Dodd-Frank Act Text

1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 2 (a) SHORT TITLE.—This Act may be cited as the 3 ‘‘Dodd-Frank Wall Street Reform and Consumer Protec4 tion Act’’. 5 (b) TABLE OF CONTENTS.—The table of contents for 6 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. 2 Sec. 153. Purpose and duties of the Office. Sec. 154. Organizational structure; responsibilities of primary programmatic units. Sec. 155. Funding. Sec. 156. Transition oversight. Subtitle C—Additional Board of Governors Authority for Certain Nonbank Financial Companies and Bank Holding Companies Sec. 161. Reports by and examinations of nonbank financial companies by the Board of Governors. Sec. 162. Enforcement. Sec. 163. Acquisitions. Sec. 164. Prohibition against management interlocks between certain financial companies. Sec. 165. Enhanced supervision and prudential standards for nonbank financial companies supervised by the Board of Governors and certain bank holding companies. Sec. 166. Early remediation requirements. Sec. 167. Affiliations. Sec. 168. Regulations. Sec. 169. Avoiding duplication. Sec. 170. Safe harbor. Sec. 171. Leverage and risk-based capital requirements. Sec. 172. Examination and enforcement actions for insurance and orderly liquidation purposes. Sec. 173. Access to United States financial market by foreign institutions. Sec. 174. Studies and reports on holding company capital requirements. Sec. 175. International policy coordination. Sec. 176. Rule of construction. TITLE II—ORDERLY LIQUIDATION AUTHORITY Sec. 201. Definitions. Sec. 202. Judicial review. Sec. 203. Systemic risk determination. Sec. 204. Orderly liquidation of covered financial companies. Sec. 205. Orderly liquidation of covered brokers and dealers. Sec. 206. Mandatory terms and conditions for all orderly liquidation actions. Sec. 207. Directors not liable for acquiescing in appointment of receiver. Sec. 208. Dismissal and exclusion of other actions. Sec. 209. Rulemaking; non-conflicting law. Sec. 210. Powers and duties of the Corporation. Sec. 211. Miscellaneous provisions. Sec. 212. Prohibition of circumvention and prevention of conflicts of interest. Sec. 213. Ban on certain activities by senior executives and directors. Sec. 214. Prohibition on taxpayer funding. Sec. 215. Study on secured creditor haircuts. Sec. 216. Study on bankruptcy process for financial and nonbank financial institutions 3 Sec. 217. Study on international coordination relating to bankruptcy process for nonbank financial institutions TITLE III—TRANSFER OF POWERS TO THE COMPTROLLER OF THE CURRENCY, THE CORPORATION, AND THE BOARD OF GOVERNORS Sec. 300. Short title. Sec. 301. Purposes. Sec. 302. Definition. Subtitle A—Transfer of Powers and Duties Sec. 311. Transfer date. Sec. 312. Powers and duties transferred. Sec. 313. Abolishment. Sec. 314. Amendments to the Revised Statutes. Sec. 315. Federal information policy. Sec. 316. Savings provisions. Sec. 317. References in Federal law to Federal banking agencies. Sec. 318. Funding. Sec. 319. Contracting and leasing authority. Subtitle B—Transitional Provisions Sec. 321. Interim use of funds, personnel, and property of the Office of Thrift Supervision. Sec. 322. Transfer of employees. Sec. 323. Property transferred. Sec. 324. Funds transferred. Sec. 325. Disposition of affairs. Sec. 326. Continuation of services. Sec. 327. Implementation plan and reports. Subtitle C—Federal Deposit Insurance Corporation Sec. 331. Deposit insurance reforms. Sec. 332. Elimination of procyclical assessments. Sec. 333. Enhanced access to information for deposit insurance purposes. Sec. 334. Transition reserve ratio requirements to reflect new assessment base. Sec. 335. Permanent increase in deposit and share insurance. Sec. 336. Management of the Federal Deposit Insurance Corporation. Subtitle D—Other Matters Sec. 341. Branching. Sec. 342. Office of Minority and Women Inclusion. Sec. 343. Insurance of transaction accounts. Subtitle E—Technical and Conforming Amendments Sec. 351. Effective date. Sec. 352. Balanced Budget and Emergency Deficit Control Act of 1985. Sec. 353. Bank Enterprise Act of 1991. Sec. 354. Bank Holding Company Act of 1956. Sec. 355. Bank Holding Company Act Amendments of 1970. Sec. 356. Bank Protection Act of 1968. Sec. 357. Bank Service Company Act. 4 Sec. 358. Community Reinvestment Act of 1977. Sec. 359. Crime Control Act of 1990. Sec. 360. Depository Institution Management Interlocks Act. Sec. 361. Emergency Homeowners’ Relief Act. Sec. 362. Federal Credit Union Act. Sec. 363. Federal Deposit Insurance Act. Sec. 364. Federal Home Loan Bank Act. Sec. 365. Federal Housing Enterprises Financial Safety and Soundness Act of 1992. Sec. 366. Federal Reserve Act. Sec. 367. Financial Institutions Reform, Recovery, and Enforcement Act of 1989. Sec. 368. Flood Disaster Protection Act of 1973. Sec. 369. Home Owners’ Loan Act. Sec. 370. Housing Act of 1948. Sec. 371. Housing and Community Development Act of 1992. Sec. 372. Housing and Urban-Rural Recovery Act of 1983. Sec. 373. National Housing Act. Sec. 374. Neighborhood Reinvestment Corporation Act. Sec. 375. Public Law 93–100. Sec. 376. Securities Exchange Act of 1934. Sec. 377. Title 18, United States Code. Sec. 378. Title 31, United States Code. TITLE IV—REGULATION OF ADVISERS TO HEDGE FUNDS AND OTHERS Sec. 401. Short title. Sec. 402. Definitions. Sec. 403. Elimination of private adviser exemption; limited exemption for foreign private advisers; limited intrastate exemption. Sec. 404. Collection of systemic risk data; reports; examinations; disclosures. Sec. 405. Disclosure provision amendment. Sec. 406. Clarification of rulemaking authority. Sec. 407. Exemption of venture capital fund advisers. Sec. 408. Exemption of and record keeping by private equity fund advisers. Sec. 409. Family offices. Sec. 410. State and Federal responsibilities; asset threshold for Federal registration of investment advisers. Sec. 411. Custody of client assets. Sec. 412. Adjusting the accredited investor standard. Sec. 413. GAO study and report on accredited investors. Sec. 414. GAO study on self-regulatory organization for private funds. Sec. 415. Commission study and report on short selling. Sec. 416. Transition period. TITLE V—INSURANCE Subtitle A—Office of National Insurance Sec. 501. Short title. Sec. 502. Federal Insurance Office. Subtitle B—State-Based Insurance Reform Sec. 511. Short title. Sec. 512. Effective date. 5 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. 6 Sec. 625. Treatment of dividends by certain mutual holding companies. Sec. 626. Intermediate holding companies. Sec. 627. Interest-bearing transaction accounts authorized. Sec. 628. Credit card bank small business lending. TITLE VII—WALL STREET TRANSPARENCY AND ACCOUNTABILITY Sec. 701. Short title. Subtitle A—Regulation of Over-the-Counter Swaps Markets PART I—REGULATORY AUTHORITY Sec. 711. Definitions. Sec. 712. Review of regulatory authority. Sec. 713. Portfolio margining conforming changes. Sec. 714. Abusive swaps. Sec. 715. Authority to prohibit participation in swap activities. Sec. 716. Prohibition against Federal Government bailouts of swaps entities. Sec. 717. New product approval CFTC—SEC process. Sec. 718. Determining status of novel derivative products. Sec. 719. Studies. Sec. 720. Memorandum. PART II—REGULATION OF SWAP MARKETS Sec. 721. Definitions. Sec. 722. Jurisdiction. Sec. 723. Clearing. Sec. 724. Swaps; segregation and bankruptcy treatment. Sec. 725. Derivatives clearing organizations. Sec. 726. Rulemaking on conflict of interest. Sec. 727. Public reporting of swap transaction data. Sec. 728. Swap data repositories. Sec. 729. Reporting and recordkeeping. Sec. 730. Large swap trader reporting. Sec. 731. Registration and regulation of swap dealers and major swap participants. Sec. 732. Conflicts of interest. Sec. 733. Swap execution facilities. Sec. 734. Derivatives transaction execution facilities and exempt boards of trade. Sec. 735. Designated contract markets. Sec. 736. Margin. Sec. 737. Position limits. Sec. 738. Foreign boards of trade. Sec. 739. Legal certainty for swaps. Sec. 740. Multilateral clearing organizations. Sec. 741. Enforcement. Sec. 742. Retail commodity transactions. Sec. 743. Other authority. Sec. 744. Restitution remedies. Sec. 745. Enhanced compliance by registered entities. Sec. 746. Insider trading. Sec. 747. Antidisruptive practices authority. Sec. 748. Commodity whistleblower incentives and protection. 7 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 securitybased swaps. Sec. 769. Definitions under the Investment Company Act of 1940. Sec. 770. Definitions under the Investment Advisers Act of 1940. Sec. 771. Other authority. Sec. 772. Jurisdiction. Sec. 773. Civil penalties. Sec. 774. Effective date. TITLE VIII—PAYMENT, CLEARING, AND SETTLEMENT SUPERVISION Sec. 801. Short title. Sec. 802. Findings and purposes. Sec. 803. Definitions. Sec. 804. Designation of systemic importance. Sec. 805. Standards for systemically important financial market utilities and payment, clearing, or settlement activities. Sec. 806. Operations of designated financial market utilities. Sec. 807. Examination of and enforcement actions against designated financial market utilities. Sec. 808. Examination of and enforcement actions against financial institutions subject to standards for designated activities. Sec. 809. Requests for information, reports, or records. Sec. 810. Rulemaking. Sec. 811. Other authority. Sec. 812. Consultation. Sec. 813. Common framework for designated clearing entity risk management. Sec. 814. Effective date. TITLE IX—INVESTOR PROTECTIONS AND IMPROVEMENTS TO THE REGULATION OF SECURITIES Sec. 901. Short title. Subtitle A—Increasing Investor Protection Sec. 911. Investor Advisory Committee established. 8 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. 9 Sec. 929V. Security Investor Protection Act amendments. Sec. 929W. Notice to missing security holders. Sec. 929X. Short sale reforms. Sec. 929Y. Study on extraterritorial private rights of action. Sec. 929Z. GAO study on securities litigation. Subtitle C—Improvements to the Regulation of Credit Rating Agencies Sec. 931. Findings. Sec. 932. Enhanced regulation, accountability, and transparency of nationally recognized statistical rating organizations. Sec. 933. State of mind in private actions. Sec. 934. Referring tips to law enforcement or regulatory authorities. Sec. 935. Consideration of information from sources other than the issuer in rating decisions. Sec. 936. Qualification standards for credit rating analysts. Sec. 937. Timing of regulations. Sec. 938. Universal ratings symbols. Sec. 939. Removal of statutory references to credit ratings. Sec. 939A. Review of reliance on ratings. Sec. 939B. Elimination of exemption from fair disclosure rule. Sec. 939C. Securities and Exchange Commission study on strengthening credit rating agency independence. Sec. 939D. Government Accountability Office study on alternative business models. Sec. 939E. Government Accountability Office study on the creation of an independent professional analyst organization. Sec. 939F. Study and rulemaking on assigned credit ratings. Sec. 939G. Effect of Rule 436(g). Sec. 939H. Sense of Congress. Subtitle D—Improvements to the Asset-Backed Securitization Process Sec. 941. Regulation of credit risk retention. Sec. 942. Disclosures and reporting for asset-backed securities. Sec. 943. Representations and warranties in asset-backed offerings. Sec. 944. Exempted transactions under the Securities Act of 1933. Sec. 945. Due diligence analysis and disclosure in asset-backed securities issues. Sec. 946. Study on the macroeconomic effects of risk retention requirements. Subtitle E—Accountability and Executive Compensation Sec. 951. Shareholder vote on executive compensation disclosures. Sec. 952. Compensation committee independence. Sec. 953. Executive compensation disclosures. Sec. 954. Recovery of erroneously awarded compensation. Sec. 955. Disclosure regarding employee and director hedging. Sec. 956. Enhanced compensation structure reporting. Sec. 957. Voting by brokers. Subtitle F—Improvements to the Management of the Securities and Exchange Commission Sec. 961. Report and certification of internal supervisory controls. Sec. 962. Triennial report on personnel management. Sec. 963. Annual financial controls audit. 10 Sec. 964. Report on oversight of national securities associations. Sec. 965. Compliance examiners. Sec. 966. Suggestion program for employees of the Commission. Sec. 967. Commission organizational study and reform. Sec. 968. Study on SEC revolving door. Subtitle G—Strengthening Corporate Governance Sec. 971. Proxy access. Sec. 972. Disclosures regarding chairman and CEO structures. Subtitle H—Municipal Securities Sec. 975. Regulation of municipal securities and changes to the board of the MSRB. Sec. 976. Government Accountability Office study of increased disclosure to investors. Sec. 977. Government Accountability Office study on the municipal securities markets. Sec. 978. Funding for Governmental Accounting Standards Board. Sec. 979. Commission Office of Municipal Securities. Subtitle I—Public Company Accounting Oversight Board, Portfolio Margining, and Other Matters Sec. 981. Authority to share certain information with foreign authorities. Sec. 982. Oversight of brokers and dealers. Sec. 983. Portfolio margining. Sec. 984. Loan or borrowing of securities. Sec. 985. Technical corrections to Federal securities laws. Sec. 986. Conforming amendments relating to repeal of the Public Utility Holding Company Act of 1935. Sec. 987. Amendment to definition of material loss and nonmaterial losses to the Deposit Insurance Fund for purposes of Inspector General reviews. Sec. 988. Amendment to definition of material loss and nonmaterial losses to the National Credit Union Share Insurance Fund for purposes of Inspector General reviews. Sec. 989. Government Accountability Office study on proprietary trading. Sec. 989A. Senior investor protections. Sec. 989B. Designated Federal entity inspectors general independence. Sec. 989C. Strengthening Inspector General accountability. Sec. 989D. Removal of Inspectors General of designated Federal entities. Sec. 989E. Additional oversight of financial regulatory system. Sec. 989F. GAO study of person to person lending. Sec. 989G. Exemption for nonaccelerated filers. Sec. 989H. Corrective responses by heads of certain establishments to deficiencies identified by Inspectors General. Sec. 989I. GAO study regarding exemption for smaller issuers. Sec. 989J. Further promoting the adoption of the NAIC Model Regulations that enhance protection of seniors and other consumers. Subtitle J—Securities and Exchange Commission Match Funding Sec. 991. Securities and Exchange Commission match funding. TITLE X—BUREAU OF CONSUMER FINANCIAL PROTECTION 11 Sec. 1001. Short title. Sec. 1002. Definitions. Subtitle A—Bureau of Consumer Financial Protection Sec. 1011. Establishment of the Bureau of Consumer Financial Protection. Sec. 1012. Executive and administrative powers. Sec. 1013. Administration. Sec. 1014. Consumer Advisory Board. Sec. 1015. Coordination. Sec. 1016. Appearances before and reports to Congress. Sec. 1017. Funding; penalties and fines. Sec. 1018. Effective date. Subtitle B—General Powers of the Bureau Sec. 1021. Purpose, objectives, and functions. Sec. 1022. Rulemaking authority. Sec. 1023. Review of Bureau regulations. Sec. 1024. Supervision of nondepository covered persons. Sec. 1025. Supervision of very large banks, savings associations, and credit unions. Sec. 1026. Other banks, savings associations, and credit unions. Sec. 1027. Limitations on authorities of the Bureau; preservation of authorities. Sec. 1028. Authority to restrict mandatory pre-dispute arbitration. Sec. 1029. Exclusion for auto dealers. Sec. 1029A. Effective date. Subtitle C—Specific Bureau Authorities Sec. 1031. Prohibiting unfair, deceptive, or abusive acts or practices. Sec. 1032. Disclosures. Sec. 1033. Consumer rights to access information. Sec. 1034. Response to consumer complaints and inquiries. Sec. 1035. Private education loan ombudsman. Sec. 1036. Prohibited acts. Sec. 1037. Effective date. Subtitle D—Preservation of State Law Sec. 1041. Relation to State law. Sec. 1042. Preservation of enforcement powers of States. Sec. 1043. Preservation of existing contracts. Sec. 1044. State law preemption standards for national banks and subsidiaries clarified. Sec. 1045. Clarification of law applicable to nondepository institution subsidiaries. Sec. 1046. State law preemption standards for Federal savings associations and subsidiaries clarified. Sec. 1047. Visitorial standards for national banks and savings associations. Sec. 1048. Effective date. Subtitle E—Enforcement Powers Sec. 1051. Definitions. Sec. 1052. Investigations and administrative discovery. 12 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. 13 Sec. 1098A. Amendments to the Interstate Land Sales Full Disclosure Act. Sec. 1099. Amendments to the Right to Financial Privacy Act of 1978. Sec. 1100. Amendments to the Secure and Fair Enforcement for Mortgage Licensing Act of 2008. Sec. 1100A. Amendments to the Truth in Lending Act. Sec. 1100B. Amendments to the Truth in Savings Act. Sec. 1100C. Amendments to the Telemarketing and Consumer Fraud and Abuse Prevention Act. Sec. 1100D. Amendments to the Paperwork Reduction Act. Sec. 1100E. Adjustments for inflation in the Truth in Lending Act. Sec. 1100F. Use of consumer reports. Sec. 1100G. Small business fairness and regulatory transparency. Sec. 1100H. Effective date. TITLE XI—FEDERAL RESERVE SYSTEM PROVISIONS Sec. 1101. Federal Reserve Act amendments on emergency lending authority. Sec. 1102. Reviews of special Federal reserve credit facilities. Sec. 1103. Public access to information. Sec. 1104. Liquidity event determination. Sec. 1105. Emergency financial stabilization. Sec. 1106. Additional related amendments. Sec. 1107. Federal Reserve Act amendments on Federal reserve bank governance. Sec. 1108. Federal Reserve Act amendments on supervision and regulation policy. Sec. 1109. GAO audit of the Federal Reserve facilities; publication of Board actions. TITLE XII—IMPROVING ACCESS TO MAINSTREAM FINANCIAL INSTITUTIONS Sec. 1201. Short title. Sec. 1202. Purpose. Sec. 1203. Definitions. Sec. 1204. Expanded access to mainstream financial institutions. Sec. 1205. Low-cost alternatives to payday loans. Sec. 1206. Grants to establish loan-loss reserve funds. Sec. 1207. Procedural provisions. Sec. 1208. Authorization of appropriations. Sec. 1209. Regulations. Sec. 1210. Evaluation and reports to Congress. TITLE XIII—PAY IT BACK ACT Sec. 1301. Short title. Sec. 1302. Amendment to reduce TARP authorization. Sec. 1303. Report. Sec. 1304. Amendments to Housing and Economic Recovery Act of 2008. Sec. 1305. Federal Housing Finance Agency report. Sec. 1306. Repayment of unobligated ARRA funds. TITLE XIV—MORTGAGE REFORM AND ANTI-PREDATORY LENDING ACT Sec. 1400. Short title; designation as enumerated consumer law. 14 Subtitle A—Residential Mortgage Loan Origination Standards Sec. 1401. Definitions. Sec. 1402. Residential mortgage loan origination. Sec. 1403. Prohibition on steering incentives. Sec. 1404. Liability. Sec. 1405. Regulations. Sec. 1406. Study of shared appreciation mortgages. Subtitle B—Minimum Standards For Mortgages Sec. 1411. Ability to repay. Sec. 1412. Safe harbor and rebuttable presumption. Sec. 1413. Defense to foreclosure. Sec. 1414. Additional standards and requirements. Sec. 1415. Rule of construction. Sec. 1416. Amendments to civil liability provisions. Sec. 1417. Lender rights in the context of borrower deception. Sec. 1418. Six-month notice required before reset of hybrid adjustable rate mortgages. Sec. 1419. Required disclosures. Sec. 1420. Disclosures required in monthly statements for residential mortgage loans. Sec. 1421. Report by the GAO. Sec. 1422. State attorney general enforcement authority. Subtitle C—High-Cost Mortgages Sec. 1431. Definitions relating to high-cost mortgages. Sec. 1432. Amendments to existing requirements for certain mortgages. Sec. 1433. Additional requirements for certain mortgages. Subtitle D—Office of Housing Counseling Sec. 1441. Short title. Sec. 1442. Establishment of Office of Housing Counseling. Sec. 1443. Counseling procedures. Sec. 1444. Grants for housing counseling assistance. Sec. 1445. Requirements to use HUD-certified counselors under HUD programs. Sec. 1446. Study of defaults and foreclosures. Sec. 1447. Default and foreclosure database. Sec. 1448. Definitions for counseling-related programs. Sec. 1449. Accountability and transparency for grant recipients. Sec. 1450. Updating and simplification of mortgage information booklet. Sec. 1451. Home inspection counseling. Sec. 1452. Warnings to homeowners of foreclosure rescue scams. Subtitle E—Mortgage Servicing Sec. 1461. Escrow and impound accounts relating to certain consumer credit transactions. Sec. 1462. Disclosure notice required for consumers who waive escrow services. Sec. 1463. Real Estate Settlement Procedures Act of 1974 amendments. Sec. 1464. Truth in Lending Act amendments. Sec. 1465. Escrows included in repayment analysis. 15 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—FINANCIAL CRISIS ASSESSMENT AND FUND Sec. 1601. Financial crisis special assessment. Sec. 1602. Financial Crisis Special Assessment Fund. Sec. 1603. Certain swaps, etc., not treated as section 1256 contracts. 16 1 SEC. 2. DEFINITIONS. 2 As used in this Act, the following definitions shall 3 apply, except as the context otherwise requires or as other4 wise specifically provided in this Act: 5 (1) AFFILIATE.—The term ‘‘affiliate’’ has the 6 same meaning as in section 3 of the Federal Deposit 7 Insurance Act (12 U.S.C. 1813). 8 (2) APPROPRIATE FEDERAL BANKING AGEN9 CY.—On and after the transfer date, the term ‘‘ap10 propriate Federal banking agency’’ has the same 11 meaning as in section 3(q) of the Federal Deposit 12 Insurance Act (12 U.S.C. 1813(q)), as amended by 13 title III. 14 (3) BOARD OF GOVERNORS.—The term ‘‘Board 15 of Governors’’ means the Board of Governors of the 16 Federal Reserve System. 17 (4) BUREAU.—The term ‘‘Bureau’’ means the 18 Bureau of Consumer Financial Protection estab19 lished under title X. 20 (5) COMMISSION.—The term ‘‘Commission’’ 21 means the Securities and Exchange Commission, ex22 cept in the context of the Commodity Futures Trad23 ing Commission. 24 (6) COMMODITY FUTURES TERMS.—The terms 25 ‘‘futures commission merchant’’, ‘‘swap’’, ‘‘swap 26 dealer’’, ‘‘swap execution facility’’, ‘‘derivatives clear17 1 ing organization’’, ‘‘board of trade’’, ‘‘commodity 2 trading advisor’’, ‘‘commodity pool’’, and ‘‘com3 modity pool operator’’ have the same meanings as 4 given the terms in section 1a of the Commodity Ex5 change Act (7 U.S.C. 1 et seq.). 6 (7) CORPORATION.—The term ‘‘Corporation’’ 7 means the Federal Deposit Insurance Corporation. 8 (8) COUNCIL.—The term ‘‘Council’’ means the 9 Financial Stability Oversight Council established 10 under title I. 11 (9) CREDIT UNION.—The term ‘‘credit union’’ 12 means a Federal credit union, State credit union, or 13 State-chartered credit union, as those terms are de14 fined in section 101 of the Federal Credit Union Act 15 (12 U.S.C. 1752). 16 (10) FEDERAL BANKING AGENCY.—The term— 17 (A) ‘‘Federal banking agency’’ means, indi18 vidually, the Board of Governors, the Office of 19 the Comptroller of the Currency, and the Cor20 poration; and 21 (B) ‘‘Federal banking agencies’’ means all 22 of the agencies referred to in subparagraph (A), 23 collectively. 24 (11) FUNCTIONALLY REGULATED SUB25 SIDIARY.—The term ‘‘functionally regulated sub18 1 sidiary’’ has the same meaning as in section 5(c)(5) 2 of the Bank Holding Company Act of 1956 (12 3 U.S.C. 1844(c)(5)). 4 (12) PRIMARY FINANCIAL REGULATORY AGEN5 CY.—The term ‘‘primary financial regulatory agen6 cy’’ means— 7 (A) the appropriate Federal banking agen8 cy, with respect to institutions described in sec9 tion 3(q) of the Federal Deposit Insurance Act, 10 except to the extent that an institution is or the 11 activities of an institution are otherwise de12 scribed in subparagraph (B), (C), (D), or (E); 13 (B) the Securities and Exchange Commis14 sion, with respect to— 15 (i) any broker or dealer that is reg16 istered with the Commission under the Se17 curities Exchange Act of 1934, with re18 spect to the activities of the broker or deal19 er that require the broker or dealer to be 20 registered under that Act; 21 (ii) any investment company that is 22 registered with the Commission under the 23 Investment Company Act of 1940, with re24 spect to the activities of the investment 19 1 company that require the investment com2 pany to be registered under that Act; 3 (iii) any investment adviser that is 4 registered with the Commission under the 5 Investment Advisers Act of 1940, with re6 spect to the investment advisory activities 7 of such company and activities that are in8 cidental to such advisory activities; 9 (iv) any clearing agency registered 10 with the Commission under the Securities 11 Exchange Act of 1934, with respect to the 12 activities of the clearing agency that re13 quire the agency to be registered under 14 such Act; 15 (v) any nationally recognized statis16 tical rating organization registered with 17 the Commission under the Securities Ex18 change Act of 1934; 19 (vi) any transfer agent registered with 20 the Commission under the Securities Ex21 change Act of 1934; 22 (vii) any exchange registered as a na23 tional securities exchange with the Com24 mission under the Securities Exchange Act 25 of 1934; 20 1 (viii) any national securities associa2 tion registered with the Commission under 3 the Securities Exchange Act of 1934; 4 (ix) any securities information proc5 essor registered with the Commission 6 under the Securities Exchange Act of 7 1934; 8 (x) the Municipal Securities Rule9 making Board established under the Secu10 rities Exchange Act of 1934; 11 (xi) the Public Company Accounting 12 Oversight Board established under the 13 Sarbanes-Oxley Act of 2002 (15 U.S.C. 14 7211 et seq.); 15 (xii) the Securities Investor Protection 16 Corporation established under the Securi17 ties Investor Protection Act of 1970 (15 18 U.S.C. 78aaa et seq.); and 19 (xiii) any security-based swap execu20 tion facility, security-based swap data re21 pository, security-based swap dealer or 22 major security-based swap participant reg23 istered with the Commission under the Se24 curities Exchange Act of 1934, with re25 spect to the security-based swap activities 21 1 of the person that require such person to 2 be registered under such Act; 3 (C) the Commodity Futures Trading Com4 mission, with respect to— 5 (i) any futures commission merchant 6 registered with the Commodity Futures 7 Trading Commission under the Commodity 8 Exchange Act (7 U.S.C. 1 et seq.), with 9 respect to the activities of the futures com10 mission merchant that require the futures 11 commission merchant to be registered 12 under that Act; 13 (ii) any commodity pool operator reg14 istered with the Commodity Futures Trad15 ing Commission under the Commodity Ex16 change Act (7 U.S.C. 1 et seq.), with re17 spect to the activities of the commodity 18 pool operator that require the commodity 19 pool operator to be registered under that 20 Act, or a commodity pool, as defined in 21 that Act; 22 (iii) any commodity trading advisor or 23 introducing broker registered with the 24 Commodity Futures Trading Commission 25 under the Commodity Exchange Act (7 22 1 U.S.C. 1 et seq.), with respect to the ac2 tivities of the commodity trading advisor or 3 introducing broker that require the com4 modity trading adviser or introducing 5 broker to be registered under that Act; 6 (iv) any derivatives clearing organiza7 tion registered with the Commodity Fu8 tures Trading Commission under the Com9 modity Exchange Act (7 U.S.C. 1 et seq.), 10 with respect to the activities of the deriva11 tives clearing organization that require the 12 derivatives clearing organization to be reg13 istered under that Act; 14 (v) any board of trade designated as 15 a contract market by the Commodity Fu16 tures Trading Commission under the Com17 modity Exchange Act (7 U.S.C. 1 et seq.); 18 (vi) any futures association registered 19 with the Commodity Futures Trading 20 Commission under the Commodity Ex21 change Act (7 U.S.C. 1 et seq.); 22 (vii) any retail foreign exchange dealer 23 registered with the Commodity Futures 24 Trading Commission under the Commodity 25 Exchange Act (7 U.S.C. 1 et seq.), with 23 1 respect to the activities of the retail foreign 2 exchange dealer that require the retail for3 eign exchange dealer to be registered under 4 that Act; 5 (viii) any swap execution facility, swap 6 data repository, swap dealer, or major 7 swap participant registered with the Com8 modity Futures Trading Commission 9 under the Commodity Exchange Act (7 10 U.S.C. 1 et seq.) with respect to the swap 11 activities of the person that require such 12 person to be registered under that Act; and 13 (ix) any registered entity under the 14 Commodity Exchange Act (7 U.S.C. 1 et 15 seq.), with respect to the activities of the 16 registered entity that require the registered 17 entity to be registered under that Act; 18 (D) the State insurance authority of the 19 State in which an insurance company is domi20 ciled, with respect to the insurance activities 21 and activities that are incidental to such insur22 ance activities of an insurance company that is 23 subject to supervision by the State insurance 24 authority under State insurance law; and 24 1 (E) the Federal Housing Finance Agency, 2 with respect to Federal Home Loan Banks or 3 the Federal Home Loan Bank System, and 4 with respect to the Federal National Mortgage 5 Association or the Federal Home Loan Mort6 gage Corporation. 7 (13) PRUDENTIAL STANDARDS.—The term 8 ‘‘prudential standards’’ means enhanced supervision 9 and regulatory standards developed by the Board of 10 Governors under section 165. 11 (14) SECRETARY.—The term ‘‘Secretary’’ 12 means the Secretary of the Treasury. 13 (15) SECURITIES TERMS.—The— 14 (A) terms ‘‘broker’’, ‘‘dealer’’, ‘‘issuer’’, 15 ‘‘nationally recognized statistical rating organi16 zation’’, ‘‘security’’, and ‘‘securities laws’’ have 17 the same meanings as in section 3 of the Secu18 rities Exchange Act of 1934 (15 U.S.C. 78c); 19 (B) term ‘‘investment adviser’’ has the 20 same meaning as in section 202 of the Invest21 ment Advisers Act of 1940 (15 U.S.C. 80b–2); 22 and 23 (C) term ‘‘investment company’’ has the 24 same meaning as in section 3 of the Investment 25 Company Act of 1940 (15 U.S.C. 80a–3). 25 1 (16) STATE.—The term ‘‘State’’ means any 2 State, commonwealth, territory, or possession of the 3 United States, the District of Columbia, the Com4 monwealth of Puerto Rico, the Commonwealth of the 5 Northern Mariana Islands, American Samoa, Guam, 6 or the United States Virgin Islands. 7 (17) TRANSFER DATE.—The term ‘‘transfer 8 date’’ means the date established under section 311. 9 (18) OTHER INCORPORATED DEFINITIONS.— 10 (A) FEDERAL DEPOSIT INSURANCE ACT.— 11 The terms ‘‘bank’’, ‘‘bank holding company’’, 12 ‘‘control’’, ‘‘deposit’’, ‘‘depository institution’’, 13 ‘‘Federal depository institution’’, ‘‘Federal sav14 ings association’’, ‘‘foreign bank’’, ‘‘including’’, 15 ‘‘insured branch’’, ‘‘insured depository institu16 tion’’, ‘‘national member bank’’, ‘‘national non17 member bank’’, ‘‘savings association’’, ‘‘State 18 bank’’, ‘‘State depository institution’’, ‘‘State 19 member bank’’, ‘‘State nonmember bank’’, 20 ‘‘State savings association’’, and ‘‘subsidiary’’ 21 have the same meanings as in section 3 of the 22 Federal Deposit Insurance Act (12 U.S.C. 23 1813). 24 (B) HOLDING COMPANIES.—The term— 26 1 (i) ‘‘bank holding company’’ has the 2 same meaning as in section 2 of the Bank 3 Holding Company Act of 1956 (12 U.S.C. 4 1841); 5 (ii) ‘‘financial holding company’’ has 6 the same meaning as in section 2(p) of the 7 Bank Holding Company Act of 1956 (12 8 U.S.C. 1841(p)); and 9 (iii) ‘‘savings and loan holding com10 pany’’ has the same meaning as in section 11 10 of the Home Owners’ Loan Act (12 12 U.S.C. 1467a(a)). 13 SEC. 3. SEVERABILITY. 14 If any provision of this Act, an amendment made by 15 this Act, or the application of such provision or amend16 ment to any person or circumstance is held to be unconsti17 tutional, the remainder of this Act, the amendments made 18 by this Act, and the application of the provisions of such 19 to any person or circumstance shall not be affected there20 by. 21 SEC. 4. EFFECTIVE DATE. 22 Except as otherwise specifically provided in this Act 23 or the amendments made by this Act, this Act and such 24 amendments shall take effect 1 day after the date of en25 actment of this Act. 27 1 SEC. 5. BUDGETARY EFFECTS. 2 The budgetary effects of this Act, for the purpose of 3 complying with the Statutory Pay-As-You-Go-Act of 2010, 4 shall be determined by reference to the latest statement 5 titled ‘‘Budgetary Effects of PAYGO Legislation’’ for this 6 Act, jointly submitted for printing in the Congressional 7 Record by the Chairmen of the House and Senate Budget 8 Committees, provided that such statement has been sub9 mitted prior to the vote on passage in the House acting 10 first on this conference report or amendment between the 11 Houses. 12 SEC. 6. ANTITRUST SAVINGS CLAUSE. 13 Nothing in this Act, or any amendment made by this 14 Act, shall be construed to modify, impair, or supersede 15 the operation of any of the antitrust laws, unless otherwise 16 specified. For purposes of this section, the term ‘‘antitrust 17 laws’’ has the same meaning as in subsection (a) of the 18 first section of the Clayton Act, except that such term in19 cludes section 5 of the Federal Trade Commission Act, 20 to the extent that such section 5 applies to unfair methods 21 of competition. 22 TITLE I—FINANCIAL STABILITY 23 SEC. 101. SHORT TITLE. 24 This title may be cited as the ‘‘Financial Stability Act 25 of 2010’’. 28 1 SEC. 102. DEFINITIONS. 2 (a) IN GENERAL.—For purposes of this title, unless 3 the context otherwise requires, the following definitions 4 shall apply: 5 (1) BANK HOLDING COMPANY.—The term 6 ‘‘bank holding company’’ has the same meaning as 7 in section 2 of the Bank Holding Company Act of 8 1956 (12 U.S.C. 1841). A foreign bank or company 9 that is treated as a bank holding company for pur10 poses of the Bank Holding Company Act of 1956, 11 pursuant to section 8(a) of the International Bank12 ing Act of 1978 (12 U.S.C. 3106(a)), shall be treat13 ed as a bank holding company for purposes of this 14 title. 15 (2) CHAIRPERSON.—The term ‘‘Chairperson’’ 16 means the Chairperson of the Council. 17 (3) MEMBER AGENCY.—The term ‘‘member 18 agency’’ means an agency represented by a voting 19 member of the Council. 20 (4) NONBANK FINANCIAL COMPANY DEFINI21 TIONS.— 22 (A) FOREIGN NONBANK FINANCIAL COM23 PANY.—The term ‘‘foreign nonbank financial 24 company’’ means a company (other than a com25 pany that is, or is treated in the United States 26 as, a bank holding company) that is— 29 1 (i) incorporated or organized in a 2 country other than the United States; and 3 (ii) predominantly engaged in, includ4 ing through a branch in the United States, 5 financial activities, as defined in paragraph 6 (6). 7 (B) U.S. NONBANK FINANCIAL COM8 PANY.—The term ‘‘U.S. nonbank financial com9 pany’’ means a company (other than a bank 10 holding company, a Farm Credit System insti11 tution chartered and subject to the provisions of 12 the Farm Credit Act of 1971 (12 U.S.C. 2001 13 et seq.), or a national securities exchange (or 14 parent thereof), clearing agency (or parent 15 thereof, unless the parent is a bank holding 16 company), security-based swap execution facil17 ity, or security-based swap data repository reg18 istered with the Commission, or a board of 19 trade designated as a contract market (or par20 ent thereof), or a derivatives clearing organiza21 tion (or parent thereof, unless the parent is a 22 bank holding company), swap execution facility 23 or a swap data repository registered with the 24 Commodity Futures Trading Commission), that 25 is— 30 1 (i) incorporated or organized under 2 the laws of the United States or any State; 3 and 4 (ii) predominantly engaged in finan5 cial activities, as defined in paragraph (6). 6 (C) NONBANK FINANCIAL COMPANY.—The 7 term ‘‘nonbank financial company’’ means a 8 U.S. nonbank financial company and a foreign 9 nonbank financial company. 10 (D) NONBANK FINANCIAL COMPANY SU11 PERVISED BY THE BOARD OF GOVERNORS.— 12 The term ‘‘nonbank financial company super13 vised by the Board of Governors’’ means a 14 nonbank financial company that the Council 15 has determined under section 113 shall be su16 pervised by the Board of Governors. 17 (5) OFFICE OF FINANCIAL RESEARCH.—The 18 term ‘‘Office of Financial Research’’ means the of19 fice established under section 152. 20 (6) PREDOMINANTLY ENGAGED.—A company is 21 ‘‘predominantly engaged in financial activities’’ if— 22 (A) the annual gross revenues derived by 23 the company and all of its subsidiaries from ac24 tivities that are financial in nature (as defined 25 in section 4(k) of the Bank Holding Company 31 1 Act of 1956) and, if applicable, from the owner2 ship or control of one or more insured deposi3 tory institutions, represents 85 percent or more 4 of the consolidated annual gross revenues of the 5 company; or 6 (B) the consolidated assets of the company 7 and all of its subsidiaries related to activities 8 that are financial in nature (as defined in sec9 tion 4(k) of the Bank Holding Company Act of 10 1956) and, if applicable, related to the owner11 ship or control of one or more insured deposi12 tory institutions, represents 85 percent or more 13 of the consolidated assets of the company. 14 (7) SIGNIFICANT INSTITUTIONS.—The terms 15 ‘‘significant nonbank financial company’’ and ‘‘sig16 nificant bank holding company’’ have the meanings 17 given those terms by rule of the Board of Governors, 18 but in no instance shall the term ‘‘significant 19 nonbank financial company’’ include those entities 20 that are excluded under paragraph (4)(B). 21 (b) DEFINITIONAL CRITERIA.—The Board of Gov22 ernors shall establish, by regulation, the requirements for 23 determining if a company is predominantly engaged in fi24 nancial activities, as defined in subsection (a)(6). 32 1 (c) FOREIGN NONBANK FINANCIAL COMPANIES.— 2 For purposes of the application of subtitles A and C (other 3 than section 113(b)) with respect to a foreign nonbank 4 financial company, references in this title to ‘‘company’’ 5 or ‘‘subsidiary’’ include only the United States activities 6 and subsidiaries of such foreign company, except as other7 wise provided. 8 Subtitle A—Financial Stability 9 Oversight Council 10 SEC. 111. FINANCIAL STABILITY OVERSIGHT COUNCIL ES11 TABLISHED. 12 (a) ESTABLISHMENT.—Effective on the date of en13 actment of this Act, there is established the Financial Sta14 bility Oversight Council. 15 (b) MEMBERSHIP.—The Council shall consist of the 16 following members: 17 (1) VOTING MEMBERS.—The voting members, 18 who shall each have 1 vote on the Council shall be— 19 (A) the Secretary of the Treasury, who 20 shall serve as Chairperson of the Council; 21 (B) the Chairman of the Board of Gov22 ernors; 23 (C) the Comptroller of the Currency; 24 (D) the Director of the Bureau; 25 (E) the Chairman of the Commission; 33 1 (F) the Chairperson of the Corporation; 2 (G) the Chairperson of the Commodity Fu3 tures Trading Commission; 4 (H) the Director of the Federal Housing 5 Finance Agency; 6 (I) the Chairman of the National Credit 7 Union Administration Board; and 8 (J) an independent member appointed by 9 the President, by and with the advice and con10 sent of the Senate, having insurance expertise. 11 (2) NONVOTING MEMBERS.—The nonvoting 12 members, who shall serve in an advisory capacity as 13 a nonvoting member of the Council, shall be— 14 (A) the Director of the Office of Financial 15 Research; 16 (B) the Director of the Federal Insurance 17 Office; 18 (C) a State insurance commissioner, to be 19 designated by a selection process determined by 20 the State insurance commissioners; 21 (D) a State banking supervisor, to be des22 ignated by a selection process determined by 23 the State banking supervisors; and 24 (E) a State securities commissioner (or an 25 officer performing like functions), to be des34 1 ignated by a selection process determined by 2 such State securities commissioners. 3 (3) NONVOTING MEMBER PARTICIPATION.—The 4 nonvoting members of the Council shall not be ex5 cluded from any of the proceedings, meetings, dis6 cussions, or deliberations of the Council, except that 7 the Chairperson may, upon an affirmative vote of 8 the member agencies, exclude the nonvoting mem9 bers from any of the proceedings, meetings, discus10 sions, or deliberations of the Council when necessary 11 to safeguard and promote the free exchange of con12 fidential supervisory information. 13 (c) TERMS; VACANCY.— 14 (1) TERMS.—The independent member of the 15 Council shall serve for a term of 6 years, and each 16 nonvoting member described in subparagraphs (C), 17 (D), and (E) of subsection (b)(2) shall serve for a 18 term of 2 years. 19 (2) VACANCY.—Any vacancy on the Council 20 shall be filled in the manner in which the original 21 appointment was made. 22 (3) ACTING OFFICIALS MAY SERVE.—In the 23 event of a vacancy in the office of the head of a 24 member agency or department, and pending the ap25 pointment of a successor, or during the absence or 35 1 disability of the head of a member agency or depart2 ment, the acting head of the member agency or de3 partment shall serve as a member of the Council in 4 the place of that agency or department head. 5 (d) TECHNICAL AND PROFESSIONAL ADVISORY COM6 MITTEES.—The Council may appoint such special advi7 sory, technical, or professional committees as may be use8 ful in carrying out the functions of the Council, including 9 an advisory committee consisting of State regulators, and 10 the members of such committees may be members of the 11 Council, or other persons, or both. 12 (e) MEETINGS.— 13 (1) TIMING.—The Council shall meet at the call 14 of the Chairperson or a majority of the members 15 then serving, but not less frequently than quarterly. 16 (2) RULES FOR CONDUCTING BUSINESS.—The 17 Council shall adopt such rules as may be necessary 18 for the conduct of the business of the Council. Such 19 rules shall be rules of agency organization, proce20 dure, or practice for purposes of section 553 of title 21 5, United States Code. 22 (f) VOTING.—Unless otherwise specified, the Council 23 shall make all decisions that it is authorized or required 24 to make by a majority vote of the voting members then 25 serving. 36 1 (g) NONAPPLICABILITY OF FACA.—The Federal Ad2 visory Committee Act (5 U.S.C. App.) shall not apply to 3 the Council, or to any special advisory, technical, or pro4 fessional committee appointed by the Council, except that, 5 if an advisory, technical, or professional committee has 6 one or more members who are not employees of or affili7 ated with the United States Government, the Council shall 8 publish a list of the names of the members of such com9 mittee. 10 (h) ASSISTANCE FROM FEDERAL AGENCIES.—Any 11 department or agency of the United States may provide 12 to the Council and any special advisory, technical, or pro13 fessional committee appointed by the Council, such serv14 ices, funds, facilities, staff, and other support services as 15 the Council may determine advisable. 16 (i) COMPENSATION OF MEMBERS.— 17 (1) FEDERAL EMPLOYEE MEMBERS.—All mem18 bers of the Council who are officers or employees of 19 the United States shall serve without compensation 20 in addition to that received for their services as offi21 cers or employees of the United States. 22 (2) COMPENSATION FOR NON-FEDERAL MEM23 BER.—Section 5314 of title 5, United States Code, 24 is amended by adding at the end the following: 37 1 ‘‘Independent Member of the Financial Stability 2 Oversight Council (1).’’. 3 (j) DETAIL OF GOVERNMENT EMPLOYEES.—Any em4 ployee of the Federal Government may be detailed to the 5 Council without reimbursement, and such detail shall be 6 without interruption or loss of civil service status or privi7 lege. An employee of the Federal Government detailed to 8 the Council shall report to and be subject to oversight by 9 the Council during the assignment to the Council, and 10 shall be compensated by the department or agency from 11 which the employee was detailed. 12 SEC. 112. COUNCIL AUTHORITY. 13 (a) PURPOSES AND DUTIES OF THE COUNCIL.— 14 (1) IN GENERAL.—The purposes of the Council 15 are— 16 (A) to identify risks to the financial sta17 bility of the United States that could arise from 18 the material financial distress or failure, or on19 going activities, of large, interconnected bank 20 holding companies or nonbank financial compa21 nies, or that could arise outside the financial 22 services marketplace; 23 (B) to promote market discipline, by elimi24 nating expectations on the part of shareholders, 25 creditors, and counterparties of such companies 38 1 that the Government will shield them from 2 losses in the event of failure; and 3 (C) to respond to emerging threats to the 4 stability of the United States financial system. 5 (2) DUTIES.—The Council shall, in accordance 6 with this title— 7 (A) collect information from member agen8 cies, other Federal and State financial regu9 latory agencies, the Federal Insurance Office 10 and, if necessary to assess risks to the United 11 States financial system, direct the Office of Fi12 nancial Research to collect information from 13 bank holding companies and nonbank financial 14 companies; 15 (B) provide direction to, and request data 16 and analyses from, the Office of Financial Re17 search to support the work of the Council; 18 (C) monitor the financial services market19 place in order to identify potential threats to 20 the financial stability of the United States; 21 (D) to monitor domestic and international 22 financial regulatory proposals and develop23 ments, including insurance and accounting 24 issues, and to advise Congress and make rec25 ommendations in such areas that will enhance 39 1 the integrity, efficiency, competitiveness, and 2 stability of the U.S. financial markets; 3 (E) facilitate information sharing and co4 ordination among the member agencies and 5 other Federal and State agencies regarding do6 mestic financial services policy development, 7 rulemaking, examinations, reporting require8 ments, and enforcement actions; 9 (F) recommend to the member agencies 10 general supervisory priorities and principles re11 flecting the outcome of discussions among the 12 member agencies; 13 (G) identify gaps in regulation that could 14 pose risks to the financial stability of the 15 United States; 16 (H) require supervision by the Board of 17 Governors for nonbank financial companies that 18 may pose risks to the financial stability of the 19 United States in the event of their material fi20 nancial distress or failure, or because of their 21 activities pursuant to section 113; 22 (I) make recommendations to the Board of 23 Governors concerning the establishment of 24 heightened prudential standards for risk-based 25 capital, leverage, liquidity, contingent capital, 40 1 resolution plans and credit exposure reports, 2 concentration limits, enhanced public disclo3 sures, and overall risk management for 4 nonbank financial companies and large, inter5 connected bank holding companies supervised 6 by the Board of Governors; 7 (J) identify systemically important finan8 cial market utilities and payment, clearing, and 9 settlement activities (as that term is defined in 10 title VIII); 11 (K) make recommendations to primary fi12 nancial regulatory agencies to apply new or 13 heightened standards and safeguards for finan14 cial activities or practices that could create or 15 increase risks of significant liquidity, credit, or 16 other problems spreading among bank holding 17 companies, nonbank financial companies, and 18 United States financial markets; 19 (L) review and, as appropriate, may sub20 mit comments to the Commission and any 21 standard-setting body with respect to an exist22 ing or proposed accounting principle, standard, 23 or procedure; 24 (M) provide a forum for— 41 1 (i) discussion and analysis of emerg2 ing market developments and financial reg3 ulatory issues; and 4 (ii) resolution of jurisdictional dis5 putes among the members of the Council; 6 and 7 (N) annually report to and testify before 8 Congress on— 9 (i) the activities of the Council; 10 (ii) significant financial market and 11 regulatory developments, including insur12 ance and accounting regulations and 13 standards, along with an assessment of 14 those developments on the stability of the 15 financial system; 16 (iii) potential emerging threats to the 17 financial stability of the United States; 18 (iv) all determinations made under 19 section 113 or title VIII, and the basis for 20 such determinations; 21 (v) all recommendations made under 22 section 119 and the result of such rec23 ommendations; and 24 (vi) recommendations— 42 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (I) to enhance the integrity, effi2 ciency, competitiveness, and stability 3 of United States financial markets; 4 (II) to promote market discipline; 5 and 6 (III) to maintain investor con7 fidence. 8 (b) STATEMENTS BY VOTING MEMBERS OF THE 9 COUNCIL.—At the time at which each report is submitted 10 under subsection (a), each voting member of the Council 11 shall— 12 (1) if such member believes that the Council, 13 the Government, and the private sector are taking 14 all reasonable steps to ensure financial stability and 15 to mitigate systemic risk that would negatively affect 16 the economy, submit a signed statement to Congress 17 stating such belief; or 18 (2) if such member does not believe that all rea19 sonable steps described under paragraph (1) are 20 being taken, submit a signed statement to Congress 21 stating what actions such member believes need to 22 be taken in order to ensure that all reasonable steps 23 described under paragraph (1) are taken. 24 (c) TESTIMONY BY THE CHAIRPERSON.—The Chair25 person shall appear before the Committee on Financial 43 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 Services of the House of Representatives and the Com2 mittee on Banking, Housing, and Urban Affairs of the 3 Senate at an annual hearing, after the report is submitted 4 under subsection (a)— 5 (1) to discuss the efforts, activities, objectives, 6 and plans of the Council; and 7 (2) to discuss and answer questions concerning 8 such report. 9 (d) AUTHORITY TO OBTAIN INFORMATION.— 10 (1) IN GENERAL.—The Council may receive, 11 and may request the submission of, any data or in12 formation from the Office of Financial Research, 13 member agencies, and the Federal Insurance Office, 14 as necessary— 15 (A) to monitor the financial services mar16 ketplace to identify potential risks to the finan17 cial stability of the United States; or 18 (B) to otherwise carry out any of the pro19 visions of this title. 20 (2) SUBMISSIONS BY THE OFFICE AND MEMBER 21 AGENCIES.—Notwithstanding any other provision of 22 law, the Office of Financial Research, any member 23 agency, and the Federal Insurance Office, are au24 thorized to submit information to the Council. 25 (3) FINANCIAL DATA COLLECTION.— 44 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (A) IN GENERAL.—The Council, acting 2 through the Office of Financial Research, may 3 require the submission of periodic and other re4 ports from any nonbank financial company or 5 bank holding company for the purpose of as6 sessing the extent to which a financial activity 7 or financial market in which the nonbank finan8 cial company or bank holding company partici9 pates, or the nonbank financial company or 10 bank holding company itself, poses a threat to 11 the financial stability of the United States. 12 (B) MITIGATION OF REPORT BURDEN.— 13 Before requiring the submission of reports from 14 any nonbank financial company or bank holding 15 company that is regulated by a member agency 16 or any primary financial regulatory agency, the 17 Council, acting through the Office of Financial 18 Research, shall coordinate with such agencies 19 and shall, whenever possible, rely on informa20 tion available from the Office of Financial Re21 search or such agencies. 22 (C) MITIGATION IN CASE OF FOREIGN FI23 NANCIAL COMPANIES.—Before requiring the 24 submission of reports from a company that is 25 a foreign nonbank financial company or foreign45 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 based bank holding company, the Council shall, 2 acting through the Office of Financial Re3 search, to the extent appropriate, consult with 4 the appropriate foreign regulator of such com5 pany and, whenever possible, rely on informa6 tion already being collected by such foreign reg7 ulator, with English translation. 8 (4) BACK-UP EXAMINATION BY THE BOARD OF 9 GOVERNORS.—If the Council is unable to determine 10 whether the financial activities of a U.S. nonbank fi11 nancial company pose a threat to the financial sta12 bility of the United States, based on information or 13 reports obtained under paragraphs (1) and (3), dis14 cussions with management, and publicly available in15 formation, the Council may request the Board of 16 Governors, and the Board of Governors is author17 ized, to conduct an examination of the U.S. nonbank 18 financial company for the sole purpose of deter19 mining whether the nonbank financial company 20 should be supervised by the Board of Governors for 21 purposes of this title. 22 (5) CONFIDENTIALITY.— 23 (A) IN GENERAL.—The Council, the Office 24 of Financial Research, and the other member 25 agencies shall maintain the confidentiality of 46 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 any data, information, and reports submitted 2 under this title. 3 (B) RETENTION OF PRIVILEGE.—The sub4 mission of any nonpublicly available data or in5 formation under this subsection and subtitle B 6 shall not constitute a waiver of, or otherwise af7 fect, any privilege arising under Federal or 8 State law (including the rules of any Federal or 9 State court) to which the data or information is 10 otherwise subject. 11 (C) FREEDOM OF INFORMATION ACT.— 12 Section 552 of title 5, United States Code, in13 cluding the exceptions thereunder, shall apply 14 to any data or information submitted under this 15 subsection and subtitle B. 16 SEC. 113. AUTHORITY TO REQUIRE SUPERVISION AND REG17 ULATION OF CERTAIN NONBANK FINANCIAL 18 COMPANIES. 19 (a) U.S. NONBANK FINANCIAL COMPANIES SUPER20 VISED BY THE BOARD OF GOVERNORS.— 21 (1) DETERMINATION.—The Council, on a non22 delegable basis and by a vote of not fewer than 2⁄3 23 of the voting members then serving, including an af24 firmative vote by the Chairperson, may determine 25 that a U.S. nonbank financial company shall be su47 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 pervised by the Board of Governors and shall be 2 subject to prudential standards, in accordance with 3 this title, if the Council determines that material fi4 nancial distress at the U.S. nonbank financial com5 pany, or the nature, scope, size, scale, concentration, 6 interconnectedness, or mix of the activities of the 7 U.S. nonbank financial company, could pose a threat 8 to the financial stability of the United States. 9 (2) CONSIDERATIONS.—In making a determina10 tion under paragraph (1), the Council shall con11 sider— 12 (A) the extent of the leverage of the com13 pany; 14 (B) the extent and nature of the off-bal15 ance-sheet exposures of the company; 16 (C) the extent and nature of the trans17 actions and relationships of the company with 18 other significant nonbank financial companies 19 and significant bank holding companies; 20 (D) the importance of the company as a 21 source of credit for households, businesses, and 22 State and local governments and as a source of 23 liquidity for the United States financial system; 24 (E) the importance of the company as a 25 source of credit for low-income, minority, or un48 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 derserved communities, and the impact that the 2 failure of such company would have on the 3 availability of credit in such communities; 4 (F) the extent to which assets are man5 aged rather than owned by the company, and 6 the extent to which ownership of assets under 7 management is diffuse; 8 (G) the nature, scope, size, scale, con9 centration, interconnectedness, and mix of the 10 activities of the company; 11 (H) the degree to which the company is al12 ready regulated by 1 or more primary financial 13 regulatory agencies; 14 (I) the amount and nature of the financial 15 assets of the company; 16 (J) the amount and types of the liabilities 17 of the company, including the degree of reliance 18 on short-term funding; and 19 (K) any other risk-related factors that the 20 Council deems appropriate. 21 (b) FOREIGN NONBANK FINANCIAL COMPANIES SU22 PERVISED BY THE BOARD OF GOVERNORS.— 23 (1) DETERMINATION.—The Council, on a non24 delegable basis and by a vote of not fewer than 2⁄3 25 of the voting members then serving, including an af49 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 firmative vote by the Chairperson, may determine 2 that a foreign nonbank financial company shall be 3 supervised by the Board of Governors and shall be 4 subject to prudential standards, in accordance with 5 this title, if the Council determines that material fi6 nancial distress at the foreign nonbank financial 7 company, or the nature, scope, size, scale, concentra8 tion, interconnectedness, or mix of the activities of 9 the foreign nonbank financial company, could pose a 10 threat to the financial stability of the United States. 11 (2) CONSIDERATIONS.—In making a determina12 tion under paragraph (1), the Council shall con13 sider— 14 (A) the extent of the leverage of the com15 pany; 16 (B) the extent and nature of the United 17 States related off-balance-sheet exposures of the 18 company; 19 (C) the extent and nature of the trans20 actions and relationships of the company with 21 other significant nonbank financial companies 22 and significant bank holding companies; 23 (D) the importance of the company as a 24 source of credit for United States households, 25 businesses, and State and local governments 50 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 and as a source of liquidity for the United 2 States financial system; 3 (E) the importance of the company as a 4 source of credit for low-income, minority, or un5 derserved communities in the United States, 6 and the impact that the failure of such com7 pany would have on the availability of credit in 8 such communities; 9 (F) the extent to which assets are man10 aged rather than owned by the company and 11 the extent to which ownership of assets under 12 management is diffuse; 13 (G) the nature, scope, size, scale, con14 centration, interconnectedness, and mix of the 15 activities of the company; 16 (H) the extent to which the company is 17 subject to prudential standards on a consoli18 dated basis in its home country that are admin19 istered and enforced by a comparable foreign 20 supervisory authority; 21 (I) the amount and nature of the United 22 States financial assets of the company; 23 (J) the amount and nature of the liabilities 24 of the company used to fund activities and op51 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 erations in the United States, including the de2 gree of reliance on short-term funding; and 3 (K) any other risk-related factors that the 4 Council deems appropriate. 5 (c) ANTIEVASION.— 6 (1) DETERMINATIONS.—In order to avoid eva7 sion of this title, the Council, on its own initiative 8 or at the request of the Board of Governors, may de9 termine, on a nondelegable basis and by a vote of 10 not fewer than 2⁄3 of the voting members then serv11 ing, including an affirmative vote by the Chair12 person, that— 13 (A) material financial distress related to, 14 or the nature, scope, size, scale, concentration, 15 interconnectedness, or mix of, the financial ac16 tivities conducted directly or indirectly by a 17 company incorporated or organized under the 18 laws of the United States or any State or the 19 financial activities in the United States of a 20 company incorporated or organized in a country 21 other than the United States would pose a 22 threat to the financial stability of the United 23 States, based on consideration of the factors in 24 subsection (a)(2) or (b)(2), as applicable; 52 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (B) the company is organized or operates 2 in such a manner as to evade the application of 3 this title; and 4 (C) such financial activities of the company 5 shall be supervised by the Board of Governors 6 and subject to prudential standards in accord7 ance with this title, consistent with paragraph 8 (3). 9 (2) REPORT.—Upon making a determination 10 under paragraph (1), the Council shall submit a re11 port to the appropriate committees of Congress de12 tailing the reasons for making such determination. 13 (3) CONSOLIDATED SUPERVISION OF ONLY FI14 NANCIAL ACTIVITIES; ESTABLISHMENT OF AN IN15 TERMEDIATE HOLDING COMPANY.— 16 (A) ESTABLISHMENT OF AN INTER17 MEDIATE HOLDING COMPANY.—Upon a deter18 mination under paragraph (1), the company 19 that is the subject of the determination may es20 tablish an intermediate holding company in 21 which the financial activities of such company 22 and its subsidiaries shall be conducted (other 23 than the activities described in section 24 167(b)(2)) in compliance with any regulations 25 or guidance provided by the Board of Gov53 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 ernors. Such intermediate holding company 2 shall be subject to the supervision of the Board 3 of Governors and to prudential standards under 4 this title as if the intermediate holding company 5 were a nonbank financial company supervised 6 by the Board of Governors. 7 (B) ACTION OF THE BOARD OF GOV8 ERNORS.—To facilitate the supervision of the 9 financial activities subject to the determination 10 in paragraph (1), the Board of Governors may 11 require a company to establish an intermediate 12 holding company, as provided for in section 13 167, which would be subject to the supervision 14 of the Board of Governors and to prudential 15 standards under this title, as if the intermediate 16 holding company were a nonbank financial com17 pany supervised by the Board of Governors. 18 (4) NOTICE AND OPPORTUNITY FOR HEARING 19 AND FINAL DETERMINATION; JUDICIAL REVIEW.— 20 Subsections (d) through (h) shall apply to deter21 minations made by the Council pursuant to para22 graph (1) in the same manner as such subsections 23 apply to nonbank financial companies. 54 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (5) COVERED FINANCIAL ACTIVITIES.—For 2 purposes of this subsection, the term ‘‘financial ac3 tivities’’— 4 (A) means activities that are financial in 5 nature (as defined in section 4(k) of the Bank 6 Holding Company Act of 1956); 7 (B) includes the ownership or control of 8 one or more insured depository institutions; and 9 (C) does not include internal financial ac10 tivities conducted for the company or any affil11 iate thereof, including internal treasury, invest12 ment, and employee benefit functions. 13 (6) ONLY FINANCIAL ACTIVITIES SUBJECT TO 14 PRUDENTIAL SUPERVISION.—Nonfinancial activities 15 of the company shall not be subject to supervision 16 by the Board of Governors and prudential standards 17 of the Board. For purposes of this Act, the financial 18 activities that are the subject of the determination in 19 paragraph (1) shall be subject to the same require20 ments as a nonbank financial company supervised by 21 the Board of Governors. Nothing in this paragraph 22 shall prohibit or limit the authority of the Board of 23 Governors to apply prudential standards under this 24 title to the financial activities that are subject to the 25 determination in paragraph (1). 55 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (d) REEVALUATION AND RESCISSION.—The Council 2 shall— 3 (1) not less frequently than annually, reevaluate 4 each determination made under subsections (a) and 5 (b) with respect to such nonbank financial company 6 supervised by the Board of Governors; and 7 (2) rescind any such determination, if the 8 Council, by a vote of not fewer than 2⁄3 of the voting 9 members then serving, including an affirmative vote 10 by the Chairperson, determines that the nonbank fi11 nancial company no longer meets the standards 12 under subsection (a) or (b), as applicable. 13 (e) NOTICE AND OPPORTUNITY FOR HEARING AND 14 FINAL DETERMINATION.— 15 (1) IN GENERAL.—The Council shall provide to 16 a nonbank financial company written notice of a 17 proposed determination of the Council, including an 18 explanation of the basis of the proposed determina19 tion of the Council, that a nonbank financial com20 pany shall be supervised by the Board of Governors 21 and shall be subject to prudential standards in ac22 cordance with this title. 23 (2) HEARING.—Not later than 30 days after 24 the date of receipt of any notice of a proposed deter25 mination under paragraph (1), the nonbank finan56 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 cial company may request, in writing, an oppor2 tunity for a written or oral hearing before the Coun3 cil to contest the proposed determination. Upon re4 ceipt of a timely request, the Council shall fix a time 5 (not later than 30 days after the date of receipt of 6 the request) and place at which such company may 7 appear, personally or through counsel, to submit 8 written materials (or, at the sole discretion of the 9 Council, oral testimony and oral argument). 10 (3) FINAL DETERMINATION.—Not later than 60 11 days after the date of a hearing under paragraph 12 (2), the Council shall notify the nonbank financial 13 company of the final determination of the Council, 14 which shall contain a statement of the basis for the 15 decision of the Council. 16 (4) NO HEARING REQUESTED.—If a nonbank 17 financial company does not make a timely request 18 for a hearing, the Council shall notify the nonbank 19 financial company, in writing, of the final determina20 tion of the Council under subsection (a) or (b), as 21 applicable, not later than 10 days after the date by 22 which the company may request a hearing under 23 paragraph (2). 24 (f) EMERGENCY EXCEPTION.— 57 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (1) IN GENERAL.—The Council may waive or 2 modify the requirements of subsection (e) with re3 spect to a nonbank financial company, if the Council 4 determines, by a vote of not fewer than 2⁄3 of the 5 voting members then serving, including an affirma6 tive vote by the Chairperson, that such waiver or 7 modification is necessary or appropriate to prevent 8 or mitigate threats posed by the nonbank financial 9 company to the financial stability of the United 10 States. 11 (2) NOTICE.—The Council shall provide notice 12 of a waiver or modification under this subsection to 13 the nonbank financial company concerned as soon as 14 practicable, but not later than 24 hours after the 15 waiver or modification is granted. 16 (3) INTERNATIONAL COORDINATION.—In mak17 ing a determination under paragraph (1), the Coun18 cil shall consult with the appropriate home country 19 supervisor, if any, of the foreign nonbank financial 20 company that is being considered for such a deter21 mination. 22 (4) OPPORTUNITY FOR HEARING.—The Council 23 shall allow a nonbank financial company to request, 24 in writing, an opportunity for a written or oral hear25 ing before the Council to contest a waiver or modi58 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 fication under this subsection, not later than 10 2 days after the date of receipt of notice of the waiver 3 or modification by the company. Upon receipt of a 4 timely request, the Council shall fix a time (not later 5 than 15 days after the date of receipt of the request) 6 and place at which the nonbank financial company 7 may appear, personally or through counsel, to sub8 mit written materials (or, at the sole discretion of 9 the Council, oral testimony and oral argument). 10 (5) NOTICE OF FINAL DETERMINATION.—Not 11 later than 30 days after the date of any hearing 12 under paragraph (4), the Council shall notify the 13 subject nonbank financial company of the final de14 termination of the Council under this subsection, 15 which shall contain a statement of the basis for the 16 decision of the Council. 17 (g) CONSULTATION.—The Council shall consult with 18 the primary financial regulatory agency, if any, for each 19 nonbank financial company or subsidiary of a nonbank fi20 nancial company that is being considered for supervision 21 by the Board of Governors under this section before the 22 Council makes any final determination with respect to 23 such nonbank financial company under subsection (a), (b), 24 or (c). 59 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (h) JUDICIAL REVIEW.—If the Council makes a final 2 determination under this section with respect to a 3 nonbank financial company, such nonbank financial com4 pany may, not later than 30 days after the date of receipt 5 of the notice of final determination under subsection 6 (d)(2), (e)(3), or (f)(5), bring an action in the United 7 States district court for the judicial district in which the 8 home office of such nonbank financial company is located, 9 or in the United States District Court for the District of 10 Columbia, for an order requiring that the final determina11 tion be rescinded, and the court shall, upon review, dismiss 12 such action or direct the final determination to be re13 scinded. Review of such an action shall be limited to 14 whether the final determination made under this section 15 was arbitrary and capricious. 16 (i) INTERNATIONAL COORDINATION.—In exercising 17 its duties under this title with respect to foreign nonbank 18 financial companies, foreign-based bank holding compa19 nies, and cross-border activities and markets, the Council 20 shall consult with appropriate foreign regulatory authori21 ties, to the extent appropriate. 60 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 SEC. 114. REGISTRATION OF NONBANK FINANCIAL COMPA2 NIES SUPERVISED BY THE BOARD OF GOV3 ERNORS. 4 Not later than 180 days after the date of a final 5 Council determination under section 113 that a nonbank 6 financial company is to be supervised by the Board of Gov7 ernors, such company shall register with the Board of 8 Governors, on forms prescribed by the Board of Gov9 ernors, which shall include such information as the Board 10 of Governors, in consultation with the Council, may deem 11 necessary or appropriate to carry out this title. 12 SEC. 115. ENHANCED SUPERVISION AND PRUDENTIAL 13 STANDARDS FOR NONBANK FINANCIAL COM14 PANIES SUPERVISED BY THE BOARD OF GOV15 ERNORS AND CERTAIN BANK HOLDING COM16 PANIES. 17 (a) IN GENERAL.— 18 (1) PURPOSE.—In order to prevent or mitigate 19 risks to the financial stability of the United States 20 that could arise from the material financial distress, 21 failure, or ongoing activities of large, interconnected 22 financial institutions, the Council may make rec23 ommendations to the Board of Governors concerning 24 the establishment and refinement of prudential 25 standards and reporting and disclosure requirements 26 applicable to nonbank financial companies super61 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 vised by the Board of Governors and large, inter2 connected bank holding companies, that— 3 (A) are more stringent than those applica4 ble to other nonbank financial companies and 5 bank holding companies that do not present 6 similar risks to the financial stability of the 7 United States; and 8 (B) increase in stringency, based on the 9 considerations identified in subsection (b)(3). 10 (2) RECOMMENDED APPLICATION OF REQUIRED 11 STANDARDS.—In making recommendations under 12 this section, the Council may— 13 (A) differentiate among companies that are 14 subject to heightened standards on an indi15 vidual basis or by category, taking into consid16 eration their capital structure, riskiness, com17 plexity, financial activities (including the finan18 cial activities of their subsidiaries), size, and 19 any other risk-related factors that the Council 20 deems appropriate; or 21 (B) recommend an asset threshold that is 22 higher than $50,000,000,000 for the applica23 tion of any standard described in subsections 24 (c) through (g). 25 (b) DEVELOPMENT OF PRUDENTIAL STANDARDS.— 62 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (1) IN GENERAL.—The recommendations of the 2 Council under subsection (a) may include— 3 (A) risk-based capital requirements; 4 (B) leverage limits; 5 (C) liquidity requirements; 6 (D) resolution plan and credit exposure re7 port requirements; 8 (E) concentration limits; 9 (F) a contingent capital requirement; 10 (G) enhanced public disclosures; 11 (H) short-term debt limits; and 12 (I) overall risk management requirements. 13 (2) PRUDENTIAL STANDARDS FOR FOREIGN FI14 NANCIAL COMPANIES.—In making recommendations 15 concerning the standards set forth in paragraph (1) 16 that would apply to foreign nonbank financial com17 panies supervised by the Board of Governors or for18 eign-based bank holding companies, the Council 19 shall— 20 (A) give due regard to the principle of na21 tional treatment and equality of competitive op22 portunity; and 23 (B) take into account the extent to which 24 the foreign nonbank financial company or for25 eign-based bank holding company is subject on 63 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 a consolidated basis to home country standards 2 that are comparable to those applied to finan3 cial companies in the United States. 4 (3) CONSIDERATIONS.—In making rec5 ommendations concerning prudential standards 6 under paragraph (1), the Council shall— 7 (A) take into account differences among 8 nonbank financial companies supervised by the 9 Board of Governors and bank holding compa10 nies described in subsection (a), based on— 11 (i) the factors described in subsections 12 (a) and (b) of section 113; 13 (ii) whether the company owns an in14 sured depository institution; 15 (iii) nonfinancial activities and affili16 ations of the company; and 17 (iv) any other factors that the Council 18 determines appropriate; 19 (B) to the extent possible, ensure that 20 small changes in the factors listed in sub21 sections (a) and (b) of section 113 would not 22 result in sharp, discontinuous changes in the 23 prudential standards established under section 24 165; and 64 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (C) adapt its recommendations as appro2 priate in light of any predominant line of busi3 ness of such company, including assets under 4 management or other activities for which par5 ticular standards may not be appropriate. 6 (c) CONTINGENT CAPITAL.— 7 (1) STUDY REQUIRED.—The Council shall con8 duct a study of the feasibility, benefits, costs, and 9 structure of a contingent capital requirement for 10 nonbank financial companies supervised by the 11 Board of Governors and bank holding companies de12 scribed in subsection (a), which study shall in13 clude— 14 (A) an evaluation of the degree to which 15 such requirement would enhance the safety and 16 soundness of companies subject to the require17 ment, promote the financial stability of the 18 United States, and reduce risks to United 19 States taxpayers; 20 (B) an evaluation of the characteristics 21 and amounts of contingent capital that should 22 be required; 23 (C) an analysis of potential prudential 24 standards that should be used to determine 25 whether the contingent capital of a company 65 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 would be converted to equity in times of finan2 cial stress; 3 (D) an evaluation of the costs to compa4 nies, the effects on the structure and operation 5 of credit and other financial markets, and other 6 economic effects of requiring contingent capital; 7 (E) an evaluation of the effects of such re8 quirement on the international competitiveness 9 of companies subject to the requirement and 10 the prospects for international coordination in 11 establishing such requirement; and 12 (F) recommendations for implementing 13 regulations. 14 (2) REPORT.—The Council shall submit a re15 port to Congress regarding the study required by 16 paragraph (1) not later than 2 years after the date 17 of enactment of this Act. 18 (3) RECOMMENDATIONS.— 19 (A) IN GENERAL.—Subsequent to submit20 ting a report to Congress under paragraph (2), 21 the Council may make recommendations to the 22 Board of Governors to require any nonbank fi23 nancial company supervised by the Board of 24 Governors and any bank holding company de25 scribed in subsection (a) to maintain a min66 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 imum amount of contingent capital that is con2 vertible to equity in times of financial stress. 3 (B) FACTORS TO CONSIDER.—In making 4 recommendations under this subsection, the 5 Council shall consider— 6 (i) an appropriate transition period 7 for implementation of a conversion under 8 this subsection; 9 (ii) the factors described in subsection 10 (b)(3); 11 (iii) capital requirements applicable to 12 a nonbank financial company supervised by 13 the Board of Governors or a bank holding 14 company described in subsection (a), and 15 subsidiaries thereof; 16 (iv) results of the study required by 17 paragraph (1); and 18 (v) any other factor that the Council 19 deems appropriate. 20 (d) RESOLUTION PLAN AND CREDIT EXPOSURE RE21 PORTS.— 22 (1) RESOLUTION PLAN.—The Council may 23 make recommendations to the Board of Governors 24 concerning the requirement that each nonbank fi25 nancial company supervised by the Board of Gov67 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 ernors and each bank holding company described in 2 subsection (a) report periodically to the Council, the 3 Board of Governors, and the Corporation, the plan 4 of such company for rapid and orderly resolution in 5 the event of material financial distress or failure. 6 (2) CREDIT EXPOSURE REPORT.—The Council 7 may make recommendations to the Board of Gov8 ernors concerning the advisability of requiring each 9 nonbank financial company supervised by the Board 10 of Governors and bank holding company described in 11 subsection (a) to report periodically to the Council, 12 the Board of Governors, and the Corporation on— 13 (A) the nature and extent to which the 14 company has credit exposure to other signifi15 cant nonbank financial companies and signifi16 cant bank holding companies; and 17 (B) the nature and extent to which other 18 such significant nonbank financial companies 19 and significant bank holding companies have 20 credit exposure to that company. 21 (e) CONCENTRATION LIMITS.—In order to limit the 22 risks that the failure of any individual company could pose 23 to nonbank financial companies supervised by the Board 24 of Governors or bank holding companies described in sub25 section (a), the Council may make recommendations to the 68 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 Board of Governors to prescribe standards to limit such 2 risks, as set forth in section 165. 3 (f) ENHANCED PUBLIC DISCLOSURES.—The Council 4 may make recommendations to the Board of Governors 5 to require periodic public disclosures by bank holding com6 panies described in subsection (a) and by nonbank finan7 cial companies supervised by the Board of Governors, in 8 order to support market evaluation of the risk profile, cap9 ital adequacy, and risk management capabilities thereof. 10 (g) SHORT-TERM DEBT LIMITS.—The Council may 11 make recommendations to the Board of Governors to re12 quire short-term debt limits to mitigate the risks that an 13 over-accumulation of such debt could pose to bank holding 14 companies described in subsection (a), nonbank financial 15 companies supervised by the Board of Governors, or the 16 financial system. 17 SEC. 116. REPORTS. 18 (a) IN GENERAL.—Subject to subsection (b), the 19 Council, acting through the Office of Financial Research, 20 may require a bank holding company with total consoli21 dated assets of $50,000,000,000 or greater or a nonbank 22 financial company supervised by the Board of Governors, 23 and any subsidiary thereof, to submit certified reports to 24 keep the Council informed as to— 25 (1) the financial condition of the company; 69 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (2) systems for monitoring and controlling fi2 nancial, operating, and other risks; 3 (3) transactions with any subsidiary that is a 4 depository institution; and 5 (4) the extent to which the activities and oper6 ations of the company and any subsidiary thereof, 7 could, under adverse circumstances, have the poten8 tial to disrupt financial markets or affect the overall 9 financial stability of the United States. 10 (b) USE OF EXISTING REPORTS.— 11 (1) IN GENERAL.—For purposes of compliance 12 with subsection (a), the Council, acting through the 13 Office of Financial Research, shall, to the fullest ex14 tent possible, use— 15 (A) reports that a bank holding company, 16 nonbank financial company supervised by the 17 Board of Governors, or any functionally regu18 lated subsidiary of such company has been re19 quired to provide to other Federal or State reg20 ulatory agencies or to a relevant foreign super21 visory authority; 22 (B) information that is otherwise required 23 to be reported publicly; and 24 (C) externally audited financial statements. 70 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (2) AVAILABILITY.—Each bank holding com2 pany described in subsection (a) and nonbank finan3 cial company supervised by the Board of Governors, 4 and any subsidiary thereof, shall provide to the 5 Council, at the request of the Council, copies of all 6 reports referred to in paragraph (1). 7 (3) CONFIDENTIALITY.—The Council shall 8 maintain the confidentiality of the reports obtained 9 under subsection (a) and paragraph (1)(A) of this 10 subsection. 11 SEC. 117. TREATMENT OF CERTAIN COMPANIES THAT 12 CEASE TO BE BANK HOLDING COMPANIES. 13 (a) APPLICABILITY.—This section shall apply to— 14 (1) any entity that— 15 (A) was a bank holding company having 16 total consolidated assets equal to or greater 17 than $50,000,000,000 as of January 1, 2010; 18 and 19 (B) received financial assistance under or 20 participated in the Capital Purchase Program 21 established under the Troubled Asset Relief 22 Program authorized by the Emergency Eco23 nomic Stabilization Act of 2008; and 71 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (2) any successor entity (as defined by the 2 Board of Governors, in consultation with the Coun3 cil) to an entity described in paragraph (1). 4 (b) TREATMENT.—If an entity described in sub5 section (a) ceases to be a bank holding company at any 6 time after January 1, 2010, then such entity shall be 7 treated as a nonbank financial company supervised by the 8 Board of Governors, as if the Council had made a deter9 mination under section 113 with respect to that entity. 10 (c) APPEAL.— 11 (1) REQUEST FOR HEARING.—An entity may 12 request, in writing, an opportunity for a written or 13 oral hearing before the Council to appeal its treat14 ment as a nonbank financial company supervised by 15 the Board of Governors in accordance with this sec16 tion. Upon receipt of the request, the Council shall 17 fix a time (not later than 30 days after the date of 18 receipt of the request) and place at which such enti19 ty may appear, personally or through counsel, to 20 submit written materials (or, at the sole discretion 21 of the Council, oral testimony and oral argument). 22 (2) DECISION.— 23 (A) PROPOSED DECISION.—A Council deci24 sion to grant an appeal under this subsection 25 shall be made by a vote of not fewer than 2⁄3 72 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 of the voting members then serving, including 2 an affirmative vote by the Chairperson. Not 3 later than 60 days after the date of a hearing 4 under paragraph (1), the Council shall submit 5 a report to, and may testify before, the Com6 mittee on Banking, Housing, and Urban Affairs 7 of the Senate and the Committee on Financial 8 Services of the House of Representatives on the 9 proposed decision of the Council regarding an 10 appeal under paragraph (1), which report shall 11 include a statement of the basis for the pro12 posed decision of the Council. 13 (B) NOTICE OF FINAL DECISION.—The 14 Council shall notify the subject entity of the 15 final decision of the Council regarding an ap16 peal under paragraph (1), which notice shall 17 contain a statement of the basis for the final 18 decision of the Council, not later than 60 days 19 after the later of— 20 (i) the date of the submission of the 21 report under subparagraph (A); or 22 (ii) if, not later than 1 year after the 23 date of submission of the report under sub24 paragraph (A), the Committee on Banking, 25 Housing, and Urban Affairs of the Senate 73 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 or the Committee on Financial Services of 2 the House of Representatives holds one or 3 more hearings regarding such report, the 4 date of the last such hearing. 5 (C) CONSIDERATIONS.—In making a deci6 sion regarding an appeal under paragraph (1), 7 the Council shall consider whether the company 8 meets the standards under section 113(a) or 9 113(b), as applicable, and the definition of the 10 term ‘‘nonbank financial company’’ under sec11 tion 102. The decision of the Council shall be 12 final, subject to the review under paragraph 13 (3). 14 (3) REVIEW.—If the Council denies an appeal 15 under this subsection, the Council shall, not less fre16 quently than annually, review and reevaluate the de17 cision. 18 SEC. 118. COUNCIL FUNDING. 19 Any expenses of the Council shall be treated as ex20 penses of, and paid by, the Office of Financial Research. 21 SEC. 119. RESOLUTION OF SUPERVISORY JURISDICTIONAL 22 DISPUTES AMONG MEMBER AGENCIES. 23 (a) REQUEST FOR COUNCIL RECOMMENDATION.— 24 The Council shall seek to resolve a dispute among 2 or 25 more member agencies, if— 74 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (1) a member agency has a dispute with an2 other member agency about the respective jurisdic3 tion over a particular bank holding company, 4 nonbank financial company, or financial activity or 5 product (excluding matters for which another dis6 pute mechanism specifically has been provided under 7 title X); 8 (2) the Council determines that the disputing 9 agencies cannot, after a demonstrated good faith ef10 fort, resolve the dispute without the intervention of 11 the Council; and 12 (3) any of the member agencies involved in the 13 dispute— 14 (A) provides all other disputants prior no15 tice of the intent to request dispute resolution 16 by the Council; and 17 (B) requests in writing, not earlier than 14 18 days after providing the notice described in sub19 paragraph (A), that the Council seek to resolve 20 the dispute. 21 (b) COUNCIL RECOMMENDATION.—The Council shall 22 seek to resolve each dispute described in subsection (a)— 23 (1) within a reasonable time after receiving the 24 dispute resolution request; 75 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (2) after consideration of relevant information 2 provided by each agency party to the dispute; and 3 (3) by agreeing with 1 of the disputants regard4 ing the entirety of the matter, or by determining a 5 compromise position. 6 (c) FORM OF RECOMMENDATION.—Any Council rec7 ommendation under this section shall— 8 (1) be in writing; 9 (2) include an explanation of the reasons there10 for; and 11 (3) be approved by the affirmative vote of 2⁄3 of 12 the voting members of the Council then serving. 13 (d) NONBINDING EFFECT.—Any recommendation 14 made by the Council under subsection (c) shall not be 15 binding on the Federal agencies that are parties to the 16 dispute. 17 SEC. 120. ADDITIONAL STANDARDS APPLICABLE TO ACTIVI18 TIES OR PRACTICES FOR FINANCIAL STA19 BILITY PURPOSES. 20 (a) IN GENERAL.—The Council may provide for more 21 stringent regulation of a financial activity by issuing rec22 ommendations to the primary financial regulatory agen23 cies to apply new or heightened standards and safeguards, 24 including standards enumerated in section 115, for a fi25 nancial activity or practice conducted by bank holding 76 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 companies or nonbank financial companies under their re2 spective jurisdictions, if the Council determines that the 3 conduct, scope, nature, size, scale, concentration, or inter4 connectedness of such activity or practice could create or 5 increase the risk of significant liquidity, credit, or other 6 problems spreading among bank holding companies and 7 nonbank financial companies, financial markets of the 8 United States, or low-income, minority, or underserved 9 communities. 10 (b) PROCEDURE FOR RECOMMENDATIONS TO REGU11 LATORS.— 12 (1) NOTICE AND OPPORTUNITY FOR COM13 MENT.—The Council shall consult with the primary 14 financial regulatory agencies and provide notice to 15 the public and opportunity for comment for any pro16 posed recommendation that the primary financial 17 regulatory agencies apply new or heightened stand18 ards and safeguards for a financial activity or prac19 tice. 20 (2) CRITERIA.