impediments to Use of Remittance
    History in Calculation of Credit Score.--Before the end of the 365-day
    period beginning on the date of enactment of this Act, the Director
    shall submit a report to the President, the Committee on Banking,
    Housing, and Urban Affairs of the Senate, and the Committee on Financial
    Services of the House of Representatives regarding--
                (1) the manner in which the remittance history of a consumer
            could be used to enhance the credit score of the consumer;
                (2) the current legal and business model barriers and
            impediments that impede the use of the remittance history of the
            consumer to enhance the credit score of the consumer; and
                (3) recommendations on the manner in which maximum
            transparency and disclosure to consumers of exchange rates for
            remittance transfers subject to this title and the amendments
            made by this title may be accomplished, whether or not such
            exchange rates are known at the time of origination or payment
            by the consumer for the remittance transfer, including
            disclosure to the sender of the actual exchange rate

    [[Page 124 STAT. 2067]]

            used and the amount of currency that the recipient of the
            remittance transfer received, using the values of the currency
            into which the funds were exchanged, as contained in sections
            919(a)(2)(D) and 919(a)(3) of the Electronic Fund Transfer Act
            (as amended by this section).
    SEC. 1074. DEPARTMENT OF THE TREASURY STUDY ON ENDING THE
                              CONSERVATORSHIP OF FANNIE MAE, FREDDIE
                              MAC, AND REFORMING THE HOUSING FINANCE
                              SYSTEM.

        (a) Study Required.--
                (1) In general.--The Secretary <<NOTE: Recommenda- tions.>>
            of the Treasury shall conduct a study of and develop
            recommendations regarding the options for ending the
            conservatorship of the Federal National Mortgage Association (in
            this section referred to as ``Fannie Mae'') and the Federal Home
            Loan Mortgage Corporation (in this section referred to as
            ``Freddie Mac''), while minimizing the cost to taxpayers,
            including such options as--
                        (A) the gradual wind-down and liquidation of such
                    entities;
                        (B) the privatization of such entities;
                        (C) the incorporation of the functions of such
                    entities into a Federal agency;
                        (D) the dissolution of Fannie Mae and Freddie Mac
                    into smaller companies; or
                        (E) any other measures the Secretary determines
                    appropriate.
                (2) Analyses.--The study required under paragraph (1) shall
            include an analysis of--
                        (A) the role of the Federal Government in supporting
                    a stable, well-functioning housing finance system, and
                    whether and to what extent the Federal Government should
                    bear risks in meeting Federal housing finance
                    objectives;
                        (B) how the current structure of the housing finance
                    system can be improved;
                        (C) how the housing finance system should support
                    the continued availability of mortgage credit to all
                    segments of the market;
                        (D) how the housing finance system should be
                    structured to ensure that consumers continue to have
                    access to 30-year, fixed rate, pre-payable mortgages and
                    other mortgage products that have simple terms that can
                    be easily understood;
                        (E) the role of the Federal Housing Administration
                    and the Department of Veterans Affairs in a future
                    housing system;
                        (F) the impact of reforms of the housing finance
                    system on the financing of rental housing;
                        (G) the impact of reforms of the housing finance
                    system on secondary market liquidity;
                        (H) the role of standardization in the housing
                    finance system;
                        (I) how housing finance systems in other countries
                    offer insights that can help inform options for reform
                    in the United States; and
                        (J) the options for transition to a reformed housing
                    finance system.

    [[Page 124 STAT. 2068]]

        (b) Report and Recommendations.--Not later than January 31, 2011,
    the Secretary of the Treasury shall submit the report and
    recommendations required under subsection (a) to the Committee on
    Banking, Housing, and Urban Affairs of the Senate and the Committee on
    Financial Services of the House of Representatives.
    SEC. 1075. REASONABLE FEES AND RULES FOR PAYMENT CARD
                              TRANSACTIONS.

        (a) In General.--The Electronic Fund Transfer Act (15 U.S.C. 1693 et
    seq.) is amended--
                (1) by redesignating sections 920 and 921 <<NOTE: 15 USC
            1693p, 1693q.>>  as sections 921 and 922, respectively; and
                (2) by inserting after section 919 the following:
    ``SEC. 920. <<NOTE: 15 USC 1693o-2.>>  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 <<NOTE: Deadline. Standards.>>  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--

    [[Page 124 STAT. 2069]]

                              ``(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.
                ``(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 <<NOTE: Deadline. Standards.>>  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;

    [[Page 124 STAT. 2070]]

                                        ``(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;

    [[Page 124 STAT. 2071]]

                                        ``(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) <<NOTE: Applicability.>>  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 <<NOTE: Effective
                    date.>>  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 <<NOTE: Deadline.>>  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).

    [[Page 124 STAT. 2072]]

                ``(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) <<NOTE: Deadlines.>>  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.

    [[Page 124 STAT. 2073]]

                ``(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--

    [[Page 124 STAT. 2074]]

                        ``(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.''.

        (b) Amendment to the Food and Nutrition Act of 2008.--Section
    7(h)(10) of the Food and Nutrition Act of 2008 (7 U.S.C. 2016(h)(10)) is
    amended to read as follows:
                ``(10) Federal law not applicable.--Section 920 of the
            Electronic Fund Transfer Act shall not apply to electronic
            benefit transfer or reimbursement systems under this Act.''.

        (c) Amendment to the Farm Security and Rural Investment Act of
    2002.--Section 4402 of the Farm Security and Rural Investment Act of
    2002 (7 U.S.C. 3007) is amended by adding at the end the following new
    subsection:
        ``(f) Federal Law Not Applicable.--Section 920 of the Electronic
    Fund Transfer Act shall not apply to electronic benefit transfer systems
    established under this section.''.
        (d) Amendment to the Child Nutrition Act of 1966.--Section 11 of the
    Child Nutrition Act of 1966 (42 U.S.C. 1780) is amended by adding at the
    end the following:
        ``(c) Federal Law Not Applicable.--Section 920 of the Electronic
    Fund Transfer Act shall not apply to electronic benefit transfer systems
    established under this Act or the Richard B. Russell National School
    Lunch Act (42 U.S.C. 1751 et seq.).''.

    [[Page 124 STAT. 2075]]

    SEC. 1076. <<NOTE: 12 USC 5602.>>  REVERSE MORTGAGE STUDY AND
                              REGULATIONS.

        (a) Study.--Not later than 1 year after the designated transfer
    date, the Bureau shall conduct a study on reverse mortgage transactions.
        (b) Regulations.--
                (1) In general.--If the Bureau determines through the study
            required under subsection (a) that conditions or limitations on
            reverse mortgage transactions are necessary or appropriate for
            accomplishing the purposes and objectives of this title,
            including protecting borrowers with respect to the obtaining of
            reverse mortgage loans for the purpose of funding investments,
            annuities, and other investment products and the suitability of
            a borrower in obtaining a reverse mortgage for such purpose.
                (2) Identified practices and integrated disclosures.--The
            regulations prescribed under paragraph (1) may, as the Bureau
            may so determine--
                        (A) identify any practice as unfair, deceptive, or
                    abusive in connection with a reverse mortgage
                    transaction; and
                        (B) provide for an integrated disclosure standard
                    and model disclosures for reverse mortgage transactions,
                    consistent with section 4302(d), that combines the
                    relevant disclosures required under the Truth in Lending
                    Act (15 U.S.C. 1601 et seq.) and the Real Estate
                    Settlement Procedures Act, with the disclosures required
                    to be provided to consumers for Home Equity Conversion
                    Mortgages under section 255 of the National Housing Act.

        (c) Rule of Construction.--This section shall not be construed as
    limiting the authority of the Bureau to issue regulations, orders, or
    guidance that apply to reverse mortgages prior to the completion of the
    study required under subsection (a).
    SEC. 1077. REPORT ON PRIVATE EDUCATION LOANS AND PRIVATE
                              EDUCATIONAL LENDERS.

        (a) Report.--Not later than 2 years after the date of enactment of
    this Act, the Director and the Secretary of Education, in consultation
    with the Commissioners of the Federal Trade Commission, and the Attorney
    General of the United States, shall submit a report to 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, on private education loans (as that term is defined
    in section 140 of the Truth in Lending Act (15 U.S.C. 1650)) and private
    educational lenders (as that term is defined in such section).
        (b) Content.--The report required by this section shall examine, at
    a minimum--
                (1) the growth and changes of the private education loan
            market in the United States;
                (2) factors influencing such growth and changes;
                (3) the extent to which students and parents of students
            rely on private education loans to finance postsecondary
            education and the private education loan indebtedness of
            borrowers;
                (4) the characteristics of private education loan borrowers,
            including--

    [[Page 124 STAT. 2076]]

                        (A) the types of institutions of higher education
                    that they attend;
                        (B) socioeconomic characteristics (including income
                    and education levels, racial characteristics,
                    geographical background, age, and gender);
                        (C) what other forms of financing borrowers use to
                    pay for education;
                        (D) whether they exhaust their Federal loan options
                    before taking out a private loan;
                        (E) whether such borrowers are dependent or
                    independent students (as determined under part F of
                    title IV of the Higher Education Act of 1965) or parents
                    of such students;
                        (F) whether such borrowers are students enrolled in
                    a program leading to a certificate, license, or
                    credential other than a degree, an associates degree, a
                    baccalaureate degree, or a graduate or professional
                    degree; and
                        (G) if practicable, employment and repayment
                    behaviors;
                (5) the characteristics of private educational lenders,
            including whether such creditors are for-profit, non-profit, or
            institutions of higher education;
                (6) the underwriting criteria used by private educational
            lenders, including the use of cohort default rate (as such term
            is defined in section 435(m) of the Higher Education Act of
            1965);
                (7) the terms, conditions, and pricing of private education
            loans;
                (8) the consumer protections available to private education
            loan borrowers, including the effectiveness of existing
            disclosures and requirements and borrowers' awareness and
            understanding about terms and conditions of various financial
            products;
                (9) whether Federal regulators and the public have access to
            information sufficient to provide them with assurances that
            private education loans are provided in accord with the Nation's
            fair lending laws and that allows public officials to determine
            lender compliance with fair lending laws; and
                (10) any statutory or legislative recommendations necessary
            to improve consumer protections for private education loan
            borrowers and to better enable Federal regulators and the public
            to ascertain private educational lender compliance with fair
            lending laws.
    SEC. 1078. STUDY AND REPORT ON CREDIT SCORES.

        (a) Study.--The Bureau shall conduct a study on the nature, range,
    and size of variations between the credit scores sold to creditors and
    those sold to consumers by consumer reporting agencies that compile and
    maintain files on consumers on a nationwide basis (as defined in section
    603(p) of the Fair Credit Reporting Act; 15 U.S.C. 1681a(p)), and
    whether such variations disadvantage consumers.
        (b) Report to Congress.--The Bureau shall submit a report to
    Congress on the results of the study conducted under subsection (a) not
    later than 1 year after the date of enactment of this Act.

    [[Page 124 STAT. 2077]]

    SEC. 1079. <<NOTE: 12 USC 5603.>> REVIEW, REPORT, AND PROGRAM WITH
                              RESPECT TO EXCHANGE FACILITATORS.

        (a) Review.--The Director 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 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.
    SEC. 1079A. FINANCIAL FRAUD PROVISIONS.

        (a) Sentencing <<NOTE: Review.>> Guidelines.--
                (1) Securities <<NOTE: 28 USC 994 note.>>  fraud.--
                        (A) Directive.--Pursuant to its authority under
                    section 994 of title 28, United States Code, and in
                    accordance with this paragraph, the United States
                    Sentencing Commission shall review and, if appropriate,
                    amend the Federal Sentencing Guidelines and policy
                    statements applicable to persons convicted of offenses
                    relating to securities fraud or any other similar
                    provision of law, in order to reflect the intent of
                    Congress that penalties for the offenses under the
                    guidelines and policy statements appropriately account
                    for the potential and actual harm to the public and the
                    financial markets from the offenses.

    [[Page 124 STAT. 2078]]

                        (B) Requirements.--In making any amendments to the
                    Federal Sentencing Guidelines and policy statements
                    under subparagraph (A), the United States Sentencing
                    Commission shall--
                              (i) ensure that the guidelines and policy
                          statements, particularly section 2B1.1(b)(14) and
                          section 2B1.1(b)(17) (and any successors thereto),
                          reflect--
                                        (I) the serious nature of the
                                    offenses described in subparagraph (A);
                                        (II) the need for an effective
                                    deterrent and appropriate punishment to
                                    prevent the offenses; and
                                        (III) the effectiveness of
                                    incarceration in furthering the
                                    objectives described in subclauses (I)
                                    and (II);
                              (ii) consider the extent to which the
                          guidelines appropriately account for the potential
                          and actual harm to the public and the financial
                          markets resulting from the offenses;
                              (iii) ensure reasonable consistency with other
                          relevant directives and guidelines and Federal
                          statutes;
                              (iv) make any necessary conforming changes to
                          guidelines; and
                              (v) ensure that the guidelines adequately meet
                          the purposes of sentencing, as set forth in
                          section 3553(a)(2) of title 18, United States
                          Code.
                (2) Financial <<NOTE: 28 USC 994 note.>> institution
            fraud.--
                        (A) Directive.--Pursuant to its authority under
                    section 994 of title 28, United States Code, and in
                    accordance with this paragraph, the United States
                    Sentencing Commission shall review and, if appropriate,
                    amend the Federal Sentencing Guidelines and policy
                    statements applicable to persons convicted of fraud
                    offenses relating to financial institutions or federally
                    related mortgage loans and any other similar provisions
                    of law, to reflect the intent of Congress that the
                    penalties for the offenses under the guidelines and
                    policy statements ensure appropriate terms of
                    imprisonment for offenders involved in substantial bank
                    frauds or other frauds relating to financial
                    institutions.
                        (B) Requirements.--In making any amendments to the
                    Federal Sentencing Guidelines and policy statements
                    under subparagraph (A), the United States Sentencing
                    Commission shall--
                              (i) ensure that the guidelines and policy
                          statements reflect--
                                        (I) the serious nature of the
                                    offenses described in subparagraph (A);
                                        (II) the need for an effective
                                    deterrent and appropriate punishment to
                                    prevent the offenses; and
                                        (III) the effectiveness of
                                    incarceration in furthering the
                                    objectives described in subclauses (I)
                                    and (II);
                              (ii) consider the extent to which the
                          guidelines appropriately account for the potential
                          and actual harm

    [[Page 124 STAT. 2079]]

                          to the public and the financial markets resulting
                          from the offenses;
                              (iii) ensure reasonable consistency with other
                          relevant directives and guidelines and Federal
                          statutes;
                              (iv) make any necessary conforming changes to
                          guidelines; and
                              (v) ensure that the guidelines adequately meet
                          the purposes of sentencing, as set forth in
                          section 3553(a)(2) of title 18, United States
                          Code.

        (b) Extension of Statute of Limitations for Securities Fraud
    Violations.--
                (1) In general.--Chapter 213 of title 18, United States
            Code, is amended by adding at the end the following:
    ``Sec. 3301. Securities fraud offenses

        ``(a) Definition.--In this section, the term `securities fraud
    offense' means a violation of, or a conspiracy or an attempt to
    violate--
                ``(1) section 1348;
                ``(2) section 32(a) of the Securities Exchange Act of 1934
            (15 U.S.C. 78ff(a));
                ``(3) section 24 of the Securities Act of 1933 (15 U.S.C.
            77x);
                ``(4) section 217 of the Investment Advisers Act of 1940 (15
            U.S.C. 80b-17);
                ``(5) section 49 of the Investment Company Act of 1940 (15
            U.S.C. 80a-48); or
                ``(6) section 325 of the Trust Indenture Act of 1939 (15
            U.S.C. 77yyy).

        ``(b) Limitation.--No person shall be prosecuted, tried, or punished
    for a securities fraud offense, unless the indictment is found or the
    information is instituted within 6 years after the commission of the
    offense.''.
                (2) Technical and conforming amendment.--The table of
            sections for chapter 213 of title 18, United States Code, is
            amended by adding at the end the following:

    ``3301. Securities fraud offenses.''.

        (c) Amendments to the False Claims Act Relating to Limitations on
    Actions.--Section 3730(h) of title 31, United States Code, is amended--
                (1) in paragraph (1), by striking ``or agent on behalf of
            the employee, contractor, or agent or associated others in
            furtherance of other efforts to stop 1 or more violations of
            this subchapter'' and inserting ``agent or associated others in
            furtherance of an action under this section or other efforts to
            stop 1 or more violations of this subchapter''; and
                (2) by adding at the end the following:
                ``(3) Limitation on bringing civil action.--A civil action
            under this subsection may not be brought more than 3 years after
            the date when the retaliation occurred.''.

    [[Page 124 STAT. 2080]]

                        Subtitle H--Conforming Amendments

    SEC. 1081. <<NOTE: 5 USC app. 8G note.>>  AMENDMENTS TO THE
                              INSPECTOR GENERAL ACT.

        Effective <<NOTE: Effective date.>>  on the date of enactment of
    this Act, the Inspector General Act of 1978 <<NOTE: 5 USC app. 8G.>> (5
    U.S.C. App. 3) is amended--
                (1) in section 8G(a)(2), by inserting ``and the Bureau of
            Consumer Financial Protection'' after ``Board of Governors of
            the Federal Reserve System'';
                (2) in <<NOTE: Appointment.>> section 8G(c), by adding at
            the end the following: ``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
                (3) in section 8G(g)(3), by inserting ``and the Bureau of
            Consumer Financial Protection'' after ``Board of Governors of
            the Federal Reserve System'' the first place that term appears.
    SEC. 1082. <<NOTE: 5 USC 552a note.>> AMENDMENTS TO THE PRIVACY
                              ACT OF 1974.

        Effective <<NOTE: Effective date.>> on the date of enactment of this
    Act, section 552a of title 5, United States Code, is amended by adding
    at the end the following:

        ``(w) Applicability to Bureau of Consumer Financial Protection.--
    Except as provided in the Consumer Financial Protection Act of 2010,
    this section shall apply with respect to the Bureau of Consumer
    Financial Protection.''.
    SEC. 1083. AMENDMENTS TO THE ALTERNATIVE MORTGAGE TRANSACTION
                              PARITY ACT OF 1982.

        (a) In General.--The Alternative Mortgage Transaction Parity Act of
    1982 (12 U.S.C. 3801 et seq.) is amended--
                (1) in section 803 (12 U.S.C. 3802(1)), by striking ``1974''
            and all that follows through ``described and defined'' and
            inserting the following: ``1974), in which the interest rate or
            finance charge may be adjusted or renegotiated, described and
            defined''; and
                (2) in section 804 (12 U.S.C. 3803)--
                        (A) in subsection (a)--
                              (i) in each of paragraphs (1), (2), and (3),
                          by inserting after ``transactions made'' each
                          place that term appears ``on or before the
                          designated transfer date, as determined under
                          section 1062 of the Consumer Financial Protection
                          Act of 2010,'';
                              (ii) in paragraph (2), by striking ``and'' at
                          the end;
                              (iii) in paragraph (3), by striking the period
                          at the end and inserting ``; and''; and
                              (iv) by adding at the end the following new
                          paragraph:
                ``(4) with respect to transactions made after the designated
            transfer date, only in accordance with regulations governing
            alternative mortgage transactions, as issued by the Bureau

    [[Page 124 STAT. 2081]]

            of Consumer Financial Protection for federally chartered housing
            creditors, in accordance with the rulemaking authority granted
            to the Bureau of Consumer Financial Protection with regard to
            federally chartered housing creditors under provisions of law
            other than this section.'';
                        (B) by striking subsection (c) and inserting the
                    following:

        ``(c) Preemption of State Law.--An alternative mortgage transaction
    may be made by a housing creditor in accordance with this section,
    notwithstanding any State constitution, law, or regulation that
    prohibits an alternative mortgage transaction. For purposes of this
    subsection, a State constitution, law, or regulation that prohibits an
    alternative mortgage transaction does not include any State
    constitution, law, or regulation that regulates mortgage transactions
    generally, including any restriction on prepayment penalties or late
    charges.''; and
                        (C) by adding at the end the following:

        ``(d) Bureau Actions.--The Bureau of Consumer Financial Protection
    shall--
                ``(1) <<NOTE: Review.>> review the regulations identified by
            the Comptroller of the Currency and the National Credit Union
            Administration, (as those rules exist on the designated transfer
            date), as applicable under paragraphs (1) through (3) of
            subsection (a);
                ``(2) <<NOTE: Determination.>> determine whether such
            regulations are fair and not deceptive and otherwise meet the
            objectives of the Consumer Financial Protection Act of 2010; and
                ``(3) promulgate <<NOTE: Regulations.>>  regulations under
            subsection (a)(4) after the designated transfer date.

        ``(e) Designated <<NOTE: Definition.>> Transfer Date.--As used in
    this section, the term `designated transfer date' means the date
    determined under section 1062 of the Consumer Financial Protection Act
    of 2010.''.

        (b) Effective <<NOTE: 12 USC 3802 note.>> Date.--This section and
    the amendments made by this section shall become effective on the
    designated transfer date.

        (c) Rule <<NOTE: 12 USC 3802 note.>> of Construction.--The
    amendments made by subsection (a) shall not affect any transaction
    covered by the Alternative Mortgage Transaction Parity Act of l982 (12
    U.S.C. 3801 et seq.) and entered into on or before the designated
    transfer date.
    SEC. 1084. AMENDMENTS TO THE ELECTRONIC FUND TRANSFER ACT.

        The Electronic Fund Transfer Act <<NOTE: 15 USC 1693a et seq.>> (15
    U.S.C. 1693 et seq.) is amended--
                (1) by striking ``Board'' each place that term appears and
            inserting ``Bureau'', except in subsections (a) and (e) of
            section 904 (as amended in paragraph (3) of this section) and in
            918 (15 U.S.C. 1693o) (as so designated by the Credit Card Act
            of 2009) and section 920 (as added by section 1076);
                (2) in section 903 (15 U.S.C. 1693a)--
                        (A) by redesignating paragraphs (3) through (11) as
                    paragraphs (4) through (12), respectively; and
                        (B) by inserting after paragraph (3) the following:
                ``(4) <<NOTE: Definition.>> the term `Bureau' means the
            Bureau of Consumer Financial Protection;'';
                (3) in section 904 (15 U.S.C. 1693b)--

    [[Page 124 STAT. 2082]]

                        (A) in subsection (a), by striking ``(a)
                    Prescription by Board.--The <<NOTE: Regulations.>> Board
                    shall prescribe regulations to carry out the purposes of
                    this title.'' and inserting the following:

        ``(a) Prescription <<NOTE: Regulations.>>  by the Bureau and the
    Board.--
                ``(1) In general.--Except as provided in paragraph (2), the
            Bureau shall prescribe rules to carry out the purposes of this
            title.
                ``(2) Authority of the board.--The Board shall have sole
            authority to prescribe rules--
                        ``(A) to carry out the purposes of this title with
                    respect to a person described in section 1029(a) of the
                    Consumer Financial Protection Act of 2010; and
                        ``(B) to carry out the purposes of section 920.'';
                    and
                        (B) by adding at the end the following new
                    subsection:

        ``(e) Deference.--No provision of this title may be construed as
    altering, limiting, or otherwise affecting the deference that a court
    affords to--
                ``(1) the Bureau in making determinations regarding the
            meaning or interpretation of any provision of this title for
            which the Bureau has authority to prescribe regulations; or
                ``(2) the Board in making determinations regarding the
            meaning or interpretation of section 920.''.
                (4) in section 916(d) (15 U.S.C. 1693m) (as so designated by
            the Credit CARD Act of 2009)--
                        (A) in the subsection heading, by striking ``of
                    Board or Approval of Duly Authorized Official or
                    Employee of Federal Reserve System'';
                        (B) by inserting ``Bureau or the'' before ``Board''
                    each place that term appears; and
                        (C) by inserting ``Bureau of Consumer Financial
                    Protection or the'' before ``Federal Reserve System'';
                    and
                (5) in section 918 (15 U.S.C. 1693o) (as so designated by
            the Credit CARD Act of 2009)--
                        (A) in subsection (a)--
                              (i) by striking ``Compliance'' and inserting
                          ``Subject to subtitle B of the Consumer Financial
                          Protection Act of 2010, compliance'';
                              (ii) by striking paragraphs (1) and (2), and
                          inserting the following:
                ``(1) section 8 of the Federal Deposit Insurance Act, by the
            appropriate Federal banking agency, as defined in section 3(q)
            of the Federal Deposit Insurance Act (12 U.S.C. 1813(q)), with
            respect to--
                        ``(A) national banks, Federal savings associations,
                    and Federal branches and Federal agencies of foreign
                    banks;
                        ``(B) member banks of the Federal Reserve System
                    (other than national banks), branches and agencies of
                    foreign banks (other than Federal branches, Federal
                    agencies, and insured State branches of foreign banks),
                    commercial lending companies owned or controlled by
                    foreign banks, and organizations operating under section
                    25 or 25A of the Federal Reserve Act; and
                        ``(C) banks and State savings associations insured
                    by the Federal Deposit Insurance Corporation (other than
                    members of the Federal Reserve System), and insured
                    State branches of foreign banks;'';

    [[Page 124 STAT. 2083]]

                              (iii) by redesignating paragraphs (3) through
                          (5) as paragraphs (2) through (4), respectively;
                              (iv) in paragraph (2) (as so redesignated), by
                          striking the period at the end and inserting a
                          semicolon;
                              (v) in paragraph (3) (as so redesignated), by
                          striking ``and'' at the end;
                              (vi) in paragraph (4) (as so redesignated), by
                          striking the period at the end and inserting
                          ``and''; and
                              (vii) by adding at the end the following:
                ``(5) subtitle E of the Consumer Financial Protection Act of
            2010, by the Bureau, with respect to any person subject to this
            title, except that the Bureau shall not have authority to
            enforce the requirements of section 920 or any regulations
            prescribed by the Board under section 920.'';
                        (B) in subsection (b), by inserting ``any of
                    paragraphs (1) through (4) of'' before ``subsection
                    (a)'' each place that term appears; and
                        (C) by striking subsection (c) and inserting the
                    following:

        ``(c) Overall Enforcement Authority of the Federal Trade
    Commission.--Except to the extent that enforcement of the requirements
    imposed under this title is specifically committed to some other
    Government agency under any of paragraphs (1) through (4) of subsection
    (a), and subject to subtitle B of the Consumer Financial Protection Act
    of 2010, the Federal Trade Commission shall be authorized to enforce
    such requirements. For the purpose of the exercise by the Federal Trade
    Commission of its functions and powers under the Federal Trade
    Commission Act, a violation of any requirement imposed under this title
    shall be deemed a violation of a requirement imposed under that Act. All
    of the functions and powers of the Federal Trade Commission under the
    Federal Trade Commission Act are available to the Federal Trade
    Commission to enforce compliance by any person subject to the
    jurisdiction of the Federal Trade Commission with the requirements
    imposed under this title, irrespective of whether that person is engaged
    in commerce or meets any other jurisdictional tests under the Federal
    Trade Commission Act.''.
    SEC. 1085. AMENDMENTS TO THE EQUAL CREDIT OPPORTUNITY ACT.

        The Equal Credit Opportunity Act (15 U.S.C. 1691 et seq.) is
    amended--
                (1) by striking ``Board'' each place that term appears,
            other than in section 703(f) (as added by this section) and
            section 704(a)(4) (15 U.S.C. 1691c(a)(4)), and inserting
            ``Bureau'';
                (2) in section 702 (15 U.S.C. 1691a), by striking subsection
            (c) and inserting the following:

        ``(c) The <<NOTE: Definition.>> term `Bureau' means the Bureau of
    Consumer Financial Protection.'';
                (3) in section 703 (15 U.S.C. 1691b)--
                        (A) by striking the section heading and inserting
                    the following:
    ``SEC. 703. PROMULGATION OF REGULATIONS BY THE BUREAU.'';
                        (B) by striking ``(a) Regulations.--'';
                        (C) by striking subsection (b);

    [[Page 124 STAT. 2084]]

                        (D) by redesignating paragraphs (1) through (5) as
                    subsections (a) through (e), respectively;
                        (E) in subsection (c), as so redesignated, by
                    striking ``paragraph (2)'' and inserting ``subsection
                    (b)''; and
                        (F) by adding at the end the following:

        ``(f) Board <<NOTE: Regulations.>>  Authority.--Notwithstanding
    subsection (a), the Board shall prescribe regulations to carry out the
    purposes of this title with respect to a person described in section
    1029(a) of the Consumer Financial Protection Act of 2010. These
    regulations may contain but are not limited to such classifications,
    differentiation, or other provision, and may provide for such
    adjustments and exceptions for any class of transactions, as in the
    judgment of the Board are necessary or proper to effectuate the purposes
    of this title, to prevent circumvention or evasion thereof, or to
    facilitate or substantiate compliance therewith.

        ``(g) Deference.--Notwithstanding any power granted to any Federal
    agency under this title, the deference that a court affords to a Federal
    agency with respect to a determination made by such agency relating to
    the meaning or interpretation of any provision of this title that is
    subject to the jurisdiction of such agency shall be applied as if that
    agency were the only agency authorized to apply, enforce, interpret, or
    administer the provisions of this title'';
                (4) in section 704 (15 U.S.C. 1691c)--
                        (A) in subsection (a)--
                              (i) by striking ``Compliance'' and inserting
                          ``Subject to subtitle B of the Consumer Protection
                          Financial Protection Act of 2010'';
                              (ii) by striking paragraphs (1) and (2) and
                          inserting the following:
                ``(1) section 8 of the Federal Deposit Insurance Act, by the
            appropriate Federal banking agency, as defined in section 3(q)
            of the Federal Deposit Insurance Act (12 U.S.C. 1813(q)), with
            respect to--
                        ``(A) national banks, Federal savings associations,
                    and Federal branches and Federal agencies of foreign
                    banks;
                        ``(B) member banks of the Federal Reserve System
                    (other than national banks), branches and agencies of
                    foreign banks (other than Federal branches, Federal
                    agencies, and insured State branches of foreign banks),
                    commercial lending companies owned or controlled by
                    foreign banks, and organizations operating under section
                    25 or 25A of the Federal Reserve Act; and
                        ``(C) banks and State savings associations insured
                    by the Federal Deposit Insurance Corporation (other than
                    members of the Federal Reserve System), and insured
                    State branches of foreign banks;'';
                              (iii) by redesignating paragraphs (3) through
                          (9) as paragraphs (2) through (8), respectively;
                              (iv) in paragraph (7) (as so redesignated), by
                          striking ``and'' at the end;
                              (v) in paragraph (8) (as so redesignated), by
                          striking the period at the end, and inserting ``;
                          and''; and
                              (vi) by adding at the end the following:

    [[Page 124 STAT. 2085]]

                ``(9) Subtitle E of the Consumer Financial Protection Act of
            2010, by the Bureau, with respect to any person subject to this
            title.'';
                        (B) by striking subsection (c) and inserting the
                    following:

        ``(c) Overall Enforcement Authority of Federal Trade Commission.--
    Except to the extent that enforcement of the requirements imposed under
    this title is specifically committed to some other Government agency
    under any of paragraphs (1) through (8) of subsection (a), and subject
    to subtitle B of the Consumer Financial Protection Act of 2010, the
    Federal Trade Commission shall be authorized to enforce such
    requirements. For the purpose of the exercise by the Federal Trade
    Commission of its functions and powers under the Federal Trade
    Commission Act (15 U.S.C. 41 et seq.), a violation of any requirement
    imposed under this subchapter shall be deemed a violation of a
    requirement imposed under that Act. All of the functions and powers of
    the Federal Trade Commission under the Federal Trade Commission Act are
    available to the Federal Trade Commission to enforce compliance by any
    person with the requirements imposed under this title, irrespective of
    whether that person is engaged in commerce or meets any other
    jurisdictional tests under the Federal Trade Commission Act, including
    the power to enforce any rule prescribed by the Bureau under this title
    in the same manner as if the violation had been a violation of a Federal
    Trade Commission trade regulation rule.''; and
                        (C) in subsection (d), by striking ``Board'' and
                    inserting ``Bureau'';
                (5) in section 706(e) (15 U.S.C. 1691e(e))--
                        (A) in the subsection heading--
                              (i) by striking ``Board'' each place that term
                          appears and inserting ``Bureau''; and
                              (ii) by striking ``Federal Reserve System''
                          and inserting ``Bureau of Consumer Financial
                          Protection''; and
                        (B) by striking ``Federal Reserve System'' and
                    inserting ``Bureau of Consumer Financial Protection'';
                (6) in section 706(g) (15 U.S.C. 1691e(g)), by striking
            ``(3)'' and inserting ``(9)''; and
                (7) in section 706(f) (15 U.S.C. 1691e(f)), by striking
            ``two years from'' each place that term appears and inserting
            ``5 years after''.
    SEC. 1086. AMENDMENTS TO THE EXPEDITED FUNDS AVAILABILITY ACT.

        (a) Amendment to Section 603.--Section 603(d)(1) of the Expedited
    Funds Availability Act (12 U.S.C. 4002) is amended by inserting after
    ``Board'' the following ``, jointly with the Director of the Bureau of
    Consumer Financial Protection,''.
        (b) Amendments to Section 604.--Section 604 of the Expedited Funds
    Availability Act (12 U.S.C. 4003) is amended--
                (1) by inserting after ``Board'' each place that term
            appears, other than in subsection (f), the following: ``,
            jointly with the Director of the Bureau of Consumer Financial
            Protection,''; and

    [[Page 124 STAT. 2086]]

                (2) in subsection (f), by striking ``Board.'' each place
            that term appears and inserting the following: ``Board, jointly
            with the Director of the Bureau of Consumer Financial
            Protection.''.

        (c) Amendments to Section 605.--Section 605 of the Expedited Funds
    Availability Act (12 U.S.C. 4004) is amended--
                (1) by inserting after ``Board'' each place that term
            appears, other than in the heading for section 605(f)(1), the
            following: ``, jointly with the Director of the Bureau of
            Consumer Financial Protection,''; and
                (2) in subsection (f)(1), in the paragraph heading, by
            inserting ``and bureau'' after ``board''.

        (d) Amendments to Section 609.--Section 609 of the Expedited Funds
    Availability Act (12 U.S.C. 4008) is amended:
                (1) in subsection (a), by inserting after ``Board'' the
            following ``, jointly with the Director of the Bureau of
            Consumer Financial Protection,''; and
                (2) by striking subsection (e) and inserting the following:

        ``(e) Consultations.--In prescribing regulations under subsections
    (a) and (b), the Board and the Director of the 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.''.
        (e) Expedited Funds Availability Improvements.--Section 603 of the
    Expedited Funds Availability Act (12 U.S.C. 4002) is amended--
                (1) in subsection (a)(2)(D), by striking ``$100'' and
            inserting ``$200''; and
                (2) in subsection (b)(3)(C), in the subparagraph heading, by
            striking ``$100'' and inserting ``$200''; and
                (3) in subsection (c)(1)(B)(iii), in the clause heading, by
            striking ``$100'' and inserting ``$200''.

        (f) Regular Adjustments for Inflation.--Section 607 of the Expedited
    Funds Availability Act (12 U.S.C. 4006) is amended by adding at the end
    the following:
        ``(f) Adjustments to Dollar Amounts
    for <<NOTE: Deadline.>> Inflation.--The dollar amounts under this title
    shall be adjusted every 5 years after December 31, 2011, by the annual
    percentage increase in the Consumer Price Index for Urban Wage Earners
    and Clerical Workers, as published by the Bureau of Labor Statistics,
    rounded to the nearest multiple of $25.''.
    SEC. 1087. AMENDMENTS TO THE FAIR CREDIT BILLING ACT.

        The Fair Credit Billing Act <<NOTE: 15 USC 1666, 1666c, 1666j.>> (15
    U.S.C. 1666-1666j) is amended by striking ``Board'' each place that term
    appears, other than in section 105(i) (as added by this subtitle) and
    inserting ``Bureau''.
    SEC. 1088. AMENDMENTS TO THE FAIR CREDIT REPORTING ACT AND THE
                              FAIR AND ACCURATE CREDIT TRANSACTIONS
                              ACT OF 2003.

        (a) Fair Credit Reporting Act.--The Fair Credit Reporting Act (15
    U.S.C. 1681 et seq.) is amended--
                (1) in section 603 (15 U.S.C. 1681a)--
                        (A) by redesignating subsections (w) and (x) as
                    subsections (x) and (y), respectively; and
                        (B) by inserting after subsection (v) the following:

    [[Page 124 STAT. 2087]]

        ``(w) <<NOTE: Definition.>> The term `Bureau' means the Bureau of
    Consumer Financial Protection.''; and
                (2) except as otherwise specifically provided in this
            subsection--
                        (A) by <<NOTE: 15 USC 1681a et seq.>> striking
                    ``Federal Trade Commission'' each place that term
                    appears and inserting ``Bureau'';
                        (B) by <<NOTE: 15 USC 1681s.>> striking ``FTC'' each
                    place that term appears and inserting ``Bureau'';
                        (C) by <<NOTE: 15 USC 1681a et seq.>> striking ``the
                    Commission'' each place that term appears, other than
                    sections 615(e) (15 U.S.C. 1681m(e)) and 628(a)(1) (15
                    U.S.C. 1681w(a)(1)), and inserting ``the Bureau''; and
                        (D) <<NOTE: 15 USC 1681c, 1681s-2.>> by striking
                    ``The Federal banking agencies, the National Credit
                    Union Administration, and the Commission shall jointly''
                    each place that term appears, other than section
                    615(e)(1) (15 U.S.C. 1681m(e)) and section 628(a)(1) (15
                    U.S.C. 1681w(a)(1)), and inserting ``The Bureau shall'';
                (3) in section 603(k)(2) (15 U.S.C. 1681a(k)(2)), by
            striking ``Board of Governors of the Federal Reserve System''
            and inserting ``Bureau'';
                (4) in section 604(g) (15 U.S.C. 1681b(g))--
                        (A) in paragraph (3), by striking subparagraph (C)
                    and inserting the following:
                        ``(C) as otherwise determined to be necessary and
                    appropriate, by regulation or order, by the Bureau or
                    the applicable State insurance authority (with respect
                    to any person engaged in providing insurance or
                    annuities).''; and
                        (B) by striking paragraph (5) and inserting the
                    following:
                ``(5) Regulations and effective date for paragraph (2).--
                        ``(A) Regulations required.--The Bureau may, after
                    notice and opportunity for comment, prescribe
                    regulations that permit transactions under paragraph (2)
                    that are determined to be necessary and appropriate to
                    protect legitimate operational, transactional, risk,
                    consumer, and other needs (and which shall include
                    permitting actions necessary for administrative
                    verification purposes), consistent with the intent of
                    paragraph (2) to restrict the use of medical information
                    for inappropriate purposes.'';
                (5) in section 605(h)(2)(A) (15 U.S.C. 1681c(h)(2)(A)), by
            striking ``with respect to the entities that are subject to
            their respective enforcement authority under section 621'' and
            inserting ``, in consultation with the Federal banking agencies,
            the National Credit Union Administration, and the Federal Trade
            Commission,''.
                (6) in section 611(e)(2) (15 U.S.C. 1681i(e)), by striking
            paragraph (2) and inserting the following:
                ``(2) Exclusion.--Complaints received or obtained by the
            Bureau pursuant to its investigative authority under the
            Consumer Financial Protection Act of 2010 shall not be subject
            to paragraph (1).'';
                (7) in section 615(d)(2)(B) (15 U.S.C. 1681m(d)(2)(B)), by
            striking ``the Federal banking agencies'' and inserting ``the
            Federal Trade Commission, the Federal banking agencies,'';
                (8) in section 615(e)(1) (15 U.S.C. 1681m(e)(1)), by
            striking ``and the Commission'' and inserting ``the Federal
            Trade

    [[Page 124 STAT. 2088]]

            Commission, the Commodity Futures Trading Commission, and the
            Securities and Exchange Commission'';
                (9) in section 615(h)(6) (15 U.S.C. 1681m(h)(6)), by
            striking subparagraph (A) and inserting the following:
                        ``(A) Rules required.--The Bureau shall prescribe
                    rules to carry out this subsection.'';
                (10) in section 621 (15 U.S.C. 1681s)--
                        (A) by striking subsection (a) and inserting the
                    following:

        ``(a) Enforcement by Federal Trade Commission.--
                ``(1) In general.--The Federal Trade Commission shall be
            authorized to enforce compliance with the requirements imposed
            by this title under the Federal Trade Commission Act (15 U.S.C.
            41 et seq.), with respect to consumer reporting agencies and all
            other persons subject thereto, except to the extent that
            enforcement of the requirements imposed under this title is
            specifically committed to some other Government agency under any
            of subparagraphs (A) through (G) of subsection (b)(1), and
            subject to subtitle B of the Consumer Financial Protection Act
            of 2010, subsection (b). For the purpose of the exercise by the
            Federal Trade Commission of its functions and powers under the
            Federal Trade Commission Act, a violation of any requirement or
            prohibition imposed under this title shall constitute an unfair
            or deceptive act or practice in commerce, in violation of
            section 5(a) of the Federal Trade Commission Act (15 U.S.C.
            45(a)), and shall be subject to enforcement by the Federal Trade
            Commission under section 5(b) of that Act with respect to any
            consumer reporting agency or person that is subject to
            enforcement by the Federal Trade Commission pursuant to this
            subsection, irrespective of whether that person is engaged in
            commerce or meets any other jurisdictional tests under the
            Federal Trade Commission Act. The Federal Trade Commission shall
            have such procedural, investigative, and enforcement powers,
            including the power to issue procedural rules in enforcing
            compliance with the requirements imposed under this title and to
            require the filing of reports, the production of documents, and
            the appearance of witnesses, as though the applicable terms and
            conditions of the Federal Trade Commission Act were part of this
            title. Any person violating any of the provisions of this title
            shall be subject to the penalties and entitled to the privileges
            and immunities provided in the Federal Trade Commission Act as
            though the applicable terms and provisions of such Act are part
            of this title.
                ``(2) Penalties.--
                        ``(A) Knowing violations.--Except as otherwise
                    provided by subtitle B of the Consumer Financial
                    Protection Act of 2010, in the event of a knowing
                    violation, which constitutes a pattern or practice of
                    violations of this title, the Federal Trade Commission
                    may commence a civil action to recover a civil penalty
                    in a district court of the United States against any
                    person that violates this title. In such action, such
                    person shall be liable for a civil penalty of not more
                    than $2,500 per violation.
                        ``(B) Determining penalty amount.--In determining
                    the amount of a civil penalty under subparagraph (A),
                    the court shall take into account the degree of
                    culpability, any history of such prior conduct, ability
                    to pay, effect

    [[Page 124 STAT. 2089]]

                    on ability to continue to do business, and such other
                    matters as justice may require.
                        ``(C) Limitation.--Notwithstanding paragraph (2), a
                    court may not impose any civil penalty on a person for a
                    violation of section 623(a)(1), unless the person has
                    been enjoined from committing the violation, or ordered
                    not to commit the violation, in an action or proceeding
                    brought by or on behalf of the Federal Trade Commission,
                    and has violated the injunction or order, and the court
                    may not impose any civil penalty for any violation
                    occurring before the date of the violation of the
                    injunction or order.'';
                        (B) by striking subsection (b) and inserting the
                    following:

        ``(b) Enforcement by Other Agencies.--
                ``(1) In general.--Subject to subtitle B of the Consumer
            Financial Protection Act of 2010, compliance with the
            requirements imposed under this title with respect to consumer
            reporting agencies, persons who use consumer reports from such
            agencies, persons who furnish information to such agencies, and
            users of information that are subject to section 615(d) shall be
            enforced under--
                        ``(A) section 8 of the Federal Deposit Insurance Act
                    (12 U.S.C. 1818), by the appropriate Federal banking
                    agency, as defined in section 3(q) of the Federal
                    Deposit Insurance Act (12 U.S.C. 1813(q)), with respect
                    to--
                              ``(i) any national bank or State savings
                          association, and any Federal branch or Federal
                          agency of a foreign bank;
                              ``(ii) any member bank of the Federal Reserve
                          System (other than a national bank), a branch or
                          agency of a foreign bank (other than a Federal
                          branch, Federal agency, or insured State branch of
                          a foreign bank), a commercial lending company
                          owned or controlled by a foreign bank, and any
                          organization operating under section 25 or 25A of
                          the Federal Reserve Act; and
                              ``(iii) any bank or Federal savings
                          association insured by the Federal Deposit
                          Insurance Corporation (other than a member of the
                          Federal Reserve System) and any insured State
                          branch of a foreign bank;
                        ``(B) the Federal Credit Union Act (12 U.S.C. 1751
                    et seq.), by the Administrator of the National Credit
                    Union Administration with respect to any Federal credit
                    union;
                        ``(C) subtitle IV of title 49, United States Code,
                    by the Secretary of Transportation, with respect to all
                    carriers subject to the jurisdiction of the Surface
                    Transportation Board;
                        ``(D) the Federal Aviation Act of 1958 (49 U.S.C.
                    App. 1301 et seq.), by the Secretary of Transportation,
                    with respect to any air carrier or foreign air carrier
                    subject to that Act;
                        ``(E) the Packers and Stockyards Act, 1921 (7 U.S.C.
                    181 et seq.) (except as provided in section 406 of that
                    Act), by the Secretary of Agriculture, with respect to
                    any activities subject to that Act;

    [[Page 124 STAT. 2090]]

                        ``(F) the Commodity Exchange Act, with respect to a
                    person subject to the jurisdiction of the Commodity
                    Futures Trading Commission;
                        ``(G) the Federal securities laws, and any other
                    laws that are subject to the jurisdiction of the
                    Securities and Exchange Commission, with respect to a
                    person that is subject to the jurisdiction of the
                    Securities and Exchange Commission; and
                        ``(H) subtitle E of the Consumer Financial
                    Protection Act of 2010, by the Bureau, with respect to
                    any person subject to this title.
                ``(2) Incorporated definitions.--The terms used in paragraph
            (1) that are not defined in this title or otherwise defined in
            section 3(s) of the Federal Deposit Insurance Act (12 U.S.C.
            1813(s)) have the same meanings as in section 1(b) of the
            International Banking Act of 1978 (12 U.S.C. 3101).'';
                        (C) in subsection (c)(2)--
                              (i) by inserting ``and the Federal Trade
                          Commission'' before ``or the appropriate''; and
                              (ii) by inserting ``and the Federal Trade
                          Commission'' before ``or appropriate'' each place
                          that term appears;
                        (D) in subsection (c)(4), by inserting before ``or
                    the appropriate'' each place that term appears the
                    following: ``, the Federal Trade Commission,'';
                        (E) by striking subsection (e) and inserting the
                    following:

        ``(e) Regulatory <<NOTE: Applicability.>>  Authority.--
                ``(1) In general.--The Bureau shall prescribe such
            regulations as are necessary to carry out the purposes of this
            title, except with respect to sections 615(e) and 628. The
            Bureau may prescribe regulations as may be necessary or
            appropriate to administer and carry out the purposes and
            objectives of this title, and to prevent evasions thereof or to
            facilitate compliance therewith. Except as provided in section
            1029(a) of the Consumer Financial Protection Act of 2010, the
            regulations prescribed by the Bureau under this title shall
            apply to any person that is subject to this title,
            notwithstanding the enforcement authorities granted to other
            agencies under this section.
                ``(2) Deference.--Notwithstanding any power granted to any
            Federal agency under this title, the deference that a court
            affords to a Federal agency with respect to a determination made
            by such agency relating to the meaning or interpretation of any
            provision of this title that is subject to the jurisdiction of
            such agency shall be applied as if that agency were the only
            agency authorized to apply, enforce, interpret, or administer
            the provisions of this title The regulations prescribed by the
            Bureau under this title shall apply to any person that is
            subject to this title, notwithstanding the enforcement
            authorities granted to other agencies under this section.''; and
                        (F) in subsection (f)(2), by striking ``the Federal
                    banking agencies'' and insert ``the Federal Trade
                    Commission, the Federal banking agencies,'';
                (11) in section 623 (15 U.S.C. 1681s-2)--
                        (A) in subsection (a)(7), by striking subparagraph
                    (D) and inserting the following:
                        ``(D) Model disclosure.--

    [[Page 124 STAT. 2091]]

                              ``(i) Duty of bureau.--The Bureau shall
                          prescribe a brief model disclosure that a
                          financial institution may use to comply with
                          subparagraph (A), which shall not exceed 30 words.
                              ``(ii) Use of model not required.--No
                          provision of this paragraph may be construed to
                          require a financial institution to use any such
                          model form prescribed by the Bureau.
                              ``(iii) Compliance using model.--A financial
                          institution shall be deemed to be in compliance
                          with subparagraph (A) if the financial institution
                          uses any model form prescribed by the Bureau under
                          this subparagraph, or the financial institution
                          uses any such model form and rearranges its
                          format.'';
                        (B) in subsection (a)(8), by inserting ``, in
                    consultation with the Federal Trade Commission, the
                    Federal banking agencies, and the National Credit Union
                    Administration,'' before ``shall jointly''; and
                        (C) by striking subsection (e) and inserting the
                    following:

        ``(e) Accuracy Guidelines and Regulations Required.--
                ``(1) Guidelines.--The Bureau shall, with respect to persons
            or entities that are subject to the enforcement authority of the
            Bureau under section 621--
                        ``(A) establish and maintain guidelines for use by
                    each person that furnishes information to a consumer
                    reporting agency regarding the accuracy and integrity of
                    the information relating to consumers that such entities
                    furnish to consumer reporting agencies, and update such
                    guidelines as often as necessary; and
                        ``(B) prescribe regulations requiring each person
                    that furnishes information to a consumer reporting
                    agency to establish reasonable policies and procedures
                    for implementing the guidelines established pursuant to
                    subparagraph (A).
                ``(2) Criteria.--In developing the guidelines required by
            paragraph (1)(A), the Bureau shall--
                        ``(A) identify patterns, practices, and specific
                    forms of activity that can compromise the accuracy and
                    integrity of information furnished to consumer reporting
                    agencies;
                        ``(B) <<NOTE: Review.>> review the methods
                    (including technological means) used to furnish
                    information relating to consumers to consumer reporting
                    agencies;
                        ``(C) <<NOTE: Determination.>> determine whether
                    persons that furnish information to consumer reporting
                    agencies maintain and enforce policies to ensure the
                    accuracy and integrity of information furnished to
                    consumer reporting agencies; and
                        ``(D) <<NOTE: Examination.>> examine the policies
                    and processes that persons that furnish information to
                    consumer reporting agencies employ to conduct
                    reinvestigations and correct inaccurate information
                    relating to consumers that has been furnished to
                    consumer reporting agencies.'';
                (12) in section 628(a)(1) (15 U.S.C. 1681w(a)(1)), by
            striking ``Not later than'' and all that follows through
            ``Exchange Commission,'' and inserting ``The Federal Trade
            Commission, the Securities and Exchange Commission, the
            Commodity Futures Trading Commission, the Federal banking
            agencies,

    [[Page 124 STAT. 2092]]

            and the National Credit Union Administration, with respect to
            the entities that are subject to their respective enforcement
            authority under section 621,''; and
                (13) in section 628(a)(3) (15 U.S.C. 1681w(a)(3)), by
            striking ``the Federal banking agencies, the National Credit
            Union Administration, the Commission, and the Securities and
            Exchange Commission'' and inserting ``the agencies identified in
            paragraph (1)''.

