financial reform draft bill

8/9/2019 Financial Reform Draft Bill

1/1968

O:\AYO\ AYO10F74.xml [file 1 of 26] S.L.C

CONFERENCE BASE TEXT (HR 4173):

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.1

(a) SHORT TITLE.This Act may be cited as the2

Restoring American Financial Stability Act of 2010.3

(b) T ABLE OF CONTENTS.The table of contents for4

this Act is as follows:5

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 IFINANCIAL STABILITY

Sec. 101. Short title.


Subtitle AFinancial 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 fi-

nancial 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 compa-

nies.

Sec. 118. Council funding.

Sec. 119. Resolution of supervisory jurisdictional disputes among member agen-

cies.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.

Subtitle BOffice of Financial Research


Sec. 152. Office of Financial Research established.

Sec. 153. Purpose and duties of the Office.


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Sec. 154. Organizational structure; responsibilities of primary programmatic

units.

Sec. 155. Funding.

Sec. 156. Transition oversight.

Subtitle CAdditional Board of Governors Authority for Certain Nonbank

Financial Companies and Bank Holding CompaniesSec. 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.

TITLE IIORDERLY LIQUIDATION AUTHORITY


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.

TITLE IIITRANSFER OF POWERS TO THE COMPTROLLER OF

THE CURRENCY, THE CORPORATION, AND THE BOARD OF GOV-

ERNORS


Sec. 301. Purposes.Sec. 302. Definition.

Subtitle ATransfer 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.


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Sec. 317. References in Federal law to Federal banking agencies.

Sec. 318. Funding.

Sec. 319. Contracting and leasing authority.

Subtitle BTransitional 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.

Subtitle CFederal Deposit Insurance Corporation

Sec. 331. Deposit insurance reforms.

Sec. 332. Management of the Federal Deposit Insurance Corporation.

Subtitle DOther Matters

Sec. 341. Branching.

Sec. 342. Office of Minority and Women Inclusion.

Subtitle ETechnical and Conforming Amendments


Sec. 352. Alternative Mortgage Transaction Parity Act of 1982.

Sec. 353. Balanced Budget and Emergency Deficit Control Act of 1985.

Sec. 354. Bank Enterprise Act of 1991.

Sec. 355. Bank Holding Company Act of 1956.

Sec. 356. Bank Holding Company Act Amendments of 1970.

Sec. 357. Bank Protection Act of 1968.

Sec. 358. Bank Service Company Act.

Sec. 359. Community Reinvestment Act of 1977.

Sec. 360. Crime Control Act of 1990.

Sec. 361. Depository Institution Management Interlocks Act.

Sec. 362. Emergency Homeowners Relief Act.

Sec. 363. Federal Credit Union Act.

Sec. 364. Federal Deposit Insurance Act.

Sec. 365. Federal Home Loan Bank Act.

Sec. 366. Federal Housing Enterprises Financial Safety and Soundness Act of

1992.

Sec. 367. Federal Reserve Act.

Sec. 368. Financial Institutions Reform, Recovery, and Enforcement Act of

1989.

Sec. 369. Flood Disaster Protection Act of 1973.

Sec. 370. Home Owners Loan Act.

Sec. 371. Housing Act of 1948.

Sec. 372. Housing and Community Development Act of 1992.

Sec. 373. Housing and Urban-Rural Recovery Act of 1983.

Sec. 374. National Housing Act.

Sec. 375. Neighborhood Reinvestment Corporation Act.

Sec. 376. Public Law 93100.

Sec. 377. Securities Exchange Act of 1934.

Sec. 378. Title 18, United States Code.

Sec. 379. Title 31, United States Code.


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TITLE IVREGULATION OF ADVISERS TO HEDGE FUNDS AND

OTHERS



Sec. 403. Elimination of private adviser exemption; limited exemption for for-

eign 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 reg-

istration 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 VINSURANCE

Subtitle AOffice of National Insurance


Sec. 502. Establishment of Office of National Insurance.

Subtitle BState-based Insurance Reform



PART INONADMITTED INSURANCE

Sec. 521. Reporting, payment, and allocation of premium taxes.

Sec. 522. Regulation of nonadmitted insurance by insureds 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.


PART IIREINSURANCE

Sec. 531. Regulation of credit for reinsurance and reinsurance agreements.

Sec. 532. Regulation of reinsurer solvency.Sec. 533. Definitions.

PART IIIRULE OF CONSTRUCTION

Sec. 541. Rule of construction.


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Sec. 542. Severability.

TITLE VIIMPROVEMENTS TO REGULATION OF BANK AND SAV-

INGS ASSOCIATION HOLDING COMPANIES AND DEPOSITORY IN-

STITUTIONS


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 func-

tionally 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 capital-

ized 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 trans-

actions, repurchase agreements, reverse repurchase agree-

ments, and securities lending and borrowing transactions.

Sec. 611. Application of national bank lending limits to insured State banks.

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 of holding companies.

Sec. 617. Elimination of elective investment bank holding company framework.

Sec. 618. Securities holding companies.

Sec. 619. Restrictions on capital market activity by banks and bank holding

companies.Sec. 620. Concentration limits on large financial firms.

Sec. 621. Interstate merger transactions.

Sec. 622. Qualified thrift lenders.

Sec. 623. Treatment of dividends by certain mutual holding companies.

TITLE VIIWALL STREET TRANSPARENCY AND

ACCOUNTABILITY


Subtitle ARegulation of Over-the-Counter Swaps Markets

PART IREGULATORY AUTHORITY


Sec. 712. Review of regulatory authority.

Sec. 713. Recommendations for changes to portfolio margining laws.

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 CFTCSEC process.

Sec. 718. Determining status of novel derivative products.

PART IIREGULATION OF SWAP MARKETS


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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 partici-

pants.

Sec. 732. Conflicts of interest.

Sec. 733. Swap execution facilities.

Sec. 734. Derivatives transaction execution facilities and exempt boards of

trade.

Sec. 735. Designated contract markets.

Sec. 736. Margin.

Sec. 737. Position limits.

Sec. 738. Foreign boards of trade.Sec. 739. Legal certainty for swaps.

Sec. 740. Multilateral clearing organizations.

Sec. 741. Enforcement.

Sec. 742. Retail commodity transactions.

Sec. 743. Other authority.

Sec. 744. Restitution remedies.

Sec. 745. Enhanced compliance by registered entities.

Sec. 746. Insider trading.

Sec. 747. Antidisruptive practices authority.

Sec. 748. Commodity whistleblower incentives and protection.

Sec. 749. Conforming amendments.

Sec. 750. Study on oversight of carbon markets.

Sec. 751. Energy and environmental markets advisory committee.

Sec. 752. International harmonization.

Sec. 753. Antimarket manipulation authority.


Subtitle BRegulation 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 agree-

ments.

Sec. 763. Amendments to the Securities Exchange Act of 1934.

Sec. 764. Registration and regulation of security-based swap dealers and major

security-based swap participants.

Sec. 765. Rulemaking on conflict of interest.Sec. 766. Reporting and recordkeeping.

Sec. 767. State gaming and bucket shop laws.

