    [United States Statutes at Large, Volume 124, 111th Congress, 2nd Session]
    [From the U.S. Government Publishing Office, www.gpo.gov]

    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. <>

    Be it enacted by the Senate and House of Representatives of the
    United States of America in Congress assembled, <>
    SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

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

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

    TITLE I--FINANCIAL STABILITY

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

    Subtitle A--Financial Stability Oversight Council

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

    Subtitle B--Office of Financial Research

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

    [[Page 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 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 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 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 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 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 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 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 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 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. <> 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 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 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 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 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. <> SEVERABILITY.

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

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

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

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

    [[Page 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-- <> FINANCIAL STABILITY
    SEC. 101. <> SHORT TITLE.

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

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

    [[Page 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 <> Board of
    Governors shall establish, by regulation, the requirements for
    determining if a company is predominantly engaged in financial
    activities, as defined in subsection (a)(6).

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

    Subtitle A--Financial Stability Oversight Council

    SEC. 111. <> FINANCIAL STABILITY OVERSIGHT
    COUNCIL ESTABLISHED.

    (a) Establishment.--Effective <> on the date
    of enactment of this Act, there is established the Financial Stability
    Oversight Council.

    (b) Membership.--The Council shall consist of the following members:
    (1) Voting members.--The voting members, who shall each have
    1 vote on the Council shall be--

    [[Page 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 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 <> Federal Advisory Committee Act (5
    U.S.C. App.) shall not apply to the Council, or to any special advisory,
    technical, or professional committee appointed by the Council, except
    that, if an advisory, technical, or professional committee has one or
    more members who are not employees of or affiliated with the United
    States Government, the Council shall publish a list of the names of the
    members of such committee.

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

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

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

    [[Page 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 <> recommendations to the Board of Governors
    concerning the establishment of heightened prudential
    standards for risk-based capital, leverage, liquidity,
    contingent capital, resolution plans and credit exposure
    reports, concentration limits, enhanced public
    disclosures, and overall risk management for nonbank
    financial companies and large, interconnected bank
    holding companies supervised by the Board of Governors;
    (J) identify systemically important financial market
    utilities and payment, clearing, and settlement
    activities (as that term is defined in title VIII);
    (K) <>  make
    recommendations to primary financial regulatory agencies
    to apply new or heightened standards and safeguards for
    financial activities or practices that could create or
    increase risks of significant liquidity, credit, or
    other problems spreading among bank holding companies,
    nonbank financial companies, and United States financial
    markets;

    [[Page 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) <> 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 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 <> 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 1398]]

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

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

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

    [[Page 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 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.--
    <> Subsections (d) through (h) shall apply
    to determinations made by the Council pursuant to paragraph (1)
    in the same manner as such subsections apply to nonbank
    financial companies.
    (5) Covered financial activities.--For purposes of this
    subsection, the term ``financial activities''--
    (A) <> means activities that are
    financial in nature (as defined in section 4(k) of the
    Bank Holding Company Act of 1956);
    (B) includes the ownership or control of one or more
    insured depository institutions; and
    (C) does not include internal financial activities
    conducted for the company or any affiliate thereof,
    including internal treasury, investment, and employee
    benefit functions.
    (6) Only financial activities subject to prudential
    supervision.--Nonfinancial activities of the company shall not

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

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

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

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

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

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

    [[Page 1403]]

    SEC. 114. <> REGISTRATION OF NONBANK FINANCIAL
    COMPANIES SUPERVISED BY THE BOARD OF
    GOVERNORS.

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

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

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

    [[Page 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 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 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. <> REPORTS.

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

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

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

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

    [[Page 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. <> COUNCIL FUNDING.

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

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

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

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

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

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

    [[Page 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 <> Council shall
    consult with the primary financial regulatory agencies and
    provide notice to the public and opportunity for comment for any
    proposed recommendation that the primary financial regulatory
    agencies apply new or heightened standards and safeguards for a
    financial activity or practice.
    (2) Criteria.--The new or heightened standards and
    safeguards for a financial activity or practice recommended
    under paragraph (1)--
    (A) shall take costs to long-term economic growth
    into account; and
    (B) may include prescribing the conduct of the
    activity or practice in specific ways (such as by
    limiting its scope, or applying particular capital or
    risk management requirements to the conduct of the
    activity) or prohibiting the activity or practice.

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

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

    [[Page 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 <> primary financial regulatory
    agency that has imposed standards under this section
    shall promulgate regulations to establish a procedure
    under which entities under its jurisdiction may appeal a
    determination by such agency under this paragraph that
    standards imposed under this section should remain in
    effect.
    SEC. 121. <> MITIGATION OF RISKS TO FINANCIAL
    STABILITY.

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

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

    [[Page 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. <> GAO AUDIT OF COUNCIL.

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

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

    [[Page 1412]]

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

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

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

    Subtitle B--Office of Financial Research

    SEC. 151. <> DEFINITIONS.

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

    [[Page 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. <> OFFICE OF FINANCIAL RESEARCH
    ESTABLISHED.

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

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

    [[Page 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 <> 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 1415]]

    SEC. 153. <> PURPOSE AND DUTIES OF THE OFFICE.

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

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

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

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

    [[Page 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 <> shall notify the Council of any such
    additional reports provided to Congress.

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

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

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

    [[Page 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 <> Data Center shall prepare and publish, in
    a manner that is easily accessible to the public--
    (i) a financial company reference database;
    (ii) a financial instrument reference
    database; and
    (iii) formats and standards for Office data,
    including standards for reporting financial
    transaction and position data to the Office.
    (B) Confidentiality.--The Data Center shall not
    publish any confidential data under subparagraph (A).
    (3) Information security.--The Director shall ensure that
    data collected and maintained by the Data Center are kept secure
    and protected against unauthorized disclosure.
    (4) Catalog of financial entities and instruments.--The Data
    Center shall maintain a catalog of the financial entities and
    instruments reported to the Office.
    (5) Availability to the council and member agencies.--The
    Data Center shall make data collected and maintained by the Data
    Center available to the Council and member agencies, as
    necessary to support their regulatory responsibilities.
    (6) Other authority.--The <> Office shall, after consultation with the member
    agencies, provide certain data to financial industry
    participants and to the general public to increase market
    transparency and facilitate research on the financial system, to
    the extent that intellectual property rights are not violated,
    business confidential information is properly protected, and the
    sharing of such information poses no significant threats to the
    financial system of the United States.

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

    [[Page 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. <> 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 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 <> the 2-year
    period following the date of enactment of this Act, the Board of
    Governors shall provide to the Office an amount sufficient to cover the
    expenses of the Office.

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

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

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

    [[Page 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. <> 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 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) <> provide reasonable
    notice to, and consult with, the primary financial regulatory
    agency for any subsidiary before requiring a report or
    commencing an examination of such subsidiary under this section;
    and
    (2) avoid duplication of examination activities, reporting
    requirements, and requests for information, to the fullest
    extent possible.
    SEC. 162. <> ENFORCEMENT.

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

    [[Page 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. <> 163. ACQUISITIONS.

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

    [[Page 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. <> 164. PROHIBITION AGAINST MANAGEMENT
    INTERLOCKS BETWEEN CERTAIN FINANCIAL
    COMPANIES.

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

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

    [[Page 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 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 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 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 <> later than 18 months
    after the date of enactment of this Act, the Board of Governors
    and the Corporation shall jointly issue final rules implementing
    this subsection.

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

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

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

    [[Page 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 <> 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 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 <> Board of Governors shall issue final rules to carry out
    this subsection, not later than 1 year after the transfer date,
    to take effect not later than 15 months after the transfer date.

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

    [[Page 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) <> require companies
    subject to this paragraph to publish a summary of
    the results of the required stress tests.

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

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

    [[Page 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. <> EARLY REMEDIATION REQUIREMENTS.

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

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

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

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

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

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

    [[Page 1435]]

    SEC. 170. <> SAFE HARBOR.

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

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

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

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

    [[Page 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 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 1438]]

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

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

    [[Page 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 <> conducting a special
    examination of a nonbank financial company supervised by
    the Board of Governors or a bank holding company
    described in section 165(a) of the Financial Stability
    Act of 2010, the Corporation shall review any available
    and acceptable resolution plan that the company has
    submitted in accordance with section 165(d) of that Act,
    consistent with the nonbinding effect of such plan, and
    available reports of examination, and shall coordinate
    to the maximum extent practicable with the Board of
    Governors, in order to minimize duplicative or
    conflicting examinations.''.

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

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

    [[Page 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 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 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. <> INTERNATIONAL
    POLICY COORDINATION.

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

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

    TITLE II--ORDERLY LIQUIDATION AUTHORITY

    SEC. 201. <> DEFINITIONS.

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

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

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

    [[Page 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 <> 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 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 <> to clause (ii), the
    United States Court of Appeals for the District of
    Columbia Circuit shall have jurisdiction of an
    appeal of a final decision of the Court filed by
    the Secretary or a covered financial company,
    through its board of directors, notwithstanding
    section 210(a)(1)(A)(i), not later than 30 days
    after the date on which the decision of the Court
    is rendered or deemed rendered under this
    subsection.
    (ii) Condition of jurisdiction.--The Court of
    Appeals shall have jurisdiction of an appeal by a
    covered financial company only if the covered
    financial company did not acquiesce or consent to
    the appointment of a receiver by the Secretary
    under paragraph (1)(A).
    (iii) Expedition.--The Court of Appeals shall
    consider any appeal under this subparagraph on an
    expedited basis.
    (iv) Scope of review.--For an appeal taken
    under this subparagraph, review shall be limited
    to whether the determination of the Secretary that
    a covered financial company is in default or in
    danger of default and satisfies the definition of
    a financial company under section 201(a)(11) is
    arbitrary and capricious.
    (B) Appeal to the supreme court.--
    (i) In <> general.--A
    petition for a writ of certiorari to review a
    decision of the Court of Appeals under
    subparagraph (A) may be filed by the Secretary or
    the covered financial company, through its board
    of directors, notwithstanding section
    210(a)(1)(A)(i), with the Supreme Court of the
    United States, not later than 30 days after the
    date of the final decision of the Court of
    Appeals, and the Supreme Court shall have
    discretionary jurisdiction to review such
    decision.
    (ii) Written statement.--
    In <> the event of a petition
    under clause (i), the Court of Appeals shall
    immediately provide for the record a written
    statement of each reason for its decision.
    (iii) Expedition.--The Supreme Court shall
    consider any petition under this subparagraph on
    an expedited basis.
    (iv) Scope of review.--Review by the Supreme
    Court under this subparagraph shall be limited to
    whether the determination of the Secretary that
    the covered financial company is in default or in
    danger of default and satisfies the definition of
    a financial company under section 201(a)(11) is
    arbitrary and capricious.

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

    [[Page 1447]]

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

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

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

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

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

    [[Page 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 <> 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 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. <> 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 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 1452]]

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

    [[Page 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) <> which report the Corporation shall
    publish on an online website maintained by the
    Corporation, subject to maintaining appropriate
    confidentiality.
    (B) Amendments.--The <> Corporation
    shall, on a timely basis, not less frequently than
    quarterly, amend or revise and resubmit the reports
    prepared under this paragraph, as necessary.
    (C) Congressional testimony.--
    The <> Corporation and the primary
    financial regulatory agency, if any, of the financial
    company for which the Corporation was appointed receiver
    under this title shall appear before Congress, if
    requested, not later than 30 days after the date on
    which the Corporation first files the reports required
    under subparagraph (A).
    (4) Default or in danger of default.--For purposes of this
    title, a financial company shall be considered to be in default
    or in danger of default if, as determined in accordance with
    subsection (b)--
    (A) a case has been, or likely will promptly be,
    commenced with respect to the financial company under
    the Bankruptcy Code;
    (B) the financial company has incurred, or is likely
    to incur, losses that will deplete all or substantially
    all of its capital, and there is no reasonable prospect
    for the company to avoid such depletion;
    (C) the assets of the financial company are, or are
    likely to be, less than its obligations to creditors and
    others; or
    (D) the financial company is, or is likely to be,
    unable to pay its obligations (other than those subject
    to a bona fide dispute) in the normal course of
    business.
    (5) GAO review.--The Comptroller General of the United
    States shall review and report to Congress on any determination
    under subsection (b), that results in the appointment of the
    Corporation as receiver, including--
    (A) the basis for the determination;
    (B) the purpose for which any action was taken
    pursuant thereto;
    (C) the likely effect of the determination and such
    action on the incentives and conduct of financial
    companies and their creditors, counterparties, and
    shareholders; and

    [[Page 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 <> authority.--
    Notwithstanding paragraph (1), with respect to a covered
    financial company described in paragraph (1), if, after the end
    of the 60-day period beginning on the date on which a
    determination is made under section 202(a) with respect to such
    company, the appropriate regulatory agency has not filed the
    appropriate judicial action in the appropriate State court to
    place such company into orderly liquidation under the laws and
    requirements of the State, the Corporation shall have the
    authority to stand in the place of the appropriate regulatory
    agency and file the appropriate judicial action in the
    appropriate State court to place such company into orderly
    liquidation under the laws and requirements of the State.
    SEC. 204. <> ORDERLY LIQUIDATION OF COVERED
    FINANCIAL COMPANIES.

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

    [[Page 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 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. <> 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 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 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 1459]]

    SEC. 206. <> MANDATORY TERMS AND CONDITIONS
    FOR ALL ORDERLY LIQUIDATION ACTIONS.

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

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

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

    [[Page 1460]]

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

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

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

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

    [[Page 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 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 <> Corporation,
    as receiver for a covered financial company, shall
    report on claims, as set forth in section 203(c)(3).
    Subject to paragraph (4) of this subsection, the
    Corporation, as receiver for a covered financial
    company, shall determine claims in accordance with the
    requirements of this subsection and regulations
    prescribed under section 209.
    (B) Notice requirements.--
    The <> Corporation, as
    receiver for a covered financial company, in any case
    involving the liquidation or winding up of the affairs
    of a covered financial company, shall--
    (i) promptly publish a notice to the creditors
    of the covered financial company to present their
    claims, together with proof, to the receiver by a
    date specified in the notice, which shall be not
    earlier than 90 days after the date of publication
    of such notice; and
    (ii) republish such notice 1 month and 2
    months, respectively, after the date of
    publication under clause (i).
    (C) Mailing required.--The Corporation as receiver
    shall mail a notice similar to the notice published
    under clause (i) or (ii) of subparagraph (B), at the
    time of such publication, to any creditor shown on the
    books and records of the covered financial company--
    (i) at the last address of the creditor
    appearing in such books;
    (ii) in any claim filed by the claimant; or
    (iii) upon <> discovery of
    the name and address of a claimant not appearing
    on the books and records of the covered financial
    company, not later than 30

    [[Page 1465]]

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

    [[Page 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 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) <> notify the
    claimant of the determination; and
    (iii) if the claim is disallowed, provide a
    statement of each reason for the disallowance and
    the procedure for obtaining a judicial
    determination.
    (C) Period for filing or renewing suit.--Any
    claimant who files a request for expedited relief shall
    be permitted to file suit (or continue a suit filed
    before the date of appointment of the Corporation as
    receiver seeking a determination of the rights of the
    claimant with respect to such security interest (or such
    security entitlement) after the earlier of--
    (i) the end of the 90-day period beginning on
    the date of the filing of a request for expedited
    relief; or
    (ii) the date on which the Corporation denies
    the claim or a portion thereof.
    (D) Statute <> of limitations.--
    If an action described in subparagraph (C) is not filed,
    or the motion to renew a previously filed suit is not
    made, before the end of the 30-day period beginning on
    the date on which such action

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

    [[Page 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 <> report prepared pursuant to subparagraph
    (B) and section 203(c)(3) shall be made available to the
    public by the Corporation.
    (D) Recordkeeping requirement.--
    (i) In general.--
    The <> Corporation shall
    prescribe such regulations and establish such
    retention schedules as are necessary to maintain
    the documents and records of the Corporation
    generated in exercising the authorities of this
    title and the records of a covered financial
    company for which the Corporation is appointed
    receiver, with due regard for--
    (I) the avoidance of duplicative
    record retention; and
    (II) the expected evidentiary needs
    of the Corporation as receiver for a
    covered financial company and the public
    regarding the records of covered
    financial companies.
    (ii) Retention of records.--Unless otherwise
    required by applicable Federal law or court order,
    the Corporation may not, at any time, destroy any
    records that are subject to clause (i).
    (iii) Records defined.--As used in this
    subparagraph, the terms ``records'' and ``records
    of a covered financial company'' mean any
    document, book, paper, map, photograph,
    microfiche, microfilm, computer or electronically-
    created record generated or maintained by the
    covered financial company in the course of and
    necessary to its transaction of business.

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

    [[Page 1476]]

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

    [[Page 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 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 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 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 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 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 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 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 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 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 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 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 <> 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 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 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 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 <> 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 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 <> 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 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 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 <> 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 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 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 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 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 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 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 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, <> in connection
    with any such approval a report on competitive factors from the
    Attorney General is required, the Federal agency responsible for
    such approval shall promptly notify the Attorney General of the
    proposed transaction and the Attorney General shall provide the
    required report within 10 days of the request.
    If <>  a notification is required under
    section 7A of the Clayton Act with respect to such transaction,
    the required waiting period shall end on the 15th day after the
    date on which the Attorney General and the Federal Trade
    Commission receive such notification, unless the waiting period
    is terminated earlier under section 7A(b)(2) of the Clayton Act,
    or extended under section 7A(e)(2) of that Act.
    (12) Duration of bridge <> financial company.--Subject to paragraphs (13) and (14),
    the status of a bridge financial company as such shall terminate
    at the end of the 2-year period following the date on which it
    was granted a charter. The Corporation may, in its discretion,
    extend the status of the bridge financial company as such for no
    more than 3 additional 1-year periods.
    (13) Termination of bridge financial company status.--The
    status of any bridge financial company as such shall terminate
    upon the earliest of--
    (A) the date of the merger or consolidation of the
    bridge financial company with a company that is not a
    bridge financial company;
    (B) at the election of the Corporation, the sale of
    a majority of the capital stock of the bridge financial
    company to a company other than the Corporation and
    other than another bridge financial company;
    (C) the sale of 80 percent, or more, of the capital
    stock of the bridge financial company to a person other
    than the Corporation and other than another bridge
    financial company;
    (D) at the election of the Corporation, either the
    assumption of all or substantially all of the
    liabilities of the bridge financial company by a company
    that is not a bridge financial company, or the
    acquisition of all or

    [[Page 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 <> 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 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 <> 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 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 <> 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 1505]]

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

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

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

    [[Page 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 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 <> 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 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 <> amount authorized under
    paragraph (6)(B) may be provided by the Secretary
    to the Corporation under paragraph (5), unless an
    agreement is in effect between the Secretary and
    the Corporation that--
    (I) provides a specific plan and
    schedule to achieve the repayment of the
    outstanding amount of any borrowing
    under paragraph (5); and
    (II) demonstrates that income to the
    Corporation from the liquidated assets
    of the covered financial company and
    assessments under subsection (o) will be
    sufficient to amortize the outstanding
    balance within the period established in
    the repayment schedule and pay the
    interest accruing on such balance within
    the time provided in subsection
    (o)(1)(B).
    (ii) Consultation with and report to
    congress.--The Secretary and the Corporation
    shall--
    (I) consult with the Committee on
    Banking, Housing, and Urban Affairs of
    the Senate and the Committee on
    Financial Services of the House of
    Representatives on the terms of any
    repayment schedule agreement; and
    (II) submit <> a copy of the repayment
    schedule agreement to the Committees
    described in subclause (I) before the
    end of the 30-day period beginning on
    the date on which any amount is provided

    [[Page 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 <> 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 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 <> 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 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 <> Corporation shall prescribe
    regulations to carry out this subsection. The
    Corporation shall

    [[Page 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 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 <> 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 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. <> MISCELLANEOUS PROVISIONS.