        (b) Fair and Accurate Credit Transactions Act of 2003.--The Fair and
    Accurate Credit Transactions Act of 2003 (Public Law 108-159) is
    amended--
                (1) in section 112(b) (15 U.S.C. 1681c-1 note), by striking
            ``Commission'' and inserting ``Bureau'';
                (2) in section 211(d) (15 U.S.C. 1681j note), by striking
            ``Commission'' each place that term appears and inserting
            ``Bureau'';
                (3) in section 214(b) (15 U.S.C. 1681s-3 note), by striking
            paragraph (1) and inserting the following:
                ``(1) In general.--Regulations <<NOTE: Regulations.>>  to
            carry out section 624 of the Fair Credit Reporting Act (15
            U.S.C. 1681s-3), shall be prescribed, as described in paragraph
            (2), by--
                        ``(A) the Commodity Futures Trading Commission, with
                    respect to entities subject to its enforcement
                    authorities;
                        ``(B) the Securities and Exchange Commission, with
                    respect to entities subject to its enforcement
                    authorities; and
                        ``(C) the Bureau, with respect to other entities
                    subject to this Act.''; and
                (4) in section 214(e)(1) (15 U.S.C. 1681s-3 note), by
            striking ``Commission'' and inserting ``Bureau''.
    SEC. 1089. AMENDMENTS TO THE FAIR DEBT COLLECTION PRACTICES ACT.

        The Fair Debt Collection Practices Act (15 U.S.C. 1692 et seq.) is
    amended--
                (1) by <<NOTE: 15 USC 1692k, 1692m, 1692o.>> striking
            ``Commission'' each place that term appears and inserting
            ``Bureau'';
                (2) in section 803 (15 U.S.C. 1692a)--
                        (A) by striking paragraph (1) and inserting the
                    following:
                ``(1) The <<NOTE: Definition.>> term `Bureau' means the
            Bureau of Consumer Financial Protection.'';
                (3) in section 814 (15 U.S.C. 1692l)--
                        (A) by striking subsection (a) and inserting the
                    following:

        ``(a) Federal <<NOTE: Compliance.>> Trade Commission.--The Federal
    Trade Commission shall be authorized to enforce compliance with this
    title, except to the extent that enforcement of the requirements imposed
    under this title is specifically committed to another Government agency
    under any of paragraphs (1) through (5) of subsection (b), subject to
    subtitle B of the Consumer Financial Protection Act of 2010. For purpose
    of the exercise by the Federal Trade Commission of its functions and
    powers under the Federal Trade Commission Act (15 U.S.C. 41 et seq.), a
    violation of this title shall be deemed an unfair or deceptive act or
    practice in violation of that Act. All of the functions and powers of
    the Federal Trade Commission

    [[Page 124 STAT. 2093]]

    under the Federal Trade Commission Act are available to the Federal
    Trade Commission to enforce compliance by any person with this title,
    irrespective of whether that person is engaged in commerce or meets any
    other jurisdictional tests under the Federal Trade Commission Act,
    including the power to enforce the provisions of this title, in the same
    manner as if the violation had been a violation of a Federal Trade
    Commission trade regulation rule.''; and
                        (B) in subsection (b)--
                              (i) by striking ``Compliance'' and inserting
                          ``Subject to subtitle B of the Consumer Financial
                          Protection Act of 2010, compliance'';
                              (ii) by striking paragraphs (1) and (2) and
                          inserting the following:
                ``(1) section 8 of the Federal Deposit Insurance Act, by the
            appropriate Federal banking agency, as defined in section 3(q)
            of the Federal Deposit Insurance Act (12 U.S.C. 1813(q)), with
            respect to--
                        ``(A) national banks, Federal savings associations,
                    and Federal branches and Federal agencies of foreign
                    banks;
                        ``(B) member banks of the Federal Reserve System
                    (other than national banks), branches and agencies of
                    foreign banks (other than Federal branches, Federal
                    agencies, and insured State branches of foreign banks),
                    commercial lending companies owned or controlled by
                    foreign banks, and organizations operating under section
                    25 or 25A of the Federal Reserve Act; and
                        ``(C) banks and State savings associations insured
                    by the Federal Deposit Insurance Corporation (other than
                    members of the Federal Reserve System), and insured
                    State branches of foreign banks;'';
                              (iii) by redesignating paragraphs (3) through
                          (6), as paragraphs (2) through (5), respectively;
                              (iv) in paragraph (4) (as so redesignated), by
                          striking ``and'' at the end;
                              (v) in paragraph (5) (as so redesignated), by
                          striking the period at the end and inserting ``;
                          and''; and
                              (vi) by inserting before the undesignated
                          matter at the end the following:
                ``(6) subtitle E of the Consumer Financial Protection Act of
            2010, by the Bureau, with respect to any person subject to this
            title.''.
                (4) in subsection (d), by striking ``Neither the
            Commission'' and all that follows through the end of the
            subsection and inserting the following: ``Except as provided in
            section 1029(a) of the Consumer Financial Protection Act of
            2010, the Bureau may prescribe rules with respect to the
            collection of debts by debt collectors, as defined in this
            title.''.
    SEC. 1090. AMENDMENTS TO THE FEDERAL DEPOSIT INSURANCE ACT.

        The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) is
    amended--
                (1) in section 8(t) (12 U.S.C. 1818(t)), by adding at the
            end the following:

    [[Page 124 STAT. 2094]]

                ``(6) Referral to bureau of consumer financial protection.--
            Subject to subtitle B of the Consumer Financial Protection Act
            of 2010, each appropriate Federal banking agency shall make a
            referral to the Bureau of Consumer Financial Protection when the
            Federal banking agency has a reasonable belief that a violation
            of an enumerated consumer law, as defined in the Consumer
            Financial Protection Act of 2010, has been committed by any
            insured depository institution or institution-affiliated party
            within the jurisdiction of that appropriate Federal banking
            agency.''; and
                (2) in section 43 (12 U.S.C. 1831t)--
                        (A) in subsection (c), by striking ``Federal Trade
                    Commission'' and inserting ``Bureau'';
                        (B) in subsection (d), by striking ``Federal Trade
                    Commission'' and inserting ``Bureau'';
                        (C) in subsection (e)--
                              (i) in paragraph (2), by striking ``Federal
                          Trade Commission'' and inserting ``Bureau''; and
                              (ii) by adding at the end the following new
                          paragraph:
                ``(5) Bureau.--The <<NOTE: Definition.>> term `Bureau' means
            the Bureau of Consumer Financial Protection.''; and
                        (D) in subsection (f)--
                              (i) by striking paragraph (1) and inserting
                          the following:
                ``(1) Limited enforcement authority.--Compliance with the
            requirements of subsections (b), (c), and (e), and any
            regulation prescribed or order issued under such subsection,
            shall be enforced under the Consumer Financial Protection Act of
            2010, by the Bureau, subject to subtitle B of the Consumer
            Financial Protection Act of 2010, and under the Federal Trade
            Commission Act (15 U.S.C. 41 et seq.) by the Federal Trade
            Commission.''; and
                              (ii) in paragraph (2), by striking
                          subparagraph (C) and inserting the following:
                        ``(C) Limitation on state action while federal
                    action pending.--If the Bureau or Federal Trade
                    Commission has instituted an enforcement action for a
                    violation of this section, no appropriate State
                    supervisory agency may, during the pendency of such
                    action, bring an action under this section against any
                    defendant named in the complaint of the Bureau or
                    Federal Trade Commission for any violation of this
                    section that is alleged in that complaint.''.
    SEC. 1091. AMENDMENT TO 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)) is amended by striking
    ``Director, Office of Thrift Supervision'' and inserting ``Director of
    the Consumer Financial Protection Bureau''.
    SEC. 1092. AMENDMENTS TO THE FEDERAL TRADE COMMISSION ACT.

        Section 18(f) of the Federal Trade Commission Act (15 U.S.C. 57a(f))
    is amended--
                (1) by striking the subsection heading and inserting the
            following:

    [[Page 124 STAT. 2095]]

        ``(f) Definitions of Banks, Savings and Loan Institutions, and
    Federal Credit Unions.--''.
                (2) by striking paragraph (1) and inserting the following:
                ``(1) [Repealed.]'';
                (3) by striking paragraphs (5) through (7);
                (4) in paragraph (2)--
                        (A) by striking ``(2) Enforcement'' and all that
                    follows through ``in the case of'' and inserting the
                    following:
                ``(2) Definition.--For purposes of this Act, the term `bank'
            means'';
                        (B) in subparagraph (A), by striking ``, by the
                    division'' and all that follows through ``Currency'';
                        (C) in subparagraph (B)--
                              (i) by striking ``, by the division'' and all
                          that follows through ``System''; and
                              (ii) by striking ``25(a)'' and inserting
                          ``25A''; and
                        (D) in subparagraph (C)--
                              (i) by striking ``(other'' and inserting
                          ``(other than''; and
                              (ii) by striking ``, by the division'' and all
                          that follows through ``Corporation'';
                (5) in paragraph (3), by striking ``Compliance'' and all
            that follows through ``as defined in'' and inserting the
            following: ``For purposes of this Act, the term ``savings and
            loan institution'' has the same meaning as in''; and
                (6) in paragraph (4), by striking ``Compliance'' and all
            that follows through ``credit unions under'' and inserting the
            following: ``For purposes of this Act, the term ``Federal credit
            union'' has the same meaning as in''.
    SEC. 1093. AMENDMENTS TO THE GRAMM-LEACH-BLILEY ACT.

        Title V of the Gramm-Leach-Bliley Act (15 U.S.C. 6801 et seq.) is
    amended--
                (1) in section 501(b) (15 U.S.C. 6801(b)), by inserting ``,
            other than the Bureau of Consumer Financial Protection,'' after
            ``505(a)'';
                (2) in section 502(e)(5) (15 U.S.C. 6802(e)(5)), by
            inserting ``the Bureau of Consumer Financial Protection'' after
            ``(including'';
                (3) in section 504(a) (15 U.S.C. 6804(a))--
                        (A) by striking paragraphs (1) and (2) and inserting
                    the following:
                ``(1) Rulemaking.--
                        ``(A) In general.--Except as provided in
                    subparagraph (C), the Bureau of Consumer Financial
                    Protection and the Securities and Exchange Commission
                    shall have authority to prescribe such regulations as
                    may be necessary to carry out the purposes of this
                    subtitle with respect to financial institutions and
                    other persons subject to their respective jurisdiction
                    under section 505 (and notwithstanding subtitle B of the
                    Consumer Financial Protection Act of 2010), except that
                    the Bureau of Consumer Financial Protection shall not
                    have authority to prescribe regulations with respect to
                    the standards under section 501.
                        ``(B) CFTC.--The Commodity Futures Trading
                    Commission shall have authority to prescribe such
                    regulations as may be necessary to carry out the
                    purposes of

    [[Page 124 STAT. 2096]]

                    this subtitle with respect to financial institutions and
                    other persons subject to the jurisdiction of the
                    Commodity Futures Trading Commission under section 5g of
                    the Commodity Exchange Act.
                        ``(C) Federal trade commission authority.--
                    Notwithstanding the authority of the Bureau of Consumer
                    Financial Protection under subparagraph (A), the Federal
                    Trade Commission shall have authority to prescribe such
                    regulations as may be necessary to carry out the
                    purposes of this subtitle with respect to any financial
                    institution that is a person described in section
                    1029(a) of the Consumer Financial Protection Act of
                    2010.
                        ``(D) Rule of construction.--Nothing in this
                    paragraph shall be construed to alter, affect, or
                    otherwise limit the authority of a State insurance
                    authority to adopt regulations to carry out this
                    subtitle.
                ``(2) Coordination, consistency, and comparability.--
            Each <<NOTE: Consultation.>> of the agencies authorized under
            paragraph (1) to prescribe regulations shall consult and
            coordinate with the other such agencies and, as appropriate, and
            with representatives of State insurance authorities designated
            by the National Association of Insurance Commissioners, for the
            purpose of assuring, to the extent possible, that the
            regulations prescribed by each such agency are consistent and
            comparable with the regulations prescribed by the other such
            agencies.''; and
                        (B) in <<NOTE: Deadline.>>  paragraph (3), by
                    striking ``, and shall be issued in final form not later
                    than 6 months after the date of enactment of this Act'';
                (4) in section 505(a) (15 U.S.C. 6805(a))--
                        (A) by striking ``This subtitle'' and all that
                    follows through ``as follows:'' and inserting ``Subject
                    to subtitle B of the Consumer Financial Protection Act
                    of 2010, this subtitle and the regulations prescribed
                    thereunder shall be enforced by the Bureau of Consumer
                    Financial Protection, the Federal functional regulators,
                    the State insurance authorities, and the Federal Trade
                    Commission with respect to financial institutions and
                    other persons subject to their jurisdiction under
                    applicable law, as follows:'';
                        (B) in paragraph (1)--
                              (i) in the matter preceding subparagraph (A),
                          by inserting ``by the appropriate Federal banking
                          agency, as defined in section 3(q) of the Federal
                          Deposit Insurance Act,'' after ``Act,'';
                              (ii) in subparagraph (A), by striking ``, by
                          the Office of the Comptroller of the Currency'';
                              (iii) in subparagraph (B), by striking ``, by
                          the Board of Governors of the Federal Reserve
                          System'';
                              (iv) in subparagraph (C), by striking ``, by
                          the Board of Directors of the Federal Deposit
                          Insurance Corporation''; and
                              (v) in subparagraph (D), by striking ``, by
                          the Director of the Office of Thrift
                          Supervision''; and
                        (C) by adding at the end the following:
                ``(8) Under subtitle E of the Consumer Financial Protection
            Act of 2010, by the Bureau of Consumer Financial Protection, in
            the case of any financial institution and other covered person
            or service provider that is subject to the jurisdiction of the

    [[Page 124 STAT. 2097]]

            Bureau and any person subject to this subtitle, but not with
            respect to the standards under section 501.'';
                (5) in section 505(b)(1) (15 U.S.C. 6805(b)(1)), by
            inserting ``, other than the Bureau of Consumer Financial
            Protection,'' after ``subsection (a)''; and
                (6) in section 507(b) (15 U.S.C. 6807), by striking
            ``Federal Trade Commission'' and inserting ``Bureau of Consumer
            Financial Protection''.
    SEC. 1094. AMENDMENTS TO THE HOME MORTGAGE DISCLOSURE ACT OF 1975.

        The Home Mortgage Disclosure Act of 1975 (12 U.S.C. 2801 et seq.) is
    amended--
                (1) by <<NOTE: 12 USC 2803 et seq.>> striking ``Board'' each
            place that term appears, other than in sections 303, 304(h),
            305(b) (as amended by this section), and 307(a) (as amended by
            this section) and inserting ``Bureau''.
                (2) in section 303 (12 U.S.C. 2802)--
                        (A) by redesignating paragraphs (1) through (6) as
                    paragraphs (2) through (7), respectively; and
                        (B) by inserting before paragraph (2) the following:
                ``(1) the <<NOTE: Definition.>> term `Bureau' means the
            Bureau of Consumer Financial Protection;'';
                (3) in section 304 (12 U.S.C. 2803)--
                        (A) in subsection (b)--
                              (i) in paragraph (4), by inserting ``age,''
                          before ``and gender'';
                              (ii) in paragraph (3), by striking ``and'' at
                          the end;
                              (iii) in paragraph (4), by striking the period
                          at the end and inserting a semicolon; and
                              (iv) by adding at the end the following:
                ``(5) the number and dollar amount of mortgage loans grouped
            according to measurements of--
                        ``(A) the total points and fees payable at
                    origination in connection with the mortgage as
                    determined by the Bureau, taking into account 15 U.S.C.
                    1602(aa)(4);
                        ``(B) the difference between the annual percentage
                    rate associated with the loan and a benchmark rate or
                    rates for all loans;
                        ``(C) the term in months of any prepayment penalty
                    or other fee or charge payable on repayment of some
                    portion of principal or the entire principal in advance
                    of scheduled payments; and
                        ``(D) such other information as the Bureau may
                    require; and
                ``(6) the number and dollar amount of mortgage loans and
            completed applications grouped according to measurements of--
                        ``(A) the value of the real property pledged or
                    proposed to be pledged as collateral;
                        ``(B) the actual or proposed term in months of any
                    introductory period after which the rate of interest may
                    change;
                        ``(C) the presence of contractual terms or proposed
                    contractual terms that would allow the mortgagor or
                    applicant to make payments other than fully amortizing
                    payments during any portion of the loan term;

    [[Page 124 STAT. 2098]]

                        ``(D) the actual or proposed term in months of the
                    mortgage loan;
                        ``(E) the channel through which application was
                    made, including retail, broker, and other relevant
                    categories;
                        ``(F) as the Bureau may determine to be appropriate,
                    a unique identifier that identifies the loan originator
                    as set forth in section 1503 of the S.A.F.E. Mortgage
                    Licensing Act of 2008;
                        ``(G) as the Bureau may determine to be appropriate,
                    a universal loan identifier;
                        ``(H) as the Bureau may determine to be appropriate,
                    the parcel number that corresponds to the real property
                    pledged or proposed to be pledged as collateral;
                        ``(I) the credit score of mortgage applicants and
                    mortgagors, in such form as the Bureau may prescribe;
                    and
                        ``(J) such other information as the Bureau may
                    require.'';
                        (B) by striking subsection (h) and inserting the
                    following:

        ``(h) Submission to Agencies.--
                ``(1) In <<NOTE: Regulations.>> general.--The data required
            to be disclosed under subsection (b) shall be submitted to the
            Bureau or to the appropriate agency for the institution
            reporting under this title, in accordance with rules prescribed
            by <<NOTE: Notice. Public comment.>> the Bureau. Notwithstanding
            the requirement of subsection (a)(2)(A) for disclosure by census
            tract, the Bureau, in consultation with other appropriate
            agencies described in paragraph (2) and, after notice and
            comment, shall develop regulations that--
                        ``(A) prescribe the format for such disclosures, the
                    method for submission of the data to the appropriate
                    agency, and the procedures for disclosing the
                    information to the public;
                        ``(B) require the collection of data required to be
                    disclosed under subsection (b) with respect to loans
                    sold by each institution reporting under this title;
                        ``(C) require disclosure of the class of the
                    purchaser of such loans;
                        ``(D) permit any reporting institution to submit in
                    writing to the Bureau or to the appropriate agency such
                    additional data or explanations as it deems relevant to
                    the decision to originate or purchase mortgage loans;
                    and
                        ``(E) modify or require modification of itemized
                    information, for the purpose of protecting the privacy
                    interests of the mortgage applicants or mortgagors, that
                    is or will be available to the public.
                ``(2) Other appropriate agencies.--The appropriate agencies
            described in this paragraph are--
                        ``(A) the appropriate Federal banking agencies, as
                    defined in section 3(q) of the Federal Deposit Insurance
                    Act (12 U.S.C. 1813(q)), with respect to the entities
                    that are subject to the jurisdiction of each such
                    agency, respectively;
                        ``(B) the Federal Deposit Insurance Corporation for
                    banks insured by the Federal Deposit Insurance
                    Corporation (other than members of the Federal Reserve
                    System), mutual savings banks, insured State branches of
                    foreign banks, and any other depository institution
                    described in

    [[Page 124 STAT. 2099]]

                    section 303(2)(A) which is not otherwise referred to in
                    this paragraph;
                        ``(C) the National Credit Union Administration Board
                    with respect to credit unions; and
                        ``(D) the Secretary of Housing and Urban Development
                    with respect to other lending institutions not regulated
                    by the agencies referred to in subparagraph (A) or (B).
                ``(3) Rules for modifications under paragraph (1).--
                        ``(A) Application.--A modification under paragraph
                    (1)(E) shall apply to information concerning--
                              ``(i) credit score data described in
                          subsection (b)(6)(I), in a manner that is
                          consistent with the purpose described in paragraph
                          (1)(E); and
                              ``(ii) age or any other category of data
                          described in paragraph (5) or (6) of subsection
                          (b), as the Bureau determines to be necessary to
                          satisfy the purpose described in paragraph (1)(E),
                          and in a manner consistent with that purpose.
                        ``(B) Standards.--The Bureau shall prescribe
                    standards for any modification under paragraph (1)(E) to
                    effectuate the purposes of this title, in light of the
                    privacy interests of mortgage applicants or mortgagors.
                    Where necessary to protect the privacy interests of
                    mortgage applicants or mortgagors, the Bureau shall
                    provide for the disclosure of information described in
                    subparagraph (A) in aggregate or other reasonably
                    modified form, in order to effectuate the purposes of
                    this title.'';
                        (C) in subsection (i), by striking ``subsection
                    (b)(4)'' and inserting ``subsections (b)(4), (b)(5), and
                    (b)(6)'';
                        (D) in subsection (j)--
                              (i) by striking paragraph (3) and inserting
                          the following:
                ``(3) Change of form not required.--A depository institution
            meets the disclosure requirement of paragraph (1) if the
            institution provides the information required under such
            paragraph in such formats as the Bureau may require''; and
                              (ii) in paragraph (2)(A), by striking ``in the
                          format in which such information is maintained by
                          the institution'' and inserting ``in such formats
                          as the Bureau may require'';
                        (E) in subsection (m), by striking paragraph (2) and
                    inserting the following:
                ``(2) Form of information.--In complying with paragraph (1),
            a depository institution shall provide the person requesting the
            information with a copy of the information requested in such
            formats as the Bureau may require.''; and
                        (F) by adding at the end the following:

        ``(n) Timing of Certain Disclosures.--
    The <<NOTE: Regulations.>> data required to be disclosed under
    subsection (b) shall be submitted to the Bureau or to the appropriate
    agency for any institution reporting under this title, in accordance
    with regulations prescribed by the Bureau. Institutions shall not be
    required to report new data under paragraph (5) or (6) of subsection (b)
    before the first January 1 that occurs after the end of the 9-month
    period beginning on the date on which regulations are issued by the
    Bureau in final form with respect to such disclosures.'';
                (4) in section 305 (12 U.S.C. 2804)--

    [[Page 124 STAT. 2100]]

                        (A) by striking subsection (b) and inserting the
                    following:

        ``(b) Powers of Certain Other Agencies.--
                ``(1) In general.--Subject to subtitle B of the Consumer
            Financial Protection Act of 2010, compliance with the
            requirements of this title shall be enforced--
                        ``(A) under section 8 of the Federal Deposit
                    Insurance Act, the appropriate Federal banking agency,
                    as defined in section 3(q) of the Federal Deposit
                    Insurance Act (12 U.S.C. 1813(q)), with respect to--
                              ``(i) any national bank or Federal savings
                          association, and any Federal branch or Federal
                          agency of a foreign bank;
                              ``(ii) any member bank of the Federal Reserve
                          System (other than a national bank), branch or
                          agency of a foreign bank (other than a Federal
                          branch, Federal agency, and insured State branch
                          of a foreign bank), commercial lending company
                          owned or controlled by a foreign bank, and any
                          organization operating under section 25 or 25A of
                          the Federal Reserve Act; and
                              ``(iii) any bank or State savings association
                          insured by the Federal Deposit Insurance
                          Corporation (other than a member of the Federal
                          Reserve System), any mutual savings bank as,
                          defined in section 3(f) of the Federal Deposit
                          Insurance Act (12 U.S.C. 1813(f)), any insured
                          State branch of a foreign bank, and any other
                          depository institution not referred to in this
                          paragraph or subparagraph (B) or (C);
                        ``(B) under subtitle E of the Consumer Financial
                    Protection Act of 2010, by the Bureau, with respect to
                    any person subject to this subtitle;
                        ``(C) under the Federal Credit Union Act, by the
                    Administrator of the National Credit Union
                    Administration with respect to any insured credit union;
                    and
                        ``(D) with respect to other lending institutions, by
                    the Secretary of Housing and Urban Development.
                ``(2) Incorporated definitions.--The terms used in paragraph
            (1) that are not defined in this title or otherwise defined in
            section 3(s) of the Federal Deposit Insurance Act (12 U.S.C.
            1813(s)) shall have the same meanings as in section 1(b) of the
            International Banking Act of 1978 (12 U.S.C. 3101).''; and
                        (B) by adding at the end the following:

        ``(d) Overall Enforcement Authority of the Bureau of Consumer
    Financial Protection.--Subject to subtitle B of the Consumer Financial
    Protection Act of 2010, enforcement of the requirements imposed under
    this title is committed to each of the agencies under subsection (b). To
    facilitate research, examinations, and enforcement, all data collected
    pursuant to section 304 shall be available to the entities listed under
    subsection (b). The Bureau may exercise its authorities under the
    Consumer Financial Protection Act of 2010 to exercise principal
    authority to examine and enforce compliance by any person with the
    requirements of this title.'';
                (5) in section 306 (12 U.S.C. 2805(b)), by striking
            subsection (b) and inserting the following:

        ``(b) Exemption Authority.--The Bureau may, by regulation, exempt
    from the requirements of this title any State-chartered

    [[Page 124 STAT. 2101]]

    depository institution within any State or subdivision thereof, if the
    agency determines that, under the law of such State or subdivision, that
    institution is subject to requirements that are substantially similar to
    those imposed under this title, and that such law contains adequate
    provisions for enforcement. Notwithstanding any other provision of this
    subsection, compliance with the requirements imposed under this
    subsection shall be enforced by the Office of the Comptroller of the
    Currency under section 8 of the Federal Deposit Insurance Act, in the
    case of national banks and Federal savings associations, the deposits of
    which are insured by the Federal Deposit Insurance Corporation.''; and
                (6) by striking section 307 (12 U.S.C. 2806) and inserting
            the following:
    ``SEC. 307. COMPLIANCE <<NOTE: 12 USC 2806.>>  IMPROVEMENT
                            METHODS.

        ``(a) In General.--
                ``(1) Consultation required.--The Director of the 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 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 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 deems appropriate to carry out the purpose of this title.''.
    SEC. 1095. AMENDMENTS TO THE HOMEOWNERS PROTECTION ACT OF 1998.

        Section 10 of the Homeowners Protection Act of 1998 (12 U.S.C. 4909)
    is amended--
                (1) in subsection (a)--
                        (A) by striking ``Compliance'' and all that follows
                    through the end of paragraph (1) and inserting the
                    following: ``Subject to subtitle B of the Consumer
                    Financial Protection Act of 2010, compliance with the
                    requirements imposed under this Act shall be enforced
                    under--
                ``(1) section 8 of the Federal Deposit Insurance Act, by the
            appropriate Federal banking agency (as defined in section 3(q)
            of that Act), with respect to--
                        ``(A) insured depository institutions (as defined in
                    section 3(c)(2) of that Act);
                        ``(B) depository institutions described in clause
                    (i), (ii), or (iii) of section 19(b)(1)(A) of the
                    Federal Reserve Act

    [[Page 124 STAT. 2102]]

                    which are not insured depository institutions (as
                    defined in section 3(c)(2) of the Federal Deposit
                    Insurance Act); and
                        ``(C) depository institutions described in clause
                    (v) or (vi) of section 19(b)(1)(A) of the Federal
                    Reserve Act which are not insured depository
                    institutions (as defined in section 3(c)(2) of the
                    Federal Deposit Insurance Act);'';
                        (B) in paragraph (2), by striking ``and'' at the
                    end;
                        (C) in paragraph (3), by striking the period at the
                    end and inserting ``; and''; and
                        (D) by adding at the end the following:
                ``(4) subtitle E of the Consumer Financial Protection Act of
            2010, by the Bureau of Consumer Financial Protection, with
            respect to any person subject to this Act.''; and
                (2) in subsection (b)(2), by inserting before the period at
            the end the following: ``, subject to subtitle B of the Consumer
            Financial Protection Act of 2010''.
    SEC. 1096. AMENDMENTS TO THE HOME OWNERSHIP AND EQUITY PROTECTION
                              ACT OF 1994.

        The Home Ownership and Equity Protection Act of 1994 (15 U.S.C. 1601
    note) is amended--
                (1) in section 158(a), by striking ``Board of Governors of
            the Federal Reserve System, in consultation with the Consumer
            Advisory Council of the Board'' and inserting ``Bureau, in
            consultation with the Advisory Board to the Bureau''; and
                (2) in section 158(b), by striking ``Board of Governors of
            the Federal Reserve System'' and inserting ``Bureau''.
    SEC. 1097. <<NOTE: 15 USC 1638 note.>> AMENDMENTS TO THE OMNIBUS
                              APPROPRIATIONS ACT, 2009.

        Section 626 of the Omnibus Appropriations Act, 2009 (15 U.S.C. 1638
    note) is amended--
                (1) by striking subsection (a) and inserting the following:

        ``(a)(1) The <<NOTE: Regulations.>>  Bureau of Consumer Financial
    Protection shall have authority to prescribe rules with respect to
    mortgage loans in accordance with section 553 of title 5, United States
    Code. Such rulemaking shall relate to unfair or deceptive acts or
    practices regarding mortgage loans, which may include unfair or
    deceptive acts or practices involving loan modification and foreclosure
    rescue services. Any violation of a rule prescribed under this paragraph
    shall be treated as a violation of a rule prohibiting unfair, deceptive,
    or abusive acts or practices under the Consumer Financial Protection Act
    of 2010 and a violation of a rule under section 18 of the Federal Trade
    Commission Act (15 U.S.C. 57a) regarding unfair or deceptive acts or
    practices.

        ``(2) The Bureau of Consumer Financial Protection shall enforce the
    rules issued under paragraph (1) in the same manner, by the same means,
    and with the same jurisdiction, powers, and duties, as though all
    applicable terms and provisions of the Consumer Financial Protection Act
    of 2010 were incorporated into and made part of this subsection.
        ``(3) Subject to subtitle B of the Consumer Financial Protection Act
    of 2010, the Federal Trade Commission shall enforce the rules issued
    under paragraph (1), in the same manner, by the same means, and with the
    same jurisdiction, as though all applicable terms and provisions of the
    Federal Trade Commission Act were incorporated into and made part of
    this section.''; and

    [[Page 124 STAT. 2103]]

                (2) in subsection (b)--
                        (A) by striking paragraph (1) and inserting the
                    following:
                ``(1) Except as provided in paragraph (6), in any case in
            which the attorney general of a State has reason to believe that
            an interest of the residents of the State has been or is
            threatened or adversely affected by the engagement of any person
            subject to a rule prescribed under subsection (a) in practices
            that violate such rule, the State, as parens patriae, may bring
            a civil action on behalf of its residents in an appropriate
            district court of the United States or other court of competent
            jurisdiction--
                        ``(A) to enjoin that practice;
                        ``(B) to enforce compliance with the rule;
                        ``(C) to obtain damages, restitution, or other
                    compensation on behalf of the residents of the State; or
                        ``(D) to obtain penalties and relief provided under
                    the Consumer Financial Protection Act of 2010, the
                    Federal Trade Commission Act, and such other relief as
                    the court deems appropriate.'';
                        (B) in paragraphs (2) and (3), by striking ``the
                    primary Federal regulator'' each time the term appears
                    and inserting ``the Bureau of Consumer Financial
                    Protection or the Commission, as appropriate'';
                        (C) in paragraph (3), by inserting ``and subject to
                    subtitle B of the Consumer Financial Protection Act of
                    2010,'' after ``paragraph (2),''; and
                        (D) in paragraph (6), by striking ``the primary
                    Federal regulator'' each place that term appears and
                    inserting ``the Bureau of Consumer Financial Protection
                    or the Commission''.
    SEC. 1098. AMENDMENTS TO THE REAL ESTATE SETTLEMENT PROCEDURES ACT
                              OF 1974.

        The Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2601 et
    seq.) is amended--
                (1) in section 3 (12 U.S.C. 2602)--
                        (A) in paragraph (7), by striking ``and'' at the
                    end;
                        (B) in paragraph (8), by striking the period at the
                    end and inserting ``; and''; and
                        (C) by adding at the end the following:
                ``(9) <<NOTE: Definition.>> the term `Bureau' means the
            Bureau of Consumer Financial Protection.'';
                (2) in section 4 (12 U.S.C. 2603)--
                        (A) in <<NOTE: Publication.>> subsection (a), by
                    striking the first sentence and inserting the following:
                    ``The Bureau shall publish a single, integrated
                    disclosure for mortgage loan transactions (including
                    real estate settlement cost statements) which includes
                    the disclosure requirements of this section and section
                    5, in conjunction with the disclosure requirements of
                    the Truth in Lending Act that, taken together, may apply
                    to a transaction that is subject to both or either
                    provisions of law. The purpose of such model disclosure
                    shall be to facilitate compliance with the disclosure
                    requirements of this title and the Truth in Lending Act,
                    and

    [[Page 124 STAT. 2104]]

                    to aid the borrower or lessee in understanding the
                    transaction by utilizing readily understandable language
                    to simplify the technical nature of the disclosures.'';
                        (B) by striking ``Secretary'' each place that term
                    appears and inserting ``Bureau''; and
                        (C) by striking ``form'' each place that term
                    appears and inserting ``forms'';
                (3) in section 5 (12 U.S.C. 2604)--
                        (A) by striking ``Secretary'' each place that term
                    appears and inserting ``Bureau''; and
                        (B) in subsection (a), by striking the first
                    sentence and inserting the following:
                    ``The <<NOTE: Booklets.>> Bureau shall prepare and
                    distribute booklets jointly addressing compliance with
                    the requirements of the Truth in Lending Act and the
                    provisions of this title, in order to help persons
                    borrowing money to finance the purchase of residential
                    real estate better to understand the nature and costs of
                    real estate settlement services.'';
                (4) in section 6(j)(3) (12 U.S.C. 2605(j)(3))--
                        (A) by striking ``Secretary'' and inserting
                    ``Bureau''; and
                        (B) by striking ``, by regulations that shall take
                    effect not later than April 20, 1991,'';
                (5) in section 7(b) (12 U.S.C. 2606(b)) by striking
            ``Secretary'' and inserting ``Bureau'';
                (6) in section 8(c)(5) (12 U.S.C. 2607(c)(5)), by striking
            ``Secretary'' and inserting ``Bureau'';
                (7) in section 8(d) (12 U.S.C. 2607(d))--
                        (A) in the subsection heading, by inserting ``Bureau
                    and'' before ``Secretary''; and
                        (B) by striking paragraph (4), and inserting the
                    following:
                ``(4) The Bureau, the Secretary, or the attorney general or
            the insurance commissioner of any State may bring an action to
            enjoin violations of this section. Except, to the extent that a
            person is subject to the jurisdiction of the Bureau, the
            Secretary, or the attorney general or the insurance commissioner
            of any State, the Bureau shall have primary authority to enforce
            or administer this section, subject to subtitle B of the
            Consumer Financial Protection Act of 2010.'';
                (8) in section 10(c) (12 U.S.C. 2609(c) and (d)), by
            striking ``Secretary'' and inserting ``Bureau'';
                (9) in section 16 (12 U.S.C. 2614), by inserting ``the
            Bureau,'' before ``the Secretary'';
                (10) in section 18 (12 U.S.C. 2616), by striking
            ``Secretary'' each place that term appears and inserting
            ``Bureau''; and
                (11) in section 19 (12 U.S.C. 2617)--
                        (A) in the section heading by striking ``secretary''
                    and inserting ``bureau'';
                        (B) in subsection (a), by striking ``Secretary''
                    each place that term appears and inserting ``Bureau'';
                    and
                        (C) in subsections (b) and (c), by striking ``the
                    Secretary'' each place that term appears and inserting
                    ``the Bureau''.

    [[Page 124 STAT. 2105]]

    SEC. 1098A. AMENDMENTS TO THE INTERSTATE LAND SALES FULL
                                DISCLOSURE ACT.

        The Interstate Land Sales Full Disclosure Act (15 U.S.C. 1701 et
    seq.) is amended--
                (1) by <<NOTE: 15 USC 1702 et seq.>> striking ``Secretary''
            each place that term appears and inserting ``Director'';
                (2) <<NOTE: 15 USC 1715.>> by striking ``Department of
            Housing and Urban Development'' each place that term appears and
            inserting ``Bureau of Consumer Financial Protection'';
                (3) by <<NOTE: 15 USC 1715.>> striking ``Department'' each
            place that term appears and inserting ``Bureau'';
                (4) in section 1402 (15 U.S.C. 1701)--
                        (A) by striking paragraph (1) and inserting the
                    following:
                ``(1) `Director' <<NOTE: Definition.>> means the Director of
            the Bureau of Consumer FinancialProtection;'';
                        (B) in paragraph (10), by striking ``and'' at the
                    end;
                        (C) in paragraph (11), by striking the period at the
                    end and inserting ``; and''; and
                        (D) by adding at the end the following:
                ``(12) `Bureau' <<NOTE: Definition.>> means the Bureau of
            Consumer Financial Protection.''; and
                (5) in section 1416(a) (15 U.S.C. 1715(a)), by striking
            ``Secretary of Housing and Urban Development'' and inserting
            ``Director of the Bureau of Consumer Financial Protection''.
    SEC. 1099. AMENDMENTS TO THE RIGHT TO FINANCIAL PRIVACY ACT OF
                              1978.

        The Right to Financial Privacy Act of 1978 (12 U.S.C. 3401 et seq.)
    is amended--
                (1) in section 1101-- <<NOTE: 12 USC 3401.>>
                        (A) in paragraph (6)--
                              (i) in subparagraph (A), by inserting ``and''
                          after the semicolon;
                              (ii) in subparagraph (B), by striking ``and''
                          at the end; and
                              (iii) by striking subparagraph (C); and
                        (B) in paragraph (7), by striking subparagraph (B),
                    and inserting the following:
                        ``(B) the Bureau of Consumer Financial
                    Protection;'';
                (2) in section 1112(e) (12 U.S.C. 3412(e)), by striking
            ``and the Commodity Futures Trading Commission is permitted''
            and inserting ``the Commodity Futures Trading Commission, and
            the Bureau of Consumer Financial Protection is permitted''; and
                (3) in section 1113 (12 U.S.C. 3413), by adding at the end
            the following new subsection:

        ``(r) Disclosure to the Bureau of Consumer Financial Protection.--
    Nothing in this title shall apply to the examination by or disclosure to
    the Bureau of Consumer Financial Protection of financial records or
    information in the exercise of its authority with respect to a financial
    institution.''.
    SEC. 1100. AMENDMENTS TO THE SECURE AND FAIR ENFORCEMENT FOR
                              MORTGAGE LICENSING ACT OF 2008.

        The S.A.F.E. Mortgage Licensing Act of 2008 (12 U.S.C. 5101 et seq.)
    is amended--

    [[Page 124 STAT. 2106]]

                (1) by striking ``a Federal banking agency'' each place that
            term appears, other than in paragraphs (7) and (11) of section
            1503 and section 1507(a)(1), and inserting ``the Bureau'';
                (2) by <<NOTE: 12 USC 5102, 5106.>> striking ``Federal
            banking agencies'' each place that term appears and inserting
            ``Bureau''; and
                (3) by <<NOTE: 12 USC 5102 et seq.>> striking ``Secretary''
            each place that term appears and inserting ``Director'';
                (4) in section 1503 (12 U.S.C. 5102)--
                        (A) by redesignating paragraphs (2) through (12) as
                    (3) through (13), respectively;
                        (B) <<NOTE: Definitions.>> by striking paragraph (1)
                    and inserting the following:
                ``(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.''; and
                        (C) by striking paragraph (10), as so designated by
                    this section, and inserting the following:
                ``(10) Director.--The <<NOTE: Definition.>> term `Director'
            means the Director of the Bureau of Consumer Financial
            Protection.''; and
                (5) in section 1507 (12 U.S.C. 5106)--
                        (A) in subsection (a)--
                              (i) by striking paragraph (1) and inserting
                          the following:
                ``(1) In <<NOTE: System.>> general.--The Bureau shall
            develop and maintain a system for registering employees of a
            depository institution, employees of a subsidiary that is owned
            and controlled by a depository institution and regulated by a
            Federal banking agency, or employees of an institution regulated
            by the Farm Credit Administration, as registered loan
            originators with the Nationwide Mortgage
            Licensing <<NOTE: Deadline.>>  System and Registry. The system
            shall be implemented before the end of the 1-year period
            beginning on the date of enactment of the Consumer Financial
            Protection Act of 2010.''; and
                              (ii) in paragraph (2)--
                                        (I) by striking ``appropriate
                                    Federal banking agency and the Farm
                                    Credit Administration'' and inserting
                                    ``Bureau''; and
                                        (II) by striking ``employees's
                                    identity'' and inserting ``identity of
                                    the employee''; and
                        (B) in subsection (b), by striking ``through the
                    Financial Institutions Examination Council, and the Farm
                    Credit Administration'', and inserting ``and the Bureau
                    of Consumer Financial Protection'';
                (6) in section 1508 (12 U.S.C. 5107)--
                        (A) by striking the section heading and inserting
                    the following: ``sec. 1508. bureau of consumer financial
                    protection backup authority to establish loan originator
                    licensing system.''; and
                        (B) by adding at the end the following:

        ``(f) Regulation Authority.--

    [[Page 124 STAT. 2107]]

                ``(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.'';
                (7) by striking section 1510 (12 U.S.C. 5109) and inserting
            the following:
    ``SEC. <<NOTE: 12 USC 5109.>> 1510. FEES.

        ``The Bureau, the Farm Credit Administration, and the Nationwide
    Mortgage Licensing System and Registry may charge reasonable fees to
    cover the costs of maintaining and providing access to information from
    the Nationwide Mortgage Licensing System and Registry, to the extent
    that such fees are not charged to consumers for access to such system
    and registry.'';
                (8) by striking section 1513 (12 U.S.C. 5112) and inserting
            the following:
    ``SEC. 1513. <<NOTE: 12 USC 5112.>> 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 under section 1509,
    or any officer or employee of any such entity, shall not be subject to
    any civil action or proceeding for monetary damages by reason of the
    good faith action or omission of any officer or employee of any such
    entity, while acting within the scope of office or employment, relating
    to the collection, furnishing, or dissemination of information
    concerning persons who are loan originators or are applying for
    licensing or registration as loan originators.''; and
                (9) in section 1514 (12 U.S.C. 5113) in the section heading,
            by striking ``under hud backup licensing system'' and inserting
            ``by the bureau''.
    SEC. 1100A. AMENDMENTS TO THE TRUTH IN LENDING ACT.

        The Truth in Lending Act (15 U.S.C. 1601 et seq.) is amended--
                (1) in section 103 (15 U.S.C. 1602)--
                        (A) by redesignating subsections (b) through (bb) as
                    subsections (c) through (cc), respectively; and
                        (B) by inserting after subsection (a) the following:

        ``(b) Bureau.--The <<NOTE: Definition.>> term `Bureau' means the
    Bureau of Consumer Financial Protection.'';
                (2) by <<NOTE: 15 USC 1602 et seq.>> striking ``Board'' each
            place that term appears, other than in section 140(d) and
            sections 105(i) and 108(a), as amended by this section, and
            inserting ``Bureau'';
                (3) by <<NOTE: 15 USC 1616, 1632, 1651.>> striking ``Federal
            Trade Commission'' each place that term appears, other than in
            section 108(c) and section 129(m), as amended by this Act, and
            other than in the context of a reference to the Federal Trade
            Commission Act, and inserting ``Bureau'';
                (4) in section 105(a) (15 U.S.C. 1604(a)), in the second
            sentence--

    [[Page 124 STAT. 2108]]

                        (A) by striking ``Except in the case of a mortgage
                    referred to in section 103(aa), these regulations may
                    contain such'' and inserting ``Except with respect to
                    the provisions of section 129 that apply to a mortgage
                    referred to in section 103(aa), such regulations may
                    contain such additional requirements,''; and
                        (B) by inserting ``all or'' after ``exceptions
                    for'';
                (5) in section 105(b) (15 U.S.C. 1604(b)), by striking the
            first sentence and inserting the following:
            ``The <<NOTE: Publication.>> Bureau shall publish a single,
            integrated disclosure for mortgage loan transactions (including
            real estate settlement cost statements) which includes the
            disclosure requirements of this title in conjunction with the
            disclosure requirements of the Real Estate Settlement Procedures
            Act of 1974 that, taken together, may apply to a transaction
            that is subject to both or either provisions of law. The purpose
            of such model disclosure shall be to facilitate compliance with
            the disclosure requirements of this title and the Real Estate
            Settlement Procedures Act of 1974, and to aid the borrower or
            lessee in understanding the transaction by utilizing readily
            understandable language to simplify the technical nature of the
            disclosures.'';
                (6) in section 105(f)(1) (15 U.S.C. 1604(f)(1)), by
            inserting ``all or'' after ``from all or part of this title'';
                (7) in section 105 (15 U.S.C. 1604), by adding at the end
            the following:
                              ``(i) Authority of the board to prescribe
                          rules.--Notwithstanding subsection (a), the Board
                          shall have authority to prescribe rules under this
                          title with respect to a person described in
                          section 1029(a) of the Consumer Financial
                          Protection Act of 2010. Regulations prescribed
                          under this subsection may contain such
                          classifications, differentiations, or other
                          provisions, as in the judgment of the Board are
                          necessary or proper to effectuate the purposes of
                          this title, to prevent circumvention or evasion
                          thereof, or to facilitate compliance therewith.'';
                (8) in section 108 <<NOTE: 15 USC 1607.>> (15 U.S.C. 1604),
            by adding at the end the following:
                        (A) by striking subsection (a) and inserting the
                    following:

        ``(a) Enforcing Agencies.--Subject to subtitle B of the Consumer
    Financial Protection Act of 2010, compliance with the requirements
    imposed under this title shall be enforced under--
                ``(1) section 8 of the Federal Deposit Insurance Act, by the
            appropriate Federal banking agency, as defined in section 3(q)
            of the Federal Deposit Insurance Act (12 U.S.C. 1813(q)), with
            respect to--
                        ``(A) national banks, Federal savings associations,
                    and Federal branches and Federal agencies of foreign
                    banks;
                        ``(B) member banks of the Federal Reserve System
                    (other than national banks), branches and agencies of
                    foreign banks (other than Federal branches, Federal
                    agencies, and insured State branches of foreign banks),
                    commercial lending companies owned or controlled by
                    foreign banks, and organizations operating under section
                    25 or 25A of the Federal Reserve Act; and

    [[Page 124 STAT. 2109]]

                        ``(C) banks and State savings associations insured
                    by the Federal Deposit Insurance Corporation (other than
                    members of the Federal Reserve System), and insured
                    State branches of foreign banks;
                ``(2) the Federal Credit Union Act, by the Director of the
            National Credit Union Administration, with respect to any
            Federal credit union;
                ``(3) the Federal Aviation Act of 1958, by the Secretary of
            Transportation, with respect to any air carrier or foreign air
            carrier subject to that Act;
                ``(4) the Packers and Stockyards Act, 1921 (except as
            provided in section 406 of that Act), by the Secretary of
            Agriculture, with respect to any activities subject to that Act;
                ``(5) the Farm Credit Act of 1971, by the Farm Credit
            Administration with respect to any Federal land bank, Federal
            land bank association, Federal intermediate credit bank, or
            production credit association; and
                ``(6) subtitle E of the Consumer Financial Protection Act of
            2010, by the Bureau, with respect to any person subject to this
            title.''; and
                        (B) by striking subsection (c) and inserting the
                    following:

        ``(c) Overall Enforcement Authority of the Federal Trade
    Commission.--Except to the extent that enforcement of the requirements
    imposed under this title is specifically committed to some other
    Government agency under any of paragraphs (1) through (5) of subsection
    (a), and subject to subtitle B of the Consumer Financial Protection Act
    of 2010, the Federal Trade Commission shall be authorized to enforce
    such requirements. For the purpose of the exercise by the Federal Trade
    Commission of its functions and powers under the Federal Trade
    Commission Act, a violation of any requirement imposed under this title
    shall be deemed a violation of a requirement imposed under that Act. All
    of the functions and powers of the Federal Trade Commission under the
    Federal Trade Commission Act are available to the Federal Trade
    Commission to enforce compliance by any person with the requirements
    under this title, irrespective of whether that person is engaged in
    commerce or meets any other jurisdictional tests under the Federal Trade
    Commission Act.''; and
                (9) in section 129 (15 U.S.C. 1639), by striking subsection
            (m) and inserting the following:

        ``(m) Civil Penalties in Federal Trade Commission Enforcement
    Actions.--For purposes of enforcement by the Federal Trade Commission,
    any violation of a regulation issued by the Bureau pursuant to
    subsection (l)(2) shall be treated as a violation of a rule promulgated
    under section 18 of the Federal Trade Commission Act (15 U.S.C. 57a)
    regarding unfair or deceptive acts or practices.''; and
                (10) in chapter 5 (15 U.S.C. 1667 et seq.)--
                        (A) <<NOTE: 15 USC 1667c, 1667e, 1667f.>> by
                    striking ``the Board'' each place that term appears and
                    inserting ``the Bureau''; and
                        (B) by <<NOTE: 15 USC 1667a, 1667e,
                    1667f.>> striking ``The Board'' each place that term
                    appears and inserting ``The Bureau''.
    SEC. 1100B. AMENDMENTS TO THE TRUTH IN SAVINGS ACT.