Sec. 768. Amendments to the Securities Act of 1933; treatment of security-

based swaps.

Sec. 769. Definitions under the Investment Company Act of 1940.

Sec. 770. Definitions under the Investment Advisors Act of 1940.


Sec. 772. Jurisdiction.



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TITLE VIIIPAYMENT, CLEARING, AND SETTLEMENT

SUPERVISION


Sec. 802. Findings and purposes.


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.



TITLE IXINVESTOR PROTECTIONS AND IMPROVEMENTS TO

THE REGULATION OF SECURITIES


Subtitle AIncreasing Investor Protection

Sec. 911. Investor Advisory Committee established.

Sec. 912. Clarification of authority of the Commission to engage in investor

testing.

Sec. 913. Study and rulemaking regarding obligations of brokers, dealers, and

investment advisers.

Sec. 914. Office of the Investor Advocate.

Sec. 915. Streamlining of filing procedures for self-regulatory organizations.

Sec. 916. Study regarding financial literacy among investors.Sec. 917. Study regarding mutual fund advertising.

Sec. 918. Clarification of Commission authority to require investor disclosures

before purchase of investment products and services.

Sec. 919. Study on conflicts of interest.

Sec. 919A. Study on improved investor access to information on investment ad-

visers and broker-dealers.

Sec. 919B. Study on financial planners and the use of financial designations.

Subtitle BIncreasing Regulatory Enforcement and Remedies

Sec. 921. Authority to issue rules related to mandatory predispute 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 offer-

ings.

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.


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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 In-

vestment Company Act.

Sec. 929N. Authority to impose penalties for aiding and abetting violations of

the Investment Advisers Act.

Subtitle CImprovements 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. Securities and Exchange Commission study on strengthening credit

rating agency independence.

Sec. 939B. Government Accountability Office study on alternative business

models.Sec. 939C. Government Accountability Office study on the creation of an inde-

pendent professional analyst organization.

Sec. 939D. Initial credit rating assignments.

Subtitle DImprovements 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.

Subtitle EAccountability 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. Excessive compensation by holding companies of depository institu-

tions.

Sec. 957. Voting by brokers.


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Subtitle FImprovements to the Management of the Securities and

Exchange Commission

Sec. 961. Report and certification of internal supervisory controls.

Sec. 962. Triennial report on personnel management.

Sec. 963. Annual financial controls audit.

Sec. 964. Report on oversight of national securities associations.

Sec. 965. Compliance examiners.

Sec. 966. Suggestion program for employees of the Commission.

Subtitle GStrengthening Corporate Governance

Sec. 971. Election of directors by majority vote in uncontested elections.

Sec. 972. Proxy access.

Sec. 973. Disclosures regarding chairman and CEO structures.

Subtitle HMunicipal 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 in-vestors.

Sec. 977. Government Accountability Office study on the municipal securities

markets.

Sec. 978. Study of funding for Government Accounting Standards Board.

Sec. 979. Commission Office of Municipal Securities.

Subtitle IPublic 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 Hold-

ing 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.

Subtitle JSelf-funding of the Securities and Exchange Commission

Sec. 991. Securities and Exchange Commission self-funding.

TITLE XBUREAU OF CONSUMER FINANCIAL PROTECTION



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Subtitle ABureau 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.


Subtitle BGeneral 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 authori-

ties.

Sec. 1028. Authority to restrict mandatory pre-dispute arbitration.


Subtitle CSpecific 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.


Subtitle DPreservation 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 subsidi-

aries.

Sec. 1046. State law preemption standards for Federal savings associations and

subsidiaries clarified.

Sec. 1047. Visitorial standards for national banks and savings associations.


Subtitle EEnforcement Powers


Sec. 1052. Investigations and administrative discovery.

Sec. 1053. Hearings and adjudication proceedings.

Sec. 1054. Litigation authority.


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Sec. 1055. Relief available.

Sec. 1056. Referrals for criminal proceedings.

Sec. 1057. Employee protection.


Subtitle FTransfer 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 GRegulatory Improvements

Sec. 1071. Small business data collection.

Sec. 1072. GAO study on the effectiveness and impact of various appraisal

methods.

Sec. 1073. Assistance for economically vulnerable individuals and families.Sec. 1074. Remittance transfers.

Sec. 1075. Department of the Treasury study on ending the conservatorship of

Fannie Mae, Freddie Mac, and reforming the housing finance

system.

Sec. 1076. Reasonable fees and rules for payment card transactions.

Sec. 1077. Use of consumer reports.

Sec. 1078. Report on private education loans and private educational lenders.

Sec. 1079. Study and report on credit scores.

Subtitle HConforming 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 Ac-

curate 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 Gramm-Leach-Bliley Act.Sec. 1093. Amendments to the Home Mortgage Disclosure Act of 1975.

Sec. 1094. Amendments to the Homeowners Protection Act of 1998.

Sec. 1095. Amendments to the Home Ownership and Equity Protection Act of

1994.

Sec. 1096. Amendments to the Omnibus Appropriations Act, 2009.

Sec. 1097. Amendments to the Real Estate Settlement Procedures Act of 1974.

Sec. 1098. Amendments to the Right to Financial Privacy Act of 1978.

Sec. 1099. Amendments to the Secure and Fair Enforcement for Mortgage Li-

censing Act of 2008.


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Sec. 1099A. Amendments to the Truth in Lending Act.

Sec. 1099B. Amendments to the Truth in Savings Act.

Sec. 1099C. Amendments to the Telemarketing and Consumer Fraud and

Abuse Prevention Act.

Sec. 1099D. Amendments to the Paperwork Reduction Act.

Sec. 1099E. Adjustments for inflation in the Truth in Lending Act.

Sec. 1099F. Small business fairness and regulatory transparency.Sec. 1099G. Effective date.

TITLE XIFEDERAL 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 govern-

ance.

Sec. 1108. Federal Reserve Act amendments on supervision and regulation pol-

icy.

Sec. 1109. GAO audit of the Federal Reserve facilities; publication of Board ac-

tions.

TITLE XIIIMPROVING ACCESS TO MAINSTREAM FINANCIAL

INSTITUTIONS


Sec. 1202. Purpose.


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. 1210. Evaluation and reports to Congress.

TITLE XIIIPAY IT BACK ACT


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 XIVMORTGAGE REFORM AND ANTI-PREDATORY

LENDING ACT

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

Subtitle AResidential Mortgage Loan Origination Standards


Sec. 1402. Residential mortgage loan origination.

Sec. 1403. Prohibition on steering incentives.


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Sec. 1404. Liability.


Sec. 1406. Study of shared appreciation mortgages.

Subtitle BMinimum Standards For Mortgages

Sec. 1411. Ability to repay.

Sec. 1412. Net tangible benefit for refinancing of residential mortgage loans.Sec. 1413. Safe harbor and rebuttable presumption.

Sec. 1414. Defense to foreclosure.

Sec. 1415. Additional standards and requirements.

Sec. 1416. Rule of construction.


Sec. 1418. Amendments to civil liability provisions.

Sec. 1419. Lender rights in the context of borrower deception.

