To provide an orderly and transparent bankruptcy process for non-bank financial institutions and prohibit bailout authority.

SA 3832. Mr. SESSIONS (for himself, Mr. Bunning, Mr. DeMint, Mr.
Ensign, and Mr. Brown of Massachusetts) submitted an amendment intended
to be proposed to amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd
(for himself and Mrs. Lincoln)) 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:

Strike title II and insert the following:

TITLE II--BANKRUPTCY INTEGRITY AND ACCOUNTABILITY ACT

SEC. 201. SHORT TITLE.

This title may be cited as the ``Bankruptcy Integrity and
Accountability Act of 2010''.

SEC. 202. AMENDMENTS TO TITLE 28 OF THE UNITED STATES CODE.

Title 28, United States Code, is amended--

[[Page S3261]]

(1) in section 1408, by striking ``section 1410'' and
inserting ``sections 1409A and 1410'';
(2) by inserting after section 1409 the following:

``Sec. 1409A. Venue of cases involving non-bank financial
institutions

``A case under chapter 14 may be commenced in the district
court of the United States for the district--
``(1) in which the debtor has its domicile, principal place
of business in the United States, principal assets in the
United States, or in which there is pending a case under
title 11 concerning the debtor's affiliate or subsidiary, if
a Federal Reserve Bank is located in that district;
``(2) if venue does not exist under paragraph (1), in which
there is a Federal Reserve Bank and in a Federal Reserve
district in which the debtor has its domicile, principal
place of business in the United States, principal assets in
the United States, or in which there is pending a case under
title 11 concerning the debtor's affiliate or subsidiary; or
``(3) if venue does not exist under paragraph (1) or (2),
in which there is a Federal Reserve Bank and in a Federal
circuit adjacent to the Federal circuit in which the debtor
has its domicile, principal place of business or principal
assets in the United States.'', and
(3) by amending the table of sections for chapter 87, by
inserting after the item relating to section 1408 the
following:

``1409A. Venue of cases involving non-bank financial institutions.''.

SEC. 203. AMENDMENTS TO TITLE 11 OF THE UNITED STATES CODE.

(a) Definitions.--Section 101 of title 11, United States
Code, is amended--
(1) by inserting after paragraph (26) the following:
``(26A) The term `functional regulator' means the Federal
regulatory agency with the primary Federal regulatory
authority over the debtor, such as an agency listed in
section 509 of the Gramm-Leach-Bliley Act.'';
(2) by redesignating paragraphs (38A) and (38B) as
paragraphs (38B) and (38C), respectively;
(3) by inserting after paragraph (38) the following:
``(38A) the term `Financial Stability Oversight Council'
means the entity established in section 111 of the Restoring
American Financial Stability Act of 2010''; and
(4) by inserting after paragraph (40) the following:
``(40A) The term `non-bank financial institution' means an
institution the business of which is primarily engaged in
financial activities that is not an insured depository
institution.''.
(b) Applicability of Chapters.--Section 103 of title 11,
United States Code, is amended--
(1) in subsection (a) by striking ``13'' and inserting
``13, and 14'';
(2) by redesignating subsection (k) as subsection (l); and
(3) by inserting after subsection (j) the following:
``(k) Chapter 14 applies only in a case under such
chapter.''.
(c) Who May Be a Debtor.--Section 109 of title 11, United
States Code, is amended--
(1) in subsection (b)--
(A) in paragraph (2), by striking ``or'' at the end;
(B) in paragraph (3), by striking the period at the end and
inserting ``; or''; and
(C) by adding at the end the following:
``(4) a non-bank financial institution that has not been a
debtor under chapter 14 of this title.''; and
(2) in subsection (d), by striking ``or commodity broker''
and inserting ``, commodity broker, or a non-bank financial
institution''.
(d) Involuntary Cases.--Section 303 of title 11, the United
States Code, is amended--
(1) in subsection (a) by striking ``or 11'' and inserting
``, 11, or 14''; and
(2) in subsection (b) by striking ``or 11'' and inserting
``, 11, or 14''.
(e) Obtaining Credit.--Section 364 of title 11, United
States Code, is amended by adding at the end the following:
``(g) Notwithstanding any other provision of this section,
the trustee may not, and the court may not authorize the
trustee to, obtain credit, if the source of that credit
either directly or indirectly is the United States. Nor shall
any Federal funds be made available through the Federal
Reserve System, including through the authority of the third
undesignated paragraph of section 13 of the Federal Reserve
Act (12 U.S.C. 343).''.
(f) Chapter 14.--Title 11, United States Code, is amended--
(1) by inserting the following after chapter 13:

``CHAPTER 14--ADJUSTMENT TO THE DEBTS OF A NON-BANK FINANCIAL
INSTITUTION

``1401. Inapplicability of other sections.
``1402. Applicability of chapter 11 to cases under this chapter.
``1403. Prepetition consultation.
``1404. Appointment of trustee.
``1405. Right to be heard.
``1406. Right to communicate.
``1407. Exemption with respect to certain contracts or agreements.
``1408. Conversion or dismissal.