        The Truth in Savings Act (12 U.S.C. 4301 et seq.) is amended--

    [[Page 124 STAT. 2110]]

                (1) by <<NOTE: 12 USC 4302 et seq.>> striking ``Board'' each
            place that term appears, other than in section 272(b) (12 U.S.C.
            4311), and inserting ``Bureau'';
                (2) in section 270(a) (12 U.S.C. 4309)--
                        (A) by striking ``Compliance'' and all that follows
                    through the end of paragraph (1) and inserting:
                    ``Subject to subtitle B of the Consumer Financial
                    Protection Act of 2010, compliance with the requirements
                    imposed under this subtitle shall be enforced under--
                ``(1) section 8 of the Federal Deposit Insurance Act by the
            appropriate Federal banking agency (as defined in section 3(q)
            of that Act), with respect to--
                        ``(A) insured depository institutions (as defined in
                    section 3(c)(2) of that Act);
                        ``(B) depository institutions described in clause
                    (i), (ii), or (iii) of section 19(b)(1)(A) of the
                    Federal Reserve Act which are not insured depository
                    institutions (as defined in section 3(c)(2) of the
                    Federal Deposit Insurance Act); and
                        ``(C) depository institutions described in clause
                    (v) or (vi) of section 19(b)(1)(A) of the Federal
                    Reserve Act which are not insured depository
                    institutions (as defined in section 3(c)(2) of the
                    Federal Deposit Insurance Act);'';
                        (B) in paragraph (2), by striking the period at the
                    end and inserting ``; and''; and
                        (C) by adding at the end the following:
                ``(3) subtitle E of the Consumer Financial Protection Act of
            2010, by the Bureau, with respect to any person subject to this
            subtitle.'';
                (3) in section 272(b) (12 U.S.C. 4311(b)), by striking
            ``regulation prescribed by the Board'' each place that term
            appears and inserting ``regulation prescribed by the Bureau'';
            and
                (4) in section 274 (12 U.S.C. 4313), by striking paragraph
            (4) and inserting the following:
                ``(4) Bureau.--The <<NOTE: Definition.>> term `Bureau' means
            the Bureau of Consumer Financial Protection.''.
    SEC. 1100C. AMENDMENTS TO THE TELEMARKETING AND CONSUMER FRAUD AND
                                ABUSE PREVENTION ACT.

        (a) Amendments to Section 3.--Section 3 of the Telemarketing and
    Consumer Fraud and Abuse Prevention Act (15 U.S.C. 6102) is amended by
    striking subsections (b) and (c) and inserting the following:
        ``(b) Rulemaking Authority.--The Commission shall have authority to
    prescribe rules under subsection (a), in accordance with section 553 of
    title 5, United States <<NOTE: Consultation.>> Code. In prescribing a
    rule under this section that relates to the provision of a consumer
    financial product or service that is subject to the Consumer Financial
    Protection Act of 2010, including any enumerated consumer law
    thereunder, the Commission shall consult with the Bureau of Consumer
    Financial Protection regarding the consistency of a proposed rule with
    standards, purposes, or objectives administered by the Bureau of
    Consumer Financial Protection.

        ``(c) Violations.--Any violation of any rule prescribed under
    subsection (a)--
                ``(1) shall be treated as a violation of a rule under
            section 18 of the Federal Trade Commission Act regarding unfair
            or deceptive acts or practices; and

    [[Page 124 STAT. 2111]]

                ``(2) that is committed by a person subject to the Consumer
            Financial Protection Act of 2010 shall be treated as a violation
            of a rule under section 1031 of that Act regarding unfair,
            deceptive, or abusive acts or practices.''.

        (b) Amendments to Section 4.--Section 4(d) of the Telemarketing and
    Consumer Fraud and Abuse Prevention Act (15 U.S.C. 6103(d)) is amended
    by inserting after ``Commission'' each place that term appears the
    following: ``or the Bureau of Consumer Financial Protection''.
        (c) Amendments to Section 5.--Section 5(c) of the Telemarketing and
    Consumer Fraud and Abuse Prevention Act (15 U.S.C. 6104(c)) is amended
    by inserting after ``Commission'' each place that term appears the
    following: ``or the Bureau of Consumer Financial Protection''.
        (d) Amendment to Section 6.--Section 6 of the Telemarketing and
    Consumer Fraud and Abuse Prevention Act (15 U.S.C. 6105) is amended by
    adding at the end the following:
        ``(d) Enforcement by Bureau of Consumer Financial Protection.--
    Except as otherwise provided in sections 3(d), 3(e), 4, and 5, and
    subject to subtitle B of the Consumer Financial Protection Act of 2010,
    this Act shall be enforced by the Bureau of Consumer Financial
    Protection under subtitle E of the Consumer Financial Protection Act of
    2010, with respect to the offering or provision of a consumer financial
    product or service subject to that Act.''.
    SEC. 1100D. AMENDMENTS TO THE PAPERWORK REDUCTION ACT.

        (a) Designation as an Independent Agency.--Section 2(5) of the
    Paperwork Reduction Act (44 U.S.C. 3502(5)) is amended by inserting
    ``the Bureau of Consumer Financial Protection, the Office of Financial
    Research,'' after ``the Securities and Exchange Commission,''.
        (b) Comparable Treatment.--Section 3513 of title 44, United States
    Code, is amended by adding at the end the following:
        ``(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.''.
    SEC. 1100E. ADJUSTMENTS FOR INFLATION IN THE TRUTH IN LENDING ACT.

        (a) Caps.--
                (1) Credit transactions.--Section 104(3) of the Truth in
            Lending Act (15 U.S.C. 1603(3)) is amended by striking
            ``$25,000'' and inserting ``$50,000''.
                (2) Consumer leases.--Section 181(1) of the Truth in Lending
            Act (15 U.S.C. 1667(1)) is amended by striking ``$25,000'' and
            inserting ``$50,000''.

        (b) Adjustments for Inflation.--On <<NOTE: Deadline. 15 USC 1603
    note.>> and after December 31, 2011, the Bureau shall adjust annually
    the dollar amounts described in sections 104(3) and 181(1) of the Truth
    in Lending Act (as amended by this section), by the annual percentage
    increase in the Consumer Price Index for Urban Wage Earners and Clerical
    Workers, as published by the Bureau of Labor Statistics, rounded to the
    nearest multiple of $100, or $1,000, as applicable.

    [[Page 124 STAT. 2112]]

    SEC. 1100F. USE OF CONSUMER REPORTS.

        Section 615 of the Fair Credit Reporting Act (15 U.S.C. 1681m) is
    amended--
                (1) in subsection (a)--
                        (A) by redesignating paragraphs (2) and (3) as
                    paragraphs (3) and (4), respectively;
                        (B) by inserting after paragraph (1) the following:
                ``(2) provide to the consumer written or electronic
            disclosure--
                        ``(A) of a numerical credit score as defined in
                    section 609(f)(2)(A) used by such person in taking any
                    adverse action based in whole or in part on any
                    information in a consumer report; and
                        ``(B) of the information set forth in subparagraphs
                    (B) through (E) of section 609(f)(1);''; and
                        (C) in paragraph (4) (as so redesignated), by
                    striking ``paragraph (2)'' and inserting ``paragraph
                    (3)''; and
                (2) in subsection (h)(5)--
                        (A) in subparagraph (C), by striking ``; and'' and
                    inserting a semicolon;
                        (B) in subparagraph (D), by striking the period and
                    inserting ``; and''; and
                        (C) by inserting at the end the following:
                        ``(E) include a statement informing the consumer
                    of--
                              ``(i) a numerical credit score as defined in
                          section 609(f)(2)(A), used by such person in
                          making the credit decision described in paragraph
                          (1) based in whole or in part on any information
                          in a consumer report; and
                              ``(ii) the information set forth in
                          subparagraphs (B) through (E) of section
                          609(f)(1).''.
    SEC. 1100G. SMALL BUSINESS FAIRNESS AND REGULATORY TRANSPARENCY.

        (a) Panel Requirement.--Section 609(d) of title 5, United States
    Code, is amended by striking ``means the'' and all that follows and
    inserting the following: ``means--
                ``(1) the Environmental Protection Agency;
                ``(2) the Consumer Financial Protection Bureau of the
            Federal Reserve System; and
                ``(3) the Occupational Safety and Health Administration of
            the Department of Labor.''.

        (b) Initial Regulatory Flexibility Analysis.--Section 603 of title
    5, United States Code, is amended by adding at the end the following:
        ``(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).

    [[Page 124 STAT. 2113]]

        ``(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).''.

        (c) Final Regulatory Flexibility Analysis.--Section 604(a) of title
    5, United States Code, is amended--
                (1) in paragraph (4), by striking ``and'' at the end;
                (2) in paragraph (5), by striking the period at the end and
            inserting ``; and''; and
                (3) by adding at the end the following:
                ``(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.''.
    SEC. 1100H. <<NOTE: 5 USC 552a note.>> EFFECTIVE DATE.

        Except as otherwise provided in this subtitle and the amendments
    made by this subtitle, this subtitle and the amendments made by this
    subtitle, other than sections 1081 and 1082, shall become effective on
    the designated transfer date.

                   TITLE XI--FEDERAL RESERVE SYSTEM PROVISIONS

    SEC. 1101. FEDERAL RESERVE ACT AMENDMENTS ON EMERGENCY LENDING
                              AUTHORITY.

        (a) Federal Reserve Act.--The third undesignated paragraph of
    section 13 of the Federal Reserve Act (12 U.S.C. 343) (relating to
    emergency lending authority) is amended--
                (1) by inserting ``(3)(A)'' before ``In unusual'';
                (2) by striking ``individual, partnership, or corporation''
            the first place that term appears and inserting the following:
            ``participant in any program or facility with broad-based
            eligibility'';
                (3) by striking ``exchange for an individual or a
            partnership or corporation'' and inserting ``exchange,'';
                (4) by striking ``such individual, partnership, or
            corporation'' and inserting the following: ``such participant in
            any program or facility with broad-based eligibility'';
                (5) by striking ``for individuals, partnerships,
            corporations'' and inserting ``for any participant in any
            program or facility with broad-based eligibility''; and
                (6) by striking ``may prescribe.'' and inserting the
            following: ``may prescribe.
                        ``(B)(i) <<NOTE: Regulation. Procedures.>> As soon
                    as is practicable after the date of enactment of this
                    subparagraph, the Board shall establish, by regulation,
                    in consultation with the Secretary of the Treasury, the
                    policies and procedures governing emergency lending
                    under this paragraph. Such policies and procedures shall
                    be designed to ensure that any emergency lending program
                    or facility is for the purpose of providing liquidity to
                    the financial system, and not to aid a failing financial

    [[Page 124 STAT. 2114]]

                    company, and that the security for emergency loans is
                    sufficient to protect taxpayers from losses and that any
                    such program is terminated in a timely and orderly
                    fashion. The policies and procedures established by the
                    Board shall require that a Federal reserve bank assign,
                    consistent with sound risk management practices and to
                    ensure protection for the taxpayer, a lendable value to
                    all collateral for a loan executed by a Federal reserve
                    bank under this paragraph in determining whether the
                    loan is secured satisfactorily for purposes of this
                    paragraph.
                        ``(ii) The Board shall establish procedures to
                    prohibit borrowing from programs and facilities by
                    borrowers that are insolvent. Such procedures may
                    include a certification from the chief executive officer
                    (or other authorized officer) of the borrower, at the
                    time the borrower initially borrows under the program or
                    facility (with a duty by the borrower to update the
                    certification if the information in the certification
                    materially changes), that the borrower is not insolvent.
                    A borrower shall be considered insolvent for purposes of
                    this subparagraph, if the borrower is in bankruptcy,
                    resolution under title II of the Dodd-Frank Wall Street
                    Reform and Consumer Protection Act, or any other Federal
                    or State insolvency proceeding.
                        ``(iii) A program or facility that is structured to
                    remove assets from the balance sheet of a single and
                    specific company, or that is established for the purpose
                    of assisting a single and specific company avoid
                    bankruptcy, resolution under title II of the Dodd-Frank
                    Wall Street Reform and Consumer Protection Act, or any
                    other Federal or State insolvency proceeding, shall not
                    be considered a program or facility with broad-based
                    eligibility.
                        ``(iv) The Board may not establish any program or
                    facility under this paragraph without the prior approval
                    of the Secretary of the Treasury.
                        ``(C) <<NOTE: Deadlines. Reports.>> The Board shall
                    provide to the Committee on Banking, Housing, and Urban
                    Affairs of the Senate and the Committee on Financial
                    Services of the House of Representatives--
                              ``(i) not later than 7 days after the Board
                          authorizes any loan or other financial assistance
                          under this paragraph, a report that includes--
                                        ``(I) the justification for the
                                    exercise of authority to provide such
                                    assistance;
                                        ``(II) the identity of the
                                    recipients of such assistance;
                                        ``(III) the date and amount of the
                                    assistance, and form in which the
                                    assistance was provided; and
                                        ``(IV) the material terms of the
                                    assistance, including--
                                                ``(aa) duration;
                                                ``(bb) collateral pledged
                                            and the value thereof;
                                                ``(cc) all interest, fees,
                                            and other revenue or items of
                                            value to be received in exchange
                                            for the assistance;

    [[Page 124 STAT. 2115]]

                                                ``(dd) any requirements
                                            imposed on the recipient with
                                            respect to employee
                                            compensation, distribution of
                                            dividends, or any other
                                            corporate decision in exchange
                                            for the assistance; and
                                                ``(ee) the expected costs to
                                            the taxpayers of such
                                            assistance; and
                              ``(ii) once every 30 days, with respect to any
                          outstanding loan or other financial assistance
                          under this paragraph, written updates on--
                                        ``(I) the value of collateral;
                                        ``(II) the amount of interest, fees,
                                    and other revenue or items of value
                                    received in exchange for the assistance;
                                    and
                                        ``(III) the expected or final cost
                                    to the taxpayers of such assistance.
                        ``(D) The information required to be submitted to
                    Congress under subparagraph (C) related to--
                              ``(i) the identity of the participants in an
                          emergency lending program or facility commenced
                          under this paragraph;
                              ``(ii) the amounts borrowed by each
                          participant in any such program or facility;
                              ``(iii) <<NOTE: Confidentiality.>> identifying
                          details concerning the assets or collateral held
                          by, under, or in connection with such a program or
                          facility,
                    shall be kept confidential, upon the written request of
                    the Chairman of the Board, in which case such
                    information shall be made available only to the
                    Chairpersons or Ranking Members of the Committees
                    described in subparagraph (C).
                        ``(E) If an entity to which a Federal reserve bank
                    has provided a loan under this paragraph becomes a
                    covered financial company, as defined in section 201 of
                    the Dodd-Frank Wall Street Reform and Consumer
                    Protection Act, at any time while such loan is
                    outstanding, and the Federal reserve bank incurs a
                    realized net loss on the loan, then the Federal reserve
                    bank shall have a claim equal to the amount of the net
                    realized loss against the covered entity, with the same
                    priority as an obligation to the Secretary of the
                    Treasury under section 210(b) of the Dodd-Frank Wall
                    Street Reform and Consumer Protection Act.''.

        (b) Conforming Amendment.--Section 507(a)(2) of title 11, United
    States Code, is amended by inserting ``unsecured claims of any Federal
    reserve bank related to loans made through programs or facilities
    authorized under section 13(3) of the Federal Reserve Act (12 U.S.C.
    343),'' after ``this title,''.
        (c) References.--On <<NOTE: Effective date. 12 USC 343 note.>>  and
    after the date of enactment of this Act, any reference in any provision
    of Federal law to the third undesignated paragraph of section 13 of the
    Federal Reserve Act (12 U.S.C. 343) shall be deemed to be a reference to
    section 13(3) of the Federal Reserve Act, as so designated by this
    section.
    SEC. 1102. AUDITS OF SPECIAL FEDERAL RESERVE CREDIT FACILITIES.

        (a) Audits.--Section 714 of title 31, United States Code, is amended
    by adding at the end the following:

    [[Page 124 STAT. 2116]]

        ``(f) Audits of Credit Facilities of the Federal Reserve System.--
                ``(1) Definitions.--In this subsection, the following
            definitions shall apply:
                        ``(A) Credit facility.--The term `credit facility'
                    means a program or facility, including any special
                    purpose vehicle or other entity established by or on
                    behalf of the Board of Governors of the Federal Reserve
                    System or a Federal reserve bank, authorized by the
                    Board of Governors under section 13(3) of the Federal
                    Reserve Act (12 U.S.C. 343), that is not subject to
                    audit under subsection (e).
                        ``(B) Covered transaction.--The term `covered
                    transaction' means any open market transaction or
                    discount window advance that meets the definition of
                    `covered transaction' in section 11(s) of the Federal
                    Reserve Act.
                ``(2) Authority for audits and examinations.--Subject to
            paragraph (3), and notwithstanding any limitation in subsection
            (b) on the auditing and oversight of certain functions of the
            Board of Governors of the Federal Reserve System or any Federal
            reserve bank, the Comptroller General of the United States may
            conduct audits, including onsite examinations, of the Board of
            Governors, a Federal reserve bank, or a credit facility, if the
            Comptroller General determines that such audits are appropriate,
            solely for the purposes of assessing, with respect to a credit
            facility or a covered transaction--
                        ``(A) the operational integrity, accounting,
                    financial reporting, and internal controls governing the
                    credit facility or covered transaction;
                        ``(B) the effectiveness of the security and
                    collateral policies established for the facility or
                    covered transaction in mitigating risk to the relevant
                    Federal reserve bank and taxpayers;
                        ``(C) whether the credit facility or the conduct of
                    a covered transaction inappropriately favors one or more
                    specific participants over other institutions eligible
                    to utilize the facility; and
                        ``(D) the policies governing the use, selection, or
                    payment of third-party contractors by or for any credit
                    facility or to conduct any covered transaction.
                ``(3) Reports and delayed disclosure.--
                        ``(A) Reports required.--A report on each audit
                    conducted under paragraph (2) shall be submitted by the
                    Comptroller General to the Congress before the end of
                    the 90-day period beginning on the date on which such
                    audit is completed.
                        ``(B) Contents.--The report under subparagraph (A)
                    shall include a detailed description of the findings and
                    conclusions of the Comptroller General with respect to
                    the matters described in paragraph (2) that were audited
                    and are the subject of the report, together with such
                    recommendations for legislative or administrative action
                    relating to such matters as the Comptroller General may
                    determine to be appropriate.
                        ``(C) Delayed release of certain information.--
                              ``(i) In general.--The Comptroller General
                          shall not disclose to any person or entity,
                          including to Congress, the names or identifying
                          details of specific

    [[Page 124 STAT. 2117]]

                          participants in any credit facility or covered
                          transaction, the amounts borrowed by or
                          transferred by or to specific participants in any
                          credit facility or covered transaction, or
                          identifying details regarding assets or collateral
                          held or transferred by, under, or in connection
                          with any credit facility or covered transaction,
                          and any report provided under subparagraph (A)
                          shall be redacted to ensure that such names and
                          details are not disclosed.
                              ``(ii) Delayed <<NOTE: Expiration date.>>
                          release.--The nondisclosure obligation under
                          clause (i) shall expire with respect to any
                          participant on the date on which the Board of
                          Governors, directly or through a Federal reserve
                          bank, publicly discloses the identity of the
                          subject participant or the identifying details of
                          the subject assets, collateral, or transaction.
                              ``(iii) General <<NOTE: Deadline.>>
                          release.--The Comptroller General shall release a
                          nonredacted version of any report on a credit
                          facility 1 year after the effective date of the
                          termination by the Board of Governors of the
                          authorization for the credit facility. For
                          purposes of this clause, a credit facility shall
                          be deemed to have terminated 24 months after the
                          date on which the credit facility ceases to make
                          extensions of credit and loans, unless the credit
                          facility is otherwise terminated by the Board of
                          Governors.
                              ``(iv) Exceptions.--The nondisclosure
                          obligation under clause (i) shall not apply to the
                          credit facilities Maiden Lane, Maiden Lane II, and
                          Maiden Lane III.
                              ``(v) Release of covered transaction
                          information.--The Comptroller General shall
                          release a nonredacted version of any report
                          regarding covered transactions upon the release of
                          the information regarding such covered
                          transactions by the Board of Governors of the
                          Federal Reserve System, as provided in section
                          11(s) of the Federal Reserve Act.''.

        (b) Access to Records.--Section 714(d) of title 31, United States
    Code, is amended--
                (1) in paragraph (2), by inserting ``or any person or entity
            described in paragraph (3)(A)'' after ``used by an agency'';
                (2) in paragraph (3), by inserting ``or (f)'' after
            ``subsection (e)'' each place that term appears;
                (3) in clauses (i) and (ii) of paragraph (3)(A), by
            inserting ``or the Federal Reserve banks'' after ``by the
            Board'' each place that term appears;
                (4) in paragraph (3)(A)(ii), by inserting ``participating in
            or'' after ``any entity''; and
                (5) in paragraph (3)(B), by adding at the end the following:
            ``The Comptroller General may make and retain copies of books,
            accounts, and other records provided under subparagraph (A) as
            the Comptroller General deems <<NOTE: Records.>> appropriate.
            The Comptroller General shall provide to any person or entity
            described in subparagraph (A) a current list of officers and
            employees to whom, with proper identification, records and
            property may be made available, and who may make notes or copies
            necessary to carry out a audit or examination under this
            subsection.''.

    [[Page 124 STAT. 2118]]

    SEC. 1103. PUBLIC ACCESS TO INFORMATION.

        (a) In General.--Section 2B of the Federal Reserve Act (12 U.S.C.
    225b) is amended by adding at the end the following:
        ``(c) Public Access to Information.--The <<NOTE: Web posting. Time
    period.>> Board shall place on its home Internet website, a link
    entitled `Audit', which shall link to a webpage that shall serve as a
    repository of information made available to the public for a reasonable
    period of time, not less than 6 months following the date of release of
    the relevant information, including--
                ``(1) the reports prepared by the Comptroller General under
            section 714 of title 31, United States Code;
                ``(2) the annual financial statements prepared by an
            independent auditor for the Board in accordance with section
            11B;
                ``(3) the reports to the Committee on Banking, Housing, and
            Urban Affairs of the Senate required under section 13(3)
            (relating to emergency lending authority); and
                ``(4) such other information as the Board reasonably
            believes is necessary or helpful to the public in understanding
            the accounting, financial reporting, and internal controls of
            the Board and the Federal reserve banks.''.

        (b) Federal Reserve Transparency and Release of Information.--
    Section 11 of the Federal Reserve Act (12 U.S.C. 248) is amended by
    adding at the end the following new subsection:
        ``(s) Federal Reserve Transparency and Release of Information.--
                ``(1) In general.--In order to ensure the disclosure in a
            timely manner consistent with the purposes of this Act of
            information concerning the borrowers and counterparties
            participating in emergency credit facilities, discount window
            lending programs, and open market operations authorized or
            conducted by the Board or a Federal reserve bank, the Board of
            Governors shall disclose, as provided in paragraph (2)--
                        ``(A) the names and identifying details of each
                    borrower, participant, or counterparty in any credit
                    facility or covered transaction;
                        ``(B) the amount borrowed by or transferred by or to
                    a specific borrower, participant, or counterparty in any
                    credit facility or covered transaction;
                        ``(C) the interest rate or discount paid by each
                    borrower, participant, or counterparty in any credit
                    facility or covered transaction; and
                        ``(D) information identifying the types and amounts
                    of collateral pledged or assets transferred in
                    connection with participation in any credit facility or
                    covered transaction.
                ``(2) Mandatory release date.--In the case of--
                        ``(A) a credit facility, the Board shall disclose
                    the information described in paragraph (1) on the date
                    that is 1 year after the effective date of the
                    termination by the Board of the authorization of the
                    credit facility; and
                        ``(B) a covered transaction, the Board shall
                    disclose the information described in paragraph (1) on
                    the last day of the eighth calendar quarter following
                    the calendar quarter in which the covered transaction
                    was conducted.
                ``(3) Earlier release date authorized.--The Chairman of the
            Board may publicly release the information described in
            paragraph (1) before the relevant date specified in paragraph

    [[Page 124 STAT. 2119]]

            (2), if the Chairman determines that such disclosure would be in
            the public interest and would not harm the effectiveness of the
            relevant credit facility or the purpose or conduct of covered
            transactions.
                ``(4) Definitions.--For purposes of this subsection, the
            following definitions shall apply:
                        ``(A) Credit facility.--The term `credit facility'
                    has the same meaning as in section 714(f)(1)(A) of title
                    31, United States Code.
                        ``(B) Covered transaction.--The term `covered
                    transaction' means--
                              ``(i) any open market transaction with a
                          nongovernmental third party conducted under the
                          first undesignated paragraph of section 14 or
                          subparagraph (a), (b), or (c) of the 2nd
                          undesignated paragraph of such section, after the
                          date of enactment of the Dodd-Frank Wall Street
                          Reform and Consumer Protection Act; and
                              ``(ii) any advance made under section 10B
                          after the date of enactment of that Act.
                ``(5) Termination of credit facility by operation of law.--A
            credit facility shall be deemed to have terminated as of the end
            of the 24-month period beginning on the date on which the credit
            facility ceases to make extensions of credit and loans, unless
            the credit facility is otherwise terminated by the Board before
            such date.
                ``(6) Consistent treatment
            of <<NOTE: Confidentiality.>> information.--Except as provided
            in this subsection or section 13(3)(D), or in section
            714(f)(3)(C) of title 31, United States Code, the information
            described in paragraph (1) and information concerning the
            transactions described in section 714(f) of such title, shall be
            confidential, including for purposes of section 552(b)(3) of
            title 5 of such Code, until the relevant mandatory release date
            described in paragraph (2), unless the Chairman of the Board
            determines that earlier disclosure of such information would be
            in the public interest and would not harm the effectiveness of
            the relevant credit facility or the purpose of conduct of the
            relevant transactions.
                ``(7) Protection of personal privacy.--This subsection and
            section 13(3)(C), section 714(f)(3)(C) of title 31, United
            States Code, and subsection (a) or (c) of section 1109 of the
            Dodd-Frank Wall Street Reform and Consumer Protection Act shall
            not be construed as requiring any disclosure of nonpublic
            personal information (as defined for purposes of section 502 of
            the Gramm-Leach-Bliley Act (12 U.S.C. 6802)) concerning any
            individual who is referenced in collateral pledged or assets
            transferred in connection with a credit facility or covered
            transaction, unless the person is a borrower, participant, or
            counterparty under the credit facility or covered transaction.
                ``(8) Study of foia exemption impact.--
                        ``(A) Study.--The Inspector General of the Board of
                    Governors of the Federal Reserve System shall--
                              ``(i) conduct a study on the impact that the
                          exemption from section 552(b)(3) of title 5 (known
                          as the Freedom of Information Act) established
                          under paragraph (6) has had on the ability of the
                          public to access information about the
                          administration by the Board of Governors of
                          emergency credit facilities, discount

    [[Page 124 STAT. 2120]]

                          window lending programs, and open market
                          operations; and
                              ``(ii) make any recommendations on whether the
                          exemption described in clause (i) should remain in
                          effect.
                        ``(B) Report.--Not <<NOTE: Publication. Web
                    posting.>> later than 30 months after the date of
                    enactment of this section, the Inspector General of the
                    Board of Governors of the Federal Reserve System shall
                    submit a report on the findings of the study required
                    under subparagraph (A) to the Committee on Banking,
                    Housing, and Urban Affairs of the Senate and the
                    Committee on Financial Services of the House of
                    Representatives, and publish the report on the website
                    of the Board.
                ``(9) Rule of construction.--Nothing in this section is
            meant to affect any pending litigation or lawsuit filed under
            section 552 of title 5, United States Code (popularly known as
            the Freedom of Information Act), on or before the date of
            enactment of the Dodd-Frank Wall Street Reform and Consumer
            Protection Act.''.
    SEC. 1104. <<NOTE: 12 USC 5611.>> LIQUIDITY EVENT DETERMINATION.

        (a) Determination and Written Recommendation.--
                (1) Determination request.--The Secretary may request the
            Corporation and the Board of Governors to determine whether a
            liquidity event exists that warrants use of the guarantee
            program authorized under section 1105.
                (2) Requirements of determination.--Any determination
            pursuant to paragraph (1) shall--
                        (A) be written; and
                        (B) contain an evaluation of the evidence that--
                              (i) a liquidity event exists;
                              (ii) failure to take action would have serious
                          adverse effects on financial stability or economic
                          conditions in the United States; and
                              (iii) actions authorized under section 1105
                          are needed to avoid or mitigate potential adverse
                          effects on the United States financial system or
                          economic conditions.

        (b) Procedures.--Notwithstanding any other provision of Federal or
    State law, upon the determination of both the Corporation (upon a vote
    of not fewer than \2/3\ of the members of the Corporation then serving)
    and the Board of Governors (upon a vote of not fewer than \2/3\ of the
    members of the Board of Governors then serving) under subsection (a)
    that a liquidity event exists that warrants use of the guarantee program
    authorized under section 1105, and with the written consent of the
    Secretary--
                (1) the Corporation shall take action in accordance with
            section 1105(a); and
                (2) the Secretary (in consultation with the President) shall
            take action in accordance with section 1105(c).

        (c) Documentation and Review.--
                (1) Documentation.--The Secretary shall--
                        (A) maintain the written documentation of each
                    determination of the Corporation and the Board of
                    Governors under this section; and
                        (B) provide the documentation for review under
                    paragraph (2).

    [[Page 124 STAT. 2121]]

                (2) GAO review.--The Comptroller General of the United
            States shall review and report to Congress on any determination
            of the Corporation and the Board of Governors under subsection
            (a), including--
                        (A) the basis for the determination; and
                        (B) the likely effect of the actions taken.

        (d) Report to Congress.--On the earlier of the date of a submission
    made to Congress under section 1105(c), or within 30 days of the date of
    a determination under subsection (a), the Secretary shall provide
    written notice of the determination of the Corporation and the Board of
    Governors to the Committee on Banking, Housing, and Urban Affairs of the
    Senate and the Committee on Financial Services of the House of
    Representatives, including a description of the basis for the
    determination.
    SEC. 1105. <<NOTE: 12 USC 5612.>> EMERGENCY FINANCIAL
                              STABILIZATION.

        (a) In General.--Upon the written determination of the Corporation
    and the Board of Governors under section 1104, the Corporation shall
    create a widely available program to guarantee obligations of solvent
    insured depository institutions or solvent depository institution
    holding companies (including any affiliates thereof) during times of
    severe economic distress, except that a guarantee of obligations under
    this section may not include the provision of equity in any form.
        (b) Rulemaking and Terms and Conditions.--
                (1) Policies and procedures.--As soon as is practicable
            after the date of enactment of this Act, the Corporation shall
            establish, by regulation, and in consultation with the
            Secretary, policies and procedures governing the issuance of
            guarantees authorized by this section. Such policies and
            procedures may include a requirement of collateral as a
            condition of any such guarantee.
                (2) Terms and conditions.--The terms and conditions of any
            guarantee program shall be established by the Corporation, with
            the concurrence of the Secretary.

        (c) Determination of Guaranteed Amount.--
                (1) In general.--In connection with any program established
            pursuant to subsection (a) and subject to paragraph (2) of this
            subsection, the Secretary (in consultation with the President)
            shall determine the maximum amount of debt outstanding that the
            Corporation may guarantee under this section, and the President
            may transmit to Congress a written report on the plan of the
            Corporation to exercise the authority under this section to
            issue guarantees up to that maximum amount and a request for
            approval of such plan. The Corporation shall exercise the
            authority under this section to issue guarantees up to that
            specified maximum amount upon passage of the joint resolution of
            approval, as provided in subsection (d). Absent such approval,
            the Corporation shall issue no such guarantees.
                (2) Additional debt guarantee authority.--If the Secretary
            (in consultation with the President) determines, after a
            submission to Congress under paragraph (1), that the maximum
            guarantee amount should be raised, and the Council concurs with
            that determination, the President may transmit to Congress a
            written report on the plan of the Corporation to exercise the
            authority under this section to issue guarantees

    [[Page 124 STAT. 2122]]

            up to the increased maximum debt guarantee amount. The
            Corporation shall exercise the authority under this section to
            issue guarantees up to that specified maximum amount upon
            passage of the joint resolution of approval, as provided in
            subsection (d). Absent such approval, the Corporation shall
            issue no such guarantees.

        (d) Resolution of Approval.--
                (1) Additional debt guarantee authority.--
            A <<NOTE: President.>> request by the President under this
            section shall be considered granted by Congress upon adoption of
            a joint resolution approving such request. Such joint resolution
            shall be considered in the Senate under expedited procedures.
                (2) Fast track consideration in senate.--
                        (A) Reconvening.--
                    Upon <<NOTE: Notification. Deadline.>> receipt of a
                    request under subsection (c), if the Senate has
                    adjourned or recessed for more than 2 days, the majority
                    leader of the Senate, after consultation with the
                    minority leader of the Senate, shall notify the Members
                    of the Senate that, pursuant to this section, the Senate
                    shall convene not later than the second calendar day
                    after receipt of such message.
                        (B) Placement on calendar.--Upon introduction in the
                    Senate, the joint resolution shall be placed immediately
                    on the calendar.
                        (C) Floor consideration.--
                              (i) In general.--Notwithstanding <<NOTE: Time
                          period.>>  Rule XXII of the Standing Rules of the
                          Senate, it is in order at any time during the
                          period beginning on the 4th day after the date on
                          which Congress receives a request under subsection
                          (c), and ending on the 7th day after that date
                          (even though a previous motion to the same effect
                          has been disagreed to) to move to proceed to the
                          consideration of the joint resolution, and all
                          points of order against the joint resolution (and
                          against consideration of the joint resolution) are
                          waived. The motion to proceed is not debatable.
                          The motion is not subject to a motion to postpone.
                          A motion to reconsider the vote by which the
                          motion is agreed to or disagreed to shall not be
                          in order. If a motion to proceed to the
                          consideration of the resolution is agreed to, the
                          joint resolution shall remain the unfinished
                          business until disposed of.
                              (ii) Debate.--Debate <<NOTE: Limitation.>> on
                          the joint resolution, and on all debatable motions
                          and appeals in connection therewith, shall be
                          limited to not more than 10 hours, which shall be
                          divided equally between the majority and minority
                          leaders or their designees. A motion further to
                          limit debate is in order and not debatable. An
                          amendment to, or a motion to postpone, or a motion
                          to proceed to the consideration of other business,
                          or a motion to recommit the joint resolution is
                          not in order.
                              (iii) Vote on passage.--The vote on passage
                          shall occur immediately following the conclusion
                          of the debate on the joint resolution, and a
                          single quorum call at the conclusion of the debate
                          if requested in accordance with the rules of the
                          Senate.

    [[Page 124 STAT. 2123]]

                              (iv) Rulings <<NOTE: Appeals.>> of the chair
                          on procedure.--Appeals from the decisions of the
                          Chair relating to the application of the rules of
                          the Senate, as the case may be, to the procedure
                          relating to a joint resolution shall be decided
                          without debate.
                (3) Rules.--
                        (A) Coordination with action by house of
                    representatives.--
                    <<NOTE: Procedures. Applicability.>> If, before the
                    passage by the Senate of a joint resolution of the
                    Senate, the Senate receives a joint resolution, from the
                    House of Representatives, then the following procedures
                    shall apply:
                              (i) The joint resolution of the House of
                          Representatives shall not be referred to a
                          committee.
                              (ii) With respect to a joint resolution of the
                          Senate--
                                        (I) the procedure in the Senate
                                    shall be the same as if no joint
                                    resolution had been received from the
                                    other House; but
                                        (II) the vote on passage shall be on
                                    the joint resolution of the House of
                                    Representatives.
                        (B) Treatment of joint resolution of house of
                    representatives.--If the Senate fails to introduce or
                    consider a joint resolution under this section, the
                    joint resolution of the House of Representatives shall
                    be entitled to expedited floor procedures under this
                    subsection.
                        (C) Treatment of companion measures.--If, following
                    passage of the joint resolution in the Senate, the
                    Senate then receives the companion measure from the
                    House of Representatives, the companion measure shall
                    not be debatable.
                        (D) Rules of the senate.--This subsection is enacted
                    by Congress--
                              (i) as an exercise of the rulemaking power of
                          the Senate, and as such it is deemed a part of the
                          rules of the Senate, but applicable only with
                          respect to the procedure to be followed in the
                          Senate in the case of a joint resolution, and it
                          supersedes other rules, only to the extent that it
                          is inconsistent with such rules; and
                              (ii) with full recognition of the
                          constitutional right of the Senate to change the
                          rules (so far as relating to the procedure of the
                          Senate) at any time, in the same manner, and to
                          the same extent as in the case of any other rule
                          of the Senate.
                (4) Definition.--As used in this subsection, the term
            ``joint resolution'' means only a joint resolution--
                        (A) <<NOTE: Deadline.>> that is introduced not later
                    than 3 calendar days after the date on which the request
                    referred to in subsection (c) is received by Congress;
                        (B) that does not have a preamble;
                        (C) the title of which is as follows: ``Joint
                    resolution relating to the approval of a plan to
                    guarantee obligations under section 1105 of the Dodd-
                    Frank Wall Street Reform and Consumer Protection Act'';
                    and
                        (D) the matter after the resolving clause of which
                    is as follows: ``That Congress approves the obligation
                    of

    [[Page 124 STAT. 2124]]

                    any amount described in section 1105(c) of the Dodd-
                    Frank Wall Street Reform and Consumer Protection Act.''.

        (e) Funding.--
                (1) Fees and other charges.--The Corporation shall charge
            fees and other assessments to all participants in the program
            established pursuant to this section, in such amounts as are
            necessary to offset projected losses and administrative
            expenses, including amounts borrowed pursuant to paragraph (3),
            and such amounts shall be available to the Corporation.
                (2) Excess funds.--If, at the conclusion of the program
            established under this section, there are any excess funds
            collected from the fees associated with such program, the funds
            shall be deposited in the General Fund of the Treasury.
                (3) Authority of corporation.--The Corporation--
                        (A) may borrow funds from the Secretary of the
                    Treasury and issue obligations of the Corporation to the
                    Secretary for amounts borrowed, and the amounts borrowed
                    shall be available to the Corporation for purposes of
                    carrying out a program established pursuant to this
                    section, including the payment of reasonable costs of
                    administering the program, and the obligations issued
                    shall be repaid in full with interest through fees and
                    charges paid by participants in accordance with
                    paragraphs (1) and (4), as applicable; and
                        (B) may not borrow funds from the Deposit Insurance
                    Fund established pursuant to section 11(a)(4) of the
                    Federal Deposit Insurance Act.
                (4) Backup special assessments.--To the extent that the
            funds collected pursuant to paragraph (1) are insufficient to
            cover any losses or expenses, including amounts borrowed
            pursuant to paragraph (3), arising from a program established
            pursuant to this section, the Corporation shall impose a special
            assessment solely on participants in the program, in amounts
            necessary to address such insufficiency, and which shall be
            available to the Corporation to cover such losses or expenses.
                (5) Authority of the secretary.--The Secretary may purchase
            any obligations issued under paragraph (3)(A). For such purpose,
            the Secretary may use the proceeds of the sale of any securities
            issued under chapter 31 of title 31, United States Code, and the
            purposes for which securities may be issued under that chapter
            31 are extended to include such purchases, and the amount of any
            securities issued under that chapter 31 for such purpose shall
            be treated in the same manner as securities issued under section
            208(n)(5)(E).

        (f) Rule of Construction.--For purposes of this section, a guarantee
    of deposits held by insured depository institutions shall not be treated
    as a debt guarantee program.
        (g) Definitions.--For purposes of this section, the following
    definitions shall apply:
                (1) Company.--The term ``company'' means any entity other
            than a natural person that is incorporated or organized under
            Federal law or the laws of any State.
                (2) Depository institution holding company.--The term
            ``depository institution holding company'' has the same meaning
            as in section 3 of the Federal Deposit Insurance Act (12 U.S.C.
            1813).
                (3) Liquidity event.--The term ``liquidity event'' means--

    [[Page 124 STAT. 2125]]

                        (A) an exceptional and broad reduction in the
                    general ability of financial market participants--
                              (i) to sell financial assets without an
                          unusual and significant discount; or
                              (ii) to borrow using financial assets as
                          collateral without an unusual and significant
                          increase in margin; or
                        (B) an unusual and significant reduction in the
                    ability of financial market participants to obtain
                    unsecured credit.
                (4) Solvent.--The term ``solvent'' means that the value of
            the assets of an entity exceed its obligations to creditors.
    SEC. 1106. <<NOTE: 12 USC 5613.>> ADDITIONAL RELATED AMENDMENTS.

        (a) Suspension of Parallel Federal Deposit Insurance Act
    Authority.--Effective <<NOTE: Effective date.>>  upon the date of
    enactment of this section, the Corporation may not exercise its
    authority under section 13(c)(4)(G)(i) of the Federal Deposit Insurance
    Act (12 U.S.C. 1823(c)(4)(G)(i)) to establish any widely available debt
    guarantee program for which section 1105 would provide authority.

        (b) Federal Deposit Insurance Act.--Section 13(c)(4)(G) of the
    Federal Deposit Insurance Act (12 U.S.C. 1823(c)(4)(G)) is amended--
                (1) in clause (i)--
                        (A) in subclause (I), by inserting ``for which the
                    Corporation has been appointed receiver'' before ``would
                    have serious''; and
                        (B) in the undesignated matter following subclause
                    (II), by inserting ``for the purpose of winding up the
                    insured depository institution for which the Corporation
                    has been appointed receiver'' after ``provide assistance
                    under this section''; and
                (2) in clause (v)(I), by striking ``The'' and inserting
            ``Not later than 3 days after making a determination under
            clause (i), the''.

        (c) Effect of Default on an FDIC Guarantee.--If an insured
    depository institution or depository institution holding company (as
    those terms are defined in section 3 of the Federal Deposit Insurance
    Act) participating in a program under section 1105, or any participant
    in a debt guarantee program established pursuant to section
    13(c)(4)(G)(i) of the Federal Deposit Insurance Act defaults on any
    obligation guaranteed by the Corporation after the date of enactment of
    this Act, the Corporation shall--
                (1) appoint itself as receiver for the insured depository
            institution that defaults; and
                (2) with respect to any other participating company that is
            not an insured depository institution that defaults--
                        (A) require--
                              (i) consideration of whether a determination
                          shall be made, as provided in section 203 to
                          resolve the company under section 202; and
                              (ii) <<NOTE: Deadline.>> the company to file a
                          petition for bankruptcy under section 301 of title
                          11, United States Code, if the Corporation is not
                          appointed receiver pursuant to section 202 within
                          30 days of the date of default; or

    [[Page 124 STAT. 2126]]

                        (B) file a petition for involuntary bankruptcy on
                    behalf of the company under section 303 of title 11,
                    United States Code.
    SEC. 1107. FEDERAL RESERVE ACT AMENDMENTS ON FEDERAL RESERVE BANK
                              GOVERNANCE.

        The 5th subparagraph of the 4th undesignated paragraph of section 4
    of the Federal Reserve Act (12 U.S.C. 341) is amended by striking the
    2nd sentence and inserting the following: ``The president shall be the
    chief executive officer of the bank and shall be appointed by the Class
    B and Class C directors of the bank, with the approval of the Board of
    Governors of the Federal Reserve System, for a term of 5 years; and all
    other executive officers and all employees of the bank shall be directly
    responsible to the president.''.
    SEC. 1108. FEDERAL RESERVE ACT AMENDMENTS ON SUPERVISION AND
                              REGULATION POLICY.

        (a) Establishment of the Position of Vice Chairman for
    Supervision.--
                (1) Position established.--The second undesignated paragraph
            of section 10 of the Federal Reserve Act (12 U.S.C. 242)
            (relating to the Chairman and Vice Chairman of the Board) is
            amended by striking the third sentence and inserting the
            following: ``Of the persons thus appointed, 1 shall be
            designated by the President, by and with the advice and consent
            of the Senate, to serve as Chairman of the Board for a term of 4
            years, and 2 shall be designated by the President, by and with
            the advice and consent of the Senate, to serve as Vice Chairmen
            of the Board, each for a term of 4 years, 1 of whom shall serve
            in the absence of the Chairman, as provided in the fourth
            undesignated paragraph of this section, and 1 of whom shall be
            designated Vice Chairman for Supervision. The Vice Chairman for
            Supervision shall develop policy recommendations for the Board
            regarding supervision and regulation of depository institution
            holding companies and other financial firms supervised by the
            Board, and shall oversee the supervision and regulation of such
            firms.''.
                (2) Effective <<NOTE: 12 USC 242 note.>> date.--The
            amendment made by subsection (a) takes effect on the date of
            enactment of this title and applies to individuals who are
            designated by the President on or after that date to serve as
            Vice Chairman of Supervision.

        (b) Appearances Before Congress.--Section 10 of the Federal Reserve
    Act (12 U.S.C. 241 et seq.) is amended by adding at the end the
    following:
                ``(12) Appearances <<NOTE: 12 USC 247b.>>  before
            congress.--The Vice Chairman for Supervision 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 and at semi-annual hearings regarding the
            efforts, activities, objectives, and plans of the Board with
            respect to the conduct of supervision and regulation of
            depository institution holding companies and other financial
            firms supervised by the Board.''.

        (c) Board Responsibility To Set Supervision and Regulatory Policy.--
    Section 11 of the Federal Reserve Act (12 U.S.C. 248) (relating to
    enumerated powers of the Board) is amended by adding at the end of
    subsection (k) (relating to delegation)

    [[Page 124 STAT. 2127]]

    the following: ``The Board of Governors may not delegate to a Federal
    reserve bank its functions for the establishment of policies for the
    supervision and regulation of depository institution holding companies
    and other financial firms supervised by the Board of Governors.''.
        (d) Exercise <<NOTE: 12 USC 5614.>> of Federal Reserve Authority.--
                (1) No decisions by federal reserve bank presidents.--No
            provision of title I relating to the authority of the Board of
            Governors shall be construed as conferring any decision-making
            authority on presidents of Federal reserve banks.
                (2) Voting decisions by board.--The Board of Governors shall
            not delegate the authority to make any voting decision that the
            Board of Governors is authorized or required to make under title
            I of this Act in contravention of section 11(k) of the Federal
            Reserve Act.
    SEC. 1109. GAO AUDIT OF THE FEDERAL RESERVE FACILITIES;
                              PUBLICATION OF BOARD ACTIONS.

        (a) GAO Audit.--
                (1) In general.--Notwithstanding <<NOTE: Time period.>>
            section 714(b) of title 31, United States Code, or any other
            provision of law, the Comptroller General of the United States
            (in this subsection referred to as the ``Comptroller General'')
            shall conduct a one-time audit of all loans and other financial
            assistance provided during the period beginning on December 1,
            2007 and ending on the date of enactment of this Act by the
            Board of Governors or a Federal reserve bank under the Asset-
            Backed Commercial Paper Money Market Mutual Fund Liquidity
            Facility, the Term Asset-Backed Securities Loan Facility, the
            Primary Dealer Credit Facility, the Commercial Paper Funding
            Facility, the Term Securities Lending Facility, the Term Auction
            Facility, Maiden Lane, Maiden Lane II, Maiden Lane III, the
            agency Mortgage-Backed Securities program, foreign currency
            liquidity swap lines, and any other program created as a result
            of section 13(3) of the Federal Reserve Act (as so designated by
            this title).
                (2) Assessments.--In conducting the audit under paragraph
            (1), the Comptroller General shall assess--
                        (A) the operational integrity, accounting, financial
                    reporting, and internal controls of the credit facility;
                        (B) the effectiveness of the security and collateral
                    policies established for the facility in mitigating risk
                    to the relevant Federal reserve bank and taxpayers;
                        (C) whether the credit facility inappropriately
                    favors one or more specific participants over other
                    institutions eligible to utilize the facility;
                        (D) the policies governing the use, selection, or
                    payment of third-party contractors by or for any credit
                    facility; and
                        (E) whether there were conflicts of interest with
                    respect to the manner in which such facility was
                    established or operated.
                (3) Timing.--The audit required by this subsection shall be
            commenced not later than 30 days after the date of enactment of
            this Act, and shall be completed not later than 12 months after
            that date of enactment.

    [[Page 124 STAT. 2128]]

                (4) Report required.--The Comptroller General shall submit a
            report on the audit conducted under paragraph (1) to the
            Congress not later than 12 months after the date of enactment of
            this Act, and such report shall be made available to--
                        (A) the Speaker of the House of Representatives;
                        (B) the majority and minority leaders of the House
                    of Representatives;
                        (C) the majority and minority leaders of the Senate;
                        (D) the Chairman and Ranking Member of the Committee
                    on Banking, Housing, and Urban Affairs of the Senate and
                    of the Committee on Financial Services of the House of
                    Representatives; and
                        (E) any member of Congress who requests it.

        (b) Audit of Federal Reserve Bank Governance.--
                (1) Audit.--
                        (A) In general.--Not <<NOTE: Deadline.>>  later than
                    1 year after the date of enactment of this Act, the
                    Comptroller General shall complete an audit of the
                    governance of the Federal reserve bank system.
                        (B) Required examinations.--The audit required under
                    subparagraph (A) shall--
                              (i) examine the extent to which the current
                          system of appointing Federal reserve bank
                          directors effectively represents ``the public,
                          without discrimination on the basis of race,
                          creed, color, sex or national origin, and with due
                          but not exclusive consideration to the interests
                          of agriculture, commerce, industry, services,
                          labor, and consumers'' in the selection of bank
                          directors, as such requirement is set forth under
                          section 4 of the Federal Reserve Act;
                              (ii) examine whether there are actual or
                          potential conflicts of interest created when the
                          directors of Federal reserve banks, which execute
                          the supervisory functions of the Board of
                          Governors of the Federal Reserve System, are
                          elected by member banks;
                              (iii) examine the establishment and operations
                          of each facility described in subsection (a)(1)
                          and each Federal reserve bank involved in the
                          establishment and operations thereof; and
                              (iv) identify changes to selection procedures
                          for Federal reserve bank directors, or to other
                          aspects of Federal reserve bank governance, that
                          would--
                                        (I) improve how the public is
                                    represented;
                                        (II) eliminate actual or potential
                                    conflicts of interest in bank
                                    supervision;
                                        (III) increase the availability of
                                    information useful for the formation and
                                    execution of monetary policy; or
                                        (IV) in other ways increase the
                                    effectiveness or efficiency of reserve
                                    banks.
                (2) Report required.--A report on the audit conducted under
            paragraph (1) shall be submitted by the Comptroller General to
            the Congress before the end of the 90-day period beginning on
            the date on which such audit is completed, and such report shall
            be made available to--
                        (A) the Speaker of the House of Representatives;

    [[Page 124 STAT. 2129]]

                        (B) the majority and minority leaders of the House
                    of Representatives;
                        (C) the majority and minority leaders of the Senate;
                        (D) the Chairman and Ranking Member of the Committee
                    on Banking, Housing, and Urban Affairs of the Senate and
                    of the Committee on Financial Services of the House of
                    Representatives; and
                        (E) any member of Congress who requests it.