Sec. 1420. Six-month notice required before reset of hybrid adjustable rate

mortgages.

Sec. 1421. Required disclosures.

Sec. 1422. Disclosures required in monthly statements for residential mortgage

loans.


Sec. 1424. Report by the GAO.

Sec. 1425. State attorney general enforcement authority.

Subtitle CHigh-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 DOffice of Housing Counseling


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 pro-

grams.

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 EMortgage 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.


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Subtitle FAppraisal Activities

Sec. 1471. Property appraisal requirements.

Sec. 1472. Unfair and deceptive practices and acts relating to certain consumer

credit transactions.

Sec. 1473. Amendments relating to Appraisal Subcommittee of FFIEC, ap-

praiser independence monitoring, approved appraiser edu-

cation, appraisal management companies, appraiser complaint

hotline, automated valuation models, and broker price opinions.

Sec. 1474. Study required on improvements in appraisal process and compli-

ance programs.

Sec. 1475. Equal Credit Opportunity Act amendment.

Sec. 1476. Real Estate Settlement Procedures Act of 1974 amendment relating

to certain appraisal fees.

Subtitle GMortgage 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 Pro-

gram.Sec. 1484. Protecting tenants at foreclosure extension.

Subtitle HMiscellaneous Provisions

Sec. 1491. Sense of Congress regarding the importance of Government-spon-

sored 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 fore-

closure rescue scams and loan modification fraud.

Sec. 1493. Reporting of mortgage data by State.

Sec. 1494. Study of effect of drywall presence on foreclosures.

TITLE XVMISCELLANEOUS PROVISIONS

Sec. 1501. Restrictions on use of Federal funds to finance bailouts of foreign

governments.

Sec. 1502. Congo conflict minerals.

SEC. 2. DEFINITIONS.1

As used in this Act, the following definitions shall2

apply, except as the context otherwise requires or as other-3

wise specifically provided in this Act:4

(1) AFFILIATE.The term affiliate means5

any company that controls, is controlled by, or is6

under common control with another company.7


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(2) APPROPRIATE FEDERAL BANKING AGEN-1