—The new or heightened stand21 ards and safeguards for a financial activity or prac22 tice recommended under paragraph (1)— 23 (A) shall take costs to long-term economic 24 growth into account; and 77 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (B) may include prescribing the conduct of 2 the activity or practice in specific ways (such as 3 by limiting its scope, or applying particular cap4 ital or risk management requirements to the 5 conduct of the activity) or prohibiting the activ6 ity or practice. 7 (c) IMPLEMENTATION OF RECOMMENDED STAND8 ARDS.— 9 (1) ROLE OF PRIMARY FINANCIAL REGULATORY 10 AGENCY.— 11 (A) IN GENERAL.—Each primary financial 12 regulatory agency may impose, require reports 13 regarding, examine for compliance with, and en14 force standards in accordance with this section 15 with respect to those entities for which it is the 16 primary financial regulatory agency. 17 (B) RULE OF CONSTRUCTION.—The au18 thority under this paragraph is in addition to, 19 and does not limit, any other authority of a pri20 mary financial regulatory agency. Compliance 21 by an entity with actions taken by a primary fi22 nancial regulatory agency under this section 23 shall be enforceable in accordance with the stat24 utes governing the respective jurisdiction of the 25 primary financial regulatory agency over the en78 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 tity, as if the agency action were taken under 2 those statutes. 3 (2) IMPOSITION OF STANDARDS.—The primary 4 financial regulatory agency shall impose the stand5 ards recommended by the Council in accordance 6 with subsection (a), or similar standards that the 7 Council deems acceptable, or shall explain in writing 8 to the Council, not later than 90 days after the date 9 on which the Council issues the recommendation, 10 why the agency has determined not to follow the rec11 ommendation of the Council. 12 (d) REPORT TO CONGRESS.—The Council shall re13 port to Congress on— 14 (1) any recommendations issued by the Council 15 under this section; 16 (2) the implementation of, or failure to imple17 ment, such recommendation on the part of a pri18 mary financial regulatory agency; and 19 (3) in any case in which no primary financial 20 regulatory agency exists for the nonbank financial 21 company conducting financial activities or practices 22 referred to in subsection (a), recommendations for 23 legislation that would prevent such activities or prac24 tices from threatening the stability of the financial 25 system of the United States. 79 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (e) EFFECT OF RESCISSION OF IDENTIFICATION.— 2 (1) NOTICE.—The Council may recommend to 3 the relevant primary financial regulatory agency that 4 a financial activity or practice no longer requires any 5 standards or safeguards implemented under this sec6 tion. 7 (2) DETERMINATION OF PRIMARY FINANCIAL 8 REGULATORY AGENCY TO CONTINUE.— 9 (A) IN GENERAL.—Upon receipt of a rec10 ommendation under paragraph (1), a primary 11 financial regulatory agency that has imposed 12 standards under this section shall determine 13 whether such standards should remain in effect. 14 (B) APPEAL PROCESS.—Each primary fi15 nancial regulatory agency that has imposed 16 standards under this section shall promulgate 17 regulations to establish a procedure under 18 which entities under its jurisdiction may appeal 19 a determination by such agency under this 20 paragraph that standards imposed under this 21 section should remain in effect. 22 SEC. 121. MITIGATION OF RISKS TO FINANCIAL STABILITY. 23 (a) MITIGATORY ACTIONS.—If the Board of Gov24 ernors determines that a bank holding company with total 25 consolidated assets of $50,000,000,000 or more, or a 80 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 nonbank financial company supervised by the Board of 2 Governors, poses a grave threat to the financial stability 3 of the United States, the Board of Governors, upon an 4 affirmative vote of not fewer than 2⁄3 of the voting mem5 bers of the Council then serving, shall— 6 (1) limit the ability of the company to merge 7 with, acquire, consolidate with, or otherwise become 8 affiliated with another company; 9 (2) restrict the ability of the company to offer 10 a financial product or products; 11 (3) require the company to terminate one or 12 more activities; 13 (4) impose conditions on the manner in which 14 the company conducts 1 or more activities; or 15 (5) if the Board of Governors determines that 16 the actions described in paragraphs (1) through (4) 17 are inadequate to mitigate a threat to the financial 18 stability of the United States in its recommendation, 19 require the company to sell or otherwise transfer as20 sets or off-balance-sheet items to unaffiliated enti21 ties. 22 (b) NOTICE AND HEARING.— 23 (1) IN GENERAL.—The Board of Governors, in 24 consultation with the Council, shall provide to a 25 company described in subsection (a) written notice 81 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 that such company is being considered for mitiga2 tory action pursuant to this section, including an ex3 planation of the basis for, and description of, the 4 proposed mitigatory action. 5 (2) HEARING.—Not later than 30 days after 6 the date of receipt of notice under paragraph (1), 7 the company may request, in writing, an opportunity 8 for a written or oral hearing before the Board of 9 Governors to contest the proposed mitigatory action. 10 Upon receipt of a timely request, the Board of Gov11 ernors shall fix a time (not later than 30 days after 12 the date of receipt of the request) and place at 13 which such company may appear, personally or 14 through counsel, to submit written materials (or, at 15 the discretion of the Board of Governors, in con16 sultation with the Council, oral testimony and oral 17 argument). 18 (3) DECISION.—Not later than 60 days after 19 the date of a hearing under paragraph (2), or not 20 later than 60 days after the provision of a notice 21 under paragraph (1) if no hearing was held, the 22 Board of Governors shall notify the company of the 23 final decision of the Board of Governors, including 24 the results of the vote of the Council, as described 25 in subsection (a). 82 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (c) FACTORS FOR CONSIDERATION.—The Board of 2 Governors and the Council shall take into consideration 3 the factors set forth in subsection (a) or (b) of section 4 113, as applicable, in making any determination under 5 subsection (a). 6 (d) APPLICATION TO FOREIGN FINANCIAL COMPA7 NIES.—The Board of Governors may prescribe regulations 8 regarding the application of this section to foreign 9 nonbank financial companies supervised by the Board of 10 Governors and foreign-based bank holding companies— 11 (1) giving due regard to the principle of na12 tional treatment and equality of competitive oppor13 tunity; and 14 (2) taking into account the extent to which the 15 foreign nonbank financial company or foreign-based 16 bank holding company is subject on a consolidated 17 basis to home country standards that are com18 parable to those applied to financial companies in 19 the United States. 20 SEC. 122. GAO AUDIT OF COUNCIL. 21 (a) AUTHORITY TO AUDIT.—The Comptroller Gen22 eral of the United States may audit the activities of— 23 (1) the Council; and 24 (2) any person or entity acting on behalf of or 25 under the authority of the Council, to the extent 83 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 that such activities relate to work for the Council by 2 such person or entity. 3 (b) ACCESS TO INFORMATION.— 4 (1) IN GENERAL.—Notwithstanding any other 5 provision of law, the Comptroller General shall, upon 6 request and at such reasonable time and in such rea7 sonable form as the Comptroller General may re8 quest, have access to— 9 (A) any records or other information under 10 the control of or used by the Council; 11 (B) any records or other information under 12 the control of a person or entity acting on be13 half of or under the authority of the Council, to 14 the extent that such records or other informa15 tion is relevant to an audit under subsection 16 (a); and 17 (C) the officers, directors, employees, fi18 nancial advisors, staff, working groups, and 19 agents and representatives of the Council (as 20 related to the activities on behalf of the Council 21 of such agent or representative), at such rea22 sonable times as the Comptroller General may 23 request. 24 (2) COPIES.—The Comptroller General may 25 make and retain copies of such books, accounts, and 84 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 other records, access to which is granted under this 2 section, as the Comptroller General considers appro3 priate. 4 SEC. 123. STUDY OF THE EFFECTS OF SIZE AND COM5 PLEXITY OF FINANCIAL INSTITUTIONS ON 6 CAPITAL MARKET EFFICIENCY AND ECO7 NOMIC GROWTH. 8 (a) STUDY REQUIRED.— 9 (1) IN GENERAL.—The Chairperson of the 10 Council shall carry out a study of the economic im11 pact of possible financial services regulatory limita12 tions intended to reduce systemic risk. Such study 13 shall estimate the benefits and costs on the effi14 ciency of capital markets, on the financial sector, 15 and on national economic growth, of— 16 (A) explicit or implicit limits on the max17 imum size of banks, bank holding companies, 18 and other large financial institutions; 19 (B) limits on the organizational complexity 20 and diversification of large financial institu21 tions; 22 (C) requirements for operational separa23 tion between business units of large financial 24 institutions in order to expedite resolution in 25 case of failure; 85 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (D) limits on risk transfer between busi2 ness units of large financial institutions; 3 (E) requirements to carry contingent cap4 ital or similar mechanisms; 5 (F) limits on commingling of commercial 6 and financial activities by large financial insti7 tutions; 8 (G) segregation requirements between tra9 ditional financial activities and trading or other 10 high-risk operations in large financial institu11 tions; and 12 (H) other limitations on the activities or 13 structure of large financial institutions that 14 may be useful to limit systemic risk. 15 (2) RECOMMENDATIONS.—The study required 16 by this section shall include recommendations for the 17 optimal structure of any limits considered in sub18 paragraphs (A) through (E), in order to maximize 19 their effectiveness and minimize their economic im20 pact. 21 (b) REPORT.—Not later than the end of the 180-day 22 period beginning on the date of enactment of this title, 23 and not later than every 5 years thereafter, the Chair24 person shall issue a report to the Congress containing any 86 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 findings and determinations made in carrying out the 2 study required under subsection (a). 3 Subtitle B—Office of Financial 4 Research 5 SEC. 151. DEFINITIONS. 6 For purposes of this subtitle— 7 (1) the terms ‘‘Office’’ and ‘‘Director’’ mean 8 the Office of Financial Research established under 9 this subtitle and the Director thereof, respectively; 10 (2) the term ‘‘financial company’’ has the same 11 meaning as in title II, and includes an insured de12 pository institution and an insurance company; 13 (3) the term ‘‘Data Center’’ means the data 14 center established under section 154; 15 (4) the term ‘‘Research and Analysis Center’’ 16 means the research and analysis center established 17 under section 154; 18 (5) the term ‘‘financial transaction data’’ means 19 the structure and legal description of a financial 20 contract, with sufficient detail to describe the rights 21 and obligations between counterparties and make 22 possible an independent valuation; 23 (6) the term ‘‘position data’’— 24 (A) means data on financial assets or li25 abilities held on the balance sheet of a financial 87 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 company, where positions are created or 2 changed by the execution of a financial trans3 action; and 4 (B) includes information that identifies 5 counterparties, the valuation by the financial 6 company of the position, and information that 7 makes possible an independent valuation of the 8 position; 9 (7) the term ‘‘financial contract’’ means a le10 gally binding agreement between 2 or more counter11 parties, describing rights and obligations relating to 12 the future delivery of items of intrinsic or extrinsic 13 value among the counterparties; and 14 (8) the term ‘‘financial instrument’’ means a fi15 nancial contract in which the terms and conditions 16 are publicly available, and the roles of one or more 17 of the counterparties are assignable without the con18 sent of any of the other counterparties (including 19 common stock of a publicly traded company, govern20 ment bonds, or exchange traded futures and options 21 contracts). 22 SEC. 152. OFFICE OF FINANCIAL RESEARCH ESTABLISHED. 23 (a) ESTABLISHMENT.—There is established within 24 the Department of the Treasury the Office of Financial 25 Research. 88 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (b) DIRECTOR.— 2 (1) IN GENERAL.—The Office shall be headed 3 by a Director, who shall be appointed by the Presi4 dent, by and with the advice and consent of the Sen5 ate. 6 (2) TERM OF SERVICE.—The Director shall 7 serve for a term of 6 years, except that, in the event 8 that a successor is not nominated and confirmed by 9 the end of the term of service of a Director, the Di10 rector may continue to serve until such time as the 11 next Director is appointed and confirmed. 12 (3) EXECUTIVE LEVEL.—The Director shall be 13 compensated at Level III of the Executive Schedule. 14 (4) PROHIBITION ON DUAL SERVICE.—The in15 dividual serving in the position of Director may not, 16 during such service, also serve as the head of any fi17 nancial regulatory agency. 18 (5) RESPONSIBILITIES, DUTIES, AND AUTHOR19 ITY.—The Director shall have sole discretion in the 20 manner in which the Director fulfills the responsibil21 ities and duties and exercises the authorities de22 scribed in this subtitle. 23 (c) BUDGET.—The Director, in consultation with the 24 Chairperson, shall establish the annual budget of the Of25 fice. 89 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (d) OFFICE PERSONNEL.— 2 (1) IN GENERAL.—The Director, in consulta3 tion with the Chairperson, may fix the number of, 4 and appoint and direct, all employees of the Office. 5 (2) COMPENSATION.—The Director, in con6 sultation with the Chairperson, shall fix, adjust, and 7 administer the pay for all employees of the Office, 8 without regard to chapter 51 or subchapter III of 9 chapter 53 of title 5, United States Code, relating 10 to classification of positions and General Schedule 11 pay rates. 12 (3) COMPARABILITY.—Section 1206(a) of the 13 Financial Institutions Reform, Recovery, and En14 forcement Act of 1989 (12 U.S.C. 1833b(a)) is 15 amended— 16 (A) by striking ‘‘Finance Board,’’ and in17 serting ‘‘Finance Board, the Office of Financial 18 Research, and the Bureau of Consumer Finan19 cial Protection’’; and 20 (B) by striking ‘‘and the Office of Thrift 21 Supervision,’’. 22 (4) SENIOR EXECUTIVES.—Section 23 3132(a)(1)(D) of title 5, United States Code, is 24 amended by striking ‘‘and the National Credit Union 25 Administration;’’ and inserting ‘‘the National Credit 90 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 Union Administration, the Bureau of Consumer Fi2 nancial Protection, and the Office of Financial Re3 search;’’. 4 (e) ASSISTANCE FROM FEDERAL AGENCIES.—Any 5 department or agency of the United States may provide 6 to the Office and any special advisory, technical, or profes7 sional committees appointed by the Office, such services, 8 funds, facilities, staff, and other support services as the 9 Office may determine advisable. Any Federal Government 10 employee may be detailed to the Office without reimburse11 ment, and such detail shall be without interruption or loss 12 of civil service status or privilege. 13 (f) PROCUREMENT OF TEMPORARY AND INTERMIT14 TENT SERVICES.—The Director may procure temporary 15 and intermittent services under section 3109(b) of title 5, 16 United States Code, at rates for individuals which do not 17 exceed the daily equivalent of the annual rate of basic pay 18 prescribed for Level V of the Executive Schedule under 19 section 5316 of such title. 20 (g) POST-EMPLOYMENT PROHIBITIONS.—The Sec21 retary, with the concurrence of the Director of the Office 22 of Government Ethics, shall issue regulations prohibiting 23 the Director and any employee of the Office who has had 24 access to the transaction or position data maintained by 25 the Data Center or other business confidential information 91 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 about financial entities required to report to the Office 2 from being employed by or providing advice or consulting 3 services to a financial company, for a period of 1 year 4 after last having had access in the course of official duties 5 to such transaction or position data or business confiden6 tial information, regardless of whether that entity is re7 quired to report to the Office. For employees whose access 8 to business confidential information was limited, the regu9 lations may provide, on a case-by-case basis, for a shorter 10 period of post-employment prohibition, provided that the 11 shorter period does not compromise business confidential 12 information. 13 (h) TECHNICAL AND PROFESSIONAL ADVISORY COM14 MITTEES.—The Office, in consultation with the Chair15 person, may appoint such special advisory, technical, or 16 professional committees as may be useful in carrying out 17 the functions of the Office, and the members of such com18 mittees may be staff of the Office, or other persons, or 19 both. 20 (i) FELLOWSHIP PROGRAM.—The Office, in consulta21 tion with the Chairperson, may establish and maintain an 22 academic and professional fellowship program, under 23 which qualified academics and professionals shall be in24 vited to spend not longer than 2 years at the Office, to 92 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 perform research and to provide advanced training for Of2 fice personnel. 3 (j) EXECUTIVE SCHEDULE COMPENSATION.—Sec4 tion 5314 of title 5, United States Code, is amended by 5 adding at the end the following new item: 6 ‘‘Director of the Office of Financial Research.’’. 7 SEC. 153. PURPOSE AND DUTIES OF THE OFFICE. 8 (a) PURPOSE AND DUTIES.—The purpose of the Of9 fice is to support the Council in fulfilling the purposes and 10 duties of the Council, as set forth in subtitle A, and to 11 support member agencies, by— 12 (1) collecting data on behalf of the Council, and 13 providing such data to the Council and member 14 agencies; 15 (2) standardizing the types and formats of data 16 reported and collected; 17 (3) performing applied research and essential 18 long-term research; 19 (4) developing tools for risk measurement and 20 monitoring; 21 (5) performing other related services; 22 (6) making the results of the activities of the 23 Office available to financial regulatory agencies; and 93 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (7) assisting such member agencies in deter2 mining the types and formats of data authorized by 3 this Act to be collected by such member agencies. 4 (b) ADMINISTRATIVE AUTHORITY.—The Office 5 may— 6 (1) share data and information, including soft7 ware developed by the Office, with the Council, 8 member agencies, and the Bureau of Economic 9 Analysis, which shared data, information, and soft10 ware— 11 (A) shall be maintained with at least the 12 same level of security as is used by the Office; 13 and 14 (B) may not be shared with any individual 15 or entity without the permission of the Council; 16 (2) sponsor and conduct research projects; and 17 (3) assist, on a reimbursable basis, with finan18 cial analyses undertaken at the request of other 19 Federal agencies that are not member agencies. 20 (c) RULEMAKING AUTHORITY.— 21 (1) SCOPE.—The Office, in consultation with 22 the Chairperson, shall issue rules, regulations, and 23 orders only to the extent necessary to carry out the 24 purposes and duties described in paragraphs (1), 25 (2), and (7) of subsection (a). 94 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (2) STANDARDIZATION.—Member agencies, in 2 consultation with the Office, shall implement regula3 tions promulgated by the Office under paragraph (1) 4 to standardize the types and formats of data re5 ported and collected on behalf of the Council, as de6 scribed in subsection (a)(2). If a member agency 7 fails to implement such regulations prior to the expi8 ration of the 3-year period following the date of pub9 lication of final regulations, the Office, in consulta10 tion with the Chairperson, may implement such reg11 ulations with respect to the financial entities under 12 the jurisdiction of the member agency. This para13 graph shall not supersede or interfere with the inde14 pendent authority of a member agency under other 15 law to collect data, in such format and manner as 16 the member agency requires. 17 (d) TESTIMONY.— 18 (1) IN GENERAL.—The Director of the Office 19 shall report to and testify before the Committee on 20 Banking, Housing, and Urban Affairs of the Senate 21 and the Committee on Financial Services of the 22 House of Representatives annually on the activities 23 of the Office, including the work of the Data Center 24 and the Research and Analysis Center, and the as25 sessment of the Office of significant financial market 95 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 developments and potential emerging threats to the 2 financial stability of the United States. 3 (2) NO PRIOR REVIEW.—No officer or agency of 4 the United States shall have any authority to require 5 the Director to submit the testimony required under 6 paragraph (1) or other congressional testimony to 7 any officer or agency of the United States for ap8 proval, comment, or review prior to the submission 9 of such testimony. Any such testimony to Congress 10 shall include a statement that the views expressed 11 therein are those of the Director and do not nec12 essarily represent the views of the President. 13 (e) ADDITIONAL REPORTS.—The Director may pro14 vide additional reports to Congress concerning the finan15 cial stability of the United States. The Director shall no16 tify the Council of any such additional reports provided 17 to Congress. 18 (f) SUBPOENA.— 19 (1) IN GENERAL.—The Director may require 20 from a financial company, by subpoena, the produc21 tion of the data requested under subsection (a)(1) 22 and section 154(b)(1), but only upon a written find23 ing by the Director that— 24 (A) such data is required to carry out the 25 functions described under this subtitle; and 96 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (B) the Office has coordinated with the 2 relevant primary financial regulatory agency, as 3 required under section 154(b)(1)(B)(ii). 4 (2) FORMAT.—Subpoenas under paragraph (1) 5 shall bear the signature of the Director, and shall be 6 served by any person or class of persons designated 7 by the Director for that purpose. 8 (3) ENFORCEMENT.—In the case of contumacy 9 or failure to obey a subpoena, the subpoena shall be 10 enforceable by order of any appropriate district 11 court of the United States. Any failure to obey the 12 order of the court may be punished by the court as 13 a contempt of court. 14 SEC. 154. ORGANIZATIONAL STRUCTURE; RESPONSIBIL15 ITIES OF PRIMARY PROGRAMMATIC UNITS. 16 (a) IN GENERAL.—There are established within the 17 Office, to carry out the programmatic responsibilities of 18 the Office— 19 (1) the Data Center; and 20 (2) the Research and Analysis Center. 21 (b) DATA CENTER.— 22 (1) GENERAL DUTIES.— 23 (A) DATA COLLECTION.—The Data Cen24 ter, on behalf of the Council, shall collect, vali25 date, and maintain all data necessary to carry 97 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 out the duties of the Data Center, as described 2 in this subtitle. The data assembled shall be ob3 tained from member agencies, commercial data 4 providers, publicly available data sources, and 5 financial entities under subparagraph (B). 6 (B) AUTHORITY.— 7 (i) IN GENERAL.—The Office may, as 8 determined by the Council or by the Direc9 tor in consultation with the Council, re10 quire the submission of periodic and other 11 reports from any financial company for the 12 purpose of assessing the extent to which a 13 financial activity or financial market in 14 which the financial company participates, 15 or the financial company itself, poses a 16 threat to the financial stability of the 17 United States. 18 (ii) MITIGATION OF REPORT BUR19 DEN.—Before requiring the submission of 20 a report from any financial company that 21 is regulated by a member agency, any pri22 mary financial regulatory agency, a foreign 23 supervisory authority, or the Office shall 24 coordinate with such agencies or authority, 25 and shall, whenever possible, rely on infor98 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 mation available from such agencies or au2 thority. 3 (iii) COLLECTION OF FINANCIAL 4 TRANSACTION AND POSITION DATA.—The 5 Office shall collect, on a schedule deter6 mined by the Director, in consultation with 7 the Council, financial transaction data and 8 position data from financial companies. 9 (C) RULEMAKING.—The Office shall pro10 mulgate regulations pursuant to subsections 11 (a)(1), (a)(2), (a)(7), and (c)(1) of section 153 12 regarding the type and scope of the data to be 13 collected by the Data Center under this para14 graph. 15 (2) RESPONSIBILITIES.— 16 (A) PUBLICATION.—The Data Center shall 17 prepare and publish, in a manner that is easily 18 accessible to the public— 19 (i) a financial company reference 20 database; 21 (ii) a financial instrument reference 22 database; and 23 (iii) formats and standards for Office 24 data, including standards for reporting fi99 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 nancial transaction and position data to 2 the Office. 3 (B) CONFIDENTIALITY.—The Data Center 4 shall not publish any confidential data under 5 subparagraph (A). 6 (3) INFORMATION SECURITY.—The Director 7 shall ensure that data collected and maintained by 8 the Data Center are kept secure and protected 9 against unauthorized disclosure. 10 (4) CATALOG OF FINANCIAL ENTITIES AND IN11 STRUMENTS.—The Data Center shall maintain a 12 catalog of the financial entities and instruments re13 ported to the Office. 14 (5) AVAILABILITY TO THE COUNCIL AND MEM15 BER AGENCIES.—The Data Center shall make data 16 collected and maintained by the Data Center avail17 able to the Council and member agencies, as nec18 essary to support their regulatory responsibilities. 19 (6) OTHER AUTHORITY.—The Office shall, 20 after consultation with the member agencies, provide 21 certain data to financial industry participants and to 22 the general public to increase market transparency 23 and facilitate research on the financial system, to 24 the extent that intellectual property rights are not 25 violated, business confidential information is prop100 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 erly protected, and the sharing of such information 2 poses no significant threats to the financial system 3 of the United States. 4 (c) RESEARCH AND ANALYSIS CENTER.— 5 (1) GENERAL DUTIES.—The Research and 6 Analysis Center, on behalf of the Council, shall de7 velop and maintain independent analytical capabili8 ties and computing resources— 9 (A) to develop and maintain metrics and 10 reporting systems for risks to the financial sta11 bility of the United States; 12 (B) to monitor, investigate, and report on 13 changes in systemwide risk levels and patterns 14 to the Council and Congress; 15 (C) to conduct, coordinate, and sponsor re16 search to support and improve regulation of fi17 nancial entities and markets; 18 (D) to evaluate and report on stress tests 19 or other stability-related evaluations of financial 20 entities overseen by the member agencies; 21 (E) to maintain expertise in such areas as 22 may be necessary to support specific requests 23 for advice and assistance from financial regu24 lators; 101 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (F) to investigate disruptions and failures 2 in the financial markets, report findings, and 3 make recommendations to the Council based on 4 those findings; 5 (G) to conduct studies and provide advice 6 on the impact of policies related to systemic 7 risk; and 8 (H) to promote best practices for financial 9 risk management. 10 (d) REPORTING RESPONSIBILITIES.— 11 (1) REQUIRED REPORTS.—Not later than 2 12 years after the date of enactment of this Act, and 13 not later than 120 days after the end of each fiscal 14 year thereafter, the Office shall prepare and submit 15 a report to Congress. 16 (2) CONTENT.—Each report required by this 17 subsection shall assess the state of the United States 18 financial system, including— 19 (A) an analysis of any threats to the finan20 cial stability of the United States; 21 (B) the status of the efforts of the Office 22 in meeting the mission of the Office; and 23 (C) key findings from the research and 24 analysis of the financial system by the Office. 102 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 SEC. 155. FUNDING. 2 (a) FINANCIAL RESEARCH FUND.— 3 (1) FUND ESTABLISHED.—There is established 4 in the Treasury of the United States a separate fund 5 to be known as the ‘‘Financial Research Fund’’. 6 (2) FUND RECEIPTS.—All amounts provided to 7 the Office under subsection (c), and all assessments 8 that the Office receives under subsection (d) shall be 9 deposited into the Financial Research Fund. 10 (3) INVESTMENTS AUTHORIZED.— 11 (A) AMOUNTS IN FUND MAY BE IN12 VESTED.—The Director may request the Sec13 retary to invest the portion of the Financial Re14 search Fund that is not, in the judgment of the 15 Director, required to meet the needs of the Of16 fice. 17 (B) ELIGIBLE INVESTMENTS.—Invest18 ments shall be made by the Secretary in obliga19 tions of the United States or obligations that 20 are guaranteed as to principal and interest by 21 the United States, with maturities suitable to 22 the needs of the Financial Research Fund, as 23 determined by the Director. 24 (4) INTEREST AND PROCEEDS CREDITED.—The 25 interest on, and the proceeds from the sale or re26 demption of, any obligations held in the Financial 103 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 Research Fund shall be credited to and form a part 2 of the Financial Research Fund. 3 (b) USE OF FUNDS.— 4 (1) IN GENERAL.—Funds obtained by, trans5 ferred to, or credited to the Financial Research 6 Fund shall be immediately available to the Office, 7 and shall remain available until expended, to pay the 8 expenses of the Office in carrying out the duties and 9 responsibilities of the Office. 10 (2) FEES, ASSESSMENTS, AND OTHER FUNDS 11 NOT GOVERNMENT FUNDS.—Funds obtained by, 12 transferred to, or credited to the Financial Research 13 Fund shall not be construed to be Government funds 14 or appropriated moneys. 15 (3) AMOUNTS NOT SUBJECT TO APPORTION16 MENT.—Notwithstanding any other provision of law, 17 amounts in the Financial Research Fund shall not 18 be subject to apportionment for purposes of chapter 19 15 of title 31, United States Code, or under any 20 other authority, or for any other purpose. 21 (c) INTERIM FUNDING.—During the 2-year period 22 following the date of enactment of this Act, the Board of 23 Governors shall provide to the Office an amount sufficient 24 to cover the expenses of the Office. 104 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (d) PERMANENT SELF-FUNDING.—Beginning 2 years 2 after the date of enactment of this Act, the Secretary shall 3 establish, by regulation, and with the approval of the 4 Council, an assessment schedule, including the assessment 5 base and rates, applicable to bank holding companies with 6 total consolidated assets of $50,000,000,000 or greater 7 and nonbank financial companies supervised by the Board 8 of Governors, that takes into account differences among 9 such companies, based on the considerations for estab10 lishing the prudential standards under section 115, to col11 lect assessments equal to the total expenses of the Office. 12 SEC. 156. TRANSITION OVERSIGHT. 13 (a) PURPOSE.—The purpose of this section is to en14 sure that the Office— 15 (1) has an orderly and organized startup; 16 (2) attracts and retains a qualified workforce; 17 and 18 (3) establishes comprehensive employee training 19 and benefits programs. 20 (b) REPORTING REQUIREMENT.— 21 (1) IN GENERAL.—The Office shall submit an 22 annual report to the Committee on Banking, Hous23 ing, and Urban Affairs of the Senate and the Com24 mittee on Financial Services of the House of Rep105 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 resentatives that includes the plans described in 2 paragraph (2). 3 (2) PLANS.—The plans described in this para4 graph are as follows: 5 (A) TRAINING AND WORKFORCE DEVELOP6 MENT PLAN.—The Office shall submit a train7 ing and workforce development plan that in8 cludes, to the extent practicable— 9 (i) identification of skill and technical 10 expertise needs and actions taken to meet 11 those requirements; 12 (ii) steps taken to foster innovation 13 and creativity; 14 (iii) leadership development and suc15 cession planning; and 16 (iv) effective use of technology by em17 ployees. 18 (B) WORKPLACE FLEXIBILITY PLAN.—The 19 Office shall submit a workforce flexibility plan 20 that includes, to the extent practicable— 21 (i) telework; 22 (ii) flexible work schedules; 23 (iii) phased retirement; 24 (iv) reemployed annuitants; 25 (v) part-time work; 106 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (vi) job sharing; 2 (vii) parental leave benefits and 3 childcare assistance; 4 (viii) domestic partner benefits; 5 (ix) other workplace flexibilities; or 6 (x) any combination of the items de7 scribed in clauses (i) through (ix). 8 (C) RECRUITMENT AND RETENTION 9 PLAN.—The Office shall submit a recruitment 10 and retention plan that includes, to the extent 11 practicable, provisions relating to— 12 (i) the steps necessary to target highly 13 qualified applicant pools with diverse back14 grounds; 15 (ii) streamlined employment applica16 tion processes; 17 (iii) the provision of timely notifica18 tion of the status of employment applica19 tions to applicants; and 20 (iv) the collection of information to 21 measure indicators of hiring effectiveness. 22 (c) EXPIRATION.—The reporting requirement under 23 subsection (b) shall terminate 5 years after the date of 24 enactment of this Act. 107 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (d) RULE OF CONSTRUCTION.—Nothing in this sec2 tion may be construed to affect— 3 (1) a collective bargaining agreement, as that 4 term is defined in section 7103(a)(8) of title 5, 5 United States Code, that is in effect on the date of 6 enactment of this Act; or 7 (2) the rights of employees under chapter 71 of 8 title 5, United States Code. 9 Subtitle C—Additional Board of 10 Governors Authority for Certain 11 Nonbank Financial Companies 12 and Bank Holding Companies 13 SEC. 161. REPORTS BY AND EXAMINATIONS OF NONBANK 14 FINANCIAL COMPANIES BY THE BOARD OF 15 GOVERNORS. 16 (a) REPORTS.— 17 (1) IN GENERAL.—The Board of Governors 18 may require each nonbank financial company super19 vised by the Board of Governors, and any subsidiary 20 thereof, to submit reports under oath, to keep the 21 Board of Governors informed as to— 22 (A) the financial condition of the company 23 or subsidiary, systems of the company or sub24 sidiary for monitoring and controlling financial, 25 operating, and other risks, and the extent to 108 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 which the activities and operations of the com2 pany or subsidiary pose a threat to the financial 3 stability of the United States; and 4 (B) compliance by the company or sub5 sidiary with the requirements of this title. 6 (2) USE OF EXISTING REPORTS AND INFORMA7 TION.—In carrying out subsection (a), the Board of 8 Governors shall, to the fullest extent possible, use— 9 (A) reports and supervisory information 10 that a nonbank financial company or subsidiary 11 thereof has been required to provide to other 12 Federal or State regulatory agencies; 13 (B) information otherwise obtainable from 14 Federal or State regulatory agencies; 15 (C) information that is otherwise required 16 to be reported publicly; and 17 (D) externally audited financial statements 18 of such company or subsidiary. 19 (3) AVAILABILITY.—Upon the request of the 20 Board of Governors, a nonbank financial company 21 supervised by the Board of Governors, or a sub22 sidiary thereof, shall promptly provide to the Board 23 of Governors any information described in para24 graph (2). 25 (b) EXAMINATIONS.— 109 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (1) IN GENERAL.—Subject to paragraph (2), 2 the Board of Governors may examine any nonbank 3 financial company supervised by the Board of Gov4 ernors and any subsidiary of such company, to in5 form the Board of Governors of— 6 (A) the nature of the operations and finan7 cial condition of the company and such sub8 sidiary; 9 (B) the financial, operational, and other 10 risks of the company or such subsidiary that 11 may pose a threat to the safety and soundness 12 of such company or subsidiary or to the finan13 cial stability of the United States; 14 (C) the systems for monitoring and con15 trolling such risks; and 16 (D) compliance by the company or such 17 subsidiary with the requirements of this title. 18 (2) USE OF EXAMINATION REPORTS AND IN19 FORMATION.—For purposes of this subsection, the 20 Board of Governors shall, to the fullest extent pos21 sible, rely on reports of examination of any sub22 sidiary depository institution or functionally regu23 lated subsidiary made by the primary financial regu24 latory agency for that subsidiary, and on informa25 tion described in subsection (a)(2). 110 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (c) COORDINATION WITH PRIMARY FINANCIAL REG2 ULATORY AGENCY.—The Board of Governors shall— 3 (1) provide reasonable notice to, and consult 4 with, the primary financial regulatory agency for 5 any subsidiary before requiring a report or com6 mencing an examination of such subsidiary under 7 this section; and 8 (2) avoid duplication of examination activities, 9 reporting requirements, and requests for informa10 tion, to the fullest extent possible. 11 SEC. 162. ENFORCEMENT. 12 (a) IN GENERAL.—Except as provided in subsection 13 (b), a nonbank financial company supervised by the Board 14 of Governors and any subsidiaries of such company (other 15 than any depository institution subsidiary) shall be subject 16 to the provisions of subsections (b) through (n) of section 17 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818), 18 in the same manner and to the same extent as if the com19 pany were a bank holding company, as provided in section 20 8(b)(3) of the Federal Deposit Insurance Act (12 U.S.C. 21 1818(b)(3)). 22 (b) ENFORCEMENT AUTHORITY FOR FUNCTIONALLY 23 REGULATED SUBSIDIARIES.— 24 (1) REFERRAL.—If the Board of Governors de25 termines that a condition, practice, or activity of a 111 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 depository institution subsidiary or functionally reg2 ulated subsidiary of a nonbank financial company 3 supervised by the Board of Governors does not com4 ply with the regulations or orders prescribed by the 5 Board of Governors under this Act, or otherwise 6 poses a threat to the financial stability of the United 7 States, the Board of Governors may recommend, in 8 writing, to the primary financial regulatory agency 9 for the subsidiary that such agency initiate a super10 visory action or enforcement proceeding. The rec11 ommendation shall be accompanied by a written ex12 planation of the concerns giving rise to the rec13 ommendation. 14 (2) BACK-UP AUTHORITY OF THE BOARD OF 15 GOVERNORS.—If, during the 60-day period begin16 ning on the date on which the primary financial reg17 ulatory agency receives a recommendation under 18 paragraph (1), the primary financial regulatory 19 agency does not take supervisory or enforcement ac20 tion against a subsidiary that is acceptable to the 21 Board of Governors, the Board of Governors (upon 22 a vote of its members) may take the recommended 23 supervisory or enforcement action, as if the sub24 sidiary were a bank holding company subject to su25 pervision by the Board of Governors. 112 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 SEC. 163. ACQUISITIONS. 2 (a) ACQUISITIONS OF BANKS; TREATMENT AS A 3 BANK HOLDING COMPANY.—For purposes of section 3 of 4 the Bank Holding Company Act of 1956 (12 U.S.C. 5 1842), a nonbank financial company supervised by the 6 Board of Governors shall be deemed to be, and shall be 7 treated as, a bank holding company. 8 (b) ACQUISITION OF NONBANK COMPANIES.— 9 (1) PRIOR NOTICE FOR LARGE ACQUISITIONS.— 10 Notwithstanding section 4(k)(6)(B) of the Bank 11 Holding Company Act of 1956 (12 U.S.C. 12 1843(k)(6)(B)), a bank holding company with total 13 consolidated assets equal to or greater than 14 $50,000,000,000 or a nonbank financial company 15 supervised by the Board of Governors shall not ac16 quire direct or indirect ownership or control of any 17 voting shares of any company (other than an insured 18 depository institution) that is engaged in activities 19 described in section 4(k) of the Bank Holding Com20 pany Act of 1956 having total consolidated assets of 21 $10,000,000,000 or more, without providing written 22 notice to the Board of Governors in advance of the 23 transaction. 24 (2) EXEMPTIONS.—The prior notice require25 ment in paragraph (1) shall not apply with regard 26 to the acquisition of shares that would qualify for 113 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 the exemptions in section 4(c) or section 4(k)(4)(E) 2 of the Bank Holding Company Act of 1956 (12 3 U.S.C. 1843(c) and (k)(4)(E)). 4 (3) NOTICE PROCEDURES.—The notice proce5 dures set forth in section 4(j)(1) of the Bank Hold6 ing Company Act of 1956 (12 U.S.C. 1843(j)(1)), 7 without regard to section 4(j)(3) of that Act, shall 8 apply to an acquisition of any company (other than 9 an insured depository institution) by a bank holding 10 company with total consolidated assets equal to or 11 greater than $50,000,000,000 or a nonbank finan12 cial company supervised by the Board of Governors, 13 as described in paragraph (1), including any such 14 company engaged in activities described in section 15 4(k) of that Act. 16 (4) STANDARDS FOR REVIEW.—In addition to 17 the standards provided in section 4(j)(2) of the 18 Bank Holding Company Act of 1956 (12 U.S.C. 19 1843(j)(2)), the Board of Governors shall consider 20 the extent to which the proposed acquisition would 21 result in greater or more concentrated risks to global 22 or United States financial stability or the United 23 States economy. 24 (5) HART-SCOTT-RODINO FILING REQUIRE25 MENT.—Solely for purposes of section 7A(c)(8) of 114 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 the Clayton Act (15 U.S.C. 18a(c)(8)), the trans2 actions subject to the requirements of paragraph (1) 3 shall be treated as if Board of Governors approval 4 is not required. 5 SEC. 164. PROHIBITION AGAINST MANAGEMENT INTER6 LOCKS BETWEEN CERTAIN FINANCIAL COM7 PANIES. 8 A nonbank financial company supervised by the 9 Board of Governors shall be treated as a bank holding 10 company for purposes of the Depository Institutions Man11 agement Interlocks Act (12 U.S.C. 3201 et seq.), except 12 that the Board of Governors shall not exercise the author13 ity provided in section 7 of that Act (12 U.S.C. 3207) 14 to permit service by a management official of a nonbank 15 financial company supervised by the Board of Governors 16 as a management official of any bank holding company 17 with total consolidated assets equal to or greater than 18 $50,000,000,000, or other nonaffiliated nonbank financial 19 company supervised by the Board of Governors (other 20 than to provide a temporary exemption for interlocks re21 sulting from a merger, acquisition, or consolidation). 115 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 SEC. 165. ENHANCED SUPERVISION AND PRUDENTIAL 2 STANDARDS FOR NONBANK FINANCIAL COM3 PANIES SUPERVISED BY THE BOARD OF GOV4 ERNORS AND CERTAIN BANK HOLDING COM5 PANIES. 6 (a) IN GENERAL.— 7 (1) PURPOSE.—In order to prevent or mitigate 8 risks to the financial stability of the United States 9 that could arise from the material financial distress 10 or failure, or ongoing activities, of large, inter11 connected financial institutions, the Board of Gov12 ernors shall, on its own or pursuant to recommenda13 tions by the Council under section 115, establish 14 prudential standards for nonbank financial compa15 nies supervised by the Board of Governors and bank 16 holding companies with total consolidated assets 17 equal to or greater than $50,000,000,000 that— 18 (A) are more stringent than the standards 19 and requirements applicable to nonbank finan20 cial companies and bank holding companies 21 that do not present similar risks to the financial 22 stability of the United States; and 23 (B) increase in stringency, based on the 24 considerations identified in subsection (b)(3). 25 (2) TAILORED APPLICATION.— 116 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (A) IN GENERAL.—In prescribing more 2 stringent prudential standards under this sec3 tion, the Board of Governors may, on its own 4 or pursuant to a recommendation by the Coun5 cil in accordance with section 115, differentiate 6 among companies on an individual basis or by 7 category, taking into consideration their capital 8 structure, riskiness, complexity, financial activi9 ties (including the financial activities of their 10 subsidiaries), size, and any other risk-related 11 factors that the Board of Governors deems ap12 propriate. 13 (B) ADJUSTMENT OF THRESHOLD FOR AP14 PLICATION OF CERTAIN STANDARDS.—The 15 Board of Governors may, pursuant to a rec16 ommendation by the Council in accordance with 17 section 115, establish an asset threshold above 18 $50,000,000,000 for the application of any 19 standard established under subsections (c) 20 through (g). 21 (b) DEVELOPMENT OF PRUDENTIAL STANDARDS.— 22 (1) IN GENERAL.— 23 (A) REQUIRED STANDARDS.—The Board 24 of Governors shall establish prudential stand25 ards for nonbank financial companies super117 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 vised by the Board of Governors and bank hold2 ing companies described in subsection (a), that 3 shall include— 4 (i) risk-based capital requirements 5 and leverage limits, unless the Board of 6 Governors, in consultation with the Coun7 cil, determines that such requirements are 8 not appropriate for a company subject to 9 more stringent prudential standards be10 cause of the activities of such company 11 (such as investment company activities or 12 assets under management) or structure, in 13 which case, the Board of Governors shall 14 apply other standards that result in simi15 larly stringent risk controls; 16 (ii) liquidity requirements; 17 (iii) overall risk management require18 ments; 19 (iv) resolution plan and credit expo20 sure report requirements; and 21 (v) concentration limits. 22 (B) ADDITIONAL STANDARDS AUTHOR23 IZED.—The Board of Governors may establish 24 additional prudential standards for nonbank fi25 nancial companies supervised by the Board of 118 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 Governors and bank holding companies de2 scribed in subsection (a), that include— 3 (i) a contingent capital requirement; 4 (ii) enhanced public disclosures; 5 (iii) short-term debt limits; and 6 (iv) such other prudential standards 7 as the Board or Governors, on its own or 8 pursuant to a recommendation made by 9 the Council in accordance with section 115, 10 determines are appropriate. 11 (2) STANDARDS FOR FOREIGN FINANCIAL COM12 PANIES.—In applying the standards set forth in 13 paragraph (1) to any foreign nonbank financial com14 pany supervised by the Board of Governors or for15 eign-based bank holding company, the Board of Gov16 ernors shall— 17 (A) give due regard to the principle of na18 tional treatment and equality of competitive op19 portunity; and 20 (B) take into account the extent to which 21 the foreign financial company is subject on a 22 consolidated basis to home country standards 23 that are comparable to those applied to finan24 cial companies in the United States. 119 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (3) CONSIDERATIONS.—In prescribing pruden2 tial standards under paragraph (1), the Board of 3 Governors shall— 4 (A) take into account differences among 5 nonbank financial companies supervised by the 6 Board of Governors and bank holding compa7 nies described in subsection (a), based on— 8 (i) the factors described in subsections 9 (a) and (b) of section 113; 10 (ii) whether the company owns an in11 sured depository institution; 12 (iii) nonfinancial activities and affili13 ations of the company; and 14 (iv) any other risk-related factors that 15 the Board of Governors determines appro16 priate; 17 (B) to the extent possible, ensure that 18 small changes in the factors listed in sub19 sections (a) and (b) of section 113 would not 20 result in sharp, discontinuous changes in the 21 prudential standards established under para22 graph (1) of this subsection; 23 (C) take into account any recommenda24 tions of the Council under section 115; and 120 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (D) adapt the required standards as appro2 priate in light of any predominant line of busi3 ness of such company, including assets under 4 management or other activities for which par5 ticular standards may not be appropriate. 6 (4) CONSULTATION.—Before imposing pruden7 tial standards or any other requirements pursuant to 8 this section, including notices of deficiencies in reso9 lution plans and more stringent requirements or di10 vestiture orders resulting from such notices, that are 11 likely to have a significant impact on a functionally 12 regulated subsidiary or depository institution sub13 sidiary of a nonbank financial company supervised 14 by the Board of Governors or a bank holding com15 pany described in subsection (a), the Board of Gov16 ernors shall consult with each Council member that 17 primarily supervises any such subsidiary with re18 spect to any such standard or requirement. 19 (5) REPORT.—The Board of Governors shall 20 submit an annual report to Congress regarding the 21 implementation of the prudential standards required 22 pursuant to paragraph (1), including the use of such 23 standards to mitigate risks to the financial stability 24 of the United States. 25 (c) CONTINGENT CAPITAL.— 121 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (1) IN GENERAL.—Subsequent to submission by 2 the Council of a report to Congress under section 3 115(c), the Board of Governors may issue regula4 tions that require each nonbank financial company 5 supervised by the Board of Governors and bank 6 holding companies described in subsection (a) to 7 maintain a minimum amount of contingent capital 8 that is convertible to equity in times of financial 9 stress. 10 (2) FACTORS TO CONSIDER.—In issuing regula11 tions under this subsection, the Board of Governors 12 shall consider— 13 (A) the results of the study undertaken by 14 the Council, and any recommendations of the 15 Council, under section 115(c); 16 (B) an appropriate transition period for 17 implementation of contingent capital under this 18 subsection; 19 (C) the factors described in subsection 20 (b)(3)(A); 21 (D) capital requirements applicable to the 22 nonbank financial company supervised by the 23 Board of Governors or a bank holding company 24 described in subsection (a), and subsidiaries 25 thereof; and 122 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (E) any other factor that the Board of 2 Governors deems appropriate. 3 (d) RESOLUTION PLAN AND CREDIT EXPOSURE RE4 PORTS.— 5 (1) RESOLUTION PLAN.—The Board of Gov6 ernors shall require each nonbank financial company 7 supervised by the Board of Governors and bank 8 holding companies described in subsection (a) to re9 port periodically to the Board of Governors, the 10 Council, and the Corporation the plan of such com11 pany for rapid and orderly resolution in the event of 12 material financial distress or failure, which shall in13 clude— 14 (A) information regarding the manner and 15 extent to which any insured depository institu16 tion affiliated with the company is adequately 17 protected from risks arising from the activities 18 of any nonbank subsidiaries of the company; 19 (B) full descriptions of the ownership 20 structure, assets, liabilities, and contractual ob21 ligations of the company; 22 (C) identification of the cross-guarantees 23 tied to different securities, identification of 24 major counterparties, and a process for deter123 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 mining to whom the collateral of the company 2 is pledged; and 3 (D) any other information that the Board 4 of Governors and the Corporation jointly re5 quire by rule or order. 6 (2) CREDIT EXPOSURE REPORT.—The Board of 7 Governors shall require each nonbank financial com8 pany supervised by the Board of Governors and 9 bank holding companies described in subsection (a) 10 to report periodically to the Board of Governors, the 11 Council, and the Corporation on— 12 (A) the nature and extent to which the 13 company has credit exposure to other signifi14 cant nonbank financial companies and signifi15 cant bank holding companies; and 16 (B) the nature and extent to which other 17 significant nonbank financial companies and 18 significant bank holding companies have credit 19 exposure to that company. 20 (3) REVIEW.—The Board of Governors and the 21 Corporation shall review the information provided in 22 accordance with this subsection by each nonbank fi23 nancial company supervised by the Board of Gov24 ernors and bank holding company described in sub25 section (a). 124 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (4) NOTICE OF DEFICIENCIES.—If the Board of 2 Governors and the Corporation jointly determine, 3 based on their review under paragraph (3), that the 4 resolution plan of a nonbank financial company su5 pervised by the Board of Governors or a bank hold6 ing company described in subsection (a) is not cred7 ible or would not facilitate an orderly resolution of 8 the company under title 11, United States Code— 9 (A) the Board of Governors and the Cor10 poration shall notify the company of the defi11 ciencies in the resolution plan; and 12 (B) the company shall resubmit the resolu13 tion plan within a timeframe determined by the 14 Board of Governors and the Corporation, with 15 revisions demonstrating that the plan is credible 16 and would result in an orderly resolution under 17 title 11, United States Code, including any pro18 posed changes in business operations and cor19 porate structure to facilitate implementation of 20 the plan. 21 (5) FAILURE TO RESUBMIT CREDIBLE PLAN.— 22 (A) IN GENERAL.—If a nonbank financial 23 company supervised by the Board of Governors 24 or a bank holding company described in sub25 section (a) fails to timely resubmit the resolu125 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 tion plan as required under paragraph (4), with 2 such revisions as are required under subpara3 graph (B), the Board of Governors and the 4 Corporation may jointly impose more stringent 5 capital, leverage, or liquidity requirements, or 6 restrictions on the growth, activities, or oper7 ations of the company, or any subsidiary there8 of, until such time as the company resubmits a 9 plan that remedies the deficiencies. 10 (B) DIVESTITURE.—The Board of Gov11 ernors and the Corporation, in consultation 12 with the Council, may jointly direct a nonbank 13 financial company supervised by the Board of 14 Governors or a bank holding company described 15 in subsection (a), by order, to divest certain as16 sets or operations identified by the Board of 17 Governors and the Corporation, to facilitate an 18 orderly resolution of such company under title 19 11, United States Code, in the event of the fail20 ure of such company, in any case in which— 21 (i) the Board of Governors and the 22 Corporation have jointly imposed more 23 stringent requirements on the company 24 pursuant to subparagraph (A); and 126 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (ii) the company has failed, within the 2 2-year period beginning on the date of the 3 imposition of such requirements under sub4 paragraph (A), to resubmit the resolution 5 plan with such revisions as were required 6 under paragraph (4)(B). 7 (6) NO LIMITING EFFECT.—A resolution plan 8 submitted in accordance with this subsection shall 9 not be binding on a bankruptcy court, a receiver ap10 pointed under title II, or any other authority that is 11 authorized or required to resolve the nonbank finan12 cial company supervised by the Board, any bank 13 holding company, or any subsidiary or affiliate of 14 the foregoing. 15 (7) NO PRIVATE RIGHT OF ACTION.—No pri16 vate right of action may be based on any resolution 17 plan submitted in accordance with this subsection. 18 (8) RULES.—Not later than 18 months after 19 the date of enactment of this Act, the Board of Gov20 ernors and the Corporation shall jointly issue final 21 rules implementing this subsection. 22 (e) CONCENTRATION LIMITS.— 23 (1) STANDARDS.—In order to limit the risks 24 that the failure of any individual company could 25 pose to a nonbank financial company supervised by 127 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 the Board of Governors or a bank holding company 2 described in subsection (a), the Board of Governors, 3 by regulation, shall prescribe standards that limit 4 such risks. 5 (2) LIMITATION ON CREDIT EXPOSURE.—The 6 regulations prescribed by the Board of Governors 7 under paragraph (1) shall prohibit each nonbank fi8 nancial company supervised by the Board of Gov9 ernors and bank holding company described in sub10 section (a) from having credit exposure to any unaf11 filiated company that exceeds 25 percent of the cap12 ital stock and surplus (or such lower amount as the 13 Board of Governors may determine by regulation to 14 be necessary to mitigate risks to the financial sta15 bility of the United States) of the company. 16 (3) CREDIT EXPOSURE.—For purposes of para17 graph (2), ‘‘credit exposure’’ to a company means— 18 (A) all extensions of credit to the company, 19 including loans, deposits, and lines of credit; 20 (B) all repurchase agreements and reverse 21 repurchase agreements with the company, and 22 all securities borrowing and lending trans23 actions with the company, to the extent that 24 such transactions create credit exposure for the 25 nonbank financial company supervised by the 128 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 Board of Governors or a bank holding company 2 described in subsection (a); 3 (C) all guarantees, acceptances, or letters 4 of credit (including endorsement or standby let5 ters of credit) issued on behalf of the company; 6 (D) all purchases of or investment in secu7 rities issued by the company; 8 (E) counterparty credit exposure to the 9 company in connection with a derivative trans10 action between the nonbank financial company 11 supervised by the Board of Governors or a bank 12 holding company described in subsection (a) 13 and the company; and 14 (F) any other similar transactions that the 15 Board of Governors, by regulation, determines 16 to be a credit exposure for purposes of this sec17 tion. 18 (4) ATTRIBUTION RULE.—For purposes of this 19 subsection, any transaction by a nonbank financial 20 company supervised by the Board of Governors or a 21 bank holding company described in subsection (a) 22 with any person is a transaction with a company, to 23 the extent that the proceeds of the transaction are 24 used for the benefit of, or transferred to, that com25 pany. 129 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (5) RULEMAKING.—The Board of Governors 2 may issue such regulations and orders, including 3 definitions consistent with this section, as may be 4 necessary to administer and carry out this sub5 section. 6 (6) EXEMPTIONS.—This subsection shall not 7 apply to any Federal home loan bank. The Board of 8 Governors may, by regulation or order, exempt 9 transactions, in whole or in part, from the definition 10 of the term ‘‘credit exposure’’ for purposes of this 11 subsection, if the Board of Governors finds that the 12 exemption is in the public interest and is consistent 13 with the purpose of this subsection. 14 (7) TRANSITION PERIOD.— 15 (A) IN GENERAL.—This subsection and 16 any regulations and orders of the Board of Gov17 ernors under this subsection shall not be effec18 tive until 3 years after the date of enactment 19 of this Act. 20 (B) EXTENSION AUTHORIZED.—The 21 Board of Governors may extend the period 22 specified in subparagraph (A) for not longer 23 than an additional 2 years. 24 (f) ENHANCED PUBLIC DISCLOSURES.—The Board 25 of Governors may prescribe, by regulation, periodic public 130 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 disclosures by nonbank financial companies supervised by 2 the Board of Governors and bank holding companies de3 scribed in subsection (a) in order to support market eval4 uation of the risk profile, capital adequacy, and risk man5 agement capabilities thereof. 6 (g) SHORT-TERM DEBT LIMITS.— 7 (1) IN GENERAL.—In order to mitigate the 8 risks that an over-accumulation of short-term debt 9 could pose to financial companies and to the stability 10 of the United States financial system, the Board of 11 Governors may, by regulation, prescribe a limit on 12 the amount of short-term debt, including off-balance 13 sheet exposures, that may be accumulated by any 14 bank holding company described in subsection (a) 15 and any nonbank financial company supervised by 16 the Board of Governors. 17 (2) BASIS OF LIMIT.—Any limit prescribed 18 under paragraph (1) shall be based on the short19 term debt of the company described in paragraph 20 (1) as a percentage of capital stock and surplus of 21 the company or on such other measure as the Board 22 of Governors considers appropriate. 23 (3) SHORT-TERM DEBT DEFINED.—For pur24 poses of this subsection, the term ‘‘short-term debt’’ 25 means such liabilities with short-dated maturity that 131 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 the Board of Governors identifies, by regulation, ex2 cept that such term does not include insured depos3 its. 4 (4) RULEMAKING AUTHORITY.—In addition to 5 prescribing regulations under paragraphs (1) and 6 (3), the Board of Governors may prescribe such reg7 ulations, including definitions consistent with this 8 subsection, and issue such orders, as may be nec9 essary to carry out this subsection. 10 (5) AUTHORITY TO ISSUE EXEMPTIONS AND 11 ADJUSTMENTS.—Notwithstanding the Bank Holding 12 Company Act of 1956 (12 U.S.C. 1841 et seq.), the 13 Board of Governors may, if it determines such ac14 tion is necessary to ensure appropriate heightened 15 prudential supervision, with respect to a company 16 described in paragraph (1) that does not control an 17 insured depository institution, issue to such company 18 an exemption from or adjustment to the limit pre19 scribed under paragraph (1). 20 (h) RISK COMMITTEE.— 21 (1) NONBANK FINANCIAL COMPANIES SUPER22 VISED BY THE BOARD OF GOVERNORS.—The Board 23 of Governors shall require each nonbank financial 24 company supervised by the Board of Governors that 25 is a publicly traded company to establish a risk com132 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 mittee, as set forth in paragraph (3), not later than 2 1 year after the date of receipt of a notice of final 3 determination under section 113(e)(3) with respect 4 to such nonbank financial company supervised by 5 the Board of Governors. 6 (2) CERTAIN BANK HOLDING COMPANIES.— 7 (A) MANDATORY REGULATIONS.—The 8 Board of Governors shall issue regulations re9 quiring each bank holding company that is a 10 publicly traded company and that has total con11 solidated assets of not less than 12 $10,000,000,000 to establish a risk committee, 13 as set forth in paragraph (3). 14 (B) PERMISSIVE REGULATIONS.—The 15 Board of Governors may require each bank 16 holding company that is a publicly traded com17 pany and that has total consolidated assets of 18 less than $10,000,000,000 to establish a risk 19 committee, as set forth in paragraph (3), as de20 termined necessary or appropriate by the Board 21 of Governors to promote sound risk manage22 ment practices. 23 (3) RISK COMMITTEE.—A risk committee re24 quired by this subsection shall— 133 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (A) be responsible for the oversight of the 2 enterprise-wide risk management practices of 3 the nonbank financial company supervised by 4 the Board of Governors or bank holding com5 pany described in subsection (a), as applicable; 6 (B) include such number of independent 7 directors as the Board of Governors may deter8 mine appropriate, based on the nature of oper9 ations, size of assets, and other appropriate cri10 teria related to the nonbank financial company 11 supervised by the Board of Governors or a bank 12 holding company described in subsection (a), as 13 applicable; and 14 (C) include at least 1 risk management ex15 pert having experience in identifying, assessing, 16 and managing risk exposures of large, complex 17 firms. 18 (4) RULEMAKING.—The Board of Governors 19 shall issue final rules to carry out this subsection, 20 not later than 1 year after the transfer date, to take 21 effect not later than 15 months after the transfer 22 date. 23 (i) STRESS TESTS.— 24 (1) BY THE BOARD OF GOVERNORS.— 134 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (A) ANNUAL TESTS REQUIRED.—The 2 Board of Governors, in coordination with the 3 appropriate primary financial regulatory agen4 cies and the Federal Insurance Office, shall 5 conduct annual analyses in which nonbank fi6 nancial companies supervised by the Board of 7 Governors and bank holding companies de8 scribed in subsection (a) are subject to evalua9 tion of whether such companies have the cap10 ital, on a total consolidated basis, necessary to 11 absorb losses as a result of adverse economic 12 conditions. 13 (B) TEST PARAMETERS AND CON14 SEQUENCES.—The Board of Governors— 15 (i) shall provide for at least 3 dif16 ferent sets of conditions under which the 17 evaluation required by this subsection shall 18 be conducted, including baseline, adverse, 19 and severely adverse; 20 (ii) may require the tests described in 21 subparagraph (A) at bank holding compa22 nies and nonbank financial companies, in 23 addition to those for which annual tests 24 are required under subparagraph (A); 135 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (iii) may develop and apply such other 2 analytic techniques as are necessary to 3 identify, measure, and monitor risks to the 4 financial stability of the United States; 5 (iv) shall require the companies de6 scribed in subparagraph (A) to update 7 their resolution plans required under sub8 section (d)(1), as the Board of Governors 9 determines appropriate, based on the re10 sults of the analyses; and 11 (v) shall publish a summary of the re12 sults of the tests required under subpara13 graph (A) or clause (ii) of this subpara14 graph. 15 (2) BY THE COMPANY.— 16 (A) REQUIREMENT.—A nonbank financial 17 company supervised by the Board of Governors 18 and a bank holding company described in sub19 section (a) shall conduct semiannual stress 20 tests. All other financial companies that have 21 total consolidated assets of more than 22 $10,000,000,000 and are regulated by a pri23 mary Federal financial regulatory agency shall 24 conduct annual stress tests. The tests required 25 under this subparagraph shall be conducted in 136 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 accordance with the regulations prescribed 2 under subparagraph (C). 3 (B) REPORT.—A company required to con4 duct stress tests under subparagraph (A) shall 5 submit a report to the Board of Governors and 6 to its primary financial regulatory agency at 7 such time, in such form, and containing such 8 information as the primary financial regulatory 9 agency shall require. 10 (C) REGULATIONS.—Each Federal pri11 mary financial regulatory agency, in coordina12 tion with the Board of Governors and the Fed13 eral Insurance Office, shall issue consistent and 14 comparable regulations to implement this para15 graph that shall— 16 (i) define the term ‘‘stress test’’ for 17 purposes of this paragraph; 18 (ii) establish methodologies for the 19 conduct of stress tests required by this 20 paragraph that shall provide for at least 3 21 different sets of conditions, including base22 line, adverse, and severely adverse; 23 (iii) establish the form and content of 24 the report required by subparagraph (B); 25 and 137 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (iv) require companies subject to this 2 paragraph to publish a summary of the re3 sults of the required stress tests. 4 (j) LEVERAGE LIMITATION.— 5 (1) REQUIREMENT.—The Board of Governors 6 shall require a bank holding company with total con7 solidated assets equal to or greater than 8 $50,000,000,000 or a nonbank financial company 9 supervised by the Board of Governors to maintain a 10 debt to equity ratio of no more than 15 to 1, upon 11 a determination by the Council that such company 12 poses a grave threat to the financial stability of the 13 United States and that the imposition of such re14 quirement is necessary to mitigate the risk that such 15 company poses to the financial stability of the 16 United States. Nothing in this paragraph shall apply 17 to a Federal home loan bank. 18 (2) CONSIDERATIONS.—In making a determina19 tion under this subsection, the Council shall consider 20 the factors described in subsections (a) and (b) of 21 section 113 and any other risk-related factors that 22 the Council deems appropriate. 23 (3) REGULATIONS.—The Board of Governors 24 shall promulgate regulations to establish procedures 138 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 and timelines for complying with the requirements of 2 this subsection. 3 (k) INCLUSION OF OFF-BALANCE-SHEET ACTIVITIES 4 IN COMPUTING CAPITAL REQUIREMENTS.— 5 (1) IN GENERAL.—In the case of any bank 6 holding company described in subsection (a) or 7 nonbank financial company supervised by the Board 8 of Governors, the computation of capital for pur9 poses of meeting capital requirements shall take into 10 account any off-balance-sheet activities of the com11 pany. 12 (2) EXEMPTIONS.—If the Board of Governors 13 determines that an exemption from the requirement 14 under paragraph (1) is appropriate, the Board of 15 Governors may exempt a company, or any trans16 action or transactions engaged in by such company, 17 from the requirements of paragraph (1). 18 (3) OFF-BALANCE-SHEET ACTIVITIES DE19 FINED.—For purposes of this subsection, the term 20 ‘‘off-balance-sheet activities’’ means an existing li21 ability of a company that is not currently a balance 22 sheet liability, but may become one upon the hap23 pening of some future event, including the following 24 transactions, to the extent that they may create a li25 ability: 139 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (A) Direct credit substitutes in which a 2 bank substitutes its own credit for a third 3 party, including standby letters of credit. 4 (B) Irrevocable letters of credit that guar5 antee repayment of commercial paper or tax-ex6 empt securities. 7 (C) Risk participations in bankers’ accept8 ances. 9 (D) Sale and repurchase agreements. 10 (E) Asset sales with recourse against the 11 seller. 12 (F) Interest rate swaps. 13 (G) Credit swaps. 14 (H) Commodities contracts. 15 (I) Forward contracts. 16 (J) Securities contracts. 17 (K) Such other activities or transactions as 18 the Board of Governors may, by rule, define. 19 SEC. 166. EARLY REMEDIATION REQUIREMENTS. 20 (a) IN GENERAL.—The Board of Governors, in con21 sultation with the Council and the Corporation, shall pre22 scribe regulations establishing requirements to provide for 23 the early remediation of financial distress of a nonbank 24 financial company supervised by the Board of Governors 25 or a bank holding company described in section 165(a), 140 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 except that nothing in this subsection authorizes the provi2 sion of financial assistance from the Federal Government. 3 (b) PURPOSE OF THE EARLY REMEDIATION RE4 QUIREMENTS.—The purpose of the early remediation re5 quirements under subsection (a) shall be to establish a se6 ries of specific remedial actions to be taken by a nonbank 7 financial company supervised by the Board of Governors 8 or a bank holding company described in section 165(a) 9 that is experiencing increasing financial distress, in order 10 to minimize the probability that the company will become 11 insolvent and the potential harm of such insolvency to the 12 financial stability of the United States. 13 (c) REMEDIATION REQUIREMENTS.—The regulations 14 prescribed by the Board of Governors under subsection (a) 15 shall— 16 (1) define measures of the financial condition of 17 the company, including regulatory capital, liquidity 18 measures, and other forward-looking indicators; and 19 (2) establish requirements that increase in 20 stringency as the financial condition of the company 21 declines, including— 22 (A) requirements in the initial stages of fi23 nancial decline, including limits on capital dis24 tributions, acquisitions, and asset growth; and 141 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (B) requirements at later stages of finan2 cial decline, including a capital restoration plan 3 and capital-raising requirements, limits on 4 transactions with affiliates, management 5 changes, and asset sales. 6 SEC. 167. AFFILIATIONS. 7 (a) AFFILIATIONS.—Nothing in this subtitle shall be 8 construed to require a nonbank financial company super9 vised by the Board of Governors, or a company that con10 trols a nonbank financial company supervised by the 11 Board of Governors, to conform the activities thereof to 12 the requirements of section 4 of the Bank Holding Com13 pany Act of 1956 (12 U.S.C. 1843). 14 (b) REQUIREMENT.— 15 (1) IN GENERAL.— 16 (A) BOARD AUTHORITY.—If a nonbank fi17 nancial company supervised by the Board of 18 Governors conducts activities other than those 19 that are determined to be financial in nature or 20 incidental thereto under section 4(k) of the 21 Bank Holding Company Act of 1956, the Board 22 of Governors may require such company to es23 tablish and conduct all or a portion of such ac24 tivities that are determined to be financial in 25 nature or incidental thereto in or through an 142 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 intermediate holding company established pur2 suant to regulation of the Board of Governors, 3 not later than 90 days (or such longer period 4 as the Board of Governors may deem appro5 priate) after the date on which the nonbank fi6 nancial company supervised by the Board of 7 Governors is notified of the determination of 8 the Board of Governors under this section. 9 (B) NECESSARY ACTIONS.—Notwith10 standing subparagraph (A), the Board of Gov11 ernors shall require a nonbank financial com12 pany supervised by the Board of Governors to 13 establish an intermediate holding company if 14 the Board of Governors makes a determination 15 that the establishment of such intermediate 16 holding company is necessary to— 17 (i) appropriately supervise activities 18 that are determined to be financial in na19 ture or incidental thereto; or 20 (ii) to ensure that supervision by the 21 Board of Governors does not extend to the 22 commercial activities of such nonbank fi23 nancial company. 24 (2) INTERNAL FINANCIAL ACTIVITIES.—For 25 purposes of this subsection, activities that are deter143 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 mined to be financial in nature or incidental thereto 2 under section 4(k) of the Bank Holding Company 3 Act of 1956, as described in paragraph (1), shall not 4 include internal financial activities, including inter5 nal treasury, investment, and employee benefit func6 tions. With respect to any internal financial activity 7 engaged in for the company or an affiliate and a 8 non-affiliate of such company during the year prior 9 to the date of enactment of this Act, such company 10 (or an affiliate that is not an intermediate holding 11 company or subsidiary of an intermediate holding 12 company) may continue to engage in such activity, 13 as long as not less than 2/3 of the assets or 2/3 of 14 the revenues generated from the activity are from or 15 attributable to such company or an affiliate, subject 16 to review by the Board of Governors, to determine 17 whether engaging in such activity presents undue 18 risk to such company or to the financial stability of 19 the United States. 20 (3) SOURCE OF STRENGTH.—A company that 21 directly or indirectly controls an intermediate hold22 ing company established under this section shall 23 serve as a source of strength to its subsidiary inter24 mediate holding company. 144 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (4) PARENT COMPANY REPORTS.—The Board 2 of Governors may, from time to time, require reports 3 under oath from a company that controls an inter4 mediate holding company, and from the appropriate 5 officers or directors of such company, solely for pur6 poses of ensuring compliance with the provisions of 7 this section, including assessing the ability of the 8 company to serve as a source of strength to its sub9 sidiary intermediate holding company pursuant to 10 paragraph (3) and enforcing such compliance. 11 (5) LIMITED PARENT COMPANY ENFORCE12 MENT.— 13 (A) IN GENERAL.—In addition to any 14 other authority of the Board of Governors, the 15 Board of Governors may enforce compliance 16 with the provisions of this subsection that are 17 applicable to any company described in para18 graph (1) that controls an intermediate holding 19 company under section 8 of the Federal Deposit 20 Insurance Act, and such company shall be sub21 ject to such section (solely for such purposes) in 22 the same manner and to the same extent as if 23 such company were a bank holding company. 24 (B) APPLICATION OF OTHER ACT.—Any 25 violation of this subsection by any company 145 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 that controls an intermediate holding company 2 may also be treated as a violation of the Fed3 eral Deposit Insurance Act for purposes of sub4 paragraph (A). 5 (C) NO EFFECT ON OTHER AUTHORITY.— 6 No provision of this paragraph shall be con7 strued as limiting any authority of the Board of 8 Governors or any other Federal agency under 9 any other provision of law. 10 (c) REGULATIONS.—The Board of Governors— 11 (1) shall promulgate regulations to establish the 12 criteria for determining whether to require a 13 nonbank financial company supervised by the Board 14 of Governors to establish an intermediate holding 15 company under subsection (b); and 16 (2) may promulgate regulations to establish any 17 restrictions or limitations on transactions between 18 an intermediate holding company or a nonbank fi19 nancial company supervised by the Board of Gov20 ernors and its affiliates, as necessary to prevent un21 safe and unsound practices in connection with trans22 actions between such company, or any subsidiary 23 thereof, and its parent company or affiliates that are 24 not subsidiaries of such company, except that such 25 regulations shall not restrict or limit any transaction 146 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 in connection with the bona fide acquisition or lease 2 by an unaffiliated person of assets, goods, or serv3 ices. 4 SEC. 168. REGULATIONS. 5 The Board of Governors shall have authority to issue 6 regulations to implement subtitles A and C and the 7 amendments made thereunder. Except as otherwise speci8 fied in subtitle A or C, not later than 18 months after 9 the effective date of this Act, the Board of Governors shall 10 issue final regulations to implement subtitles A and C, and 11 the amendments made thereunder. 12 SEC. 169. AVOIDING DUPLICATION. 13 The Board of Governors shall take any action that 14 the Board of Governors deems appropriate to avoid impos15 ing requirements under this subtitle that are duplicative 16 of requirements applicable to bank holding companies and 17 nonbank financial companies under other provisions of 18 law. 19 SEC. 170. SAFE HARBOR. 20 (a) REGULATIONS.—The Board of Governors shall 21 promulgate regulations on behalf of, and in consultation 22 with, the Council setting forth the criteria for exempting 23 certain types or classes of U.S. nonbank financial compa24 nies or foreign nonbank financial companies from super25 vision by the Board of Governors. 147 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (b) CONSIDERATIONS.—In developing the criteria 2 under subsection (a), the Board of Governors shall take 3 into account the factors for consideration described in sub4 sections (a) and (b) of section 113 in determining whether 5 a U.S. nonbank financial company or foreign nonbank fi6 nancial company shall be supervised by the Board of Gov7 ernors. 8 (c) RULE OF CONSTRUCTION.—Nothing in this sec9 tion shall be construed to require supervision by the Board 10 of Governors of a U.S. nonbank financial company or for11 eign nonbank financial company, if such company does not 12 meet the criteria for exemption established under sub13 section (a). 14 (d) REVISIONS.— 15 (1) IN GENERAL.—The Board of Governors 16 shall, in consultation with the Council, review the 17 regulations promulgated under subsection (a), not 18 less frequently than every 5 years, and based upon 19 the review, the Board of Governors may revise such 20 regulations on behalf of, and in consultation with, 21 the Council to update as necessary the criteria set 22 forth in such regulations. 23 (2) TRANSITION PERIOD.—No revisions under 24 paragraph (1) shall take effect before the end of the 148 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 2-year period after the date of publication of such 2 revisions in final form. 3 (e) REPORT.—The Chairman of the Board of Gov4 ernors and the Chairperson of the Council shall submit 5 a joint report to the Committee on Banking, Housing, and 6 Urban Affairs of the Senate and the Committee on Finan7 cial Services of the House of Representatives not later 8 than 30 days after the date of the issuance in final form 9 of regulations under subsection (a), or any subsequent re10 vision to such regulations under subsection (d), as applica11 ble. Such report shall include, at a minimum, the rationale 12 for exemption and empirical evidence to support the cri13 teria for exemption. 14 SEC. 171. LEVERAGE AND RISK-BASED CAPITAL REQUIRE15 MENTS. 16 (a) DEFINITIONS.—For purposes of this section, the 17 following definitions shall apply: 18 (1) GENERALLY APPLICABLE LEVERAGE CAP19 ITAL REQUIREMENTS.—The term ‘‘generally applica20 ble leverage capital requirements’’ means— 21 (A) the minimum ratios of tier 1 capital to 22 average total assets, as established by the ap23 propriate Federal banking agencies to apply to 24 insured depository institutions under the 25 prompt corrective action regulations imple149 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 menting section 38 of the Federal Deposit In2 surance Act, regardless of total consolidated 3 asset size or foreign financial exposure; and 4 (B) includes the regulatory capital compo5 nents in the numerator of that capital require6 ment, average total assets in the denominator 7 of that capital requirement, and the required 8 ratio of the numerator to the denominator. 9 (2) GENERALLY APPLICABLE RISK-BASED CAP10 ITAL REQUIREMENTS.—The term ‘‘generally applica11 ble risk-based capital requirements’’ means— 12 (A) the risk-based capital requirements, as 13 established by the appropriate Federal banking 14 agencies to apply to insured depository institu15 tions under the prompt corrective action regula16 tions implementing section 38 of the Federal 17 Deposit Insurance Act, regardless of total con18 solidated asset size or foreign financial expo19 sure; and 20 (B) includes the regulatory capital compo21 nents in the numerator of those capital require22 ments, the risk-weighted assets in the denomi23 nator of those capital requirements, and the re24 quired ratio of the numerator to the denomi25 nator. 150 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (3) DEFINITION OF DEPOSITORY INSTITUTION 2 HOLDING COMPANY.—The term ‘‘depository institu3 tion holding company’’ means a bank holding com4 pany or a savings and loan holding company (as 5 those terms are defined in section 3 of the Federal 6 Deposit Insurance Act) that is organized in the 7 United States, including any bank or savings and 8 loan holding company that is owned or controlled by 9 a foreign organization, but does not include the for10 eign organization. 11 (b) MINIMUM CAPITAL REQUIREMENTS.— 12 (1) MINIMUM LEVERAGE CAPITAL REQUIRE13 MENTS.—The appropriate Federal banking agencies 14 shall establish minimum leverage capital require15 ments on a consolidated basis for insured depository 16 institutions, depository institution holding compa17 nies, and nonbank financial companies supervised by 18 the Board of Governors. The minimum leverage cap19 ital requirements established under this paragraph 20 shall not be less than the generally applicable lever21 age capital requirements, which shall serve as a floor 22 for any capital requirements that the agency may re23 quire, nor quantitatively lower than the generally ap24 plicable leverage capital requirements that were in 151 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 effect for insured depository institutions as of the 2 date of enactment of this Act. 3 (2) MINIMUM RISK-BASED CAPITAL REQUIRE4 MENTS.—The appropriate Federal banking agencies 5 shall establish minimum risk-based capital require6 ments on a consolidated basis for insured depository 7 institutions, depository institution holding compa8 nies, and nonbank financial companies supervised by 9 the Board of Governors. The minimum risk-based 10 capital requirements established under this para11 graph shall not be less than the generally applicable 12 risk-based capital requirements, which shall serve as 13 a floor for any capital requirements that the agency 14 may require, nor quantitatively lower than the gen15 erally applicable risk-based capital requirements that 16 were in effect for insured depository institutions as 17 of the date of enactment of this Act. 18 (3) INVESTMENTS IN FINANCIAL SUBSIDI19 ARIES.—For purposes of this section, investments in 20 financial subsidiaries that insured depository institu21 tions are required to deduct from regulatory capital 22 under section 5136A of the Revised Statutes of the 23 United States or section 46(a)(2) of the Federal De24 posit Insurance Act need not be deducted from regu25 latory capital by depository institution holding com152 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 panies or nonbank financial companies supervised by 2 the Board of Governors, unless such capital deduc3 tion is required by the Board of Governors or the 4 primary financial regulatory agency in the case of 5 nonbank financial companies supervised by the 6 Board of Governors. 7 (4) EFFECTIVE DATES AND PHASE-IN PERI8 ODS.— 9 (A) DEBT OR EQUITY INSTRUMENTS ON 10 OR AFTER MAY 19, 2010.—For debt or equity in11 struments issued on or after May 19, 2010, by 12 depository institution holding companies or by 13 nonbank financial companies supervised by the 14 Board of Governors, this section shall be 15 deemed to have become effective as of May 19, 16 2010. 17 (B) DEBT OR EQUITY INSTRUMENTS 18 ISSUED BEFORE MAY 19, 2010.—For debt or eq19 uity instruments issued before May 19, 2010, 20 by depository institution holding companies or 21 by nonbank financial companies supervised by 22 the Board of Governors, any regulatory capital 23 deductions required under this section shall be 24 phased in incrementally over a period of 3 25 years, with the phase-in period to begin on Jan153 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 uary 1, 2013, except as set forth in subpara2 graph (C). 3 (C) DEBT OR EQUITY INSTRUMENTS OF 4 SMALLER INSTITUTIONS.—For debt or equity 5 instruments issued before May 19, 2010, by de6 pository institution holding companies with 7 total consolidated assets of less than 8 $15,000,000,000 as of December 31, 2009, and 9 by organizations that were mutual holding com10 panies on May 19, 2010, the capital deductions 11 that would be required for other institutions 12 under this section are not required as a result 13 of this section. 14 (D) DEPOSITORY INSTITUTION HOLDING 15 COMPANIES NOT PREVIOUSLY SUPERVISED BY 16 THE BOARD OF GOVERNORS.—For any deposi17 tory institution holding company that was not 18 supervised by the Board of Governors as of 19 May 19, 2010, the requirements of this section, 20 except as set forth in subparagraphs (A) and 21 (B), shall be effective 5 years after the date of 22 enactment of this Act 23 (E) CERTAIN BANK HOLDING COMPANY 24 SUBSIDIARIES OF FOREIGN BANKING ORGANIZA25 TIONS.