        (c) Publication of Board <<NOTE: Web posting. Deadline.>> Actions.--
    Notwithstanding any other provision of law, the Board of Governors shall
    publish on its website, not later than December 1, 2010, with respect to
    all loans and other financial assistance provided during the period
    beginning on December 1, 2007 and ending on the date of enactment of
    this Act under the Asset-Backed Commercial Paper Money Market Mutual
    Fund Liquidity Facility, the Term Asset-Backed Securities Loan Facility,
    the Primary Dealer Credit Facility, the Commercial Paper Funding
    Facility, the Term Securities Lending Facility, the Term Auction
    Facility, Maiden Lane, Maiden Lane II, Maiden Lane III, the agency
    Mortgage-Backed Securities program, foreign currency liquidity swap
    lines, and any other program created as a result of section 13(3) of the
    Federal Reserve Act (as so designated by this title)--
                (1) the identity of each business, individual, entity, or
            foreign central bank to which the Board of Governors or a
            Federal reserve bank has provided such assistance;
                (2) the type of financial assistance provided to that
            business, individual, entity, or foreign central bank;
                (3) the value or amount of that financial assistance;
                (4) the date on which the financial assistance was provided;
                (5) the specific terms of any repayment expected, including
            the repayment time period, interest charges, collateral,
            limitations on executive compensation or dividends, and other
            material terms; and
                (6) the specific rationale for each such facility or
            program.

     TITLE XII--IMPROVING <<NOTE: Improving Access to Mainstream Financial
    Institutions Act of 2010.>>  ACCESS TO MAINSTREAM FINANCIAL INSTITUTIONS
    SEC. <<NOTE: 12 USC 5301 note.>> 1201. SHORT TITLE.

        This title may be cited as the ``Improving Access to Mainstream
    Financial Institutions Act of 2010''.
    SEC. <<NOTE: 12 USC 5621.>> 1202. PURPOSE.

        The purpose of this title is to encourage initiatives for financial
    products and services that are appropriate and accessible for millions
    of Americans who are not fully incorporated into the financial
    mainstream.
    SEC. <<NOTE: 12 USC 5622.>> 1203. DEFINITIONS.

        In this title, the following definitions shall apply:
                (1) Account.--The term ``account'' means an agreement
            between an individual and an eligible entity under which the
            individual obtains from or through the entity 1 or more banking
            products and services, and includes a deposit account, a savings

    [[Page 124 STAT. 2130]]

            account (including a money market savings account), an account
            for a closed-end loan, and other products or services, as the
            Secretary deems appropriate.
                (2) Community development financial institution.--The term
            ``community development financial institution'' has the same
            meaning as in section 103(5) of the Community Development
            Banking and Financial Institutions Act of 1994 (12 U.S.C.
            4702(5)).
                (3) Eligible entity.--The term ``eligible entity'' means--
                        (A) an organization described in section 501(c)(3)
                    of the Internal Revenue Code of 1986, and exempt from
                    tax under section 501(a) of such Code;
                        (B) a federally insured depository institution;
                        (C) a community development financial institution;
                        (D) a State, local, or tribal government entity; or
                        (E) a partnership or other joint venture comprised
                    of 1 or more of the entities described in subparagraphs
                    (A) through (D), in accordance with regulations
                    prescribed by the Secretary under this title.
                (4) Federally insured depository institution.--The term
            ``federally insured depository institution'' means any insured
            depository institution (as that term is defined in section 3 of
            the Federal Deposit Insurance Act (12 U.S.C. 1813)) and any
            insured credit union (as that term is defined in section 101 of
            the Federal Credit Union Act (12 U.S.C. 1752)).
    SEC. 1204. <<NOTE: 12 USC 5623.>> EXPANDED ACCESS TO MAINSTREAM
                              FINANCIAL INSTITUTIONS.

        (a) In <<NOTE: Grants.>> General.--The Secretary is authorized to
    establish a multiyear program of grants, cooperative agreements,
    financial agency agreements, and similar contracts or undertakings to
    promote initiatives designed--
                (1) to enable low- and moderate-income individuals to
            establish one or more accounts in a federally insured depository
            institution that are appropriate to meet the financial needs of
            such individuals; and
                (2) to improve access to the provision of accounts, on
            reasonable terms, for low- and moderate-income individuals.

        (b) Program Eligibility and Activities.--
                (1) In general.--The Secretary shall restrict participation
            in any program established under subsection (a) to an eligible
            entity. Subject to regulations prescribed by the Secretary under
            this title, 1 or more eligible entities may participate in 1 or
            several programs established under subsection (a).
                (2) Account activities.--Subject to regulations prescribed
            by the Secretary, an eligible entity may, in participating in a
            program established under subsection (a), offer or provide to
            low- and moderate-income individuals products and services
            relating to accounts, including--
                        (A) small-dollar value loans; and
                        (B) financial education and counseling relating to
                    conducting transactions in and managing accounts.
    SEC. 1205. <<NOTE: 12 USC 5624.>> LOW-COST ALTERNATIVES TO SMALL
                              DOLLAR LOANS.

        (a) Grants Authorized.--The Secretary is authorized to establish
    multiyear demonstration programs by means of grants, cooperative
    agreements, financial agency agreements, and similar contracts or
    undertakings, with eligible entities to provide low-cost, small

    [[Page 124 STAT. 2131]]

    loans to consumers that will provide alternatives to more costly small
    dollar loans.
        (b) Terms and Conditions.--
                (1) In general.--Loans under this section shall be made on
            terms and conditions, and pursuant to lending practices, that
            are reasonable for consumers.
                (2) Financial literacy and education opportunities.--
                        (A) In general.--Each <<NOTE: Grants.>>  eligible
                    entity awarded a grant under this section shall promote
                    and take appropriate steps to ensure the provision of
                    financial literacy and education opportunities, such as
                    relevant counseling services, educational courses, or
                    wealth building programs, to each consumer provided with
                    a loan pursuant to this section.
                        (B) Authority to expand access.--As part of the
                    grants, agreements, and undertakings established under
                    this section, the Secretary may implement reasonable
                    measures or programs designed to expand access to
                    financial literacy and education opportunities,
                    including relevant counseling services, educational
                    courses, or wealth building programs to be provided to
                    individuals who obtain loans from eligible entities
                    under this section.
    SEC. 1206. GRANTS TO ESTABLISH LOAN-LOSS RESERVE FUNDS.

        The Community Development Banking and Financial Institutions Act of
    1994 (12 U.S.C. 4701 et seq.) is amended by adding at the end the
    following:
    ``SEC. 122. GRANTS <<NOTE: 12 USC 4719.>>  TO ESTABLISH LOAN-LOSS
                            RESERVE FUNDS.

        ``(a) Purposes.--The purposes of this section are--
                ``(1) to make financial assistance available from the Fund
            in order to help community development financial institutions
            defray the costs of operating small dollar loan programs, by
            providing the amounts necessary for such institutions to
            establish their own loan loss reserve funds to mitigate some of
            the losses on such small dollar loan programs; and
                ``(2) to encourage community development financial
            institutions to establish and maintain small dollar loan
            programs that would help give consumers access to mainstream
            financial institutions and combat high cost small dollar
            lending.

        ``(b) Grants.--
                ``(1) Loan-loss reserve fund grants.--The Fund shall make
            grants to community development financial institutions or to any
            partnership between such community development financial
            institutions and any other federally insured depository
            institution with a primary mission to serve targeted investment
            areas, as such areas are defined under section 103(16), to
            enable such institutions or any partnership of such institutions
            to establish a loan-loss reserve fund in order to defray the
            costs of a small dollar loan program established or maintained
            by such institution.
                ``(2) Matching requirement.--A community development
            financial institution or any partnership of institutions
            established pursuant to paragraph (1) shall provide non-Federal
            matching funds in an amount equal to 50 percent of the amount of
            any grant received under this section.
                ``(3) Use of funds.--Any grant amounts received by a
            community development financial institution or any partnership
            between or among such institutions under paragraph (1)--

    [[Page 124 STAT. 2132]]

                        ``(A) may not be used by such institution to provide
                    direct loans to consumers;
                        ``(B) may be used by such institution to help
                    recapture a portion or all of a defaulted loan made
                    under the small dollar loan program of such institution;
                    and
                        ``(C) may be used to designate and utilize a fiscal
                    agent for services normally provided by such an agent.
                ``(4) Technical assistance grants.--The Fund shall make
            technical assistance grants to community development financial
            institutions or any partnership between or among such
            institutions to support and maintain a small dollar loan
            program. Any grant amounts received under this paragraph may be
            used for technology, staff support, and other costs associated
            with establishing a small dollar loan program.

        ``(c) Definitions.--For purposes of this section--
                ``(1) the term `consumer reporting agency that compiles and
            maintains files on consumers on a nationwide basis' has the same
            meaning given such term in section 603(p) of the Fair Credit
            Reporting Act (15 U.S.C. 1681a(p)); and
                ``(2) the term `small dollar loan program' means a loan
            program wherein a community development financial institution or
            any partnership between or among such institutions offers loans
            to consumers that--
                        ``(A) are made in amounts not exceeding $2,500;
                        ``(B) must be repaid in installments;
                        ``(C) have no pre-payment penalty;
                        ``(D) the institution has to report payments
                    regarding the loan to at least 1 of the consumer
                    reporting agencies that compiles and maintains files on
                    consumers on a nationwide basis; and
                        ``(E) meet any other affordability requirements as
                    may be established by the Administrator.''.
    SEC. 1207. <<NOTE: Application. 12 USC 5625.>> PROCEDURAL
                              PROVISIONS.

        An eligible entity desiring to participate in a program or obtain a
    grant under this title shall submit an application to the Secretary, in
    such form and containing such information as the Secretary may require.
    SEC. 1208. <<NOTE: 12 USC 5626.>> AUTHORIZATION OF APPROPRIATIONS.

        (a) Authorization to the Secretary.--There are authorized to be
    appropriated to the Secretary, such sums as are necessary to both
    administer and fund the programs and projects authorized by this title,
    to remain available until expended.
        (b) Authorization to the Fund.--There is authorized to be
    appropriated to the Fund for each fiscal year beginning in fiscal year
    2010, an amount equal to the amount of the administrative costs of the
    Fund for the operation of the grant program established under this
    title.
    SEC. <<NOTE: 12 USC 5627.>> 1209. REGULATIONS.

        (a) In General.--The Secretary is authorized to promulgate
    regulations to implement and administer the grant programs and
    undertakings authorized by this title.
        (b) Regulatory Authority.--Regulations prescribed under this section
    may contain such classifications, differentiations, or other provisions,
    and may provide for such adjustments and exceptions for any class of
    grant programs, undertakings, or eligible

    [[Page 124 STAT. 2133]]

    entities, as, in the judgment of the Secretary, are necessary or proper
    to effectuate the purposes of this title, to prevent circumvention or
    evasion of this title, or to facilitate compliance with this title.
    SEC. 1210. <<NOTE: 12 USC 5628.>> EVALUATION AND REPORTS TO
                              CONGRESS.

        For each fiscal year in which a program or project is carried out
    under this title, the Secretary shall submit a report to the Committee
    on Banking, Housing, and Urban Affairs of the Senate and the Committee
    on Financial Services of the House of Representatives containing a
    description of the activities funded, amounts distributed, and
    measurable results, as appropriate and available.

    TITLE XIII--PAY <<NOTE: Pay It Back Act.>>  IT BACK ACT
    SEC. 1301. <<NOTE: 12 USC 5201 note.>> SHORT TITLE.

        This title may be cited as the ``Pay It Back Act''.
    SEC. 1302. AMENDMENT TO REDUCE TARP AUTHORIZATION.

        Section 115(a) of the Emergency Economic Stabilization Act of 2008
    (12 U.S.C. 5225(a)) is amended--
                (1) in paragraph (3)--
                        (A) by striking ``, $700,000,000,000, as such amount
                    is reduced by $1,259,000,000, as such amount is reduced
                    by $1,244,000,000'' and inserting ``$475,000,000,000'';
                    and
                        (B) by striking ``outstanding at any one time''; and
                (2) by adding at the end the following:
                ``(4) For purposes of this subsection, the amount of
            authority considered to be exercised by the Secretary shall not
            be reduced by--
                        ``(A) any amounts received by the Secretary before,
                    on, or after the date of enactment of the Pay It Back
                    Act from repayment of the principal of financial
                    assistance by an entity that has received financial
                    assistance under the TARP or any other program enacted
                    by the Secretary under the authorities granted to the
                    Secretary under this Act;
                        ``(B) any amounts committed for any guarantees
                    pursuant to the TARP that became or become uncommitted;
                    or
                        ``(C) any losses realized by the Secretary.
                ``(5) No authority under this Act may be used to incur any
            obligation for a program or initiative that was not initiated
            prior to June 25, 2010.''.
    SEC. 1303. REPORT.

        Section 106 of the Emergency Economic Stabilization Act of 2008 (12
    U.S.C. 5216) is amended by inserting at the end the following:
        ``(f) Report.--The Secretary of the Treasury shall report to
    Congress every 6 months on amounts received and transferred to the
    general fund under subsection (d).''.

    [[Page 124 STAT. 2134]]

    SEC. 1304. AMENDMENTS TO HOUSING AND ECONOMIC RECOVERY ACT OF
                              2008.

        (a) Sale of Fannie Mae Obligations and Securities by the Treasury;
    Deficit Reduction.--Section 304(g)(2) of the Federal National Mortgage
    Association Charter Act (12 U.S.C. 1719(g)(2)) is amended--
                (1) by redesignating subparagraph (C) as subparagraph (D);
            and
                (2) by inserting after subparagraph (B) the following:
                        ``(C) Deficit reduction.--The Secretary of the
                    Treasury shall deposit in the General Fund of the
                    Treasury any amounts received by the Secretary from the
                    sale of any obligation acquired by the Secretary under
                    this subsection, where such amounts shall be--
                              ``(i) dedicated for the sole purpose of
                          deficit reduction; and
                              ``(ii) prohibited from use as an offset for
                          other spending increases or revenue reductions.''.

        (b) Sale of Freddie Mac Obligations and Securities by the Treasury;
    Deficit Reduction.--Section 306(l)(2) of the Federal Home Loan Mortgage
    Corporation Act (12 U.S.C. 1455(l)(2)) is amended--
                (1) by redesignating subparagraph (C) as subparagraph (D);
            and
                (2) by inserting after subparagraph (B) the following:
                        ``(C) Deficit reduction.--The Secretary of the
                    Treasury shall deposit in the General Fund of the
                    Treasury any amounts received by the Secretary from the
                    sale of any obligation acquired by the Secretary under
                    this subsection, where such amounts shall be--
                              ``(i) dedicated for the sole purpose of
                          deficit reduction; and
                              ``(ii) prohibited from use as an offset for
                          other spending increases or revenue reductions.''.

        (c) Sale of Federal Home Loan Banks Obligations by the Treasury;
    Deficit Reduction.--Section 11(l)(2) of the Federal Home Loan Bank Act
    (12 U.S.C. 1431(l)(2)) is amended--
                (1) by redesignating subparagraph (C) as subparagraph (D);
            and
                (2) by inserting after subparagraph (B) the following:
                        ``(C) Deficit reduction.--The Secretary of the
                    Treasury shall deposit in the General Fund of the
                    Treasury any amounts received by the Secretary from the
                    sale of any obligation acquired by the Secretary under
                    this subsection, where such amounts shall be--
                              ``(i) dedicated for the sole purpose of
                          deficit reduction; and
                              ``(ii) prohibited from use as an offset for
                          other spending increases or revenue reductions.''.

        (d) Repayment <<NOTE: 12 USC 1455 note.>> of Fees.--Any periodic
    commitment fee or any other fee or assessment paid by the Federal
    National Mortgage Association or Federal Home Loan Mortgage Corporation
    to the Secretary of the Treasury as a result of any preferred stock
    purchase agreement, mortgage-backed security purchase program, or any
    other program or activity authorized or carried out pursuant to the
    authorities granted to the Secretary of the Treasury under section 1117
    of the Housing and Economic Recovery Act of 2008

    [[Page 124 STAT. 2135]]

    (Public Law 110-289; 122 Stat. 2683), including any fee agreed to by
    contract between the Secretary and the Association or Corporation, shall
    be deposited in the General Fund of the Treasury where such amounts
    shall be--
                (1) dedicated for the sole purpose of deficit reduction; and
                (2) prohibited from use as an offset for other spending
            increases or revenue reductions.
    SEC. 1305. FEDERAL HOUSING FINANCE AGENCY REPORT.

        The Director of the Federal Housing Finance Agency shall submit to
    Congress a report on the plans of the Agency to continue to support and
    maintain the Nation's vital housing industry, while at the same time
    guaranteeing that the American taxpayer will not suffer unnecessary
    losses.
    SEC. 1306. REPAYMENT OF UNOBLIGATED ARRA FUNDS.

        (a) Rejection of ARRA Funds by State.--Section 1607 of the American
    Recovery and Reinvestment Act of 2009 (Public Law 111-5; 123 Stat. 305)
    is amended by adding at the end the following:
        ``(d) Statewide Rejection of Funds.--If funds provided to any State
    in any division of this Act are not accepted for use by the Governor of
    the State pursuant to subsection (a) or by the State legislature
    pursuant to subsection (b), then all such funds shall be--
                ``(1) <<NOTE: Rescission.>> rescinded; and
                ``(2) deposited in the General Fund of the Treasury where
            such amounts shall be--
                        ``(A) dedicated for the sole purpose of deficit
                    reduction; and
                        ``(B) prohibited from use as an offset for other
                    spending increases or revenue reductions.''.

        (b) Withdrawal or Recapture of Unobligated Funds.--Title XVI of the
    American Recovery and Reinvestment Act of 2009 (Public Law 111-5; 123
    Stat. 302) is amended by adding at the end the following:
    ``SEC. 1613. WITHDRAWAL OR RECAPTURE OF UNOBLIGATED FUNDS.

        ``Notwithstanding any other provision of this Act, if the head of
    any executive agency withdraws or recaptures for any reason funds
    appropriated or otherwise made available under this division, and such
    funds have not been obligated by a State to a local government or for a
    specific project, such recaptured funds shall be--
                ``(1) rescinded; and
                ``(2) deposited in the General Fund of the Treasury where
            such amounts shall be--
                        ``(A) dedicated for the sole purpose of deficit
                    reduction; and
                        ``(B) prohibited from use as an offset for other
                    spending increases or revenue reductions.''.

        (c) Return of Unobligated Funds by End of 2012.--Section 1603 of the
    American Recovery and Reinvestment Act of 2009 (Public Law 111-5; 123
    Stat. 302) is amended by--
                (1) striking ``All funds'' and inserting ``(a) In General.--
            All funds''; and
                (2) adding at the end the following:

        ``(b) Repayment of Unobligated Funds.--Any discretionary
    appropriations made available in this division that have not been

    [[Page 124 STAT. 2136]]

    obligated as of December 31, 2012, are hereby rescinded, and such
    amounts shall be deposited in the General Fund of the Treasury where
    such amounts shall be--
                ``(1) dedicated for the sole purpose of deficit reduction;
            and
                ``(2) prohibited from use as an offset for other spending
            increases or revenue reductions.

        ``(c) Presidential Waiver Authority.--
                ``(1) In general.--The President may waive the requirements
            under subsection (b), if the President determines that it is not
            in the best interest of the Nation to rescind a specific
            unobligated amount after December 31, 2012.
                ``(2) Requests.--The head of an executive agency may also
            apply to the President for a waiver from the requirements under
            subsection (b).''.

         TITLE XIV-- <<NOTE: Mortgage Reform and Anti-Predatory Lending
    Act.>> MORTGAGE REFORM AND ANTI-PREDATORY LENDING ACT
    SEC. 1400. SHORT TITLE; DESIGNATION AS ENUMERATED CONSUMER LAW.

        (a) Short <<NOTE: 15 USC 1601 note.>> Title.--This title may be
    cited as the ``Mortgage Reform and Anti-Predatory Lending Act''.

        (b) Designation <<NOTE: 12 USC 5481 note.>>  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; <<NOTE: 15 USC 1601 note.>>  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.

    [[Page 124 STAT. 2137]]

           Subtitle A--Residential Mortgage Loan Origination Standards

    SEC. 1401. DEFINITIONS.

        Section 103 of the Truth in Lending Act (15 U.S.C. 1602) is amended
    by adding at the end the following new subsection:
        ``(cc) Definitions Relating to Mortgage Origination and Residential
    Mortgage Loans.--
                ``(1) Commission.--Unless otherwise specified, the term
            `Commission' means the Federal Trade Commission.
                ``(2) Mortgage originator.--The term `mortgage originator'--
                        ``(A) means any person who, for direct or indirect
                    compensation or gain, or in the expectation of direct or
                    indirect compensation or gain--
                              ``(i) takes a residential mortgage loan
                          application;
                              ``(ii) assists a consumer in obtaining or
                          applying to obtain a residential mortgage loan; or
                              ``(iii) offers or negotiates terms of a
                          residential mortgage loan;
                        ``(B) includes any person who represents to the
                    public, through advertising or other means of
                    communicating or providing information (including the
                    use of business cards, stationery, brochures, signs,
                    rate lists, or other promotional items), that such
                    person can or will provide any of the services or
                    perform any of the activities described in subparagraph
                    (A);
                        ``(C) does not include any person who is (i) not
                    otherwise described in subparagraph (A) or (B) and who
                    performs purely administrative or clerical tasks on
                    behalf of a person who is described in any such
                    subparagraph, or (ii) an employee of a retailer of
                    manufactured homes who is not described in clause (i) or
                    (iii) of subparagraph (A) and who does not advise a
                    consumer on loan terms (including rates, fees, and other
                    costs);
                        ``(D) does not include a person or entity that only
                    performs real estate brokerage activities and is
                    licensed or registered in accordance with applicable
                    State law, unless such person or entity is compensated
                    by a lender, a mortgage broker, or other mortgage
                    originator or by any agent of such lender, mortgage
                    broker, or other mortgage originator;
                        ``(E) does not include, with respect to a
                    residential mortgage loan, a person, estate, or trust
                    that provides mortgage financing for the sale of 3
                    properties in any 12-month period to purchasers of such
                    properties, each of which is owned by such person,
                    estate, or trust and serves as security for the loan,
                    provided that such loan--
                              ``(i) is not made by a person, estate, or
                          trust that has constructed, or acted as a
                          contractor for the construction of, a residence on
                          the property in the ordinary course of business of
                          such person, estate, or trust;
                              ``(ii) is fully amortizing;

    [[Page 124 STAT. 2138]]

                              ``(iii) is with respect to a sale for which
                          the seller determines in good faith and documents
                          that the buyer has a reasonable ability to repay
                          the loan;
                              ``(iv) has a fixed rate or an adjustable rate
                          that is adjustable after 5 or more years, subject
                          to reasonable annual and lifetime limitations on
                          interest rate increases; and
                              ``(v) meets any other criteria the Board may
                          prescribe;
                        ``(F) does not include the creditor (except the
                    creditor in a table-funded transaction) under paragraph
                    (1), (2), or (4) of section 129B(c); and
                        ``(G) does not include a servicer or servicer
                    employees, agents and contractors, including but not
                    limited to those who offer or negotiate terms of a
                    residential mortgage loan for purposes of renegotiating,
                    modifying, replacing and subordinating principal of
                    existing mortgages where borrowers are behind in their
                    payments, in default or have a reasonable likelihood of
                    being in default or falling behind.
                ``(3) Nationwide mortgage licensing system and registry.--
            The term `Nationwide Mortgage Licensing System and Registry' has
            the same meaning as in the Secure and Fair Enforcement for
            Mortgage Licensing Act of 2008.
                ``(4) Other definitions relating to mortgage originator.--
            For purposes of this subsection, a person `assists a consumer in
            obtaining or applying to obtain a residential mortgage loan' by,
            among other things, advising on residential mortgage loan terms
            (including rates, fees, and other costs), preparing residential
            mortgage loan packages, or collecting information on behalf of
            the consumer with regard to a residential mortgage loan.
                ``(5) Residential mortgage loan.--The term `residential
            mortgage loan' means any consumer credit transaction that is
            secured by a mortgage, deed of trust, or other equivalent
            consensual security interest on a dwelling or on residential
            real property that includes a dwelling, other than a consumer
            credit transaction under an open end credit plan or, for
            purposes of sections 129B and 129C and section 128(a) (16),
            (17), (18), and (19), and sections 128(f) and 130(k), and any
            regulations promulgated thereunder, an extension of credit
            relating to a plan described in section 101(53D) of title 11,
            United States Code.
                ``(6) Secretary.--The term `Secretary', when used in
            connection with any transaction or person involved with a
            residential mortgage loan, means the Secretary of Housing and
            Urban Development.
                ``(7) Servicer.--The term `servicer' has the same meaning as
            in section 6(i)(2) of the Real Estate Settlement Procedures Act
            of 1974 (12 U.S.C. 2605(i)(2)).''.
    SEC. 1402. RESIDENTIAL MORTGAGE LOAN ORIGINATION.

        (a) In General.--Chapter 2 of the Truth in Lending Act (15 U.S.C.
    1631 et seq.) is amended--
                (1) by redesignating the 2nd of the 2 sections designated as
            section 129 (15 U.S.C. 1639a) (relating to duty of servicers of
            residential mortgages) as section 129A; and

    [[Page 124 STAT. 2139]]

                (2) by inserting after section 129A (as so redesignated) the
            following new section:
    ``Sec. 129B. <<NOTE: 15 USC 1639b.>> Residential mortgage loan
                      origination

        ``(a) Finding and Purpose.--
                ``(1) Finding.--The Congress finds that economic
            stabilization would be enhanced by the protection, limitation,
            and regulation of the terms of residential mortgage credit and
            the practices related to such credit, while ensuring that
            responsible, affordable mortgage credit remains available to
            consumers.
                ``(2) Purpose.--It is the purpose of this section and
            section 129C to assure that consumers are offered and receive
            residential mortgage loans on terms that reasonably reflect
            their ability to repay the loans and that are understandable and
            not unfair, deceptive or abusive.

        ``(b) Duty of Care.--
                ``(1) Standard.--Subject to regulations prescribed under
            this subsection, each mortgage originator shall, in addition to
            the duties imposed by otherwise applicable provisions of State
            or Federal law--
                        ``(A) be qualified and, when required, registered
                    and licensed as a mortgage originator in accordance with
                    applicable State or Federal law, including the Secure
                    and Fair Enforcement for Mortgage Licensing Act of 2008;
                    and
                        ``(B) include on all loan documents any unique
                    identifier of the mortgage originator provided by the
                    Nationwide Mortgage Licensing System and Registry.
                ``(2) Compliance <<NOTE: Regulations.>>  procedures
            required.--The Board shall prescribe regulations requiring
            depository institutions to establish and maintain procedures
            reasonably designed to assure and monitor the compliance of such
            depository institutions, the subsidiaries of such institutions,
            and the employees of such institutions or subsidiaries with the
            requirements of this section and the registration procedures
            established under section 1507 of the Secure and Fair
            Enforcement for Mortgage Licensing Act of 2008.''.

        (b) Clerical Amendment.--The table of sections for chapter 2 of the
    Truth in Lending Act is amended by inserting after the item relating to
    section 129 the following new items:

    ``129A. Fiduciary duty of servicers of pooled residential mortgages.
    ``129B. Residential mortgage loan origination.''.

    SEC. 1403. PROHIBITION ON STEERING INCENTIVES.

        Section 129B of the Truth in Lending Act (as added by section
    1402(a)) is amended by inserting after subsection (b) the following new
    subsection:
        ``(c) Prohibition on Steering Incentives.--
                ``(1) In general.--For any residential mortgage loan, no
            mortgage originator shall receive from any person and no person
            shall pay to a mortgage originator, directly or indirectly,
            compensation that varies based on the terms of the loan (other
            than the amount of the principal).
                ``(2) Restructuring of financing origination fee.--
                        ``(A) In general.--For any mortgage loan, a mortgage
                    originator may not receive from any person other than
                    the consumer and no person, other than the consumer, who
                    knows or has reason to know that a consumer has

    [[Page 124 STAT. 2140]]

                    directly compensated or will directly compensate a
                    mortgage originator may pay a mortgage originator any
                    origination fee or charge except bona fide third party
                    charges not retained by the creditor, mortgage
                    originator, or an affiliate of the creditor or mortgage
                    originator .
                        ``(B) Exception.--Notwithstanding subparagraph (A),
                    a mortgage originator may receive from a person other
                    than the consumer an origination fee or charge, and a
                    person other than the consumer may pay a mortgage
                    originator an origination fee or charge, if--
                              ``(i) the mortgage originator does not receive
                          any compensation directly from the consumer; and
                              ``(ii) <<NOTE: Waiver authority.>>  the
                          consumer does not make an upfront payment of
                          discount points, origination points, or fees,
                          however denominated (other than bona fide third
                          party charges not retained by the mortgage
                          originator, creditor, or an affiliate of the
                          creditor or originator), except that the Board
                          may, by rule, waive or provide exemptions to this
                          clause if the Board determines that such waiver or
                          exemption is in the interest of consumers and in
                          the public interest.
                ``(3) Regulations.--The Board shall prescribe regulations to
            prohibit--
                        ``(A) mortgage originators from steering any
                    consumer to a residential mortgage loan that--
                              ``(i) the consumer lacks a reasonable ability
                          to repay (in accordance with regulations
                          prescribed under section 129C(a)); or
                              ``(ii) has predatory characteristics or
                          effects (such as equity stripping, excessive fees,
                          or abusive terms);
                        ``(B) mortgage originators from steering any
                    consumer from a residential mortgage loan for which the
                    consumer is qualified that is a qualified mortgage (as
                    defined in section 129C(b)(2)) to a residential mortgage
                    loan that is not a qualified mortgage;
                        ``(C) abusive or unfair lending practices that
                    promote disparities among consumers of equal credit
                    worthiness but of different race, ethnicity, gender, or
                    age; and
                        ``(D) mortgage originators from--
                              ``(i) mischaracterizing the credit history of
                          a consumer or the residential mortgage loans
                          available to a consumer;
                              ``(ii) mischaracterizing or suborning the
                          mischaracterization of the appraised value of the
                          property securing the extension of credit; or
                              ``(iii) if unable to suggest, offer, or
                          recommend to a consumer a loan that is not more
                          expensive than a loan for which the consumer
                          qualifies, discouraging a consumer from seeking a
                          residential mortgage loan secured by a consumer's
                          principal dwelling from another mortgage
                          originator.
                ``(4) Rules of construction.--No provision of this
            subsection shall be construed as--
                        ``(A) permitting any yield spread premium or other
                    similar compensation that would, for any residential
                    mortgage loan, permit the total amount of direct and
                    indirect compensation from all sources permitted to a
                    mortgage

    [[Page 124 STAT. 2141]]

                    originator to vary based on the terms of the loan (other
                    than the amount of the principal);
                        ``(B) limiting or affecting the amount of
                    compensation received by a creditor upon the sale of a
                    consummated loan to a subsequent purchaser;
                        ``(C) restricting a consumer's ability to finance,
                    at the option of the consumer, including through
                    principal or rate, any origination fees or costs
                    permitted under this subsection, or the mortgage
                    originator's right to receive such fees or costs
                    (including compensation) from any person, subject to
                    paragraph (2)(B), so long as such fees or costs do not
                    vary based on the terms of the loan (other than the
                    amount of the principal) or the consumer's decision
                    about whether to finance such fees or costs; or
                        ``(D) prohibiting incentive payments to a mortgage
                    originator based on the number of residential mortgage
                    loans originated within a specified period of time.''.
    SEC. 1404. LIABILITY.

        Section 129B of the Truth in Lending Act is amended by inserting
    after subsection (c) (as added by section 1403) the following new
    subsection:
        ``(d) Liability for Violations.--
                ``(1) In general.-- <<NOTE: Applicability.>> For purposes of
            providing a cause of action for any failure by a mortgage
            originator, other than a creditor, to comply with any
            requirement imposed under this section and any regulation
            prescribed under this section, section 130 shall be applied with
            respect to any such failure by substituting `mortgage
            originator' for `creditor' each place such term appears in each
            such subsection.
                ``(2) Maximum.--The maximum amount of any liability of a
            mortgage originator under paragraph (1) to a consumer for any
            violation of this section shall not exceed the greater of actual
            damages or an amount equal to 3 times the total amount of direct
            and indirect compensation or gain accruing to the mortgage
            originator in connection with the residential mortgage loan
            involved in the violation, plus the costs to the consumer of the
            action, including a reasonable attorney's fee.''.
    SEC. 1405. REGULATIONS.

        (a) Discretionary Regulatory Authority.--Section 129B of the Truth
    in Lending Act is amended by inserting after subsection (d) (as added by
    section 1404) the following new subsection:
        ``(e) Discretionary Regulatory Authority.--
                ``(1) In general.--The Board shall, by regulations, prohibit
            or condition terms, acts or practices relating to residential
            mortgage loans that the Board finds to be abusive, unfair,
            deceptive, predatory, necessary or proper to ensure that
            responsible, affordable mortgage credit remains available to
            consumers in a manner consistent with the purposes of this
            section and section 129C, necessary or proper to effectuate the
            purposes of this section and section 129C, to prevent
            circumvention or evasion thereof, or to facilitate compliance
            with such sections, or are not in the interest of the borrower.
                ``(2) Application.--The regulations prescribed under
            paragraph (1) shall be applicable to all residential mortgage
            loans and shall be applied in the same manner as regulations
            prescribed under section 105.

    [[Page 124 STAT. 2142]]

        ``(f) Section 129B and any regulations promulgated thereunder do not
    apply to an extension of credit relating to a plan described in section
    101(53D) of title 11, United States Code.''.
        (b) Disclosures.--Notwithstanding <<NOTE: 15 USC 1601 note.>>  any
    other provision of this title, in order to improve consumer awareness
    and understanding of transactions involving residential mortgage loans
    through the use of disclosures, the Board may, by rule, exempt from or
    modify disclosure requirements, in whole or in part, for any class of
    residential mortgage loans if the Board determines that such exemption
    or modification is in the interest of consumers and in the public
    interest.
    SEC. 1406. STUDY OF SHARED APPRECIATION MORTGAGES.

        (a) Study.--The Secretary of Housing and Urban Development, in
    consultation with the Secretary of the Treasury and other relevant
    agencies, shall conduct a comprehensive study to determine prudent
    statutory and regulatory requirements sufficient to provide for the
    widespread use of shared appreciation mortgages to strengthen local
    housing markets, provide new opportunities for affordable homeownership,
    and enable homeowners at risk of foreclosure to refinance or modify
    their mortgages.
        (b) Report.--Not later than the expiration of the 6-month period
    beginning on the date of the enactment of this Act, the Secretary of
    Housing and Urban Development shall submit a report to the Congress on
    the results of the study, which shall include recommendations for the
    regulatory and legislative requirements referred to in subsection (a).

                   Subtitle B--Minimum Standards For Mortgages

    SEC. 1411. ABILITY TO REPAY.

        (a) In General.--
                (1) Rule <<NOTE: 15 USC 1639c note.>>  of construction.--No
            regulation, order, or guidance issued by the Bureau under this
            title shall be construed as requiring a depository institution
            to apply mortgage underwriting standards that do not meet the
            minimum underwriting standards required by the appropriate
            prudential regulator of the depository institution.
                (2) Amendment to truth in lending act.--Chapter 2 of the
            Truth in Lending Act (15 U.S.C. 1631 et seq.) is amended by
            inserting after section 129B (as added by section 1402(a)) the
            following new section:
    ``Sec. 129C. Minimum <<NOTE: 15 USC 1639c.>>  standards for
                      residential mortgage loans

        ``(a) Ability To Repay.--
                ``(1) In general.--In accordance with regulations prescribed
            by the Board, no creditor may make a residential mortgage loan
            unless the creditor makes a reasonable and good faith
            determination based on verified and documented information that,
            at the time the loan is consummated, the consumer has a
            reasonable ability to repay the loan, according to its terms,
            and all applicable taxes, insurance (including mortgage
            guarantee insurance), and assessments.
                ``(2) Multiple loans.--If the creditor knows, or has reason
            to know, that 1 or more residential mortgage loans secured

    [[Page 124 STAT. 2143]]

            by the same dwelling will be made to the same consumer, the
            creditor shall make a reasonable and good faith determination,
            based on verified and documented information, that the consumer
            has a reasonable ability to repay the combined payments of all
            loans on the same dwelling according to the terms of those loans
            and all applicable taxes, insurance (including mortgage
            guarantee insurance), and assessments.
                ``(3) Basis for determination.--A determination under this
            subsection of a consumer's ability to repay a residential
            mortgage loan shall include consideration of the consumer's
            credit history, current income, expected income the consumer is
            reasonably assured of receiving, current obligations, debt-to-
            income ratio or the residual income the consumer will have after
            paying non-mortgage debt and mortgage-related obligations,
            employment status, and other financial resources other than the
            consumer's equity in the dwelling or real property that secures
            repayment of the loan. A creditor shall determine the ability of
            the consumer to repay using a payment schedule that fully
            amortizes the loan over the term of the loan.
                ``(4) Income verification.--A creditor making a residential
            mortgage loan shall verify amounts of income or assets that such
            creditor relies on to determine repayment ability, including
            expected income or assets, by reviewing the consumer's Internal
            Revenue Service Form W-2, tax returns, payroll receipts,
            financial institution records, or other third-party documents
            that provide reasonably reliable evidence of the consumer's
            income or assets. In order to safeguard against fraudulent
            reporting, any consideration of a consumer's income history in
            making a determination under this subsection shall include the
            verification of such income by the use of--
                        ``(A) Internal Revenue Service transcripts of tax
                    returns; or
                        ``(B) a method that quickly and effectively verifies
                    income documentation by a third party subject to rules
                    prescribed by the Board.
                ``(5) Exemption.--With respect to loans made, guaranteed, or
            insured by Federal departments or agencies identified in
            subsection (b)(3)(B)(ii), such departments or agencies may
            exempt refinancings under a streamlined refinancing from this
            income verification requirement as long as the following
            conditions are met:
                        ``(A) The consumer is not 30 days or more past due
                    on the prior existing residential mortgage loan.
                        ``(B) The refinancing does not increase the
                    principal balance outstanding on the prior existing
                    residential mortgage loan, except to the extent of fees
                    and charges allowed by the department or agency making,
                    guaranteeing, or insuring the refinancing.
                        ``(C) Total points and fees (as defined in section
                    103(aa)(4), other than bona fide third party charges not
                    retained by the mortgage originator, creditor, or an
                    affiliate of the creditor or mortgage originator)
                    payable in connection with the refinancing do not exceed
                    3 percent of the total new loan amount.
                        ``(D) The interest rate on the refinanced loan is
                    lower than the interest rate of the original loan,
                    unless the borrower is refinancing from an adjustable
                    rate to a fixed-

    [[Page 124 STAT. 2144]]

                    rate loan, under guidelines that the department or
                    agency shall establish for loans they make, guarantee,
                    or issue.
                        ``(E) The <<NOTE: Regulations.>> refinancing is
                    subject to a payment schedule that will fully amortize
                    the refinancing in accordance with the regulations
                    prescribed by the department or agency making,
                    guaranteeing, or insuring the refinancing.
                        ``(F) The terms of the refinancing do not result in
                    a balloon payment, as defined in subsection
                    (b)(2)(A)(ii).
                        ``(G) Both the residential mortgage loan being
                    refinanced and the refinancing satisfy all requirements
                    of the department or agency making, guaranteeing, or
                    insuring the refinancing.
                ``(6) Nonstandard loans.--
                        ``(A) Variable rate loans that defer repayment of
                    any principal or interest.--For purposes of determining,
                    under this subsection, a consumer's ability to repay a
                    variable rate residential mortgage loan that allows or
                    requires the consumer to defer the repayment of any
                    principal or interest, the creditor shall use a fully
                    amortizing repayment schedule.
                        ``(B) Interest-only loans.--For purposes of
                    determining, under this subsection, a consumer's ability
                    to repay a residential mortgage loan that permits or
                    requires the payment of interest only, the creditor
                    shall use the payment amount required to amortize the
                    loan by its final maturity.
                        ``(C) Calculation for negative amortization.--In
                    making any determination under this subsection, a
                    creditor shall also take into consideration any balance
                    increase that may accrue from any negative amortization
                    provision.
                        ``(D) Calculation process.--For purposes of making
                    any determination under this subsection, a creditor
                    shall calculate the monthly payment amount for principal
                    and interest on any residential mortgage loan by
                    assuming--
                              ``(i) the loan proceeds are fully disbursed on
                          the date of the consummation of the loan;
                              ``(ii) the loan is to be repaid in
                          substantially equal monthly amortizing payments
                          for principal and interest over the entire term of
                          the loan with no balloon payment, unless the loan
                          contract requires more rapid repayment (including
                          balloon payment), in which case the calculation
                          shall be made (I) in accordance with regulations
                          prescribed by the Board, with respect to any loan
                          which has an annual percentage rate that does not
                          exceed the average prime offer rate for a
                          comparable transaction, as of the date the
                          interest rate is set, by 1.5 or more percentage
                          points for a first lien residential mortgage loan;
                          and by 3.5 or more percentage points for a
                          subordinate lien residential mortgage loan; or
                          (II) using the contract's repayment schedule, with
                          respect to a loan which has an annual percentage
                          rate, as of the date the interest rate is set,
                          that is at least 1.5 percentage points above the
                          average prime offer rate for a first lien
                          residential mortgage loan; and 3.5 percentage
                          points above the average prime offer rate for a
                          subordinate lien residential mortgage loan; and

    [[Page 124 STAT. 2145]]

                              ``(iii) the interest rate over the entire term
                          of the loan is a fixed rate equal to the fully
                          indexed rate at the time of the loan closing,
                          without considering the introductory rate.
                        ``(E) Refinance of hybrid loans with current
                    lender.--In considering any application for refinancing
                    an existing hybrid loan by the creditor into a standard
                    loan to be made by the same creditor in any case in
                    which there would be a reduction in monthly payment and
                    the mortgagor has not been delinquent on any payment on
                    the existing hybrid loan, the creditor may--
                              ``(i) consider the mortgagor's good standing
                          on the existing mortgage;
                              ``(ii) consider if the extension of new credit
                          would prevent a likely default should the original
                          mortgage reset and give such concerns a higher
                          priority as an acceptable underwriting practice;
                          and
                              ``(iii) offer rate discounts and other
                          favorable terms to such mortgagor that would be
                          available to new customers with high credit
                          ratings based on such underwriting practice.
                ``(7) Fully-indexed rate defined.--For purposes of this
            subsection, the term `fully indexed rate' means the index rate
            prevailing on a residential mortgage loan at the time the loan
            is made plus the margin that will apply after the expiration of
            any introductory interest rates.
                ``(8) Reverse mortgages and bridge loans.--This subsection
            shall not apply with respect to any reverse mortgage or
            temporary or bridge loan with a term of 12 months or less,
            including to any loan to purchase a new dwelling where the
            consumer plans to sell a different dwelling within 12 months.
                ``(9) Seasonal income.--If documented income, including
            income from a small business, is a repayment source for a
            residential mortgage loan, a creditor may consider the
            seasonality and irregularity of such income in the underwriting
            of and scheduling of payments for such credit.''.

        (b) Clerical Amendment.--The table of sections for chapter 2 of the
    Truth in Lending Act is amended by inserting after the item relating to
    section 129B (as added by section 1402(b)) the following new item:

    ``129C. Minimum standards for residential mortgage loans.''.

    SEC. 1412. SAFE HARBOR AND REBUTTABLE PRESUMPTION.

        Section 129C of the Truth in Lending Act is amended by inserting
    after subsection (a) (as added by section 1411) the following new
    subsection:
        ``(b) Presumption of Ability To Repay.--
                ``(1) In general.--Any creditor with respect to any
            residential mortgage loan, and any assignee of such loan subject
            to liability under this title, may presume that the loan has met
            the requirements of subsection (a), if the loan is a qualified
            mortgage.
                ``(2) Definitions.--For purposes of this subsection, the
            following definitions shall apply:
                        ``(A) Qualified mortgage.--The term `qualified
                    mortgage' means any residential mortgage loan--

    [[Page 124 STAT. 2146]]

                              ``(i) for which the regular periodic payments
                          for the loan may not--
                                        ``(I) result in an increase of the
                                    principal balance; or
                                        ``(II) except as provided in
                                    subparagraph (E), allow the consumer to
                                    defer repayment of principal;
                              ``(ii) except as provided in subparagraph (E),
                          the terms of which do not result in a balloon
                          payment, where a `balloon payment' is a scheduled
                          payment that is more than twice as large as the
                          average of earlier scheduled payments;
                              ``(iii) for which the income and financial
                          resources relied upon to qualify the obligors on
                          the loan are verified and documented;
                              ``(iv) in the case of a fixed rate loan, for
                          which the underwriting process is based on a
                          payment schedule that fully amortizes the loan
                          over the loan term and takes into account all
                          applicable taxes, insurance, and assessments;
                              ``(v) in the case of an adjustable rate loan,
                          for which the underwriting is based on the maximum
                          rate permitted under the loan during the first 5
                          years, and a payment schedule that fully amortizes
                          the loan over the loan term and takes into account
                          all applicable taxes, insurance, and assessments;
                              ``(vi) that complies with any guidelines or
                          regulations established by the Board relating to
                          ratios of total monthly debt to monthly income or
                          alternative measures of ability to pay regular
                          expenses after payment of total monthly debt,
                          taking into account the income levels of the
                          borrower and such other factors as the Board may
                          determine relevant and consistent with the
                          purposes described in paragraph (3)(B)(i);
                              ``(vii) for which the total points and fees
                          (as defined in subparagraph (C)) payable in
                          connection with the loan do not exceed 3 percent
                          of the total loan amount;
                              ``(viii) for which the term of the loan does
                          not exceed 30 years, except as such term may be
                          extended under paragraph (3), such as in high-cost
                          areas; and
                              ``(ix) in the case of a reverse mortgage
                          (except for the purposes of subsection (a) of
                          section 129C, to the extent that such mortgages
                          are exempt altogether from those requirements), a
                          reverse mortgage which meets the standards for a
                          qualified mortgage, as set by the Board in rules
                          that are consistent with the purposes of this
                          subsection.
                        ``(B) Average prime offer rate.--The term `average
                    prime offer rate' means the average prime offer rate for
                    a comparable transaction as of the date on which the
                    interest rate for the transaction is set, as published
                    by the Board..
                        ``(C) Points and fees.--
                              ``(i) In general.--For purposes of
                          subparagraph (A), the term `points and fees' means
                          points and fees as defined by section 103(aa)(4)
                          (other than bona fide

    [[Page 124 STAT. 2147]]

                          third party charges not retained by the mortgage
                          originator, creditor, or an affiliate of the
                          creditor or mortgage originator).
                              ``(ii) Computation.--For purposes of computing
                          the total points and fees under this subparagraph,
                          the total points and fees shall exclude either of
                          the amounts described in the following subclauses,
                          but not both:
                                        ``(I) Up to and including 2 bona
                                    fide discount points payable by the
                                    consumer in connection with the
                                    mortgage, but only if the interest rate
                                    from which the mortgage's interest rate
                                    will be discounted does not exceed by
                                    more than 1 percentage point the average
                                    prime offer rate.
                                        ``(II) Unless 2 bona fide discount
                                    points have been excluded under
                                    subclause (I), up to and including 1
                                    bona fide discount point payable by the
                                    consumer in connection with the
                                    mortgage, but only if the interest rate
                                    from which the mortgage's interest rate
                                    will be discounted does not exceed by
                                    more than 2 percentage points the
                                    average prime offer rate.
                              ``(iii) Bona fide discount points defined.--
                          For purposes of clause (ii), the term `bona fide
                          discount points' means loan discount points which
                          are knowingly paid by the consumer for the purpose
                          of reducing, and which in fact result in a bona
                          fide reduction of, the interest rate or time-price
                          differential applicable to the mortgage.
                              ``(iv) Interest rate reduction.--Subclauses
                          (I) and (II) of clause (ii) shall not apply to
                          discount points used to purchase an interest rate
                          reduction unless the amount of the interest rate
                          reduction purchased is reasonably consistent with
                          established industry norms and practices for
                          secondary mortgage market transactions.
                        ``(D) Smaller loans.--
                    The <<NOTE: Regulations.>> Board shall prescribe rules
                    adjusting the criteria under subparagraph (A)(vii) in
                    order to permit lenders that extend smaller loans to
                    meet the requirements of the presumption of compliance
                    under paragraph (1). In prescribing <<NOTE: Urban and
                    rural areas.>>  such rules, the Board shall consider the
                    potential impact of such rules on rural areas and other
                    areas where home values are lower.
                        ``(E) Balloon loans.--The Board may, by regulation,
                    provide that the term `qualified mortgage' includes a
                    balloon loan--
                              ``(i) that meets all of the criteria for a
                          qualified mortgage under subparagraph (A) (except
                          clauses (i)(II), (ii), (iv), and (v) of such
                          subparagraph);
                              ``(ii) for which the creditor makes a
                          determination that the consumer is able to make
                          all scheduled payments, except the balloon
                          payment, out of income or assets other than the
                          collateral;
                              ``(iii) for which the underwriting is based on
                          a payment schedule that fully amortizes the loan
                          over a period of not more than 30 years and takes
                          into

    [[Page 124 STAT. 2148]]

                          account all applicable taxes, insurance, and
                          assessments; and
                              ``(iv) that is extended by a creditor that--
                                        ``(I) operates predominantly in
                                    rural or underserved areas;
                                        ``(II) together with all affiliates,
                                    has total annual residential mortgage
                                    loan originations that do not exceed a
                                    limit set by the Board;
                                        ``(III) retains the balloon loans in
                                    portfolio; and
                                        ``(IV) meets any asset size
                                    threshold and any other criteria as the
                                    Board may establish, consistent with the
                                    purposes of this subtitle.
                ``(3) Regulations.--
                        ``(A) In general.--The Board shall prescribe
                    regulations to carry out the purposes of this
                    subsection.
                        ``(B) Revision of safe harbor criteria.--
                              ``(i) In general.--The Board may prescribe
                          regulations that revise, add to, or subtract from
                          the criteria that define a qualified mortgage upon
                          a finding that such regulations are necessary or
                          proper to ensure that responsible, affordable
                          mortgage credit remains available to consumers in
                          a manner consistent with the purposes of this
                          section, necessary and appropriate to effectuate
                          the purposes of this section and section 129B, to
                          prevent circumvention or evasion thereof, or to
                          facilitate compliance with such sections.
                              ``(ii) Loan definition.--The following
                          agencies shall, in consultation with the Board,
                          prescribe rules defining the types of loans they
                          insure, guarantee, or administer, as the case may
                          be, that are qualified mortgages for purposes of
                          paragraph (2)(A), and such rules may revise, add
                          to, or subtract from the criteria used to define a
                          qualified mortgage under paragraph (2)(A), upon a
                          finding that such rules are consistent with the
                          purposes of this section and section 129B, to
                          prevent circumvention or evasion thereof, or to
                          facilitate compliance with such sections:
                                        ``(I) The Department of Housing and
                                    Urban Development, with regard to
                                    mortgages insured under the National
                                    Housing Act (12 U.S.C. 1707 et seq.).
                                        ``(II) The Department of Veterans
                                    Affairs, with regard to a loan made or
                                    guaranteed by the Secretary of Veterans
                                    Affairs.
                                        ``(III) The Department of
                                    Agriculture, with regard loans
                                    guaranteed by the Secretary of
                                    Agriculture pursuant to 42 U.S.C.
                                    1472(h).
                                        ``(IV) The Rural Housing Service,
                                    with regard to loans insured by the
                                    Rural Housing Service.''.
    SEC. 1413. DEFENSE TO FORECLOSURE.