CY.On and after the transfer date, the term ap-2

propriate Federal banking agency has the same3

meaning as in section 3(q) of the Federal Deposit4

Insurance Act (12 U.S.C. 1813(q)), as amended by5

title III.6

(3) BOARD OF GOVERNORS.The term Board7

of Governors means the Board of Governors of the8

Federal Reserve System.9

(4) BUREAU.The term Bureau means the10

Bureau of Consumer Financial Protection estab-11

lished under title X.12

(5) COMMISSION.The term Commission13

means the Securities and Exchange Commission, ex-14

cept in the context of the Commodity Futures Trad-15

ing Commission.16

(6) CORPORATION.The term Corporation17

means the Federal Deposit Insurance Corporation.18

(7) COUNCIL.The term Council means the19

Financial Stability Oversight Council established20

under title I.21

(8) CREDIT UNION.The term credit union22

means a Federal credit union, State credit union, or23

State-chartered credit union, as those terms are de-24


16/1968

16


fined in section 101 of the Federal Credit Union Act1

(12 U.S.C. 1752).2

(9) FEDERAL BANKING AGENCY.The term3

(A) Federal banking agency means, indi-4

vidually, the Board of Governors, the Office of5

the Comptroller of the Currency, and the Cor-6

poration; and7

(B) Federal banking agencies means all8

of the agencies referred to in subparagraph (A),9

collectively.10

(10) FUNCTIONALLY REGULATED SUB-11

SIDIARY.The term functionally regulated sub-12

sidiary has the same meaning as in section 5(c)(5)13

of the Bank Holding Company Act of 1956 (1214

U.S.C. 1844(c)(5)).15

(11) PRIMARY FINANCIAL REGULATORY AGEN-16

CY.The term primary financial regulatory agen-17

cy means18

(A) the appropriate Federal banking agen-19

cy, with respect to institutions described in sec-20

tion 3(q) of the Federal Deposit Insurance Act,21

except to the extent that an institution is or the22

activities of an institution are otherwise de-23

scribed in subparagraph (B), (C), (D), or (E);24


17/1968

17


(B) the Securities and Exchange Commis-1

sion, with respect to2

(i) any broker or dealer that is reg-3

istered with the Commission under the Se-4

curities Exchange Act of 1934;5

(ii) any investment company that is6

registered with the Commission under the7

Investment Company Act of 1940;8

(iii) any investment adviser that is9

registered with the Commission under the10

Investment Advisers Act of 1940, with re-11

spect to the investment advisory activities12

of such company and activities that are in-13

cidental to such advisory activities;14

(iv) any clearing agency registered15

with the Commission under the Securities16

Exchange Act of 1934, with respect to the17

activities of the clearing agency that re-18

quire the agency to be registered under19

such Act;20

(v) any nationally recognized statis-21

tical rating organization registered with22

the Commission under the Securities Ex-23

change Act of 1934;24


18/1968

18


(vi) any transfer agent registered with1

the Commission under the Securities Ex-2

change Act of 1934;3

(vii) any exchange registered as a na-4

tional securities exchange with the Com-5

mission under the Securities Exchange Act6

of 1934;7

(viii) any national securities associa-8

tion registered with the Commission under9

the Securities Exchange Act of 1934;10

(ix) any securities information proc-11

essor registered with the Commission12

under the Securities Exchange Act of13

1934;14

(x) the Municipal Securities Rule-15

making Board established under the Secu-16

rities Exchange Act of 1934;17

(xi) the Public Company Accounting18

Oversight Board established under the19

Sarbanes-Oxley Act of 2002 (15 U.S.C.20

7211 et seq.);21

(xii) the Securities Investor Protection22

Corporation established under the Securi-23

ties Investor Protection Act of 1970 (1524

U.S.C. 78aaa et seq.); and25


19/1968

19


(xiii) any security-based swap execu-1

tion facility, security-based swap data re-2

pository, security-based swap dealer or3

major security-based swap participant reg-4

istered with the Commission under the Se-5

curities Exchange Act of 1934, with re-6

spect to the security-based swap activities7

of the person that require such person to8

be registered under such Act;9

(C) the Commodity Futures Trading Com-10

mission, with respect to any futures commission11

merchant, any commodity trading adviser, and12

any commodity pool operator registered with13

the Commodity Futures Trading Commission14

under the Commodity Exchange Act, with re-15

spect to the commodities activities of such enti-16

ty and activities that are incidental to such17

commodities activities;18

(D) the State insurance authority of the19

State in which an insurance company is domi-20

ciled, with respect to the insurance activities21

and activities that are incidental to such insur-22

ance activities of an insurance company that is23

subject to supervision by the State insurance24

authority under State insurance law; and25


20/1968

20


(E) the Federal Housing Finance Agency,1

with respect to Federal Home Loan Banks or2

the Federal Home Loan Bank System, and3

with respect to the Federal National Mortgage4

Association or the Federal Home Loan Mort-5

gage Corporation.6

(12) PRUDENTIAL STANDARDS.The term7

prudential standards means enhanced supervision8

and regulatory standards developed by the Board of9

Governors under section 115 or 165.10

(13) SECRETARY.The term Secretary11

means the Secretary of the Treasury.12

(14) SECURITIES TERMS.The13

(A) terms broker, dealer, issuer,14

nationally recognized statistical ratings organi-15

zation, security, and securities laws have16

the same meanings as in section 3 of the Secu-17

rities Exchange Act of 1934 (15 U.S.C. 78c);18

(B) term investment adviser has the19

same meaning as in section 202 of the Invest-20

ment Advisers Act of 1940 (15 U.S.C. 80b2);21

and22

(C) term investment company has the23

same meaning as in section 3 of the Investment24

Company Act of 1940 (15 U.S.C. 80a3).25


21/1968

21


(15) STATE.The term State means any1

State, commonwealth, territory, or possession of the2

United States, the District of Columbia, the Com-3

monwealth of Puerto Rico, the Commonwealth of the4

Northern Mariana Islands, American Samoa, Guam,5

or the United States Virgin Islands.6

(16) TRANSFER DATE.The term transfer7

date means the date established under section 311.8

(17) OTHER INCORPORATED DEFINITIONS.9

(A) FEDERAL DEPOSIT INSURANCE ACT.10

The terms affiliate, bank, bank holding11

company, control (when used with respect to12

a depository institution), deposit, depository13

institution, Federal depository institution,14

Federal savings association, foreign bank,15

including, insured branch, insured deposi-16

tory institution, national member bank,17

national nonmember bank, savings associa-18

tion, State bank, State depository institu-19

tion, State member bank, State non-20

member bank, State savings association,21

and subsidiary have the same meanings as in22

section 3 of the Federal Deposit Insurance Act23

(12 U.S.C. 1813).24

(B) HOLDING COMPANIES.The term25


22/1968

22


(i) bank holding company has the1

same meaning as in section 2 of the Bank2

Holding Company Act of 1956 (12 U.S.C.3

1841);4

(ii) financial holding company has5

the same meaning as in section 2(p) of the6

Bank Holding Company Act of 1956 (127

U.S.C. 1841(p)); and8

(iii) savings and loan holding com-9

pany has the same meaning as in section10

10 of the Home Owners Loan Act (1211

U.S.C. 1467a(a)).12

SEC. 3. SEVERABILITY.13

If any provision of this Act, an amendment made by14

this Act, or the application of such provision or amend-15

ment to any person or circumstance is held to be unconsti-16

tutional, the remainder of this Act, the amendments made17

by this Act, and the application of the provisions of such18

to any person or circumstance shall not be affected there-19

by.20

SEC. 4. EFFECTIVE DATE.21

Except as otherwise specifically provided in this Act22

or the amendments made by this Act, this Act and such23

amendments shall take effect 1 day after the date of en-24

actment of this Act.25


23/1968

23


SEC. 5. BUDGETARY EFFECTS.1

The budgetary effects of this Act, for the purpose of2

complying with the Statutory Pay-As-You-Go-Act of 2010,3

shall be determined by reference to the latest statement4

titled Budgetary Effects of PAYGO Legislation for this5

Act, submitted for printing in the Congressional Record6

by the Chairman of the Senate Budget Committee, pro-7

vided that such statement has been submitted prior to the8

vote on passage.9

SEC. 6. ANTITRUST SAVINGS CLAUSE.10

Nothing in this Act, or any amendment made by this11

Act, shall be construed to modify, impair, or supersede12

the operation of any of the antitrust laws, unless otherwise13

specified. For purposes of this section, the term antitrust14