—For bank holding company subsidiaries 154 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 of foreign banking organizations that have re2 lied on Supervision and Regulation Letter SR- 3 01-1 issued by the Board of Governors (as in 4 effect on May 19, 2010), the requirements of 5 this section, except as set forth in subparagraph 6 (A), shall be effective 5 years after the date of 7 enactment of this Act. 8 (5) EXCEPTIONS.—This section shall not apply 9 to— 10 (A) debt or equity instruments issued to 11 the United States or any agency or instrumen12 tality thereof pursuant to the Emergency Eco13 nomic Stabilization Act of 2008, and prior to 14 October 4, 2010; 15 (B) any Federal home loan bank; or 16 (C) any small bank holding company that 17 is subject to the Small Bank Holding Company 18 Policy Statement of the Board of Governors, as 19 in effect on May 19, 2010. 20 (6) STUDY AND REPORT ON SMALL INSTITU21 TION ACCESS TO CAPITAL.— 22 (A) STUDY REQUIRED.—The Comptroller 23 General of the United States, after consultation 24 with the Federal banking agencies, shall con155 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 duct a study of access to capital by smaller in2 sured depository institutions. 3 (B) SCOPE.—For purposes of this study 4 required by subparagraph (A), the term ‘‘small5 er insured depository institution’’ means an in6 sured depository institution with total consoli7 dated assets of $5,000,000,000 or less. 8 (C) REPORT TO CONGRESS.—Not later 9 than 18 months after the date of enactment of 10 this Act, the Comptroller General of the United 11 States shall submit to the Committee on Bank12 ing, Housing, and Urban Affairs of the Senate 13 and the Committee on Financial Services of the 14 House of Representatives a report summarizing 15 the results of the study conducted under sub16 paragraph (A), together with any recommenda17 tions for legislative or regulatory action that 18 would enhance the access to capital of smaller 19 insured depository institutions, in a manner 20 that is consistent with safe and sound banking 21 operations. 22 (7) CAPITAL REQUIREMENTS TO ADDRESS AC23 TIVITIES THAT POSE RISKS TO THE FINANCIAL SYS24 TEM.— 156 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (A) IN GENERAL.—Subject to the rec2 ommendations of the Council, in accordance 3 with section 120, the Federal banking agencies 4 shall develop capital requirements applicable to 5 insured depository institutions, depository insti6 tution holding companies, and nonbank finan7 cial companies supervised by the Board of Gov8 ernors that address the risks that the activities 9 of such institutions pose, not only to the insti10 tution engaging in the activity, but to other 11 public and private stakeholders in the event of 12 adverse performance, disruption, or failure of 13 the institution or the activity. 14 (B) CONTENT.—Such rules shall address, 15 at a minimum, the risks arising from— 16 (i) significant volumes of activity in 17 derivatives, securitized products purchased 18 and sold, financial guarantees purchased 19 and sold, securities borrowing and lending, 20 and repurchase agreements and reverse re21 purchase agreements; 22 (ii) concentrations in assets for which 23 the values presented in financial reports 24 are based on models rather than historical 157 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 cost or prices deriving from deep and liq2 uid 2-way markets; and 3 (iii) concentrations in market share 4 for any activity that would substantially 5 disrupt financial markets if the institution 6 is forced to unexpectedly cease the activity. 7 SEC. 172. EXAMINATION AND ENFORCEMENT ACTIONS FOR 8 INSURANCE AND ORDERLY LIQUIDATION 9 PURPOSES. 10 (a) EXAMINATIONS FOR INSURANCE AND RESOLU11 TION PURPOSES.—Section 10(b)(3) of the Federal De12 posit Insurance Act (12 U.S.C. 1820(b)(3)) is amended— 13 (1) by striking ‘‘In addition’’ and inserting the 14 following: 15 ‘‘(A) IN GENERAL.—In addition’’; and 16 (2) by striking ‘‘whenever the board of directors 17 determines’’ and all that follows through the period 18 and inserting the following: ‘‘or nonbank financial 19 company supervised by the Board of Governors or a 20 bank holding company described in section 165(a) of 21 the Financial Stability Act of 2010, whenever the 22 Board of Directors determines that a special exam23 ination of any such depository institution is nec24 essary to determine the condition of such depository 25 institution for insurance purposes, or of such 158 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 nonbank financial company supervised by the Board 2 of Governors or bank holding company described in 3 section 165(a) of the Financial Stability Act of 4 2010, for the purpose of implementing its authority 5 to provide for orderly liquidation of any such com6 pany under title II of that Act, provided that such 7 authority may not be used with respect to any such 8 company that is in a generally sound condition. 9 ‘‘(B) LIMITATION.—Before conducting a 10 special examination of a nonbank financial com11 pany supervised by the Board of Governors or 12 a bank holding company described in section 13 165(a) of the Financial Stability Act of 2010, 14 the Corporation shall review any available and 15 acceptable resolution plan that the company has 16 submitted in accordance with section 165(d) of 17 that Act, consistent with the nonbinding effect 18 of such plan, and available reports of examina19 tion, and shall coordinate to the maximum ex20 tent practicable with the Board of Governors, in 21 order to minimize duplicative or conflicting ex22 aminations.’’. 23 (b) ENFORCEMENT AUTHORITY.—Section 8(t) of the 24 Federal Deposit Insurance Act (12 U.S.C. 1818(t)) is 25 amended— 159 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (1) in paragraph (1), by inserting ‘‘, any depos2 itory institution holding company,’’ before ‘‘or any 3 institution-affiliated party’’; 4 (2) in paragraph (2)— 5 (A) by striking ‘‘or’’ at the end of subpara6 graph (B); 7 (B) at the end of subparagraph (C), by 8 striking the period and inserting ‘‘or’’; and 9 (C) by inserting at the end the following 10 new subparagraph: 11 ‘‘(D) the conduct or threatened conduct 12 (including any acts or omissions) of the deposi13 tory institution holding company poses a risk to 14 the Deposit Insurance Fund, provided that such 15 authority may not be used with respect to a de16 pository institution holding company that is in 17 generally sound condition and whose conduct 18 does not pose a foreseeable and material risk of 19 loss to the Deposit Insurance Fund;’’; and 20 (3) by adding at the end the following: 21 ‘‘(6) POWERS AND DUTIES WITH RESPECT TO 22 DEPOSITORY INSTITUTION HOLDING COMPANIES.— 23 For purposes of exercising the backup authority pro24 vided in this subsection— 160 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 ‘‘(A) the Corporation shall have the same 2 powers with respect to a depository institution 3 holding company and its affiliates as the appro4 priate Federal banking agency has with respect 5 to the holding company and its affiliates; and 6 ‘‘(B) the holding company and its affiliates 7 shall have the same duties and obligations with 8 respect to the Corporation as the holding com9 pany and its affiliates have with respect to the 10 appropriate Federal banking agency.’’. 11 (c) RULE OF CONSTRUCTION.—Nothing in this Act 12 shall be construed to limit or curtail the Corporation’s cur13 rent authority to examine or bring enforcement actions 14 with respect to any insured depository institution or insti15 tution-affiliated party. 16 SEC. 173. ACCESS TO UNITED STATES FINANCIAL MARKET 17 BY FOREIGN INSTITUTIONS. 18 (a) ESTABLISHMENT OF FOREIGN BANK OFFICES IN 19 THE UNITED STATES.—Section 7(d)(3) of the Inter20 national Banking Act of 1978 (12 U.S.C. 3105(d)(3)) is 21 amended— 22 (1) in subparagraph (C), by striking ‘‘and’’ at 23 the end; 24 (2) in subparagraph (D), by striking the period 25 at the end of and inserting ‘‘; and’’; and 161 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (3) by adding at the end the following new sub2 paragraph: 3 ‘‘(E) for a foreign bank that presents a 4 risk to the stability of United States financial 5 system, whether the home country of the for6 eign bank has adopted, or is making demon7 strable progress toward adopting, an appro8 priate system of financial regulation for the fi9 nancial system of such home country to miti10 gate such risk.’’. 11 (b) TERMINATION OF FOREIGN BANK OFFICES IN 12 THE UNITED STATES.—Section 7(e)(1) of the Inter13 national Banking Act of 1978 (12 U.S.C. 3105(e)(1)) is 14 amended— 15 (1) in subparagraph (A), by striking ‘‘or’’ at 16 the end; 17 (2) in subparagraph (B), by striking the period 18 at the end of and inserting ‘‘; or’’; and 19 (3) by inserting after subparagraph (B), the 20 following new subparagraph: 21 ‘‘(C) for a foreign bank that presents a 22 risk to the stability of the United States finan23 cial system, the home country of the foreign 24 bank has not adopted, or made demonstrable 25 progress toward adopting, an appropriate sys162 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 tem of financial regulation to mitigate such 2 risk.’’. 3 (c) REGISTRATION OR SUCCESSION TO A UNITED 4 STATES BROKER OR DEALER AND TERMINATION OF 5 SUCH REGISTRATION.—Section 15 of the Securities Ex6 change Act of 1934 (15 U.S.C. 78o) is amended by adding 7 at the end the following new subsections: 8 ‘‘(k) REGISTRATION OR SUCCESSION TO A UNITED 9 STATES BROKER OR DEALER.—In determining whether 10 to permit a foreign person or an affiliate of a foreign per11 son to register as a United States broker or dealer, or 12 succeed to the registration of a United States broker or 13 dealer, the Commission may consider whether, for a for14 eign person, or an affiliate of a foreign person that pre15 sents a risk to the stability of the United States financial 16 system, the home country of the foreign person has adopt17 ed, or made demonstrable progress toward adopting, an 18 appropriate system of financial regulation to mitigate such 19 risk. 20 ‘‘(l) TERMINATION OF A UNITED STATES BROKER 21 OR DEALER.—For a foreign person or an affiliate of a 22 foreign person that presents such a risk to the stability 23 of the United States financial system, the Commission 24 may determine to terminate the registration of such for25 eign person or an affiliate of such foreign person as a 163 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 broker or dealer in the United States, if the Commission 2 determines that the home country of the foreign person 3 has not adopted, or made demonstrable progress toward 4 adopting, an appropriate system of financial regulation to 5 mitigate such risk.’’. 6 SEC. 174. STUDIES AND REPORTS ON HOLDING COMPANY 7 CAPITAL REQUIREMENTS. 8 (a) STUDY OF HYBRID CAPITAL INSTRUMENTS.— 9 The Comptroller General of the United States, in con10 sultation with the Board of Governors, the Comptroller of 11 the Currency, and the Corporation, shall conduct a study 12 of the use of hybrid capital instruments as a component 13 of Tier 1 capital for banking institutions and bank holding 14 companies. The study shall consider— 15 (1) the current use of hybrid capital instru16 ments, such as trust preferred shares, as a compo17 nent of Tier 1 capital; 18 (2) the differences between the components of 19 capital permitted for insured depository institutions 20 and those permitted for companies that control in21 sured depository institutions; 22 (3) the benefits and risks of allowing such in23 struments to be used to comply with Tier 1 capital 24 requirements; 164 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (4) the economic impact of prohibiting the use 2 of such capital instruments for Tier 1; 3 (5) a review of the consequences of disquali4 fying trust preferred instruments, and whether it 5 could lead to the failure or undercapitalization of ex6 isting banking organizations; 7 (6) the international competitive implications 8 prohibiting hybrid capital instruments for Tier 1; 9 (7) the impact on the cost and availability of 10 credit in the United States from such a prohibition; 11 (8) the availability of capital for financial insti12 tutions with less than $10,000,000,000 in total as13 sets; and 14 (9) any other relevant factors relating to the 15 safety and soundness of our financial system and po16 tential economic impact of such a prohibition. 17 (b) STUDY OF FOREIGN BANK INTERMEDIATE 18 HOLDING COMPANY CAPITAL REQUIREMENTS.—The 19 Comptroller General of the United States, in consultation 20 with the Secretary, the Board of Governors, the Comp21 troller of the Currency, and the Corporation, shall conduct 22 a study of capital requirements applicable to United 23 States intermediate holding companies of foreign banks 24 that are bank holding companies or savings and loan hold25 ing companies. The study shall consider— 165 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 (1) current Board of Governors policy regarding 2 the treatment of intermediate holding companies; 3 (2) the principle of national treatment and 4 equality of competitive opportunity for foreign banks 5 operating in the United States; 6 (3) the extent to which foreign banks are sub7 ject on a consolidated basis to home country capital 8 standards comparable to United States capital 9 standards; 10 (4) potential effects on United States banking 11 organizations operating abroad of changes to United 12 States policy regarding intermediate holding compa13 nies; 14 (5) the impact on the cost and availability of 15 credit in the United States from a change in United 16 States policy regarding intermediate holding compa17 nies; and 18 (6) any other relevant factors relating to the 19 safety and soundness of our financial system and po20 tential economic impact of such a prohibition. 21 (c) REPORT.—Not later than 18 months after the 22 date of enactment of this Act, the Comptroller General 23 of the United States shall submit reports to the Com24 mittee on Banking, Housing, and Urban Affairs of the 25 Senate and the Committee on Financial Services of the 166 O:AYOAYO10H30.xml [file 1 of 17] S.L.C 1 House of Representatives summarizing the results of the 2 studies required under subsection (a). The reports shall 3 include specific recommendations for legislative or regu4 latory action regarding the treatment of hybrid capital in5 struments, including trust preferred shares, and shall ex6 plain the basis for such recommendations. 7 SEC. 175. INTERNATIONAL POLICY COORDINATION. 8 (a) BY THE PRESIDENT.—The President, or a des9 ignee of the President, may coordinate through all avail10 able international policy channels, similar policies as those 11 found in United States law relating to limiting the scope, 12 nature, size, scale, concentration, and interconnectedness 13 of financial companies, in order to protect financial sta14 bility and the global economy. 15 (b) BY THE COUNCIL.—The Chairperson of the 16 Council, in consultation with the other members of the 17 Council, shall regularly consult with the financial regu18 latory entities and other appropriate organizations of for19 eign governments or international organizations on mat20 ters relating to systemic risk to the international financial 21 system. 22 (c) BY THE BOARD OF GOVERNORS AND THE SEC23 RETARY.—The Board of Governors and the Secretary 24 shall consult with their foreign counterparts and through 25 appropriate multilateral organizations to encourage com167 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 prehensive and robust prudential supervision and regula2 tion for all highly leveraged and interconnected financial 3 companies. 4 SEC. 176. RULE OF CONSTRUCTION. 5 No regulation or standard imposed under this title 6 may be construed in a manner that would lessen the strin7 gency of the requirements of any applicable primary finan8 cial regulatory agency or any other Federal or State agen9 cy that are otherwise applicable. This title, and the rules 10 and regulations or orders prescribed pursuant to this title, 11 do not divest any such agency of any authority derived 12 from any other applicable law. 13 TITLE II—ORDERLY 14 LIQUIDATION AUTHORITY 15 SEC. 201. DEFINITIONS. 16 (a) IN GENERAL.—In this title, the following defini17 tions shall apply: 18 (1) ADMINISTRATIVE EXPENSES OF THE RE19 CEIVER.—The term ‘‘administrative expenses of the 20 receiver’’ includes— 21 (A) the actual, necessary costs and ex22 penses incurred by the Corporation as receiver 23 for a covered financial company in liquidating a 24 covered financial company; and 168 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (B) any obligations that the Corporation 2 as receiver for a covered financial company de3 termines are necessary and appropriate to fa4 cilitate the smooth and orderly liquidation of 5 the covered financial company. 6 (2) BANKRUPTCY CODE.—The term ‘‘Bank7 ruptcy Code’’ means title 11, United States Code. 8 (3) BRIDGE FINANCIAL COMPANY.—The term 9 ‘‘bridge financial company’’ means a new financial 10 company organized by the Corporation in accordance 11 with section 210(h) for the purpose of resolving a 12 covered financial company. 13 (4) CLAIM.—The term ‘‘claim’’ means any right 14 to payment, whether or not such right is reduced to 15 judgment, liquidated, unliquidated, fixed, contingent, 16 matured, unmatured, disputed, undisputed, legal, eq17 uitable, secured, or unsecured. 18 (5) COMPANY.—The term ‘‘company’’ has the 19 same meaning as in section 2(b) of the Bank Hold20 ing Company Act of 1956 (12 U.S.C. 1841(b)), ex21 cept that such term includes any company described 22 in paragraph (11), the majority of the securities of 23 which are owned by the United States or any State. 169 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (6) COURT.—The term ‘‘Court’’ means the 2 United States District Court for the District of Co3 lumbia, unless the context otherwise requires. 4 (7) COVERED BROKER OR DEALER.—The term 5 ‘‘covered broker or dealer’’ means a covered financial 6 company that is a broker or dealer that— 7 (A) is registered with the Commission 8 under section 15(b) of the Securities Exchange 9 Act of 1934 (15 U.S.C. 78o(b)); and 10 (B) is a member of SIPC. 11 (8) COVERED FINANCIAL COMPANY.—The term 12 ‘‘covered financial company’’— 13 (A) means a financial company for which 14 a determination has been made under section 15 203(b); and 16 (B) does not include an insured depository 17 institution. 18 (9) COVERED SUBSIDIARY.—The term ‘‘covered 19 subsidiary’’ means a subsidiary of a covered finan20 cial company, other than— 21 (A) an insured depository institution; 22 (B) an insurance company; or 23 (C) a covered broker or dealer. 24 (10) DEFINITIONS RELATING TO COVERED BRO25 KERS AND DEALERS.—The terms ‘‘customer’’, ‘‘cus170 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 tomer name securities’’, ‘‘customer property’’, and 2 ‘‘net equity’’ in the context of a covered broker or 3 dealer, have the same meanings as in section 16 of 4 the Securities Investor Protection Act of 1970 (15 5 U.S.C. 78lll). 6 (11) FINANCIAL COMPANY.—The term ‘‘finan7 cial company’’ means any company that— 8 (A) is incorporated or organized under any 9 provision of Federal law or the laws of any 10 State; 11 (B) is— 12 (i) a bank holding company, as de13 fined in section 2(a) of the Bank Holding 14 Company Act of 1956 (12 U.S.C. 15 1841(a)); 16 (ii) a nonbank financial company su17 pervised by the Board of Governors; 18 (iii) any company that is predomi19 nantly engaged in activities that the Board 20 of Governors has determined are financial 21 in nature or incidental thereto for purposes 22 of section 4(k) of the Bank Holding Com23 pany Act of 1956 (12 U.S.C. 1843(k)) 24 other than a company described in clause 25 (i) or (ii); or 171 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (iv) any subsidiary of any company 2 described in any of clauses (i) through (iii) 3 that is predominantly engaged in activities 4 that the Board of Governors has deter5 mined are financial in nature or incidental 6 thereto for purposes of section 4(k) of the 7 Bank Holding Company Act of 1956 (12 8 U.S.C. 1843(k)) (other than a subsidiary 9 that is an insured depository institution or 10 an insurance company); and 11 (C) is not a Farm Credit System institu12 tion chartered under and subject to the provi13 sions of the Farm Credit Act of 1971, as 14 amended (12 U.S.C. 2001 et seq.), a govern15 mental entity, or a regulated entity, as defined 16 under section 1303(20) of the Federal Housing 17 Enterprises Financial Safety and Soundness 18 Act of 1992 (12 U.S.C. 4502(20)). 19 (12) FUND.—The term ‘‘Fund’’ means the Or20 derly Liquidation Fund established under section 21 210(n). 22 (13) INSURANCE COMPANY.—The term ‘‘insur23 ance company’’ means any entity that is— 24 (A) engaged in the business of insurance; 172 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (B) subject to regulation by a State insur2 ance regulator; and 3 (C) covered by a State law that is designed 4 to specifically deal with the rehabilitation, liq5 uidation, or insolvency of an insurance com6 pany. 7 (14) NONBANK FINANCIAL COMPANY.—The 8 term ‘‘nonbank financial company’’ has the same 9 meaning as in section 102(a)(4)(C). 10 (15) NONBANK FINANCIAL COMPANY SUPER11 VISED BY THE BOARD OF GOVERNORS.—The term 12 ‘‘nonbank financial company supervised by the 13 Board of Governors’’ has the same meaning as in 14 section 102(a)(4)(D). 15 (16) SIPC.—The term ‘‘SIPC’’ means the Se16 curities Investor Protection Corporation. 17 (b) DEFINITIONAL CRITERIA.—For purpose of the 18 definition of the term ‘‘financial company’’ under sub19 section (a)(11), no company shall be deemed to be pre20 dominantly engaged in activities that the Board of Gov21 ernors has determined are financial in nature or incidental 22 thereto for purposes of section 4(k) of the Bank Holding 23 Company Act of 1956 (12 U.S.C. 1843(k)), if the consoli24 dated revenues of such company from such activities con25 stitute less than 85 percent of the total consolidated reve173 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 nues of such company, as the Corporation, in consultation 2 with the Secretary, shall establish by regulation. In deter3 mining whether a company is a financial company under 4 this title, the consolidated revenues derived from the own5 ership or control of a depository institution shall be in6 cluded. 7 SEC. 202. JUDICIAL REVIEW. 8 (a) COMMENCEMENT OF ORDERLY LIQUIDATION.— 9 (1) PETITION TO DISTRICT COURT.— 10 (A) DISTRICT COURT REVIEW.— 11 (i) PETITION TO DISTRICT COURT.— 12 Subsequent to a determination by the Sec13 retary under section 203 that a financial 14 company satisfies the criteria in section 15 203(b), the Secretary shall notify the Cor16 poration and the covered financial com17 pany. If the board of directors (or body 18 performing similar functions) of the cov19 ered financial company acquiesces or con20 sents to the appointment of the Corpora21 tion as receiver, the Secretary shall ap22 point the Corporation as receiver. If the 23 board of directors (or body performing 24 similar functions) of the covered financial 25 company does not acquiesce or consent to 174 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 the appointment of the Corporation as re2 ceiver, the Secretary shall petition the 3 United States District Court for the Dis4 trict of Columbia for an order authorizing 5 the Secretary to appoint the Corporation 6 as receiver. 7 (ii) FORM AND CONTENT OF 8 ORDER.—The Secretary shall present all 9 relevant findings and the recommendation 10 made pursuant to section 203(a) to the 11 Court. The petition shall be filed under 12 seal. 13 (iii) DETERMINATION.—On a strictly 14 confidential basis, and without any prior 15 public disclosure, the Court, after notice to 16 the covered financial company and a hear17 ing in which the covered financial company 18 may oppose the petition, shall determine 19 whether the determination of the Secretary 20 that the covered financial company is in 21 default or in danger of default and satis22 fies the definition of a financial company 23 under section 201(a)(11) is arbitrary and 24 capricious. 175 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (iv) ISSUANCE OF ORDER.—If the 2 Court determines that the determination of 3 the Secretary that the covered financial 4 company is in default or in danger of de5 fault and satisfies the definition of a finan6 cial company under section 201(a)(11)— 7 (I) is not arbitrary and capri8 cious, the Court shall issue an order 9 immediately authorizing the Secretary 10 to appoint the Corporation as receiver 11 of the covered financial company; or 12 (II) is arbitrary and capricious, 13 the Court shall immediately provide to 14 the Secretary a written statement of 15 each reason supporting its determina16 tion, and afford the Secretary an im17 mediate opportunity to amend and 18 refile the petition under clause (i). 19 (v) PETITION GRANTED BY OPER20 ATION OF LAW.—If the Court does not 21 make a determination within 24 hours of 22 receipt of the petition— 23 (I) the petition shall be granted 24 by operation of law; 176 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (II) the Secretary shall appoint 2 the Corporation as receiver; and 3 (III) liquidation under this title 4 shall automatically and without fur5 ther notice or action be commenced 6 and the Corporation may immediately 7 take all actions authorized under this 8 title. 9 (B) EFFECT OF DETERMINATION.—The 10 determination of the Court under subparagraph 11 (A) shall be final, and shall be subject to appeal 12 only in accordance with paragraph (2). The de13 cision shall not be subject to any stay or injunc14 tion pending appeal. Upon conclusion of its pro15 ceedings under subparagraph (A), the Court 16 shall provide immediately for the record a writ17 ten statement of each reason supporting the de18 cision of the Court, and shall provide copies 19 thereof to the Secretary and the covered finan20 cial company. 21 (C) CRIMINAL PENALTIES.—A person who 22 recklessly discloses a determination of the Sec23 retary under section 203(b) or a petition of the 24 Secretary under subparagraph (A), or the pend25 ency of court proceedings as provided for under 177 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 subparagraph (A), shall be fined not more than 2 $250,000, or imprisoned for not more than 5 3 years, or both. 4 (2) APPEAL OF DECISIONS OF THE DISTRICT 5 COURT.— 6 (A) APPEAL TO COURT OF APPEALS.— 7 (i) IN GENERAL.—Subject to clause 8 (ii), the United States Court of Appeals for 9 the District of Columbia Circuit shall have 10 jurisdiction of an appeal of a final decision 11 of the Court filed by the Secretary or a 12 covered financial company, through its 13 board of directors, notwithstanding section 14 210(a)(1)(A)(i), not later than 30 days 15 after the date on which the decision of the 16 Court is rendered or deemed rendered 17 under this subsection. 18 (ii) CONDITION OF JURISDICTION.— 19 The Court of Appeals shall have jurisdic20 tion of an appeal by a covered financial 21 company only if the covered financial com22 pany did not acquiesce or consent to the 23 appointment of a receiver by the Secretary 24 under paragraph (1)(A). 178 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (iii) EXPEDITION.—The Court of Ap2 peals shall consider any appeal under this 3 subparagraph on an expedited basis. 4 (iv) SCOPE OF REVIEW.—For an ap5 peal taken under this subparagraph, review 6 shall be limited to whether the determina7 tion of the Secretary that a covered finan8 cial company is in default or in danger of 9 default and satisfies the definition of a fi10 nancial company under section 201(a)(11) 11 is arbitrary and capricious. 12 (B) APPEAL TO THE SUPREME COURT.— 13 (i) IN GENERAL.—A petition for a 14 writ of certiorari to review a decision of 15 the Court of Appeals under subparagraph 16 (A) may be filed by the Secretary or the 17 covered financial company, through its 18 board of directors, notwithstanding section 19 210(a)(1)(A)(i), with the Supreme Court 20 of the United States, not later than 30 21 days after the date of the final decision of 22 the Court of Appeals, and the Supreme 23 Court shall have discretionary jurisdiction 24 to review such decision. 179 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (ii) WRITTEN STATEMENT.—In the 2 event of a petition under clause (i), the 3 Court of Appeals shall immediately provide 4 for the record a written statement of each 5 reason for its decision. 6 (iii) EXPEDITION.—The Supreme 7 Court shall consider any petition under 8 this subparagraph on an expedited basis. 9 (iv) SCOPE OF REVIEW.—Review by 10 the Supreme Court under this subpara11 graph shall be limited to whether the de12 termination of the Secretary that the cov13 ered financial company is in default or in 14 danger of default and satisfies the defini15 tion of a financial company under section 16 201(a)(11) is arbitrary and capricious. 17 (b) ESTABLISHMENT AND TRANSMITTAL OF RULES 18 AND PROCEDURES.— 19 (1) IN GENERAL.—Not later than 6 months 20 after the date of enactment of this Act, the Court 21 shall establish such rules and procedures as may be 22 necessary to ensure the orderly conduct of pro23 ceedings, including rules and procedures to ensure 24 that the 24-hour deadline is met and that the Sec180 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 retary shall have an ongoing opportunity to amend 2 and refile petitions under subsection (a)(1). 3 (2) PUBLICATION OF RULES.—The rules and 4 procedures established under paragraph (1), and any 5 modifications of such rules and procedures, shall be 6 recorded and shall be transmitted to— 7 (A) the Committee on the Judiciary of the 8 Senate; 9 (B) the Committee on Banking, Housing, 10 and Urban Affairs of the Senate; 11 (C) the Committee on the Judiciary of the 12 House of Representatives; and 13 (D) the Committee on Financial Services 14 of the House of Representatives. 15 (c) PROVISIONS APPLICABLE TO FINANCIAL COMPA16 NIES.— 17 (1) BANKRUPTCY CODE.—Except as provided in 18 this subsection, the provisions of the Bankruptcy 19 Code and rules issued thereunder or otherwise appli20 cable insolvency law, and not the provisions of this 21 title, shall apply to financial companies that are not 22 covered financial companies for which the Corpora23 tion has been appointed as receiver. 24 (2) THIS TITLE.—The provisions of this title 25 shall exclusively apply to and govern all matters re181 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 lating to covered financial companies for which the 2 Corporation is appointed as receiver, and no provi3 sions of the Bankruptcy Code or the rules issued 4 thereunder shall apply in such cases, except as ex5 pressly provided in this title. 6 (d) TIME LIMIT ON RECEIVERSHIP AUTHORITY.— 7 (1) BASELINE PERIOD.—Any appointment of 8 the Corporation as receiver under this section shall 9 terminate at the end of the 3-year period beginning 10 on the date on which such appointment is made. 11 (2) EXTENSION OF TIME LIMIT.—The time 12 limit established in paragraph (1) may be extended 13 by the Corporation for up to 1 additional year, if the 14 Chairperson of the Corporation determines and cer15 tifies in writing to the Committee on Banking, 16 Housing, and Urban Affairs of the Senate and the 17 Committee on Financial Services of the House of 18 Representatives that continuation of the receivership 19 is necessary— 20 (A) to— 21 (i) maximize the net present value re22 turn from the sale or other disposition of 23 the assets of the covered financial com24 pany; or 182 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (ii) minimize the amount of loss real2 ized upon the sale or other disposition of 3 the assets of the covered financial com4 pany; and 5 (B) to protect the stability of the financial 6 system of the United States. 7 (3) SECOND EXTENSION OF TIME LIMIT.— 8 (A) IN GENERAL.—The time limit under 9 this subsection, as extended under paragraph 10 (2), may be extended for up to 1 additional 11 year, if the Chairperson of the Corporation, 12 with the concurrence of the Secretary, submits 13 the certifications described in paragraph (2). 14 (B) ADDITIONAL REPORT REQUIRED.—Not 15 later than 30 days after the date of commence16 ment of the extension under subparagraph (A), 17 the Corporation shall submit a report to the 18 Committee on Banking, Housing, and Urban 19 Affairs of the Senate and the Committee on Fi20 nancial Services of the House of Representa21 tives describing the need for the extension and 22 the specific plan of the Corporation to conclude 23 the receivership before the end of the second ex24 tension. 183 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (4) ONGOING LITIGATION.—The time limit 2 under this subsection, as extended under paragraph 3 (3), may be further extended solely for the purpose 4 of completing ongoing litigation in which the Cor5 poration as receiver is a party, provided that the ap6 pointment of the Corporation as receiver shall termi7 nate not later than 90 days after the date of comple8 tion of such litigation, if— 9 (A) the Council determines that the Cor10 poration used its best efforts to conclude the re11 ceivership in accordance with its plan before the 12 end of the time limit described in paragraph 13 (3); 14 (B) the Council determines that the com15 pletion of longer-term responsibilities in the 16 form of ongoing litigation justifies the need for 17 an extension; and 18 (C) the Corporation submits a report ap19 proved by the Council not later than 30 days 20 after the date of the determinations by the 21 Council under subparagraphs (A) and (B) to 22 the Committee on Banking, Housing, and 23 Urban Affairs of the Senate and the Committee 24 on Financial Services of the House of Rep25 resentatives, describing— 184 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (i) the ongoing litigation justifying the 2 need for an extension; and 3 (ii) the specific plan of the Corpora4 tion to complete the litigation and conclude 5 the receivership. 6 (5) REGULATIONS.—The Corporation may issue 7 regulations governing the termination of receiver8 ships under this title. 9 (6) NO LIABILITY.—The Corporation and the 10 Deposit Insurance Fund shall not be liable for unre11 solved claims arising from the receivership after the 12 termination of the receivership. 13 (e) STUDY OF BANKRUPTCY AND ORDERLY LIQUIDA14 TION PROCESS FOR FINANCIAL COMPANIES.— 15 (1) STUDY.— 16 (A) IN GENERAL.—The Administrative Of17 fice of the United States Courts and the Comp18 troller General of the United States shall each 19 monitor the activities of the Court, and each 20 such Office shall conduct separate studies re21 garding the bankruptcy and orderly liquidation 22 process for financial companies under the 23 Bankruptcy Code. 24 (B) ISSUES TO BE STUDIED.—In con25 ducting the study under subparagraph (A), the 185 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 Administrative Office of the United States 2 Courts and the Comptroller General of the 3 United States each shall evaluate— 4 (i) the effectiveness of chapter 7 or 5 chapter 11 of the Bankruptcy Code in fa6 cilitating the orderly liquidation or reorga7 nization of financial companies; 8 (ii) ways to maximize the efficiency 9 and effectiveness of the Court; and 10 (iii) ways to make the orderly liquida11 tion process under the Bankruptcy Code 12 for financial companies more effective. 13 (2) REPORTS.—Not later than 1 year after the 14 date of enactment of this Act, in each successive 15 year until the third year, and every fifth year after 16 that date of enactment, the Administrative Office of 17 the United States Courts and the Comptroller Gen18 eral of the United States shall submit to the Com19 mittee on Banking, Housing, and Urban Affairs and 20 the Committee on the Judiciary of the Senate and 21 the Committee on Financial Services and the Com22 mittee on the Judiciary of the House of Representa23 tives separate reports summarizing the results of the 24 studies conducted under paragraph (1). 186 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (f) STUDY OF INTERNATIONAL COORDINATION RE2 LATING TO BANKRUPTCY PROCESS FOR FINANCIAL COM3 PANIES.— 4 (1) STUDY.— 5 (A) IN GENERAL.—The Comptroller Gen6 eral of the United States shall conduct a study 7 regarding international coordination relating to 8 the orderly liquidation of financial companies 9 under the Bankruptcy Code. 10 (B) ISSUES TO BE STUDIED.—In con11 ducting the study under subparagraph (A), the 12 Comptroller General of the United States shall 13 evaluate, with respect to the bankruptcy process 14 for financial companies— 15 (i) the extent to which international 16 coordination currently exists; 17 (ii) current mechanisms and struc18 tures for facilitating international coopera19 tion; 20 (iii) barriers to effective international 21 coordination; and 22 (iv) ways to increase and make more 23 effective international coordination. 24 (2) REPORT.—Not later than 1 year after the 25 date of enactment of this Act, the Comptroller Gen187 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 eral of the United States shall submit to the Com2 mittee on Banking, Housing, and Urban Affairs and 3 the Committee on the Judiciary of the Senate and 4 the Committee on Financial Services and the Com5 mittee on the Judiciary of the House of Representa6 tives and the Secretary a report summarizing the re7 sults of the study conducted under paragraph (1). 8 (g) STUDY OF PROMPT CORRECTIVE ACTION IMPLE9 MENTATION BY THE APPROPRIATE FEDERAL AGEN10 CIES.— 11 (1) STUDY.—The Comptroller General of the 12 United States shall conduct a study regarding the 13 implementation of prompt corrective action by the 14 appropriate Federal banking agencies. 15 (2) ISSUES TO BE STUDIED.—In conducting the 16 study under paragraph (1), the Comptroller General 17 shall evaluate— 18 (A) the effectiveness of implementation of 19 prompt corrective action by the appropriate 20 Federal banking agencies and the resolution of 21 insured depository institutions by the Corpora22 tion; and 23 (B) ways to make prompt corrective action 24 a more effective tool to resolve the insured de188 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 pository institutions at the least possible long2 term cost to the Deposit Insurance Fund. 3 (3) REPORT TO COUNCIL.—Not later than 1 4 year after the date of enactment of this Act, the 5 Comptroller General shall submit a report to the 6 Council on the results of the study conducted under 7 this subsection. 8 (4) COUNCIL REPORT OF ACTION.—Not later 9 than 6 months after the date of receipt of the report 10 from the Comptroller General under paragraph (3), 11 the Council shall submit a report to the Committee 12 on Banking, Housing, and Urban Affairs of the Sen13 ate and the Committee on Financial Services of the 14 House of Representatives on actions taken in re15 sponse to the report, including any recommendations 16 made to the Federal primary financial regulatory 17 agencies under section 120. 18 SEC. 203. SYSTEMIC RISK DETERMINATION. 19 (a) WRITTEN RECOMMENDATION AND DETERMINA20 TION.— 21 (1) VOTE REQUIRED.— 22 (A) IN GENERAL.—On their own initiative, 23 or at the request of the Secretary, the Corpora24 tion and the Board of Governors shall consider 25 whether to make a written recommendation de189 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 scribed in paragraph (2) with respect to wheth2 er the Secretary should appoint the Corporation 3 as receiver for a financial company. Such rec4 ommendation shall be made upon a vote of not 5 fewer than 2⁄3 of the members of the Board of 6 Governors then serving and 2⁄3 of the members 7 of the board of directors of the Corporation 8 then serving. 9 (B) CASES INVOLVING BROKERS OR DEAL10 ERS.—In the case of a broker or dealer, or in 11 which the largest United States subsidiary (as 12 measured by total assets as of the end of the 13 previous calendar quarter) of a financial com14 pany is a broker or dealer, the Commission and 15 the Board of Governors, at the request of the 16 Secretary, or on their own initiative, shall con17 sider whether to make the written recommenda18 tion described in paragraph (2) with respect to 19 the financial company. Subject to the require20 ments in paragraph (2), such recommendation 21 shall be made upon a vote of not fewer than 2⁄3 22 of the members of the Board of Governors then 23 serving and 2⁄3 of the members of the Commis24 sion then serving, and in consultation with the 25 Corporation. 190 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (C) CASES INVOLVING INSURANCE COMPA2 NIES.—In the case of an insurance company, or 3 in which the largest United States subsidiary 4 (as measured by total assets as of the end of 5 the previous calendar quarter) of a financial 6 company is an insurance company, the Director 7 of the Federal Insurance Office and the Board 8 of Governors, at the request of the Secretary or 9 on their own initiative, shall consider whether 10 to make the written recommendation described 11 in paragraph (2) with respect to the financial 12 company. Subject to the requirements in para13 graph (2), such recommendation shall be made 14 upon a vote of not fewer than 2⁄3 of the Board 15 of Governors then serving and the affirmative 16 approval of the Director of the Federal Insur17 ance Office, and in consultation with the Cor18 poration. 19 (2) RECOMMENDATION REQUIRED.—Any writ20 ten recommendation pursuant to paragraph (1) shall 21 contain— 22 (A) an evaluation of whether the financial 23 company is in default or in danger of default; 191 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (B) a description of the effect that the de2 fault of the financial company would have on fi3 nancial stability in the United States; 4 (C) a description of the effect that the de5 fault of the financial company would have on 6 economic conditions or financial stability for 7 low income, minority, or underserved commu8 nities; 9 (D) a recommendation regarding the na10 ture and the extent of actions to be taken under 11 this title regarding the financial company; 12 (E) an evaluation of the likelihood of a pri13 vate sector alternative to prevent the default of 14 the financial company; 15 (F) an evaluation of why a case under the 16 Bankruptcy Code is not appropriate for the fi17 nancial company; 18 (G) an evaluation of the effects on credi19 tors, counterparties, and shareholders of the fi20 nancial company and other market participants; 21 and 22 (H) an evaluation of whether the company 23 satisfies the definition of a financial company 24 under section 201. 192 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (b) DETERMINATION BY THE SECRETARY.—Notwith2 standing any other provision of Federal or State law, the 3 Secretary shall take action in accordance with section 4 202(a)(1)(A), if, upon the written recommendation under 5 subsection (a), the Secretary (in consultation with the 6 President) determines that— 7 (1) the financial company is in default or in 8 danger of default; 9 (2) the failure of the financial company and its 10 resolution under otherwise applicable Federal or 11 State law would have serious adverse effects on fi12 nancial stability in the United States; 13 (3) no viable private sector alternative is avail14 able to prevent the default of the financial company; 15 (4) any effect on the claims or interests of 16 creditors, counterparties, and shareholders of the fi17 nancial company and other market participants as a 18 result of actions to be taken under this title is ap19 propriate, given the impact that any action taken 20 under this title would have on financial stability in 21 the United States; 22 (5) any action under section 204 would avoid or 23 mitigate such adverse effects, taking into consider24 ation the effectiveness of the action in mitigating po25 tential adverse effects on the financial system, the 193 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 cost to the general fund of the Treasury, and the po2 tential to increase excessive risk taking on the part 3 of creditors, counterparties, and shareholders in the 4 financial company; 5 (6) a Federal regulatory agency has ordered the 6 financial company to convert all of its convertible 7 debt instruments that are subject to the regulatory 8 order; and 9 (7) the company satisfies the definition of a fi10 nancial company under section 201. 11 (c) DOCUMENTATION AND REVIEW.— 12 (1) IN GENERAL.—The Secretary shall— 13 (A) document any determination under 14 subsection (b); 15 (B) retain the documentation for review 16 under paragraph (2); and 17 (C) notify the covered financial company 18 and the Corporation of such determination. 19 (2) REPORT TO CONGRESS.—Not later than 24 20 hours after the date of appointment of the Corpora21 tion as receiver for a covered financial company, the 22 Secretary shall provide written notice of the rec23 ommendations and determinations reached in ac24 cordance with subsections (a) and (b) to the Major25 ity Leader and the Minority Leader of the Senate 194 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 and the Speaker and the Minority Leader of the 2 House of Representatives, the Committee on Bank3 ing, Housing, and Urban Affairs of the Senate, and 4 the Committee on Financial Services of the House of 5 Representatives, which shall consist of a summary of 6 the basis for the determination, including, to the ex7 tent available at the time of the determination— 8 (A) the size and financial condition of the 9 covered financial company; 10 (B) the sources of capital and credit sup11 port that were available to the covered financial 12 company; 13 (C) the operations of the covered financial 14 company that could have had a significant im15 pact on financial stability, markets, or both; 16 (D) identification of the banks and finan17 cial companies which may be able to provide the 18 services offered by the covered financial com19 pany; 20 (E) any potential international ramifica21 tions of resolution of the covered financial com22 pany under other applicable insolvency law; 23 (F) an estimate of the potential effect of 24 the resolution of the covered financial company 195 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 under other applicable insolvency law on the fi2 nancial stability of the United States; 3 (G) the potential effect of the appointment 4 of a receiver by the Secretary on consumers; 5 (H) the potential effect of the appointment 6 of a receiver by the Secretary on the financial 7 system, financial markets, and banks and other 8 financial companies; and 9 (I) whether resolution of the covered finan10 cial company under other applicable insolvency 11 law would cause banks or other financial com12 panies to experience severe liquidity distress. 13 (3) REPORTS TO CONGRESS AND THE PUB14 LIC.— 15 (A) IN GENERAL.—Not later than 60 days 16 after the date of appointment of the Corpora17 tion as receiver for a covered financial company, 18 the Corporation shall file a report with the 19 Committee on Banking, Housing, and Urban 20 Affairs of the Senate and the Committee on Fi21 nancial Services of the House of Representa22 tives— 23 (i) setting forth information on the fi24 nancial condition of the covered financial 25 company as of the date of the appoint196 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 ment, including a description of its assets 2 and liabilities; 3 (ii) describing the plan of, and actions 4 taken by, the Corporation to wind down 5 the covered financial company; 6 (iii) explaining each instance in which 7 the Corporation waived any applicable re8 quirements of part 366 of title 12, Code of 9 Federal Regulations (or any successor 10 thereto) with respect to conflicts of interest 11 by any person in the private sector who 12 was retained to provide services to the Cor13 poration in connection with such receiver14 ship; 15 (iv) describing the reasons for the 16 provision of any funding to the receivership 17 out of the Fund; 18 (v) setting forth the expected costs of 19 the orderly liquidation of the covered fi20 nancial company; 21 (vi) setting forth the identity of any 22 claimant that is treated in a manner dif23 ferent from other similarly situated claim24 ants under subsection (b)(4), (d)(4), or 25 (h)(5)(E), the amount of any additional 197 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 payment to such claimant under subsection 2 (d)(4), and the reason for any such action; 3 and 4 (vii) which report the Corporation 5 shall publish on an online website main6 tained by the Corporation, subject to main7 taining appropriate confidentiality. 8 (B) AMENDMENTS.—The Corporation 9 shall, on a timely basis, not less frequently than 10 quarterly, amend or revise and resubmit the re11 ports prepared under this paragraph, as nec12 essary. 13 (C) CONGRESSIONAL TESTIMONY.—The 14 Corporation and the primary financial regu15 latory agency, if any, of the financial company 16 for which the Corporation was appointed re17 ceiver under this title shall appear before Con18 gress, if requested, not later than 30 days after 19 the date on which the Corporation first files the 20 reports required under subparagraph (A). 21 (4) DEFAULT OR IN DANGER OF DEFAULT.— 22 For purposes of this title, a financial company shall 23 be considered to be in default or in danger of default 24 if, as determined in accordance with subsection 25 (b)— 198 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (A) a case has been, or likely will promptly 2 be, commenced with respect to the financial 3 company under the Bankruptcy Code; 4 (B) the financial company has incurred, or 5 is likely to incur, losses that will deplete all or 6 substantially all of its capital, and there is no 7 reasonable prospect for the company to avoid 8 such depletion; 9 (C) the assets of the financial company 10 are, or are likely to be, less than its obligations 11 to creditors and others; or 12 (D) the financial company is, or is likely to 13 be, unable to pay its obligations (other than 14 those subject to a bona fide dispute) in the nor15 mal course of business. 16 (5) GAO REVIEW.—The Comptroller General of 17 the United States shall review and report to Con18 gress on any determination under subsection (b), 19 that results in the appointment of the Corporation 20 as receiver, including— 21 (A) the basis for the determination; 22 (B) the purpose for which any action was 23 taken pursuant thereto; 24 (C) the likely effect of the determination 25 and such action on the incentives and conduct 199 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 of financial companies and their creditors, 2 counterparties, and shareholders; and 3 (D) the likely disruptive effect of the deter4 mination and such action on the reasonable ex5 pectations of creditors, counterparties, and 6 shareholders, taking into account the impact 7 any action under this title would have on finan8 cial stability in the United States, including 9 whether the rights of such parties will be dis10 rupted. 11 (d) CORPORATION POLICIES AND PROCEDURES.—As 12 soon as is practicable after the date of enactment of this 13 Act, the Corporation shall establish policies and proce14 dures that are acceptable to the Secretary governing the 15 use of funds available to the Corporation to carry out this 16 title, including the terms and conditions for the provision 17 and use of funds under sections 204(d), 210(h)(2)(G)(iv), 18 and 210(h)(9). 19 (e) TREATMENT OF INSURANCE COMPANIES AND IN20 SURANCE COMPANY SUBSIDIARIES.— 21 (1) IN GENERAL.—Notwithstanding subsection 22 (b), if an insurance company is a covered financial 23 company or a subsidiary or affiliate of a covered fi24 nancial company, the liquidation or rehabilitation of 25 such insurance company, and any subsidiary or affil200 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 iate of such company that is not excepted under 2 paragraph (2), shall be conducted as provided under 3 applicable State law. 4 (2) EXCEPTION FOR SUBSIDIARIES AND AFFILI5 ATES.—The requirement of paragraph (1) shall not 6 apply with respect to any subsidiary or affiliate of 7 an insurance company that is not itself an insurance 8 company. 9 (3) BACKUP AUTHORITY.—Notwithstanding 10 paragraph (1), with respect to a covered financial 11 company described in paragraph (1), if, after the 12 end of the 60-day period beginning on the date on 13 which a determination is made under section 202(a) 14 with respect to such company, the appropriate regu15 latory agency has not filed the appropriate judicial 16 action in the appropriate State court to place such 17 company into orderly liquidation under the laws and 18 requirements of the State, the Corporation shall 19 have the authority to stand in the place of the ap20 propriate regulatory agency and file the appropriate 21 judicial action in the appropriate State court to 22 place such company into orderly liquidation under 23 the laws and requirements of the State. 201 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 SEC. 204. ORDERLY LIQUIDATION OF COVERED FINANCIAL 2 COMPANIES. 3 (a) PURPOSE OF ORDERLY LIQUIDATION AUTHOR4 ITY.—It is the purpose of this title to provide the nec5 essary authority to liquidate failing financial companies 6 that pose a significant risk to the financial stability of the 7 United States in a manner that mitigates such risk and 8 minimizes moral hazard. The authority provided in this 9 title shall be exercised in the manner that best fulfills such 10 purpose, so that— 11 (1) creditors and shareholders will bear the 12 losses of the financial company; 13 (2) management responsible for the condition of 14 the financial company will not be retained; and 15 (3) the Corporation and other appropriate 16 agencies will take all steps necessary and appro17 priate to assure that all parties, including manage18 ment, directors, and third parties, having responsi19 bility for the condition of the financial company bear 20 losses consistent with their responsibility, including 21 actions for damages, restitution, and recoupment of 22 compensation and other gains not compatible with 23 such responsibility. 24 (b) CORPORATION AS RECEIVER.—Upon the appoint25 ment of the Corporation under section 202, the Corpora26 tion shall act as the receiver for the covered financial com202 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 pany, with all of the rights and obligations set forth in 2 this title. 3 (c) CONSULTATION.—The Corporation, as receiver— 4 (1) shall consult with the primary financial reg5 ulatory agency or agencies of the covered financial 6 company and its covered subsidiaries for purposes of 7 ensuring an orderly liquidation of the covered finan8 cial company; 9 (2) may consult with, or under subsection 10 (a)(1)(B)(v) or (a)(1)(L) of section 210, acquire the 11 services of, any outside experts, as appropriate to in12 form and aid the Corporation in the orderly liquida13 tion process; 14 (3) shall consult with the primary financial reg15 ulatory agency or agencies of any subsidiaries of the 16 covered financial company that are not covered sub17 sidiaries, and coordinate with such regulators re18 garding the treatment of such solvent subsidiaries 19 and the separate resolution of any such insolvent 20 subsidiaries under other governmental authority, as 21 appropriate; and 22 (4) shall consult with the Commission and the 23 Securities Investor Protection Corporation in the 24 case of any covered financial company for which the 25 Corporation has been appointed as receiver that is a 203 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 broker or dealer registered with the Commission 2 under section 15(b) of the Securities Exchange Act 3 of 1934 (15 U.S.C. 78o(b)) and is a member of the 4 Securities Investor Protection Corporation, for the 5 purpose of determining whether to transfer to a 6 bridge financial company organized by the Corpora7 tion as receiver, without consent of any customer, 8 customer accounts of the covered financial company. 9 (d) FUNDING FOR ORDERLY LIQUIDATION.—Upon 10 its appointment as receiver for a covered financial com11 pany, and thereafter as the Corporation may, in its discre12 tion, determine to be necessary or appropriate, the Cor13 poration may make available to the receivership, subject 14 to the conditions set forth in section 206 and subject to 15 the plan described in section 210(n)(9), funds for the or16 derly liquidation of the covered financial company. All 17 funds provided by the Corporation under this subsection 18 shall have a priority of claims under subparagraph (A) or 19 (B) of section 210(b)(1), as applicable, including funds 20 used for— 21 (1) making loans to, or purchasing any debt ob22 ligation of, the covered financial company or any 23 covered subsidiary; 24 (2) purchasing or guaranteeing against loss the 25 assets of the covered financial company or any cov204 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 ered subsidiary, directly or through an entity estab2 lished by the Corporation for such purpose; 3 (3) assuming or guaranteeing the obligations of 4 the covered financial company or any covered sub5 sidiary to 1 or more third parties; 6 (4) taking a lien on any or all assets of the cov7 ered financial company or any covered subsidiary, 8 including a first priority lien on all unencumbered 9 assets of the covered financial company or any cov10 ered subsidiary to secure repayment of any trans11 actions conducted under this subsection; 12 (5) selling or transferring all, or any part, of 13 such acquired assets, liabilities, or obligations of the 14 covered financial company or any covered subsidiary; 15 and 16 (6) making payments pursuant to subsections 17 (b)(4), (d)(4), and (h)(5)(E) of section 210. 18 SEC. 205. ORDERLY LIQUIDATION OF COVERED BROKERS 19 AND DEALERS. 20 (a) APPOINTMENT OF SIPC AS TRUSTEE.— 21 (1) APPOINTMENT.—Upon the appointment of 22 the Corporation as receiver for any covered broker 23 or dealer, the Corporation shall appoint, without any 24 need for court approval, the Securities Investor Pro25 tection Corporation to act as trustee for the liquida205 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 tion under the Securities Investor Protection Act of 2 1970 (15 U.S.C. 78aaa et seq.) of the covered 3 broker or dealer. 4 (2) ACTIONS BY SIPC.— 5 (A) FILING.—Upon appointment of SIPC 6 under paragraph (1), SIPC shall promptly file 7 with any Federal district court of competent ju8 risdiction specified in section 21 or 27 of the 9 Securities Exchange Act of 1934 (15 U.S.C. 10 78u, 78aa), an application for a protective de11 cree under the Securities Investor Protection 12 Act of 1970 (15 U.S.C. 78aaa et seq.) as to the 13 covered broker or dealer. The Federal district 14 court shall accept and approve the filing, in15 cluding outside of normal business hours, and 16 shall immediately issue the protective decree as 17 to the covered broker or dealer. 18 (B) ADMINISTRATION BY SIPC.—Following 19 entry of the protective decree, and except as 20 otherwise provided in this section, the deter21 mination of claims and the liquidation of assets 22 retained in the receivership of the covered 23 broker or dealer and not transferred to the 24 bridge financial company shall be administered 25 under the Securities Investor Protection Act of 206 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 1970 (15 U.S.C. 78aaa et seq.) by SIPC, as 2 trustee for the covered broker or dealer. 3 (C) DEFINITION OF FILING DATE.—For 4 purposes of the liquidation proceeding, the term 5 ‘‘filing date’’ means the date on which the Cor6 poration is appointed as receiver of the covered 7 broker or dealer. 8 (D) DETERMINATION OF CLAIMS.—As 9 trustee for the covered broker or dealer, SIPC 10 shall determine and satisfy, consistent with this 11 title and with the Securities Investor Protection 12 Act of 1970 (15 U.S.C. 78aaa et seq.), all 13 claims against the covered broker or dealer aris14 ing on or before the filing date. 15 (b) POWERS AND DUTIES OF SIPC.— 16 (1) IN GENERAL.—Except as provided in this 17 section, upon its appointment as trustee for the liq18 uidation of a covered broker or dealer, SIPC shall 19 have all of the powers and duties provided by the Se20 curities Investor Protection Act of 1970 (15 U.S.C. 21 78aaa et seq.), including, without limitation, all 22 rights of action against third parties, and shall con23 duct such liquidation in accordance with the terms 24 of the Securities Investor Protection Act of 1970 (15 25 U.S.C. 78aaa et seq.), except that SIPC shall have 207 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 no powers or duties with respect to assets and liabil2 ities transferred by the Corporation from the covered 3 broker or dealer to any bridge financial company es4 tablished in accordance with this title. 5 (2) LIMITATION OF POWERS.—The exercise by 6 SIPC of powers and functions as trustee under sub7 section (a) shall not impair or impede the exercise 8 of the powers and duties of the Corporation with re9 gard to— 10 (A) any action, except as otherwise pro11 vided in this title— 12 (i) to make funds available under sec13 tion 204(d); 14 (ii) to organize, establish, operate, or 15 terminate any bridge financial company; 16 (iii) to transfer assets and liabilities; 17 (iv) to enforce or repudiate contracts; 18 or 19 (v) to take any other action relating 20 to such bridge financial company under 21 section 210; or 22 (B) determining claims under subsection 23 (e). 24 (3) PROTECTIVE DECREE.—SIPC and the Cor25 poration, in consultation with the Commission, shall 208 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 jointly determine the terms of the protective decree 2 to be filed by SIPC with any court of competent ju3 risdiction under section 21 or 27 of the Securities 4 Exchange Act of 1934 (15 U.S.C. 78u, 78aa), as re5 quired by subsection (a). 6 (4) QUALIFIED FINANCIAL CONTRACTS.—Not7 withstanding any provision of the Securities Investor 8 Protection Act of 1970 (15 U.S.C. 78aaa et seq.) to 9 the contrary (including section 5(b)(2)(C) of that 10 Act (15 U.S.C. 78eee(b)(2)(C))), the rights and obli11 gations of any party to a qualified financial contract 12 (as that term is defined in section 210(c)(8)) to 13 which a covered broker or dealer for which the Cor14 poration has been appointed receiver is a party shall 15 be governed exclusively by section 210, including the 16 limitations and restrictions contained in section 17 210(c)(10)(B). 18 (c) LIMITATION ON COURT ACTION.—Except as oth19 erwise provided in this title, no court may take any action, 20 including any action pursuant to the Securities Investor 21 Protection Act of 1970 (15 U.S.C. 78aaa et seq.) or the 22 Bankruptcy Code, to restrain or affect the exercise of pow23 ers or functions of the Corporation as receiver for a cov24 ered broker or dealer and any claims against the Corpora25 tion as such receiver shall be determined in accordance 209 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 with subsection (e) and such claims shall be limited to 2 money damages. 3 (d) ACTIONS BY CORPORATION AS RECEIVER.— 4 (1) IN GENERAL.—Notwithstanding any other 5 provision of this title, no action taken by the Cor6 poration as receiver with respect to a covered broker 7 or dealer shall— 8 (A) adversely affect the rights of a cus9 tomer to customer property or customer name 10 securities; 11 (B) diminish the amount or timely pay12 ment of net equity claims of customers; or 13 (C) otherwise impair the recoveries pro14 vided to a customer under the Securities Inves15 tor Protection Act of 1970 (15 U.S.C. 78aaa et 16 seq.). 17 (2) NET PROCEEDS.—The net proceeds from 18 any transfer, sale, or disposition of assets of the cov19 ered broker or dealer, or proceeds thereof by the 20 Corporation as receiver for the covered broker or 21 dealer shall be for the benefit of the estate of the 22 covered broker or dealer, as provided in this title. 23 (e) CLAIMS AGAINST THE CORPORATION AS RE24 CEIVER.—Any claim against the Corporation as receiver 25 for a covered broker or dealer for assets transferred to 210 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 a bridge financial company established with respect to 2 such covered broker or dealer— 3 (1) shall be determined in accordance with sec4 tion 210(a)(2); and 5 (2) may be reviewed by the appropriate district 6 or territorial court of the United States in accord7 ance with section 210(a)(5). 8 (f) SATISFACTION OF CUSTOMER CLAIMS.— 9 (1) OBLIGATIONS TO CUSTOMERS.—Notwith10 standing any other provision of this title, all obliga11 tions of a covered broker or dealer or of any bridge 12 financial company established with respect to such 13 covered broker or dealer to a customer relating to, 14 or net equity claims based upon, customer property 15 or customer name securities shall be promptly dis16 charged by SIPC, the Corporation, or the bridge fi17 nancial company, as applicable, by the delivery of se18 curities or the making of payments to or for the ac19 count of such customer, in a manner and in an 20 amount at least as beneficial to the customer as 21 would have been the case had the actual proceeds re22 alized from the liquidation of the covered broker or 23 dealer under this title been distributed in a pro24 ceeding under the Securities Investor Protection Act 25 of 1970 (15 U.S.C. 78aaa et seq.) without the ap211 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 pointment of the Corporation as receiver and with2 out any transfer of assets or liabilities to a bridge 3 financial company, and with a filing date as of the 4 date on which the Corporation is appointed as re5 ceiver. 6 (2) SATISFACTION OF CLAIMS BY SIPC.—SIPC, 7 as trustee for a covered broker or dealer, shall sat8 isfy customer claims in the manner and amount pro9 vided under the Securities Investor Protection Act of 10 1970 (15 U.S.C. 78aaa et seq.), as if the appoint11 ment of the Corporation as receiver had not oc12 curred, and with a filing date as of the date on 13 which the Corporation is appointed as receiver. The 14 Corporation shall satisfy customer claims, to the ex15 tent that a customer would have received more secu16 rities or cash with respect to the allocation of cus17 tomer property had the covered financial company 18 been subject to a proceeding under the Securities In19 vestor Protection Act (15 U.S.C. 78aaa et seq.) 20 without the appointment of the Corporation as re21 ceiver, and with a filing date as of the date on which 22 the Corporation is appointed as receiver. 23 (g) PRIORITIES.— 24 (1) CUSTOMER PROPERTY.—As trustee for a 25 covered broker or dealer, SIPC shall allocate cus212 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 tomer property and deliver customer name securities 2 in accordance with section 8(c) of the Securities In3 vestor Protection Act of 1970 (15 U.S.C. 78fff– 4 2(c)). 5 (2) OTHER CLAIMS.—All claims other than 6 those described in paragraph (1) (including any un7 paid claim by a customer for the allowed net equity 8 claim of such customer from customer property) 9 shall be paid in accordance with the priorities in sec10 tion 210(b). 11 (h) RULEMAKING.—The Commission and the Cor12 poration, after consultation with SIPC, shall jointly issue 13 rules to implement this section. 14 SEC. 206. MANDATORY TERMS AND CONDITIONS FOR ALL 15 ORDERLY LIQUIDATION ACTIONS. 16 In taking action under this title, the Corporation 17 shall— 18 (1) determine that such action is necessary for 19 purposes of the financial stability of the United 20 States, and not for the purpose of preserving the 21 covered financial company; 22 (2) ensure that the shareholders of a covered fi23 nancial company do not receive payment until after 24 all other claims and the Fund are fully paid; 213 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (3) ensure that unsecured creditors bear losses 2 in accordance with the priority of claim provisions in 3 section 210; 4 (4) ensure that management responsible for the 5 failed condition of the covered financial company is 6 removed (if such management has not already been 7 removed at the time at which the Corporation is ap8 pointed receiver); 9 (5) ensure that the members of the board of di10 rectors (or body performing similar functions) re11 sponsible for the failed condition of the covered fi12 nancial company are removed, if such members have 13 not already been removed at the time the Corpora14 tion is appointed as receiver; and 15 (6) not take an equity interest in or become a 16 shareholder of any covered financial company or any 17 covered subsidiary. 18 SEC. 207. DIRECTORS NOT LIABLE FOR ACQUIESCING IN 19 APPOINTMENT OF RECEIVER. 20 The members of the board of directors (or body per21 forming similar functions) of a covered financial company 22 shall not be liable to the shareholders or creditors thereof 23 for acquiescing in or consenting in good faith to the ap24 pointment of the Corporation as receiver for the covered 25 financial company under section 203. 214 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 SEC. 208. DISMISSAL AND EXCLUSION OF OTHER ACTIONS. 2 (a) IN GENERAL.—Effective as of the date of the ap3 pointment of the Corporation as receiver for the covered 4 financial company under section 202 or the appointment 5 of SIPC as trustee for a covered broker or dealer under 6 section 205, as applicable, any case or proceeding com7 menced with respect to the covered financial company 8 under the Bankruptcy Code or the Securities Investor 9 Protection Act of 1970 (15 U.S.C. 78aaa et seq.) shall 10 be dismissed, upon notice to the bankruptcy court (with 11 respect to a case commenced under the Bankruptcy Code), 12 and upon notice to SIPC (with respect to a covered broker 13 or dealer) and no such case or proceeding may be com14 menced with respect to a covered financial company at any 15 time while the orderly liquidation is pending. 16 (b) REVESTING OF ASSETS.—Effective as of the date 17 of appointment of the Corporation as receiver, the assets 18 of a covered financial company shall, to the extent they 19 have vested in any entity other than the covered financial 20 company as a result of any case or proceeding commenced 21 with respect to the covered financial company under the 22 Bankruptcy Code, the Securities Investor Protection Act 23 of 1970 (15 U.S.C. 78aaa et seq.), or any similar provision 24 of State liquidation or insolvency law applicable to the cov25 ered financial company, revest in the covered financial 26 company. 215 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (c) LIMITATION.—Notwithstanding subsections (a) 2 and (b), any order entered or other relief granted by a 3 bankruptcy court prior to the date of appointment of the 4 Corporation as receiver shall continue with the same valid5 ity as if an orderly liquidation had not been commenced. 6 SEC. 209. RULEMAKING; NON-CONFLICTING LAW. 7 The Corporation shall, in consultation with the Coun8 cil, prescribe such rules or regulations as the Corporation 9 considers necessary or appropriate to implement this title, 10 including rules and regulations with respect to the rights, 11 interests, and priorities of creditors, counterparties, secu12 rity entitlement holders, or other persons with respect to 13 any covered financial company or any assets or other prop14 erty of or held by such covered financial company, and 15 address the potential for conflicts of interest between or 16 among individual receiverships established under this title 17 or under the Federal Deposit Insurance Act. To the extent 18 possible, the Corporation shall seek to harmonize applica19 ble rules and regulations promulgated under this section 20 with the insolvency laws that would otherwise apply to a 21 covered financial company. 22 SEC. 210. POWERS AND DUTIES OF THE CORPORATION. 23 (a) POWERS AND AUTHORITIES.— 24 (1) GENERAL POWERS.— 216 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (A) SUCCESSOR TO COVERED FINANCIAL 2 COMPANY.—The Corporation shall, upon ap3 pointment as receiver for a covered financial 4 company under this title, succeed to— 5 (i) all rights, titles, powers, and privi6 leges of the covered financial company and 7 its assets, and of any stockholder, member, 8 officer, or director of such company; and 9 (ii) title to the books, records, and as10 sets of any previous receiver or other legal 11 custodian of such covered financial com12 pany. 13 (B) OPERATION OF THE COVERED FINAN14 CIAL COMPANY DURING THE PERIOD OF OR15 DERLY LIQUIDATION.—The Corporation, as re16 ceiver for a covered financial company, may— 17 (i) take over the assets of and operate 18 the covered financial company with all of 19 the powers of the members or share20 holders, the directors, and the officers of 21 the covered financial company, and con22 duct all business of the covered financial 23 company; 24 (ii) collect all obligations and money 25 owed to the covered financial company; 217 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (iii) perform all functions of the cov2 ered financial company, in the name of the 3 covered financial company; 4 (iv) manage the assets and property 5 of the covered financial company, con6 sistent with maximization of the value of 7 the assets in the context of the orderly liq8 uidation; and 9 (v) provide by contract for assistance 10 in fulfilling any function, activity, action, 11 or duty of the Corporation as receiver. 12 (C) FUNCTIONS OF COVERED FINANCIAL 13 COMPANY OFFICERS, DIRECTORS, AND SHARE14 HOLDERS.—The Corporation may provide for 15 the exercise of any function by any member or 16 stockholder, director, or officer of any covered 17 financial company for which the Corporation 18 has been appointed as receiver under this title. 19 (D) ADDITIONAL POWERS AS RECEIVER.— 20 The Corporation shall, as receiver for a covered 21 financial company, and subject to all legally en22 forceable and perfected security interests and 23 all legally enforceable security entitlements in 24 respect of assets held by the covered financial 25 company, liquidate, and wind-up the affairs of 218 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 a covered financial company, including taking 2 steps to realize upon the assets of the covered 3 financial company, in such manner as the Cor4 poration deems appropriate, including through 5 the sale of assets, the transfer of assets to a 6 bridge financial company established under sub7 section (h), or the exercise of any other rights 8 or privileges granted to the receiver under this 9 section. 10 (E) ADDITIONAL POWERS WITH RESPECT 11 TO FAILING SUBSIDIARIES OF A COVERED FI12 NANCIAL COMPANY.— 13 (i) IN GENERAL.—In any case in 14 which a receiver is appointed for a covered 15 financial company under section 202, the 16 Corporation may appoint itself as receiver 17 of any covered subsidiary of the covered fi18 nancial company that is organized under 19 Federal law or the laws of any State, if the 20 Corporation and the Secretary jointly de21 termine that— 22 (I) the covered subsidiary is in 23 default or in danger of default; 24 (II) such action would avoid or 25 mitigate serious adverse effects on the 219 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 financial stability or economic condi2 tions of the United States; and 3 (III) such action would facilitate 4 the orderly liquidation of the covered 5 financial company. 6 (ii) TREATMENT AS COVERED FINAN7 CIAL COMPANY.—If the Corporation is ap8 pointed as receiver of a covered subsidiary 9 of a covered financial company under 10 clause (i), the covered subsidiary shall 11 thereafter be considered a covered financial 12 company under this title, and the Corpora13 tion shall thereafter have all the powers 14 and rights with respect to that covered 15 subsidiary as it has with respect to a cov16 ered financial company under this title. 17 (F) ORGANIZATION OF BRIDGE COMPA18 NIES.—The Corporation, as receiver for a cov19 ered financial company, may organize a bridge 20 financial company under subsection (h). 21 (G) MERGER; TRANSFER OF ASSETS AND 22 LIABILITIES.— 23 (i) IN GENERAL.—Subject to clauses 24 (ii) and (iii), the Corporation, as receiver 25 for a covered financial company, may— 220 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (I) merge the covered financial 2 company with another company; or 3 (II) transfer any asset or liability 4 of the covered financial company (in5 cluding any assets and liabilities held 6 by the covered financial company for 7 security entitlement holders, any cus8 tomer property, or any assets and li9 abilities associated with any trust or 10 custody business) without obtaining 11 any approval, assignment, or consent 12 with respect to such transfer. 13 (ii) FEDERAL AGENCY APPROVAL; 14 ANTITRUST REVIEW.—With respect to a 15 transaction described in clause (i)(I) that 16 requires approval by a Federal agency— 17 (I) the transaction may not be 18 consummated before the 5th calendar 19 day after the date of approval by the 20 Federal agency responsible for such 21 approval; 22 (II) if, in connection with any 23 such approval, a report on competitive 24 factors is required, the Federal agency 25 responsible for such approval shall 221 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 promptly notify the Attorney General 2 of the United States of the proposed 3 transaction, and the Attorney General 4 shall provide the required report not 5 later than 10 days after the date of 6 the request; and 7 (III) if notification under section 8 7A of the Clayton Act is required with 9 respect to such transaction, then the 10 required waiting period shall end on 11 the 15th day after the date on which 12 the Attorney General and the Federal 13 Trade Commission receive such notifi14 cation, unless the waiting period is 15 terminated earlier under subsection 16 (b)(2) of such section 7A, or is ex17 tended pursuant to subsection (e)(2) 18 of such section 7A. 19 (iii) SETOFF.—Subject to the other 20 provisions of this title, any transferee of 21 assets from a receiver, including a bridge 22 financial company, shall be subject to such 23 claims or rights as would prevail over the 24 rights of such transferee in such assets 25 under applicable noninsolvency law. 222 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (H) PAYMENT OF VALID OBLIGATIONS.— 2 The Corporation, as receiver for a covered fi3 nancial company, shall, to the extent that funds 4 are available, pay all valid obligations of the 5 covered financial company that are due and 6 payable at the time of the appointment of the 7 Corporation as receiver, in accordance with the 8 prescriptions and limitations of this title. 9 (I) APPLICABLE NONINSOLVENCY LAW.— 10 Except as may otherwise be provided in this 11 title, the applicable noninsolvency law shall be 12 determined by the noninsolvency choice of law 13 rules otherwise applicable to the claims, rights, 14 titles, persons, or entities at issue. 15 (J) SUBPOENA AUTHORITY.— 16 (i) IN GENERAL.—The Corporation, 17 as receiver for a covered financial com18 pany, may, for purposes of carrying out 19 any power, authority, or duty with respect 20 to the covered financial company (includ21 ing determining any claim against the cov22 ered financial company and determining 23 and realizing upon any asset of any person 24 in the course of collecting money due the 25 covered financial company), exercise any 223 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 power established under section 8(n) of the 2 Federal Deposit Insurance Act, as if the 3 Corporation were the appropriate Federal 4 banking agency for the covered financial 5 company, and the covered financial com6 pany were an insured depository institu7 tion. 8 (ii) RULE OF CONSTRUCTION.—This 9 subparagraph may not be construed as 10 limiting any rights that the Corporation, in 11 any capacity, might otherwise have to exer12 cise any powers described in clause (i) or 13 under any other provision of law. 14 (K) INCIDENTAL POWERS.—The Corpora15 tion, as receiver for a covered financial com16 pany, may exercise all powers and authorities 17 specifically granted to receivers under this title, 18 and such incidental powers as shall be nec19 essary to carry out such powers under this title. 20 (L) UTILIZATION OF PRIVATE SECTOR.— 21 In carrying out its responsibilities in the man22 agement and disposition of assets from the cov23 ered financial company, the Corporation, as re24 ceiver for a covered financial company, may uti25 lize the services of private persons, including 224 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 real estate and loan portfolio asset manage2 ment, property management, auction mar3 keting, legal, and brokerage services, if such 4 services are available in the private sector, and 5 the Corporation determines that utilization of 6 such services is practicable, efficient, and cost 7 effective. 8 (M) SHAREHOLDERS AND CREDITORS OF 9 COVERED FINANCIAL COMPANY.—Notwith10 standing any other provision of law, the Cor11 poration, as receiver for a covered financial 12 company, shall succeed by operation of law to 13 the rights, titles, powers, and privileges de14 scribed in subparagraph (A), and shall termi15 nate all rights and claims that the stockholders 16 and creditors of the covered financial company 17 may have against the assets of the covered fi18 nancial company or the Corporation arising out 19 of their status as stockholders or creditors, ex20 cept for their right to payment, resolution, or 21 other satisfaction of their claims, as permitted 22 under this section. The Corporation shall en23 sure that shareholders and unsecured creditors 24 bear losses, consistent with the priority of 25 claims provisions under this section. 225 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (N) COORDINATION WITH FOREIGN FINAN2 CIAL AUTHORITIES.—The Corporation, as re3 ceiver for a covered financial company, shall co4 ordinate, to the maximum extent possible, with 5 the appropriate foreign financial authorities re6 garding the orderly liquidation of any covered 7 financial company that has assets or operations 8 in a country other than the United States. 9 (O) RESTRICTION ON TRANSFERS.— 10 (i) SELECTION OF ACCOUNTS FOR 11 TRANSFER.—If the Corporation establishes 12 one or more bridge financial companies 13 with respect to a covered broker or dealer, 14 the Corporation shall transfer to one of 15 such bridge financial companies, all cus16 tomer accounts of the covered broker or 17 dealer, and all associated customer name 18 securities and customer property, unless 19 the Corporation, after consulting with the 20 Commission and SIPC, determines that— 21 (I) the customer accounts, cus22 tomer name securities, and customer 23 property are likely to be promptly 24 transferred to another broker or deal25 er that is registered with the Commis226 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 sion under section 15(b) of the Secu2 rities Exchange Act of 1934 (15 3 U.S.C. 73o(b)) and is a member of 4 SIPC; or 5 (II) the transfer of the accounts 6 to a bridge financial company would 7 materially interfere with the ability of 8 the Corporation to avoid or mitigate 9 serious adverse effects on financial 10 stability or economic conditions in the 11 United States. 12 (ii) TRANSFER OF PROPERTY.—SIPC, 13 as trustee for the liquidation of the covered 14 broker or dealer, and the Commission shall 15 provide any and all reasonable assistance 16 necessary to complete such transfers by 17 the Corporation. 18 (iii) CUSTOMER CONSENT AND COURT 19 APPROVAL NOT REQUIRED.—Neither cus20 tomer consent nor court approval shall be 21 required to transfer any customer accounts 22 or associated customer name securities or 23 customer property to a bridge financial 24 company in accordance with this section. 227 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (iv) NOTIFICATION OF SIPC AND 2 SHARING OF INFORMATION.—The Corpora3 tion shall identify to SIPC the customer 4 accounts and associated customer name se5 curities and customer property transferred 6 to the bridge financial company. The Cor7 poration and SIPC shall cooperate in the 8 sharing of any information necessary for 9 each entity to discharge its obligations 10 under this title and under the Securities 11 Investor Protection Act of 1970 (15 U.S.C. 12 78aaa et seq.) including by providing ac13 cess to the books and records of the cov14 ered financial company and any bridge fi15 nancial company established in accordance 16 with this title. 17 (2) DETERMINATION OF CLAIMS.— 18 (A) IN GENERAL.—The Corporation, as re19 ceiver for a covered financial company, shall re20 port on claims, as set forth in section 203(c)(3). 21 Subject to paragraph (4) of this subsection, the 22 Corporation, as receiver for a covered financial 23 company, shall determine claims in accordance 24 with the requirements of this subsection and 25 regulations prescribed under section 209. 228 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (B) NOTICE REQUIREMENTS.—The Cor2 poration, as receiver for a covered financial 3 company, in any case involving the liquidation 4 or winding up of the affairs of a covered finan5 cial company, shall— 6 (i) promptly publish a notice to the 7 creditors of the covered financial company 8 to present their claims, together with 9 proof, to the receiver by a date specified in 10 the notice, which shall be not earlier than 11 90 days after the date of publication of 12 such notice; and 13 (ii) republish such notice 1 month and 14 2 months, respectively, after the date of 15 publication under clause (i). 16 (C) MAILING REQUIRED.—The Corpora17 tion as receiver shall mail a notice similar to 18 the notice published under clause (i) or (ii) of 19 subparagraph (B), at the time of such publica20 tion, to any creditor shown on the books and 21 records of the covered financial company— 22 (i) at the last address of the creditor 23 appearing in such books; 24 (ii) in any claim filed by the claimant; 25 or 229 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (iii) upon discovery of the name and 2 address of a claimant not appearing on the 3 books and records of the covered financial 4 company, not later than 30 days after the 5 date of the discovery of such name and ad6 dress. 7 (3) PROCEDURES FOR RESOLUTION OF 8 CLAIMS.— 9 (A) DECISION PERIOD.— 10 (i) IN GENERAL.—Prior to the 180th 11 day after the date on which a claim 12 against a covered financial company is 13 filed with the Corporation as receiver, or 14 such later date as may be agreed as pro15 vided in clause (ii), the Corporation shall 16 notify the claimant whether it allows or 17 disallows the claim, in accordance with 18 subparagraphs (B), (C), and (D). 19 (ii) EXTENSION OF TIME.—By written 20 agreement executed not later than 180 21 days after the date on which a claim 22 against a covered financial company is 23 filed with the Corporation, the period de24 scribed in clause (i) may be extended by 25 written agreement between the claimant 230 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 and the Corporation. Failure to notify the 2 claimant of any disallowance within the 3 time period set forth in clause (i), as it 4 may be extended by agreement under this 5 clause, shall be deemed to be a disallow6 ance of such claim, and the claimant may 7 file or continue an action in court, as pro8 vided in paragraph (4). 9 (iii) MAILING OF NOTICE SUFFI10 CIENT.—The requirements of clause (i) 11 shall be deemed to be satisfied if the notice 12 of any decision with respect to any claim 13 is mailed to the last address of the claim14 ant which appears— 15 (I) on the books, records, or both 16 of the covered financial company; 17 (II) in the claim filed by the 18 claimant; or 19 (III) in documents submitted in 20 proof of the claim. 21 (iv) CONTENTS OF NOTICE OF DIS22 ALLOWANCE.—If the Corporation as re23 ceiver disallows any claim filed under 24 clause (i), the notice to the claimant shall 25 contain— 231 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (I) a statement of each reason 2 for the disallowance; and 3 (II) the procedures required to 4 file or continue an action in court, as 5 provided in paragraph (4). 6 (B) ALLOWANCE OF PROVEN CLAIM.—The 7 receiver shall allow any claim received by the 8 receiver on or before the date specified in the 9 notice under paragraph (2)(B)(i), which is 10 proved to the satisfaction of the receiver. 11 (C) DISALLOWANCE OF CLAIMS FILED 12 AFTER END OF FILING PERIOD.— 13 (i) IN GENERAL.—Except as provided 14 in clause (ii), claims filed after the date 15 specified in the notice published under 16 paragraph (2)(B)(i) shall be disallowed, 17 and such disallowance shall be final. 18 (ii) CERTAIN EXCEPTIONS.—Clause 19 (i) shall not apply with respect to any 20 claim filed by a claimant after the date 21 specified in the notice published under 22 paragraph (2)(B)(i), and such claim may 23 be considered by the receiver under sub24 paragraph (B), if— 232 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (I) the claimant did not receive 2 notice of the appointment of the re3 ceiver in time to file such claim before 4 such date; and 5 (II) such claim is filed in time to 6 permit payment of such claim. 7 (D) AUTHORITY TO DISALLOW CLAIMS.— 8 (i) IN GENERAL.—The Corporation 9 may disallow any portion of any claim by 10 a creditor or claim of a security, pref11 erence, setoff, or priority which is not 12 proved to the satisfaction of the Corpora13 tion. 14 (ii) PAYMENTS TO UNDERSECURED 15 CREDITORS.—In the case of a claim 16 against a covered financial company that is 17 secured by any property or other asset of 18 such covered financial company, the re19 ceiver— 20 (I) may treat the portion of such 21 claim which exceeds an amount equal 22 to the fair market value of such prop23 erty or other asset as an unsecured 24 claim; and 233 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (II) may not make any payment 2 with respect to such unsecured por3 tion of the claim, other than in con4 nection with the disposition of all 5 claims of unsecured creditors of the 6 covered financial company. 