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

    [[Page 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 <> later than 6 months
    after the date of appointment of the Corporation as receiver
    under this title and every 6 months thereafter, the Inspector
    General of the Corporation shall conduct the audit and
    investigation described in paragraph (1).
    (3) Reports and testimony.--The Inspector General of the
    Corporation shall include in the semiannual reports required by
    section 5(a) of the Inspector General Act of 1978 (5 U.S.C.
    App.), a summary of the findings and evaluations under paragraph
    (1), and shall appear before the appropriate committees of
    Congress, if requested, to present each such report.
    (4) Funding.--
    (A) Initial funding.--The expenses of the Inspector
    General of the Corporation in carrying out this
    subsection shall be considered administrative expenses
    of the receivership.
    (B) Additional funding.--If the maximum amount
    available to the Corporation as receiver under this
    title is insufficient to enable the Inspector General of
    the Corporation to carry out the duties under this
    subsection, the Corporation shall pay such additional
    amounts from assessments imposed under section 210.
    (5) Termination of responsibilities.--The duties and
    responsibilities of the Inspector General of the Corporation
    under this subsection shall terminate 1 year after the date of
    termination of the receivership under this title.

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

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

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

    [[Page 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. <> BAN ON CERTAIN ACTIVITIES BY
    SENIOR EXECUTIVES AND DIRECTORS.

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

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

    [[Page 1518]]

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

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

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

    (a) Study Required.--The Council shall conduct a study evaluating
    the importance of maximizing United States taxpayer protections and
    promoting market discipline with respect to the treatment of fully
    secured creditors in the utilization of the orderly liquidation
    authority authorized by this Act. In carrying out such study, the
    Council shall--
    (1) not be prejudicial to current or past laws or
    regulations with respect to secured creditor treatment in a
    resolution process;
    (2) study the similarities and differences between the
    resolution mechanisms authorized by the Bankruptcy Code, the
    Federal Deposit Insurance Corporation Improvement Act of 1991,
    and the orderly liquidation authority authorized by this Act;
    (3) determine how various secured creditors are treated in
    such resolution mechanisms and examine how a haircut (of various
    degrees) on secured creditors could improve market discipline
    and protect taxpayers;
    (4) compare the benefits and dynamics of prudent lending
    practices by depository institutions in secured loans for
    consumers and small businesses to the lending practices of
    secured creditors to large, interconnected financial firms;
    (5) consider whether credit differs according to different
    types of collateral and different terms and timing of the
    extension of credit; 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 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 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 <> OF POWERS TO THE COMPTROLLER OF THE CURRENCY,
    THE CORPORATION, AND THE BOARD OF GOVERNORS
    SEC. 300. <> SHORT TITLE.

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

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

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

    Subtitle A--Transfer of Powers and Duties

    SEC. 311. <> TRANSFER DATE.

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

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

    [[Page 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 <> later than 270 days after the date of
    enactment of this Act, the Secretary shall publish in the
    Federal Register notice of any transfer date designated under
    paragraph (1).
    SEC. 312. <> POWERS AND DUTIES TRANSFERRED.

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

    [[Page 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 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. <> ABOLISHMENT.

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

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

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

    [[Page 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. <> DEPUTY COMPTROLLER FOR THE
    SUPERVISION AND EXAMINATION OF FEDERAL
    SAVINGS ASSOCIATIONS.

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

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

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

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

    [[Page 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 <> 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 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. <> REFERENCES IN FEDERAL LAW TO
    FEDERAL BANKING AGENCIES.

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

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

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

    [[Page 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 <> Date.--This section, and the
    amendments made by this section, shall take effect on the transfer date.

    [[Page 1528]]

    SEC. 319. <> CONTRACTING AND LEASING
    AUTHORITY.

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

    Subtitle B--Transitional Provisions

    SEC. 321. <> INTERIM USE OF FUNDS, PERSONNEL,
    AND PROPERTY OF THE OFFICE OF THRIFT
    SUPERVISION.

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

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

    [[Page 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. <> TRANSFER OF EMPLOYEES.

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

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

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

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

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

    [[Page 1531]]

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

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

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

    [[Page 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 <> plans
    continue.--During the 1-year period following the
    transfer date, each transferred employee may
    retain membership in any employee benefit program
    (other than a retirement benefit program) of the
    agency from which the employee was transferred
    under this title, including any dental, vision,
    long term care, or life insurance program to which
    the employee belonged on the day before the
    transfer date.
    (ii) Employer's contribution.--The Office of
    the Comptroller of the Currency or the
    Corporation, as appropriate, shall pay any
    employer cost required to extend coverage in the
    benefit program to the transferred employee as
    required under that program or negotiated
    agreements.
    (B) Dental, vision, or life insurance after first
    year.--If, <> after the 1-year
    period beginning on the transfer date, the Office of the
    Comptroller of the Currency or the Corporation
    determines that the Office of the Comptroller of the
    Currency or the Corporation, as the case may be, will
    not continue to participate in any dental, vision, or
    life insurance program of an agency from which an
    employee was transferred, a transferred employee who is
    a member of the program may, before the decision takes
    effect and without regard to any regularly scheduled
    open season, elect to enroll in--
    (i) the enhanced dental benefits program
    established under chapter 89A of title 5, United
    States Code;
    (ii) the enhanced vision benefits established
    under chapter 89B of title 5, United States Code;
    and
    (iii) the Federal Employees' Group Life
    Insurance Program established under chapter 87 of
    title 5, United States Code, without regard to any
    requirement of insurability.

    [[Page 1533]]

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

    [[Page 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 <> 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 1535]]

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

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

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

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

    [[Page 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. <> FUNDS TRANSFERRED.

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

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

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

    [[Page 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. <> CONTINUATION OF SERVICES.

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

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

    [[Page 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 <> 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 1539]]

    SEC. 332. ELIMINATION OF PROCYCLICAL ASSESSMENTS.

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

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

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

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

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

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

    [[Page 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 <> Date.--This section, and
    the amendments made by this section, shall take effect on the transfer
    date.

    Subtitle D--Other Matters

    SEC. <> 341. BRANCHING.

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

    [[Page 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. <> OFFICE OF MINORITY AND WOMEN
    INCLUSION.

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

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

    [[Page 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 <> 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 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 <> 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 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 <> amendments made by paragraph (1) shall take effect on
    December 31, 2010.
    (3) Prospective <> repeal.--Effective January 1, 2013, section 11(a)(1) of
    the Federal Deposit Insurance Act (12 U.S.C. 1821(a)(1)), as
    amended by paragraph (1), is amended--
    (A) in subparagraph (B)--
    (i) by striking ``deposit.--'' and all that
    follows through ``clause (ii), the net amount''
    and insert ``deposit.--The net amount''; and

    [[Page 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 <> date.--The
    amendments made by paragraph (1) shall take effect upon the date
    of the enactment of this Act
    (3) Prospective <> repeal.--Effective January 1, 2013, section 207(k)(1) of
    the Federal Credit Union Act (12 U.S.C. 1787(k)(1)), as amended
    by paragraph (1), is amended--
    (A) in subparagraph (A)--
    (i) by striking ``(i) net amount of insurance
    payable.--'' and all that follows through
    ``paragraph (2), the net amount'' and inserting
    ``Subject to the provisions of paragraph (2), the
    net amount''; and
    (ii) by striking clauses (ii) and (iii); and
    (B) in subparagraph (B), by striking ``subparagraph
    (A)(i)'' and inserting ``subparagraph (A)''.

    [[Page 1546]]

    Subtitle E--Technical and Conforming Amendments

    SEC. 351. <> EFFECTIVE DATE.

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

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

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

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

    [[Page 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 <> 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 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 <> 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 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 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 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 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 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 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 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 <> 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 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 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 <> adding at the end the
    following:

    [[Page 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 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 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 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 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 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 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 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 <> amended by striking ``Director'' and inserting ``a
    Federal banking agency''.
    SEC. 370. HOUSING ACT OF 1948.

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

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

    [[Page 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 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 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 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 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 <> OF ADVISERS TO HEDGE FUNDS AND OTHERS
    SEC. 401. <> SHORT TITLE.

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

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

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

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

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

    [[Page 1575]]

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

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

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

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

    [[Page 1576]]

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

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

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

    [[Page 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. <>  CUSTODY OF CLIENT ACCOUNTS.

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

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

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

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

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

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

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

    [[Page 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) <> submit a report to the
    Committee on Banking, Housing, and Urban Affairs of the Senate
    and the Committee on Financial Services of the House of
    Representatives on the results of such study, not later than 1
    year after the date of enactment of this Act.
    SEC. 417. COMMISSION STUDY AND REPORT ON SHORT SELLING.

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

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

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

    [[Page 1580]]

    SEC. 419. <>  TRANSITION
    PERIOD.

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

    TITLE V--INSURANCE

    Subtitle <>  A--Federal Insurance Office
    SEC. 501. SHORT TITLE.

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

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

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

    [[Page 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 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 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) <>  cause to be published in the
    Federal Register notice of the issue regarding the
    potential inconsistency or preemption, including a
    description of each State insurance measure at
    issue and any applicable covered agreement;
    ``(iv) <> provide interested
    parties a reasonable opportunity to submit written
    comments to the Office; and
    ``(v) consider any comments received.
    ``(B) Scope of review.--For purposes of this
    subsection, any determination of the Director regarding
    State insurance measures, and any preemption under
    paragraph (1) as a result of such determination, shall
    be limited

    [[Page 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 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 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 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 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) <> 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 1589]]

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

    Subtitle <>  B--State-Based Insurance Reform
    SEC. 511. SHORT TITLE.

    This subtitle may be cited as the ``Nonadmitted and Reinsurance
    Reform Act of 2010''.
    SEC. 512. <>  EFFECTIVE DATE.

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

    PART I--NONADMITTED INSURANCE

    SEC. 521. <> REPORTING, PAYMENT, AND
    ALLOCATION OF PREMIUM TAXES.

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

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

    [[Page 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. <> REGULATION OF NONADMITTED
    INSURANCE BY INSURED'S HOME STATE.

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

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

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

    [[Page 1591]]

    SEC. 525. <> STREAMLINED APPLICATION FOR
    COMMERCIAL PURCHASERS.

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

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

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

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

    [[Page 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) <> 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 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 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 1595]]

    PART II--REINSURANCE

    SEC. 531. <>  REGULATION OF CREDIT FOR
    REINSURANCE AND REINSURANCE AGREEMENTS.

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

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

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

    [[Page 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. <> RULE OF CONSTRUCTION.

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

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

    TITLE VI--IMPROVEMENTS TO <>  REGULATION OF BANK AND SAVINGS ASSOCIATION
    HOLDING COMPANIES AND DEPOSITORY INSTITUTIONS
    SEC. 601. SHORT TITLE.

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

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

    [[Page 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) <>  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 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 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 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 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) <> 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 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 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) <>  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 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) <>  Effective Date.--The amendments
    made by this section shall take effect on the transfer date.
    SEC. 605. ASSURING CONSISTENT OVERSIGHT OF PERMISSIBLE ACTIVITIES
    OF DEPOSITORY INSTITUTION SUBSIDIARIES OF
    HOLDING COMPANIES.

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

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

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

    [[Page 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 <>  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 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 <>  the 60-day period
    beginning on the date on which the Board receives a
    recommendation under paragraph (1), the Board does not take
    enforcement action against the nondepository institution
    subsidiary or provide a plan for supervisory or enforcement
    action that is acceptable to the appropriate Federal banking
    agency that made the recommendation pursuant to paragraph (1),
    such agency may take the recommended enforcement action against
    the nondepository institution subsidiary, in the same manner as
    if the nondepository institution subsidiary were an insured
    depository institution for which the agency was the appropriate
    Federal banking agency.

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

    [[Page 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) <>  Effective Date.--The amendment
    made by subsection (a) shall take effect on the transfer date.
    SEC. 606. REQUIREMENTS FOR FINANCIAL HOLDING COMPANIES TO REMAIN
    WELL CAPITALIZED AND WELL MANAGED.

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

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

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

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

    [[Page 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) <>  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 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) <>  the Board finds
    the exemption to be in the public interest and
    consistent with the purposes of this section, and
    notifies the Federal Deposit Insurance Corporation
    of such finding; and
    ``(ii) <>  before
    the end of the 60-day period beginning on the date
    on which the Federal Deposit Insurance Corporation
    receives notice of the finding under clause (i),
    the Federal Deposit Insurance Corporation does not
    object, in writing, to the finding, based on a
    determination that the exemption presents an
    unacceptable risk to the Deposit Insurance
    Fund.'';
    (iii) by striking the Board and inserting the
    following:
    ``(A) In general.--The Board''; and
    (iv) by adding at the end the following:
    ``(B) Additional exemptions.--
    ``(i) National banks.--The Comptroller of the
    Currency may, by order, exempt a transaction of a
    national bank from the requirements of this
    section if--
    ``(I) <> the
    Board and the Office of the Comptroller
    of the Currency jointly find the
    exemption to be in the public interest
    and consistent with the purposes of this
    section and notify the Federal Deposit
    Insurance Corporation of such finding;
    and
    ``(II) <>  before the end of the
    60-day period beginning on the date on
    which the Federal Deposit Insurance
    Corporation receives notice of the
    finding under subclause (I), the Federal
    Deposit Insurance Corporation does not
    object, in writing, to the finding,
    based on a determination that the
    exemption presents an unacceptable risk
    to the Deposit Insurance Fund.
    ``(ii) State banks.--The Federal Deposit
    Insurance Corporation may, by order, exempt a
    transaction of a State nonmember bank, and the
    Board may, by order, exempt a transaction of a
    State member bank, from the requirements of this
    section if--

    [[Page 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), <>  if the Board
    finds that an exemption or exclusion is in the public
    interest and is consistent with the purposes of this
    section, and notifies the Federal Deposit Insurance
    Corporation of such finding,''; and
    (B) in clause (ii), by striking the comma at the end
    and inserting a period; and
    (6) by adding at the end the following:
    ``(2) Exception.-- <> The Board
    may grant an exemption or exclusion under this subsection only
    if, during the 60-day period beginning on the date of receipt of
    notice of the finding from the Board under paragraph (1)(B), the
    Federal Deposit Insurance Corporation does not object, in
    writing, to such exemption or exclusion, based on a
    determination that the exemption presents an unacceptable risk
    to the Deposit Insurance Fund.''.

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

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

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

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

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

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

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

    [[Page 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) <> Effective Date.--The amendments made
    by this section shall take effect 1 year after the transfer date.
    SEC. 611. CONSISTENT TREATMENT OF DERIVATIVE TRANSACTIONS IN
    LENDING LIMITS.

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

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

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

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

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

    [[Page 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) <>  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 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) <>  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) <>  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 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. <>  SOURCE OF STRENGTH.

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

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

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

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

    (b) <>  Effective Date.--The amendments made
    by this section shall take effect on the transfer date.
    SEC. 618. <>  SECURITIES HOLDING COMPANIES.

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

    [[Page 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. <>  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 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 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.-- <> 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 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) <> Notice.--A capital requirement
    imposed under this subsection may not take effect earlier than
    180 days after the date on which a supervised securities holding
    company is provided notice of the capital requirement.

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

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

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

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

    [[Page 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 <>  and issuing
    regulations pursuant to this section, the
    appropriate Federal banking agencies, the
    Securities and Exchange Commission, and the
    Commodity Futures Trading Commission shall consult
    and coordinate with each other, as appropriate,
    for the purposes of assuring, to the extent
    possible, that such regulations are comparable and
    provide for consistent application and
    implementation of the applicable provisions of
    this section to avoid providing advantages or
    imposing disadvantages to the companies affected
    by this subsection and to protect the safety and
    soundness of banking entities and nonbank
    financial companies supervised by the Board.
    ``(iii) Council role.--The Chairperson of the
    Financial Stability Oversight Council shall be
    responsible for coordination of the regulations
    issued under this section.

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

    [[Page 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) <>  Additional capital during
    transition period.--Notwithstanding paragraph (2), on the date
    on which the rules are issued under subsection (b)(2), the
    appropriate Federal banking agencies, the Securities and
    Exchange Commission, and the Commodity Futures Trading
    Commission shall issue rules, as provided in subsection (b)(2),
    to impose additional capital requirements, and any other
    restrictions, as appropriate, on any equity, partnership, or
    ownership interest in or sponsorship of a hedge fund or private
    equity fund by a banking entity.
    ``(6) Special rulemaking.--Not later <>
    than 6 months after the date of enactment of this section, the
    Board shall 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 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 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 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 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) <>  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 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 1629]]

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

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

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

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

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

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

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

    [[Page 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) <>  Rulemaking.--Not later than 270 days
    after the date of enactment of this section, the Commission shall issue
    rules for the purpose of implementing subsection (a).

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

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

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

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

    [[Page 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) <>  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 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) <> 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 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 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 1637]]

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

    [[Page 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) <> Effective Date.--The amendment made
    by subsection (a) shall take effect on the transfer date.
    SEC. 626. INTERMEDIATE HOLDING COMPANIES.

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

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

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

    [[Page 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 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) <> 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 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 <>  VII--WALL STREET TRANSPARENCY AND ACCOUNTABILITY
    SEC. 701. <>  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. <>  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. <>  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 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 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) <> 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 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 <>  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 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 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) <> 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. <>  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 1647]]

    ``(h) <>  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. <> 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. <>  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) <>  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. <>  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 1648]]

    SEC. 716. <>  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 <>  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 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) <>  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 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 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. <>  SECURITIES-RELATED
    DERIVATIVES.

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

    [[Page 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. <>  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 1653]]

    Commission and the Commodity Futures Trading Commission.
    Any such notice shall state that notice has been made
    with both Commissions.
    (B) <>  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) <> 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) <> 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 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) <>  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 <>  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 <>  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. <>  STUDIES.

    (a) Study on Effects of Position Limits on Trading on Exchanges in
    the United States.--

    [[Page 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.-- <> 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 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.-- <> 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 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 <>
    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. <>  MEMORANDUM.

    (a)(1) <>  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 1658]]

    (2) Such memorandum and any subsequent amendments to the memorandum
    shall be promptly submitted to the appropriate committees of Congress.
    (b) <> 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 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 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 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 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 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) <>  Definition of
    substantial position.--For purposes of subparagraph (A),
    the Commission shall define

    [[Page 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 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 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 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 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 <>  general.--
    Foreign exchange swaps and foreign exchange
    forwards shall be considered swaps under this
    paragraph unless the Secretary makes a

    [[Page 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 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 <>  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 <>  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 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 <>  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 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 <>  (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) <>  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 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 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) <> 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. <>  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 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 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) <>
    The Commission shall provide at least a 30-day
    public comment period regarding any determination
    made under clause (i).
    ``(B) Swap submissions.--
    ``(i) <>  A derivatives
    clearing organization shall submit to the
    Commission each swap, or any group, category,
    type, or class of swaps that it plans to accept
    for clearing, and provide notice to its members
    (in a manner to be determined by the Commission)
    of the submission.
    ``(ii) Any swap or group, category, type, or
    class of swaps listed for clearing by a derivative
    clearing organization as of the date of enactment
    of this subsection shall be considered submitted
    to the Commission.
    ``(iii) <>  The
    Commission shall--
    ``(I) make available to the public
    submissions received under clauses (i)
    and (ii);
    ``(II) review each submission made
    under clauses (i) and (ii), and
    determine whether the swap, or group,
    category, type, or class of swaps
    described in the submission is required
    to be cleared; and
    ``(III) <>  provide at least a 30-day
    public comment period regarding its
    determination as to whether the clearing
    requirement under paragraph (1)(A) shall
    apply to the submission.
    ``(C) Deadline.--The Commission shall make its
    determination under subparagraph (B)(iii) not later than
    90 days after receiving a submission made under
    subparagraphs (B)(i) and (B)(ii), unless the submitting
    derivatives clearing organization agrees to an extension
    for the time limitation established under this
    subparagraph.