laws has the same meaning as in subsection (a) of the15

first section of the Clayton Act, except that such term in-16

cludes section 5 of the Federal Trade Commission Act,17

to the extent that such section 5 applies to unfair methods18

of competition.19

TITLE IFINANCIAL STABILITY20

SEC. 101. SHORT TITLE.21

This title may be cited as the Financial Stability Act22

of 2010.23


24/1968

24


SEC. 102. DEFINITIONS.1

(a) IN GENERAL.For purposes of this title, unless2

the context otherwise requires, the following definitions3

shall apply:4

(1) B ANK HOLDING COMPANY.The term5

bank holding company has the same meaning as6

in section 2 of the Bank Holding Company Act of7

1956 (12 U.S.C. 1841). A foreign bank or company8

that is treated as a bank holding company for pur-9

poses of the Bank Holding Company Act of 1956,10

pursuant to section 8(a) of the International Bank-11

ing Act of 1978 (12 U.S.C. 3106(a)), shall be treat-12

ed as a bank holding company for purposes of this13

title.14

(2) CHAIRPERSON.The term Chairperson15

means the Chairperson of the Council.16

(3) MEMBER AGENCY.The term member17

agency means an agency represented by a voting18

member of the Council.19

(4) NONBANK FINANCIAL COMPANY DEFINI-20

TIONS.21

(A) FOREIGN NONBANK FINANCIAL COM-22

PANY.The term foreign nonbank financial23

company means a company (other than a com-24

pany that is, or is treated in the United States25


25/1968

25


as, a bank holding company or a subsidiary1

thereof) that is2

(i) incorporated or organized in a3

country other than the United States; and4

(ii) predominantly engaged in, includ-5

ing through a branch in the United States,6

financial activities, as defined in paragraph7

(6).8

(B) U.S. NONBANK FINANCIAL COM-9

PANY.The term U.S. nonbank financial com-10

pany means a company (other than a bank11

holding company or a subsidiary thereof, or a12

Farm Credit System institution chartered and13

subject to the provisions of the Farm Credit14

Act of 1971 (12 U.S.C. 2001 et seq.)) that is15

(i) incorporated or organized under16

the laws of the United States or any State;17

and18

(ii) predominantly engaged in finan-19

cial activities as defined in paragraph (6).20

(C) NONBANK FINANCIAL COMPANY.The21

term nonbank financial company means a22

U.S. nonbank financial company and a foreign23

nonbank financial company.24


26/1968

26


(D) NONBANK FINANCIAL COMPANY SU-1

PERVISED BY THE BOARD OF GOVERNORS.2

The term nonbank financial company super-3

vised by the Board of Governors means a4

nonbank financial company that the Council5

has determined under section 113 shall be su-6

pervised by the Board of Governors.7

(5) OFFICE OF FINANCIAL RESEARCH.The8

term Office of Financial Research means the of-9

fice established under section 152.10

(6) PREDOMINANTLY ENGAGED.A company is11

predominantly engaged in financial activities if12

(A) the annual gross revenues derived by13

the company and all of its subsidiaries from ac-14

tivities that are financial in nature (as defined15

in section 4(k) of the Bank Holding Company16

Act of 1956) and, if applicable, from the owner-17

ship or control of one or more insured deposi-18

tory institutions, represents 85 percent or more19

of the consolidated annual gross revenues of the20

company; or21

(B) the consolidated assets of the company22

and all of its subsidiaries related to activities23

that are financial in nature (as defined in sec-24

tion 4(k) of the Bank Holding Company Act of25


27/1968

27


1956) and, if applicable, related to the owner-1

ship or control of one or more insured deposi-2

tory institutions, represents 85 percent or more3

of the consolidated assets of the company.4

(7) SIGNIFICANT INSTITUTIONS.The terms5

significant nonbank financial company and sig-6

nificant bank holding company have the meanings7

given those terms by rule of the Board of Governors.8

(b) DEFINITIONAL CRITERIA.The Board of Gov-9

ernors shall establish, by regulation, the requirements for10

determining if a company is predominantly engaged in fi-11

nancial activities, as defined in subsection (a)(6).12

(c) FOREIGN NONBANK FINANCIAL COMPANIES.13

For purposes of the authority of the Board of Governors14

under this title with respect to foreign nonbank financial15

companies, references in this title to company or sub-16

sidiary include only the United States activities and sub-17

sidiaries of such foreign company.18

Subtitle AFinancial Stability19

Oversight Council20

SEC. 111. FINANCIAL STABILITY OVERSIGHT COUNCIL ES-21

TABLISHED.22

(a) ESTABLISHMENT.Effective on the date of en-23

actment of this Act, there is established the Financial Sta-24

bility Oversight Council.25


28/1968

28


(b) MEMBERSHIP.The Council shall consist of the1

following members:2

(1) VOTING MEMBERS.The voting members,3

who shall each have 1 vote on the Council shall be4

(A) the Secretary of the Treasury, who5

shall serve as Chairperson of the Council;6

(B) the Chairman of the Board of Gov-7

ernors;8

(C) the Comptroller of the Currency;9

(D) the Director of the Bureau;10

(E) the Chairman of the Commission;11

(F) the Chairperson of the Corporation;12

(G) the Chairperson of the Commodity Fu-13

tures Trading Commission;14

(H) the Director of the Federal Housing15

Finance Agency; and16

(I) an independent member appointed by17

the President, by and with the advice and con-18

sent of the Senate, having insurance expertise.19

(2) NONVOTING MEMBERS.The Director of20

the Office of Financial Research21

(A) shall serve in an advisory capacity as22

a nonvoting member of the Council; and23


29/1968

29


(B) may not be excluded from any of the1

proceedings, meetings, discussions, or delibera-2

tions of the Council.3

(c) TERMS; VACANCY.4

(1) TERMS.The independent member of the5

Council shall serve for a term of 6 years.6

(2) VACANCY.Any vacancy on the Council7

shall be filled in the manner in which the original8

appointment was made.9

(3) ACTING OFFICIALS MAY SERVE.In the10

event of a vacancy in the office of the head of a11

member agency or department, and pending the ap-12

pointment of a successor, or during the absence or13

disability of the head of a member agency or depart-14

ment, the acting head of the member agency or de-15

partment shall serve as a member of the Council in16

the place of that agency or department head.17

(d) TECHNICAL AND PROFESSIONALADVISORY COM-18

MITTEES.The Council may appoint such special advi-19

sory, technical, or professional committees as may be use-20

ful in carrying out the functions of the Council, including21

an advisory committee consisting of State regulators, and22

the members of such committees may be members of the23

Council, or other persons, or both.24

(e) MEETINGS.25


30/1968

30


(1) TIMING.The Council shall meet at the call1

of the Chairperson or a majority of the members2

then serving, but not less frequently than quarterly.3

(2) RULES FOR CONDUCTING BUSINESS.The4

Council shall adopt such rules as may be necessary5

for the conduct of the business of the Council. Such6

rules shall be rules of agency organization, proce-7

dure, or practice for purposes of section 553 of title8

5, United States Code.9

(f) VOTING.Unless otherwise specified, the Council10

shall make all decisions that it is authorized or required11

to make by a majority vote of the members then serving.12

(g) NONAPPLICABILITY OF FACA.The Federal Ad-13

visory Committee Act (5 U.S.C. App.) shall not apply to14

the Council, or to any special advisory, technical, or pro-15

fessional committee appointed by the Council, except that,16

if an advisory, technical, or professional committee has17

one or more members who are not employees of or affili-18

ated with the United States Government, the Council shall19

publish a list of the names of the members of such com-20

mittee.21

(h) ASSISTANCE FROM FEDERAL AGENCIES.Any22

department or agency of the United States may provide23

to the Council and any special advisory, technical, or pro-24

fessional committee appointed by the Council, such serv-25


31/1968

31


ices, funds, facilities, staff, and other support services as1

the Council may determine advisable.2

(i) COMPENSATION OF MEMBERS.3

(1) FEDERAL EMPLOYEE MEMBERS.All mem-4

bers of the Council who are officers or employees of5

the United States shall serve without compensation6

in addition to that received for their services as offi-7

cers or employees of the United States.8

(2) COMPENSATION FOR NON-FEDERAL MEM-9

BER.Section 5314 of title 5, United States Code,10

is amended by adding at the end the following:11

Independent Member of the Financial Stability12

Oversight Council (1)..13

(j) DETAIL OF GOVERNMENT EMPLOYEES.Any em-14

ployee of the Federal Government may be detailed to the15

Council without reimbursement, and such detail shall be16