7 (iii) EXCEPTIONS.—No provision of 8 this paragraph shall apply with respect 9 to— 10 (I) any extension of credit from 11 any Federal reserve bank, or the Cor12 poration, to any covered financial 13 company; or 14 (II) subject to clause (ii), any le15 gally enforceable and perfected secu16 rity interest in the assets of the cov17 ered financial company securing any 18 such extension of credit. 19 (E) LEGAL EFFECT OF FILING.— 20 (i) STATUTE OF LIMITATIONS 21 TOLLED.—For purposes of any applicable 22 statute of limitations, the filing of a claim 23 with the receiver shall constitute a com24 mencement of an action. 234 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (ii) NO PREJUDICE TO OTHER AC2 TIONS.—Subject to paragraph (8), the fil3 ing of a claim with the receiver shall not 4 prejudice any right of the claimant to con5 tinue any action which was filed before the 6 date of appointment of the receiver for the 7 covered financial company. 8 (4) JUDICIAL DETERMINATION OF CLAIMS.— 9 (A) IN GENERAL.—Subject to subpara10 graph (B), a claimant may file suit on a claim 11 (or continue an action commenced before the 12 date of appointment of the Corporation as re13 ceiver) in the district or territorial court of the 14 United States for the district within which the 15 principal place of business of the covered finan16 cial company is located (and such court shall 17 have jurisdiction to hear such claim). 18 (B) TIMING.—A claim under subparagraph 19 (A) may be filed before the end of the 60-day 20 period beginning on the earlier of— 21 (i) the end of the period described in 22 paragraph (3)(A)(i) (or, if extended by 23 agreement of the Corporation and the 24 claimant, the period described in para25 graph (3)(A)(ii)) with respect to any claim 235 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 against a covered financial company for 2 which the Corporation is receiver; or 3 (ii) the date of any notice of disallow4 ance of such claim pursuant to paragraph 5 (3)(A)(i). 6 (C) STATUTE OF LIMITATIONS.—If any 7 claimant fails to file suit on such claim (or to 8 continue an action on such claim commenced 9 before the date of appointment of the Corpora10 tion as receiver) prior to the end of the 60-day 11 period described in subparagraph (B), the claim 12 shall be deemed to be disallowed (other than 13 any portion of such claim which was allowed by 14 the receiver) as of the end of such period, such 15 disallowance shall be final, and the claimant 16 shall have no further rights or remedies with re17 spect to such claim. 18 (5) EXPEDITED DETERMINATION OF CLAIMS.— 19 (A) PROCEDURE REQUIRED.—The Cor20 poration shall establish a procedure for expe21 dited relief outside of the claims process estab22 lished under paragraph (3), for any claimant 23 that alleges— 24 (i) having a legally valid and enforce25 able or perfected security interest in prop236 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 erty of a covered financial company or con2 trol of any legally valid and enforceable se3 curity entitlement in respect of any asset 4 held by the covered financial company for 5 which the Corporation has been appointed 6 receiver; and 7 (ii) that irreparable injury will occur 8 if the claims procedure established under 9 paragraph (3) is followed. 10 (B) DETERMINATION PERIOD.—Prior to 11 the end of the 90-day period beginning on the 12 date on which a claim is filed in accordance 13 with the procedures established pursuant to 14 subparagraph (A), the Corporation shall— 15 (i) determine— 16 (I) whether to allow or disallow 17 such claim, or any portion thereof; or 18 (II) whether such claim should be 19 determined pursuant to the proce20 dures established pursuant to para21 graph (3); 22 (ii) notify the claimant of the deter23 mination; and 24 (iii) if the claim is disallowed, provide 25 a statement of each reason for the dis237 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 allowance and the procedure for obtaining 2 a judicial determination. 3 (C) PERIOD FOR FILING OR RENEWING 4 SUIT.—Any claimant who files a request for ex5 pedited relief shall be permitted to file suit (or 6 continue a suit filed before the date of appoint7 ment of the Corporation as receiver seeking a 8 determination of the rights of the claimant with 9 respect to such security interest (or such secu10 rity entitlement) after the earlier of— 11 (i) the end of the 90-day period begin12 ning on the date of the filing of a request 13 for expedited relief; or 14 (ii) the date on which the Corporation 15 denies the claim or a portion thereof. 16 (D) STATUTE OF LIMITATIONS.—If an ac17 tion described in subparagraph (C) is not filed, 18 or the motion to renew a previously filed suit is 19 not made, before the end of the 30-day period 20 beginning on the date on which such action or 21 motion may be filed in accordance with sub22 paragraph (C), the claim shall be deemed to be 23 disallowed as of the end of such period (other 24 than any portion of such claim which was al25 lowed by the receiver), such disallowance shall 238 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 be final, and the claimant shall have no further 2 rights or remedies with respect to such claim. 3 (E) LEGAL EFFECT OF FILING.— 4 (i) STATUTE OF LIMITATIONS 5 TOLLED.—For purposes of any applicable 6 statute of limitations, the filing of a claim 7 with the receiver shall constitute a com8 mencement of an action. 9 (ii) NO PREJUDICE TO OTHER AC10 TIONS.—Subject to paragraph (8), the fil11 ing of a claim with the receiver shall not 12 prejudice any right of the claimant to con13 tinue any action which was filed before the 14 appointment of the Corporation as receiver 15 for the covered financial company. 16 (6) AGREEMENTS AGAINST INTEREST OF THE 17 RECEIVER.—No agreement that tends to diminish or 18 defeat the interest of the Corporation as receiver in 19 any asset acquired by the receiver under this section 20 shall be valid against the receiver, unless such agree21 ment— 22 (A) is in writing; 23 (B) was executed by an authorized officer 24 or representative of the covered financial com239 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 pany, or confirmed in the ordinary course of 2 business by the covered financial company; and 3 (C) has been, since the time of its execu4 tion, an official record of the company or the 5 party claiming under the agreement provides 6 documentation, acceptable to the receiver, of 7 such agreement and its authorized execution or 8 confirmation by the covered financial company. 9 (7) PAYMENT OF CLAIMS.— 10 (A) IN GENERAL.—Subject to subpara11 graph (B), the Corporation as receiver may, in 12 its discretion and to the extent that funds are 13 available, pay creditor claims, in such manner 14 and amounts as are authorized under this sec15 tion, which are— 16 (i) allowed by the receiver; 17 (ii) approved by the receiver pursuant 18 to a final determination pursuant to para19 graph (3) or (5), as applicable; or 20 (iii) determined by the final judgment 21 of a court of competent jurisdiction. 22 (B) LIMITATION.—A creditor shall, in no 23 event, receive less than the amount that the 24 creditor is entitled to receive under paragraphs 25 (2) and (3) of subsection (d), as applicable. 240 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (C) PAYMENT OF DIVIDENDS ON 2 CLAIMS.—The Corporation as receiver may, in 3 its sole discretion, and to the extent otherwise 4 permitted by this section, pay dividends on 5 proven claims at any time, and no liability shall 6 attach to the Corporation as receiver, by reason 7 of any such payment or for failure to pay divi8 dends to a claimant whose claim is not proved 9 at the time of any such payment. 10 (D) RULEMAKING BY THE CORPORA11 TION.—The Corporation may prescribe such 12 rules, including definitions of terms, as the Cor13 poration deems appropriate to establish an in14 terest rate for or to make payments of post-in15 solvency interest to creditors holding proven 16 claims against the receivership estate of a cov17 ered financial company, except that no such in18 terest shall be paid until the Corporation as re19 ceiver has satisfied the principal amount of all 20 creditor claims. 21 (8) SUSPENSION OF LEGAL ACTIONS.— 22 (A) IN GENERAL.—After the appointment 23 of the Corporation as receiver for a covered fi24 nancial company, the Corporation may request 25 a stay in any judicial action or proceeding in 241 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 which such covered financial company is or be2 comes a party, for a period of not to exceed 90 3 days. 4 (B) GRANT OF STAY BY ALL COURTS RE5 QUIRED.—Upon receipt of a request by the Cor6 poration pursuant to subparagraph (A), the 7 court shall grant such stay as to all parties. 8 (9) ADDITIONAL RIGHTS AND DUTIES.— 9 (A) PRIOR FINAL ADJUDICATION.—The 10 Corporation shall abide by any final, non-ap11 pealable judgment of any court of competent ju12 risdiction that was rendered before the appoint13 ment of the Corporation as receiver. 14 (B) RIGHTS AND REMEDIES OF RE15 CEIVER.—In the event of any appealable judg16 ment, the Corporation as receiver shall— 17 (i) have all the rights and remedies 18 available to the covered financial company 19 (before the date of appointment of the Cor20 poration as receiver under section 202) 21 and the Corporation, including removal to 22 Federal court and all appellate rights; and 23 (ii) not be required to post any bond 24 in order to pursue such remedies. 242 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (C) NO ATTACHMENT OR EXECUTION.—No 2 attachment or execution may be issued by any 3 court upon assets in the possession of the Cor4 poration as receiver for a covered financial com5 pany. 6 (D) LIMITATION ON JUDICIAL REVIEW.— 7 Except as otherwise provided in this title, no 8 court shall have jurisdiction over— 9 (i) any claim or action for payment 10 from, or any action seeking a determina11 tion of rights with respect to, the assets of 12 any covered financial company for which 13 the Corporation has been appointed re14 ceiver, including any assets which the Cor15 poration may acquire from itself as such 16 receiver; or 17 (ii) any claim relating to any act or 18 omission of such covered financial company 19 or the Corporation as receiver. 20 (E) DISPOSITION OF ASSETS.—In exer21 cising any right, power, privilege, or authority 22 as receiver in connection with any covered fi23 nancial company for which the Corporation is 24 acting as receiver under this section, the Cor25 poration shall, to the greatest extent prac243 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 ticable, conduct its operations in a manner 2 that— 3 (i) maximizes the net present value 4 return from the sale or disposition of such 5 assets; 6 (ii) minimizes the amount of any loss 7 realized in the resolution of cases; 8 (iii) mitigates the potential for serious 9 adverse effects to the financial system; 10 (iv) ensures timely and adequate com11 petition and fair and consistent treatment 12 of offerors; and 13 (v) prohibits discrimination on the 14 basis of race, sex, or ethnic group in the 15 solicitation and consideration of offers. 16 (10) STATUTE OF LIMITATIONS FOR ACTIONS 17 BROUGHT BY RECEIVER.— 18 (A) IN GENERAL.—Notwithstanding any 19 provision of any contract, the applicable statute 20 of limitations with regard to any action brought 21 by the Corporation as receiver for a covered fi22 nancial company shall be— 23 (i) in the case of any contract claim, 24 the longer of— 244 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (I) the 6-year period beginning 2 on the date on which the claim ac3 crues; or 4 (II) the period applicable under 5 State law; and 6 (ii) in the case of any tort claim, the 7 longer of— 8 (I) the 3-year period beginning 9 on the date on which the claim ac10 crues; or 11 (II) the period applicable under 12 State law. 13 (B) DATE ON WHICH A CLAIM ACCRUES.— 14 For purposes of subparagraph (A), the date on 15 which the statute of limitations begins to run 16 on any claim described in subparagraph (A) 17 shall be the later of— 18 (i) the date of the appointment of the 19 Corporation as receiver under this title; or 20 (ii) the date on which the cause of ac21 tion accrues. 22 (C) REVIVAL OF EXPIRED STATE CAUSES 23 OF ACTION.— 24 (i) IN GENERAL.—In the case of any 25 tort claim described in clause (ii) for which 245 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 the applicable statute of limitations under 2 State law has expired not more than 5 3 years before the date of appointment of the 4 Corporation as receiver for a covered fi5 nancial company, the Corporation may 6 bring an action as receiver on such claim 7 without regard to the expiration of the 8 statute of limitations. 9 (ii) CLAIMS DESCRIBED.—A tort 10 claim referred to in clause (i) is a claim 11 arising from fraud, intentional misconduct 12 resulting in unjust enrichment, or inten13 tional misconduct resulting in substantial 14 loss to the covered financial company. 15 (11) AVOIDABLE TRANSFERS.— 16 (A) FRAUDULENT TRANSFERS.—The Cor17 poration, as receiver for any covered financial 18 company, may avoid a transfer of any interest 19 of the covered financial company in property, or 20 any obligation incurred by the covered financial 21 company, that was made or incurred at or with22 in 2 years before the date on which the Cor23 poration was appointed receiver, if— 24 (i) the covered financial company vol25 untarily or involuntarily— 246 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (I) made such transfer or in2 curred such obligation with actual in3 tent to hinder, delay, or defraud any 4 entity to which the covered financial 5 company was or became, on or after 6 the date on which such transfer was 7 made or such obligation was incurred, 8 indebted; or 9 (II) received less than a reason10 ably equivalent value in exchange for 11 such transferor obligation; and 12 (ii) the covered financial company vol13 untarily or involuntarily— 14 (I) was insolvent on the date that 15 such transfer was made or such obli16 gation was incurred, or became insol17 vent as a result of such transfer or 18 obligation; 19 (II) was engaged in business or a 20 transaction, or was about to engage in 21 business or a transaction, for which 22 any property remaining with the cov23 ered financial company was an unrea24 sonably small capital; 247 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (III) intended to incur, or be2 lieved that the covered financial com3 pany would incur, debts that would be 4 beyond the ability of the covered fi5 nancial company to pay as such debts 6 matured; or 7 (IV) made such transfer to or for 8 the benefit of an insider, or incurred 9 such obligation to or for the benefit of 10 an insider, under an employment con11 tract and not in the ordinary course 12 of business. 13 (B) PREFERENTIAL TRANSFERS.—The 14 Corporation as receiver for any covered finan15 cial company may avoid a transfer of an inter16 est of the covered financial company in prop17 erty— 18 (i) to or for the benefit of a creditor; 19 (ii) for or on account of an antecedent 20 debt that was owed by the covered finan21 cial company before the transfer was made; 22 (iii) that was made while the covered 23 financial company was insolvent; 24 (iv) that was made— 248 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (I) 90 days or less before the 2 date on which the Corporation was 3 appointed receiver; or 4 (II) more than 90 days, but less 5 than 1 year before the date on which 6 the Corporation was appointed re7 ceiver, if such creditor at the time of 8 the transfer was an insider; and 9 (v) that enables the creditor to receive 10 more than the creditor would receive if— 11 (I) the covered financial company 12 had been liquidated under chapter 7 13 of the Bankruptcy Code; 14 (II) the transfer had not been 15 made; and 16 (III) the creditor received pay17 ment of such debt to the extent pro18 vided by the provisions of chapter 7 of 19 the Bankruptcy Code. 20 (C) POST-RECEIVERSHIP TRANSACTIONS.— 21 The Corporation as receiver for any covered fi22 nancial company may avoid a transfer of prop23 erty of the receivership that occurred after the 24 Corporation was appointed receiver that was 249 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 not authorized under this title by the Corpora2 tion as receiver. 3 (D) RIGHT OF RECOVERY.—To the extent 4 that a transfer is avoided under subparagraph 5 (A), (B), or (C), the Corporation may recover, 6 for the benefit of the covered financial com7 pany, the property transferred or, if a court so 8 orders, the value of such property (at the time 9 of such transfer) from— 10 (i) the initial transferee of such trans11 fer or the person for whose benefit such 12 transfer was made; or 13 (ii) any immediate or mediate trans14 feree of any such initial transferee. 15 (E) RIGHTS OF TRANSFEREE OR OBLI16 GEE.—The Corporation may not recover under 17 subparagraph (D)(ii) from— 18 (i) any transferee that takes for value, 19 including in satisfaction of or to secure a 20 present or antecedent debt, in good faith, 21 and without knowledge of the voidability of 22 the transfer avoided; or 23 (ii) any immediate or mediate good 24 faith transferee of such transferee. 250 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (F) DEFENSES.—Subject to the other pro2 visions of this title— 3 (i) a transferee or obligee from which 4 the Corporation seeks to recover a transfer 5 or to avoid an obligation under subpara6 graph (A), (B), (C), or (D) shall have the 7 same defenses available to a transferee or 8 obligee from which a trustee seeks to re9 cover a transfer or avoid an obligation 10 under sections 547, 548, and 549 of the 11 Bankruptcy Code; and 12 (ii) the authority of the Corporation 13 to recover a transfer or avoid an obligation 14 shall be subject to subsections (b) and (c) 15 of section 546, section 547(c), and section 16 548(c) of the Bankruptcy Code. 17 (G) RIGHTS UNDER THIS SECTION.—The 18 rights of the Corporation as receiver under this 19 section shall be superior to any rights of a 20 trustee or any other party (other than a Fed21 eral agency) under the Bankruptcy Code. 22 (H) RULES OF CONSTRUCTION; DEFINI23 TIONS.—For purposes of— 24 (i) subparagraphs (A) and (B)— 251 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (I) the term ‘‘insider’’ has the 2 same meaning as in section 101(31) 3 of the Bankruptcy Code; 4 (II) a transfer is made when 5 such transfer is so perfected that a 6 bona fide purchaser from the covered 7 financial company against whom ap8 plicable law permits such transfer to 9 be perfected cannot acquire an inter10 est in the property transferred that is 11 superior to the interest in such prop12 erty of the transferee, but if such 13 transfer is not so perfected before the 14 date on which the Corporation is ap15 pointed as receiver for the covered fi16 nancial company, such transfer is 17 made immediately before the date of 18 such appointment; and 19 (III) the term ‘‘value’’ means 20 property, or satisfaction or securing of 21 a present or antecedent debt of the 22 covered financial company, but does 23 not include an unperformed promise 24 to furnish support to the covered fi25 nancial company; and 252 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (ii) subparagraph (B)— 2 (I) the covered financial company 3 is presumed to have been insolvent on 4 and during the 90-day period imme5 diately preceding the date of appoint6 ment of the Corporation as receiver; 7 and 8 (II) the term ‘‘insolvent’’ has the 9 same meaning as in section 101(32) 10 of the Bankruptcy Code. 11 (12) SETOFF.— 12 (A) GENERALLY.—Except as otherwise 13 provided in this title, any right of a creditor to 14 offset a mutual debt owed by the creditor to 15 any covered financial company that arose before 16 the Corporation was appointed as receiver for 17 the covered financial company against a claim 18 of such creditor may be asserted if enforceable 19 under applicable noninsolvency law, except to 20 the extent that— 21 (i) the claim of the creditor against 22 the covered financial company is dis23 allowed; 253 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (ii) the claim was transferred, by an 2 entity other than the covered financial 3 company, to the creditor— 4 (I) after the Corporation was ap5 pointed as receiver of the covered fi6 nancial company; or 7 (II)(aa) after the 90-day period 8 preceding the date on which the Cor9 poration was appointed as receiver for 10 the covered financial company; and 11 (bb) while the covered financial 12 company was insolvent (except for a 13 setoff in connection with a qualified 14 financial contract); or 15 (iii) the debt owed to the covered fi16 nancial company was incurred by the cov17 ered financial company— 18 (I) after the 90-day period pre19 ceding the date on which the Corpora20 tion was appointed as receiver for the 21 covered financial company; 22 (II) while the covered financial 23 company was insolvent; and 24 (III) for the purpose of obtaining 25 a right of setoff against the covered 254 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 financial company (except for a setoff 2 in connection with a qualified finan3 cial contract). 4 (B) INSUFFICIENCY.— 5 (i) IN GENERAL.—Except with respect 6 to a setoff in connection with a qualified fi7 nancial contract, if a creditor offsets a mu8 tual debt owed to the covered financial 9 company against a claim of the covered fi10 nancial company on or within the 90-day 11 period preceding the date on which the 12 Corporation is appointed as receiver for 13 the covered financial company, the Cor14 poration may recover from the creditor the 15 amount so offset, to the extent that any in16 sufficiency on the date of such setoff is less 17 than the insufficiency on the later of— 18 (I) the date that is 90 days be19 fore the date on which the Corpora20 tion is appointed as receiver for the 21 covered financial company; or 22 (II) the first day on which there 23 is an insufficiency during the 90-day 24 period preceding the date on which 25 the Corporation is appointed as re255 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 ceiver for the covered financial com2 pany. 3 (ii) DEFINITION OF INSUFFI4 CIENCY.—In this subparagraph, the term 5 ‘‘insufficiency’’ means the amount, if any, 6 by which a claim against the covered finan7 cial company exceeds a mutual debt owed 8 to the covered financial company by the 9 holder of such claim. 10 (C) INSOLVENCY.—The term ‘‘insolvent’’ 11 has the same meaning as in section 101(32) of 12 the Bankruptcy Code. 13 (D) PRESUMPTION OF INSOLVENCY.—For 14 purposes of this paragraph, the covered finan15 cial company is presumed to have been insol16 vent on and during the 90-day period preceding 17 the date of appointment of the Corporation as 18 receiver. 19 (E) LIMITATION.—Nothing in this para20 graph (12) shall be the basis for any right of 21 setoff where no such right exists under applica22 ble noninsolvency law. 23 (F) PRIORITY CLAIM.—Except as other24 wise provided in this title, the Corporation as 25 receiver for the covered financial company may 256 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 sell or transfer any assets free and clear of the 2 setoff rights of any party, except that such 3 party shall be entitled to a claim, subordinate 4 to the claims payable under subparagraphs (A), 5 (B), (C), and (D) of subsection (b)(1), but sen6 ior to all other unsecured liabilities defined in 7 subsection (b)(1)(E), in an amount equal to the 8 value of such setoff rights. 9 (13) ATTACHMENT OF ASSETS AND OTHER IN10 JUNCTIVE RELIEF.—Subject to paragraph (14), any 11 court of competent jurisdiction may, at the request 12 of the Corporation as receiver for a covered financial 13 company, issue an order in accordance with Rule 65 14 of the Federal Rules of Civil Procedure, including an 15 order placing the assets of any person designated by 16 the Corporation under the control of the court and 17 appointing a trustee to hold such assets. 18 (14) STANDARDS.— 19 (A) SHOWING.—Rule 65 of the Federal 20 Rules of Civil Procedure shall apply with re21 spect to any proceeding under paragraph (13), 22 without regard to the requirement that the ap23 plicant show that the injury, loss, or damage is 24 irreparable and immediate. 257 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (B) STATE PROCEEDING.—If, in the case 2 of any proceeding in a State court, the court 3 determines that rules of civil procedure avail4 able under the laws of the State provide sub5 stantially similar protections of the right of the 6 parties to due process as provided under Rule 7 65 (as modified with respect to such proceeding 8 by subparagraph (A)), the relief sought by the 9 Corporation pursuant to paragraph (14) may be 10 requested under the laws of such State. 11 (15) TREATMENT OF CLAIMS ARISING FROM 12 BREACH OF CONTRACTS EXECUTED BY THE COR13 PORATION AS RECEIVER.—Notwithstanding any 14 other provision of this title, any final and non-ap15 pealable judgment for monetary damages entered 16 against the Corporation as receiver for a covered fi17 nancial company for the breach of an agreement exe18 cuted or approved by the Corporation after the date 19 of its appointment shall be paid as an administrative 20 expense of the receiver. Nothing in this paragraph 21 shall be construed to limit the power of a receiver 22 to exercise any rights under contract or law, includ23 ing to terminate, breach, cancel, or otherwise dis24 continue such agreement. 258 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (16) ACCOUNTING AND RECORDKEEPING RE2 QUIREMENTS.— 3 (A) IN GENERAL.—The Corporation as re4 ceiver for a covered financial company shall, 5 consistent with the accounting and reporting 6 practices and procedures established by the 7 Corporation, maintain a full accounting of each 8 receivership or other disposition of any covered 9 financial company. 10 (B) ANNUAL ACCOUNTING OR REPORT.— 11 With respect to each receivership to which the 12 Corporation is appointed, the Corporation shall 13 make an annual accounting or report, as appro14 priate, available to the Secretary and the Comp15 troller General of the United States. 16 (C) AVAILABILITY OF REPORTS.—Any re17 port prepared pursuant to subparagraph (B) 18 and section 203(c)(3) shall be made available to 19 the public by the Corporation. 20 (D) RECORDKEEPING REQUIREMENT.— 21 (i) IN GENERAL.—The Corporation 22 shall prescribe such regulations and estab23 lish such retention schedules as are nec24 essary to maintain the documents and 25 records of the Corporation generated in ex259 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 ercising the authorities of this title and the 2 records of a covered financial company for 3 which the Corporation is appointed re4 ceiver, with due regard for— 5 (I) the avoidance of duplicative 6 record retention; and 7 (II) the expected evidentiary 8 needs of the Corporation as receiver 9 for a covered financial company and 10 the public regarding the records of 11 covered financial companies. 12 (ii) RETENTION OF RECORDS.—Un13 less otherwise required by applicable Fed14 eral law or court order, the Corporation 15 may not, at any time, destroy any records 16 that are subject to clause (i). 17 (iii) RECORDS DEFINED.—As used in 18 this subparagraph, the terms ‘‘records’’ 19 and ‘‘records of a covered financial com20 pany’’ mean any document, book, paper, 21 map, photograph, microfiche, microfilm, 22 computer or electronically-created record 23 generated or maintained by the covered fi24 nancial company in the course of and nec25 essary to its transaction of business. 260 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (b) PRIORITY OF EXPENSES AND UNSECURED 2 CLAIMS.— 3 (1) IN GENERAL.—Unsecured claims against a 4 covered financial company, or the Corporation as re5 ceiver for such covered financial company under this 6 section, that are proven to the satisfaction of the re7 ceiver shall have priority in the following order: 8 (A) Administrative expenses of the re9 ceiver. 10 (B) Any amounts owed to the United 11 States, unless the United States agrees or con12 sents otherwise. 13 (C) Wages, salaries, or commissions, in14 cluding vacation, severance, and sick leave pay 15 earned by an individual (other than an indi16 vidual described in subparagraph (G)), but only 17 to the extent of $11,725 for each individual (as 18 indexed for inflation, by regulation of the Cor19 poration) earned not later than 180 days before 20 the date of appointment of the Corporation as 21 receiver. 22 (D) Contributions owed to employee ben23 efit plans arising from services rendered not 24 later than 180 days before the date of appoint25 ment of the Corporation as receiver, to the ex261 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 tent of the number of employees covered by 2 each such plan, multiplied by $11,725 (as in3 dexed for inflation, by regulation of the Cor4 poration), less the aggregate amount paid to 5 such employees under subparagraph (C), plus 6 the aggregate amount paid by the receivership 7 on behalf of such employees to any other em8 ployee benefit plan. 9 (E) Any other general or senior liability of 10 the covered financial company (which is not a 11 liability described under subparagraph (F), (G), 12 or (H)). 13 (F) Any obligation subordinated to general 14 creditors (which is not an obligation described 15 under subparagraph (G) or (H)). 16 (G) Any wages, salaries, or commissions, 17 including vacation, severance, and sick leave 18 pay earned, owed to senior executives and direc19 tors of the covered financial company. 20 (H) Any obligation to shareholders, mem21 bers, general partners, limited partners, or 22 other persons, with interests in the equity of 23 the covered financial company arising as a re24 sult of their status as shareholders, members, 25 general partners, limited partners, or other per262 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 sons with interests in the equity of the covered 2 financial company. 3 (2) POST-RECEIVERSHIP FINANCING PRI4 ORITY.—In the event that the Corporation, as re5 ceiver for a covered financial company, is unable to 6 obtain unsecured credit for the covered financial 7 company from commercial sources, the Corporation 8 as receiver may obtain credit or incur debt on the 9 part of the covered financial company, which shall 10 have priority over any or all administrative expenses 11 of the receiver under paragraph (1)(A). 12 (3) CLAIMS OF THE UNITED STATES.—Unse13 cured claims of the United States shall, at a min14 imum, have a higher priority than liabilities of the 15 covered financial company that count as regulatory 16 capital. 17 (4) CREDITORS SIMILARLY SITUATED.—All 18 claimants of a covered financial company that are 19 similarly situated under paragraph (1) shall be 20 treated in a similar manner, except that the Cor21 poration may take any action (including making 22 payments, subject to subsection (o)(1)(D)(i)) that 23 does not comply with this subsection, if— 24 (A) the Corporation determines that such 25 action is necessary— 263 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (i) to maximize the value of the assets 2 of the covered financial company; 3 (ii) to initiate and continue operations 4 essential to implementation of the receiver5 ship or any bridge financial company; 6 (iii) to maximize the present value re7 turn from the sale or other disposition of 8 the assets of the covered financial com9 pany; or 10 (iv) to minimize the amount of any 11 loss realized upon the sale or other disposi12 tion of the assets of the covered financial 13 company; and 14 (B) all claimants that are similarly situ15 ated under paragraph (1) receive not less than 16 the amount provided in paragraphs (2) and (3) 17 of subsection (d). 18 (5) SECURED CLAIMS UNAFFECTED.—This sec19 tion shall not affect secured claims or security enti20 tlements in respect of assets or property held by the 21 covered financial company, except to the extent that 22 the security is insufficient to satisfy the claim, and 23 then only with regard to the difference between the 24 claim and the amount realized from the security. 264 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (6) PRIORITY OF EXPENSES AND UNSECURED 2 CLAIMS IN THE ORDERLY LIQUIDATION OF SIPC 3 MEMBER.—Where the Corporation is appointed as 4 receiver for a covered broker or dealer, unsecured 5 claims against such covered broker or dealer, or the 6 Corporation as receiver for such covered broker or 7 dealer under this section, that are proven to the sat8 isfaction of the receiver under section 205(e), shall 9 have the priority prescribed in paragraph (1), except 10 that— 11 (A) SIPC shall be entitled to recover ad12 ministrative expenses incurred in performing its 13 responsibilities under section 205 on an equal 14 basis with the Corporation, in accordance with 15 paragraph (1)(A); 16 (B) the Corporation shall be entitled to re17 cover any amounts paid to customers or to 18 SIPC pursuant to section 205(f), in accordance 19 with paragraph (1)(B); 20 (C) SIPC shall be entitled to recover any 21 amounts paid out of the SIPC Fund to meet its 22 obligations under section 205 and under the Se23 curities Investor Protection Act of 1970 (15 24 U.S.C. 78aaa et seq.), which claim shall be sub25 ordinate to the claims payable under subpara265 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 graphs (A) and (B) of paragraph (1), but sen2 ior to all other claims; and 3 (D) the Corporation may, after paying any 4 proven claims to customers under section 205 5 and the Securities Investor Protection Act of 6 1970 (15 U.S.C. 78aaa et seq.), and as pro7 vided above, pay dividends on other proven 8 claims, in its discretion, and to the extent that 9 funds are available, in accordance with the pri10 orities set forth in paragraph (1). 11 (c) PROVISIONS RELATING TO CONTRACTS ENTERED 12 INTO BEFORE APPOINTMENT OF RECEIVER.— 13 (1) AUTHORITY TO REPUDIATE CONTRACTS.— 14 In addition to any other rights that a receiver may 15 have, the Corporation as receiver for any covered fi16 nancial company may disaffirm or repudiate any 17 contract or lease— 18 (A) to which the covered financial company 19 is a party; 20 (B) the performance of which the Corpora21 tion as receiver, in the discretion of the Cor22 poration, determines to be burdensome; and 23 (C) the disaffirmance or repudiation of 24 which the Corporation as receiver determines, 25 in the discretion of the Corporation, will pro266 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 mote the orderly administration of the affairs of 2 the covered financial company. 3 (2) TIMING OF REPUDIATION.—The Corpora4 tion, as receiver for any covered financial company, 5 shall determine whether or not to exercise the rights 6 of repudiation under this section within a reasonable 7 period of time. 8 (3) CLAIMS FOR DAMAGES FOR REPUDI9 ATION.— 10 (A) IN GENERAL.—Except as provided in 11 paragraphs (4), (5), and (6) and in subpara12 graphs (C), (D), and (E) of this paragraph, the 13 liability of the Corporation as receiver for a cov14 ered financial company for the disaffirmance or 15 repudiation of any contract pursuant to para16 graph (1) shall be— 17 (i) limited to actual direct compen18 satory damages; and 19 (ii) determined as of— 20 (I) the date of the appointment 21 of the Corporation as receiver; or 22 (II) in the case of any contract 23 or agreement referred to in paragraph 24 (8), the date of the disaffirmance or 267 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 repudiation of such contract or agree2 ment. 3 (B) NO LIABILITY FOR OTHER DAM4 AGES.—For purposes of subparagraph (A), the 5 term ‘‘actual direct compensatory damages’’ 6 does not include— 7 (i) punitive or exemplary damages; 8 (ii) damages for lost profits or oppor9 tunity; or 10 (iii) damages for pain and suffering. 11 (C) MEASURE OF DAMAGES FOR REPUDI12 ATION OF QUALIFIED FINANCIAL CONTRACTS.— 13 In the case of any qualified financial contract 14 or agreement to which paragraph (8) applies, 15 compensatory damages shall be— 16 (i) deemed to include normal and rea17 sonable costs of cover or other reasonable 18 measures of damages utilized in the indus19 tries for such contract and agreement 20 claims; and 21 (ii) paid in accordance with this para22 graph and subsection (d), except as other23 wise specifically provided in this sub24 section. 268 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (D) MEASURE OF DAMAGES FOR REPUDI2 ATION OR DISAFFIRMANCE OF DEBT OBLIGA3 TION.—In the case of any debt for borrowed 4 money or evidenced by a security, actual direct 5 compensatory damages shall be no less than the 6 amount lent plus accrued interest plus any 7 accreted original issue discount as of the date 8 the Corporation was appointed receiver of the 9 covered financial company and, to the extent 10 that an allowed secured claim is secured by 11 property the value of which is greater than the 12 amount of such claim and any accrued interest 13 through the date of repudiation or 14 disaffirmance, such accrued interest pursuant 15 to paragraph (1). 16 (E) MEASURE OF DAMAGES FOR REPUDI17 ATION OR DISAFFIRMANCE OF CONTINGENT OB18 LIGATION.—In the case of any contingent obli19 gation of a covered financial company con20 sisting of any obligation under a guarantee, let21 ter of credit, loan commitment, or similar credit 22 obligation, the Corporation may, by rule or reg23 ulation, prescribe that actual direct compen24 satory damages shall be no less than the esti25 mated value of the claim as of the date the Cor269 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 poration was appointed receiver of the covered 2 financial company, as such value is measured 3 based on the likelihood that such contingent 4 claim would become fixed and the probable 5 magnitude thereof. 6 (4) LEASES UNDER WHICH THE COVERED FI7 NANCIAL COMPANY IS THE LESSEE.— 8 (A) IN GENERAL.—If the Corporation as 9 receiver disaffirms or repudiates a lease under 10 which the covered financial company is the les11 see, the receiver shall not be liable for any dam12 ages (other than damages determined pursuant 13 to subparagraph (B)) for the disaffirmance or 14 repudiation of such lease. 15 (B) PAYMENTS OF RENT.—Notwith16 standing subparagraph (A), the lessor under a 17 lease to which subparagraph (A) would other18 wise apply shall— 19 (i) be entitled to the contractual rent 20 accruing before the later of the date on 21 which— 22 (I) the notice of disaffirmance or 23 repudiation is mailed; or 24 (II) the disaffirmance or repudi25 ation becomes effective, unless the les270 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 sor is in default or breach of the 2 terms of the lease; 3 (ii) have no claim for damages under 4 any acceleration clause or other penalty 5 provision in the lease; and 6 (iii) have a claim for any unpaid rent, 7 subject to all appropriate offsets and de8 fenses, due as of the date of the appoint9 ment which shall be paid in accordance 10 with this paragraph and subsection (d). 11 (5) LEASES UNDER WHICH THE COVERED FI12 NANCIAL COMPANY IS THE LESSOR.— 13 (A) IN GENERAL.—If the Corporation as 14 receiver for a covered financial company repudi15 ates an unexpired written lease of real property 16 of the covered financial company under which 17 the covered financial company is the lessor and 18 the lessee is not, as of the date of such repudi19 ation, in default, the lessee under such lease 20 may either— 21 (i) treat the lease as terminated by 22 such repudiation; or 23 (ii) remain in possession of the lease24 hold interest for the balance of the term of 25 the lease, unless the lessee defaults under 271 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 the terms of the lease after the date of 2 such repudiation. 3 (B) PROVISIONS APPLICABLE TO LESSEE 4 REMAINING IN POSSESSION.—If any lessee 5 under a lease described in subparagraph (A) re6 mains in possession of a leasehold interest pur7 suant to clause (ii) of subparagraph (A)— 8 (i) the lessee— 9 (I) shall continue to pay the con10 tractual rent pursuant to the terms of 11 the lease after the date of the repudi12 ation of such lease; and 13 (II) may offset against any rent 14 payment which accrues after the date 15 of the repudiation of the lease, any 16 damages which accrue after such date 17 due to the nonperformance of any ob18 ligation of the covered financial com19 pany under the lease after such date; 20 and 21 (ii) the Corporation as receiver shall 22 not be liable to the lessee for any damages 23 arising after such date as a result of the 24 repudiation, other than the amount of any 25 offset allowed under clause (i)(II). 272 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (6) CONTRACTS FOR THE SALE OF REAL PROP2 ERTY.— 3 (A) IN GENERAL.—If the receiver repudi4 ates any contract (which meets the require5 ments of subsection (a)(6)) for the sale of real 6 property, and the purchaser of such real prop7 erty under such contract is in possession and is 8 not, as of the date of such repudiation, in de9 fault, such purchaser may either— 10 (i) treat the contract as terminated by 11 such repudiation; or 12 (ii) remain in possession of such real 13 property. 14 (B) PROVISIONS APPLICABLE TO PUR15 CHASER REMAINING IN POSSESSION.—If any 16 purchaser of real property under any contract 17 described in subparagraph (A) remains in pos18 session of such property pursuant to clause (ii) 19 of subparagraph (A)— 20 (i) the purchaser— 21 (I) shall continue to make all 22 payments due under the contract after 23 the date of the repudiation of the con24 tract; and 273 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (II) may offset against any such 2 payments any damages which accrue 3 after such date due to the non4 performance (after such date) of any 5 obligation of the covered financial 6 company under the contract; and 7 (ii) the Corporation as receiver shall— 8 (I) not be liable to the purchaser 9 for any damages arising after such 10 date as a result of the repudiation, 11 other than the amount of any offset 12 allowed under clause (i)(II); 13 (II) deliver title to the purchaser 14 in accordance with the provisions of 15 the contract; and 16 (III) have no obligation under 17 the contract other than the perform18 ance required under subclause (II). 19 (C) ASSIGNMENT AND SALE ALLOWED.— 20 (i) IN GENERAL.—No provision of this 21 paragraph shall be construed as limiting 22 the right of the Corporation as receiver to 23 assign the contract described in subpara24 graph (A) and sell the property, subject to 274 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 the contract and the provisions of this 2 paragraph. 3 (ii) NO LIABILITY AFTER ASSIGNMENT 4 AND SALE.—If an assignment and sale de5 scribed in clause (i) is consummated, the 6 Corporation as receiver shall have no fur7 ther liability under the contract described 8 in subparagraph (A) or with respect to the 9 real property which was the subject of such 10 contract. 11 (7) PROVISIONS APPLICABLE TO SERVICE CON12 TRACTS.— 13 (A) SERVICES PERFORMED BEFORE AP14 POINTMENT.—In the case of any contract for 15 services between any person and any covered fi16 nancial company for which the Corporation has 17 been appointed receiver, any claim of such per18 son for services performed before the date of 19 appointment shall be— 20 (i) a claim to be paid in accordance 21 with subsections (a), (b), and (d); and 22 (ii) deemed to have arisen as of the 23 date on which the receiver was appointed. 24 (B) SERVICES PERFORMED AFTER AP25 POINTMENT AND PRIOR TO REPUDIATION.—If, 275 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 in the case of any contract for services de2 scribed in subparagraph (A), the Corporation as 3 receiver accepts performance by the other per4 son before making any determination to exer5 cise the right of repudiation of such contract 6 under this section— 7 (i) the other party shall be paid under 8 the terms of the contract for the services 9 performed; and 10 (ii) the amount of such payment shall 11 be treated as an administrative expense of 12 the receivership. 13 (C) ACCEPTANCE OF PERFORMANCE NO 14 BAR TO SUBSEQUENT REPUDIATION.—The ac15 ceptance by the Corporation as receiver for 16 services referred to in subparagraph (B) in con17 nection with a contract described in subpara18 graph (B) shall not affect the right of the Cor19 poration as receiver to repudiate such contract 20 under this section at any time after such per21 formance. 22 (8) CERTAIN QUALIFIED FINANCIAL CON23 TRACTS.— 24 (A) RIGHTS OF PARTIES TO CONTRACTS.— 25 Subject to subsection (a)(8) and paragraphs (9) 276 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 and (10) of this subsection, and notwith2 standing any other provision of this section, any 3 other provision of Federal law, or the law of 4 any State, no person shall be stayed or prohib5 ited from exercising— 6 (i) any right that such person has to 7 cause the termination, liquidation, or accel8 eration of any qualified financial contract 9 with a covered financial company which 10 arises upon the date of appointment of the 11 Corporation as receiver for such covered fi12 nancial company or at any time after such 13 appointment; 14 (ii) any right under any security 15 agreement or arrangement or other credit 16 enhancement related to one or more quali17 fied financial contracts described in clause 18 (i); or 19 (iii) any right to offset or net out any 20 termination value, payment amount, or 21 other transfer obligation arising under or 22 in connection with 1 or more contracts or 23 agreements described in clause (i), includ24 ing any master agreement for such con25 tracts or agreements. 277 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (B) APPLICABILITY OF OTHER PROVI2 SIONS.—Subsection (a)(8) shall apply in the 3 case of any judicial action or proceeding 4 brought against the Corporation as receiver re5 ferred to in subparagraph (A), or the subject 6 covered financial company, by any party to a 7 contract or agreement described in subpara8 graph (A)(i) with such covered financial com9 pany. 10 (C) CERTAIN TRANSFERS NOT AVOID11 ABLE.— 12 (i) IN GENERAL.—Notwithstanding 13 subsection (a)(11), (a)(12), or (c)(12), sec14 tion 5242 of the Revised Statutes of the 15 United States, or any other provision of 16 Federal or State law relating to the avoid17 ance of preferential or fraudulent trans18 fers, the Corporation, whether acting as 19 the Corporation or as receiver for a cov20 ered financial company, may not avoid any 21 transfer of money or other property in con22 nection with any qualified financial con23 tract with a covered financial company. 24 (ii) EXCEPTION FOR CERTAIN TRANS25 FERS.—Clause (i) shall not apply to any 278 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 transfer of money or other property in con2 nection with any qualified financial con3 tract with a covered financial company if 4 the transferee had actual intent to hinder, 5 delay, or defraud such company, the credi6 tors of such company, or the Corporation 7 as receiver appointed for such company. 8 (D) CERTAIN CONTRACTS AND AGREE9 MENTS DEFINED.—For purposes of this sub10 section, the following definitions shall apply: 11 (i) QUALIFIED FINANCIAL CON12 TRACT.—The term ‘‘qualified financial 13 contract’’ means any securities contract, 14 commodity contract, forward contract, re15 purchase agreement, swap agreement, and 16 any similar agreement that the Corpora17 tion determines by regulation, resolution, 18 or order to be a qualified financial contract 19 for purposes of this paragraph. 20 (ii) SECURITIES CONTRACT.—The 21 term ‘‘securities contract’’— 22 (I) means a contract for the pur23 chase, sale, or loan of a security, a 24 certificate of deposit, a mortgage loan, 25 any interest in a mortgage loan, a 279 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 group or index of securities, certifi2 cates of deposit, or mortgage loans or 3 interests therein (including any inter4 est therein or based on the value 5 thereof), or any option on any of the 6 foregoing, including any option to 7 purchase or sell any such security, 8 certificate of deposit, mortgage loan, 9 interest, group or index, or option, 10 and including any repurchase or re11 verse repurchase transaction on any 12 such security, certificate of deposit, 13 mortgage loan, interest, group or 14 index, or option (whether or not such 15 repurchase or reverse repurchase 16 transaction is a ‘‘repurchase agree17 ment’’, as defined in clause (v)); 18 (II) does not include any pur19 chase, sale, or repurchase obligation 20 under a participation in a commercial 21 mortgage loan unless the Corporation 22 determines by regulation, resolution, 23 or order to include any such agree24 ment within the meaning of such 25 term; 280 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (III) means any option entered 2 into on a national securities exchange 3 relating to foreign currencies; 4 (IV) means the guarantee (in5 cluding by novation) by or to any se6 curities clearing agency of any settle7 ment of cash, securities, certificates of 8 deposit, mortgage loans or interests 9 therein, group or index of securities, 10 certificates of deposit or mortgage 11 loans or interests therein (including 12 any interest therein or based on the 13 value thereof) or an option on any of 14 the foregoing, including any option to 15 purchase or sell any such security, 16 certificate of deposit, mortgage loan, 17 interest, group or index, or option 18 (whether or not such settlement is in 19 connection with any agreement or 20 transaction referred to in subclauses 21 (I) through (XII) (other than sub22 clause (II))); 23 (V) means any margin loan; 281 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (VI) means any extension of 2 credit for the clearance or settlement 3 of securities transactions; 4 (VII) means any loan transaction 5 coupled with a securities collar trans6 action, any prepaid securities forward 7 transaction, or any total return swap 8 transaction coupled with a securities 9 sale transaction; 10 (VIII) means any other agree11 ment or transaction that is similar to 12 any agreement or transaction referred 13 to in this clause; 14 (IX) means any combination of 15 the agreements or transactions re16 ferred to in this clause; 17 (X) means any option to enter 18 into any agreement or transaction re19 ferred to in this clause; 20 (XI) means a master agreement 21 that provides for an agreement or 22 transaction referred to in any of sub23 clauses (I) through (X), other than 24 subclause (II), together with all sup25 plements to any such master agree282 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 ment, without regard to whether the 2 master agreement provides for an 3 agreement or transaction that is not a 4 securities contract under this clause, 5 except that the master agreement 6 shall be considered to be a securities 7 contract under this clause only with 8 respect to each agreement or trans9 action under the master agreement 10 that is referred to in any of sub11 clauses (I) through (X), other than 12 subclause (II); and 13 (XII) means any security agree14 ment or arrangement or other credit 15 enhancement related to any agree16 ment or transaction referred to in this 17 clause, including any guarantee or re18 imbursement obligation in connection 19 with any agreement or transaction re20 ferred to in this clause. 21 (iii) COMMODITY CONTRACT.—The 22 term ‘‘commodity contract’’ means— 23 (I) with respect to a futures com24 mission merchant, a contract for the 25 purchase or sale of a commodity for 283 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 future delivery on, or subject to the 2 rules of, a contract market or board 3 of trade; 4 (II) with respect to a foreign fu5 tures commission merchant, a foreign 6 future; 7 (III) with respect to a leverage 8 transaction merchant, a leverage 9 transaction; 10 (IV) with respect to a clearing 11 organization, a contract for the pur12 chase or sale of a commodity for fu13 ture delivery on, or subject to the 14 rules of, a contract market or board 15 of trade that is cleared by such clear16 ing organization, or commodity option 17 traded on, or subject to the rules of, 18 a contract market or board of trade 19 that is cleared by such clearing orga20 nization; 21 (V) with respect to a commodity 22 options dealer, a commodity option; 23 (VI) any other agreement or 24 transaction that is similar to any 284 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 agreement or transaction referred to 2 in this clause; 3 (VII) any combination of the 4 agreements or transactions referred to 5 in this clause; 6 (VIII) any option to enter into 7 any agreement or transaction referred 8 to in this clause; 9 (IX) a master agreement that 10 provides for an agreement or trans11 action referred to in any of subclauses 12 (I) through (VIII), together with all 13 supplements to any such master 14 agreement, without regard to whether 15 the master agreement provides for an 16 agreement or transaction that is not a 17 commodity contract under this clause, 18 except that the master agreement 19 shall be considered to be a commodity 20 contract under this clause only with 21 respect to each agreement or trans22 action under the master agreement 23 that is referred to in any of sub24 clauses (I) through (VIII); or 285 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (X) any security agreement or 2 arrangement or other credit enhance3 ment related to any agreement or 4 transaction referred to in this clause, 5 including any guarantee or reimburse6 ment obligation in connection with 7 any agreement or transaction referred 8 to in this clause. 9 (iv) FORWARD CONTRACT.—The term 10 ‘‘forward contract’’ means— 11 (I) a contract (other than a com12 modity contract) for the purchase, 13 sale, or transfer of a commodity or 14 any similar good, article, service, 15 right, or interest which is presently or 16 in the future becomes the subject of 17 dealing in the forward contract trade, 18 or product or byproduct thereof, with 19 a maturity date that is more than 2 20 days after the date on which the con21 tract is entered into, including a re22 purchase or reverse repurchase trans23 action (whether or not such repur24 chase or reverse repurchase trans25 action is a ‘‘repurchase agreement’’, 286 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 as defined in clause (v)), consignment, 2 lease, swap, hedge transaction, de3 posit, loan, option, allocated trans4 action, unallocated transaction, or any 5 other similar agreement; 6 (II) any combination of agree7 ments or transactions referred to in 8 subclauses (I) and (III); 9 (III) any option to enter into any 10 agreement or transaction referred to 11 in subclause (I) or (II); 12 (IV) a master agreement that 13 provides for an agreement or trans14 action referred to in subclause (I), 15 (II), or (III), together with all supple16 ments to any such master agreement, 17 without regard to whether the master 18 agreement provides for an agreement 19 or transaction that is not a forward 20 contract under this clause, except that 21 the master agreement shall be consid22 ered to be a forward contract under 23 this clause only with respect to each 24 agreement or transaction under the 287 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 master agreement that is referred to 2 in subclause (I), (II), or (III); or 3 (V) any security agreement or ar4 rangement or other credit enhance5 ment related to any agreement or 6 transaction referred to in subclause 7 (I), (II), (III), or (IV), including any 8 guarantee or reimbursement obliga9 tion in connection with any agreement 10 or transaction referred to in any such 11 subclause. 12 (v) REPURCHASE AGREEMENT.—The 13 term ‘‘repurchase agreement’’ (which defi14 nition also applies to a reverse repurchase 15 agreement)— 16 (I) means an agreement, includ17 ing related terms, which provides for 18 the transfer of one or more certifi19 cates of deposit, mortgage related se20 curities (as such term is defined in 21 section 3 of the Securities Exchange 22 Act of 1934), mortgage loans, inter23 ests in mortgage-related securities or 24 mortgage loans, eligible bankers’ ac25 ceptances, qualified foreign govern288 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 ment securities (which, for purposes 2 of this clause, means a security that is 3 a direct obligation of, or that is fully 4 guaranteed by, the central government 5 of a member of the Organization for 6 Economic Cooperation and Develop7 ment, as determined by regulation or 8 order adopted by the Board of Gov9 ernors), or securities that are direct 10 obligations of, or that are fully guar11 anteed by, the United States or any 12 agency of the United States against 13 the transfer of funds by the transferee 14 of such certificates of deposit, eligible 15 bankers’ acceptances, securities, mort16 gage loans, or interests with a simul17 taneous agreement by such transferee 18 to transfer to the transferor thereof 19 certificates of deposit, eligible bank20 ers’ acceptances, securities, mortgage 21 loans, or interests as described above, 22 at a date certain not later than 1 year 23 after such transfers or on demand, 24 against the transfer of funds, or any 25 other similar agreement; 289 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (II) does not include any repur2 chase obligation under a participation 3 in a commercial mortgage loan, unless 4 the Corporation determines, by regu5 lation, resolution, or order to include 6 any such participation within the 7 meaning of such term; 8 (III) means any combination of 9 agreements or transactions referred to 10 in subclauses (I) and (IV); 11 (IV) means any option to enter 12 into any agreement or transaction re13 ferred to in subclause (I) or (III); 14 (V) means a master agreement 15 that provides for an agreement or 16 transaction referred to in subclause 17 (I), (III), or (IV), together with all 18 supplements to any such master 19 agreement, without regard to whether 20 the master agreement provides for an 21 agreement or transaction that is not a 22 repurchase agreement under this 23 clause, except that the master agree24 ment shall be considered to be a re25 purchase agreement under this sub290 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 clause only with respect to each agree2 ment or transaction under the master 3 agreement that is referred to in sub4 clause (I), (III), or (IV); and 5 (VI) means any security agree6 ment or arrangement or other credit 7 enhancement related to any agree8 ment or transaction referred to in 9 subclause (I), (III), (IV), or (V), in10 cluding any guarantee or reimburse11 ment obligation in connection with 12 any agreement or transaction referred 13 to in any such subclause. 14 (vi) SWAP AGREEMENT.—The term 15 ‘‘swap agreement’’ means— 16 (I) any agreement, including the 17 terms and conditions incorporated by 18 reference in any such agreement, 19 which is an interest rate swap, option, 20 future, or forward agreement, includ21 ing a rate floor, rate cap, rate collar, 22 cross-currency rate swap, and basis 23 swap; a spot, same day-tomorrow, to24 morrow-next, forward, or other for25 eign exchange, precious metals, or 291 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 other commodity agreement; a cur2 rency swap, option, future, or forward 3 agreement; an equity index or equity 4 swap, option, future, or forward 5 agreement; a debt index or debt swap, 6 option, future, or forward agreement; 7 a total return, credit spread or credit 8 swap, option, future, or forward 9 agreement; a commodity index or 10 commodity swap, option, future, or 11 forward agreement; weather swap, op12 tion, future, or forward agreement; an 13 emissions swap, option, future, or for14 ward agreement; or an inflation swap, 15 option, future, or forward agreement; 16 (II) any agreement or transaction 17 that is similar to any other agreement 18 or transaction referred to in this 19 clause and that is of a type that has 20 been, is presently, or in the future be21 comes, the subject of recurrent deal22 ings in the swap or other derivatives 23 markets (including terms and condi24 tions incorporated by reference in 25 such agreement) and that is a for292 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 ward, swap, future, option, or spot 2 transaction on one or more rates, cur3 rencies, commodities, equity securities 4 or other equity instruments, debt se5 curities or other debt instruments, 6 quantitative measures associated with 7 an occurrence, extent of an occur8 rence, or contingency associated with 9 a financial, commercial, or economic 10 consequence, or economic or financial 11 indices or measures of economic or fi12 nancial risk or value; 13 (III) any combination of agree14 ments or transactions referred to in 15 this clause; 16 (IV) any option to enter into any 17 agreement or transaction referred to 18 in this clause; 19 (V) a master agreement that pro20 vides for an agreement or transaction 21 referred to in subclause (I), (II), (III), 22 or (IV), together with all supplements 23 to any such master agreement, with24 out regard to whether the master 25 agreement contains an agreement or 293 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 transaction that is not a swap agree2 ment under this clause, except that 3 the master agreement shall be consid4 ered to be a swap agreement under 5 this clause only with respect to each 6 agreement or transaction under the 7 master agreement that is referred to 8 in subclause (I), (II), (III), or (IV); 9 and 10 (VI) any security agreement or 11 arrangement or other credit enhance12 ment related to any agreement or 13 transaction referred to in any of sub14 clauses (I) through (V), including any 15 guarantee or reimbursement obliga16 tion in connection with any agreement 17 or transaction referred to in any such 18 clause. 19 (vii) DEFINITIONS RELATING TO DE20 FAULT.—When used in this paragraph and 21 paragraphs (9) and (10)— 22 (I) the term ‘‘default’’ means, 23 with respect to a covered financial 24 company, any adjudication or other 25 official decision by any court of com294 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 petent jurisdiction, or other public au2 thority pursuant to which the Cor3 poration has been appointed receiver; 4 and 5 (II) the term ‘‘in danger of de6 fault’’ means a covered financial com7 pany with respect to which the Cor8 poration or appropriate State author9 ity has determined that— 10 (aa) in the opinion of the 11 Corporation or such authority— 12 (AA) the covered finan13 cial company is not likely to 14 be able to pay its obligations 15 in the normal course of busi16 ness; and 17 (BB) there is no rea18 sonable prospect that the 19 covered financial company 20 will be able to pay such obli21 gations without Federal as22 sistance; or 23 (bb) in the opinion of the 24 Corporation or such authority— 295 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (AA) the covered finan2 cial company has incurred or 3 is likely to incur losses that 4 will deplete all or substan5 tially all of its capital; and 6 (BB) there is no rea7 sonable prospect that the 8 capital will be replenished 9 without Federal assistance. 10 (viii) TREATMENT OF MASTER AGREE11 MENT AS ONE AGREEMENT.—Any master 12 agreement for any contract or agreement 13 described in any of clauses (i) through (vi) 14 (or any master agreement for such master 15 agreement or agreements), together with 16 all supplements to such master agreement, 17 shall be treated as a single agreement and 18 a single qualified financial contact. If a 19 master agreement contains provisions re20 lating to agreements or transactions that 21 are not themselves qualified financial con22 tracts, the master agreement shall be 23 deemed to be a qualified financial contract 24 only with respect to those transactions that 296 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 are themselves qualified financial con2 tracts. 3 (ix) TRANSFER.—The term ‘‘transfer’’ 4 means every mode, direct or indirect, abso5 lute or conditional, voluntary or involun6 tary, of disposing of or parting with prop7 erty or with an interest in property, includ8 ing retention of title as a security interest 9 and foreclosure of the equity of redemption 10 of the covered financial company. 11 (x) PERSON.—The term ‘‘person’’ in12 cludes any governmental entity in addition 13 to any entity included in the definition of 14 such term in section 1, title 1, United 15 States Code. 16 (E) CLARIFICATION.—No provision of law 17 shall be construed as limiting the right or 18 power of the Corporation, or authorizing any 19 court or agency to limit or delay, in any man20 ner, the right or power of the Corporation to 21 transfer any qualified financial contract or to 22 disaffirm or repudiate any such contract in ac23 cordance with this subsection. 24 (F) WALKAWAY CLAUSES NOT EFFEC25 TIVE.— 297 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (i) IN GENERAL.—Notwithstanding 2 the provisions of subparagraph (A) of this 3 paragraph and sections 403 and 404 of the 4 Federal Deposit Insurance Corporation 5 Improvement Act of 1991, no walkaway 6 clause shall be enforceable in a qualified fi7 nancial contract of a covered financial 8 company in default. 9 (ii) LIMITED SUSPENSION OF CERTAIN 10 OBLIGATIONS.—In the case of a qualified 11 financial contract referred to in clause (i), 12 any payment or delivery obligations other13 wise due from a party pursuant to the 14 qualified financial contract shall be sus15 pended from the time at which the Cor16 poration is appointed as receiver until the 17 earlier of— 18 (I) the time at which such party 19 receives notice that such contract has 20 been transferred pursuant to para21 graph (10)(A); or 22 (II) 5:00 p.m. (eastern time) on 23 the business day following the date of 24 the appointment of the Corporation as 25 receiver. 298 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (iii) WALKAWAY CLAUSE DEFINED.— 2 For purposes of this subparagraph, the 3 term ‘‘walkaway clause’’ means any provi4 sion in a qualified financial contract that 5 suspends, conditions, or extinguishes a 6 payment obligation of a party, in whole or 7 in part, or does not create a payment obli8 gation of a party that would otherwise 9 exist, solely because of the status of such 10 party as a nondefaulting party in connec11 tion with the insolvency of a covered finan12 cial company that is a party to the con13 tract or the appointment of or the exercise 14 of rights or powers by the Corporation as 15 receiver for such covered financial com16 pany, and not as a result of the exercise by 17 a party of any right to offset, setoff, or net 18 obligations that exist under the contract, 19 any other contract between those parties, 20 or applicable law. 21 (G) CERTAIN OBLIGATIONS TO CLEARING 22 ORGANIZATIONS.—In the event that the Cor23 poration has been appointed as receiver for a 24 covered financial company which is a party to 25 any qualified financial contract cleared by or 299 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 subject to the rules of a clearing organization 2 (as defined in paragraph (9)(D)), the receiver 3 shall use its best efforts to meet all margin, col4 lateral, and settlement obligations of the cov5 ered financial company that arise under quali6 fied financial contracts (other than any margin, 7 collateral, or settlement obligation that is not 8 enforceable against the receiver under para9 graph (8)(F)(i) or paragraph (10)(B)), as re10 quired by the rules of the clearing organization 11 when due. Notwithstanding any other provision 12 of this title, if the receiver fails to satisfy any 13 such margin, collateral, or settlement obliga14 tions under the rules of the clearing organiza15 tion, the clearing organization shall have the 16 immediate right to exercise, and shall not be 17 stayed from exercising, all of its rights and 18 remedies under its rules and applicable law with 19 respect to any qualified financial contract of the 20 covered financial company, including, without 21 limitation, the right to liquidate all positions 22 and collateral of such covered financial com23 pany under the company’s qualified financial 24 contracts, and suspend or cease to act for such 300 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 covered financial company, all in accordance 2 with the rules of the clearing organization. 3 (H) RECORDKEEPING.— 4 (i) JOINT RULEMAKING.—The Federal 5 primary financial regulatory agencies shall 6 jointly prescribe regulations requiring that 7 financial companies maintain such records 8 with respect to qualified financial contracts 9 (including market valuations) that the 10 Federal primary financial regulatory agen11 cies determine to be necessary or appro12 priate in order to assist the Corporation as 13 receiver for a covered financial company in 14 being able to exercise its rights and fulfill 15 its obligations under this paragraph or 16 paragraph (9) or (10). 17 (ii) TIME FRAME.—The Federal pri18 mary financial regulatory agencies shall 19 prescribe joint final or interim final regula20 tions not later than 24 months after the 21 date of enactment of this Act. 22 (iii) BACK-UP RULEMAKING AUTHOR23 ITY.—If the Federal primary financial reg24 ulatory agencies do not prescribe joint final 25 or interim final regulations within the time 301 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 frame in clause (ii), the Chairperson of the 2 Council shall prescribe, in consultation 3 with the Corporation, the regulations re4 quired by clause (i). 5 (iv) CATEGORIZATION AND 6 TIERING.—The joint regulations prescribed 7 under clause (i) shall, as appropriate, dif8 ferentiate among financial companies by 9 taking into consideration their size, risk, 10 complexity, leverage, frequency and dollar 11 amount of qualified financial contracts, 12 interconnectedness to the financial system, 13 and any other factors deemed appropriate. 14 (9) TRANSFER OF QUALIFIED FINANCIAL CON15 TRACTS.— 16 (A) IN GENERAL.—In making any transfer 17 of assets or liabilities of a covered financial 18 company in default, which includes any quali19 fied financial contract, the Corporation as re20 ceiver for such covered financial company shall 21 either— 22 (i) transfer to one financial institu23 tion, other than a financial institution for 24 which a conservator, receiver, trustee in 25 bankruptcy, or other legal custodian has 302 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 been appointed or which is otherwise the 2 subject of a bankruptcy or insolvency pro3 ceeding— 4 (I) all qualified financial con5 tracts between any person or any af6 filiate of such person and the covered 7 financial company in default; 8 (II) all claims of such person or 9 any affiliate of such person against 10 such covered financial company under 11 any such contract (other than any 12 claim which, under the terms of any 13 such contract, is subordinated to the 14 claims of general unsecured creditors 15 of such company); 16 (III) all claims of such covered fi17 nancial company against such person 18 or any affiliate of such person under 19 any such contract; and 20 (IV) all property securing or any 21 other credit enhancement for any con22 tract described in subclause (I) or any 23 claim described in subclause (II) or 24 (III) under any such contract; or 303 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (ii) transfer none of the qualified fi2 nancial contracts, claims, property or other 3 credit enhancement referred to in clause (i) 4 (with respect to such person and any affil5 iate of such person). 6 (B) TRANSFER TO FOREIGN BANK, FINAN7 CIAL INSTITUTION, OR BRANCH OR AGENCY 8 THEREOF.—In transferring any qualified finan9 cial contracts and related claims and property 10 under subparagraph (A)(i), the Corporation as 11 receiver for the covered financial company shall 12 not make such transfer to a foreign bank, fi13 nancial institution organized under the laws of 14 a foreign country, or a branch or agency of a 15 foreign bank or financial institution unless, 16 under the law applicable to such bank, financial 17 institution, branch or agency, to the qualified 18 financial contracts, and to any netting contract, 19 any security agreement or arrangement or other 20 credit enhancement related to one or more 21 qualified financial contracts, the contractual 22 rights of the parties to such qualified financial 23 contracts, netting contracts, security agree24 ments or arrangements, or other credit en304 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 hancements are enforceable substantially to the 2 same extent as permitted under this section. 3 (C) TRANSFER OF CONTRACTS SUBJECT 4 TO THE RULES OF A CLEARING ORGANIZA5 TION.—In the event that the Corporation as re6 ceiver for a financial institution transfers any 7 qualified financial contract and related claims, 8 property, or credit enhancement pursuant to 9 subparagraph (A)(i) and such contract is 10 cleared by or subject to the rules of a clearing 11 organization, the clearing organization shall not 12 be required to accept the transferee as a mem13 ber by virtue of the transfer. 14 (D) DEFINITIONS.—For purposes of this 15 paragraph— 16 (i) the term ‘‘financial institution’’ 17 means a broker or dealer, a depository in18 stitution, a futures commission merchant, 19 a bridge financial company, or any other 20 institution determined by the Corporation, 21 by regulation, to be a financial institution; 22 and 23 (ii) the term ‘‘clearing organization’’ 24 has the same meaning as in section 402 of 305 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 the Federal Deposit Insurance Corporation 2 Improvement Act of 1991. 3 (10) NOTIFICATION OF TRANSFER.— 4 (A) IN GENERAL.— 5 (i) NOTICE.—The Corporation shall 6 provide notice in accordance with clause 7 (ii), if— 8 (I) the Corporation as receiver 9 for a covered financial company in de10 fault or in danger of default transfers 11 any assets or liabilities of the covered 12 financial company; and 13 (II) the transfer includes any 14 qualified financial contract. 15 (ii) TIMING.—The Corporation as re16 ceiver for a covered financial company 17 shall notify any person who is a party to 18 any contract described in clause (i) of such 19 transfer not later than 5:00 p.m. (eastern 20 time) on the business day following the 21 date of the appointment of the Corporation 22 as receiver. 23 (B) CERTAIN RIGHTS NOT ENFORCE24 ABLE.— 306 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (i) RECEIVERSHIP.—A person who is 2 a party to a qualified financial contract 3 with a covered financial company may not 4 exercise any right that such person has to 5 terminate, liquidate, or net such contract 6 under paragraph (8)(A) solely by reason of 7 or incidental to the appointment under this 8 section of the Corporation as receiver for 9 the covered financial company (or the in10 solvency or financial condition of the cov11 ered financial company for which the Cor12 poration has been appointed as receiver)— 13 (I) until 5:00 p.m. (eastern time) 14 on the business day following the date 15 of the appointment; or 16 (II) after the person has received 17 notice that the contract has been 18 transferred pursuant to paragraph 19 (9)(A). 20 (ii) NOTICE.—For purposes of this 21 paragraph, the Corporation as receiver for 22 a covered financial company shall be 23 deemed to have notified a person who is a 24 party to a qualified financial contract with 25 such covered financial company, if the Cor307 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 poration has taken steps reasonably cal2 culated to provide notice to such person by 3 the time specified in subparagraph (A). 4 (C) TREATMENT OF BRIDGE FINANCIAL 5 COMPANY.—For purposes of paragraph (9), a 6 bridge financial company shall not be consid7 ered to be a financial institution for which a 8 conservator, receiver, trustee in bankruptcy, or 9 other legal custodian has been appointed, or 10 which is otherwise the subject of a bankruptcy 11 or insolvency proceeding. 12 (D) BUSINESS DAY DEFINED.—For pur13 poses of this paragraph, the term ‘‘business 14 day’’ means any day other than any Saturday, 15 Sunday, or any day on which either the New 16 York Stock Exchange or the Federal Reserve 17 Bank of New York is closed. 18 (11) DISAFFIRMANCE OR REPUDIATION OF 19 QUALIFIED FINANCIAL CONTRACTS.—In exercising 20 the rights of disaffirmance or repudiation of the 21 Corporation as receiver with respect to any qualified 22 financial contract to which a covered financial com23 pany is a party, the Corporation shall either— 24 (A) disaffirm or repudiate all qualified fi25 nancial contracts between— 308 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (i) any person or any affiliate of such 2 person; and 3 (ii) the covered financial company in 4 default; or 5 (B) disaffirm or repudiate none of the 6 qualified financial contracts referred to in sub7 paragraph (A) (with respect to such person or 8 any affiliate of such person). 9 (12) CERTAIN SECURITY AND CUSTOMER IN10 TERESTS NOT AVOIDABLE.—No provision of this 11 subsection shall be construed as permitting the 12 avoidance of any— 13 (A) legally enforceable or perfected secu14 rity interest in any of the assets of any covered 15 financial company, except in accordance with 16 subsection (a)(11); or 17 (B) legally enforceable interest in customer 18 property, security entitlements in respect of as19 sets or property held by the covered financial 20 company for any security entitlement holder. 21 (13) AUTHORITY TO ENFORCE CONTRACTS.— 22 (A) IN GENERAL.—The Corporation, as re23 ceiver for a covered financial company, may en24 force any contract, other than a liability insur25 ance contract of a director or officer, a financial 309 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 institution bond entered into by the covered fi2 nancial company, notwithstanding any provision 3 of the contract providing for termination, de4 fault, acceleration, or exercise of rights upon, or 5 solely by reason of, insolvency, the appointment 6 of or the exercise of rights or powers by the 7 Corporation as receiver, the filing of the peti8 tion pursuant to section 202(a)(1), or the 9 issuance of the recommendations or determina10 tion, or any actions or events occurring in con11 nection therewith or as a result thereof, pursu12 ant to section 203. 13 (B) CERTAIN RIGHTS NOT AFFECTED.— 14 No provision of this paragraph may be con15 strued as impairing or affecting any right of the 16 Corporation as receiver to enforce or recover 17 under a liability insurance contract of a director 18 or officer or financial institution bond under 19 other applicable law. 20 (C) CONSENT REQUIREMENT AND IPSO 21 FACTO CLAUSES.— 22 (i) IN GENERAL.—Except as otherwise 23 provided by this section, no person may ex24 ercise any right or power to terminate, ac25 celerate, or declare a default under any 310 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 contract to which the covered financial 2 company is a party (and no provision in 3 any such contract providing for such de4 fault, termination, or acceleration shall be 5 enforceable), or to obtain possession of or 6 exercise control over any property of the 7 covered financial company or affect any 8 contractual rights of the covered financial 9 company, without the consent of the Cor10 poration as receiver for the covered finan11 cial company during the 90 day period be12 ginning from the appointment of the Cor13 poration as receiver. 14 (ii) EXCEPTIONS.—No provision of 15 this subparagraph shall apply to a director 16 or officer liability insurance contract or a 17 financial institution bond, to the rights of 18 parties to certain qualified financial con19 tracts pursuant to paragraph (8), or to the 20 rights of parties to netting contracts pur21 suant to subtitle A of title IV of the Fed22 eral Deposit Insurance Corporation Im23 provement Act of 1991 (12 U.S.C. 4401 et 24 seq.), or shall be construed as permitting 25 the Corporation as receiver to fail to com311 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 ply with otherwise enforceable provisions of 2 such contract. 3 (D) CONTRACTS TO EXTEND CREDIT.— 4 Notwithstanding any other provision in this 5 title, if the Corporation as receiver enforces any 6 contract to extend credit to the covered finan7 cial company or bridge financial company, any 8 valid and enforceable obligation to repay such 9 debt shall be paid by the Corporation as re10 ceiver, as an administrative expense of the re11 ceivership. 12 (14) EXCEPTION FOR FEDERAL RESERVE 13 BANKS AND CORPORATION SECURITY INTEREST.— 14 No provision of this subsection shall apply with re15 spect to— 16 (A) any extension of credit from any Fed17 eral reserve bank or the Corporation to any cov18 ered financial company; or 19 (B) any security interest in the assets of 20 the covered financial company securing any 21 such extension of credit. 22 (15) SAVINGS CLAUSE.—The meanings of terms 23 used in this subsection are applicable for purposes of 24 this subsection only, and shall not be construed or 25 applied so as to challenge or affect the characteriza312 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 tion, definition, or treatment of any similar terms 2 under any other statute, regulation, or rule, includ3 ing the Gramm-Leach-Bliley Act, the Legal Cer4 tainty for Bank Products Act of 2000, the securities 5 laws (as that term is defined in section 3(a)(47) of 6 the Securities Exchange Act of 1934), and the Com7 modity Exchange Act. 8 (16) ENFORCEMENT OF CONTRACTS GUARAN9 TEED BY THE COVERED FINANCIAL COMPANY.— 10 (A) IN GENERAL.—The Corporation, as re11 ceiver for a covered financial company or as re12 ceiver for a subsidiary of a covered financial 13 company (including an insured depository insti14 tution) shall have the power to enforce con15 tracts of subsidiaries or affiliates of the covered 16 financial company, the obligations under which 17 are guaranteed or otherwise supported by or 18 linked to the covered financial company, not19 withstanding any contractual right to cause the 20 termination, liquidation, or acceleration of such 21 contracts based solely on the insolvency, finan22 cial condition, or receivership of the covered fi23 nancial company, if— 24 (i) such guaranty or other support 25 and all related assets and liabilities are 313 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 transferred to and assumed by a bridge fi2 nancial company or a third party (other 3 than a third party for which a conservator, 4 receiver, trustee in bankruptcy, or other 5 legal custodian has been appointed, or 6 which is otherwise the subject of a bank7 ruptcy or insolvency proceeding) within the 8 same period of time as the Corporation is 9 entitled to transfer the qualified financial 10 contracts of such covered financial com11 pany; or 12 (ii) the Corporation, as receiver, oth13 erwise provides adequate protection with 14 respect to such obligations. 15 (B) RULE OF CONSTRUCTION.—For pur16 poses of this paragraph, a bridge financial com17 pany shall not be considered to be a third party 18 for which a conservator, receiver, trustee in 19 bankruptcy, or other legal custodian has been 20 appointed, or which is otherwise the subject of 21 a bankruptcy or insolvency proceeding. 22 (d) VALUATION OF CLAIMS IN DEFAULT.— 23 (1) IN GENERAL.—Notwithstanding any other 24 provision of Federal law or the law of any State, and 25 regardless of the method utilized by the Corporation 314 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 for a covered financial company, including trans2 actions authorized under subsection (h), this sub3 section shall govern the rights of the creditors of any 4 such covered financial company. 5 (2) MAXIMUM LIABILITY.—The maximum li6 ability of the Corporation, acting as receiver for a 7 covered financial company or in any other capacity, 8 to any person having a claim against the Corpora9 tion as receiver or the covered financial company for 10 which the Corporation is appointed shall equal the 11 amount that such claimant would have received if— 12 (A) the Corporation had not been ap13 pointed receiver with respect to the covered fi14 nancial company; and 15 (B) the covered financial company had 16 been liquidated under chapter 7 of the Bank17 ruptcy Code, or any similar provision of State 18 insolvency law applicable to the covered finan19 cial company. 20 (3) SPECIAL PROVISION FOR ORDERLY LIQ21 UIDATION BY SIPC.—The maximum liability of the 22 Corporation, acting as receiver or in its corporate 23 capacity for any covered broker or dealer to any cus24 tomer of such covered broker or dealer, with respect 25 to customer property of such customer, shall be— 315 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (A) equal to the amount that such cus2 tomer would have received with respect to such 3 customer property in a case initiated by SIPC 4 under the Securities Investor Protection Act of 5 1970 (15 U.S.C. 78aaa et seq.); and 6 (B) determined as of the close of business 7 on the date on which the Corporation is ap8 pointed as receiver. 9 (4) ADDITIONAL PAYMENTS AUTHORIZED.— 10 (A) IN GENERAL.—Subject to subsection 11 (o)(1)(D)(i), the Corporation, with the approval 12 of the Secretary, may make additional pay13 ments or credit additional amounts to or with 14 respect to or for the account of any claimant or 15 category of claimants of the covered financial 16 company, if the Corporation determines that 17 such payments or credits are necessary or ap18 propriate to minimize losses to the Corporation 19 as receiver from the orderly liquidation of the 20 covered financial company under this section. 21 (B) LIMITATIONS.— 22 (i) PROHIBITION.—The Corporation 23 shall not make any payments or credit 24 amounts to any claimant or category of 25 claimants that would result in any claim316 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 ant receiving more than the face value 2 amount of any claim that is proven to the 3 satisfaction of the Corporation. 4 (ii) NO OBLIGATION.—Notwith5 standing any other provision of Federal or 6 State law, or the Constitution of any State, 7 the Corporation shall not be obligated, as 8 a result of having made any payment 9 under subparagraph (A) or credited any 10 amount described in subparagraph (A) to 11 or with respect to, or for the account, of 12 any claimant or category of claimants, to 13 make payments to any other claimant or 14 category of claimants. 15 (C) MANNER OF PAYMENT.—The Corpora16 tion may make payments or credit amounts 17 under subparagraph (A) directly to the claim18 ants or may make such payments or credit such 19 amounts to a company other than a covered fi20 nancial company or a bridge financial company 21 established with respect thereto in order to in22 duce such other company to accept liability for 23 such claims. 24 (e) LIMITATION ON COURT ACTION.—Except as pro25 vided in this title, no court may take any action to restrain 317 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 or affect the exercise of powers or functions of the receiver 2 hereunder, and any remedy against the Corporation or re3 ceiver shall be limited to money damages determined in 4 accordance with this title. 5 (f) LIABILITY OF DIRECTORS AND OFFICERS.— 6 (1) IN GENERAL.—A director or officer of a 7 covered financial company may be held personally 8 liable for monetary damages in any civil action de9 scribed in paragraph (2) by, on behalf of, or at the 10 request or direction of the Corporation, which action 11 is prosecuted wholly or partially for the benefit of 12 the Corporation— 13 (A) acting as receiver for such covered fi14 nancial company; 15 (B) acting based upon a suit, claim, or 16 cause of action purchased from, assigned by, or 17 otherwise conveyed by the Corporation as re18 ceiver; or 19 (C) acting based upon a suit, claim, or 20 cause of action purchased from, assigned by, or 21 otherwise conveyed in whole or in part by a cov22 ered financial company or its affiliate in con23 nection with assistance provided under this 24 title. 318 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (2) ACTIONS COVERED.—Paragraph (1) shall 2 apply with respect to actions for gross negligence, 3 including any similar conduct or conduct that dem4 onstrates a greater disregard of a duty of care (than 5 gross negligence) including intentional tortious con6 duct, as such terms are defined and determined 7 under applicable State law. 8 (3) SAVINGS CLAUSE.—Nothing in this sub9 section shall impair or affect any right of the Cor10 poration under other applicable law. 11 (g) DAMAGES.—In any proceeding related to any 12 claim against a director, officer, employee, agent, attorney, 13 accountant, or appraiser of a covered financial company, 14 or any other party employed by or providing services to 15 a covered financial company, recoverable damages deter16 mined to result from the improvident or otherwise im17 proper use or investment of any assets of the covered fi18 nancial company shall include principal losses and appro19 priate interest. 20 (h) BRIDGE FINANCIAL COMPANIES.— 21 (1) ORGANIZATION.— 22 (A) PURPOSE.—The Corporation, as re23 ceiver for one or more covered financial compa24 nies or in anticipation of being appointed re25 ceiver for one or more covered financial compa319 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 nies, may organize one or more bridge financial 2 companies in accordance with this subsection. 3 (B) AUTHORITIES.