    [[Page 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) <>  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 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) <>  Rules.--Not later than 1
    year after the date of the enactment of the Wall Street
    Transparency and Accountability Act of 2010, the
    Commission shall adopt rules for reviewing, pursuant to
    this paragraph, a derivatives clearing organization's
    clearing of a swap, or a group, category, type, or class
    of swaps, that it has accepted for clearing.
    ``(4) Prevention of evasion.--
    ``(A) <>  In general.--The
    Commission shall prescribe rules under this subsection
    (and issue interpretations of rules prescribed under
    this subsection) as determined by the Commission to be
    necessary to prevent evasions of the mandatory clearing
    requirements under this Act.
    ``(B) Duty of commission to investigate and take
    certain actions.--To the extent the Commission finds
    that a particular swap, group, category, type, or class
    of swaps would otherwise be subject to mandatory
    clearing but no derivatives clearing organization has
    listed the swap, group, category, type, or class of
    swaps for clearing, the Commission shall--
    ``(i) investigate the relevant facts and
    circumstances;
    ``(ii) <>  within 30 days issue a
    public report containing the results of the
    investigation; and
    ``(iii) take such actions as the Commission
    determines to be necessary and in the public
    interest, which may include requiring the
    retaining of adequate margin or capital by parties
    to the swap, group, category, type, or class of
    swaps.
    ``(C) Effect on authority.--Nothing in this
    paragraph--
    ``(i) authorizes the Commission to adopt rules
    requiring a derivatives clearing organization to
    list for clearing a swap, group, category, type,
    or class of swaps if the clearing of the swap,
    group, category, type, or class of swaps would
    threaten the financial integrity of the
    derivatives clearing organization; and
    ``(ii) affects the authority of the Commission
    to enforce the open access provisions of paragraph
    (1)(B) with respect to a swap, group, category,
    type, or class of swaps that is listed for
    clearing by a derivatives clearing organization.

    [[Page 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) <>  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 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 <>  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 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 1682]]

    (c) <>  Grandfather Provisions.--
    (1) Legal certainty for certain transactions in exempt
    commodities.--Not <>  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) <>  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 <>
    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 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 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 <>  (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 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) <>  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 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 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) <>  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 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 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 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) <>  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) <>  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 1691]]

    ``(ii) <>  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) <>  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) <>  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 1692]]

    ``(M) Information-sharing.--Each derivatives
    clearing organization shall--
    ``(i) <>  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) <>  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) <>  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 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 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 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. <>  RULEMAKING ON CONFLICT OF
    INTEREST.

    (a) 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 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 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 1697]]

    ``(ii) <> to specify the
    criteria for determining what constitutes a large
    notional swap transaction (block trade) for
    particular markets and contracts;
    ``(iii) to specify the appropriate time delay
    for reporting large notional swap transactions
    (block trades) to the public; and
    ``(iv) that take into account whether the
    public disclosure will materially reduce market
    liquidity.
    ``(F) Timeliness of reporting.--Parties to a swap
    (including agents of the parties to a swap) shall be
    responsible for reporting swap transaction information
    to the appropriate registered entity in a timely manner
    as may be prescribed by the Commission.
    ``(G) Reporting of swaps to registered swap data
    repositories.--Each swap (whether cleared or uncleared)
    shall be reported to a registered swap data repository.
    ``(14) Semiannual and annual public reporting of aggregate
    swap data.--
    ``(A) In general.--In accordance with subparagraph
    (B), the Commission shall issue a written report on a
    semiannual and annual basis to make available to the
    public information relating to--
    ``(i) the trading and clearing in the major
    swap categories; and
    ``(ii) the market participants and
    developments in new products.
    ``(B) Use; consultation.--In preparing a report
    under subparagraph (A), the Commission shall--
    ``(i) use information from swap data
    repositories and derivatives clearing
    organizations; and
    ``(ii) consult with the Office of the
    Comptroller of the Currency, the Bank for
    International Settlements, and such other
    regulatory bodies as may be necessary.
    ``(C) Authority of the commission.--The Commission
    may, by rule, regulation, or order, delegate the public
    reporting responsibilities of the Commission under this
    paragraph in accordance with such terms and conditions
    as the Commission determines to be appropriate and in
    the public interest.''.
    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. <>  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 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 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 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) <>  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) <>  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 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 <>  (7 U.S.C. 6o-1) the following:
    ``SEC. 4r. <>  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 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. <>  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 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) <>  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. <>  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 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 <>
    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) <>  In general.--

    [[Page 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 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 <>  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 1707]]

    ``(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 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 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 <>  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 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 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 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 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) <>  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) <>  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) <>  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. <>  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 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) <>  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 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 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) <>  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) <>  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) <>  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) <>  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 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 <>  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 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) <>
    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 1718]]

    SEC. 734. DERIVATIVES TRANSACTION EXECUTION FACILITIES AND EXEMPT
    BOARDS OF TRADE.

    (a) <>  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) <>  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. <>  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 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 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) <>  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) <>  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 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) <>  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 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) <>  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 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) <>  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 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) <>  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 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) <>  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) <>  Effective Date.--This section and the
    amendments made by this section shall become effective on the date of
    the enactment of this section.

    [[Page 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 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) <>
    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) <>  the information
    that the foreign board of trade
    will make publicly available;
    ``(bb) the position limits
    that the foreign board of trade
    or foreign futures authority
    will adopt and enforce;
    ``(cc) the position
    reductions required to prevent
    manipulation, excessive
    speculation as described in
    section 4a, price distortion, or
    disruption of delivery or the
    cash settlement process; and
    ``(dd) any other area of
    interest expressed by the
    Commission to the foreign board
    of trade or foreign futures
    authority;
    ``(IV) provides information to the
    Commission regarding large trader
    positions in the agreement, contract, or
    transaction that is comparable to the
    large trader position information
    collected by the Commission for the 1 or
    more contracts against which the
    agreement, contract, or transaction
    traded on the foreign board of trade
    settles; and
    ``(V) <>  provides
    the Commission such information as is
    necessary to publish reports on
    aggregate

    [[Page 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) <>  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 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 <>  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. <> 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 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) <>  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 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) <>  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 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) <>  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) <>  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) <>  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) <>  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) <>  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 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) <>
    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 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) <>  Prohibition.--
    ``(I) In general.--Except as
    provided in subclause (II), a person
    described in subparagraph (B)(i)(II) for
    which there is a Federal regulatory
    agency shall not offer to, or enter into
    with, a person that is not an eligible
    contract participant, any agreement,
    contract, or transaction in foreign
    currency described in subparagraph
    (B)(i)(I) except pursuant to a rule or
    regulation of a Federal regulatory
    agency allowing the agreement, contract,
    or transaction under such terms and
    conditions as the Federal regulatory
    agency shall prescribe.
    ``(II) Effective date.--With regard
    to persons described in subparagraph
    (B)(i)(II) for which a Federal
    regulatory agency has issued a proposed
    rule concerning agreements, contracts,
    or transactions in foreign currency
    described in subparagraph (B)(i)(I)
    prior to the date of enactment of this
    subclause, subclause (I) shall take
    effect 90 days after the date of
    enactment of this subclause.
    ``(iii) Requirements of rules and
    regulations.--
    ``(I) In general.--The rules and
    regulations described in clause (ii)
    shall prescribe appropriate requirements
    with respect to--
    ``(aa) disclosure;
    ``(bb) recordkeeping;
    ``(cc) capital and margin;
    ``(dd) reporting;
    ``(ee) business conduct;
    ``(ff) documentation; and

    ``(gg) <>
    such other standards or
    requirements as the Federal
    regulatory agency shall
    determine to be necessary.
    ``(II) Treatment.--The rules or
    regulations described in clause (ii)
    shall treat all agreements, contracts,
    and transactions in foreign currency
    described in subparagraph (B)(i)(I), and
    all agreements, contracts, and
    transactions in foreign currency that
    are functionally or economically similar
    to agreements, contracts, or
    transactions described in subparagraph
    (B)(i)(I), similarly.''.

    [[Page 1735]]

    SEC. <>  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) <>  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) <>  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 1736]]

    ``(3) <>  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) <>  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) <>  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 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 <>  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 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 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. <>  COMMODITY WHISTLEBLOWER INCENTIVES
    AND PROTECTION.

    ``(a) Definitions.--In this section:

    [[Page 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) <>  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 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 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 <>  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 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 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 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 1746]]

    Financial Services of the House
    of Representatives; and
    ``(bb) <>
    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) <>  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 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 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 <>  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) <>  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 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 <>  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. <>
    INTERNATIONAL HARMONIZATION.

    (a) <>  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 1750]]

    appropriate in the public interest or for the protection of investors,
    swap counterparties, and security-based swap counterparties.

    (b) <>  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) <>  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 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) <>  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) <>  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 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 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) <>  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) <>  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 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) <>  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. <>  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 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 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 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 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 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) <>  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 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 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 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. <>  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) <>  The Commission
    shall provide at least a 30-day public comment period
    regarding any determination under subparagraph (A).
    ``(2) Swap submissions.--
    ``(A) <>  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) <>  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) <>  provide at
    least a 30-day public comment period regarding its
    determination whether the

    [[Page 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 <>  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 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 <>  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 <>  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) <>  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 1765]]

    ``(e) Reporting <>  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) <>  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 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 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 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 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. <>  SECURITY-BASED SWAP EXECUTION
    FACILITIES.

    ``(a) Registration.--

    [[Page 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 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) <>  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 <>  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 <>
    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) <>  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 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) <>  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) <>  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.
    ``(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 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) <>  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) <>  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 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. <>  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 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 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. <>  The definitions

    [[Page 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. <>  The Commission

    [[Page 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. <>  POSITION LIMITS AND POSITION
    ACCOUNTABILITY FOR SECURITY-BASED SWAPS
    AND LARGE TRADER REPORTING.

    ``(a) Position Limits.-- <> 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 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 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) <> 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 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 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) <>  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 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) <>  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 1784]]

    ``(II) <>
    include a certification that, under
    penalty of law, the compliance report is
    accurate and complete.
    ``(7) Core principles applicable to security-based swap data
    repositories.--
    ``(A) Antitrust considerations.--Unless necessary or
    appropriate to achieve the purposes of this title, the
    swap data repository shall not--
    ``(i) adopt any rule or take any action that
    results in any unreasonable restraint of trade; or
    ``(ii) impose any material anticompetitive
    burden on the trading, clearing, or reporting of
    transactions.
    ``(B) Governance arrangements.--Each security-based
    swap data repository shall establish governance
    arrangements that are transparent--
    ``(i) to fulfill public interest requirements;
    and
    ``(ii) to support the objectives of the
    Federal Government, owners, and participants.
    ``(C) Conflicts of interest.--Each security-based
    swap data repository shall--
    ``(i) <>  establish and
    enforce rules to minimize conflicts of interest in
    the decision-making process of the security-based
    swap data repository; and
    ``(ii) <>  establish a process
    for resolving any conflicts of interest described
    in clause (i).
    ``(D) Additional duties developed by commission.--
    ``(i) In general.--The Commission may develop
    1 or more additional duties applicable to
    security-based swap data repositories.
    ``(ii) Consideration of evolving standards.--
    In developing additional duties under subparagraph
    (A), the Commission may take into consideration
    any evolving standard of the United States or the
    international community.
    ``(iii) Additional duties for commission
    designees.--The Commission shall establish
    additional duties for any registrant described in
    section 13(m)(2)(C) in order to minimize conflicts
    of interest, protect data, ensure compliance, and
    guarantee the safety and security of the security-
    based swap data repository.
    ``(8) Required registration for security-based swap data
    repositories.--Any person that is required to be registered as a
    security-based swap data repository under this subsection shall
    register with the Commission, regardless of whether that person
    is also licensed under the Commodity Exchange Act as a swap data
    repository.
    ``(9) Rules.--The Commission shall adopt rules governing
    persons that are registered under this subsection.''.
    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 1785]]

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

    ``(a) Registration.--
    ``(1) Security-based swap dealers.--It shall be unlawful for
    any person to act as a security-based swap dealer unless the
    person is registered as a security-based swap dealer with the
    Commission.
    ``(2) Major security-based swap participants.--It shall be
    unlawful for any person to act as a major security-based swap
    participant unless the person is registered as a major security-
    based swap participant with the Commission.

    ``(b) Requirements.--
    ``(1) In general.--A person shall register as a security-
    based swap dealer or major security-based swap participant by
    filing a registration application with the Commission.
    ``(2) Contents.--
    ``(A) In general.--The application shall be made in
    such form and manner as prescribed by the Commission,
    and shall contain such information, as the Commission
    considers necessary concerning the business in which the
    applicant is or will be engaged.
    ``(B) Continual reporting.--A person that is
    registered as a security-based swap dealer or major
    security-based swap participant shall continue to submit
    to the Commission reports that contain such information
    pertaining to the business of the person as the
    Commission may require.
    ``(3) Expiration.--Each registration under this section
    shall expire at such time as the Commission may prescribe by
    rule or regulation.
    ``(4) Rules.--Except as provided in subsections (d) and (e),
    the Commission may prescribe rules applicable to security-based
    swap dealers and major security-based swap participants,
    including rules that limit the activities of non-bank security-
    based swap dealers and major security-based swap participants.
    ``(5) Transition.-- <> Not later than 1
    year after the date of enactment of the Wall Street Transparency
    and Accountability Act of 2010, the Commission shall issue rules
    under this section to provide for the registration of security-
    based swap dealers and major security-based swap participants.
    ``(6) Statutory disqualification.--Except to the extent
    otherwise specifically provided by rule, regulation, or order of
    the Commission, it shall be unlawful for a security-based swap
    dealer or a major security-based swap participant to permit any
    person associated with a security-based swap dealer or a major
    security-based swap participant who is subject to a statutory
    disqualification to effect or be involved in effecting security-
    based swaps on behalf of the security-based swap dealer or major
    security-based swap participant, if the security-based swap
    dealer or major security-based swap participant knew, or in the
    exercise of reasonable care should have known, of the statutory
    disqualification.

    ``(c) Dual Registration.--
    ``(1) Security-based swap dealer.--Any person that is
    required to be registered as a security-based swap dealer under
    this section shall register with the Commission, regardless

    [[Page 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 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 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.--
    <> 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 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) <>  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 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) <>  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 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) <>  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 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) <>  Duties.--Each registered security-based
    swap dealer and major security-based swap participant shall, at all
    times, comply with the following requirements:
    ``(1) Monitoring of trading.--The security-based swap dealer
    or major security-based swap participant shall monitor its
    trading in security-based swaps to prevent violations of
    applicable position limits.
    ``(2) Risk management procedures.--The security-based swap
    dealer or major security-based swap participant shall establish
    robust and professional risk management systems adequate for
    managing the day-to-day business of the security-based swap
    dealer or major security-based swap participant.
    ``(3) Disclosure of general information.--The security-based
    swap dealer or major security-based swap participant shall
    disclose to the Commission and to the prudential regulator for
    the security-based swap dealer or major security-based swap
    participant, as applicable, information concerning--
    ``(A) terms and conditions of its security-based
    swaps;
    ``(B) security-based swap trading operations,
    mechanisms, and practices;
    ``(C) financial integrity protections relating to
    security-based swaps; and
    ``(D) other information relevant to its trading in
    security-based swaps.
    ``(4) Ability to obtain information.--The security-based
    swap dealer or major security-based swap participant shall--
    ``(A) establish and enforce internal systems and
    procedures to obtain any necessary information to
    perform any of the functions described in this section;
    and
    ``(B) provide the information to the Commission and
    to the prudential regulator for the security-based swap
    dealer or major security-based swap participant, as
    applicable, on request.
    ``(5) <>  Conflicts of interest.--The
    security-based swap dealer and major security-based swap
    participant shall implement conflict-of-interest systems and
    procedures that--
    ``(A) establish structural and institutional
    safeguards to ensure that the activities of any person
    within the firm relating to research or analysis of the
    price or market for any security-based swap or acting in
    a role of providing

    [[Page 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 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) <>  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 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) <>  Backstop enforcement
    authority.--
    ``(i) Initiation of enforcement proceeding by
    prudential regulator.--If the Commission does not
    initiate an enforcement proceeding before the end
    of the 90-day period beginning on the date on
    which the Commission receives a written report
    under subsection (C)(i), the prudential regulator
    may initiate an enforcement proceeding.
    ``(ii) Initiation of enforcement proceeding by
    commission.--If the prudential regulator does not
    initiate an enforcement proceeding before the end
    of the 90-day period beginning on the date on
    which the prudential regulator receives a written
    report under subsection (C)(ii), the Commission
    may initiate an enforcement proceeding.
    ``(2) Censure, denial, suspension; notice and hearing.--The
    Commission, by order, shall censure, place limitations on the
    activities, functions, or operations of, or revoke the
    registration of any security-based swap dealer or major
    security-based swap participant that has registered with the
    Commission pursuant to subsection (b) if the Commission finds,
    on the record after notice and opportunity for hearing, that
    such censure, placing of limitations, or revocation is in the
    public interest and that such security-based swap dealer or
    major security-based swap participant, or any person associated
    with such security-based swap dealer or major security-based
    swap participant effecting or involved in effecting transactions
    in security-based swaps on behalf of such security-based swap
    dealer or major security-based swap participant, whether prior
    or subsequent to becoming so associated--
    ``(A) has committed or omitted any act, or is
    subject to an order or finding, enumerated in
    subparagraph (A), (D), or (E) of paragraph (4) of
    section 15(b);
    ``(B) has been convicted of any offense specified in
    subparagraph (B) of such paragraph (4) within 10 years
    of the commencement of the proceedings under this
    subsection;
    ``(C) is enjoined from any action, conduct, or
    practice specified in subparagraph (C) of such paragraph
    (4);
    ``(D) is subject to an order or a final order
    specified in subparagraph (F) or (H), respectively, of
    such paragraph (4); or
    ``(E) has been found by a foreign financial
    regulatory authority to have committed or omitted any
    act, or violated any foreign statute or regulation,
    enumerated in subparagraph (G) of such paragraph (4).
    ``(3) <>  Associated persons.--With
    respect to any person who is associated, who is seeking to
    become associated, or, at the time of the alleged misconduct,
    who was associated or was seeking to become associated with a
    security-based swap dealer or major security-based swap
    participant for the purpose of effecting or being involved in
    effecting security-based swaps

    [[Page 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) <>  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) <>  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. <>  RULEMAKING ON CONFLICT OF
    INTEREST.

    (a) <>  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 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. <>  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 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 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 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 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. <>  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 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 <>  (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. <>  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 <>  VIII--PAYMENT, CLEARING, AND SETTLEMENT SUPERVISION
    SEC. 801. <>  SHORT TITLE.