without interruption or loss of civil service status or privi-17

lege. An employee of the Federal Government detailed to18

the Council shall report to and be subject to oversight by19

the Council during the assignment to the Council, and20

shall be compensated by the department or agency from21

which the employee was detailed.22

SEC. 112. COUNCIL AUTHORITY.23

(a) PURPOSES AND DUTIES OF THE COUNCIL.24


32/1968

32


(1) IN GENERAL.The purposes of the Council1

are2

(A) to identify risks to the financial sta-3

bility of the United States that could arise from4

the material financial distress or failure of5

large, interconnected bank holding companies or6

nonbank financial companies;7

(B) to promote market discipline, by elimi-8

nating expectations on the part of shareholders,9

creditors, and counterparties of such companies10

that the Government will shield them from11

losses in the event of failure; and12

(C) to respond to emerging threats to the13

stability of the United States financial markets.14

(2) DUTIES.The Council shall, in accordance15

with this title16

(A) collect information from member agen-17

cies and other Federal and State financial regu-18

latory agencies and, if necessary to assess risks19

to the United States financial system, direct the20

Office of Financial Research to collect informa-21

tion from bank holding companies and nonbank22

financial companies;23


33/1968

33


(B) provide direction to, and request data1

and analyses from, the Office of Financial Re-2

search to support the work of the Council;3

(C) monitor the financial services market-4

place in order to identify potential threats to5

the financial stability of the United States;6

(D) facilitate information sharing and co-7

ordination among the member agencies and8

other Federal and State agencies regarding do-9

mestic financial services policy development,10

rulemaking, examinations, reporting require-11

ments, and enforcement actions;12

(E) recommend to the member agencies13

general supervisory priorities and principles re-14

flecting the outcome of discussions among the15

member agencies;16

(F) identify gaps in regulation that could17

pose risks to the financial stability of the18

United States;19

(G) require supervision by the Board of20

Governors for nonbank financial companies that21

may pose risks to the financial stability of the22

United States in the event of their material fi-23

nancial distress or failure, pursuant to section24

113;25


34/1968

34


(H) make recommendations to the Board1

of Governors concerning the establishment of2

heightened prudential standards for risk-based3

capital, leverage, liquidity, contingent capital,4

resolution plans and credit exposure reports,5

concentration limits, enhanced public disclo-6

sures, and overall risk management for7

nonbank financial companies and large, inter-8

connected bank holding companies supervised9

by the Board of Governors;10

(I) identify systemically important finan-11

cial market utilities and payment, clearing, and12

settlement activities (as that term is defined in13

title VIII), and require such utilities and activi-14

ties to be subject to standards established by15

the Board of Governors;16

(J) make recommendations to primary fi-17

nancial regulatory agencies to apply new or18

heightened standards and safeguards for finan-19

cial activities or practices that could create or20

increase risks of significant liquidity, credit, or21

other problems spreading among bank holding22

companies, nonbank financial companies, and23

United States financial markets;24


35/1968

35


(K) make determinations regarding exemp-1

tions in title VII, where necessary;2

(L) provide a forum for3

(i) discussion and analysis of emerg-4

ing market developments and financial reg-5

ulatory issues; and6

(ii) resolution of jurisdictional dis-7

putes among the members of the Council;8

and9

(M) annually report to and testify before10

Congress on11

(i) the activities of the Council;12

(ii) significant financial market devel-13

opments and potential emerging threats to14

the financial stability of the United States;15

(iii) all determinations made under16

section 113 or title VIII, and the basis for17

such determinations; and18

(iv) recommendations19

(I) to enhance the integrity, effi-20

ciency, competitiveness, and stability21

of United States financial markets;22

(II) to promote market discipline;23

and24


36/1968

36


(III) to maintain investor con-1

fidence.2

(b) AUTHORITY TO OBTAIN INFORMATION.3

(1) IN GENERAL.The Council may receive,4

and may request the submission of, any data or in-5

formation from the Office of Financial Research and6

member agencies, as necessary7

(A) to monitor the financial services mar-8

ketplace to identify potential risks to the finan-9

cial stability of the United States; or10

(B) to otherwise carry out any of the pro-11

visions of this title.12

(2) SUBMISSIONS BY THE OFFICE AND MEMBER13

AGENCIES.Notwithstanding any other provision of14

law, the Office of Financial Research and any mem-15

ber agency are authorized to submit information to16

the Council.17

(3) FINANCIAL DATA COLLECTION.18

(A) IN GENERAL.The Council, acting19

through the Office of Financial Research, may20

require the submission of periodic and other re-21

ports from any nonbank financial company or22

bank holding company for the purpose of as-23

sessing the extent to which a financial activity24

or financial market in which the nonbank finan-25


37/1968

37


cial company or bank holding company partici-1

pates, or the nonbank financial company or2

bank holding company itself, poses a threat to3

the financial stability of the United States.4

(B) MITIGATION OF REPORT BURDEN.5

Before requiring the submission of reports from6

any nonbank financial company or bank holding7

company that is regulated by a member agency8

or any primary financial regulatory agency, the9

Council, acting through the Office of Financial10

Research, shall coordinate with such agencies11

and shall, whenever possible, rely on informa-12

tion available from the Office of Financial Re-13

search or such agencies.14

(C) MITIGATION IN CASE OF FOREIGN FI-15

NANCIAL COMPANIES.Before requiring the16

submission of reports from a company that is17

a foreign nonbank financial company or foreign-18

based bank holding company, the Council shall,19

acting through the Office of Financial Re-20

search, to the extent appropriate, consult with21

the appropriate foreign regulator of such com-22

pany and, whenever possible, rely on informa-23

tion already being collected by such foreign reg-24

ulator, with English translation.25


38/1968

38


(4) BACK-UP EXAMINATION BY THE BOARD OF1

GOVERNORS.If the Council is unable to determine2

whether the financial activities of a nonbank finan-3

cial company pose a threat to the financial stability4

of the United States, based on information or re-5

ports obtained under paragraph (3), discussions with6

management, and publicly available information, the7

Council may request the Board of Governors, and8

the Board of Governors is authorized, to conduct an9

examination of the nonbank financial company for10

the sole purpose of determining whether the11

nonbank financial company should be supervised by12

the Board of Governors for purposes of this title.13

(5) CONFIDENTIALITY.14

(A) IN GENERAL.The Council, the Office15

of Financial Research, and the other member16

agencies shall maintain the confidentiality of17

any data, information, and reports submitted18

under this subsection and subtitle B.19

(B) RETENTION OF PRIVILEGE.The sub-20

mission of any nonpublicly available data or in-21

formation under this subsection and subtitle B22

shall not constitute a waiver of, or otherwise af-23

fect, any privilege arising under Federal or24

State law (including the rules of any Federal or25


39/1968

39


State court) to which the data or information is1

otherwise subject.2

(C) FREEDOM OF INFORMATION ACT.3

Section 552 of title 5, United States Code, in-4

cluding the exceptions thereunder, shall apply5

to any data or information submitted under this6

subsection and subtitle B.7

SEC. 113. AUTHORITY TO REQUIRE SUPERVISION AND REG-8

ULATION OF CERTAIN NONBANK FINANCIAL9

COMPANIES.10

(a) U.S. NONBANK FINANCIAL COMPANIES SUPER-11

VISED BY THE BOARD OF GOVERNORS.12

(1) DETERMINATION.The Council, on a non-13

delegable basis and by a vote of not fewer than 2314

of the members then serving, including an affirma-15

tive vote by the Chairperson, may determine that a16

U.S. nonbank financial company shall be supervised17

by the Board of Governors and shall be subject to18

prudential standards, in accordance with this title, if19

the Council determines that material financial dis-20

tress at the U.S. nonbank financial company would21