        Section 130 of the Truth in Lending Act (15 U.S.C. 1640) is amended
    by adding at the end the following new subsection:
        ``(k) Defense to Foreclosure.--
                ``(1) In general.--Notwithstanding any other provision of
            law, when a creditor, assignee, or other holder of a residential

    [[Page 124 STAT. 2149]]

            mortgage loan or anyone acting on behalf of such creditor,
            assignee, or holder, initiates a judicial or nonjudicial
            foreclosure of the residential mortgage loan, or any other
            action to collect the debt in connection with such loan, a
            consumer may assert a violation by a creditor of paragraph (1)
            or (2) of section 129B(c), or of section 129C(a), as a matter of
            defense by recoupment or set off without regard for the time
            limit on a private action for damages under subsection (e).
                ``(2) Amount of recoupment or setoff.--
                        ``(A) In general.--The amount of recoupment or set-
                    off under paragraph (1) shall equal the amount to which
                    the consumer would be entitled under subsection (a) for
                    damages for a valid claim brought in an original action
                    against the creditor, plus the costs to the consumer of
                    the action, including a reasonable attorney's fee.
                        ``(B) Special rule.--Where such judgment is rendered
                    after the expiration of the applicable time limit on a
                    private action for damages under subsection (e), the
                    amount of recoupment or set-off under paragraph (1)
                    derived from damages under subsection (a)(4) shall not
                    exceed the amount to which the consumer would have been
                    entitled under subsection (a)(4) for damages computed up
                    to the day preceding the expiration of the applicable
                    time limit.''.
    SEC. 1414. ADDITIONAL STANDARDS AND REQUIREMENTS.

        (a) In General.--Section 129C of the Truth in Lending Act is amended
    by inserting after subsection (b) (as added by this title) the following
    new subsections:
        ``(c) Prohibition on Certain Prepayment Penalties.--
                ``(1) Prohibited on certain loans.--
                        ``(A) In general.--A residential mortgage loan that
                    is not a `qualified mortgage', as defined under
                    subsection (b)(2), may not contain terms under which a
                    consumer must pay a prepayment penalty for paying all or
                    part of the principal after the loan is consummated.
                        ``(B) Exclusions.--For purposes of this subsection,
                    a `qualified mortgage' may not include a residential
                    mortgage loan that--
                              ``(i) has an adjustable rate; or
                              ``(ii) has an annual percentage rate that
                          exceeds the average prime offer rate for a
                          comparable transaction, as of the date the
                          interest rate is set--
                                        ``(I) by 1.5 or more percentage
                                    points, in the case of a first lien
                                    residential mortgage loan having a
                                    original principal obligation amount
                                    that is equal to or less than the amount
                                    of the maximum limitation on the
                                    original principal obligation of
                                    mortgage in effect for a residence of
                                    the applicable size, as of the date of
                                    such interest rate set, pursuant to the
                                    6th sentence of section 305(a)(2) the
                                    Federal Home Loan Mortgage Corporation
                                    Act (12 U.S.C. 1454(a)(2));
                                        ``(II) by 2.5 or more percentage
                                    points, in the case of a first lien
                                    residential mortgage loan having a
                                    original principal obligation amount
                                    that is more than the amount of the
                                    maximum limitation on the original
                                    principal obligation of mortgage in

    [[Page 124 STAT. 2150]]

                                    effect for a residence of the applicable
                                    size, as of the date of such interest
                                    rate set, pursuant to the 6th sentence
                                    of section 305(a)(2) the Federal Home
                                    Loan Mortgage Corporation Act (12 U.S.C.
                                    1454(a)(2)); and
                                        ``(III) by 3.5 or more percentage
                                    points, in the case of a subordinate
                                    lien residential mortgage loan.
                ``(2)  Publication of average prime offer rate and apr
            thresholds.--The Board--
                        ``(A) <<NOTE: Deadline.>> shall publish, and update
                    at least weekly, average prime offer rates;
                        ``(B) may publish multiple rates based on varying
                    types of mortgage transactions; and
                        ``(C) shall adjust the thresholds established under
                    subclause (I), (II), and (III) of paragraph (1)(B)(ii)
                    as necessary to reflect significant changes in market
                    conditions and to effectuate the purposes of the
                    Mortgage Reform and Anti-Predatory Lending Act.
                ``(3) Phased-out <<NOTE: Time periods.>> penalties on
            qualified mortgages.--A qualified mortgage (as defined in
            subsection (b)(2)) may not contain terms under which a consumer
            must pay a prepayment penalty for paying all or part of the
            principal after the loan is consummated in excess of the
            following limitations:
                        ``(A) During the 1-year period beginning on the date
                    the loan is consummated, the prepayment penalty shall
                    not exceed an amount equal to 3 percent of the
                    outstanding balance on the loan.
                        ``(B) During the 1-year period beginning after the
                    period described in subparagraph (A), the prepayment
                    penalty shall not exceed an amount equal to 2 percent of
                    the outstanding balance on the loan.
                        ``(C) During the 1-year period beginning after the
                    1-year period described in subparagraph (B), the
                    prepayment penalty shall not exceed an amount equal to 1
                    percent of the outstanding balance on the loan.
                        ``(D) After the end of the 3-year period beginning
                    on the date the loan is consummated, no prepayment
                    penalty may be imposed on a qualified mortgage.
                ``(4) Option for no prepayment penalty required.--A creditor
            may not offer a consumer a residential mortgage loan product
            that has a prepayment penalty for paying all or part of the
            principal after the loan is consummated as a term of the loan
            without offering the consumer a residential mortgage loan
            product that does not have a prepayment penalty as a term of the
            loan.

        ``(d) Single Premium Credit Insurance Prohibited.--No creditor may
    finance, directly or indirectly, in connection with any residential
    mortgage loan or with any extension of credit under an open end consumer
    credit plan secured by the principal dwelling of the consumer, any
    credit life, credit disability, credit unemployment, or credit property
    insurance, or any other accident, loss-of-income, life, or health
    insurance, or any payments directly or indirectly for any debt
    cancellation or suspension agreement or contract, except that--

    [[Page 124 STAT. 2151]]

                ``(1) insurance premiums or debt cancellation or suspension
            fees calculated and paid in full on a monthly basis shall not be
            considered financed by the creditor; and
                ``(2) this subsection shall not apply to credit unemployment
            insurance for which the unemployment insurance premiums are
            reasonable, the creditor receives no direct or indirect
            compensation in connection with the unemployment insurance
            premiums, and the unemployment insurance premiums are paid
            pursuant to another insurance contract and not paid to an
            affiliate of the creditor.

        ``(e) Arbitration.--
                ``(1) In general.--No residential mortgage loan and no
            extension of credit under an open end consumer credit plan
            secured by the principal dwelling of the consumer may include
            terms which require arbitration or any other nonjudicial
            procedure as the method for resolving any controversy or
            settling any claims arising out of the transaction.
                ``(2) Post-controversy agreements.--Subject to paragraph
            (3), paragraph (1) shall not be construed as limiting the right
            of the consumer and the creditor or any assignee to agree to
            arbitration or any other nonjudicial procedure as the method for
            resolving any controversy at any time after a dispute or claim
            under the transaction arises.
                ``(3) No waiver of statutory cause of action.--No provision
            of any residential mortgage loan or of any extension of credit
            under an open end consumer credit plan secured by the principal
            dwelling of the consumer, and no other agreement between the
            consumer and the creditor relating to the residential mortgage
            loan or extension of credit referred to in paragraph (1), shall
            be applied or interpreted so as to bar a consumer from bringing
            an action in an appropriate district court of the United States,
            or any other court of competent jurisdiction, pursuant to
            section 130 or any other provision of law, for damages or other
            relief in connection with any alleged violation of this section,
            any other provision of this title, or any other Federal law.

        ``(f) Mortgages With Negative Amortization.--No creditor may extend
    credit to a borrower in connection with a consumer credit transaction
    under an open or closed end consumer credit plan secured by a dwelling
    or residential real property that includes a dwelling, other than a
    reverse mortgage, that provides or permits a payment plan that may, at
    any time over the term of the extension of credit, result in negative
    amortization unless, before such transaction is consummated--
                ``(1) the creditor provides the consumer with a statement
            that--
                        ``(A) the pending transaction will or may, as the
                    case may be, result in negative amortization;
                        ``(B) describes negative amortization in such manner
                    as the Board shall prescribe;
                        ``(C) negative amortization increases the
                    outstanding principal balance of the account; and
                        ``(D) negative amortization reduces the consumer's
                    equity in the dwelling or real property; and
                ``(2) in the case of a first-time borrower with respect to a
            residential mortgage loan that is not a qualified mortgage, the
            first-time borrower provides the creditor with sufficient

    [[Page 124 STAT. 2152]]

            documentation to demonstrate that the consumer received
            homeownership counseling from organizations or counselors
            certified by the Secretary of Housing and Urban Development as
            competent to provide such counseling.''.

        (b) Conforming Amendment Relating to Enforcement.--Section 108(a) of
    the Truth in Lending Act (15 U.S.C. 1607(a)) is amended by inserting
    after paragraph (6) the following new paragraph:
                ``(7) sections 21B and 21C of the Securities Exchange Act of
            1934, in the case of a broker or dealer, other than a depository
            institution, by the Securities and Exchange Commission.''.

        (c) Protection Against Loss of Anti-deficiency Protection.--Section
    129C of the Truth in Lending Act is amended by inserting after
    subsection (f) (as added by subsection (a)) the following new
    subsection:
        ``(g) Protection Against Loss of Anti-deficiency Protection.--
                ``(1) Definition.--For purposes of this subsection, the term
            `anti-deficiency law' means the law of any State which provides
            that, in the event of foreclosure on the residential property of
            a consumer securing a mortgage, the consumer is not liable, in
            accordance with the terms and limitations of such State law, for
            any deficiency between the sale price obtained on such property
            through foreclosure and the outstanding balance of the mortgage.
                ``(2) Notice at time of consummation.--In the case of any
            residential mortgage loan that is, or upon consummation will be,
            subject to protection under an anti-deficiency law, the creditor
            or mortgage originator shall provide a written notice to the
            consumer describing the protection provided by the anti-
            deficiency law and the significance for the consumer of the loss
            of such protection before such loan is consummated.
                ``(3) Notice before refinancing that would cause loss of
            protection.--In the case of any residential mortgage loan that
            is subject to protection under an anti-deficiency law, if a
            creditor or mortgage originator provides an application to a
            consumer, or receives an application from a consumer, for any
            type of refinancing for such loan that would cause the loan to
            lose the protection of such anti-deficiency law, the creditor or
            mortgage originator shall provide a written notice to the
            consumer describing the protection provided by the anti-
            deficiency law and the significance for the consumer of the loss
            of such protection before any agreement for any such refinancing
            is consummated.''.

        (d) Policy Regarding Acceptance of Partial Payment.--Section 129C of
    the Truth in Lending Act is amended by inserting after subsection (g)
    (as added by subsection (c)) the following new subsection:
        ``(h) Policy Regarding Acceptance of Partial Payment.--In the case
    of any residential mortgage loan, a creditor shall disclose prior to
    settlement or, in the case of a person becoming a creditor with respect
    to an existing residential mortgage loan, at the time such person
    becomes a creditor--
                ``(1) the creditor's policy regarding the acceptance of
            partial payments; and

    [[Page 124 STAT. 2153]]

                ``(2) if partial payments are accepted, how such payments
            will be applied to such mortgage and if such payments will be
            placed in escrow.

        ``(i) Timeshare Plans.--This section and any regulations promulgated
    under this section do not apply to an extension of credit relating to a
    plan described in section 101(53D) of title 11, United States Code.''.
    SEC. 1415. <<NOTE: 15 USC 1639b note.>> RULE OF CONSTRUCTION.

        Except as otherwise expressly provided in section 129B or 129C of
    the Truth in Lending Act (as added by this title), no provision of such
    section 129B or 129C shall be construed as superseding, repealing, or
    affecting any duty, right, obligation, privilege, or remedy of any
    person under any other provision of the Truth in Lending Act or any
    other provision of Federal or State law.
    SEC. 1416. AMENDMENTS TO CIVIL LIABILITY PROVISIONS.

        (a) Increase in Amount of Civil Money Penalties for Certain
    Violations.--Section 130(a) of the Truth in Lending Act (15 U.S.C.
    1640(a)) is amended--
                (1) in paragraph (2)(A)(ii)--
                        (A) by striking ``$100'' and inserting ``$200''; and
                        (B) by striking ``$1,000'' and inserting ``$2,000'';
                (2) in paragraph (2)(B), by striking ``$500,000'' and
            inserting ``$1,000,000''; and
                (3) in paragraph (4), by inserting ``, paragraph (1) or (2)
            of section 129B(c), or section 129C(a)'' after ``section 129''.

        (b) Statute of Limitations Extended for Section 129 Violations.--
    Section 130(e) of the Truth in Lending Act (15 U.S.C. 1640(e)) is
    amended--
                (1) in the first sentence, by striking ``Any action'' and
            inserting ``Except as provided in the subsequent sentence, any
            action''; and
                (2) by inserting after the first sentence the following new
            sentence: ``Any action under this section with respect to any
            violation of section 129, 129B, or 129C may be brought in any
            United States district court, or in any other court of competent
            jurisdiction, before the end of the 3-year period beginning on
            the date of the occurrence of the violation.''.
    SEC. 1417. LENDER RIGHTS IN THE CONTEXT OF BORROWER DECEPTION.

        Section 130 of the Truth in Lending Act (15 U.S.C. 1640) is amended
    by adding after subsection (k) (as added by this title) the following
    new subsection:
        ``(l) Exemption From Liability and Rescission in Case of Borrower
    Fraud or Deception.--In addition to any other remedy available by law or
    contract, no creditor or assignee shall be liable to an obligor under
    this section, if such obligor, or co-obligor has been convicted of
    obtaining by actual fraud such residential mortgage loan.''.
    SEC. 1418. SIX-MONTH NOTICE REQUIRED BEFORE RESET OF HYBRID
                              ADJUSTABLE RATE MORTGAGES.

        (a) In General.--Chapter 2 of the Truth in Lending Act (15 U.S.C.
    1631 et seq.) is amended by inserting after section 128 the following
    new section:

    [[Page 124 STAT. 2154]]

    ``Sec. 128A. <<NOTE: 15 USC 1638a.>> Reset of hybrid adjustable
                      rate mortgages

        ``(a) Hybrid Adjustable Rate Mortgages Defined.--For purposes of
    this section, the term `hybrid adjustable rate mortgage' means a
    consumer credit transaction secured by the consumer's principal
    residence with a fixed interest rate for an introductory period that
    adjusts or resets to a variable interest rate after such period.
        ``(b) Notice of Reset and Alternatives.--During <<NOTE: Time
    period.>> the 1-month period that ends 6 months before the date on which
    the interest rate in effect during the introductory period of a hybrid
    adjustable rate mortgage adjusts or resets to a variable interest rate
    or, in the case of such an adjustment or resetting that occurs within
    the first 6 months after consummation of such loan, at consummation, the
    creditor or servicer of such loan shall provide a written notice,
    separate and distinct from all other correspondence to the consumer,
    that includes the following:
                ``(1) Any index or formula used in making adjustments to or
            resetting the interest rate and a source of information about
            the index or formula.
                ``(2) An explanation of how the new interest rate and
            payment would be determined, including an explanation of how the
            index was adjusted, such as by the addition of a margin.
                ``(3) A good faith estimate, based on accepted industry
            standards, of the creditor or servicer of the amount of the
            monthly payment that will apply after the date of the adjustment
            or reset, and the assumptions on which this estimate is based.
                ``(4) A list of alternatives consumers may pursue before the
            date of adjustment or reset, and descriptions of the actions
            consumers must take to pursue these alternatives, including--
                        ``(A) refinancing;
                        ``(B) renegotiation of loan terms;
                        ``(C) payment forbearances; and
                        ``(D) pre-foreclosure sales.
                ``(5) The names, addresses, telephone numbers, and Internet
            addresses of counseling agencies or programs reasonably
            available to the consumer that have been certified or approved
            and made publicly available by the Secretary of Housing and
            Urban Development or a State housing finance authority (as
            defined in section 1301 of the Financial Institutions Reform,
            Recovery, and Enforcement Act of 1989).
                ``(6) The address, telephone number, and Internet address
            for the State housing finance authority (as so defined) for the
            State in which the consumer resides.

        ``(c) Savings Clause.--The Board may require the notice in paragraph
    (b) or other notice consistent with this Act for adjustable rate
    mortgage loans that are not hybrid adjustable rate mortgage loans.''.
        (b) Clerical Amendment.--The table of sections for chapter 2 of the
    Truth in Lending Act is amended by inserting after the item relating to
    section 128 the following new item:

    ``128A. Reset of hybrid adjustable rate mortgages.''.

    SEC. 1419. REQUIRED DISCLOSURES.

        Section 128(a) of Truth in Lending Act (15 U.S.C. 1638(a)) is
    amended by adding at the end the following new paragraphs:

    [[Page 124 STAT. 2155]]

                ``(16) In the case of a variable rate residential mortgage
            loan for which an escrow or impound account will be established
            for the payment of all applicable taxes, insurance, and
            assessments--
                        ``(A) the amount of initial monthly payment due
                    under the loan for the payment of principal and
                    interest, and the amount of such initial monthly payment
                    including the monthly payment deposited in the account
                    for the payment of all applicable taxes, insurance, and
                    assessments; and
                        ``(B) the amount of the fully indexed monthly
                    payment due under the loan for the payment of principal
                    and interest, and the amount of such fully indexed
                    monthly payment including the monthly payment deposited
                    in the account for the payment of all applicable taxes,
                    insurance, and assessments.
                ``(17) In the case of a residential mortgage loan, the
            aggregate amount of settlement charges for all settlement
            services provided in connection with the loan, the amount of
            charges that are included in the loan and the amount of such
            charges the borrower must pay at closing, the approximate amount
            of the wholesale rate of funds in connection with the loan, and
            the aggregate amount of other fees or required payments in
            connection with the loan.
                ``(18) In the case of a residential mortgage loan, the
            aggregate amount of fees paid to the mortgage originator in
            connection with the loan, the amount of such fees paid directly
            by the consumer, and any additional amount received by the
            originator from the creditor.
                ``(19) In the case of a residential mortgage loan, the total
            amount of interest that the consumer will pay over the life of
            the loan as a percentage of the principal of the loan. Such
            amount shall be computed assuming the consumer makes each
            monthly payment in full and on-time, and does not make any over-
            payments.''.
    SEC. 1420. DISCLOSURES REQUIRED IN MONTHLY STATEMENTS FOR
                              RESIDENTIAL MORTGAGE LOANS.

        Section 128 of the Truth in Lending Act (15 U.S.C. 1638) is amended
    by adding at the end the following new subsection:
        ``(f) Periodic Statements for Residential Mortgage Loans.--
                ``(1) In general.--The creditor, assignee, or servicer with
            respect to any residential mortgage loan shall transmit to the
            obligor, for each billing cycle, a statement setting forth each
            of the following items, to the extent applicable, in a
            conspicuous and prominent manner:
                        ``(A) The amount of the principal obligation under
                    the mortgage.
                        ``(B) The current interest rate in effect for the
                    loan.
                        ``(C) The date on which the interest rate may next
                    reset or adjust.
                        ``(D) The amount of any prepayment fee to be
                    charged, if any.
                        ``(E) A description of any late payment fees.
                        ``(F) A telephone number and electronic mail address
                    that may be used by the obligor to obtain information
                    regarding the mortgage.

    [[Page 124 STAT. 2156]]

                        ``(G) The names, addresses, telephone numbers, and
                    Internet addresses of counseling agencies or programs
                    reasonably available to the consumer that have been
                    certified or approved and made publicly available by the
                    Secretary of Housing and Urban Development or a State
                    housing finance authority (as defined in section 1301 of
                    the Financial Institutions Reform, Recovery, and
                    Enforcement Act of 1989).
                        ``(H) Such other information as the Board may
                    prescribe in regulations.
                ``(2) Development and use of standard form.--The Board shall
            develop and prescribe a standard form for the disclosure
            required under this subsection, taking into account that the
            statements required may be transmitted in writing or
            electronically.
                ``(3) Exception.--Paragraph (1) shall not apply to any fixed
            rate residential mortgage loan where the creditor, assignee, or
            servicer provides the obligor with a coupon book that provides
            the obligor with substantially the same information as required
            in paragraph (1).''.
    SEC. 1421. REPORT BY THE GAO.

        (a) Report Required.--The Comptroller General of the United States
    shall conduct a study to determine the effects the enactment of this Act
    will have on the availability and affordability of credit for consumers,
    small businesses, homebuyers, and mortgage lending, including the
    effect--
                (1) on the mortgage market for mortgages that are not within
            the safe harbor provided in the amendments made by this
            subtitle;
                (2) on the ability of prospective homebuyers to obtain
            financing;
                (3) on the ability of homeowners facing resets or
            adjustments to refinance--for example, do they have fewer
            refinancing options due to the unavailability of certain loan
            products that were available before the enactment of this Act;
                (4) on minorities' ability to access affordable credit
            compared with other prospective borrowers;
                (5) on home sales and construction;
                (6) of extending the rescission right, if any, on adjustable
            rate loans and its impact on litigation;
                (7) of State foreclosure laws and, if any, an investor's
            ability to transfer a property after foreclosure;
                (8) of expanding the existing provisions of the Home
            Ownership and Equity Protection Act of 1994;
                (9) of prohibiting prepayment penalties on high-cost
            mortgages; and
                (10) of establishing counseling services under the
            Department of Housing and Urban Development and offered through
            the Office of Housing Counseling.

        (b) Report.--Before the end of the 1-year period beginning on the
    date of the enactment of this Act, the Comptroller General shall submit
    a report to the Congress containing the findings and conclusions of the
    Comptroller General with respect to the study conducted pursuant to
    subsection (a).
        (c) Examination Related to Certain Credit Risk Retention
    Provisions.--The report required by subsection (b) shall also

    [[Page 124 STAT. 2157]]

    include an analysis by the Comptroller General of the effect on the
    capital reserves and funding of lenders of credit risk retention
    provisions for non-qualified mortgages, including an analysis of the
    exceptions and adjustments authorized in section 129C(b)(3) of the Truth
    in Lending Act and a recommendation on whether a uniform standard is
    needed.
        (d) Analysis of Credit Risk Retention Provisions.--The report
    required by subsection (b) shall also include--
                (1) an analysis by the Comptroller General of whether the
            credit risk retention provisions have significantly reduced
            risks to the larger credit market of the repackaging and selling
            of securitized loans on a secondary market; and
                (2) recommendations to the Congress on adjustments that
            should be made, or additional measures that should be
            undertaken.
    SEC. 1422. STATE ATTORNEY GENERAL ENFORCEMENT AUTHORITY.

        Section 130(e) of the Truth in Lending Act (15 U.S.C. 1640(e)) is
    amended by striking ``section 129 may also'' and inserting ``section
    129, 129B, 129C, 129D, 129E, 129F, 129G, or 129H of this Act may also''.

                         Subtitle C--High-Cost Mortgages

    SEC. 1431. DEFINITIONS RELATING TO HIGH-COST MORTGAGES.

        (a) High-cost Mortgage Defined.--Section 103(aa) of the Truth in
    Lending Act (15 U.S.C. 1602(aa)) is amended by striking all that
    precedes paragraph (2) and inserting the following:
        ``(aa) High-cost Mortgage.--
                ``(1) Definition.--
                        ``(A) In general.--The term `high-cost mortgage',
                    and a mortgage referred to in this subsection, means a
                    consumer credit transaction that is secured by the
                    consumer's principal dwelling, other than a reverse
                    mortgage transaction, if--
                              ``(i) in the case of a credit transaction
                          secured--
                                        ``(I) by a first mortgage on the
                                    consumer's principal dwelling, the
                                    annual percentage rate at consummation
                                    of the transaction will exceed by more
                                    than 6.5 percentage points (8.5
                                    percentage points, if the dwelling is
                                    personal property and the transaction is
                                    for less than $50,000) the average prime
                                    offer rate, as defined in section
                                    129C(b)(2)(B), for a comparable
                                    transaction; or
                                        ``(II) by a subordinate or junior
                                    mortgage on the consumer's principal
                                    dwelling, the annual percentage rate at
                                    consummation of the transaction will
                                    exceed by more than 8.5 percentage
                                    points the average prime offer rate, as
                                    defined in section 129C(b)(2)(B), for a
                                    comparable transaction;
                              ``(ii) the total points and fees payable in
                          connection with the transaction, other than bona
                          fide third party charges not retained by the
                          mortgage originator, creditor, or an affiliate of
                          the creditor or mortgage originator, exceed--

    [[Page 124 STAT. 2158]]

                                        ``(I) in the case of a transaction
                                    for $20,000 or more, 5 percent of the
                                    total transaction amount; or
                                        ``(II) in the case of a transaction
                                    for less than $20,000, the lesser of 8
                                    percent of the total transaction amount
                                    or $1,000 (or such other dollar amount
                                    as the Board shall prescribe by
                                    regulation); or
                              ``(iii) the credit transaction documents
                          permit the creditor to charge or collect
                          prepayment fees or penalties more than 36 months
                          after the transaction closing or such fees or
                          penalties exceed, in the aggregate, more than 2
                          percent of the amount prepaid.
                        ``(B) Introductory rates taken into account.--For
                    purposes of subparagraph (A)(i), the annual percentage
                    rate of interest shall be determined based on the
                    following interest rate:
                              ``(i) In the case of a fixed-rate transaction
                          in which the annual percentage rate will not vary
                          during the term of the loan, the interest rate in
                          effect on the date of consummation of the
                          transaction.
                              ``(ii) In the case of a transaction in which
                          the rate of interest varies solely in accordance
                          with an index, the interest rate determined by
                          adding the index rate in effect on the date of
                          consummation of the transaction to the maximum
                          margin permitted at any time during the loan
                          agreement.
                              ``(iii) In the case of any other transaction
                          in which the rate may vary at any time during the
                          term of the loan for any reason, the interest
                          charged on the transaction at the maximum rate
                          that may be charged during the term of the loan.
                        ``(C) Mortgage insurance.--For the purposes of
                    computing the total points and fees under paragraph (4),
                    the total points and fees shall exclude--
                              ``(i) any premium provided by an agency of the
                          Federal Government or an agency of a State;
                              ``(ii) any amount that is not in excess of the
                          amount payable under policies in effect at the
                          time of origination under section 203(c)(2)(A) of
                          the National Housing Act (12 U.S.C.
                          1709(c)(2)(A)), provided that the premium, charge,
                          or fee is required to be refundable on a pro-rated
                          basis and the refund is automatically issued upon
                          notification of the satisfaction of the underlying
                          mortgage loan; and
                              ``(iii) any premium paid by the consumer after
                          closing.''.

        (b) Adjustment of Percentage Points.--Section 103(aa)(2) of the
    Truth in Lending Act (15 U.S.C. 1602(aa)(2)) is amended by striking
    subparagraph (B) and inserting the following new subparagraph:
                        ``(B) An increase or decrease under subparagraph
                    (A)--
                              ``(i) may not result in the number of
                          percentage points referred to in paragraph
                          (1)(A)(i)(I) being less than 6 percentage points
                          or greater than 10 percentage points; and

    [[Page 124 STAT. 2159]]

                              ``(ii) may not result in the number of
                          percentage points referred to in paragraph
                          (1)(A)(i)(II) being less than 8 percentage points
                          or greater than 12 percentage points.''.

        (c) Points and Fees Defined.--
                (1) In general.--Section 103(aa)(4) of the Truth in Lending
            Act (15 U.S.C. 1602(aa)(4)) is amended--
                        (A) by striking subparagraph (B) and inserting the
                    following:
                        ``(B) all compensation paid directly or indirectly
                    by a consumer or creditor to a mortgage originator from
                    any source, including a mortgage originator that is also
                    the creditor in a table-funded transaction;'';
                        (B) by redesignating subparagraph (D) as
                    subparagraph (G); and
                        (C) by inserting after subparagraph (C) the
                    following new subparagraphs:
                        ``(D) premiums or other charges payable at or before
                    closing for any credit life, credit disability, credit
                    unemployment, or credit property insurance, or any other
                    accident, loss-of-income, life or health insurance, or
                    any payments directly or indirectly for any debt
                    cancellation or suspension agreement or contract, except
                    that insurance premiums or debt cancellation or
                    suspension fees calculated and paid in full on a monthly
                    basis shall not be considered financed by the creditor;
                        ``(E) the maximum prepayment fees and penalties
                    which may be charged or collected under the terms of the
                    credit transaction;
                        ``(F) all prepayment fees or penalties that are
                    incurred by the consumer if the loan refinances a
                    previous loan made or currently held by the same
                    creditor or an affiliate of the creditor; and''.
                (2) Calculation of points and fees for open-end consumer
            credit plans.--Section 103(aa) of the Truth in Lending Act (15
            U.S.C. 1602(aa)) is amended--
                        (A) by redesignating paragraph (5) as paragraph (6);
                    and
                        (B) by inserting after paragraph (4) the following
                    new paragraph:
                ``(5) Calculation of points and fees for open-end consumer
            credit plans.--In the case of open-end consumer credit plans,
            points and fees shall be calculated, for purposes of this
            section and section 129, by adding the total points and fees
            known at or before closing, including the maximum prepayment
            penalties which may be charged or collected under the terms of
            the credit transaction, plus the minimum additional fees the
            consumer would be required to pay to draw down an amount equal
            to the total credit line.''.

        (d) Bona Fide Discount Loan Discount Points.--Section 103 of the
    Truth in Lending Act (15 U.S.C. 1602) is amended by inserting after
    subsection (cc) (as added by section 1401) the following new subsection:
        ``(dd) Bona Fide Discount Points and Prepayment Penalties.--For the
    purposes of determining the amount of points and fees for purposes of
    subsection (aa), either the amounts

    [[Page 124 STAT. 2160]]

    described in paragraph (1) or (2) of the following paragraphs, but not
    both, shall be excluded:
                ``(1) Up to and including 2 bona fide discount points
            payable by the consumer in connection with the mortgage, but
            only if the interest rate from which the mortgage's interest
            rate will be discounted does not exceed by more than 1
            percentage point--
                        ``(A) the average prime offer rate, as defined in
                    section 129C; or
                        ``(B) if secured by a personal property loan, the
                    average rate on a loan in connection with which
                    insurance is provided under title I of the National
                    Housing Act (12 U.S.C. 1702 et seq.).
                ``(2) Unless 2 bona fide discount points have been excluded
            under paragraph (1), up to and including 1 bona fide discount
            point payable by the consumer in connection with the mortgage,
            but only if the interest rate from which the mortgage's interest
            rate will be discounted does not exceed by more than 2
            percentage points--
                        ``(A) the average prime offer rate, as defined in
                    section 129C; or
                        ``(B) if secured by a personal property loan, the
                    average rate on a loan in connection with which
                    insurance is provided under title I of the National
                    Housing Act (12 U.S.C. 1702 et seq.).
                ``(3) For purposes of paragraph (1), the term `bona fide
            discount points' means loan discount points which are knowingly
            paid by the consumer for the purpose of reducing, and which in
            fact result in a bona fide reduction of, the interest rate or
            time-price differential applicable to the mortgage.
                ``(4) Paragraphs (1) and (2) shall not apply to discount
            points used to purchase an interest rate reduction unless the
            amount of the interest rate reduction purchased is reasonably
            consistent with established industry norms and practices for
            secondary mortgage market transactions.''.
    SEC. 1432. AMENDMENTS TO EXISTING REQUIREMENTS FOR CERTAIN
                              MORTGAGES.

        (a) Prepayment Penalty Provisions.-- <<NOTE: Repeal.>> Section
    129(c)(2) of the Truth in Lending Act (15 U.S.C. 1639(c)(2)) is hereby
    repealed.

        (b) No Balloon Payments.--Section 129(e) of the Truth in Lending Act
    (15 U.S.C. 1639(e)) is amended to read as follows:
        ``(e) No Balloon Payments.--No high-cost mortgage may contain a
    scheduled payment that is more than twice as large as the average of
    earlier scheduled payments. This subsection shall not apply when the
    payment schedule is adjusted to the seasonal or irregular income of the
    consumer.''.
    SEC. 1433. ADDITIONAL REQUIREMENTS FOR CERTAIN MORTGAGES.

        (a) Additional Requirements for Certain Mortgages.--Section 129 of
    the Truth in Lending Act (15 U.S.C. 1639) is amended--
                (1) by redesignating subsections (j), (k), (l) and (m) as
            subsections (n), (o), (p), and (q) respectively; and
                (2) by inserting after subsection (i) the following new
            subsections:

        ``(j) Recommended Default.--No creditor shall recommend or encourage
    default on an existing loan or other debt prior to and in connection
    with the closing or planned closing of a high-cost

    [[Page 124 STAT. 2161]]

    mortgage that refinances all or any portion of such existing loan or
    debt.
        ``(k) Late Fees.--
                ``(1) In general.--No creditor may impose a late payment
            charge or fee in connection with a high-cost mortgage--
                        ``(A) in an amount in excess of 4 percent of the
                    amount of the payment past due;
                        ``(B) unless the loan documents specifically
                    authorize the charge or fee;
                        ``(C) <<NOTE: Deadlines.>> before the end of the 15-
                    day period beginning on the date the payment is due, or
                    in the case of a loan on which interest on each
                    installment is paid in advance, before the end of the
                    30-day period beginning on the date the payment is due;
                    or
                        ``(D) more than once with respect to a single late
                    payment.
                ``(2) Coordination with subsequent late fees.--If a payment
            is otherwise a full payment for the applicable period and is
            paid on its due date or within an applicable grace period, and
            the only delinquency or insufficiency of payment is attributable
            to any late fee or delinquency charge assessed on any earlier
            payment, no late fee or delinquency charge may be imposed on
            such payment.
                ``(3) Failure to make installment payment.--If, in the case
            of a loan agreement the terms of which provide that any payment
            shall first be applied to any past due principal balance, the
            consumer fails to make an installment payment and the consumer
            subsequently resumes making installment payments but has not
            paid all past due installments, the creditor may impose a
            separate late payment charge or fee for any principal due
            (without deduction due to late fees or related fees) until the
            default is cured.

        ``(l) Acceleration of Debt.--No high-cost mortgage may contain a
    provision which permits the creditor to accelerate the indebtedness,
    except when repayment of the loan has been accelerated by default in
    payment, or pursuant to a due-on-sale provision, or pursuant to a
    material violation of some other provision of the loan document
    unrelated to payment schedule.
        ``(m) Restriction on Financing Points and Fees.--No creditor may
    directly or indirectly finance, in connection with any high-cost
    mortgage, any of the following:
                ``(1) Any prepayment fee or penalty payable by the consumer
            in a refinancing transaction if the creditor or an affiliate of
            the creditor is the noteholder of the note being refinanced.
                ``(2) Any points or fees.''.

        (b) Prohibitions on Evasions.--Section 129 of the Truth in Lending
    Act (15 U.S.C. 1639) is amended by inserting after subsection (q) (as so
    redesignated by subsection (a)(1)) the following new subsection:
        ``(r) Prohibitions on Evasions, Structuring of Transactions, and
    Reciprocal Arrangements.--A creditor may not take any action in
    connection with a high-cost mortgage--
                ``(1) to structure a loan transaction as an open-end credit
            plan or another form of loan for the purpose and with the intent
            of evading the provisions of this title; or

    [[Page 124 STAT. 2162]]

                ``(2) to divide any loan transaction into separate parts for
            the purpose and with the intent of evading provisions of this
            title.''.

        (c) Modification or Deferral Fees.--Section 129 of the Truth in
    Lending Act (15 U.S.C. 1639) is amended by inserting after subsection
    (r) (as added by subsection (b) of this section) the following new
    subsection:
        ``(s) Modification and Deferral Fees Prohibited.--A creditor,
    successor in interest, assignee, or any agent of any of the above, may
    not charge a consumer any fee to modify, renew, extend, or amend a high-
    cost mortgage, or to defer any payment due under the terms of such
    mortgage.''.
        (d) Payoff Statement.--Section 129 of the Truth in Lending Act (15
    U.S.C. 1639) is amended by inserting after subsection (s) (as added by
    subsection (c) of this section) the following new subsection:
        ``(t) Payoff Statement.--
                ``(1) Fees.--
                        ``(A) In general.--Except as provided in
                    subparagraph (B), no creditor or servicer may charge a
                    fee for informing or transmitting to any person the
                    balance due to pay off the outstanding balance on a
                    high-cost mortgage.
                        ``(B) Transaction fee.--When payoff information
                    referred to in subparagraph (A) is provided by facsimile
                    transmission or by a courier service, a creditor or
                    servicer may charge a processing fee to cover the cost
                    of such transmission or service in an amount not to
                    exceed an amount that is comparable to fees imposed for
                    similar services provided in connection with consumer
                    credit transactions that are secured by the consumer's
                    principal dwelling and are not high-cost mortgages.
                        ``(C) Fee disclosure.--Prior to charging a
                    transaction fee as provided in subparagraph (B), a
                    creditor or servicer shall disclose that payoff balances
                    are available for free pursuant to subparagraph (A).
                        ``(D) Multiple requests.--If a creditor or servicer
                    has provided payoff information referred to in
                    subparagraph (A) without charge, other than the
                    transaction fee allowed by subparagraph (B), on 4
                    occasions during a calendar year, the creditor or
                    servicer may thereafter charge a reasonable fee for
                    providing such information during the remainder of the
                    calendar year.
                ``(2) Prompt delivery.--Payoff <<NOTE: Deadline.>> balances
            shall be provided within 5 business days after receiving a
            request by a consumer or a person authorized by the consumer to
            obtain such information.''.

        (e) Pre-Loan Counseling Required.--Section 129 of the Truth in
    Lending Act (15 U.S.C. 1639) is amended by inserting after subsection t)
    (as added by subsection (d) of this section) the following new
    subsection:
        ``(u) Pre-Loan Counseling.--
                ``(1) In general.--A <<NOTE: Certification.>> creditor may
            not extend credit to a consumer under a high-cost mortgage
            without first receiving certification from a counselor that is
            approved by the Secretary of Housing and Urban Development, or
            at the discretion of

    [[Page 124 STAT. 2163]]

            the Secretary, a State housing finance authority, that the
            consumer has received counseling on the advisability of the
            mortgage. Such counselor shall not be employed by the creditor
            or an affiliate of the creditor or be affiliated with the
            creditor.
                ``(2) Disclosures required prior to counseling.--No
            counselor may certify that a consumer has received counseling on
            the advisability of the high-cost mortgage unless the counselor
            can verify that the consumer has received each statement
            required (in connection with such loan) by this section or the
            Real Estate Settlement Procedures Act of 1974 with respect to
            the transaction.
                ``(3) Regulations.--The Board may prescribe such regulations
            as the Board determines to be appropriate to carry out the
            requirements of paragraph (1).''.

        (f) Corrections and Unintentional Violations.--Section 129 of the
    Truth in Lending Act (15 U.S.C. 1639) is amended by inserting after
    subsection (u) (as added by subsection (e)) the following new
    subsection:
        ``(v) Corrections and
    Unintentional <<NOTE: Deadlines. Notifications.>> Violations.--A
    creditor or assignee in a high-cost mortgage who, when acting in good
    faith, fails to comply with any requirement under this section will not
    be deemed to have violated such requirement if the creditor or assignee
    establishes that either--
                ``(1) within 30 days of the loan closing and prior to the
            institution of any action, the consumer is notified of or
            discovers the violation, appropriate restitution is made, and
            whatever adjustments are necessary are made to the loan to
            either, at the choice of the consumer--
                        ``(A) make the loan satisfy the requirements of this
                    chapter; or
                        ``(B) in the case of a high-cost mortgage, change
                    the terms of the loan in a manner beneficial to the
                    consumer so that the loan will no longer be a high-cost
                    mortgage; or
                ``(2) within 60 days of the creditor's discovery or receipt
            of notification of an unintentional violation or bona fide error
            and prior to the institution of any action, the consumer is
            notified of the compliance failure, appropriate restitution is
            made, and whatever adjustments are necessary are made to the
            loan to either, at the choice of the consumer--
                        ``(A) make the loan satisfy the requirements of this
                    chapter; or
                        ``(B) in the case of a high-cost mortgage, change
                    the terms of the loan in a manner beneficial so that the
                    loan will no longer be a high-cost mortgage.''.

     Subtitle D--Office <<NOTE: Expand and Preserve Home Ownership Through
    Counseling Act.>>  of Housing Counseling
    SEC. 1441. <<NOTE: 12 USC 1701 note.>> SHORT TITLE.

        This subtitle may be cited as the ``Expand and Preserve Home
    Ownership Through Counseling Act''.
    SEC. 1442. ESTABLISHMENT OF OFFICE OF HOUSING COUNSELING.

        Section 4 of the Department of Housing and Urban Development Act (42
    U.S.C. 3533) is amended by adding at the end the following new
    subsection:

    [[Page 124 STAT. 2164]]

        ``(g) Office of Housing Counseling.--
                ``(1) Establishment.--There is established, in the
            Department, the Office of Housing Counseling.
                ``(2) Director.--There is established the position of
            Director of Housing Counseling. The Director shall be the head
            of the Office of Housing Counseling and shall be appointed by,
            and shall report to, the Secretary. Such position shall be a
            career-reserved position in the Senior Executive Service.
                ``(3) Functions.--
                        ``(A) In general.--The Director shall have primary
                    responsibility within the Department for all activities
                    and matters relating to homeownership counseling and
                    rental housing counseling, including--
                              ``(i) research, grant administration, public
                          outreach, and policy development relating to such
                          counseling; and
                              ``(ii) establishment, coordination, and
                          administration of all regulations, requirements,
                          standards, and performance measures under programs
                          and laws administered by the Department that
                          relate to housing counseling, homeownership
                          counseling (including maintenance of homes),
                          mortgage-related counseling (including home equity
                          conversion mortgages and credit protection options
                          to avoid foreclosure), and rental housing
                          counseling, including the requirements, standards,
                          and performance measures relating to housing
                          counseling.
                        ``(B) Specific functions.--The Director shall carry
                    out the functions assigned to the Director and the
                    Office under this section and any other provisions of
                    law. Such functions shall include establishing rules
                    necessary for--
                              ``(i) the counseling procedures under section
                          106(g)(1) of the Housing and Urban Development Act
                          of 1968 (12 U.S.C. 1701x(h)(1));
                              ``(ii) carrying out all other functions of the
                          Secretary under section 106(g) of the Housing and
                          Urban Development Act of 1968, including the
                          establishment, operation, and publication of the
                          availability of the toll-free telephone number
                          under paragraph (2) of such section;
                              ``(iii) contributing to the distribution of
                          home buying information booklets pursuant to
                          section 5 of the Real Estate Settlement Procedures
                          Act of 1974 (12 U.S.C. 2604);
                              ``(iv) carrying out the certification program
                          under section 106(e) of the Housing and Urban
                          Development Act of 1968 (12 U.S.C. 1701x(e));
                              ``(v) carrying out the assistance program
                          under section 106(a)(4) of the Housing and Urban
                          Development Act of 1968, including criteria for
                          selection of applications to receive assistance;
                              ``(vi) carrying out any functions regarding
                          abusive, deceptive, or unscrupulous lending
                          practices relating to residential mortgage loans
                          that the Secretary considers appropriate, which
                          shall include conducting the study under section 6
                          of the Expand and Preserve Home Ownership Through
                          Counseling Act;

    [[Page 124 STAT. 2165]]

                              ``(vii) providing for operation of the
                          advisory committee established under paragraph (4)
                          of this subsection;
                              ``(viii) collaborating with community-based
                          organizations with expertise in the field of
                          housing counseling; and
                              ``(ix) providing for the building of capacity
                          to provide housing counseling services in areas
                          that lack sufficient services, including
                          underdeveloped areas that lack basic water and
                          sewer systems, electricity services, and safe,
                          sanitary housing.
                ``(4) Advisory committee.--
                        ``(A) In general.--
                    The <<NOTE: Appointment.>> Secretary shall appoint an
                    advisory committee to provide advice regarding the
                    carrying out of the functions of the Director.
                        ``(B) Members.--Such advisory committee shall
                    consist of not more than 12 individuals, and the
                    membership of the committee shall equally represent the
                    mortgage and real estate industry, including consumers
                    and housing counseling agencies certified by the
                    Secretary.
                        ``(C) Terms.--Except as provided in subparagraph
                    (D), each member of the advisory committee shall be
                    appointed for a term of 3 years. Members may be
                    reappointed at the discretion of the Secretary.
                        ``(D) Terms of initial appointees.--As designated by
                    the Secretary at the time of appointment, of the members
                    first appointed to the advisory committee, 4 shall be
                    appointed for a term of 1 year and 4 shall be appointed
                    for a term of 2 years.
                        ``(E) Prohibition of pay; travel expenses.--Members
                    of the advisory committee shall serve without pay, but
                    shall receive travel expenses, including per diem in
                    lieu of subsistence, in accordance with applicable
                    provisions under subchapter I of chapter 57 of title 5,
                    United States Code.
                        ``(F) Advisory role only.--The advisory committee
                    shall have no role in reviewing or awarding housing
                    counseling grants.
                ``(5) Scope of homeownership counseling.--In carrying out
            the responsibilities of the Director, the Director shall ensure
            that homeownership counseling provided by, in connection with,
            or pursuant to any function, activity, or program of the
            Department addresses the entire process of homeownership,
            including the decision to purchase a home, the selection and
            purchase of a home, issues arising during or affecting the
            period of ownership of a home (including refinancing, default
            and foreclosure, and other financial decisions), and the sale or
            other disposition of a home.''.
    SEC. 1443. COUNSELING PROCEDURES.