—Upon the creation of 4 a bridge financial company under subparagraph 5 (A) with respect to a covered financial com6 pany, such bridge financial company may— 7 (i) assume such liabilities (including 8 liabilities associated with any trust or cus9 tody business, but excluding any liabilities 10 that count as regulatory capital) of such 11 covered financial company as the Corpora12 tion may, in its discretion, determine to be 13 appropriate; 14 (ii) purchase such assets (including 15 assets associated with any trust or custody 16 business) of such covered financial com17 pany as the Corporation may, in its discre18 tion, determine to be appropriate; and 19 (iii) perform any other temporary 20 function which the Corporation may, in its 21 discretion, prescribe in accordance with 22 this section. 23 (2) CHARTER AND ESTABLISHMENT.— 24 (A) ESTABLISHMENT.—Except as provided 25 in subparagraph (H), where the covered finan320 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 cial company is a covered broker or dealer, the 2 Corporation, as receiver for a covered financial 3 company, may grant a Federal charter to and 4 approve articles of association for one or more 5 bridge financial company or companies, with re6 spect to such covered financial company which 7 shall, by operation of law and immediately upon 8 issuance of its charter and approval of its arti9 cles of association, be established and operate 10 in accordance with, and subject to, such char11 ter, articles, and this section. 12 (B) MANAGEMENT.—Upon its establish13 ment, a bridge financial company shall be under 14 the management of a board of directors ap15 pointed by the Corporation. 16 (C) ARTICLES OF ASSOCIATION.—The arti17 cles of association and organization certificate 18 of a bridge financial company shall have such 19 terms as the Corporation may provide, and 20 shall be executed by such representatives as the 21 Corporation may designate. 22 (D) TERMS OF CHARTER; RIGHTS AND 23 PRIVILEGES.—Subject to and in accordance 24 with the provisions of this subsection, the Cor25 poration shall— 321 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (i) establish the terms of the charter 2 of a bridge financial company and the 3 rights, powers, authorities, and privileges 4 of a bridge financial company granted by 5 the charter or as an incident thereto; and 6 (ii) provide for, and establish the 7 terms and conditions governing, the man8 agement (including the bylaws and the 9 number of directors of the board of direc10 tors) and operations of the bridge financial 11 company. 12 (E) TRANSFER OF RIGHTS AND PRIVI13 LEGES OF COVERED FINANCIAL COMPANY.— 14 (i) IN GENERAL.—Notwithstanding 15 any other provision of Federal or State 16 law, the Corporation may provide for a 17 bridge financial company to succeed to and 18 assume any rights, powers, authorities, or 19 privileges of the covered financial company 20 with respect to which the bridge financial 21 company was established and, upon such 22 determination by the Corporation, the 23 bridge financial company shall immediately 24 and by operation of law succeed to and as322 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 sume such rights, powers, authorities, and 2 privileges. 3 (ii) EFFECTIVE WITHOUT AP4 PROVAL.—Any succession to or assumption 5 by a bridge financial company of rights, 6 powers, authorities, or privileges of a cov7 ered financial company under clause (i) or 8 otherwise shall be effective without any 9 further approval under Federal or State 10 law, assignment, or consent with respect 11 thereto. 12 (F) CORPORATE GOVERNANCE AND ELEC13 TION AND DESIGNATION OF BODY OF LAW.—To 14 the extent permitted by the Corporation and 15 consistent with this section and any rules, regu16 lations, or directives issued by the Corporation 17 under this section, a bridge financial company 18 may elect to follow the corporate governance 19 practices and procedures that are applicable to 20 a corporation incorporated under the general 21 corporation law of the State of Delaware, or the 22 State of incorporation or organization of the 23 covered financial company with respect to which 24 the bridge financial company was established, 25 as such law may be amended from time to time. 323 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (G) CAPITAL.— 2 (i) CAPITAL NOT REQUIRED.—Not3 withstanding any other provision of Fed4 eral or State law, a bridge financial com5 pany may, if permitted by the Corporation, 6 operate without any capital or surplus, or 7 with such capital or surplus as the Cor8 poration may in its discretion determine to 9 be appropriate. 10 (ii) NO CONTRIBUTION BY THE COR11 PORATION REQUIRED.—The Corporation is 12 not required to pay capital into a bridge fi13 nancial company or to issue any capital 14 stock on behalf of a bridge financial com15 pany established under this subsection. 16 (iii) AUTHORITY.—If the Corporation 17 determines that such action is advisable, 18 the Corporation may cause capital stock or 19 other securities of a bridge financial com20 pany established with respect to a covered 21 financial company to be issued and offered 22 for sale in such amounts and on such 23 terms and conditions as the Corporation 24 may, in its discretion, determine. 324 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (iv) OPERATING FUNDS IN LIEU OF 2 CAPITAL AND IMPLEMENTATION PLAN.— 3 Upon the organization of a bridge financial 4 company, and thereafter as the Corpora5 tion may, in its discretion, determine to be 6 necessary or advisable, the Corporation 7 may make available to the bridge financial 8 company, subject to the plan described in 9 subsection (n)(9), funds for the operation 10 of the bridge financial company in lieu of 11 capital. 12 (H) BRIDGE BROKERS OR DEALERS.— 13 (i) IN GENERAL.—The Corporation, 14 as receiver for a covered broker or dealer, 15 may approve articles of association for one 16 or more bridge financial companies with 17 respect to such covered broker or dealer, 18 which bridge financial company or compa19 nies shall, by operation of law and imme20 diately upon approval of its articles of as21 sociation— 22 (I) be established and deemed 23 registered with the Commission under 24 the Securities Exchange Act of 1934 25 and a member of SIPC; 325 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (II) operate in accordance with 2 such articles and this section; and 3 (III) succeed to any and all reg4 istrations and memberships of the 5 covered financial company with or in 6 any self-regulatory organizations. 7 (ii) OTHER REQUIREMENTS.—Except 8 as provided in clause (i), and notwith9 standing any other provision of this sec10 tion, the bridge financial company shall be 11 subject to the Federal securities laws and 12 all requirements with respect to being a 13 member of a self-regulatory organization, 14 unless exempted from any such require15 ments by the Commission, as is necessary 16 or appropriate in the public interest or for 17 the protection of investors. 18 (iii) TREATMENT OF CUSTOMERS.— 19 Except as otherwise provided by this title, 20 any customer of the covered broker or 21 dealer whose account is transferred to a 22 bridge financial company shall have all the 23 rights, privileges, and protections under 24 section 205(f) and under the Securities In25 vestor Protection Act of 1970 (15 U.S.C. 326 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 78aaa et seq.), that such customer would 2 have had if the account were not trans3 ferred from the covered financial company 4 under this subparagraph. 5 (iv) OPERATION OF BRIDGE BROKERS 6 OR DEALERS.—Notwithstanding any other 7 provision of this title, the Corporation shall 8 not operate any bridge financial company 9 created by the Corporation under this title 10 with respect to a covered broker or dealer 11 in such a manner as to adversely affect the 12 ability of customers to promptly access 13 their customer property in accordance with 14 applicable law. 15 (3) INTERESTS IN AND ASSETS AND OBLIGA16 TIONS OF COVERED FINANCIAL COMPANY.—Notwith17 standing paragraph (1) or (2) or any other provision 18 of law— 19 (A) a bridge financial company shall as20 sume, acquire, or succeed to the assets or liabil21 ities of a covered financial company (including 22 the assets or liabilities associated with any trust 23 or custody business) only to the extent that 24 such assets or liabilities are transferred by the 25 Corporation to the bridge financial company in 327 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 accordance with, and subject to the restrictions 2 set forth in, paragraph (1)(B); and 3 (B) a bridge financial company shall not 4 assume, acquire, or succeed to any obligation 5 that a covered financial company for which the 6 Corporation has been appointed receiver may 7 have to any shareholder, member, general part8 ner, limited partner, or other person with an in9 terest in the equity of the covered financial 10 company that arises as a result of the status of 11 that person having an equity claim in the cov12 ered financial company. 13 (4) BRIDGE FINANCIAL COMPANY TREATED AS 14 BEING IN DEFAULT FOR CERTAIN PURPOSES.—A 15 bridge financial company shall be treated as a cov16 ered financial company in default at such times and 17 for such purposes as the Corporation may, in its dis18 cretion, determine. 19 (5) TRANSFER OF ASSETS AND LIABILITIES.— 20 (A) AUTHORITY OF CORPORATION.—The 21 Corporation, as receiver for a covered financial 22 company, may transfer any assets and liabilities 23 of a covered financial company (including any 24 assets or liabilities associated with any trust or 25 custody business) to one or more bridge finan328 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 cial companies, in accordance with and subject 2 to the restrictions of paragraph (1). 3 (B) SUBSEQUENT TRANSFERS.—At any 4 time after the establishment of a bridge finan5 cial company with respect to a covered financial 6 company, the Corporation, as receiver, may 7 transfer any assets and liabilities of such cov8 ered financial company as the Corporation may, 9 in its discretion, determine to be appropriate in 10 accordance with and subject to the restrictions 11 of paragraph (1). 12 (C) TREATMENT OF TRUST OR CUSTODY 13 BUSINESS.—For purposes of this paragraph, 14 the trust or custody business, including fidu15 ciary appointments, held by any covered finan16 cial company is included among its assets and 17 liabilities. 18 (D) EFFECTIVE WITHOUT APPROVAL.— 19 The transfer of any assets or liabilities, includ20 ing those associated with any trust or custody 21 business of a covered financial company, to a 22 bridge financial company shall be effective with23 out any further approval under Federal or 24 State law, assignment, or consent with respect 25 thereto. 329 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (E) EQUITABLE TREATMENT OF SIMI2 LARLY SITUATED CREDITORS.—The Corpora3 tion shall treat all creditors of a covered finan4 cial company that are similarly situated under 5 subsection (b)(1), in a similar manner in exer6 cising the authority of the Corporation under 7 this subsection to transfer any assets or liabil8 ities of the covered financial company to one or 9 more bridge financial companies established 10 with respect to such covered financial company, 11 except that the Corporation may take any ac12 tion (including making payments, subject to 13 subsection (o)(1)(D)(i)) that does not comply 14 with this subparagraph, if— 15 (i) the Corporation determines that 16 such action is necessary— 17 (I) to maximize the value of the 18 assets of the covered financial com19 pany; 20 (II) to maximize the present 21 value return from the sale or other 22 disposition of the assets of the covered 23 financial company; or 24 (III) to minimize the amount of 25 any loss realized upon the sale or 330 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 other disposition of the assets of the 2 covered financial company; and 3 (ii) all creditors that are similarly sit4 uated under subsection (b)(1) receive not 5 less than the amount provided under para6 graphs (2) and (3) of subsection (d). 7 (F) LIMITATION ON TRANSFER OF LIABIL8 ITIES.—Notwithstanding any other provision of 9 law, the aggregate amount of liabilities of a cov10 ered financial company that are transferred to, 11 or assumed by, a bridge financial company from 12 a covered financial company may not exceed the 13 aggregate amount of the assets of the covered 14 financial company that are transferred to, or 15 purchased by, the bridge financial company 16 from the covered financial company. 17 (6) STAY OF JUDICIAL ACTION.—Any judicial 18 action to which a bridge financial company becomes 19 a party by virtue of its acquisition of any assets or 20 assumption of any liabilities of a covered financial 21 company shall be stayed from further proceedings 22 for a period of not longer than 45 days (or such 23 longer period as may be agreed to upon the consent 24 of all parties) at the request of the bridge financial 25 company. 331 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (7) AGREEMENTS AGAINST INTEREST OF THE 2 BRIDGE FINANCIAL COMPANY.—No agreement that 3 tends to diminish or defeat the interest of the bridge 4 financial company in any asset of a covered financial 5 company acquired by the bridge financial company 6 shall be valid against the bridge financial company, 7 unless such agreement— 8 (A) is in writing; 9 (B) was executed by an authorized officer 10 or representative of the covered financial com11 pany or confirmed in the ordinary course of 12 business by the covered financial company; and 13 (C) has been on the official record of the 14 company, since the time of its execution, or 15 with which, the party claiming under the agree16 ment provides documentation of such agreement 17 and its authorized execution or confirmation by 18 the covered financial company that is acceptable 19 to the receiver. 20 (8) NO FEDERAL STATUS.— 21 (A) AGENCY STATUS.—A bridge financial 22 company is not an agency, establishment, or in23 strumentality of the United States. 24 (B) EMPLOYEE STATUS.—Representatives 25 for purposes of paragraph (1)(B), directors, of332 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 ficers, employees, or agents of a bridge financial 2 company are not, solely by virtue of service in 3 any such capacity, officers or employees of the 4 United States. Any employee of the Corporation 5 or of any Federal instrumentality who serves at 6 the request of the Corporation as a representa7 tive for purposes of paragraph (1)(B), director, 8 officer, employee, or agent of a bridge financial 9 company shall not— 10 (i) solely by virtue of service in any 11 such capacity lose any existing status as 12 an officer or employee of the United States 13 for purposes of title 5, United States Code, 14 or any other provision of law; or 15 (ii) receive any salary or benefits for 16 service in any such capacity with respect to 17 a bridge financial company in addition to 18 such salary or benefits as are obtained 19 through employment with the Corporation 20 or such Federal instrumentality. 21 (9) FUNDING AUTHORIZED.—The Corporation 22 may, subject to the plan described in subsection 23 (n)(9), provide funding to facilitate any transaction 24 described in subparagraph (A), (B), (C), or (D) of 25 paragraph (13) with respect to any bridge financial 333 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 company, or facilitate the acquisition by a bridge fi2 nancial company of any assets, or the assumption of 3 any liabilities, of a covered financial company for 4 which the Corporation has been appointed receiver. 5 (10) EXEMPT TAX STATUS.—Notwithstanding 6 any other provision of Federal or State law, a bridge 7 financial company, its franchise, property, and in8 come shall be exempt from all taxation now or here9 after imposed by the United States, by any territory, 10 dependency, or possession thereof, or by any State, 11 county, municipality, or local taxing authority. 12 (11) FEDERAL AGENCY APPROVAL; ANTITRUST 13 REVIEW.—If a transaction involving the merger or 14 sale of a bridge financial company requires approval 15 by a Federal agency, the transaction may not be 16 consummated before the 5th calendar day after the 17 date of approval by the Federal agency responsible 18 for such approval with respect thereto. If, in connec19 tion with any such approval a report on competitive 20 factors from the Attorney General is required, the 21 Federal agency responsible for such approval shall 22 promptly notify the Attorney General of the pro23 posed transaction and the Attorney General shall 24 provide the required report within 10 days of the re25 quest. If a notification is required under section 7A 334 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 of the Clayton Act with respect to such transaction, 2 the required waiting period shall end on the 15th 3 day after the date on which the Attorney General 4 and the Federal Trade Commission receive such no5 tification, unless the waiting period is terminated 6 earlier under section 7A(b)(2) of the Clayton Act, or 7 extended under section 7A(e)(2) of that Act. 8 (12) DURATION OF BRIDGE FINANCIAL COM9 PANY.—Subject to paragraphs (13) and (14), the 10 status of a bridge financial company as such shall 11 terminate at the end of the 2-year period following 12 the date on which it was granted a charter. The 13 Corporation may, in its discretion, extend the status 14 of the bridge financial company as such for no more 15 than 3 additional 1-year periods. 16 (13) TERMINATION OF BRIDGE FINANCIAL COM17 PANY STATUS.—The status of any bridge financial 18 company as such shall terminate upon the earliest 19 of— 20 (A) the date of the merger or consolidation 21 of the bridge financial company with a company 22 that is not a bridge financial company; 23 (B) at the election of the Corporation, the 24 sale of a majority of the capital stock of the 25 bridge financial company to a company other 335 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 than the Corporation and other than another 2 bridge financial company; 3 (C) the sale of 80 percent, or more, of the 4 capital stock of the bridge financial company to 5 a person other than the Corporation and other 6 than another bridge financial company; 7 (D) at the election of the Corporation, ei8 ther the assumption of all or substantially all of 9 the liabilities of the bridge financial company by 10 a company that is not a bridge financial com11 pany, or the acquisition of all or substantially 12 all of the assets of the bridge financial company 13 by a company that is not a bridge financial 14 company, or other entity as permitted under 15 applicable law; and 16 (E) the expiration of the period provided in 17 paragraph (12), or the earlier dissolution of the 18 bridge financial company, as provided in para19 graph (15). 20 (14) EFFECT OF TERMINATION EVENTS.— 21 (A) MERGER OR CONSOLIDATION.—A 22 merger or consolidation, described in paragraph 23 (13)(A) shall be conducted in accordance with, 24 and shall have the effect provided in, the provi25 sions of applicable law. For the purpose of ef336 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 fecting such a merger or consolidation, the 2 bridge financial company shall be treated as a 3 corporation organized under the laws of the 4 State of Delaware (unless the law of another 5 State has been selected by the bridge financial 6 company in accordance with paragraph (2)(F)), 7 and the Corporation shall be treated as the sole 8 shareholder thereof, notwithstanding any other 9 provision of State or Federal law. 10 (B) CHARTER CONVERSION.—Following 11 the sale of a majority of the capital stock of the 12 bridge financial company, as provided in para13 graph (13)(B), the Corporation may amend the 14 charter of the bridge financial company to re15 flect the termination of the status of the bridge 16 financial company as such, whereupon the com17 pany shall have all of the rights, powers, and 18 privileges under its constituent documents and 19 applicable Federal or State law. In connection 20 therewith, the Corporation may take such steps 21 as may be necessary or convenient to reincor22 porate the bridge financial company under the 23 laws of a State and, notwithstanding any provi24 sions of Federal or State law, such State-char25 tered corporation shall be deemed to succeed by 337 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 operation of law to such rights, titles, powers, 2 and interests of the bridge financial company as 3 the Corporation may provide, with the same ef4 fect as if the bridge financial company had 5 merged with the State-chartered corporation 6 under provisions of the corporate laws of such 7 State. 8 (C) SALE OF STOCK.—Following the sale 9 of 80 percent or more of the capital stock of a 10 bridge financial company, as provided in para11 graph (13)(C), the company shall have all of 12 the rights, powers, and privileges under its con13 stituent documents and applicable Federal or 14 State law. In connection therewith, the Cor15 poration may take such steps as may be nec16 essary or convenient to reincorporate the bridge 17 financial company under the laws of a State 18 and, notwithstanding any provisions of Federal 19 or State law, the State-chartered corporation 20 shall be deemed to succeed by operation of law 21 to such rights, titles, powers and interests of 22 the bridge financial company as the Corpora23 tion may provide, with the same effect as if the 24 bridge financial company had merged with the 338 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 State-chartered corporation under provisions of 2 the corporate laws of such State. 3 (D) ASSUMPTION OF LIABILITIES AND 4 SALE OF ASSETS.—Following the assumption of 5 all or substantially all of the liabilities of the 6 bridge financial company, or the sale of all or 7 substantially all of the assets of the bridge fi8 nancial company, as provided in paragraph 9 (13)(D), at the election of the Corporation, the 10 bridge financial company may retain its status 11 as such for the period provided in paragraph 12 (12) or may be dissolved at the election of the 13 Corporation. 14 (E) AMENDMENTS TO CHARTER.—Fol15 lowing the consummation of a transaction de16 scribed in subparagraph (A), (B), (C), or (D) 17 of paragraph (13), the charter of the resulting 18 company shall be amended to reflect the termi19 nation of bridge financial company status, if ap20 propriate. 21 (15) DISSOLUTION OF BRIDGE FINANCIAL COM22 PANY.— 23 (A) IN GENERAL.—Notwithstanding any 24 other provision of Federal or State law, if the 25 status of a bridge financial company as such 339 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 has not previously been terminated by the oc2 currence of an event specified in subparagraph 3 (A), (B), (C), or (D) of paragraph (13)— 4 (i) the Corporation may, in its discre5 tion, dissolve the bridge financial company 6 in accordance with this paragraph at any 7 time; and 8 (ii) the Corporation shall promptly 9 commence dissolution proceedings in ac10 cordance with this paragraph upon the ex11 piration of the 2-year period following the 12 date on which the bridge financial com13 pany was chartered, or any extension 14 thereof, as provided in paragraph (12). 15 (B) PROCEDURES.—The Corporation shall 16 remain the receiver for a bridge financial com17 pany for the purpose of dissolving the bridge fi18 nancial company. The Corporation as receiver 19 for a bridge financial company shall wind up 20 the affairs of the bridge financial company in 21 conformity with the provisions of law relating to 22 the liquidation of covered financial companies 23 under this title. With respect to any such bridge 24 financial company, the Corporation as receiver 25 shall have all the rights, powers, and privileges 340 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 and shall perform the duties related to the exer2 cise of such rights, powers, or privileges granted 3 by law to the Corporation as receiver for a cov4 ered financial company under this title and, 5 notwithstanding any other provision of law, in 6 the exercise of such rights, powers, and privi7 leges, the Corporation shall not be subject to 8 the direction or supervision of any State agency 9 or other Federal agency. 10 (16) AUTHORITY TO OBTAIN CREDIT.— 11 (A) IN GENERAL.—A bridge financial com12 pany may obtain unsecured credit and issue un13 secured debt. 14 (B) INABILITY TO OBTAIN CREDIT.—If a 15 bridge financial company is unable to obtain 16 unsecured credit or issue unsecured debt, the 17 Corporation may authorize the obtaining of 18 credit or the issuance of debt by the bridge fi19 nancial company— 20 (i) with priority over any or all of the 21 obligations of the bridge financial com22 pany; 23 (ii) secured by a lien on property of 24 the bridge financial company that is not 25 otherwise subject to a lien; or 341 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (iii) secured by a junior lien on prop2 erty of the bridge financial company that 3 is subject to a lien. 4 (C) LIMITATIONS.— 5 (i) IN GENERAL.—The Corporation, 6 after notice and a hearing, may authorize 7 the obtaining of credit or the issuance of 8 debt by a bridge financial company that is 9 secured by a senior or equal lien on prop10 erty of the bridge financial company that 11 is subject to a lien, only if— 12 (I) the bridge financial company 13 is unable to otherwise obtain such 14 credit or issue such debt; and 15 (II) there is adequate protection 16 of the interest of the holder of the lien 17 on the property with respect to which 18 such senior or equal lien is proposed 19 to be granted. 20 (ii) HEARING.—The hearing required 21 pursuant to this subparagraph shall be be22 fore a court of the United States, which 23 shall have jurisdiction to conduct such 24 hearing and to authorize a bridge financial 342 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 company to obtain secured credit under 2 clause (i). 3 (D) BURDEN OF PROOF.—In any hearing 4 under this paragraph, the Corporation has the 5 burden of proof on the issue of adequate protec6 tion. 7 (E) QUALIFIED FINANCIAL CONTRACTS.— 8 No credit or debt obtained or issued by a bridge 9 financial company may contain terms that im10 pair the rights of a counterparty to a qualified 11 financial contract upon a default by the bridge 12 financial company, other than the priority of 13 such counterparty’s unsecured claim (after the 14 exercise of rights) relative to the priority of the 15 bridge financial company’s obligations in re16 spect of such credit or debt, unless such 17 counterparty consents in writing to any such 18 impairment. 19 (17) EFFECT ON DEBTS AND LIENS.—The re20 versal or modification on appeal of an authorization 21 under this subsection to obtain credit or issue debt, 22 or of a grant under this section of a priority or a 23 lien, does not affect the validity of any debt so 24 issued, or any priority or lien so granted, to an enti25 ty that extended such credit in good faith, whether 343 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 or not such entity knew of the pendency of the ap2 peal, unless such authorization and the issuance of 3 such debt, or the granting of such priority or lien, 4 were stayed pending appeal. 5 (i) SHARING RECORDS.—If the Corporation has been 6 appointed as receiver for a covered financial company, 7 other Federal regulators shall make all records relating 8 to the covered financial company available to the Corpora9 tion, which may be used by the Corporation in any manner 10 that the Corporation determines to be appropriate. 11 (j) EXPEDITED PROCEDURES FOR CERTAIN 12 CLAIMS.— 13 (1) TIME FOR FILING NOTICE OF APPEAL.— 14 The notice of appeal of any order, whether interlocu15 tory or final, entered in any case brought by the 16 Corporation against a director, officer, employee, 17 agent, attorney, accountant, or appraiser of the cov18 ered financial company, or any other person em19 ployed by or providing services to a covered financial 20 company, shall be filed not later than 30 days after 21 the date of entry of the order. The hearing of the 22 appeal shall be held not later than 120 days after 23 the date of the notice of appeal. The appeal shall be 24 decided not later than 180 days after the date of the 25 notice of appeal. 344 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (2) SCHEDULING.—The court shall expedite the 2 consideration of any case brought by the Corpora3 tion against a director, officer, employee, agent, at4 torney, accountant, or appraiser of a covered finan5 cial company or any other person employed by or 6 providing services to a covered financial company. 7 As far as practicable, the court shall give such case 8 priority on its docket. 9 (3) JUDICIAL DISCRETION.—The court may 10 modify the schedule and limitations stated in para11 graphs (1) and (2) in a particular case, based on a 12 specific finding that the ends of justice that would 13 be served by making such a modification would out14 weigh the best interest of the public in having the 15 case resolved expeditiously. 16 (k) FOREIGN INVESTIGATIONS.—The Corporation, as 17 receiver for any covered financial company, and for pur18 poses of carrying out any power, authority, or duty with 19 respect to a covered financial company— 20 (1) may request the assistance of any foreign fi21 nancial authority and provide assistance to any for22 eign financial authority in accordance with section 23 8(v) of the Federal Deposit Insurance Act, as if the 24 covered financial company were an insured deposi25 tory institution, the Corporation were the appro345 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 priate Federal banking agency for the company, and 2 any foreign financial authority were the foreign 3 banking authority; and 4 (2) may maintain an office to coordinate for5 eign investigations or investigations on behalf of for6 eign financial authorities. 7 (l) PROHIBITION ON ENTERING SECRECY AGREE8 MENTS AND PROTECTIVE ORDERS.—The Corporation 9 may not enter into any agreement or approve any protec10 tive order which prohibits the Corporation from disclosing 11 the terms of any settlement of an administrative or other 12 action for damages or restitution brought by the Corpora13 tion in its capacity as receiver for a covered financial com14 pany. 15 (m) LIQUIDATION OF CERTAIN COVERED FINANCIAL 16 COMPANIES OR BRIDGE FINANCIAL COMPANIES.— 17 (1) IN GENERAL.—Except as specifically pro18 vided in this section, and notwithstanding any other 19 provision of law, the Corporation, in connection with 20 the liquidation of any covered financial company or 21 bridge financial company with respect to which the 22 Corporation has been appointed as receiver, shall— 23 (A) in the case of any covered financial 24 company or bridge financial company that is a 25 stockbroker, but is not a member of the Securi346 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 ties Investor Protection Corporation, apply the 2 provisions of subchapter III of chapter 7 of the 3 Bankruptcy Code, in respect of the distribution 4 to any customer of all customer name security 5 and customer property and member property, 6 as if such covered financial company or bridge 7 financial company were a debtor for purposes of 8 such subchapter; or 9 (B) in the case of any covered financial 10 company or bridge financial company that is a 11 commodity broker, apply the provisions of sub12 chapter IV of chapter 7 the Bankruptcy Code, 13 in respect of the distribution to any customer of 14 all customer property and member property, as 15 if such covered financial company or bridge fi16 nancial company were a debtor for purposes of 17 such subchapter. 18 (2) DEFINITIONS.—For purposes of this sub19 section— 20 (A) the terms ‘‘customer’’, ‘‘customer 21 name security’’, and ‘‘customer property and 22 member property’’ have the same meanings as 23 in sections 741 and 761 of title 11, United 24 States Code; and 347 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (B) the terms ‘‘commodity broker’’ and 2 ‘‘stockbroker’’ have the same meanings as in 3 section 101 of the Bankruptcy Code. 4 (n) ORDERLY LIQUIDATION FUND.— 5 (1) ESTABLISHMENT.—There is established in 6 the Treasury of the United States a separate fund 7 to be known as the ‘‘Orderly Liquidation Fund’’, 8 which shall be available to the Corporation to carry 9 out the authorities contained in this title, for the 10 cost of actions authorized by this title, including the 11 orderly liquidation of covered financial companies, 12 payment of administrative expenses, the payment of 13 principal and interest by the Corporation on obliga14 tions issued under paragraph (5), and the exercise 15 of the authorities of the Corporation under this title. 16 (2) PROCEEDS.—Amounts received by the Cor17 poration, including assessments received under sub18 section (o), proceeds of obligations issued under 19 paragraph (5), interest and other earnings from in20 vestments, and repayments to the Corporation by 21 covered financial companies, shall be deposited into 22 the Fund. 23 (3) MANAGEMENT.—The Corporation shall 24 manage the Fund in accordance with this subsection 348 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 and the policies and procedures established under 2 section 203(d). 3 (4) INVESTMENTS.—At the request of the Cor4 poration, the Secretary may invest such portion of 5 amounts held in the Fund that are not, in the judg6 ment of the Corporation, required to meet the cur7 rent needs of the Corporation, in obligations of the 8 United States having suitable maturities, as deter9 mined by the Corporation. The interest on and the 10 proceeds from the sale or redemption of such obliga11 tions shall be credited to the Fund. 12 (5) AUTHORITY TO ISSUE OBLIGATIONS.— 13 (A) CORPORATION AUTHORIZED TO ISSUE 14 OBLIGATIONS.—Upon appointment by the Sec15 retary of the Corporation as receiver for a cov16 ered financial company, the Corporation is au17 thorized to issue obligations to the Secretary. 18 (B) SECRETARY AUTHORIZED TO PUR19 CHASE OBLIGATIONS.—The Secretary may, 20 under such terms and conditions as the Sec21 retary may require, purchase or agree to pur22 chase any obligations issued under subpara23 graph (A), and for such purpose, the Secretary 24 is authorized to use as a public debt transaction 25 the proceeds of the sale of any securities issued 349 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 under chapter 31 of title 31, United States 2 Code, and the purposes for which securities 3 may be issued under chapter 31 of title 31, 4 United States Code, are extended to include 5 such purchases. 6 (C) INTEREST RATE.—Each purchase of 7 obligations by the Secretary under this para8 graph shall be upon such terms and conditions 9 as to yield a return at a rate determined by the 10 Secretary, taking into consideration the current 11 average yield on outstanding marketable obliga12 tions of the United States of comparable matu13 rity, plus an interest rate surcharge to be deter14 mined by the Secretary, which shall be greater 15 than the difference between— 16 (i) the current average rate on an 17 index of corporate obligations of com18 parable maturity; and 19 (ii) the current average rate on out20 standing marketable obligations of the 21 United States of comparable maturity. 22 (D) SECRETARY AUTHORIZED TO SELL OB23 LIGATIONS.—The Secretary may sell, upon such 24 terms and conditions as the Secretary shall de350 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 termine, any of the obligations acquired under 2 this paragraph. 3 (E) PUBLIC DEBT TRANSACTIONS.—All 4 purchases and sales by the Secretary of such 5 obligations under this paragraph shall be treat6 ed as public debt transactions of the United 7 States, and the proceeds from the sale of any 8 obligations acquired by the Secretary under this 9 paragraph shall be deposited into the Treasury 10 of the United States as miscellaneous receipts. 11 (6) MAXIMUM OBLIGATION LIMITATION.—The 12 Corporation may not, in connection with the orderly 13 liquidation of a covered financial company, issue or 14 incur any obligation, if, after issuing or incurring 15 the obligation, the aggregate amount of such obliga16 tions outstanding under this subsection for each cov17 ered financial company would exceed— 18 (A) an amount that is equal to 10 percent 19 of the total consolidated assets of the covered 20 financial company, based on the most recent fi21 nancial statement available, during the 30-day 22 period immediately following the date of ap23 pointment of the Corporation as receiver (or a 24 shorter time period if the Corporation has cal351 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 culated the amount described under subpara2 graph (B)); and 3 (B) the amount that is equal to 90 percent 4 of the fair value of the total consolidated assets 5 of each covered financial company that are 6 available for repayment, after the time period 7 described in subparagraph (A). 8 (7) RULEMAKING.—The Corporation and the 9 Secretary shall jointly, in consultation with the 10 Council, prescribe regulations governing the calcula11 tion of the maximum obligation limitation defined in 12 this paragraph. 13 (8) RULE OF CONSTRUCTION.— 14 (A) IN GENERAL.—Nothing in this section 15 shall be construed to affect the authority of the 16 Corporation under subsection (a) or (b) of sec17 tion 14 or section 15(c)(5) of the Federal De18 posit Insurance Act (12 U.S.C. 1824, 19 1825(c)(5)), the management of the Deposit In20 surance Fund by the Corporation, or the resolu21 tion of insured depository institutions, provided 22 that— 23 (i) the authorities of the Corporation 24 contained in this title shall not be used to 25 assist the Deposit Insurance Fund or to 352 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 assist any financial company under appli2 cable law other than this Act; 3 (ii) the authorities of the Corporation 4 relating to the Deposit Insurance Fund, or 5 any other responsibilities of the Corpora6 tion under applicable law other than this 7 title, shall not be used to assist a covered 8 financial company pursuant to this title; 9 and 10 (iii) the Deposit Insurance Fund may 11 not be used in any manner to otherwise 12 circumvent the purposes of this title. 13 (B) VALUATION.—For purposes of deter14 mining the amount of obligations under this 15 subsection— 16 (i) the Corporation shall include as an 17 obligation any contingent liability of the 18 Corporation pursuant to this title; and 19 (ii) the Corporation shall value any 20 contingent liability at its expected cost to 21 the Corporation. 22 (9) ORDERLY LIQUIDATION AND REPAYMENT 23 PLANS.— 24 (A) ORDERLY LIQUIDATION PLAN.— 25 Amounts in the Fund shall be available to the 353 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 Corporation with regard to a covered financial 2 company for which the Corporation is appointed 3 receiver after the Corporation has developed an 4 orderly liquidation plan that is acceptable to the 5 Secretary with regard to such covered financial 6 company, including the provision and use of 7 funds, including taking any actions specified 8 under section 204(d) and subsection 9 (h)(2)(G)(iv) and (h)(9) of this section, and 10 payments to third parties. The orderly liquida11 tion plan shall take into account actions to 12 avoid or mitigate potential adverse effects on 13 low income, minority, or underserved commu14 nities affected by the failure of the covered fi15 nancial company, and shall provide for coordi16 nation with the primary financial regulatory 17 agencies, as appropriate, to ensure that such 18 actions are taken. The Corporation may, at any 19 time, amend any orderly liquidation plan ap20 proved by the Secretary with the concurrence of 21 the Secretary. 22 (B) MANDATORY REPAYMENT PLAN.— 23 (i) IN GENERAL.—No amount author24 ized under paragraph (6)(B) may be pro25 vided by the Secretary to the Corporation 354 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 under paragraph (5), unless an agreement 2 is in effect between the Secretary and the 3 Corporation that— 4 (I) provides a specific plan and 5 schedule to achieve the repayment of 6 the outstanding amount of any bor7 rowing under paragraph (5); and 8 (II) demonstrates that income to 9 the Corporation from the liquidated 10 assets of the covered financial com11 pany and assessments under sub12 section (o) will be sufficient to amor13 tize the outstanding balance within 14 the period established in the repay15 ment schedule and pay the interest 16 accruing on such balance within the 17 time provided in subsection (o)(1)(B). 18 (ii) CONSULTATION WITH AND RE19 PORT TO CONGRESS.—The Secretary and 20 the Corporation shall— 21 (I) consult with the Committee 22 on Banking, Housing, and Urban Af23 fairs of the Senate and the Committee 24 on Financial Services of the House of 355 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 Representatives on the terms of any 2 repayment schedule agreement; and 3 (II) submit a copy of the repay4 ment schedule agreement to the Com5 mittees described in subclause (I) be6 fore the end of the 30-day period be7 ginning on the date on which any 8 amount is provided by the Secretary 9 to the Corporation under paragraph 10 (5). 11 (10) IMPLEMENTATION EXPENSES.— 12 (A) IN GENERAL.—Reasonable implemen13 tation expenses of the Corporation incurred 14 after the date of enactment of this Act shall be 15 treated as expenses of the Council. 16 (B) REQUESTS FOR REIMBURSEMENT.— 17 The Corporation shall periodically submit a re18 quest for reimbursement for implementation ex19 penses to the Chairperson of the Council, who 20 shall arrange for prompt reimbursement to the 21 Corporation of reasonable implementation ex22 penses. 23 (C) DEFINITION.—As used in this para24 graph, the term ‘‘implementation expenses’’— 356 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (i) means costs incurred by the Cor2 poration beginning on the date of enact3 ment of this Act, as part of its efforts to 4 implement this title that do not relate to a 5 particular covered financial company; and 6 (ii) includes the costs incurred in con7 nection with the development of policies, 8 procedures, rules, and regulations and 9 other planning activities of the Corporation 10 consistent with carrying out this title. 11 (o) ASSESSMENTS.— 12 (1) RISK-BASED ASSESSMENTS.— 13 (A) ELIGIBLE FINANCIAL COMPANIES DE14 FINED.—For purposes of this subsection, the 15 term ‘‘eligible financial company’’ means any 16 bank holding company with total consolidated 17 assets equal to or greater than 18 $50,000,000,000 and any nonbank financial 19 company supervised by the Board of Governors. 20 (B) ASSESSMENTS.—The Corporation shall 21 charge one or more risk-based assessments in 22 accordance with the provisions of subparagraph 23 (D), if such assessments are necessary to pay 24 in full the obligations issued by the Corporation 25 to the Secretary under this title within 60 357 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 months of the date of issuance of such obliga2 tions. 3 (C) EXTENSIONS AUTHORIZED.—The Cor4 poration may, with the approval of the Sec5 retary, extend the time period under subpara6 graph (B), if the Corporation determines that 7 an extension is necessary to avoid a serious ad8 verse effect on the financial system of the 9 United States. 10 (D) APPLICATION OF ASSESSMENTS.—To 11 meet the requirements of subparagraph (B), the 12 Corporation shall— 13 (i) impose assessments, as soon as 14 practicable, on any claimant that received 15 additional payments or amounts from the 16 Corporation pursuant to subsection (b)(4), 17 (d)(4), or (h)(5)(E), except for payments 18 or amounts necessary to initiate and con19 tinue operations essential to implementa20 tion of the receivership or any bridge fi21 nancial company, to recover on a cumu22 lative basis, the entire difference be23 tween— 24 (I) the aggregate value the claim25 ant received from the Corporation on 358 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 a claim pursuant to this title (includ2 ing pursuant to subsection (b)(4), 3 (d)(4), and (h)(5)(E)), as of the date 4 on which such value was received; and 5 (II) the value the claimant was 6 entitled to receive from the Corpora7 tion on such claim solely from the 8 proceeds of the liquidation of the cov9 ered financial company under this 10 title; and 11 (ii) if the amounts to be recovered on 12 a cumulative basis under clause (i) are in13 sufficient to meet the requirements of sub14 paragraph (B), after taking into account 15 the considerations set forth in paragraph 16 (4), impose assessments on— 17 (I) eligible financial companies; 18 and 19 (II) financial companies with 20 total consolidated assets equal to or 21 greater than $50,000,000,000 that 22 are not eligible financial companies. 23 (E) PROVISION OF FINANCING.—Payments 24 or amounts necessary to initiate and continue 25 operations essential to implementation of the 359 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 receivership or any bridge financial company 2 described in subparagraph (D)(i) shall not in3 clude the provision of financing, as defined by 4 rule of the Corporation, to third parties. 5 (2) GRADUATED ASSESSMENT RATE.—The Cor6 poration shall impose assessments on a graduated 7 basis, with financial companies having greater assets 8 and risk being assessed at a higher rate. 9 (3) NOTIFICATION AND PAYMENT.—The Cor10 poration shall notify each financial company of that 11 company’s assessment under this subsection. Any fi12 nancial company subject to assessment under this 13 subsection shall pay such assessment in accordance 14 with the regulations prescribed pursuant to para15 graph (6). 16 (4) RISK-BASED ASSESSMENT CONSIDER17 ATIONS.—In imposing assessments under paragraph 18 (1)(D)(ii), the Corporation shall use a risk matrix. 19 The Council shall make a recommendation to the 20 Corporation on the risk matrix to be used in impos21 ing such assessments, and the Corporation shall take 22 into account any such recommendation in the estab23 lishment of the risk matrix to be used to impose 24 such assessments. In recommending or establishing 360 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 such risk matrix, the Council and the Corporation, 2 respectively, shall take into account— 3 (A) economic conditions generally affecting 4 financial companies so as to allow assessments 5 to increase during more favorable economic con6 ditions and to decrease during less favorable 7 economic conditions; 8 (B) any assessments imposed on a finan9 cial company or an affiliate of a financial com10 pany that— 11 (i) is an insured depository institu12 tion, assessed pursuant to section 7 or 13 13(c)(4)(G) of the Federal Deposit Insur14 ance Act; 15 (ii) is a member of the Securities In16 vestor Protection Corporation, assessed 17 pursuant to section 4 of the Securities In18 vestor Protection Act of 1970 (15 U.S.C. 19 78ddd); 20 (iii) is an insured credit union, as21 sessed pursuant to section 202(c)(1)(A)(i) 22 of the Federal Credit Union Act (12 23 U.S.C. 1782(c)(1)(A)(i)); or 24 (iv) is an insurance company, assessed 25 pursuant to applicable State law to cover 361 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (or reimburse payments made to cover) the 2 costs of the rehabilitation, liquidation, or 3 other State insolvency proceeding with re4 spect to 1 or more insurance companies; 5 (C) the risks presented by the financial 6 company to the financial system and the extent 7 to which the financial company has benefitted, 8 or likely would benefit, from the orderly liquida9 tion of a financial company under this title, in10 cluding— 11 (i) the amount, different categories, 12 and concentrations of assets of the finan13 cial company and its affiliates, including 14 both on-balance sheet and off-balance sheet 15 assets; 16 (ii) the activities of the financial com17 pany and its affiliates; 18 (iii) the relevant market share of the 19 financial company and its affiliates; 20 (iv) the extent to which the financial 21 company is leveraged; 22 (v) the potential exposure to sudden 23 calls on liquidity precipitated by economic 24 distress; 362 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (vi) the amount, maturity, volatility, 2 and stability of the company’s financial ob3 ligations to, and relationship with, other fi4 nancial companies; 5 (vii) the amount, maturity, volatility, 6 and stability of the liabilities of the com7 pany, including the degree of reliance on 8 short-term funding, taking into consider9 ation existing systems for measuring a 10 company’s risk-based capital; 11 (viii) the stability and variety of the 12 company’s sources of funding; 13 (ix) the company’s importance as a 14 source of credit for households, businesses, 15 and State and local governments and as a 16 source of liquidity for the financial system; 17 (x) the extent to which assets are sim18 ply managed and not owned by the finan19 cial company and the extent to which own20 ership of assets under management is dif21 fuse; and 22 (xi) the amount, different categories, 23 and concentrations of liabilities, both in24 sured and uninsured, contingent and non25 contingent, including both on-balance sheet 363 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 and off-balance sheet liabilities, of the fi2 nancial company and its affiliates; 3 (D) any risks presented by the financial 4 company during the 10-year period immediately 5 prior to the appointment of the Corporation as 6 receiver for the covered financial company that 7 contributed to the failure of the covered finan8 cial company; and 9 (E) such other risk-related factors as the 10 Corporation, or the Council, as applicable, may 11 determine to be appropriate. 12 (5) COLLECTION OF INFORMATION.—The Cor13 poration may impose on covered financial companies 14 such collection of information requirements as the 15 Corporation deems necessary to carry out this sub16 section after the appointment of the Corporation as 17 receiver under this title. 18 (6) RULEMAKING.— 19 (A) IN GENERAL.—The Corporation shall 20 prescribe regulations to carry out this sub21 section. The Corporation shall consult with the 22 Secretary in the development and finalization of 23 such regulations. 24 (B) EQUITABLE TREATMENT.—The regu25 lations prescribed under subparagraph (A) shall 364 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 take into account the differences in risks posed 2 to the financial stability of the United States by 3 financial companies, the differences in the li4 ability structures of financial companies, and 5 the different bases for other assessments that 6 such financial companies may be required to 7 pay, to ensure that assessed financial compa8 nies are treated equitably and that assessments 9 under this subsection reflect such differences. 10 (p) UNENFORCEABILITY OF CERTAIN AGREE11 MENTS.— 12 (1) IN GENERAL.—No provision described in 13 paragraph (2) shall be enforceable against or impose 14 any liability on any person, as such enforcement or 15 liability shall be contrary to public policy. 16 (2) PROHIBITED PROVISIONS.—A provision de17 scribed in this paragraph is any term contained in 18 any existing or future standstill, confidentiality, or 19 other agreement that, directly or indirectly— 20 (A) affects, restricts, or limits the ability 21 of any person to offer to acquire or acquire; 22 (B) prohibits any person from offering to 23 acquire or acquiring; or 365 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (C) prohibits any person from using any 2 previously disclosed information in connection 3 with any such offer to acquire or acquisition of, 4 all or part of any covered financial company, includ5 ing any liabilities, assets, or interest therein, in con6 nection with any transaction in which the Corpora7 tion exercises its authority under this title. 8 (q) OTHER EXEMPTIONS.— 9 (1) IN GENERAL.—When acting as a receiver 10 under this title— 11 (A) the Corporation, including its fran12 chise, its capital, reserves and surplus, and its 13 income, shall be exempt from all taxation im14 posed by any State, county, municipality, or 15 local taxing authority, except that any real 16 property of the Corporation shall be subject to 17 State, territorial, county, municipal, or local 18 taxation to the same extent according to its 19 value as other real property is taxed, except 20 that, notwithstanding the failure of any person 21 to challenge an assessment under State law of 22 the value of such property, such value, and the 23 tax thereon, shall be determined as of the pe24 riod for which such tax is imposed; 366 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (B) no property of the Corporation shall be 2 subject to levy, attachment, garnishment, fore3 closure, or sale without the consent of the Cor4 poration, nor shall any involuntary lien attach 5 to the property of the Corporation; and 6 (C) the Corporation shall not be liable for 7 any amounts in the nature of penalties or fines, 8 including those arising from the failure of any 9 person to pay any real property, personal prop10 erty, probate, or recording tax or any recording 11 or filing fees when due; and 12 (D) the Corporation shall be exempt from 13 all prosecution by the United States or any 14 State, county, municipality, or local authority 15 for any criminal offense arising under Federal, 16 State, county, municipal, or local law, which 17 was allegedly committed by the covered finan18 cial company, or persons acting on behalf of the 19 covered financial company, prior to the appoint20 ment of the Corporation as receiver. 21 (2) LIMITATION.—Paragraph (1) shall not 22 apply with respect to any tax imposed (or other 23 amount arising) under the Internal Revenue Code of 24 1986. 25 (r) CERTAIN SALES OF ASSETS PROHIBITED.— 367 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (1) PERSONS WHO ENGAGED IN IMPROPER CON2 DUCT WITH, OR CAUSED LOSSES TO, COVERED FI3 NANCIAL COMPANIES.—The Corporation shall pre4 scribe regulations which, at a minimum, shall pro5 hibit the sale of assets of a covered financial com6 pany by the Corporation to— 7 (A) any person who— 8 (i) has defaulted, or was a member of 9 a partnership or an officer or director of a 10 corporation that has defaulted, on 1 or 11 more obligations, the aggregate amount of 12 which exceeds $1,000,000, to such covered 13 financial company; 14 (ii) has been found to have engaged in 15 fraudulent activity in connection with any 16 obligation referred to in clause (i); and 17 (iii) proposes to purchase any such 18 asset in whole or in part through the use 19 of the proceeds of a loan or advance of 20 credit from the Corporation or from any 21 covered financial company; 22 (B) any person who participated, as an of23 ficer or director of such covered financial com24 pany or of any affiliate of such company, in a 25 material way in any transaction that resulted in 368 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 a substantial loss to such covered financial com2 pany; or 3 (C) any person who has demonstrated a 4 pattern or practice of defalcation regarding ob5 ligations to such covered financial company. 6 (2) CONVICTED DEBTORS.—Except as provided 7 in paragraph (3), a person may not purchase any 8 asset of such institution from the receiver, if that 9 person— 10 (A) has been convicted of an offense under 11 section 215, 656, 657, 1005, 1006, 1007, 1008, 12 1014, 1032, 1341, 1343, or 1344 of title 18, 13 United States Code, or of conspiring to commit 14 such an offense, affecting any covered financial 15 company; and 16 (B) is in default on any loan or other ex17 tension of credit from such covered financial 18 company which, if not paid, will cause substan19 tial loss to the Fund or the Corporation. 20 (3) SETTLEMENT OF CLAIMS.—Paragraphs (1) 21 and (2) shall not apply to the sale or transfer by the 22 Corporation of any asset of any covered financial 23 company to any person, if the sale or transfer of the 24 asset resolves or settles, or is part of the resolution 25 or settlement, of 1 or more claims that have been, 369 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 or could have been, asserted by the Corporation 2 against the person. 3 (4) DEFINITION OF DEFAULT.—For purposes 4 of this subsection, the term ‘‘default’’ means a fail5 ure to comply with the terms of a loan or other obli6 gation to such an extent that the property securing 7 the obligation is foreclosed upon. 8 (s) RECOUPMENT OF COMPENSATION FROM SENIOR 9 EXECUTIVES AND DIRECTORS.— 10 (1) IN GENERAL.—The Corporation, as receiver 11 of a covered financial company, may recover from 12 any current or former senior executive or director 13 substantially responsible for the failed condition of 14 the covered financial company any compensation re15 ceived during the 2-year period preceding the date 16 on which the Corporation was appointed as the re17 ceiver of the covered financial company, except that, 18 in the case of fraud, no time limit shall apply. 19 (2) COST CONSIDERATIONS.—In seeking to re20 cover any such compensation, the Corporation shall 21 weigh the financial and deterrent benefits of such re22 covery against the cost of executing the recovery. 23 (3) RULEMAKING.—The Corporation shall pro24 mulgate regulations to implement the requirements 25 of this subsection, including defining the term ‘‘com370 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 pensation’’ to mean any financial remuneration, in2 cluding salary, bonuses, incentives, benefits, sever3 ance, deferred compensation, or golden parachute 4 benefits, and any profits realized from the sale of 5 the securities of the covered financial company. 6 SEC. 211. MISCELLANEOUS PROVISIONS. 7 (a) CLARIFICATION OF PROHIBITION REGARDING 8 CONCEALMENT OF ASSETS FROM RECEIVER OR LIQUI9 DATING AGENT.—Section 1032(1) of title 18, United 10 States Code, is amended by inserting ‘‘the Federal Deposit 11 Insurance Corporation acting as receiver for a covered fi12 nancial company, in accordance with title II of the Dodd- 13 Frank Wall Street Reform and Consumer Protection Act,’’ 14 before ‘‘or the National Credit’’. 15 (b) CONFORMING AMENDMENT.—Section 1032 of 16 title 18, United States Code, is amended in the section 17 heading, by striking ‘‘of financial institution’’. 18 (c) FEDERAL DEPOSIT INSURANCE CORPORATION 19 IMPROVEMENT ACT OF 1991.—Section 403(a) of the Fed20 eral Deposit Insurance Corporation Improvement Act of 21 1991 (12 U.S.C. 4403(a)) is amended by inserting ‘‘sec22 tion 210(c) of the Dodd-Frank Wall Street Reform and 23 Consumer Protection Act, section 1367 of the Federal 24 Housing Enterprises Financial Safety and Soundness Act 371 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 of 1992 (12 U.S.C. 4617(d)),’’ after ‘‘section 11(e) of the 2 Federal Deposit Insurance Act,’’. 3 (d) FDIC INSPECTOR GENERAL REVIEWS.— 4 (1) SCOPE.—The Inspector General of the Cor5 poration shall conduct, supervise, and coordinate au6 dits and investigations of the liquidation of any cov7 ered financial company by the Corporation as re8 ceiver under this title, including collecting and sum9 marizing— 10 (A) a description of actions taken by the 11 Corporation as receiver; 12 (B) a description of any material sales, 13 transfers, mergers, obligations, purchases, and 14 other material transactions entered into by the 15 Corporation; 16 (C) an evaluation of the adequacy of the 17 policies and procedures of the Corporation 18 under section 203(d) and orderly liquidation 19 plan under section 210(n)(14); 20 (D) an evaluation of the utilization by the 21 Corporation of the private sector in carrying 22 out its functions, including the adequacy of any 23 conflict-of-interest reviews; and 24 (E) an evaluation of the overall perform25 ance of the Corporation in liquidating the cov372 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 ered financial company, including administra2 tive costs, timeliness of liquidation process, and 3 impact on the financial system. 4 (2) FREQUENCY.—Not later than 6 months 5 after the date of appointment of the Corporation as 6 receiver under this title and every 6 months there7 after, the Inspector General of the Corporation shall 8 conduct the audit and investigation described in 9 paragraph (1). 10 (3) REPORTS AND TESTIMONY.—The Inspector 11 General of the Corporation shall include in the semi12 annual reports required by section 5(a) of the In13 spector General Act of 1978 (5 U.S.C. App.), a sum14 mary of the findings and evaluations under para15 graph (1), and shall appear before the appropriate 16 committees of Congress, if requested, to present 17 each such report. 18 (4) FUNDING.— 19 (A) INITIAL FUNDING.—The expenses of 20 the Inspector General of the Corporation in car21 rying out this subsection shall be considered ad22 ministrative expenses of the receivership. 23 (B) ADDITIONAL FUNDING.—If the max24 imum amount available to the Corporation as 25 receiver under this title is insufficient to enable 373 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 the Inspector General of the Corporation to 2 carry out the duties under this subsection, the 3 Corporation shall pay such additional amounts 4 from assessments imposed under section 210. 5 (5) TERMINATION OF RESPONSIBILITIES.—The 6 duties and responsibilities of the Inspector General 7 of the Corporation under this subsection shall termi8 nate 1 year after the date of termination of the re9 ceivership under this title. 10 (e) TREASURY INSPECTOR GENERAL REVIEWS.— 11 (1) SCOPE.—The Inspector General of the De12 partment of the Treasury shall conduct, supervise, 13 and coordinate audits and investigations of actions 14 taken by the Secretary related to the liquidation of 15 any covered financial company under this title, in16 cluding collecting and summarizing— 17 (A) a description of actions taken by the 18 Secretary under this title; 19 (B) an analysis of the approval by the Sec20 retary of the policies and procedures of the Cor21 poration under section 203 and acceptance of 22 the orderly liquidation plan of the Corporation 23 under section 210; and 24 (C) an assessment of the terms and condi25 tions underlying the purchase by the Secretary 374 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 of obligations of the Corporation under section 2 210. 3 (2) FREQUENCY.—Not later than 6 months 4 after the date of appointment of the Corporation as 5 receiver under this title and every 6 months there6 after, the Inspector General of the Department of 7 the Treasury shall conduct the audit and investiga8 tion described in paragraph (1). 9 (3) REPORTS AND TESTIMONY.—The Inspector 10 General of the Department of the Treasury shall in11 clude in the semiannual reports required by section 12 5(a) of the Inspector General Act of 1978 (5 U.S.C. 13 App.), a summary of the findings and assessments 14 under paragraph (1), and shall appear before the 15 appropriate committees of Congress, if requested, to 16 present each such report. 17 (4) TERMINATION OF RESPONSIBILITIES.—The 18 duties and responsibilities of the Inspector General 19 of the Department of the Treasury under this sub20 section shall terminate 1 year after the date on 21 which the obligations purchased by the Secretary 22 from the Corporation under section 210 are fully re23 deemed. 24 (f) PRIMARY FINANCIAL REGULATORY AGENCY IN25 SPECTOR GENERAL REVIEWS.— 375 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (1) SCOPE.—Upon the appointment of the Cor2 poration as receiver for a covered financial company 3 supervised by a Federal primary financial regulatory 4 agency or the Board of Governors under section 5 165, the Inspector General of the agency or the 6 Board of Governors shall make a written report re7 viewing the supervision by the agency or the Board 8 of Governors of the covered financial company, 9 which shall— 10 (A) evaluate the effectiveness of the agency 11 or the Board of Governors in carrying out its 12 supervisory responsibilities with respect to the 13 covered financial company; 14 (B) identify any acts or omissions on the 15 part of agency or Board of Governors officials 16 that contributed to the covered financial com17 pany being in default or in danger of default; 18 (C) identify any actions that could have 19 been taken by the agency or the Board of Gov20 ernors that would have prevented the company 21 from being in default or in danger of default; 22 and 23 (D) recommend appropriate administrative 24 or legislative action. 376 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (2) REPORTS AND TESTIMONY.—Not later than 2 1 year after the date of appointment of the Corpora3 tion as receiver under this title, the Inspector Gen4 eral of the Federal primary financial regulatory 5 agency or the Board of Governors shall provide the 6 report required by paragraph (1) to such agency or 7 the Board of Governors, and along with such agency 8 or the Board of Governors, as applicable, shall ap9 pear before the appropriate committees of Congress, 10 if requested, to present the report required by para11 graph (1). Not later than 90 days after the date of 12 receipt of the report required by paragraph (1), such 13 agency or the Board of Governors, as applicable, 14 shall provide a written report to Congress describing 15 any actions taken in response to the recommenda16 tions in the report, and if no such actions were 17 taken, describing the reasons why no actions were 18 taken. 19 SEC. 212. PROHIBITION OF CIRCUMVENTION AND PREVEN20 TION OF CONFLICTS OF INTEREST. 21 (a) NO OTHER FUNDING.—Funds for the orderly liq22 uidation of any covered financial company under this title 23 shall only be provided as specified under this title. 377 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (b) LIMIT ON GOVERNMENTAL ACTIONS.—No gov2 ernmental entity may take any action to circumvent the 3 purposes of this title. 4 (c) CONFLICT OF INTEREST.—In the event that the 5 Corporation is appointed receiver for more than 1 covered 6 financial company or is appointed receiver for a covered 7 financial company and receiver for any insured depository 8 institution that is an affiliate of such covered financial 9 company, the Corporation shall take appropriate action, 10 as necessary to avoid any conflicts of interest that may 11 arise in connection with multiple receiverships. 12 SEC. 213. BAN ON CERTAIN ACTIVITIES BY SENIOR EXECU13 TIVES AND DIRECTORS. 14 (a) PROHIBITION AUTHORITY.—The Board of Gov15 ernors or, if the covered financial company was not super16 vised by the Board of Governors, the Corporation, may 17 exercise the authority provided by this section. 18 (b) AUTHORITY TO ISSUE ORDER.—The appropriate 19 agency described in subsection (a) may take any action 20 authorized by subsection (c), if the agency determines 21 that— 22 (1) a senior executive or a director of the cov23 ered financial company, prior to the appointment of 24 the Corporation as receiver, has, directly or indi25 rectly— 378 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (A) violated— 2 (i) any law or regulation; 3 (ii) any cease-and-desist order which 4 has become final; 5 (iii) any condition imposed in writing 6 by a Federal agency in connection with 7 any action on any application, notice, or 8 request by such company or senior execu9 tive; or 10 (iv) any written agreement between 11 such company and such agency; 12 (B) engaged or participated in any unsafe 13 or unsound practice in connection with any fi14 nancial company; or 15 (C) committed or engaged in any act, 16 omission, or practice which constitutes a breach 17 of the fiduciary duty of such senior executive or 18 director; 19 (2) by reason of the violation, practice, or 20 breach described in any subparagraph of paragraph 21 (1), such senior executive or director has received fi22 nancial gain or other benefit by reason of such viola23 tion, practice, or breach and such violation, practice, 24 or breach contributed to the failure of the company; 25 and 379 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (3) such violation, practice, or breach— 2 (A) involves personal dishonesty on the 3 part of such senior executive or director; or 4 (B) demonstrates willful or continuing dis5 regard by such senior executive or director for 6 the safety or soundness of such company. 7 (c) AUTHORIZED ACTIONS.— 8 (1) IN GENERAL.—The appropriate agency for 9 a financial company, as described in subsection (a), 10 may serve upon a senior executive or director de11 scribed in subsection (b) a written notice of the in12 tention of the agency to prohibit any further partici13 pation by such person, in any manner, in the con14 duct of the affairs of any financial company for a 15 period of time determined by the appropriate agency 16 to be commensurate with such violation, practice, or 17 breach, provided such period shall be not less than 18 2 years. 19 (2) PROCEDURES.—The due process require20 ments and other procedures under section 8(e) of 21 the Federal Deposit Insurance Act (12 U.S.C. 22 1818(e)) shall apply to actions under this section as 23 if the covered financial company were an insured de24 pository institution and the senior executive or direc380 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 tor were an institution-affiliated party, as those 2 terms are defined in that Act. 3 (d) REGULATIONS.—The Corporation and the Board 4 of Governors, in consultation with the Council, shall joint5 ly prescribe rules or regulations to administer and carry 6 out this section, including rules, regulations, or guidelines 7 to further define the term senior executive for the pur8 poses of this section. 9 SEC. 214. PROHIBITION ON TAXPAYER FUNDING. 10 (a) LIQUIDATION REQUIRED.—All financial compa11 nies put into receivership under this title shall be liq12 uidated. No taxpayer funds shall be used to prevent the 13 liquidation of any financial company under this title. 14 (b) RECOVERY OF FUNDS.—All funds expended in 15 the liquidation of a financial company under this title shall 16 be recovered from the disposition of assets of such finan17 cial company, or shall be the responsibility of the financial 18 sector, through assessments. 19 (c) NO LOSSES TO TAXPAYERS.—Taxpayers shall 20 bear no losses from the exercise of any authority under 21 this title. 22 SEC. 215. STUDY ON SECURED CREDITOR HAIRCUTS. 23 (a) STUDY REQUIRED.—The Council shall conduct a 24 study evaluating the importance of maximizing United 25 States taxpayer protections and promoting market dis381 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 cipline with respect to the treatment of fully secured credi2 tors in the utilization of the orderly liquidation authority 3 authorized by this Act. In carrying out such study, the 4 Council shall— 5 (1) not be prejudicial to current or past laws or 6 regulations with respect to secured creditor treat7 ment in a resolution process; 8 (2) study the similarities and differences be9 tween the resolution mechanisms authorized by the 10 Bankruptcy Code, the Federal Deposit Insurance 11 Corporation Improvement Act of 1991, and the or12 derly liquidation authority authorized by this Act; 13 (3) determine how various secured creditors are 14 treated in such resolution mechanisms and examine 15 how a haircut (of various degrees) on secured credi16 tors could improve market discipline and protect tax17 payers; 18 (4) compare the benefits and dynamics of pru19 dent lending practices by depository institutions in 20 secured loans for consumers and small businesses to 21 the lending practices of secured creditors to large, 22 interconnected financial firms; 23 (5) consider whether credit differs according to 24 different types of collateral and different terms and 25 timing of the extension of credit; amd 382 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (6) include an examination of stakeholders who 2 were unsecured or under-collateralized and seek col3 lateral when a firm is failing, and the impact that 4 such behavior has on financial stability and an or5 derly resolution that protects taxpayers if the firm 6 fails. 7 (b) REPORT.—Not later than the end of the 1-year 8 period beginning on the date of enactment of this Act, the 9 Council shall issue a report to the Congress containing all 10 findings and conclusions made by the Council in carrying 11 out the study required under subsection (a). 12 SEC. 216. STUDY ON BANKRUPTCY PROCESS FOR FINAN13 CIAL AND NONBANK FINANCIAL INSTITU14 TIONS. 15 (a) STUDY.— 16 (1) IN GENERAL.—Upon enactment of this Act, 17 the Board of Governors, in consultation with the Ad18 ministrative Office of the United States Courts, shall 19 conduct a study regarding the resolution of financial 20 companies under the Bankruptcy Code, under chap21 ter 7 or 11 thereof . 22 (2) ISSUES TO BE STUDIED.—Issues to be stud23 ied under this section include— 24 (A) the effectiveness of chapter 7 and 25 chapter 11 of the Bankruptcy Code in facili383 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 tating the orderly resolution or reorganization 2 of systemic financial companies; 3 (B) whether a special financial resolution 4 court or panel of special masters or judges 5 should be established to oversee cases involving 6 financial companies to provide for the resolution 7 of such companies under the Bankruptcy Code, 8 in a manner that minimizes adverse impacts on 9 financial markets without creating moral haz10 ard; 11 (C) whether amendments to the Bank12 ruptcy Code should be adopted to enhance the 13 ability of the Code to resolve financial compa14 nies in a manner that minimizes adverse im15 pacts on financial markets without creating 16 moral hazard; 17 (D) whether amendments should be made 18 to the Bankruptcy Code, the Federal Deposit 19 Insurance Act, and other insolvency laws to ad20 dress the manner in which qualified financial 21 contracts of financial companies are treated; 22 and 23 (E) the implications, challenges, and bene24 fits to creating a new chapter or subchapter of 384 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 the Bankruptcy Code to deal with financial 2 companies. 3 (b) REPORTS TO CONGRESS.—Not later than 1 year 4 after the date of enactment of this Act, and in each succes5 sive year until the fifth year after the date of enactment 6 of this Act, the Administrative Office of the United States 7 courts shall submit to the Committees on Banking, Hous8 ing, and Urban Affairs and the Judiciary of the Senate 9 and the Committees on Financial Services and the Judici10 ary of the House of Representatives a report summarizing 11 the results of the study conducted under subsection (a). 12 SEC. 217. STUDY ON INTERNATIONAL COORDINATION RE13 LATING TO BANKRUPTCY PROCESS FOR 14 NONBANK FINANCIAL INSTITUTIONS. 15 (a) STUDY.— 16 (1) IN GENERAL.—The Board of Governors, in 17 consultation with the Administrative Office of the 18 United States Courts, shall conduct a study regard19 ing international coordination relating to the resolu20 tion of systemic financial companies under the 21 United States Bankruptcy Code and applicable for22 eign law. 23 (2) ISSUES TO BE STUDIED.—With respect to 24 the bankruptcy process for financial companies, 25 issues to be studied under this section include— 385 O:AYOAYO10H27.xml [file 2 of 17] S.L.C 1 (A) the extent to which international co2 ordination currently exists; 3 (B) current mechanisms and structures for 4 facilitating international cooperation; 5 (C) barriers to effective international co6 ordination; and 7 (D) ways to increase and make more effec8 tive international coordination of the resolution 9 of financial companies, so as to minimize the 10 impact on the financial system without creating 11 moral hazard. 12 (b) REPORT TO CONGRESS.—Not later than 1 year 13 after the date of enactment of this Act, the Administrative 14 office of the United States Courts shall submit to the 15 Committees on Banking, Housing, and Urban Affairs and 16 the Judiciary of the Senate and the Committees on Finan17 cial Services and the Judiciary of the House of Represent18 atives a report summarizing the results of the study con19 ducted under subsection (a). 386 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 TITLE III—TRANSFER OF POW2 ERS TO THE COMPTROLLER 3 OF THE CURRENCY, THE COR4 PORATION, AND THE BOARD 5 OF GOVERNORS 6 SEC. 300. SHORT TITLE. 7 This title may be cited as the ‘‘Enhancing Financial 8 Institution Safety and Soundness Act of 2010’’. 9 SEC. 301. PURPOSES. 10 The purposes of this title are— 11 (1) to provide for the safe and sound operation 12 of the banking system of the United States; 13 (2) to preserve and protect the dual system of 14 Federal and State-chartered depository institutions; 15 (3) to ensure the fair and appropriate super16 vision of each depository institution, regardless of 17 the size or type of charter of the depository institu18 tion; and 19 (4) to streamline and rationalize the supervision 20 of depository institutions and the holding companies 21 of depository institutions. 22 SEC. 302. DEFINITION. 23 In this title, the term ‘‘transferred employee’’ means, 24 as the context requires, an employee transferred to the 387 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 Office of the Comptroller of the Currency or the Corpora2 tion under section 322. 3 Subtitle A—Transfer of Powers and 4 Duties 5 SEC. 311. TRANSFER DATE. 6 (a) TRANSFER DATE.—Except as provided in sub7 section (b), the term ‘‘transfer date’’ means the date that 8 is 1 year after the date of enactment of this Act. 9 (b) EXTENSION PERMITTED.— 10 (1) NOTICE REQUIRED.—The Secretary, in con11 sultation with the Comptroller of the Currency, the 12 Director of the Office of Thrift Supervision, the 13 Chairman of the Board of Governors, and the Chair14 person of the Corporation, may extend the period 15 under subsection (a) and designate a transfer date 16 that is not later than 18 months after the date of 17 enactment of this Act, if the Secretary transmits to 18 the Committee on Banking, Housing, and Urban Af19 fairs of the Senate and the Committee on Financial 20 Services of the House of Representatives— 21 (A) a written determination that com22 mencement of the orderly process to implement 23 this title is not feasible by the date that is 1 24 year after the date of enactment of this Act; 388 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (B) an explanation of why an extension is 2 necessary to commence the process of orderly 3 implementation of this title; 4 (C) the transfer date designated under this 5 subsection; and 6 (D) a description of the steps that will be 7 taken to initiate the process of an orderly and 8 timely implementation of this title within the 9 extended time period. 10 (2) PUBLICATION OF NOTICE.—Not later than 11 270 days after the date of enactment of this Act, the 12 Secretary shall publish in the Federal Register no13 tice of any transfer date designated under paragraph 14 (1). 15 SEC. 312. POWERS AND DUTIES TRANSFERRED. 16 (a) EFFECTIVE DATE.—This section, and the amend17 ments made by this section, shall take effect on the trans18 fer date. 19 (b) FUNCTIONS OF THE OFFICE OF THRIFT SUPER20 VISION.— 21 (1) SAVINGS AND LOAN HOLDING COMPANY 22 FUNCTIONS TRANSFERRED.— 23 (A) TRANSFER OF FUNCTIONS.—There are 24 transferred to the Board of Governors all func25 tions of the Office of Thrift Supervision and the 389 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 Director of the Office of Thrift Supervision (in2 cluding the authority to issue orders) relating 3 to— 4 (i) the supervision of— 5 (I) any savings and loan holding 6 company; and 7 (II) any subsidiary (other than a 8 depository institution) of a savings 9 and loan holding company; and 10 (ii) all rulemaking authority of the Of11 fice of Thrift Supervision and the Director 12 of the Office of Thrift Supervision relating 13 to savings and loan holding companies. 14 (B) POWERS, AUTHORITIES, RIGHTS, AND 15 DUTIES.—The Board of Governors shall suc16 ceed to all powers, authorities, rights, and du17 ties that were vested in the Office of Thrift Su18 pervision and the Director of the Office of 19 Thrift Supervision on the day before the trans20 fer date relating to the functions and authority 21 transferred under subparagraph (A). 22 (2) ALL OTHER FUNCTIONS TRANSFERRED.— 23 (A) BOARD OF GOVERNORS.—All rule24 making authority of the Office of Thrift Super25 vision and the Director of the Office of Thrift 390 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 Supervision under section 11 of the Home Own2 ers’ Loan Act (12 U.S.C. 1468) relating to 3 transactions with affiliates and extensions of 4 credit to executive officers, directors, and prin5 cipal shareholders and under section 5(q) of 6 such Act relating to tying arrangements is 7 transferred to the Board of Governors. 8 (B) COMPTROLLER OF THE CURRENCY.— 9 Except as provided in paragraph (1) and sub10 paragraph (A)— 11 (i) there are transferred to the Office 12 of the Comptroller of the Currency and the 13 Comptroller of the Currency— 14 (I) all functions of the Office of 15 Thrift Supervision and the Director of 16 the Office of Thrift Supervision, re17 spectively, relating to Federal savings 18 associations; and 19 (II) all rulemaking authority of 20 the Office of Thrift Supervision and 21 the Director of the Office of Thrift 22 Supervision, respectively, relating to 23 savings associations; and 24 (ii) the Office of the Comptroller of 25 the Currency and the Comptroller of the 391 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 Currency shall succeed to all powers, au2 thorities, rights, and duties that were vest3 ed in the Office of Thrift Supervision and 4 the Director of the Office of Thrift Super5 vision, respectively, on the day before the 6 transfer date relating to the functions and 7 authority transferred under clause (i). 8 (C) CORPORATION.—Except as provided in 9 paragraph (1) and subparagraphs (A) and 10 (B)— 11 (i) all functions of the Office of Thrift 12 Supervision and the Director of the Office 13 of Thrift Supervision relating to State sav14 ings associations are transferred to the 15 Corporation; and 16 (ii) the Corporation shall succeed to 17 all powers, authorities, rights, and duties 18 that were vested in the Office of Thrift Su19 pervision and the Director of the Office of 20 Thrift Supervision on the day before the 21 transfer date relating to the functions 22 transferred under clause (i). 23 (c) CONFORMING AMENDMENTS.—Section 3 of the 24 Federal Deposit Insurance Act (12 U.S.C. 1813) is 25 amended— 392 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (1) in subsection (q), by striking paragraphs 2 (1) through (4) and inserting the following: 3 ‘‘(1) the Office of the Comptroller of the Cur4 rency, in the case of— 5 ‘‘(A) any national banking association; 6 ‘‘(B) any Federal branch or agency of a 7 foreign bank; and 8 ‘‘(C) any Federal savings association; 9 ‘‘(2) the Federal Deposit Insurance Corpora10 tion, in the case of— 11 ‘‘(A) any State nonmember insured bank; 12 ‘‘(B) any foreign bank having an insured 13 branch; and 14 ‘‘(C) any State savings association; 15 ‘‘(3) the Board of Governors of the Federal Re16 serve System, in the case of— 17 ‘‘(A) any State member bank; 18 ‘‘(B) any branch or agency of a foreign 19 bank with respect to any provision of the Fed20 eral Reserve Act which is made applicable 21 under the International Banking Act of 1978; 22 ‘‘(C) any foreign bank which does not op23 erate an insured branch; 24 ‘‘(D) any agency or commercial lending 25 company other than a Federal agency; 393 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 ‘‘(E) supervisory or regulatory proceedings 2 arising from the authority given to the Board 3 of Governors under section 7(c)(1) of the Inter4 national Banking Act of 1978, including such 5 proceedings under the Financial Institutions 6 Supervisory Act of 1966; 7 ‘‘(F) any bank holding company and any 8 subsidiary (other than a depository institution) 9 of a bank holding company; and 10 ‘‘(G) any savings and loan holding com11 pany and any subsidiary (other than a deposi12 tory institution) of a savings and loan holding 13 company.’’; and 14 (2) in paragraphs (1) and (3) of subsection (u), 15 by striking ‘‘(other than a bank holding company’’ 16 and inserting ‘‘(other than a bank holding company 17 or savings and loan holding company’’. 18 (d) CONSUMER PROTECTION.—Nothing in this sec19 tion may be construed to limit or otherwise affect the 20 transfer of powers under title X. 21 SEC. 313. ABOLISHMENT. 22 Effective 90 days after the transfer date, the Office 23 of Thrift Supervision and the position of Director of the 24 Office of Thrift Supervision are abolished. 394 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 SEC. 314. AMENDMENTS TO THE REVISED STATUTES. 2 (a) AMENDMENT TO SECTION 324.—Section 324 of 3 the Revised Statutes of the United States (12 U.S.C. 1) 4 is amended to read as follows: 5 ‘‘SEC. 324. COMPTROLLER OF THE CURRENCY. 6 ‘‘(a) OFFICE OF THE COMPTROLLER OF THE CUR7 RENCY ESTABLISHED.—There is established in the De8 partment of the Treasury a bureau to be known as the 9 ‘Office of the Comptroller of the Currency’ which is 10 charged with assuring the safety and soundness of, and 11 compliance with laws and regulations, fair access to finan12 cial services, and fair treatment of customers by, the insti13 tutions and other persons subject to its jurisdiction. 14 ‘‘(b) COMPTROLLER OF THE CURRENCY.— 15 ‘‘(1) IN GENERAL.—The chief officer of the Of16 fice of the Comptroller of the Currency shall be 17 known as the Comptroller of the Currency. The 18 Comptroller of the Currency shall perform the duties 19 of the Comptroller of the Currency under the gen20 eral direction of the Secretary of the Treasury. The 21 Secretary of the Treasury may not delay or prevent 22 the issuance of any rule or the promulgation of any 23 regulation by the Comptroller of the Currency, and 24 may not intervene in any matter or proceeding be25 fore the Comptroller of the Currency (including 395 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 agency enforcement actions), unless otherwise spe2 cifically provided by law. 3 ‘‘(2) ADDITIONAL AUTHORITY.—The Comp4 troller of the Currency shall have the same authority 5 with respect to functions transferred to the Comp6 troller of the Currency under the Enhancing Finan7 cial Institution Safety and Soundness Act of 2010 8 as was vested in the Director of the Office of Thrift 9 Supervision on the transfer date, as defined in sec10 tion 311 of that Act.’’. 11 (b) SUPERVISION OF FEDERAL SAVINGS ASSOCIA12 TIONS.—Chapter 9 of title VII of the Revised Statutes of 13 the United States (12 U.S.C. 1 et seq.) is amended by 14 inserting after section 327A (12 U.S.C. 4a) the following: 15 ‘‘SEC. 327B. DEPUTY COMPTROLLER FOR THE SUPER16 VISION AND EXAMINATION OF FEDERAL SAV17 INGS ASSOCIATIONS. 18 ‘‘The Comptroller of the Currency shall designate a 19 Deputy Comptroller, who shall be responsible for the su20 pervision and examination of Federal savings associa21 tions.’’. 22 (c) AMENDMENT TO SECTION 329.—Section 329 of 23 the Revised Statutes of the United States (12 U.S.C. 11) 24 is amended by inserting before the period at the end the 25 following: ‘‘or any Federal savings association’’. 396 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (d) EFFECTIVE DATE.—This section, and the amend2 ments made by this section, shall take effect on the trans3 fer date. 4 SEC. 315. FEDERAL INFORMATION POLICY. 5 Section 3502(5) of title 44, United States Code, is 6 amended by inserting ‘‘Office of the Comptroller of the 7 Currency,’’ after ‘‘the Securities and Exchange Commis8 sion,’’. 9 SEC. 316. SAVINGS PROVISIONS. 10 (a) OFFICE OF THRIFT SUPERVISION.— 11 (1) EXISTING RIGHTS, DUTIES, AND OBLIGA12 TIONS NOT AFFECTED.—Sections 312(b) and 313 13 shall not affect the validity of any right, duty, or ob14 ligation of the United States, the Director of the Of15 fice of Thrift Supervision, the Office of Thrift Su16 pervision, or any other person, that existed on the 17 day before the transfer date. 18 (2) CONTINUATION OF SUITS.—This title shall 19 not abate any action or proceeding commenced by or 20 against the Director of the Office of Thrift Super21 vision or the Office of Thrift Supervision before the 22 transfer date, except that— 23 (A) for any action or proceeding arising 24 out of a function of the Office of Thrift Super25 vision or the Director of the Office of Thrift 397 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 Supervision transferred to the Board of Gov2 ernors by this title, the Board of Governors 3 shall be substituted for the Office of Thrift Su4 pervision or the Director of the Office of Thrift 5 Supervision as a party to the action or pro6 ceeding on and after the transfer date; 7 (B) for any action or proceeding arising 8 out of a function of the Office of Thrift Super9 vision or the Director of the Office of Thrift 10 Supervision transferred to the Office of the 11 Comptroller of the Currency or the Comptroller 12 of the Currency by this title, the Office of the 13 Comptroller of the Currency or the Comptroller 14 of the Currency shall be substituted for the Of15 fice of Thrift Supervision or the Director of the 16 Office of Thrift Supervision, as the case may 17 be, as a party to the action or proceeding on 18 and after the transfer date; and 19 (C) for any action or proceeding arising 20 out of a function of the Office of Thrift Super21 vision or the Director of the Office of Thrift 22 Supervision transferred to the Corporation by 23 this title, the Corporation shall be substituted 24 for the Office of Thrift Supervision or the Di25 rector of the Office of Thrift Supervision as a 398 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 party to the action or proceeding on and after 2 the transfer date. 3 (b) CONTINUATION OF EXISTING OTS ORDERS, RES4 OLUTIONS, DETERMINATIONS, AGREEMENTS, REGULA5 TIONS, ETC.