pose a threat to the financial stability of the United22

States.23


40/1968

40


(2) CONSIDERATIONS.Each determination1

under paragraph (1) shall be based on a consider-2

ation by the Council of3

(A) the degree of leverage of the company;4

(B) the amount and nature of the financial5

assets of the company;6

(C) the amount and types of the liabilities7

of the company, including the degree of reliance8

on short-term funding;9

(D) the extent and types of the off-bal-10

ance-sheet exposures of the company;11

(E) the extent and types of the trans-12

actions and relationships of the company with13

other significant nonbank financial companies14

and significant bank holding companies;15

(F) the importance of the company as a16

source of credit for households, businesses, and17

State and local governments and as a source of18

liquidity for the United States financial system;19

(G) the importance of the company as a20

source of credit for low income, minority, or un-21

derserved communities, and the impact that the22

failure of such company would have on the23

availability of credit in such communities;24


41/1968

41


(H) the recommendation, if any, of a mem-1

ber of the Council;2

(I) the operation of, or ownership interest3

in, any clearing, settlement, or payment busi-4

ness of the company;5

(J) the extent to which6

(i) assets are managed rather than7

owned by the company; and8

(ii) ownership of assets under man-9

agement is diffuse; and10

(K) any other risk-related factors that the11

Council deems appropriate.12

(b) FOREIGN NONBANK FINANCIAL COMPANIES SU-13

PERVISED BY THE BOARD OF GOVERNORS.14

(1) DETERMINATION.The Council, on a non-15

delegable basis and by a vote of not fewer than 2316

of the members then serving, including an affirma-17

tive vote by the Chairperson, may determine that a18

foreign nonbank financial company that has sub-19

stantial assets or operations in the United States20

shall be supervised by the Board of Governors and21

shall be subject to prudential standards in accord-22

ance with this title, if the Council determines that23

material financial distress at the foreign nonbank fi-24


42/1968

42


nancial company would pose a threat to the financial1

stability of the United States.2

(2) CONSIDERATIONS.Each determination3

under paragraph (1) shall be based on a consider-4

ation by the Council of5

(A) the degree of leverage of the company;6

(B) the amount and nature of the United7

States financial assets of the company;8

(C) the amount and types of the liabilities9

of the company used to fund activities and op-10

erations in the United States, including the de-11

gree of reliance on short-term funding;12

(D) the extent of the United States-related13

off-balance-sheet exposure of the company;14

(E) the extent and type of the transactions15

and relationships of the company with other16

significant nonbank financial companies and17

bank holding companies;18

(F) the importance of the company as a19

source of credit for United States households,20

businesses, and State and local governments,21

and as a source of liquidity for the United22

States financial system;23

(G) the importance of the company as a24

source of credit for low income, minority, or un-25


43/1968

43


derserved communities, and the impact that the1

failure of such company would have on the2

availability of credit in such communities;3

(H) the recommendation, if any, of a mem-4

ber of the Council;5

(I) the extent to which6

(i) assets are managed rather than7

owned by the company; and8

(ii) ownership of assets under man-9

agement is diffuse; and10

(J) any other risk-related factors that the11

Council deems appropriate.12

(c) ANTI-EVASION.13

(1) DETERMINATIONS.In order to avoid eva-14

sion of this title, the Council, on its own initiative15

or at the request of the Board of Governors, may de-16

termine, on a nondelegable basis and by a vote of17

not fewer than 23 of the members then serving, in-18

cluding an affirmative vote by the Chairperson,19

that20

(A) material financial distress related to fi-21

nancial activities conducted directly or indi-22

rectly by a company incorporated or organized23

under the laws of the United States or any24

State or the financial activities in the United25


44/1968

44


States of a company incorporated or organized1

in a country other than the United States2

would pose a threat to the financial stability of3

the United States, based on consideration of the4

factors in subsection (b)(2);5

(B) the company is organized or operates6

in such a manner as to evade the application of7

this title; and8

(C) such financial activities of the company9

shall be supervised by the Board of Governors10

and subject to prudential standards in accord-11

ance with this title, consistent with paragraph12

(3).13

(2) REPORT.Upon making a determination14

under paragraph (1), the Council shall submit a re-15

port to the appropriate committees of Congress de-16

tailing the reasons for making such determination.17

(3) CONSOLIDATED SUPERVISION OF ONLY FI-18

NANCIAL ACTIVITIES; ESTABLISHMENT OF AN IN-19

TERMEDIATE HOLDING COMPANY.20

(A) ESTABLISHMENT OF AN INTER-21

MEDIATE HOLDING COMPANY.Upon a deter-22

mination under paragraph (1), the company23

that is the subject of the determination may es-24

tablish an intermediate holding company in25


45/1968

45


which the financial activities of such company1

and its subsidiaries shall be conducted (other2

than the activities described in section3

167(b)(2)) in compliance with any regulations4

or guidance provided by the Board of Gov-5

ernors. Such intermediate holding company6

shall be subject to the supervision of the Board7

of Governors and to prudential standards under8

this title as if the intermediate holding company9

were a nonbank financial company supervised10

by the Board of Governors.11

(B) ACTION OF THE BOARD OF GOV -12

ERNORS.To facilitate the supervision of the13

financial activities subject to the determination14

in paragraph (1), the Board of Governors may15

require a company to establish an intermediate16

holding company, as provided for in section17

167, which would be subject to the supervision18

of the Board of Governors and to prudential19

standards under this title, as if the intermediate20

holding company were a nonbank financial com-21

pany supervised by the Board of Governors.22

(4) NOTICE AND OPPORTUNITY FOR HEARING23

AND FINAL DETERMINATION; JUDICIAL REVIEW.24

Subsections (d), (f), and (g) shall apply to deter-25


46/1968

46


minations made by the Council pursuant to para-1

graph (1) in the same manner as such subsections2

apply to nonbank financial companies.3

(5) COVERED FINANCIAL ACTIVITIES.For4

purposes of this subsection, the term financial ac-5

tivities6

(A) means activities that are financial in7

nature (as defined in section 4(k) of the Bank8

Holding Company Act of 1956);9

(B) includes the ownership or control of10

one or more insured depository institutions; and11

(C) does not include internal financial ac-12

tivities conducted for the company or any affil-13

iate thereof, including internal treasury, invest-14

ment, and employee benefit functions.15

(6) ONLY FINANCIAL ACTIVITIES SUBJECT TO16

PRUDENTIAL SUPERVISION.Nonfinancial activities17

of the company shall not be subject to supervision18

by the Board of Governors and prudential standards19

of the Board. For purposes of this Act, the financial20

activities that are the subject of the determination in21

paragraph (1) shall be subject to the same require-22

ments as a nonbank financial company. Nothing in23

this paragraph shall prohibit or limit the authority24

of the Board of Governors to apply prudential stand-25


47/1968

47


ards under this title to the financial activities that1

are subject to the determination in paragraph (1).2

(d) REEVALUATION AND RESCISSION.The Council3

shall4

(1) not less frequently than annually, reevaluate5

each determination made under subsections (a) and6

(b) with respect to such nonbank financial company7

supervised by the Board of Governors; and8

(2) rescind any such determination, if the9

Council, by a vote of not fewer than 23 of the mem-10

bers then serving, including an affirmative vote by11

the Chairperson, determines that the nonbank finan-12

cial company no longer meets the standards under13

subsection (a) or (b), as applicable.14

(e) NOTICE AND OPPORTUNITY FOR HEARING AND15

FINAL DETERMINATION.16

(1) IN GENERAL.The Council shall provide to17

a nonbank financial company written notice of a18

proposed determination of the Council, including an19

explanation of the basis of the proposed determina-20

tion of the Council, that such nonbank financial21

company shall be supervised by the Board of Gov-22

ernors and shall be subject to prudential standards23

in accordance with this title.24