        (a) In General.--Section 106 of the Housing and Urban Development
    Act of 1968 (12 U.S.C. 1701x) is amended by adding at the end the
    following new subsection:
        ``(g) Procedures and Activities.--
                ``(1) Counseling <<NOTE: Definitions.>>  procedures.--

    [[Page 124 STAT. 2166]]

                        ``(A) In general.--The Secretary shall establish,
                    coordinate, and monitor the administration by the
                    Department of Housing and Urban Development of the
                    counseling procedures for homeownership counseling and
                    rental housing counseling provided in connection with
                    any program of the Department, including all
                    requirements, standards, and performance measures that
                    relate to homeownership and rental housing counseling.
                        ``(B) Homeownership counseling.--For purposes of
                    this subsection and as used in the provisions referred
                    to in this subparagraph, the term `homeownership
                    counseling' means counseling related to homeownership
                    and residential mortgage loans. Such term includes
                    counseling related to homeownership and residential
                    mortgage loans that is provided pursuant to--
                              ``(i) section 105(a)(20) of the Housing and
                          Community Development Act of 1974 (42 U.S.C.
                          5305(a)(20));
                              ``(ii) in the United States Housing Act of
                          1937--
                                        ``(I) section 9(e) (42 U.S.C.
                                    1437g(e));
                                        ``(II) section 8(y)(1)(D) (42 U.S.C.
                                    1437f(y)(1)(D));
                                        ``(III) section 18(a)(4)(D) (42
                                    U.S.C. 1437p(a)(4)(D));
                                        ``(IV) section 23(c)(4) (42 U.S.C.
                                    1437u(c)(4));
                                        ``(V) section 32(e)(4) (42 U.S.C.
                                    1437z-4(e)(4));
                                        ``(VI) section 33(d)(2)(B) (42
                                    U.S.C. 1437z-5(d)(2)(B));
                                        ``(VII) sections 302(b)(6) and
                                    303(b)(7) (42 U.S.C. 1437aaa-1(b)(6),
                                    1437aaa-2(b)(7)); and
                                        ``(VIII) section 304(c)(4) (42
                                    U.S.C. 1437aaa-3(c)(4));
                              ``(iii) section 302(a)(4) of the American
                          Homeownership and Economic Opportunity Act of 2000
                          (42 U.S.C. 1437f note);
                              ``(iv) sections 233(b)(2) and 258(b) of the
                          Cranston-Gonzalez National Affordable Housing Act
                          (42 U.S.C. 12773(b)(2), 12808(b));
                              ``(v) this section and section 101(e) of the
                          Housing and Urban Development Act of 1968 (12
                          U.S.C. 1701x, 1701w(e));
                              ``(vi) section 220(d)(2)(G) of the Low-Income
                          Housing Preservation and Resident Homeownership
                          Act of 1990 (12 U.S.C. 4110(d)(2)(G));
                              ``(vii) sections 422(b)(6), 423(b)(7),
                          424(c)(4), 442(b)(6), and 443(b)(6) of the
                          Cranston-Gonzalez National Affordable Housing Act
                          (42 U.S.C. 12872(b)(6), 12873(b)(7), 12874(c)(4),
                          12892(b)(6), and 12893(b)(6));
                              ``(viii) section 491(b)(1)(F)(iii) of the
                          McKinney-Vento Homeless Assistance Act (42 U.S.C.
                          11408(b)(1)(F)(iii));
                              ``(ix) sections 202(3) and 810(b)(2)(A) of the
                          Native American Housing and Self-Determination Act
                          of 1996 (25 U.S.C. 4132(3), 4229(b)(2)(A));
                              ``(x) in the National Housing Act--
                                        ``(I) in section 203 (12 U.S.C.
                                    1709), the penultimate undesignated
                                    paragraph of paragraph (2)

    [[Page 124 STAT. 2167]]

                                    of subsection (b), subsection (c)(2)(A),
                                    and subsection (r)(4);
                                        ``(II) subsections (a) and (c)(3) of
                                    section 237 (12 U.S.C. 1715z-2); and
                                        ``(III) subsections (d)(2)(B) and
                                    (m)(1) of section 255 (12 U.S.C. 1715z-
                                    20);
                              ``(xi) section 502(h)(4)(B) of the Housing Act
                          of 1949 (42 U.S.C. 1472(h)(4)(B));
                              ``(xii) section 508 of the Housing and Urban
                          Development Act of 1970 (12 U.S.C. 1701z-7); and
                              ``(xiii) section 106 of the Energy Policy Act
                          of 1992 (42 U.S.C. 12712 note).
                        ``(C) Rental housing counseling.--For purposes of
                    this subsection, the term `rental housing counseling'
                    means counseling related to rental of residential
                    property, which may include counseling regarding future
                    homeownership opportunities and providing referrals for
                    renters and prospective renters to entities providing
                    counseling and shall include counseling related to such
                    topics that is provided pursuant to--
                              ``(i) section 105(a)(20) of the Housing and
                          Community Development Act of 1974 (42 U.S.C.
                          5305(a)(20));
                              ``(ii) in the United States Housing Act of
                          1937--
                                        ``(I) section 9(e) (42 U.S.C.
                                    1437g(e));
                                        ``(II) section 18(a)(4)(D) (42
                                    U.S.C. 1437p(a)(4)(D));
                                        ``(III) section 23(c)(4) (42 U.S.C.
                                    1437u(c)(4));
                                        ``(IV) section 32(e)(4) (42 U.S.C.
                                    1437z-4(e)(4));
                                        ``(V) section 33(d)(2)(B) (42 U.S.C.
                                    1437z-5(d)(2)(B)); and
                                        ``(VI) section 302(b)(6) (42 U.S.C.
                                    1437aaa-1(b)(6));
                              ``(iii) section 233(b)(2) of the Cranston-
                          Gonzalez National Affordable Housing Act (42
                          U.S.C. 12773(b)(2));
                              ``(iv) section 106 of the Housing and Urban
                          Development Act of 1968 (12 U.S.C. 1701x);
                              ``(v) section 422(b)(6) of the Cranston-
                          Gonzalez National Affordable Housing Act (42
                          U.S.C. 12872(b)(6));
                              ``(vi) section 491(b)(1)(F)(iii) of the
                          McKinney-Vento Homeless Assistance Act (42 U.S.C.
                          11408(b)(1)(F)(iii));
                              ``(vii) sections 202(3) and 810(b)(2)(A) of
                          the Native American Housing and Self-Determination
                          Act of 1996 (25 U.S.C. 4132(3), 4229(b)(2)(A));
                          and
                              ``(viii) the rental assistance program under
                          section 8 of the United States Housing Act of 1937
                          (42 U.S.C. 1437f).
                ``(2) Standards for materials.--The Secretary, in
            consultation with the advisory committee established under
            subsection (g)(4) of the Department of Housing and Urban
            Development Act, shall establish standards for materials and
            forms to be used, as appropriate, by organizations providing
            homeownership counseling services, including any recipients of
            assistance pursuant to subsection (a)(4).
                ``(3) Mortgage software systems.--

    [[Page 124 STAT. 2168]]

                        ``(A) Certification.--The Secretary shall provide
                    for the certification of various computer software
                    programs for consumers to use in evaluating different
                    residential mortgage loan proposals. The Secretary shall
                    require, for such certification, that the mortgage
                    software systems take into account--
                              ``(i) the consumer's financial situation and
                          the cost of maintaining a home, including
                          insurance, taxes, and utilities;
                              ``(ii) the amount of time the consumer expects
                          to remain in the home or expected time to maturity
                          of the loan; and
                              ``(iii) such other factors as the Secretary
                          considers appropriate to assist the consumer in
                          evaluating whether to pay points, to lock in an
                          interest rate, to select an adjustable or fixed
                          rate loan, to select a conventional or government-
                          insured or guaranteed loan and to make other
                          choices during the loan application process.
                    If the Secretary determines that available existing
                    software is inadequate to assist consumers during the
                    residential mortgage loan application process, the
                    Secretary shall arrange for the development by private
                    sector software companies of new mortgage software
                    systems that meet the Secretary's specifications.
                        ``(B) Use and initial availability.--Such certified
                    computer software programs shall be used to supplement,
                    not replace, housing counseling. The Secretary shall
                    provide that such programs are initially used only in
                    connection with the assistance of housing counselors
                    certified pursuant to subsection (e).
                        ``(C) Availability.--After <<NOTE: Web posting.>>  a
                    period of initial availability under subparagraph (B) as
                    the Secretary considers appropriate, the Secretary shall
                    take reasonable steps to make mortgage software systems
                    certified pursuant to this paragraph widely available
                    through the Internet and at public locations, including
                    public libraries, senior-citizen centers, public housing
                    sites, offices of public housing agencies that
                    administer rental housing assistance vouchers, and
                    housing counseling centers.
                        ``(D) Budget compliance.--This paragraph shall be
                    effective only to the extent that amounts to carry out
                    this paragraph are made available in advance in
                    appropriations Acts.
                ``(4) National public service multimedia campaigns to
            promote housing counseling.--
                        ``(A) In general.--The Director of Housing
                    Counseling shall develop, implement, and conduct
                    national public service multimedia campaigns designed to
                    make persons facing mortgage foreclosure, persons
                    considering a subprime mortgage loan to purchase a home,
                    elderly persons, persons who face language barriers,
                    low-income persons, minorities, and other potentially
                    vulnerable consumers aware that it is advisable, before
                    seeking or maintaining a residential mortgage loan, to
                    obtain homeownership counseling from an unbiased and
                    reliable

    [[Page 124 STAT. 2169]]

                    sources and that such homeownership counseling is
                    available, including through programs sponsored by the
                    Secretary of Housing and Urban Development.
                        ``(B) Contact information.-- <<NOTE: Public
                    information. Web posting.>> Each segment of the
                    multimedia campaign under subparagraph (A) shall
                    publicize the toll-free telephone number and website of
                    the Department of Housing and Urban Development through
                    which persons seeking housing counseling can locate a
                    housing counseling agency in their State that is
                    certified by the Secretary of Housing and Urban
                    Development and can provide advice on buying a home,
                    renting, defaults, foreclosures, credit issues, and
                    reverse mortgages.
                        ``(C) Authorization of appropriations.--There are
                    authorized to be appropriated to the Secretary, not to
                    exceed $3,000,000 for fiscal years 2009, 2010, and 2011,
                    for the development, implementation, and conduct of
                    national public service multimedia campaigns under this
                    paragraph.
                        ``(D) Foreclosure rescue education programs.--
                              ``(i) In general.--Ten percent of any funds
                          appropriated pursuant to the authorization under
                          subparagraph (C) shall be used by the Director of
                          Housing Counseling to conduct an education program
                          in areas that have a high density of foreclosure.
                          Such program shall involve direct mailings to
                          persons living in such areas describing--
                                        ``(I) tips on avoiding foreclosure
                                    rescue scams;
                                        ``(II) tips on avoiding predatory
                                    lending mortgage agreements;
                                        ``(III) tips on avoiding for-profit
                                    foreclosure counseling services; and
                                        ``(IV) local counseling resources
                                    that are approved by the Department of
                                    Housing and Urban Development.
                              ``(ii) Program emphasis.--In conducting the
                          education program described under clause (i), the
                          Director of Housing Counseling shall also place an
                          emphasis on serving communities that have a high
                          percentage of retirement communities or a high
                          percentage of low-income minority communities.
                              ``(iii) Terms defined.--For purposes of this
                          subparagraph:
                                        ``(I) High density of
                                    foreclosures.--An area has a `high
                                    density of foreclosures' if such area is
                                    one of the metropolitan statistical
                                    areas (as that term is defined by the
                                    Director of the Office of Management and
                                    Budget) with the highest home
                                    foreclosure rates.
                                        ``(II) High percentage of retirement
                                    communities.--An area has a `high
                                    percentage of retirement communities' if
                                    such area is one of the metropolitan
                                    statistical areas (as that term is
                                    defined by the Director of the Office of
                                    Management and Budget) with the highest
                                    percentage of residents aged 65 or
                                    older.
                                        ``(III) High percentage of low-
                                    income minority communities.--An area
                                    has a `high

    [[Page 124 STAT. 2170]]

                                    percentage of low-income minority
                                    communities' if such area contains a
                                    higher-than-normal percentage of
                                    residents who are both minorities and
                                    low-income, as defined by the Director
                                    of Housing Counseling.
                ``(5) Education programs.--The Secretary shall provide
            advice and technical assistance to States, units of general
            local government, and nonprofit organizations regarding the
            establishment and operation of, including assistance with the
            development of content and materials for, educational programs
            to inform and educate consumers, particularly those most
            vulnerable with respect to residential mortgage loans (such as
            elderly persons, persons facing language barriers, low-income
            persons, minorities, and other potentially vulnerable
            consumers), regarding home mortgages, mortgage refinancing, home
            equity loans, home repair loans, and where appropriate by
            region, any requirements and costs associated with obtaining
            flood or other disaster-specific insurance coverage.''.

        (b) Conforming Amendments to Grant Program for Homeownership
    Counseling Organizations.--Section 106(c)(5)(A)(ii) of the Housing and
    Urban Development Act of 1968 (12 U.S.C. 1701x(c)(5)(A)(ii)) is
    amended--
                (1) in subclause (III), by striking ``and'' at the end;
                (2) in subclause (IV) by striking the period at the end and
            inserting ``; and''; and
                (3) by inserting after subclause (IV) the following new
            subclause:
                                        ``(V) <<NOTE: Notification.>> notify
                                    the housing or mortgage applicant of the
                                    availability of mortgage software
                                    systems provided pursuant to subsection
                                    (g)(3).''.
    SEC. 1444. GRANTS FOR HOUSING COUNSELING ASSISTANCE.

        Section 106(a) of the Housing and Urban Development Act of 1968 (12
    U.S.C. 1701x(a)) is amended by adding at the end the following new
    paragraph:
        ``(4) Homeownership and Rental Counseling Assistance.--
                ``(A) In general.--The Secretary shall make financial
            assistance available under this paragraph to HUD-approved
            housing counseling agencies and State housing finance agencies.
                ``(B) Qualified entities.--
            The <<NOTE: Standards. Guidelines.>>  Secretary shall establish
            standards and guidelines for eligibility of organizations
            (including governmental and nonprofit organizations) to receive
            assistance under this paragraph, in accordance with subparagraph
            (D).
                ``(C) Distribution.--Assistance made available under this
            paragraph shall be distributed in a manner that encourages
            efficient and successful counseling programs and that ensures
            adequate distribution of amounts for rural areas having
            traditionally low levels of access to such counseling services,
            including areas with insufficient access to the Internet. In
            distributing such assistance, the Secretary may give priority
            consideration to entities serving areas with the highest home
            foreclosure rates.
                ``(D) Limitation on distribution of assistance.--
                        ``(i) In general.--None of the amounts made
                    available under this paragraph shall be distributed to--

    [[Page 124 STAT. 2171]]

                              ``(I) any organization which has been
                          convicted for a violation under Federal law
                          relating to an election for Federal office; or
                              ``(II) any organization which employs
                          applicable individuals.
                        ``(ii) Definition of applicable individuals.--In
                    this subparagraph, the term `applicable individual'
                    means an individual who--
                              ``(I) is--
                                        ``(aa) employed by the organization
                                    in a permanent or temporary capacity;
                                        ``(bb) contracted or retained by the
                                    organization; or
                                        ``(cc) acting on behalf of, or with
                                    the express or apparent authority of,
                                    the organization; and
                              ``(II) has been convicted for a violation
                          under Federal law relating to an election for
                          Federal office.
                ``(E) Grantmaking process.--In making assistance available
            under this paragraph, the Secretary shall consider appropriate
            ways of streamlining and improving the processes for grant
            application, review, approval, and award.
                ``(F) Authorization of appropriations.--There are authorized
            to be appropriated $45,000,000 for each of fiscal years 2009
            through 2012 for--
                        ``(i) the operations of the Office of Housing
                    Counseling of the Department of Housing and Urban
                    Development;
                        ``(ii) the responsibilities of the Director of
                    Housing Counseling under paragraphs (2) through (5) of
                    subsection (g); and
                        ``(iii) assistance pursuant to this paragraph for
                    entities providing homeownership and rental
                    counseling.''.
    SEC. 1445. REQUIREMENTS TO USE HUD-CERTIFIED COUNSELORS UNDER HUD
                              PROGRAMS.

        Section 106(e) of the Housing and Urban Development Act of 1968 (12
    U.S.C. 1701x(e)) is amended--
                (1) by striking paragraph (1) and inserting the following
            new paragraph:
                ``(1) Requirement for assistance.--An organization may not
            receive assistance for counseling activities under subsection
            (a)(1)(iii), (a)(2), (a)(4), (c), or (d) of this section, or
            under section 101(e), unless the organization, or the
            individuals through which the organization provides such
            counseling, has been certified by the Secretary under this
            subsection as competent to provide such counseling.'';
                (2) in paragraph (2)--
                        (A) by inserting ``and for certifying
                    organizations'' before the period at the end of the
                    first sentence; and
                        (B) in the second sentence by striking ``for
                    certification'' and inserting ``, for certification of
                    an organization, that each individual through which the
                    organization provides counseling shall demonstrate, and,
                    for certification of an individual,'';
                (3) in paragraph (3), by inserting ``organizations and''
            before ``individuals'';
                (4) by redesignating paragraph (3) as paragraph (5); and

    [[Page 124 STAT. 2172]]

                (5) by inserting after paragraph (2) the following new
            paragraphs:
                ``(3) Requirement under hud programs.--Any homeownership
            counseling or rental housing counseling (as such terms are
            defined in subsection (g)(1)) required under, or provided in
            connection with, any program administered by the Department of
            Housing and Urban Development shall be provided only by
            organizations or counselors certified by the Secretary under
            this subsection as competent to provide such counseling.
                ``(4) Outreach.--The Secretary shall take such actions as
            the Secretary considers appropriate to ensure that individuals
            and organizations providing homeownership or rental housing
            counseling are aware of the certification requirements and
            standards of this subsection and of the training and
            certification programs under subsection (f).''.
    SEC. 1446. STUDY OF DEFAULTS AND FORECLOSURES.

        The Secretary of Housing and Urban Development shall conduct an
    extensive study of the root causes of default and foreclosure of home
    loans, using as much empirical data as are available. The study shall
    also examine the role of escrow accounts in helping prime and nonprime
    borrowers to avoid defaults and foreclosures, and the role of computer
    registries of mortgages, including those used for trading mortgage
    loans. Not later <<NOTE: Deadlines. Reports.>> than 12 months after the
    date of the enactment of this Act, the Secretary shall submit to the
    Congress a preliminary report regarding the study. Not later than 24
    months after such date of enactment, the Secretary shall submit a final
    report regarding the results of the study, which shall include any
    recommended legislation relating to the study, and recommendations for
    best practices and for a process to identify populations that need
    counseling the most.
    SEC. 1447. <<NOTE: 12 USC 1701p-2.>> DEFAULT AND FORECLOSURE
                              DATABASE.

        (a) Establishment.--The <<NOTE: Public information.>>  Secretary of
    Housing and Urban Development and the Director 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

    [[Page 124 STAT. 2173]]

                (6) such other information as the Secretary of Housing and
            Urban Development and the Director 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 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.
    SEC. 1448. DEFINITIONS FOR COUNSELING-RELATED PROGRAMS.

        Section 106 of the Housing and Urban Development Act of 1968 (12
    U.S.C. 1701x), as amended by the preceding provisions of this subtitle,
    is amended by adding at the end the following new subsection:
        ``(h) Definitions.--For purposes of this section:
                ``(1) Nonprofit organization.--The term `nonprofit
            organization' has the meaning given such term in section 104(5)
            of the Cranston-Gonzalez National Affordable Housing Act (42
            U.S.C. 12704(5)), except that subparagraph (D) of such section
            shall not apply for purposes of this section.
                ``(2) State.--The term `State' means each of the several
            States, the Commonwealth of Puerto Rico, the District of
            Columbia, the Commonwealth of the Northern Mariana Islands,
            Guam, the Virgin Islands, American Samoa, the Trust Territories
            of the Pacific, or any other possession of the United States.
                ``(3) Unit of general local government.--The term `unit of
            general local government' means any city, county, parish, town,
            township, borough, village, or other general purpose political
            subdivision of a State.
                ``(4) HUD-approved counseling agency.--The term `HUD-
            approved counseling agency' means a private or public nonprofit
            organization that is--
                        ``(A) exempt from taxation under section 501(c) of
                    the Internal Revenue Code of 1986; and
                        ``(B) certified by the Secretary to provide housing
                    counseling services.
                ``(5) State housing finance agency.--The term `State housing
            finance agency' means any public body, agency, or
            instrumentality specifically created under State statute that is
            authorised to finance activities designed to provide housing and
            related facilities throughout an entire State through land
            acquisition, construction, or rehabilitation.''.

    [[Page 124 STAT. 2174]]

    SEC. 1449. ACCOUNTABILITY AND TRANSPARENCY FOR GRANT RECIPIENTS.

        Section 106 of the Housing and Urban Development Act of 1968 (12
    U.S.C. 1701x), as amended by the preceding provisions of this subtitle,
    is amended by adding at the end the following:
        ``(i) Accountability for Recipients of Covered Assistance.--
                ``(1) Tracking of funds.--The Secretary shall--
                        ``(A) develop and maintain a system to ensure that
                    any organization or entity that receives any covered
                    assistance uses all amounts of covered assistance in
                    accordance with this section, the regulations issued
                    under this section, and any requirements or conditions
                    under which such amounts were provided; and
                        ``(B) require any organization or entity, as a
                    condition of receipt of any covered assistance, to agree
                    to comply with such requirements regarding covered
                    assistance as the Secretary shall establish, which shall
                    include--
                              ``(i) <<NOTE: Reports. Records.>> appropriate
                          periodic financial and grant activity reporting,
                          record retention, and audit requirements for the
                          duration of the covered assistance to the
                          organization or entity to ensure compliance with
                          the limitations and requirements of this section,
                          the regulations under this section, and any
                          requirements or conditions under which such
                          amounts were provided; and
                              ``(ii) any other requirements that the
                          Secretary determines are necessary to ensure
                          appropriate administration and compliance.
                ``(2) Misuse of funds.--If any organization or entity that
            receives any covered assistance is determined by the Secretary
            to have used any covered assistance in a manner that is
            materially in violation of this section, the regulations issued
            under this section, or any requirements or conditions under
            which such assistance was provided--
                        ``(A)
                    the <<NOTE: Deadline. Reimbursement.>> Secretary shall
                    require that, within 12 months after the determination
                    of such misuse, the organization or entity shall
                    reimburse the Secretary for such misused amounts and
                    return to the Secretary any such amounts that remain
                    unused or uncommitted for use; and
                        ``(B) such organization or entity shall be
                    ineligible, at any time after such determination, to
                    apply for or receive any further covered assistance.
            The remedies under this paragraph are in addition to any other
            remedies that may be available under law.
                ``(3) Covered assistance.--For <<NOTE: Definition.>>
            purposes of this subsection, the term `covered assistance' means
            any grant or other financial assistance provided under this
            section.''.
    SEC. 1450. UPDATING AND SIMPLIFICATION OF MORTGAGE INFORMATION
                              BOOKLET.

        Section 5 of the Real Estate Settlement Procedures Act of 1974 (12
    U.S.C. 2604) is amended--
                (1) in the section heading, by striking ``special'' and
            inserting ``home buying'';
                (2) by striking subsections (a) and (b) and inserting the
            following new subsections:

    [[Page 124 STAT. 2175]]

        ``(a) Preparation and <<NOTE: Deadline.>> Distribution.--The
    Director of the Bureau of Consumer Financial Protection (hereafter in
    this section referred to as the `Director') shall prepare, at least once
    every 5 years, a booklet to help consumers applying for federally
    related mortgage loans to understand the nature and costs of real estate
    settlement services. The Director shall prepare the booklet in various
    languages and cultural styles, as the Director determines to be
    appropriate, so that the booklet is understandable and accessible to
    homebuyers of different ethnic and cultural backgrounds. The Director
    shall distribute such booklets to all lenders that make federally
    related mortgage loans. The <<NOTE: Lists.>> Director shall also
    distribute to such lenders lists, organized by location, of
    homeownership counselors certified under section 106(e) of the Housing
    and Urban Development Act of 1968 (12 U.S.C. 1701x(e)) for use in
    complying with the requirement under subsection (c) of this section.

        ``(b) Contents.--Each booklet shall be in such form and detail as
    the Director shall prescribe and, in addition to such other information
    as the Director may provide, shall include in plain and understandable
    language the following information:
                ``(1) A description and explanation of the nature and
            purpose of the costs incident to a real estate settlement or a
            federally related mortgage loan. The description and explanation
            shall provide general information about the mortgage process as
            well as specific information concerning, at a minimum--
                        ``(A) balloon payments;
                        ``(B) prepayment penalties;
                        ``(C) the advantages of prepayment; and
                        ``(D) the trade-off between closing costs and the
                    interest rate over the life of the loan.
                ``(2) An explanation and sample of the uniform settlement
            statement required by section 4.
                ``(3) <<NOTE: List.>> 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 <<NOTE: List.>> list and explanation of questions a
            consumer obtaining a federally related mortgage loan should ask
            regarding the loan, including whether the consumer will have the
            ability to repay the loan, whether the consumer sufficiently
            shopped for the loan, whether the loan terms include prepayment
            penalties or balloon payments, and whether the loan will benefit
            the borrower.
                ``(5) An explanation of the right of rescission as to
            certain transactions provided by sections 125 and 129 of the
            Truth in Lending Act.
                ``(6) A brief explanation of the nature of a variable rate
            mortgage and a reference to the booklet entitled `Consumer
            Handbook on Adjustable Rate Mortgages', published by the
            Director, or to any suitable substitute of such booklet that the
            Director may subsequently adopt pursuant to such section.
                ``(7) A brief explanation of the nature of a home equity
            line of credit and a reference to the pamphlet required to be
            provided under section 127A of the Truth in Lending Act.
                ``(8) Information about homeownership counseling services
            made available pursuant to section 106(a)(4) of the Housing

    [[Page 124 STAT. 2176]]

            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 Department
            of Housing and Urban Development has made publicly available a
            brochure regarding loan fraud and a World Wide Web address and
            toll-free telephone number for obtaining the brochure.

    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.'';
                (3) in subsection (c), by inserting at the end the following
            new sentence: ``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.''; and
                (4) in subsection (d), by inserting after the period at the
            end of the first sentence the following: ``The lender shall
            provide the booklet in the version that is most appropriate for
            the person receiving it.''.
    SEC. 1451. <<NOTE: 12 USC 1701x-1.>> HOME INSPECTION COUNSELING.

        (a) Public Outreach.--
                (1) In general.--The Secretary of Housing and Urban
            Development (in this section referred to as the ``Secretary'')
            shall take such actions as may be necessary to inform potential
            homebuyers of the availability and importance of obtaining an
            independent home inspection. Such actions shall include--
                        (A) publication of the HUD/FHA form HUD 92564-CN
                    entitled ``For Your Protection: Get a Home Inspection'',
                    in both English and Spanish languages;
                        (B) publication of the HUD/FHA booklet entitled
                    ``For Your Protection: Get a Home Inspection'', in both
                    English and Spanish languages;
                        (C) development and publication of a HUD booklet
                    entitled ``For Your Protection--Get a Home Inspection''
                    that does not reference FHA-insured homes, in both
                    English and Spanish languages; and
                        (D) publication of the HUD document entitled ``Ten
                    Important Questions To Ask Your Home Inspector'', in
                    both English and Spanish languages.

    [[Page 124 STAT. 2177]]

                (2) Availability.-- <<NOTE: Public information.>> The
            Secretary shall make the materials specified in paragraph (1)
            available for electronic access and, where appropriate, inform
            potential homebuyers of such availability through home purchase
            counseling public service announcements and toll-free telephone
            hotlines of the Department of Housing and Urban Development. The
            Secretary shall give special emphasis to reaching first-time and
            low-income homebuyers with these materials and efforts.
                (3) Updating.--The Secretary may periodically update and
            revise such materials, as the Secretary determines to be
            appropriate.

        (b) Requirement for FHA-approved Lenders.--Each mortgagee approved
    for participation in the mortgage insurance programs under title II of
    the National Housing Act shall provide prospective homebuyers, at first
    contact, whether upon pre-qualification, pre-approval, or initial
    application, the materials specified in subparagraphs (A), (B), and (D)
    of subsection (a)(1).
        (c) Requirements for HUD-approved Counseling Agencies.--Each
    counseling agency certified pursuant by the Secretary to provide housing
    counseling services shall provide each of their clients, as part of the
    home purchase counseling process, the materials specified in
    subparagraphs (C) and (D) of subsection (a)(1).
        (d) Training.--Training provided the Department of Housing and Urban
    Development for housing counseling agencies, whether such training is
    provided directly by the Department or otherwise, shall include--
                (1) providing information on counseling potential homebuyers
            of the availability and importance of getting an independent
            home inspection;
                (2) providing information about the home inspection process,
            including the reasons for specific inspections such as radon and
            lead-based paint testing;
                (3) providing information about advising potential
            homebuyers on how to locate and select a qualified home
            inspector; and
                (4) review of home inspection public outreach materials of
            the Department.
    SEC. 1452. <<NOTE: 42 USC 8108.>> WARNINGS TO HOMEOWNERS OF
                              FORECLOSURE RESCUE SCAMS.

        (a) Assistance to NRC.-- <<NOTE: Notice.>> Notwithstanding any other
    provision of law, of any amounts made available for any fiscal year
    pursuant to section 106(a)(4)(F) of the Housing and Urban Development
    Act of 1968 (12 U.S.C. 1701x(a)(4)(F)) (as added by section 1444), 10
    percent shall be used only for assistance to the Neighborhood
    Reinvestment Corporation for activities, in consultation with servicers
    of residential mortgage loans, to provide notice to borrowers under such
    loans who are delinquent with respect to payments due under such loans
    that makes such borrowers aware of the dangers of fraudulent activities
    associated with foreclosure.

        (b) Notice.--The Neighborhood Reinvestment Corporation, in
    consultation with servicers of residential mortgage loans, shall use the
    amounts provided pursuant to subsection (a) to carry out activities to
    inform borrowers under residential mortgage loans--
                (1) that the foreclosure process is complex and can be
            confusing;

    [[Page 124 STAT. 2178]]

                (2) that the borrower may be approached during the
            foreclosure process by persons regarding saving their home and
            they should use caution in any such dealings;
                (3) that there are Federal Government and nonprofit agencies
            that may provide information about the foreclosure process,
            including the Department of Housing and Urban Development;
                (4) that they should contact their lender immediately,
            contact the Department of Housing and Urban Development to find
            a housing counseling agency certified by the Department to
            assist in avoiding foreclosure, or visit the Department's
            website regarding tips for avoiding foreclosure; and
                (5) of the telephone number of the loan servicer or
            successor, the telephone number of the Department of Housing and
            Urban Development housing counseling line, and the Uniform
            Resource Locators (URLs) for the Department of Housing and Urban
            Development Web sites for housing counseling and for tips for
            avoiding foreclosure.

                         Subtitle E--Mortgage Servicing

    SEC. 1461. ESCROW AND IMPOUND ACCOUNTS RELATING TO CERTAIN
                              CONSUMER CREDIT TRANSACTIONS.

        (a) In General.--Chapter 2 of the Truth in Lending Act (15 U.S.C.
    1631 et seq.) is amended by inserting after section 129C (as added by
    section 1411) the following new section:
    ``Sec. 129D. <<NOTE: 15 USC 1639d.>> Escrow or impound accounts
                      relating to certain consumer credit transactions

        ``(a) In General.--Except as provided in subsection (b), (c), (d),
    or (e), a creditor, in connection with the consummation of a consumer
    credit transaction secured by a first lien on the principal dwelling of
    the consumer, other than a consumer credit transaction under an open end
    credit plan or a reverse mortgage, shall establish, before the
    consummation of such transaction, an escrow or impound account for the
    payment of taxes and hazard insurance, and, if applicable, flood
    insurance, mortgage insurance, ground rents, and any other required
    periodic payments or premiums with respect to the property or the loan
    terms, as provided in, and in accordance with, this section.
        ``(b) When Required.--No impound, trust, or other type of account
    for the payment of property taxes, insurance premiums, or other purposes
    relating to the property may be required as a condition of a real
    property sale contract or a loan secured by a first deed of trust or
    mortgage on the principal dwelling of the consumer, other than a
    consumer credit transaction under an open end credit plan or a reverse
    mortgage, except when--
                ``(1) any such impound, trust, or other type of escrow or
            impound account for such purposes is required by Federal or
            State law;
                ``(2) a loan is made, guaranteed, or insured by a State or
            Federal governmental lending or insuring agency;
                ``(3) the transaction is secured by a first mortgage or lien
            on the consumer's principal dwelling having an original
            principal obligation amount that--
                        ``(A) does not exceed the amount of the maximum
                    limitation on the original principal obligation of
                    mortgage

    [[Page 124 STAT. 2179]]

                    in effect for a residence of the applicable size, as of
                    the date such interest rate set, pursuant to the sixth
                    sentence of section 305(a)(2) the Federal Home Loan
                    Mortgage Corporation Act (12 U.S.C. 1454(a)(2)), and the
                    annual percentage rate will exceed the average prime
                    offer rate as defined in section 129C by 1.5 or more
                    percentage points; or
                        ``(B) exceeds the amount of the maximum limitation
                    on the original principal obligation of mortgage in
                    effect for a residence of the applicable size, as of the
                    date such interest rate set, pursuant to the sixth
                    sentence of section 305(a)(2) the Federal Home Loan
                    Mortgage Corporation Act (12 U.S.C. 1454(a)(2)), and the
                    annual percentage rate will exceed the average prime
                    offer rate as defined in section 129C by 2.5 or more
                    percentage points; or
                ``(4) so required pursuant to regulation.

        ``(c) Exemptions.--The Board may, by regulation, exempt from the
    requirements of subsection (a) a creditor that--
                ``(1) operates predominantly in rural or underserved areas;
                ``(2) together with all affiliates, has total annual
            mortgage loan originations that do not exceed a limit set by the
            Board;
                ``(3) retains its mortgage loan originations in portfolio;
            and
                ``(4) meets any asset size threshold and any other criteria
            the Board may establish, consistent with the purposes of this
            subtitle.

        ``(d) Duration of Mandatory Escrow or Impound Account.--An escrow or
    impound account established pursuant to subsection (b) shall remain in
    existence for a minimum period of 5 years, beginning with the date of
    the consummation of the loan, unless and until--
                ``(1) such borrower has sufficient equity in the dwelling
            securing the consumer credit transaction so as to no longer be
            required to maintain private mortgage insurance;
                ``(2) such borrower is delinquent;
                ``(3) such borrower otherwise has not complied with the
            legal obligation, as established by rule; or
                ``(4) the underlying mortgage establishing the account is
            terminated.

        ``(e) Limited Exemptions for Loans Secured by Shares in a
    Cooperative or in Which an Association Must Maintain a Master Insurance
    Policy.--Escrow accounts need not be established for loans secured by
    shares in a cooperative. Insurance premiums need not be included in
    escrow accounts for loans secured by dwellings or units, where the
    borrower must join an association as a condition of ownership, and that
    association has an obligation to the dwelling or unit owners to maintain
    a master policy insuring the dwellings or units.
        ``(f) Clarification on Escrow Accounts for Loans Not Meeting
    Statutory Test.--For mortgages not covered by the requirements of
    subsection (b), no provision of this section shall be construed as
    precluding the establishment of an impound, trust, or other type of
    account for the payment of property taxes, insurance premiums, or other
    purposes relating to the property--
                ``(1) on terms mutually agreeable to the parties to the
            loan;
                ``(2) at the discretion of the lender or servicer, as
            provided by the contract between the lender or servicer and the
            borrower; or

    [[Page 124 STAT. 2180]]

                ``(3) pursuant to the requirements for the escrowing of
            flood insurance payments for regulated lending institutions in
            section 102(d) of the Flood Disaster Protection Act of 1973.

        ``(g) Administration of Mandatory Escrow or Impound Accounts.--
                ``(1) In general.--Except as may otherwise be provided for
            in this title or in regulations prescribed by the Board, escrow
            or impound accounts established pursuant to subsection (b) shall
            be established in a federally insured depository institution or
            credit union.
                ``(2) Administration.--Except as provided in this section or
            regulations prescribed under this section, an escrow or impound
            account subject to this section shall be administered in
            accordance with--
                        ``(A) the Real Estate Settlement Procedures Act of
                    1974 and regulations prescribed under such Act;
                        ``(B) the Flood Disaster Protection Act of 1973 and
                    regulations prescribed under such Act; and
                        ``(C) the law of the State, if applicable, where the
                    real property securing the consumer credit transaction
                    is located.
                ``(3) Applicability of payment of interest.--If prescribed
            by applicable State or Federal law, each creditor shall pay
            interest to the consumer on the amount held in any impound,
            trust, or escrow account that is subject to this section in the
            manner as prescribed by that applicable State or Federal law.
                ``(4) Penalty coordination with respa.--Any action or
            omission on the part of any person which constitutes a violation
            of the Real Estate Settlement Procedures Act of 1974 or any
            regulation prescribed under such Act for which the person has
            paid any fine, civil money penalty, or other damages shall not
            give rise to any additional fine, civil money penalty, or other
            damages under this section, unless the action or omission also
            constitutes a direct violation of this section.

        ``(h) Disclosures Relating to Mandatory Escrow or Impound Account.--
    <<NOTE: Notice. Deadline. Regulations.>> In the case of any impound,
    trust, or escrow account that is required under subsection (b), the
    creditor shall disclose by written notice to the consumer at least 3
    business days before the consummation of the consumer credit transaction
    giving rise to such account or in accordance with timeframes established
    in prescribed regulations the following information:
                ``(1) The fact that an escrow or impound account will be
            established at consummation of the transaction.
                ``(2) The amount required at closing to initially fund the
            escrow or impound account.
                ``(3) The amount, in the initial year after the consummation
            of the transaction, of the estimated taxes and hazard insurance,
            including flood insurance, if applicable, and any other required
            periodic payments or premiums that reflects, as appropriate,
            either the taxable assessed value of the real property securing
            the transaction, including the value of any improvements on the
            property or to be constructed on the property (whether or not
            such construction will be financed from the proceeds of the
            transaction) or the replacement costs of the property.
                ``(4) The estimated monthly amount payable to be escrowed
            for taxes, hazard insurance (including flood insurance, if

    [[Page 124 STAT. 2181]]

            applicable) and any other required periodic payments or
            premiums.
                ``(5) The fact that, if the consumer chooses to terminate
            the account in the future, the consumer will become responsible
            for the payment of all taxes, hazard insurance, and flood
            insurance, if applicable, as well as any other required periodic
            payments or premiums on the property unless a new escrow or
            impound account is established.
                ``(6) Such other information as the Board determines
            necessary for the protection of the consumer.

        ``(i) Definitions.--For purposes of this section, the following
    definitions shall apply:
                ``(1) Flood insurance.--The term `flood insurance' means
            flood insurance coverage provided under the national flood
            insurance program pursuant to the National Flood Insurance Act
            of 1968.
                ``(2) Hazard insurance.--The term `hazard insurance' shall
            have the same meaning as provided for `hazard insurance',
            `casualty insurance', `homeowner's insurance', or other similar
            term under the law of the State where the real property securing
            the consumer credit transaction is located.''.

        (b) <<NOTE: 15 USC 1639d note.>>  Exemptions and Modifications.--The
    Board may prescribe rules that revise, add to, or subtract from the
    criteria of section 129D(b) of the Truth in Lending Act if the Board
    determines that such rules are in the interest of consumers and in the
    public interest.

        (c) Clerical Amendment.--The table of sections for chapter 2 of the
    Truth in Lending Act is amended by inserting after the item relating to
    section 129C (as added by section 1411) the following new item:

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

    SEC. 1462. <<NOTE: 15 USC 1639d.>> DISCLOSURE NOTICE REQUIRED FOR
                              CONSUMERS WHO WAIVE ESCROW SERVICES.

        Section 129D of the Truth in Lending Act (as added by section 1461)
    is amended by adding at the end the following new subsection:
        ``(j) Disclosure Notice Required for Consumers Who Waive Escrow
    Services.--
                ``(1) In general.--If--
                        ``(A) an impound, trust, or other type of account
                    for the payment of property taxes, insurance premiums,
                    or other purposes relating to real property securing a
                    consumer credit transaction is not established in
                    connection with the transaction; or
                        ``(B) a consumer chooses, and provides written
                    notice to the creditor or servicer of such choice, at
                    any time after such an account is established in
                    connection with any such transaction and in accordance
                    with any statute, regulation, or contractual agreement,
                    to close such account,
            the creditor or servicer shall provide a timely and clearly
            written disclosure to the consumer that advises the consumer of
            the responsibilities of the consumer and implications for the
            consumer in the absence of any such account.
                ``(2) Disclosure requirements.--Any disclosure provided to a
            consumer under paragraph (1) shall include the following:

    [[Page 124 STAT. 2182]]

                        ``(A) Information concerning any applicable fees or
                    costs associated with either the non-establishment of
                    any such account at the time of the transaction, or any
                    subsequent closure of any such account.
                        ``(B) A clear and prominent statement that the
                    consumer is responsible for personally and directly
                    paying the non-escrowed items, in addition to paying the
                    mortgage loan payment, in the absence of any such
                    account, and the fact that the costs for taxes,
                    insurance, and related fees can be substantial.
                        ``(C) A clear explanation of the consequences of any
                    failure to pay non-escrowed items, including the
                    possible requirement for the forced placement of
                    insurance by the creditor or servicer and the
                    potentially higher cost (including any potential
                    commission payments to the servicer) or reduced coverage
                    for the consumer in the event of any such creditor-
                    placed insurance.
                        ``(D) Such other information as the Board determines
                    necessary for the protection of the consumer.''.
    SEC. 1463. REAL ESTATE SETTLEMENT PROCEDURES ACT OF 1974
                              AMENDMENTS.

        (a) Servicer Prohibitions.--Section 6 of the Real Estate Settlement
    Procedures Act of 1974 (12 U.S.C. 2605) is amended by adding at the end
    the following new subsections:
        ``(k) Servicer Prohibitions.--
                ``(1) In general.--A servicer of a federally related
            mortgage shall not--
                        ``(A) obtain force-placed hazard insurance unless
                    there is a reasonable basis to believe the borrower has
                    failed to comply with the loan contract's requirements
                    to maintain property insurance;
                        ``(B) charge fees for responding to valid qualified
                    written requests (as defined in regulations which the
                    Bureau of Consumer Financial Protection shall prescribe)
                    under this section;
                        ``(C) fail to take timely action to respond to a
                    borrower's requests to correct errors relating to
                    allocation of payments, final balances for purposes of
                    paying off the loan, or avoiding foreclosure, or other
                    standard servicer's duties;
                        ``(D) <<NOTE: Deadline.>> fail to respond within 10
                    business days to a request from a borrower to provide
                    the identity, address, and other relevant contact
                    information about the owner or assignee of the loan; or
                        ``(E) fail to comply with any other obligation found
                    by the Bureau of Consumer Financial Protection, by
                    regulation, to be appropriate to carry out the consumer
                    protection purposes of this Act.
                ``(2) Force-placed insurance defined.--For purposes of this
            subsection and subsections (l) and (m), the term `force-placed
            insurance' means hazard insurance coverage obtained by a
            servicer of a federally related mortgage when the borrower has
            failed to maintain or renew hazard insurance on such property as
            required of the borrower under the terms of the mortgage.

        ``(l) Requirements for Force-placed Insurance.--A servicer of a
    federally related mortgage shall not be construed as having

    [[Page 124 STAT. 2183]]

    a reasonable basis for obtaining force-placed insurance unless the
    requirements of this subsection have been met.
                ``(1) Written notices to borrower.--A servicer may not
            impose any charge on any borrower for force-placed insurance
            with respect to any property securing a federally related
            mortgage unless--
                        ``(A) the servicer has sent, by first-class mail, a
                    written notice to the borrower containing--
                              ``(i) a reminder of the borrower's obligation
                          to maintain hazard insurance on the property
                          securing the federally related mortgage;
                              ``(ii) a statement that the servicer does not
                          have evidence of insurance coverage of such
                          property;
                              ``(iii) a clear and conspicuous statement of
                          the procedures by which the borrower may
                          demonstrate that the borrower already has
                          insurance coverage; and
                              ``(iv) a statement that the servicer may
                          obtain such coverage at the borrower's expense if
                          the borrower does not provide such demonstration
                          of the borrower's existing coverage in a timely
                          manner;
                        ``(B) <<NOTE: Deadline.>> the servicer has sent, by
                    first-class mail, a second written notice, at least 30
                    days after the mailing of the notice under subparagraph
                    (A) that contains all the information described in each
                    clause of such subparagraph; and
                        ``(C) <<NOTE: Time period.>> the servicer has not
                    received from the borrower any demonstration of hazard
                    insurance coverage for the property securing the
                    mortgage by the end of the 15-day period beginning on
                    the date the notice under subparagraph (B) was sent by
                    the servicer.
                ``(2) Sufficiency of demonstration.--A servicer of a
            federally related mortgage shall accept any reasonable form of
            written confirmation from a borrower of existing insurance
            coverage, which shall include the existing insurance policy
            number along with the identity of, and contact information for,
            the insurance company or agent, or as otherwise required by the
            Bureau of Consumer Financial Protection.
                ``(3) Termination of force-placed insurance.--
            <<NOTE: Deadline.>> Within 15 days of the receipt by a servicer
            of confirmation of a borrower's existing insurance coverage, the
            servicer shall--
                        ``(A) terminate the force-placed insurance; and
                        ``(B) refund to the consumer all force-placed
                    insurance premiums paid by the borrower during any
                    period during which the borrower's insurance coverage
                    and the force-placed insurance coverage were each in
                    effect, and any related fees charged to the consumer's
                    account with respect to the force-placed insurance
                    during such period.
                ``(4) Clarification with respect to flood disaster
            protection act.--No provision of this section shall be construed
            as prohibiting a servicer from providing simultaneous or
            concurrent notice of a lack of flood insurance pursuant to
            section 102(e) of the Flood Disaster Protection Act of 1973.

        ``(m) Limitations on Force-placed Insurance Charges.--All charges,
    apart from charges subject to State regulation as the business of
    insurance, related to force-placed insurance imposed on the borrower by
    or through the servicer shall be bona fide and reasonable.''.

    [[Page 124 STAT. 2184]]

        (b) Increase in Penalty Amounts.--Section 6(f) of the Real Estate
    Settlement Procedures Act of 1974 (12 U.S.C. 2605(f)) is amended--
                (1) in paragraphs (1)(B) and (2)(B), by striking ``$1,000''
            each place such term appears and inserting ``$2,000''; and
                (2) in paragraph (2)(B)(i), by striking ``$500,000'' and
            inserting ``$1,000,000''.

        (c) Decrease in Response Times.--Section 6(e) of the Real Estate
    Settlement Procedures Act of 1974 (12 U.S.C. 2605(e)) is amended--
                (1) in paragraph (1)(A), by striking ``20 days'' and
            inserting ``5 days'';
                (2) in paragraph (2), by striking ``60 days'' and inserting
            ``30 days''; and
                (3) by adding at the end the following new paragraph:
                ``(4) Limited extension of response time.--
            <<NOTE: Deadline. Notification.>> The 30-day period described in
            paragraph (2) may be extended for not more than 15 days if,
            before the end of such 30-day period, the servicer notifies the
            borrower of the extension and the reasons for the delay in
            responding.''.

        (d) Prompt Refund of Escrow Accounts Upon Payoff.--Section 6(g) of
    the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2605(g)) is
    amended by adding at the end the following new
    sentence: <<NOTE: Deadline.>> ``Any balance in any such account that is
    within the servicer's control at the time the loan is paid off shall be
    promptly returned to the borrower within 20 business days or credited to
    a similar account for a new mortgage loan to the borrower with the same
    lender.''.
    SEC. 1464. TRUTH IN LENDING ACT AMENDMENTS.

        (a) Requirements for Prompt Crediting of Home Loan Payments.--
    Chapter 2 of the Truth in Lending Act (15 U.S.C. 1631 et seq.) is
    amended by inserting after section 129E (as added by section 1472) the
    following new section:
    ``Sec. 129F. <<NOTE: 15 USC 1639f.>> Requirements for prompt
                      crediting of home loan payments

        ``(a) In General.--In connection with a consumer credit transaction
    secured by a consumer's principal dwelling, no servicer shall fail to
    credit a payment to the consumer's loan account as of the date of
    receipt, except when a delay in crediting does not result in any charge
    to the consumer or in the reporting of negative information to a
    consumer reporting agency, except as required in subsection (b).
        ``(b) Exception.--If a servicer specifies in writing requirements
    for the consumer to follow in making payments, but accepts a payment
    that does not conform to the requirements, the servicer shall credit the
    payment as of 5 days after receipt.''.
        (b) Requests for Payoff Amounts.--Chapter 2 of the Truth in Lending
    Act (15 U.S.C. 1631 et seq.), as amended by this title, is amended by
    inserting after section 129F (as added by subsection (a)) the following
    new section:
    ``Sec. 129G. <<NOTE: 15 USC 1639g.>>  Requests for payoff amounts
                      of home loan

         <<NOTE: Deadline.>> ``A creditor or servicer of a home loan shall
    send an accurate payoff balance within a reasonable time, but in no case
    more

    [[Page 124 STAT. 2185]]

    than 7 business days, after the receipt of a written request for such
    balance from or on behalf of the borrower.''.
    SEC. 1465. ESCROWS INCLUDED IN REPAYMENT ANALYSIS.

        Section 128(b) of the Truth in Lending Act (15 U.S.C. 1638(b)) is
    amended by adding at the end the following new paragraph:
                ``(4) Repayment analysis required to include escrow
            payments.--
                        ``(A) In general.--In the case of any consumer
                    credit transaction secured by a first mortgage or lien
                    on the principal dwelling of the consumer, other than a
                    consumer credit transaction under an open end credit
                    plan or a reverse mortgage, for which an impound, trust,
                    or other type of account has been or will be established
                    in connection with the transaction for the payment of
                    property taxes, hazard and flood (if any) insurance
                    premiums, or other periodic payments or premiums with
                    respect to the property, the information required to be
                    provided under subsection (a) with respect to the
                    number, amount, and due dates or period of payments
                    scheduled to repay the total of payments shall take into
                    account the amount of any monthly payment to such
                    account for each such repayment in accordance with
                    section 10(a)(2) of the Real Estate Settlement
                    Procedures Act of 1974.
                        ``(B) Assessment value.--The amount taken into
                    account under subparagraph (A) for the payment of
                    property taxes, hazard and flood (if any) insurance
                    premiums, or other periodic payments or premiums with
                    respect to the property shall reflect the taxable
                    assessed value of the real property securing the
                    transaction after the consummation of the transaction,
                    including the value of any improvements on the property
                    or to be constructed on the property (whether or not
                    such construction will be financed from the proceeds of
                    the transaction), if known, and the replacement costs of
                    the property for hazard insurance, in the initial year
                    after the transaction.''.

                        Subtitle F--Appraisal Activities

    SEC. 1471. PROPERTY APPRAISAL REQUIREMENTS.

        Chapter 2 of the Truth in Lending Act (15 U.S.C. 1631 et seq.) is
    amended by inserting after 129G (as added by section 1464(b)) the
    following new section:
    ``Sec. 129H. <<NOTE: 15 USC 1639h.>> Property appraisal
                      requirements

        ``(a) In General.--A creditor may not extend credit in the form of a
    higher-risk mortgage to any consumer without first obtaining a written
    appraisal of the property to be mortgaged prepared in accordance with
    the requirements of this section.
        ``(b) Appraisal Requirements.--
                ``(1) Physical property visit.--Subject to the rules
            prescribed under paragraph (4), an appraisal of property to be
            secured by a higher-risk mortgage does not meet the requirement
            of this section unless it is performed by a certified or
            licensed appraiser who conducts a physical property visit of the
            interior of the mortgaged property.
                ``(2) Second appraisal under certain circumstances.--

    [[Page 124 STAT. 2186]]

                        ``(A) In general.--If the purpose of a higher-risk
                    mortgage is to finance the purchase or acquisition of
                    the mortgaged property from a person within 180 days of
                    the purchase or acquisition of such property by that
                    person at a price that was lower than the current sale
                    price of the property, the creditor shall obtain a
                    second appraisal from a different certified or licensed
                    appraiser. The second appraisal shall include an
                    analysis of the difference in sale prices, changes in
                    market conditions, and any improvements made to the
                    property between the date of the previous sale and the
                    current sale.
                        ``(B) No cost to applicant.--The cost of any second
                    appraisal required under subparagraph (A) may not be
                    charged to the applicant.
                ``(3) Certified or licensed appraiser defined.--For purposes
            of this section, the term `certified or licensed appraiser'
            means a person who--
                        ``(A) is, at a minimum, certified or licensed by the
                    State in which the property to be appraised is located;
                    and
                        ``(B) performs each appraisal in conformity with the
                    Uniform Standards of Professional Appraisal Practice and
                    title XI of the Financial Institutions Reform, Recovery,
                    and Enforcement Act of 1989, and the regulations
                    prescribed under such title, as in effect on the date of
                    the appraisal.
                ``(4) Regulations.--
                        ``(A) In general.--The Board, the Comptroller of the
                    Currency, the Federal Deposit Insurance Corporation, the
                    National Credit Union Administration Board, the Federal
                    Housing Finance Agency, and the Bureau shall jointly
                    prescribe regulations to implement this section.
                        ``(B) Exemption.--The agencies listed in
                    subparagraph (A) may jointly exempt, by rule, a class of
                    loans from the requirements of this subsection or
                    subsection (a) if the agencies determine that the
                    exemption is in the public interest and promotes the
                    safety and soundness of creditors.

        ``(c) Free Copy of Appraisal.-- <<NOTE: Deadline.>> A creditor shall
    provide 1 copy of each appraisal conducted in accordance with this
    section in connection with a higher-risk mortgage to the applicant
    without charge, and at least 3 days prior to the transaction closing
    date.