—All orders, resolutions, determinations, 6 agreements, and regulations, interpretative rules, other in7 terpretations, guidelines, procedures, and other advisory 8 materials, that have been issued, made, prescribed, or al9 lowed to become effective by the Office of Thrift Super10 vision or the Director of the Office of Thrift Supervision, 11 or by a court of competent jurisdiction, in the performance 12 of functions that are transferred by this title and that are 13 in effect on the day before the transfer date, shall continue 14 in effect according to the terms of such orders, resolutions, 15 determinations, agreements, and regulations, interpreta16 tive rules, other interpretations, guidelines, procedures, 17 and other advisory materials, and shall be enforceable by 18 or against— 19 (1) the Board of Governors, in the case of a 20 function of the Office of Thrift Supervision or the 21 Director of the Office of Thrift Supervision trans22 ferred to the Board of Governors, until modified, 23 terminated, set aside, or superseded in accordance 24 with applicable law by the Board of Governors, by 399 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 any court of competent jurisdiction, or by operation 2 of law; 3 (2) the Office of the Comptroller of the Cur4 rency or the Comptroller of the Currency, in the 5 case of a function of the Office of Thrift Supervision 6 or the Director of the Office of Thrift Supervision 7 transferred to the Office of the Comptroller of the 8 Currency or the Comptroller of the Currency, re9 spectively, until modified, terminated, set aside, or 10 superseded in accordance with applicable law by the 11 Office of the Comptroller of the Currency or the 12 Comptroller of the Currency, by any court of com13 petent jurisdiction, or by operation of law; and 14 (3) the Corporation, in the case of a function 15 of the Office of Thrift Supervision or the Director 16 of the Office of Thrift Supervision transferred to the 17 Corporation, until modified, terminated, set aside, or 18 superseded in accordance with applicable law by the 19 Corporation, by any court of competent jurisdiction, 20 or by operation of law. 21 (c) IDENTIFICATION OF REGULATIONS CONTIN22 UED.— 23 (1) BY THE BOARD OF GOVERNORS.—Not later 24 than the transfer date, the Board of Governors 25 shall— 400 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (A) identify the regulations continued 2 under subsection (b) that will be enforced by 3 the Board of Governors; and 4 (B) publish a list of the regulations identi5 fied under subparagraph (A) in the Federal 6 Register. 7 (2) BY OFFICE OF THE COMPTROLLER OF THE 8 CURRENCY.—Not later than the transfer date, the 9 Office of the Comptroller of the Currency shall— 10 (A) after consultation with the Corpora11 tion, identify the regulations continued under 12 subsection (b) that will be enforced by the Of13 fice of the Comptroller of the Currency; and 14 (B) publish a list of the regulations identi15 fied under subparagraph (A) in the Federal 16 Register. 17 (3) BY THE CORPORATION.—Not later than the 18 transfer date, the Corporation shall— 19 (A) after consultation with the Office of 20 the Comptroller of the Currency, identify the 21 regulations continued under subsection (b) that 22 will be enforced by the Corporation; and 23 (B) publish a list of the regulations identi24 fied under subparagraph (A) in the Federal 25 Register. 401 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (d) STATUS OF REGULATIONS PROPOSED OR NOT 2 YET EFFECTIVE.— 3 (1) PROPOSED REGULATIONS.—Any proposed 4 regulation of the Office of Thrift Supervision, which 5 the Office of Thrift Supervision in performing func6 tions transferred by this title, has proposed before 7 the transfer date but has not published as a final 8 regulation before such date, shall be deemed to be 9 a proposed regulation of the Office of the Comp10 troller of the Currency or the Board of Governors, 11 as appropriate, according to the terms of the pro12 posed regulation. 13 (2) REGULATIONS NOT YET EFFECTIVE.—Any 14 interim or final regulation of the Office of Thrift Su15 pervision, which the Office of Thrift Supervision, in 16 performing functions transferred by this title, has 17 published before the transfer date but which has not 18 become effective before that date, shall become effec19 tive as a regulation of the Office of the Comptroller 20 of the Currency or the Board of Governors, as ap21 propriate, according to the terms of the interim or 22 final regulation, unless modified, terminated, set 23 aside, or superseded in accordance with applicable 24 law by the Office of the Comptroller of the Currency 25 or the Board of Governors, as appropriate, by any 402 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 court of competent jurisdiction, or by operation of 2 law. 3 SEC. 317. REFERENCES IN FEDERAL LAW TO FEDERAL 4 BANKING AGENCIES. 5 On and after the transfer date, any reference in Fed6 eral law to the Director of the Office of Thrift Supervision 7 or the Office of Thrift Supervision, in connection with any 8 function of the Director of the Office of Thrift Supervision 9 or the Office of Thrift Supervision transferred under sec10 tion 312(b) or any other provision of this subtitle, shall 11 be deemed to be a reference to the Comptroller of the Cur12 rency, the Office of the Comptroller of the Currency, the 13 Chairperson of the Corporation, the Corporation, the 14 Chairman of the Board of Governors, or the Board of Gov15 ernors, as appropriate and consistent with the amend16 ments made in subtitle E. 17 SEC. 318. FUNDING. 18 (a) COMPENSATION OF EXAMINERS.—Section 5240 19 of the Revised Statutes of the United States (12 U.S.C. 20 481 et seq.) is amended— 21 (1) in the second undesignated paragraph (12 22 U.S.C. 481), in the fourth sentence, by striking 23 ‘‘without regard to the provisions of other laws ap24 plicable to officers or employees of the United 25 States’’ and inserting the following: ‘‘set and ad403 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 justed subject to chapter 71 of title 5, United States 2 Code, and without regard to the provisions of other 3 laws applicable to officers or employees of the 4 United States’’; and 5 (2) in the third undesignated paragraph (12 6 U.S.C. 482), in the first sentence, by striking ‘‘shall 7 fix’’ and inserting ‘‘shall, subject to chapter 71 of 8 title 5, United States Code, fix’’. 9 (b) FUNDING OF OFFICE OF THE COMPTROLLER OF 10 THE CURRENCY.—Chapter 4 of title LXII of the Revised 11 Statutes is amended by inserting after section 5240 (12 12 U.S.C. 481, 482) the following: 13 ‘‘SEC. 5240A. The Comptroller of the Currency may 14 collect an assessment, fee, or other charge from any entity 15 described in section 3(q)(1) of the Federal Deposit Insur16 ance Act (12 U.S.C. 1813(q)(1)), as the Comptroller de17 termines is necessary or appropriate to carry out the re18 sponsibilities of the Office of the Comptroller of the Cur19 rency. In establishing the amount of an assessment, fee, 20 or charge collected from an entity under this section, the 21 Comptroller of the Currency may take into account the 22 nature and scope of the activities of the entity, the amount 23 and type of assets that the entity holds, the financial and 24 managerial condition of the entity, and any other factor, 25 as the Comptroller of the Currency determines is appro404 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 priate. Funds derived from any assessment, fee, or charge 2 collected or payment made pursuant to this section may 3 be deposited by the Comptroller of the Currency in accord4 ance with the provisions of section 5234. Such funds shall 5 not be construed to be Government funds or appropriated 6 monies, and shall not be subject to apportionment for pur7 poses of chapter 15 of title 31, United States Code, or 8 any other provision of law. The authority of the Comp9 troller of the Currency under this section shall be in addi10 tion to the authority under section 5240. 11 ‘‘The Comptroller of the Currency shall have sole au12 thority to determine the manner in which the obligations 13 of the Office of the Comptroller of the Currency shall be 14 incurred and its disbursements and expenses allowed and 15 paid, in accordance with this section, except as provided 16 in chapter 71 of title 5, United States Code (with respect 17 to compensation).’’. 18 (c) FUNDING OF BOARD OF GOVERNORS.—Section 19 11 of the Federal Reserve Act (12 U.S.C. 248) is amended 20 by adding at the end the following: 21 ‘‘(s) ASSESSMENTS, FEES, AND OTHER CHARGES 22 FOR CERTAIN COMPANIES.— 23 ‘‘(1) IN GENERAL.—The Board shall collect a 24 total amount of assessments, fees, or other charges 25 from the companies described in paragraph (2) that 405 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 is equal to the total expenses the Board estimates 2 are necessary or appropriate to carry out the super3 visory and regulatory responsibilities of the Board 4 with respect to such companies. 5 ‘‘(2) COMPANIES.—The companies described in 6 this paragraph are— 7 ‘‘(A) all bank holding companies having 8 total consolidated assets of $50,000,000,000 or 9 more; 10 ‘‘(B) all savings and loan holding compa11 nies having total consolidated assets of 12 $50,000,000,000 or more; and 13 ‘‘(C) all nonbank financial companies su14 pervised by the Board under section 113 of the 15 Dodd-Frank Wall Street Reform and Consumer 16 Protection Act.’’. 17 (d) CORPORATION EXAMINATION FEES.—Section 18 10(e) of the Federal Deposit Insurance Act (12 U.S.C. 19 1820(e)) is amended by striking paragraph (1) and insert20 ing the following: 21 ‘‘(1) REGULAR AND SPECIAL EXAMINATIONS OF 22 DEPOSITORY INSTITUTIONS.—The cost of conducting 23 any regular examination or special examination of 24 any depository institution under subsection (b)(2), 25 (b)(3), or (d) or of any entity described in section 406 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 3(q)(2) may be assessed by the Corporation against 2 the institution or entity to meet the expenses of the 3 Corporation in carrying out such examinations.’’. 4 (e) EFFECTIVE DATE.—This section, and the amend5 ments made by this section, shall take effect on the trans6 fer date. 7 SEC. 319. CONTRACTING AND LEASING AUTHORITY. 8 Notwithstanding the Federal Property and Adminis9 trative Services Act of 1949 (41 U.S.C. 251 et seq.) or 10 any other provision of law (except the full and open com11 petition requirements of the Competition in Contracting 12 Act), the Office of the Comptroller of the Currency may— 13 (1) enter into and perform contracts, execute 14 instruments, and acquire real property (or property 15 interest) as the Comptroller deems necessary to 16 carry out the duties and responsibilities of the Office 17 of the Comptroller of the Currency; and 18 (2) hold, maintain, sell, lease, or otherwise dis19 pose of the property (or property interest) acquired 20 under paragraph (1). 407 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 Subtitle B—Transitional Provisions 2 SEC. 321. INTERIM USE OF FUNDS, PERSONNEL, AND PROP3 ERTY OF THE OFFICE OF THRIFT SUPER4 VISION. 5 (a) IN GENERAL.—Before the transfer date, the Of6 fice of the Comptroller of the Currency, the Corporation, 7 and the Board of Governors shall— 8 (1) consult and cooperate with the Office of 9 Thrift Supervision to facilitate the orderly transfer 10 of functions to the Office of the Comptroller of the 11 Currency, the Corporation, and the Board of Gov12 ernors in accordance with this title; 13 (2) determine jointly, from time to time— 14 (A) the amount of funds necessary to pay 15 any expenses associated with the transfer of 16 functions (including expenses for personnel, 17 property, and administrative services) during 18 the period beginning on the date of enactment 19 of this Act and ending on the transfer date; 20 (B) which personnel are appropriate to fa21 cilitate the orderly transfer of functions by this 22 title; and 23 (C) what property and administrative serv24 ices are necessary to support the Office of the 25 Comptroller of the Currency, the Corporation, 408 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 and the Board of Governors during the period 2 beginning on the date of enactment of this Act 3 and ending on the transfer date; and 4 (3) take such actions as may be necessary to 5 provide for the orderly implementation of this title. 6 (b) AGENCY CONSULTATION.—When requested joint7 ly by the Office of the Comptroller of the Currency, the 8 Corporation, and the Board of Governors to do so before 9 the transfer date, the Office of Thrift Supervision shall— 10 (1) pay to the Office of the Comptroller of the 11 Currency, the Corporation, or the Board of Gov12 ernors, as applicable, from funds obtained by the Of13 fice of Thrift Supervision through assessments, fees, 14 or other charges that the Office of Thrift Super15 vision is authorized by law to impose, such amounts 16 as the Office of the Comptroller of the Currency, the 17 Corporation, and the Board of Governors jointly de18 termine to be necessary under subsection (a); 19 (2) detail to the Office of the Comptroller of the 20 Currency, the Corporation, or the Board of Gov21 ernors, as applicable, such personnel as the Office of 22 the Comptroller of the Currency, the Corporation, 23 and the Board of Governors jointly determine to be 24 appropriate under subsection (a); and 409 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (3) make available to the Office of the Comp2 troller of the Currency, the Corporation, or the 3 Board of Governors, as applicable, such property 4 and provide to the Office of the Comptroller of the 5 Currency, the Corporation, or the Board of Gov6 ernors, as applicable, such administrative services as 7 the Office of the Comptroller of the Currency, the 8 Corporation, and the Board of Governors jointly de9 termine to be necessary under subsection (a). 10 (c) NOTICE REQUIRED.—The Office of the Comp11 troller of the Currency, the Corporation, and the Board 12 of Governors shall jointly give the Office of Thrift Super13 vision reasonable prior notice of any request that the Of14 fice of the Comptroller of the Currency, the Corporation, 15 and the Board of Governors jointly intend to make under 16 subsection (b). 17 SEC. 322. TRANSFER OF EMPLOYEES. 18 (a) IN GENERAL.— 19 (1) OFFICE OF THRIFT SUPERVISION EMPLOY20 EES.— 21 (A) IN GENERAL.—Except as provided in 22 section 1064, all employees of the Office of 23 Thrift Supervision shall be transferred to the 24 Office of the Comptroller of the Currency or the 410 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 Corporation for employment in accordance with 2 this section. 3 (B) ALLOCATING EMPLOYEES FOR TRANS4 FER TO RECEIVING AGENCIES.—The Director of 5 the Office of Thrift Supervision, the Comp6 troller of the Currency, and the Chairperson of 7 the Corporation shall— 8 (i) jointly determine the number of 9 employees of the Office of Thrift Super10 vision necessary to perform or support the 11 functions that are transferred to the Office 12 of the Comptroller of the Currency or the 13 Corporation by this title; and 14 (ii) consistent with the determination 15 under clause (i), jointly identify employees 16 of the Office of Thrift Supervision for 17 transfer to the Office of the Comptroller of 18 the Currency or the Corporation. 19 (2) EMPLOYEES TRANSFERRED; SERVICE PERI20 ODS CREDITED.—For purposes of this section, peri21 ods of service with a Federal home loan bank, a 22 joint office of Federal home loan banks, or a Federal 23 reserve bank shall be credited as periods of service 24 with a Federal agency. 411 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (3) APPOINTMENT AUTHORITY FOR EXCEPTED 2 SERVICE TRANSFERRED.— 3 (A) IN GENERAL.—Except as provided in 4 subparagraph (B), any appointment authority 5 of the Office of Thrift Supervision under Fed6 eral law that relates to the functions trans7 ferred under section 312, including the regula8 tions of the Office of Personnel Management, 9 for filling the positions of employees in the ex10 cepted service shall be transferred to the Comp11 troller of the Currency or the Chairperson of 12 the Corporation, as appropriate. 13 (B) DECLINING TRANSFERS ALLOWED.— 14 The Comptroller of the Currency or the Chair15 person of the Corporation may decline to accept 16 a transfer of authority under subparagraph (A) 17 (and the employees appointed under that au18 thority) to the extent that such authority re19 lates to positions excepted from the competitive 20 service because of their confidential, policy-mak21 ing, policy-determining, or policy-advocating 22 character. 23 (4) ADDITIONAL APPOINTMENT AUTHORITY.— 24 Notwithstanding any other provision of law, the Of25 fice of the Comptroller of the Currency and the Cor412 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 poration may appoint transferred employees to posi2 tions in the Office of the Comptroller of the Cur3 rency or the Corporation, respectively. 4 (b) TIMING OF TRANSFERS AND POSITION ASSIGN5 MENTS.—Each employee to be transferred under sub6 section (a)(1) shall— 7 (1) be transferred not later than 90 days after 8 the transfer date; and 9 (2) receive notice of the position assignment of 10 the employee not later than 120 days after the effec11 tive date of the transfer of the employee. 12 (c) TRANSFER OF FUNCTIONS.— 13 (1) IN GENERAL.—Notwithstanding any other 14 provision of law, the transfer of employees under 15 this subtitle shall be deemed a transfer of functions 16 for the purpose of section 3503 of title 5, United 17 States Code. 18 (2) PRIORITY.—If any provision of this subtitle 19 conflicts with any protection provided to a trans20 ferred employee under section 3503 of title 5, 21 United States Code, the provisions of this subtitle 22 shall control. 23 (d) EMPLOYEE STATUS AND ELIGIBILITY.—The 24 transfer of functions and employees under this subtitle, 25 and the abolishment of the Office of Thrift Supervision 413 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 under section 313, shall not affect the status of the trans2 ferred employees as employees of an agency of the United 3 States under any provision of law. 4 (e) EQUAL STATUS AND TENURE POSITIONS.— 5 (1) STATUS AND TENURE.—Each transferred 6 employee from the Office of Thrift Supervision shall 7 be placed in a position at the Office of the Comp8 troller of the Currency or the Corporation with the 9 same status and tenure as the transferred employee 10 held on the day before the date on which the em11 ployee was transferred. 12 (2) FUNCTIONS.—To the extent practicable, 13 each transferred employee shall be placed in a posi14 tion at the Office of the Comptroller of the Currency 15 or the Corporation, as applicable, responsible for the 16 same functions and duties as the transferred em17 ployee had on the day before the date on which the 18 employee was transferred, in accordance with the ex19 pertise and preferences of the transferred employee. 20 (f) NO ADDITIONAL CERTIFICATION REQUIRE21 MENTS.—An examiner who is a transferred employee shall 22 not be subject to any additional certification requirements 23 before being placed in a comparable position at the Office 24 of the Comptroller of the Currency or the Corporation, 25 if the examiner carries out examinations of the same type 414 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 of institutions as an employee of the Office of the Comp2 troller of the Currency or the Corporation as the employee 3 was responsible for carrying out before the date on which 4 the employee was transferred. 5 (g) PERSONNEL ACTIONS LIMITED.— 6 (1) PROTECTION.— 7 (A) IN GENERAL.—Except as provided in 8 paragraph (2), each affected employee shall not, 9 during the 30-month period beginning on the 10 transfer date, be involuntarily separated, or in11 voluntarily reassigned outside his or her locality 12 pay area. 13 (B) AFFECTED EMPLOYEES.—For pur14 poses of this paragraph, the term ‘‘affected em15 ployee’’ means— 16 (i) an employee transferred from the 17 Office of Thrift Supervision holding a per18 manent position on the day before the 19 transfer date; and 20 (ii) an employee of the Office of the 21 Comptroller of the Currency or the Cor22 poration holding a permanent position on 23 the day before the transfer date. 415 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (2) EXCEPTIONS.—Paragraph (1) does not 2 limit the right of the Office of the Comptroller of the 3 Currency or the Corporation to— 4 (A) separate an employee for cause or for 5 unacceptable performance; 6 (B) terminate an appointment to a position 7 excepted from the competitive service because of 8 its confidential policy-making, policy-deter9 mining, or policy-advocating character; or 10 (C) reassign an employee outside such em11 ployee’s locality pay area when the Office of the 12 Comptroller of the Currency or the Corporation 13 determines that the reassignment is necessary 14 for the efficient operation of the agency. 15 (h) PAY.— 16 (1) 30-MONTH PROTECTION.—Except as pro17 vided in paragraph (2), during the 30-month period 18 beginning on the date on which the employee was 19 transferred under this subtitle, a transferred em20 ployee shall be paid at a rate that is not less than 21 the basic rate of pay, including any geographic dif22 ferential, that the transferred employee received dur23 ing the pay period immediately preceding the date 24 on which the employee was transferred. Notwith25 standing the preceding sentence, if the employee was 416 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 receiving a higher rate of basic pay on a temporary 2 basis (because of a temporary assignment, tem3 porary promotion, or other temporary action) imme4 diately before the transfer, the Agency may reduce 5 the rate of basic pay on the date the rate would have 6 been reduced but for the transfer, and the protected 7 rate for the remainder of the 30-month period will 8 be the reduced rate that would have applied but for 9 the transfer. 10 (2) EXCEPTIONS.—The Comptroller of the Cur11 rency or the Corporation may reduce the rate of 12 basic pay of a transferred employee— 13 (A) for cause, including for unacceptable 14 performance; or 15 (B) with the consent of the transferred 16 employee. 17 (3) PROTECTION ONLY WHILE EMPLOYED.— 18 This subsection shall apply to a transferred em19 ployee only during the period that the transferred 20 employee remains employed by Office of the Comp21 troller of the Currency or the Corporation. 22 (4) PAY INCREASES PERMITTED.—Nothing in 23 this subsection shall limit the authority of the Comp24 troller of the Currency or the Chairperson of the 417 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 Corporation to increase the pay of a transferred em2 ployee. 3 (i) BENEFITS.— 4 (1) RETIREMENT BENEFITS FOR TRANSFERRED 5 EMPLOYEES.— 6 (A) IN GENERAL.— 7 (i) CONTINUATION OF EXISTING RE8 TIREMENT PLAN.—Each transferred em9 ployee shall remain enrolled in the retire10 ment plan of the transferred employee, for 11 as long as the transferred employee is em12 ployed by the Office of the Comptroller of 13 the Currency or the Corporation. 14 (ii) EMPLOYER’S CONTRIBUTION.— 15 The Comptroller of the Currency or the 16 Chairperson of the Corporation, as appro17 priate, shall pay any employer contribu18 tions to the existing retirement plan of 19 each transferred employee, as required 20 under each such existing retirement plan. 21 (B) DEFINITION.—In this paragraph, the 22 term ‘‘existing retirement plan’’ means, with re23 spect to a transferred employee, the retirement 24 plan (including the Financial Institutions Re25 tirement Fund), and any associated thrift sav418 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 ings plan, of the agency from which the em2 ployee was transferred in which the employee 3 was enrolled on the day before the date on 4 which the employee was transferred. 5 (2) BENEFITS OTHER THAN RETIREMENT BEN6 EFITS.— 7 (A) DURING FIRST YEAR.— 8 (i) EXISTING PLANS CONTINUE.— 9 During the 1-year period following the 10 transfer date, each transferred employee 11 may retain membership in any employee 12 benefit program (other than a retirement 13 benefit program) of the agency from which 14 the employee was transferred under this 15 title, including any dental, vision, long 16 term care, or life insurance program to 17 which the employee belonged on the day 18 before the transfer date. 19 (ii) EMPLOYER’S CONTRIBUTION.— 20 The Office of the Comptroller of the Cur21 rency or the Corporation, as appropriate, 22 shall pay any employer cost required to ex23 tend coverage in the benefit program to 24 the transferred employee as required under 25 that program or negotiated agreements. 419 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (B) DENTAL, VISION, OR LIFE INSURANCE 2 AFTER FIRST YEAR.—If, after the 1-year period 3 beginning on the transfer date, the Office of the 4 Comptroller of the Currency or the Corporation 5 determines that the Office of the Comptroller of 6 the Currency or the Corporation, as the case 7 may be, will not continue to participate in any 8 dental, vision, or life insurance program of an 9 agency from which an employee was trans10 ferred, a transferred employee who is a member 11 of the program may, before the decision takes 12 effect and without regard to any regularly 13 scheduled open season, elect to enroll in— 14 (i) the enhanced dental benefits pro15 gram established under chapter 89A of 16 title 5, United States Code; 17 (ii) the enhanced vision benefits estab18 lished under chapter 89B of title 5, United 19 States Code; and 20 (iii) the Federal Employees’ Group 21 Life Insurance Program established under 22 chapter 87 of title 5, United States Code, 23 without regard to any requirement of in24 surability. 420 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (C) LONG TERM CARE INSURANCE AFTER 2 1ST YEAR.—If, after the 1-year period begin3 ning on the transfer date, the Office of the 4 Comptroller of the Currency or the Corporation 5 determines that the Office of the Comptroller of 6 the Currency or the Corporation, as appro7 priate, will not continue to participate in any 8 long term care insurance program of an agency 9 from which an employee transferred, a trans10 ferred employee who is a member of such a pro11 gram may, before the decision takes effect, elect 12 to apply for coverage under the Federal Long 13 Term Care Insurance Program established 14 under chapter 90 of title 5, United States Code, 15 under the underwriting requirements applicable 16 to a new active workforce member, as described 17 in part 875 of title 5, Code of Federal Regula18 tions (or any successor thereto). 19 (D) CONTRIBUTION OF TRANSFERRED EM20 PLOYEE.— 21 (i) IN GENERAL.—Subject to clause 22 (ii), a transferred employee who is enrolled 23 in a plan under the Federal Employees 24 Health Benefits Program shall pay any 421 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 employee contribution required under the 2 plan. 3 (ii) COST DIFFERENTIAL.—The Office 4 of the Comptroller of the Currency or the 5 Corporation, as applicable, shall pay any 6 difference in cost between the employee 7 contribution required under the plan pro8 vided to transferred employees by the 9 agency from which the employee trans10 ferred on the date of enactment of this Act 11 and the plan provided by the Office of the 12 Comptroller of the Currency or the Cor13 poration, as the case may be, under this 14 section. 15 (iii) FUNDS TRANSFER.—The Office 16 of the Comptroller of the Currency or the 17 Corporation, as the case may be, shall 18 transfer to the Employees Health Benefits 19 Fund established under section 8909 of 20 title 5, United States Code, an amount de21 termined by the Director of the Office of 22 Personnel Management, after consultation 23 with the Comptroller of the Currency or 24 the Chairperson of the Corporation, as the 25 case may be, and the Office of Manage422 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 ment and Budget, to be necessary to reim2 burse the Fund for the cost to the Fund 3 of providing any benefits under this sub4 paragraph that are not otherwise paid for 5 by a transferred employee under clause (i). 6 (E) SPECIAL PROVISIONS TO ENSURE CON7 TINUATION OF LIFE INSURANCE BENEFITS.— 8 (i) IN GENERAL.—An annuitant, as 9 defined in section 8901 of title 5, United 10 States Code, who is enrolled in a life insur11 ance plan administered by an agency from 12 which employees are transferred under this 13 title on the day before the transfer date 14 shall be eligible for coverage by a life in15 surance plan under sections 8706(b), 16 8714a, 8714b, or 8714c of title 5, United 17 States Code, or by a life insurance plan es18 tablished by the Office of the Comptroller 19 of the Currency or the Corporation, as ap20 plicable, without regard to any regularly 21 scheduled open season or any requirement 22 of insurability. 23 (ii) CONTRIBUTION OF TRANSFERRED 24 EMPLOYEE.— 423 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (I) IN GENERAL.—Subject to 2 subclause (II), a transferred employee 3 enrolled in a life insurance plan under 4 this subparagraph shall pay any em5 ployee contribution required by the 6 plan. 7 (II) COST DIFFERENTIAL.—The 8 Office of the Comptroller of the Cur9 rency or the Corporation, as the case 10 may be, shall pay any difference in 11 cost between the benefits provided by 12 the agency from which the employee 13 transferred on the date of enactment 14 of this Act and the benefits provided 15 under this section. 16 (III) FUNDS TRANSFER.—The 17 Office of the Comptroller of the Cur18 rency or the Corporation, as the case 19 may be, shall transfer to the Federal 20 Employees’ Group Life Insurance 21 Fund established under section 8714 22 of title 5, United States Code, an 23 amount determined by the Director of 24 the Office of Personnel Management, 25 after consultation with the Comp424 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 troller of the Currency or the Chair2 person of the Corporation, as the case 3 may be, and the Office of Manage4 ment and Budget, to be necessary to 5 reimburse the Federal Employees’ 6 Group Life Insurance Fund for the 7 cost to the Federal Employees’ Group 8 Life Insurance Fund of providing ben9 efits under this subparagraph not oth10 erwise paid for by a transferred em11 ployee under subclause (I). 12 (IV) CREDIT FOR TIME EN13 ROLLED IN OTHER PLANS.—For any 14 transferred employee, enrollment in a 15 life insurance plan administered by 16 the agency from which the employee 17 transferred, immediately before enroll18 ment in a life insurance plan under 19 chapter 87 of title 5, United States 20 Code, shall be considered as enroll21 ment in a life insurance plan under 22 that chapter for purposes of section 23 8706(b)(1)(A) of title 5, United 24 States Code. 425 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (j) INCORPORATION INTO AGENCY PAY SYSTEM.— 2 Not later than 30 months after the transfer date, the 3 Comptroller of the Currency and the Chairperson of the 4 Corporation shall place each transferred employee into the 5 established pay system and structure of the appropriate 6 employing agency. 7 (k) EQUITABLE TREATMENT.—In administering the 8 provisions of this section, the Comptroller of the Currency 9 and the Chairperson of the Corporation— 10 (1) may not take any action that would unfairly 11 disadvantage a transferred employee relative to any 12 other employee of the Office of the Comptroller of 13 the Currency or the Corporation on the basis of 14 prior employment by the Office of Thrift Super15 vision; 16 (2) may take such action as is appropriate in 17 an individual case to ensure that a transferred em18 ployee receives equitable treatment, with respect to 19 the status, tenure, pay, benefits (other than benefits 20 under programs administered by the Office of Per21 sonnel Management), and accrued leave or vacation 22 time for prior periods of service with any Federal 23 agency of the transferred employee; 24 (3) shall, jointly with the Director of the Office 25 of Thrift Supervision, develop and adopt procedures 426 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 and safeguards designed to ensure that the require2 ments of this subsection are met; and 3 (4) shall conduct a study detailing the position 4 assignments of all employees transferred pursuant to 5 subsection (a), describing the procedures and safe6 guards adopted pursuant to paragraph (3), and 7 demonstrating that the requirements of this sub8 section have been met; and shall, not later than 365 9 days after the transfer date, submit a copy of such 10 study to Congress. 11 (l) REORGANIZATION.— 12 (1) IN GENERAL.—If the Comptroller of the 13 Currency or the Chairperson of the Corporation de14 termines, during the 2-year period beginning 1 year 15 after the transfer date, that a reorganization of the 16 staff of the Office of the Comptroller of the Cur17 rency or the Corporation, respectively, is required, 18 the reorganization shall be deemed a ‘‘major reorga19 nization’’ for purposes of affording affected employ20 ees retirement under section 8336(d)(2) or 21 8414(b)(1)(B) of title 5, United States Code. 22 (2) SERVICE CREDIT.—For purposes of this 23 subsection, periods of service with a Federal home 24 loan bank or a joint office of Federal home loan 427 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 banks shall be credited as periods of service with a 2 Federal agency. 3 SEC. 323. PROPERTY TRANSFERRED. 4 (a) PROPERTY DEFINED.—For purposes of this sec5 tion, the term ‘‘property’’ includes all real property (in6 cluding leaseholds) and all personal property, including 7 computers, furniture, fixtures, equipment, books, ac8 counts, records, reports, files, memoranda, paper, reports 9 of examination, work papers, and correspondence related 10 to such reports, and any other information or materials. 11 (b) PROPERTY OF THE OFFICE OF THRIFT SUPER12 VISION.— 13 (1) IN GENERAL.—No later than 90 days after 14 the transfer date, all property of the Office of Thrift 15 Supervision (other than property described under 16 paragraph (b)(2)) that the Comptroller of the Cur17 rency and the Chairperson of the Corporation jointly 18 determine is used, on the day before the transfer 19 date, to perform or support the functions of the Of20 fice of Thrift Supervision transferred to the Office 21 of the Comptroller of the Currency or the Corpora22 tion under this title, shall be transferred to the Of23 fice of the Comptroller of the Currency or the Cor24 poration in a manner consistent with the transfer of 25 employees under this subtitle. 428 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (2) PERSONAL PROPERTY.—All books, ac2 counts, records, reports, files, memoranda, papers, 3 documents, reports of examination, work papers, and 4 correspondence of the Office of Thrift Supervision 5 that the Comptroller of the Currency, the Chair6 person of the Corporation, and the Chairman of the 7 Board of Governors jointly determine is used, on the 8 day before the transfer date, to perform or support 9 the functions of the Office of Thrift Supervision 10 transferred to the Board of Governors under this 11 title shall be transferred to the Board of Governors 12 in a manner consistent with the purposes of this 13 title. 14 (c) CONTRACTS RELATED TO PROPERTY TRANS15 FERRED.—Each contract, agreement, lease, license, per16 mit, and similar arrangement relating to property trans17 ferred to the Office of the Comptroller of the Currency 18 or the Corporation by this section shall be transferred to 19 the Office of the Comptroller of the Currency or the Cor20 poration, as appropriate, together with the property to 21 which it relates. 22 (d) PRESERVATION OF PROPERTY.—Property identi23 fied for transfer under this section shall not be altered, 24 destroyed, or deleted before transfer under this section. 429 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 SEC. 324. FUNDS TRANSFERRED. 2 The funds that, on the day before the transfer date, 3 the Director of the Office of Thrift Supervision (in con4 sultation with the Comptroller of the Currency, the Chair5 person of the Corporation, and the Chairman of the Board 6 of Governors) determines are not necessary to dispose of 7 the affairs of the Office of Thrift Supervision under sec8 tion 325 and are available to the Office of Thrift Super9 vision to pay the expenses of the Office of Thrift Super10 vision— 11 (1) relating to the functions of the Office of 12 Thrift Supervision transferred under section 13 312(b)(2)(B), shall be transferred to the Office of 14 the Comptroller of the Currency on the transfer 15 date; 16 (2) relating to the functions of the Office of 17 Thrift Supervision transferred under section 18 312(b)(2)(C), shall be transferred to the Corporation 19 on the transfer date; and 20 (3) relating to the functions of the Office of 21 Thrift Supervision transferred under section 22 312(b)(1)(A), shall be transferred to the Board of 23 Governors on the transfer date. 430 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 SEC. 325. DISPOSITION OF AFFAIRS. 2 (a) AUTHORITY OF DIRECTOR.—During the 90-day 3 period beginning on the transfer date, the Director of the 4 Office of Thrift Supervision— 5 (1) shall, solely for the purpose of winding up 6 the affairs of the Office of Thrift Supervision relat7 ing to any function transferred to the Office of the 8 Comptroller of the Currency, the Corporation, or the 9 Board of Governors under this title— 10 (A) manage the employees of the Office of 11 Thrift Supervision who have not yet been trans12 ferred and provide for the payment of the com13 pensation and benefits of the employees that ac14 crue before the date on which the employees are 15 transferred under this title; and 16 (B) manage any property of the Office of 17 Thrift Supervision, until the date on which the 18 property is transferred under section 323; and 19 (2) may take any other action necessary to 20 wind up the affairs of the Office of Thrift Super21 vision. 22 (b) STATUS OF DIRECTOR.— 23 (1) IN GENERAL.—Notwithstanding the trans24 fer of functions under this subtitle, during the 90- 25 day period beginning on the transfer date, the Direc26 tor of the Office of Thrift Supervision shall retain 431 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 and may exercise any authority vested in the Direc2 tor of the Office of Thrift Supervision on the day be3 fore the transfer date, only to the extent necessary— 4 (A) to wind up the Office of Thrift Super5 vision; and 6 (B) to carry out the transfer under this 7 subtitle during such 90-day period. 8 (2) OTHER PROVISIONS.—For purposes of 9 paragraph (1), the Director of the Office of Thrift 10 Supervision shall, during the 90-day period begin11 ning on the transfer date, continue to be— 12 (A) treated as an officer of the United 13 States; and 14 (B) entitled to receive compensation at the 15 same annual rate of basic pay that the Director 16 of the Office of Thrift Supervision received on 17 the day before the transfer date. 18 SEC. 326. CONTINUATION OF SERVICES. 19 Any agency, department, or other instrumentality of 20 the United States, and any successor to any such agency, 21 department, or instrumentality, that was, before the trans22 fer date, providing support services to the Office of Thrift 23 Supervision in connection with functions transferred to 24 the Office of the Comptroller of the Currency, the Cor432 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 poration or the Board of Governors under this title, 2 shall— 3 (1) continue to provide such services, subject to 4 reimbursement by the Office of the Comptroller of 5 the Currency, the Corporation, or the Board of Gov6 ernors, until the transfer of functions under this 7 title is complete; and 8 (2) consult with the Comptroller of the Cur9 rency, the Chairperson of the Corporation, or the 10 Chairman of the Board of Governors, as appro11 priate, to coordinate and facilitate a prompt and or12 derly transition. 13 SEC. 327. IMPLEMENTATION PLAN AND REPORTS. 14 (a) PLAN SUBMISSION.—Within 180 days of the en15 actment of the Dodd-Frank Wall Street Reform and Con16 sumer Protection Act, the Board of Governors, the Cor17 poration, the Office of the Comptroller of the Currency, 18 and the Office of Thrift Supervision, shall jointly submit 19 a plan to the Committee on Banking, Housing, and Urban 20 Affairs of the Senate, the Committee on Financial Services 21 of the House of Representatives, and the Inspectors Gen22 eral of the Department of the Treasury, the Corporation, 23 and the Board of Governors detailing the steps the Board 24 of Governors, the Corporation, the Office of the Comp25 troller of the Currency, and the Office of Thrift Super433 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 vision will take to implement the provisions of sections 301 2 through 326, and the provisions of the amendments made 3 by such sections. 4 (b) INSPECTORS GENERAL REVIEW OF THE PLAN.— 5 Within 60 days of receiving the plan required under sub6 section (a), the Inspectors General of the Department of 7 the Treasury, the Corporation, and the Board of Gov8 ernors shall jointly provide a written report to the Board 9 of Governors, the Corporation, the Office of the Comp10 troller of the Currency, and the Office of Thrift Super11 vision and shall submit a copy to the Committee on Bank12 ing, Housing, and Urban Affairs of the Senate and the 13 Committee on Financial Services of the House of Rep14 resentatives detailing whether the plan conforms with the 15 provisions of sections 301 through 326, and the provisions 16 of the amendments made by such sections, including— 17 (1) whether the plan sufficiently takes into con18 sideration the orderly transfer of personnel; 19 (2) whether the plan describes procedures and 20 safeguards to ensure that the Office of Thrift Super21 vision employees are not unfairly disadvantaged rel22 ative to employees of the Office of the Comptroller 23 of the Currency and the Corporation; 434 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (3) whether the plan sufficiently takes into con2 sideration the orderly transfer of authority and re3 sponsibilities; 4 (4) whether the plan sufficiently takes into con5 sideration the effective transfer of funds; 6 (5) whether the plan sufficiently takes in con7 sideration the orderly transfer of property; and 8 (6) any additional recommendations for an or9 derly and effective process. 10 (c) IMPLEMENTATION REPORTS.—Not later than 6 11 months after the date on which the Committee on Bank12 ing, Housing, and Urban Affairs of the Senate and the 13 Committee on Financial Services of the House of Rep14 resentatives receives the report required under subsection 15 (b), and every 6 months thereafter until all aspects of the 16 plan have been implemented, the Inspectors General of the 17 Department of the Treasury, the Corporation, and the 18 Board of Governors shall jointly provide a written report 19 on the status of the implementation of the plan to the 20 Board of Governors, the Corporation, the Office of the 21 Comptroller of the Currency, and the Office of Thrift Su22 pervision and shall submit a copy to the Committee on 23 Banking, Housing, and Urban Affairs of the Senate and 24 the Committee on Financial Services of the House of Rep25 resentatives. 435 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 Subtitle C—Federal Deposit 2 Insurance Corporation 3 SEC. 331. DEPOSIT INSURANCE REFORMS. 4 (a) SIZE DISTINCTIONS.—Section 7(b)(2) of the Fed5 eral Deposit Insurance Act (12 U.S.C. 1817(b)(2)) is 6 amended— 7 (1) by striking subparagraph (D); and 8 (2) by redesignating subparagraph (C) as sub9 paragraph (D). 10 (b) ASSESSMENT BASE.—The Corporation shall 11 amend the regulations issued by the Corporation under 12 section 7(b)(2) of the Federal Deposit Insurance Act (12 13 U.S.C. 1817(b)(2)) to define the term ‘‘assessment base’’ 14 with respect to an insured depository institution for pur15 poses of that section 7(b)(2), as an amount equal to— 16 (1) the average consolidated total assets of the 17 insured depository institution during the assessment 18 period; minus 19 (2) the sum of— 20 (A) the average tangible equity of the in21 sured depository institution during the assess22 ment period; and 23 (B) in the case of an insured depository in24 stitution that is a custodial bank (as defined by 25 the Corporation, based on factors including the 436 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 percentage of total revenues generated by custo2 dial businesses and the level of assets under 3 custody) or a banker’s bank (as that term is 4 used in section 5136 of the Revised Statutes 5 (12 U.S.C. 24)), an amount that the Corpora6 tion determines is necessary to establish assess7 ments consistent with the definition under sec8 tion 7(b)(1) of the Federal Deposit Insurance 9 Act (12 U.S.C. 1817(b)(1)) for a custodial 10 bank or a banker’s bank. 11 SEC. 332. ELIMINATION OF PROCYCLICAL ASSESSMENTS. 12 Section 7(e) of the Federal Deposit Insurance Act is 13 amended— 14 (1) in paragraph (2)— 15 (A) by amending subparagraph (B) to read 16 as follows: 17 ‘‘(B) LIMITATION.—The Board of Direc18 tors may, in its sole discretion, suspend or limit 19 the declaration of payment of dividends under 20 subparagraph (A).’’; 21 (B) by amending subparagraph (C) to read 22 as follows: 23 ‘‘(C) NOTICE AND OPPORTUNITY FOR COM24 MENT.—The Corporation shall prescribe, by 25 regulation, after notice and opportunity for 437 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 comment, the method for the declaration, cal2 culation, distribution, and payment of dividends 3 under this paragraph’’; and 4 (C) by striking subparagraphs (D) through 5 (G); and 6 (2) in paragraph (4)(A) by striking ‘‘para7 graphs (2)(D) and’’ and inserting ‘‘paragraphs (2) 8 and’’. 9 SEC. 333. ENHANCED ACCESS TO INFORMATION FOR DE10 POSIT INSURANCE PURPOSES. 11 (a) Section 7(a)(2)(B) of the Federal Deposit Insur12 ance Act is amended by striking ‘‘agreement’’ and insert13 ing ‘‘consultation’’. 14 (b) Section 7(b)(1)(E) of the Federal Deposit Insur15 ance Act is amended— 16 (1) in clause (i), by striking ‘‘such as’’ and in17 serting ‘‘including’’; and 18 (2) in clause (iii), by striking ‘‘Corporation’’ 19 and inserting ‘‘Corporation, except as provided in 20 section 7(a)(2)(B)’’. 21 SEC. 334. TRANSITION RESERVE RATIO REQUIREMENTS TO 22 REFLECT NEW ASSESSMENT BASE. 23 (a) Section 7(b)(3)(B) of the Federal Deposit Insur24 ance Act is amended to read as follows: 438 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 ‘‘(B) MINIMUM RESERVE RATIO.—The re2 serve ratio designated by the Board of Direc3 tors for any year may not be less than 1.15 per4 cent of estimated insured deposits, or the com5 parable percentage of the assessment base set 6 forth in paragraph (2)(C).’’. 7 (b) Section 3(y)(3) of the Federal Deposit Insurance 8 Act is amended by inserting ‘‘, or such comparable per9 centage of the assessment base set forth in section 10 7(b)(2)(C)’’ before the period. 11 (c) For a period of not less than 5 years after the 12 date of the enactment of this title, the Federal Deposit 13 Insurance Corporation shall make available to the public 14 the reserve ratio and the designated reserve ratio using 15 both estimated insured deposits and the assessment base 16 under section 7(b)(2)(C) of the Federal Deposit Insurance 17 Act. 18 SEC. 335. PERMANENT INCREASE IN DEPOSIT AND SHARE 19 INSURANCE. 20 (a) PERMANENT INCREASE IN DEPOSIT INSUR21 ANCE.—Section 11(a)(1)(E) of the Federal Deposit Insur22 ance Act (12 U.S.C. 1821(a)(1)(E)) is amended— 23 (1) by striking ‘‘$100,000’’ and inserting 24 ‘‘$250,000’’; and 439 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (2) by adding at the end the following new sen2 tences: ‘‘Notwithstanding any other provision of law, 3 the increase in the standard maximum deposit insur4 ance amount to $250,000 shall apply to depositors 5 in any institution for which the Corporation was ap6 pointed as receiver or conservator on or after Janu7 ary 1, 2008, and before October 3, 2008. The Cor8 poration shall take such actions as are necessary to 9 carry out the requirements of this section with re10 spect to such depositors, without regard to any time 11 limitations under this Act. In implementing this and 12 the preceding 2 sentences, any payment on a deposit 13 claim made by the Corporation as receiver or conser14 vator to a depositor above the standard maximum 15 deposit insurance amount in effect at the time of the 16 appointment of the Corporation as receiver or con17 servator shall be deemed to be part of the net 18 amount due to the depositor under subparagraph 19 (B).’’ 20 (b) PERMANENT INCREASE IN SHARE INSURANCE.— 21 Section 207(k)(5) of the Federal Credit Union Act (12 22 U.S.C. 1787(k)(5)) is amended by striking ‘‘$100,000’’ 23 and inserting ‘‘$250,000’’. 440 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 SEC. 336. MANAGEMENT OF THE FEDERAL DEPOSIT INSUR2 ANCE CORPORATION. 3 (a) IN GENERAL.—Section 2 of the Federal Deposit 4 Insurance Act (12 U.S.C. 1812) is amended— 5 (1) in subsection (a)(1)(B), by striking ‘‘Direc6 tor of the Office of Thrift Supervision’’ and insert7 ing ‘‘Director of the Consumer Financial Protection 8 Bureau’’; 9 (2) by amending subsection (d)(2) to read as 10 follows: 11 ‘‘(2) ACTING OFFICIALS MAY SERVE.—In the 12 event of a vacancy in the office of the Comptroller 13 of the Currency or the office of Director of the Con14 sumer Financial Protection Bureau and pending the 15 appointment of a successor, or during the absence or 16 disability of the Comptroller of the Currency or the 17 Director of the Consumer Financial Protection Bu18 reau, the acting Comptroller of the Currency or the 19 acting Director of the Consumer Financial Protec20 tion Bureau, as the case may be, shall be a member 21 of the Board of Directors in the place of the Comp22 troller or Director.’’; and 23 (3) in subsection (f)(2), by striking ‘‘Office of 24 Thrift Supervision’’ and inserting ‘‘Consumer Finan25 cial Protection Bureau’’. 441 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (b) EFFECTIVE DATE.—This section, and the amend2 ments made by this section, shall take effect on the trans3 fer date. 4 Subtitle D—Other Matters 5 SEC. 341. BRANCHING. 6 Notwithstanding the Federal Deposit Insurance Act 7 (12 U.S.C. 1811 et seq.), the Bank Holding Company Act 8 of 1956 (12 U.S.C. 1841 et seq.), or any other provision 9 of Federal or State law, a savings association that be10 comes a bank may— 11 (1) continue to operate any branch or agency 12 that the savings association operated immediately 13 before the savings association became a bank; and 14 (2) establish, acquire, and operate additional 15 branches and agencies at any location within any 16 State in which the savings association operated a 17 branch immediately before the savings association 18 became a bank, if the law of the State in which the 19 branch is located, or is to be located, would permit 20 establishment of the branch if the bank were a State 21 bank chartered by such State. 22 SEC. 342. OFFICE OF MINORITY AND WOMEN INCLUSION. 23 (a) OFFICE OF MINORITY AND WOMEN INCLU24 SION.— 25 (1) ESTABLISHMENT.— 442 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (A) IN GENERAL.—Except as provided in 2 subparagraph (B), not later than 6 months 3 after the date of enactment of this Act, each 4 agency shall establish an Office of Minority and 5 Women Inclusion that shall be responsible for 6 all matters of the agency relating to diversity in 7 management, employment, and business activi8 ties. 9 (B) BUREAU.—The Bureau shall establish 10 an Office of Minority and Women Inclusion not 11 later than 6 months after the designated trans12 fer date established under section 1062. 13 (2) TRANSFER OF RESPONSIBILITIES.—Each 14 agency that, on the day before the date of enactment 15 of this Act, assigned the responsibilities described in 16 paragraph (1) (or comparable responsibilities) to an17 other office of the agency shall ensure that such re18 sponsibilities are transferred to the Office. 19 (3) DUTIES WITH RESPECT TO CIVIL RIGHTS 20 LAWS.—The responsibilities described in paragraph 21 (1) do not include enforcement of statutes, regula22 tions, or executive orders pertaining to civil rights, 23 except each Director shall coordinate with the agen24 cy administrator, or the designee of the agency ad25 ministrator, regarding the design and implementa443 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 tion of any remedies resulting from violations of 2 such statutes, regulations, or executive orders. 3 (b) DIRECTOR.— 4 (1) IN GENERAL.—The Director of each Office 5 shall be appointed by, and shall report to, the agen6 cy administrator. The position of Director shall be 7 a career reserved position in the Senior Executive 8 Service, as that position is defined in section 3132 9 of title 5, United States Code, or an equivalent des10 ignation. 11 (2) DUTIES.—Each Director shall develop 12 standards for— 13 (A) equal employment opportunity and the 14 racial, ethnic, and gender diversity of the work15 force and senior management of the agency; 16 (B) increased participation of minority17 owned and women-owned businesses in the pro18 grams and contracts of the agency, including 19 standards for coordinating technical assistance 20 to such businesses; and 21 (C) assessing the diversity policies and 22 practices of entities regulated by the agency. 23 (3) OTHER DUTIES.—Each Director shall ad24 vise the agency administrator on the impact of the 444 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 policies and regulations of the agency on minority2 owned and women-owned businesses. 3 (4) RULE OF CONSTRUCTION.—Nothing in 4 paragraph (2)(C) may be construed to mandate any 5 requirement on or otherwise affect the lending poli6 cies and practices of any regulated entity, or to re7 quire any specific action based on the findings of the 8 assessment. 9 (c) INCLUSION IN ALL LEVELS OF BUSINESS ACTIVI10 TIES.— 11 (1) IN GENERAL.—The Director of each Office 12 shall develop and implement standards and proce13 dures to ensure, to the maximum extent possible, the 14 fair inclusion and utilization of minorities, women, 15 and minority-owned and women-owned businesses in 16 all business and activities of the agency at all levels, 17 including in procurement, insurance, and all types of 18 contracts. 19 (2) CONTRACTS.—The procedures established 20 by each agency for review and evaluation of contract 21 proposals and for hiring service providers shall in22 clude, to the extent consistent with applicable law, a 23 component that gives consideration to the diversity 24 of the applicant. Such procedure shall include a 25 written statement, in a form and with such content 445 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 as the Director shall prescribe, that a contractor 2 shall ensure, to the maximum extent possible, the 3 fair inclusion of women and minorities in the work4 force of the contractor and, as applicable, sub5 contractors. 6 (3) TERMINATION.— 7 (A) DETERMINATION.—The standards and 8 procedures developed and implemented under 9 this subsection shall include a procedure for the 10 Director to make a determination whether an 11 agency contractor, and, as applicable, a subcon12 tractor has failed to make a good faith effort to 13 include minorities and women in their work14 force. 15 (B) EFFECT OF DETERMINATION.— 16 (i) RECOMMENDATION TO AGENCY AD17 MINISTRATOR.—Upon a determination de18 scribed in subparagraph (A), the Director 19 shall make a recommendation to the agen20 cy administrator that the contract be ter21 minated. 22 (ii) ACTION BY AGENCY ADMINIS23 TRATOR.—Upon receipt of a recommenda24 tion under clause (i), the agency adminis25 trator may— 446 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (I) terminate the contract; 2 (II) make a referral to the Office 3 of Federal Contract Compliance Pro4 grams of the Department of Labor; or 5 (III) take other appropriate ac6 tion. 7 (d) APPLICABILITY.—This section shall apply to all 8 contracts of an agency for services of any kind, including 9 the services of financial institutions, investment banking 10 firms, mortgage banking firms, asset management firms, 11 brokers, dealers, financial services entities, underwriters, 12 accountants, investment consultants, and providers of 13 legal services. The contracts referred to in this subsection 14 include all contracts for all business and activities of an 15 agency, at all levels, including contracts for the issuance 16 or guarantee of any debt, equity, or security, the sale of 17 assets, the management of the assets of the agency, the 18 making of equity investments by the agency, and the im19 plementation by the agency of programs to address eco20 nomic recovery. 21 (e) REPORTS.—Each Office shall submit to Congress 22 an annual report regarding the actions taken by the agen23 cy and the Office pursuant to this section, which shall in24 clude— 447 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (1) a statement of the total amounts paid by 2 the agency to contractors since the previous report; 3 (2) the percentage of the amounts described in 4 paragraph (1) that were paid to contractors de5 scribed in subsection (c)(1); 6 (3) the successes achieved and challenges faced 7 by the agency in operating minority and women out8 reach programs; 9 (4) the challenges the agency may face in hiring 10 qualified minority and women employees and con11 tracting with qualified minority-owned and women12 owned businesses; and 13 (5) any other information, findings, conclusions, 14 and recommendations for legislative or agency ac15 tion, as the Director determines appropriate. 16 (f) DIVERSITY IN AGENCY WORKFORCE.—Each 17 agency shall take affirmative steps to seek diversity in the 18 workforce of the agency at all levels of the agency in a 19 manner consistent with applicable law. Such steps shall 20 include— 21 (1) recruiting at historically black colleges and 22 universities, Hispanic-serving institutions, women’s 23 colleges, and colleges that typically serve majority 24 minority populations; 448 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (2) sponsoring and recruiting at job fairs in 2 urban communities; 3 (3) placing employment advertisements in news4 papers and magazines oriented toward minorities 5 and women; 6 (4) partnering with organizations that are fo7 cused on developing opportunities for minorities and 8 women to place talented young minorities and 9 women in industry internships, summer employment, 10 and full-time positions; 11 (5) where feasible, partnering with inner-city 12 high schools, girls’ high schools, and high schools 13 with majority minority populations to establish or 14 enhance financial literacy programs and provide 15 mentoring; and 16 (6) any other mass media communications that 17 the Office determines necessary. 18 (g) DEFINITIONS.—For purposes of this section, the 19 following definitions shall apply: 20 (1) AGENCY.—The term ‘‘agency’’ means— 21 (A) the Departmental Offices of the De22 partment of the Treasury; 23 (B) the Corporation; 24 (C) the Federal Housing Finance Agency; 25 (D) each of the Federal reserve banks; 449 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (E) the Board; 2 (F) the National Credit Union Administra3 tion; 4 (G) the Office of the Comptroller of the 5 Currency; 6 (H) the Commission; and 7 (I) the Bureau. 8 (2) AGENCY ADMINISTRATOR.—The term 9 ‘‘agency administrator’’ means the head of an agen10 cy. 11 (3) MINORITY.—The term ‘‘minority’’ has the 12 same meaning as in section 1204(c) of the Financial 13 Institutions Reform, Recovery, and Enforcement Act 14 of 1989 (12 U.S.C. 1811 note). 15 (4) MINORITY-OWNED BUSINESS.—The term 16 ‘‘minority-owned business’’ has the same meaning as 17 in section 21A(r)(4)(A) of the Federal Home Loan 18 Bank Act (12 U.S.C. 1441a(r)(4)(A)), as in effect 19 on the day before the transfer date. 20 (5) OFFICE.—The term ‘‘Office’’ means the Of21 fice of Minority and Women Inclusion established by 22 an agency under subsection (a). 23 (6) WOMEN-OWNED BUSINESS.—The term 24 ‘‘women-owned business’’ has the meaning given the 25 term ‘‘women’s business’’ in section 21A(r)(4)(B) of 450 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 the Federal Home Loan Bank Act (12 U.S.C. 2 1441a(r)(4)(B)), as in effect on the day before the 3 transfer date. 4 SEC. 343. INSURANCE OF TRANSACTION ACCOUNTS. 5 (a) BANKS AND SAVINGS ASSOCIATIONS.— 6 (1) AMENDMENTS.—Section 11(a)(1) of the 7 Federal Deposit Insurance Act (12 U.S.C. 8 1821(a)(1)) is amended— 9 (A) in subparagraph (B)— 10 (i) by striking ‘‘The net amount’’ and 11 inserting the following: 12 ‘‘(i) IN GENERAL.—Subject to clause 13 (ii), the net amount’’; and 14 (ii) by adding at the end the following 15 new clauses: 16 ‘‘(ii) INSURANCE FOR NONINTEREST17 BEARING TRANSACTION ACCOUNTS.—Not18 withstanding clause (i), the Corporation 19 shall fully insure the net amount that any 20 depositor at an insured depository institu21 tion maintains in a noninterest-bearing 22 transaction account. Such amount shall 23 not be taken into account when computing 24 the net amount due to such depositor 25 under clause (i). 451 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 ‘‘(iii) NONINTEREST-BEARING TRANS2 ACTION ACCOUNT DEFINED.—For purposes 3 of this subparagraph, the term ‘non4 interest-bearing transaction account’ 5 means a deposit or account maintained at 6 an insured depository institution— 7 ‘‘(I) with respect to which inter8 est is neither accrued nor paid; 9 ‘‘(II) on which the depositor or 10 account holder is permitted to make 11 withdrawals by negotiable or transfer12 able instrument, payment orders of 13 withdrawal, telephone or other elec14 tronic media transfers, or other simi15 lar items for the purpose of making 16 payments or transfers to third parties 17 or others; and 18 ‘‘(III) on which the insured de19 pository institution does not reserve 20 the right to require advance notice of 21 an intended withdrawal.’’; and 22 (B) in subparagraph (C), by striking ‘‘sub23 paragraph (B)’’ and inserting ‘‘subparagraph 24 (B)(i)’’. 452 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (2) EFFECTIVE DATE.—The amendments made 2 by paragraph (1) shall take effect on December 31, 3 2010. 4 (3) PROSPECTIVE REPEAL.—Effective January 5 1, 2013, section 11(a)(1) of the Federal Deposit In6 surance Act (12 U.S.C. 1821(a)(1)), as amended by 7 paragraph (1), is amended— 8 (A) in subparagraph (B)— 9 (i) by striking ‘‘DEPOSIT.—’’ and all 10 that follows through ‘‘clause (ii), the net 11 amount’’ and insert ‘‘DEPOSIT.—The net 12 amount’’; and 13 (ii) by striking clauses (ii) and (iii); 14 and 15 (B) in subparagraph (C), by striking ‘‘sub16 paragraph (B)(i)’’ and inserting ‘‘subparagraph 17 (B)’’. 18 (b) CREDIT UNIONS.— 19 (1) AMENDMENTS.—Section 207(k)(1) of the 20 Federal Credit Union Act (12 U.S.C. 1787(k)(1)) is 21 amended— 22 (A) in subparagraph (A)— 23 (i) by striking ‘‘Subject to the provi24 sions of paragraph (2), the net amount’’ 25 and inserting the following: 453 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 ‘‘(i) NET AMOUNT OF INSURANCE 2 PAYABLE.—Subject to clause (ii) and the 3 provisions of paragraph (2), the net 4 amount’’; and 5 (ii) by adding at the end the following 6 new clauses: ‘‘(ii) .-- ‘‘(iii) .--’’. 7 ‘‘(ii) INSURANCE FOR NONINTEREST8 BEARING TRANSACTION ACCOUNTS.—Not9 withstanding clause (i), the Board shall 10 fully insure the net amount that any mem11 ber or depositor at an insured credit union 12 maintains in a noninterest-bearing trans13 action account. Such amount shall not be 14 taken into account when computing the net 15 amount due to such member or depositor 16 under clause (i). 17 ‘‘(iii) NONINTEREST-BEARING TRANS18 ACTION ACCOUNT DEFINED.—For purposes 19 of this subparagraph, the term ‘non20 interest-bearing transaction account’ 21 means an account or deposit maintained at 22 an insured credit union— 23 ‘‘(I) with respect to which inter24 est is neither accrued nor paid; 454 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 ‘‘(II) on which the account holder 2 or depositor is permitted to make 3 withdrawals by negotiable or transfer4 able instrument, payment orders of 5 withdrawal, telephone or other elec6 tronic media transfers, or other simi7 lar items for the purpose of making 8 payments or transfers to third parties 9 or others; and 10 ‘‘(III) on which the insured cred11 it union does not reserve the right to 12 require advance notice of an intended 13 withdrawal.’’; and 14 (B) in subparagraph (B), by striking ‘‘sub15 paragraph (A)’’ and inserting ‘‘subparagraph 16 (A)(i)’’. 17 (2) EFFECTIVE DATE.—The amendments made 18 by paragraph (1) shall take effect upon the date of 19 the enactment of this Act 20 (3) PROSPECTIVE REPEAL.—Effective January 21 1, 2013, section 207(k)(1) of the Federal Credit 22 Union Act (12 U.S.C. 1787(k)(1)), as amended by 23 paragraph (1), is amended— 24 (A) in subparagraph (A)— 455 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (i) by striking ‘‘(i) NET AMOUNT OF 2 INSURANCE PAYABLE.—’’ and all that fol3 lows through ‘‘paragraph (2), the net 4 amount’’ and inserting ‘‘Subject to the 5 provisions of paragraph (2), the net 6 amount’’; and 7 (ii) by striking clauses (ii) and (iii); 8 and 9 (B) in subparagraph (B), by striking ‘‘sub10 paragraph (A)(i)’’ and inserting ‘‘subparagraph 11 (A)’’. 12 Subtitle E—Technical and 13 Conforming Amendments 14 SEC. 351. EFFECTIVE DATE. 15 Except as provided in section 364(a), the amend16 ments made by this subtitle shall take effect on the trans17 fer date. 18 SEC. 352. BALANCED BUDGET AND EMERGENCY DEFICIT 19 CONTROL ACT OF 1985. 20 Section 256(h) of the Balanced Budget and Emer21 gency Deficit Control Act of 1985 (2 U.S.C. 906(h)) is 22 amended— 23 (1) in paragraph (4), by striking subparagraphs 24 (C) and (G); and 456 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (2) by redesignating subparagraphs (D), (E), 2 (F), and (H) as subparagraphs (C), (D), (E), and 3 (F), respectively. 4 SEC. 353. BANK ENTERPRISE ACT OF 1991. 5 Section 232(a) of the Bank Enterprise Act of 1991 6 (12 U.S.C. 1834(a)) is amended— 7 (1) in the subsection heading, by striking ‘‘BY 8 FEDERAL RESERVE BOARD’’; 9 (2) in paragraph (1)— 10 (A) by striking ‘‘The Board of Governors 11 of the Federal Reserve System,’’ and inserting 12 ‘‘The Comptroller of the Currency’’; and 13 (B) by striking ‘‘section 7(b)(2)(H)’’ and 14 inserting ‘‘section 7(b)(2)(E)’’; 15 (3) in paragraph (2)(A), by striking ‘‘Board’’ 16 and inserting ‘‘Comptroller’’; and 17 (4) in paragraph (3)— 18 (A) by redesignating subparagraphs (A) 19 through (C) as subparagraphs (B) through (D), 20 respectively; and 21 (B) by inserting before subparagraph (B) 22 the following: 23 ‘‘(A) COMPTROLLER.—The term ‘Comp24 troller’ means the Comptroller of the Cur25 rency.’’. 457 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 SEC. 354. BANK HOLDING COMPANY ACT OF 1956. 2 The Bank Holding Company Act of 1956 (12 U.S.C. 3 1841 et seq.) is amended— 4 (1) in section 2(j)(3) (12 U.S.C. 1841(j)(3)), 5 strike ‘‘Director of the Office of Thrift Supervision’’ 6 and inserting ‘‘appropriate Federal banking agen7 cy’’; 8 (2) in section 4 (12 U.S.C. 1843)— 9 (A) in subsection (i)— 10 (i) in paragraph (4)— 11 (I) in subparagraph (A)— 12 (aa) in the subparagraph 13 heading, by striking ‘‘TO DIREC14 TOR’’; and 15 (bb) by striking ‘‘Board’’ 16 and all that follows through the 17 end of the subparagraph and in18 serting ‘‘Board shall solicit com19 ments and recommendations 20 from— 21 ‘‘(i) the Comptroller of the Currency, 22 with respect to the acquisition of a Federal 23 savings association; and 24 ‘‘(ii) the Federal Deposit Insurance 25 Corporation, with respect to the acquisition 26 of a State savings association.’’. 458 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (II) in subparagraph (B), by 2 striking ‘‘Director’’ each place that 3 term appears and inserting ‘‘Comp4 troller of the Currency or the Federal 5 Deposit Insurance Corporation, as ap6 plicable,’’; 7 (ii) in paragraph (5)— 8 (I) in subparagraph (B), by 9 striking ‘‘Director with’’ and inserting 10 ‘‘Comptroller of the Currency or the 11 Federal Deposit Insurance Corpora12 tion, as applicable, with’’; and 13 (II) by striking ‘‘Director’’ each 14 place that term appears and inserting 15 ‘‘Comptroller of the Currency or the 16 Federal Deposit Insurance Corpora17 tion’’; 18 (iii) in paragraph (6), by striking ‘‘Di19 rector’’ and inserting ‘‘Comptroller of the 20 Currency or the Federal Deposit Insurance 21 Corporation, as applicable,’’; and 22 (iv) by striking paragraph (7); and 23 (3) in section 5(f) (12 U.S.C. 1844(f))— 24 (A) by striking ‘‘subpena’’ each place that 25 term appears and inserting ‘‘subpoena’’; 459 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (B) by striking ‘‘subpenas’’ each place that 2 term appears and inserting ‘‘subpoenas’’; and 3 (C) by striking ‘‘subpenaed’’ and inserting 4 ‘‘subpoenaed’’. 5 SEC. 355. BANK HOLDING COMPANY ACT AMENDMENTS OF 6 1970. 7 Section 106(b)(1) of the Bank Holding Company Act 8 Amendments of 1970 (12 U.S.C. 1972(1)) is amended in 9 the undesignated matter following subparagraph (E) by 10 inserting ‘‘issue such regulations as are necessary to carry 11 out this section, and, in consultation with the Comptroller 12 of the Currency and the Federal Deposit Insurance Com13 pany, may’’ after ‘‘The Board may’’. 14 SEC. 356. BANK PROTECTION ACT OF 1968. 15 The Bank Protection Act of 1968 (12 U.S.C. 1881 16 et seq.) is amended— 17 (1) in section 2 (12 U.S.C. 1881), by striking 18 ‘‘the term’’ and all that follows through the end of 19 the section and inserting ‘‘the term ‘Federal super20 visory agency’ means the appropriate Federal bank21 ing agency, as defined in section 3(q) of the Federal 22 Deposit Insurance Act (12 U.S.C. 1813(q)).’’; 23 (2) in section 3 (12 U.S.C. 1882), by striking 24 ‘‘and loan’’ each place that term appears; and 460 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (3) in section 5 (12 U.S.C. 1884), by striking 2 ‘‘and loan’’. 3 SEC. 357. BANK SERVICE COMPANY ACT. 4 The Bank Service Company Act (12 U.S.C. 1861 et 5 seq.) is amended— 6 (1) in section 1(b)(4) (12 U.S.C. 1861(b)(4))— 7 (A) by inserting after ‘‘an insured bank,’’ 8 the following: ‘‘a savings association,’’; 9 (B) by striking ‘‘Director of the Office of 10 Thrift Supervision’’ and inserting ‘‘appropriate 11 Federal banking agency’’; and 12 (C) by striking ‘‘, the Federal Savings and 13 Loan Insurance Corporation,’’; 14 (2) in section 1(b)(5), by striking ‘‘term ‘in15 sured depository institution’ has the same meaning 16 as in section 3(c)’’ and inserting ‘‘terms ‘depository 17 institution’ and ‘savings association’ have the same 18 meanings as in section 3’’; and 19 (3) in section 7(c)(2) (12 U.S.C. 1867(c)(2)), 20 by inserting ‘‘each’’ after ‘‘notify’’. 21 SEC. 358. COMMUNITY REINVESTMENT ACT OF 1977. 22 The Community Reinvestment Act of 1977 (12 23 U.S.C. 2901 et seq.) is amended— 24 (1) in section 803 (12 U.S.C. 2902)— 25 (A) in paragraph (1)— 461 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (i) in subparagraph (A), by inserting 2 ‘‘and Federal savings associations (the de3 posits of which are insured by the Federal 4 Deposit Insurance Corporation)’’ after 5 ‘‘banks’’; 6 (ii) in subparagraph (B), by striking 7 ‘‘and bank holding companies’’ and insert8 ing ‘‘, bank holding companies, and sav9 ings and loan holding companies’’; and 10 (iii) in subparagraph (C), by striking 11 ‘‘; and’’ and inserting ‘‘, and State savings 12 associations (the deposits of which are in13 sured by the Federal Deposit Insurance 14 Corporation).’’; and 15 (B) by striking paragraph (2) (relating to 16 the Office of Thrift Supervision), as added by 17 section 744(q) of the Financial Institutions Re18 form, Recovery, and Enforcement Act of 1989 19 (Public Law 101–73; 103 Stat. 440); and 20 (2) in section 806 (12 U.S.C. 2905), by insert21 ing ‘‘, except that the Comptroller of the Currency 22 shall prescribe regulations applicable to savings asso23 ciations and the Board of Governors shall prescribe 24 regulations applicable to insured State member 462 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 banks, bank holding companies and savings and loan 2 holding companies,’’ after ‘‘supervisory agency’’. 3 SEC. 359. CRIME CONTROL ACT OF 1990. 4 The Crime Control Act of 1990 is amended— 5 (1) in section 2539(c)(2) (28 U.S.C. 509 6 note)— 7 (A) by striking subparagraphs (C) and 8 (D); and 9 (B) by redesignating subparagraphs (E) 10 through (H) as subparagraphs (C) through (G), 11 respectively; and 12 (2) in section 2554(b)(2) (Public Law 101–647; 13 104 Stat. 4890)— 14 (A) in subparagraph (A), by striking ‘‘, the 15 Director of the Office of Thrift Supervision,’’ 16 and inserting ‘‘the Comptroller of the Cur17 rency’’; and 18 (B) in subparagraph (B), by striking ‘‘, 19 the Director’’ and all that follows through 20 ‘‘Trust Corporation’’ and inserting ‘‘or the Fed21 eral Deposit Insurance Corporation’’. 22 SEC. 360. DEPOSITORY INSTITUTION MANAGEMENT INTER23 LOCKS ACT. 24 The Depository Institution Management Interlocks 25 Act (12 U.S.C. 3201 et seq.) is amended— 463 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (1) in section 207 (12 U.S.C. 3206)— 2 (A) in paragraph (1), by inserting before 3 the comma at the end the following: ‘‘and Fed4 eral savings associations (the deposits of which 5 are insured by the Federal Deposit Insurance 6 Corporation)’’; 7 (B) in paragraph (2), by striking ‘‘, and 8 bank holding companies’’ and inserting ‘‘, bank 9 holding companies, and savings and loan hold10 ing companies’’; 11 (C) in paragraph (3), by striking ‘‘Cor12 poration,’’ and inserting ‘‘Corporation and 13 State savings associations (the deposits of 14 which are insured by the Federal Deposit In15 surance Corporation),’’; 16 (D) by striking paragraph (4); 17 (E) by redesignating paragraphs (5) and 18 (6) as paragraphs (4) and (5), respectively; and 19 (F) in paragraph (5), as so redesignated, 20 by striking ‘‘through (5)’’ and inserting 21 ‘‘through (4)’’; 22 (2) in section 209 (12 U.S.C. 3207)— 23 (A) in paragraph (1), by inserting before 24 the comma at the end the following: ‘‘and Fed25 eral savings associations (the deposits of which 464 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 are insured by the Federal Deposit Insurance 2 Corporation)’’; 3 (B) in paragraph (2), by striking ‘‘, and 4 bank holding companies’’ and inserting ‘‘, bank 5 holding companies, and savings and loan hold6 ing companies’’; 7 (C) in paragraph (3), by striking ‘‘Cor8 poration,’’ and inserting ‘‘Corporation and 9 State savings associations (the deposits of 10 which are insured by the Federal Deposit In11 surance Corporation),’’; 12 (D) by striking paragraph (4); and 13 (E) by redesignating paragraph (5) as 14 paragraph (4); and 15 (3) in section 210(a) (12 U.S.C. 3208(a))— 16 (A) by striking ‘‘his’’ and inserting ‘‘the’’; 17 and 18 (B) by inserting ‘‘of the Attorney General’’ 19 after ‘‘enforcement functions’’. 20 SEC. 361. EMERGENCY HOMEOWNERS’ RELIEF ACT. 21 Section 110 of the Emergency Homeowners’ Relief 22 Act (12 U.S.C. 2709) is amended in the second sentence, 23 by striking ‘‘Home Loan Bank Board, the Federal Savings 24 and Loan Insurance Corporation’’ and inserting ‘‘Housing 25 Finance Agency’’. 465 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 SEC. 362. FEDERAL CREDIT UNION ACT. 2 The Federal Credit Union Act (12 U.S.C. 1751 et 3 seq.) is amended— 4 (1) in section 107(8) (12 U.S.C. 1757(8)), by 5 striking ‘‘or the Federal Savings and Loan Insur6 ance Corporation’’; 7 (2) in section 205 (12 U.S.C. 1785)— 8 (A) in subsection (b)(2)(G)(i), by striking 9 ‘‘the Office of Thrift Supervision and’’; and 10 (B) in subsection (i)(1), by striking ‘‘or the 11 Federal Savings and Loan Insurance Corpora12 tion’’; and 13 (3) in section 206(g)(7) (12 U.S.C. 14 1786(g)(7))— 15 (A) in subparagraph (A)— 16 (i) in clause (ii), by striking ‘‘(b)(8)’’ 17 and inserting ‘‘(b)(9)’’; 18 (ii) in clause (v)— 19 (I) by striking ‘‘depository’’ and 20 inserting ‘‘financial’’; and 21 (II) by adding ‘‘and’’ at the end; 22 (iii) in clause (vi)— 23 (I) by striking ‘‘Board’’ and in24 serting ‘‘Agency’’; and 25 (II) by striking ‘‘; and’’ and in26 serting a period; and 466 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (iv) by striking clause (vii); and 2 (B) in subparagraph (D)— 3 (i) in clause (iii), by adding ‘‘and’’ at 4 the end; 5 (ii) in clause (iv)— 6 (I) by striking ‘‘Board’’ and in7 serting ‘‘Agency’’; and 8 (II) by striking ‘‘and’’ at the end; 9 and 10 (iii) by striking clause (v). 11 SEC. 363. FEDERAL DEPOSIT INSURANCE ACT. 12 The Federal Deposit Insurance Act (12 U.S.C. 1811 13 et seq.) is amended— 14 (1) in section 3 (12 U.S.C. 1813)— 15 (A) in subsection (b)(1)(C), by striking 16 ‘‘Director of the Office of Thrift Supervision’’ 17 and inserting ‘‘Comptroller of the Currency’’; 18 (B) in subsection (l)(5), in the matter pre19 ceding subparagraph (A), by striking ‘‘Director 20 of the Office of Thrift Supervision,’’; and 21 (C) in subsection (z), by striking ‘‘the Di22 rector of the Office of Thrift Supervision,’’; 23 (2) in section 7 (12 U.S.C. 1817)— 24 (A) in subsection (a)— 25 (i) in paragraph (2)— 467 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (I) in subparagraph (A)— 2 (aa) in the first sentence, by 3 striking ‘‘the Director of the Of4 fice of Thrift Supervision,’’; 5 (bb) in the second sen6 tence— 7 (AA) by striking ‘‘the 8 Director of the Office of 9 Thrift Supervision,’’ and in10 serting ‘‘to’’; and 11 (BB) by inserting ‘‘to’’ 12 before ‘‘any Federal home’’; 13 and 14 (cc) by striking ‘‘Finance 15 Board’’ each place that term ap16 pears and inserting ‘‘Finance 17 Agency’’; and 18 (II) in subparagraph (B), by 19 striking ‘‘the Comptroller of the Cur20 rency, the Board of Governors of the 21 Federal Reserve System, and the Di22 rector of the Office of Thrift Super23 vision,’’ and inserting ‘‘the Comp24 troller of the Currency and the Board 468 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 of Governors of the Federal Reserve 2 System,’’; 3 (ii) in paragraph (3), in the first sen4 tence, by striking ‘‘Comptroller of the Cur5 rency, the Chairman of the Board of Gov6 ernors of the Federal Reserve System, and 7 the Director of the Office of Thrift Super8 vision.’’ and inserting ‘‘Comptroller of the 9 Currency, and the Chairman of the Board 10 of Governors of the Federal Reserve Sys11 tem.’’; 12 (iii) in paragraph (6), by striking 13 ‘‘section 232(a)(3)(C)’’ and inserting ‘‘sec14 tion 232(a)(3)(D)’’; and 15 (iv) in paragraph (7), by striking ‘‘, 16 the Director of the Office of Thrift Super17 vision,’’; and 18 (B) in subsection (n)— 19 (i) in the heading, by striking ‘‘DI20 RECTOR OF THE OFFICE OF THRIFT SU21 PERVISION’’ and inserting ‘‘COMPTROLLER 22 OF THE CURRENCY’’; 23 (ii) in the first sentence— 24 (I) by striking ‘‘the Director of 25 the Office of Thrift Supervision’’ and 469 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 inserting ‘‘the Comptroller of the Cur2 rency’’; and 3 (II) by inserting ‘‘Federal’’ be4 fore ‘‘savings associations’’; 5 (iii) in the third sentence, by striking 6 ‘‘, the Financing Corporation, and the Res7 olution Funding Corporation’’; and 8 (iv) by striking ‘‘the Director’’ each 9 place that term appears and inserting ‘‘the 10 Comptroller’’; 11 (3) in section 8 (12 U.S.C. 1818)— 12 (A) in subsection (a)(8)(B)(ii), in the last 13 sentence, by striking ‘‘Director of the Office of 14 Thrift Supervision’’ each place that term ap15 pears and inserting ‘‘Comptroller of the Cur16 rency’’; 17 (B) in subsection (b)(3)— 18 (i) by inserting ‘‘any savings and loan 19 holding company and any subsidiary (other 20 than a depository institution) of a savings 21 and loan holding company (as such terms 22 are defined in section 10 of Home Owners’ 23 Loan Act)), any noninsured State member 24 bank’’ after ‘‘Bank Holding Company Act 25 of 1956,’’; and 470 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (ii) by inserting ‘‘or against a savings 2 and loan holding company or any sub3 sidiary thereof (other than a depository in4 stitution or a subsidiary of such depository 5 institution)’’ before the period at the end; 6 (C) by striking paragraph (9) of subsection 7 (b) and inserting the following new paragraph: 8 ‘‘(9) [Repealed]’’. 9 (D) in subsection (e)(7)— 10 (i) in subparagraph (A)— 11 (I) in clause (v), by inserting 12 ‘‘and’’ after the semicolon; 13 (II) in clause (vi)— 14 (aa) by striking ‘‘Board’’ 15 and inserting ‘‘Agency’’; and 16 (bb) by striking ‘‘; and’’ and 17 inserting a period; and 18 (III) by striking clause (vii); and 19 (ii) in subparagraph (D)— 20 (I) in clause (iii), by inserting 21 ‘‘and’’ after the semicolon; 22 (II) in clause (iv)— 23 (aa) by striking ‘‘Board’’ 24 and inserting ‘‘Agency’’; and 471 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (bb) by striking ‘‘; and’’ and 2 inserting a period; and 3 (III) by striking clause (v); 4 (E) in subsection (j)— 5 (i) in paragraph (2), by striking ‘‘, or 6 as a savings association under subsection 7 (b)(9) of this section’’; 8 (ii) in paragraph (3), by inserting 9 ‘‘or’’ after the semicolon; 10 (iii) in paragraph (4), by striking ‘‘; 11 or’’ and inserting a comma; and 12 (iv) by striking paragraph (5); 13 (F) in subsection (o), by striking ‘‘Director 14 of the Office of Thrift Supervision’’ and insert15 ing ‘‘Comptroller of the Currency’’; and 16 (G) in subsection (w)(3)(A), by striking 17 ‘‘and the Office of Thrift Supervision’’; 18 (4) in section 10 (12 U.S.C. 1820)— 19 (A) in subsection (d)(5), by striking ‘‘or 20 the Resolution Trust Corporation’’ each place 21 that term appears; and 22 (B) in subsection (k)(5)(B)— 23 (i) in clause (ii), by inserting ‘‘and’’ 24 after the semicolon; 472 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (ii) in clause (iii), by striking ‘‘; and’’ 2 and inserting a period; and 3 (iii) by striking clause (iv); 4 (5) in section 11 (12 U.S.C. 1821)— 5 (A) in subsection (c)— 6 (i) in paragraph (2)(A)(ii), by striking 7 ‘‘(other than section 21A of the Federal 8 Home Loan Bank Act)’’; 9 (ii) in paragraph (4), by striking ‘‘Ex10 cept as otherwise provided in section 21A 11 of the Federal Home Loan Bank Act and 12 notwithstanding’’ and inserting ‘‘Notwith13 standing’’; 14 (iii) in paragraph (6)— 15 (I) in the heading, by striking 16 ‘‘DIRECTOR OF THE OFFICE OF 17 THRIFT SUPERVISION’’ and inserting 18 ‘‘COMPTROLLER OF THE CURRENCY’’; 19 (II) in subparagraph (A)— 20 (aa) by striking ‘‘or the Res21 olution Trust Corporation’’; and 22 (bb) by striking ‘‘Director of 23 the Office of Thrift Supervision’’ 24 and inserting ‘‘Comptroller of the 25 Currency’’; and 473 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (III) by amending subparagraph 2 (B) to read as follows: 3 ‘‘(B) RECEIVER.—The Corporation may, 4 at the discretion of the Comptroller of the Cur5 rency, be appointed receiver and the Corpora6 tion may accept any such appointment.’’; 7 (iv) in paragraph (12)(A), by striking 8 ‘‘or the Resolution Trust Corporation’’; 9 (B) in subsection (d)— 10 (i) in paragraph (17)(A), by striking 11 ‘‘or the Director of the Office of Thrift Su12 pervision’’; and 13 (ii) in paragraph (18)(B), by striking 14 ‘‘or the Director of the Office of Thrift Su15 pervision’’; 16 (C) in subsection (m)— 17 (i) in paragraph (9), by striking ‘‘or 18 the Director of the Office of Thrift Super19 vision, as appropriate’’; 20 (ii) in paragraph (16), by striking ‘‘or 21 the Director of the Office of Thrift Super22 vision, as appropriate’’ each place that 23 term appears; and 24 (iii) in paragraph (18), by striking 25 ‘‘or the Director of the Office of Thrift Su474 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 pervision, as appropriate’’ each place that 2 term appears; 3 (D) in subsection (n)— 4 (i) in paragraph (1)(A)— 5 (I) by striking ‘‘, or the Director 6 of the Office of Thrift Supervision, 7 with respect to’’ and inserting ‘‘or’’; 8 and 9 (II) by striking ‘‘applicable,,’’ 10 and inserting ‘‘applicable,’’; 11 (ii) in paragraph (2)(A), by striking 12 ‘‘or the Director of the Office of Thrift Su13 pervision’’; 14 (iii) in paragraph (4)(D), by striking 15 ‘‘and the Director of the Office of Thrift 16 Supervision, as appropriate,’’; 17 (iv) in paragraph (4)(G), by striking 18 ‘‘and the Director of the Office of Thrift 19 Supervision, as appropriate,’’; and 20 (v) in paragraph (12)(B)— 21 (I) by inserting ‘‘as’’ after ‘‘shall 22 appoint the Corporation’’; 23 (II) by striking ‘‘or the Director 24 of the Office of Thrift Supervision, as 475 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 appropriate,’’ each place such term 2 appears; 3 (E) in subsection (p)— 4 (i) in paragraph (2)(B), by striking 5 ‘‘the Corporation, the FSLIC Resolution 6 Fund, or the Resolution Trust Corpora7 tion,’’ and inserting ‘‘or the Corporation,’’; 8 and 9 (ii) in paragraph (3)(B), by striking 10 ‘‘, the FSLIC Resolution Fund, the Reso11 lution Trust Corporation,’’; and 12 (F) in subsection (r), by striking ‘‘and the 13 Resolution Trust Corporation’’; 14 (6) in section 13(k)(1)(A)(iv) (12 U.S.C. 15 1823(k)(1)(A)(iv)), by striking ‘‘Director of the Of16 fice of Thrift Supervision’’ and inserting ‘‘Comp17 troller of the Currency’’; 18 (7) in section 18 (12 U.S.C. 1828)— 19 (A) in subsection (c)(2)— 20 (i) in subparagraph (A), by inserting 21 ‘‘or a Federal savings association’’ before 22 the semicolon; 23 (ii) in subparagraph (B), by adding 24 ‘‘and’’ at the end; 476 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (iii) in subparagraph (C), by striking 2 ‘‘(except’’ and all that follows through ‘‘; 3 and’’ and inserting ‘‘or a State savings as4 sociation.’’; and 5 (iv) by striking subparagraph (D); 6 (B) in subsection (g)(1), by striking ‘‘the 7 Director of the Office of Thrift Supervision’’and 8 inserting ‘‘the Comptroller of the Currency’’; 9 (C) in subsection (i)(2)(C), by striking 10 ‘‘Director of the Office of Thrift Supervision’’ 11 and inserting ‘‘Corporation’’; and 12 (D) in subsection (m)— 13 (i) in paragraph (1)— 14 (I) in subparagraph (A), by strik15 ing ‘‘and the Director of the Office of 16 Thrift Supervision’’ and inserting ‘‘or 17 the Comptroller of the Currency, as 18 appropriate,’’; and 19 (II) in subparagraph (B), by 20 striking ‘‘and orders of the Director 21 of the Office of Thrift Supervision’’ 22 and inserting ‘‘of the Comptroller of 23 the Currency and orders of the Cor24 poration and the Comptroller of the 25 Currency’’; 477 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (ii) in paragraph (2)— 2 (I) in subparagraph (A), by strik3 ing ‘‘Director of the Office of Thrift 4 Supervision’’ and inserting ‘‘Comp5 troller of the Currency, as appro6 priate,’’; and 7 (II) in subparagraph (B)— 8 (aa) in the matter before 9 clause (i), by striking ‘‘Director 10 of the Office of Thrift Super11 vision’’ and inserting ‘‘Corpora12 tion or the Comptroller of the 13 Currency, as appropriate,’’; and 14 (bb) in the matter following 15 clause (ii)— 16 (AA) in the first sen17 tence, by striking ‘‘Director 18 of the Office of Thrift Su19 pervision’’ and inserting 20 ‘‘Office of the Comptroller of 21 the Currency, as appro22 priate,’’; and 23 (BB) by striking the 24 second sentence and insert25 ing the following: ‘‘The Cor478 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 poration or the Comptroller 2 of the Currency, as appro3 priate, may take any other 4 corrective measures with re5 spect to the subsidiary, in6 cluding the authority to re7 quire the subsidiary to ter8 minate the activities or oper9 ations posing such risks, as 10 the Corporation or the 11 Comptroller of the Currency, 12 respectively, may deem ap13 propriate.’’; and 14 (iii) in paragraph (3)— 15 (I) in subparagraph (A), in the 16 second sentence— 17 (aa) by inserting ‘‘, in the 18 case of a Federal savings associa19 tion,’’ before ‘‘consult with’’; and 20 (bb) by striking ‘‘Director of 21 the Office of Thrift Supervision’’ 22 and inserting ‘‘Comptroller of the 23 Currency’’; and 24 (II) in subparagraph (B)— 479 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (aa) in the subparagraph 2 heading, by striking ‘‘DIRECTOR’’ 3 and inserting ‘‘COMPTROLLER OF 4 THE CURRENCY’’; 5 (bb) by striking ‘‘Office of 6 Thrift Supervision’’ and inserting 7 ‘‘Comptroller of the Currency’’; 8 (cc) by inserting a comma 9 after ‘‘soundness’’; and 10 (dd) by inserting ‘‘as to 11 Federal savings associations’’ 12 after ‘‘compliance’’; 13 (8) in section 19(e) (12 U.S.C. 1829(e))— 14 (A) in paragraph (1), by striking ‘‘Director 15 of the Office of Thrift Supervision’’ and insert16 ing ‘‘Board of Governors of the Federal Reserve 17 System’’; and 18 (B) in paragraph (2), by striking ‘‘Director 19 of the Office of Thrift Supervision’’ and insert20 ing ‘‘Board of Governors of the Federal Reserve 21 System’’; 22 (9) in section 28 (12 U.S.C. 1831e)— 23 (A) in subsection (e)— 24 (i) in paragraph (2)— 480 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (I) in subparagraph (A)(ii), by 2 striking ‘‘Director of the Office of 3 Thrift Supervision’’ and inserting 4 ‘‘Comptroller of the Currency or the 5 Corporation, as appropriate’’; 6 (II) in subparagraph (C), by 7 striking ‘‘Director of the Office of 8 Thrift Supervision’’ and inserting 9 ‘‘Comptroller of the Currency or the 10 Corporation, as appropriate,’’; and 11 (III) in subparagraph (F), by 12 striking ‘‘Director of the Office of 13 Thrift Supervision’’ and inserting 14 ‘‘Comptroller of the Currency or the 15 Corporation, as appropriate’’; and 16 (ii) in paragraph (3)— 17 (I) in subparagraph (A), by strik18 ing ‘‘Director of the Office of Thrift 19 Supervision’’ and inserting ‘‘Comp20 troller of the Currency or the Cor21 poration, as appropriate’’; and 22 (II) in subparagraph (B), by 23 striking ‘‘Director of the Office of 24 Thrift Supervision’’ and inserting 481 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 ‘‘Comptroller of the Currency or the 2 Corporation, as appropriate,’’; and 3 (B) in subsection (h)(2), by striking ‘‘Di4 rector of the Office of Thrift Supervision’’ and 5 inserting ‘‘Comptroller of the Currency, of the 6 Corporation,’’; and 7 (10) in section 33(e) (12 U.S.C. 1831j(e)), by 8 striking ‘‘Federal Housing Finance Board, the 9 Comptroller of the Currency, and the Director of the 10 Office of Thrift Supervision’’ and inserting ‘‘Federal 11 Housing Finance Agency and the Comptroller of the 12 Currency’’. 