``Sec. 1401. Inapplicability of other sections

``Except as provided in section 1407, sections 362(b)(6),
362(b)(7), 362(b)(17), 546(e), 546(f), 546(g), 555, 556, 559,
560, and 561 do not apply in a case under this chapter.

``Sec. 1402. Applicability of chapter 11 to cases under this
chapter

``With the exception of sections 1104(d), 1109, 1112(a),
1115, and 1116, subchapters I, II, and III of chapter 11
apply in a case under this chapter.

``Sec. 1403. Prepetition consultation

``(a) Subject to subsection (b)--
``(1) a non-bank financial institution may not be a debtor
under this chapter unless that institution has, at least 10
days prior to the date of the filing of the petition by such
institution, taken part in the consultation described in
subsection (c); and
``(2) a creditor may not commence an involuntary case under
this chapter unless, at least 10 days prior to the date of
the filing of the petition by such creditor, the creditor
notifies the non-bank financial institution, the functional
regulator, and the Financial Stability Oversight Council of
its intent to file a petition and requests a consultation as
described in subsection (c).
``(b) If the non-bank financial institution, the functional
regulator, and the Financial Stability Oversight Council, in
consultation with any agency charged with administering a
nonbankruptcy insolvency regime for any component of the
debtor, certify that the immediate filing of a petition under
section 301 or 303 is necessary, or that an immediate filing
would be in the interests of justice, a petition may be filed
notwithstanding subsection (a).
``(c) The non-bank financial institution, the functional
regulator, the Financial Stability Oversight Council, and any
agency charged with administering a nonbankruptcy insolvency
regime for any component of the debtor shall engage in
prepetition consultation in order to attempt to avoid the
need for the non-bank financial institution's liquidation or
reorganization in bankruptcy, to make any liquidation or
reorganization of the non-bank financial institution under
this title more orderly, or to aid in the nonbankruptcy
resolution of any of the non-bank financial institution's
components under its nonbankruptcy insolvency regime. Such
consultation shall specifically include the attempt to
negotiate forbearance of claims between the non-bank
financial institution and its creditors if such forbearance
would likely help to avoid the commencement of a case under
this title, would make any liquidation or reorganization
under this title more orderly, or would aid in the
nonbankruptcy resolution of any of the non-bank financial
institution's components under its nonbankruptcy insolvency
regime. Additionally, the consultation shall consider
whether, if a petition is filed under section 301 or 303, the
debtor should file a motion for an exemption authorized by
section 1407.
``(d) The court may allow the consultation process to
continue for 30 days after the petition, upon motion by the
debtor or a creditor. Any post-petition consultation
proceedings authorized should be facilitated by the court's
mediation services, under seal, and exclude ex parte
communications.
``(e) The Financial Stability Oversight Council and the
functional regulator shall publish and transmit to Congress a
report documenting the course of any consultation. Such
report shall be published and transmitted to Congress within
30 days of the conclusion of the consultation.
``(f) Nothing in this section shall be interpreted to set
aside any of the limitations on the use of Federal funds set
forth in the Bankruptcy Integrity and Accountability Act of
2010 or the amendments made by such Act. Nor shall any
Federal funds be made available through the Federal Reserve
System, including through the authority of the third
undesignated paragraph of section 13 of the Federal Reserve
Act (12 U.S.C. 343).

``Sec. 1404. Appointment of trustee

``In applying section 1104 to a case under this chapter, if
the court orders the appointment of a trustee or an examiner,
if the trustee or an examiner dies or resigns during the case
or is removed under section 324, or if a trustee fails to
qualify under section 322, the functional regulator, in
consultation with the Financial Stability Oversight Council,
shall submit a list of five disinterested persons that are
qualified and willing to serve as trustees in the case and
the United States trustee shall appoint, subject to the
court's approval, one of such persons to serve as trustee in
the case.