        ``(d) Consumer Notification.--At the time of the initial mortgage
    application, the applicant shall be provided with a statement by the
    creditor that any appraisal prepared for the mortgage is for the sole
    use of the creditor, and that the applicant may choose to have a
    separate appraisal conducted at the expense of the applicant.
        ``(e) Violations.--In addition to any other liability to any person
    under this title, a creditor found to have willfully failed to obtain an
    appraisal as required in this section shall be liable to the applicant
    or borrower for the sum of $2,000.
        ``(f) Higher-risk Mortgage Defined.--For purposes of this section,
    the term `higher-risk mortgage' means a residential mortgage loan, other
    than a reverse mortgage loan that is a qualified mortgage, as defined in
    section 129C, secured by a principal dwelling--

    [[Page 124 STAT. 2187]]

                ``(1) that is not a qualified mortgage, as defined in
            section 129C; and
                ``(2) with an annual percentage rate that exceeds the
            average prime offer rate for a comparable transaction, as
            defined in section 129C, as of the date the interest rate is
            set--
                        ``(A) by 1.5 or more percentage points, in the case
                    of a first lien residential mortgage loan having an
                    original principal obligation amount that does not
                    exceed the amount of the maximum limitation on the
                    original principal obligation of mortgage in effect for
                    a residence of the applicable size, as of the date of
                    such interest rate set, pursuant to the sixth sentence
                    of section 305(a)(2) the Federal Home Loan Mortgage
                    Corporation Act (12 U.S.C. 1454(a)(2));
                        ``(B) by 2.5 or more percentage points, in the case
                    of a first lien residential mortgage loan having an
                    original principal obligation amount that exceeds the
                    amount of the maximum limitation on the original
                    principal obligation of mortgage in effect for a
                    residence of the applicable size, as of the date of such
                    interest rate set, pursuant to the sixth sentence of
                    section 305(a)(2) the Federal Home Loan Mortgage
                    Corporation Act (12 U.S.C. 1454(a)(2)); and
                        ``(C) by 3.5 or more percentage points for a
                    subordinate lien residential mortgage loan.''.
    SEC. 1472. APPRAISAL INDEPENDENCE REQUIREMENTS.

        (a) In General.--Chapter 2 of the Truth in Lending Act (15 U.S.C.
    1631 et seq.) is amended by inserting after section 129D (as added by
    section 1461(a)) the following new section:
    ``Sec. 129E. <<NOTE: 15 USC 1639e.>> Appraisal independence
                      requirements

        ``(a) In General.--It shall be unlawful, in extending credit or in
    providing any services for a consumer credit transaction secured by the
    principal dwelling of the consumer, to engage in any act or practice
    that violates appraisal independence as described in or pursuant to
    regulations prescribed under this section.
        ``(b) Appraisal Independence.--For purposes of subsection (a), acts
    or practices that violate appraisal independence shall include--
                ``(1) any appraisal of a property offered as security for
            repayment of the consumer credit transaction that is conducted
            in connection with such transaction in which a person with an
            interest in the underlying transaction compensates, coerces,
            extorts, colludes, instructs, induces, bribes, or intimidates a
            person, appraisal management company, firm, or other entity
            conducting or involved in an appraisal, or attempts, to
            compensate, coerce, extort, collude, instruct, induce, bribe, or
            intimidate such a person, for the purpose of causing the
            appraised value assigned, under the appraisal, to the property
            to be based on any factor other than the independent judgment of
            the appraiser;
                ``(2) mischaracterizing, or suborning any
            mischaracterization of, the appraised value of the property
            securing the extension of the credit;
                ``(3) seeking to influence an appraiser or otherwise to
            encourage a targeted value in order to facilitate the making or
            pricing of the transaction; and

    [[Page 124 STAT. 2188]]

                ``(4) withholding or threatening to withhold timely payment
            for an appraisal report or for appraisal services rendered when
            the appraisal report or services are provided for in accordance
            with the contract between the parties.

        ``(c) Exceptions.--The requirements of subsection (b) shall not be
    construed as prohibiting a mortgage lender, mortgage broker, mortgage
    banker, real estate broker, appraisal management company, employee of an
    appraisal management company, consumer, or any other person with an
    interest in a real estate transaction from asking an appraiser to
    undertake 1 or more of the following:
                ``(1) Consider additional, appropriate property information,
            including the consideration of additional comparable properties
            to make or support an appraisal.
                ``(2) Provide further detail, substantiation, or explanation
            for the appraiser's value conclusion.
                ``(3) Correct errors in the appraisal report.

        ``(d) Prohibitions on Conflicts of Interest.--No certified or
    licensed appraiser conducting, and no appraisal management company
    procuring or facilitating, an appraisal in connection with a consumer
    credit transaction secured by the principal dwelling of a consumer may
    have a direct or indirect interest, financial or otherwise, in the
    property or transaction involving the appraisal.
        ``(e) Mandatory Reporting.--Any mortgage lender, mortgage broker,
    mortgage banker, real estate broker, appraisal management company,
    employee of an appraisal management company, or any other person
    involved in a real estate transaction involving an appraisal in
    connection with a consumer credit transaction secured by the principal
    dwelling of a consumer who has a reasonable basis to believe an
    appraiser is failing to comply with the Uniform Standards of
    Professional Appraisal Practice, is violating applicable laws, or is
    otherwise engaging in unethical or unprofessional conduct, shall refer
    the matter to the applicable State appraiser certifying and licensing
    agency.
        ``(f) No Extension of Credit.--In connection with a consumer credit
    transaction secured by a consumer's principal dwelling, a creditor who
    knows, at or before loan consummation, of a violation of the appraisal
    independence standards established in subsections (b) or (d) shall not
    extend credit based on such appraisal unless the creditor documents that
    the creditor has acted with reasonable diligence to determine that the
    appraisal does not materially misstate or misrepresent the value of such
    dwelling.
        ``(g) Rules and Interpretive Guidelines.--
                ``(1) In general.--Except as provided under paragraph (2),
            the Board, the Comptroller of the Currency, the Federal Deposit
            Insurance Corporation, the National Credit Union Administration
            Board, the Federal Housing Finance Agency, and the Bureau may
            jointly issue rules, interpretive guidelines, and general
            statements of policy with respect to acts or practices that
            violate appraisal independence in the provision of mortgage
            lending services for a consumer credit transaction secured by
            the principal dwelling of the consumer and mortgage brokerage
            services for such a transaction, within the meaning of
            subsections (a), (b), (c), (d), (e), (f), (h), and (i).
                ``(2) Interim final regulations.-- <<NOTE: Deadline.>> The
            Board shall, for purposes of this section, prescribe interim
            final regulations no later than 90 days after the date of
            enactment of this section defining with specificity acts or
            practices that violate

    [[Page 124 STAT. 2189]]

            appraisal independence in the provision of mortgage lending
            services for a consumer credit transaction secured by the
            principal dwelling of the consumer or mortgage brokerage
            services for such a transaction and defining any terms in this
            section or such regulations. Rules prescribed by the Board under
            this paragraph shall be deemed to be rules prescribed by the
            agencies jointly under paragraph (1).

        ``(h) Appraisal Report Portability.--Consistent with the
    requirements of this section, the Board, the Comptroller of the
    Currency, the Federal Deposit Insurance Corporation, the National Credit
    Union Administration Board, the Federal Housing Finance Agency, and the
    Bureau may jointly issue regulations that address the issue of appraisal
    report portability, including regulations that ensure the portability of
    the appraisal report between lenders for a consumer credit transaction
    secured by a 1-4 unit single family residence that is the principal
    dwelling of the consumer, or mortgage brokerage services for such a
    transaction.
        ``(i) Customary and Reasonable Fee.--
                ``(1) In general.--Lenders and their agents shall compensate
            fee appraisers at a rate that is customary and reasonable for
            appraisal services performed in the market area of the property
            being appraised. Evidence for such fees may be established by
            objective third-party information, such as government agency fee
            schedules, academic studies, and independent private sector
            surveys. Fee studies shall exclude assignments ordered by known
            appraisal management companies.
                ``(2) Fee appraiser definition.--For purposes of this
            section, the term `fee appraiser' means a person who is not an
            employee of the mortgage loan originator or appraisal management
            company engaging the appraiser and is--
                        ``(A) a State licensed or certified appraiser who
                    receives a fee for performing an appraisal and certifies
                    that the appraisal has been prepared in accordance with
                    the Uniform Standards of Professional Appraisal
                    Practice; or
                        ``(B) a company not subject to the requirements of
                    section 1124 of the Financial Institutions Reform,
                    Recovery, and Enforcement Act of 1989 (12 U.S.C. 3331 et
                    seq.) that utilizes the services of State licensed or
                    certified appraisers and receives a fee for performing
                    appraisals in accordance with the Uniform Standards of
                    Professional Appraisal Practice.
                ``(3) Exception for complex assignments.--In the case of an
            appraisal involving a complex assignment, the customary and
            reasonable fee may reflect the increased time, difficulty, and
            scope of the work required for such an appraisal and include an
            amount over and above the customary and reasonable fee for non-
            complex assignments.

        ``(j) Sunset.--Effective on the date the interim final regulations
    are promulgated pursuant to subsection (g), the Home Valuation Code of
    Conduct announced by the Federal Housing Finance Agency on December 23,
    2008, shall have no force or effect.
        ``(k) Penalties.--
                ``(1) First violation.--In addition to the enforcement
            provisions referred to in section 130, each person who violates
            this section shall forfeit and pay a civil penalty of not more
            than $10,000 for each day any such violation continues.

    [[Page 124 STAT. 2190]]

                ``(2) Subsequent violations.-- <<NOTE: Applicability.>> In
            the case of any person on whom a civil penalty has been imposed
            under paragraph (1), paragraph (1) shall be applied by
            substituting `$20,000' for `$10,000' with respect to all
            subsequent violations.
                ``(3) Assessment.--The agency referred to in subsection (a)
            or (c) of section 108 with respect to any person described in
            paragraph (1) shall assess any penalty under this subsection to
            which such person is subject.''.

        (b) Clerical Amendment.--The table of sections for chapter 2 of the
    Truth in Lending Act is amended by inserting after the item relating to
    section 129D (as added by section 1461(c)) the following new items:

    ``129E. Appraisal independence requirements.
    ``129F. Requirements for prompt crediting of home loan payments.
    ``129G. Requests for payoff amounts of home loan.
    ``129H. Property appraisal requirements.''.

        (c) Deference.--Section 105 of the Truth in Lending Act (15 U.S.C.
    1604) is amended by adding at the end the following:
        ``(h) Deference.-- <<NOTE: Applicability.>> Notwithstanding any
    power granted to any Federal agency under this title, the deference that
    a court affords to the Bureau with respect to a determination made by
    the Bureau relating to the meaning or interpretation of any provision of
    this title, other than section 129E or 129H, shall be applied as if the
    Bureau were the only agency authorized to apply, enforce, interpret, or
    administer the provisions of this title.''.

        (d) Conforming Amendments in Title X Not Applicable to Sections 129E
    and 129H.--Notwithstanding section 1099A, the term ``Board'' in sections
    129E and 129H, as added by this subtitle, shall not be substituted by
    the term ``Bureau''.
    SEC. 1473. AMENDMENTS RELATING TO APPRAISAL SUBCOMMITTEE OF FFIEC,
                              APPRAISER INDEPENDENCE MONITORING,
                              APPROVED APPRAISER EDUCATION, APPRAISAL
                              MANAGEMENT COMPANIES, APPRAISER
                              COMPLAINT HOTLINE, AUTOMATED VALUATION
                              MODELS, AND BROKER PRICE OPINIONS.

        (a) Threshold Levels.--Section 1112(b) of the Financial Institutions
    Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3341(b)) is
    amended by inserting before the period the following: ``, and receives
    concurrence from the Bureau of Consumer Financial Protection that such
    threshold level provides reasonable protection for consumers who
    purchase 1-4 unit single-family residences''.
        (b) Annual Report of Appraisal Subcommittee.--Section 1103(a) of the
    Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12
    U.S.C. 3332(a)) is amended at the end by inserting the following new
    paragraph:
                ``(5) transmit an annual report to the Congress not later
            than June 15 of each year that describes the manner in which
            each function assigned to the Appraisal Subcommittee has been
            carried out during the preceding year. The report shall also
            detail the activities of the Appraisal Subcommittee, including
            the results of all audits of State appraiser regulatory
            agencies, and provide an accounting of disapproved actions and
            warnings taken in the previous year, including a description of
            the conditions causing the disapproval and actions taken to
            achieve compliance.''.

    [[Page 124 STAT. 2191]]

        (c) Open Meetings.--Section 1104(b) of the Financial Institutions
    Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3333(b)) is
    amended--
                (1) by inserting ``in public session after notice in the
            Federal Register, but may close certain portions of these
            meetings related to personnel and review of preliminary State
            audit reports,'' after ``shall meet''; and
                (2) by adding after the final period the following: ``The
            subject matter discussed in any closed or executive session
            shall be described in the Federal Register notice of the
            meeting.''.

        (d) Regulations.--Section 1106 of the Financial Institutions Reform,
    Recovery, and Enforcement Act of 1989 (12 U.S.C. 3335) is amended--
                (1) by inserting ``prescribe regulations in accordance with
            chapter 5 of title 5, United States Code (commonly referred to
            as the Administrative Procedures Act) after notice and
            opportunity for comment,'' after ``hold hearings''; and
                (2) at the end by inserting ``Any regulations prescribed by
            the Appraisal Subcommittee shall (unless otherwise provided in
            this title) be limited to the following functions: temporary
            practice, national registry, information sharing, and
            enforcement. <<NOTE: Establishment.>>  For purposes of
            prescribing regulations, the Appraisal Subcommittee shall
            establish an advisory committee of industry participants,
            including appraisers, lenders, consumer advocates, real estate
            agents, and government agencies, and hold meetings as necessary
            to support the development of regulations.''.

        (e) Appraisal Reviews and Complex Appraisals.--
                (1) Section 1110.--Section 1110 of the Financial
            Institutions Reform, Recovery, and Enforcement Act of 1989 (12
            U.S.C. 3339) is amended--
                        (A) in paragraph (1), by striking ``and'';
                        (B) in paragraph (2), by striking the period at the
                    end and inserting ``; and''; and
                        (C) by inserting after paragraph (2) the following:
                ``(3) that such appraisals shall be subject to appropriate
            review for compliance with the Uniform Standards of Professional
            Appraisal Practice.''.
                (2) Section 1113.--Section 1113 of the Financial
            Institutions and Reform, Recovery, and Enforcement Act of 1989
            (12 U.S.C. 3342) is amended by inserting before the period the
            following: <<NOTE: Definition.>>  ``, where a complex 1-to-4
            unit single family residential appraisal means an appraisal for
            which the property to be appraised, the form of ownership, the
            property characteristics, or the market conditions are
            atypical''.

        (f) Appraisal Management Services.--
                (1) Supervision of third party providers of appraisal
            management services.--Section 1103(a) of the Financial
            Institutions Reform, Recovery, and Enforcement Act of 1989 (12
            U.S.C. 3332(a)) (as previously amended by this section) is
            amended--
                        (A) by amending paragraph (1) to read as follows:
                ``(1) monitor the requirements established by States--
                        ``(A) for the certification and licensing of
                    individuals who are qualified to perform appraisals in
                    connection with federally related transactions,
                    including a code of professional responsibility; and

    [[Page 124 STAT. 2192]]

                        ``(B) for the registration and supervision of the
                    operations and activities of an appraisal management
                    company;''; and
                        (B) by adding at the end the following new
                    paragraph:
                ``(6) maintain a national registry of appraisal management
            companies that either are registered with and subject to
            supervision of a State appraiser certifying and licensing agency
            or are operating subsidiaries of a Federally regulated financial
            institution.''.
                (2) Appraisal management company minimum requirements.--
            Title XI of the Financial Institutions Reform, Recovery, and
            Enforcement Act of 1989 (12 U.S.C. 3331 et seq.) is amended by
            adding at the end the following new section (and amending the
            table of contents accordingly):
    ``SEC. 1124. <<NOTE: 12 USC 3353.>> APPRAISAL MANAGEMENT COMPANY
                              MINIMUM REQUIREMENTS.

        ``(a) In General.--
    <<NOTE: Regulations. Applicability. States.>> The Board of Governors of
    the Federal Reserve System, the Comptroller of the Currency, the Federal
    Deposit Insurance Corporation, the National Credit Union Administration
    Board, the Federal Housing Finance Agency, and the Bureau of Consumer
    Financial Protection shall jointly, by rule, establish minimum
    requirements to be applied by a State in the registration of appraisal
    management companies. Such requirements shall include a requirement that
    such companies--
                ``(1) register with and be subject to supervision by a State
            appraiser certifying and licensing agency in each State in which
            such company operates;
                ``(2) verify that only licensed or certified appraisers are
            used for federally related transactions;
                ``(3) require that appraisals coordinated by an appraisal
            management company comply with the Uniform Standards of
            Professional Appraisal Practice; and
                ``(4) require that appraisals are conducted independently
            and free from inappropriate influence and coercion pursuant to
            the appraisal independence standards established under section
            129E of the Truth in Lending Act.

        ``(b) Relation to State Law.--Nothing in this section shall be
    construed to prevent States from establishing requirements in addition
    to any rules promulgated under subsection (a).
        ``(c) Federally Regulated Financial Institutions.--
    <<NOTE: Applicability.>> The requirements of subsection (a) shall apply
    to an appraisal management company that is a subsidiary owned and
    controlled by a financial institution and regulated by a Federal
    financial institution regulatory agency. An appraisal management company
    that is a subsidiary owned and controlled by a financial institution
    regulated by a Federal financial institution regulatory agency shall not
    be required to register with a State.

        ``(d) Registration Limitations.--An appraisal management company
    shall not be registered by a State or included on the national registry
    if such company, in whole or in part, directly or indirectly, is owned
    by any person who has had an appraiser license or certificate refused,
    denied, cancelled, surrendered in lieu of revocation, or revoked in any
    State. <<NOTE: Investigation.>>  Additionally, each person that owns
    more than 10 percent of an appraisal management company shall be of good
    moral character, as determined by the State appraiser certifying and
    licensing agency, and shall submit to a

    [[Page 124 STAT. 2193]]

    background investigation carried out by the State appraiser certifying
    and licensing agency.

        ``(e) Reporting.-- <<NOTE: Regulations.>> The Board of Governors of
    the Federal Reserve System, the Comptroller of the Currency, the Federal
    Deposit Insurance Corporation, the National Credit Union Administration
    Board, the Federal Housing Finance Agency, and the Bureau of Consumer
    Financial Protection shall jointly promulgate regulations for the
    reporting of the activities of appraisal management companies to the
    Appraisal Subcommittee in determining the payment of the annual registry
    fee.

        ``(f) Effective Date.--
                ``(1) In general.--No appraisal management company may
            perform services related to a federally related transaction in a
            State after the date that is 36 months after the date on which
            the regulations required to be prescribed under subsection (a)
            are prescribed in final form unless such company is registered
            with such State or subject to oversight by a Federal financial
            institutions regulatory agency.
                ``(2) Extension of effective date.--Subject to the approval
            of the Council, the Appraisal Subcommittee may extend by an
            additional 12 months the requirements for the registration and
            supervision of appraisal management companies if it makes a
            written finding that a State has made substantial progress in
            establishing a State appraisal management company registration
            and supervision system that appears to conform with the
            provisions of this title.''.
                (3) State appraiser certifying and licensing agency
            authority.--Section 1117 of the Financial Institutions Reform,
            Recovery, and Enforcement Act of 1989 (12 U.S.C. 3346) is
            amended by adding at the end the following: ``The duties of such
            agency may additionally include the registration and supervision
            of appraisal management companies and the addition of
            information about the appraisal management company to the
            national registry.''.
                (4) Appraisal management company definition.--Section 1121
            of the Financial Institutions Reform, Recovery, and Enforcement
            Act of 1989 (12 U.S.C. 3350) is amended by adding at the end the
            following:
                ``(11) Appraisal management company.--The term `appraisal
            management company' means, in connection with valuing properties
            collateralizing mortgage loans or mortgages incorporated into a
            securitization, any external third party authorized either by a
            creditor of a consumer credit transaction secured by a
            consumer's principal dwelling or by an underwriter of or other
            principal in the secondary mortgage markets, that oversees a
            network or panel of more than 15 certified or licensed
            appraisers in a State or 25 or more nationally within a given
            year--
                        ``(A) to recruit, select, and retain appraisers;
                        ``(B) to contract with licensed and certified
                    appraisers to perform appraisal assignments;
                        ``(C) to manage the process of having an appraisal
                    performed, including providing administrative duties
                    such as receiving appraisal orders and appraisal
                    reports, submitting completed appraisal reports to
                    creditors and underwriters, collecting fees from
                    creditors and underwriters for

    [[Page 124 STAT. 2194]]

                    services provided, and reimbursing appraisers for
                    services performed; or
                        ``(D) to review and verify the work of
                    appraisers.''.

        (g) State Agency Reporting Requirement.--Section 1109(a) of the
    Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12
    U.S.C. 3338(a)) is amended--
                (1) by striking ``and'' after the semicolon in paragraph
            (1);
                (2) by redesignating paragraph (2) as paragraph (4); and
                (3) by inserting after paragraph (1) the following new
            paragraphs:
                ``(2) transmit reports on the issuance and renewal of
            licenses and certifications, sanctions, disciplinary actions,
            license and certification revocations, and license and
            certification suspensions on a timely basis to the national
            registry of the Appraisal Subcommittee;
                ``(3) transmit reports on a timely basis of supervisory
            activities involving appraisal management companies or other
            third-party providers of appraisals and appraisal management
            services, including investigations initiated and disciplinary
            actions taken; and''.

        (h) Registry Fees Modified.--
                (1) In general.--Section 1109(a) of the Financial
            Institutions Reform, Recovery, and Enforcement Act of 1989 (12
            U.S.C. 3338(a)) is amended--
                        (A) by amending paragraph (4) (as modified by
                    section 1473(g)) to read as follows:
                ``(4) collect--
                        ``(A) from such individuals who perform or seek to
                    perform appraisals in federally related transactions, an
                    annual registry fee of not more than $40, such fees to
                    be transmitted by the State agencies to the Council on
                    an annual basis; and
                        ``(B) from an appraisal management company that
                    either has registered with a State appraiser certifying
                    and licensing agency in accordance with this title or
                    operates as a subsidiary of a federally regulated
                    financial institution, an annual registry fee of--
                              ``(i) in the case of such a company that has
                          been in existence for more than a year, $25
                          multiplied by the number of appraisers working for
                          or contracting with such company in such State
                          during the previous year, but where such $25
                          amount may be adjusted, up to a maximum of $50, at
                          the discretion of the Appraisal Subcommittee, if
                          necessary to carry out the Subcommittee's
                          functions under this title; and
                              ``(ii) in the case of such a company that has
                          not been in existence for more than a year, $25
                          multiplied by an appropriate number to be
                          determined by the Appraisal Subcommittee, and
                          where such number will be used for determining the
                          fee of all such companies that were not in
                          existence for more than a year, but where such $25
                          amount may be adjusted, up to a maximum of $50, at
                          the discretion of the Appraisal Subcommittee, if
                          necessary to carry out the Subcommittee's
                          functions under this title.''; and

    [[Page 124 STAT. 2195]]

                        (B) by amending the matter following paragraph (4),
                    as redesignated, to read as follows:

    ``Subject to the approval of the Council, the Appraisal Subcommittee may
    adjust the dollar amount of registry fees under paragraph (4)(A), up to
    a maximum of $80 per annum, as necessary to carry out its functions
    under this title. <<NOTE: Deadline.>>  The Appraisal Subcommittee shall
    consider at least once every 5 years whether to adjust the dollar amount
    of the registry fees to account for inflation. In implementing any
    change in registry fees, the Appraisal Subcommittee shall provide
    flexibility to the States for multi-year certifications and licenses
    already in place, as well as a transition period to implement the
    changes in registry fees. In establishing the amount of the annual
    registry fee for an appraisal management company, the Appraisal
    Subcommittee shall have the discretion to impose a minimum annual
    registry fee for an appraisal management company to protect against the
    under reporting of the number of appraisers working for or contracted by
    the appraisal management company.''.
                (2) Incremental revenues.--Incremental revenues collected
            pursuant to the increases required by this subsection shall be
            placed in a separate account at the United States Treasury,
            entitled the ``Appraisal Subcommittee Account''.

        (i) <<NOTE: 12 USC 3338 note.>>  Grants and Reports.--Section
    1109(b) of the Financial Institutions Reform, Recovery, and Enforcement
    Act of 1989 (12 U.S.C. 3338(b)) is amended--
                (1) by striking ``and'' after the semicolon in paragraph
            (3);
                (2) by striking the period at the end of paragraph (4) and
            inserting a semicolon;
                (3) by adding at the end the following new paragraphs:
                ``(5) to make grants to State appraiser certifying and
            licensing agencies, in accordance with policies to be developed
            by the Appraisal Subcommittee, to support the efforts of such
            agencies to comply with this title, including--
                        ``(A) the complaint process, complaint
                    investigations, and appraiser enforcement activities of
                    such agencies; and
                        ``(B) the submission of data on State licensed and
                    certified appraisers and appraisal management companies
                    to the National appraisal registry, including
                    information affirming that the appraiser or appraisal
                    management company meets the required qualification
                    criteria and formal and informal disciplinary actions;
                    and
                ``(6) to report to all State appraiser certifying and
            licensing agencies when a license or certification is
            surrendered, revoked, or suspended.''.

    Obligations authorized under this subsection may not exceed 75 percent
    of the fiscal year total of incremental increase in fees collected and
    deposited in the ``Appraisal Subcommittee Account'' pursuant to
    subsection (h).
        (j) Criteria.--Section 1116 of the Financial Institutions Reform,
    Recovery, and Enforcement Act of 1989 (12 U.S.C. 3345) is amended--
                (1) in subsection (c), by inserting ``whose criteria for the
            licensing of a real estate appraiser currently meet or exceed
            the minimum criteria issued by the Appraisal Qualifications
            Board of The Appraisal Foundation for the licensing of real
            estate appraisers'' before the period at the end; and

    [[Page 124 STAT. 2196]]

                (2) by striking subsection (e) and inserting the following
            new subsection:

        ``(e) Minimum Qualification Requirements.--Any requirements
    established for individuals in the position of `Trainee Appraiser' and
    `Supervisory Appraiser' shall meet or exceed the minimum qualification
    requirements of the Appraiser Qualifications Board of The Appraisal
    Foundation. The Appraisal Subcommittee shall have the authority to
    enforce these requirements.''.
        (k) Monitoring of State Appraiser Certifying and Licensing
    Agencies.--Section 1118 of the Financial Institutions Reform, Recovery,
    and Enforcement Act of 1989 (12 U.S.C. 3347) is amended--
                (1) by amending subsection (a) to read as follows:

        ``(a) In General.--The Appraisal Subcommittee shall monitor each
    State appraiser certifying and licensing agency for the purposes of
    determining whether such agency--
                ``(1) has policies, practices, funding, staffing, and
            procedures that are consistent with this title;
                ``(2) processes complaints and completes investigations in a
            reasonable time period;
                ``(3) appropriately disciplines sanctioned appraisers and
            appraisal management companies;
                ``(4) maintains an effective regulatory program; and
                ``(5) reports complaints and disciplinary actions on a
            timely basis to the national registries on appraisers and
            appraisal management companies maintained by the Appraisal
            Subcommittee.

    The Appraisal Subcommittee shall have the authority to remove a State
    licensed or certified appraiser or a registered appraisal management
    company from a national registry on an interim basis, not to exceed 90
    days, pending State agency action on licensing, certification,
    registration, and disciplinary proceedings. The Appraisal Subcommittee
    and all agencies, instrumentalities, and Federally recognized entities
    under this title shall not recognize appraiser certifications and
    licenses from States whose appraisal policies, practices, funding,
    staffing, or procedures are found to be inconsistent with this title.
    The Appraisal Subcommittee shall have the authority to impose sanctions,
    as described in this section, against a State agency that fails to have
    an effective appraiser regulatory program. In determining whether such a
    program is effective, the Appraisal Subcommittee shall include an
    analysis of the licensing and certification of appraisers, the
    registration of appraisal management companies, the issuance of
    temporary licenses and certifications for appraisers, the receiving and
    tracking of submitted complaints against appraisers and appraisal
    management companies, the investigation of complaints, and enforcement
    actions against appraisers and appraisal management companies. The
    Appraisal Subcommittee shall have the authority to impose interim
    actions and suspensions against a State agency as an alternative to, or
    in advance of, the derecognition of a State agency.''.
                (2) in subsection (b)(2), by inserting after ``authority''
            the following: ``or sufficient funding''.

        (l) Reciprocity.--Subsection (b) of section 1122 of the Financial
    Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
    3351(b)) is amended to read as follows:
        ``(b) Reciprocity.--Notwithstanding any other provisions of this
    title, a federally related transaction shall not be appraised

    [[Page 124 STAT. 2197]]

    by a certified or licensed appraiser unless the State appraiser
    certifying or licensing agency of the State certifying or licensing such
    appraiser has in place a policy of issuing a reciprocal certification or
    license for an individual from another State when--
                ``(1) the appraiser licensing and certification program of
            such other State is in compliance with the provisions of this
            title; and
                ``(2) the appraiser holds a valid certification from a State
            whose requirements for certification or licensing meet or exceed
            the licensure standards established by the State where an
            individual seeks appraisal licensure.''.

        (m) Consideration of Professional Appraisal Designations.--Section
    1122(d) of the Financial Institutions Reform, Recovery, and Enforcement
    Act of 1989 (12 U.S.C. 3351(d)) is amended by striking ``shall not
    exclude'' and all that follows through the end of the subsection and
    inserting the following: ``may include education achieved, experience,
    sample appraisals, and references from prior clients. Membership in a
    nationally recognized professional appraisal organization may be a
    criteria considered, though lack of membership therein shall not be the
    sole bar against consideration for an assignment under these
    criteria.''.
        (n) Appraiser Independence.--Section 1122 of the Financial
    Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
    3351) is amended by adding at the end the following new subsection:
        ``(g) Appraiser Independence Monitoring.--The Appraisal Subcommittee
    shall monitor each State appraiser certifying and licensing agency for
    the purpose of determining whether such agency's policies, practices,
    and procedures are consistent with the purposes of maintaining appraiser
    independence and whether such State has adopted and maintains effective
    laws, regulations, and policies aimed at maintaining appraiser
    independence.''.
        (o) Appraiser Education.--Section 1122 of the Financial Institutions
    Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3351) is
    amended by inserting after subsection (g) (as added by subsection (l) of
    this section) the following new subsection:
        ``(h) Approved Education.--The Appraisal Subcommittee shall
    encourage the States to accept courses approved by the Appraiser
    Qualification Board's Course Approval Program.''.
        (p) Appraisal Complaint Hotline.--Section 1122 of the Financial
    Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
    3351), as amended by this section, is amended by adding at the end the
    following new subsection:
        ``(i) Appraisal Complaint National Hotline.--
    <<NOTE: Deadline. Determination.>> If, 6 months after the date of the
    enactment of this subsection, the Appraisal Subcommittee determines that
    no national hotline exists to receive complaints of non-compliance with
    appraisal independence standards and Uniform Standards of Professional
    Appraisal Practice, including complaints from appraisers, individuals,
    or other entities concerning the improper influencing or attempted
    improper influencing of appraisers or the appraisal process, the
    Appraisal Subcommittee shall establish and operate such a national
    hotline, which shall include a toll-free telephone number and an email
    address. If the Appraisal Subcommittee operates such a national hotline,
    the Appraisal Subcommittee shall refer complaints for further action to
    appropriate governmental bodies, including a State appraiser certifying
    and licensing agency, a financial institution regulator,

    [[Page 124 STAT. 2198]]

    or other appropriate legal authorities. For complaints referred to State
    appraiser certifying and licensing agencies or to Federal regulators,
    the Appraisal Subcommittee shall have the authority to follow up such
    complaint referrals in order to determine the status of the resolution
    of the complaint.''.

        (q) Automated Valuation Models.--Title XI of the Financial
    Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
    3331 et seq.), as amended by this section, is amended by adding at the
    end the following new section (and amending the table of contents
    accordingly):
    ``SEC. 1125. <<NOTE: 12 USC 3354.>> AUTOMATED VALUATION MODELS
                              USED TO ESTIMATE COLLATERAL VALUE FOR
                              MORTGAGE LENDING PURPOSES.

        ``(a) In General.--Automated valuation models shall adhere to
    quality control standards designed to--
                ``(1) ensure a high level of confidence in the estimates
            produced by automated valuation models;
                ``(2) protect against the manipulation of data;
                ``(3) seek to avoid conflicts of interest;
                ``(4) require random sample testing and reviews; and
                ``(5) account for any other such factor that the agencies
            listed in subsection (b) determine to be appropriate.

        ``(b) Adoption of Regulations.--The Board, the Comptroller of the
    Currency, the Federal Deposit Insurance Corporation, the National Credit
    Union Administration Board, the Federal Housing Finance Agency, and the
    Bureau of Consumer Financial Protection, in consultation with the staff
    of the Appraisal Subcommittee and the Appraisal Standards Board of the
    Appraisal Foundation, shall promulgate regulations to implement the
    quality control standards required under this section.
        ``(c) Enforcement.--Compliance with regulations issued under this
    subsection shall be enforced by--
                ``(1) with respect to a financial institution, or subsidiary
            owned and controlled by a financial institution and regulated by
            a Federal financial institution regulatory agency, the Federal
            financial institution regulatory agency that acts as the primary
            Federal supervisor of such financial institution or subsidiary;
            and
                ``(2) with respect to other participants in the market for
            appraisals of 1-to-4 unit single family residential real estate,
            the Federal Trade Commission, the Bureau of Consumer Financial
            Protection, and a State attorney general.

        ``(d) Automated Valuation Model Defined.--For purposes of this
    section, the term `automated valuation model' means any computerized
    model used by mortgage originators and secondary market issuers to
    determine the collateral worth of a mortgage secured by a consumer's
    principal dwelling.''.
        (r) Broker Price Opinions.--Title XI of the Financial Institutions
    Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3331 et seq.),
    as amended by this section, is amended by adding at the end the
    following new section (and amending the table of contents accordingly):
    ``SEC. 1126. <<NOTE: 12 USC 3355.>> BROKER PRICE OPINIONS.

        ``(a) General Prohibition.--In conjunction with the purchase of a
    consumer's principal dwelling, broker price opinions may not be used as
    the primary basis to determine the value of a piece

    [[Page 124 STAT. 2199]]

    of property for the purpose of a loan origination of a residential
    mortgage loan secured by such piece of property.
        ``(b) Broker Price Opinion Defined.--For purposes of this section,
    the term `broker price opinion' means an estimate prepared by a real
    estate broker, agent, or sales person that details the probable selling
    price of a particular piece of real estate property and provides a
    varying level of detail about the property's condition, market, and
    neighborhood, and information on comparable sales, but does not include
    an automated valuation model, as defined in section 1125(c).''.
        (s) Amendments to Appraisal Subcommittee.--Section 1011 of the
    Federal Financial Institutions Examination Council Act of 1978 (12
    U.S.C. 3310) is amended--
                (1) in the first sentence, by adding before the period the
            following: ``, the Bureau of Consumer Financial Protection, and
            the Federal Housing Finance Agency''; and
                (2) by inserting at the end the following: ``At all times at
            least one member of the Appraisal Subcommittee shall have
            demonstrated knowledge and competence through licensure,
            certification, or professional designation within the appraisal
            profession.''.

        (t) Technical Corrections.--
                (1) Section 1119(a)(2) of the Financial Institutions Reform,
            Recovery, and Enforcement Act of 1989 (12 U.S.C. 3348(a)(2)) is
            amended by striking ``council,'' and inserting ``Council,''.
                (2) Section 1121(6) of the Financial Institutions Reform,
            Recovery, and Enforcement Act of 1989 (12 U.S.C. 3350(6)) is
            amended by striking ``Corporations,'' and inserting
            ``Corporation,''.
                (3) Section 1121(8) of the Financial Institutions Reform,
            Recovery, and Enforcement Act of 1989 (12 U.S.C. 3350(8)) is
            amended by striking ``council'' and inserting ``Council''.
                (4) Section 1122 of the Financial Institutions Reform,
            Recovery, and Enforcement Act of 1989 (12 U.S.C. 3351) is
            amended--
                        (A) in subsection (a)(1) by moving the left margin
                    of subparagraphs (A), (B), and (C) 2 ems to the right;
                    and
                        (B) in subsection (c)--
                              (i) by striking ``Federal Financial
                          Institutions Examination Council'' and inserting
                          ``Financial Institutions Examination Council'';
                          and
                              (ii) by striking ``the council's functions''
                          and inserting ``the Council's functions''.
    SEC. 1474. EQUAL CREDIT OPPORTUNITY ACT AMENDMENT.

        Subsection (e) of section 701 of the Equal Credit Opportunity Act
    (15 U.S.C. 1691) is amended to read as follows:
        ``(e) Copies Furnished to Applicants.--
                ``(1) In general.-- <<NOTE: Deadline.>> Each creditor shall
            furnish to an applicant a copy of any and all written appraisals
            and valuations developed in connection with the applicant's
            application for a loan that is secured or would have been
            secured by a first lien on a dwelling promptly upon completion,
            but in no case later than 3 days prior to the closing of the
            loan, whether the creditor grants or denies the applicant's
            request for credit or the application is incomplete or
            withdrawn.

    [[Page 124 STAT. 2200]]

                ``(2) Waiver.--The applicant may waive the 3 day requirement
            provided for in paragraph (1), except where otherwise required
            in law.
                ``(3) Reimbursement.--The applicant may be required to pay a
            reasonable fee to reimburse the creditor for the cost of the
            appraisal, except where otherwise required in law.
                ``(4) Free copy.--Notwithstanding paragraph (3), the
            creditor shall provide a copy of each written appraisal or
            valuation at no additional cost to the applicant.
                ``(5) Notification to applicants.--At the time of
            application, the creditor shall notify an applicant in writing
            of the right to receive a copy of each written appraisal and
            valuation under this subsection.
                ``(6) Valuation defined.--For purposes of this subsection,
            the term `valuation' shall include any estimate of the value of
            a dwelling developed in connection with a creditor's decision to
            provide credit, including those values developed pursuant to a
            policy of a government sponsored enterprise or by an automated
            valuation model, a broker price opinion, or other methodology or
            mechanism.''.
    SEC. 1475. REAL ESTATE SETTLEMENT PROCEDURES ACT OF 1974 AMENDMENT
                              RELATING TO CERTAIN APPRAISAL FEES.

        Section 4 of the Real Estate Settlement Procedures Act of
    1974 <<NOTE: 12 USC 2603.>> is amended by adding at the end the
    following new subsection:

        ``(c) The standard form described in subsection (a) may include, in
    the case of an appraisal coordinated by an appraisal management company
    (as such term is defined in section 1121(11) of the Financial
    Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
    3350(11))), a clear disclosure of--
                ``(1) the fee paid directly to the appraiser by such
            company; and
                ``(2) the administration fee charged by such company.''.
    SEC. 1476. GAO STUDY ON THE EFFECTIVENESS AND IMPACT OF VARIOUS
                              APPRAISAL METHODS, VALUATION MODELS AND
                              DISTRIBUTIONS CHANNELS, AND ON THE HOME
                              VALUATION CODE OF CONDUCT AND THE
                              APPRAISAL SUBCOMMITTEE.

        (a) In General.--The Government Accountability Office shall conduct
    a study on--
                (1) the effectiveness and impact of--
                        (A) appraisal methods, including the cost approach,
                    the comparative sales approach, the income approach, and
                    others that may be available;
                        (B) appraisal valuation models, including licensed
                    and certified appraisals, broker-priced opinions, and
                    automated valuation models; and
                        (C) appraisal distribution channels, including
                    appraisal management companies, independent appraisal
                    operations within mortgage originators, and fee-for-
                    service appraisers;
                (2) the Home Valuation Code of Conduct; and
                (3) the Appraisal Subcommittee's functions pursuant to title
            XI of the Financial Institutions Reform, Recovery, and
            Enforcement Act of 1989.

        (b) Study.--Not later than--
                (1) <<NOTE: Deadline.>> 12 months after the date of
            enactment of this Act, the Government Accountability Office
            shall submit a study

    [[Page 124 STAT. 2201]]

            to the Committee on Banking, Housing, and Urban Affairs of the
            Senate and the Committee on Financial Services of the House of
            Representatives; and
                (2) <<NOTE: Deadline. Reports.>> 90 days after the date of
            enactment of this Act, the Government Accountability Office
            shall provide a report on the status of the study and any
            preliminary findings to the Committee on Banking, Housing, and
            Urban Affairs of the Senate and the Committee on Financial
            Services of the House of Representatives.

        (c) Content of Study.--The study required by this section shall
    include an examination of the following:
                (1) Appraisal approaches, valuation models, and distribution
            channels.--
                        (A) The prevalence, alone or in combination, of
                    certain appraisal approaches, models, and channels in
                    purchase-money and refinance mortgage transactions.
                        (B) The accuracy of these approaches, models, and
                    channels in assessing the property as collateral.
                        (C) Whether and how these approaches, models, and
                    channels contributed to price speculation during the
                    previous cycle.
                        (D) The costs to consumers of these approaches,
                    models, and channels.
                        (E) The disclosure of fees to consumers in the
                    appraisal process.
                        (F) To what extent the usage of these approaches,
                    models, and channels may be influenced by a conflict of
                    interest between the mortgage lender and the appraiser
                    and the mechanism by which the lender selects and
                    compensates the appraiser.
                        (G) The suitability of these approaches, models, and
                    channels in rural versus urban areas.
                (2) Home valuation code of conduct (hvcc).--
                        (A) How the HVCC affects mortgage lenders' selection
                    of appraisers.
                        (B) How the HVCC affects State regulation of
                    appraisers and appraisal distribution channels.
                        (C) How the HVCC affects the quality and cost of
                    appraisals and the length of time to obtain an
                    appraisal.
                        (D) How the HVCC affects mortgage brokers, small
                    businesses, and consumers.

        (d) Additional Study Required.--
                (1) In general.-- <<NOTE: Deadline.>> Not later than 18
            months after the date of enactment of this Act, the Government
            Accountability Office shall submit a study to the Committee on
            Banking, Housing, and Urban Affairs of the Senate and the
            Committee on Financial Services of the House of Representatives.
                (2) Content of additional study.--The study required under
            paragraph (1) shall include--
                        (A) an examination of--
                              (i) the Appraisal Subcommittee's ability to
                          monitor and enforce State and Federal
                          certification requirements and standards,
                          including by providing a summary with a
                          statistical breakdown of enforcement actions taken
                          during the last 10 years;

    [[Page 124 STAT. 2202]]

                              (ii) whether existing Federal financial
                          institutions regulatory agency exemptions on
                          appraisals for federally related transactions
                          needs to be revised; and
                              (iii) whether new means of data collection,
                          such as the establishment of a national
                          repository, would benefit the Appraisal
                          Subcommittee's ability to perform its functions;
                          and
                        (B) recommendations from this examination for
                    administrative and legislative action at the Federal and
                    State level.

                Subtitle G--Mortgage Resolution and Modification

    SEC. 1481. <<NOTE: 12 USC 5220b.>> MULTIFAMILY MORTGAGE RESOLUTION
                              PROGRAM.

        (a) Establishment.--The Secretary of Housing and Urban Development
    shall develop a program under this subsection to ensure the protection
    of current and future tenants and at-risk multifamily properties, where
    feasible, based on criteria that may include--
                (1) creating sustainable financing of such properties, that
            may take into consideration such factors as--
                        (A) the rental income generated by such properties;
                    and
                        (B) the preservation of adequate operating reserves;
                (2) maintaining the level of Federal, State, and city
            subsidies in effect as of the date of the enactment of this Act;
                (3) providing funds for rehabilitation; and
                (4) facilitating the transfer of such properties, when
            appropriate and with the agreement of owners, to responsible new
            owners and ensuring affordability of such properties.

        (b) Coordination.--The Secretary of Housing and Urban Development
    may, in carrying out the program developed under this section,
    coordinate with the Secretary of the Treasury, the Federal Deposit
    Insurance Corporation, the Board of Governors of the Federal Reserve
    System, the Federal Housing Finance Agency, and any other Federal
    Government agency that the Secretary considers appropriate.
        (c) Definition.--For purposes of this section, the term
    ``multifamily properties'' means a residential structure that consists
    of 5 or more dwelling units.
        (d) Prevention of Qualification for Criminal Applicants.--
                (1) In general.-- <<NOTE: Time period.>> No person shall be
            eligible to begin receiving assistance from the Making Home
            Affordable Program authorized under the Emergency Economic
            Stabilization Act of 2008 (12 U.S.C. 5201 et seq.), or any other
            mortgage assistance program authorized or funded by that Act, on
            or after 60 days after the date of the enactment of this Act, if
            such person, in connection with a mortgage or real estate
            transaction, has been convicted, within the last 10 years, of
            any one of the following:
                        (A) Felony larceny, theft, fraud, or forgery.
                        (B) Money laundering.
                        (C) Tax evasion.
                (2) Procedures.--The Secretary shall establish procedures to
            ensure compliance with this subsection.

    [[Page 124 STAT. 2203]]

                (3) Report.--The Secretary shall report to the Committee on
            Financial Services of the House of Representatives and the
            Committee on Banking, Housing, and Urban Affairs of the Senate
            regarding the implementation of this provision. The report shall
            also describe the steps taken to implement this subsection.
    SEC. 1482. <<NOTE: 12 USC 5219a.>> HOME AFFORDABLE MODIFICATION
                              PROGRAM GUIDELINES.

        (a) Net Present Value Input Data.--The Secretary of the Treasury (in
    this section referred to as the ``Secretary'') shall revise the
    supplemental directives and other guidelines for the Home Affordable
    Modification Program of the Making Home Affordable initiative of the
    Secretary of the Treasury, authorized under the Emergency Economic
    Stabilization Act of 2008 (Public Law 110-343), to require each mortgage
    servicer participating in such program to provide each borrower under a
    mortgage whose request for a mortgage modification under the Program is
    denied with all borrower-related and mortgage-related input data used in
    any net present value (NPV) analyses performed in connection with the
    subject mortgage. Such input data shall be provided to the borrower at
    the time of such denial.
        (b) Web-based Site for NPV Calculator and Application.--
                (1) NPV calculator.--In carrying out the Home Affordable
            Modification Program, the Secretary shall establish and maintain
            a site on the World Wide Web that provides a calculator for net
            present value analyses of a mortgage, based on the Secretary's
            methodology for calculating such value, that mortgagors can use
            to enter information regarding their own mortgages and that
            provides a determination after entering such information
            regarding a mortgage of whether such mortgage would be accepted
            or rejected for modification under the Program, using such
            methodology.
                (2) Disclosure.--Such Web site shall also prominently
            disclose that each mortgage servicer participating in such
            Program may use a method for calculating net present value of a
            mortgage that is different than the method used by such
            calculator.
                (3) Application.--The Secretary shall make a reasonable
            effort to include on such World Wide Web site a method for
            homeowners to apply for a mortgage modification under the Home
            Affordable Modification Program.

        (c) Public Availability of NPV Methodology, Computer Model, and
    Variables.--The Secretary shall make publicly available, including by
    posting on a World Wide Web site of the Secretary--
                (1) the Secretary's methodology and computer model,
            including all formulae used in such computer model, used for
            calculating net present value of a mortgage that is used by the
            calculator established pursuant to subsection (b); and
                (2) all non-proprietary variables used in such net present
            value analysis.
    SEC. 1483. <<NOTE: 12 USC 5219b.>> PUBLIC AVAILABILITY OF
                              INFORMATION OF MAKING HOME AFFORDABLE
                              PROGRAM.

        (a) Revisions to Program Guidelines.--The Secretary of the Treasury
    (in this section referred to as the ``Secretary'') shall revise the
    guidelines for the Home Affordable Modification Program of the Making
    Home Affordable initiative of the Secretary of the

    [[Page 124 STAT. 2204]]

    Treasury, authorized under the Emergency Economic Stabilization Act of
    2008 (Public Law 110-343), to provide that the data being collected by
    the Secretary from each mortgage servicer and lender participating in
    the Program is made public in accordance with subsection (b).
        (b) <<NOTE: Deadlines.>>  Public Availability.--Data shall be made
    available according to the following guidelines:
                (1) <<NOTE: Reports. Web posting.>> Not more than 14 days
            after each monthly deadline for submission of data by mortgage
            servicers and lenders participating in the Program, reports
            shall be made publicly available by means of a World Wide Web
            site of the Secretary, and by submitting a report to the
            Congress, that shall includes the following information:
                        (A) The number of requests for mortgage
                    modifications under the Program that the servicer or
                    lender has received.
                        (B) The number of requests for mortgage
                    modifications under the Program that the servicer or
                    lender has processed.
                        (C) The number of requests for mortgage
                    modifications under the Program that the servicer or
                    lender has approved.
                        (D) The number of requests for mortgage
                    modifications under the Program that the servicer or
                    lender has denied.
                (2) <<NOTE: Records.>> Not more than 60 days after each
            monthly deadline for submission of data by mortgage servicers
            and lenders participating in the Program, the Secretary shall
            make data tables available to the public at the individual
            record level. The <<NOTE: Regulations.>> Secretary shall issue
            regulations prescribing--
                        (A) the procedures for disclosing such data to the
                    public; and
                        (B) such deletions as the Secretary may determine to
                    be appropriate to protect any privacy interest of any
                    mortgage modification applicant, including the deletion
                    or alteration of the applicant's name and identification
                    number.
    SEC. 1484. PROTECTING TENANTS AT FORECLOSURE EXTENSION AND
                              CLARIFICATION.

        The Protecting Tenants at Foreclosure Act is amended--
                (1) in section 702 (12 U.S.C. 5220 note)--
                        (A) in subsection (a)(2), by striking ``, as of the
                    date of such notice of foreclosure''; and
                        (B) in subsection (c), by inserting after the period
                    the following: ``For purposes of this section, the date
                    of a notice of foreclosure shall be deemed to be the
                    date on which complete title to a property is
                    transferred to a successor entity or person as a result
                    of an order of a court or pursuant to provisions in a
                    mortgage, deed of trust, or security deed.''; and
                (2) in section 704 (12 U.S.C. 5201 note), by striking
            ``2012'' and inserting ``2014''.