    This title may be cited as the ``Payment, Clearing, and Settlement
    Supervision Act of 2010''.
    SEC. 802. <>  FINDINGS 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 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. <>  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 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 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) <>  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 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 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. <>  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 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) <>  Requests for hearing.--
    Within 30 days from the date of any notice of the
    proposed determination of the Council, the financial
    market utility or, in the case of a payment, clearing,
    or settlement activity, a financial institution engaged
    in the designated activity may request, in writing, an
    opportunity for a written or oral hearing before the
    Council to demonstrate that the proposed designation or
    rescission of designation is not supported by
    substantial evidence.
    (D) <>  Written submissions.--Upon
    receipt of a timely request, the Council shall fix a
    time, not more than 30 days after receipt of the
    request, unless extended at the request of the financial
    market utility or financial institution, and place at
    which the financial market utility or financial
    institution may appear, personally or through counsel,
    to submit written materials, or, at the sole discretion
    of the Council, oral testimony or oral argument.
    (3) Emergency exception.--
    (A) Waiver or modification by vote of the council.--
    The Council may waive or modify the requirements of
    paragraph (2) if the Council determines, by an
    affirmative vote of not 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) <>  Notice of waiver or
    modification.--The Council shall provide notice of the
    waiver or modification to the financial market utility
    concerned or, in the case of a payment, clearing, or
    settlement activity, to financial institutions, as soon
    as practicable, which shall be no later than 24 hours
    after the waiver or modification in the case of a
    financial market utility and 3 business days in the case
    of financial institutions. <> The Council shall provide the
    notice to financial institutions by posting a notice on
    the website of the Council and by publishing a notice in
    the Federal Register.

    (d) <>  Notification of Final Determination.--
    (1) After hearing.--Within 60 days of any hearing under
    subsection (c)(2), the Council shall notify the financial market
    utility or financial institutions of the final determination of
    the Council in writing, which shall include findings of fact
    upon which the determination of the Council is based.

    [[Page 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. <> All notices to financial institutions
    under this subsection shall be published in the Federal
    Register.

    (e) Extension of Time Periods.--The Council may extend the time
    periods established in subsections (c) and (d) as the Council determines
    to be necessary or appropriate.
    SEC. 805. <>  STANDARDS FOR SYSTEMICALLY
    IMPORTANT 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 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) <>  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 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. <>  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 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) <>  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 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.--
    <> 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.-- <> 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 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. <>  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.-- <> 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 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) <>  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 1816]]

    SEC. 808. <>  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) <>  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 1817]]

    under this title against a financial institution that is
    subject to the standards prescribed under section 805(a)
    for a designated activity.
    (B) <>  Enforcement by board
    of governors.--Upon receipt of an appropriate written
    request, the Board of Governors shall determine whether
    an enforcement action is warranted, and, if so, it shall
    enforce compliance with this title or the rules or
    orders prescribed 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) <>  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) <>  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 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) <>  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) <>  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. <>  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 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.-- <> 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 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) <>  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. <>  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 1821]]

    SEC. 811. <>  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. <>  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. <>  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. <>  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 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. <>  EFFECTIVE DATE.

    This title is effective as of the date of enactment of this Act.

    TITLE <>
    IX--INVESTOR PROTECTIONS AND IMPROVEMENTS TO THE REGULATION OF
    SECURITIES
    SEC. 901. <>  SHORT TITLE.

    This title may be cited as the ``Investor Protection and Securities
    Reform Act of 2010''.

    Subtitle 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. <>  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 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) <>  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 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) <>  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) <>  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 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) <>  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 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 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) <>  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) <>  Public Comment.--The Commission
    shall seek and consider public input, comments, and data in order to
    prepare the report required under subsection (d).

    (f) <>  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 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, <>  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 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, <>  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 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. <>  STUDY ON ENHANCING
    INVESTMENT ADVISER EXAMINATIONS.

    (a) Study Required.--
    (1) <>  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) <>  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 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) <>  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 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) <>  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 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) <>  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) <>  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) <>
    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 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) <>  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.-- <> 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) <>  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 1835]]

    to be the date on which the Commission receives the
    proposed rule change.
    ``(B) <>
    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 <>  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 1836]]

    ``(D)(i) <>  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 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 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. <>  STUDY ON IMPROVED
    INVESTOR ACCESS TO INFORMATION ON
    INVESTMENT ADVISERS AND BROKER-DEALERS.

    (a) Study.--
    (1) <>  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 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) <>  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) <>  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 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. <>  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) <>  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 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. <>  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 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 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 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) <>  Appeals.--Any
    determination made under this section, including whether, to whom, or in
    what amount to make awards, shall be in the discretion of the
    Commission. Any such determination, except the determination of the
    amount of an award if the award was made in accordance with subsection
    (b), may be appealed to the appropriate court of appeals of the United
    States not more than 30 days after the determination is issued by the
    Commission. The court shall <>  review the determination
    made by the Commission in accordance with section 706 of title 5, United
    States Code.

    ``(g) Investor Protection Fund.--
    ``(1) Fund established.--There is established in the
    Treasury of the United States a fund to be known as the
    `Securities and Exchange Commission Investor Protection Fund'.
    ``(2) Use of fund.--The Fund shall be available to the
    Commission, without further appropriation or fiscal year
    limitation, for--
    ``(A) paying awards to whistleblowers as provided in
    subsection (b); and
    ``(B) funding the activities of the Inspector
    General of the Commission under section 4(i).
    ``(3) Deposits and credits.--
    ``(A)  In general.--There shall be deposited into or
    credited to the Fund an amount equal to--
    ``(i) any monetary sanction collected by the
    Commission in any judicial or administrative
    action brought by the Commission under the
    securities laws that is not added to a
    disgorgement fund or other fund under section 308
    of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7246)
    or otherwise distributed to victims of a violation
    of the securities laws, or the rules and
    regulations thereunder, underlying such action,
    unless the balance of the Fund at the time the
    monetary sanction is collected exceeds
    $300,000,000;
    ``(ii) any monetary sanction added to a
    disgorgement fund or other fund under section 308
    of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7246)
    that is not distributed to the victims for whom
    the Fund was established, unless the balance of
    the disgorgement fund at the time the
    determination is made not to distribute the
    monetary sanction to such victims exceeds
    $200,000,000; and
    ``(iii) all income from investments made under
    paragraph (4).
    ``(B) Additional amounts.--If the amounts deposited
    into or credited to the Fund under subparagraph (A) are
    not sufficient to satisfy an award made under subsection
    (b), there shall be deposited into or credited to the
    Fund an amount equal to the unsatisfied portion of the
    award from any monetary sanction collected by the
    Commission

    [[Page 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 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 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 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 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) <>  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 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. <>  IMPLEMENTATION AND TRANSITION
    PROVISIONS FOR WHISTLEBLOWER PROTECTION.

    (a) <>  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) <>  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)). <>  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 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. <>  DISQUALIFYING FELONS AND
    OTHER ``BAD ACTORS'' FROM REGULATION D
    OFFERINGS.

    Not later <>  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 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 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 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) <>  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 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 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) <>  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) <>  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 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) <>  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.-- <> 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 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 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 1860]]

    ``(2) <>  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 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 <>  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), <>  by striking
    ``registered on a national securities exchange'' and inserting
    ``other than a government security''; and
    (3) in section 15(c)(1)(A), <>  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 <>  (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 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 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 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) <>  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 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 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 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. <>  DEADLINE FOR COMPLETING
    ENFORCEMENT INVESTIGATIONS AND COMPLIANCE
    EXAMINATIONS AND INSPECTIONS.

    ``(a) Enforcement Investigations.--
    ``(1) <>  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) <>  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 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) <>  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) <>  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 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) <>
    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) <>  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 1870]]

    accepts payments from the issuer of a security and
    distributes the payments to the holders of the
    security.
    ``(2) <>  Rulemaking.--The Commission shall
    adopt such rules, regulations, and orders necessary to implement
    this subsection no later than 1 year after the date of enactment
    of this subsection. In proposing such rules, the Commission
    shall seek to minimize disruptions to current systems used by or
    on behalf of paying agents to process payment to account holders
    and avoid requiring multiple paying agents to send written
    notification to a missing security holder regarding the same not
    yet negotiated check.''.
    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) <>  The Commission shall prescribe
    rules providing for the public disclosure of the name of the
    issuer and the title, class, CUSIP number, aggregate amount of
    the number of short sales of each security, and any additional
    information determined by the Commission following the end of
    the reporting period. <> At a minimum, such
    public disclosure shall occur every month.''.

    (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. <>  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 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) <>  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 1872]]

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

    SEC. 931. <>  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 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) <>  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) <>  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) <>  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 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 1875]]

    ``(4) Look-back requirement.--
    ``(A) Review by the nationally recognized
    statistical rating organization.--
    <> 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 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.-- <> 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 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 1878]]

    ``(C) Inspection reports.-- <> The Commission shall make available to
    the public, in an easily understandable format, an
    annual report summarizing--
    ``(i) the essential findings of all
    examinations conducted under subparagraph (A), as
    deemed appropriate by the Commission;
    ``(ii) the responses by the nationally
    recognized statistical rating organizations to any
    material regulatory deficiencies identified by the
    Commission under clause (i); and
    ``(iii) whether the nationally recognized
    statistical rating organizations have
    appropriately addressed the recommendations of the
    Commission contained in previous reports under
    this subparagraph.
    ``(4) <>  Rulemaking authority.--
    The Commission shall--
    ``(A) establish, by rule, fines, and other penalties
    applicable to any nationally recognized statistical
    rating organization that violates the requirements of
    this section and the rules thereunder; and
    ``(B) issue such rules as may be necessary to carry
    out this section.

    ``(q) Transparency of Ratings Performance.--
    ``(1) Rulemaking required.-- <> The Commission shall, by rule, require that each
    nationally recognized statistical rating organization publicly
    disclose information on the initial credit ratings determined by
    the nationally recognized statistical rating organization for
    each type of obligor, security, and money market instrument, and
    any subsequent changes to such credit ratings, for the purpose
    of allowing users of credit ratings to evaluate the accuracy of
    ratings and compare the performance of ratings by different
    nationally recognized statistical rating organizations.
    ``(2) Content.--The rules of the Commission under this
    subsection shall require, at a minimum, disclosures that--
    ``(A) are comparable among nationally recognized
    statistical rating organizations, to allow users of
    credit ratings to compare the performance of credit
    ratings across nationally recognized statistical rating
    organizations;
    ``(B) are clear and informative for investors having
    a wide range of sophistication who use or might use
    credit ratings;
    ``(C) include performance information over a range
    of years and for a variety of types of credit ratings,
    including for credit ratings withdrawn by the nationally
    recognized statistical rating organization;
    ``(D) are published and made freely available by the
    nationally recognized statistical rating organization,
    on an easily accessible portion of its website, and in
    writing, when requested;
    ``(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 1879]]

    that such rating was an independent evaluation of the
    risks and merits of the instrument.

    ``(r) Credit Ratings Methodologies.-- <> The
    Commission shall prescribe rules, for the protection of investors and in
    the public interest, with respect to the procedures and methodologies,
    including qualitative and quantitative data and models, used by
    nationally recognized statistical rating organizations that require each
    nationally recognized statistical rating organization--
    ``(1) to ensure that credit ratings are determined using
    procedures and methodologies, including qualitative and
    quantitative data and models, that are--
    ``(A) approved by the board of the nationally
    recognized statistical rating organization, a body
    performing a function similar to that of a board; and
    ``(B) in accordance with the policies and procedures
    of the nationally recognized statistical rating
    organization for the development and modification of
    credit rating procedures and methodologies;
    ``(2) to ensure that when material changes to credit rating
    procedures and methodologies (including changes to qualitative
    and quantitative data and models) are made, that--
    ``(A) the changes are applied consistently to all
    credit ratings to which the changed procedures and
    methodologies apply;
    ``(B) to the extent that changes are made to credit
    rating surveillance procedures and methodologies, the
    changes are applied to then-current credit ratings by
    the nationally recognized statistical rating
    organization within a reasonable time period determined
    by the Commission, by rule; and
    ``(C) the nationally recognized statistical rating
    organization publicly discloses the reason for the
    change; and
    ``(3) <>  to notify users of credit
    ratings--
    ``(A) of the version of a procedure or methodology,
    including the qualitative methodology or quantitative
    inputs, used with respect to a particular credit rating;
    ``(B) when a material change is made to a procedure
    or methodology, including to a qualitative model or
    quantitative inputs;
    ``(C) when a significant error is identified in a
    procedure or methodology, including a qualitative or
    quantitative model, that may result in credit rating
    actions; and
    ``(D) of the likelihood of a material change
    described in subparagraph (B) resulting in a change in
    current credit ratings.

    ``(s) Transparency of Credit Rating Methodologies and Information
    Reviewed.--
    ``(1) Form for disclosures.-- <> The
    Commission shall require, by rule, each nationally recognized
    statistical rating organization to prescribe a form to accompany
    the publication of each credit rating that discloses--
    ``(A) information relating to--
    ``(i) the assumptions underlying the credit
    rating procedures and methodologies;
    ``(ii) the data that was relied on to
    determine the credit rating; and

    [[Page 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 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.-- <> 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 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.--
    <> The
    Commission shall adopt rules requiring a nationally
    recognized statistical rating organization, at the time
    at which the nationally recognized statistical rating
    organization produces a rating, to disclose the
    certification described in subparagraph (B) to the
    public in a manner that allows the public to determine
    the adequacy and level of due diligence services
    provided by a third party.

    ``(t) Corporate Governance, Organization, and Management of
    Conflicts of Interest.--
    ``(1) Board of directors.-- <> Each
    nationally recognized statistical rating organization shall have
    a board of directors.
    ``(2) Independent directors.--
    ``(A) In general.--At least \1/2\ of the board of
    directors, but not fewer than 2 of the members thereof,
    shall be independent of the nationally recognized
    statistical rating agency. A portion of the independent
    directors shall include users of ratings from a
    nationally recognized statistical rating organization.
    ``(B) Independence determination.--In order to be
    considered independent for purposes of this subsection,
    a member of the board of directors of a nationally
    recognized statistical rating organization--
    ``(i) may not, other than in his or her
    capacity as a member of the board of directors or
    any committee thereof--
    ``(I) accept any consulting,
    advisory, or other compensatory fee from
    the nationally recognized statistical
    rating organization; or
    ``(II) be a person associated with
    the nationally recognized statistical
    rating organization or with any
    affiliated company thereof; and
    ``(ii) shall be disqualified from any
    deliberation involving a specific rating in which
    the independent board member has a financial
    interest in the outcome of the rating.
    ``(C) Compensation and term.--The compensation of
    the independent members of the board of directors of a
    nationally recognized statistical rating organization
    shall not be linked to the business performance of the
    nationally recognized statistical rating organization,
    and shall be arranged so as to ensure the independence
    of their judgment. The term of office of the independent
    directors shall be for a pre-agreed fixed period, not to
    exceed 5 years, and shall not be renewable.
    ``(3) Duties of board of directors.--In addition to the
    overall responsibilities of the board of directors, the board
    shall oversee--

    [[Page 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.-- <> 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 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. <> QUALIFICATION STANDARDS FOR
    CREDIT RATING ANALYSTS.

    Not <>  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 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. <> 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. <> UNIVERSAL RATINGS SYMBOLS.

    (a) <>  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), <> by
    striking ``credit rating entities, and other private economic''
    and insert ``private economic, credit,'';
    (2) in section <> 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 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 <> (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 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) <>  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. <> REVIEW OF
    RELIANCE ON RATINGS.

    (a) Agency Review.-- <> 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. <> 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. <> ELIMINATION OF EXEMPTION
    FROM FAIR DISCLOSURE RULE.

    Not <> 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 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. <> 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 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. <> 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.-- <> 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 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 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. <> 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 <> 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 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) <> 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 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 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) <>  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) <>  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 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 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 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) <>  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. <> REPRESENTATIONS AND
    WARRANTIES IN ASSET-BACKED OFFERINGS.

    Not <> 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 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) <>  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 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. <>  SHAREHOLDER APPROVAL OF
    EXECUTIVE COMPENSATION.

    ``(a) <>  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.-- <> 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 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.-- <> 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. <> COMPENSATION COMMITTEES.

    ``(a) Independence of Compensation Committees.--
    ``(1) <>  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 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 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 1903]]

    ``(f) Commission Rules.--
    ``(1) In general.-- <> 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) <>  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) <>  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 1904]]

    disclosure under this subsection may include a graphic representation of
    the information required to be disclosed.''.

    (b) <>  Additional Disclosure
    Requirements.--
    (1) In general.-- <> 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. <>  RECOVERY OF ERRONEOUSLY
    AWARDED COMPENSATION POLICY.

    ``(a) Listing Standards.-- <> The Commission
    shall, by rule, direct the national securities exchanges and national
    securities associations to prohibit the listing of any security of an
    issuer that does not comply with the requirements of this section.

    ``(b) Recovery of Funds.--The rules of the Commission under
    subsection (a) shall require each issuer to develop and implement a
    policy providing--
    ``(1) for disclosure of the policy of the issuer on
    incentive-based compensation that is based on financial
    information required to be reported under the securities laws;
    and
    ``(2) that, in the event that the issuer is required to
    prepare an accounting restatement due to the material
    noncompliance of the issuer with any financial reporting
    requirement under the securities laws, the issuer will recover
    from any current or former executive officer of the issuer who
    received incentive-based compensation (including stock options
    awarded as compensation) during the 3-year period preceding the
    date on which the issuer is required to prepare an accounting
    restatement, based on the erroneous data, in excess of what
    would have been paid to the executive officer under the
    accounting restatement.''.
    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 <> 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 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. <>  ENHANCED COMPENSATION STRUCTURE
    REPORTING.

    (a) Enhanced Disclosure and Reporting of Compensation
    Arrangements.--
    (1) In general.-- <> 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. <> --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 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 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. <> 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 1908]]

    (C) <>  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.-- <> 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. <> 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 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 1910]]

    General described in this section, in order to assist the Comptroller
    General in carrying out such duties.
    SEC. 963. <> 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. <>  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 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 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. <> 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 1913]]

    Commission Investor Protection Fund established under section 21F.''.
    SEC. 967. COMMISSION ORGANIZATIONAL STUDY AND REFORM.

    (a) Study Required.--
    (1) In general.-- <> 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 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 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) <>  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) <>  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. <> CORPORATE GOVERNANCE.

    `` <> 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 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 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) <> 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 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) <> 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 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 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 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) <> 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 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 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 <> 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 <> is amended by inserting ``municipal
    advisor,'' after ``municipal securities dealer''.

    (i) <>  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 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.-- <> 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 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 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. <>  COMMISSION OFFICE OF MUNICIPAL
    SECURITIES.

    (a) <>  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 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. <>  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 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 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 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.-- <> 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) <>  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 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 <>  (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 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 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) <>  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 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 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 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 <>  (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 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.-- <> 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 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) <> 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 1939]]

    ``(4) Losses that are not material.--
    ``(A) Semiannual report.-- <> 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) <>  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) <>  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 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 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. <>  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 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 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 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 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 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. <> 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 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 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 <> 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. <>  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. <> 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) <>  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 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. <> 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 1950]]

    National Association of Insurance Commissioners in
    March 2010; and
    (ii) <>  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.--
    <> 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 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.--
    <> Subject to subsections
    (i)(1)(B) and (k), for each fiscal year, the Commission shall
    determine, by March 1 of such fiscal year, whether, based on the
    actual aggregate dollar volume of sales during the first 5
    months of such fiscal year, the baseline estimate of the
    aggregate dollar volume of sales used under paragraph (1) for
    such fiscal year is reasonably likely to be 10 percent (or more)
    greater or less than the actual aggregate dollar volume of sales
    for such fiscal year. <>  If the
    Commission so determines, the Commission shall by order, no
    later than March 1, adjust each of the rates applicable under
    subsections (b) and (c) for such fiscal year to a uniform
    adjusted rate that, when applied to the revised estimate of the
    aggregate dollar amount of sales for the remainder of such
    fiscal year, is reasonably likely to produce aggregate fee
    collections under this section (including fees collected during
    such five-month period and assessments collected under
    subsection (d) of this section) that are equal to the regular
    appropriation to the Commission by Congress for such fiscal
    year. 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) <>  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 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 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) <>  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.-- <> 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 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) <>  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 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. <>  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) <>  Effective date.--The
    amendment made by this subsection shall take effect on October
    1, 2011.