48/1968

48


(2) HEARING.Not later than 30 days after1

the date of receipt of any notice of a proposed deter-2

mination under paragraph (1), the nonbank finan-3

cial company may request, in writing, an oppor-4

tunity for a written or oral hearing before the Coun-5

cil to contest the proposed determination. Upon re-6

ceipt of a timely request, the Council shall fix a time7

(not later than 30 days after the date of receipt of8

the request) and place at which such company may9

appear, personally or through counsel, to submit10

written materials (or, at the sole discretion of the11

Council, oral testimony and oral argument).12

(3) FINAL DETERMINATION.Not later than 6013

days after the date of a hearing under paragraph14

(2), the Council shall notify the nonbank financial15

company of the final determination of the Council,16

which shall contain a statement of the basis for the17

decision of the Council.18

(4) NO HEARING REQUESTED.If a nonbank19

financial company does not make a timely request20

for a hearing, the Council shall notify the nonbank21

financial company, in writing, of the final determina-22

tion of the Council under subsection (a) or (b), as23

applicable, not later than 10 days after the date by24


49/1968

49


which the company may request a hearing under1

paragraph (2).2

(f) EMERGENCY EXCEPTION.3

(1) IN GENERAL.The Council may waive or4

modify the requirements of subsection (d) with re-5

spect to a nonbank financial company, if the Council6

determines, by a vote of not fewer than 23 of the7

members then serving, including an affirmative vote8

by the Chairperson, that such waiver or modification9

is necessary or appropriate to prevent or mitigate10

threats posed by the nonbank financial company to11

the financial stability of the United States.12

(2) NOTICE.The Council shall provide notice13

of a waiver or modification under this paragraph to14

the nonbank financial company concerned as soon as15

practicable, but not later than 24 hours after the16

waiver or modification is granted.17

(3) INTERNATIONAL COORDINATION.In mak-18

ing a determination under paragraph (1), the Coun-19

cil shall consult with the appropriate home country20

supervisor, if any, of the foreign nonbank financial21

company that is being considered for such a deter-22

mination.23

(4) OPPORTUNITY FOR HEARING.The Council24

shall allow a nonbank financial company to request,25


50/1968

50


in writing, an opportunity for a written or oral hear-1

ing before the Council to contest a waiver or modi-2

fication under this paragraph, not later than 103

days after the date of receipt of notice of the waiver4

or modification by the company. Upon receipt of a5

timely request, the Council shall fix a time (not later6

than 15 days after the date of receipt of the request)7

and place at which the nonbank financial company8

may appear, personally or through counsel, to sub-9

mit written materials (or, at the sole discretion of10

the Council, oral testimony and oral argument).11

(5) NOTICE OF FINAL DETERMINATION.Not12

later than 30 days after the date of any hearing13

under paragraph (4), the Council shall notify the14

subject nonbank financial company of the final de-15

termination of the Council under this paragraph,16

which shall contain a statement of the basis for the17

decision of the Council.18

(g) CONSULTATION.The Council shall consult with19

the primary financial regulatory agency, if any, for each20

nonbank financial company or subsidiary of a nonbank fi-21

nancial company that is being considered for supervision22

by the Board of Governors under this section before the23

Council makes any final determination with respect to24


51/1968

51


such nonbank financial company under subsection (a), (b),1

or (c).2

(h) JUDICIAL REVIEW.If the Council makes a final3

determination under this section with respect to a4

nonbank financial company, such nonbank financial com-5

pany may, not later than 30 days after the date of receipt6

of the notice of final determination under subsection7

(d)(3) or (e)(4), bring an action in the United States dis-8

trict court for the judicial district in which the home office9

of such nonbank financial company is located, or in the10

United States District Court for the District of Columbia,11

for an order requiring that the final determination be re-12

scinded, and the court shall, upon review, dismiss such ac-13

tion or direct the final determination to be rescinded. Re-14

view of such an action shall be limited to whether the final15

determination made under this section was arbitrary and16

capricious.17

(i) INTERNATIONAL COORDINATION.In exercising18

its duties under this title with respect to foreign nonbank19

financial companies, foreign-based bank holding compa-20

nies, and cross-border activities and markets, the Council21

shall consult with appropriate foreign regulatory authori-22

ties, to the extent appropriate.23


52/1968

52


SEC. 114. REGISTRATION OF NONBANK FINANCIAL COMPA-1

NIES SUPERVISED BY THE BOARD OF GOV-2

ERNORS.3

Not later than 180 days after the date of a final4

Council determination under section 113 that a nonbank5

financial company is to be supervised by the Board of Gov-6

ernors, such company shall register with the Board of7

Governors, on forms prescribed by the Board of Gov-8

ernors, which shall include such information as the Board9

of Governors, in consultation with the Council, may deem10

necessary or appropriate to carry out this title.11

SEC. 115. ENHANCED SUPERVISION AND PRUDENTIAL12

STANDARDS FOR NONBANK FINANCIAL COM-13

PANIES SUPERVISED BY THE BOARD OF GOV-14

ERNORS AND CERTAIN BANK HOLDING COM-15

PANIES.16

(a) IN GENERAL.17

(1) PURPOSE.In order to prevent or mitigate18

risks to the financial stability of the United States19

that could arise from the material financial distress20

or failure of large, interconnected financial institu-21

tions, the Council may make recommendations to22

the Board of Governors concerning the establish-23

ment and refinement of prudential standards and re-24

porting and disclosure requirements applicable to25

nonbank financial companies supervised by the26


53/1968

53


Board of Governors and large, interconnected bank1

holding companies, that2

(A) are more stringent than those applica-3

ble to other nonbank financial companies and4

bank holding companies that do not present5

similar risks to the financial stability of the6

United States; and7

(B) increase in stringency, based on the8

considerations identified in subsection (b)(3).9

(2) LIMITATION ON BANK HOLDING COMPA-10

NIES.Any standards recommended under sub-11

sections (b) through (f) shall not apply to any bank12

holding company with total consolidated assets of13

less than $50,000,000,000. The Council may rec-14

ommend an asset threshold greater than15

$50,000,000,000 for the applicability of any par-16

ticular standard under those subsections.17

(b) DEVELOPMENT OF PRUDENTIAL STANDARDS.18

(1) IN GENERAL.The recommendations of the19

Council under subsection (a) may include20

(A) risk-based capital requirements;21

(B) leverage limits;22

(C) liquidity requirements;23

(D) resolution plan and credit exposure re-24

port requirements;25


54/1968

54


(E) concentration limits;1

(F) a contingent capital requirement;2

(G) enhanced public disclosures; and3

(H) overall risk management requirements.4

(2) PRUDENTIAL STANDARDS FOR FOREIGN FI-5

NANCIAL COMPANIES.In making recommendations6

concerning the standards set forth in paragraph (1)7

that would apply to foreign nonbank financial com-8

panies supervised by the Board of Governors or for-9

eign-based bank holding companies, the Council10

shall11

(A) give due regard to the principle of na-12

tional treatment and equality of competitive op-13

portunity; and14

(B) take into account the extent to which15

the foreign nonbank financial company or for-16

eign-based bank holding company is subject on17

a consolidated basis to home country standards18

that are comparable to those applied to finan-19

cial companies in the United States.20

(3) CONSIDERATIONS.In making rec-21

ommendations concerning prudential standards22

under paragraph (1), the Council shall23

(A) take into account differences among24

nonbank financial companies supervised by the25


55/1968

55


Board of Governors and bank holding compa-1

nies described in subsection (a), based on2

(i) the factors described in subsections3

(a) and (b) of section 113;4

(ii) whether the company owns an in-5

sured depository institution;6

(iii) nonfinancial activities and affili-7

ations of the company; and8

(iv) any other factors that the Council9

determines appropriate; and10

(B) to the extent possible, ensure that11

small changes in the factors listed in sub-12

secti

financial reform draft bill

Documents