``Sec. 1405. Right to be heard

``(a) The functional regulator, the Financial Stability
Oversight Council, the Federal Reserve, the Department of the
Treasury, the Securities and Exchange Commission, and any
domestic or foreign agency charged with administering a
nonbankruptcy insolvency regime for any component of the
debtor may raise and may appear and be heard on any issue in
a case under this chapter, but may not appeal from any
judgment, order, or decree entered in the case.
``(b) A party in interest, including the debtor, the
trustee, a creditors' committee, an equity security holders'
committee, a creditor, an equity security holder, or any
indenture trustee may raise, and may appear and be heard on,
any issue in a case under this chapter.

``Sec. 1406. Right to communicate

``The court is entitled to communicate directly with, or to
request information or assistance directly from, the
functional regulator, the Financial Stability Oversight

[[Page S3262]]

Council, the Board of Governors of the Federal Reserve
System, the Department of the Treasury, or any agency charged
with administering a nonbankruptcy insolvency regime for any
component of the debtor, subject to the rights of a party in
interest to notice and participation.

``Sec. 1407. Exemption with respect to certain contracts or
agreements

``(a) Subject to subsection (b)--
``(1) upon motion of the debtor, consented to by the
Financial Stability Oversight Council--
``(A) the debtor and the estate shall be exempt from the
operation of sections 362(b)(6), 362(b)(7), 362(b)(17),
546(e), 546(f), 546(g), 555, 556, 559, 560, and 561;
``(B) if the Financial Stability Oversight Council consents
to the filing of such motion by the debtor, the Board shall
inform the court of its reasons for consenting; and
``(C) the debtor may limit its motion, or the board may
limit its consent, to exempt the debtor and the estate from
the operation of section 362(b)(6), 362(b)(7), 362(b)(17),
546(e), 546(f), 546(g), 555, 556, 559, 560, or 561, or any
combination thereof; and
``(2) if the Financial Stability Oversight Council does not
consent to the filing of a motion by the debtor under
paragraph (1), the debtor may file a motion to exempt the
debtor and the estate from the operation of sections
362(b)(6), 362(b)(7), 362(b)(17), 546(e), 546(f), 546(g),
555, 556, 559, 560, and 561, or any combination thereof.
``(b) The court shall commence a hearing on a motion under
subsection (a) not later than 5 days after the filing of the
motion to determine whether to maintain, terminate, annul,
modify, or condition the exemption under subsection (a)(1)
or, in the case of a motion under subsection (a)(2), grant
the exemption. The court shall request the filing or briefs
by the functional regulator and the Financial Stability
Oversight Council. The court shall decide the motion not
later than 5 days after commencing such hearing unless--
``(1) the parties in interest consent to a extension for a
specific period of time; or
``(2) except with respect to an exemption from the
operation of section 559, the court sua sponte extends for 5
additional days the period for decision if such extension
would be in the interests of justice or is required by
compelling circumstances.
``(c) The court shall maintain, terminate, annul, modify,
or condition the exemption under subsection (a)(1), or, in
the case of a motion under subsection (a)(2), grant the
exemption only upon showing of good cause. In determining
whether good cause has been shown, the court shall balance
the interests of both debtor and creditors while attempting
to preserve the debtor's assets for repayment and
reorganization of the debtors obligations, or to provide for
a more orderly liquidation.
``(d) For purposes of timing under section 562 of this
title, if a motion is filed under subsection (a)(1) or if a
motion is granted under subsection (a)(2), the date or dates
of liquidation, termination, or acceleration shall be
measured from the earlier of--
``(1) the actual date or dates of liquidation, termination,
or acceleration; or
``(2) the date on which a forward contract merchant,
stockbroker, financial institution, securities clearing
agency, repo participant, financial participant, master
netting agreement participant, or swap participant files a
notice with the court that it would have liquidated,
terminated, or accelerated a contract or agreement covered by
section 562 of this title had a stay under this section not
been in place.
``(e) The provisions of this section shall apply only with
respect to contracts and agreements covered by this section
entered into on or after the date of enactment of this
chapter.

``Sec. 1408. Conversion or dismissal

``In applying section 1112 to a case under this chapter,
the debtor may convert a case under this chapter to a case
under chapter 7 of this title if the debtor may be a debtor
under such chapter unless the debtor is not a debtor in
possession.'', and
(2) by amending the table of chapters of such title by
adding at the end the following:

``14. Adjustment to the Debts of a Non-Bank Financial Instit1401''.....

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