13 SEC. 364. FEDERAL HOME LOAN BANK ACT. 14 (a) REPEAL OF SECTION 18(c).—Effective 90 days 15 after the transfer date, section 18(c) of the Federal Home 16 Loan Bank Act (12 U.S.C. 1438(c)) is repealed. 17 (b) REPEAL OF SECTION 21A.—Section 21A of the 18 Federal Home Loan Bank Act (12 U.S.C. 1441a) is re19 pealed. 20 SEC. 365. FEDERAL HOUSING ENTERPRISES FINANCIAL 21 SAFETY AND SOUNDNESS ACT OF 1992. 22 The Federal Housing Enterprises Financial Safety 23 and Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is 24 amended— 482 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (1) in section 1315(b) (12 U.S.C. 4515(b)), by 2 striking ‘‘the Federal Deposit Insurance Corpora3 tion, and the Office of Thrift Supervision.’’ and in4 serting ‘‘and the Federal Deposit Insurance Cor5 poration.’’; and 6 (2) in section 1317(c) (12 U.S.C. 4517(c)), by 7 striking ‘‘the Federal Deposit Insurance Corpora8 tion, or the Director of the Office of Thrift Super9 vision’’ and inserting ‘‘or the Federal Deposit Insur10 ance Corporation’’. 11 SEC. 366. FEDERAL RESERVE ACT. 12 The Federal Reserve Act (12 U.S.C. 221 et seq.) is 13 amended— 14 (1) in section 11(a)(2) (12 U.S.C. 248(a)(2))— 15 (A) by inserting ‘‘State savings associa16 tions that are insured depository institutions 17 (as defined in section 3 of the Federal Deposit 18 Insurance Act),’’ after ‘‘case of insured’’; 19 (B) by striking ‘‘Director of the Office of 20 Thrift Supervision’’ and inserting ‘‘Comptroller 21 of the Currency’’; 22 (C) by inserting ‘‘Federal’’ before ‘‘savings 23 association which’’; and 24 (D) by striking ‘‘savings and loan associa25 tion’’ and inserting ‘‘savings association’’; and 483 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (2) in section 19(b) (12 U.S.C. 461(b))— 2 (A) in paragraph (1)(F), by striking ‘‘Di3 rector of the Office of Thrift Supervision’’ and 4 inserting ‘‘Comptroller of the Currency’’; and 5 (B) in paragraph (4)(B), by striking ‘‘Di6 rector of the Office of Thrift Supervision’’ and 7 inserting ‘‘Comptroller of the Currency’’. 8 SEC. 367. FINANCIAL INSTITUTIONS REFORM, RECOVERY, 9 AND ENFORCEMENT ACT OF 1989. 10 The Financial Institutions Reform, Recovery, and 11 Enforcement Act of 1989 is amended— 12 (1) in section 203 (12 U.S.C. 1812 note), by 13 striking subsection (b); 14 (2) in section 302(1) (12 U.S.C. 1467a note), 15 by striking ‘‘Director of the Office of Thrift Super16 vision’’ and inserting ‘‘Comptroller of the Currency’’; 17 (3) in section 305(12 U.S.C. 1464 note), by 18 striking subsection (b); 19 (4) in section 308 (12 U.S.C. 1463 note)— 20 (A) in subsection (a), by striking ‘‘Director 21 of the Office of Thrift Supervision’’ and insert22 ing ‘‘Chairman of the Board of Governors of 23 the Federal Reserve System, the Comptroller of 24 the Currency, the Chairman of the National 25 Credit Union Administration,’’; and 484 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (B) by adding at the end the following new 2 subsection: 3 ‘‘(c) REPORTS.—The Secretary of the Treasury, the 4 Chairman of the Board of Governors of the Federal Re5 serve System, the Comptroller of the Currency, the Chair6 man of the National Credit Union Administration, and the 7 Chairperson of Board of Directors of the Federal Deposit 8 Insurance Corporation shall each submit an annual report 9 to the Congress containing a description of actions taken 10 to carry out this section.’’; 11 (5) in section 402 (12 U.S.C. 1437 note)— 12 (A) in subsection (a), by striking ‘‘Director 13 of the Office of Thrift Supervision’’ and insert14 ing ‘‘Comptroller of the Currency’’; 15 (B) by striking subsection (b); 16 (C) in subsection (e)— 17 (i) in paragraph (1), by striking ‘‘Of18 fice of Thrift Supervision’’ and inserting 19 ‘‘Comptroller of the Currency’’; and 20 (ii) in each of paragraphs (2), (3), 21 and (4), by striking ‘‘Director of the Office 22 of Thrift Supervision’’ each place that 23 term appears and inserting ‘‘Comptroller 24 of the Currency’’; and 485 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (D) by striking ‘‘Federal Housing Finance 2 Board’’ each place that term appears and in3 serting ‘‘Federal Housing Finance Agency’’; 4 (6) in section 1103(a) (12 U.S.C. 3332(a)), by 5 striking ‘‘and the Resolution Trust Corporation’’; 6 (7) in section 1205(b) (12 U.S.C. 1818 note)— 7 (A) in paragraph (1)— 8 (i) by striking subparagraph (B); and 9 (ii) by redesignating subparagraphs 10 (C) through (F) as subparagraphs (B) 11 through (E), respectively; and 12 (B) in paragraph (2), by striking ‘‘para13 graph (1)(F)’’ and inserting ‘‘paragraph 14 (1)(E)’’; 15 (8) in section 1206 (12 U.S.C. 1833b)— 16 (A) by striking ‘‘Board, the Oversight 17 Board of the Resolution Trust Corporation’’ 18 and inserting ‘‘Agency, and’’; and 19 (B) by striking ‘‘, and the Office of Thrift 20 Supervision’’; 21 (9) in section 1216 (12 U.S.C. 1833e)— 22 (A) in subsection (a)— 23 (i) in paragraph (3), by adding ‘‘and’’ 24 at the end; 486 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (ii) in paragraph (4), by striking the 2 semicolon at the end and inserting a pe3 riod; 4 (iii) by striking paragraphs (2), (5), 5 and (6); and 6 (iv) by redesignating paragraphs (3) 7 and (4), as paragraphs (2) and (3), respec8 tively; 9 (B) in subsection (c)— 10 (i) by striking ‘‘the Director of the 11 Office of Thrift Supervision,’’ and insert12 ing ‘‘and’’; and 13 (ii) by striking ‘‘the Thrift Depositor 14 Protection Oversight Board of the Resolu15 tion Trust Corporation, and the Resolution 16 Trust Corporation’’; and 17 (C) in subsection (d)— 18 (i) by striking paragraphs (3), (5), 19 and (6); and 20 (ii) by redesignating paragraphs (4), 21 (7), and (8) as paragraphs (3), (4), and 22 (5), respectively. 487 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 SEC. 368. FLOOD DISASTER PROTECTION ACT OF 1973. 2 Section 3(a)(5) of the Flood Disaster Protection Act 3 of 1973 (42 U.S.C. 4003(a)(5)) is amended by striking 4 ‘‘, the Office of Thrift Supervision’’. 5 SEC. 369. HOME OWNERS’ LOAN ACT. 6 The Home Owners’ Loan Act (12 U.S.C. 1461 et 7 seq.) is amended— 8 (1) in section 1 (12 U.S.C. 1461), by striking 9 the table of contents; 10 (2) in section 2 (12 U.S.C. 1462), as amended 11 by this Act— 12 (A) by striking paragraphs (1) and (3); 13 (B) by redesignating paragraph (2) as 14 paragraph (1); 15 (C) by redesignating paragraphs (4) 16 through (9) as paragraphs (2) through (7), re17 spectively; and 18 (D) by adding at the end the following: 19 ‘‘(8) BOARD.—The term ‘Board’, other than in 20 the context of the Board of Directors of the Cor21 poration, means the Board of Governors of the Fed22 eral Reserve System. 23 ‘‘(9) COMPTROLLER.—The term ‘Comptroller’ 24 means the Comptroller of the Currency.’’; 25 (3) in section 3 (12 U.S.C. 1462a)— 488 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (A) by striking the section heading and in2 serting the following: 3 ‘‘SEC. 3. ADMINISTRATIVE PROVISIONS.’’; 4 (B) by striking subsections (a), (b), (c), 5 (d), (g), (h), (i), and (j); 6 (C) by redesignating subsections (e) and 7 (f) as subsections (a) and (b), respectively; 8 (D) in subsection (a), as so redesignated— 9 (i) in the heading by striking ‘‘OF 10 THE DIRECTOR’’; and 11 (ii) in the matter preceding paragraph 12 (1), by striking ‘‘The Director’’ and insert13 ing ‘‘In accordance with subtitle A of title 14 III of the Dodd-Frank Wall Street Reform 15 and Consumer Protection Act, the appro16 priate Federal banking agency’’; and 17 (E) in subsection (b), as so redesignated, 18 by striking ‘‘Director’’ and inserting ‘‘appro19 priate Federal banking agency’’; 20 (4) in section 4 (12 U.S.C. 1463)— 21 (A) in subsection (a)— 22 (i) in the subsection heading, by strik23 ing ‘‘FEDERAL’’; 24 (ii) by striking paragraphs (1) and (2) 25 and inserting the following: 489 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 ‘‘(1) EXAMINATION AND SAFE AND SOUND OP2 ERATION.— 3 ‘‘(A) FEDERAL SAVINGS ASSOCIATIONS.— 4 The Comptroller shall provide for the examina5 tion and safe and sound operation of Federal 6 savings associations. 7 ‘‘(B) STATE SAVINGS ASSOCIATIONS.—The 8 Corporation shall provide for the examination 9 and safe and sound operation of State savings 10 associations. 11 ‘‘(2) REGULATIONS FOR SAVINGS ASSOCIA12 TIONS.—The Comptroller may prescribe regulations 13 with respect to savings associations, as the Comp14 troller determines to be appropriate to carry out the 15 purposes of this Act.’’; and 16 (iii) in paragraph (3), by striking ‘‘Di17 rector’’ each place that term appears and 18 inserting ‘‘Comptroller and the Corpora19 tion’’; 20 (B) in subsection (b)— 21 (i) in paragraph (2)— 22 (I) in subparagraph (A), by add23 ing ‘‘and’’ at the end; 490 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (II) in subparagraph (B), by 2 striking ‘‘; and’’ and inserting a pe3 riod; and 4 (III) by striking subparagraph 5 (C); and 6 (ii) by striking ‘‘Director’’ each place 7 that term appears and inserting ‘‘Comp8 troller’’; 9 (C) in subsection (c)— 10 (i) by striking ‘‘All regulations and 11 policies of the Director’’ and inserting 12 ‘‘The regulations of the Comptroller and 13 the policies of the Comptroller and the 14 Corporation’’; and 15 (ii) by striking ‘‘of the Currency’’; 16 (D) in subsection (e)(5), by striking ‘‘Di17 rector’’ and inserting ‘‘Comptroller’’; 18 (E) in subsection (f), by striking ‘‘Direc19 tor’’ each place that term appears and inserting 20 ‘‘appropriate Federal banking agency’’; and 21 (F) in subsection (h), by striking ‘‘Direc22 tor’’ each place that term appears and inserting 23 ‘‘appropriate Federal banking agency’’; 24 (5) in section 5 (12 U.S.C. 1464)— 491 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (A) in subsection (a), by striking ‘‘Direc2 tor’’, each place such term appears and insert3 ing ‘‘Comptroller of the Currency’’; 4 (B) in subsection (b), by striking ‘‘Direc5 tor’’, each place such term appears and insert6 ing ‘‘Comptroller of the Currency’’; 7 (C) in subsection (c)— 8 (i) in paragraph (5)— 9 (I) in subparagraph (A), by strik10 ing ‘‘Director’’ and inserting ‘‘appro11 priate Federal banking agency’’; and 12 (II) in subparagraph (B)— 13 (aa) by striking ‘‘The Direc14 tor’’ and inserting ‘‘The appro15 priate Federal banking agency’’; 16 and 17 (bb) by striking ‘‘the Direc18 tor’’ and inserting ‘‘the appro19 priate Federal banking agency’’; 20 (D) in subsection (d)— 21 (i) in paragraph (1)— 22 (I) in subparagraph (A)— 23 (aa) in the first sentence, by 24 striking ‘‘Director’’ and inserting 492 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 ‘‘appropriate Federal banking 2 agency’’; 3 (bb) in the second sen4 tence— 5 (AA) by striking ‘‘Di6 rector’s own name and 7 through the Director’s own 8 attorneys’’ and inserting 9 ‘‘name of the appropriate 10 Federal banking agency and 11 through the attorneys of the 12 appropriate Federal banking 13 agency’’; and 14 (BB) by striking ‘‘Di15 rector’’ each place that term 16 appears and inserting ‘‘ap17 propriate Federal banking 18 agency’’; and 19 (cc) in the third sentence, by 20 striking ‘‘Director’’ each place 21 that term appears and inserting 22 ‘‘Comptroller’’; 23 (II) in subparagraph (B)— 24 (aa) in clauses (i) through 25 (iv), by striking ‘‘Director’’ each 493 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 place that term appears and in2 serting ‘‘appropriate Federal 3 banking agency’’; 4 (III) in clause (v)— 5 (aa) in the matter preceding 6 subclause (I), by striking ‘‘Direc7 tor’’ and inserting ‘‘appropriate 8 Federal banking agency’’; 9 (bb) in subclause (II), by 10 striking ‘‘subpenas’’ and insert11 ing ‘‘subpoenas’’; and 12 (cc) in the matter following 13 subclause (II), by striking ‘‘sub14 pena’’ and inserting ‘‘subpoena’’; 15 (IV) in clause (vi)— 16 (aa) in the first sentence, by 17 striking ‘‘Director’’ and inserting 18 ‘‘appropriate Federal banking 19 agency’’; and 20 (bb) in the second sentence, 21 by striking ‘‘Director’’ and in22 serting ‘‘Comptroller’’; 23 (V) in clause (vii)— 494 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (aa) in the first sentence, by 2 striking ‘‘subpena’’ and inserting 3 ‘‘subpoena’’; 4 (bb) in the second sentence, 5 by striking ‘‘subpenaed’’ and in6 serting ‘‘subpoenaed’’; and 7 (cc) in the third sentence, by 8 striking ‘‘Director’’ and inserting 9 ‘‘appropriate Federal banking 10 agency’’; 11 (ii) in paragraph (2)— 12 (I) in subparagraph (A)— 13 (aa) by striking ‘‘Director of 14 the Office of Thrift Supervision’’ 15 and inserting ‘‘appropriate Fed16 eral banking agency’’; 17 (bb) by striking ‘‘any in18 sured savings association’’ and 19 inserting ‘‘an insured savings as20 sociation’’; and 21 (cc) by striking ‘‘Director 22 determines, in the Director’s dis23 cretion’’ and inserting ‘‘appro24 priate Federal banking agency 25 determines, in the discretion of 495 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 the appropriate Federal banking 2 agency’’; 3 (II) in subparagraph (B), by 4 striking ‘‘Director’’ each place that 5 term appears and inserting ‘‘appro6 priate Federal banking agency’’; 7 (III) in subparagraphs (C) and 8 (D), by striking ‘‘Director’’ and in9 serting ‘‘appropriate Federal banking 10 agency’’; 11 (IV) in subparagraph (E)— 12 (aa) in clause (ii)— 13 (AA) in the clause 14 heading, by striking ‘‘OR 15 RTC’’; and 16 (BB) by striking ‘‘or 17 the Resolution Trust Cor18 poration, as appropriate,’’ 19 each place that term ap20 pears; and 21 (bb) by striking ‘‘Director’’ 22 each place that term appears and 23 inserting ‘‘appropriate Federal 24 banking agency’’; and 25 (iii) in paragraph (3)— 496 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (I) in subparagraph (A), by strik2 ing ‘‘Director’’ each place that term 3 appears and inserting ‘‘Comptroller’’; 4 and 5 (II) in subparagraph (B)— 6 (aa) in the subparagraph 7 heading, by striking ‘‘OR RTC’’; 8 (bb) by striking ‘‘Corpora9 tion or the Resolution Trust’’; 10 and 11 (cc) by striking ‘‘Director’’ 12 and inserting ‘‘Comptroller’’; 13 (iv) in paragraph (4), by striking ‘‘Di14 rector’’ and inserting ‘‘appropriate Federal 15 banking agency’’; 16 (v) in paragraph (6)— 17 (I) in subparagraph (A), by strik18 ing ‘‘Director’’ and inserting ‘‘Comp19 troller’’; and 20 (II) in subparagraphs (B) and 21 (C), by striking ‘‘Director’’ each place 22 that term appears and inserting ‘‘ap23 propriate Federal banking agency’’; 24 (vi) in paragraph (7)— 497 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (I) in subparagraphs (A), (B), 2 and (D), by striking ‘‘Director’’ each 3 place that term appears and inserting 4 ‘‘appropriate Federal banking agen5 cy’’; 6 (II) in subparagraph (C), by 7 striking ‘‘Director’’ and inserting 8 ‘‘Federal Deposit Insurance Corpora9 tion or the Comptroller, as appro10 priate,’’; and 11 (III) by striking subparagraph 12 (E) and inserting the following: 13 ‘‘(E) ADMINISTRATION BY THE COMP14 TROLLER AND THE CORPORATION.—The Comp15 troller may issue such regulations, and the ap16 propriate Federal banking agency may issue 17 such orders, including those issued pursuant to 18 section 8 of the Federal Deposit Insurance Act, 19 as may be necessary to administer and carry 20 out this paragraph and to prevent evasion of 21 this paragraph.’’; 22 (E) in subsection (e)(2), strike ‘‘Director’’ 23 and insert ‘‘Comptroller’’; 24 (F) in subsection (i)— 498 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (i) by striking ‘‘Director’’, each place 2 such term appears, and inserting ‘‘Comp3 troller’’; 4 (ii) in paragraph (2), in the heading, 5 by striking ‘‘DIRECTOR’’ and inserting 6 ‘‘COMPTROLLER’’; 7 (iii) in paragraph (5)(A), by striking 8 ‘‘of the Currency’’; and 9 (iv) except as provided in clauses (i) 10 through (iii), by striking ‘‘Director’’ each 11 place such term appears and inserting 12 ‘‘Comptroller’’; 13 (G) in subsection (o)— 14 (i) in paragraph (1), by striking ‘‘Di15 rector’’ and inserting ‘‘Comptroller’’; and 16 (ii) in paragraph (2)(B), by striking 17 ‘‘Director’s determination’’ and inserting 18 ‘‘determination of the Comptroller’’; 19 (H) in subsections (m), (n), (o), and (p), 20 by striking ‘‘Director’’, each place such term 21 appears, and inserting ‘‘Comptroller’’; 22 (I) in subsection (q)— 23 (i) in paragraph (6), by striking ‘‘of 24 Governors of the Federal Reserve System’’; 499 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (ii) by striking ‘‘Director’’ each place 2 that term appears and inserting ‘‘Board’’; 3 and 4 (iii) by inserting ‘‘in consultation with 5 the Comptroller and the Corporation,’’ be6 fore ‘‘considers’’; 7 (J) in subsection (r)(3), by striking ‘‘Di8 rector’’ and inserting ‘‘Comptroller of the Cur9 rency’’; 10 (K) in subsection (s)— 11 (i) in paragraph (1), strike ‘‘Director’’ 12 and insert ‘‘Comptroller of the Currency’’; 13 (ii) in paragraph (2), strike ‘‘Direc14 tor’’ and insert ‘‘Comptroller of the Cur15 rency’’; 16 (iii) in paragraph (3), by striking ‘‘Di17 rector’s discretion, the Director’’ and in18 serting ‘‘discretion of the appropriate Fed19 eral banking agency, the appropriate Fed20 eral banking agency,’’; 21 (iv) in paragraph (4), by striking ‘‘Di22 rector’’ each place that term appears and 23 inserting ‘‘appropriate Federal banking 24 agency’’; and 25 (v) in paragraph (5)— 500 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (I) by striking ‘‘Director’’, each 2 place such term appears, and insert3 ing ‘‘appropriate Federal banking 4 agency’’; and 5 (II) by striking ‘‘Director’s ap6 proval’’ and inserting ‘‘approval of the 7 appropriate Federal banking agency’’; 8 (L) in subsection (t)— 9 (i) in paragraph (1), by striking sub10 paragraph (D); 11 (ii) by striking paragraph (3) and in12 serting the following: 13 ‘‘(3) [Repealed].’’; 14 (iii) in paragraph (5)— 15 (I) in subparagraph (B), by 16 striking ‘‘Corporation, in its sole dis17 cretion’’ and inserting ‘‘appropriate 18 Federal banking agency, in the sole 19 discretion of the appropriate Federal 20 banking agency’’; and 21 (II) by striking subparagraph 22 (D); 23 (iv) in paragraph (6)— 24 (I) by striking subparagraph (A) 25 and inserting the following: 501 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 ‘‘(A) [Reserved].’’; 2 (II) in subparagraph (B), by 3 striking ‘‘Director’’ each place that 4 term appears and inserting ‘‘appro5 priate Federal banking agency’’; 6 (III) in subparagraph (C)— 7 (aa) in clause (i), by striking 8 ‘‘Director’s prior approval’’ and 9 inserting ‘‘prior approval of the 10 appropriate Federal banking 11 agency’’; 12 (bb) in clause (ii), by strik13 ing ‘‘Director’s discretion’’ and 14 inserting ‘‘discretion of the ap15 propriate Federal banking agen16 cy’’; and 17 (cc) by striking ‘‘Director’’ 18 each place that term appears and 19 inserting ‘‘appropriate Federal 20 banking agency’’; 21 (IV) in subparagraph (E), by 22 striking ‘‘Director shall’’ and inserting 23 ‘‘appropriate Federal banking agency 24 may’’; and 502 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (V) in subparagraph (F), by 2 striking ‘‘Director’’ and all that fol3 lows through the end of the subpara4 graph and inserting ‘‘appropriate Fed5 eral banking agency under this Act or 6 any other provision of law.’’; 7 (v) in paragraph (7), by striking ‘‘Di8 rector’’ each place that term appears and 9 inserting ‘‘appropriate Federal banking 10 agency’’; 11 (vi) by striking paragraph (8) and in12 serting the following: 13 ‘‘(8) [Repealed].’’; 14 (vii) in paragraph (9)— 15 (I) in subparagraph (A), by strik16 ing ‘‘Director’’ and inserting ‘‘Comp17 troller’’; 18 (II) in subparagraph (C), by 19 striking ‘‘of the Currency’’; and 20 (III) by striking subparagraph 21 (B) and redesignating subparagraphs 22 (C) and (D) as subparagraphs (B) 23 and (C), respectively; and 24 (viii) except as provided in clauses (i) 25 through (vii), by striking ‘‘Director’’ each 503 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 place that term appears and inserting ‘‘ap2 propriate Federal banking agency’’; 3 (M) in subsection (u), by striking ‘‘Direc4 tor’’ each place that term appears and inserting 5 ‘‘appropriate Federal banking agency’’; 6 (N) in subsection (v)— 7 (i) in paragraph (2), by striking ‘‘Di8 rector’s determinations’’ and inserting ‘‘de9 terminations of the appropriate Federal 10 banking agency’’; and 11 (ii) by striking ‘‘Director’’ each place 12 that term appears and inserting ‘‘appro13 priate Federal banking agency’’; 14 (O) in subsection (w)(1)— 15 (i) in subparagraph (A)(II), by strik16 ing ‘‘Director’s intention’’ and inserting 17 ‘‘intention of the Comptroller’’; and 18 (ii) in subparagraph (B), by striking 19 ‘‘Director’s intention’’ and inserting ‘‘in20 tention of the Comptroller’’; and 21 (P) except as provided in subparagraphs 22 (A) through (J), by striking ‘‘Director’’ each 23 place that term appears and inserting ‘‘Comp24 troller’’; 504 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (6) in section 8 (12 U.S.C. 1466a), by striking 2 ‘‘Director’’ each place that term appears and insert3 ing ‘‘Comptroller’’; 4 (7) in section 9 (12 U.S.C. 1467)— 5 (A) in subsection (a), by striking ‘‘assessed 6 by the Director’’ and all that follows through 7 the end of the subsection and inserting the fol8 lowing: ‘‘assessed by— 9 ‘‘(1) the Comptroller, against each such Federal 10 savings association, as the Comptroller deems nec11 essary or appropriate; and 12 ‘‘(2) the Corporation, against each such State 13 savings association, as the Corporation deems nec14 essary or appropriate.’’; 15 (B) in subsection (b), by striking ‘‘Direc16 tor’’, each place such term appears, and insert17 ing ‘‘Comptroller or Corporation, as appro18 priate’’; 19 (C) in subsection (e)— 20 (i) by striking ‘‘Only the Director’’ 21 and inserting ‘‘The Comptroller’’; and 22 (ii) by striking ‘‘Director’s designee’’ 23 and inserting ‘‘designee of the Comp24 troller’’; 505 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (D) by striking subsection (f) and inserting 2 the following: 3 ‘‘(f) [Reserved].’’; 4 (E) in subsection (g)— 5 (i) in paragraph (1), by striking ‘‘Di6 rector’’ and inserting ‘‘appropriate Federal 7 banking agency’’; and 8 (ii) in paragraph (2), by striking ‘‘Di9 rector, or the Corporation, as the case may 10 be,’’ and inserting ‘‘appropriate Federal 11 banking agency for the savings associa12 tion’’; 13 (F) in subsection (i), by striking ‘‘Direc14 tor’’ each place that term appears and inserting 15 ‘‘appropriate Federal banking agency’’; 16 (G) in subsection (j), by striking ‘‘Direc17 tor’s sole discretion’’ and inserting ‘‘sole discre18 tion of the appropriate Federal banking agen19 cy’’; 20 (H) in subsection (k), by striking ‘‘Direc21 tor may assess against institutions for which 22 the Director is the appropriate Federal banking 23 agency, as defined in section 3 of the Federal 24 Deposit Insurance Act,’’ and inserting ‘‘appro506 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 priate Federal banking agency may assess 2 against an institution’’; and 3 (I) except as provided in subparagraphs 4 (A) through (G), by striking ‘‘Director’’ each 5 place that term appears and inserting ‘‘appro6 priate Federal banking agency’’; 7 (8) in section 10 (12 U.S.C. 1467a)— 8 (A) in subsection (a)(1), by striking ‘‘Di9 rector’’ each place that term appears and in10 serting ‘‘appropriate Federal banking agency’’; 11 (B) in subsection (b)— 12 (i) in paragraph (2), by striking ‘‘and 13 the regional office of the Director of the 14 district in which its principal office is lo15 cated,’’; and 16 (ii) in paragraph (6), by striking ‘‘Di17 rector’s own motion or application’’ and in18 serting ‘‘motion or application of the 19 Board’’; 20 (C) in subsection (c)— 21 (i) in paragraph (2)(F), by striking 22 ‘‘of Governors of the Federal Reserve Sys23 tem’’; 507 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (ii) in paragraph (4)(B), in the sub2 paragraph heading, by striking ‘‘BY DIREC3 TOR’’; 4 (iii) in paragraph (6)(D), in the sub5 paragraph heading, by striking ‘‘BY DIREC6 TOR’’; and 7 (iv) in paragraph (9)(E), by inserting 8 ‘‘(in consultation with the appropriate Fed9 eral banking agency)’’ after ‘‘including a 10 determination’’; 11 (D) in subsection (g)(5)(B), by striking 12 ‘‘the Director’s discretion’’ and inserting ‘‘the 13 discretion of the Board’’; 14 (E) in subsection (l), by striking ‘‘Direc15 tor’’ each place that term appears and inserting 16 ‘‘appropriate Federal banking agency’’; 17 (F) in subsection (m), by striking ‘‘Direc18 tor’’ and inserting ‘‘appropriate Federal bank19 ing agency’’; 20 (G) in subsection (p)— 21 (i) in paragraph (1)— 22 (I) by striking ‘‘Director deter23 mines’’ the 1st place such term ap24 pears and inserting ‘‘Board or the ap508 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 propriate Federal banking agency for 2 the savings association determines’’; 3 (II) by striking ‘‘Director may’’ 4 and inserting ‘‘Board may’’; and 5 (III) by striking ‘‘Director deter6 mines’’ the 2nd place such term ap7 pears and inserting ‘‘Board, in con8 sultation with the appropriate Federal 9 banking agency for the savings asso10 ciation determines’’; and 11 (ii) in paragraph (2), by striking ‘‘Di12 rector’’, each place such term appears, and 13 inserting ‘‘Board’’; 14 (H) in subsection (q), by striking ‘‘Direc15 tor’’, each place such term appears, and insert16 ing ‘‘Board’’; 17 (I) in subsection (r), by striking ‘‘Direc18 tor’’, each place such term appears, and insert19 ing ‘‘Board or appropriate Federal banking 20 agency’’; 21 (J) in subsection (s)— 22 (i) in paragraph (2)— 23 (I) in subparagraph (B)(ii), by 24 striking ‘‘Director’s judgment’’ and 25 inserting ‘‘judgment of the appro509 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 priate Federal banking agency for the 2 savings association’’; and 3 (II) by striking ‘‘Director’’ each 4 place that term appears and inserting 5 ‘‘appropriate Federal banking agency 6 for the savings association’’; and 7 (ii) in paragraph (4), by striking ‘‘Di8 rector’’ and inserting ‘‘Comptroller’’; and 9 (K) except as provided in subparagraphs 10 (A) through (J), by striking ‘‘Director’’ each 11 place that term appears and inserting ‘‘Board’’; 12 (9) in section 11 (12 U.S.C. 1468), by striking 13 ‘‘Director’’ each place that term appears and insert14 ing ‘‘appropriate Federal banking agency’’; 15 (10) in section 12 (12 U.S.C. 1468a), by strik16 ing ‘‘the Director’’ and inserting ‘‘a Federal banking 17 agency’’; and 18 (11) in section 13 (12 U.S.C. 1468a) is amend19 ed by striking ‘‘Director’’ and inserting ‘‘a Federal 20 banking agency’’. 21 SEC. 370. HOUSING ACT OF 1948. 22 Section 502(c) of the Housing Act of 1948 (12 23 U.S.C. 1701c(c)) is amended— 24 (1) in the matter preceding paragraph (1), by 25 striking ‘‘and the Director of the Office of Thrift 510 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 Supervision’’ and inserting ‘‘, the Comptroller of the 2 Currency, and the Federal Deposit Insurance Cor3 poration’’; and 4 (2) in paragraph (3), by striking ‘‘Board’’ and 5 inserting ‘‘Agency’’. 6 SEC. 371. HOUSING AND COMMUNITY DEVELOPMENT ACT 7 OF 1992. 8 Section 543 of the Housing and Community Develop9 ment Act of 1992 (Public Law 102–550; 106 Stat. 3798) 10 is amended— 11 (1) in subsection (c)(1)— 12 (A) by striking subparagraphs (D) through 13 (F); and 14 (B) by redesignating subparagraphs (G) 15 and (H) as subparagraphs (D) and (E), respec16 tively; and 17 (2) in subsection (f)— 18 (A) in paragraph (2), by striking ‘‘the Of19 fice of Thrift Supervision,’’ each place that 20 term appears; and 21 (B) in paragraph (3)— 22 (i) in the matter preceding subpara23 graph (A), by striking ‘‘the Office of Thrift 24 Supervision,’’; and 511 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (ii) in subparagraph (D), by striking 2 ‘‘Office of Thrift Supervision,’’. 3 SEC. 372. HOUSING AND URBAN-RURAL RECOVERY ACT OF 4 1983. 5 Section 469 of the Housing and Urban-Rural Recov6 ery Act of 1983 (12 U.S.C. 1701p–1) is amended in the 7 first sentence, by striking ‘‘Federal Home Loan Bank 8 Board’’ and inserting ‘‘Federal Housing Finance Agency’’. 9 SEC. 373. NATIONAL HOUSING ACT. 10 Section 202(f) of the National Housing Act (12 11 U.S.C. 1708(f)) is amended— 12 (1) by striking paragraph (5) and inserting the 13 following: 14 ‘‘(5) if the mortgagee is a national bank, a sub15 sidiary or affiliate of such bank, a Federal savings 16 association or a subsidiary or affiliate of a savings 17 association, the Comptroller of the Currency;’’; 18 (2) in paragraph (6), by adding ‘‘and’’ at the 19 end; 20 (3) in paragraph (7)— 21 (A) by inserting ‘‘or State savings associa22 tion’’ after ‘‘State bank’’; and 23 (B) by striking ‘‘; and’’ and inserting a pe24 riod; and 25 (4) by striking paragraph (8). 512 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 SEC. 374. NEIGHBORHOOD REINVESTMENT CORPORATION 2 ACT. 3 Section 606(c)(3) of the Neighborhood Reinvestment 4 Corporation Act (42 U.S.C. 8105(c)(3)) is amended by 5 striking ‘‘Federal Home Loan Bank Board’’ and inserting 6 ‘‘Federal Housing Finance Agency’’. 7 SEC. 375. PUBLIC LAW 93–100. 8 Section 5(d) of Public Law 93–100 (12 U.S.C. 9 1470(a)) is amended— 10 (1) in paragraph (1), by striking ‘‘Federal Sav11 ings and Loan Insurance Corporation with respect 12 to insured institutions, the Board of Governors of 13 the Federal Reserve System with respect to State 14 member insured banks, and the Federal Deposit In15 surance Corporation with respect to State non16 member insured banks’’ and inserting ‘‘appropriate 17 Federal banking agency, with respect to the institu18 tions subject to the jurisdiction of each such agen19 cy,’’; and 20 (2) in paragraph (2), by striking ‘‘supervisory’’ 21 and inserting ‘‘banking’’. 22 SEC. 376. SECURITIES EXCHANGE ACT OF 1934. 23 The Securities Exchange Act of 1934 (15 U.S.C. 78a 24 et seq.) is amended— 25 (1) in section 3(a)(34) (15 U.S.C. 26 78c(a)(34))— 513 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (A) in subparagraph (A)— 2 (i) in clause (i), by striking ‘‘or a sub3 sidiary or a department or division of any 4 such bank’’ and inserting ‘‘a subsidiary or 5 a department or division of any such bank, 6 a Federal savings association (as defined 7 in section 3(b)(2) of the Federal Deposit 8 Insurance Act (12 U.S.C. 1813(b)(2))), 9 the deposits of which are insured by the 10 Federal Deposit Insurance Corporation, or 11 a subsidiary or department or division of 12 any such Federal savings association’’; 13 (ii) in clause (ii), by striking ‘‘or a 14 subsidiary or a department or division of 15 such subsidiary’’ and inserting ‘‘a sub16 sidiary or a department or division of such 17 subsidiary, or a savings and loan holding 18 company’’; 19 (iii) in clause (iii), by striking ‘‘or a 20 subsidiary or department or division there21 of;’’ and inserting ‘‘a subsidiary or depart22 ment or division of any such bank, a State 23 savings association (as defined in section 24 3(b)(3) of the Federal Deposit Insurance 25 Act (12 U.S.C. 1813(b)(3))), the deposits 514 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 of which are insured by the Federal De2 posit Insurance Corporation, or a sub3 sidiary or a department or division of any 4 such State savings association; and’’; 5 (iv) by striking clause (iv); and 6 (v) by redesignating clause (v) as 7 clause (iv); 8 (B) in subparagraph (B)— 9 (i) in clause (i), by striking ‘‘or a sub10 sidiary of any such bank’’ and inserting ‘‘a 11 subsidiary of any such bank, a Federal 12 savings association (as defined in section 13 3(b)(2) of the Federal Deposit Insurance 14 Act (12 U.S.C. 1813(b)(2))), the deposits 15 of which are insured by the Federal De16 posit Insurance Corporation, or a sub17 sidiary of any such Federal savings asso18 ciation’’; 19 (ii) in clause (ii), by striking ‘‘or a 20 subsidiary of a bank holding company 21 which is a bank other than a bank speci22 fied in clause (i), (iii), or (iv) of this sub23 paragraph’’ and inserting ‘‘a subsidiary of 24 a bank holding company that is a bank 25 other than a bank specified in clause (i) or 515 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (iii) of this subparagraph, or a savings and 2 loan holding company’’; 3 (iii) in clause (iii), by striking ‘‘or a 4 subsidiary thereof;’’ and inserting ‘‘a sub5 sidiary of any such bank, a State savings 6 association (as defined in section 3(b)(3) of 7 the Federal Deposit Insurance Act (12 8 U.S.C. 1813(b)(3))), the deposits of which 9 are insured by the Federal Deposit Insur10 ance Corporation, or a subsidiary of any 11 such State savings association; and’’; 12 (iv) by striking clause (iv); and 13 (v) by redesignating clause (v) as 14 clause (iv); 15 (C) in subparagraph (C)— 16 (i) in clause (i), by striking ‘‘bank’’ 17 and inserting ‘‘bank or a Federal savings 18 association (as defined in section 3(b)(2) of 19 the Federal Deposit Insurance Act (12 20 U.S.C. 1813(b)(2))), the deposits of which 21 are insured by the Federal Deposit Insur22 ance Corporation’’; 23 (ii) in clause (ii), by striking ‘‘or a 24 subsidiary of a bank holding company 25 which is a bank other than a bank speci516 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 fied in clause (i), (iii), or (iv) of this sub2 paragraph’’ and inserting ‘‘a subsidiary of 3 a bank holding company that is a bank 4 other than a bank specified in clause (i) or 5 (iii) of this subparagraph, or a savings and 6 loan holding company’’; 7 (iii) in clause (iii), by striking ‘‘Sys8 tem)’’ and inserting, ‘‘System) or a State 9 savings association (as defined in section 10 3(b)(3) of the Federal Deposit Insurance 11 Act (12 U.S.C. 1813(b)(3))), the deposits 12 of which are insured by the Federal De13 posit Insurance Corporation; and’’; 14 (iv) by striking clause (iv); and 15 (v) by redesignating clause (v) as 16 clause (iv); 17 (D) in subparagraph (D)— 18 (i) in clause (i), by inserting after 19 ‘‘bank’’ the following: ‘‘or a Federal sav20 ings association (as defined in section 21 3(b)(2) of the Federal Deposit Insurance 22 Act (12 U.S.C. 1813(b)(2))), the deposits 23 of which are insured by the Federal De24 posit Insurance Corporation’’; 517 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (ii) in clause (ii), by adding ‘‘and’’ at 2 the end; 3 (iii) by striking clause (iii); 4 (iv) by redesignating clause (iv) as 5 clause (iii); and 6 (v) in clause (iii), as so redesignated, 7 by inserting after ‘‘bank’’ the following: 8 ‘‘or a State savings association (as defined 9 in section 3(b)(3) of the Federal Deposit 10 Insurance Act (12 U.S.C. 1813(b)(3))), 11 the deposits of which are insured by the 12 Federal Deposit Insurance Corporation’’; 13 (E) in subparagraph (F)— 14 (i) in clause (i), by inserting after 15 ‘‘bank’’ the following: ‘‘or a Federal sav16 ings association (as defined in section 17 3(b)(2) of the Federal Deposit Insurance 18 Act (12 U.S.C. 1813(b)(2))), the deposits 19 of which are insured by the Federal De20 posit Insurance Corporation’’; 21 (ii) by striking clause (ii); 22 (iii) by redesignating clauses (iii), (iv), 23 and (v) as clauses (ii), (iii), and (iv), re24 spectively; and 518 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (iv) in clause (iii), as so redesignated, 2 by inserting before the semicolon the fol3 lowing: ‘‘or a State savings association (as 4 defined in section 3(b)(3) of the Federal 5 Deposit Insurance Act (12 U.S.C. 6 1813(b)(3))), the deposits of which are in7 sured by the Federal Deposit Insurance 8 Corporation’’; 9 (F) in subparagraph (G)— 10 (i) in clause (i), by inserting after 11 ‘‘national bank’’ the following: ‘‘, a Federal 12 savings association (as defined in section 13 3(b)(2) of the Federal Deposit Insurance 14 Act), the deposits of which are insured by 15 the Federal Deposit Insurance Corpora16 tion,’’; 17 (ii) in clause (iii)— 18 (I) by inserting after ‘‘bank)’’ the 19 following: ‘‘, a State savings associa20 tion (as defined in section 3(b)(3) of 21 the Federal Deposit Insurance Act), 22 the deposits of which are insured by 23 the Federal Deposit Insurance Cor24 poration,’’; and 25 (II) by adding ‘‘and’’ at the end; 519 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (iii) by striking clause (iv); and 2 (iv) by redesignating clause (v) as 3 clause (iv); and 4 (G) in the undesignated matter following 5 subparagraph (H), by striking ‘‘, and the term 6 ‘District of Columbia savings and loan associa7 tion’ means any association subject to examina8 tion and supervision by the Office of Thrift Su9 pervision under section 8 of the Home Owners’ 10 Loan Act of 1933’’; 11 (2) in section 12(i) (15 U.S.C. 78l(i))— 12 (A) in paragraph (1), by inserting after 13 ‘‘national banks’’ the following: ‘‘and Federal 14 savings associations, the accounts of which are 15 insured by the Federal Deposit Insurance Cor16 poration’’; 17 (B) by striking ‘‘(3)’’ and all that follows 18 through ‘‘vested in the Office of Thrift Super19 vision’’ and inserting ‘‘and (3) with respect to 20 all other insured banks and State savings asso21 ciations, the accounts of which are insured by 22 the Federal Deposit Insurance Corporation, are 23 vested in the Federal Deposit Insurance Cor24 poration’’; and 520 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (C) in the second sentence, by striking 2 ‘‘the Federal Deposit Insurance Corporation, 3 and the Office of Thrift Supervision’’ and in4 serting ‘‘and the Federal Deposit Insurance 5 Corporation’’; 6 (3) in section 15C(g)(1) (15 U.S.C. 78o– 7 5(g)(1)), by striking ‘‘the Director of the Office of 8 Thrift Supervision, the Federal Savings and Loan 9 Insurance Corporation,’’; and 10 (4) in section 23(b)(1) (15 U.S.C. 78w(b)(1)), 11 by striking ‘‘, other than the Office of Thrift Super12 vision,’’. 13 SEC. 377. TITLE 18, UNITED STATES CODE. 14 Title 18, United States Code, is amended— 15 (1) in section 212(c)(2)— 16 (A) by striking subparagraph (C); and 17 (B) by redesignating subparagraphs (D) 18 through (H) as subparagraphs (C) through (G), 19 respectively; 20 (2) in section 657, by striking ‘‘Office of Thrift 21 Supervision, the Resolution Trust Corporation,’’; 22 (3) in section 981(a)(1)(D)— 23 (A) by striking ‘‘Resolution Trust Corpora24 tion,’’; and 521 O:WRIWRI10949.xml [file 3 of 17] S.L.C 1 (B) by striking ‘‘or the Office of Thrift Su2 pervision’’; 3 (4) in section 982(a)(3)— 4 (A) by striking ‘‘Resolution Trust Corpora5 tion,’’; and 6 (B) by striking ‘‘or the Office of Thrift Su7 pervision’’; 8 (5) in section 1006— 9 (A) by striking ‘‘Office of Thrift Super10 vision,’’; and 11 (B) by striking ‘‘the Resolution Trust Cor12 poration,’’; 13 (6) in section 1014— 14 (A) by striking ‘‘the Office of Thrift Su15 pervision’’; and 16 (B) by striking ‘‘the Resolution Trust Cor17 poration,’’; and 18 (7) in section 1032(1)— 19 (A) by striking ‘‘the Resolution Trust Cor20 poration,’’; and 21 (B) by striking ‘‘or the Director of the Of22 fice of Thrift Supervision’’. 23 SEC. 378. TITLE 31, UNITED STATES CODE. 24 Title 31, United States Code, is amended— 25 (1) in section 321— 522 O:AYOAYO10H34.xml [file 4 of 17] S.L.C 1 (A) in subsection (c)— 2 (i) in paragraph (1), by adding ‘‘and’’ 3 at the end; 4 (ii) in paragraph (2), by striking ‘‘; 5 and’’ and inserting a period; and 6 (iii) by striking paragraph (3); and 7 (B) by striking subsection (e); and 8 (2) in section 714(a), by striking ‘‘the Office of 9 the Comptroller of the Currency, and the Office of 10 Thrift Supervision.’’ and inserting ‘‘and the Office of 11 the Comptroller of the Currency.’’. 12 TITLE IV—REGULATION OF AD13 VISERS TO HEDGE FUNDS 14 AND OTHERS 15 SEC. 401. SHORT TITLE. 16 This title may be cited as the ‘‘Private Fund Invest17 ment Advisers Registration Act of 2010’’. 18 SEC. 402. DEFINITIONS. 19 (a) INVESTMENT ADVISERS ACT OF 1940 DEFINI20 TIONS.—Section 202(a) of the Investment Advisers Act of 21 1940 (15 U.S.C. 80b–2(a)) is amended by adding at the 22 end the following: 523 O:AYOAYO10H34.xml [file 4 of 17] S.L.C 1 ‘‘(29) The term ‘private fund’ means an issuer 2 that would be an investment company, as defined in 3 section 3 of the Investment Company Act of 1940 4 (15 U.S.C. 80a–3), but for section 3(c)(1) or 3(c)(7) 5 of that Act. 6 ‘‘(30) The term ‘foreign private adviser’ means 7 any investment adviser who— 8 ‘‘(A) has no place of business in the 9 United States; 10 ‘‘(B) has, in total, fewer than 15 clients 11 and investors in the United States in private 12 funds advised by the investment adviser; 13 ‘‘(C) has aggregate assets under manage14 ment attributable to clients in the United 15 States and investors in the United States in 16 private funds advised by the investment adviser 17 of less than $25,000,000, or such higher 18 amount as the Commission may, by rule, deem 19 appropriate in accordance with the purposes of 20 this title; and 21 ‘‘(D) neither— 22 ‘‘(i) holds itself out generally to the 23 public in the United States as an invest24 ment adviser; nor 25 ‘‘(ii) acts as— 524 O:AYOAYO10H34.xml [file 4 of 17] S.L.C 1 ‘‘(I) an investment adviser to any 2 investment company registered under 3 the Investment Company Act of 1940; 4 or 5 ‘‘(II) a company that has elected 6 to be a business development company 7 pursuant to section 54 of the Invest8 ment Company Act of 1940 (15 9 U.S.C. 80a–53), and has not with10 drawn its election.’’. 11 (b) OTHER DEFINITIONS.—As used in this title, the 12 terms ‘‘investment adviser’’ and ‘‘private fund’’ have the 13 same meanings as in section 202 of the Investment Advis14 ers Act of 1940, as amended by this title. 15 SEC. 403. ELIMINATION OF PRIVATE ADVISER EXEMPTION; 16 LIMITED EXEMPTION FOR FOREIGN PRIVATE 17 ADVISERS; LIMITED INTRASTATE EXEMP18 TION. 19 Section 203(b) of the Investment Advisers Act of 20 1940 (15 U.S.C. 80b–3(b)) is amended— 21 (1) in paragraph (1), by inserting ‘‘, other than 22 an investment adviser who acts as an investment ad23 viser to any private fund,’’ before ‘‘all of whose’’; 24 (2) by striking paragraph (3) and inserting the 25 following: 525 O:AYOAYO10H34.xml [file 4 of 17] S.L.C 1 ‘‘(3) any investment adviser that is a foreign 2 private adviser;’’; and 3 (3) in paragraph (5), by striking ‘‘or’’ at the 4 end; 5 (4) in paragraph (6)— 6 (A) by striking ‘‘any investment adviser’’ 7 and inserting ‘‘(A) any investment adviser’’; 8 (B) by redesignating subparagraphs (A) 9 and (B) as clauses (i) and (ii), respectively; and 10 (C) in clause (ii) (as so redesignated), by 11 striking the period at the end and inserting ‘‘; 12 or’’; and 13 (D) by adding at the end the following: 14 ‘‘(B) any investment adviser that is registered with 15 the Commodity Futures Trading Commission as a com16 modity trading advisor and advises a private fund, pro17 vided that, if after the date of enactment of the Private 18 Fund Investment Advisers Registration Act of 2010, the 19 business of the advisor should become predominately the 20 provision of securities-related advice, then such adviser 21 shall register with the Commission.’’. 22 (5) by adding at the end the following: 23 ‘‘(7) any investment adviser, other than any en24 tity that has elected to be regulated or is regulated 25 as a business development company pursuant to sec526 O:AYOAYO10H34.xml [file 4 of 17] S.L.C 1 tion 54 of the Investment Company Act of 1940 (15 2 U.S.C. 80a–54), who solely advises— 3 ‘‘(A) small business investment companies 4 that are licensees under the Small Business In5 vestment Act of 1958; 6 ‘‘(B) entities that have received from the 7 Small Business Administration notice to pro8 ceed to qualify for a license as a small business 9 investment company under the Small Business 10 Investment Act of 1958, which notice or license 11 has not been revoked; or 12 ‘‘(C) applicants that are affiliated with 1 13 or more licensed small business investment 14 companies described in subparagraph (A) and 15 that have applied for another license under the 16 Small Business Investment Act of 1958, which 17 application remains pending.’’. 18 SEC. 404. COLLECTION OF SYSTEMIC RISK DATA; REPORTS; 19 EXAMINATIONS; DISCLOSURES. 20 Section 204 of the Investment Advisers Act of 1940 21 (15 U.S.C. 80b–4) is amended— 22 (1) by redesignating subsections (b) and (c) as 23 subsections (c) and (d), respectively; and 24 (2) by inserting after subsection (a) the fol25 lowing: 527 O:AYOAYO10H34.xml [file 4 of 17] S.L.C 1 ‘‘(b) RECORDS AND REPORTS OF PRIVATE FUNDS.— 2 ‘‘(1) IN GENERAL.—The Commission may re3 quire any investment adviser registered under this 4 title— 5 ‘‘(A) to maintain such records of, and file 6 with the Commission such reports regarding, 7 private funds advised by the investment adviser, 8 as necessary and appropriate in the public in9 terest and for the protection of investors, or for 10 the assessment of systemic risk by the Finan11 cial Stability Oversight Council (in this sub12 section referred to as the ‘Council’); and 13 ‘‘(B) to provide or make available to the 14 Council those reports or records or the informa15 tion contained therein. 16 ‘‘(2) TREATMENT OF RECORDS.—The records 17 and reports of any private fund to which an invest18 ment adviser registered under this title provides in19 vestment advice shall be deemed to be the records 20 and reports of the investment adviser. 21 ‘‘(3) REQUIRED INFORMATION.—The records 22 and reports required to be maintained by an invest23 ment adviser and subject to inspection by the Com24 mission under this subsection shall include, for each 528 O:AYOAYO10H34.xml [file 4 of 17] S.L.C 1 private fund advised by the investment adviser, a de2 scription of— 3 ‘‘(A) the amount of assets under manage4 ment and use of leverage, including off-balance5 sheet leverage; 6 ‘‘(B) counterparty credit risk exposure; 7 ‘‘(C) trading and investment positions; 8 ‘‘(D) valuation policies and practices of the 9 fund; 10 ‘‘(E) types of assets held; 11 ‘‘(F) side arrangements or side letters, 12 whereby certain investors in a fund obtain more 13 favorable rights or entitlements than other in14 vestors; 15 ‘‘(G) trading practices; and 16 ‘‘(H) such other information as the Com17 mission, in consultation with the Council, deter18 mines is necessary and appropriate in the pub19 lic interest and for the protection of investors 20 or for the assessment of systemic risk, which 21 may include the establishment of different re22 porting requirements for different classes of 23 fund advisers, based on the type or size of pri24 vate fund being advised. 529 O:AYOAYO10H34.xml [file 4 of 17] S.L.C 1 ‘‘(4) MAINTENANCE OF RECORDS.—An invest2 ment adviser registered under this title shall main3 tain such records of private funds advised by the in4 vestment adviser for such period or periods as the 5 Commission, by rule, may prescribe as necessary and 6 appropriate in the public interest and for the protec7 tion of investors, or for the assessment of systemic 8 risk. 9 ‘‘(5) FILING OF RECORDS.—The Commission 10 shall issue rules requiring each investment adviser to 11 a private fund to file reports containing such infor12 mation as the Commission deems necessary and ap13 propriate in the public interest and for the protec14 tion of investors or for the assessment of systemic 15 risk. 16 ‘‘(6) EXAMINATION OF RECORDS.— 17 ‘‘(A) PERIODIC AND SPECIAL EXAMINA18 TIONS.—The Commission— 19 ‘‘(i) shall conduct periodic inspections 20 of the records of private funds maintained 21 by an investment adviser registered under 22 this title in accordance with a schedule es23 tablished by the Commission; and 24 ‘‘(ii) may conduct at any time and 25 from time to time such additional, special, 530 O:AYOAYO10H34.xml [file 4 of 17] S.L.C 1 and other examinations as the Commission 2 may prescribe as necessary and appro3 priate in the public interest and for the 4 protection of investors, or for the assess5 ment of systemic risk. 6 ‘‘(B) AVAILABILITY OF RECORDS.—An in7 vestment adviser registered under this title shall 8 make available to the Commission any copies or 9 extracts from such records as may be prepared 10 without undue effort, expense, or delay, as the 11 Commission or its representatives may reason12 ably request. 13 ‘‘(7) INFORMATION SHARING.— 14 ‘‘(A) IN GENERAL.—The Commission shall 15 make available to the Council copies of all re16 ports, documents, records, and information filed 17 with or provided to the Commission by an in18 vestment adviser under this subsection as the 19 Council may consider necessary for the purpose 20 of assessing the systemic risk posed by a pri21 vate fund. 22 ‘‘(B) CONFIDENTIALITY.—The Council 23 shall maintain the confidentiality of information 24 received under this paragraph in all such re25 ports, documents, records, and information, in 531 O:AYOAYO10H34.xml [file 4 of 17] S.L.C 1 a manner consistent with the level of confiden2 tiality established for the Commission pursuant 3 to paragraph (8). The Council shall be exempt 4 from section 552 of title 5, United States Code, 5 with respect to any information in any report, 6 document, record, or information made avail7 able, to the Council under this subsection.’’. 8 ‘‘(8) COMMISSION CONFIDENTIALITY OF RE9 PORTS.—Notwithstanding any other provision of 10 law, the Commission may not be compelled to dis11 close any report or information contained therein re12 quired to be filed with the Commission under this 13 subsection, except that nothing in this subsection 14 authorizes the Commission— 15 ‘‘(A) to withhold information from Con16 gress, upon an agreement of confidentiality; or 17 ‘‘(B) prevent the Commission from com18 plying with— 19 ‘‘(i) a request for information from 20 any other Federal department or agency or 21 any self-regulatory organization requesting 22 the report or information for purposes 23 within the scope of its jurisdiction; or 532 O:AYOAYO10H34.xml [file 4 of 17] S.L.C 1 ‘‘(ii) an order of a court of the United 2 States in an action brought by the United 3 States or the Commission. 4 ‘‘(9) OTHER RECIPIENTS CONFIDENTIALITY.— 5 Any department, agency, or self-regulatory organiza6 tion that receives reports or information from the 7 Commission under this subsection shall maintain the 8 confidentiality of such reports, documents, records, 9 and information in a manner consistent with the 10 level of confidentiality established for the Commis11 sion under paragraph (8). 12 ‘‘(10) PUBLIC INFORMATION EXCEPTION.— 13 ‘‘(A) IN GENERAL.—The Commission, the 14 Council, and any other department, agency, or 15 self-regulatory organization that receives infor16 mation, reports, documents, records, or infor17 mation from the Commission under this sub18 section, shall be exempt from the provisions of 19 section 552 of title 5, United States Code, with 20 respect to any such report, document, record, or 21 information. Any proprietary information of an 22 investment adviser ascertained by the Commis23 sion from any report required to be filed with 24 the Commission pursuant to this subsection 25 shall be subject to the same limitations on pub533 O:AYOAYO10H34.xml [file 4 of 17] S.L.C 1 lic disclosure as any facts ascertained during an 2 examination, as provided by section 210(b) of 3 this title. 4 ‘‘(B) PROPRIETARY INFORMATION.—For 5 purposes of this paragraph, proprietary infor6 mation includes sensitive, non-public informa7 tion regarding— 8 ‘‘(i) the investment or trading strate9 gies of the investment adviser; 10 ‘‘(ii) analytical or research methodolo11 gies; 12 ‘‘(iii) trading data; 13 ‘‘(iv) computer hardware or software 14 containing intellectual property; and 15 ‘‘(v) any additional information that 16 the Commission determines to be propri17 etary. 18 ‘‘(11) ANNUAL REPORT TO CONGRESS.—The 19 Commission shall report annually to Congress on 20 how the Commission has used the data collected 21 pursuant to this subsection to monitor the markets 22 for the protection of investors and the integrity of 23 the markets.’’. 534 O:AYOAYO10H34.xml [file 4 of 17] S.L.C 1 SEC. 405. DISCLOSURE PROVISION AMENDMENT. 2 Section 210(c) of the Investment Advisers Act of 3 1940 (15 U.S.C. 80b–10(c)) is amended by inserting be4 fore the period at the end the following: ‘‘or for purposes 5 of assessment of potential systemic risk’’. 6 SEC. 406. CLARIFICATION OF RULEMAKING AUTHORITY. 7 Section 211 of the Investment Advisers Act of 1940 8 (15 U.S.C. 80b–11) is amended— 9 (1) in subsection (a), by inserting before the pe10 riod at the end of the first sentence the following: 11 ‘‘, including rules and regulations defining technical, 12 trade, and other terms used in this title, except that 13 the Commission may not define the term ‘client’ for 14 purposes of paragraphs (1) and (2) of section 206 15 to include an investor in a private fund managed by 16 an investment adviser, if such private fund has en17 tered into an advisory contract with such adviser’’; 18 and 19 (2) by adding at the end the following: 20 ‘‘(e) DISCLOSURE RULES ON PRIVATE FUNDS.—The 21 Commission and the Commodity Futures Trading Com22 mission shall, after consultation with the Council but not 23 later than 12 months after the date of enactment of the 24 Private Fund Investment Advisers Registration Act of 25 2010, jointly promulgate rules to establish the form and 26 content of the reports required to be filed with the Com535 O:AYOAYO10H34.xml [file 4 of 17] S.L.C 1 mission under subsection 204(b) and with the Commodity 2 Futures Trading Commission by investment advisers that 3 are registered both under this title and the Commodity 4 Exchange Act (7 U.S.C. 1a et seq.).’’. 5 SEC. 407. EXEMPTION OF AND REPORTING BY VENTURE 6 CAPITAL FUND ADVISERS. 7 Section 203 of the Investment Advisers Act of 1940 8 (15 U.S.C. 80b–3) is amended by adding at the end the 9 following: 10 ‘‘(l) EXEMPTION OF VENTURE CAPITAL FUND AD11 VISERS.—No investment adviser that acts as an invest12 ment adviser solely to 1 or more venture capital funds 13 shall be subject to the registration requirements of this 14 title with respect to the provision of investment advice re15 lating to a venture capital fund. Not later than 1 year 16 after the date of enactment of this subsection, the Com17 mission shall issue final rules to define the term ‘venture 18 capital fund’ for purposes of this subsection. The Commis19 sion shall require such advisers to maintain such records 20 and provide to the Commission such annual or other re21 ports as the Commission determines necessary or appro22 priate in the public interest or for the protection of inves23 tors.’’. 536 O:AYOAYO10H34.xml [file 4 of 17] S.L.C 1 SEC. 408. EXEMPTION OF AND REPORTING BY CERTAIN 2 PRIVATE FUND ADVISERS. 3 Section 203 of the Investment Advisers Act of 1940 4 (15 U.S.C. 80b–3) is amended by adding at the end the 5 following: 6 ‘‘(m) EXEMPTION OF AND REPORTING BY CERTAIN 7 PRIVATE FUND ADVISERS.— 8 ‘‘(1) IN GENERAL.—The Commission shall pro9 vide an exemption from the registration require10 ments under this section to any investment adviser 11 of private funds, if each of such investment adviser 12 acts solely as an adviser to private funds and has as13 sets under management in the United States of less 14 than $150,000,000. 15 ‘‘(2) REPORTING.—The Commission shall re16 quire investment advisers exempted by reason of this 17 subsection to maintain such records and provide to 18 the Commission such annual or other reports as the 19 Commission determines necessary or appropriate in 20 the public interest or for the protection of investors. 21 ‘‘(n) REGISTRATION AND EXAMINATION OF MID22 SIZED PRIVATE FUND ADVISERS.—In prescribing regula23 tions to carry out the requirements of this section with 24 respect to investment advisers acting as investment advis25 ers to mid-sized private funds, the Commission shall take 26 into account the size, governance, and investment strategy 537 O:AYOAYO10H34.xml [file 4 of 17] S.L.C 1 of such funds to determine whether they pose systemic 2 risk, and shall provide for registration and examination 3 procedures with respect to the investment advisers of such 4 funds which reflect the level of systemic risk posed by such 5 funds.’’. 6 SEC. 409. FAMILY OFFICES. 7 (a) IN GENERAL.—Section 202(a)(11) of the Invest8 ment Advisers Act of 1940 (15 U.S.C. 80b–2(a)(11)) is 9 amended by striking ‘‘or (G)’’ and inserting the following: 10 ‘‘; (G) any family office, as defined by rule, regulation, 11 or order of the Commission, in accordance with the pur12 poses of this title; or (H)’’. 13 (b) RULEMAKING.—The rules, regulations, or orders 14 issued by the Commission pursuant to section 15 202(a)(11)(G) of the Investment Advisers Act of 1940, as 16 added by this section, regarding the definition of the term 17 ‘‘family office’’ shall provide for an exemption that— 18 (1) is consistent with the previous exemptive 19 policy of the Commission, as reflected in exemptive 20 orders for family offices in effect on the date of en21 actment of this Act, and the grandfathering provi22 sions in paragraph (3); 23 (2) recognizes the range of organizational, man24 agement, and employment structures and arrange25 ments employed by family offices; and 538 O:AYOAYO10H34.xml [file 4 of 17] S.L.C 1 (3) does not exclude any person who was not 2 registered or required to be registered under the In3 vestment Advisers Act of 1940 on January 1, 2010 4 from the definition of the term ‘‘family office’’, sole5 ly because such person provides investment advice 6 to, and was engaged before January 1, 2010 in pro7 viding investment advice to— 8 (A) natural persons who, at the time of 9 their applicable investment, are officers, direc10 tors, or employees of the family office who— 11 (i) have invested with the family office 12 before January 1, 2010; and 13 (ii) are accredited investors, as de14 fined in Regulation D of the Commission 15 (or any successor thereto) under the Secu16 rities Act of 1933, or, as the Commission 17 may prescribe by rule, the successors-in-in18 terest thereto; 19 (B) any company owned exclusively and 20 controlled by members of the family of the fam21 ily office, or as the Commission may prescribe 22 by rule; 23 (C) any investment adviser registered 24 under the Investment Adviser Act of 1940 that 25 provides investment advice to the family office 539 O:AYOAYO10H34.xml [file 4 of 17] S.L.C 1 and who identifies investment opportunities to 2 the family office, and invests in such trans3 actions on substantially the same terms as the 4 family office invests, but does not invest in 5 other funds advised by the family office, and 6 whose assets as to which the family office di7 rectly or indirectly provides investment advice 8 represent, in the aggregate, not more than 5 9 percent of the value of the total assets as to 10 which the family office provides investment ad11 vice. 12 (c) ANTIFRAUD AUTHORITY.—A family office that 13 would not be a family office, but for subsection (b)(3), 14 shall be deemed to be an investment adviser for the pur15 poses of paragraphs (1), (2) and (4) of section 206 of the 16 Investment Advisers Act of 1940. 17 SEC. 410. STATE AND FEDERAL RESPONSIBILITIES; ASSET 18 THRESHOLD FOR FEDERAL REGISTRATION 19 OF INVESTMENT ADVISERS. 20 Section 203A(a) of the of the Investment Advisers 21 Act of 1940 (15 U.S.C. 80b–3a(a)) is amended— 22 (1) by redesignating paragraph (2) as para23 graph (3); and 24 (2) by inserting after paragraph (1) the fol25 lowing: 540 O:AYOAYO10H34.xml [file 4 of 17] S.L.C 1 ‘‘(2) TREATMENT OF MID-SIZED INVESTMENT 2 ADVISERS.— 3 ‘‘(A) IN GENERAL.—No investment adviser 4 described in subparagraph (B) shall register 5 under section 203, unless the investment ad6 viser is an adviser to an investment company 7 registered under the Investment Company Act 8 of 1940, or a company which has elected to be 9 a business development company pursuant to 10 section 54 of the Investment Company Act of 11 1940, and has not withdrawn the election, ex12 cept that, if by effect of this paragraph an in13 vestment adviser would be required to register 14 with 15 or more States, then the adviser may 15 register under section 203. 16 ‘‘(B) COVERED PERSONS.—An investment 17 adviser described in this subparagraph is an in18 vestment adviser that— 19 ‘‘(i) is required to be registered as an 20 investment adviser with the securities com21 missioner (or any agency or office per22 forming like functions) of the State in 23 which it maintains its principal office and 24 place of business and, if registered, would 25 be subject to examination as an investment 541 O:AYOAYO10H34.xml [file 4 of 17] S.L.C 1 adviser by any such commissioner, agency, 2 or office; and 3 ‘‘(ii) has assets under management 4 between— 5 ‘‘(I) the amount specified under 6 subparagraph (A) of paragraph (1), 7 as such amount may have been ad8 justed by the Commission pursuant to 9 that subparagraph; and 10 ‘‘(II) $100,000,000, or such 11 higher amount as the Commission 12 may, by rule, deem appropriate in ac13 cordance with the purposes of this 14 title.’’. 15 SEC. 411. CUSTODY OF CLIENT ASSETS. 16 The Investment Advisers Act of 1940 (15 U.S.C. 17 80b–1 et seq.) is amended by adding at the end the fol18 lowing new section: 19 ‘‘SEC. 223. CUSTODY OF CLIENT ACCOUNTS. 20 ‘‘An investment adviser registered under this title 21 shall take such steps to safeguard client assets over which 22 such adviser has custody, including, without limitation, 23 verification of such assets by an independent public ac24 countant, as the Commission may, by rule, prescribe.’’. 542 O:AYOAYO10H34.xml [file 4 of 17] S.L.C 1 SEC. 412. COMPTROLLER GENERAL STUDY ON CUSTODY 2 RULE COSTS. 3 The Comptroller General of the United States shall— 4 (1) conduct a study of— 5 (A) the compliance costs associated with 6 the current Securities and Exchange Commis7 sion rules 204–2 (17 C.F.R. Parts 275.204–2) 8 and rule 206(4)–2 (17 C.F.R. 275.206(4)–2) 9 under the Investment Advisers Act of 1940 re10 garding custody of funds or securities of clients 11 by investment advisers; and 12 (B) the additional costs if subsection 13 (b)(6) of rule 206(4)–2 (17 C.F.R. 275.206(4)– 14 2(b)(6)) relating to operational independence 15 were eliminated; and 16 (2) submit a report to the Committee on Bank17 ing, Housing, and Urban Affairs of the Senate and 18 the Committee on Financial Services of the House of 19 Representatives on the results of such study, not 20 later than 3 years after the date of enactment of 21 this Act. 22 SEC. 413. ADJUSTING THE ACCREDITED INVESTOR STAND23 ARD. 24 (a) IN GENERAL.—The Commission shall adjust any 25 net worth standard for an accredited investor, as set forth 26 in the rules of the Commission under the Securities Act 543 O:AYOAYO10H34.xml [file 4 of 17] S.L.C 1 of 1933, so that the individual net worth of any natural 2 person, or joint net worth with the spouse of that person, 3 at the time of purchase, is more than $1,000,000 (as such 4 amount is adjusted periodically by rule of the Commis5 sion), excluding the value of the primary residence of such 6 natural person, except that during the 4-year period that 7 begins on the date of enactment of this Act, any net worth 8 standard shall be $1,000,000, excluding the value of the 9 primary residence of such natural person. 10 (b) REVIEW AND ADJUSTMENT.— 11 (1) INITIAL REVIEW AND ADJUSTMENT.— 12 (A) INITIAL REVIEW.—The Commission 13 may undertake a review of the definition of the 14 term ‘‘accredited investor’’, as such term ap15 plies to natural persons, to determine whether 16 the requirements of the definition, excluding the 17 requirement relating to the net worth standard 18 described in subsection (a), should be adjusted 19 or modified for the protection of investors, in 20 the public interest, and in light of the economy. 21 (B) ADJUSTMENT OR MODIFICATION.— 22 Upon completion of a review under subpara23 graph (A), the Commission may, by notice and 24 comment rulemaking, make such adjustments 25 to the definition of the term ‘‘accredited inves544 O:AYOAYO10H34.xml [file 4 of 17] S.L.C 1 tor’’, excluding adjusting or modifying the re2 quirement relating to the net worth standard 3 described in subsection (a), as such term ap4 plies to natural persons, as the Commission 5 may deem appropriate for the protection of in6 vestors, in the public interest, and in light of 7 the economy. 8 (2) SUBSEQUENT REVIEWS AND ADJUST9 MENT.— 10 (A) SUBSEQUENT REVIEWS.—Not earlier 11 than 4 years after the date of enactment of this 12 Act, and not less frequently than once every 4 13 years thereafter, the Commission shall under14 take a review of the definition, in its entirety, 15 of the term ‘‘accredited investor’’, as defined in 16 section 230.215 of title 17, Code of Federal 17 Regulations, or any successor thereto, as such 18 term applies to natural persons, to determine 19 whether the requirements of the definition 20 should be adjusted or modified for the protec21 tion of investors, in the public interest, and in 22 light of the economy. 23 (B) ADJUSTMENT OR MODIFICATION.— 24 Upon completion of a review under subpara25 graph (A), the Commission may, by notice and 545 O:AYOAYO10H34.xml [file 4 of 17] S.L.C 1 comment rulemaking, make such adjustments 2 to the definition of the term ‘‘accredited inves3 tor’’, as defined in section 230.215 of title 17, 4 Code of Federal Regulations, or any successor 5 thereto, as such term applies to natural per6 sons, as the Commission may deem appropriate 7 for the protection of investors, in the public in8 terest, and in light of the economy. 9 SEC. 414. RULE OF CONSTRUCTION RELATING TO THE 10 COMMODITIES EXCHANGE ACT. 11 The Investment Advisers Act of 1940 (15 U.S.C. 12 80b–1 et seq.) is further amended by adding at the end 13 the following new section: 14 ‘‘SEC. 224. RULE OF CONSTRUCTION RELATING TO THE 15 COMMODITIES EXCHANGE ACT. 16 ‘‘Nothing in this title shall relieve any person of any 17 obligation or duty, or affect the availability of any right 18 or remedy available to the Commodity Futures Trading 19 Commission or any private party, arising under the Com20 modity Exchange Act (7 U.S.C. 1 et seq.) governing com21 modity pools, commodity pool operators, or commodity 22 trading advisors.’’. 546 O:AYOAYO10H34.xml [file 4 of 17] S.L.C 1 SEC. 415. GAO STUDY AND REPORT ON ACCREDITED INVES2 TORS. 3 The Comptroller General of the United States shall 4 conduct a study on the appropriate criteria for deter5 mining the financial thresholds or other criteria needed 6 to qualify for accredited investor status and eligibility to 7 invest in private funds, and shall submit a report to the 8 Committee on Banking, Housing, and Urban Affairs of 9 the Senate and the Committee on Financial Services of 10 the House of Representatives on the results of such study 11 not later than 3 years after the date of enactment of this 12 Act. 13 SEC. 416. GAO STUDY ON SELF-REGULATORY ORGANIZA14 TION FOR PRIVATE FUNDS. 15 The Comptroller General of the United States shall— 16 (1) conduct a study of the feasibility of forming 17 a self-regulatory organization to oversee private 18 funds; and 19 (2) submit a report to the Committee on Bank20 ing, Housing, and Urban Affairs of the Senate and 21 the Committee on Financial Services of the House of 22 Representatives on the results of such study, not 23 later than 1 year after the date of enactment of this 24 Act. 547 O:AYOAYO10H34.xml [file 4 of 17] S.L.C 1 SEC. 417. COMMISSION STUDY AND REPORT ON SHORT 2 SELLING. 3 (a) STUDIES.—The Division of Risk, Strategy, and 4 Financial Innovation of the Commission shall conduct— 5 (1) a study, taking into account current schol6 arship, on the state of short selling on national secu7 rities exchanges and in the over-the-counter markets, 8 with particular attention to the impact of recent rule 9 changes and the incidence of— 10 (A) the failure to deliver shares sold short; 11 or 12 (B) delivery of shares on the fourth day 13 following the short sale transaction; and 14 (2) a study of— 15 (A) the feasibility, benefits, and costs of 16 requiring reporting publicly, in real time short 17 sale positions of publicly listed securities, or, in 18 the alternative, reporting such short positions 19 in real time only to the Commission and the Fi20 nancial Industry Regulatory Authority; and 21 (B) the feasibility, benefits, and costs of 22 conducting a voluntary pilot program in which 23 public companies will agree to have all trades of 24 their shares marked ‘‘short’’, ‘‘market maker 25 short’’, ‘‘buy’’, ‘‘buy-to-cover’’, or ‘‘long’’, and 548 O:AYOAYO10H34.xml [file 4 of 17] S.L.C 1 reported in real time through the Consolidated 2 Tape. 3 (b) REPORTS.—The Commission shall submit a re4 port to the Committee on Banking, Housing, and Urban 5 Affairs of the Senate and the Committee on Financial 6 Services of the House of Representatives— 7 (1) on the results of the study required under 8 subsection (a)(1), including recommendations for 9 market improvements, not later than 2 years after 10 the date of enactment of this Act; and 11 (2) on the results of the study required under 12 subsection (a)(2), not later than 1 year after the 13 date of enactment of this Act. 14 SEC. 418. QUALIFIED CLIENT STANDARD. 15 Section 205(e) of the Investment Advisers Act of 16 1940 (15 U.S.C. 80b–5(e)) is amended by adding at the 17 end the following: ‘‘With respect to any factor used in any 18 rule or regulation by the Commission in making a deter19 mination under this subsection, if the Commission uses 20 a dollar amount test in connection with such factor, such 21 as a net asset threshold, the Commission shall, by order, 22 not later than 1 year after the date of enactment of the 23 Private Fund Investment Advisers Registration Act of 24 2010, and every 5 years thereafter, adjust for the effects 25 of inflation on such test. Any such adjustment that is not 549 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 a multiple of $100,000 shall be rounded to the nearest 2 multiple of $100,000.’’. 3 SEC. 419. TRANSITION PERIOD. 4 Except as otherwise provided in this title, this title 5 and the amendments made by this title shall become effec6 tive 1 year after the date of enactment of this Act, except 7 that any investment adviser may, at the discretion of the 8 investment adviser, register with the Commission under 9 the Investment Advisers Act of 1940 during that 1-year 10 period, subject to the rules of the Commission. 11 TITLE V—INSURANCE 12 Subtitle A—Federal Insurance 13 Office 14 SEC. 501. SHORT TITLE. 15 This subtitle may be cited as the ‘‘Federal Insurance 16 Office Act of 2010’’. 17 SEC. 502. FEDERAL INSURANCE OFFICE. 18 (a) ESTABLISHMENT OF OFFICE.—Subchapter I of 19 chapter 3 of subtitle I of title 31, United States Code, 20 is amended— 21 (1) by redesignating section 312 as section 315; 22 (2) by redesignating section 313 as section 312; 23 and 24 (3) by inserting after section 312 (as so redes25 ignated) the following new sections: 550 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 ‘‘SEC. 313. FEDERAL INSURANCE OFFICE. 2 ‘‘(a) ESTABLISHMENT.—There is established within 3 the Department of the Treasury the Federal Insurance 4 Office. 5 ‘‘(b) LEADERSHIP.—The Office shall be headed by a 6 Director, who shall be appointed by the Secretary of the 7 Treasury. The position of Director shall be a career re8 served position in the Senior Executive Service, as that 9 position is defined under section 3132 of title 5, United 10 States Code. 11 ‘‘(c) FUNCTIONS.— 12 ‘‘(1) AUTHORITY PURSUANT TO DIRECTION OF 13 SECRETARY.—The Office, pursuant to the direction 14 of the Secretary, shall have the authority— 15 ‘‘(A) to monitor all aspects of the insur16 ance industry, including identifying issues or 17 gaps in the regulation of insurers that could 18 contribute to a systemic crisis in the insurance 19 industry or the United States financial system; 20 ‘‘(B) to monitor the extent to which tradi21 tionally underserved communities and con22 sumers, minorities (as such term is defined in 23 section 1204(c) of the Financial Institutions 24 Reform, Recovery, and Enforcement Act of 25 1989 (12 U.S.C. 1811 note)), and low- and 26 moderate-income persons have access to afford551 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 able insurance products regarding all lines of 2 insurance, except health insurance; 3 ‘‘(C) to recommend to the Financial Sta4 bility Oversight Council that it designate an in5 surer, including the affiliates of such insurer, as 6 an entity subject to regulation as a nonbank fi7 nancial company supervised by the Board of 8 Governors pursuant to title I of the Dodd- 9 Frank Wall Street Reform and Consumer Pro10 tection Act; 11 ‘‘(D) to assist the Secretary in admin12 istering the Terrorism Insurance Program es13 tablished in the Department of the Treasury 14 under the Terrorism Risk Insurance Act of 15 2002 (15 U.S.C. 6701 note); 16 ‘‘(E) to coordinate Federal efforts and de17 velop Federal policy on prudential aspects of 18 international insurance matters, including rep19 resenting the United States, as appropriate, in 20 the International Association of Insurance Su21 pervisors (or a successor entity) and assisting 22 the Secretary in negotiating covered agreements 23 (as such term is defined in subsection (r)); 552 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 ‘‘(F) to determine, in accordance with sub2 section (f), whether State insurance measures 3 are preempted by covered agreements; 4 ‘‘(G) to consult with the States (including 5 State insurance regulators) regarding insurance 6 matters of national importance and prudential 7 insurance matters of international importance; 8 and 9 ‘‘(H) to perform such other related duties 10 and authorities as may be assigned to the Of11 fice by the Secretary. 12 ‘‘(2) ADVISORY FUNCTIONS.—The Office shall 13 advise the Secretary on major domestic and pruden14 tial international insurance policy issues. 15 ‘‘(3) ADVISORY CAPACITY ON COUNCIL.—The 16 Director shall serve in an advisory capacity on the 17 Financial Stability Oversight Council established 18 under the Financial Stability Act of 2010. 19 ‘‘(d) SCOPE.—The authority of the Office shall ex20 tend to all lines of insurance except— 21 ‘‘(1) health insurance, as determined by the 22 Secretary in coordination with the Secretary of 23 Health and Human Services based on section 2791 24 of the Public Health Service Act (42 U.S.C. 300gg– 25 91); 553 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 ‘‘(2) long-term care insurance, except long-term 2 care insurance that is included with life or annuity 3 insurance components, as determined by the Sec4 retary in coordination with the Secretary of Health 5 and Human Services, and in the case of long-term 6 care insurance that is included with such compo7 nents, the Secretary shall coordinate with the Sec8 retary of Health and Human Services in performing 9 the functions of the Office; and 10 ‘‘(3) crop insurance, as established by the Fed11 eral Crop Insurance Act (7 U.S.C. 1501 et seq.). 12 ‘‘(e) GATHERING OF INFORMATION.— 13 ‘‘(1) IN GENERAL.—In carrying out the func14 tions required under subsection (c), the Office 15 may— 16 ‘‘(A) receive and collect data and informa17 tion on and from the insurance industry and in18 surers; 19 ‘‘(B) enter into information-sharing agree20 ments; 21 ‘‘(C) analyze and disseminate data and in22 formation; and 23 ‘‘(D) issue reports regarding all lines of in24 surance except health insurance. 554 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 ‘‘(2) COLLECTION OF INFORMATION FROM IN2 SURERS AND AFFILIATES.— 3 ‘‘(A) IN GENERAL.—Except as provided in 4 paragraph (3), the Office may require an in5 surer, or any affiliate of an insurer, to submit 6 such data or information as the Office may rea7 sonably require in carrying out the functions 8 described under subsection (c). 9 ‘‘(B) RULE OF CONSTRUCTION.—Notwith10 standing any other provision of this section, for 11 purposes of subparagraph (A), the term ‘in12 surer’ means any entity that writes insurance 13 or reinsures risks and issues contracts or poli14 cies in 1 or more States. 15 ‘‘(3) EXCEPTION FOR SMALL INSURERS.—Para16 graph (2) shall not apply with respect to any insurer 17 or affiliate thereof that meets a minimum size 18 threshold that the Office may establish, whether by 19 order or rule. 20 ‘‘(4) ADVANCE COORDINATION.—Before col21 lecting any data or information under paragraph (2) 22 from an insurer, or affiliate of an insurer, the Office 23 shall coordinate with each relevant Federal agency 24 and State insurance regulator (or other relevant 25 Federal or State regulatory agency, if any, in the 555 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 case of an affiliate of an insurer) and any publicly 2 available sources to determine if the information to 3 be collected is available from, and may be obtained 4 in a timely manner by, such Federal agency or State 5 insurance regulator, individually or collectively, other 6 regulatory agency, or publicly available sources. If 7 the Director determines that such data or informa8 tion is available, and may be obtained in a timely 9 manner, from such an agency, regulator, regulatory 10 agency, or source, the Director shall obtain the data 11 or information from such agency, regulator, regu12 latory agency, or source. If the Director determines 13 that such data or information is not so available, the 14 Director may collect such data or information from 15 an insurer (or affiliate) only if the Director complies 16 with the requirements of subchapter I of chapter 35 17 of title 44, United States Code (relating to Federal 18 information policy; commonly known as the Paper19 work Reduction Act), in collecting such data or in20 formation. Notwithstanding any other provision of 21 law, each such relevant Federal agency and State in22 surance regulator or other Federal or State regu23 latory agency is authorized to provide to the Office 24 such data or information. 25 ‘‘(5) CONFIDENTIALITY.— 556 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 ‘‘(A) RETENTION OF PRIVILEGE.—The 2 submission of any nonpublicly available data 3 and information to the Office under this sub4 section shall not constitute a waiver of, or oth5 erwise affect, any privilege arising under Fed6 eral or State law (including the rules of any 7 Federal or State court) to which the data or in8 formation is otherwise subject. 9 ‘‘(B) CONTINUED APPLICATION OF PRIOR 10 CONFIDENTIALITY AGREEMENTS.—Any require11 ment under Federal or State law to the extent 12 otherwise applicable, or any requirement pursu13 ant to a written agreement in effect between 14 the original source of any nonpublicly available 15 data or information and the source of such data 16 or information to the Office, regarding the pri17 vacy or confidentiality of any data or informa18 tion in the possession of the source to the Of19 fice, shall continue to apply to such data or in20 formation after the data or information has 21 been provided pursuant to this subsection to the 22 Office. 23 ‘‘(C) INFORMATION-SHARING AGREE24 MENT.—Any data or information obtained by 25 the Office may be made available to State in557 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 surance regulators, individually or collectively, 2 through an information-sharing agreement 3 that— 4 ‘‘(i) shall comply with applicable Fed5 eral law; and 6 ‘‘(ii) shall not constitute a waiver of, 7 or otherwise affect, any privilege under 8 Federal or State law (including the rules 9 of any Federal or State court) to which the 10 data or information is otherwise subject. 11 ‘‘(D) AGENCY DISCLOSURE REQUIRE12 MENTS.—Section 552 of title 5, United States 13 Code, shall apply to any data or information 14 submitted to the Office by an insurer or an af15 filiate of an insurer. 16 ‘‘(6) SUBPOENAS AND ENFORCEMENT.—The 17 Director shall have the power to require by subpoena 18 the production of the data or information requested 19 under paragraph (2), but only upon a written find20 ing by the Director that such data or information is 21 required to carry out the functions described under 22 subsection (c) and that the Office has coordinated 23 with such regulator or agency as required under 24 paragraph (4). Subpoenas shall bear the signature of 25 the Director and shall be served by any person or 558 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 class of persons designated by the Director for that 2 purpose. In the case of contumacy or failure to obey 3 a subpoena, the subpoena shall be enforceable by 4 order of any appropriate district court of the United 5 States. Any failure to obey the order of the court 6 may be punished by the court as a contempt of 7 court. 8 ‘‘(f) PREEMPTION OF STATE INSURANCE MEAS9 URES.— 10 ‘‘(1) STANDARD.—A State insurance measure 11 shall be preempted pursuant to this section or sec12 tion 314 if, and only to the extent that the Director 13 determines, in accordance with this subsection, that 14 the measure— 15 ‘‘(A) results in less favorable treatment of 16 a non-United States insurer domiciled in a for17 eign jurisdiction that is subject to a covered 18 agreement than a United States insurer domi19 ciled, licensed, or otherwise admitted in that 20 State; and 21 ‘‘(B) is inconsistent with a covered agree22 ment. 23 ‘‘(2) DETERMINATION.— 559 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 ‘‘(A) NOTICE OF POTENTIAL INCONSIST2 ENCY.—Before making any determination 3 under paragraph (1), the Director shall— 4 ‘‘(i) notify and consult with the appro5 priate State regarding any potential incon6 sistency or preemption; 7 ‘‘(ii) notify and consult with the 8 United States Trade Representative re9 garding any potential inconsistency or pre10 emption; 11 ‘‘(iii) cause to be published in the 12 Federal Register notice of the issue re13 garding the potential inconsistency or pre14 emption, including a description of each 15 State insurance measure at issue and any 16 applicable covered agreement; 17 ‘‘(iv) provide interested parties a rea18 sonable opportunity to submit written com19 ments to the Office; and 20 ‘‘(v) consider any comments received. 21 ‘‘(B) SCOPE OF REVIEW.—For purposes of 22 this subsection, any determination of the Direc23 tor regarding State insurance measures, and 24 any preemption under paragraph (1) as a result 25 of such determination, shall be limited to the 560 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 subject matter contained within the covered 2 agreement involved and shall achieve a level of 3 protection for insurance or reinsurance con4 sumers that is substantially equivalent to the 5 level of protection achieved under State insur6 ance or reinsurance regulation. 7 ‘‘(C) NOTICE OF DETERMINATION OF IN8 CONSISTENCY.—Upon making any determina9 tion under paragraph (1), the Director shall— 10 ‘‘(i) notify the appropriate State of 11 the determination and the extent of the in12 consistency; 13 ‘‘(ii) establish a reasonable period of 14 time, which shall not be less than 30 days, 15 before the determination shall become ef16 fective; and 17 ‘‘(iii) notify the Committees on Finan18 cial Services and Ways and Means of the 19 House of Representatives and the Commit20 tees on Banking, Housing, and Urban Af21 fairs and Finance of the Senate. 22 ‘‘(3) NOTICE OF EFFECTIVENESS.—Upon the 23 conclusion of the period referred to in paragraph 24 (2)(C)(ii), if the basis for such determination still 561 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 exists, the determination shall become effective and 2 the Director shall— 3 ‘‘(A) cause to be published a notice in the 4 Federal Register that the preemption has be5 come effective, as well as the effective date; and 6 ‘‘(B) notify the appropriate State. 7 ‘‘(4) LIMITATION.—No State may enforce a 8 State insurance measure to the extent that such 9 measure has been preempted under this subsection. 10 ‘‘(g) APPLICABILITY OF ADMINISTRATIVE PROCE11 DURES ACT.—Determinations of inconsistency made pur12 suant to subsection (f)(2) shall be subject to the applicable 13 provisions of subchapter II of chapter 5 of title 5, United 14 States Code (relating to administrative procedure), and 15 chapter 7 of such title (relating to judicial review), except 16 that in any action for judicial review of a determination 17 of inconsistency, the court shall determine the matter de 18 novo. 19 ‘‘(h) REGULATIONS, POLICIES, AND PROCEDURES.— 20 The Secretary may issue orders, regulations, policies, and 21 procedures to implement this section. 22 ‘‘(i) CONSULTATION.—The Director shall consult 23 with State insurance regulators, individually or collec24 tively, to the extent the Director determines appropriate, 25 in carrying out the functions of the Office. 562 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 ‘‘(j) SAVINGS PROVISIONS.—Nothing in this section 2 shall— 3 ‘‘(1) preempt— 4 ‘‘(A) any State insurance measure that 5 governs any insurer’s rates, premiums, under6 writing, or sales practices; 7 ‘‘(B) any State coverage requirements for 8 insurance; 9 ‘‘(C) the application of the antitrust laws 10 of any State to the business of insurance; or 11 ‘‘(D) any State insurance measure gov12 erning the capital or solvency of an insurer, ex13 cept to the extent that such State insurance 14 measure results in less favorable treatment of a 15 non-United State insurer than a United States 16 insurer; 17 ‘‘(2) be construed to alter, amend, or limit any 18 provision of the Consumer Financial Protection 19 Agency Act of 2010; or 20 ‘‘(3) affect the preemption of any State insur21 ance measure otherwise inconsistent with and pre22 empted by Federal law. 23 ‘‘(k) RETENTION OF EXISTING STATE REGULATORY 24 AUTHORITY.—Nothing in this section or section 314 shall 25 be construed to establish or provide the Office or the De563 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 partment of the Treasury with general supervisory or reg2 ulatory authority over the business of insurance. 3 ‘‘(l) RETENTION OF AUTHORITY OF FEDERAL FI4 NANCIAL REGULATORY AGENCIES.—Nothing in this sec5 tion or section 314 shall be construed to limit the author6 ity of any Federal financial regulatory agency, including 7 the authority to develop and coordinate policy, negotiate, 8 and enter into agreements with foreign governments, au9 thorities, regulators, and multinational regulatory commit10 tees and to preempt State measures to affect uniformity 11 with international regulatory agreements. 12 ‘‘(m) RETENTION OF AUTHORITY OF UNITED 13 STATES TRADE REPRESENTATIVE.—Nothing in this sec14 tion or section 314 shall be construed to affect the author15 ity of the Office of the United States Trade Representative 16 pursuant to section 141 of the Trade Act of 1974 (19 17 U.S.C. 2171) or any other provision of law, including au18 thority over the development and coordination of United 19 States international trade policy and the administration 20 of the United States trade agreements program. 21 ‘‘(n) ANNUAL REPORTS TO CONGRESS.— 22 ‘‘(1) SECTION 313(f) REPORTS.—Beginning 23 September 30, 2011, the Director shall submit a re24 port on or before September 30 of each calendar 25 year to the President and to the Committees on Fi564 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 nancial Services and Ways and Means of the House 2 of Representatives and the Committees on Banking, 3 Housing, and Urban Affairs and Finance of the 4 Senate on any actions taken by the Office pursuant 5 to subsection (f) (regarding preemption of incon6 sistent State insurance measures). 7 ‘‘(2) INSURANCE INDUSTRY.—Beginning Sep8 tember 30, 2011, the Director shall submit a report 9 on or before September 30 of each calendar year to 10 the President and to the Committee on Financial 11 Services of the House of Representatives and the 12 Committee on Banking, Housing, and Urban Affairs 13 of the Senate on the insurance industry and any 14 other information as deemed relevant by the Direc15 tor or requested by such Committees. 16 ‘‘(o) REPORTS ON U.S. AND GLOBAL REINSURANCE 17 MARKET.—The Director shall submit to the Committee 18 on Financial Services of the House of Representatives and 19 the Committee on Banking, Housing, and Urban Affairs 20 of the Senate— 21 ‘‘(1) a report received not later than September 22 30, 2012, describing the breadth and scope of the 23 global reinsurance market and the critical role such 24 market plays in supporting insurance in the United 25 States; and 565 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 ‘‘(2) a report received not later than January 1, 2 2013, and updated not later than January 1, 2015, 3 describing the impact of part II of the Nonadmitted 4 and Reinsurance Reform Act of 2010 on the ability 5 of State regulators to access reinsurance information 6 for regulated companies in their jurisdictions. 7 ‘‘(p) STUDY AND REPORT ON REGULATION OF IN8 SURANCE.— 9 ‘‘(1) IN GENERAL.—Not later than 18 months 10 after the date of enactment of this section, the Di11 rector shall conduct a study and submit a report to 12 Congress on how to modernize and improve the sys13 tem of insurance regulation in the United States. 14 ‘‘(2) CONSIDERATIONS.—The study and report 15 required under paragraph (1) shall be based on and 16 guided by the following considerations: 17 ‘‘(A) Systemic risk regulation with respect 18 to insurance. 