    TITLE X-- <> BUREAU OF
    CONSUMER FINANCIAL PROTECTION
    SEC. 1001. <> SHORT TITLE.

    This title may be cited as the ``Consumer Financial Protection Act
    of 2010''.
    SEC. 1002. <> DEFINITIONS.

    Except as otherwise provided in this title, for purposes of this
    title, the following definitions shall apply:
    (1) Affiliate.--The term ``affiliate'' means any person that
    controls, is controlled by, or is under common control with
    another person.
    (2) Bureau.--The term ``Bureau'' means the Bureau of
    Consumer Financial Protection.
    (3) Business of insurance.--The term ``business of
    insurance'' means the writing of insurance or the reinsuring of
    risks by an insurer, including all acts necessary to such
    writing or reinsuring and the activities relating to the writing
    of insurance or the reinsuring of risks conducted by persons who
    act as, or are, officers, directors, agents, or employees of
    insurers or who are other persons authorized to act on behalf of
    such persons.

    [[Page 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 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 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 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 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 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 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 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 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. <> 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. <>  Except as otherwise provided expressly
    by law, all Federal laws dealing with public or Federal contracts,
    property, works, officers, employees, budgets, or funds, including the
    provisions of chapters 5 and 7 of title 5, shall apply to the exercise
    of the powers of the Bureau.

    (b) Director and Deputy Director.--
    (1) In general.--There is established the position of the
    Director, who shall serve as the head of the Bureau.
    (2) Appointment.-- <> Subject to paragraph
    (3), the Director shall be appointed by the President, by and
    with the advice and consent of the Senate.
    (3) Qualification.-- <> The President
    shall nominate the Director from among individuals who are
    citizens of the United States.
    (4) Compensation.--The Director shall be compensated at the
    rate prescribed for level II of the Executive Schedule under
    section 5313 of title 5, United States Code.
    (5) Deputy director.--There is established the position of
    Deputy Director, who shall--
    (A) be appointed by the Director; and
    (B) serve as acting Director in the absence or
    unavailability of the Director.

    (c) Term.--
    (1) In general.--The Director shall serve for a term of 5
    years.
    (2) Expiration of term.--An individual may serve as Director
    after the expiration of the term for which appointed, until a
    successor has been appointed and qualified.
    (3) Removal for cause.--The President may remove the
    Director for inefficiency, neglect of duty, or malfeasance in
    office.

    [[Page 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. <> 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 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. <>  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 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. <> The authority
    under this subparagraph to waive the requirements
    of that chapter 33 shall expire 5 years after the
    date of enactment of this Act.
    (2) Compensation.-- <> Notwithstanding
    any otherwise applicable provision of title 5, United States
    Code, concerning compensation, including the provisions of
    chapter 51 and chapter 53, the following provisions shall apply
    with respect to employees of the Bureau:
    (A) The rates of basic pay for all employees of the
    Bureau may be set and adjusted by the Director.
    (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.-- <> 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 1968]]

    (C) <>  Employer contribution.--The
    Bureau shall pay an employer contribution to the Federal
    Reserve System Retirement Plan, in the amount
    established as an employer contribution under the
    Federal Employees Retirement System, as established
    under chapter 84 of title 5, United States Code, for
    each Bureau employee who elects to participate in the
    Federal Reserve System Retirement Plan. The Bureau shall
    pay an employer contribution to the Federal Reserve
    System Thrift Plan for each Bureau employee who elects
    to participate in such plan, as required under the terms
    of such plan.
    (D) Controlled group status.--The Bureau is the same
    employer as the Federal Reserve System (as comprised of
    the Board of Governors and each of the 12 Federal
    reserve banks prior to the date of enactment of this
    Act) for purposes of subsections (b), (c), (m), and (o)
    of section 414 of the Internal Revenue Code of 1986, (26
    U.S.C. 414).
    (4) Labor-management relations.--
    <> Chapter 71 of title 5, United States
    Code, shall apply to the Bureau and the employees of the Bureau.
    (5) Agency ombudsman.--
    (A) Establishment required.--
    <> Not later than 180 days
    after the designated transfer date, the Bureau shall
    appoint an ombudsman.
    (B) Duties of ombudsman.--The ombudsman appointed in
    accordance with subparagraph (A) shall--
    (i) act as a liaison between the Bureau and
    any affected person with respect to any problem
    that such party may have in dealing with the
    Bureau, resulting from the regulatory activities
    of the Bureau; and
    (ii) assure that safeguards exist to encourage
    complainants to come forward and preserve
    confidentiality.

    (b) <>  Specific Functional Units.--
    (1) Research.--The Director 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 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 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) <>  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.-- <> 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 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 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.-- <> 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.-- <> Before the end of
    the 180-day period beginning on the designated transfer date,
    the Director shall

    [[Page 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) <>  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 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. <> 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. <> 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 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. <> FUNDING; PENALTIES AND FINES.

    (a) Transfer of Funds From Board Of Governors.--
    (1) In general.-- <> Each
    year (or quarter of such year), beginning on the designated
    transfer date, and each quarter thereafter, the Board of
    Governors shall transfer to the Bureau from the combined
    earnings of the Federal Reserve System, the amount determined by
    the Director to be reasonably necessary to carry out the
    authorities of the Bureau under Federal consumer financial law,
    taking into account such other sums made available to the Bureau
    from the preceding year (or quarter of such year).
    (2) Funding cap.--
    (A) In general.--Notwithstanding paragraph (1), and
    in accordance with this paragraph, the amount that shall
    be transferred to the Bureau in each fiscal year shall
    not exceed a fixed percentage of the total operating
    expenses of the Federal Reserve System, as reported in
    the Annual Report, 2009, of the Board of Governors,
    equal to--
    (i) 10 percent of such expenses in fiscal year
    2011;
    (ii) 11 percent of such expenses in fiscal
    year 2012; and
    (iii) 12 percent of such expenses in fiscal
    year 2013, and in each year thereafter.
    (B) Adjustment of amount.--The dollar amount
    referred to in subparagraph (A)(iii) shall be adjusted

    [[Page 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 <>  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 <>  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 1977]]

    (A) In general.--The
    Comptroller <>  General shall annually
    audit the financial transactions of the Bureau in
    accordance with the United States generally accepted
    government auditing standards, as may be prescribed by
    the Comptroller General of the United States. The audit
    shall be conducted at the place or places where accounts
    of the Bureau are normally kept. The representatives of
    the Government Accountability Office shall have access
    to the personnel and to all books, accounts, documents,
    papers, records (including electronic records), reports,
    files, and all other papers, automated data, things, or
    property belonging to or under the control of or used or
    employed by the Bureau pertaining to its financial
    transactions and necessary to facilitate the audit, and
    such representatives shall be afforded full facilities
    for verifying transactions with the balances or
    securities held by depositories, fiscal agents, and
    custodians. All such books, accounts, documents,
    records, reports, files, papers, and property of the
    Bureau shall remain in possession and custody of the
    Bureau. The Comptroller General may obtain and duplicate
    any such books, accounts, documents, records, working
    papers, automated data and files, or other information
    relevant to such audit without cost to the Comptroller
    General, and the right of access of the Comptroller
    General to such information shall be enforceable
    pursuant to section 716(c) of title 31, United States
    Code.
    (B) Report.--The Comptroller General shall submit to
    the Congress a report of each annual audit conducted
    under this subsection. The report to the Congress shall
    set forth the scope of the audit and shall include the
    statement of assets and liabilities and surplus or
    deficit, the statement of income and expenses, the
    statement of sources and application of funds, and such
    comments and information as may be deemed necessary to
    inform Congress of the financial operations and
    condition of the Bureau, together with such
    recommendations with respect thereto as the Comptroller
    General may deem advisable. A copy of each report shall
    be furnished to the President and to the Bureau at the
    time submitted to the Congress.
    (C) Assistance and costs.--For the purpose of
    conducting an audit under this subsection, the
    Comptroller General may, in the discretion of the
    Comptroller General, employ by contract, without regard
    to section 3709 of the Revised Statutes of the United
    States (41 U.S.C. 5), professional services of firms and
    organizations of certified public accountants for
    temporary periods or for special purposes. Upon the
    request <>  of the
    Comptroller General, the Director of the Bureau 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 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 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. <>  EFFECTIVE DATE.

    This subtitle shall become effective on the date of enactment of
    this Act.

    Subtitle B--General Powers of the Bureau

    SEC. 1021. <>  PURPOSE, OBJECTIVES, AND
    FUNCTIONS.

    (a) Purpose.--The Bureau shall seek to implement and, where
    applicable, enforce Federal consumer financial law consistently for the
    purpose of ensuring that all consumers have access to markets

    [[Page 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. <>  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 1981]]

    (ii) the impact of proposed rules on covered
    persons, as described in section 1026, and the
    impact on consumers in rural areas;
    (B) <>  the Bureau shall
    consult with the appropriate prudential regulators or
    other Federal agencies prior to proposing a rule and
    during the comment process regarding consistency with
    prudential, market, or systemic objectives administered
    by such agencies; and
    (C) if, during the consultation process described in
    subparagraph (B), a prudential regulator provides the
    Bureau with a written objection to the proposed rule of
    the Bureau or a portion thereof, the Bureau shall
    include in the adopting release a description of the
    objection and the basis for the Bureau decision, if any,
    regarding such objection, except that nothing in this
    clause shall be construed as altering or limiting the
    procedures under section 1023 that may apply to any rule
    prescribed by the Bureau.
    (3) Exemptions.--
    (A) In general.--The Bureau, by rule, may
    conditionally or unconditionally exempt any class of
    covered persons, service providers, or consumer
    financial products or services, from any provision of
    this title, or from any rule issued under this title, as
    the Bureau determines necessary or appropriate to carry
    out the purposes and objectives of this title, taking
    into consideration the factors in subparagraph (B).
    (B) Factors.--In issuing an exemption, as permitted
    under subparagraph (A), the Bureau shall, as
    appropriate, take into consideration--
    (i) the total assets of the class of covered
    persons;
    (ii) the volume of transactions involving
    consumer financial products or services in which
    the class of covered persons engages; and
    (iii) existing provisions of law which are
    applicable to the consumer financial product or
    service and the extent to which such provisions
    provide consumers with adequate protections.
    (4) Exclusive rulemaking authority.--
    (A) In general.--Notwithstanding any other
    provisions of Federal law and except as provided in
    section 1061(b)(5), to the extent that a provision of
    Federal consumer financial law authorizes the Bureau and
    another Federal agency to issue regulations under that
    provision of law for purposes of assuring compliance
    with Federal consumer financial law and any regulations
    thereunder, the Bureau shall have the exclusive
    authority to prescribe rules subject to those provisions
    of law.
    (B) Deference.--Notwithstanding
    any <>  power granted to any
    Federal agency or to the Council under this title, and
    subject to section 1061(b)(5)(E), the deference that a
    court affords to the Bureau with respect to a
    determination by the Bureau regarding the meaning or
    interpretation of any provision of a Federal consumer
    financial law shall be applied as if the Bureau were the
    only agency authorized to apply, enforce, interpret, or
    administer the provisions of such Federal consumer
    financial law.

    (c) Monitoring.--

    [[Page 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 <>  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 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 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 1985]]

    reflect available evidence and any data that the Bureau
    reasonably may collect.
    (2) Reports.--The Bureau <>  shall
    publish a report of its assessment under this subsection not
    later than 5 years after the effective date of the subject rule
    or order.
    (3) Public comment required.--Before publishing a report of
    its assessment, the Bureau shall invite public comment on
    recommendations for modifying, expanding, or eliminating the
    newly adopted significant rule or order.
    SEC. 1023. <>  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) <>  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) <>  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 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) <>  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 1987]]

    (f) Implementing Rules.--The Council shall prescribe procedural
    rules to implement this section.
    SEC. 1024. <>  SUPERVISION OF NONDEPOSITORY
    COVERED PERSONS.

    (a) Scope of Coverage.--
    (1) Applicability.--Notwithstanding any other provision of
    this title, and except as provided in paragraph (3), this
    section shall apply to any covered person who--
    (A) offers or provides origination, brokerage, or
    servicing of loans secured by real estate for use by
    consumers primarily for personal, family, or household
    purposes, or loan modification or foreclosure relief
    services in connection with such loans;
    (B) is a larger participant of a market for other
    consumer financial products or services, as defined by
    rule in accordance with paragraph (2);
    (C) the Bureau has reasonable cause to determine, by
    order, after notice to the covered person and a
    reasonable opportunity for such covered person to
    respond, based on complaints collected through the
    system under section 1013(b)(3) or information from
    other sources, that such covered person is engaging, or
    has engaged, in conduct that poses risks to consumers
    with regard to the offering or provision of consumer
    financial products or services;
    (D) offers or provides to a consumer any private
    education loan, as defined in section 140 of the Truth
    in Lending Act (15 U.S.C. 1650), notwithstanding section
    1027(a)(2)(A) and subject to section 1027(a)(2)(C); or
    (E) offers or provides to a consumer a payday loan.
    (2) Rulemaking to define covered persons subject to this
    section.--The Bureau <>  shall consult with
    the Federal Trade Commission prior to issuing a rule, in
    accordance with paragraph (1)(B), to define covered persons
    subject to this section. The Bureau <>  shall
    issue its initial rule not later than 1 year after the
    designated transfer date.
    (3) Rules of construction.--
    (A) Certain persons excluded.--This section shall
    not apply to persons described in section 1025(a) or
    1026(a).
    (B) Activity levels.--For purposes of computing
    activity levels under paragraph (1) or rules issued
    thereunder, activities of affiliated companies (other
    than insured depository institutions or insured credit
    unions) shall be aggregated.

    (b) Supervision.--
    (1) In general.--The
    Bureau <>  shall require reports
    and conduct examinations on a periodic basis of persons
    described in subsection (a)(1) for purposes of--
    (A) assessing compliance with the requirements of
    Federal consumer financial law;
    (B) obtaining information about the activities and
    compliance systems or procedures of such person; and
    (C) detecting and assessing risks to consumers and
    to markets for consumer financial products and services.
    (2) Risk-based supervision program.--The Bureau shall
    exercise its authority under paragraph (1) in a manner designed
    to ensure that such exercise, with respect to persons described
    in subsection (a)(1), is based on the assessment by the Bureau

    [[Page 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) <>  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 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 <>
    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 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 <>
    conducting any examination or requiring any report from a service
    provider subject to this subsection, the Bureau shall coordinate with
    the appropriate prudential regulator, as applicable.

    (f) Preservation of Farm Credit Administration Authority.--No
    provision of this title may be construed as modifying, limiting, or
    otherwise affecting the authority of the Farm Credit Administration.
    SEC. 1025. <>  SUPERVISION OF VERY LARGE
    BANKS, SAVINGS ASSOCIATIONS, AND CREDIT
    UNIONS.

    (a) Scope of Coverage.--This section <>  shall
    apply to any covered person that is--
    (1) an insured depository institution with total assets of
    more than $10,000,000,000 and any affiliate thereof; or
    (2) an insured credit union with total assets of more than
    $10,000,000,000 and any affiliate thereof.

    (b) <>  Supervision.--
    (1) <>  In general.--The Bureau shall
    have exclusive authority to require reports and conduct
    examinations on a periodic basis of persons described in
    subsection (a) for purposes of--
    (A) assessing compliance with the requirements of
    Federal consumer financial laws;
    (B) obtaining information about the activities
    subject to such laws and the associated compliance
    systems or procedures of such persons; and
    (C) detecting and assessing associated risks to
    consumers and to markets for consumer financial products
    and services.
    (2) Coordination.--To minimize regulatory burden, the Bureau
    shall coordinate its supervisory activities with the supervisory
    activities conducted by prudential regulators and the State bank
    regulatory authorities, including consultation regarding their
    respective schedules for examining such persons described in
    subsection (a) and requirements regarding reports to be
    submitted by such persons.
    (3) Use of existing reports.--The Bureau shall, to the
    fullest extent possible, use--
    (A) reports pertaining to a person described in
    subsection (a) that have been provided or required to
    have been provided to a Federal or State agency; and
    (B) information that has been reported publicly.
    (4) Preservation of authority.--Nothing in this title may be
    construed as limiting the authority of the Director to require
    reports from a person described in subsection (a), as permitted
    under paragraph (1), regarding information owned

    [[Page 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 <>  Bureau does not, before
    the end of the 120-day period beginning on the date on which the
    Bureau receives a recommendation under paragraph (2), initiate
    an enforcement proceeding, the other agency referred to in
    paragraph (2) may initiate an enforcement proceeding, including
    performing follow up supervisory and support functions
    incidental thereto, to assure compliance with such proceeding.

    (d) Service Providers.--A service provider to a person described in
    subsection (a) shall be subject to the authority of the Bureau under
    this section, to the same extent as if the Bureau were an appropriate
    Federal banking agency under section 7(c) of the Bank Service Company
    Act 12 U.S.C. 1867(c). <>  In conducting any
    examination or requiring any report from a service provider subject to
    this subsection, the Bureau shall coordinate with the appropriate
    prudential regulator.

