To impose leverage and liability limits on bank holding companies and financial companies.

SA 3733. Mr. BROWN of Ohio (for himself, Mr. Kaufman, Mr. Casey, Mr.
Whitehouse, Mr. Merkley, Mr. Harkin, Mr. Sanders, and Mr. Burris)
submitted an amendment intended to be proposed by him to the bill S.
3217, to promote the financial stability of the United States by
improving accountability and transparency in the financial system, to
end ``too big to fail'', to protect the American taxpayer by ending
bailouts, to protect consumers from abusive financial services
practices, and for other purposes; which was ordered to lie on the
table; as follows:

On page 92, strike lines 8 through 12 and insert the
following:
(ii) liquidity requirements;
(iii) resolution plan and credit exposure report
requirements; and
(iv) concentration limits.
On page 105, between lines 1 and 2, insert the following:
(i) Leverage Ratio for Bank Holding Companies and Financial
Companies.--
(1) Amendment.--The Bank Holding Company Act of 1956 (12
U.S.C. 1841 et seq.) is amended by adding at the end the
following:

``SEC. 13. LIMITS ON LEVERAGE.

``(a) Definitions.--In this section, the following
definitions shall apply:
``(1) Financial company.--The term `financial company'
means any nonbank financial company, as that term is defined
in section 102 of the Restoring American Financial Stability
Act of 2010, that is supervised by the Board.
``(2) Incorporated terms.--The terms `average total
consolidated assets' and `tier 1 capital' have the meanings
given those terms in part 225 of title 12, Code of Federal
Regulations, or any successor thereto.
``(b) Leverage Ratio Requirements for Bank Holding
Companies and Financial Companies.--
``(1) Leverage ratio.--A bank holding company or financial
company may not maintain tier 1 capital in an amount that is
less than 6 percent of the average total consolidated assets
of the bank holding company or financial holding company.
``(2) Balance sheet leverage ratio.--A bank holding company
or financial company

[[Page S2766]]

may not maintain less than 6 percent of tier 1 capital for
all outstanding balance sheet liabilities, as required to be
recorded under section 13(p) of the Securities Exchange Act
of 1934.
``(c) Exemptions.--
``(1) In general.--The Board may adjust the leverage ratio
requirements under subsection (b) for any class of
institutions, based upon the size or activity of such class
of institutions. No adjustment made under this paragraph may
allow an institution to carry less capital than is required
under subsection (b).
``(2) International agreements.--Consistent with this
subsection, the Board may adjust the leverage ratio
requirements under subsection (b), as necessary to harmonize
such ratios with official international agreements regarding
capital standards, if the Board determines that the capital
standards under such international agreements are
commensurate with the credit, market, operational, or other
risks posed by the bank holding companies or financial
companies to which such international agreements apply.
``(3) Temporary emergency exemption.--
``(A) In general.--The appropriate Federal banking agency
may, in a manner consistent with this subsection, grant any
bank holding company a temporary emergency exemption from the
leverage ratio requirements under subsection (b), if the
appropriate Federal banking agency determines such an
exemption is necessary to prevent an imminent threat to the
financial stability of the United States.
``(B) Publication.--
``(i) Publication required.--The appropriate Federal
banking agency shall publish a notice of any exemption
granted under this paragraph in the Federal Register within a
reasonable period after granting the exemption, and in no
case later than 90 days after the date on which the exemption
is granted.
``(ii) Contents.--The notice under clause (i) shall
include--

``(I) the name of the bank holding company or financial
company that is granted an exemption;
``(II) the reason for the exemption; and
``(III) a plan detailing the manner by which the bank
holding company will be brought into compliance with
subsection (b).