19 ‘‘(B) Capital standards and the relation20 ship between capital allocation and liabilities, 21 including standards relating to liquidity and du22 ration risk. 23 ‘‘(C) Consumer protection for insurance 24 products and practices, including gaps in State 25 regulation. 566 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 ‘‘(D) The degree of national uniformity of 2 State insurance regulation. 3 ‘‘(E) The regulation of insurance compa4 nies and affiliates on a consolidated basis. 5 ‘‘(F) International coordination of insur6 ance regulation. 7 ‘‘(3) ADDITIONAL FACTORS.—The study and 8 report required under paragraph (1) shall also exam9 ine the following factors: 10 ‘‘(A) The costs and benefits of potential 11 Federal regulation of insurance across various 12 lines of insurance (except health insurance). 13 ‘‘(B) The feasibility of regulating only cer14 tain lines of insurance at the Federal level, 15 while leaving other lines of insurance to be reg16 ulated at the State level. 17 ‘‘(C) The ability of any potential Federal 18 regulation or Federal regulators to eliminate or 19 minimize regulatory arbitrage. 20 ‘‘(D) The impact that developments in the 21 regulation of insurance in foreign jurisdictions 22 might have on the potential Federal regulation 23 of insurance. 567 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 ‘‘(E) The ability of any potential Federal 2 regulation or Federal regulator to provide ro3 bust consumer protection for policyholders. 4 ‘‘(F) The potential consequences of sub5 jecting insurance companies to a Federal reso6 lution authority, including the effects of any 7 Federal resolution authority— 8 ‘‘(i) on the operation of State insur9 ance guaranty fund systems, including the 10 loss of guaranty fund coverage if an insur11 ance company is subject to a Federal reso12 lution authority; 13 ‘‘(ii) on policyholder protection, in14 cluding the loss of the priority status of 15 policyholder claims over other unsecured 16 general creditor claims; 17 ‘‘(iii) in the case of life insurance 18 companies, on the loss of the special status 19 of separate account assets and separate ac20 count liabilities; and 21 ‘‘(iv) on the international competitive22 ness of insurance companies. 23 ‘‘(G) Such other factors as the Director 24 determines necessary or appropriate, consistent 25 with the principles set forth in paragraph (2). 568 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 ‘‘(4) REQUIRED RECOMMENDATIONS.—The 2 study and report required under paragraph (1) shall 3 also contain any legislative, administrative, or regu4 latory recommendations, as the Director determines 5 appropriate, to carry out or effectuate the findings 6 set forth in such report. 7 ‘‘(5) CONSULTATION.—With respect to the 8 study and report required under paragraph (1), the 9 Director shall consult with the State insurance regu10 lators, consumer organizations, representatives of 11 the insurance industry and policyholders, and other 12 organizations and experts, as appropriate. 13 ‘‘(q) USE OF EXISTING RESOURCES.—To carry out 14 this section, the Office may employ personnel, facilities, 15 and any other resource of the Department of the Treasury 16 available to the Secretary and the Secretary shall dedicate 17 specific personnel to the Office. 18 ‘‘(r) DEFINITIONS.—In this section and section 314, 19 the following definitions shall apply: 20 ‘‘(1) AFFILIATE.—The term ‘affiliate’ means, 21 with respect to an insurer, any person who controls, 22 is controlled by, or is under common control with the 23 insurer. 24 ‘‘(2) COVERED AGREEMENT.—The term ‘cov25 ered agreement’ means a written bilateral or multi569 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 lateral agreement regarding prudential measures 2 with respect to the business of insurance or reinsur3 ance that— 4 ‘‘(A) is entered into between the United 5 States and one or more foreign governments, 6 authorities, or regulatory entities; and 7 ‘‘(B) relates to the recognition of pruden8 tial measures with respect to the business of in9 surance or reinsurance that achieves a level of 10 protection for insurance or reinsurance con11 sumers that is substantially equivalent to the 12 level of protection achieved under State insur13 ance or reinsurance regulation. 14 ‘‘(3) INSURER.—The term ‘insurer’ means any 15 person engaged in the business of insurance, includ16 ing reinsurance. 17 ‘‘(4) FEDERAL FINANCIAL REGULATORY AGEN18 CY.—The term ‘Federal financial regulatory agency’ 19 means the Department of the Treasury, the Board 20 of Governors of the Federal Reserve System, the Of21 fice of the Comptroller of the Currency, the Office 22 of Thrift Supervision, the Securities and Exchange 23 Commission, the Commodity Futures Trading Com24 mission, the Federal Deposit Insurance Corporation, 570 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 the Federal Housing Finance Agency, or the Na2 tional Credit Union Administration. 3 ‘‘(5) NON-UNITED STATES INSURER.—The term 4 ‘non-United States insurer’ means an insurer that is 5 organized under the laws of a jurisdiction other than 6 a State, but does not include any United States 7 branch of such an insurer. 8 ‘‘(6) OFFICE.—The term ‘Office’ means the 9 Federal Insurance Office established by this section. 10 ‘‘(7) STATE INSURANCE MEASURE.—The term 11 ‘State insurance measure’ means any State law, reg12 ulation, administrative ruling, bulletin, guideline, or 13 practice relating to or affecting prudential measures 14 applicable to insurance or reinsurance. 15 ‘‘(8) STATE INSURANCE REGULATOR.—The 16 term ‘State insurance regulator’ means any State 17 regulatory authority responsible for the supervision 18 of insurers. 19 ‘‘(9) SUBSTANTIALLY EQUIVALENT TO THE 20 LEVEL OF PROTECTION ACHIEVED.—The term ‘sub21 stantially equivalent to the level of protection 22 achieved’ means the prudential measures of a for23 eign government, authority, or regulatory entity 24 achieve a similar outcome in consumer protection as 571 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 the outcome achieved under State insurance or rein2 surance regulation. 3 ‘‘(10) UNITED STATES INSURER.—The term 4 ‘United States insurer’ means— 5 ‘‘(A) an insurer that is organized under 6 the laws of a State; or 7 ‘‘(B) a United States branch of a non- 8 United States insurer. 9 ‘‘(s) AUTHORIZATION OF APPROPRIATIONS.—There 10 are authorized to be appropriated for the Office for each 11 fiscal year such sums as may be necessary. 12 ‘‘SEC. 314. COVERED AGREEMENTS. 13 ‘‘(a) AUTHORITY.—The Secretary and the United 14 States Trade Representative are authorized, jointly, to ne15 gotiate and enter into covered agreements on behalf of the 16 United States. 17 ‘‘(b) REQUIREMENTS FOR CONSULTATION WITH 18 CONGRESS.— 19 ‘‘(1) IN GENERAL.—Before initiating negotia20 tions to enter into a covered agreement under sub21 section (a), during such negotiations, and before en22 tering into any such agreement, the Secretary and 23 the United States Trade Representative shall jointly 24 consult with the Committee on Financial Services 25 and the Committee on Ways and Means of the 572 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 House of Representatives and the Committee on 2 Banking, Housing, and Urban Affairs and the Com3 mittee on Finance of the Senate. 4 ‘‘(2) SCOPE.—The consultation described in 5 paragraph (1) shall include consultation with respect 6 to— 7 ‘‘(A) the nature of the agreement; 8 ‘‘(B) how and to what extent the agree9 ment will achieve the applicable purposes, poli10 cies, priorities, and objectives of section 313 11 and this section; and 12 ‘‘(C) the implementation of the agreement, 13 including the general effect of the agreement on 14 existing State laws. 15 ‘‘(c) SUBMISSION AND LAYOVER PROVISIONS.—A 16 covered agreement under subsection (a) may enter into 17 force with respect to the United States only if— 18 ‘‘(1) the Secretary and the United States Trade 19 Representative jointly submit to the congressional 20 committees specified in subsection (b)(1), on a day 21 on which both Houses of Congress are in session, a 22 copy of the final legal text of the agreement; and 23 ‘‘(2) a period of 90 calendar days beginning on 24 the date on which the copy of the final legal text of 573 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 the agreement is submitted to the congressional 2 committees under paragraph (1) has expired.’’. 3 (b) DUTIES OF SECRETARY.—Section 321(a) of title 4 31, United States Code, is amended— 5 (1) in paragraph (7), by striking ‘‘; and’’ and 6 inserting a semicolon; 7 (2) in paragraph (8)(C), by striking the period 8 at the end and inserting ‘‘; and’’; and 9 (3) by adding at the end the following new 10 paragraph: 11 ‘‘(9) advise the President on major domestic 12 and international prudential policy issues in connec13 tion with all lines of insurance except health insur14 ance.’’. 15 (c) CLERICAL AMENDMENT.—The table of sections 16 for subchapter I of chapter 3 of title 31, United States 17 Code, is amended by striking the item relating to section 18 312 and inserting the following new items: ‘‘Sec. 312. Terrorism and financial intelligence. ‘‘Sec. 313. Federal Insurance Office. ‘‘Sec. 314. Covered agreements. ‘‘Sec. 315. Continuing in office.’’. 19 Subtitle B—State-Based Insurance 20 Reform 21 SEC. 511. SHORT TITLE. 22 This subtitle may be cited as the ‘‘Nonadmitted and 23 Reinsurance Reform Act of 2010’’. 574 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 SEC. 512. EFFECTIVE DATE. 2 Except as otherwise specifically provided in this sub3 title, this subtitle shall take effect upon the expiration of 4 the 12-month period beginning on the date of the enact5 ment of this subtitle. 6 PART I—NONADMITTED INSURANCE 7 SEC. 521. REPORTING, PAYMENT, AND ALLOCATION OF 8 PREMIUM TAXES. 9 (a) HOME STATE’S EXCLUSIVE AUTHORITY.—No 10 State other than the home State of an insured may require 11 any premium tax payment for nonadmitted insurance. 12 (b) ALLOCATION OF NONADMITTED PREMIUM 13 TAXES.— 14 (1) IN GENERAL.—The States may enter into a 15 compact or otherwise establish procedures to allocate 16 among the States the premium taxes paid to an in17 sured’s home State described in subsection (a). 18 (2) EFFECTIVE DATE.—Except as expressly 19 otherwise provided in such compact or other proce20 dures, any such compact or other procedures— 21 (A) if adopted on or before the expiration 22 of the 330-day period that begins on the date 23 of the enactment of this subtitle, shall apply to 24 any premium taxes that, on or after such date 25 of enactment, are required to be paid to any 575 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 State that is subject to such compact or proce2 dures; and 3 (B) if adopted after the expiration of such 4 330-day period, shall apply to any premium 5 taxes that, on or after January 1 of the first 6 calendar year that begins after the expiration of 7 such 330-day period, are required to be paid to 8 any State that is subject to such compact or 9 procedures. 10 (3) REPORT.—Upon the expiration of the 330- 11 day period referred to in paragraph (2), the NAIC 12 may submit a report to the Committee on Financial 13 Services and the Committee on the Judiciary of the 14 House of Representatives and the Committee on 15 Banking, Housing, and Urban Affairs of the Senate 16 identifying and describing any compact or other pro17 cedures for allocation among the States of premium 18 taxes that have been adopted during such period by 19 any States. 20 (4) NATIONWIDE SYSTEM.—The Congress in21 tends that each State adopt nationwide uniform re22 quirements, forms, and procedures, such as an inter23 state compact, that provide for the reporting, pay24 ment, collection, and allocation of premium taxes for 25 nonadmitted insurance consistent with this section. 576 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 (c) ALLOCATION BASED ON TAX ALLOCATION RE2 PORT.—To facilitate the payment of premium taxes 3 among the States, an insured’s home State may require 4 surplus lines brokers and insureds who have independently 5 procured insurance to annually file tax allocation reports 6 with the insured’s home State detailing the portion of the 7 nonadmitted insurance policy premium or premiums at8 tributable to properties, risks, or exposures located in each 9 State. The filing of a nonadmitted insurance tax allocation 10 report and the payment of tax may be made by a person 11 authorized by the insured to act as its agent. 12 SEC. 522. REGULATION OF NONADMITTED INSURANCE BY 13 INSURED’S HOME STATE. 14 (a) HOME STATE AUTHORITY.—Except as otherwise 15 provided in this section, the placement of nonadmitted in16 surance shall be subject to the statutory and regulatory 17 requirements solely of the insured’s home State. 18 (b) BROKER LICENSING.—No State other than an in19 sured’s home State may require a surplus lines broker to 20 be licensed in order to sell, solicit, or negotiate non21 admitted insurance with respect to such insured. 22 (c) ENFORCEMENT PROVISION.—With respect to sec23 tion 521 and subsections (a) and (b) of this section, any 24 law, regulation, provision, or action of any State that ap25 plies or purports to apply to nonadmitted insurance sold 577 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 to, solicited by, or negotiated with an insured whose home 2 State is another State shall be preempted with respect to 3 such application. 4 (d) WORKERS’ COMPENSATION EXCEPTION.—This 5 section may not be construed to preempt any State law, 6 rule, or regulation that restricts the placement of workers’ 7 compensation insurance or excess insurance for self-fund8 ed workers’ compensation plans with a nonadmitted in9 surer. 10 SEC. 523. PARTICIPATION IN NATIONAL PRODUCER DATA11 BASE. 12 After the expiration of the 2-year period beginning 13 on the date of the enactment of this subtitle, a State may 14 not collect any fees relating to licensing of an individual 15 or entity as a surplus lines broker in the State unless the 16 State has in effect at such time laws or regulations that 17 provide for participation by the State in the national in18 surance producer database of the NAIC, or any other 19 equivalent uniform national database, for the licensure of 20 surplus lines brokers and the renewal of such licenses. 21 SEC. 524. UNIFORM STANDARDS FOR SURPLUS LINES ELI22 GIBILITY. 23 A State may not— 24 (1) impose eligibility requirements on, or other25 wise establish eligibility criteria for, nonadmitted in578 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 surers domiciled in a United States jurisdiction, ex2 cept in conformance with such requirements and cri3 teria in sections 5A(2) and 5C(2)(a) of the Non-Ad4 mitted Insurance Model Act, unless the State has 5 adopted nationwide uniform requirements, forms, 6 and procedures developed in accordance with section 7 521(b) of this subtitle that include alternative na8 tionwide uniform eligibility requirements; or 9 (2) prohibit a surplus lines broker from placing 10 nonadmitted insurance with, or procuring non11 admitted insurance from, a nonadmitted insurer 12 domiciled outside the United States that is listed on 13 the Quarterly Listing of Alien Insurers maintained 14 by the International Insurers Department of the 15 NAIC. 16 SEC. 525. STREAMLINED APPLICATION FOR COMMERCIAL 17 PURCHASERS. 18 A surplus lines broker seeking to procure or place 19 nonadmitted insurance in a State for an exempt commer20 cial purchaser shall not be required to satisfy any State 21 requirement to make a due diligence search to determine 22 whether the full amount or type of insurance sought by 23 such exempt commercial purchaser can be obtained from 24 admitted insurers if— 579 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 (1) the broker procuring or placing the surplus 2 lines insurance has disclosed to the exempt commer3 cial purchaser that such insurance may or may not 4 be available from the admitted market that may pro5 vide greater protection with more regulatory over6 sight; and 7 (2) the exempt commercial purchaser has sub8 sequently requested in writing the broker to procure 9 or place such insurance from a nonadmitted insurer. 10 SEC. 526. GAO STUDY OF NONADMITTED INSURANCE MAR11 KET. 12 (a) IN GENERAL.—The Comptroller General of the 13 United States shall conduct a study of the nonadmitted 14 insurance market to determine the effect of the enactment 15 of this part on the size and market share of the non16 admitted insurance market for providing coverage typi17 cally provided by the admitted insurance market. 18 (b) CONTENTS.—The study shall determine and ana19 lyze— 20 (1) the change in the size and market share of 21 the nonadmitted insurance market and in the num22 ber of insurance companies and insurance holding 23 companies providing such business in the 18-month 24 period that begins upon the effective date of this 25 subtitle; 580 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 (2) the extent to which insurance coverage typi2 cally provided by the admitted insurance market has 3 shifted to the nonadmitted insurance market; 4 (3) the consequences of any change in the size 5 and market share of the nonadmitted insurance 6 market, including differences in the price and avail7 ability of coverage available in both the admitted 8 and nonadmitted insurance markets; 9 (4) the extent to which insurance companies 10 and insurance holding companies that provide both 11 admitted and nonadmitted insurance have experi12 enced shifts in the volume of business between ad13 mitted and nonadmitted insurance; and 14 (5) the extent to which there has been a change 15 in the number of individuals who have nonadmitted 16 insurance policies, the type of coverage provided 17 under such policies, and whether such coverage is 18 available in the admitted insurance market. 19 (c) CONSULTATION WITH NAIC.—In conducting the 20 study under this section, the Comptroller General shall 21 consult with the NAIC. 22 (d) REPORT.—The Comptroller General shall com23 plete the study under this section and submit a report to 24 the Committee on Banking, Housing, and Urban Affairs 25 of the Senate and the Committee on Financial Services 581 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 of the House of Representatives regarding the findings of 2 the study not later than 30 months after the effective date 3 of this subtitle. 4 SEC. 527. DEFINITIONS. 5 For purposes of this part, the following definitions 6 shall apply: 7 (1) ADMITTED INSURER.—The term ‘‘admitted 8 insurer’’ means, with respect to a State, an insurer 9 licensed to engage in the business of insurance in 10 such State. 11 (2) AFFILIATE.—The term ‘‘affiliate’’ means, 12 with respect to an insured, any entity that controls, 13 is controlled by, or is under common control with the 14 insured. 15 (3) AFFILIATED GROUP.—The term ‘‘affiliated 16 group’’ means any group of entities that are all af17 filiated. 18 (4) CONTROL.—An entity has ‘‘control’’ over 19 another entity if— 20 (A) the entity directly or indirectly or act21 ing through 1 or more other persons owns, con22 trols, or has the power to vote 25 percent or 23 more of any class of voting securities of the 24 other entity; or 582 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 (B) the entity controls in any manner the 2 election of a majority of the directors or trust3 ees of the other entity. 4 (5) EXEMPT COMMERCIAL PURCHASER.—The 5 term ‘‘exempt commercial purchaser’’ means any 6 person purchasing commercial insurance that, at the 7 time of placement, meets the following requirements: 8 (A) The person employs or retains a quali9 fied risk manager to negotiate insurance cov10 erage. 11 (B) The person has paid aggregate nation12 wide commercial property and casualty insur13 ance premiums in excess of $100,000 in the im14 mediately preceding 12 months. 15 (C)(i) The person meets at least 1 of the 16 following criteria: 17 (I) The person possesses a net worth 18 in excess of $20,000,000, as such amount 19 is adjusted pursuant to clause (ii). 20 (II) The person generates annual rev21 enues in excess of $50,000,000, as such 22 amount is adjusted pursuant to clause (ii). 23 (III) The person employs more than 24 500 full-time or full-time equivalent em25 ployees per individual insured or is a mem583 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 ber of an affiliated group employing more 2 than 1,000 employees in the aggregate. 3 (IV) The person is a not-for-profit or4 ganization or public entity generating an5 nual budgeted expenditures of at least 6 $30,000,000, as such amount is adjusted 7 pursuant to clause (ii). 8 (V) The person is a municipality with 9 a population in excess of 50,000 persons. 10 (ii) Effective on the fifth January 1 occur11 ring after the date of the enactment of this sub12 title and each fifth January 1 occurring there13 after, the amounts in subclauses (I), (II), and 14 (IV) of clause (i) shall be adjusted to reflect the 15 percentage change for such 5-year period in the 16 Consumer Price Index for All Urban Con17 sumers published by the Bureau of Labor Sta18 tistics of the Department of Labor. 19 (6) HOME STATE.— 20 (A) IN GENERAL.—Except as provided in 21 subparagraph (B), the term ‘‘home State’’ 22 means, with respect to an insured— 23 (i) the State in which an insured 24 maintains its principal place of business or, 584 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 in the case of an individual, the individ2 ual’s principal residence; or 3 (ii) if 100 percent of the insured risk 4 is located out of the State referred to in 5 clause (i), the State to which the greatest 6 percentage of the insured’s taxable pre7 mium for that insurance contract is allo8 cated. 9 (B) AFFILIATED GROUPS.—If more than 1 10 insured from an affiliated group are named in11 sureds on a single nonadmitted insurance con12 tract, the term ‘‘home State’’ means the home 13 State, as determined pursuant to subparagraph 14 (A), of the member of the affiliated group that 15 has the largest percentage of premium attrib16 uted to it under such insurance contract. 17 (7) INDEPENDENTLY PROCURED INSURANCE.— 18 The term ‘‘independently procured insurance’’ 19 means insurance procured directly by an insured 20 from a nonadmitted insurer. 21 (8) NAIC.—The term ‘‘NAIC’’ means the Na22 tional Association of Insurance Commissioners or 23 any successor entity. 24 (9) NONADMITTED INSURANCE.—The term 25 ‘‘nonadmitted insurance’’ means any property and 585 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 casualty insurance permitted to be placed directly or 2 through a surplus lines broker with a nonadmitted 3 insurer eligible to accept such insurance. 4 (10) NON-ADMITTED INSURANCE MODEL 5 ACT.—The term ‘‘Non-Admitted Insurance Model 6 Act’’ means the provisions of the Non-Admitted In7 surance Model Act, as adopted by the NAIC on Au8 gust 3, 1994, and amended on September 30, 1996, 9 December 6, 1997, October 2, 1999, and June 8, 10 2002. 11 (11) NONADMITTED INSURER.—The term 12 ‘‘nonadmitted insurer’’— 13 (A) means, with respect to a State, an in14 surer not licensed to engage in the business of 15 insurance in such State; but 16 (B) does not include a risk retention 17 group, as that term is defined in section 2(a)(4) 18 of the Liability Risk Retention Act of 1986 (15 19 U.S.C. 3901(a)(4)). 20 (12) PREMIUM TAX.—The term ‘‘premium tax’’ 21 means, with respect to surplus lines or independently 22 procured insurance coverage, any tax, fee, assess23 ment, or other charge imposed by a government en24 tity directly or indirectly based on any payment 25 made as consideration for an insurance contract for 586 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 such insurance, including premium deposits, assess2 ments, registration fees, and any other compensation 3 given in consideration for a contract of insurance. 4 (13) QUALIFIED RISK MANAGER.—The term 5 ‘‘qualified risk manager’’ means, with respect to a 6 policyholder of commercial insurance, a person who 7 meets all of the following requirements: 8 (A) The person is an employee of, or third9 party consultant retained by, the commercial 10 policyholder. 11 (B) The person provides skilled services in 12 loss prevention, loss reduction, or risk and in13 surance coverage analysis, and purchase of in14 surance. 15 (C) The person— 16 (i)(I) has a bachelor’s degree or high17 er from an accredited college or university 18 in risk management, business administra19 tion, finance, economics, or any other field 20 determined by a State insurance commis21 sioner or other State regulatory official or 22 entity to demonstrate minimum com23 petence in risk management; and 24 (II)(aa) has 3 years of experience in 25 risk financing, claims administration, loss 587 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 prevention, risk and insurance analysis, or 2 purchasing commercial lines of insurance; 3 or 4 (bb) has— 5 (AA) a designation as a Char6 tered Property and Casualty Under7 writer (in this subparagraph referred 8 to as ‘‘CPCU’’) issued by the Amer9 ican Institute for CPCU/Insurance In10 stitute of America; 11 (BB) a designation as an Asso12 ciate in Risk Management (ARM) 13 issued by the American Institute for 14 CPCU/Insurance Institute of America; 15 (CC) a designation as Certified 16 Risk Manager (CRM) issued by the 17 National Alliance for Insurance Edu18 cation & Research; 19 (DD) a designation as a RIMS 20 Fellow (RF) issued by the Global Risk 21 Management Institute; or 22 (EE) any other designation, cer23 tification, or license determined by a 24 State insurance commissioner or other 25 State insurance regulatory official or 588 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 entity to demonstrate minimum com2 petency in risk management; 3 (ii)(I) has at least 7 years of experi4 ence in risk financing, claims administra5 tion, loss prevention, risk and insurance 6 coverage analysis, or purchasing commer7 cial lines of insurance; and 8 (II) has any 1 of the designations 9 specified in subitems (AA) through (EE) 10 of clause (i)(II)(bb); 11 (iii) has at least 10 years of experi12 ence in risk financing, claims administra13 tion, loss prevention, risk and insurance 14 coverage analysis, or purchasing commer15 cial lines of insurance; or 16 (iv) has a graduate degree from an 17 accredited college or university in risk 18 management, business administration, fi19 nance, economics, or any other field deter20 mined by a State insurance commissioner 21 or other State regulatory official or entity 22 to demonstrate minimum competence in 23 risk management. 589 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 (14) REINSURANCE.—The term ‘‘reinsurance’’ 2 means the assumption by an insurer of all or part 3 of a risk undertaken originally by another insurer. 4 (15) SURPLUS LINES BROKER.—The term ‘‘sur5 plus lines broker’’ means an individual, firm, or cor6 poration which is licensed in a State to sell, solicit, 7 or negotiate insurance on properties, risks, or expo8 sures located or to be performed in a State with 9 nonadmitted insurers. 10 (16) STATE.—The term ‘‘State’’ includes any 11 State of the United States, the District of Columbia, 12 the Commonwealth of Puerto Rico, Guam, the 13 Northern Mariana Islands, the Virgin Islands, and 14 American Samoa. 15 PART II—REINSURANCE 16 SEC. 531. REGULATION OF CREDIT FOR REINSURANCE AND 17 REINSURANCE AGREEMENTS. 18 (a) CREDIT FOR REINSURANCE.—If the State of 19 domicile of a ceding insurer is an NAIC-accredited State, 20 or has financial solvency requirements substantially simi21 lar to the requirements necessary for NAIC accreditation, 22 and recognizes credit for reinsurance for the insurer’s 23 ceded risk, then no other State may deny such credit for 24 reinsurance. 590 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 (b) ADDITIONAL PREEMPTION OF 2 EXTRATERRITORIAL APPLICATION OF STATE LAW.—In 3 addition to the application of subsection (a), all laws, regu4 lations, provisions, or other actions of a State that is not 5 the domiciliary State of the ceding insurer, except those 6 with respect to taxes and assessments on insurance com7 panies or insurance income, are preempted to the extent 8 that they— 9 (1) restrict or eliminate the rights of the ceding 10 insurer or the assuming insurer to resolve disputes 11 pursuant to contractual arbitration to the extent 12 such contractual provision is not inconsistent with 13 the provisions of title 9, United States Code; 14 (2) require that a certain State’s law shall gov15 ern the reinsurance contract, disputes arising from 16 the reinsurance contract, or requirements of the re17 insurance contract; 18 (3) attempt to enforce a reinsurance contract 19 on terms different than those set forth in the rein20 surance contract, to the extent that the terms are 21 not inconsistent with this part; or 22 (4) otherwise apply the laws of the State to re23 insurance agreements of ceding insurers not domi24 ciled in that State. 591 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 SEC. 532. REGULATION OF REINSURER SOLVENCY. 2 (a) DOMICILIARY STATE REGULATION.—If the State 3 of domicile of a reinsurer is an NAIC-accredited State or 4 has financial solvency requirements substantially similar 5 to the requirements necessary for NAIC accreditation, 6 such State shall be solely responsible for regulating the 7 financial solvency of the reinsurer. 8 (b) NONDOMICILIARY STATES.— 9 (1) LIMITATION ON FINANCIAL INFORMATION 10 REQUIREMENTS.—If the State of domicile of a rein11 surer is an NAIC-accredited State or has financial 12 solvency requirements substantially similar to the re13 quirements necessary for NAIC accreditation, no 14 other State may require the reinsurer to provide any 15 additional financial information other than the infor16 mation the reinsurer is required to file with its 17 domiciliary State. 18 (2) RECEIPT OF INFORMATION.—No provision 19 of this section shall be construed as preventing or 20 prohibiting a State that is not the State of domicile 21 of a reinsurer from receiving a copy of any financial 22 statement filed with its domiciliary State. 23 SEC. 533. DEFINITIONS. 24 For purposes of this part, the following definitions 25 shall apply: 592 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 (1) CEDING INSURER.—The term ‘‘ceding in2 surer’’ means an insurer that purchases reinsurance. 3 (2) DOMICILIARY STATE.—The terms ‘‘State of 4 domicile’’ and ‘‘domiciliary State’’ mean, with re5 spect to an insurer or reinsurer, the State in which 6 the insurer or reinsurer is incorporated or entered 7 through, and licensed. 8 (3) NAIC.—The term ‘‘NAIC’’ means the Na9 tional Association of Insurance Commissioners or 10 any successor entity. 11 (4) REINSURANCE.—The term ‘‘reinsurance’’ 12 means the assumption by an insurer of all or part 13 of a risk undertaken originally by another insurer. 14 (5) REINSURER.— 15 (A) IN GENERAL.—The term ‘‘reinsurer’’ 16 means an insurer to the extent that the in17 surer— 18 (i) is principally engaged in the busi19 ness of reinsurance; 20 (ii) does not conduct significant 21 amounts of direct insurance as a percent22 age of its net premiums; and 23 (iii) is not engaged in an ongoing 24 basis in the business of soliciting direct in25 surance. 593 O:GRAGRA10A38.xml [file 5 of 17] S.L.C 1 (B) DETERMINATION.—A determination of 2 whether an insurer is a reinsurer shall be made 3 under the laws of the State of domicile in ac4 cordance with this paragraph. 5 (6) STATE.—The term ‘‘State’’ includes any 6 State of the United States, the District of Columbia, 7 the Commonwealth of Puerto Rico, Guam, the 8 Northern Mariana Islands, the Virgin Islands, and 9 American Samoa. 10 PART III—RULE OF CONSTRUCTION 11 SEC. 541. RULE OF CONSTRUCTION. 12 Nothing in this subtitle or the amendments made by 13 this subtitle shall be construed to modify, impair, or super14 sede the application of the antitrust laws. Any implied or 15 actual conflict between this subtitle and any amendments 16 to this subtitle and the antitrust laws shall be resolved 17 in favor of the operation of the antitrust laws. 18 SEC. 542. SEVERABILITY. 19 If any section or subsection of this subtitle, or any 20 application of such provision to any person or cir21 cumstance, is held to be unconstitutional, the remainder 22 of this subtitle, and the application of the provision to any 23 other person or circumstance, shall not be affected. 594 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 TITLE VI—IMPROVEMENTS TO 2 REGULATION OF BANK AND 3 SAVINGS ASSOCIATION HOLD4 ING COMPANIES AND DEPOSI5 TORY INSTITUTIONS 6 SEC. 601. SHORT TITLE. 7 This title may be cited as the ‘‘Bank and Savings 8 Association Holding Company and Depository Institution 9 Regulatory Improvements Act of 2010’’. 10 SEC. 602. DEFINITION. 11 For purposes of this title, a company is a ‘‘commer12 cial firm’’ if the annual gross revenues derived by the com13 pany and all of its affiliates from activities that are finan14 cial in nature (as defined in section 4(k) of the Bank 15 Holding Company Act of 1956 (12 U.S.C. 1843(k))) and, 16 if applicable, from the ownership or control of one or more 17 insured depository institutions, represent less than 15 per18 cent of the consolidated annual gross revenues of the com19 pany. 20 SEC. 603. MORATORIUM AND STUDY ON TREATMENT OF 21 CREDIT CARD BANKS, INDUSTRIAL LOAN 22 COMPANIES, AND CERTAIN OTHER COMPA23 NIES UNDER THE BANK HOLDING COMPANY 24 ACT OF 1956. 25 (a) MORATORIUM.— 595 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 (1) DEFINITIONS.—In this subsection— 2 (A) the term ‘‘credit card bank’’ means an 3 institution described in section 2(c)(2)(F) of the 4 Bank Holding Company Act of 1956 (12 5 U.S.C. 1841(c)(2)(F)); 6 (B) the term ‘‘industrial bank’’ means an 7 institution described in section 2(c)(2)(H) of 8 the Bank Holding Company Act of 1956 (12 9 U.S.C. 1841(c)(2)(H)); and 10 (C) the term ‘‘trust bank’’ means an insti11 tution described in section 2(c)(2)(D) of the 12 Bank Holding Company Act of 1956 (12 13 U.S.C. 1841(c)(2)(D)). 14 (2) MORATORIUM ON PROVISION OF DEPOSIT 15 INSURANCE.—The Corporation may not approve an 16 application for deposit insurance under section 5 of 17 the Federal Deposit Insurance Act (12 U.S.C. 1815) 18 that is received after November 23, 2009, for an in19 dustrial bank, a credit card bank, or a trust bank 20 that is directly or indirectly owned or controlled by 21 a commercial firm. 22 (3) CHANGE IN CONTROL.— 23 (A) IN GENERAL.—Except as provided in 24 subparagraph (B), the appropriate Federal 25 banking agency shall disapprove a change in 596 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 control, as provided in section 7(j) of the Fed2 eral Deposit Insurance Act (12 U.S.C. 1817(j)), 3 of an industrial bank, a credit card bank, or a 4 trust bank if the change in control would result 5 in direct or indirect control of the industrial 6 bank, credit card bank, or trust bank by a com7 mercial firm. 8 (B) EXCEPTIONS.—Subparagraph (A) 9 shall not apply to a change in control of an in10 dustrial bank, credit card bank, or trust bank— 11 (i) that— 12 (I) is in danger of default, as de13 termined by the appropriate Federal 14 banking agency; 15 (II) results from the merger or 16 whole acquisition of a commercial firm 17 that directly or indirectly controls the 18 industrial bank, credit card bank, or 19 trust bank in a bona fide merger with 20 or acquisition by another commercial 21 firm, as determined by the appro22 priate Federal banking agency; or 23 (III) results from an acquisition 24 of voting shares of a publicly traded 25 company that controls an industrial 597 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 bank, credit card bank, or trust bank, 2 if, after the acquisition, the acquiring 3 shareholder (or group of shareholders 4 acting in concert) holds less than 25 5 percent of any class of the voting 6 shares of the company; and 7 (ii) that has obtained all regulatory 8 approvals otherwise required for such 9 change of control under any applicable 10 Federal or State law, including section 7(j) 11 of the Federal Deposit Insurance Act (12 12 U.S.C. 1817(j)). 13 (4) SUNSET.—This subsection shall cease to 14 have effect 3 years after the date of enactment of 15 this Act. 16 (b) GOVERNMENT ACCOUNTABILITY OFFICE STUDY 17 OF EXCEPTIONS UNDER THE BANK HOLDING COMPANY 18 ACT OF 1956.— 19 (1) STUDY REQUIRED.—The Comptroller Gen20 eral of the United States shall carry out a study to 21 determine whether it is necessary, in order to 22 strengthen the safety and soundness of institutions 23 or the stability of the financial system, to eliminate 24 the exceptions under section 2 of the Bank Holding 598 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 Company Act of 1956 (12 U.S.C. 1841) for institu2 tions described in— 3 (A) section 2(a)(5)(E) of the Bank Hold4 ing Company Act of 1956 (12 U.S.C. 5 1841(a)(5)(E)); 6 (B) section 2(a)(5)(F) of the Bank Hold7 ing Company Act of 1956 (12 U.S.C. 8 1841(a)(5)(F)); 9 (C) section 2(c)(2)(D) of the Bank Hold10 ing Company Act of 1956 (12 U.S.C. 11 1841(c)(2)(D)); 12 (D) section 2(c)(2)(F) of the Bank Hold13 ing Company Act of 1956 (12 U.S.C. 14 1841(c)(2)(F)); 15 (E) section 2(c)(2)(H) of the Bank Hold16 ing Company Act of 1956 (12 U.S.C. 17 1841(c)(2)(H)); and 18 (F) section 2(c)(2)(B) of the Bank Hold19 ing Company Act of 1956 (12 U.S.C. 20 1841(c)(2)(B)). 21 (2) CONTENT OF STUDY.— 22 (A) IN GENERAL.—The study required 23 under paragraph (1), with respect to the insti24 tutions referenced in each of subparagraphs (A) 25 through (E) of paragraph (1), shall, to the ex599 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 tent feasible be based on information provided 2 to the Comptroller General by the appropriate 3 Federal or State regulator, and shall— 4 (i) identify the types and number of 5 institutions excepted from section 2 of the 6 Bank Holding Company Act of 1956 (12 7 U.S.C. 1841) under each of the subpara8 graphs described in subparagraphs (A) 9 through (E) of paragraph (1); 10 (ii) generally describe the size and ge11 ographic locations of the institutions de12 scribed in clause (i); 13 (iii) determine the extent to which the 14 institutions described in clause (i) are held 15 by holding companies that are commercial 16 firms; 17 (iv) determine whether the institutions 18 described in clause (i) have any affiliates 19 that are commercial firms; 20 (v) identify the Federal banking agen21 cy responsible for the supervision of the in22 stitutions described in clause (i) on and 23 after the transfer date; 24 (vi) determine the adequacy of the 25 Federal bank regulatory framework appli600 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 cable to each category of institution de2 scribed in clause (i), including any restric3 tions (including limitations on affiliate 4 transactions or cross-marketing) that apply 5 to transactions between an institution, the 6 holding company of the institution, and 7 any other affiliate of the institution; and 8 (vii) evaluate the potential con9 sequences of subjecting the institutions de10 scribed in clause (i) to the requirements of 11 the Bank Holding Company Act of 1956, 12 including with respect to the availability 13 and allocation of credit, the stability of the 14 financial system and the economy, the safe 15 and sound operation of each category of 16 institution, and the impact on the types of 17 activities in which such institutions, and 18 the holding companies of such institutions, 19 may engage. 20 (B) SAVINGS ASSOCIATIONS.—With respect 21 to institutions described in paragraph (1)(F), 22 the study required under paragraph (1) shall— 23 (i) determine the adequacy of the 24 Federal bank regulatory framework appli25 cable to such institutions, including any re601 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 strictions (including limitations on affiliate 2 transactions or cross-marketing) that apply 3 to transactions between an institution, the 4 holding company of the institution, and 5 any other affiliate of the institution; and 6 (ii) evaluate the potential con7 sequences of subjecting the institutions de8 scribed in paragraph (1)(F) to the require9 ments of the Bank Holding Company Act 10 of 1956, including with respect to the 11 availability and allocation of credit, the 12 stability of the financial system and the 13 economy, the safe and sound operation of 14 such institutions, and the impact on the 15 types of activities in which such institu16 tions, and the holding companies of such 17 institutions, may engage. 18 (3) REPORT.—Not later than 18 months after 19 the date of enactment of this Act, the Comptroller 20 General shall submit to the Committee on Banking, 21 Housing, and Urban Affairs of the Senate and the 22 Committee on Financial Services of the House of 23 Representatives a report on the study required 24 under paragraph (1). 602 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 SEC. 604. REPORTS AND EXAMINATIONS OF HOLDING COM2 PANIES; REGULATION OF FUNCTIONALLY 3 REGULATED SUBSIDIARIES. 4 (a) REPORTS BY BANK HOLDING COMPANIES.—Sec5 tions 5(c)(1) of the Bank Holding Company Act of 1956 6 (12 U.S.C. 1844(c)(1)) is amended— 7 (1) by striking subclause (A)(ii) and inserting 8 the following: 9 ‘‘(ii) compliance by the bank holding 10 company or subsidiary with— 11 ‘‘(I) this Act; 12 ‘‘(II) Federal laws that the 13 Board has specific jurisdiction to en14 force against the company or sub15 sidiary; and 16 ‘‘(III) other than in the case of 17 an insured depository institution or 18 functionally regulated subsidiary, any 19 other applicable provision of Federal 20 law.’’; 21 (2) by striking subparagraph (B) and inserting 22 the following: 23 ‘‘(B) USE OF EXISTING REPORTS AND 24 OTHER SUPERVISORY INFORMATION.—The 25 Board shall, to the fullest extent possible, use— 603 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 ‘‘(i) reports and other supervisory in2 formation that the bank holding company 3 or any subsidiary thereof has been required 4 to provide to other Federal or State regu5 latory agencies; 6 ‘‘(ii) externally audited financial state7 ments of the bank holding company or 8 subsidiary; 9 ‘‘(iii) information otherwise available 10 from Federal or State regulatory agencies; 11 and 12 ‘‘(iv) information that is otherwise re13 quired to be reported publicly.’’; and 14 (3) by adding at the end the following: 15 ‘‘(C) AVAILABILITY.—Upon the request of 16 the Board, the bank holding company or a sub17 sidiary of the bank holding company shall 18 promptly provide to the Board any information 19 described in clauses (i) through (iii) of subpara20 graph (B).’’. 21 (b) EXAMINATIONS OF BANK HOLDING COMPA22 NIES.—Section 5(c)(2) of the Bank Holding Company Act 23 of 1956 (12 U.S.C. 1844(c)(2)) is amended to read as 24 follows: 25 ‘‘(2) EXAMINATIONS.— 604 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 ‘‘(A) IN GENERAL.—Subject to subtitle B 2 of the Consumer Financial Protection Act of 3 2010, the Board may make examinations of a 4 bank holding company and each subsidiary of a 5 bank holding company in order to— 6 ‘‘(i) inform the Board of— 7 ‘‘(I) the nature of the operations 8 and financial condition of the bank 9 holding company and the subsidiary; 10 ‘‘(II) the financial, operational, 11 and other risks within the bank hold12 ing company system that may pose a 13 threat to— 14 ‘‘(aa) the safety and sound15 ness of the bank holding com16 pany or of any depository institu17 tion subsidiary of the bank hold18 ing company; or 19 ‘‘(bb) the stability of the fi20 nancial system of the United 21 States; and 22 ‘‘(III) the systems of the bank 23 holding company for monitoring and 24 controlling the risks described in sub25 clause (II); and 605 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 ‘‘(ii) monitor the compliance of the 2 bank holding company and the subsidiary 3 with— 4 ‘‘(I) this Act; 5 ‘‘(II) Federal laws that the 6 Board has specific jurisdiction to en7 force against the company or sub8 sidiary; and 9 ‘‘(III) other than in the case of 10 an insured depository institution or 11 functionally regulated subsidiary, any 12 other applicable provisions of Federal 13 law. 14 ‘‘(B) USE OF REPORTS TO REDUCE EXAMI15 NATIONS.—For purposes of this paragraph, the 16 Board shall, to the fullest extent possible, rely 17 on— 18 ‘‘(i) examination reports made by 19 other Federal or State regulatory agencies 20 relating to a bank holding company and 21 any subsidiary of a bank holding company; 22 and 23 ‘‘(ii) the reports and other informa24 tion required under paragraph (1). 606 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 ‘‘(C) COORDINATION WITH OTHER REGU2 LATORS.—The Board shall— 3 ‘‘(i) provide reasonable notice to, and 4 consult with, the appropriate Federal 5 banking agency, the Securities and Ex6 change Commission, the Commodity Fu7 tures Trading Commission, or State regu8 latory agency, as appropriate, for a sub9 sidiary that is a depository institution or a 10 functionally regulated subsidiary of a bank 11 holding company before commencing an ex12 amination of the subsidiary under this sec13 tion; and 14 ‘‘(ii) to the fullest extent possible, 15 avoid duplication of examination activities, 16 reporting requirements, and requests for 17 information.’’. 18 (c) AUTHORITY TO REGULATE FUNCTIONALLY REG19 ULATED SUBSIDIARIES OF BANK HOLDING COMPA20 NIES.—The Bank Holding Company Act of 1956 (12 21 U.S.C. 1841 et seq.) is amended— 22 (1) in section 5(c)(5)(B) (12 U.S.C. 23 1844(c)(5)(B)), by striking clause (v) and inserting 24 the following: 607 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 ‘‘(v) an entity that is subject to regu2 lation by, or registration with, the Com3 modity Futures Trading Commission, with 4 respect to activities conducted as a futures 5 commission merchant, commodity trading 6 adviser, commodity pool, commodity pool 7 operator, swap execution facility, swap 8 data repository, swap dealer, major swap 9 participant, and activities that are inci10 dental to such commodities and swaps ac11 tivities.’’; and 12 (2) by striking section 10A (12 U.S.C. 1848a). 13 (d) ACQUISITIONS OF BANKS.—Section 3(c) of the 14 Bank Holding Company Act of 1956 (12 U.S.C. 1842(c)) 15 is amended by adding at the end the following: 16 ‘‘(7) FINANCIAL STABILITY.—In every case, the 17 Board shall take into consideration the extent to 18 which a proposed acquisition, merger, or consolida19 tion would result in greater or more concentrated 20 risks to the stability of the United States banking or 21 financial system.’’. 22 (e) ACQUISITIONS OF NONBANKS.— 23 (1) NOTICE PROCEDURES.—Section 4(j)(2)(A) 24 of the Bank Holding Company Act of 1956 (12 25 U.S.C. 1843(j)(2)(A)) is amended by striking ‘‘or 608 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 unsound banking practices’’ and inserting ‘‘unsound 2 banking practices, or risk to the stability of the 3 United States banking or financial system’’. 4 (2) ACTIVITIES THAT ARE FINANCIAL IN NA5 TURE.—Section 4(k)(6)(B) of the Bank Holding 6 Company Act of 1956 (12 U.S.C. 1843(k)(6)(B)) is 7 amended to read as follows: 8 ‘‘(B) APPROVAL NOT REQUIRED FOR CER9 TAIN FINANCIAL ACTIVITIES.— 10 ‘‘(i) IN GENERAL.—Except as pro11 vided in subsection (j) with regard to the 12 acquisition of a savings association and 13 clause (ii), a financial holding company 14 may commence any activity, or acquire any 15 company, pursuant to paragraph (4) or 16 any regulation prescribed or order issued 17 under paragraph (5), without prior ap18 proval of the Board. 19 ‘‘(ii) EXCEPTION.—A financial hold20 ing company may not acquire a company, 21 without the prior approval of the Board, in 22 a transaction in which the total consoli23 dated assets to be acquired by the financial 24 holding company exceed $10,000,000,000. 609 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 ‘‘(iii) HART-SCOTT-RODINO FILING 2 REQUIREMENT.—Solely for purposes of 3 section 7A(c)(8) of the Clayton Act (15 4 U.S.C. 18a(c)(8)), the transactions subject 5 to the requirements of this paragraph shall 6 be treated as if the approval of the Board 7 is not required.’’. 8 (f) BANK MERGER ACT TRANSACTIONS.—Section 9 18(c)(5) of the Federal Deposit Insurance Act (12 U.S.C. 10 1828(c)(5)) is amended, in the matter immediately fol11 lowing subparagraph (B), by striking ‘‘and the conven12 ience and needs of the community to be served’’ and in13 serting ‘‘the convenience and needs of the community to 14 be served, and the risk to the stability of the United States 15 banking or financial system’’. 16 (g) REPORTS BY SAVINGS AND LOAN HOLDING COM17 PANIES.—Section 10(b)(2) of the Home Owners’ Loan Act 18 (12 U.S.C. 1467a(b)(2) is amended— 19 (1) by striking ‘‘Each savings’’ and inserting 20 the following: 21 ‘‘(A) IN GENERAL.—Each savings’’; and 22 (2) by adding at the end the following: 23 ‘‘(B) USE OF EXISTING REPORTS AND 24 OTHER SUPERVISORY INFORMATION.—The 25 Board shall, to the fullest extent possible, use— 610 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 ‘‘(i) reports and other supervisory in2 formation that the savings and loan hold3 ing company or any subsidiary thereof has 4 been required to provide to other Federal 5 or State regulatory agencies; 6 ‘‘(ii) externally audited financial state7 ments of the savings and loan holding com8 pany or subsidiary; 9 ‘‘(iii) information that is otherwise 10 available from Federal or State regulatory 11 agencies; and 12 ‘‘(iv) information that is otherwise re13 quired to be reported publicly. 14 ‘‘(C) AVAILABILITY.—Upon the request of 15 the Board, a savings and loan holding company 16 or a subsidiary of a savings and loan holding 17 company shall promptly provide to the Board 18 any information described in clauses (i) through 19 (iii) of subparagraph (B).’’. 20 (h) EXAMINATION OF SAVINGS AND LOAN HOLDING 21 COMPANIES.— 22 (1) DEFINITIONS.—Section 2 of the Home 23 Owners’ Loan Act (12 U.S.C. 1462) is amended by 24 adding at the end the following: 611 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 ‘‘(10) APPROPRIATE FEDERAL BANKING AGEN2 CY.—The term ‘appropriate Federal banking agency’ 3 has the same meaning as in section 3(q) of the Fed4 eral Deposit Insurance Act (12 U.S.C. 1813(q)). 5 ‘‘(11) FUNCTIONALLY REGULATED SUB6 SIDIARY.—The term ‘functionally regulated sub7 sidiary’ has the same meaning as in section 5(c)(5) 8 of the Bank Holding Company Act of 1956 (12 9 U.S.C. 1844(c)(5)).’’. 10 (2) EXAMINATION.—Section 10(b) of the Home 11 Owners’ Loan Act (12 U.S.C. 1467a(b)) is amended 12 by striking paragraph (4) and inserting the fol13 lowing: 14 ‘‘(4) EXAMINATIONS.— 15 ‘‘(A) IN GENERAL.—Subject to subtitle B 16 of the Consumer Financial Protection Act of 17 2010, the Board may make examinations of a 18 savings and loan holding company and each 19 subsidiary of a savings and loan holding com20 pany system, in order to— 21 ‘‘(i) inform the Board of— 22 ‘‘(I) the nature of the operations 23 and financial condition of the savings 24 and loan holding company and the 25 subsidiary; 612 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 ‘‘(II) the financial, operational, 2 and other risks within the savings and 3 loan holding company system that 4 may pose a threat to— 5 ‘‘(aa) the safety and sound6 ness of the savings and loan 7 holding company or of any depos8 itory institution subsidiary of the 9 savings and loan holding com10 pany; or 11 ‘‘(bb) the stability of the fi12 nancial system of the United 13 States; and 14 ‘‘(III) the systems of the savings 15 and loan holding company for moni16 toring and controlling the risks de17 scribed in subclause (II); and 18 ‘‘(ii) monitor the compliance of the 19 savings and loan holding company and the 20 subsidiary with— 21 ‘‘(I) this Act; 22 ‘‘(II) Federal laws that the 23 Board has specific jurisdiction to en24 force against the company or sub25 sidiary; and 613 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 ‘‘(III) other than in the case of 2 an insured depository institution or 3 functionally regulated subsidiary, any 4 other applicable provisions of Federal 5 law. 6 ‘‘(B) USE OF REPORTS TO REDUCE EXAMI7 NATIONS.—For purposes of this subsection, the 8 Board shall, to the fullest extent possible, rely 9 on— 10 ‘‘(i) the examination reports made by 11 other Federal or State regulatory agencies 12 relating to a savings and loan holding com13 pany and any subsidiary; and 14 ‘‘(ii) the reports and other informa15 tion required under paragraph (2). 16 ‘‘(C) COORDINATION WITH OTHER REGU17 LATORS.—The Board shall— 18 ‘‘(i) provide reasonable notice to, and 19 consult with, the appropriate Federal 20 banking agency, the Securities and Ex21 change Commission, the Commodity Fu22 tures Trading Commission, or State regu23 latory agency, as appropriate, for a sub24 sidiary that is a depository institution or a 25 functionally regulated subsidiary of a sav614 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 ings and loan holding company before com2 mencing an examination of the subsidiary 3 under this section; and 4 ‘‘(ii) to the fullest extent possible, 5 avoid duplication of examination activities, 6 reporting requirements, and requests for 7 information.’’. 8 (i) DEFINITION OF THE TERM ‘‘SAVINGS AND LOAN 9 HOLDING COMPANY’’.—Section 10(a)(1)(D)(ii) of the 10 Home Owners’ Loan Act (12 U.S.C. 1467a(a)(1)(D)(ii)) 11 is amended to read as follows: 12 ‘‘(ii) EXCLUSION.—The term ‘savings 13 and loan holding company’ does not in14 clude— 15 ‘‘(I) a bank holding company 16 that is registered under, and subject 17 to, the Bank Holding Company Act of 18 1956 (12 U.S.C. 1841 et seq.), or to 19 any company directly or indirectly 20 controlled by such company (other 21 than a savings association); 22 ‘‘(II) a company that controls a 23 savings association that functions 24 solely in a trust or fiduciary capacity 25 as described in section 2(c)(2)(D) of 615 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 the Bank Holding Company Act of 2 1956 (12 U.S.C. 1841(c)(2)(D)); or 3 ‘‘(III) a company described in 4 subsection (c)(9)(C) solely by virtue of 5 such company’s control of an inter6 mediate holding company established 7 pursuant to section 10A.’’. 8 (j) EFFECTIVE DATE.—The amendments made by 9 this section shall take effect on the transfer date. 10 SEC. 605. ASSURING CONSISTENT OVERSIGHT OF PERMIS11 SIBLE ACTIVITIES OF DEPOSITORY INSTITU12 TION SUBSIDIARIES OF HOLDING COMPA13 NIES. 14 (a) IN GENERAL.—The Federal Deposit Insurance 15 Act (12 U.S.C. 1811 et seq.) is amended by inserting after 16 section 25 the following new section: 17 ‘‘SEC. 26. ASSURING CONSISTENT OVERSIGHT OF SUBSIDI18 ARIES OF HOLDING COMPANIES. 19 ‘‘(a) DEFINITIONS.—For purposes of this section: 20 ‘‘(1) BOARD.—The term ‘Board’ means the 21 Board of Governors of the Federal Reserve System. 22 ‘‘(2) FUNCTIONALLY REGULATED SUB23 SIDIARY.—The term ‘functionally regulated sub24 sidiary’ has the same meaning as in section 5(c)(5) 25 of the Bank Holding Company Act. 616 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 ‘‘(3) LEAD INSURED DEPOSITORY INSTITU2 TION.—The term ‘lead insured depository institu3 tion’ has the same meaning as in section 2(o)(8) of 4 the Bank Holding Company Act. 5 ‘‘(b) EXAMINATION REQUIREMENTS.—Subject to 6 subtitle B of the Consumer Financial Protection Act of 7 2010, the Board shall examine the activities of a non8 depository institution subsidiary (other than a functionally 9 regulated subsidiary or a subsidiary of a depository insti10 tution) of a depository institution holding company that 11 are permissible for the insured depository institution sub12 sidiaries of the depository institution holding company in 13 the same manner, subject to the same standards, and with 14 the same frequency as would be required if such activities 15 were conducted in the lead insured depository institution 16 of the depository institution holding company. 17 ‘‘(c) STATE COORDINATION.— 18 ‘‘(1) CONSULTATION AND COORDINATION.—If a 19 nondepository institution subsidiary is supervised by 20 a State bank supervisor or other State regulatory 21 authority, the Board, in conducting the examinations 22 required in subsection (b), shall consult and coordi23 nate with such State regulator. 24 ‘‘(2) ALTERNATING EXAMINATIONS PER25 MITTED.—The examinations required under sub617 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 section (b) may be conducted in joint or alternating 2 manner with a State regulator, if the Board deter3 mines that an examination of a nondepository insti4 tution subsidiary conducted by the State carries out 5 the purposes of this section. 6 ‘‘(d) APPROPRIATE FEDERAL BANKING AGENCY 7 BACKUP EXAMINATION AUTHORITY.— 8 ‘‘(1) IN GENERAL.—In the event that the 9 Board does not conduct examinations required under 10 subsection (b) in the same manner, subject to the 11 same standards, and with the same frequency as 12 would be required if such activities were conducted 13 by the lead insured depository institution subsidiary 14 of the depository institution holding company, the 15 appropriate Federal banking agency for the lead in16 sured depository institution may recommend in writ17 ing (which shall include a written explanation of the 18 concerns giving rise to the recommendation) that the 19 Board perform the examination required under sub20 section (b). 21 ‘‘(2) EXAMINATION BY AN APPROPRIATE FED22 ERAL BANKING AGENCY.—If the Board does not, be23 fore the end of the 60-day period beginning on the 24 date on which the Board receives a recommendation 25 under paragraph (1), begin an examination as re618 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 quired under subsection (b) or provide a written ex2 planation or plan to the appropriate Federal banking 3 agency making such recommendation responding to 4 the concerns raised by the appropriate Federal 5 banking agency for the lead insured depository insti6 tution, the appropriate Federal banking agency for 7 the lead insured depository institution may, subject 8 to the Consumer Financial Protection Act of 2010, 9 examine the activities that are permissible for a de10 pository institution subsidiary conducted by such 11 nondepository institution subsidiary (other than a 12 functionally regulated subsidiary or a subsidiary of 13 a depository institution) of the depository institution 14 holding company as if the nondepository institution 15 subsidiary were an insured depository institution for 16 which the appropriate Federal banking agency of the 17 lead insured depository institution was the appro18 priate Federal banking agency, to determine whether 19 the activities— 20 ‘‘(A) pose a material threat to the safety 21 and soundness of any insured depository insti22 tution subsidiary of the depository institution 23 holding company; 24 ‘‘(B) are conducted in accordance with ap25 plicable Federal law; and 619 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 ‘‘(C) are subject to appropriate systems for 2 monitoring and controlling the financial, oper3 ating, and other material risks of the activities 4 that may pose a material threat to the safety 5 and soundness of the insured depository institu6 tion subsidiaries of the holding company. 7 ‘‘(3) AGENCY COORDINATION WITH THE 8 BOARD.—An appropriate Federal banking agency 9 that conducts an examination pursuant to paragraph 10 (2) shall coordinate examination of the activities of 11 nondepository institution subsidiaries described in 12 subsection (b) with the Board in a manner that— 13 ‘‘(A) avoids duplication; 14 ‘‘(B) shares information relevant to the su15 pervision of the depository institution holding 16 company; 17 ‘‘(C) achieves the objectives of subsection 18 (b); and 19 ‘‘(D) ensures that the depository institu20 tion holding company and the subsidiaries of 21 the depository institution holding company are 22 not subject to conflicting supervisory demands 23 by such agency and the Board. 24 ‘‘(4) FEE PERMITTED FOR EXAMINATION 25 COSTS.—An appropriate Federal banking agency 620 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 that conducts an examination or enforcement action 2 pursuant to this section may collect an assessment, 3 fee, or such other charge from the subsidiary as the 4 appropriate Federal banking agency determines nec5 essary or appropriate to carry out the responsibil6 ities of the appropriate Federal banking agency in 7 connection with such examination. 8 ‘‘(e) REFERRALS FOR ENFORCEMENT BY APPRO9 PRIATE FEDERAL BANKING AGENCY.— 10 ‘‘(1) RECOMMENDATION OF ENFORCEMENT AC11 TION.—The appropriate Federal banking agency for 12 the lead insured depository institution, based upon 13 its examination of a nondepository institution sub14 sidiary conducted pursuant to subsection (d), or 15 other relevant information, may submit to the 16 Board, in writing, a recommendation that the Board 17 take enforcement action against such nondepository 18 institution subsidiary, together with an explanation 19 of the concerns giving rise to the recommendation, 20 if the appropriate Federal banking agency deter21 mines (by a vote of its members, if applicable) that 22 the activities of the nondepository institution sub23 sidiary pose a material threat to the safety and 24 soundness of any insured depository institution sub621 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 sidiary of the depository institution holding com2 pany. 3 ‘‘(2) BACK-UP AUTHORITY OF THE APPRO4 PRIATE FEDERAL BANKING AGENCY.—If, within the 5 60-day period beginning on the date on which the 6 Board receives a recommendation under paragraph 7 (1), the Board does not take enforcement action 8 against the nondepository institution subsidiary or 9 provide a plan for supervisory or enforcement action 10 that is acceptable to the appropriate Federal bank11 ing agency that made the recommendation pursuant 12 to paragraph (1), such agency may take the rec13 ommended enforcement action against the non14 depository institution subsidiary, in the same man15 ner as if the nondepository institution subsidiary 16 were an insured depository institution for which the 17 agency was the appropriate Federal banking agency. 18 ‘‘(f) COORDINATION AMONG APPROPRIATE FEDERAL 19 BANKING AGENCIES.—Each Federal banking agency, 20 prior to or when exercising authority under subsection (d) 21 or (e) shall— 22 ‘‘(1) provide reasonable notice to, and consult 23 with, the appropriate Federal banking agency or 24 State bank supervisor (or other State regulatory 25 agency) of the nondepository institution subsidiary 622 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 of a depository institution holding company that is 2 described in subsection (d) before commencing any 3 examination of the subsidiary; 4 ‘‘(2) to the fullest extent possible— 5 ‘‘(A) rely on the examinations, inspections, 6 and reports of the appropriate Federal banking 7 agency or the State bank supervisor (or other 8 State regulatory agency) of the subsidiary; 9 ‘‘(B) avoid duplication of examination ac10 tivities, reporting requirements, and requests 11 for information; and 12 ‘‘(C) ensure that the depository institution 13 holding company and the subsidiaries of the de14 pository institution holding company are not 15 subject to conflicting supervisory demands by 16 the appropriate Federal banking agencies. 17 ‘‘(g) RULE OF CONSTRUCTION.—No provision of this 18 section shall be construed as limiting any authority of the 19 Board, the Corporation, or the Comptroller of the Cur20 rency under any other provision of law.’’. 21 (b) EFFECTIVE DATE.—The amendment made by 22 subsection (a) shall take effect on the transfer date. 623 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 SEC. 606. REQUIREMENTS FOR FINANCIAL HOLDING COM2 PANIES TO REMAIN WELL CAPITALIZED AND 3 WELL MANAGED. 4 (a) AMENDMENT.—Section 4(l)(1) of the Bank Hold5 ing Company Act of 1956 (12 U.S.C. 1843(l)(1)) is 6 amended— 7 (1) in subparagraph (B), by striking ‘‘and’’ at 8 the end; 9 (2) by redesignating subparagraph (C) as sub10 paragraph (D); 11 (3) by inserting after subparagraph (B) the fol12 lowing: 13 ‘‘(C) the bank holding company is well 14 capitalized and well managed; and’’; and 15 (4) in subparagraph (D)(ii), as so redesignated, 16 by striking ‘‘subparagraphs (A) and (B)’’ and insert17 ing ‘‘subparagraphs (A), (B), and (C)’’. 18 (b) HOME OWNERS’ LOAN ACT AMENDMENT.—Sec19 tion 10(c)(2) of the Home Owners’ Loan Act (12 U.S.C. 20 1467a(c)(2)) is amended by adding at the end the fol21 lowing new subparagraph: 22 ‘‘(H) Any activity that is permissible for a 23 financial holding company (as such term is de24 fined under section 2(p) of the Bank Holding 25 Company Act of 1956 (12 U.S.C. 1841(p)) to 624 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 conduct under section 4(k) of the Bank Holding 2 Company Act of 1956 if— 3 ‘‘(i) the savings and loan holding com4 pany meets all of the criteria to qualify as 5 a financial holding company, and complies 6 with all of the requirements applicable to a 7 financial holding company, under sections 8 4(l) and 4(m) of the Bank Holding Com9 pany Act and section 804(c) of the Com10 munity Reinvestment Act of 1977 (12 11 U.S.C. 2903(c)) as if the savings and loan 12 holding company was a bank holding com13 pany; and 14 ‘‘(ii) the savings and loan holding 15 company conducts the activity in accord16 ance with the same terms, conditions, and 17 requirements that apply to the conduct of 18 such activity by a bank holding company 19 under the Bank Holding Company Act of 20 1956 and the Board’s regulations and in21 terpretations under such Act.’’. 22 (c) EFFECTIVE DATE.—The amendments made by 23 this section shall take effect on the transfer date. 625 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 SEC. 607. STANDARDS FOR INTERSTATE ACQUISITIONS. 2 (a) ACQUISITION OF BANKS.—Section 3(d)(1)(A) of 3 the Bank Holding Company Act of 1956 (12 U.S.C. 4 1842(d)(1)(A)) is amended by striking ‘‘adequately cap5 italized and adequately managed’’ and inserting ‘‘well cap6 italized and well managed’’. 7 (b) INTERSTATE BANK MERGERS.—Section 8 44(b)(4)(B) of the Federal Deposit Insurance Act (12 9 U.S.C. 1831u(b)(4)(B)) is amended by striking ‘‘will con10 tinue to be adequately capitalized and adequately man11 aged’’ and inserting ‘‘will be well capitalized and well man12 aged’’. 13 (c) EFFECTIVE DATE.—The amendments made by 14 this section shall take effect on the transfer date. 15 SEC. 608. ENHANCING EXISTING RESTRICTIONS ON BANK 16 TRANSACTIONS WITH AFFILIATES. 17 (a) AFFILIATE TRANSACTIONS.—Section 23A of the 18 Federal Reserve Act (12 U.S.C. 371c) is amended— 19 (1) in subsection (b)— 20 (A) in paragraph (1), by striking subpara21 graph (D) and inserting the following: 22 ‘‘(D) any investment fund with respect to 23 which a member bank or affiliate thereof is an 24 investment adviser; and’’; and 25 (B) in paragraph (7)— 626 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 (i) in subparagraph (A), by inserting 2 before the semicolon at the end the fol3 lowing: ‘‘, including a purchase of assets 4 subject to an agreement to repurchase’’; 5 (ii) in subparagraph (C), by striking 6 ‘‘, including assets subject to an agreement 7 to repurchase,’’; 8 (iii) in subparagraph (D)— 9 (I) by inserting ‘‘or other debt 10 obligations’’ after ‘‘acceptance of secu11 rities’’; and 12 (II) by striking ‘‘or’’ at the end; 13 and 14 (iv) by adding at the end the fol15 lowing: 16 ‘‘(F) a transaction with an affiliate that 17 involves the borrowing or lending of securities, 18 to the extent that the transaction causes a 19 member bank or a subsidiary to have credit ex20 posure to the affiliate; or 21 ‘‘(G) a derivative transaction, as defined in 22 paragraph (3) of section 5200(b) of the Revised 23 Statutes of the United States (12 U.S.C. 24 84(b)), with an affiliate, to the extent that the 627 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 transaction causes a member bank or a sub2 sidiary to have credit exposure to the affiliate;’’; 3 (2) in subsection (c)— 4 (A) in paragraph (1)— 5 (i) in the matter preceding subpara6 graph (A), by striking ‘‘subsidiary’’ and all 7 that follows through ‘‘time of the trans8 action’’ and inserting ‘‘subsidiary, and any 9 credit exposure of a member bank or a 10 subsidiary to an affiliate resulting from a 11 securities borrowing or lending transaction, 12 or a derivative transaction, shall be se13 cured at all times’’; and 14 (ii) in each of subparagraphs (A) 15 through (D), by striking ‘‘or letter of cred16 it’’ and inserting ‘‘letter of credit, or credit 17 exposure’’; 18 (B) by striking paragraph (2); 19 (C) by redesignating paragraphs (3) 20 through (5) as paragraphs (2) through (4), re21 spectively; 22 (D) in paragraph (2), as so redesignated, 23 by inserting before the period at the end ‘‘, or 24 credit exposure to an affiliate resulting from a 628 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 securities borrowing or lending transaction, or 2 derivative transaction’’; and 3 (E) in paragraph (3), as so redesignated— 4 (i) by inserting ‘‘or other debt obliga5 tions’’ after ‘‘securities’’; and 6 (ii) by striking ‘‘or guarantee’’ and all 7 that follows through ‘‘behalf of,’’ and in8 serting ‘‘guarantee, acceptance, or letter of 9 credit issued on behalf of, or credit expo10 sure from a securities borrowing or lending 11 transaction, or derivative transaction to,’’; 12 (3) in subsection (d)(4), in the matter pre13 ceding subparagraph (A), by striking ‘‘or issuing’’ 14 and all that follows through ‘‘behalf of,’’ and insert15 ing ‘‘issuing a guarantee, acceptance, or letter of 16 credit on behalf of, or having credit exposure result17 ing from a securities borrowing or lending trans18 action, or derivative transaction to,’’; and 19 (4) in subsection (f)— 20 (A) in paragraph (2)— 21 (i) by striking ‘‘or order’’; 22 (ii) by striking ‘‘if it finds’’ and all 23 that follows through the end of the para24 graph and inserting the following: ‘‘if— 629 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 ‘‘(i) the Board finds the exemption to 2 be in the public interest and consistent 3 with the purposes of this section, and noti4 fies the Federal Deposit Insurance Cor5 poration of such finding; and 6 ‘‘(ii) before the end of the 60-day pe7 riod beginning on the date on which the 8 Federal Deposit Insurance Corporation re9 ceives notice of the finding under clause 10 (i), the Federal Deposit Insurance Cor11 poration does not object, in writing, to the 12 finding, based on a determination that the 13 exemption presents an unacceptable risk to 14 the Deposit Insurance Fund.’’; 15 (iii) by striking the Board and insert16 ing the following: 17 ‘‘(A) IN GENERAL.—The Board’’; and 18 (iv) by adding at the end the fol19 lowing: 20 ‘‘(B) ADDITIONAL EXEMPTIONS.— 21 ‘‘(i) NATIONAL BANKS.—The Comp22 troller of the Currency may, by order, ex23 empt a transaction of a national bank from 24 the requirements of this section if— 630 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 ‘‘(I) the Board and the Office of 2 the Comptroller of the Currency joint3 ly find the exemption to be in the 4 public interest and consistent with the 5 purposes of this section and notify the 6 Federal Deposit Insurance Corpora7 tion of such finding; and 8 ‘‘(II) before the end of the 60- 9 day period beginning on the date on 10 which the Federal Deposit Insurance 11 Corporation receives notice of the 12 finding under subclause (I), the Fed13 eral Deposit Insurance Corporation 14 does not object, in writing, to the 15 finding, based on a determination that 16 the exemption presents an unaccept17 able risk to the Deposit Insurance 18 Fund. 19 ‘‘(ii) STATE BANKS.—The Federal 20 Deposit Insurance Corporation may, by 21 order, exempt a transaction of a State non22 member bank, and the Board may, by 23 order, exempt a transaction of a State 24 member bank, from the requirements of 25 this section if— 631 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 ‘‘(I) the Board and the Federal 2 Deposit Insurance Corporation jointly 3 find that the exemption is in the pub4 lic interest and consistent with the 5 purposes of this section; and 6 ‘‘(II) the Federal Deposit Insur7 ance Corporation finds that the ex8 emption does not present an unaccept9 able risk to the Deposit Insurance 10 Fund.’’; and 11 (B) by adding at the end the following: 12 ‘‘(4) AMOUNTS OF COVERED TRANSACTIONS.— 13 The Board may issue such regulations or interpreta14 tions as the Board determines are necessary or ap15 propriate with respect to the manner in which a net16 ting agreement may be taken into account in deter17 mining the amount of a covered transaction between 18 a member bank or a subsidiary and an affiliate, in19 cluding the extent to which netting agreements be20 tween a member bank or a subsidiary and an affil21 iate may be taken into account in determining 22 whether a covered transaction is fully secured for 23 purposes of subsection (d)(4). An interpretation 24 under this paragraph with respect to a specific mem25 ber bank, subsidiary, or affiliate shall be issued 632 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 jointly with the appropriate Federal banking agency 2 for such member bank, subsidiary, or affiliate.’’. 3 (b) TRANSACTIONS WITH AFFILIATES.—Section 4 23B(e) of the Federal Reserve Act (12 U.S.C. 371c–1(e)) 5 is amended— 6 (1) by striking the undesignated matter fol7 lowing subparagraph (B); 8 (2) by redesignating subparagraphs (A) and 9 (B) as clauses (i) and (ii), respectively, and adjust10 ing the clause margins accordingly; 11 (3) by redesignating paragraphs (1) and (2) as 12 subparagraphs (A) and (B), respectively, and adjust13 ing the subparagraph margins accordingly; 14 (4) by striking ‘‘The Board’’ and inserting the 15 following: 16 ‘‘(1) IN GENERAL.—The Board’’; 17 (5) in paragraph (1)(B), as so redesignated— 18 (A) in the matter preceding clause (i), by 19 inserting before ‘‘regulations’’ the following: 20 ‘‘subject to paragraph (2), if the Board finds 21 that an exemption or exclusion is in the public 22 interest and is consistent with the purposes of 23 this section, and notifies the Federal Deposit 24 Insurance Corporation of such finding,’’; and 633 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 (B) in clause (ii), by striking the comma at 2 the end and inserting a period; and 3 (6) by adding at the end the following: 4 ‘‘(2) EXCEPTION.—The Board may grant an 5 exemption or exclusion under this subsection only if, 6 during the 60-day period beginning on the date of 7 receipt of notice of the finding from the Board 8 under paragraph (1)(B), the Federal Deposit Insur9 ance Corporation does not object, in writing, to such 10 exemption or exclusion, based on a determination 11 that the exemption presents an unacceptable risk to 12 the Deposit Insurance Fund.’’. 13 (c) HOME OWNERS’ LOAN ACT.—Section 11 of the 14 Home Owners’ Loan Act (12 U.S.C. 1468) is amended 15 by adding at the end the following: 16 ‘‘(d) EXEMPTIONS.— 17 ‘‘(1) FEDERAL SAVINGS ASSOCIATIONS.—The 18 Comptroller of the Currency may, by order, exempt 19 a transaction of a Federal savings association from 20 the requirements of this section if— 21 ‘‘(A) the Board and the Office of the 22 Comptroller of the Currency jointly find the ex23 emption to be in the public interest and con24 sistent with the purposes of this section and no634 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 tify the Federal Deposit Insurance Corporation 2 of such finding; and 3 ‘‘(B) before the end of the 60-day period 4 beginning on the date on which the Federal De5 posit Insurance Corporation receives notice of 6 the finding under subparagraph (A), the Fed7 eral Deposit Insurance Corporation does not ob8 ject, in writing, to the finding, based on a de9 termination that the exemption presents an un10 acceptable risk to the Deposit Insurance Fund. 11 ‘‘(2) STATE SAVINGS ASSOCIATION.—The Fed12 eral Deposit Insurance Corporation may, by order, 13 exempt a transaction of a State savings association 14 from the requirements of this section if the Board 15 and the Federal Deposit Insurance Corporation 16 jointly find that— 17 ‘‘(A) the exemption is in the public interest 18 and consistent with the purposes of this section; 19 and 20 ‘‘(B) the exemption does not present an 21 unacceptable risk to the Deposit Insurance 22 Fund.’’. 23 (d) EFFECTIVE DATE.—The amendments made by 24 this section shall take effect 1 year after the transfer date. 635 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 SEC. 609. ELIMINATING EXCEPTIONS FOR TRANSACTIONS 2 WITH FINANCIAL SUBSIDIARIES. 3 (a) AMENDMENT.—Section 23A(e) of the Federal Re4 serve Act (12 U.S.C. 371c(e)) is amended— 5 (1) by striking paragraph (3); and 6 (2) by redesignating paragraph (4) as para7 graph (3). 8 (b) PROSPECTIVE APPLICATION OF AMENDMENT.— 9 The amendments made by this section shall apply with 10 respect to any covered transaction between a bank and 11 a subsidiary of the bank, as those terms are defined in 12 section 23A of the Federal Reserve Act (12 U.S.C. 371c), 13 that is entered into on or after the date of enactment of 14 this Act. 15 (c) EFFECTIVE DATE.—The amendments made by 16 this section shall take effect 1 year after the transfer date. 17 SEC. 610. LENDING LIMITS APPLICABLE TO CREDIT EXPO18 SURE ON DERIVATIVE TRANSACTIONS, RE19 PURCHASE AGREEMENTS, REVERSE REPUR20 CHASE AGREEMENTS, AND SECURITIES 21 LENDING AND BORROWING TRANSACTIONS. 22 (a) NATIONAL BANKS.—Section 5200(b) of the Re23 vised Statutes of the United States (12 U.S.C. 84(b)) is 24 amended— 25 (1) in paragraph (1), by striking ‘‘shall in26 clude’’ and all that follows through the end of the 636 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 paragraph and inserting the following: ‘‘shall in2 clude— 3 ‘‘(A) all direct or indirect advances of 4 funds to a person made on the basis of any ob5 ligation of that person to repay the funds or re6 payable from specific property pledged by or on 7 behalf of the person; 8 ‘‘(B) to the extent specified by the Comp9 troller of the Currency, any liability of a na10 tional banking association to advance funds to 11 or on behalf of a person pursuant to a contrac12 tual commitment; and 13 ‘‘(C) any credit exposure to a person aris14 ing from a derivative transaction, repurchase 15 agreement, reverse repurchase agreement, secu16 rities lending transaction, or securities bor17 rowing transaction between the national bank18 ing association and the person;’’; 19 (2) in paragraph (2), by striking the period at 20 the end and inserting ‘‘; and’’; and 21 (3) by adding at the end the following: 22 ‘‘(3) the term ‘derivative transaction’ includes 23 any transaction that is a contract, agreement, swap, 24 warrant, note, or option that is based, in whole or 25 in part, on the value of, any interest in, or any 637 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 quantitative measure or the occurrence of any event 2 relating to, one or more commodities, securities, cur3 rencies, interest or other rates, indices, or other as4 sets.’’. 5 (b) SAVINGS ASSOCIATIONS.—Section 5(u)(3) of the 6 Home Owners’ Loan Act (12 U.S.C. 1464(u)(3)) is 7 amended by striking ‘‘Director’’ each place that term ap8 pears and inserting ‘‘Comptroller of the Currency’’. 9 (c) EFFECTIVE DATE.—The amendments made by 10 this section shall take effect 1 year after the transfer date. 11 SEC. 611. CONSISTENT TREATMENT OF DERIVATIVE TRANS12 ACTIONS IN LENDING LIMITS. 13 (a) AMENDMENT.—Section 18 of the Federal Deposit 14 Insurance Act (12 U.S.C. 1828) is amended by adding at 15 the end the following: 16 ‘‘(y) STATE LENDING LIMIT TREATMENT OF DE17 RIVATIVES TRANSACTIONS.—An insured State bank may 18 engage in a derivative transaction, as defined in section 19 5200(b)(3) of the Revised Statutes of the United States 20 (12 U.S.C. 84(b)(3)), only if the law with respect to lend21 ing limits of the State in which the insured State bank 22 is chartered takes into consideration credit exposure to de23 rivative transactions.’’. 638 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 (b) EFFECTIVE DATE.—The amendment made by 2 this section shall take effect 18 months after the transfer 3 date. 4 SEC. 612. RESTRICTION ON CONVERSIONS OF TROUBLED 5 BANKS. 6 (a) CONVERSION OF A NATIONAL BANKING ASSOCIA7 TION.—The Act entitled ‘‘An Act to provide for the con8 version of national banking associations into and their 9 merger or consolidation with State banks, and for other 10 purposes.’’ (12 U.S.C. 214 et seq.) is amended by adding 11 at the end the following: 12 ‘‘SEC. 10. PROHIBITION ON CONVERSION. 13 ‘‘A national banking association may not convert to 14 a State bank or State savings association during any pe15 riod in which the national banking association is subject 16 to a cease and desist order (or other formal enforcement 17 order) issued by, or a memorandum of understanding en18 tered into with, the Comptroller of the Currency with re19 spect to a significant supervisory matter.’’. 20 (b) CONVERSION OF A STATE BANK OR SAVINGS AS21 SOCIATION.—Section 5154 of the Revised Statutes of the 22 United States (12 U.S.C. 35) is amended by adding at 23 the end the following: ‘‘The Comptroller of the Currency 24 may not approve the conversion of a State bank or State 25 savings association to a national banking association or 639 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 Federal savings association during any period in which the 2 State bank or State savings association is subject to a 3 cease and desist order (or other formal enforcement order) 4 issued by, or a memorandum of understanding entered 5 into with, a State bank supervisor or the appropriate Fed6 eral banking agency with respect to a significant super7 visory matter or a final enforcement action by a State At8 torney General.’’. 9 (c) CONVERSION OF A FEDERAL SAVINGS ASSOCIA10 TION.—Section 5(i) of the Home Owners’ Loan Act (12 11 U.S.C. 1464(i)) is amended by adding at the end the fol12 lowing: 13 ‘‘(6) LIMITATION ON CERTAIN CONVERSIONS BY 14 FEDERAL SAVINGS ASSOCIATIONS.—A Federal sav15 ings association may not convert to a State bank or 16 State savings association during any period in which 17 the Federal savings association is subject to a cease 18 and desist order (or other formal enforcement order) 19 issued by, or a memorandum of understanding en20 tered into with, the Office of Thrift Supervision or 21 the Comptroller of the Currency with respect to a 22 significant supervisory matter.’’. 23 (d) EXCEPTION.—The prohibition on the approval of 24 conversions under the amendments made by subsections 25 (a), (b), and (c) shall not apply, if— 640 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 (1) the Federal banking agency that would be 2 the appropriate Federal banking agency after the 3 proposed conversion gives the appropriate Federal 4 banking agency or State bank supervisor that issued 5 the cease and desist order (or other formal enforce6 ment order) or memorandum of understanding, as 7 appropriate, written notice of the proposed conver8 sion including a plan to address the significant su9 pervisory matter in a manner that is consistent with 10 the safe and sound operation of the institution; 11 (2) within 30 days of receipt of the written no12 tice required under paragraph (1), the appropriate 13 Federal banking agency or State bank supervisor 14 that issued the cease and desist order (or other for15 mal enforcement order) or memorandum of under16 standing, as appropriate, does not object to the con17 version or the plan to address the significant super18 visory matter; 19 (3) after conversion of the insured depository 20 institution, the appropriate Federal banking agency 21 after the conversion implements such plan; and 22 (4) in the case of a final enforcement action by 23 a State Attorney General, approval of the conversion 24 is conditioned on compliance by the insured deposi641 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 tory institution with the terms of such final enforce2 ment action. 3 (e) NOTIFICATION OF PENDING ENFORCEMENT AC4 TIONS.— 5 (1) COPY OF CONVERSION APPLICATION.—At 6 the time an insured depository institution files a 7 conversion application, the insured depository insti8 tution shall transmit a copy of the conversion appli9 cation to— 10 (A) the appropriate Federal banking agen11 cy for the insured depository institution; and 12 (B) the Federal banking agency that would 13 be the appropriate Federal banking agency of 14 the insured depository institution after the pro15 posed conversion. 16 (2) NOTIFICATION AND ACCESS TO INFORMA17 TION.—Upon receipt of a copy of the application de18 scribed in paragraph (1), the appropriate Federal 19 banking agency for the insured depository institution 20 proposing the conversion shall— 21 (A) notify the Federal banking agency that 22 would be the appropriate Federal banking agen23 cy for the institution after the proposed conver24 sion in writing of any ongoing supervisory or 25 investigative proceedings that the appropriate 642 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 Federal banking agency for the institution pro2 posing to convert believes is likely to result, in 3 the near term and absent the proposed conver4 sion, in a cease and desist order (or other for5 mal enforcement order) or memorandum of un6 derstanding with respect to a significant super7 visory matter; and 8 (B) provide the Federal banking agency 9 that would be the appropriate Federal banking 10 agency for the institution after the proposed 11 conversion access to all investigative and super12 visory information relating to the proceedings 13 described in subparagraph (A). 14 SEC. 613. DE NOVO BRANCHING INTO STATES. 15 (a) NATIONAL BANKS.—Section 5155(g)(1)(A) of the 16 Revised Statutes of the United States (12 U.S.C. 17 36(g)(1)(A)) is amended to read as follows: 18 ‘‘(A) the law of the State in which the 19 branch is located, or is to be located, would per20 mit establishment of the branch, if the national 21 bank were a State bank chartered by such 22 State; and’’. 23 (b) STATE INSURED BANKS.—Section 18(d)(4)(A)(i) 24 of the Federal Deposit Insurance Act (12 U.S.C. 25 1828(d)(4)(A)(i)) is amended to read as follows: 643 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 ‘‘(i) the law of the State in which the 2 branch is located, or is to be located, would 3 permit establishment of the branch, if the 4 bank were a State bank chartered by such 5 State; and’’. 6 SEC. 614. LENDING LIMITS TO INSIDERS. 7 (a) EXTENSIONS OF CREDIT.—Section 8 22(h)(9)(D)(i) of the Federal Reserve Act (12 U.S.C. 9 375b(9)(D)(i)) is amended— 10 (1) by striking the period at the end and insert11 ing ‘‘; or’’; 12 (2) by striking ‘‘a person’’ and inserting ‘‘the 13 person’’; 14 (3) by striking ‘‘extends credit by making’’ and 15 inserting the following: ‘‘extends credit to a person 16 by— 17 ‘‘(I) making’’; and 18 (4) by adding at the end the following: 19 ‘‘(II) having credit exposure to 20 the person arising from a derivative 21 transaction (as defined in section 22 5200(b) of the Revised Statutes of the 23 United States (12 U.S.C. 84(b))), re24 purchase agreement, reverse repur25 chase agreement, securities lending 644 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 transaction, or securities borrowing 2 transaction between the member bank 3 and the person.’’. 4 (b) EFFECTIVE DATE.—The amendments made by 5 this section shall take effect 1 year after the transfer date. 6 SEC. 615. LIMITATIONS ON PURCHASES OF ASSETS FROM 7 INSIDERS. 8 (a) AMENDMENT TO THE FEDERAL DEPOSIT INSUR9 ANCE ACT.—Section 18 of the Federal Deposit Insurance 10 Act (12 U.S.C. 1828) is amended by adding at the end 11 the following: 12 ‘‘(z) GENERAL PROHIBITION ON SALE OF ASSETS.— 13 ‘‘(1) IN GENERAL.—An insured depository in14 stitution may not purchase an asset from, or sell an 15 asset to, an executive officer, director, or principal 16 shareholder of the insured depository institution, or 17 any related interest of such person (as such terms 18 are defined in section 22(h) of Federal Reserve Act), 19 unless— 20 ‘‘(A) the transaction is on market terms; 21 and 22 ‘‘(B) if the transaction represents more 23 than 10 percent of the capital stock and surplus 24 of the insured depository institution, the trans25 action has been approved in advance by a ma645 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 jority of the members of the board of directors 2 of the insured depository institution who do not 3 have an interest in the transaction. 4 ‘‘(2) RULEMAKING.—The Board of Governors 5 of the Federal Reserve System may issue such rules 6 as may be necessary to define terms and to carry 7 out the purposes this subsection. Before proposing 8 or adopting a rule under this paragraph, the Board 9 of Governors of the Federal Reserve System shall 10 consult with the Comptroller of the Currency and 11 the Corporation as to the terms of the rule.’’. 12 (b) AMENDMENTS TO THE FEDERAL RESERVE 13 ACT.—Section 22(d) of the Federal Reserve Act (12 14 U.S.C. 375) is amended to read as follows: 15 ‘‘(d) [Reserved]’’. 16 (c) EFFECTIVE DATE.—The amendments made by 17 this section shall take effect on the transfer date. 18 SEC. 616. REGULATIONS REGARDING CAPITAL LEVELS. 19 (a) CAPITAL LEVELS OF BANK HOLDING COMPA20 NIES.—Section 5(b) of the Bank Holding Company Act 21 of 1956 (12 U.S.C. 1844(b)) is amended— 22 (1) by inserting after ‘‘orders’’ the following: ‘‘, 23 including regulations and orders relating to the cap24 ital requirements for bank holding companies,’’; and 646 O:WRIWRI10950.xml [file 6 of 17] S.L.C 1 (2) by adding at the end the following: ‘‘In es2 tablishing capital regulations pursuant to this sub3 section, the Board shall seek to make such require4 ments countercyclical, so that the amount of capital 5 required to be maintained by a company increases in 6 times of economic expansion and decreases in times 7