    (e) Simultaneous and Coordinated Supervisory Action.--
    (1) Examinations.--A prudential regulator and the Bureau
    shall, with respect to each insured depository institution,
    insured credit union, or other covered person described in
    subsection (a) that is supervised by the prudential regulator
    and the Bureau, respectively--
    (A) coordinate the scheduling of examinations of the
    insured depository institution, insured credit union, or
    other covered person described in subsection (a);
    (B) conduct simultaneous examinations of each
    insured depository institution or insured credit union,
    unless such institution requests examinations to be
    conducted separately;
    (C) <>  share each draft
    report of examination with the other agency and permit
    the receiving agency a reasonable opportunity (which
    shall not be less than a period of 30 days after the
    date of receipt) to comment on the draft report before
    such report is made final; and

    [[Page 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 <>  shall provide a joint
    statement under subparagraph (A), not later than 30 days
    after the date of receipt of the request of the insured
    depository institution, credit union, or covered person
    described in subsection (a).
    (4) Appeals to governing panel.--
    (A) In general.--If the agencies do not resolve the
    conflict or issue a joint statement required by
    subparagraph (B), or if either of the agencies takes or
    attempts to take any supervisory action relating to the
    request for the joint statement without the consent of
    the other agency, an insured depository institution,
    insured credit union, or other covered person described
    in subsection (a) may institute an appeal to a governing
    panel, as provided in this subsection, not later than 30
    days after the expiration of the period during which a
    joint statement is required to be filed under paragraph
    (3)(B).
    (B) <>  Composition of
    governing panel.--The governing panel for an appeal
    under this paragraph shall be composed of--
    (i) a representative from the Bureau and a
    representative of the prudential regulator, both
    of whom--
    (I) have not participated in the
    material supervisory determinations
    under appeal; and
    (II) do not directly or indirectly
    report to the person who participated
    materially in the supervisory
    determinations under appeal; and
    (ii) one individual representative, to be
    determined on a rotating basis, from among the
    Board of Governors, the Corporation, the National
    Credit Union Administration, and the Office of the
    Comptroller of the Currency, other than any agency
    involved in the subject dispute.
    (C) Conduct of appeal.--In an appeal under this
    paragraph--
    (i) the insured depository institution,
    insured credit union, or other covered person
    described in subsection (a)--
    (I) shall include in its appeal all
    the facts and legal arguments pertaining
    to the matter; and

    [[Page 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) <>
    by a majority vote of its members, shall
    provide a final determination, in
    writing, not later than 30 days after
    the date of filing of an informationally
    complete appeal, or such longer period
    as the panel and the insured depository
    institution, insured credit union, or
    other covered person described in
    subsection (a) may jointly agree.
    (D) <>  Public availability of
    determinations.--A governing panel shall publish all
    information contained in a determination by the
    governing panel, with appropriate redactions of
    information that would be subject to an exemption from
    disclosure under section 552 of title 5, United States
    Code.
    (E) <>  Prohibition against
    retaliation.--The Bureau and the prudential regulators
    shall prescribe rules to provide safeguards from
    retaliation against the insured depository institution,
    insured credit union, or other covered person described
    in subsection (a) instituting an appeal under this
    paragraph, as well as their officers and employees.
    (F) Limitation.--The process provided in this
    paragraph shall not apply to a determination by a
    prudential regulator to appoint a conservator or
    receiver for an insured depository institution or a
    liquidating agent for an insured credit union, as the
    case may be, or a decision to take action pursuant to
    section 38 of the Federal Deposit Insurance Act (12
    U.S.C. 1831o) or section 212 of the Federal Credit Union
    Act (112 U.S.C. 1790a), as applicable.
    (G) Effect on other authority.--Nothing in this
    section shall modify or limit the authority of the
    Bureau to interpret, or take enforcement action under,
    any Federal consumer financial law, or the authority of
    a prudential regulator to interpret or take enforcement
    action under any other provision of Federal law for
    safety and soundness purposes.
    SEC. 1026. <>  OTHER BANKS, SAVINGS
    ASSOCIATIONS, AND CREDIT UNIONS.

    (a) Scope of Coverage.--This section <>  shall
    apply to any covered person that is--
    (1) an insured depository institution with total assets of
    $10,000,000,000 or less; or
    (2) an insured credit union with total assets of
    $10,000,000,000 or less.

    (b) Reports.--The Director 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 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) <>  provide all
    reports, records, and documentation related to the
    examination process for any institution included in the
    sample referred to in paragraph (1) to the Bureau on a
    timely and continual basis;
    (B) involve such Bureau examiner in the entire
    examination process for such person; and
    (C) consider input of the Bureau concerning the
    scope of an examination, conduct of the examination, the
    contents of the examination report, the designation of
    matters requiring attention, and examination ratings.

    (d) Enforcement.--
    (1) In general.--Except for requiring reports under
    subsection (b), the prudential regulator is authorized to
    enforce the requirements of Federal consumer financial laws and,
    with respect to a covered person described in subsection (a),
    shall have exclusive authority (relative to the Bureau) to
    enforce such laws .
    (2) Coordination with prudential regulator.--
    (A) Referral.--When
    the <>  Bureau
    has reason to believe that a person described in
    subsection (a) has engaged in a material violation of a
    Federal consumer financial law, the Bureau shall notify
    the prudential regulator in writing and recommend
    appropriate action to respond.
    (B) Response.--Upon receiving <>  a
    recommendation under subparagraph (A), the prudential
    regulator shall provide a written response to the Bureau
    not later than 60 days thereafter.

    (e) Service Providers.--A service provider to a substantial number
    of persons described in subsection (a) shall be subject to the authority
    of the Bureau under section 1025 to the same

    [[Page 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. <>  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 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) <>  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 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 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 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 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 2001]]

    respect to the provision of services relating to
    any specified plan or arrangement.
    (ii) Agency response.--In
    response <>  to a request by the
    Bureau, the Secretary and the Secretary of Labor
    shall jointly issue a written response, not later
    than 90 days after receipt of such request, to
    grant or deny the request of the Bureau regarding
    implementation of appropriate consumer protection
    standards under this title with respect to the
    provision of services relating to any specified
    plan or arrangement.
    (iii) Scope of bureau action.--Subject to a
    request or response pursuant to clause (i) or
    clause (ii) by the agencies made under this
    subparagraph, the Bureau may exercise rulemaking
    authority, and may act to enforce a rule
    prescribed pursuant to such request or response,
    in accordance with the provisions of this title. A
    request or response made by the Secretary and the
    Secretary of Labor under this subparagraph shall
    describe the basis for, and scope of, appropriate
    consumer protection standards to be implemented
    under this title with respect to the provision of
    services relating to any specified plan or
    arrangement.
    (C) Description of products or services.--To the
    extent that a person engaged in providing products or
    services relating to any specified plan or arrangement
    is subject to any enumerated consumer law or any law for
    which authorities are transferred under subtitle F or H,
    subparagraph (A) shall not apply with respect to that
    law.
    (4) <>  Specified plan or arrangement.--
    For purposes of this subsection, the term ``specified plan or
    arrangement'' means any plan, account, or arrangement described
    in section 220, 223, 401(a), 403(a), 403(b), 408, 408A, 529, 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 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. <>  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 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. <>  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 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 <>
    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. <>  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 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. <>  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. <>  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 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. <>  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 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 <>  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 2008]]

    SEC. 1033. <>  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. <>  RESPONSE TO CONSUMER COMPLAINTS
    AND INQUIRIES.

    (a) <>  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 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 <>  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 <>  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. <>  PRIVATE EDUCATION LOAN
    OMBUDSMAN.

    (a) Establishment.--The Secretary, <>  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 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) <>  not later than 90 days
    after the designated transfer date, establish a memorandum of
    understanding with the student loan ombudsman established under
    section 141(f) of the Higher Education Act of 1965 (20 U.S.C.
    1018(f)), to ensure coordination in providing assistance to and
    serving borrowers seeking to resolve complaints related to their
    private education or Federal student loans;
    (3) compile and analyze data on borrower complaints
    regarding private education loans; and
    (4) <>  make appropriate
    recommendations to the Director, 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. <>  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 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. <>  EFFECTIVE DATE.

    This subtitle shall take effect on the designated transfer date.

    Subtitle D--Preservation of State Law

    SEC. 1041. <>  RELATION TO STATE LAW.

    (a) In General.--
    (1) Rule of construction.--This title, other than sections
    1044 through 1048, may not be construed as annulling, altering,
    or affecting, or exempting any person subject to the provisions
    of this title from complying with, the statutes, regulations,
    orders, or interpretations in effect in any State, except to the
    extent that any such provision of law is inconsistent with the
    provisions of this title, and then only to the extent of the
    inconsistency.
    (2) Greater protection under state law.--For purposes of
    this subsection, a statute, regulation, order, or interpretation
    in effect in any State is not inconsistent with the provisions
    of this title if the protection that such statute, regulation,
    order, or interpretation affords to consumers is greater than
    the protection provided under this title. A determination
    regarding whether a statute, regulation, order, or
    interpretation in effect in any State is inconsistent with the
    provisions of this title may be made by the Bureau on its own
    motion or in response to a nonfrivolous petition initiated by
    any interested person.

    (b) Relation to Other Provisions of Enumerated Consumer Laws That
    Relate to State Law.--No provision of this title, except as provided in
    section 1083, shall be construed as modifying, limiting, or superseding
    the operation of any provision of an enumerated consumer law that
    relates to the application of a law in effect in any State with respect
    to such Federal law.
    (c) Additional Consumer Protection Regulations in Response to State
    Action.--
    (1) Notice of proposed rule required.--The Bureau shall
    issue a notice of proposed rulemaking whenever a majority of the
    States has enacted a resolution in support of the establishment
    or modification of a consumer protection regulation by the
    Bureau.
    (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 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) <>
    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. <>  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 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) <>  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 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. <>  PRESERVATION OF EXISTING
    CONTRACTS.

    This title, and regulations, orders, guidance, and interpretations
    prescribed, issued, or established by the Bureau, shall not be construed
    to alter or affect the applicability of any regulation, order, guidance,
    or interpretation prescribed, issued, and established by the Comptroller
    of the Currency or the Director of the Office of Thrift Supervision
    regarding the applicability of State law under Federal banking law to
    any contract entered into on or before the date of enactment of this
    Act, by national banks, Federal savings associations, or subsidiaries
    thereof that are regulated and supervised by the Comptroller of the
    Currency or the Director of the Office of Thrift Supervision,
    respectively.
    SEC. 1044. STATE LAW PREEMPTION STANDARDS FOR NATIONAL BANKS AND
    SUBSIDIARIES CLARIFIED.

    (a) In General.--Chapter one of title LXII of the Revised Statutes
    of the United States (12 U.S.C. 21 et seq.) is amended by inserting
    after section 5136B the following new section:
    ``SEC. 5136C. <>  STATE LAW PREEMPTION
    STANDARDS FOR NATIONAL BANKS AND
    SUBSIDIARIES CLARIFIED.

    ``(a) Definitions.--For purposes of this section, the following
    definitions shall apply:
    ``(1) National bank.--The term `national bank' includes--
    ``(A) any bank organized under the laws of the
    United States; and
    ``(B) any Federal branch established in accordance
    with the International Banking Act of 1978.
    ``(2) State consumer financial laws.--The term `State
    consumer financial law' means a State law that does not directly
    or indirectly discriminate against national banks and that

    [[Page 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 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 <>  of the Currency shall periodically conduct a review,
    through notice and public comment, of each determination that a
    provision of Federal law preempts a State consumer financial
    law. <>  The agency shall conduct such review
    within the 5-year period after prescribing or otherwise issuing
    such determination, and at least once during each 5-year period
    thereafter. <>  After
    conducting the review of, and inspecting the comments made on,
    the determination, the agency shall publish a notice in the
    Federal Register announcing the decision to continue or rescind
    the determination or a proposal to amend the determination. Any
    such notice of a proposal to amend a determination and the
    subsequent resolution of such proposal shall comply with the
    procedures set forth in subsections (a) and (b) of section 5244
    of the Revised Statutes of the United States (12 U.S.C. 43 (a),
    (b)).
    ``(2) Reports to congress.--At the time of issuing a review
    conducted under paragraph (1), the Comptroller of the Currency
    shall submit a report regarding such review to the Committee on
    Financial Services of the House of Representatives and the
    Committee on Banking, Housing, and Urban Affairs of the Senate.
    The report submitted to the respective committees shall address
    whether the agency intends to continue, rescind, or propose to
    amend any determination that a provision of Federal law preempts
    a State consumer financial law, and the reasons therefor.

    ``(e) Application of State Consumer Financial Law to Subsidiaries
    and Affiliates.--Notwithstanding any provision of this title or section
    24 of Federal Reserve Act (12 U.S.C. 371), a State consumer financial
    law shall apply to a subsidiary or affiliate of a national bank (other
    than a subsidiary or affiliate that is chartered as a national bank) to
    the same extent that

    [[Page 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 <>  of the Currency
    shall publish and update no less frequently than quarterly, a list of
    preemption determinations by the Comptroller of the Currency then in
    effect that identifies the activities and practices covered by each
    determination and the requirements and constraints determined to be
    preempted.''.

    (b) Clerical Amendment.--The table of sections for chapter one of
    title LXII of the Revised Statutes of the United States is amended by
    inserting after the item relating to section 5136B the following new
    item:

    ``Sec. 5136C. State law preemption standards for national banks and
    subsidiaries clarified.''.

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

    Section 5136C of the Revised Statutes of the United <>  States (as added by this subtitle) is amended by adding at the
    end the following:

    ``(h) Clarification of Law Applicable to Nondepository Institution
    Subsidiaries and Affiliates of National Banks.--
    ``(1) Definitions.--For purposes of this subsection, the
    terms `depository institution', `subsidiary', and `affiliate'
    have the same meanings as in section 3 of the Federal Deposit
    Insurance Act.
    ``(2) Rule of construction.--No provision of this title or
    section 24 of the Federal Reserve Act (12 U.S.C. 371) shall be
    construed as preempting, annulling, or affecting the
    applicability of State law to any subsidiary, affiliate, or
    agent of a national bank (other than a subsidiary, affiliate, or
    agent that is chartered as a national bank).''.
    SEC. 1046. STATE LAW PREEMPTION STANDARDS FOR FEDERAL SAVINGS
    ASSOCIATIONS AND SUBSIDIARIES CLARIFIED.

    (a) In General.--The Home Owners' Loan Act (12 U.S.C. 1461 et seq.)
    is amended by inserting after section 5 the following new section:
    ``SEC. 6. <>  STATE LAW PREEMPTION STANDARDS
    FOR FEDERAL SAVINGS ASSOCIATIONS CLARIFIED.

    ``(a) In General.--Any determination by a court or by the Director
    or any successor officer or agency regarding the relation of State law
    to a provision of this Act or any regulation or order prescribed under
    this Act shall be made in accordance with the laws and legal standards
    applicable to national banks regarding the preemption of State law.
    ``(b) Principles of Conflict Preemption Applicable.--Notwithstanding
    the authorities granted under sections 4 and 5, this Act does not occupy
    the field in any area of State law.''.

    [[Page 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 <>  (as added by this subtitle) is
    amended by adding at the end the following:

    ``(i) Visitorial Powers.--
    ``(1) In general.--In accordance with the decision of the
    Supreme Court of the United States in Cuomo v. Clearing House
    Assn., L. L. C. (129 S. Ct. 2710 (2009)), no provision of this
    title which relates to visitorial powers or otherwise limits or
    restricts the visitorial authority to which any national bank is
    subject shall be construed as limiting or restricting the
    authority of any attorney general (or other chief law
    enforcement officer) of any State to bring an action against a
    national bank in a court of appropriate jurisdiction to enforce
    an applicable law and to seek relief as authorized by such law.

    ``(j) Enforcement Actions.--The ability of the Comptroller of the
    Currency to bring an enforcement action under this title or section 5 of
    the Federal Trade Commission Act does not preclude any private party
    from enforcing rights granted under Federal or State law in the
    courts.''.
    (b) Savings Associations.--Section 6 of the Home Owners' Loan
    Act <>  (as added by this title) is amended by
    adding at the end the following:

    ``(c) Visitorial Powers.--The provisions <>
    of sections 5136C(i) of the Revised Statutes of the United States shall
    apply to Federal savings associations, and any subsidiary thereof, to
    the same extent and in the same manner as if such savings associations,
    or subsidiaries thereof, were national banks or subsidiaries of national
    banks, respectively.''

    ``(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. <>  EFFECTIVE DATE.

    This subtitle shall become effective on the designated transfer
    date.

    Subtitle E--Enforcement Powers

    SEC. 1051. <>  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 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. <>  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 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 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) <>  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) <>  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) <>  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 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 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) <>  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 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 <>  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 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. <>  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 <>  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 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 <>  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 <>  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. <>  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 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 <>  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 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. <>  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 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 <>  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) <>  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. <>  RELIEF AVAILABLE.

    (a) Administrative Proceedings or Court Actions.--

    [[Page 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 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. <>  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. <>  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 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) <>  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) <>  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) <>  initiate an
    investigation and determine whether there is
    reasonable cause to believe that the complaint has
    merit; and
    (ii) <>  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 <>  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 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 <>
    order is issued under clause (i), the Secretary of
    Labor, at the request of the complainant, shall
    assess against the person against

    [[Page 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) <>  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) <>  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 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) <>  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. <>  EFFECTIVE DATE.

    This subtitle shall become effective on the designated transfer
    date.

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

    SEC. 1061. <>  TRANSFER OF CONSUMER FINANCIAL
    PROTECTION FUNCTIONS.

    (a) Defined Terms.--For purposes of this subtitle--

    [[Page 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 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 <>
    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 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 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. <>  DESIGNATED TRANSFER DATE.

    (a) In General.--Not later <>  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) <>
    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 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) <>  shall
    publish notice of any changed designated date in the Federal
    Register.

    (c) Permissible Dates.--
    (1) In general.--Except as <>  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) <>  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. <>  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 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 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 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) <>  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. <>  TRANSFER OF CERTAIN PERSONNEL.

    (a) <>  In General.--

    [[Page 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 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 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 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 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) <>  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 <>  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 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 <>  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). <>  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 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 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 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 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 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 <>  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 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. <>  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. <>  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. <>  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 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. <>  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 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) <>  maintain a record of the responses
    to such inquiry, separate from the application and accompanying
    information.

    ``(c) Right To Refuse.--Any applicant for credit may refuse to
    provide any information requested pursuant to subsection (b) in
    connection with any application for credit.
    ``(d) No Access by Underwriters.--
    ``(1) Limitation.--Where feasible, no loan underwriter or
    other officer or employee of a financial institution, or any
    affiliate of a financial institution, involved in making any
    determination concerning an application for credit shall have
    access to any information provided by the applicant pursuant to
    a request under subsection (b) in connection with such
    application.
    ``(2) Limited access.--If
    a <>  financial institution
    determines that a loan underwriter or other officer or employee
    of a financial institution, or any affiliate of a financial
    institution, involved in making any determination concerning an
    application for credit should have access to any information
    provided by the applicant pursuant to a request under subsection
    (b), the financial institution shall provide notice to the
    applicant of the access of the underwriter to such information,
    along with notice that the financial institution may not
    discriminate on the basis of such information.

    ``(e) Form and Manner of Information.--
    ``(1) In general.--Each financial <>
    institution shall compile and maintain, in accordance with
    regulations of the Bureau, a record of the information provided
    by any loan applicant pursuant to a request under subsection
    (b).
    ``(2) Itemization.--Information compiled and maintained
    under paragraph (1) shall be itemized in order to clearly and
    conspicuously disclose--
    ``(A) the number of the application and the date on
    which the application was received;
    ``(B) the type and purpose of the loan or other
    credit being applied for;
    ``(C) the amount of the credit or credit limit
    applied for, and the amount of the credit transaction or
    the credit limit approved for such applicant;
    ``(D) the type of action taken with respect to such
    application, and the date of such action;
    ``(E) the census tract in which is located the
    principal place of business of the women-owned,
    minority-owned, or small business loan applicant;
    ``(F) the gross annual revenue of the business in
    the last fiscal year of the women-owned, minority-owned,
    or small business loan applicant preceding the date of
    the application;
    ``(G) the race, sex, and ethnicity of the principal
    owners of the business; and
    ``(H) any additional data that the Bureau determines
    would aid in fulfilling the purposes of this section.
    ``(3) No personally identifiable information.--In compiling
    and maintaining any record of information under this

    [[Page 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 <>
    required to be compiled and maintained under this section by any
    financial institution shall be submitted annually to the Bureau.
    ``(2) Availability of information.--Information compiled and
    maintained under this section shall be--
    ``(A) <>  retained for not less
    than 3 years after the date of preparation;
    ``(B) made available to any member of the public,
    upon request, in the form required under regulations
    prescribed by the Bureau;
    ``(C) annually made available to the public
    generally by the Bureau, in such form and in such manner
    as is determined by the Bureau, by regulation.
    ``(3) Compilation of aggregate data.--The Bureau may, at its
    discretion--
    ``(A) compile and aggregate data collected under
    this section for its own use; and
    ``(B) make public such compilations of aggregate
    data.