    [[Page 124 STAT. 2205]]

                      Subtitle H--Miscellaneous Provisions

    SEC. 1491. SENSE OF CONGRESS REGARDING THE IMPORTANCE OF
                              GOVERNMENT-SPONSORED ENTERPRISES REFORM
                              TO ENHANCE THE PROTECTION, LIMITATION,
                              AND REGULATION OF THE TERMS OF
                              RESIDENTIAL MORTGAGE CREDIT.

        (a) Findings.--The Congress finds as follows:
                (1) The Government-sponsored enterprises, Federal National
            Mortgage Association (Fannie Mae) and the Federal Home Loan
            Mortgage Corporation (Freddie Mac), were chartered by Congress
            to ensure a reliable and affordable supply of mortgage funding,
            but enjoy a dual legal status as privately owned corporations
            with Government mandated affordable housing goals.
                (2) In 1996, the Department of Housing and Urban Development
            required that 42 percent of Fannie Mae's and Freddie Mac's
            mortgage financing should go to borrowers with income levels
            below the median for a given area.
                (3) In 2004, the Department of Housing and Urban Development
            revised those goals, increasing them to 56 percent of their
            overall mortgage purchases by 2008, and additionally mandated
            that 12 percent of all mortgage purchases by Fannie Mae and
            Freddie Mac be ``special affordable'' loans made to borrowers
            with incomes less than 60 percent of an area's median income, a
            target that ultimately increased to 28 percent for 2008.
                (4) To help fulfill those mandated affordable housing goals,
            in 1995 the Department of Housing and Urban Development
            authorized Fannie Mae and Freddie Mac to purchase subprime
            securities that included loans made to low-income borrowers.
                (5) After this authorization to purchase subprime
            securities, subprime and near-prime loans increased from 9
            percent of securitized mortgages in 2001 to 40 percent in 2006,
            while the market share of conventional mortgages dropped from
            78.8 percent in 2003 to 50.1 percent by 2007 with a
            corresponding increase in subprime and Alt-A loans from 10.1
            percent to 32.7 percent over the same period.
                (6) In 2004 alone, Fannie Mae and Freddie Mac purchased
            $175,000,000,000 in subprime mortgage securities, which
            accounted for 44 percent of the market that year, and from 2005
            through 2007, Fannie Mae and Freddie Mac purchased approximately
            $1,000,000,000,000 in subprime and Alt-A loans, while Fannie
            Mae's acquisitions of mortgages with less than 10 percent down
            payments almost tripled.
                (7) According to data from the Federal Housing Finance
            Agency (FHFA) for the fourth quarter of 2008, Fannie Mae and
            Freddie Mac own or guarantee 75 percent of all newly originated
            mortgages, and Fannie Mae and Freddie Mac currently own 13.3
            percent of outstanding mortgage debt in the United States and
            have issued mortgage-backed securities for 31.0 percent of the
            residential debt market, a combined total of 44.3 percent of
            outstanding mortgage debt in the United States.
                (8) On September 7, 2008, the FHFA placed Fannie Mae and
            Freddie Mac into conservatorship, with the Treasury

    [[Page 124 STAT. 2206]]

            Department subsequently agreeing to purchase at least
            $200,000,000,000 of preferred stock from each enterprise in
            exchange for warrants for the purchase of 79.9 percent of each
            enterprise's common stock.
                (9) The conservatorship for Fannie Mae and Freddie Mac has
            potentially exposed taxpayers to upwards of $5,300,000,000,000
            worth of risk.
                (10) The hybrid public-private status of Fannie Mae and
            Freddie Mac is untenable and must be resolved to assure that
            consumers are offered and receive residential mortgage loans on
            terms that reasonably reflect their ability to repay the loans
            and that are understandable and not unfair, deceptive, or
            abusive.

        (b) Sense of the Congress.--It is the sense of the Congress that
    efforts to enhance by the protection, limitation, and regulation of the
    terms of residential mortgage credit and the practices related to such
    credit would be incomplete without enactment of meaningful structural
    reforms of Fannie Mae and Freddie Mac.
    SEC. 1492. GAO STUDY REPORT ON GOVERNMENT EFFORTS TO COMBAT
                              MORTGAGE FORECLOSURE RESCUE SCAMS AND
                              LOAN MODIFICATION FRAUD.

        (a) Study.--The Comptroller General of the United States shall
    conduct a study of the current inter-agency efforts of the Secretary of
    the Treasury, the Secretary of Housing and Urban Development, the
    Attorney General, and the Federal Trade Commission to crackdown on
    mortgage foreclosure rescue scams and loan modification fraud in order
    to advise the Congress to the risks and vulnerabilities of emerging
    schemes in the loan modification arena.
        (b) Report.--
                (1) In general.--The Comptroller General shall submit a
            report to the Congress on the study conducted under subsection
            (a) containing such recommendations for legislative and
            administrative actions as the Comptroller General may determine
            to be appropriate in addition to the recommendations required
            under paragraph (2).
                (2) Specific topics.--The report made under paragraph (1)
            shall include--
                        (A) an evaluation of the effectiveness of the inter-
                    agency task force current efforts to combat mortgage
                    foreclosure rescue scams and loan modification fraud
                    scams;
                        (B) specific recommendations on agency or
                    legislative action that are essential to properly
                    protect homeowners from mortgage foreclosure rescue
                    scams and loan modification fraud scams; and
                        (C) the adequacy of financial resources that the
                    Federal Government is allocating to--
                              (i) crackdown on loan modification and
                          foreclosure rescue scams; and
                              (ii) the education of homeowners about
                          fraudulent scams relating to loan modification and
                          foreclosure rescues.
    SEC. 1493. REPORTING OF MORTGAGE DATA BY STATE.

        (a) In General.--Section 104(a) of the Helping Families Save Their
    Homes Act of 2009 (division A of Public Law 111-22) <<NOTE: 12
    USC 1715z-25.>>  is amended--

    [[Page 124 STAT. 2207]]

                (1) in paragraph (2), by striking ``resulting'' and
            inserting ``in each State that result'';
                (2) in paragraph (3), by inserting ``each State for'' after
            ``modifications in''; and
                (3) in paragraph (4), by inserting ``in each State'' after
            ``total number of loans''.

        (b) Conforming Amendment.--Section 104(b)(1)(A) of such Act is
    amended by adding at the end the following
    sentence: <<NOTE: Deadline.>>  ``Not later than 60 days after the date
    of the enactment of the Dodd-Frank Wall Street Reform and Consumer
    Protection Act, the Comptroller of the Currency and the Director of the
    Office of Thrift Supervision shall update such requirements to reflect
    amendments made to this section by such Act.''.
    SEC. 1494. STUDY OF EFFECT OF DRYWALL PRESENCE ON FORECLOSURES.

        (a) Study.--The Secretary of Housing and Urban Development, in
    consultation with the Secretary of the Treasury, shall conduct a study
    of the effect on residential mortgage loan foreclosures of--
                (1) the presence in residential structures subject to such
            mortgage loans of drywall that was imported from China during
            the period beginning with 2004 and ending at the end of 2007;
            and
                (2) the availability of property insurance for residential
            structures in which such drywall is present.

        (b) Report.--Not later than the expiration of the 120-day period
    beginning on the date of the enactment of this Act, the Secretary of
    Housing and Urban Development shall submit to the Congress a report on
    the study conducted under subsection (a) containing its findings,
    conclusions, and recommendations.
    SEC. 1495. <<NOTE: 15 USC 1601 note.>> DEFINITION.

        For purposes of this title, the term ``designated transfer date''
    means the date established under section 1062 of this Act.
    SEC. 1496. EMERGENCY MORTGAGE RELIEF.

        (a) Emergency Homeowners' Relief Fund.-- <<NOTE: Effective date. 12
    USC 2706 note.>> Effective October 1, 2010, and notwithstanding any
    other provision of law, there is hereby made available to the Secretary
    of Housing and Urban Development such sums as are necessary to provide
    $1,000,000,000 in assistance through the Emergency Homeowners' Relief
    Fund, which such Secretary shall establish pursuant to section 107 of
    the Emergency Housing Act of 1975 (12 U.S.C. 2706), as such Act is
    amended by this section, for use for emergency mortgage assistance in
    accordance with title I of such Act.

        (b) Reauthorization of Emergency Mortgage Relief Program.--Title I
    of the Emergency Housing Act of 1975 is amended--
                (1) in section 103 (12 U.S.C. 2702)--
                        (A) in paragraph (2)--
                              (i) by striking ``have indicated'' and all
                          that follows through ``regulation of the holder''
                          and insert ``have certified'';
                              (ii) by striking ``(such as the volume of
                          delinquent loans in its portfolio)''; and
                              (iii) by striking ``, except that such
                          statement'' and all that follows through
                          ``purposes of this title''; and

    [[Page 124 STAT. 2208]]

                        (B) in paragraph (4), by inserting ``or medical
                    conditions'' after ``adverse economic conditions'';
                (2) in section 104 (12 U.S.C. 2703)--
                        (A) in subsection (b), by striking ``, but such
                    assistance'' and all that follows through the period at
                    the end and inserting the
                    following: <<NOTE: Determination.>>  ``. The amount of
                    assistance provided to a homeowner under this title
                    shall be an amount that the Secretary determines is
                    reasonably necessary to supplement such amount as the
                    homeowner is capable of contributing toward such
                    mortgage payment, except that the aggregate amount of
                    such assistance provided for any homeowner shall not
                    exceed $50,000.'';
                        (B) in subsection (d), by striking ``interest on a
                    loan or advance'' and all that follows through the end
                    of the subsection and inserting the following: ``(1) the
                    rate of interest on any loan or advance of credit
                    insured under this title shall be fixed for the life of
                    the loan or advance of credit and shall not exceed the
                    rate of interest that is generally charged for mortgages
                    on single-family housing insured by the Secretary of
                    Housing and Urban Development under title II of the
                    National Housing Act at the time such loan or advance of
                    credit is made, and (2) no interest shall be charged on
                    interest which is deferred on a loan or advance of
                    credit made under this title. In establishing rates,
                    terms and conditions for loans or advances of credit
                    made under this title, the Secretary shall take into
                    account a homeowner's ability to repay such loan or
                    advance of credit.''; and
                        (C) in subsection (e), by inserting after the period
                    at the end of the first sentence the following: ``Any
                    eligible homeowner who receives a grant or an advance of
                    credit under this title may repay the loan in full,
                    without penalty, by lump sum or by installment payments
                    at any time before the loan becomes due and payable.'';
                (3) in section 105 (12 U.S.C. 2704)--
                        (A) by striking subsection (b);
                        (B) in subsection (e)--
                              (i) by inserting ``and emergency mortgage
                          relief payments made under section 106'' after
                          ``insured under this section''; and
                              (ii) by striking ``$1,500,000,000 at any one
                          time'' and inserting ``$3,000,000,000'';
                        (C) by redesignating subsections (c), (d), and (e)
                    as subsections (b), (c), and (d), respectively; and
                        (D) by adding at the end the following new
                    subsection:

        ``(e) <<NOTE: Guidelines. Procedures.>> The Secretary shall
    establish underwriting guidelines or procedures to allocate amounts made
    available for loans and advances insured under this section and for
    emergency relief payments made under section 106 based on the likelihood
    that a mortgagor will be able to resume mortgage payments, pursuant to
    the requirement under section 103(5).'';
                (4) in <<NOTE: 12 USC 2706.>> section 107--
                        (A) by striking ``(a)''; and
                        (B) by striking subsection (b);
                (5) in section 108 (12 U.S.C. 2707), by adding at the end
            the following new subsection:

    [[Page 124 STAT. 2209]]

        ``(d) Coverage of Existing Programs.-- <<NOTE: Determination.>> The
    Secretary shall allow funds to be administered by a State that has an
    existing program that is determined by the Secretary to provide
    substantially similar assistance to homeowners. After such determination
    is made such State shall not be required to modify such program to
    comply with the provisions of this title.'';
                (6) in section 109 (12 U.S.C. 2708)--
                        (A) in the section heading, by striking
                    ``authorization and'';
                        (B) by striking subsection (a);
                        (C) by striking ``(b)''; and
                        (D) by striking ``1977'' and inserting ``2011'';
                (7) by striking sections 110, 111, and 113 (12 U.S.C. 2709,
            2710, 2712); and
                (8) by redesignating section 112 (12 U.S.C. 2711) as section
            110.
    SEC. 1497. <<NOTE: 42 USC 5301 note.>> ADDITIONAL ASSISTANCE FOR
                              NEIGHBORHOOD STABILIZATION PROGRAM.

        (a) In General.-- <<NOTE: Effective date. State and local
    governments.>> Effective October 1, 2010, out of funds in the Treasury
    not otherwise appropriated, there is hereby made available to the
    Secretary of Housing and Urban Development $1,000,000,000, and the
    Secretary of Housing and Urban Development shall use such amounts for
    assistance to States and units of general local government for the
    redevelopment of abandoned and foreclosed homes, in accordance with the
    same provisions applicable under the second undesignated paragraph under
    the heading ``Community Planning and Development--Community Development
    Fund'' in title XII of division A of the American Recovery and
    Reinvestment Act of 2009 (Public Law 111-5; 123 Stat. 217) to amounts
    made available under such second undesignated paragraph, except as
    follows:
                (1) Notwithstanding the matter of such second undesignated
            paragraph that precedes the first proviso, amounts made
            available by this section shall remain available until expended.
                (2) The 3rd, 4th, 5th, 6th, 7th, and 15th provisos of such
            second undesignated paragraph shall not apply to amounts made
            available by this section.
                (3) Amounts made available by this section shall be
            allocated based on a funding formula for such amounts
            established by the Secretary in accordance with section 2301(b)
            of the Housing and Economic Recovery Act of 2008 (42 U.S.C. 5301
            note), except that--
                        (A) <<NOTE: Deadline.>> notwithstanding paragraph
                    (2) of such section 2301(b), the formula shall be
                    established not later than 30 days after the date of the
                    enactment of this Act;
                        (B) notwithstanding such section 2301(b), each State
                    shall receive, at a minimum, not less than 0.5 percent
                    of funds made available under this section;
                        (C) the Secretary may establish a minimum grant
                    amount for direct allocations to units of general local
                    government located within a State, which shall not
                    exceed $1,000,000;
                        (D) <<NOTE: Procedures.>> each State and local
                    government receiving grant amounts shall establish
                    procedures to create preferences

    [[Page 124 STAT. 2210]]

                    for the development of affordable rental housing for
                    properties assisted with amounts made available by this
                    section; and
                        (E) the Secretary may use not more than 2 percent of
                    the funds made available under this section for
                    technical assistance to grantees.
                (4) Paragraph (1) of section 2301(c) of the Housing and
            Economic Recovery Act of 2008 shall not apply to amounts made
            available by this section.
                (5) <<NOTE: Applicability.>> The fourth proviso from the end
            of such second undesignated paragraph shall be applied to
            amounts made available by this section by substituting ``2013''
            for ``2012''.
                (6) <<NOTE: Definition.>>  Notwithstanding section 2301(a)
            of the Housing and Economic Recovery Act of 2008, the term
            ``State'' means any State, as defined in section 102 of the
            Housing and Community Development Act of 1974 (42 U.S.C. 5302),
            and the District of Columbia, for purposes of this section and
            this title, as applied to amounts made available by this
            section.
                (7)(A) <<NOTE: Election violations.>> None of the amounts
            made available by this section shall be distributed to--
                        (i) any organization which has been convicted for a
                    violation under Federal law relating to an election for
                    Federal office; or
                        (ii) any organization which employs applicable
                    individuals.
                (B) <<NOTE: Definition.>>  In this paragraph, the term
            ``applicable individual'' means an individual who--
                        (i) is--
                              (I) employed by the organization in a
                          permanent or temporary capacity;
                              (II) contracted or retained by the
                          organization; or
                              (III) acting on behalf of, or with the express
                          or apparent authority of, the organization; and
                        (ii) has been convicted for a violation under
                    Federal law relating to an election for Federal office.
                (8) An eligible entity receiving a grant under this section
            shall, to the maximum extent feasible, provide for the hiring of
            employees who reside in the vicinity, as such term is defined by
            the Secretary, of projects funded under this section or contract
            with small businesses that are owned and operated by persons
            residing in the vicinity of such projects.

        (b) Additional Amendments.--
                (1) <<NOTE: 42 USC 5301 note.>>  Section 2301.--Section
            2301(f)(3)(A)(ii) of the Housing and Economic Recovery Act of
            2008 (42 U.S.C. 5301(f)(3)(A)(ii))--
                        (A) is amended by striking ``for the purchase and
                    redevelopment of abandoned and foreclosed upon homes or
                    residential properties that will be used''; and
                        (B) <<NOTE: Applicability.>> shall apply with
                    respect to any unexpended or unobligated balances,
                    including recaptured and reallocated funds made
                    available under this Act, section 2301 of the Housing
                    and Economic Recovery Act of 2008 (42 U.S.C. 5301), and
                    the heading ``Community Planning and Development--
                    Community Development Fund'' in title XII of division A
                    of the American Recovery and Reinvestment Act of 2009
                    (Public Law 111-5; 123 Stat. 217).

    [[Page 124 STAT. 2211]]

                (2) Notice of foreclosure.--For any amounts made available
            under this section, under division B, title III of the Housing
            and Economic Recovery Act of 2008 (42 U.S.C. 5301), or under the
            heading ``Community Planning and Development--Community
            Development Fund'' in title XII of division A of the American
            Recovery and Reinvestment Act of 2009 (Public Law 111-5; 123
            Stat. 217), the date of a notice of foreclosure shall be deemed
            to be the date on which complete title to a property is
            transferred to a successor entity or person as a result of an
            order of a court or pursuant to provisions in a mortgage, deed
            of trust, or security deed.
    SEC. 1498. <<NOTE: Grants. 12 USC 1701x-2.>> LEGAL ASSISTANCE FOR
                              FORECLOSURE-RELATED ISSUES.

        (a) Establishment.--The Secretary of Housing and Urban Development
    (hereafter in this section referred to as the ``Secretary'') shall
    establish a program for making grants for providing a full range of
    foreclosure legal assistance to low- and moderate-income homeowners and
    tenants related to home ownership preservation, home foreclosure
    prevention, and tenancy associated with home foreclosure.
        (b) Competitive Allocation.-- <<NOTE: States and local
    organizations.>> The Secretary shall allocate amounts made available for
    grants under this section to State and local legal organizations on the
    basis of a competitive process. For purposes of this subsection ``State
    and local legal organizations'' are those State and local organizations
    whose primary business or mission is to provide legal assistance.

        (c) Priority to Certain Areas.--In allocating amounts in accordance
    with subsection (b), the Secretary shall give priority consideration to
    State and local legal organizations that are operating in the 125
    metropolitan statistical areas (as that term is defined by the Director
    of the Office of Management and Budget) with the highest home
    foreclosure rates.
        (d) Legal Assistance.--
                (1) In general.--Any State or local legal organization that
            receives financial assistance pursuant to this section may use
            such amounts only to assist--
                        (A) homeowners of owner-occupied homes with
                    mortgages in default, in danger of default, or subject
                    to or at risk of foreclosure; and
                        (B) tenants at risk of or subject to eviction as a
                    result of foreclosure of the property in which such
                    tenant resides.
                (2) Commence use within 90 days.--Any State or local legal
            organization that receives financial assistance pursuant to this
            section shall begin using any financial assistance received
            under this section within 90 days after receipt of the
            assistance.
                (3) Prohibition on class actions.--No funds provided to a
            State or local legal organization under this section may be used
            to support any class action litigation.
                (4) Limitation on legal assistance.--Legal assistance funded
            with amounts provided under this section shall be limited to
            mortgage-related default, eviction, or foreclosure proceedings,
            without regard to whether such foreclosure is judicial or
            nonjudicial.
                (5) Effective date.--Notwithstanding any other provision of
            this Act, this subsection shall take effect on the date of the
            enactment of this Act.

    [[Page 124 STAT. 2212]]

        (e) Limitation on Distribution of Assistance.--
                (1) In general.--None of the amounts made available under
            this section shall be distributed to--
                        (A) <<NOTE: Election violations.>> any organization
                    which has been convicted for a violation under Federal
                    law relating to an election for Federal office; or
                        (B) any organization which employs applicable
                    individuals.
                (2) Definition of applicable individuals.--In this
            subsection, the term ``applicable individual'' means an
            individual who--
                        (A) is--
                              (i) employed by the organization in a
                          permanent or temporary capacity;
                              (ii) contracted or retained by the
                          organization; or
                              (iii) acting on behalf of, or with the express
                          or apparent authority of, the organization; and
                        (B) has been convicted for a violation under Federal
                    law relating to an election for Federal office.

        (f) Authorization of Appropriations.--There are authorized to be
    appropriated to the Secretary $35,000,000 for each of fiscal years 2011
    through 2012 for grants under this section.

                       TITLE XV--MISCELLANEOUS PROVISIONS

    SEC. 1501. RESTRICTIONS ON USE OF UNITED STATES FUNDS FOR FOREIGN
                              GOVERNMENTS; PROTECTION OF AMERICAN
                              TAXPAYERS.

        The Bretton Woods Agreements Act (22 U.S.C. 286 et seq.) is amended
    by adding at the end the following:
    ``SEC. 68. <<NOTE: 22 USC 286tt.>> RESTRICTIONS ON USE OF UNITED
                          STATES FUNDS FOR FOREIGN GOVERNMENTS;
                          PROTECTION OF AMERICAN TAXPAYERS.

        ``(a) In General.--The Secretary of the Treasury shall instruct the
    United States Executive Director at the International Monetary Fund--
                ``(1) to evaluate, prior to consideration by the Board of
            Executive Directors of the Fund , any proposal submitted to the
            Board for the Fund to make a loan to a country if--
                        ``(A) the amount of the public debt of the country
                    exceeds the gross domestic product of the country as of
                    the most recent year for which such information is
                    available; and
                        ``(B) the country is not eligible for assistance
                    from the International Development Association.
                ``(2) Opposition to loans unlikely to be repaid in full.--If
            any such evaluation indicates that the proposed loan is not
            likely to be repaid in full, the Secretary of the Treasury shall
            instruct the United States Executive Director at the Fund to use
            the voice and vote of the United States to oppose the proposal.

        ``(b) Reports to Congress.--Within 30 days after the Board of
    Executive Directors of the Fund approves a proposal described in
    subsection (a), and annually thereafter by June 30, for the

    [[Page 124 STAT. 2213]]

    duration of any program approved under such proposals, the Secretary of
    the Treasury shall report in writing to the Committee on Financial
    Services of the House of Representatives and the Committee on Foreign
    Relations and the Committee on Banking, Housing, and Urban Affairs of
    the Senate assessing the likelihood that loans made pursuant to such
    proposals will be repaid in full, including--
                ``(1) the borrowing country's current debt status,
            including, to the extent possible, its maturity structure,
            whether it has fixed or floating rates, whether it is indexed,
            and by whom it is held;
                ``(2) the borrowing country's external and internal
            vulnerabilities that could potentially affect its ability to
            repay; and
                ``(3) the borrowing country's debt management strategy.''.
    SEC. 1502. <<NOTE: 15 USC 78m note.>> CONFLICT MINERALS.

        (a) Sense of Congress on Exploitation and Trade of Conflict Minerals
    Originating in the Democratic Republic of the Congo.--It is the sense of
    Congress that the exploitation and trade of conflict minerals
    originating in the Democratic Republic of the Congo is helping to
    finance conflict characterized by extreme levels of violence in the
    eastern Democratic Republic of the Congo, particularly sexual- and
    gender-based violence, and contributing to an emergency humanitarian
    situation therein, warranting the provisions of section 13(p) of the
    Securities Exchange Act of 1934, as added by subsection (b).
        (b) Disclosure Relating to Conflict Minerals Originating in the
    Democratic Republic of the Congo.--Section 13 of the Securities Exchange
    Act of 1934 (15 U.S.C. 78m), as amended by this Act, is amended by
    adding at the end the following new subsection:
        ``(p) Disclosures Relating to Conflict Minerals Originating in the
    Democratic Republic of the Congo.--
                ``(1) Regulations.--
                        ``(A) In general.-- <<NOTE: Deadlines. Effective
                    date. Reports.>> Not later than 270 days after the date
                    of the enactment of this subsection, the Commission
                    shall promulgate regulations requiring any person
                    described in paragraph (2) to disclose annually,
                    beginning with the person's first full fiscal year that
                    begins after the date of promulgation of such
                    regulations, whether conflict minerals that are
                    necessary as described in paragraph (2)(B), in the year
                    for which such reporting is required, did originate in
                    the Democratic Republic of the Congo or an adjoining
                    country and, in cases in which such conflict minerals
                    did originate in any such country, submit to the
                    Commission a report that includes, with respect to the
                    period covered by the report--
                              ``(i) a description of the measures taken by
                          the person to exercise due diligence on the source
                          and chain of custody of such minerals, which
                          measures shall include an independent private
                          sector audit of such report submitted through the
                          Commission that is conducted in accordance with
                          standards established by the Comptroller General
                          of the United States, in accordance with rules
                          promulgated by the Commission, in consultation
                          with the Secretary of State; and

    [[Page 124 STAT. 2214]]

                              ``(ii) a description of the products
                          manufactured or contracted to be manufactured that
                          are not DRC conflict free (`DRC conflict free' is
                          defined to mean the products that do not contain
                          minerals that directly or indirectly finance or
                          benefit armed groups in the Democratic Republic of
                          the Congo or an adjoining country), the entity
                          that conducted the independent private sector
                          audit in accordance with clause (i), the
                          facilities used to process the conflict minerals,
                          the country of origin of the conflict minerals,
                          and the efforts to determine the mine or location
                          of origin with the greatest possible specificity.
                        ``(B) Certification.--The person submitting a report
                    under subparagraph (A) shall certify the audit described
                    in clause (i) of such subparagraph that is included in
                    such report. Such a certified audit shall constitute a
                    critical component of due diligence in establishing the
                    source and chain of custody of such minerals.
                        ``(C) Unreliable determination.--If a report
                    required to be submitted by a person under subparagraph
                    (A) relies on a determination of an independent private
                    sector audit, as described under subparagraph (A)(i), or
                    other due diligence processes previously determined by
                    the Commission to be unreliable, the report shall not
                    satisfy the requirements of the regulations promulgated
                    under subparagraph (A)(i).
                        ``(D) DRC conflict free.--For purposes of this
                    paragraph, a product may be labeled as `DRC conflict
                    free' if the product does not contain conflict minerals
                    that directly or indirectly finance or benefit armed
                    groups in the Democratic Republic of the Congo or an
                    adjoining country.
                        ``(E) Information available to the public.--
                    <<NOTE: Web posting.>> Each person described under
                    paragraph (2) shall make available to the public on the
                    Internet website of such person the information
                    disclosed by such person under subparagraph (A).
                ``(2) Person described.--A person is described in this
            paragraph if--
                        ``(A) the person is required to file reports with
                    the Commission pursuant to paragraph (1)(A); and
                        ``(B) conflict minerals are necessary to the
                    functionality or production of a product manufactured by
                    such person.
                ``(3) Revisions and waivers.--
            <<NOTE: President. Determination.>> The Commission shall revise
            or temporarily waive the requirements described in paragraph (1)
            if the President transmits to the Commission a determination
            that--
                        ``(A) such revision or waiver is in the national
                    security interest of the United States and the President
                    includes the reasons therefor; and
                        ``(B) <<NOTE: Publication.>> establishes a date, not
                    later than 2 years after the initial publication of such
                    exemption, on which such exemption shall expire.
                ``(4) Termination of disclosure requirements.--
            <<NOTE: President. Determination. Certification.>> The
            requirements of paragraph (1) shall terminate on the date on
            which the President determines and certifies to the appropriate
            congressional committees, but in no case earlier than

    [[Page 124 STAT. 2215]]

            the date that is one day after the end of the 5-year period
            beginning on the date of the enactment of this subsection, that
            no armed groups continue to be directly involved and benefitting
            from commercial activity involving conflict minerals.
                ``(5) Definitions.--For purposes of this subsection, the
            terms `adjoining country', `appropriate congressional
            committees', `armed group', and `conflict mineral' have the
            meaning given those terms under section 1502 of the Dodd-Frank
            Wall Street Reform and Consumer Protection Act.''.

        (c) Strategy and Map to Address Linkages Between Conflict Minerals
    and Armed Groups.--
                (1) Strategy.--
                        (A) In general.-- <<NOTE: Deadline.>> Not later than
                    180 days after the date of the enactment of this Act,
                    the Secretary of State, in consultation with the
                    Administrator of the United States Agency for
                    International Development, shall submit to the
                    appropriate congressional committees a strategy to
                    address the linkages between human rights abuses, armed
                    groups, mining of conflict minerals, and commercial
                    products.
                        (B) Contents.--The strategy required by subparagraph
                    (A) shall include the following:
                              (i) A plan to promote peace and security in
                          the Democratic Republic of the Congo by supporting
                          efforts of the Government of the Democratic
                          Republic of the Congo, including the Ministry of
                          Mines and other relevant agencies, adjoining
                          countries, and the international community, in
                          particular the United Nations Group of Experts on
                          the Democratic Republic of Congo, to--
                                        (I) monitor and stop commercial
                                    activities involving the natural
                                    resources of the Democratic Republic of
                                    the Congo that contribute to the
                                    activities of armed groups and human
                                    rights violations in the Democratic
                                    Republic of the Congo; and
                                        (II) develop stronger governance and
                                    economic institutions that can
                                    facilitate and improve transparency in
                                    the cross-border trade involving the
                                    natural resources of the Democratic
                                    Republic of the Congo to reduce
                                    exploitation by armed groups and promote
                                    local and regional development.
                              (ii) A plan to provide guidance to commercial
                          entities seeking to exercise due diligence on and
                          formalize the origin and chain of custody of
                          conflict minerals used in their products and on
                          their suppliers to ensure that conflict minerals
                          used in the products of such suppliers do not
                          directly or indirectly finance armed conflict or
                          result in labor or human rights violations.
                              (iii) A description of punitive measures that
                          could be taken against individuals or entities
                          whose commercial activities are supporting armed
                          groups and human rights violations in the
                          Democratic Republic of the Congo.
                (2) Map.--
                        (A) In general.-- <<NOTE: Deadline.>> Not later than
                    180 days after the date of the enactment of this Act,
                    the Secretary of State shall, in accordance with the
                    recommendation of the United

    [[Page 124 STAT. 2216]]

                    Nations Group of Experts on the Democratic Republic of
                    the Congo in their December 2008 report--
                              (i) produce a map of mineral-rich zones, trade
                          routes, and areas under the control of armed
                          groups in the Democratic Republic of the Congo and
                          adjoining countries based on data from multiple
                          sources, including--
                                        (I) the United Nations Group of
                                    Experts on the Democratic Republic of
                                    the Congo;
                                        (II) the Government of the
                                    Democratic Republic of the Congo, the
                                    governments of adjoining countries, and
                                    the governments of other Member States
                                    of the United Nations; and
                                        (III) local and international
                                    nongovernmental organizations;
                              (ii) <<NOTE: Public information.>> make such
                          map available to the public; and
                              (iii) provide to the appropriate congressional
                          committees an explanatory note describing the
                          sources of information from which such map is
                          based and the identification, where possible, of
                          the armed groups or other forces in control of the
                          mines depicted.
                        (B) Designation.--The map required under
                    subparagraph (A) shall be known as the ``Conflict
                    Minerals Map'', and mines located in areas under the
                    control of armed groups in the Democratic Republic of
                    the Congo and adjoining countries, as depicted on such
                    Conflict Minerals Map, shall be known as ``Conflict Zone
                    Mines''.
                        (C) Updates.-- <<NOTE: Deadline.>> The Secretary of
                    State shall update the map required under subparagraph
                    (A) not less frequently than once every 180 days until
                    the date on which the disclosure requirements under
                    paragraph (1) of section 13(p) of the Securities
                    Exchange Act of 1934, as added by subsection (b),
                    terminate in accordance with the provisions of paragraph
                    (4) of such section 13(p).
                        (D) Publication in federal register.--The Secretary
                    of State shall add minerals to the list of minerals in
                    the definition of conflict minerals under section 1502,
                    as appropriate. <<NOTE: Notice. Deadline.>> The
                    Secretary shall publish in the Federal Register notice
                    of intent to declare a mineral as a conflict mineral
                    included in such definition not later than one year
                    before such declaration.

        (d) Reports.--
                (1) Baseline report.--Not later than 1 year after the date
            of the enactment of this Act and annually thereafter until the
            termination of the disclosure requirements under section 13(p)
            of the Securities Exchange Act of 1934, the Comptroller General
            of the United States shall submit to appropriate congressional
            committees a report that includes an assessment of the rate of
            sexual- and gender-based violence in war-torn areas of the
            Democratic Republic of the Congo and adjoining countries.
                (2) Regular report on effectiveness.--Not later than 2 years
            after the date of the enactment of this Act and annually
            thereafter, the Comptroller General of the United States shall
            submit to the appropriate congressional committees a report that
            includes the following:

    [[Page 124 STAT. 2217]]

                        (A) An assessment of the effectiveness of section
                    13(p) of the Securities Exchange Act of 1934, as added
                    by subsection (b), in promoting peace and security in
                    the Democratic Republic of the Congo and adjoining
                    countries.
                        (B) A description of issues encountered by the
                    Securities and Exchange Commission in carrying out the
                    provisions of such section 13(p).
                        (C)(i) A general review of persons described in
                    clause (ii) and whether information is publicly
                    available about--
                              (I) the use of conflict minerals by such
                          persons; and
                              (II) whether such conflict minerals originate
                          from the Democratic Republic of the Congo or an
                          adjoining country.
                        (ii) A person is described in this clause if--
                              (I) the person is not required to file reports
                          with the Securities and Exchange Commission
                          pursuant to section 13(p)(1)(A) of the Securities
                          Exchange Act of 1934, as added by subsection (b);
                          and
                              (II) conflict minerals are necessary to the
                          functionality or production of a product
                          manufactured by such person.
                (3) Report on private sector auditing.--Not later than 30
            months after the date of the enactment of this Act, and annually
            thereafter, the Secretary of Commerce shall submit to the
            appropriate congressional committees a report that includes the
            following:
                        (A) An assessment of the accuracy of the independent
                    private sector audits and other due diligence processes
                    described under section 13(p) of the Securities Exchange
                    Act of 1934.
                        (B) Recommendations for the processes used to carry
                    out such audits, including ways to--
                              (i) improve the accuracy of such audits; and
                              (ii) establish standards of best practices.
                        (C) A listing of all known conflict mineral
                    processing facilities worldwide.

        (e) Definitions.--For purposes of this section:
                (1) Adjoining country.--The term ``adjoining country'', with
            respect to the Democratic Republic of the Congo, means a country
            that shares an internationally recognized border with the
            Democratic Republic of the Congo.
                (2) Appropriate congressional committees.--The term
            ``appropriate congressional committees'' means--
                        (A) the Committee on Appropriations, the Committee
                    on Foreign Affairs, the Committee on Ways and Means, and
                    the Committee on Financial Services of the House of
                    Representatives; and
                        (B) the Committee on Appropriations, the Committee
                    on Foreign Relations, the Committee on Finance, and the
                    Committee on Banking, Housing, and Urban Affairs of the
                    Senate.
                (3) Armed group.--The term ``armed group'' means an armed
            group that is identified as perpetrators of serious human rights
            abuses in the annual Country Reports on Human Rights Practices
            under sections 116(d) and 502B(b) of the Foreign Assistance Act
            of 1961 (22 U.S.C. 2151n(d) and 2304(b)) relating

    [[Page 124 STAT. 2218]]

            to the Democratic Republic of the Congo or an adjoining country.
                (4) Conflict mineral.--The term ``conflict mineral'' means--
                        (A) columbite-tantalite (coltan), cassiterite, gold,
                    wolframite, or their derivatives; or
                        (B) any other mineral or its derivatives determined
                    by the Secretary of State to be financing conflict in
                    the Democratic Republic of the Congo or an adjoining
                    country.
                (5) Under the control of armed groups.--The term ``under the
            control of armed groups'' means areas within the Democratic
            Republic of the Congo or adjoining countries in which armed
            groups--
                        (A) physically control mines or force labor of
                    civilians to mine, transport, or sell conflict minerals;
                        (B) tax, extort, or control any part of trade routes
                    for conflict minerals, including the entire trade route
                    from a Conflict Zone Mine to the point of export from
                    the Democratic Republic of the Congo or an adjoining
                    country; or
                        (C) tax, extort, or control trading facilities, in
                    whole or in part, including the point of export from the
                    Democratic Republic of the Congo or an adjoining
                    country.
    SEC. 1503. <<NOTE: 15 USC 78m-2.>> REPORTING REQUIREMENTS
                              REGARDING COAL OR OTHER MINE SAFETY.

        (a) Reporting Mine Safety Information.--Each issuer that is required
    to file reports pursuant to section 13(a) or 15(d) of the Securities
    Exchange Act of 1934 (15 U.S.C. 78m, 78o) and that is an operator, or
    that has a subsidiary that is an operator, of a coal or other mine shall
    include, in each periodic report filed with the Commission under the
    securities laws on or after the date of enactment of this Act, the
    following information for the time period covered by such report:
                (1) For each coal or other mine of which the issuer or a
            subsidiary of the issuer is an operator--
                        (A) the total number of violations of mandatory
                    health or safety standards that could significantly and
                    substantially contribute to the cause and effect of a
                    coal or other mine safety or health hazard under section
                    104 of the Federal Mine Safety and Health Act of 1977
                    (30 U.S.C. 814) for which the operator received a
                    citation from the Mine Safety and Health Administration;
                        (B) the total number of orders issued under section
                    104(b) of such Act (30 U.S.C. 814(b));
                        (C) the total number of citations and orders for
                    unwarrantable failure of the mine operator to comply
                    with mandatory health or safety standards under section
                    104(d) of such Act (30 U.S.C. 814(d));
                        (D) the total number of flagrant violations under
                    section 110(b)(2) of such Act (30 U.S.C. 820(b)(2));
                        (E) the total number of imminent danger orders
                    issued under section 107(a) of such Act (30 U.S.C.
                    817(a));
                        (F) the total dollar value of proposed assessments
                    from the Mine Safety and Health Administration under
                    such Act (30 U.S.C. 801 et seq.); and
                        (G) the total number of mining-related fatalities.

    [[Page 124 STAT. 2219]]

                (2) A list of such coal or other mines, of which the issuer
            or a subsidiary of the issuer is an operator, that receive
            written notice from the Mine Safety and Health Administration
            of--
                        (A) a pattern of violations of mandatory health or
                    safety standards that are of such nature as could have
                    significantly and substantially contributed to the cause
                    and effect of coal or other mine health or safety
                    hazards under section 104(e) of such Act (30 U.S.C.
                    814(e)); or
                        (B) the potential to have such a pattern.
                (3) Any pending legal action before the Federal Mine Safety
            and Health Review Commission involving such coal or other mine.

        (b) Reporting Shutdowns and Patterns of Violations.--
    Beginning <<NOTE: Effective date.>> on and after the date of enactment
    of this Act, each issuer that is an operator, or that has a subsidiary
    that is an operator, of a coal or other mine shall file a current report
    with the Commission on Form 8-K (or any successor form) disclosing the
    following regarding each coal or other mine of which the issuer or
    subsidiary is an operator:
                (1) The receipt of an imminent danger order issued under
            section 107(a) of the Federal Mine Safety and Health Act of 1977
            (30 U.S.C. 817(a)).
                (2) The receipt of written notice from the Mine Safety and
            Health Administration that the coal or other mine has--
                        (A) a pattern of violations of mandatory health or
                    safety standards that are of such nature as could have
                    significantly and substantially contributed to the cause
                    and effect of coal or other mine health or safety
                    hazards under section 104(e) of such Act (30 U.S.C.
                    814(e)); or
                        (B) the potential to have such a pattern.

        (c) Rule of Construction.--Nothing in this section shall be
    construed to affect any obligation of a person to make a disclosure
    under any other applicable law in effect before, on, or after the date
    of enactment of this Act.
        (d) Commission Authority.--
                (1) Enforcement.--A violation by any person of this section,
            or any rule or regulation of the Commission issued under this
            section, shall be treated for all purposes in the same manner as
            a violation of the Securities Exchange Act of 1934 (15 U.S.C.
            78a et seq.) or the rules and regulations issued thereunder,
            consistent with the provisions of this section, and any such
            person shall be subject to the same penalties, and to the same
            extent, as for a violation of such Act or the rules or
            regulations issued thereunder.
                (2) Rules and regulations.--The Commission is authorized to
            issue such rules or regulations as are necessary or appropriate
            for the protection of investors and to carry out the purposes of
            this section.

        (e) Definitions.--In this section--
                (1) the terms ``issuer'' and ``securities laws'' have the
            meaning given the terms in section 3 of the Securities Exchange
            Act of 1934 (15 U.S.C. 78c);
                (2) the term ``coal or other mine'' means a coal or other
            mine, as defined in section 3 of the Federal Mine Safety and
            Health Act of 1977 (30 U.S.C. 802), that is subject to the
            provisions of such Act (30 U.S.C. 801 et seq.); and

    [[Page 124 STAT. 2220]]

                (3) the term ``operator'' has the meaning given the term in
            section 3 of the Federal Mine Safety and Health Act of 1977 (30
            U.S.C. 802).

        (f) Effective Date.--This section shall take effect on the day that
    is 30 days after the date of enactment of this Act.
    SEC. 1504. DISCLOSURE OF PAYMENTS BY RESOURCE EXTRACTION ISSUERS.

        Section 13 of the Securities Exchange Act of 1934 (15 U.S.C. 78m),
    as amended by this Act, is amended by adding at the end the following:
        ``(q) Disclosure of Payments by Resource Extraction Issuers.--
                ``(1) Definitions.--In this subsection--
                        ``(A) the term `commercial development of oil,
                    natural gas, or minerals' includes exploration,
                    extraction, processing, export, and other significant
                    actions relating to oil, natural gas, or minerals, or
                    the acquisition of a license for any such activity, as
                    determined by the Commission;
                        ``(B) the term `foreign government' means a foreign
                    government, a department, agency, or instrumentality of
                    a foreign government, or a company owned by a foreign
                    government, as determined by the Commission;
                        ``(C) the term `payment'--
                              ``(i) means a payment that is--
                                        ``(I) made to further the commercial
                                    development of oil, natural gas, or
                                    minerals; and
                                        ``(II) not de minimis; and
                              ``(ii) includes taxes, royalties, fees
                          (including license fees), production entitlements,
                          bonuses, and other material benefits, that the
                          Commission, consistent with the guidelines of the
                          Extractive Industries Transparency Initiative (to
                          the extent practicable), determines are part of
                          the commonly recognized revenue stream for the
                          commercial development of oil, natural gas, or
                          minerals;
                        ``(D) the term `resource extraction issuer' means an
                    issuer that--
                              ``(i) is required to file an annual report
                          with the Commission; and
                              ``(ii) engages in the commercial development
                          of oil, natural gas, or minerals;
                        ``(E) the term `interactive data format' means an
                    electronic data format in which pieces of information
                    are identified using an interactive data standard; and
                        ``(F) the term `interactive data standard' means
                    standardized list of electronic tags that mark
                    information included in the annual report of a resource
                    extraction issuer.
                ``(2) Disclosure.--
                        ``(A) Information required.--
                    <<NOTE: Deadline. Regulations. Reports.>> Not later than
                    270 days after the date of enactment of the Dodd-Frank
                    Wall Street Reform and Consumer Protection Act, the
                    Commission shall issue final rules that require each
                    resource extraction issuer to include in an annual
                    report of the resource extraction issuer information
                    relating to any payment made by the resource extraction
                    issuer, a subsidiary of the resource

    [[Page 124 STAT. 2221]]

                    extraction issuer, or an entity under the control of the
                    resource extraction issuer to a foreign government or
                    the Federal Government for the purpose of the commercial
                    development of oil, natural gas, or minerals,
                    including--
                              ``(i) the type and total amount of such
                          payments made for each project of the resource
                          extraction issuer relating to the commercial
                          development of oil, natural gas, or minerals; and
                              ``(ii) the type and total amount of such
                          payments made to each government.
                        ``(B) Consultation in rulemaking.--In issuing rules
                    under subparagraph (A), the Commission may consult with
                    any agency or entity that the Commission determines is
                    relevant.
                        ``(C) Interactive data format.--The rules issued
                    under subparagraph (A) shall require that the
                    information included in the annual report of a resource
                    extraction issuer be submitted in an interactive data
                    format.
                        ``(D) Interactive data standard.--
                              ``(i) In general.--The rules issued under
                          subparagraph (A) shall establish an interactive
                          data standard for the information included in the
                          annual report of a resource extraction issuer.
                              ``(ii) Electronic tags.--The interactive data
                          standard shall include electronic tags that
                          identify, for any payments made by a resource
                          extraction issuer to a foreign government or the
                          Federal Government--
                                        ``(I) the total amounts of the
                                    payments, by category;
                                        ``(II) the currency used to make the
                                    payments;
                                        ``(III) the financial period in
                                    which the payments were made;
                                        ``(IV) the business segment of the
                                    resource extraction issuer that made the
                                    payments;
                                        ``(V) the government that received
                                    the payments, and the country in which
                                    the government is located;
                                        ``(VI) the project of the resource
                                    extraction issuer to which the payments
                                    relate; and
                                        ``(VII) such other information as
                                    the Commission may determine is
                                    necessary or appropriate in the public
                                    interest or for the protection of
                                    investors.
                        ``(E) International transparency efforts.--To the
                    extent practicable, the rules issued under subparagraph
                    (A) shall support the commitment of the Federal
                    Government to international transparency promotion
                    efforts relating to the commercial development of oil,
                    natural gas, or minerals.
                        ``(F) Effective date.--With respect to each resource
                    extraction issuer, the final rules issued under
                    subparagraph (A) shall take effect on the date on which
                    the resource extraction issuer is required to submit an
                    annual report relating to the fiscal year of the
                    resource extraction issuer that ends not earlier than 1
                    year after the date on which the Commission issues final
                    rules under subparagraph (A).
                ``(3) Public availability of information.--

    [[Page 124 STAT. 2222]]

                        ``(A) In general.-- <<NOTE: Web posting.>> To the
                    extent practicable, the Commission shall make available
                    online, to the public, a compilation of the information
                    required to be submitted under the rules issued under
                    paragraph (2)(A).
                        ``(B) Other information.--Nothing in this paragraph
                    shall require the Commission to make available online
                    information other than the information required to be
                    submitted under the rules issued under paragraph (2)(A).
                ``(4) Authorization of appropriations.--There are authorized
            to be appropriated to the Commission such sums as may be
            necessary to carry out this subsection.''.
    SEC. 1505. STUDY BY THE COMPTROLLER GENERAL.

        (a) In General.-- <<NOTE: Deadline. Reports.>> Not later than 1 year
    after the date of enactment of this Act, the Comptroller General of the
    United States shall issue a report assessing the relative independence,
    effectiveness, and expertise of presidentially appointed inspectors
    general and inspectors general of designated Federal entities, as such
    term is defined under section 8G of the Inspector General Act of 1978,
    and the effects on independence of the amendments to the Inspector
    General Act of 1978 made by this Act.

        (b) Report.--The report required by subsection (a) shall be issued
    to the Committees on Financial Services and Oversight and Government
    Reform of the House of Representatives and the Committees on Banking,
    Housing, and Urban Affairs and Homeland Security and Governmental
    Affairs of the Senate.
    SEC. 1506. STUDY ON CORE DEPOSITS AND BROKERED DEPOSITS.

        (a) Study.--The Corporation shall conduct a study to evaluate--
                (1) the definition of core deposits for the purpose of
            calculating the insurance premiums of banks;
                (2) the potential impact on the Deposit Insurance Fund of
            revising the definitions of brokered deposits and core deposits
            to better distinguish between them;
                (3) an assessment of the differences between core deposits
            and brokered deposits and their role in the economy and banking
            sector of the United States;
                (4) the potential stimulative effect on local economies of
            redefining core deposits; and
                (5) the competitive parity between large institutions and
            community banks that could result from redefining core deposits.

        (b) Report to Congress.--Not later than 1 year after the date of
    enactment of this Act, the Corporation shall submit to the Committee on
    Banking, Housing, and Urban Affairs of the Senate and the Committee on
    Financial Services of the House of Representatives a report on the
    results of the study under subsection (a) that includes legislative
    recommendations, if any, to address concerns arising in connection with
    the definitions of core deposits and brokered deposits.

    [[Page 124 STAT. 2223]]

                        TITLE XVI--SECTION 1256 CONTRACTS

    SEC. 1601. CERTAIN SWAPS, ETC., NOT TREATED AS SECTION 1256
                              CONTRACTS.

        (a) In General.--Subsection (b) of section 1256 of the Internal
    Revenue Code of 1986 <<NOTE: 26 USC 1256.>> is amended--
                (1) by redesignating paragraphs (1) through (5) as
            subparagraphs (A) through (E), respectively, and by indenting
            such subparagraphs (as so redesignated) accordingly,
                (2) by striking ``For purposes of'' and inserting the
            following:
                ``(1) In general.--For purposes of'', and
                (3) by striking the last sentence and inserting the
            following new paragraph:
                ``(2) Exceptions.--The term `section 1256 contract' shall
            not include--
                        ``(A) any securities futures contract or option on
                    such a contract unless such contract or option is a
                    dealer securities futures contract, or
                        ``(B) any interest rate swap, currency swap, basis
                    swap, interest rate cap, interest rate floor, commodity
                    swap, equity swap, equity index swap, credit default
                    swap, or similar agreement.''.

        (b) <<NOTE: 26 USC 1256 note.>>  Effective Date.--The amendments
    made by this section shall apply to taxable years beginning after the
    date of the enactment of this Act.

        Approved July 21, 2010.

    LEGISLATIVE HISTORY--H.R. 4173 (S. 3217):
    ---------------------------------------------------------------------------

    HOUSE REPORTS: No. 111-517 (Comm. of Conference).
    SENATE REPORTS: No. 111-176 (Comm. on Banking, Housing, and Urban
    Affairs) accompanying S. 3217.
    CONGRESSIONAL RECORD:
                                                            Vol. 155 (2009):
                                        Dec. 9-11, considered and passed
                                            House.
                                                            Vol. 156 (2010):
                                        May 20, considered and passed
                                            Senate, amended, in lieu of
                                            S. 3217.
                                        June 30, House agreed to conference
                                            report.
                                        July 13, 15, Senate considered and
                                            agreed to conference report.
    DAILY COMPILATION OF PRESIDENTIAL DOCUMENTS (2010):
                July 21, Presidential remarks.

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