``(d) Leverage Ratio Requirements for Operating
Subsidiaries of Bank Holding Companies and Financial
Companies.--Notwithstanding any other provision of law
applicable to insured depository institutions, not later than
1 year after the date of enactment of the Restoring American
Financial Stability Act of 2010, the Board shall promulgate
regulations establishing leverage ratio requirements under
subsection (b) for the operating subsidiaries of bank holding
companies and financial companies.
``(e) Prompt Corrective Action.--
``(1) Authorities.--The Board shall require a bank holding
company or financial company that violates subsection (b) to
comply with the leverage ratio requirements under subsection
(b) by--
``(A) selling or otherwise transferring assets or off-
balance sheet items to unaffiliated firms;
``(B) terminating 1 or more activities of the bank holding
company or financial company; or
``(C) imposing conditions on the manner in which the bank
holding company or financial company conducts an activity of
the bank holding company or financial company.
``(2) Corrective action plan.--Not later than 60 days after
the Board determines that a bank holding company or financial
holding company has violated subsection (b), the Board shall
submit to the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Financial Services
of the House of Representatives a plan detailing the manner
by which the bank holding company or financial company will
be brought into compliance with subsection (b).
``(3) Reports to congress.--
``(A) Written reports.--At the end of each 60-day period
following the date on which the Board submits a plan under
paragraph (2) during which a bank holding company or
financial company remains in violation of subsection (b), the
Board shall submit to the Committee on Banking, Housing, and
Urban Affairs of the Senate and the Committee on Financial
Services of the House of Representatives a report on the
compliance of the bank holding company or financial holding
company with the plan.
``(B) Testimony.--At the end of each 120-day period
following the date on which the Board submits a plan under
paragraph (2) during which a bank holding company or
financial company remains in violation of subsection (b), the
Board shall testify before the Committee on Banking, Housing,
and Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representatives with
respect to the compliance of the bank holding company or
financial holding company with the plan.''.
(2) Effective date.--The amendment made by this subsection
shall take effect 1 year after the date of enactment of this
Act.
On page 497, strike line 9 and all that follows through
page 501, line 15, and insert the following:

SEC. 620. CONCENTRATION LIMITS FOR BANK HOLDING COMPANIES AND
FINANCIAL COMPANIES.

(a) Deposit Concentration Limit.--
(1) Amendment.--Section 3 of the Bank Holding Company Act
of 1956 (12 U.S.C. 1842) is amended by striking subsection
(f) and inserting the following:
``(f) Nationwide Concentration Limits.--
``(1) Concentration limit established.--No single bank
holding company may control more than 10 percent of the total
amount of deposits of all insured depository institutions in
the United States.
``(2) Sale or transfer required.--The Board shall require
any bank holding company that the Board determines is in
violation of paragraph (1) to sell or otherwise transfer
assets to an unaffiliated company, to the extent that the
Board determines is necessary to bring the company into
compliance with paragraph (1).''.
(2) Effective date.--The amendment made by this subsection
shall take effect 1 year after the date of enactment of this
Act.
(b) Size Requirements for Bank Holding Companies and
Financial Companies.--
(1) Amendment.--The Bank Holding Company Act of 1956 (12
U.S.C. 1841 et seq.), as amended by this Act, is amended by
adding at the end the following:

``SEC. 14. LIMITS ON NON-DEPOSIT LIABILITIES FOR BANK HOLDING
COMPANIES AND FINANCIAL COMPANIES.

``(a) Definitions.--In this section, the following
definitions shall apply:
``(1) FDIC-assessed deposits.--The term `FDIC-assessed
deposits' means the assessment base of a bank holding
company, as calculated under part 327 of title 12 Code of
Federal Regulations, or any successor thereto.
``(2) Financial company.--The term `financial company'
means any nonbank financial company supervised by the Board.
``(3) Nonbank financial company.--The term `nonbank
financial company' has the same meaning as in section 102 of
the Restoring American Financial Stability Act of 2010.
``(4) Non-deposit liabilities.--The term `non-deposit
liabilities' means--
``(A) with respect to a bank holding company--
``(i) the total assets of the banking holding company;
minus
``(ii) the sum of--

``(I) the tier 1 capital of the bank holding company,
taking into account any off-balance-sheet liabilities; and
``(II) the FDIC-assessed deposits of the bank holding
company; and

``(B) with respect to a financial company--
``(i) the total assets of the financial company; minus
``(ii) the tier 1 capital of the financial company, taking
into account any off-balance-sheet liabilities.
``(5) Tier 1 capital.--The term `tier 1 capital' has the
meaning given that term in part 225 of title 12, Code of
Federal Regulations, or any successor thereto.
``(b) Limit on Non-Deposit Liabilities for Bank Holding
Companies.--
``(1) Limits for bank holding companies.--No bank holding
company may control non-deposit liabilities that exceed 2
percent of the annual gross domestic product of the United
States.
``(2) Limits for financial companies.--No financial company
may control non-deposit liabilities that exceed 3 percent of
the annual gross domestic product of the United States.
``(3) Determination of gross domestic product.--For
purposes of this subsection, the annual gross domestic
product of the United States shall be determined using the
average of the annual gross domestic product of the United
States, as calculated by the Bureau of Economic Analysis of
the Department of Commerce, during the 16 calendar quarters
most recently completed at the time of the determination
under paragraph (1) or (2).
``(4) Treatment of insurance companies.--
``(A) In general.--Notwithstanding the limits under
paragraphs (1) and (2), the Board may establish a separate
liability limit for a bank holding company or financial
company that the Board determines is primarily engaged in the
business of insurance, if the Board determines that such a
limit is necessary in order to provide for consistent and
equitable treatment of the bank holding company or financial
company.
``(B) Consultation.--In establishing a liability limit
under subparagraph (A), the Board shall consult with the
State insurance regulator for any bank holding company or
financial company described in subparagraph (A) having a
subsidiary that is regulated by a State insurance regulator.
``(5) Treatment of foreign deposits.--The Board may exclude
from the calculation of non-deposit liabilities under this
subsection any foreign or other deposits that are not FDIC-
assessed deposits, if the Board determines that such action
is necessary to ensure the consistent and equitable treatment
of institutions with international operations.
``(c) Prompt Corrective Action.--
``(1) Authorities.--The Board shall require a bank holding
company or financial company that violates subsection (a) to
comply with the limit under subsection (a) by--
``(A) selling or otherwise transferring assets or off-
balance-sheet items to unaffiliated firms;
``(B) terminating 1 or more activities of the bank holding
company or financial company; or
``(C) imposing conditions on the manner in which the bank
holding company or financial company conducts an activity of
the bank holding company or financial company.
``(2) Corrective action plan.--Not later than 60 days after
the Board determines that a bank holding company or financial
holding