    ``(g) Bureau Action.--
    ``(1) In general.--The Bureau shall prescribe such rules and
    issue such guidance as may be necessary to carry out, enforce,
    and compile data pursuant to this section.
    ``(2) Exceptions.--The Bureau, by rule or order, may adopt
    exceptions to any requirement of this section and may,
    conditionally or unconditionally, exempt any financial
    institution or class of financial institutions from the
    requirements of this section, as the Bureau deems necessary or
    appropriate to carry out the purposes of this section.
    ``(3) Guidance.--The Bureau shall issue guidance designed to
    facilitate compliance with the requirements of this section,
    including assisting financial institutions in working with
    applicants to determine whether the applicants are women-owned,
    minority-owned, or small businesses for purposes of this
    section.

    ``(h) Definitions.--For purposes of this section, the following
    definitions shall apply:
    ``(1) Financial institution.--The term `financial
    institution' means any partnership, company, corporation,
    association (incorporated or unincorporated), trust, estate,
    cooperative organization, or other entity that engages in any
    financial activity.
    ``(2) Small business.--The term `small business' has the
    same meaning as the term `small business concern' in section 3
    of the Small Business Act (15 U.S.C. 632).

    [[Page 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) <>  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 2060]]

    (b) <>  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. <>  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 <>  as sections 920,
    921, 922, and 923, respectively; and
    (4) by inserting after section 918 the following:
    ``SEC. 919. <>  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 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) <>  provide an initial notice
    and receipt, as required by subparagraphs (A) and (B) of
    paragraph (2), and an error resolution statement, as
    required by subsection (d), that clearly and
    conspicuously describe the information required to be
    disclosed therein; and
    ``(B) with respect to any transaction that a sender
    conducts electronically, comply with the Electronic
    Signatures in Global and National Commerce Act (15
    U.S.C. 7001 et seq.).
    ``(4) Exception for disclosures of amount received.--
    ``(A) In general.--Subject to the rules prescribed
    by the Board, and except as provided under subparagraph
    (B), the disclosures required regarding the amount of
    currency that will be received by the designated
    recipient shall be deemed to be accurate, so long as the
    disclosures provide a reasonably accurate estimate of
    the foreign currency to be
    received. <>  This paragraph shall
    apply only to a remittance transfer provider who is an
    insured depository institution, as defined in section 3
    of the Federal Deposit Insurance Act (12 U.S.C. 1813),
    or an insured credit union, as defined in section 101 of
    the Federal Credit Union Act (12 U.S.C. 1752), and if--
    ``(i) a remittance transfer is conducted
    through a demand deposit, savings deposit, or
    other asset account that the sender holds with
    such remittance transfer provider; and
    ``(ii) at the time at which the sender
    requests the transaction, the remittance transfer
    provider is unable to know, for reasons beyond its
    control, the amount of currency that will be made
    available to the designated recipient.
    ``(B) Deadline.--The application <>  of subparagraph (A) shall
    terminate 5 years after the date of enactment of the
    Consumer Financial Protection Act of 2010, unless the
    Board determines that termination of such provision
    would negatively affect the ability of remittance
    transfer providers described in subparagraph (A) to send
    remittances to locations in foreign countries, in which
    case, the Board may, by rule, extend the application of
    subparagraph (A) to not longer than 10 years after the
    date of enactment of the Consumer Financial Protection
    Act of 2010.
    ``(5) Exemption authority.--The Board may, by rule, permit a
    remittance transfer provider to satisfy the requirements of--
    ``(A) paragraph (2)(A) orally, if the transaction is
    conducted entirely by telephone;

    [[Page 2062]]

    ``(B) <>  paragraph (2)(B), in the
    case of a transaction conducted entirely by telephone,
    by mailing the disclosures required under such
    subparagraph to the sender, not later than 1 business
    day after the date on which the transaction is
    conducted, or by including such documents in the next
    periodic statement, if the telephone transaction is
    conducted through a demand deposit, savings deposit, or
    other asset account that the sender holds with the
    remittance transfer provider;
    ``(C) subparagraphs (A) and (B) of paragraph (2)
    together in one written disclosure, but only to the
    extent that the information provided in accordance with
    paragraph (3)(A) is accurate at the time at which
    payment is made in connection with the subject
    remittance transfer; and
    ``(D) paragraph (2)(A), without compliance with
    section 101(c) of the Electronic Signatures in Global
    Commerce Act, if a sender initiates the transaction
    electronically and the information is displayed
    electronically in a manner that the sender can keep.
    ``(6) Storefront and internet notices.--
    ``(A) In general.--
    ``(i) Prominent posting.--Subject to
    subparagraph (B), the Board may prescribe rules to
    require a remittance transfer provider to
    prominently post, and timely update, a notice
    describing a model remittance transfer for one or
    more amounts, as the Board may determine, which
    notice shall show the amount of currency that will
    be received by the designated recipient, using the
    values of the currency into which the funds will
    be exchanged.
    ``(ii) Onsite displays.--The Board may require
    the notice prescribed under this subparagraph to
    be displayed in every physical storefront location
    owned or controlled by the remittance transfer
    provider.
    ``(iii) Internet notices.--Subject to
    paragraph (3), the Board shall prescribe rules to
    require a remittance transfer provider that
    provides remittance transfers via the Internet to
    provide a notice, comparable to a storefront
    notice described in this subparagraph, located on
    the home page or landing page (with respect to
    such remittance transfer services) owned or
    controlled by the remittance transfer provider.
    ``(iv) Rulemaking authority.--In prescribing
    rules under this subparagraph, the Board may
    impose standards or requirements regarding the
    provision of the storefront and Internet notices
    required under this subparagraph and the provision
    of the disclosures required under paragraphs (2)
    and (3).
    ``(B) Study and analysis.--Prior to proposing rules
    under subparagraph (A), the Board shall undertake
    appropriate studies and analyses, which shall be
    consistent with section 904(a)(2), and may include an
    advanced notice of proposed rulemaking, to determine
    whether a storefront notice or Internet notice
    facilitates the ability of a consumer--
    ``(i) to compare prices for remittance
    transfers; and

    [[Page 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 <>  Board determines that a recipient nation does
    not legally allow, or the method by which transactions are made in the
    recipient country do not allow, a remittance transfer provider to know
    the amount of currency that will be received by the designated
    recipient, the Board may prescribe rules (not later than 18 months after
    the date of enactment of the Consumer Financial Protection Act of 2010)
    addressing the issue, which rules shall include standards for a
    remittance transfer provider to provide--
    ``(1) a receipt that is consistent with subsections (a) and
    (b); and
    ``(2) a reasonably accurate estimate of the foreign currency
    to be received, based on the rate provided to the sender by the
    remittance transfer provider at the time at which the
    transaction was initiated by the sender.

    ``(d) <>  Remittance Transfer Errors.--
    ``(1) Error resolution.--
    ``(A) In general.--If a remittance transfer provider
    receives oral or written notice from the sender within
    180 days of the promised date of delivery that an error
    occurred with respect to a remittance transfer,
    including the amount of currency designated in
    subsection (a)(3)(A) that was to be sent to the
    designated recipient of the remittance transfer, using
    the values of the currency into which the funds should
    have been exchanged, but was not made available to the
    designated recipient in the foreign country, the
    remittance transfer provider shall resolve the error
    pursuant to this subsection and investigate the reason
    for the error.
    ``(B) Remedies.--Not later than 90 days after the
    date of receipt of a notice from the sender pursuant to
    subparagraph (A), the remittance transfer provider
    shall, as applicable to the error and as designated by
    the sender--
    ``(i) refund to the sender the total amount of
    funds tendered by the sender in connection with
    the remittance transfer which was not properly
    transmitted;
    ``(ii) make available to the designated
    recipient, without additional cost to the
    designated recipient or to the sender, the amount
    appropriate to resolve the error;
    ``(iii) provide such other remedy, as
    determined appropriate by rule of the Board for
    the protection of senders; or
    ``(iv) provide written notice to the sender
    that there was no error with an explanation
    responding to the specific complaint of the
    sender.
    ``(2) Rules.--The Board <>  shall
    establish, by rule issued not later than 18 months after the
    date of enactment of the Consumer Financial Protection Act of
    2010, clear and appropriate standards for remittance transfer
    providers with respect to

    [[Page 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) <>  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 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 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 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 <>
    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 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 <>  as sections 921 and 922, respectively; and
    (2) by inserting after section 919 the following:
    ``SEC. 920. <>  REASONABLE FEES AND RULES
    FOR PAYMENT CARD TRANSACTIONS.

    ``(a) Reasonable Interchange Transaction Fees for Electronic Debit
    Transactions.--
    ``(1) Regulatory authority over interchange transaction
    fees.--The Board may prescribe regulations, pursuant to section
    553 of title 5, United States Code, regarding any interchange
    transaction fee that an issuer may receive or charge with
    respect to an electronic debit transaction, to implement this
    subsection (including related definitions), and to prevent
    circumvention or evasion of this subsection.
    ``(2) Reasonable interchange transaction fees.--The amount
    of any interchange transaction fee that an issuer may receive or
    charge with respect to an electronic debit transaction shall be
    reasonable and proportional to the cost incurred by the issuer
    with respect to the transaction.
    ``(3) Rulemaking required.--
    ``(A) In general.--The
    Board <>  shall prescribe
    regulations in final form not later than 9 months after
    the date of enactment of the Consumer Financial
    Protection Act of 2010, to establish standards for
    assessing whether the amount of any interchange
    transaction fee described in paragraph (2) is reasonable
    and proportional to the cost incurred by the issuer with
    respect to the transaction.
    ``(B) Information collection.--The Board may require
    any issuer (or agent of an issuer) or payment card
    network to provide the Board with such information as
    may be necessary to carry out the provisions of this
    subsection and the Board, in issuing rules under
    subparagraph (A) and on at least a bi-annual basis
    thereafter, shall disclose such aggregate or summary
    information concerning the costs incurred, and
    interchange transaction fees charged or received, by
    issuers or payment card networks in connection with the
    authorization, clearance or settlement of electronic
    debit transactions as the Board considers appropriate
    and in the public interest.
    ``(4) Considerations; consultation.--In prescribing
    regulations under paragraph (3)(A), the Board shall--
    ``(A) consider the functional similarity between--
    ``(i) electronic debit transactions; and
    ``(ii) checking transactions that are required
    within the Federal Reserve bank system to clear at
    par;
    ``(B) distinguish between--

    [[Page 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 <>  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 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 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) <>  Exception.--
    Notwithstanding subparagraph (A), after the end of the
    1-year period beginning on the effective date provided
    in paragraph (9), this subsection shall apply to an
    interchange transaction fee charged or received with
    respect to an electronic debit transaction described in
    subparagraph (A)(i) in which a person uses a general-use
    prepaid card, or an electronic debit transaction
    described in subparagraph (A)(ii), if any of the
    following fees may be charged to a person with respect
    to the card:
    ``(i) A fee for an overdraft, including a
    shortage of funds or a transaction processed for
    an amount exceeding the account balance.
    ``(ii) A fee imposed by the issuer for the
    first withdrawal per month from an automated
    teller machine that is part of the issuer's
    designated automated teller machine network.
    ``(C) Definition.--For purposes of subparagraph (B),
    the term `designated automated teller machine network'
    means either--
    ``(i) all automated teller machines identified
    in the name of the issuer; or
    ``(ii) any network of automated teller
    machines identified by the issuer that provides
    reasonable and convenient access to the issuer's
    customers.
    ``(D) Reporting.--Beginning 12 <>  months after the date of enactment of the
    Consumer Financial Protection Act of 2010, the Board
    shall annually provide a report to the Congress
    regarding --
    ``(i) the prevalence of the use of general-use
    prepaid cards in Federal, State or local
    government-administered payment programs; and
    ``(ii) the interchange transaction fees and
    cardholder fees charged with respect to the use of
    such general-use prepaid cards.
    ``(8) Regulatory authority over network fees.--
    ``(A) In general.--The Board may prescribe
    regulations, pursuant to section 553 of title 5, United
    States Code, regarding any network fee.
    ``(B) Limitation.--The authority under subparagraph
    (A) to prescribe regulations shall be limited to
    regulations to ensure that--
    ``(i) a network fee is not used to directly or
    indirectly compensate an issuer with respect to an
    electronic debit transaction; and
    ``(ii) a network fee is not used to circumvent
    or evade the restrictions of this subsection and
    regulations prescribed under such subsection.
    ``(C) Rulemaking required.--The
    Board <>  shall prescribe regulations
    in final form before the end of the 9-month period
    beginning on the date of the enactment of the Consumer
    Financial Protection Act of 2010, to carry out the
    authorities provided under subparagraph (A).

    [[Page 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) <>  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 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 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 2075]]

    SEC. 1076. <>  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 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 2077]]

    SEC. 1079. <> 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 <> Guidelines.--
    (1) Securities <>  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 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 <> 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 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 2080]]

    Subtitle H--Conforming Amendments

    SEC. 1081. <>  AMENDMENTS TO THE
    INSPECTOR GENERAL ACT.

    Effective <>  on the date of enactment of
    this Act, the Inspector General Act of 1978 <> (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 <> 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. <> AMENDMENTS TO THE PRIVACY
    ACT OF 1974.

    Effective <> 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 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) <> review the regulations identified by
    the Comptroller of the Currency and the National Credit Union
    Administration, (as those rules exist on the designated transfer
    date), as applicable under paragraphs (1) through (3) of
    subsection (a);
    ``(2) <> determine whether such
    regulations are fair and not deceptive and otherwise meet the
    objectives of the Consumer Financial Protection Act of 2010; and
    ``(3) promulgate <>  regulations under
    subsection (a)(4) after the designated transfer date.

    ``(e) Designated <> Transfer Date.--As used in
    this section, the term `designated transfer date' means the date
    determined under section 1062 of the Consumer Financial Protection Act
    of 2010.''.

    (b) Effective <> Date.--This section and
    the amendments made by this section shall become effective on the
    designated transfer date.

    (c) Rule <> 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 <> (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) <> the term `Bureau' means the
    Bureau of Consumer Financial Protection;'';
    (3) in section 904 (15 U.S.C. 1693b)--

    [[Page 2082]]

    (A) in subsection (a), by striking ``(a)
    Prescription by Board.--The <> Board
    shall prescribe regulations to carry out the purposes of
    this title.'' and inserting the following:

    ``(a) Prescription <>  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 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 <> 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 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 <>  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 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 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 <> 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 <> (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 2087]]

    ``(w) <> The term `Bureau' means the Bureau of
    Consumer Financial Protection.''; and
    (2) except as otherwise specifically provided in this
    subsection--
    (A) by <> striking
    ``Federal Trade Commission'' each place that term
    appears and inserting ``Bureau'';
    (B) by <> striking ``FTC'' each
    place that term appears and inserting ``Bureau'';
    (C) by <> 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) <> 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 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 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 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 <>  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 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) <> review the methods
    (including technological means) used to furnish
    information relating to consumers to consumer reporting
    agencies;
    ``(C) <> determine whether
    persons that furnish information to consumer reporting
    agencies maintain and enforce policies to ensure the
    accuracy and integrity of information furnished to
    consumer reporting agencies; and
    ``(D) <> examine the policies
    and processes that persons that furnish information to
    consumer reporting agencies employ to conduct
    reinvestigations and correct inaccurate information
    relating to consumers that has been furnished to
    consumer reporting agencies.'';
    (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 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 <>  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 <> 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 <> 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 <> 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 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 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 <> 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 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 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 <> 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 <>  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 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 <> 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 <> 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 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 <> 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 <> 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 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 <> 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 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 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 <>  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 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. <> 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 <>  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 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) <> the term `Bureau' means the
    Bureau of Consumer Financial Protection.'';
    (2) in section 4 (12 U.S.C. 2603)--
    (A) in <> 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 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 <> 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 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 <> striking ``Secretary''
    each place that term appears and inserting ``Director'';
    (2) <> by striking ``Department of
    Housing and Urban Development'' each place that term appears and
    inserting ``Bureau of Consumer Financial Protection'';
    (3) by <> 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' <> 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' <> 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-- <>
    (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 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 <> striking ``Federal
    banking agencies'' each place that term appears and inserting
    ``Bureau''; and
    (3) by <> 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) <> 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 <> 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 <> 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 <>  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 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. <> 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. <> 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 <> term `Bureau' means the
    Bureau of Consumer Financial Protection.'';
    (2) by <> 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 <> 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 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 <> 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 <> (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 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) <> by
    striking ``the Board'' each place that term appears and
    inserting ``the Bureau''; and
    (B) by <> 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 2110]]

    (1) by <> 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 <> 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 <> 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 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 <> 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 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 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. <> 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) <> 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 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) <> 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 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) <> 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 <>  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 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 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 <>
    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 <>
    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 <> 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 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 <> 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 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 <> 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 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 <> 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. <> 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 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. <> 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 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 <> 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 <> 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 <>  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 <> 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 2123]]

    (iv) Rulings <> 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.--
    <> 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) <> 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 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 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. <> ADDITIONAL RELATED AMENDMENTS.

    (a) Suspension of Parallel Federal Deposit Insurance Act
    Authority.--Effective <>  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) <> 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 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 <> 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 <>  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 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 <> 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 <>
    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 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 <>  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 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 <> 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 <>  ACCESS TO MAINSTREAM FINANCIAL INSTITUTIONS
    SEC. <> 1201. SHORT TITLE.

    This title may be cited as the ``Improving Access to Mainstream
    Financial Institutions Act of 2010''.
    SEC. <> 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. <> 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 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. <> EXPANDED ACCESS TO MAINSTREAM
    FINANCIAL INSTITUTIONS.

    (a) In <> 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. <> 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 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 <>  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 <>  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 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. <> 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. <> 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. <> 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 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. <> 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 <>  IT BACK ACT
    SEC. 1301. <> 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 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 <> 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 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) <> 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 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-- <> MORTGAGE REFORM AND ANTI-PREDATORY LENDING ACT
    SEC. 1400. SHORT TITLE; DESIGNATION AS ENUMERATED CONSUMER LAW.

    (a) Short <> Title.--This title may be
    cited as the ``Mortgage Reform and Anti-Predatory Lending Act''.

    (b) Designation <>  as Enumerated Consumer
    Law Under the Purview of the Bureau of Consumer Financial Protection.--
    Subtitles A, B, C, and E and sections 1471, 1472, 1475, and 1476, and
    the amendments made by such subtitles and sections, shall be enumerated
    consumer laws, as defined in section 1002, and come under the purview of
    the Bureau of Consumer Financial Protection for purposes of title X,
    including the transfer of functions and personnel under subtitle F of
    title X and the savings provisions of such subtitle.

    (c) Regulations; <>  Effective Date.--
    (1) Regulations.--The regulations required to be prescribed
    under this title or the amendments made by this title shall--
    (A) be prescribed in final form before the end of
    the 18-month period beginning on the designated transfer
    date; and
    (B) take effect not later than 12 months after the
    date of issuance of the regulations in final form.
    (2) Effective date established by rule.--Except as provided
    in paragraph (3), a section, or provision thereof, of this title
    shall take effect on the date on which the final regulations
    implementing such section, or provision, take effect.
    (3) Effective date.--A section of this title for which
    regulations have not been issued on the date that is 18 months
    after the designated transfer date shall take effect on such
    date.

    [[Page 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 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 2139]]

    (2) by inserting after section 129A (as so redesignated) the
    following new section:
    ``Sec. 129B. <> Residential mortgage loan
    origination

    ``(a) Finding and Purpose.--
    ``(1) Finding.--The Congress finds that economic
    stabilization would be enhanced by the protection, limitation,
    and regulation of the terms of residential mortgage credit and
    the practices related to such credit, while ensuring that
    responsible, affordable mortgage credit remains available to
    consumers.
    ``(2) Purpose.--It is the purpose of this section and
    section 129C to assure that consumers are offered and receive
    residential mortgage loans on terms that reasonably reflect
    their ability to repay the loans and that are understandable and
    not unfair, deceptive or abusive.