[[Page S2767]]

company has violated subsection (a), the Board shall submit
to the Committee on Banking, Housing, and Urban Affairs of
the Senate and the Committee on Financial Services of the
House of Representatives a plan detailing the manner by which
the bank holding company or financial company will be brought
into compliance with subsection (a).
``(3) Reports to congress.--
``(A) Written reports.--At the end of each 60-day period
following the date on which the Board submits a plan under
paragraph (1) during which a bank holding company or
financial company remains in violation of subsection (a), the
Board shall submit to the Committee on Banking, Housing, and
Urban Affairs of the Senate and the Committee on Financial
Services of the House of Representatives a report on the
compliance of the bank holding company or financial holding
company with the plan.
``(B) Testimony.--At the end of each 120-day period
following the date on which the Board submits a plan under
paragraph (1) during which a bank holding company or
financial company remains in violation of subsection (a), the
Board shall testify before the Committee on Banking, Housing,
and Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representatives with
respect to the compliance of the bank holding company or
financial holding company with the plan.

``SEC. 15. CAPITAL ASSESSMENT PROGRAM.

``(a) Annual Capital Assessment Required.--Not later than 1
year after the date of enactment of the Restoring American
Financial Stability Act of 2010, and annually thereafter, the
Board shall conduct a capital assessment of each bank holding
company and financial company, to estimate the losses,
revenues, and reserve needs for the bank holding company or
financial company.
``(b) Report.--The Board shall submit an annual report on
the results of the capital assessments under subsection (a)
to the Secretary of the Treasury, the Committee on Banking,
Housing, and Urban Affairs of the Senate, and the Committee
on Financial Services of the House of Representatives.''.
(2) Effective date.--The amendment made by this subsection
shall take effect 3 years after the date of enactment of this
Act.
On page 969, between lines 4 and 5, insert the following:

SEC. 919C. FINANCIAL REPORTING.

Section 13 of the Securities Exchange Act of 1934 (15
U.S.C. 78m), as amended by this Act, is amended by adding at
the end the following:
``(p) Standard Balance Sheet Calculation for Reports.--
``(1) Standard established.--Not later than 1 year after
the date of enactment of the Restoring American Financial
Stability Act of 2010, the Commission, or a standard setter
designated by and under the oversight of the Commission,
shall establish a standard requiring each that each issuer
that is required to submit reports to the Commission under
this section record all assets and liabilities of the issuer
on the balance sheet of the issuer.
``(2) Contents.--The standard established under paragraph
(1) shall require that--
``(A) the recorded amount of assets and liabilities reflect
a reasonable assessment by the issuer of the most likely
outcomes with respect to the amount of assets and
liabilities, given information available at the time of the
report;
``(B) each issuer record any financing of assets for which
the issuer has more than minimal economic risks or rewards;
and
``(C) if an issuer cannot determine the amount of a
particular liability, the issuer may exclude that liability
from the balance sheet of the issuer only if the issuer
discloses an explanation of--
``(i) the nature of the liability and purpose for incurring
the liability;
``(ii) the most likely loss and the maximum loss the issuer
may incur from the liability;
``(iii) whether any other person has recourse against the
issuer with respect to the liability and, if so, the
conditions under which such recourse may occur; and
``(iv) whether the issuer has any continuing involvement
with an asset financed by the liability or any beneficial
interest in the liability.
``(3) Compliance.--The Commission shall issue rules to
ensure compliance with this subsection that allow for
enforcement by the Commission and civil liability under this
title and the Securities Act of 1933.''.
______