    ``(b) Duty of Care.--
    ``(1) Standard.--Subject to regulations prescribed under
    this subsection, each mortgage originator shall, in addition to
    the duties imposed by otherwise applicable provisions of State
    or Federal law--
    ``(A) be qualified and, when required, registered
    and licensed as a mortgage originator in accordance with
    applicable State or Federal law, including the Secure
    and Fair Enforcement for Mortgage Licensing Act of 2008;
    and
    ``(B) include on all loan documents any unique
    identifier of the mortgage originator provided by the
    Nationwide Mortgage Licensing System and Registry.
    ``(2) Compliance <>  procedures
    required.--The Board 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 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) <>  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 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.-- <> 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 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 <>  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 <>  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 <>  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 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 2144]]

    rate loan, under guidelines that the department or
    agency shall establish for loans they make, guarantee,
    or issue.
    ``(E) The <> refinancing is
    subject to a payment schedule that will fully amortize
    the refinancing in accordance with the regulations
    prescribed by the department or agency making,
    guaranteeing, or insuring the refinancing.
    ``(F) The terms of the refinancing do not result in
    a balloon payment, as defined in subsection
    (b)(2)(A)(ii).
    ``(G) Both the residential mortgage loan being
    refinanced and the refinancing satisfy all requirements
    of the department or agency making, guaranteeing, or
    insuring the refinancing.
    ``(6) Nonstandard loans.--
    ``(A) Variable rate loans that defer repayment of
    any principal or interest.--For purposes of determining,
    under this subsection, a consumer's ability to repay a
    variable rate residential mortgage loan that allows or
    requires the consumer to defer the repayment of any
    principal or interest, the creditor shall use a fully
    amortizing repayment schedule.
    ``(B) Interest-only loans.--For purposes of
    determining, under this subsection, a consumer's ability
    to repay a residential mortgage loan that permits or
    requires the payment of interest only, the creditor
    shall use the payment amount required to amortize the
    loan by its final maturity.
    ``(C) Calculation for negative amortization.--In
    making any determination under this subsection, a
    creditor shall also take into consideration any balance
    increase that may accrue from any negative amortization
    provision.
    ``(D) Calculation process.--For purposes of making
    any determination under this subsection, a creditor
    shall calculate the monthly payment amount for principal
    and interest on any residential mortgage loan by
    assuming--
    ``(i) the loan proceeds are fully disbursed on
    the date of the consummation of the loan;
    ``(ii) the loan is to be repaid in
    substantially equal monthly amortizing payments
    for principal and interest over the entire term of
    the loan with no balloon payment, unless the loan
    contract requires more rapid repayment (including
    balloon payment), in which case the calculation
    shall be made (I) in accordance with regulations
    prescribed by the Board, 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 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 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 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 <> 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 <>  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 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 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 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) <> shall publish, and update
    at least weekly, average prime offer rates;
    ``(B) may publish multiple rates based on varying
    types of mortgage transactions; and
    ``(C) shall adjust the thresholds established under
    subclause (I), (II), and (III) of paragraph (1)(B)(ii)
    as necessary to reflect significant changes in market
    conditions and to effectuate the purposes of the
    Mortgage Reform and Anti-Predatory Lending Act.
    ``(3) Phased-out <> penalties on
    qualified mortgages.--A qualified mortgage (as defined in
    subsection (b)(2)) may not contain terms under which a consumer
    must pay a prepayment penalty for paying all or part of the
    principal after the loan is consummated in excess of the
    following limitations:
    ``(A) During the 1-year period beginning on the date
    the loan is consummated, the prepayment penalty shall
    not exceed an amount equal to 3 percent of the
    outstanding balance on the loan.
    ``(B) During the 1-year period beginning after the
    period described in subparagraph (A), the prepayment
    penalty shall not exceed an amount equal to 2 percent of
    the outstanding balance on the loan.
    ``(C) During the 1-year period beginning after the
    1-year period described in subparagraph (B), the
    prepayment penalty shall not exceed an amount equal to 1
    percent of the outstanding balance on the loan.
    ``(D) After the end of the 3-year period beginning
    on the date the loan is consummated, no prepayment
    penalty may be imposed on a qualified mortgage.
    ``(4) Option for no prepayment penalty required.--A creditor
    may not offer a consumer a residential mortgage loan product
    that has a prepayment penalty for paying all or part of the
    principal after the loan is consummated as a term of the loan
    without offering the consumer a residential mortgage loan
    product that does not have a prepayment penalty as a term of the
    loan.

    ``(d) Single Premium Credit Insurance Prohibited.--No creditor may
    finance, directly or indirectly, in connection with any residential
    mortgage loan or with any extension of credit under an open end consumer
    credit plan secured by the principal dwelling of the consumer, any
    credit life, credit disability, credit unemployment, or credit property
    insurance, or any other accident, loss-of-income, life, or health
    insurance, or any payments directly or indirectly for any debt
    cancellation or suspension agreement or contract, except that--

    [[Page 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 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 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. <> 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 2154]]

    ``Sec. 128A. <> 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 <> 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 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 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 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 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 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 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.-- <> 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 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) <> 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 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 <> 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 <> 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 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 <> 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 <>  of Housing Counseling
    SEC. 1441. <> 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 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 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 <> 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 <>  procedures.--

    [[Page 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 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 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 <>  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 2169]]

    sources and that such homeownership counseling is
    available, including through programs sponsored by the
    Secretary of Housing and Urban Development.
    ``(B) Contact information.-- <> Each segment of the
    multimedia campaign under subparagraph (A) shall
    publicize the toll-free telephone number and website of
    the Department of Housing and Urban Development through
    which persons seeking housing counseling can locate a
    housing counseling agency in their State that is
    certified by the Secretary of Housing and Urban
    Development and can provide advice on buying a home,
    renting, defaults, foreclosures, credit issues, and
    reverse mortgages.
    ``(C) Authorization of appropriations.--There are
    authorized to be appropriated to the Secretary, not to
    exceed $3,000,000 for fiscal years 2009, 2010, and 2011,
    for the development, implementation, and conduct of
    national public service multimedia campaigns under this
    paragraph.
    ``(D) Foreclosure rescue education programs.--
    ``(i) In general.--Ten percent of any funds
    appropriated pursuant to the authorization under
    subparagraph (C) shall be used by the Director of
    Housing Counseling to conduct an education program
    in areas that have a high density of foreclosure.
    Such program shall involve direct mailings to
    persons living in such areas describing--
    ``(I) tips on avoiding foreclosure
    rescue scams;
    ``(II) tips on avoiding predatory
    lending mortgage agreements;
    ``(III) tips on avoiding for-profit
    foreclosure counseling services; and
    ``(IV) local counseling resources
    that are approved by the Department of
    Housing and Urban Development.
    ``(ii) Program emphasis.--In conducting the
    education program described under clause (i), the
    Director of Housing Counseling shall also place an
    emphasis on serving communities that have a high
    percentage of retirement communities or a high
    percentage of low-income minority communities.
    ``(iii) Terms defined.--For purposes of this
    subparagraph:
    ``(I) High density of
    foreclosures.--An area has a `high
    density of foreclosures' if such area is
    one of the metropolitan statistical
    areas (as that term is defined by the
    Director of the Office of Management and
    Budget) with the highest home
    foreclosure rates.
    ``(II) High percentage of retirement
    communities.--An area has a `high
    percentage of retirement communities' if
    such area is one of the metropolitan
    statistical areas (as that term is
    defined by the Director of the Office of
    Management and Budget) with the highest
    percentage of residents aged 65 or
    older.
    ``(III) High percentage of low-
    income minority communities.--An area
    has a `high

    [[Page 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) <> 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 <>  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 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 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 <> 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. <> DEFAULT AND FORECLOSURE
    DATABASE.

    (a) Establishment.--The <>  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 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 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) <> appropriate
    periodic financial and grant activity reporting,
    record retention, and audit requirements for the
    duration of the covered assistance to the
    organization or entity to ensure compliance with
    the limitations and requirements of this section,
    the regulations under this section, and any
    requirements or conditions under which such
    amounts were provided; and
    ``(ii) any other requirements that the
    Secretary determines are necessary to ensure
    appropriate administration and compliance.
    ``(2) Misuse of funds.--If any organization or entity that
    receives any covered assistance is determined by the Secretary
    to have used any covered assistance in a manner that is
    materially in violation of this section, the regulations issued
    under this section, or any requirements or conditions under
    which such assistance was provided--
    ``(A)
    the <> Secretary shall
    require that, within 12 months after the determination
    of such misuse, the organization or entity shall
    reimburse the Secretary for such misused amounts and
    return to the Secretary any such amounts that remain
    unused or uncommitted for use; and
    ``(B) such organization or entity shall be
    ineligible, at any time after such determination, to
    apply for or receive any further covered assistance.
    The remedies under this paragraph are in addition to any other
    remedies that may be available under law.
    ``(3) Covered assistance.--For <>
    purposes of this subsection, the term `covered assistance' means
    any grant or other financial assistance provided under this
    section.''.
    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 2175]]

    ``(a) Preparation and <> 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 <> Director shall also
    distribute to such lenders lists, organized by location, of
    homeownership counselors certified under section 106(e) of the Housing
    and Urban Development Act of 1968 (12 U.S.C. 1701x(e)) for use in
    complying with the requirement under subsection (c) of this section.

    ``(b) Contents.--Each booklet shall be in such form and detail as
    the Director shall prescribe and, in addition to such other information
    as the Director may provide, shall include in plain and understandable
    language the following information:
    ``(1) A description and explanation of the nature and
    purpose of the costs incident to a real estate settlement or a
    federally related mortgage loan. The description and explanation
    shall provide general information about the mortgage process as
    well as specific information concerning, at a minimum--
    ``(A) balloon payments;
    ``(B) prepayment penalties;
    ``(C) the advantages of prepayment; and
    ``(D) the trade-off between closing costs and the
    interest rate over the life of the loan.
    ``(2) An explanation and sample of the uniform settlement
    statement required by section 4.
    ``(3) <> A list and explanation of lending
    practices, including those prohibited by the Truth in Lending
    Act or other applicable Federal law, and of other unfair
    practices and unreasonable or unnecessary charges to be avoided
    by the prospective buyer with respect to a real estate
    settlement.
    ``(4) A <> list and explanation of questions a
    consumer obtaining a federally related mortgage loan should ask
    regarding the loan, including whether the consumer will have the
    ability to repay the loan, whether the consumer sufficiently
    shopped for the loan, whether the loan terms include prepayment
    penalties or balloon payments, and whether the loan will benefit
    the borrower.
    ``(5) An explanation of the right of rescission as to
    certain transactions provided by sections 125 and 129 of the
    Truth in Lending Act.
    ``(6) A brief explanation of the nature of a variable rate
    mortgage and a reference to the booklet entitled `Consumer
    Handbook on Adjustable Rate Mortgages', published by the
    Director, or to any suitable substitute of such booklet that the
    Director may subsequently adopt pursuant to such section.
    ``(7) A brief explanation of the nature of a home equity
    line of credit and a reference to the pamphlet required to be
    provided under section 127A of the Truth in Lending Act.
    ``(8) Information about homeownership counseling services
    made available pursuant to section 106(a)(4) of the Housing

    [[Page 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. <> 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 2177]]

    (2) Availability.-- <> 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. <> WARNINGS TO HOMEOWNERS OF
    FORECLOSURE RESCUE SCAMS.

    (a) Assistance to NRC.-- <> 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 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. <> 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 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 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.--
    <> 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 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) <>  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. <> 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 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) <> 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 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) <> the servicer has sent, by
    first-class mail, a second written notice, at least 30
    days after the mailing of the notice under subparagraph
    (A) that contains all the information described in each
    clause of such subparagraph; and
    ``(C) <> the servicer has not
    received from the borrower any demonstration of hazard
    insurance coverage for the property securing the
    mortgage by the end of the 15-day period beginning on
    the date the notice under subparagraph (B) was sent by
    the servicer.
    ``(2) Sufficiency of demonstration.--A servicer of a
    federally related mortgage shall accept any reasonable form of
    written confirmation from a borrower of existing insurance
    coverage, which shall include the existing insurance policy
    number along with the identity of, and contact information for,
    the insurance company or agent, or as otherwise required by the
    Bureau of Consumer Financial Protection.
    ``(3) Termination of force-placed insurance.--
    <> Within 15 days of the receipt by a servicer
    of confirmation of a borrower's existing insurance coverage, the
    servicer shall--
    ``(A) terminate the force-placed insurance; and
    ``(B) refund to the consumer all force-placed
    insurance premiums paid by the borrower during any
    period during which the borrower's insurance coverage
    and the force-placed insurance coverage were each in
    effect, and any related fees charged to the consumer's
    account with respect to the force-placed insurance
    during such period.
    ``(4) Clarification with respect to flood disaster
    protection act.--No provision of this section shall be construed
    as prohibiting a servicer from providing simultaneous or
    concurrent notice of a lack of flood insurance pursuant to
    section 102(e) of the Flood Disaster Protection Act of 1973.

    ``(m) Limitations on Force-placed Insurance Charges.--All charges,
    apart from charges subject to State regulation as the business of
    insurance, related to force-placed insurance imposed on the borrower by
    or through the servicer shall be bona fide and reasonable.''.

    [[Page 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.--
    <> 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: <> ``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. <> 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. <>  Requests for payoff amounts
    of home loan

    <> ``A creditor or servicer of a home loan shall
    send an accurate payoff balance within a reasonable time, but in no case
    more

    [[Page 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. <> 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 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.-- <> 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 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. <> 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 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.-- <> 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 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 2190]]

    ``(2) Subsequent violations.-- <> In
    the case of any person on whom a civil penalty has been imposed
    under paragraph (1), paragraph (1) shall be applied by
    substituting `$20,000' for `$10,000' with respect to all
    subsequent violations.
    ``(3) Assessment.--The agency referred to in subsection (a)
    or (c) of section 108 with respect to any person described in
    paragraph (1) shall assess any penalty under this subsection to
    which such person is subject.''.

    (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.-- <> 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 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. <>  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: <>  ``, 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 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. <> APPRAISAL MANAGEMENT COMPANY
    MINIMUM REQUIREMENTS.

    ``(a) In General.--
    <> The Board of Governors of
    the Federal Reserve System, the Comptroller of the Currency, the Federal
    Deposit Insurance Corporation, the National Credit Union Administration
    Board, the Federal Housing Finance Agency, and the Bureau of Consumer
    Financial Protection shall jointly, by rule, establish minimum
    requirements to be applied by a State in the registration of appraisal
    management companies. Such requirements shall include a requirement that
    such companies--
    ``(1) register with and be subject to supervision by a State
    appraiser certifying and licensing agency in each State in which
    such company operates;
    ``(2) verify that only licensed or certified appraisers are
    used for federally related transactions;
    ``(3) require that appraisals coordinated by an appraisal
    management company comply with the Uniform Standards of
    Professional Appraisal Practice; and
    ``(4) require that appraisals are conducted independently
    and free from inappropriate influence and coercion pursuant to
    the appraisal independence standards established under section
    129E of the Truth in Lending Act.

    ``(b) Relation to State Law.--Nothing in this section shall be
    construed to prevent States from establishing requirements in addition
    to any rules promulgated under subsection (a).
    ``(c) Federally Regulated Financial Institutions.--
    <> The requirements of subsection (a) shall apply
    to an appraisal management company that is a subsidiary owned and
    controlled by a financial institution and regulated by a Federal
    financial institution regulatory agency. An appraisal management company
    that is a subsidiary owned and controlled by a financial institution
    regulated by a Federal financial institution regulatory agency shall not
    be required to register with a State.

    ``(d) Registration Limitations.--An appraisal management company
    shall not be registered by a State or included on the national registry
    if such company, in whole or in part, directly or indirectly, is owned
    by any person who has had an appraiser license or certificate refused,
    denied, cancelled, surrendered in lieu of revocation, or revoked in any
    State. <>  Additionally, each person that owns
    more than 10 percent of an appraisal management company shall be of good
    moral character, as determined by the State appraiser certifying and
    licensing agency, and shall submit to a

    [[Page 2193]]

    background investigation carried out by the State appraiser certifying
    and licensing agency.

    ``(e) Reporting.-- <> The Board of Governors of
    the Federal Reserve System, the Comptroller of the Currency, the Federal
    Deposit Insurance Corporation, the National Credit Union Administration
    Board, the Federal Housing Finance Agency, and the Bureau of Consumer
    Financial Protection 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 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 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. <>  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) <>  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 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 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.--
    <> 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 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. <> 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. <> 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 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.-- <> 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 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 <> 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) <> 12 months after the date of
    enactment of this Act, the Government Accountability Office
    shall submit a study

    [[Page 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) <> 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.-- <> 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 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. <> 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.-- <> 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 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. <> 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. <> 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 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) <>  Public Availability.--Data shall be made
    available according to the following guidelines:
    (1) <> 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) <> 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 <> 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 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 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) <>  is amended--

    [[Page 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: <>  ``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. <> 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.-- <> 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 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: <>  ``. 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) <> 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 <> 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 2209]]

    ``(d) Coverage of Existing Programs.-- <> 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. <> ADDITIONAL ASSISTANCE FOR
    NEIGHBORHOOD STABILIZATION PROGRAM.

    (a) In General.-- <> 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) <> 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) <> each State and local
    government receiving grant amounts shall establish
    procedures to create preferences

    [[Page 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) <> 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) <>  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) <> 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) <>  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) <>  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) <> 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 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. <> 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.-- <> 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 2212]]

    (e) Limitation on Distribution of Assistance.--
    (1) In general.--None of the amounts made available under
    this section shall be distributed to--
    (A) <> 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. <> 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 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. <> 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.-- <> 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 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.--
    <> Each person described under
    paragraph (2) shall make available to the public on the
    Internet website of such person the information
    disclosed by such person under subparagraph (A).
    ``(2) Person described.--A person is described in this
    paragraph if--
    ``(A) the person is required to file reports with
    the Commission pursuant to paragraph (1)(A); and
    ``(B) conflict minerals are necessary to the
    functionality or production of a product manufactured by
    such person.
    ``(3) Revisions and waivers.--
    <> The Commission shall revise
    or temporarily waive the requirements described in paragraph (1)
    if the President transmits to the Commission a determination
    that--
    ``(A) such revision or waiver is in the national
    security interest of the United States and the President
    includes the reasons therefor; and
    ``(B) <> establishes a date, not
    later than 2 years after the initial publication of such
    exemption, on which such exemption shall expire.
    ``(4) Termination of disclosure requirements.--
    <> The
    requirements of paragraph (1) shall terminate on the date on
    which the President determines and certifies to the appropriate
    congressional committees, but in no case earlier than

    [[Page 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.-- <> 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.-- <> 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 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) <> 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.-- <> 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. <> 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 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 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. <> 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 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 <> 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 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.--
    <> 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 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 2222]]

    ``(A) In general.-- <> To the
    extent practicable, the Commission shall make available
    online, to the public, a compilation of the information
    required to be submitted under the rules issued under
    paragraph (2)(A).
    ``(B) Other information.--Nothing in this paragraph
    shall require the Commission to make available online
    information other than the information required to be
    submitted under the rules issued under paragraph (2)(A).
    ``(4) Authorization of appropriations.--There are authorized
    to be appropriated to the Commission such sums as may be
    necessary to carry out this subsection.''.
    SEC. 1505. STUDY BY THE COMPTROLLER GENERAL.

    (a) In General.-- <> 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 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 <> 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) <>  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.